/raid1/www/Hosts/bankrupt/TCR_Public/220602.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, June 2, 2022, Vol. 26, No. 152
Headlines
6200 NE 2ND AVENUE: Unsecureds to be Paid in Full in Plan
6229 NE 2ND AVENUE: Case Summary & Seven Unsecured Creditors
942 PENN RR: Miami Beach Luxury Apartment in Chapter 11
942 PENN: Files Emergency Bid to Use Cash Collateral
AEC PARENT: Moody's Assigns B3 CFR & Rates New First Lien Loans B3
ANTERO RESOURCES: Moody's Ups CFR to Ba1 & Unsecured Notes to Ba2
ARTHUR GROOM: Jewelry Store in Chapter 11 Due to TD Bank Debt
BAUSCH + LOMB: S&P Downgrades ICR to 'B', Outlook Developing
BAUSCH HEALTH: S&P Lowers ICR to 'B', Outlook Negative
BCPE EMPIRE: Moody's Rates New $650MM Incremental Term Loan 'B3'
BCPE EMPIRE: S&P Rates $650MM First-Lien Term Loan 'B-'
BELLE GROVE: Seeks to Hire Toni Campbell Parker as Counsel
BLACK NEWS CHANNEL: $3.3MM DIP Loan from Stache Has Final OK
BROWNIE'S MARINE: Delays Filing of First Quarter Form 10-Q
CADIZ INC: Reports $5.9 Million Net Loss for First Quarter
CHESAPEAKE ENERGY: Moody's Ups CFR to Ba2 & Unsecured Notes to Ba3
CTI BIOPHARMA: Incurs $37.2 Million Net Loss in First Quarter
CYPRESS ENVIRONMENTAL: $5MM DIP Loan from APE V Has Final OK
CYTODYN INC: Jordan Naydenov Quits as Director
CYTODYN INC: Settles Suit With Former Chief Medical Officer
DARLING INGREDIENTS: Moody's Rates New $500MM Unsecured Notes Ba3
DARLING INGREDIENTS: S&P Rates New $500MM Unsecured Notes 'BB+'
DIOCESE OF CAMDEN: New Chapter 11 Plan Disclosures Approved
DIOCESE OF SYRACUSE: Committee Taps Claro Group as Valuation Expert
EAGLE BEAR: Files for Chapter 11 to Stop Blackfeet Nation
ECTOR COUNTY ENERGY: Defends Chapter 11 Plans vs. Challenges
EL JEBOWL: Seeks Continued Cash Collateral Access
ELITE HOME: Cash Collateral Access, M&T Bank DIP Loan OK'd
EQM MIDSTREAM: Moody's Rates New Senior Unsecured Notes 'Ba3'
EQM MIDSTREAM: S&P Rates New $800MM Notes Due 2027/ 2030 'BB-'
EQT CORP: Moody's Alters Outlook on 'Ba1' CFR to Positive
FORE MACHINE: Wins Continued Access to Cash Collateral
FUSE GROUP: Incurs $207K Net Loss in Second Quarter
GODFREY ROSE: Monticello, NY Property Owner Files for Chapter 11
GOODYHOUSE LLC: Fudge Farm in Chapter 11 Bankruptcy
HELIUS MEDICAL: All Three Proposals Passed at Annual Meeting
IBIO INC: Incurs $12.4 Million Net Loss in Third Quarter
INFOW LLC: Ch. 11 Case Highlights Small Biz. Bankruptcy Law Limits
JJS LOGISTICS: Gets Court Nod to Use Cash Collateral Thru July 7
JNF INVESTMENTS: Small Biz. Won't Proceed Under Subchapter V
LAKEPORT CF: Case Summary & 11 Unsecured Creditors
LECLAIRRYAN PLLC: Ch 7 Trustee Asks Court OK for $21M UnitedLex Dea
MALLINCKRODT PLC: Withdraws $900 Mil. Leveraged Loan Offering
MOHEGAN TRIBAL: Incurs $2.4 Million Net Loss in Second Quarter
NORDIC AVIATION DAC/NAC 29: S&P Assigns 'B' ICR, Outlooks Stable
PARALLAX HEALTH: Signs IP Purchase Agreement With DHPI
PEGASUS SERVICES: Files for Chapter 11 to Restructure Debt
PLATINUM GROUP: Confirms Objective to Advance Waterberg Project
PUFF FACTORY: Seeks to Hire Albies & Stark as Special Counsel
RANGE RESOURCES: Moody's Ups CFR to Ba2 & Alters Outlook to Stable
REID'S EDUCATIONAL: Files Subchapter V Amid Balloon Note
ROCKALL ENERGY: Gets Court Okay to Quick $85 Million Sale
RTW CONSTRUCTION: Hearing Next Week on Change Capital DIP Loan
SOUTHWESTERN ENERGY: Moody's Upgrades CFR to Ba1, Outlook Stable
TIMBER PHARMACEUTICALS: Incurs $3.1M Net Loss in First Quarter
TPC GROUP: Case Summary & 30 Largest Unsecured Creditors
TPC GROUP: Files for Chapter 11 With Plan to Cut Debt by $950M
VENUS CONCEPT: Incurs $8.6 Million Net Loss in First Quarter
VERITAS FARMS: Incurs $1.3 Million Net Loss in First Quarter
VIPER PRODUCTS: Seeks to Hire Superior Energy as Auctioneer
WOLVERINE WORLD: S&P Alters Outlook to Negative, Affirms 'BB' ICR
ZOHAR FUNDS: Tilton's Takeover of Stila Styles Invalid, Court Rules
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
6200 NE 2ND AVENUE: Unsecureds to be Paid in Full in Plan
---------------------------------------------------------
6200 NE 2nd Avenue, LLC and its Debtor Affiliates filed with the
U.S. Bankruptcy Court for the Southern District of Florida a
Disclosure Statement in connection with Plan of Reorganization
dated May 26, 2022.
The Debtors are Florida limited liability companies which together
own 14 parcels of real property in the Little Haiti/Upper East Side
neighborhood largely on the Northeast 2nd Avenue corridor of Miami
("Debtor Properties").
Each of the Debtors owns at least one Property that currently or
historically generated income, but prior to the filing of the
Chapter 11 Cases, several of the properties had ceased generating
income, largely as a result of two factors: (i) the Covid-19
pandemic, which caused the failure of several small business
tenants that had leased space in several of the Debtor Properties;
and (ii) after certain Debtor Properties were gutted in
anticipation of renovation, the failure of an investor to raise and
invest sufficient funds to pay existing debt and to complete the
renovations.
A foreclosure sale scheduled for Jan. 19, 2022 was stayed by the
filing of the Chapter 11 cases. The Chemtov mortgage is
overwhelmingly the largest debt in the case. On March 18, 2022,
Chemtov filed Proofs of Claim for $7,950,243 in each of the
Debtors' Cases, which reflected the Final Judgment amount plus
accrued default rate interest of 25% to the Petition Date and no
interest thereafter.
The Plan provides for an agreed payment amount of $7,775,000 to
Chemtov in full and complete discharge and resolution of its
Allowed Claim Chemtov (the "Chemtov Settlement"). Chemtov's Proof
of Claim was for $8,050,243 including $100,000 in post petition
attorney fees. Chemtov's claim through May 19, 2022, with default
rate interest and including $100,000 in post-petition attorney
fees, is $8,669,627. Chemtov's claim through May 19, 2022, at
contract rate interest (10%), including $100,000 in post-petition
attorney fees, is $8,023,057.
The Plan provides for full payment of all debt of all Debtors on
the Effective Date. The Plan is deemed substantially consummated
upon the payment of all of the Debtors' debt. All Allowed
Creditors with Allowed Claims, and all Allowed Administrative
Expenses, will be paid in full from the proceeds of the Purchase
Transaction. The consideration involved in the Purchase Transaction
shall be adjusted up or down so as to cover 100% of the allowed
creditors in this case.
Pursuant to the Purchase Transaction and 11 U.S.C. Sec. 1123(b)(4),
the Debtors will sell all the Debtors' Properties to LH OP Zone
Investors, LLC ("LOZ") as follows and the proceeds of the sale will
be allocated and distributed to Allowed Creditors under the Plan on
the Effective Date. The actual sale price may be adjusted to more
specifically address and satisfy the total allowed claims in the
case.
On the Effective Date, the Plan provides for: (1) payment of
administrative debt; (2) payment of $7,775,000.00 in compromise,
and as full satisfaction of Allowed Secured Claim of Chemtov; (3)
payment in full of all Allowed Secured Claims of Miami-Dade County
Tax Collector and Tax Certificate Holders for real estate taxes;
(4) payment in full of all Allowed Priority Claims; and (5) payment
in full of Allowed General Unsecured Claims.
Class 1 consists of Allowed Secured Claims of Chemtov in the amount
of $8,050,242.55. Class 1 will receive the Chemtov Settlement
payment of $7,775,000.00. Upon payment, its entire Claim will be
fully discharged. It will not have a residual or separate
deficiency claim; it will not have a residual or separate unsecured
claim; and because the debt will be fully satisfied, it will not
have a residual or third-party guarantee claim.
Class 5 consists of Allowed Unsecured Claims in the total amount of
$300,000.00. Allowed Claims of Class 3 shall be paid in full on the
Effective Date.
On the Effective Date, the Equity Interests of the existing Equity
Owners will be eliminated. All the Debtor Properties will be sold
pursuant to the Purchase Transaction, and the proceeds of sale are
devoted to the payment of Creditors under this Plan.
The Plan shall not become effective unless and until each of the
following conditions shall have been satisfied in full or waived in
accordance with the provisions:
* The Court shall have entered an order approving the Purchase
Transaction between the Debtors and LH OP Zone Investors, LLC.
* LH OP Zone Investors, LLC and Chemtov shall have reached a
final agreement regarding the amount to be paid to Chemtov from the
Purchase Transaction in full, final and complete resolution of its
Secured Claim. As of this writing, the Chemtov Settlement is being
finalized.
The Plan is predicated on the closing of the Purchase Transaction
that will fund the Plan.
A full-text copy of the Disclosure Statement dated May 26, 2022, is
available at https://bit.ly/3NKtVZn from PacerMonitor.com at no
charge.
Attorneys for Jointly Administered Debtors:
Aaronson Schantz Beiley P.A.
Geoffrey S. Aaronson, Esq.
Florida Bar No. 349623
gaaronson@aspalaw.com
Tamara D. McKeown, Esq.
Florida Bar No. 773247
tmckeown@aspalaw.com
One Biscayne Tower
2 S. Biscayne Blvd, 34th Floor
Miami, Florida 33131
Ph: 786.594.3000
Fax: 305.424.9336
About 6200 NE 2nd Avenue
6200 NE 2nd Avenue, LLC, and its affiliates are Florida limited
liability companies, which, together, own 14 parcels of real
property in the Little Haiti/Upper East Side neighborhood largely
on the Northeast 2nd Avenue corridor of Miami. Several of these
properties are not generating income largely as a result of the
COVID-19 pandemic, and after certain properties were gutted in
anticipation of renovation and the failure of an investor to raise
and invest sufficient funds to complete the renovations.
6200 NE 2nd Avenue and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Lead Case No.
22-10385) on Jan. 18, 2022. In the petition signed by Mallory
Kauderer, manager, 6200 NE 2nd Avenue disclosed up to $50,000 in
assets and up to $10 million in liabilities.
Judge Robert A. Mark oversees the cases.
Steven Beiley, Esq., at Aaronson Schantz Beiley P.A., is the
Debtors' legal counsel.
6229 NE 2ND AVENUE: Case Summary & Seven Unsecured Creditors
------------------------------------------------------------
Debtor: 6229 NE 2nd Avenue LLC
6229 NE 2nd Avenue
Miami, FL 33138
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: May 31, 2022
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 22-14331
Judge: Hon. Robert A. Mark
Debtor's Counsel: Steven Beiley, Esq.
AARONSON SCHANTZ BEILY P.A.
2 South Biscayne Boulevard Suite 3450
Miami, FL 33131
Tel: (786) 594-3000
Email: sbeiley@aspalaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mallory Kauderer as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/N3QA22Y/6229_NE_2nd_Avenue_LLC__flsbke-22-14331__0001.0.pdf?mcid=tGE4TAMA
942 PENN RR: Miami Beach Luxury Apartment in Chapter 11
-------------------------------------------------------
942 Penn RR, LLC, filed for chapter 11 protection in Miami,
Florida.
The Debtor owns and operates a short-term luxury apartment building
located at 942 Pennsylvania Ave., Miami Beach, FL 33139.
The Miami-Dade County Property Appraiser values the Miami Beach
Property at
$1,617,630. However, the Debtor believes that the fair market
value of the Miami Beach Property is at least $12 million.
The Debtor blames its bankruptcy filing on multiple simultaneous
foreclosure lawsuits involving the Miami Beach Property.
Scheduled secured claims on the Miami Beach Property totals $9.845
million:
* 1250916 Ontario Limited claims to hold a mortgage on the
Miami
Beach Property in the disputed amount of $800,000.
* Creative Directions, Inc., asserts a first-priority lien on
the Miami
Beach Property in the amount of $8,675,000.
* Marjam Supply of Florida, LLC claims a lien on the Miami Beach
Property in the amount of $38,304.77.
* G. Proulx, LLC claims a lien on the Miami Beach Property in
the
amount of $77,399.87.
The Debtor says the total amount of unsecured claims is $338,145.
942 Penn RR LLC estimates between 1 and 49 unsecured creditors.
The petition states that funds will be available to unsecured
creditors.
Dispute With Ontario
According to court filings, on or about Nov. 2, 2017, the Debtor
granted to 1250916 Ontario Limited an Assignment of Leases and
Rents of the Miami Beach Property, recorded in in Book 30742 Page
2897 of the Miami-Dade Public Records.
On April 2, 2022, the Miami-Dade Circuit Court entered an Order on
Plaintiff's Motion for Summary Judgment and Penn Defendants' Cross
Motion for Summary Judgment and Other Related Issues in Case No.
2019-030695-CA-01 (the "State Court Action").
Pursuant to the April Order, the State Court granted summary
judgment in favor of Ontario finding that Ontario was owed $800,000
by the Debtor in connection with its $1.2 million loan to the
Debtor.
Pursuant to the April Order, the State Court found that, with
regards to remaining $400,000, there are genuine issues of material
fact as to whether the escrow agent that stole this money "was an
agent of Ontario and acted in such a manner as to expose Ontario to
liability for his misappropriation," under various legal theories
argued by the Debtor in the State Court Action.
The Debtor notes that in the event that it is determined that
Ontario is liable for the misappropriation of the $400,000, the
Debtor will be seeking an award of substantial damages which could
very likely exceed the $800,000 awarded by the State Court, which
could then be used as a set-off against Ontario's secured claim in
this case.
About 942 Penn RR LLC
942 Penn RR, LLC, owns a short-term luxury apartment building
located at 942 Pennsylvania Ave., Miami Beach, FL 33139.
942 Penn RR filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-14038) on
May 23, 2022. In the petition filed by Raziel Ofer, manager, the
Debtor disclosed $1,617,630 in total assets and $27,179,541 in
total liabilities.
Judge Robert A. Mark oversees the case.
Mark S. Roher, Esq., at Law Office of Mark S. Roher, PA serves as
the Debtor's counsel.
942 PENN: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------
942 Penn RR, LLC asks the U.S. Bankruptcy Court for the Southern
District of Florida, Miami Division, for authority to use cash
collateral retroactive to the petition date, in which 1250916
Ontario Limited may assert a lien(s) and security interest(s), and
grant adequate protection to 1250916 Ontario Limited.
The Debtor needs access to cash collateral to conduct its
operation, including, but not limited to, payment of insurance,
utilities, suppliers, and outside services.
On November 2, 2017, the Debtor granted to 1250916 Ontario Limited
an Assignment of Leases and Rents of the Miami Beach Property,
recorded in in Book 30742 Page 2897 of the Miami-Dade Public
Records.
On April 2, 2022, the Miami-Dade Circuit Court entered an Order on
Plaintiff's Motion for Summary Judgment and Penn Defendants' Cross
Motion for Summary Judgment and Other Related Issues in Case No.
2019-030695-CA-01.
Pursuant to the April Order, the State Court granted summary
judgment in favor of Ontario finding that Ontario was owed $800,000
by the Debtor in connection with its $1.2 million loan to the
Debtor.
Pursuant to the April Order, the State Court found that, with
regards to remaining $400,000, there are genuine issues of material
fact as to whether the escrow agent that stole this money "was an
agent of Ontario and acted in such a manner as to expose Ontario to
liability for his misappropriation," under various legal theories
argued by the Debtor in the State Court Action.
In the event it is determined that Ontario is liable for the
misappropriation of the $400,000, the Debtor will be seeking an
award of substantial damages which could very likely exceed the
$800,000 awarded by the State Court, which could then be used as a
setoff against Ontario's secured claim in the case.
The post-petition rental income generated by the Miami Beach
Property constitutes cash collateral.
The amount of the scheduled secured claims on the Miami Beach
Property totals $9,845,511.
As such there is an 18% equity cushion of approximately $2,155,000
in the Miami Beach Property for all of the Debtor's scheduled
secured creditors, including Ontario.
This equity cushion is sufficient to provide Ontario with adequate
protection.
However, in the event the Court determines that, notwithstanding
the substantial equity cushion, monthly adequate protection
payments are appropriate, the Debtor is prepared to pay Ontario
adequate protection payments in the amount of $6,000 per month,
through confirmation of a Chapter 11 Plan, or until entry of an
order modifying the amount of such payments.
In addition, Ontario is adequately protected in that the Debtor's
proposed Budget illustrates that the Debtor will be operating on a
cash-flow positive basis and the Debtor agrees to grant Ontario
replacement liens on post-petition assets to the extent that it has
a lien on cash collateral, and to the extent that its pre-petition
collateral is diminished by the Debtor's use of cash collateral.
A copy of the motion and the Debtor's three-month budget for the
period from June to August 2022 is available at
https://bit.ly/3wX2EfC from PacerMonitor.com. The Debtor projects
$180,000 in gross revenue and $95,400 in total disbursements for
June 2022.
About 942 Penn RR
942 Penn RR, LLC is the fee simple owner of a real property also
known as 942 Pennsylvania, Avenue, Miami Beach, Fla., valued at
$1.62 million.
942 Penn RR filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-14038) on
May 23, 2022. In the petition filed by Raziel Ofer, manager, the
Debtor disclosed $1,617,630 in total assets and $27,179,541 in
total liabilities.
Judge Robert A. Mark oversees the case.
Mark S. Roher, Esq., at Law Office of Mark S. Roher, PA serves as
the Debtor's counsel.
AEC PARENT: Moody's Assigns B3 CFR & Rates New First Lien Loans B3
------------------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating and
B3-PD Probability of Default Rating to AEC Parent Holdings, Inc.
("Advancing Eyecare"). The ratings are being assigned in
conjunction with the leveraged buyout of the company. Moody's also
assigned B3 ratings to the company's proposed first-lien credit
facilities, consisting of a $40 million revolver expiring 2027, a
$250 million term loan due 2029, and a $50 million delayed draw
term loan due 2029. The ratings outlook is stable.
In May 2022, Cornell Capital LLC ("Cornell Capital") entered into a
definitive agreement to acquire the majority interest in Advancing
Eyecare from its existing owner Atlantic Street Capital. The
acquisition will be financed with the proposed $250 million first
lien term loan, along with new sponsors' equity and management
rollover contribution.
ESG factors are material to the ratings assignment. Social risk
exposure for Advancing Eyecare includes responsible production,
compliance with regulatory requirements for safety of medical
devices as well as adverse reputational risks arising from recalls,
safety issues or product liability litigation. Manufacturers and
distributors of ophthalmic products will generally benefit from
demographic trends, such as the aging of the populations in
developed countries. Among governance considerations, Advancing
Eyecare's financial policies are aggressive, reflected in the
moderately high financial leverage following the leveraged buyout,
as well as Moody's expectation that the management will supplement
organic growth with debt funded acquisitions.
The following ratings were assigned:
Issuer: AEC Parent Holdings, Inc.:
Corporate Family Rating, B3
Probability of default rating, B3-PD
Senior Secured Revolver Credit Facility due 2027 at B3 (LGD3)
Senior Secured Term Loan due 2029 at B3 (LGD3)
Senior Secured Delayed Draw Term Loan due 2029 at B3 (LGD3)
Outlook Actions:
Outlook, Assigned Stable
All ratings are subject to receipt and review of final
documentation.
RATINGS RATIONALE
Advancing Eyecare, LLC's B3 Corporate Family Rating (CFR) broadly
reflects its moderately high pro forma financial leverage of 5.9
times for the twelve months ended March 31, 2022, on
Moody's-adjusted basis. The rating is also constrained by the
company's modest, albeit growing absolute scale, and event and
financial policy risks related to its private equity ownership.
Advancing Eyecare benefits from its leading position among
providers of ophthalmic products and services, with a diversified
customer base. Advancing Eyecare's rating are further supported by
favorable long-term trends in the ophthalmic sector that underpin
Moody's expectation for organic growth in the mid single-digits, as
well as company's good liquidity.
Advancing Eyecare's good liquidity profile is supported by a
minimal cash balance of roughly $5 million at the close of the
transaction, full access under a $40 million revolving credit
facility due 2027, and access to a $50 million delayed draw term
loan. Furthermore, liquidity is supported by Moody's expectation of
modestly positive free cash flow, over the next 12 months. These
cash sources provide good coverage for the required 1% amortization
(roughly $2.5 million) of its first-lien senior secured term loan.
The stable outlook reflects Moody's expectation that leverage will
remain moderately high, but that the company's relatively stable
business profile will result in sustained mid-single digit top line
growth, along with positive, albeit modest, free cash flow.
Following are some of the preliminary credit agreement terms, which
remain subject to market acceptance. The proposed terms and the
final terms of the credit agreement may be materially different.
As proposed, the credit facilities contain covenant flexibility for
transactions that could adversely affect creditors, including the
ability to incur incremental term loan facilities up to the greater
of $ 45 million and 100% of trailing four quarter Consolidated
EBITDA; plus an unlimited amount subject to 5.60x First Lien Net
Leverage Ratio (if pari passu secured). No portion of the
incremental may be incurred with an earlier maturity than the
initial term loans.
The credit agreement permits the transfer of assets to unrestricted
subsidiaries, up to the carve-out capacities, subject to "blocker"
provisions which prohibit any disposition or investment by a loan
party to an unrestricted subsidiary of any IP rights (ownership,
license or right to use intellectual property) owned by a loan
party or a restricted subsidiary that is material to the operation
of the business of the company and its restricted subsidiaries,
taken as a whole. Non-wholly-owned subsidiaries are not required to
provide guarantees; dividends or transfers resulting in partial
ownership of subsidiary guarantors could jeopardize guarantees,
subject to protective provisions which only permit guarantee
releases if such dispositions are made to unaffiliated third
parties for fair market value and for a bona fide business purpose
and unless such released subsidiary guarantor does not otherwise
qualify as an excluded subsidiary for reasons other than not
constituting a wholly owned subsidiary of the company.
The credit agreement provides some limitations on up-tiering
transactions, including the requirement that the directly and
adversely affected lenders consent to any waiver, amendment or
modification that subordinates: (i) any payment obligation with
respect to the loans, and/or (ii) the liens on the collateral,
taken as a whole, to any other indebtedness, other than in
connection with, a DIP, or any other financing that is offered to
each lender on a pro rata basis with the same economics, and
ratable share of such senior debt, terms and fees.
Social and governance considerations are material to Advancing
Eyecare's credit profile. The social risks are primarily associated
with responsible production, including compliance with regulatory
requirements for safety of medical devices as well as adverse
reputational risks arising from recalls, safety issues or product
liability litigation. Manufacturers and distributors of ophthalmic
products will generally benefit from demographic trends, such as
the aging of the populations in developed countries. The company's
revenues were negatively impacted in the recent past due to
coronavirus outbreak, which Moody's regards as a social risk. Among
governance considerations, Advancing Eyecare's financial policies
under private equity ownership are aggressive, reflected in high
initial debt levels following the leveraged buyout, as well as
Moody's expectation of a strategy to supplement organic growth with
debt-funded acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the operational performance
deteriorates or liquidity weakens, or the company fails to generate
positive free cash flow. Inability to manage its growth, or if
company pursues aggressive financial policies, such that financial
leverage is sustained above 7.0 times, could also put downward
pressure on the company's ratings.
The ratings could be upgraded if the company increases its absolute
size, delivering sustained revenue and earnings growth. Moderation
of financial policies, partially evidenced by debt/EBITDA sustained
below 5.5 times, along with sustained good liquidity and positive
cash flows could also support an upgrade.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Headquartered in Jacksonville, Florida, AEC Parent Holdings, Inc.
("Advancing Eyecare") is a national provider of ophthalmic products
and service solutions in the eyecare marketplace, with presence in
Canada and Mexico. The company generated pro forma revenues of
approximately $278 million for the twelve months ended March 31,
2022. Advancing Eyecare is a portfolio company of private equity
firm Cornell Capital.
ANTERO RESOURCES: Moody's Ups CFR to Ba1 & Unsecured Notes to Ba2
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Moody's Investors Service upgraded Antero Resources Corporation's
corporate family rating to Ba1 from Ba2, probability of default
rating to Ba1-PD from Ba2-PD, and senior unsecured notes to Ba2
from Ba3. The SGL-2 Speculative Grade Liquidity Rating was
unchanged. The rating outlook remains stable.
"The upgrade reflects our expectation that Antero will
significantly reduce debt in 2022 driven by record level of free
cash flow amid strong natural gas and NGL prices," said Sajjad
Alam, Moody's Vice President. "Management remains highly committed
to further strengthening Antero's credit profile and we expect
Antero's net debt to approach $1 billion by the end of 2022."
Upgrades:
Issuer: Antero Resources Corporation
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
Corporate Family Rating, Upgraded to Ba1 from Ba2
Senior Unsecured Notes, Upgraded to Ba2 (LGD4) from Ba3 (LGD4)
Outlook Actions:
Issuer: Antero Resources Corporation
Outlook, Remains Stable
RATINGS RATIONALE
Antero's Ba1 CFR reflects its much improved financial leverage and
maturity profile following roughly $1.9 billion of debt reduction
since 2019 aided by sharply higher global natural gas and NGLs
prices; reduced level of capital spending geared to support more
sustainable free cash flow generation; and declining firm-transport
volume commitment costs that should boost future margins, all of
which enhance the company's resilience. The rating also considers
Antero's large natural gas production and reserves in Appalachia,
high exposure to NGLs (-30% of total production), low operating and
development costs, and 29.1% ownership of Antero Midstream
Corporation, which had a market capitalization of $5 billion in
late-May, 2022. Antero's ratings are restrained by its singular
geographic concentration in Appalachia, significant undeveloped
reserves, shale focused operations that require high level of
reinvestments, exposure to volatile energy prices, as well as its
prior history of aggressive capital spending and volume growth.
While Antero's diversified firm-transportation (FT) pipeline
contracts have historically helped realize higher prices, the
company pays high tariff rates and has higher overall midstream
costs than its Appalachian peers.
Antero's low debt level, high quality assets and ability to access
export markets will provide significant financial capacity and
greater resilience to withstand negative credit impacts from carbon
transition risks. While Antero's financial performance will
continue to be influenced by industry cycles compared to historical
experience, Moody's expects that over time profitability and cash
flow in the E&P sector to become less robust at the cycle peak and
worse at the cycle trough because global initiatives to limit
adverse impacts of climate change will constrain the use of
hydrocarbons and accelerate the shift to less environmentally
damaging energy sources. However, as a natural gas-focused producer
in one of the lowest cost basins in the US, the company will not be
as vulnerable to future demand decline or accelerated energy
transition as oil-focused producers. Moody's expects the energy
transition to occur over a period of decades and that global gas
demand will continue to grow through at least the latter half of
the 2040's.
Antero should have good liquidity through 2023, which is reflected
in the SGL-2 rating. The company will generate strong free cash
flow in an elevated commodity price environment enabling management
to repay the remaining balance on the company's revolving credit
facility by mid-2022. The revolver had $388 million of borrowings
against $1.5 billion of lender commitments, supported by a $3.5
billion borrowing base. Antero had $581 million in available
borrowing capacity as of March 31, 2022 after accounting for $531
million of outstanding letters of credit. The revolver will mature
the earlier of: (i) October 26, 2026, and (ii) the date that is 180
days prior to the earliest stated redemption of any series of
Antero's senior notes, unless such series of notes is refinanced.
Antero's next notes maturity is on July 15, 2026, when the $325
million 8.375% notes become due.
Antero's senior unsecured notes are rated Ba2 and notched below the
Ba1 CFR because of the significant size of the secured credit
facility, which has a first-lien priority claim to substantially
all of Antero's assets. The unsecured notes have upstream
guarantees from substantially all of Antero's E&P subsidiaries that
also guarantee the secured revolving credit facility.
The stable outlook reflects Antero's declining leverage and strong
free cash flow prospects in a robust commodity price environment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade to Baa3 would be contingent on Antero's ability to
demonstrate that it can operate with lower debt and capex levels
over a period of time, generate consistent free cash flow and
balance its debtholders' interest against potentially higher future
shareholder distributions. The company will also need to sustain a
retained cash flow to debt ratio above 50% on a consolidated basis
(for Antero Midstream Partners LP, Ba2 stable) while maintaining
the leveraged full-cycle ratio above 2x to be considered for an
upgrade. Antero's ratings could come under pressure if the
consolidated retained cash flow to debt ratio approaches 30%, the
LFCR falls below 1.5x, or the company generates negative free cash
flow.
Antero Resources Corporation is a leading natural gas and natural
gas liquids producer in the Marcellus and Utica Shales in West
Virginia, Ohio and Pennsylvania.
The principal methodology used in these ratings was Independent
Exploration and Production published in August 2021.
ARTHUR GROOM: Jewelry Store in Chapter 11 Due to TD Bank Debt
-------------------------------------------------------------
Arthur Groom & Co., Inc., recently filed for chapter 11 protection
in the District of New Jersey.
The Debtor operates a retail jewelry store located at 262 East
Ridgewood Avenue, Ridgewood, New Jersey 07450. The Debtor has been
in operation for over 30 years at that location.
The primary creditor is TD Bank, N.A.
After the Debtor's bankruptcy filing in 2010, the Bankruptcy Court
on Feb. 18, 2011, entered an Order confirming the First Modified
Joint Plan of Reorganization. In connection with the confirmation
of the 2011 Plan, Arthur Groom & Co., Inc. requested and the TD
agreed to amend and restate the RC Note and the Term Note. As of
March 2011, the amended loan principal amount was reset at
$1,578,408.
Arthur Groom & Co., Inc. met all of its obligations under the 2011
Plan from the 2010 Bankruptcy Case, including maintaining payments
to TD for many years, until Arthur Groom 's ability to remit
payments was derailed by a significant drop off in business in 2020
due to Covid-19.
On May 18, 2022, TD filed a Verified Complaint in the Superior
Court of New
Jersey Law Division, Bergen County, entitled T.D. Bank, N.A. v.
Arthur Groom & Co., Inc., Docket No. BER-L-2577-22 (the "TD
Action") seeking, inter alia, replevin of the Debtor's inventory.
A hearing on preliminary restraints requested in connection with TD
Action was scheduled to proceed on May 25, 2022.
In the Verified Complaint, TD contends that the total amount
outstanding
pursuant to the amended loan documents is $617,578 as of April 5,
2022, including principal of $395,468, interest of $134,494,
$56,716 in other fees, $30,901 in late charges, plus attorney's
fees and costs.
The Debtor on May 23, 2022, returned to Chapter 11 bankruptcy. It
immediately filed a motion for approval to use TD's cash collateral
to fund operations in exchange of payments of $7,500 per month to
TD.
According to court documents, Arthur Groom & Company estimates
between 1 and 49 unsecured creditors. The petition states that
funds will be available to unsecured creditors.
About Arthur Groom & Company
Arthur Groom & Company, Inc., operates a retail jewelry store in
Ridgewood, New Jersey.
Arthur Groom & Company previously filed for Chapter 11 bankruptcy
(Banrk. D.N.J. Case No. 10-13221) on Feb. 3, 2010.
Arthur Groom & Company again sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 22-14127) on May
23, 2022. In the petition signed by Arthur Groom, owner, the
Debtor disclosed up to $10 millio in both assets and liabilities.
Stephen B. McNally, Esq., at McNallyLaw, LLC is the Debtor's
counsel.
BAUSCH + LOMB: S&P Downgrades ICR to 'B', Outlook Developing
------------------------------------------------------------
S&P Global Ratings lowered its rating on Bausch + Lomb Corp.'s
(B+L) senior secured credit facility to 'B' from 'B+'. Its '3'
recovery rating on the debt is unchanged.
S&P's developing outlook reflects the likelihood of a downgrade on
parent Bausch Health (which currently has a negative outlook), as
well as the potential for a higher rating if the parent ultimately
distributes its ownership to Bausch shareholders, which could
delink the rating from that of the parent company.
S&P said, "Our rating on Bausch Health caps our 'B' issuer credit
rating on B+L. We expect the parent to retain majority control
following the IPO. We expect the remaining ownership will be
transferred to Bausch Health's shareholders eventually, at which
point the rating may no longer be tied to the parent and we could
raise the rating in line with our stand-alone credit profile on B+L
of 'bb+'. We cap our rating because we do not consider B+L an
insulated subsidiary and believe the weaker parent could divert
assets from the subsidiary or burden it with liabilities during
financial stress.
"While B+L remains a restricted subsidiary, we could raise our
rating on the company by one notch prior to the equity distribution
if it was designated as an unrestricted subsidiary. At that point,
we could consider B+L a partially insulated entity and apply a
one-notch uplift from the parent's rating to reflect the presence
of some outside shareholders and our potential view that the parent
has an incentive to preserve B+L's credit quality.
"Our outlook on B+L is developing. The rating is currently capped
at 'B', in line with parent company Bausch Health. Over the next 12
months, we could lower the rating if we lower our rating on Bausch
Health or raise the rating if the entity qualifies for notching due
to insulation.
"We could raise the rating if B+L becomes an unrestricted
subsidiary of parent company Bausch Health. At that point, we could
consider B+L a partially insulated entity and apply a one-notch
uplift from the rating on the parent, given the presence of some
outside shareholders and our potential view that the parent has an
incentive to preserve B+L's credit quality. We believe the
subsidiary will likely be unrestricted at some point over the next
12 months once consolidated leverage (as per Bausch Health's
covenant calculations) falls below 7.6x.
"If unrestricted, we could further raise the rating if we believe
B+L is fully insulated from Bausch Health, which could cause us to
assess credit quality on a stand-alone basis. This could occur once
Bausch Health transfers its ownership stake in B+L to its
shareholders. At that point, it's likely the rating will no longer
be tied to that of Bausch Health and would be raised in line with
B+L's stand-alone credit profile.
"We could lower the rating on B+L if we lower the rating on parent
company Bausch Health."
BAUSCH HEALTH: S&P Lowers ICR to 'B', Outlook Negative
------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Bausch
Health Cos. Inc. to 'B' from 'B+'. At the same time, it lowered its
rating on the senior secured debt to 'BB-' from 'BB' and its rating
on the unsecured debt to 'B-' from 'B'.
The negative outlook reflects a confluence of downside risks
related to the Xifaxan litigation, the planned spin-offs of B+L and
Solta, and uncertainty around management's long-term business
strategy.
The clock is ticking on Xifaxan's exclusivity and the company's
strategy remains unclear. S&P said, "Our rating on the company
reflects its significant concentration in Xifaxan, which we
estimate contributes about $1.3 billion of EBITDA (about 40% of
consolidated EBITDA and just over 50% if we exclude B+L). We
currently expect Xifaxan will lose patent protection on Jan. 1,
2028. While still a few years away, we see a lower likelihood that
Bausch will be able to meaningfully offset the significant decline
in EBITDA, profitability, and cash flow generation resulting from
the LOE than we had previously thought. Our view incorporates the
company's high leverage with large debt maturities in 2025-2029,
lower than previously anticipated IPO proceeds, and
weaker-than-expected financial performance in the first quarter
that contribute to less capacity to invest in growing its new
product pipeline. Furthermore, we believe management's focus on its
longer-term strategy to grow the pharma business is somewhat
limited due to planned spin-offs for its B+L and Solta businesses
that are likely to take longer than we had initially expected, and
ongoing litigation to defend its patent protection on Xifaxan.
Norwich Pharmaceuticals Inc. (a subsidiary of Alvogen) is
challenging Bausch's patent protection on Xifaxan. The trial on the
matter was held in March 2022 and a decision is expected in early
August. While we view an adverse ruling as a low-probability event
(i.e., not our base-case assumption), a loss in this case could
result in generic competition entering the market as early as 2025,
which could result in materially higher leverage. An additional
indication for Xifaxan to treat liver cirrhosis is currently in
phase III testing and could open the drug to a much larger
addressable market, but we do not expect FDA approval or a product
launch for the next several years. We continue to expect that
Bausch will need to turn to debt-funded acquisitions ahead of
Xifaxan's patent expiration, but that appears to be increasingly
difficult given the prolonged focus on paying down debt."
The pace of deleveraging has been slowed by continued headwinds in
the first quarter of the year and lower-than-expected proceeds from
its IPO of B+L. Bausch reported weak first-quarter results, driven
by the early-year omicron surge and extended lockdowns in China.
Despite its expectations that the macro environment will improve in
the second half of the year, Bausch lowered its full-year guidance
for revenue and EBITDA by about 2% and 4%, respectively. The IPO of
B+L also underwhelmed, due in part to equity market declines year
to date. S&P now expects consolidated adjusted debt to EBITDA
(inclusive of B+L) of 6.5x for in 2022, up modestly from our
previous expectation of 6.1x.
S&P said, "We believe that Bausch intends to consummate the spin of
B+L, but the timeline has been delayed.Bausch has reiterated its
intention to fully separate B+L once net leverage of 6.5x-6.7x is
achieved at the pharma remainco. We think this could occur in mid-
to late 2023, depending on the success of a secondary offering of
an additional 10% of B+L's equity and an IPO on Solta Medical. Both
events could require a significant stabilization in equity markets
to have a meaningful effect on leverage. In our view, the spin-off
would leave Bausch with less diversification and a higher reliance
on its top product, Xifaxan, which we estimate would account for
about 35% of remaining revenues and nearly 50% of EBITDA."
Long-dated unsecured bonds are trading at distressed levels. Senior
unsecured notes maturing between 2027 and 2031 are trading at
around60 cents on the dollar following the disappointing
first-quarter earnings release. Bausch's chief financial officer
has also recently suggested that the company could consider
repurchasing a portion of these notes below par. If a transaction
were to be announced or consummated, S&P would need to evaluate any
such transaction to determine whether it could constitute a
distressed exchange under its criteria.
The negative outlook reflects a confluence of downside risks the
company faces relating to the challenge against its Xifaxan patent
protection, the spin-off of its B+L and Solta businesses, limited
ability to offset the decline in EBITDA following Xifaxan's
ultimate loss of exclusivity, and the possibility of a below-par
debt repurchase that S&P could consider a default.
S&P could lower its rating on Bausch within the next 12 months if:
-- The company receives an unfavorable ruling on its Xifaxan
litigation against Norwich; or
-- The company follows through with its planned business
separation and S&P sees limited prospects for the remaining pharma
business to offset the expected decline in revenues when Xifaxan
faces generic competition.
S&P could revise its outlook on the company to stable within the
next 12 months if:
-- The company receives a favorable ruling on its Xifaxan
litigation against Norwich; or
-- The company abandons its planned spin-offs or S&P sees stronger
prospects for the remaining pharma business.
BCPE EMPIRE: Moody's Rates New $650MM Incremental Term Loan 'B3'
----------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to BCPE Empire
Holdings, Inc.'s proposed $650 million incremental senior secured
first lien term loan due 2026. At the same time, Moody's affirmed
all other ratings of the company including the B3 Corporate Family
Rating, the B3-PD Probability of Default Rating, and the Caa2
rating on the senior unsecured notes due 2027 of BCPE Empire Topco,
Inc. (dba "Imperial Dade"). Moody's also affirmed the B3 ratings of
the first lien term loans of BCPE Empire Holdings, Inc. The outlook
remains stable.
The proceeds from the proposed $650 million incremental first lien
term loan along with approximately $1.3 billion equity from Advent
International, will be used to acquire 45% of the ownership of
Imperial Dade from the existing sponsor Bain Capital, to repay all
of the outstanding balance of the ABL, as well as to pay related
transaction fees. Pro forma for the proposed transaction and recent
completed acquisitions, Imperial Dade's debt-to-EBITDA leverage was
8.1x as of April 30, 2022. Moody's views the transaction as credit
negative because debt continues to increase and effectively $357
million of the term loan proceeds will be used for a shareholder
distribution.
Moody's affirmed Imperial Dade's B3 CFR as the company is
generating positive free cash flow, and maintaining adequate
liquidity. Moody's also expects the debt-to-EBITDA leverage to
decline to a mid 7x range by the end of fiscal 2022, supported by
anticipated higher earnings due to continued demand improvement in
its end-markets, the contribution of earnings from recent
acquisitions, as well as Moody's view that non-operating expenses
including restructuring costs and covid-related costs will decline.
The existing ABL will be upsized by $200 million to $625 million,
and is expected to be repaid in full at the transaction close.
Moody's expects Imperial Dade will continue to be highly
acquisitive, and rely on ABL and cash generated for future
acquisitions. Deleveraging will primarily come from EBITDA growth.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: BCPE Empire Holdings, Inc.
Senior Secured 1st Lien Term Loan, Assigned B3 (LGD3)
Ratings Affirmed:
Issuer: BCPE Empire Holdings, Inc.
Senior Secured 1st Lien Bank Credit Facility, Affirmed B3 (LGD3)
Issuer: BCPE Empire Topco, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Unsecured Regular Bond/Debenture, Affirmed Caa2 (LGD6) from
Caa2 (LGD5)
Outlook Actions:
Issuer: BCPE Empire Holdings, Inc.
Outlook, Remains Stable
Issuer: BCPE Empire Topco, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Imperial Dade's B3 CFR reflects its growing scale as a specialty
distributor, and high financial leverage with debt-to-EBITDA about
8.1x for the twelve months ending April 30, 2022, pro forma for the
recapitalization and recent acquisitions. Moody's projects
debt-to-EBITDA will decline to 7.4x by the end of fiscal 2022,
supported by improving demand from foodservice and hospitality
customers as consumers continue to resume more away-from-home
activities, as well as accretive acquisitions. Imperial Dade
continues to expand its presence near major metropolitan areas in
the US and Canada including with its recent acquisition of Veritiv
Canada, a full-service provider of packaging, janitorial/sanitation
and hygiene products and services. Moody's expects Imperial Dade to
remain acquisitive and to focus on making growth investments. The
company sells some low priced and commodity-oriented products for
which switching costs are low and there is potential for pricing
pressure, though Moody's expects Imperial Dade to raise prices to
largely mitigate increases in product and freight costs.
The ratings are supported by Imperial Dade's well established and
growing market position as a specialty distributor of foodservice
packaging (FSP) and janitorial sanitation (Jan-San) products,
driven in part by its broad product breadth. The company benefits
from a relatively stable revenue stream owing to the disposable
nature of products sold, its well diversified customer and supplier
bases, and its relatively high EBITA margin for the industry. The
company's adequate liquidity reflects Moody's expectations for
positive free cash flow over the next 12-18 months. However, the
company is expected to have about $28 million cash on hand at the
transaction close that is modest for a business expected to exceed
$4.5 billion in revenue. The company will have access to an undrawn
$625 million ABL upon completion of the proposed financing, but
Moody's expects the company will rely on revolver for future
acquisitions.
Governance factors include the company's aggressive financial
policies under private equity ownership including its high
financial leverage, aggressive acquisition strategy, and debt
funded shareholder dividend distributions.
Environmental risk factors consider that disposable plastic and
paper products create high levels of waste entering landfills since
there is limited recycling of such products. A shift away from
disposable products does not seem likely over the next two years,
but could pose a longer-term risk if consumer preferences shift
away from such consumables. A shift to more
environmentally-friendly disposable products poses less of a risk
because Imperial Dade's product offerings would likely shift in
response, and customers would still need to source such products
from distributors such as the company.
Moody's regard the coronavirus outbreak as a social risk under
Moody's ESG framework, given the substantial implications for
public health and safety. Although an economic recovery is
underway, continuation will be closely tied to containment of the
virus. As a result, the degree of uncertainty around Moody's
forecasts is high.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that Imperial
Dade's revenue and earnings will continue to improve as certain
end-markets that remain below pre-pandemic levels continue to
recover, and the company continues to integrate completed
acquisitions. Moody's expects debt-to-EBITDA leverage to decline to
mid 7x by the end of fiscal 2022 and Imperial Dade to generate
positive free cash flow over the next year.
The ratings could be upgraded if the company continues to grow its
footprint and revenue scale while maintaining a stable profit
margin, and generates consistent healthy free cash flows on an
annual basis. The company would also need to sustain debt/EBITDA
below 6.0x and EBITA/interest approaching 2.0x. A ratings upgrade
will also require at least good liquidity and financial policies
that support credit metrics at the above levels.
The ratings could be downgraded if liquidity weakens for any
reason, including the company generating weak or negative free cash
flow on an annual basis, if debt/EBITDA is sustained above 8.0x, or
EBITA/interest approaches 1.0x. Ratings could also be downgraded if
the company completes a large debt-financed acquisition or
distribution to shareholders that materially increases financial
leverage.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Headquartered in Jersey City, New Jersey, BCPE Empire Topco, Inc.
(dba Imperial Dade), is a wholesale specialty distributor of
Foodservice Disposables (FSD) and Janitorial Sanitation (Jan-San)
products. Bain Capital acquired a majority stake in the company in
June 2019 and will retain a majority interest following the
proposed sale of a 45% stake in the company to Advent
International. Imperial Dade is private and does not publicly
disclose its financials. Imperial Dade generated about $4.5 billion
of revenue for the twelve-month period ended April 30, 2022 pro
forma for recent acquisitions.
BCPE EMPIRE: S&P Rates $650MM First-Lien Term Loan 'B-'
-------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating to BCPE
Empire Holdings Inc.'s (B-/Stable/--; d/b/a Imperial Dade) $650
million first-lien term loan due in 2026. S&P expects BCPE to
maintain credit metrics appropriate for its rating following the
disclosure that financial sponsor Bain Capital, which has
controlled the Jersey City, N.J.-based food service packaging and
facilities maintenance supplies distributor since 2019, intends to
sell 45% ownership to Advent International.
S&P said, "Giving effect to this transaction, our issuer credit
rating and 'B-' issue-level rating and '3' recovery rating on the
company's first-lien debt are unchanged. The '3' recovery rating
indicates our expectation for meaningful (50%-70%; rounded
estimate: 55%) recovery in the event of a payment default.
"We expect the company's still-high leverage (low- to mid-7x area
on a pro forma basis, from 8.5x as of 2021) to remain relatively
stable. In our view, the financial policies under joint owners
Advent and Bain are likely to be similar to those under Bain's sole
ownership. While we do not anticipate large debt-financed dividends
in the next year or so, we recognize the potential for releveraging
over time."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
Imperial's debt capitalization comprises:
-- A priority $425 million asset-based lending (ABL) facility due
in 2026 (unrated);
-- Senior secured first-lien class that S&P rates 'B-', all of
which rank pari passu with first-priority claims on the term loan
collateral along with second-priority claims on the ABL priority
collateral:
--$660 million first-lien term loan due in 2026;
--$145 million first-lien, delayed-draw term loan due in 2026;
--$130 million first-lien, delayed-draw term loan due in 2026;
--$280 million first-lien term loan due in 2026; and
--$179.55 million first-lien term loan due in 2026.
-- Proposed $650 million first-lien term loan due in 2026.
-- $660 million senior unsecured notes due in 2027, which we rate
'CCC'.
BCPE Empire Holdings Inc. is the borrower under the ABL and
first-lien term loans, including the proposed $650 million
first-lien term loan. BCPE Empire New TopCo Inc. is the issuer of
the senior unsecured notes.
S&P said, "Our simulated default scenario considers a default in
2024 precipitated by a combination of execution missteps and
compressed margins due to industry competition or poor acquisition
integration that leads to a material decline in its operating
performance. We believe Imperial Dade would reorganize in a default
scenario rather than liquidate given its strong customer relations,
extensive supplier network, and high recurring revenue. As such, we
value the company as a going concern using a 5.5x multiple of our
projected emergence EBITDA."
Simulated default scenario
-- Default year: 2024
-- EBITDA at emergence: $297 million
-- Multiple: 5.5x
-- Gross enterprise value: $1.6 billion
Simplified waterfall
-- Valuation split (obligors/nonobligors): 90%/10%
-- Net recovery value after administrative expenses (5%): $1.5
billion
-- Priority claims: $389 million
-- Collateral value available to first-lien debt: $1.1 billion
-- Secured first-lien debt claims: Approximately $2 billion
--Recovery expectations: 50%-70% (rounded estimate: 55%)
-- Total value available to unsecured claims: Approximately $54
million
-- Senior unsecured debt claims: Approximately $685 million
--Recovery expectations: 0%-10% (rounded estimate: 0%)
All debt amounts include six months of prepetition interest.
BELLE GROVE: Seeks to Hire Toni Campbell Parker as Counsel
----------------------------------------------------------
Belle Grove Home Builders, LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of Tennessee to hire the
Law Offices of Toni Campbell Parker to serve as counsel in its
Chapter 11 proceedings.
The normal hourly rate of Toni Campbell Parker, Esq., is $350 per
hour. Her firm has received a retainer in the amount of $4,000.
As disclosed in court filings, the Law Offices of Toni Campbell
Parker is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Toni Campbell Parker, Esq.
Law Offices of Toni Campbell Parker
5100 Poplar Ave, Ste. 2008
Memphis, TN38137
Phone: (901) 683-0099
Fax: 866-489-7938
Email: Tparker002@att.net
About Belle Grove Home Builders
Belle Grove Home Builders, LLC filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. W.D. Tenn. Case No.
22-21811) on May 9, 2022, listing up to $1 million in assets and up
to $500,000 in liabilities. James E. Bailey, III serves as
Subchapter V trustee.
Judge M. Ruthie Hagan presides over the case.
The Law Offices of Toni Campbell Parker serves as the Debtor's
counsel.
BLACK NEWS CHANNEL: $3.3MM DIP Loan from Stache Has Final OK
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Florida,
Tallahassee Division, has authorized Black News Channel, LLC to use
cash collateral on a final basis in accordance with the budget,
with a 10% variance, and provide adequate protection.
The Debtor's operations is permitted to borrow up to an aggregate
principal amount of up to $3,329,000 from Stache Investments
Corporation, subject in all respects to the terms of the DIP
Documents and the Final Order.
The Debtor has established an immediate and continuing need for the
DIP Loan and to borrow up to the Final DIP Amount in order to
continue operations and to administer and preserve the value of its
estate in the Case.
Busey Bank has a perfected first priority security interest in all
assets of the Debtor to secure the Prepetition Debt Documents and
has a valid, allowed prepetition claim in the amount not less than
$7,018,229.
The DIP Obligations will be secured, pursuant to sections 361, 362,
and 364(d)(1) of the Bankruptcy Code, by a valid, binding,
continuing, enforceable, fully-perfected, nonavoidable,
automatically and properly perfected first priority senior priming
lien on, and security interest in, all present and after acquired
property of the Debtor.
The Final Order will be sufficient and conclusive evidence of the
validity, perfection, and priority of the DIP Liens without the
necessity of filing or recording any financing statement, deed of
trust, mortgage, security agreement, notice of lie n, or other
instrument or document.
These events constitute an "Event of Default":
a. Nonpayment by the Debtor of any principal, interest or any
other DIP Obligations when due.
b. The Debtor's request for authority to obtain any financing
not consented to by the DIP Lender.
c. The filing by the Debtor (or with the Debtor's consent) of
any chapter 11 plan or related disclosure statement that does not
provide for payment in full of the DIP Obligations.
d. The appointment of a trustee in the Case or the appointment
of a responsible officer or an examiner with expanded powers
(powers beyond those set forth under section 1106(a)(3) and (4) of
the Bankruptcy Code) to operate, oversee or manage the financial
affairs, the business, or reorganization of the Debtor under
section 1106(b).
e. The dismissal of the Case.
f. The conversion of the Case to chapter 7.
g. The termination of the Debtor's exclusive right to propose
a chapter 11 plan.
h. The Debtor's material breach of any of its affirmative or
negative covenants contained in the Term Sheet or any other DIP
Document.
i. Any material breach by Debtor of any of the terms of the
Final Order.
j. The Bankruptcy Court enters an order modifying, reversing,
revoking, staying, rescinding, or vacating the Interim Order, the
Final Order, or any other DIP Document.
k. A grant of relief from any stay of proceeding (including
the automatic stay) so as to allow a third party to proceed against
any asset of the Debtor in an amount in excess of $50,000 in the
aggregate.
A copy of the order is available at https://bit.ly/3m1HmbB from
PacerMonitor.com.
About Black News Channel
Black News Channel 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, it 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.
BROWNIE'S MARINE: Delays Filing of First Quarter Form 10-Q
----------------------------------------------------------
Brownie's Marine Group, Inc. filed a Form 12b-25 with the
Securities and Exchange Commission notifying the delay in the
filing of its Quarterly Report on Form 10-Q for the period ended
March 31, 2022.
The Company was unable to file its Quarterly Report by the
prescribed date without unreasonable effort or expense, because the
Company needs additional time to complete certain disclosures and
analyses to be included in the Report. In accordance with Rule
12b-25 promulgated under the Securities Exchange Act of 1934, as
amended, the Company intends to file the Report on or prior to the
fifth calendar day following the prescribed due date.
About Brownie's Marine
Headquartered in Pompano Beach, Florida, Brownie's Marine Group,
Inc., is the parent company to a family of innovative brands with a
unique concentration in the industrial, and recreational diving
industry. The Company, together with its subsidiaries, designs,
tests, manufactures, and distributes recreational hookah diving,
yacht-based scuba air compressors and nitrox generation systems,
and scuba and water safety products in the United States and
internationally. The Company has three subsidiaries: Trebor
Industries, Inc., founded in 1981, dba as "Brownie's Third Lung";
BLU3, Inc.; and Brownie's High-Pressure Services, Inc., dba LW
Americas. The Company is headquartered in Pompano Beach, Florida.
Brownie's Marine reported a net loss of $1.59 million for the year
ended Dec. 31, 2021, compared to a net loss of $1.35 million for
the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$4.67 million in total assets, $2.05 million in total liabilities,
and $2.63 million in total stockholders' equity.
Boynton Beach, Florida-based Liggett & Webb, P.A., the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated April 22, 2022, citing that the Company has
experienced net losses and has an accumulated deficit. These
factors raise substantial doubt about the Company's ability to
continue as a going concern.
CADIZ INC: Reports $5.9 Million Net Loss for First Quarter
----------------------------------------------------------
Cadiz Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss and
comprehensive loss of $5.91 million on $142,000 of total revenues
for the three months ended March 31, 2022, compared to a net loss
and comprehensive loss of $5.94 million on $139,000 of total
revenues for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $119.74 million in total
assets, $74.13 million in total liabilities, and $45.61 million in
total stockholders' equity.
Cash used in operating activities totaled $3.2 million and $2.8
million for the three months ended March 31, 2022 and 2021,
respectively. The cash was primarily used to fund general and
administration expenses related to our water development efforts
and agricultural development efforts.
Cash used in investing activities totaled $0.6 million for the
three months ended March 31, 2022, and $0.7 million for the three
months ended March 31, 2021. The cash used in the 2021 period
primarily related to development costs for the initial planting of
760 acres of alfalfa. The 2020 period included additions to well
development and water quality and structural testing of a five-mile
segment of pipeline.
Cash provided by financing activities totaled $10.4 million for the
three months ended March 31, 2022, compared with cash provided of
$14.9 million for the three months ended March 31, 2021. Proceeds
from financing activities for both periods reported are primarily
related to the issuance of shares under direct and at-the-market
offerings.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/727273/000143774922012159/cdzi20220331_10q.htm
About Cadiz Inc.
Founded in 1983 and headquartered in Los Angeles, California, Cadiz
Inc. -- http://www.cadizinc.com-- is a natural resources
development company dedicated to creating sustainable water and
agricultural opportunities in California. The Company owns 70
square miles of property with significant water resources in
Southern California and are the largest agricultural operation in
San Bernardino, California, where we have sustainably farmed since
the 1980s. The Company is also partnering with public water
agencies to implement the Cadiz Water Project, which was named a
Top 10 Infrastructure Project that over two phases will create a
new water supply for approximately 400,000 people and make
available up to 1 million acre-feet of new groundwater storage
capacity for the region.
Cadiz reported a net loss and comprehensive loss of $31.25 million
for the year ended Dec. 31, 2021, a net loss and comprehensive loss
of $37.82 million for the year ended Dec. 31, 2020, a net loss and
comprehensive loss applicable to common stock of $29.53 million for
the year ended Dec. 31, 2019, and a net loss and comprehensive loss
of $26.27 million for the year ended Dec. 31, 2018. As of Dec. 31,
2021, the Company had $112.49 million in total assets, $71.88
million in total liabilities, and $40.61 million in total
stockholders' equity.
CHESAPEAKE ENERGY: Moody's Ups CFR to Ba2 & Unsecured Notes to Ba3
------------------------------------------------------------------
Moody's Investors Service upgraded Chesapeake Energy Corporation's
Corporate Family Rating to Ba2 from Ba3, Probability of Default
Rating to Ba2-PD from Ba3-PD, senior unsecured notes to Ba3 from B1
and Speculative Grade Liquidity (SGL) Rating to SGL-1 from SGL-2.
The rating outlook remains positive.
Chesapeake completed its acquisition of Chief E&D Holdings, LP
(Chief) and associated non-operated interests held by affiliates of
Tug Hill, Inc. (Tug Hill, and together with Chief, the Chief
acquisition) in the first quarter of 2022. This transaction
followed Chesapeake's acquisition of Vine Energy Holdings LLC (Vine
acquisition) in late 2021.
"Chesapeake's upgrade reflects its improving credit metrics upon
consolidating its Haynesville and Marcellus Shale assets through
sizeable acquisitions, while enhancing its scale and sharpening its
focus on high-return natural gas assets," commented Amol Joshi,
Moody's Vice President and Senior Credit Officer.
Upgrades:
Issuer: Chesapeake Energy Corporation
Corporate Family Rating, Upgraded to Ba2 from Ba3
Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 (LGD5)
from B1 (LGD5)
Issuer: Vine Energy Holdings LLC
Senior Unsecured Regular Bond/Debenture (assumed by Chesapeake
Energy Corporation), Upgraded to Ba3 (LGD5) from B1 (LGD5)
Outlook Actions:
Issuer: Chesapeake Energy Corporation
Outlook, Remains Positive
RATINGS RATIONALE
Chesapeake's upgrade and positive outlook reflects Moody's
expectation that the company's credit metrics should continue to
improve as industry conditions remain supportive. The recently
completed Chief acquisition further enhances Chesapeake's size and
scale, combining its existing Marcellus assets with additional
largely contiguous acreage. This follows the Vine acquisition which
meaningfully added to Chesapeake's existing Haynesville assets, and
improves Chesapeake's resilience to a range of industry conditions.
Following Chesapeake's exit from the non-core Powder River Basin,
it also sharpens the company's focus on core high-return natural
gas assets. These actions further reflect the execution of
Chesapeake's strategy and development of a track record post
emergence from bankruptcy.
Chesapeake's Ba2 CFR reflects its large, low-cost natural gas
positions in the Marcellus and Haynesville shale plays, relatively
low financial leverage and the ability to generate meaningful free
cash flow even at modest natural gas prices. The company's annual
interest burden is low relative to cash flow following its
emergence from bankruptcy in early 2021, boosting available cash
flow. Chesapeake's emphasis on natural gas marks a strategic
reversal following many years of attempting to transition to a more
oil and liquids-heavy production mix. Chesapeake's South Texas and
Brazos Valley assets still provide some oil optionality in an
environment of supportive oil prices. Management has stated its
commitment to balance sheet strength through targeting long-term
leverage of less than 1x net debt to EBITDA, while pursuing
shareholder returns including funding its dividend strategy.
Moody's had historically viewed Chesapeake's financial policy as
aggressive, though many of the actions it took in recent years were
necessitated by its then burdensome debt load. Post-bankruptcy
exit, Chesapeake's ability to generate free cash flow through its
natural gas-focused approach provides the opportunity to balance
its capital allocation goals with a more supportive financial
policy. The company's variable dividend strategy, in addition to
its fixed dividend and a potential for opportunistic share
repurchases, will cut cash flow available for capital spending or
significant credit improvement.
This rating action reflects sustained improvement in Chesapeake's
credit profile supported by largely contiguous assets in prolific
basins and the ability to generate consistent free cash flow, which
will enhance its resilience and bolster its capacity to withstand
negative credit impacts from carbon transition risks. While the
financial performance of Chesapeake will continue to be influenced
by industry cycles, compared to historical experience, Moody's
expects future profitability and cash flow in this sector to be
less robust at the cycle peak and worse at the cycle trough because
global initiatives to limit adverse impacts of climate change will
constrain the use of hydrocarbons and accelerate the shift to less
environmentally damaging energy sources.
Chesapeake's senior unsecured notes are rated Ba3, one notch
beneath the company's Ba2 CFR, reflecting the notes' junior
priority claim on assets to borrowings under the secured revolving
credit facility. The Vine notes are pari passu with Chesapeake's
outstanding notes.
Chesapeake's very good liquidity is reflected by its SGL-1 rating
and is supported by its ability to generate meaningful free cash
flow. At March 31, Chesapeake had $19 million of balance sheet
cash, excluding $9 million of restricted cash. Chesapeake's credit
facility has a borrowing base of $2.5 billion and includes a
reserve-based revolving credit facility and a non-revolving loan
facility. The elected commitments are $1.75 billion of Tranche A
Loans and $221 million of fully funded Tranche B Loans. The
revolver matures in 2024 and had $500 million of outstanding
borrowings at March 31. The credit facility is subject to financial
covenants including a maximum total leverage ratio covenant of
3.5x, maximum first lien leverage ratio of 2.75x and minimum
current ratio of 1x. Moody's expects Chesapeake to comfortably
comply with these covenants into 2023. Chesapeake's cash flow is
affected by the company's significant commodity hedge position in
2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company generates consistent
free cash flow after sufficiently reinvesting in the business,
balancing shareholder distributions and debtholders' interests
while following conservative financial policies over a period of
time. For an upgrade, the company should sustain retained cash flow
(RCF) to debt above 40% and leveraged full-cycle ratio (LFCR)
around 2x. Ratings could be downgraded if the company generates
meaningful negative free cash flow, LFCR approaches 1x, RCF to debt
falls below 25% or Chesapeake's financial policy deteriorates, such
as using significant amount of debt for acquisitions or to provide
shareholder payouts.
Oklahoma City, OK-based Chesapeake Energy Corporation is a large
and diversified independent exploration and production company.
The principal methodology used in these ratings was Independent
Exploration and Production published in August 2021.
CTI BIOPHARMA: Incurs $37.2 Million Net Loss in First Quarter
-------------------------------------------------------------
CTI Biopharma Corp. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $37.18 million on $2.30 million of net product sales for the
three months ended March 31, 2022, compared to a net loss of $17.27
million on zero sales for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $131.44 million in total
assets, $159.35 million in total liabilities, and a total
stockholders' deficit of $27.92 million.
As of March 31, 2022, the Company's cash and cash equivalents
totaled $96.9 million. The Company expects its present financial
resources, including expected cash receipts from receivables
arising from historical net product sales of VONJO (but excluding
any proceeds of future net product sales of VONJO), will enable it
to fund its operations into the first quarter of 2023. In
accordance with applicable accounting standards, the Company's
evaluation of its expected cash runway considers only relevant
conditions and events that are known or reasonably knowable at the
date that the financial statements are issued. As a result, the
Company's cash runway evaluation did not include VONJO sales that
it may recognize in the future. The Company expects to include
future net product sales of VONJO in its cash runway projections
once it has an established history of such sales.
"With the accelerated FDA approval and U.S. commercial launch of
VONJO, the first quarter was transformational for CTI and the
myelofibrosis community. We are thrilled to now be delivering
VONJO for patients with cytopenic myelofibrosis who have platelet
counts below 50 x 109/L. Our U.S. commercial team has been in the
field since early March and has delivered net product revenue of
$2.3 million in less than a month, exceeding our internal
expectations and establishing a great foundation for future
performance," said Adam Craig, president and chief executive
officer of CTI BioPharma. "We are also pleased that NCCN quickly
recommended VONJO for the treatment of myelofibrosis, making VONJO
the only approved JAK inhibitor recommended by NCCN for these
patients regardless of platelet counts."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/891293/000089129322000026/ctic-20220331.htm
About CTI BioPharma
Headquartered in Seattle, Washington, CTI BioPharma Corp. is a
biopharmaceutical company focused on the acquisition, development
and commercialization of novel targeted therapies for blood-related
cancers that offer a unique benefit to patients and their
healthcare providers. The Company concentrates its efforts on
treatments that target blood-related cancers where there is an
unmet medical need. In particular, the Company is focused on
evaluating pacritinib, its sole product candidate currently in
active development, for the treatment of adult patients with
myelofibrosis. In addition, the Company has recently started
developing pacritinib for use in hospitalized patients with severe
COVID-19, in response to the COVID-19 pandemic.
CTI Biopharma reported a net loss of $97.91 million for the year
ended Dec. 31, 2021, compared to a net loss of $52.45 million for
the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$72.43 million in total assets, $68.67 million in total
liabilities, and $3.77 million in total stockholders' equity.
Seattle, Washington-based Ernst & Young LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated March 31, 2022, citing that the Company has suffered
recurring losses from operations and has stated that substantial
doubt exists about the Company's ability to continue as a going
concern.
CYPRESS ENVIRONMENTAL: $5MM DIP Loan from APE V Has Final OK
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Cypress Environmental Partners, L.P.
and its debtor-affiliates to use cash collateral on an final basis
in accordance with the budget, with a 15% variance and obtain
post-petition financing.
The Debtors are permitted to borrow up to the principal amount of
$5 million under the DIP Credit Agreement on a final basis,
provided by APE V Cypress, LLC, as lender, and the other lenders
party thereto from time to time, for which APE V Cypress, LLC will
act as administrative agent.
Subject to the terms of the Final Order, the Prepetition First Lien
Secured Parties have agreed (i) to permit the Debtors to use the
cash collateral and (ii) not to object to the DIP Facility,
including the DIP Liens contemplated in connection therewith,
pursuant to the DIP Credit Agreement.
Pursuant to the Amended and Restated Credit Agreement, dated as of
May 29, 2018, as last amended by Second Amendment dated as of
August 13, 2021, among Cypress Environmental Partners, L.P, Tulsa
Inspection Resources-Canada ULC, the Prepetition First Lien Agent,
and the several banks and other financial institutions or entities
from time to time party to the Prepetition First Lien Credit
Agreement as lenders, the Prepetition First Lien Agent and the
Prepetition First Lien Lenders agreed to extend a credit facility
to the Prepetition First Lien Borrowers in an aggregate principal
amount of up to $75,000,000.
As of the Petition Date, the aggregate amount of the Obligations
due and payable by the Prepetition First Lien Borrowers to the
Prepetition First Lien Secured Parties under the Prepetition First
Lien Credit Agreement, equaled approximately $58,853,976 inclusive
of outstanding principal and accrued and unpaid interest as of the
Petition Date.
The Debtors need to obtain immediate access to the postpetition
financing under the DIP Facility and to use cash collateral to,
among other things, permit the orderly continuation of the
operation of their businesses, maintain business relationships with
vendors and suppliers, make capital expenditures, satisfy other
working capital and operational needs, and fund the administration
and prosecution of the Chapter 11 Cases.
The Debtors are authorized, subject to the terms and conditions of
the DIP Facility Documents and the Final Order, to use cash
collateral, including, without limitation, cash collateral on which
the DIP Secured Parties and the Prepetition First Lien Secured
Parties hold a lien to fund (a)(i) working capital, (ii) general
corporate purposes, (iii) restructuring expenses, and (iv) any fees
required under the DIP Credit Agreement or any other DIP Facility
Document, in each case with respect to clauses (i) through (iv),
pursuant to the Approved DIP Budget, subject to Permitted
Variances, and (b) fees and expenses incurred by Professionals.
As adequate protection, the Prepetition First Lien Secured Parties
are granted a valid, binding, continuing, enforceable, fully
perfected replacement security interest in and lien upon the
Prepetition First Lien Collateral, which replacement security
interests and liens and allowed superpriority claims against each
of the Debtors with priority over any and all other administrative
expenses, and other claims against the Debtors.
A copy of the order is available at https://bit.ly/395t2f7 from
PacerMonitor.com.
About Cypress Environmental Partners LP
Cypress Environmental Partners LP offers suite of services includes
inspection, water treatment, and other environmental services that
help their customers protect people, property, infrastructure, and
the environment with a focus on safety and sustainability. Cypress'
primary business, inspection services, provides essential
environmental services, including inspection and integrity services
on a variety of infrastructure assets such as midstream pipelines,
oil and gas well gathering systems, natural gas plants, storage
facilities, pumping stations, compression stations, and natural gas
distribution systems.
Cypress Environmental Partners LP and affiliates sought Chapter 11
bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 22-90039) on
May 8, 2022. In the petition filed by Jeffrey Herbers, authorized
signatory, Cypress Environmental Partners LP listed estimated total
assets amounting to $96,978,000 and total liabilities of
$62,418,000.
The case is assigned to Honorable Bankruptcy Judge Hon. Marvin
Isgur.
The Debtor's counsels are James Grogan, Esq. of PAUL HASTINGS LLP,
Justin Rawlins, Esq., and Matthew Micheli, Esq. FTI CONSULTING,
INC. is the financial advisor, PIPER SANDLER & CO. is the
investment banker,and KURTZMAN CARSON CONSULTANTS LLC is the claims
agent.
APE V Cypress, LLC, as DIP Lender, is represented by Samuel Ory,
Esq. and Frederic Dorwart, Lawyers PLLC.
CYTODYN INC: Jordan Naydenov Quits as Director
----------------------------------------------
Jordan G. Naydenov provided written notice to Cytodyn Inc.'s
corporate secretary of his resignation as a Board member of the
Company as of May 17, 2022. He did not give a reason for his
resignation, according to a Form 8-K filed with the Securities and
Exchange Commission.
About CytoDyn Inc.
Headquartered in Vancouver, Washington, CytoDyn Inc. --
http://www.cytodyn.com-- is a late-stage biotechnology company
focused on the clinical development and potential commercialization
of leronlimab (PRO 140), a CCR5 antagonist to treat HIV infection,
with the potential for multiple therapeutic indications.
Cytodyn reported a net loss of $154.67 million for the year ended
May 31, 2021, compared to a net loss of $124.40 million for the
year ended May 31, 2020. As of Nov. 30, 2021, the Company had
$103.70 million in total assets, $116.40 million in total
liabilities, and a total stockholders' deficit of $12.70 million.
Birmingham, Alabama-based Warren Averett, LLC, the Company's
auditor since 2007, issued a "going concern" qualification in its
report dated July 30, 2021, citing that the Company incurred a net
loss of approximately $154,674,000 for the year ended May 31, 2021
and has an accumulated deficit of approximately $511,294,000
through May 31, 2021, which raises substantial doubt about its
ability to continue as a going concern.
CYTODYN INC: Settles Suit With Former Chief Medical Officer
-----------------------------------------------------------
CytoDyn Inc. and its subsidiary CytoDyn Operations Inc. entered
into a settlement agreement with Richard G. Pestell, M.D. Ph.D.,
its former chief medical officer.
The Settlement Agreement relates to a lawsuit brought by Dr.
Pestell in the U.S. District Court for the District of Delaware
alleging breach of his employment agreement with the Company and
the Company's failure to release from escrow 8,342,000 shares of
the Company's common stock, par value $0.001 per share, in
connection with the Company's 2018 acquisition of ProstaGene LLC,
of which Dr. Pestell was a controlling owner.
Under the Settlement Agreement, the Company agreed to: (1)
relinquish all rights to, and remove all transfer restrictions
from, the 8,342,000 shares of Common Stock; (2) transfer and assign
to Dr. Pestell all rights, title and interest (if any) in and to
certain intangible assets previously written-off by the Company
that had been acquired in the ProstaGene transaction; (3) grant to
Dr. Pestell warrants with a three-year term to purchase 7,000,000
shares of Common Stock at an exercise price of $0.37 per share; and
(4) include the shares issuable upon exercise of the Warrants in a
registration statement to be filed by the Company with the
Securities and Exchange Commission under the Securities Act of
1933, as amended, in connection with a private placement of shares
of Common Stock and warrants being conducted through a placement
agent.
In addition, each of the parties agreed to dismiss the lawsuit and
to release the other party from all claims, whether known or
unknown, as of the Effective Date, other than the rights and
obligations arising out of or in connection with the Settlement
Agreement and related instruments.
About CytoDyn Inc.
Headquartered in Vancouver, Washington, CytoDyn Inc. --
http://www.cytodyn.com-- is a late-stage biotechnology company
focused on the clinical development and potential commercialization
of leronlimab (PRO 140), a CCR5 antagonist to treat HIV infection,
with the potential for multiple therapeutic indications.
Cytodyn reported a net loss of $154.67 million for the year ended
May 31, 2021, compared to a net loss of $124.40 million for the
year ended May 31, 2020. As of Nov. 30, 2021, the Company had
$103.70 million in total assets, $116.40 million in total
liabilities, and a total stockholders' deficit of $12.70 million.
Birmingham, Alabama-based Warren Averett, LLC, the Company's
auditor since 2007, issued a "going concern" qualification in its
report dated July 30, 2021, citing that the Company incurred a net
loss of approximately $154,674,000 for the year ended May 31, 2021
and has an accumulated deficit of approximately $511,294,000
through May 31, 2021, which raises substantial doubt about its
ability to continue as a going concern.
DARLING INGREDIENTS: Moody's Rates New $500MM Unsecured Notes Ba3
-----------------------------------------------------------------
Moody's Investors Service assigned a Ba3 rating to Darling
Ingredients Inc.'s proposed $500 million senior unsecured notes.
All other ratings remain unchanged including Darling's Ba2
Corporate Family Rating, Ba2-PD Probability of Default Rating, the
Ba1 rating on its senior secured credit facilities, and the Ba3
rating on its senior unsecured notes. Darling's SGL-1 Speculative
Grade Liquidity Rating is unchanged and the outlook is positive.
Proceeds from the senior unsecured notes offering will be used for
general corporate purposes, including acquisitions and may be used
to partially fund the acquisition of Valley Proteins, a company
that operates 18 rendering and used cooking oil facilities
throughout the mid-Atlantic, southeast, and southern portion of the
US. Darling announced that it had signed an agreement to acquire
Valley Proteins for $1.1 billion on December 28, 2021 and the
transaction is expected to close during the quarter ended June 30,
2022. Moody's estimates Darling's debt-to-EBITDA, pro-forma for the
Valley Proteins acquisition, was 2.8x as of January 1, 2022 versus
1.9x prior to the acquisition as of the same date. The Valley
Proteins acquisition is credit negative because it increases
leverage though this is partially mitigated by greater scale and
geographic diversity.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Darling Ingredients Inc.
Senior Unsecured Global Notes, Assigned Ba3 (LGD5)
RATINGS RATIONALE
Darling's Ba2 CFR reflects manageable financial leverage, good
geographic and end market diversity, and use of raw material
pricing formulas to help reduce volatility in the majority of its
businesses. The credit profile also reflects some exposure to raw
material price swings and exogenous raw material supply risk. DGD's
asset value is meaningful, but there is some uncertainty regarding
the cash flow effects on Darling given DGD's high reinvestment
levels and event risk surrounding DGD's ownership structure.
Moody's expects the current DGD ownership positions to remain in
place for at least the next several years, and that DGD's operating
cash flow will continue to expand and increase the distribution
potential to Darling.
Moody's expects the market for renewable diesel to grow, but DGD
has different business risk than Darling's recycling/rendering
businesses including high investment needs for capacity expansion,
volatility related to energy prices, and business economics that
are influenced by regulatory policies.
ESG CONSIDERATIONS
Environmental issues are important credit considerations for
Darling's recycling/rendering businesses and for DGD. Moody's
believe that consumer and business preference for
environmentally-friendly products will enhance demand for Darling's
products. Recycling/ rendering reduces waste that would otherwise
need to be stored, and thus reduces landfill usage and the
potential negative effects on the environment. Renewable diesel
reduces pollutants and greenhouse gas emissions relative to
carbon-based energy sources. The production processes of both
Darling and DGD require energy and water usage that must be managed
carefully to minimize the environmental impact. In addition, the
organic raw materials processed by Darling generate air and water
related discharges requiring the Company to invest in pollution
prevention.
Social risks tend to be moderately negative similar to other
protein & agriculture companies. Customer relations risks is low as
the company has very limited direct relationships with customers
and does not face labeling and disclosure risks. Human capital risk
is a credit consideration as Darling has nearly 10,000 employees
and the health and safety risk of these employees is a social risk
given the handling of potentially hazardous materials. Responsible
production is viewed very favorably as result of the company's
rendering business which helps reduce animal waste.
Governance factors are meaningful for good-continued collaboration
between Darling and Valero with respect to DGD's operations,
financial decisions, and ownership structure. The JV reflects the
operational benefits of both partners - Valero's energy expertise
and the use of Darling-sourced raw material as an input to the
plant. Although there are thus operating benefits to keeping the
partners together, such benefits could be replicated by operating
agreements that aren't dependent on co-ownership. Moody's views
long-term event risk related to Darling's DGD ownership, but
believes the likelihood of a change over the next few years as low
given the current planned investment and capacity expansion.
Darling is targeting reducing debt-to-EBITDA (based on the
company's calculation incorporating the company's proportionate
share of DGD's cash distributions) to less than 2.5x over the long
term.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Darling's positive outlook reflects the fact that, provided
successful capture of DGD's earnings via distributions and
significant debt repayments, Darling's credit ratings could be
upgraded in the next 12-18 months. An upgrade is contingent on the
successful growth of DGD as well as Darling utilizing DGD's
distribution income for debt repayment and does not consider any
significant acquisitions.
The ratings could be upgraded if Darling reduces its earnings and
cash flow volatility, and sustains debt to EBITDA below 3.5x
(incorporating cash distributions from DGD in EBITDA).
The ratings could be downgraded if earnings or cash flows decline,
liquidity weakens, there is an increase in the volatility of
earnings and cash flows, or debt to EBITDA is sustained above 4.5x
(incorporating cash distributions from DGD in EBITDA).
The principal methodology used in these ratings was Protein and
Agriculture published in November 2021.
Darling Ingredients Inc., headquartered in Irving Texas, provides
rendering and recycling services to the food industry. The company
processes food waste such as animal by-products, used cooking oil,
and commercial bakery residuals into ingredients used in diverse
applications in the food, pet food, pharmaceutical, feed, fuel, and
fertilizer industries. Ingredients include gelatin, tallow, feed
grade fats, meat and bone meal, poultry meal, yellow grease, fuel
feed stocks, natural casings, and hides. The company's operations
are primarily located in North America and Europe with a modest
presence in China, South America, and Australia. Darling also owns
a 50% interest in the Diamond Green Energy joint venture with
Valero Energy Corporation. The publicly-traded company generates
annual revenue of about $4.7 billion excluding DGD, and DGD's
revenues for fiscal year ended December 2021 were $2.3 billion.
DARLING INGREDIENTS: S&P Rates New $500MM Unsecured Notes 'BB+'
---------------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and '4'
recovery rating to Darling Ingredients Inc.'s (Darling) proposed
$500 million senior unsecured notes due 2030. The '4' recovery
rating indicates its expectation for average (30%-50%; rounded
estimate: 35%) recovery in the event of payment default. The notes
will rank pari passu with the company's existing senior unsecured
debt. The recovery prospects for the senior unsecured noteholders
reflect the significant amount of senior secured claims ranking
ahead of the unsecured notes in the company's capital structure.
S&P expects Darling will use the proceeds from the note offering
for general corporate purposes, including acquisitions that expand
rendering operations in its feed segment.
S&P said, "Our 'BB+' issuer credit rating and stable outlook on
Darling are unchanged. The company reported a solid increase in
revenue and EBITDA through fiscal 2021 supported by higher finished
product pricing and volume sales. We expect the strong organic
growth currently being experienced to persist well into 2022 due to
the tight global grains, fats, and oils environment. As a result,
the strong commodity cycle Darling is currently benefiting from
does not show signs of subsiding in first-half 2022. The stable
outlook reflects our expectation for sustained higher EBITDA of
$800 million to $900 million in Darling's core feed and food
businesses and leverage to remain well below 3.5x."
Darling is a global company that collects and converts food
residuals into ingredients essential for nutrition and bio energy.
The company operates through three segments: feed ingredients, food
ingredients, and fuel ingredients. With operations on five
continents, Darling transform co-products from the agri-food
industry into useable specialty ingredients, such as collagen,
edible fats, feed-grade fats, animal proteins and meals, plasma,
pet food ingredients, organic fertilizers, fuel feedstocks, and
renewable energy. The company also recovers and converts recycled
oils (used cooking oil and animal fats) into valuable fuel and feed
ingredients and collects and processes residual bakery products
into feed ingredients.
The company also operates a joint venture (JV) with Valero Energy
Corp., named Diamond Green Diesel, to produce renewable diesel fuel
and related byproducts.
ISSUE RATINGS – RECOVERY ANALYSIS
Key analytical factors:
-- S&P said, "Under a simulated default scenario, we assume
Darling would reorganize because we believe the company has
established market positions in the food rendering industry, which
has high barriers to entry. Consequently, we continue to use an
enterprise-value approach to assess recovery prospects under a
distressed-case scenario."
-- Darling's capital structure has borrowing subsidiaries in
various jurisdictions, some of which only guarantee debt borrowed
by those subsidiaries. However, the credit agreement has a
collateral allocation mechanism to adjust facilities outstanding in
the event of a default so that there will be no priority claims in
local jurisdictions and various lenders will be treated equally.
-- S&P said, "We value the company on a going-concern basis using
a 5.5x multiplier of our projected emergence EBITDA, which includes
our assumption that the company's share in DGD would remain with
the company at emergence, contribute to our emergence enterprise
value (EV), and be available to senior secured deficiency and
unsecured claims on an unsecured basis, albeit at distressed levels
from current EBITDA at the joint venture. The multiple is higher
than the standard assumption for U.S.-based agribusiness and
commodity foods. This reflects Darling's leadership positions in
the fragmented rendering animal byproducts industry and growth
prospects compared with its peers. We use a 10% cyclicality
adjustment for potential cyclical rebounds in EBITDA in line with
the standard assumption for the agribusiness and commodity foods
industry."
The company's proposed capital structure consists of:
-- $1.5 billion first-lien senior secured cash flow revolver due
in December 2026;
-- $525 million first-lien senior secured term loan B due in 2024
($200 million outstanding);
-- $400 million first-lien delayed-draw senior secured term loan A
due in 2026 (assumed drawn at default)(not rated);
-- $500 million first-lien delayed-draw senior secured term loan A
due in 2026 (assumed drawn at default)(not rated);
-- $500 million, 5.25% senior unsecured notes due in 2027;
-- EUR515 million, 3.625% senior unsecured notes due in 2026; and
-- Proposed $500 million, senior unsecured notes due in 2030.
Simulated default assumptions:
-- Year of default: 2027
-- EBITDA at emergence: $555.8 million
-- Implied enterprise value multiple: 5.5x
Simplified waterfall:
-- Emergence EBITDA: $555.8 million
-- Multiple: 5.5x
-- Gross recovery value: $3.05 billion
-- Net recovery value for waterfall after administrative expenses
(5%): $2.90 billion
-- Obligor/nonobligor valuation split: 57.7% U.S. obligors, 21.3%
(EMEA obligors), 12.6% (rest of the world nonobligors including
DGD), 8.4% (Canada obligors)
-- Collateral value available to senior secured debt: $2.3
billion
-- Estimated senior secured claims: $2.3 billion
--Recovery range for senior secured debt: 90%-100%; rounded
estimate: 95%
-- Collateral value available to senior unsecured debt: $669
million
-- Estimated senior unsecured claims including senior secured
deficiency claims: $1.7 billion
--Recovery range for unsecured debt: 30%-50%; rounded estimate:
35%
All debt amounts include six months of prepetition interest.
DIOCESE OF CAMDEN: New Chapter 11 Plan Disclosures Approved
-----------------------------------------------------------
Vince Sullivan of Law360 reports that the Diocese of Camden
received bankruptcy court approval Tuesday, May 31, 2022, in New
Jersey for a new Chapter 11 plan disclosure statement that outlines
an $87. 5 million settlement with the official committee of tort
claimants.
In an oral ruling from U. S. Bankruptcy Judge Jerrold N. Poslusny
Jr., he addressed objections to the disclosure statement raised by
the diocese's insurers, saying they lacked standing to lodge
objections at this stage of the case because they don't have a
financial interest in the outcome of the disclosure statement
approval.
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.
DIOCESE OF SYRACUSE: Committee Taps Claro Group as Valuation Expert
-------------------------------------------------------------------
The official committee of unsecured creditors of The Roman Catholic
Diocese of Syracuse seeks approval from the U.S. Bankruptcy Court
for the Northern District of New York to employ The Claro Group,
LLC as its valuation expert.
The firm will assist in assessing the value of claims filed in the
Debtor's Chapter 11 case and the allocation of such claims to any
applicable insurance coverage in order for the committee to
effectively negotiate a global settlement with the Debtor and its
insurers.
The firm's services include:
a. providing expert consulting services and expert testimony
regarding the appropriate value of claims of survivors who have
filed claims in this case;
b. providing expert consulting services and expert testimony
in connection with any contested matters or litigation arising in
this case, including without limitation, any settlements entered
into by the Debtor and its insurers without committee consent;
c. providing expert consulting services and expert testimony
in the review and evaluation of reports prepared by the Debtor and
its professionals, and the Debtor's insurers and their
professionals;
d. assisting in the preparation of case filings concerning the
issues for which Claro is providing expert consulting services and
expert testimony;
e. preparing for and providing deposition and court testimony;
f. participating in meetings or discussions with the Debtor
and its professionals, the Debtor's insurers or other
parties-in-interest; and
g. such other expert consulting and advisory services as may
be requested by the committee.
The hourly rates charged by the firm for its services are as
follows:
Managing Director $615 - $685
Director $520
Manager/Senior Manager $370 - $415
Analysts/Consultants/Senior Consultants $280 - $320
Katie McNally $635
Matt Schwab $625
As disclosed in court filings, Claro Group is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Katie McNally
The Claro Group
123 N. Wacker Drive, Suite 2100
Chicago, IL 60606
Phone: 312-546-3400
Fax: 312-554-8085
Email: kmcnally@theclarogroup.com
About The Roman Catholic Diocese of Syracuse
The Roman Catholic Diocese of Syracuse, New York, through its
administrative offices (a) provides operational support to the
Catholic parishes, schools and certain other Catholic entities that
operate within the territory of the Diocese in support of their
shared charitable, humanitarian and religious missions; (b)
conducts school operations by managing tuition and scholarship
payments, employee payroll, and other school-related operating
expenses for separately incorporated Diocesan schools, as well as
providing parish schools with financial, operational and
educational support; and (c) provides comprehensive risk management
services to the OCEs through the Diocese's insurance program. For
more information, visit www.syracusediocese.org
The Roman Catholic Diocese of Syracuse, New York filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bank. N.D.N.Y. Case No. 20-30663) on June 19, 2020. Stephen
A. Breen, chief financial officer, signed the petition. At the time
of filing, the Debtor estimated $10 million to $50 million in
assets and $50 million to $100 million in liabilities.
Judge Margaret M. Cangilos-Ruiz oversees the case.
Bond, Schoeneck and King, PLLC serves as the Debtor's bankruptcy
counsel. The Debtor also tapped Mullen Coughlin LLC as special
counsel, Arete Advisors LLC as cybersecurity consultant, and
Moxfive LLC as technical advisor. Stretto is the claims agent and
administrative advisor.
The U.S. Trustee for Region 2 appointed a committee to represent
unsecured creditors in the Debtor's bankruptcy case. The committee
tapped Stinson, LLP, Saunders Kahler, LLP and Berkeley Research
Group, LLC as its bankruptcy counsel, local counsel and financial
advisor, respectively.
EAGLE BEAR: Files for Chapter 11 to Stop Blackfeet Nation
---------------------------------------------------------
EAGLE BEAR INC., d/b/a ST. MARY-GLACIER PARK KOA, filed for chapter
11 protection in the District of Montana.
The Debtor leases ground adjacent to Glacier National Park from the
Blackfeet Nation. For several years the Debtor and the Blackfeet
Nation have been in litigation concerning the Blackfeet Nation's
contention that the Debtor has breached the lease. Matters are
currently pending before the Bureau of Indian Affairs, the U.S.
District Court for the District of Montana, the Ninth Circuit Court
of Appeals, and the Blackfeet Tribal Court.
The Debtor operates a Kampgrounds of America campground on the land
leased from the Blackfeet Nation. The campground is opened during
the summer tourist season. The campground was scheduled to open for
its summer 2022 season on May 19, 2022. Recently, the Blackfeet
Nation installed padlocks on the gates into the Debtor's campground
as well as barriers across the road. The Blackfeet Nation asserts
the lease was terminated in 2008 and the Debtor has no rights to
occupy or conduct business on the leased ground, despite the last
14 years of campground operation and lease payments. After the
commencement of this case on Monday, May 23, the Debtor upon
consultation with the Blackfeet Nation's attorney, Joseph McKay,
was informed that the Blackfeet Nation will prohibit all access to
the campground whether through locked gates or by blocking the
access road. To avoid a situation in which guests arrived at the
campground and were met with roadblocks, locked gates, and Tribal
Law Enforcement officers, the Debtor cancelled a week of
reservations in light of the Blackfeet Nation's actions.
Just a day after filing for Chapter 11 bankruptcy protection, the
Debtor filed with the Bankruptcy Court an expedited motion seeking
an order determining that the automatic stay is in effect, is
applicable to the Blackfeet Nation, and prohibits the Blackfeet
Nation from interfering with the Debtor’s business operations on
land leased from the Blackfeet Nation.
According to the Debtor, the immediate issue before the Court
implicates 11 U.S.C. Sec. 362(b)(10) which provides that any act of
a lessor to the debtor under a lease of non-residential real
property which was terminated by the expiration of the stated term
of the lease is not subject to the automatic stay. The Debtor
points out that while the U.S. District Court in 21-CV-00088
indicated, based on the limited record before it and without
discovery having been completed, that the Lease may have been
extinguished, that is not a final determination as the case is
proceeding in U.S. District Court for trial on the issue.
Likewise, according to the Debtor, the issue of whether the Lease
was cancelled in 2008 -- as opposed to whether the Tribal Court can
decide the issue -- was not presented to the U.S. District Court
and its decision is presently on appeal. The filing of the instant
bankruptcy case brings the lease dispute before the Court as a
non-terminated lease is protected by the automatic stay, the Debtor
avers.
"The automatic stay is enforceable against the Blackfeet Nation. As
stated in Gruntz, "[T]he automatic stay gives the bankruptcy court
an opportunity to harmonize the interests of both debtor and
creditors while preserving the debtor's assets for repayment and
reorganization of his or her obligations." 202 F.3d at 1081. This
Court has the authority to determine whether the automatic stay
applies to prevent the Blackfeet Nation from any further proceeding
or action that will block the access to the Debtor's business.
This issue needs immediate attention given the statements made by
the Blackfeet Nation and its counsel."
A hearing on the Debtor's motion was held in Bankruptcy Court on
May 27. According to the minutes of the hearing, both sides gave
argument. The Bankruptcy Court granted Motion for Judicial Notice.
After recess, the Court ruled that automatic stay applied and that
lease was property of the estate. Blackfeet Nation is to remove any
impediment to Debtor's campgrounds by May 31st.
Attorneys for Blackfeet Nation:
Joseph J. McKay
P.O. Box 1803
Browning, MT 59417
Phone: (406) 338-7262
Email: powerbuffalo@yahoo.com
* * *
According to court filings, Eagle Bear estimates between 1 and 49
unsecured creditors. The petition states that funds will be
available to unsecured creditors.
About Eagle Bear Inc.
Eagle Bear Inc. -- https://koa.com/campgrounds/st-mary/ -- operates
RV (Recreational Vehicle) Parks and recreational camping ground
resort.
Eagle Bear filed a voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Mont. Case No. 22-40035) on May
23, 2022. In the petition signed by Susan Brooke, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Benjamin P. Hursh oversees the case.
Patten, Peterman, Bekkedahl, and Green, PLLC, serves as the
Debtor's legal counsel.
ECTOR COUNTY ENERGY: Defends Chapter 11 Plans vs. Challenges
------------------------------------------------------------
Vince Sullivan of Law360 reports that the owner of a bankrupt Texas
power plant defended its Chapter 11 intentions Tuesday, May 31,
2022, in the Delaware bankruptcy court, saying its access to lender
cash is critical to its case, which is not being run for the
benefit of equity holders.
During a virtual hearing, Ector County Energy Center LLC's
attorney, John J. Monaghan of Holland & Knight LLP said Ector has a
stalking horse bid in hand for its power plant that would provide
recoveries to junior creditors despite the senior lenders, whose
cash collateral is being used to fund the case, only receiving
about 22% of recoveries.
About Ector County Energy Center
Ector County Energy Center, LLC owns and operates a 330 MW natural
gas-fired power generating facility in Ector County, Texas.
Ector County Energy Center sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 22-10320) on April 11, 2022. In the
petition signed by CRO John D. Baumgartner, the Debtor estimated
assets between $50 million and $100 million and estimated
liabilities between $500 million and $1 billion.
Judge John T. Dorsey oversees the case.
The Debtor tapped Holland & Knight, LLP as lead bankruptcy counsel;
Polsinelli, PC as local counsel; Locke Lord, LLP and Crowell &
Moring, LLP as special counsels; Perella Weinberg Partners, LP and
Tudor, Pickering, Holt & Co. as investment bankers; and Grant
Thornton, LLP as restructuring advisor. John Baumgartner, managing
director at Grant Thornton, serves as the Debtor's chief
restructuring officer. Donlin Recano & Company Inc. is the claims
agent.
EL JEBOWL: Seeks Continued Cash Collateral Access
-------------------------------------------------
El Jebowl, LLC asks the U.S. Bankruptcy Court for the District of
Colorado for authority to continue using cash collateral.
The Debtor seeks to use cash collateral in accordance with the
proposed budget, the Final Order, and the Stipulation with Colorado
Department of Revenue for the Use of Cash Collateral.
The Final Order governs the terms of the Debtor's use of cash
collateral and provides in part that the Order can be continued by
the Debtor filing a new proposed budget and providing notice with
an opportunity to object to secured creditors with a lien on cash
collateral and any party who has entered their appearance in the
case.
The Final Order approved a budget continuing through July 31,
2022.
The Debtor has submitted a proposed budget that covers the period
commencing August 1 through November.
A copy of the motion and the Debtor's budget for the period from
May to November 2022 is available at https://bit.ly/3zccHQI from
PacerMonitor.com.
The Debtor projects $34,600 in cash receipts and $42,308 in total
cash disbursements for June 2022.
About El Jebowl LLC
El Jebowl, LLC sought Chapter 11 protection (Bankr. D. Colo. Case
No. 22-10004) on Jan. 2, 2022, listing up to $100,000 in assets and
up to $500,000 in liabilities. Judge Thomas B. McNamara oversees
the case.
The Law Offices of Kevin S. Neiman, PC and Wadsworth Garber Warner
Conrardy, PC serve as the Debtor's bankruptcy counsels. Sumrall &
Bondy, PC is tapped to provide professional tax and accounting
services.
Veritex Community Bank, as lender, is represented by Markus
Williams Young & Hunsicker LLC.
ELITE HOME: Cash Collateral Access, M&T Bank DIP Loan OK'd
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey authorized
Elite Home Products, Inc. to use cash collateral and continue using
the revolving credit facility from M&T Bank, both being subject to
the terms and conditions of the parties' Loan Documents, which will
be fully applicable post-petition, within and for the purposes
specified in the Cash Collateral Budget, with a 15% variance.
The Debtor requires immediate authority to use cash collateral and
continue its prepetition financing arrangements with M&T Bank to
continue its business operations without interruption toward the
objective of a sale of its operating business assets to a buyer
that will continue to operate the business and maintain employment
of material portions of the Debtor's workforce or through an
orderly liquidation.
At the time of the Chapter 11 filing, the Debtor owed the Bank
$2,617,022 in principal, as of March 23, 2022, plus accrued
interest, fees, and costs, on account of a revolving credit
facility.
As adequate protection for use of cash collateral, the Bank is
granted a replacement perfected security interest in all
post-petition assets of the Debtor and a post-petition lien and
security interest on all post-petition property and assets of the
Debtor within the definition of the Bank Collateral, to secure the
Debtor's obligations. The Bank's lien and security interest have
first priority.
To the extent the adequate protection provided in the Court's Order
proves insufficient to protect the Bank's interest in and to the
cash collateral, the Bank will have a superpriority administrative
expense claim, pursuant to Section 507(b) of the Bankruptcy Code,
senior to any and all claims against the Debtor under Section 07(a)
of the Bankruptcy Code, whether in the proceeding or in any
superseding proceeding.
The liens and security interests granted are automatically deemed
perfected upon entry of the Order without the necessity of the Bank
taking possession, filing financing statements, mortgages or other
documents.
A copy of the order and the Debtor's 13-week budget through June
11, 2022 is available at https://bit.ly/3MLeLmH from
PacerMonitor.com.
The Debtor projects $1,201,523 in total disbursements for the
period.
About Elite Home Products, Inc.
Elite Home Products, Inc. is a home textile company that offers a
wide variety of sheets, duvets and comforter covers, bedding
ensembles, quilt sets, blankets & throws, and flannel.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. N.J. Case No. 22-12353) on March 24,
2022. In the petition signed by Scott R. Perretz, president, the
Debtor disclosed $6,314,175 in assets and $11,104,637 in
liabilities.
Judge Stacey L. Meisel oversees the case.
Genova Burns LLC represents the Debtor as lead counsel, Winne Banta
Basralian and Kahn, P.C. is the special counsel, Getzler Henrich
and Associates, LLC is the financial advisor, and SAX LLP is the
accountant.
EQM MIDSTREAM: Moody's Rates New Senior Unsecured Notes 'Ba3'
-------------------------------------------------------------
Moody's Investors Service assigned Ba3 ratings to EQM Midstream
Partners, LP's proposed issuance of senior unsecured notes. The
proceeds of the new notes will be used to tender for any and all of
the 2023 senior unsecured notes and to partially tender for 2024
and 2025 unsecured notes.
EQM's existing ratings, including the Ba3 Corporate Family Rating,
Ba3 rating on its existing senior unsecured notes and Ba3-PD
Probability of Default rating are not affected by this action. The
Speculative Grade Liquidity rating is unchanged at SGL-3. The
outlook remains negative.
Assignments:
Issuer: EQM Midstream Partners, LP
Senior Unsecured Regular Bond/Debenture, Assigned Ba3 (LGD4)
RATINGS RATIONALE
EQM's use of the proceeds from the proposed issuance to tender for
all of 2023 notes and to partially tender for 2024 and 2025 notes,
is credit neutral as the overall debt burden of the company remains
unchanged. The new notes, revolving credit facility, and existing
senior unsecured notes are all unsecured and pari passu.
Accordingly, the existing unsecured notes and new unsecured notes
are rated Ba3, the same as the CFR.
Pro forma for the issuance of the proposed new notes and the
repayment of the existing notes, EQM's capital structure will
include its $2.16 billion revolving credit facility which is due
in April 2025, but will step down to a $1.55 billion facility in
October 2023 ($180 million of outstanding borrowings and $235
million of letters of credit outstanding as of March 31, 2022),
$6.5 billion of senior unsecured notes with staggered maturities.
Additionally, Eureka Midstream, LLC a subsidiary of EQM had
approximately $268 million of outstanding borrowings under its $400
million senior secured revolving credit facility maturing in
November 2024 (unrated), as of March 31, 2022.
EQM's Ba3 CFR reflects its substantial asset and cash flow profile
that provides the company with alternatives to moderate its debt
burden and financial leverage even without the contribution of
Mountain Valley Pipeline's (MVP) cash flow. EQM is supported by its
close proximity to high production volumes in the Marcellus Shale
and the critical nature of its pipelines for moving natural gas
within the region to long haul pipelines. In early 2020, EQM
renegotiated the majority of its Pennsylvania and West Virginia
gathering contracts with its anchor shipper EQT Corporation to
enter into a new 15-year gas gathering agreement with longer-term
and higher minimum volume commitments (MVCs). Even without MVP's
completion the contract provides for 3 Bcf per day of MVC to EQM.
With over 60% of EQM's 2021 revenues derived from EQT, EQM's
counterparty concentration risk benefits from EQT's improving
credit profile.
As of May 2022, MVP's full in-service date has been further delayed
into the second half of 2023 and the total project budget has been
increased to $6.6 billion. In addition to the increased stress on
EQM's credit metrics, at least through 2023, caused by higher
debt-funded MVP capital spending and delay in MVP's cash flow
generation, the completion uncertainty also introduces other risks
to EQM vis-a-vis the company's complex contractual and financial
arrangements with EQT. MVP's repeated completion delays demonstrate
the ever-rising complexities in new pipeline development including
delays caused by post-permit legal challenges and impact of the
judicial process in affecting the outcome of such projects.
EQM's negative outlook reflects the negative effect of MVP's
repeated delays and cost overruns on its credit metrics and the
risks that not completing the pipeline have on the company's
contractual arrangements and legal disputes with its anchor shipper
EQT.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
EQM's ratings could be downgraded if MVP's budget continues to rise
and if EQM's debt leverage approaches 6x and is likely to remain at
that level. EQM's ratings could also be downgraded if MVP is not
likely to be online or if EQM's credit profile is significantly
weakened due to issues emanating from MVP or its contracts with
EQT.
An upgrade of EQM is unlikely given MVP's completion uncertainty.
EQM's ratings could be considered for an upgrade if MVP is
completed and the project's cash flow strengthens EQM's standalone
credit profile and the company's Debt/EBITDA approaches 5x. Given
the company's significant customer concentration, EQT's ratings
must be at least at Ba2 to consider an upgrade of EQM's ratings.
EQM Midstream Partners, LP is an indirect, wholly owned subsidiary
of Equitrans Midstream Corporation that owns and operates
interstate pipelines, gathering lines and water assets primarily
serving Marcellus Shale production.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
EQM MIDSTREAM: S&P Rates New $800MM Notes Due 2027/ 2030 'BB-'
--------------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '3'
recovery rating to EQM Midstream Partners L.P.'s (EQM) proposed
$800 million senior notes due 2027 and 2030. The '3' recovery
rating indicates its expectation for meaningful (50%-70%; rounded
estimate: 55%) recovery in the event of a default. The partnership
intends to use the net proceeds from these offerings to repay its
outstanding notes due 2023, 2024, and 2025.
EQM operates in the Marcellus and Utica Shale regions and is wholly
owned by Equitrans Midstream (ETRN). The partnership provides
midstream services to producers, utilities, and other customers
through its natural gas transmission, storage, and gathering
systems and water services business. EQM owns 950 miles of U.S.
Federal Energy Regulatory Commission (FERC)-regulated interstate
pipelines and approximately 1,170 miles of high-pressure gathering
lines.
EQT CORP: Moody's Alters Outlook on 'Ba1' CFR to Positive
---------------------------------------------------------
Moody's Investors Service changed EQT Corporation's outlook to
positive from stable. Moody's also affirmed the Ba1 Corporate
Family Rating, the Ba1-PD Probability of Default Rating, and its
Ba1 unsecured notes rating. The SGL-1 Speculative Grade Liquidity
(SGL) rating was unchanged.
"EQT's positive outlook reflects our expectation for the company's
execution of its debt reduction plan, strong cash flow prospect
that positions the company for further debt reduction and the
company's ability to modestly grow production while maintaining
capital spending discipline," said Sreedhar Kona, Moody's Senior
Analyst. "The company's continued focus on prioritizing debt
reduction with some modest level of shareholder returns and further
reduction of debt will provide greater resilience and position the
company for an investment grade rating."
Affirmations:
Issuer: EQT Corporation
Corporate Family Rating, Affirmed Ba1
Probability of Default Rating, Affirmed Ba1-PD
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 (LGD4)
Senior Unsecured Shelf, Affirmed (P)Ba1
Senior Unsecured Medium-Term Note Program, Affirmed (P)Ba1
Outlook Actions:
Issuer: EQT Corporation
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
EQT's rating reflects the substantial improvement in its organic
capital efficiency and continued progress towards its debt
reduction goal. The company's cost structure improvements have
allowed the company to generate meaningful free cash flow while
maintaining its production output and to realize improved credit
metrics in a volatile natural gas price environment. The company's
multi-pronged strategy to efficiently develop its acreage, navigate
its hedging strategy, and further reduce its absolute debt level
enhance its resilience and support its rating and outlook. EQT's
continued focus on absolute debt reduction and evolving its
commodity hedge book points to increased visibility in free cash
flow and enhanced credit metrics that was supported by restrained
capital spending in the previous two years. Moody's expects the
company to prioritize debt reduction over reserves and production
growth.
EQT's stronger business and financial profiles will bolster its
ability to withstand negative credit impacts from carbon transition
risks. While the financial performance of the company will continue
to be impacted by industry cycles, Moody's expects future
profitability and cash flow in this sector to be less robust at the
cycle peak and worse at the cycle trough compared to the past.
Global initiatives to limit the adverse impacts of climate change
will constrain the use of hydrocarbons and accelerate the shift to
less environmentally damaging and renewable energy sources.
The company's senior unsecured notes are rated Ba1, which is the
same as its CFR, because the debt portion of its capital structure
is all unsecured, including its $2.5 billion revolving credit
facility.
Moody's expects EQT to have very good liquidity over the next 12 to
18 months, as reflected in its SGL-1 rating. As of March 31, 2022,
the company had $17 million of cash on hand and over $2 billion of
availability under its $2.5 billion revolving credit facility that
expires in July 2023. The company had $26 million drawn and $425
million letters of credit posted under the facility. The revolving
credit facility has a maximum debt-to-capitalization ratio of 65%.
EQT was in compliance with this requirement at March 31, and
Moody's expect the company to meet this debt provision going
forward. Additionally, EQT has substantial natural gas reserves and
acreage that could be sold or act as collateral for subsequent
funding sources if additional liquidity were needed. EQT's next
upcoming debt maturities are $10 million in March 2023 and $1
billion in February 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
EQT's ratings could be upgraded if the company is able to reduce
its debt burden substantially while maintaining its current
production levels to generate free cash flow. The company would
need to sustain its retained cash flow-to-debt (RCF/Debt) metric
above 50% and its leverage full-cycle ratio (LFCR) above 2x.
EQT's ratings could be downgraded if the company fails to
meaningfully reduce debt or if a substantial decline in reserves
and production occurs. The ratings could be downgraded if its
retained cash flow-to-debt (RCF/Debt) ratio falls below 30%.
EQT Corporation is an independent exploration and production (E&P)
company focused on developing natural gas assets in the Appalachian
Basin.
The principal methodology used in these ratings was Independent
Exploration and Production published in August 2021.
FORE MACHINE: Wins Continued Access to Cash Collateral
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, on April 5, 2022, entered the DIP/Cash Collateral
Order that, among other things, permitted Fore Machine, LLC and its
affiliates to: (a) enter into a $2,500,000 DIP Facility with the
DIP Lenders; (b) continue to use the cash collateral of the
Debtors' Prepetition Lenders; and (c) grant adequate protection to
the DIP Lenders and the Prepetition Lenders.
The DIP Facility and the Debtors' use of cash collateral was, and
remains, critical to providing the Debtors with sufficient
liquidity to maximize the value of their estates for their
creditors. The Debtors used the DIP Facility's proceeds to, among
other things, (a) with respect to Aero Components, LLC, honor
employee wages and benefits, procure goods and services, fund
general and corporate operating needs and the administration of the
chapter 11 cases, and (b) with respect to the liquidating debtors,
Aero Holdings, LLC, Fore Machine, LLC and Fore Capital Holding,
LLC, begin the process of conducting an orderly and efficient
wind-down of the Liquidating Debtors and the liquidation of
substantially all of the assets of Fore Machine LLC. The Debtors
continue to use cash collateral to fund their day to day needs
pursuant to the Approved Budget.
It is important to the success of Aero that the Effective Date of
the First Amended and Restated Aero Components, LLC's Chapter 11
Plan of Reorganization, occur soon as possible. Since entry of the
order confirming Aero's Plan, Aero and the plan sponsors have been
working very hard to prepare for the Effective Date and have
targeted an Effective Date of June 3, 2022. However, due to the
need to complete the liquidation of Fore Machine's assets, the
Effective Date of the First Amended Joint Chapter 11 Plan of the
Liquidating Debtors will not occur until sometime after the Aero
Plan Effective Date.
The Debtors anticipate drawing the remaining amounts available
under the DIP Loan Agreement, $1,900,000, and depositing the
proceeds into a bank account for use solely by Aero on and after
the Aero Plan Effective Date, including to pay amounts due to
holders of Allowed Claims under the Aero Plan.
Moreover, on the Aero Plan Effective Date, the Line of Credit
Termination Date will occur under the DIP Loan Agreement. This
means that the DIP Lenders will have no further obligation to make
advances under the DIP Facility to the Debtors (even if amounts
remained in the DIP Facility).
While the Liquidating Debtors will not have access to advances
under the DIP Facility after the Aero Plan Effective Date, they
will have access to their cash on hand, including the deposit and
net minimum guaranteed amount under the Auction Services Agreement
with Guarantee with Perfection -- approximately $2.4 million --
provided, that, the Liquidating Debtors continue to have access to
Cash Collateral.
The Liquidating Debtors will continue to have a critical need for
the continued use of Cash Collateral to meet their liquidity
requirements and complete the auction of Machine's assets.
Therefore, the Lenders have consented to the Liquidating Debtors'
use of Cash Collateral from and after the Aero Plan Effective Date
until the Liquidating Debtors' Plan Effective Date.
The Debtors also note they are on the precipice of an Event of
Default under the DIP Loan Agreement. The DIP Facility provides
that it shall constitute an Event of Default if the RSA Termination
Date occurs, and the initial Sponsor does not exercise the
"Pre-Petition Obligation Purchase Option Agreement" within 30 days.
The RSA Termination Date occurred on May 3, 2022, when the Initial
Sponsor removed $19.5 million from escrow placed there at the
beginning of the Chapter 11 cases. The "Pre-Petition Obligation
Purchase Option Agreement" is an agreement between the Initial
Sponsor and the Prepetition Lenders under which the Initial Sponsor
had an option to acquire the Prepetition Lenders' debt for $19.5
million and take assignment of the Pre-Petition Loan Documents.
Upon information and belief, this will not occur before June 2,
2022. Thus, on June 3, 2022, the RSA Event of Default will occur
under the DIP Facility.
The DIP Agent, the DIP Lenders, the Prepetition Agent, and the
Prepetition Lenders do not want the Aero Plan Effective Date or the
transactions contemplated by the Aero Plan or the Liquidating
Debtors' Plan to cause the termination of the Liquidating Debtors'
use of Cash Collateral, an Event of Default under the DIP Facility,
or to limit payment of Professionals to the Carve-Out. Therefore,
the Lenders are willing to waive the RSA Event of Default to ensure
the smooth completion of these cases.
In exchange for the Liquidating Debtors' continued use of cash
collateral from and after the Aero Plan Effective Date, and the
waiver of the RSA Event of Default, the Debtors agree to continue
to abide by the terms and conditions of the DIP/Cash Collateral
Order (including the terms that provide the Prepetition Agent, for
the benefit of the Prepetition Lenders, with a Replacement Lien),
as amended by Amendment No. 1 to DIP/Cash Collateral Order.
In a June 1 order, the Bankruptcy Court held that from and after
the Aero Plan Effective Date and until the Liquidating Debtors'
Plan Effective Date, the Liquidating Debtors are authorized to use
Cash Collateral but solely pursuant to the terms and conditions of
the DIP/Cash Collateral Order.
About Fore Machine, LLC
Fore Machine, LLC manufactures aircraft engines and engine parts.
Fore Machine and its affiliates Aero Components, LLC, Fore Aero
Holdings, LLC, and Fore Capital Holding, LLC, sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead
Case No. 22-40487-11) on March 7, 2022. The cases are jointly
administered. In the petitions signed by Jens Verloop, chief
financial officer, Fore Machine disclosed up to $50 million in both
assets and liabilities.
Katherine A. Preston, Esq., at Winston & Strawn LLP, is the
Debtor's counsel.
Stevens & Lee, led by Robert Lapowsky, Esq., represents the lenders
NewSpring Mezzanine Capital III, L.P. and Southfield Mezzanine
Capital, L.P.
FUSE GROUP: Incurs $207K Net Loss in Second Quarter
---------------------------------------------------
Fuse Group Holding Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $207,399 on zero revenue for the three months ended March 31,
2022, compared to net income of $46,367 on $250,000 of revenue for
the three months ended March 31, 2021.
For the six months ended March 31, 2022, the Company reported a net
loss of $201,495 on $200,000 of revenue compared to a net loss of
$33,575 on $350,000 of revenue for the six months ended March 31,
2021.
As of March 31, 2022, the Company had $216,157 in total assets,
$392,882 in total liabilities, and a total stockholders' deficit of
$176,725.
Fuse Group stated, "If we are not successful in developing the
mining business and establishing profitability and positive cash
flow, additional capital may be required to maintain ongoing
operations. We have explored and continue to explore options to
provide additional financing to fund future operations as well as
other possible courses of action. Such actions may include, but
are not limited to, securing lines of credit, sales of debt or
equity securities (which may result in dilution to existing
shareholders), loans and cash advances from other third parties or
banks, and other similar actions. There can be no assurance we
will be able to obtain additional funding (if needed), on
acceptable terms or at all, through a sale of our common stock,
loans from financial institutions, or other third parties, or any
of the actions discussed above. If we cannot sustain profitable
operations, and additional capital is unavailable, lack of
liquidity could have a material adverse effect on our business
viability, financial position, results of operations and cash
flows."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1636051/000118518522000606/fuseent20220331_10q.htm
About Fuse Group
Headquartered in Arcadia, CA, Fuse Group provides consulting
services to mining industry clients to find acquisition targets
within the parameters set by the clients, when the mine owner is
considering selling its mining rights. The services of Fuse Group
and Fuse Processing, Inc. include due diligence on the potential
mine seller and the mine, such as ownership of the mine and whether
the mine meets all operation requirements and/or is currently in
operation.
Fuse Group reported a net loss of $1.02 million for the year ended
Sept. 30, 2021, compared to a net loss of $51,411 for the year
ended Sept. 30, 2020. As of Dec. 31, 2021, the Company had $145,608
in total assets, $114,934 in total liabilities, and $30,674 in
total stockholders' equity.
New York, NY-based Paris, Kreit & Chiu CPA LLP, the Company's
former auditor, issued a "going concern" qualification in its
report dated Feb. 11, 2022, citing that as of Sept. 30, 2021, the
Company had recurring losses from operations, an accumulated
deficit, and a negative cash flows from operating activities. As
such there is substantial doubt about its ability to continue as a
going concern.
GODFREY ROSE: Monticello, NY Property Owner Files for Chapter 11
----------------------------------------------------------------
Godfrey Rose LLC filed for chapter 11 protection in Brooklyn, New
York, without stating a reason.
The Debtor disclosed $2,001,200 in assets against $1,229,932 in
liabilities.
The Debtor owns a 10-acre property at Burton Ave., in Monticello,
New York, valued at $1 million; and a 12-acre property at David
Avenue, in Monticello, New York, also valued at $1 million.
According to court filing, Godfrey Rose LLC estimates between 1 and
49 unsecured creditors. The petition states funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Sec. 341(a) is slated for
July 1, 2022, at 10:00 AM at Teleconference - Brooklyn.
The Debtor's Chapter 11 Plan and Disclosure Statement are due Sept.
20, 2022.
About Godfrey Rose LLC
Godfrey Rose LLC is a Single Asset Real Estate (as defined in 11
U.S.C. Sec. 101(51B).
Godfrey Rose LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-41109) on May 23,
2022. In the petition filed Eddie Doran, as member, Godfrey Rose
estimated assets and liabilities between $1 million and $10 million
each. Joshua R Bronstein is the Debtor's counsel.
GOODYHOUSE LLC: Fudge Farm in Chapter 11 Bankruptcy
---------------------------------------------------
GoodyHouse LLC, doing business as Fudge Farm and formerly doing
business as GoodyHouse Chocolate Company, filed for chapter 11
protection in the Western District of Pennsylvania.
The Debtor is an LLC that does business as a restaurant with two
locations and a floor truck. The Debtor has 24 hourly employees
all of whom work at the Debtor's restaurants and food truck as
servers and food preparation.
According to court filing, GoodyHouse estimates between 1 and 49
unsecured creditors. The petition states that funds will be
available to unsecured creditors.
About GoodyHouse LLC
GoodyHouse LLC -- https://goodyhouse.com/ -- doing business as The
Fudge Farm and formerly doing business as GoodHouse Chocolate
Company. It is a gourmet Fudge & Chocolate Retailer and
wholesaler. It carries the largest variety of Fudge in Western
Pennsylvania. Most of it is Gluten-Free, has 40% less sugar & no
preservatives.
GoodyHouse LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-20975) on May 23,
2022. In the petition filed by Walter Rainey, as managing member,
GoodyHouse LLC listed estimated assets between $100,000 and
$500,000 and estimated liabilities between $500,000 and $1 million.
Christopher M. Frye, of Steidl & Steinberg, is the Debtor's
counsel.
HELIUS MEDICAL: All Three Proposals Passed at Annual Meeting
------------------------------------------------------------
At the annual meeting of stockholders of Helius Medical
Technologies, Inc., the Company's stockholders:
(i) elected Blane Walter, Dane C. Andreeff, Edward M. Straw,
Jeffrey Mathiesen, Paul Buckman, and Sherrie Perkins as directors,
each to serve for a one-year term until the 2023 annual meeting of
stockholders or until his or her successor is duly elected and
qualified or until his or her earlier death, resignation or
removal;
(ii) ratified the appointment of BDO USA, LLP as the Company's
independent registered public accounting firm for the year ending
Dec. 31, 2022; and
(iii) approved the Helius Medical Technologies, Inc. 2022 Equity
Incentive Plan.
About Helius Medical
Helius Medical Technologies -- http://www.heliusmedical.com-- is a
neurotech company focused on neurological wellness. Its purpose is
to develop, license or acquire non-invasive technologies targeted
at reducing symptoms of neurological disease or trauma.
Helius Medical reported a net loss of $18.13 million for the year
ended Dec. 31, 2021, compared to a net loss of $14.13 million for
the year ended Dec. 31, 2020. As of March 31, 2022, the Company
had $9.62 million in total assets, $2.49 million in total
liabilities, and $7.13 million in total stockholders' equity.
Philadelphia, Pennsylvania-based BDO USA, LLP, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated March 14, 2022, citing that the Company has incurred
substantial net losses since its inception, has an accumulated
deficit of $137.0 million as of Dec. 31, 2021 and the Company
expects to incur further net losses in the development of its
business. These conditions raise substantial doubt about its
ability to continue as a going concern.
IBIO INC: Incurs $12.4 Million Net Loss in Third Quarter
--------------------------------------------------------
iBio, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss attributable to
the company of $12.39 million on $1.94 million of revenues for the
three months ended March 31, 2022, compared to a net loss
attributable to the company of $7.66 million on $765,000 of
revenues for the three months ended March 31, 2021.
For the nine months ended March 31, 2022, the Company reported a
net loss attributable to the company of $33.25 million on $2.32
million of revenues compared to a net loss attributable to the
company of $23.32 million on $1.88 million of revenues for the nine
months ended March 31, 2021.
As of March 31, 2022, the Company had $115.37 million in total
assets, $35.99 million in total liabilities, and $79.38 million in
total equity.
As of March 31, 2022, the Company had cash and cash equivalents
plus debt securities of approximately $54.5 million, including $5.9
million of restricted cash, as compared to $97.0 million as of June
30, 2021. Based on assumptions related to its business, including
the sale-leaseback of the Bryan facility and collection of money
owed to iBio by Fraunhofer among others, management believes the
Company has adequate cash to support the Company's activities
through at least Sept. 30, 2023.
Net cash used in operating activities was approximately ($26.0)
million for the nine months ended March 31, 2022. The use of cash
was primarily attributable to funding its net loss for the period.
Net cash used in investing activities of approximately ($5.6)
million for the nine months ended March 31, 2022, was attributable
primarily to the purchase of ($5.5) million of debt securities
offset by the redemption of debt securities of $9.7 million, the
purchase of fixed assets of ($3.9) million and the agreements
entered into with RubrYc Therapeutics, Inc. which resulted in the
purchase of equity securities of ($1.8) million and additions of
intangible assets of ($4.3) million.
Net cash used in financing activities during the nine months ended
Dec. 31, 2022, was approximately ($6.1) million and mainly
attributable to the Payment of Finance Lease Obligations related to
the purchase of the manufacturing facility of ($5.8) million and
($0.3) million in costs to attain term note.
The Company has incurred significant losses and negative cash flows
from operations since its spin-off from Integrated BioPharma in
August 2008. As of March 31, 2022, the Company's accumulated
deficit was approximately $ (206.9) million and the Company used
approximately ($26.0) million of cash for operating activities
during the nine months ended March 31, 2022.
Based on management projections including assumptions regarding the
sale-leaseback of the Bryan facility and the payment of money owed
to iBio by Fraunhofer among others and on the total cash and cash
equivalents plus investments in debt securities of approximately
$57.4 million including restricted cash of $5.9 million as of Dec.
31, 2021, management believes the Company has adequate cash to
support the Company's activities through at least Sept. 30, 2023.
iBio plans to fund its future business operations using existing
cash and liquid resources, through proceeds realized in connection
with the commercialization of its technologies and proprietary
products, government grants, license and collaboration arrangements
relating to the operation of iBio CDMO, and through proceeds from
the sale of additional equity or other securities. Although it has
been successful in raising capital during the past year, the
Company cannot be certain that such funding will be available in
the future on favorable terms or at all. The Company also plans to
explore potential longer-term financing options for its Facility,
including, but not limited to, a potential sale-leaseback
transaction. The Company anticipates that expenses will increase
as it further expands its operations, including its planned
establishment of drug discovery capabilities in San Diego,
California. In addition, further product development is also
expected to increase expenses, including but not limited to the
advancing IBIO-100, IBIO-101, IBIO-202, IBIO-400 and additional
immune-oncology pipeline products in fiscal 2022. To the extent
that the Company raises additional funds by issuing equity
securities, the Company's stockholders may experience significant
dilution. If the Company is unable to raise funds when required or
on favorable terms, this assumption may no longer be operative, and
the Company may have to: a) significantly delay, scale back, or
discontinue the product application and/or commercialization of its
proprietary technologies; b) seek collaborators for its technology
and product candidates on terms that are less favorable than might
otherwise be available; c) relinquish or otherwise dispose of
rights to technologies, product candidates, or products that the
Company would otherwise seek to develop or commercialize; or d)
possibly cease operations.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1420720/000142072022000024/ibio-20220331x10q.htm
About iBio Inc.
iBio, Inc. -- http://www.ibioinc.com-- is a plant-based biologics
manufacturing company. Its FastPharming System combines vertical
farming, automated hydroponics, and novel glycosylation
technologies to rapidly deliver high-quality monoclonal antibodies,
vaccines, bioinks and other proteins. iBio is developing
proprietary products which include biopharmaceuticals for the
treatment of cancers, as well as fibrotic and infectious diseases.
The Company's subsidiary, iBio CDMO LLC, provides FastPharming
Contract Development and Manufacturing Services along with
Glycaneering Development Services for advanced recombinant protein
design.
iBio reported a net loss attributable to the Company of $23.21
million for the year ended June 30, 2021, a net loss attributable
to the company of $16.44 million for the year ended June 30, 2020,
and a net loss attributable to the Company of $17.59 million for
the year ended June 30, 2019. As of Sept. 30, 2021, the Company
had $143.74 million in total assets, $43.21 million in total
liabilities, and $100.53 million in total equity.
INFOW LLC: Ch. 11 Case Highlights Small Biz. Bankruptcy Law Limits
------------------------------------------------------------------
James Nani of Bloomberg Law reports that InfoW LLC's Infowars case
spotlights limits of small business bankruptcy law.
Infowars affiliates' Chapter 11 case is drawing high-profile
attention to the issue of who's eligible for a relatively new type
of bankruptcy filing that promises to be less cumbersome for small
businesses.
The question is part of a laundry list of challenges the right-wing
conspiracy site's owner, Alex Jones, is facing in his efforts to
use "Subchapter V" bankruptcy to minimize the fallout from
judgments for his false statements about the Sandy Hook school
shooting.
The Debtors filing bankruptcy cases under Subchapter V of Chapter
11 of the US Bankruptcy Code have access to a variety of benefits
aimed at streamlining legal proceedings, such as not having to face
a creditor committee. But the law requires debtor companies to be
"engaged in business" to qualify for Subchapter V, a provision
that's caused mixed interpretation and is working its way toward
appellate review.
The three Infowars-tied debtors -- which have been accused of being
mere shell companies -- will have to answer to the US Bankruptcy
Court for the Southern District of Texas as to how they qualify as
being "engaged in commercial or business activities" as they seek
to take advantage of Subchapter V benefits.
The court's decision will largely help determine the debtors' fate
and give broader guidance to practitioners who have wrestled with
the question and courts' varying interpretations since the
Subchapter V law went into effect in 2020.
"Any cases on this topic are noteworthy because this section -- and
all of Subchapter V -- remains a new area of law," said Nicholas
Koffroth, an attorney with Fox Rothschild LLP." "Practitioners will
get an increasingly clearer picture of the scope of 'engaged in
commercial or business activity' the more that courts add meat to
the bones of these terms."
Qualifying for Subchapter V has several advantages over a typical
Chapter 11. The cases generally don’t have committees for
unsecured creditors, allowing debtors to avoid an
otherwise-required obligation to pay for committee expenses.
In Subchapter V, only the debtor can file a reorganization plan.
And unlike a standard Chapter 11, debtors can generally keep their
interest in their property even if dissenting creditors don't see a
full recovery.
The three Infowars entities have said they want to use Subchapter V
to save money and have their reorganization plan court-confirmed
within 120 days.
Broad Standard
Courts have come to different conclusions over the issue of
qualifying for Subchapter V. But they've so far have been
relatively permissive over what it means for a business to be
"engaged in business or commercial activities."
"The issue of whether an entity is 'engaged in commercial or
business activities' is one of the more hotly litigated issues in
Subchapter V," said bankruptcy attorney Alan Rosenberg of Markowitz
Ringel Trusty & Hartog P.A.
A South Carolina bankruptcy court in 2020 found that an individual
was "engaged in commercial or business activities" under Subchapter
V just by "addressing residual business debt." The debtor told the
court he had continued to deal with creditors related to a business
he partly owned and in which he faced personal liability.
A South Dakota bankruptcy court last year said a debtor was engaged
in business activities by negotiating an office space lease when it
filed bankruptcy.
But a Western Missouri bankruptcy court in 2020 found a couple
weren't engaged in business because they had ceased operating their
business, sold assets before they filed for bankruptcy, and then
retired.
The Western Missouri decision raised the baseline of how much
business or commercial activity is needed to qualify, said Donald
L. Swanson, a bankruptcy attorney and shareholder at Koley Jessen.
"Courts have been clear that shell companies don't cut it, but the
analytical framework is certainly more of a sliding-scale test than
a hard-and-fast calculation," Koffroth said. "A ruling in this case
will add another marker on the sliding scale to help elucidate what
circumstances may or may not fit within the Subchapter V
eligibility standard."
The issue has begun to filter up to appeals courts as well.
Private jet company RS Air LLC didn’t need to show it was trying
to make a profit to qualify for Subchapter V—despite not having
flight operations, employees, revenue, or income for several years,
a bankruptcy appellate panel of the Ninth Circuit affirmed last
month.
The jet company met the Subchapter V eligibility standard simply by
litigating and negotiating with a large creditor, paying fees,
keeping its tax obligations current, and intending to resume
operations, the appellate court found.
But even as the bankruptcy appeals court in RS Air ruled for a
broader standard, its ruling noted the bankruptcy code doesn't
define “engaged in commercial or business activities" and
admitted case law is "sparse."
Debtors' Fight
Judge Christopher Lopez, who is presiding over the Infowars-tied
companies’ bankruptcy, is familiar with the issue.
Lopez last year ruled to allow Port Arthur Steam Energy L.P., or
PASE, to use Subchapter V even though the waste heat producer had
stopped selling steam and electricity when it filed for bankruptcy.
The company still qualified for Subchapter V because it pursued a
multimillion-dollar lawsuit against a third party, and planned to
sell assets, file tax reports, and collect on accounts, the judge
determined.
Infowars seized on Lopez's PASE decision to argue that Infowars
also qualifies to use the law.
The Infowars debtors say they hold the intellectual property and
the website of Jones’ family business under the Infowars label
for use by non-bankrupt affiliates. The debtors also hired a chief
restructuring officer, W. Marc Schwartz.
Courts have developed an "expansive non temporal view" of what
"engaged in" commercial or business activity means, the debtors
argued. A debtor, thus, doesn’t need to be engaged in business
activities when it files for bankruptcy to qualify for Subchapter
V, they said.
The Connecticut families of shooting victims, in opposing the
Subchapter V designation, say the debtors are really shell
companies and must show they buy and sell "economic goods or
services for profit" in order to qualify.
The families also point to Schwartz's statement that the companies
hold no assets other than those used by other companies.
Lopez weighing in again on the Subchapter V issue could be
especially helpful for practitioners—especially since courts have
tended to look at the individual facts of a case to see if someone
qualifies.
"It will be interesting to see how Judge Lopez analyzes these facts
using the framework he developed in Port Arthur," Koffroth said.
Even if the debtors meet the "engaged in business" standard, they
must still face arguments from the US Trustee and the families that
the case was filed in bad faith and should be dismissed.
"If this is allowed to go forward and to do so in Subchapter
V—where there's special benefits that are intended for somebody
else, not these people—that will rock our bankruptcy world,"
Swanson said.
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.
JJS LOGISTICS: Gets Court Nod to Use Cash Collateral Thru July 7
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized JJS Logistics of Florida, Inc. to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance.
The Debtor is permitted to use cash collateral to pay: (a) amounts
expressly authorized by the Court, including payments of pre and
post-petition wages and related amounts to non-insider employees,
payments to the Subchapter V Trustee; and, payments on insurance
for Joshua Smiley; (b) additional amounts as may be expressly
approved in writing by First Citrus Bank; and (c) current and
necessary expenses set forth in the budget.
First Citrus Bank and each creditor with a security interest in
cash collateral shall have a perfected and continuing post-petition
lien against cash collateral to the same extent and with the same
validity and priority as the prepetition lien, without the need to
file or execute any document as may otherwise be required under
nonbankruptcy law. As additional adequate protection, the Debtor
will make weekly payments of $3,571 to First Citrus Bank and First
Citrus Bank is granted a super priority administrative claim to the
extent of any diminution in value of its collateral.
The Debtor will maintain insurance coverage for its property and
all collateral of First Citrus Bank in accordance with the
obligations of the loan and security documents with First Citrus
Bank.
A continued hearing on the matter is scheduled for July 7, 2022 at
2 p.m.
A copy of the order is available at https://bit.ly/3t5APAj from
PacerMonitor.com.
About JJS Logistics of Florida
JJS Logistics of Florida Inc. is a Florida profit corporation which
provides local FedEx delivery commercial and residential services
in western Pasco County. JJS Logistics of Florida sought
protection under Subchapter V of Chapter 11 of the U.S. Bankruptcy
Court (Bankr. M.D. Fla. Case No. 22-01884) on May 10, 2022. In the
petition filed by Andrew Yurasko, III, chief restructuring officer,
the Debtor disclosed up to $500,000 in both assets and liabilities.
Amy Denton Mayer has been appointed as Subchapter V trustee.
Daniel E. Etlinger, Esq., at Jennis Morse Etlinger, is the Debtor's
counsel.
JNF INVESTMENTS: Small Biz. Won't Proceed Under Subchapter V
------------------------------------------------------------
On May 22, 2022, JNF Investments, LLC, filed a petition for relief
under Subchapter V of chapter 11 of the Bankruptcy Code. On May
24, 2022, it filed an amended petition to disclose that while it is
still a small business debtor, it no longer elects to proceed under
Subchapter V.
The Debtor is a for profit corporation which owns one property
located at 8340 SW 155th Terrace, Palmetto Bay, Florida 33157.
According to court filings, JNF Investments estimates between 1 and
49 unsecured creditors.
The petition states funds will be available to unsecured
creditors.
The meeting of creditors under 11 U.S.C. Sec. 341(a) will be held
June 21, 2022, at 3:00 p.m. Proofs of claim are due by Aug. 1,
2022.
About JNF Investments
JNF Investments LLC is a Single Asset Real Estate (as defined in 11
U.S.C. Sec. 101(51B).
JNF Investments sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-14005) on May 22,
2022. In the petition filed by Jayment Alvarez, as managing
member, JNF Investments estimated assets and liabilities between
$500,000 and $1 million each. Kathy L Houston is the Debtor's
counsel.
LAKEPORT CF: Case Summary & 11 Unsecured Creditors
--------------------------------------------------
Debtor: Lakeport CF, LLC
Elbert County, Colorado
Chapter 11 Petition Date: May 31, 2022
Court: United States Bankruptcy Court
District of Colorado
Case No.: 22-11941
Judge: Hon. Michael E. Romero
Debtor's Counsel: Jeffrey A. Weinman, Esq.
ALLEN VELLONE WOLF HELFRICH & FACTOR, P.C.
1600 Stout Street
1900
Denver, CO 80202
Tel: 303-534-4499
Email: jweinman@allen-vellone.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Jean Marc Orlando, president, on
behalf of Jay Home 2, LLC, manager of the Debtor.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/EC5U6YY/Lakeport_CF_LLC__cobke-22-11941__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 11 Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Boulder Road Funding Lien on Property $150,000
9356 Green Dragon Street
Orlando, FL 32827
2. Can America Drilling, Inc. Drilling $594,442
708 Cheyenne Ave. Services
P.O. Box 416
Simla, CO 80835
3. Deadrick SSB, LLC Deed of Trust $3,200,000
9380 Collin Ave.
Surfside, FL 33154
4. ER Golf Real Estate, LLC Advanced $280,068
4403 13th Avenue Company
Brooklyn, NY 11219 Funds
5. Fairfield and Woods, P.C. Legal Fees $125,221
1801 California Street
Suite 2600
Denver, CO 80202
6. Lead Funding II, LLC Mortgage $50,000
VAMFP Hunt, LLC on Property and Off
7400 E. Orchard Road Property Water
Suite 3000N Rights
Geenwood Village, CO 80111
7. McCann, Thomas Deed of Trust $4,500,000
EPS, 6472 S.
Quebec Street
Centennial, CO 80111
8. Natural Path Trade Vendor $526,442
Botanicals, LLC
401 Capital Street
Hayden, CO 81639
9. Rady Dyer $854,944
1951 Hidden Acres Place
Parker, CO 80138
10. River Bend Corporation Deed of Trust $564,886
155 Madison Street
Denver, CO 80206
11. River Band Corporation Mortgage $25,000
155 Madison Street
Denver, CO 80206
LECLAIRRYAN PLLC: Ch 7 Trustee Asks Court OK for $21M UnitedLex Dea
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Rick Archer of Law360 reports that the Chapter 7 trustee for
LeClairRyan PLLC asked a Virginia bankruptcy judge on Tuesday, May
31, 2022, to approve an approximately $21 million settlement with
legal services provider UnitedLex for the part it allegedly played
in driving the law firm into liquidation.
Trustee Lynn Tavenner will seek approval at a June 8, 2022 hearing
for the deal. Counsel for Tavenner told Judge Kevin R. Huennekens
of the U. S. Bankruptcy Court for the Eastern District of Virginia
at a case status conference that the settlement would more than
double Tavenner's settlement recoveries for her claims that
UnitedLex and LeClairRyan's leaders conspired to suck the firm dry.
About LeClairRyan PLLC
Founded in 1988, LeClairRyan PLLC is a national law firm with 385
attorneys, including 160 shareholders, at its peak. The firm
represented thousands of clients, including individuals and local,
regional, and global businesses.
Following massive defections by its attorneys LeClairRyan, members
of the firm in July 2019 voted to effect a wind-down of the
Debtor's operations.
LeClairRyan PLLC sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 19-bk-34574) on Sept. 3, 2019, to effect the wind-down of its
affairs.
In its Chapter 11 petition, the firm listed a range of 200-999
creditors owed between $10 million and $50 million. The firm claims
assets of $10 million to $50 million.
The Hon. Kevin R Huennekens is the case judge.
Richmond attorneys Tyler Brown and Jason Harbour of Hunton Andrews
Kurth represented LeClairRyan in the case. Protiviti was the
Debtor's financial adviser for the liquidation.
The bankruptcy case was converted to a Chapter 7 liquidation on
Oct. 24, 20219. Lynn L. Tavenner was named a Chapter 7 trustee,
and then Benjamin C. Ackerly, a successor trustee.
The Chapter 7 trustee Ackerly's counsel:
Tyler P. Brown
Hunton Andrews Kurth LLP
Tel: 804-788-8200
E-mail: tpbrown@huntonak.com
MALLINCKRODT PLC: Withdraws $900 Mil. Leveraged Loan Offering
-------------------------------------------------------------
Jeannine Amodeo of Bloomberg News reports that drugmaker
Mallinckrodt Plc has withdrawn a proposed $900 million term loan
from the market, according to a person with knowledge of the matter
who isn't authorized to speak publicly and asked not to be
identified.
The company has been in discussions over the sale of $650 million
of secured notes as it looks to salvage its bankruptcy exit
financing, Bloomberg previously reported.
Mallinckrodt marked proceeds from the loan sale, led by Morgan
Stanley, to repay its existing $900 million revolver.
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.
MOHEGAN TRIBAL: Incurs $2.4 Million Net Loss in Second Quarter
--------------------------------------------------------------
Mohegan Tribal Gaming Authority filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $2.44 million on $358.48 million of net revenues for
the three months ended March 31, 2022, compared to a net loss of
$15.97 million on $278.63 million of net revenues for the three
months ended March 31, 2021.
For the six months ended March 31, 2022, the Company reported a net
loss of $14.05 million on $760.44 million of net revenues compared
to a net loss of $42.73 million on $509.41 million of net revenues
for the same period in 2021.
As of March 31, 2022, the Company had $3.09 billion in total
assets, $3.28 billion in total liabilities, and a total capital of
($188.95) million.
"Our consolidated Adjusted EBITDA of $86.7 million reflects our
strong performance and ongoing focus on profitability," said
Raymond Pineault, chief executive officer of the Company.
"Although visitation was somewhat impacted by the Omicron variant
and poor weekend weather at our Northeast properties early in the
quarter, the consolidated Adjusted EBITDA margin of 24.2% was 234
basis points higher than the pre-COVID comparable fiscal 2019
quarter."
Carol Anderson, chief financial officer of the Company, also noted,
"These results demonstrate MGE's ability to adapt to the ongoing
COVID-19 pandemic, and reflect the current stabilizing operating
environment. We have reintroduced some lower margin non-gaming
amenities since the prior-year period, and last year also included
temporary reductions in labor, marketing and entertainment expenses
as well as deferred operating expenses that were necessary to
operate within the early phases of the COVID-impacted
environment."
The year-over-year improvements in net revenues and Adjusted EBITDA
were due to strong performance at the Company's owned properties
and the addition of Mohegan Sun Las Vegas and MGE Digital, compared
to the prior-year period, where volumes were negatively impacted by
various COVID-19 related restrictions, including the closure of the
MGE Niagara Resorts for the entire period, the closure of Mohegan
Sun Pocono for three days, self-imposed capacity limitations at
Mohegan Sun and state-mandated health protocols at most of the
Company's other properties.
As of March 31, 2022, and Sept. 30, 2021, MGE held cash and cash
equivalents of $167.7 million and $149.8 million, respectively.
Inclusive of letters of credit, which reduce borrowing
availability, MGE had $220.8 million of borrowing capacity under
its senior secured credit facility and line of credit as of March
31, 2022. In addition, inclusive of letters of credit, which
reduce borrowing availability, MGE Niagara Resorts had $103.7
million of borrowing capacity under the MGE Niagara Resorts
revolving credit facility and line of credit as of March 31, 2022.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1005276/000100527622000024/mtga-20220331.htm
About Mohegan Gaming
Mohegan Tribal Gaming Authority d/b/a Mohegan Gaming &
Entertainment is a master developer and operator of premier global
integrated entertainment resorts, including Mohegan Sun in
Uncasville, Connecticut, Inspire in Incheon, South Korea and
Niagara Casinos in Niagara, Canada. MGE is owner, developer,
and/or manager of integrated entertainment resorts throughout the
United States, including Connecticut, New Jersey, Washington,
Pennsylvania, Louisiana, as well as Northern Asia and Niagara
Falls, Canada, and coming soon pending regulatory approval, Las
Vegas, Nevada. MGE is owner and operator of Connecticut Sun, a
professional basketball team in the WNBA and New England Black
Wolves, a professional lacrosse team in the National Lacrosse
League. For more information on MGE and its properties, visit
www.mohegangaming.com.
Mohegan Gaming reported a net loss of $162.02 million for the year
ended Sept. 30, 2020, compared to a net loss of $2.37 million for
the year ended Sept. 30, 2019. As of Dec. 31, 2021, the Company
had $3.03 billion in total assets, $3.19 billion in total
liabilities, and a total capital of $(164.17) million.
* * *
As reported by the TCR on Feb. 4, 2021, Moody's Investors Service
upgraded Mohegan Tribal Gaming Authority's ("MTGA") Corporate
Family Rating to Caa1 from Caa2 and Probability of Default Rating
to Caa1-PD from Caa2-PD. The upgrade considers that on January 26,
MTGA closed on a refinancing that had a meaningful positive impact
on the company's liquidity.
NORDIC AVIATION DAC/NAC 29: S&P Assigns 'B' ICR, Outlooks Stable
----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to
aircraft lessor Nordic Aviation Capital DAC (NAC), and its major
operating subsidiary, NAC Aviation 29 DAC (NAC 29), along with
stable outlooks. S&P also assigned its 'B' issue-level and '3'
recovery ratings to the company's secured notes and term loan B.
S&P said, "Our '3' recovery rating on the secured notes and term
loan B indicates our expectation for meaningful recovery (50%-70%,
rounded estimate: 65%) in the event of a payment default.
"The stable outlook for both entities reflects our expectation that
credit metrics will recover modestly over the next few years along
with passenger traffic, stronger demand for aircraft, and the
resumption of lease payments in full after restructurings. However,
we expect credit metrics to remain well below pre-COVID-19 levels.
"We expect NAC and NAC 29 to benefit from a stronger aircraft
leasing environment upon their emergence from Chapter 11 bankruptcy
protection. NAC, the largest lessor of regional and turboprop
aircraft, filed for Chapter 11 bankruptcy protection in December
2021. This was due to the impact of the COVID-19 pandemic on its
airline customers, which resulted in more airline restructurings or
failures than did customers of aircraft lessors that focus on
larger aircraft. The company indicated its lease rental collections
are about 50% of 2019 levels, compared with roughly 90% for lessors
of larger aircraft. The company expects to emerge from Chapter 11
by early June, 2022.
"We expect the aircraft leasing sector to continue to benefit from
demand for short-haul domestic traffic focused on leisure
travelers, which has recovered strongly over the past year, as the
impact of the COVID-19 pandemic on global air travel has gradually
declined."
The company's position as the largest regional aircraft lessor is
offset by its weaker customer base and aircraft portfolio
characteristics than for other aircraft lessors. After emergence,
we expect NAC to have 353 owned and managed aircraft and about 37
aircraft on order. As of Dec. 31, 2021, the weighted-average age of
its fleet was about 8.8 years, somewhat older than the aircraft
leasing industry's typical five to eight years, and the average
remaining lease term of 3.7 years is less than the typical five to
eight years for the industry.
NAC plans to pursue various growth opportunities, including adding
larger passenger aircraft such as the Boeing 737 family and the
Airbus A320 family to its portfolio. However, S&P views the change
in operating strategy as bearing some risks as the company will be
competing against larger aircraft lessors with expertise in this
area and with a significantly lower cost of capital than NAC.
S&P said, "We expect NAC 29, a subsidiary with recourse secured
debt that we consider core to NAC, to have 269 owned and managed
aircraft. However, over time this entity will shrink as a
proportion of the consolidated NAC as new aircraft are added
outside of NAC 29. As of Dec. 31, 2021, the weighted-average age of
NAC 29's fleet was about 8.6 years, somewhat older than the
aircraft leasing industry's typical five to eight years, and the
average remaining lease term of 3.9 years is less than the typical
five to eight years for the industry. We assess NAC's and NAC 29's
business risk profiles as fair.
"Our highly leveraged financial risk profile incorporates NAC's and
NAC 29's relatively weak forecast credit metrics after their
emergence from bankruptcy. NAC's weighted-average EBIT interest
coverage ratio (our core ratio for equipment leasing companies) is
around 0.8x and NAC 29's around 0.2x (worse than average for this
type of company). NAC's ratio of debt to capital is in the mid-70%
area (about average) and funds from operations (FFO) to debt in the
5% area (below average). NAC 29's ratio of debt to capital is over
100% and FFO/debt around 3%. These are based on our forecast for
2022-2024, pro forma for the first full year after its emergence
from bankruptcy. We assess both entities' financial risk profiles
as highly leveraged.
"Upon emergence, we will assess both companies' liquidity as
adequate. In the 12 months following emergence, we expect NAC's
sources of liquidity to be comprised of around $78 million of
unrestricted cash (excluding $100 million of minimum liquidity
required under the shareholder agreement), full availability under
its $200 million emergence revolving credit facility, and funds
from operations of about $100 million a year. Uses include
committed annual capital spending of around $100 million (there are
no debt maturities until 2026). For NAC 29, we expect sources of
liquidity to consist of funds from operations of about $50 million
a year. There are no current debt maturities or committed capital
spending.
"Although we expect NAC's liquidity sources to be about 4x its uses
over the next 12 months and NAC 29's about 15x, we do not believe
that they meet our qualitative conditions for a higher assessment.
As evidenced by the recent COVID-19 outbreak, leading to its
bankruptcy, we believe the companies will not be able to absorb
high-impact, low-probability adversities, nor do we believe the
companies have satisfactory standing in the credit markets.
"The stable outlook on both entities reflects our expectation that
their credit metrics will recover modestly over the next few years
along with passenger traffic, stronger demand for aircraft, and
resumption of lease payments in full. However, we expect credit
metrics to remain well below pre-COVID-19 levels.
"We could lower our ratings on both entities over the next year if
the aircraft leasing market does not recover as expected after the
coronavirus subsides, causing credit metrics to remain under
pressure, such that EBIT interest coverage remains below 1.1x. In
addition, we could lower the rating on NAC 29, which we view as
core to NAC, if we lower the rating on NAC.
"We are unlikely to raise the rating on either entity unless EBIT
interest coverage reaches at least 1.1x and the FFO-to-debt ratio
reaches at least 6% and both are sustained at those levels. We
could also raise the ratings if the quality of the portfolio of
aircraft and airline customers materially improves."
ESG credit indicators: E-2, S-4, G-2
S&P said, "Social factors are a negative consideration in our
credit rating analysis of Nordic Aviation Capital. Lower global air
traffic due to COVID-19 had more of an impact on the company than
its aircraft lessor peers, which hurt earnings and cash flow and
resulted in the company's filing for Chapter 11 bankruptcy
protection. After its emergence from Chapter 11, we expect its
earnings and cash flow to recover over the next few years--but not
to return to pre-COVID-19 levels. We view the company as better
positioned to withstand climate transition risk than the global
airlines it serves. Its aircraft fleet's age (8.8 years old) is
younger than the global average but is older than those of most
peer aircraft lessors. Governance factors have no material
influence on our credit rating analysis of NAC."
PARALLAX HEALTH: Signs IP Purchase Agreement With DHPI
------------------------------------------------------
Pursuant to a unanimous resolution of Parallax Health Sciences,
Inc.'s Board of Directors, the Company and its wholly owned
subsidiary, Parallax Behavioral Health, Inc., executed an
Intellectual Property Purchase Agreement for the sale of certain
intellectual property, as defined within the Purchase Agreement, to
Data Health Partners, Inc., a privately held Delaware corporation.
The Purchase Agreement is effective April 13, 2022, and includes
the following consideration to Seller for the transfer of all
rights, title and interest in and to the Intellectual Property to
Buyer:
1. An aggregate of 3,960,344 shares of the Buyer's common stock
to be issued to the Company's shareholders of record on the Record
Date of April 13, 2022;
2. An Anti-Dilution Agreement providing for certain protections
for the Parallax Shareholders;
3. A corporate Promissory Note in the principal sum of
$20,0000,000, bearing interest at a rate of three percent per
annum, and maturing in ten years. The Note is secured by the
Intellectual Property, as defined within the Intellectual Property
Pledge and Security Agreement; and
4. A royalty of 2.5% of Net Proceeds from the monetization of
the Intellectual Property, as defined within the Royalty Agreement.
Parallax has entered into this transaction to help the Company meet
its financial obligations and generate value for its shareholders.
DHPI has entered into this transaction in an effort to monetize the
Intellectual Property through licensing and joint ventures, and to
prosecute possible infringement through litigation.
The consideration provided to Parallax has been based upon
potential sources of revenues for the Intellectual Property from
prospective licensing and recovery of financial damages from
infringement.
About Parallax
Headquartered in West Palm Beach, Florida, Parallax Health
Sciences, Inc. -- http://www.parallaxcare.com-- is a healthcare
company focused on developing products and services that can
provide remote communication, diagnosis, treatment, and monitoring
of patients on a proprietary platform. Through its innovative
technologies, both patented and patent-pending, the Company's
principal mission is to deliver solutions that empower patients,
reduce costs, and improve the quality of care.
Parallax reported a net loss of $12.87 million for the year ended
Dec. 31, 2019. As of Dec. 31, 2019, the Company had $1.36 million
in total assets, $11.61 million in total liabilities, and a total
stockholders' deficit of $10.25 million.
Farmington Hills, Michigan-based Freedman & Goldberg CPAs, the
Company's auditor since 2016, issued a "going concern"
qualification in its report dated May 15, 2020, citing that the
Company has suffered recurring losses from operations, has a net
capital deficiency and has significant contingencies that raise
substantial doubt about its ability to continue as a going concern.
PEGASUS SERVICES: Files for Chapter 11 to Restructure Debt
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Pegasus Services Group LLC filed for chapter 11 protection in
Jacksonville, Florida.
The Debtor's primary business of providing administrative,
accounting, human resources, and other back office and related
service to North Star Group, LLC and Pegasus Restaurant Group,
LLC.
The Debtor finances its operations on a cash basis. The Debtor has
4 prepetition business loans with lenders that have a lien on the
Debtor’s cash and receivables. Those lenders are Arsenal
Funding, LLC, Everest Business Funding, Parafin, Inc. and Toast
Funding, LLC. The Debtor relies on current revenues to fund its
operations.
The Debtor says it has filed for bankruptcy protection because it
has become overwhelmed primarily with high interest loan payments
including payments to its Lenders. The Debtor's approximate
outstanding balances owed to its Lenders are as follows: Arsenal
($64,478), Toast Funding ($61,454), Parafin ($8,914), and Everest
($43,565).
Apart from the Lenders, the Debtor also has other vendors and/or
service providers which it struggles to remain current with, and
other unsecured debt which it unable to pay.
The Debtor primarily generates income from stucco repair and
application projects. At the time of filing, the Debtor had a
total balance of approximately $13,883 in its operating account.
The business generates approximate gross receipts of $20,000 per
month.
The Debtor has filed its case to restructure its debt and pursue a
traditional chapter 11 reorganization plan.
According to court filings, Pegasus Services estimates between 1
and 49 unsecured creditors. The petition states that funds will be
available to unsecured creditors.
* * *
A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for July 6, 2022 at 1:00 P.M.
The Debtor's Chapter 11 Plan and Disclosure Statement are due by
Nov. 21, 2022.
About Pegasus Services Group
Pegasus Services Group LLC -- http://www.pegasussupport.com/--
belongs to the Defense and Space Manufacturing. It provides
Facilities Operations & Maintenance (O&M) and Logistics Support
Services to a wide range of Government customers. It is based in
Woodstock, GA and provides services nationwide.
Pegasus Services Group sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01043) on May
23, 2022. In the petition filed by CRO Neil Metzger, Pegasus
Services Group estimated assets up to $50,000 and estimated
liabilities between $100,000 and $500,000. Thomas C Adam, of Adam
Law Group, P.A., is the Debtor's counsel.
PLATINUM GROUP: Confirms Objective to Advance Waterberg Project
---------------------------------------------------------------
Platinum Group Metals Ltd. reports that the Company and Japan Oil,
Gas and Metals National Corporation have signed a formal Memorandum
of Understanding acknowledging a consensus to accelerate financing
opportunities for the Waterberg Project. Hanwa Co., Ltd. was a
witness to the MOU.
During a meeting held on the sidelines of the African Mining Indaba
in Cape Town on May 10, 2022, representatives of JOGMEC and
Platinum Group discussed finance and development plans for the
Waterberg Project. Following the meeting, both parties signed the
MOU acknowledging their discussion. Furthermore, JOGMEC expressed
its intention to maintain JOGMEC's interests in the Waterberg
Project and to support funding contributions for project
development to the extent possible.
Platinum Group President and CEO Frank Hallam stated, "We are
honored and encouraged by the declaration of support from our
Japanese partners. The current geopolitical situation has
reinforced the importance of establishing a secure and ethically
sourced supply of platinum and palladium for Japanese and global
industry. We look forward to working closely with JOGMEC and Hanwa
over the coming months to secure and finalize a funding package for
the Waterberg Project."
About Platinum Group Metals
Headquartered in British Columbia, Canada, Platinum Group Metals
Ltd. -- http://www.platinumgroupmetals.net-- is a platinum and
palladium focused exploration, development and operating company
conducting work primarily on mineral properties it has staked or
acquired by way of option agreements or applications in the
Republic of South Africa and in Canada.
Platinum Group reported a loss of $13.06 million for the year ended
Aug. 31, 2021, a loss of $7.13 million for the year ended Aug. 31,
2020, a loss of $16.78 million for the year ended Aug. 31, 2019,
and a loss of $41.02 million for the year ended Aug. 31, 2018.
PUFF FACTORY: Seeks to Hire Albies & Stark as Special Counsel
-------------------------------------------------------------
The Puff Factory, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Oregon to employ Albies & Stark, LLC as its
special counsel.
The Debtor requires the services of a special counsel in connection
with its ongoing dispute with the Port of Cascade Locks and the
associated plaintiff action filed by the Debtor and its owner,
Jacqueline Alexander.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
J. Ashlee Albies, Partner $550/hour
Maya Rinta, Associate $350/hour
Lisa Boucher, Paralegal $150/hour
The firm received a retainer in the amount of $5,000.
As disclosed in court filings, Albies & Stark is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
J. Ashlee Albies, Esq.
Albies & Stark, LLC
Attorneys at Law
1 SW Columbia St., Suite 1850
Portland, OR 97204
Phone: 503-308-4770
Fax: 503-427-9292
About The Puff Factory
The Puff Factory, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Ore. Case No. 22-30470) on March
27, 2022, listing up to $10 million in both assets and liabilities.
Jacqueline Alexander, member, signed the petition.
Judge Peter C. McKittrick oversees the case.
Michael D. O'Brien & Associates, PC and Albies & Stark, LLC serve
as the Debtor's bankruptcy counsel and special counsel,
respectively.
RANGE RESOURCES: Moody's Ups CFR to Ba2 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service upgraded Range Resources Corporation's
Corporate Family Rating to Ba2 from Ba3, Probability of Default
Rating to Ba2-PD from Ba3-PD, and senior unsecured notes to Ba3
from B1. The Speculative Grade Liquidity Rating was upgraded to
SGL-1 from SGL-2. The rating outlook was changed to stable from
positive.
"The upgrade reflects improved credit metrics for Range, and our
expectation of continued debt reduction using the meaningful free
cash flow the company will generate," said Arvinder Saluja, Moody's
Vice President. "Range has continued to focus on maintaining
capital discipline despite higher natural gas and NGLs prices, and
has made public commitments to prioritize further deleveraging."
Upgrades:
Issuer: Range Resources Corporation
Corporate Family Rating, Upgraded to Ba2 from Ba3
Probability of Default Rating, Upgraded to Ba2-PD from Ba3-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 (LGD4)
from B1 (LGD5)
Outlook Actions:
Issuer: Range Resources Corporation
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Range's upgrade to a Ba2 CFR is supported by the meaningful
improvement in its credit metrics that can be sustained through
price cycles, especially retained cash flow to debt and leveraged
full-cycle ratio (LFCR), and Moody's expectation of further debt
reduction in 2022-23. Range has a publicly-stated balance sheet
target of $1 - $1.5 billion of debt. In the first quarter of 2022,
the company reduced $350 million of debt and in the second quarter
redeemed $218 million 2022 notes. It has $532 million of senior
notes due 2023 which become callable in the fourth quarter, giving
a clear view of additional near-term debt reduction. Range's
low-cost structure and capital discipline will help the company
generate sizeable free cash flow in an improved commodity price
backdrop for both natural gas and natural gas liquids (NGLs).
Moody's expects Range to continue to optimize its operating and
development costs. The CFR is also supported by Range's strong
operating efficiency, scale, relatively high proportion of NGLs in
the production mix, and good asset-based leverage metrics. In
addition, Range benefits from long-lived reserves, conservative
financial policies, and a high level of operational control over
its reserves, enabling significant discipline over the pace of
future development. However, Range's ratings are constrained by its
sensitivity to volatile natural gas and NGLs prices, with natural
gas contributing about 70% of production, exposure to Appalachian
basin natural gas takeaway constraints with -20% of gas currently
priced locally, and high geographic concentration.
Range's improved credit metrics, liquidity, and balance sheet
strength will bolster its capacity to withstand negative credit
impacts from carbon transition risks, with its lower debt levels
and natural gas and NGL focus enhancing its relative positioning in
future energy transition scenarios. While financial performance of
Range will continue to be influenced by industry cycles, compared
to historical experience Moody's expects future profitability and
cash flow in this sector to be less robust at the cycle peak and
worse at the cycle trough because global initiatives to limit
adverse impacts of climate change will constrain the use of
hydrocarbons and accelerate the shift to less environmentally
damaging energy sources.
Moody's expects Range to have very good liquidity in 2022-23 as
reflected by the SGL-1 Speculative Grade Liquidity Rating,
underpinned by positive free cash flow generation even at mid-cycle
natural gas and NGL prices. As of March 31, 2022 Range had no
borrowings and $338 million of letters of credit outstanding under
its revolver. In April, Range amended its revolving bank facility
and downsized its revolver to $1.5 billion with a new maturity date
of April 2027, giving it pro forma borrowing capacity of just under
$1.2 billion. The committed borrowing base for the amended
revolving credit facility remains $3 billion. The credit agreement
governing the revolver contains financial maintenance covenants
requiring a minimum current ratio of 1x and maximum net leverage of
3.75x. Moody's expects Range to maintain ample cushion under its
financial covenants. The company's next maturity occurs in the
first quarter of 2023 with about $532 million of debt coming due.
Range's senior unsecured notes are rated Ba3, one notch below the
assigned Ba2 CFR, due to their structural subordination to the
company's $1.5 billion senior secured revolving credit facility.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade could be considered if Range gets closer to achieving
its balance sheet debt target and continues to produce free cash
flow on a consistent basis, and if retained cash flow to debt is
sustained above 40% and leveraged full cycle ratio (LFCR)
approaches 2x under Moody's medium term price assumptions. Range's
ratings could be downgraded if retained cash flow to debt and LFCR
fell below 25% and toward 1.25x, respectively, or the company
generated substantial negative free cash flow.
Range Resources Corporation is an independent exploration and
production company that is headquartered in Fort Worth, Texas.
The principal methodology used in these ratings was Independent
Exploration and Production published in August 2021.
REID'S EDUCATIONAL: Files Subchapter V Amid Balloon Note
--------------------------------------------------------
Reid's Educational Child Care Centre LLC filed for chapter 11
protection in the Middle District of Florida. The Debtor, a small
business Debtor, has elected to proceed under Subchapter V of
Chapter 11 of the Bankruptcy Code.
The Debtor is the owner of a commercial real estate building in
Duval County, Florida. The Debtor operated a day care business
from the property which was started in 2013. In connection with
starting the business, the Debtor mortgaged the property to James
P. Flanders who had previously owned the real estate. The mortgage
executed by the Debtor was subject to an existing mortgage which
had been previously placed on the property by Mr. Flanders. The
mortgage to Mr. Flanders was a balloon mortgage with a maturity
date of November, 2016.
The Debtor shut down the main business of day care during the
Coronavirus pandemic in 2020 in order to focus on tutoring and
other non-group activities. The tutoring business has continuously
operated since that time.
In March of 2022 the Debtor leased the property to Olga Colon with
a lease purchase agreement for the one year lease of the premises
and the option to purchase the property for $255,000. Ms. Colon
has been unable to obtain financing in order to complete the sale
at this time. As a result, the Debtor was facing foreclosure by
Mr. Flanders as a result of the balloon
maturity in Case 2016 CA 001997 in Duval County, FL. Ms. Nickesha
Reid, as owner of the Debtor had filed two previous Chapter 13
cases in order to attempt to restructure the balloon note, but was
unable to accomplish that goal as a result of the limitations of
Chapter 13.
The Debtor sought Chapter 11 protection to restructure the secured
debt of the Debtor's commercial mortgage. The Debtor was attempting
to refinance the loan prior to maturity, but was unable to find a
lender prior to the point that it could avoid filing the Chapter
11.
According to court filing, Reid's Educational Child Care Centre LLC
estimates between 1 and 49 unsecured creditors. The petition states
funds will not be available to unsecured creditors.
About Reid's Educational Child Care
Reid's Educational Child Care Centre, LLC, is a Jacksonville,
Florida-based day care center.
Reid's Educational Child Care Centre sought bankruptcy protection
under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code
(Bankr. M.D. Fla. Case No. 22-01037) on May 23, 2022. In the
petition signed by Nickesha V. Reid, manager, the Debtor disclosed
up to $500,000 in both assets and liabilities.
Bryan K. Mickler, Esq. at Law Offices of Mickler & Mickler, LLP, is
the Debtor's counsel.
Robert Altman has been appointed as Subchapter V Trustee.
ROCKALL ENERGY: Gets Court Okay to Quick $85 Million Sale
---------------------------------------------------------
Jeremy Hill of Bloomberg News reports that Rockall Energy Holdings
won court approval to sell itself to private equity firm Formentera
Partners, sparing its lenders from taking equity in the bankrupt
oil and gas driller.
U.S. Bankruptcy Judge Mark X. Mullin said in a hearing Tuesday that
he would sign off on the $85 million cash sale to the firm
co-founded by former Parsley Energy LLC Chief Executive Officer
Bryan Sheffield.
The approval comes less than 90 days after Rockall filed for
Chapter 11 bankruptcy. Mullins also said he would approve Rockall's
Chapter 11 plan.
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.
RTW CONSTRUCTION: Hearing Next Week on Change Capital DIP Loan
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey authorized
RTW Construction, Inc. to use cash collateral pending a final
hearing on the matter and obtain post-petition financing from
Change Capital Holdings I, LLC.
The DIP Loan is a revolver that will allow the Debtor to obtain
funds, repay, and obtain more funds up to the maximum principal
amount of $1,000,000 with a maximum outstanding amount during the
initial 13-week period of not more than $250,000.
The Debtor acknowledges that, separate and apart from its
negotiations with the DIP Lender, the Debtor has assured First
Indemnity of America Insurance Company that proceeds of each of the
Debtor's contracts for which FIA issued a surety bond will be
deposited into a segregated bank account and used first for
paying:
(a) beneficiaries of the New Jersey Trust Fund Act (NJ Rev.
Stat section 2A:44-148) associated with that particular Bonded
Contract who are unpaid at the time of the Debtor's receipt of the
funds; or
(b) FIA directly to the extent that FIA pays such claims
(e.g., claims to subcontractors and material suppliers for that
particular Bonded Contract).
The Budget and any subsequent Budget(s) will not deviate or
infringe upon this assurance. Excess proceeds of each of the
Debtor's contracts constitute cash collateral and may be used in
accordance with the Order.
Pursuant to the Court Order, the security interest and lien granted
post-petition by the Debtor to the DIP Lender is approved and
granted on a first priority basis on all assets of the Debtor,
subject to (i) valid and properly perfected pre-petition liens and
(ii) the Trust Fund Act.
As adequate protection for the Debtor's continued use of the DIP
Lender's cash collateral, to the extent of any diminution in the
value of its collateral, the DIP Lender continues to be granted a
replacement lien in all of the Debtor's presently owned or
hereafter acquired property and assets.
The DIP Lender is also granted, to the extent of any diminution in
the value of its collateral, an allowed super priority
administrative claim as provided in section 507(b) of the
Bankruptcy Code against the Debtor's estate which will have
priority in payment over any other indebtedness and/or obligations
now in existence or incurred hereafter by the Debtor and over all
administrative expenses or charges against property arising in the
Debtor's Chapter 11 case or any superseding Chapter 7 case.
The Debtor's authorization to use cash collateral and obtain DIP
Financing pursuant to the Order, will be in effect for the period
commencing with the date of the commencement of the case through
and including the earlier of the entry of a Final Order or June 8,
2022. The Debtor and the DIP Lender may amend or provide for new
Budgets and extend the Expiration Date, without the need for
further Court approval provided that any amended Budget and notice
of any extension of the Expiration Date is filed with the Court.
A hearing to consider the DIP Financing and entry of a Final Order
is scheduled for June 8 at 12:30 p.m.
A copy of the order is available at https://bit.ly/3lyTYGK from
PacerMonitor.com.
About RTW Construction, Inc.
RTW Construction, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 21-18595) on November
4, 2021. In the petition signed by Randy Worrell, chief executive
officer, the Debtor disclosed $1,376,365 in assets and $3,032,627
in liabilities.
Judge Christine M. Gravelle oversees the case.
Vincent Roldan, Esq., at Mandelbaum and Salsburg PC is the Debtor's
counsel.
Change Capital Holdings I, LLC, the DIP lender, is represented by
Henry G. Swergold, Esq. at Platzer, Swergold, Goldberg, Katz &
Jaslow, LLP.
SOUTHWESTERN ENERGY: Moody's Upgrades CFR to Ba1, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service upgraded Southwestern Energy Company's
Corporate Family Rating to Ba1 from Ba2, Probability of Default
Rating to Ba1-PD from Ba2-PD and senior unsecured notes rating to
Ba2 from Ba3. At the same time, Moody's affirmed the Baa2 rating on
the company's first lien term loan, and upgraded its Speculative
Grade Liquidity Rating to SGL-1 from SGL-2. The outlook remains
stable.
"Southwestern's Haynesville acquisitions have enhanced its
geographic diversification and made it the largest two-basin
natural gas producer in the United States," said Arvinder Saluja,
Moody's Vice President. "In addition, Southwestern continues to
reduce its debt levels with a publicly-stated goal to bring gross
debt down to $3.0-$3.5 billion range."
Upgrades:
Issuer: Southwestern Energy Company
Corporate Family Rating, Upgraded to Ba1 from Ba2
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba2 (LGD4)
from Ba3 (LGD4)
Affirmations:
Issuer: Southwestern Energy Company
Senior Secured Bank Credit Facility, Affirmed Baa2
Senior Unsecured Commercial Paper, Affirmed NP
Outlook Actions:
Issuer: Southwestern Energy Company
Outlook, Remains Stable
RATINGS RATIONALE
Southwestern's upgrade to a Ba1 CFR is supported by its sizeable
production and reserves base with production having doubled in the
last two years to over 780 mboe/day, materially improved geographic
diversification and access to international markets, hedges against
downside risk, and a clear path to continued debt reduction using
expected free cash flow in 2022-23. In the first quarter of 2022,
the company reduced $508 million of debt. At March 31, the company
had $174 million and $549 million outstanding under its revolver
and term loan, respectively, which are prepayable. It also has $425
million of senior notes due 2027 which become callable in October
2022. Southwestern benefits from its low cost structure and good
capital efficiency which allow it to have supportive credit metrics
in times of commodity price volatility. The acquisitions of GEP
Haynesville, LLC (GEP) and Indigo Natural Resources LLC (Indigo)
were favorable not only as they added higher margin production and
improved access to the export markets, but also reduced exposure to
the Appalachian basis differentials. However, Southwestern remains
concentrated in its natural gas weighted production profile (over
85% of expected production), which is less profitable than oil even
with recent improvements in gas fundamentals.
Southwestern's improved business and financial profiles will
bolster its capacity to withstand negative credit impacts from
carbon transition risks, especially as about two-third of its
natural gas production will have access to LNG export facilities on
the US Gulf Coast. While financial performance of Southwestern will
continue to be influenced by industry cycles, compared to
historical experience Moody's expects future profitability and cash
flow in this sector to be less robust at the cycle peak and worse
at the cycle trough because global initiatives to limit adverse
impacts of climate change will constrain the use of hydrocarbons
and accelerate the shift to less environmentally damaging energy
sources. The company's gas weighting is beneficial from an energy
transition perspective because natural gas demand is expected to
peak later and decline more slowly than oil under various energy
transition scenarios.
Southwestern has very good liquidity which is reflected in the
SGL-1 rating. Southwestern should generate over $750 million annual
free cash flow at Moodys pricing scenarios over the next two years
despite higher capex than in 2021. The company also has an ABL
credit agreement with the borrowing base revolving credit facility
expiring in April 2027, which has a security fallaway provision
conditioned upon Southwestern's achievement of investment grade
ratings. The borrowing base and the aggregate commitments of the
revolver are $3.5 billion and $2 billion, respectively.
Southwestern had $174 million of borrowings and $147 million of
letters of credit outstanding under its revolver at March 31, 2022.
The credit agreement governing the revolver contains financial
maintenance covenants requiring a minimum current ratio of 1x and
maximum net leverage of 4x. Moody's expects the company to maintain
adequate headroom in compliance with the covenants. Southwestern's
next maturity is in January 2025 when $389 million of unsecured
notes come due. Southwestern plans to pay off its revolver and term
loan borrowings by year end 2022 or shortly thereafter, as well as
pay off additional debt as part of its ongoing deleveraging plan.
Southwestern's senior unsecured notes are rated Ba2, one notch
beneath its CFR, as a result of the secured nature and size of the
priority claim of the company's secured debt. The first lien term
loan is rated Baa2, two notches above the Ba1 CFR, as it has first
lien security over all assets and is pari passu with Southwestern's
ABL revolver with $2 billion elected commitment.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if retained cash flow to debt is
sustained above 50% and leveraged full cycle ratio (LFCR)
approaches 2x under Moody's medium term price assumptions. Moody's
will also look for consistent free cash flow generation funding
gross debt reduction that enables Southwestern to deliver on its
leverage targets at lower mid-cycle natural gas prices while
maintaining conservative financial policies with respect to
balancing shareholder returns and a resilient credit profile. The
ratings could be downgraded if retained cash flow to debt falls
below 30% or debt to average daily production exceeds $8,000.
Southwestern Energy Company is a US independent exploration and
production (E&P) company headquartered in Houston, Texas.
The principal methodology used in these ratings was Independent
Exploration and Production published in August 2021.
TIMBER PHARMACEUTICALS: Incurs $3.1M Net Loss in First Quarter
--------------------------------------------------------------
Timber Pharmaceuticals, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $3.07 million on $83,177 of total revenue for the three months
ended March 31, 2022, compared to a net loss of $1.87 million on
$40,734 of total revenue for the same period in 2021.
As of March 31, 2022, the Company had $14.78 million in assets,
$4.22 million in total liabilities, and $10.56 million in total
stockholders' equity.
The Company has no product revenues, incurred operating losses
since inception, and expects to continue to incur significant
operating losses for the foreseeable future and may never become
profitable. The Company had an accumulated deficit of approximately
$32.0 million at March 31, 2022, a net loss of approximately $3.1
million, and approximately $2.9 million of net cash used in
operating activities for the three months ended March 31, 2022. As
of
March 31, 2022, the Company had cash of approximately $13.9
million.
The Company has evaluated whether there are any conditions and
events, considered in the aggregate, that raise substantial doubt
about its ability to continue as a going concern within one year
beyond the filing of this Quarterly Report on Form 10-Q. Based on
such evaluation and the Company's current plans, which are subject
to change, management believes that the Company's existing cash and
cash equivalents as of March 31, 2022 were sufficient only to
satisfy its operating cash needs into the fourth quarter of 2022.
The Company's current cash on hand is potentially not sufficient to
satisfy its operating cash needs for the twelve months from the
filing of this Quarterly Report on Form 10-Q.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1504167/000155837022008526/tmbr-20220331x10q.htm
About Timber Pharmaceuticals
Timber Pharmaceuticals, Inc. f/k/a BioPharmX Corporation --
http://www.timberpharma.com-- is a biopharmaceutical company
focused on the development and commercialization of treatments for
orphan dermatologic diseases. The Company's investigational
therapies have proven mechanisms-of-action backed by decades of
clinical experience and well-established CMC (chemistry,
manufacturing and control) and safety profiles. The Company is
initially focused on developing non-systemic treatments for rare
dermatologic diseases including congenital ichthyosis (CI), facial
angiofibromas (FAs) in tuberous sclerosis complex (TSC), and
localized scleroderma.
Timber Pharmaceuticals reported a net loss of $10.64 million for
the year ended Dec. 31, 2021, compared to a net loss of $15.12
million for the year ended Dec. 31, 2020.
Short Hills, New Jersey-based KPMG LLP, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
March 31, 2022, citing that the Company has suffered recurring
losses from operations that raise substantial doubt about its
ability to continue as a going concern.
TPC GROUP: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------
Lead Debtor: TPC Group Inc.
One Allen Center
500 Dallas Street, Suite 200
Business Description: The Debtors are North American producer and
processor of intermediate and specialty
chemicals and fuel derivatives. Their
products are critical to a wide range of
end-markets and applications, including
synthetic rubber, fuels, lubricants,
plastics, and surfactants.
Chapter 11
Petition Date: June 1, 2022
Court: United States Bankruptcy Court
District of Delaware
Eight affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
TPC Group Inc. (Lead Case) 22-10493
TPC Holdings, Inc. 22-10494
TPC Group LLC 22-10495
TP Capital Corp. 22-10496
Texas Butylene Chemical Corporation 22-10497
Texas Olefins Domestic International Sales Corporation 22-10498
TPC Phoenix Fuels LLC 22-10499
Port Neches Fuels, LLC 22-10500
Judge: Hon. Craig T. Goldblatt
Debtors' Counsel: James R. Prince, Esq.
Kevin Chiu, Esq.
BAKER BOTTS L.L.P.
2001 Ross Avenue, Suite 900
Dallas, Texas 75201-2980
Tel: (214) 953-6500
Fax: (214) 953-6503
Email: jim.prince@bakerbotts.com
kevin.chiu@bakerbotts.com
- and -
Scott R. Bowling, Esq.
BAKER BOTTS L.L.P.
30 Rockefeller Plaza
New York, New York 10112
Tel: (212) 408-2500
Fax: (212) 259-2501
Email: scott.bowling@bakerbotts.com
- and -
David R. Eastlake, Esq.
Lauren N. Randle, Esq.
BAKER BOTTS L.L.P.
910 Louisiana Street
Houston, Texas 77002
Tel: (713) 229-1234
Fax: (713) 229-1522
Email: david.eastlake@bakerbotts.com
lauren.randle@bakerbotts.com
Debtors'
Co-Counsel: Robert J. Dehney, Esq.
Curtis S. Miller, Esq.
Daniel B. Butz, Esq.
Matthew O. Talmo, Esq.
Brian Loughnane, Esq.
MORRIS, NICHOLS, ARSHT &
TUNNELL LLP
1201 N. Market Street, 16th Floor
P.O. Box 1347
Wilmington, Delaware 19899-1347
Tel: (302) 658-9200
Fax: (302) 658-3989
Email: rdehney@morrisnichols.com
cmiller@ morrisnichols.com
dbutz@ morrisnichols.com
mtalmo@ morrisnichols.com
bloughnane@ morrisnichols.com
Debtors'
Special
Finance
Counsel: SIMPSON THACHER & BARTLETT LLP
425 Lexington Avenue
New York, NY 10017
Debtors'
Investment
Banker: MOELIS & COMPANY
399 Park Avenue, New York, NY 10022
Debtors'
Financial
Advisor: FTI CONSULTING, INC.
1166 Avenue of the Americas
New York, NY 10036
Debtors'
Claims,
Noticing &
Solicitation
Agent: KROLL RESTRUCTURING ADMINISTRATION
55 East 52nd Street 17 Fl
New York, NY 10055
Debtors'
VP of
Restructuring: PROVINCE, LLC
700 Canal Street, Suite 12E
Stamford, CT 06902, by and through David
Dunn, principal
Estimated Assets: $1 billion to $10 billion
Estimated Liabilities: $1 billion to $10 billion
The petitions were signed by Bart de Jong, senior vice president
and chief financial officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/HKP5INI/TPC_Group_Inc__debke-22-10493__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. U.S. Bank National Association Deficiency Claim; $567,000,000
Global Corporate Trust Services 10.5% Secured
13737 Noel Road, Suite 800 Notes due 2024
Dallas, Texas 75240
Mark Radtke
Foley & Lardner LLP
Tel: (312) 832-4966
Email: mradtke@foley.com
2. Formosa Plastics Corporation Trade Debt $12,127,212
9 Peachtree Hill Road
Livingston, NJ 07039
Andrew Yen
Tel: (973) 716-7567
Email: ayen@fpcusa.com
3. Chevron-Phillips Trade Debt $9,684,790
Chemical Company LP
10001 Six Pines Drive
The Woodlands, TX 77538
Kevin Ristroph
Tel: (832) 728-9224
Email: kevin.ristroph@cpchem.com
4. Westlake Petrochemicals LLC Trade Debt $8,118,075
2801 Post Oak Boulevard, Suite 600
Houston, TX 77056
Lowell Sykes
Tel: (270) 519-4112
Email: lsykes@westlake.com
5. Sasol Chem N.A. LLC Trade Debt $6,752,065
12120 Wickchester Lane
Houston, TX 77079
Taylor Lombardi
Tel: (832) 840-4056
Email: taylor.lombardi@us.sasol.com
6. Nova Chemicals Inc. Trade Debt $6,521,087
1555 Coraopolis Heights Road
Moon Township, PA 15108
Kevin Blanc
Tel: (412) 490-4000
Email: kevin.blanc@novachem.com
7. Oci Methanol Marketing LLC Trade Debt $4,541,361
9 Greenway Plaza, Suite 800
Houston, TX 77046
Mark Sanders
Tel: (832) 570-3141
Email: mark.sanders@oci.nl
8. Southern Chemical Corp. Trade Debt $3,117,225
2 Northpoint Drive, Suite 975
Houston, TX 77060
Adrian Spencer
Tel: (281) 798-0366
Email: aspencer@southernchemical.com
9. Nova Chemicals Olefins LLC Trade Debt $1,856,575
2800 Post Oak Blvd., Suite 425
Houston, TX 77478
Jans Veldkamp
Tel: (713) 854-8655
Email: jans.veldkamp@novachem.com
10. Irisndt Inc. Trade Debt $1,763,360
4649 S. Sam Houston Parkway E.
Houston, TX 77048
Mike Bazzi
Tel: (713) 209-2710
Email: mike.bazzi@irisndt.com
11. Shintech Incorporated Trade Debt $1,714,771
#3 Greenway Plaza, Suite 1150
Houston, TX 77046
Tomoniro Hasegawa
Tel: (713) 965-0713
Email: thasegawa@shin-tech.com
12. Clean Harbors Trade Debt $1,521,152
Industrial Services Inc
PO Box 3442
Boston, MA 02241-3442
Tammy Hudson
Tel: (832) 780-1057
Email: hudson.tammy@cleanharbors.com
13. Cokinos Energy Corporation Trade $1,402,964
5718 Westheimer, Suite 900
Houston, TX 77057
Tel: (713) 974-0101
Email: kevin@cokinosenergy.com
14. Linde Inc. Trade Debt $1,277,842
PO Box 417518
Boston, MA 02241-7518
Tim Bowling
Tel: (281) 203-3604
Email: tim.bowling@linde.com
15. Burrow Global Services, LLC Trade Debt $1,229,228
Department 560
PO Box 4652
Houston, TX 77210
Dan Moser
Tel: (408) 348-6089
Email: daniel.moser@burrowglobal.com
16. Sabic Petrochemicals Trade Debt $1,028,148
Holdings US LLC
2500 Citywest Blvd, Suite 100
Houston, TX 77042
Deepak Veluru
Tel: (832) 434-5781
Email: dveluru@sabic.com
17. Indorama Ventures Oxides LLC Trade Debt $999,483
2701 Spur 136
Port Neches, TX 77651
Cindy Wu
Tel: (346) 365-6096
Email: cindy.wu@us.indorama.net
18. Evoqua Water Technologies LLC Trade Debt $949,564
28563 Network Place
Chicago, IL 60673-1285
Megan Link McHolick
Tel: (936) 520-8596
Email: megan.link@evoqua.com
19. Indorama Ventures PCL Litigation Undetermined
2701 Spur 136
Port Neches, TX 77651
John Maniscalco
Gette Law PLLC
Tel: (214) 447-0637
Email: jmaniscalco@gettelaw.com
20. Factory Mututal Litigation Undetermined
Insurance Company
1 Cowboys Way, Suite 600
Frisco, TX 75034
John Maniscalco
Gette Law PLLC
Tel: (214) 447-0637
Email: jmaniscalco@gettelaw.com
21. Lion Elastomers LLC Litigation Undetermined
88286 Expedite Way
Chicago, IL 60695-0001
Timothy C. Shelby;
Rey Flores; Alexander M. Dvorscak
Ahmad, Zavitsanos, Anaipakos,
Alavi & Mensing, PC
Tel: (713) 655-1101
Email: tshelby@azalaw.com;
rflores@azalaw.com;
advorscak@azalaw.com
22. Farmers Insurance Exchange Litigation Undetermined
PO Box 4665
Carol Stream, IL 60197
William D. Mahoney
Boteler, Mahoney & Gray, LLP
Tel: (972) 719-9191
Email: wmahoney@bmg-law.com
23. Ace American Insurance Company Litigation Undetermined
436 Walnut Street, PO Box 1000
Philadelphia, PA 19106
Jason S. Schulze
Cozen O'Connor
Tel: (832) 214-3916
Email: jschulze@cozen.com
24. Air Liquide Large Litigation Undetermined
Industries U.S. LP
2700 Post Oak Boulevard,
Suite 1800
Houston, TX 77056
Jay W. Brown; Bruce R. Wilkin
Shackelford, Bowen, McKinley &
Norton LLP
Tel: (832) 415-1801
Email: jbrown@shackelford.law;
bwilkin@shackelford.law
25. Ferguson Law Firm, LLP Litigation Undetermined
350 Pine Street, Suite 1440
Beaumont, TX 77701
Mark C. Sparks, Jane S. Leger,
Paul F. Ferguson Jr., Cody A.
Dishon
Ferguson Law Firm, LLP
Tel: (409) 832-9700
Email: mark@thefergusonlawfirm.com;
jleger@thefergusonlawfirm.com;
cferguson@thefergusonlawfirm.com;
cdishon@thefergusonlawfirm.com
26. Brent Coon & Associates Litigation Undetermined
215 Orleans Street
Beaumont, TX 77701
Brent Coon, Eric Newell
Brent Coon & Associates
Tel: (409) 835-2666
Email: brent@bcoonlaw.com;
eric_newell@bcoonlaw.com
27. Cristobal M. Galindo, PC Litigation Undetermined
4151 Southwest Freeway, Suite 602
Houston, TX 77027
Cristobal M. Galindo,
Joseph Gibson IV
Cristobal M. Galindo, PC
Tel: (713) 228-3030
Email: service@galindowlaw.com
28. Bailey Cowan Heckaman PLLC Litigation Undetermined
1360 Post Oak Boulevard, Suite 2300
Houston, TX 77056
Aaron H. Heckaman, K. Camp Bailey
Robert W. Cowan, Laurence G. Tien
Bailey Cowan Heckaman PLLC
Tel: (713) 425-7100
Email: aheckaman@bchlaw.com;
cbailey@bchlaw.coom;
rcowan@bchlaw.com;
ltien@bchlaw.com
29. Weller, Green, Litigation Undetermined
Toups & Terrell LLP
PO Box 350
Beaumont, TX 7770
Mitchell A. Toups
Weller, Green, Toups & Terrell LLP
Tel: (409) 832-1800
Email: matoups@wgttlaw.com
30. Farrar & Ball LLP Litigation Undetermined
1117 Herkimer Street
Houston, TX 77008
Bill Ogden
Tel: (713) 221-8300
Email: bill@fbtrial.com
TPC GROUP: Files for Chapter 11 With Plan to Cut Debt by $950M
--------------------------------------------------------------
TPC Group Inc. and certain of its subsidiaries have sought Chapter
11 protection to pursue a pre-arranged restructuring that would
position the Company to be a stronger, more competitive business
The Company intends to use the proceedings to implement a financial
restructuring with the support of a majority of its secured
noteholders that will deleverage and recapitalize the Company's
balance sheet and definitively address other legacy liabilities.
The Company expects to continue its operations uninterrupted
throughout the process.
In connection with the Chapter 11 filings, the Company and certain
of its affiliates entered into a Restructuring Support Agreement
with an ad hoc group of holders of approximately 88% of the
Company's $205.5 million outstanding 10.875% secured notes due 2024
and approximately 78% of the Company's $930 million outstanding
10.5% secured notes due 2024 and the Company's equity sponsors,
among others.
The RSA locks in the support of the Supporting Noteholders and
Sponsors, and establishes the framework for the Company's
restructuring, which, on emergence, is expected to resolve all tort
liabilities arising from the Port Neches facility incident and
eliminate from the Company's balance sheet over $950 million of the
Company's approximately $1.3 billion of secured funded debt. The
transactions contemplated by the RSA, once consummated, will result
in the Company emerging from bankruptcy with a significantly
enhanced liquidity profile by providing for capital infusions in
the form of:
* $450 million in connection with two rights offerings and $350
million in exit notes, all of which will be backstopped by certain
of the Supporting Noteholders, subject to the terms and conditions
set forth in the RSA;
* $323 million in delayed draw debtor-in-possession financing
facility provided by certain of the Supporting Noteholders, which
includes up to $85 million of new money to support the operations
of the Company and help fund the restructuring process, subject to
customary conditions; and
* $200 million in asset-based revolving debtor-in-possession
facility provided by Eclipse Business Capital LLC and its
affiliates, with the Company's option to convert such facility into
an exit asset-based revolving facility, subject to customary
conditions.
"Over the past several years, TPC Group has positioned our business
as a critical partner and player in the petrochemical industry.
However, a series of unprecedented events including the COVID-19
pandemic, supply chain issues, commodity price increases, higher
energy costs and operational challenges resulting from 2021 Winter
Storm Uri, and the explosion at our Port Neches plant in November
of 2019 have caused financial strain for the Company," said
Chairman, President and Chief Executive Officer of TPC Group,
Edward J. Dineen. "We have undertaken many efforts to address the
impacts of these events and preserve liquidity, which has given us
the necessary time to consider the best path forward for our
business and our stakeholders. We are confident that through this
process, we will bolster our liquidity, substantially improve our
debt position, and definitively resolve the liabilities associated
with the Port Neches facility incident."
For more than 75 years, the Company has operated as the largest
independent processor of crude C4 and as a leader in North America
across all of its product lines. Furthermore, the Company provides
critical infrastructure and logistics services to petrochemical
operators along the Gulf Coast. By establishing a suitable
underlying financial structure, the chapter 11 process will allow
the Company to continue to expand upon its rich history and resume
the path to sustained, profitable growth.
The Company has filed certain "First-Day" motions with the
Bankruptcy Court so that it can seamlessly transition into chapter
11 without disruption to its ordinary course operations, thereby
enabling the Company to fulfill its go-forward commitments to its
stakeholders, and pay its employees and certain vendors. The
Company is committed to continuing its operations in a safe and
environmentally responsible manner, while fulfilling its
commitments to its partners in the petrochemical industry, as well
as to its employees and surrounding communities.
* * *
A hearing on the first-day motions is scheduled before the
Honorable Craig T. Goldlbatt, United States Bankruptcy Judge, at
the United States Bankrupty Court for the District of Delaware,
located at 824 North Market Street, 3rd Floor, Courtroom No. 7,
Wilmington, Delaware 19801 on June 2, 2022 at 9:15 a.m. (ET).
The first-day motions include motions to jointly administer their
Chapter 11 cases, pay prepetition taxes and assessments, pay
prepetition wages, and salaries, continue their insurance programs,
continue their existing cash management system, pay prepetition
obligations to critical vendors, prohibit utility companies from
refusing service, and hire Kroll Restructuring Administration LLC
as claims agent.
About TPC Group
TPC Group, headquartered in Houston, is a producer of value-added
products derived from petrochemical raw materials such as C4
hydrocarbons, and provider of critical infrastructure and logistics
services along the Gulf Coast. The Company sells its products into
a wide range of performance, specialty and intermediate markets,
including synthetic rubber, fuels, lubricant additives, plastics
and surfactants. With an operating history of more than 75 years,
TPC Group has a manufacturing facility in the industrial corridor
adjacent to the Houston Ship Channel and operates product terminals
in Port Neches, Texas and Lake Charles, Louisiana.
TPC Group Inc. and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group
estimated assets and debt of $1 billion to $10 billion to $10
billion.
The Hon. Craig T. Goldblatt is the case judge.
Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arsht
& Tunnell LLP is the co-counsel; Moelis & Company LLC is the
investment banker; and FTI Consulting is the financial advisor.
Simpson Thacher & Bartlett LLP is the special finance counsel.
Kroll Restructuring Administration is the claims agent.
The Supporting Noteholders are advised by Paul Hastings LLP and
Evercore.
Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd.
VENUS CONCEPT: Incurs $8.6 Million Net Loss in First Quarter
------------------------------------------------------------
Venus Concept Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $8.64 million on $26.41 million of revenue for the three months
ended March 31, 2022, compared to a net loss of $9.44 million on
$22.60 million of revenue for the three months ended March 31,
2021.
As of March 31, 2022, the Company had $144.42 million in total
assets, $111 million in total liabilities, and $33.43 million in
total stockholders' equity.
The Company has had recurring net operating losses and negative
cash flows from operations. As of March 31, 2022 and Dec. 31,
2021, the Company had an accumulated deficit of $189,024 and
$180,405, respectively. The Company was in compliance with all
required covenants as of March 31, 2022, and Dec. 31, 2021.
The Company's recurring losses from operations and negative cash
flows raise substantial doubt about the Company's ability to
continue as a going concern within 12 months from the date that the
unaudited condensed consolidated financial statements are issued.
While the Company's business has improved and management expects
this momentum to continue through the balance of 2022, the Company
is still recovering from the impact of the coronavirus pandemic
("COVID-19" or "pandemic"). As of March 31, 2022, and for the
three months then ended management expects the pandemic to continue
to have a negative impact in the foreseeable future, the extent of
which is uncertain and largely subject to whether the severity of
the pandemic worsens, or duration lengthens. In the event that the
pandemic and the economic disruptions it has caused continue for an
extended period of time, the Company cannot assure that it will
remain in compliance with the financial covenants contained within
its credit facilities.
In order to continue its operations, the Company must achieve
profitable operations and/or obtain additional equity or debt
financing. Until the Company achieves profitability, management
plans to fund its operations and capital expenditures with cash on
hand, borrowings, and issuance of capital stock. In December 2021,
the Company issued and sold to investors 9,808,418 shares of common
stock, par value $0.0001 per share, and 3,790,755 shares of the
convertible preferred stock, par value $0.0001 per share for the
total gross proceeds of $16,999. In February 2021, several
investors exercised an aggregate of 361,200 December 2020 Public
Offering Warrants at the exercise price of $2.50 per share. The
total proceeds received by the Company from the December 2020
Public Offering Warrants exercises were $903. Until the Company
generates revenue at a level to support its cost structure, the
Company expects to continue to incur substantial operating losses
and net cash outflows from operating activities.
Given the pandemic and the uncertainty around the COVID-19
variants, the Company cannot anticipate the extent to which the
current economic turmoil and financial market conditions will
continue to adversely impact the Company's business and the Company
may need additional capital to fund its future operations and to
access the capital markets sooner than planned. There can be no
assurance that the Company will be successful in raising additional
capital or that such capital, if available, will be on terms that
are acceptable to the Company. If the Company is unable to raise
sufficient additional capital, it may be compelled to reduce the
scope of its operations and planned capital expenditures or sell
certain assets, including intellectual property assets. These
unaudited condensed consolidated financial statements do not
include any adjustments relating to the recoverability and
classification of recorded asset amounts or amounts and
classification of liabilities that might result from the
uncertainty. Such adjustments could be material.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1409269/000143774922012137/vero20220331_10q.htm
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's aesthetic systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general
practitioners
and aesthetic medical spas.
Venus Concept reported a net loss of $22.14 million for the year
ended Dec. 31, 2021, compared to a net loss of $82.82 million for
the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$153.87 million in total assets, $112.27 million in total
liabilities, and $41.60 million in stockholders' equity.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
28, 2022, citing that the Company has reported recurring net losses
and negative cash flows from operations, that raises substantial
doubt about its ability to continue as a going concern.
VERITAS FARMS: Incurs $1.3 Million Net Loss in First Quarter
------------------------------------------------------------
Veritas Farms, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $1.28 million on $482,086 of revenues for the three months ended
March 31, 2022, compared to a net loss of $1.15 million on $888,261
of revenues for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $8.38 million in total
assets, $4.91 million in total liabilities, and $3.47 million in
total shareholders' equity.
The Company has historically experienced negative cash flows and
has relied on the proceeds from the sale of debt and equity
securities to fund its operations. In addition, the Company has
utilized stock-based compensation as a means of paying for
consulting and salary related expenses. At March 31, 2022, the
Company had working capital of approximately $1,676,514.
Cash decreased to $373,360 at March 31, 2022 from $481,763 at Dec.
31, 2021. The decrease was primarily due to net cash used in
operating activities.
As of March 31, 2022, total assets were $8,377,105 as compared to
$8,597,840 at Dec. 31, 2021. The decrease in assets is primarily
due to a decrease in cash and property and equipment, net of
accumulated depreciation.
Total current liabilities as of March 31, 2022 were $2,348,121, as
compared to $2,209,096 at Dec. 31, 2021. The increase was mainly
due to increases in dividends payable and deferred revenue.
Net cash used in operating activities was $1,088,394 for the three
months ended March 31, 2022, as compared to $889,603 for the three
months ended March 31, 2021. The increase is largely attributable
to the increase in net loss attributable to common shareholders,
and by changes in inventories, accounts payable, accounts
receivable, deferred revenue and accrued expenses.
Net cash used in investing activities was $5,069 for the three
months ended March 31, 2022 as compared to net cash used of $0 for
the three months ended March 31, 2021, reflecting a slight increase
in capital expenditures in 2022.
Net cash provided by financing activities was $985,060 for the
three months ended March 31, 2022 as compared to $873,890 for the
three months ended March 31, 2021. Net cash provided by financing
activities for the three months ended March 31, 2022 included net
proceeds of $1,000,000 from a convertible note payable received
from the Wit Trust. Net cash provided by financing activities for
the three months ended March 31, 2021 included net proceeds of
$803,994 from a loan received under the U.S. Small Business
Administration Paycheck Protection Program as part of the business
incentives offered in the Coronavirus Aid, Relief, and Economic
Security Act received in February 2021, and net proceeds of $86,895
from private offerings of its equity securities.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1669400/000121390022025924/f10q0322_veritasfarms.htm
About Veritas
Fort Lauderdale, Florida-based Veritas Farms, Inc. --
www.TheVeritasFarms.com -- is a vertically-integrated agribusiness
focused on growing, producing, marketing, and distributing superior
quality, whole plant, full spectrum hemp oils and extracts
containing naturally occurring phytocannabinoids. Veritas Farms
owns and operates a 140 acre farm in Pueblo, Colorado, capable of
producing over 200,000 proprietary full spectrum hemp plants which
can potentially yield a minimum annual harvest of 250,000 to
300,000 pounds of outdoor-grown industrial hemp.
Veritas Farms reported a net loss of $7.07 million for the year
ended Dec. 31, 2021, compared to a net loss of $7.59 million for
the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$8.60 million in total assets, $3.77 million in total liabilities,
and $4.83 million in total shareholders' equity.
Hackensack, New Jersey-based Prager Metis CPA's LLC, the Company's
auditor since 2018, issued a "going concern" qualification in its
report dated April 12, 2022, citing that the Company has sustained
substantial losses from operations since its inception. As of and
for the year ended Dec. 31, 2021, the Company had an accumulated
deficit of $33,930,714, and a net loss of $7,263,567. These
factors, among others, raise substantial doubt about the ability of
the Company to continue as a going concern. Continuation as a going
concern is dependent on the ability to raise additional capital and
financing, though there is no assurance of success.
VIPER PRODUCTS: Seeks to Hire Superior Energy as Auctioneer
-----------------------------------------------------------
Viper Products & Services, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Texas to hire
Superior Energy Auctioneers, LP, an auction firm in Lubbock,
Texas.
The Debtor intends to sell at auction all of its vehicles,
trailers, equipment and tools, which it currently owns and leases.
The auction will take place through Superior Energy's website from
June 22 to 23 or as soon thereafter as reasonably possible.
Superior Energy will be paid a commission of 6 percent based upon
the gross sales price of the assets.
As disclosed in court filings, Superior Energy neither represents
nor holds any interest adverse to the Debtor and its estate.
The firm can be reached through:
Mitchell Long
Superior Energy Auctioneers, LP
P.O. Box 64250
12402 Slide Rd #204
Lubbock, TX 79064
Phone: +1 806-368-5534
About Viper Products & Services
Viper Products & Services, LLC provides environmentally sound
solutions for the oil and gas industry. Based in Lubbock, Texas,
Viper Products & Services offers oil spill management, testing,
reporting, remediation, reclamation, excavation, and bore and core
drilling services.
Viper Products & Services filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No.
21-50187) on Dec. 13, 2021, listing $1 million to $10 million in
both assets and liabilities. Zack Tuttle, manager, signed the
petition.
Judge Robert L. Jones oversees the case.
The Debtor tapped McWhorter, Cobb & Johnson, LLP as legal counsel
and Charles W. Darter, Jr. as accountant.
WOLVERINE WORLD: S&P Alters Outlook to Negative, Affirms 'BB' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on Rockford, Mich.–based
footwear seller Wolverine World Wide Inc. to negative from stable
and affirmed all of its ratings, including its 'BB' issuer-credit
rating.
The negative outlook reflects the potential for a downgrade if
leverage remains elevated and does not improve to below 4x by the
end of the fiscal year ending January 2023 due to weak consumer
demand, inability to maintain profitability from cost inflation, or
a more aggressive financial policy.
The outlook revision reflects little cushion in Wolverine's ratings
to absorb potential declines in its operating performance given its
elevated leverage. The company recently announced an additional $30
million of legal settlement costs related to its water
contamination sites in its legacy leather tannery site in Michigan.
This came at a time when the company's leverage was already
elevated and close to our downgrade trigger of 4x due to its
debt-funded acquisition of Sweaty Betty late last year. In
addition, the company's financial policy continues to be
aggressive. Despite weak cash generation due to seasonality in the
first quarter, the company nonetheless borrowed under its revolver
and repurchased approximately $40 million of shares. As a result,
the company's leverage was 5.2x as of March 31, 2022 (5x pro forma
for Sweaty Betty acquisition, and 3.7x excluding the approximately
$80 million of legal costs that accrued in the last two quarters).
S&P currently forecasts that the company's leverage will improve to
the high-3x area by the end of 2022, driven by EBITDA growth
resulting from continued healthy consumer demand in the outdoors
and work segments of its portfolio, debt reduction in the fourth
quarter from cash flow generations, and the lapping of the
approximately $46 million of legal charges booked in the fourth
quarter of 2021.
Wolverine's order book continues to look healthy, as demand for
running, outdoor, and work footwear remains strong. The company
expects stronger growth starting in the second quarter as delayed
products from Southeast Asia begin to arrive. One of its key
outdoor brands, Merrell (approximately 25% of its overall sales),
had a challenging first quarter as new product launches were
delayed by supply chain issues. Despite this, the company's organic
revenue increased 9% in the first quarter compared to the prior
year. S&P believes as products become available, and Merrell
launches its new innovations in time for the running and outdoor
seasons, the company's revenue should increase in the
low-double-digit-percent area for 2022.
S&P said, "We expect the company will manage adjusted EBITDA
margins close to 2021 levels despite a more promotional environment
and persistent cost pressure. We should see a slight improvement in
overall average selling prices for the company as new product
launches will be sold at higher price points." However, this will
be mostly offset by a more promotional environment and high freight
and input costs. Promotional environments are starting to
normalize, as consumers' purchasing behaviors cool after last
year's consumption spike following COVID-19 lockdowns. The company
has a record of managing marketing and growth spending well and we
are projecting that, including the legal settlement costs in both
years, the company's adjusted EBITDA margins will be relatively
flat to last year, at about 11%, slightly below the 11.5%
pre-pandemic.
The legal settlements are pressuring the company's profitability
and cash flow generation. The company recently announced
approximately $30 million of legal settlement charges related to
the use of chemicals in its now shuttered leather tanning locations
in Michigan, the third large legal settlement the company has
incurred. The company previously disclosed a $70 million settlement
charge in the fourth quarter of 2019 and a $46 million charge in
the fourth quarter of 2021. S&P said, "While our forecast does not
anticipate further material charges related to this case, legal
costs are hard to predict and environmental issues often have
long-term impacts (as evidenced by this series of settlements
stemming from practices that occurred decades ago) and there could
be unanticipated future claims. We believe the company has managed
the legal proceedings well thus far, and, outside of monetary
fines, we have not seen consumer backlash on its brands."
Wolverine has a history of debt-funded share buybacks and
acquisitions. More recently, it funded the $410 million acquisition
of U.K.-based yoga-wear company Sweaty Betty with revolver
borrowings in August 2021. This acquisition increased leverage to
the mid-3x area from 2.3x, leaving the company with limited room to
absorb the incremental legal settlements. In addition, the company
made approximately $40 million of share repurchases in the first
quarter, despite already elevated leverage and weak cash flow
generation. To alleviate some of the negative impacts from is
currently aggressive financial policy, there could be opportunities
from the company's strategy review underway with the Boston
Consulting Group to rationalize components of its portfolio which
could result in additional cash to pay down debt. As such, S&P
believes Wolverine's currently elevated leverage is temporary, and
the company will continue to manage leverage in the 3x-4x area in
the long term.
The negative outlook reflects the potential for a downgrade if
leverage remains elevated and does not improve to below 4x by the
end of the fiscal year due to weaker consumer demands, inability to
maintain profitability from cost inflations, or a more aggressive
financial policy.
S&P could lower its ratings if the company does not decrease
leverage to below 4x by the end of 2022. This could occur if:
-- Operating performance and free cash flow generation
deteriorates from our current expectations from weaker consumer
demands, increased competition, higher promotional activities, or
worsening supply chain congestions that delay products' key
delivery timelines; or
-- More unanticipated legal settlements charges that depress its
operating results; or
-- More aggressive financial policy with continued debt-funded
share repurchases and acquisitions while leverage is elevated.
S&P could revise its outlook to stable if the company's leverage
returns to below 4x. This could occur if:
-- Consumer demand remains healthy and the company manages stable
EBITDA margin in this volatile and inflationary environment; and
-- Prioritizes debt repayment with its free cash flow generations
at the end of the year.
ESG credit indicators: To E-3, S-2, G-2; From E-2, S-2, G-2
S&P said, "We now view environmental factors as a moderately
negative consideration in our credit rating analysis of Wolverine
World Wide. This compared with our previous view of neutral because
its latest series of legal settlements has put additional pressure
on the company's credit metrics and cash flow generations beyond
its current ratings level. It also reflects our view that
environmental issues are often long lasting, and unforeseen
developments regarding legacy practices could impair the company's
financial operations long after the physical operations are
shuttered."
ZOHAR FUNDS: Tilton's Takeover of Stila Styles Invalid, Court Rules
-------------------------------------------------------------------
Leslie A. Pappas of Law360 reports that a Delaware judge ruled
Tuesday, May 31, 2022, that turnaround mogul Lynn Tilton's takeover
of cosmetics company Stila Styles LLC in 2017 was invalid but
stopped short of saying who the manager should be, leaving in limbo
a Chapter 11 effort to appoint Kevin Carey, a retired bankruptcy
judge, as manager of the cosmetics business.
In a 42-page post-trial opinion, Vice Chancellor Joseph R. Slights
III found that Tilton violated Stila's LLC agreement in 2017 when
she purported to create a new class of units that gave her
unilateral power to remove the company's manager because Tilton
failed to get consent.
About the Zohar Funds
New York-based Patriarch Partners, LLC, is a private equity firm
specializing in acquisition, buyouts, and turnaround investment in
distressed American companies and brands. Patriarch Partners was
founded by Lynn Tilton in 2000. Lynn Tilton and her affiliates held
substantial equity stakes in portfolio companies, which include
iconic American manufacturing companies with tens of thousands of
employees.
The Zohar funds were created to raise money through selling a form
of notes called collateralized loan obligations to investors that
was then used to extend loans to dozens of distressed mid-size
companies, often in connection with the acquisition of those
companies out of bankruptcy.
Patriarch bought "distressed" companies via funding from a series
of collateralized loan obligations (CLOs) marketed through
Patriarch via its $2.5 billion "Zohar" funds. Tilton placed the
funds into bankruptcy in 2018 in an attempt to keep Patriarch's
portfolio from being liquidated by Zohar creditors including bond
insurer MBIA, which insured $1 billion worth of Zohar notes.
Combined debt of the funds is estimated at $1.7 billion.
Zohar CDO 2003-1, Zohar CDO 2003-1 Corp., Zohar II 2005-1, Limited,
Zohar II 2005-1 Corp., Zohar III, Limited, and Zohar III, Corp.
(collectively, the "Zohar Funds"), sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 18-10512 to
18-10517) on March 11, 2018. In the petition signed by Lynn Tilton,
director, the Debtors were estimated to have $1 billion to $10
billion in assets and $500 million to $1 billion in liabilities.
Young Conaway Stargatt & Taylor, LLP, is the Debtors' bankruptcy
counsel.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Walker Hospitality LLC
Bankr. S.D. Tex. Case No. 22-80095
Chapter 11 Petition filed May 13, 2022
See
https://www.pacermonitor.com/view/URZCQGQ/Walker_Hospitality_LLC__txsbke-22-80095__0012.0.pdf?mcid=tGE4TAMA
represented by: Jack N. Fuerst, Esq.
JACK N. FUERST, ATTORNEY AT LAW
E-mail: jfuerst@sbcglobal.net
In re Pera Dental Care, PC
Bankr. S.D.N.Y. Case No. 22-10653
Chapter 11 Petition filed May 23, 2022
See
https://www.pacermonitor.com/view/GXA4UGI/Pera_Dental_Care_PC__nysbke-22-10653__0001.0.pdf?mcid=tGE4TAMA
represented by: Anne Penachio, Esq.
PENACHIO MALARA, LLP
E-mail: frank@pmlawllp.com
In re Prestige Homecare, LLC
Bankr. E.D. Tenn. Case No. 22-11084
Chapter 11 Petition filed May 23, 2022
See
https://www.pacermonitor.com/view/UMFIJVQ/Prestige_Homecare_LLC__tnebke-22-11084__0001.0.pdf?mcid=tGE4TAMA
represented by: David J. Fulton, Esq.
SCARBOROUGH & FULTON
E-mail: DJF@sfglegal.com
In re 839 E Minorka Partners LLC
Bankr. D. Ariz. Case No. 22-03299
Chapter 11 Petition filed May 24, 2022
See
https://www.pacermonitor.com/view/6QO3J7Y/839_E_MINORKA_PARTNERS_LLC__azbke-22-03299__0001.0.pdf?mcid=tGE4TAMA
represented by: Bryan Goodman, Esq.
GOODMAN & GOODMAN, PLC
E-mail: bwg@goodmanadvisor.com
In re Robert Paterson
Bankr. M.D. Fla. Case No. 22-02079
Chapter 11 Petition filed May 24, 2022
In re DET Medical P.C.
Bankr. E.D.N.Y. Case No. 22-41117
Chapter 11 Petition filed May 24, 2022
See
https://www.pacermonitor.com/view/KW2SWUA/DET_Medical_PC__nyebke-22-41117__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Ding Trans Corp.
Bankr. E.D.N.Y. Case No. 22-41126
Chapter 11 Petition filed May 24, 2022
See
https://www.pacermonitor.com/view/PMNIYJI/Ding_Trans_Corp__nyebke-22-41126__0001.0.pdf?mcid=tGE4TAMA
represented by: Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
E-mail: alla@kachanlaw.com
In re Dinozeus LLC
Bankr. M.D.N.C. Case No. 22-10264
Chapter 11 Petition filed May 24, 2022
See
https://www.pacermonitor.com/view/EOBB3IQ/DINOZEUS_LLC__ncmbke-22-10264__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Citizen Protection Inc.
Bankr. D.P.R. Case No. 22-01475
Chapter 11 Petition filed May 24, 2022
See
https://www.pacermonitor.com/view/CYR5SYQ/CITIZEN_PROTECTION_INC__prbke-22-01475__0001.0.pdf?mcid=tGE4TAMA
represented by: Javier Vllarino, Esq.
VILARINO & ASSOCIATES
E-mail: jvllarino@vilarinolaw.com
In re Erika Marie Vazquez
Bankr. N.D. Tex. Case No. 22-41142
Chapter 11 Petition filed May 24, 2022
represented by: Helenna Bird, Esq.
In re Wyotrans, LLC
Bankr. D. Ariz. Case No. 22-03353
Chapter 11 Petition filed May 25, 2022
See
https://www.pacermonitor.com/view/257RWXQ/WYOTRANS_LLC__azbke-22-03353__0001.0.pdf?mcid=tGE4TAMA
represented by: Allan D. NewDelman, Esq.
ALLAN D. NEWDELMAN, P.C.
E-mail: anewdelman@adnlaw.net
In re 626 Hospice, Inc.
Bankr. C.D. Cal. Case No. 22-12904
Chapter 11 Petition filed May 25, 2022
See
https://www.pacermonitor.com/view/IBOPW2Q/626_Hospice_Inc__cacbke-22-12904__0001.0.pdf?mcid=tGE4TAMA
represented by: Yeznik Kazandjian, Esq.
LAW OFFICES OF YEZNIK O. KAZANDJIAN
E-mail: yeznik@gmail.com
In re Daniel Dragan Civic
Bankr. M.D. Fla. Case No. 22-01875
Chapter 11 Petition filed May 25, 2022
In re Lopsang Construction Service, LLC
Bankr. M.D. Fla. Case No. 22-01879
Chapter 11 Petition filed May 25, 2022
See
https://www.pacermonitor.com/view/XWQRG4Y/Lopsang_Construction_Service_LLC__flmbke-22-01879__0001.0.pdf?mcid=tGE4TAMA
represented by: Justin M. Luna, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
E-mail: jluna@lathamluna.com
In re Tampa Smoke Shop, LLC
Bankr. M.D. Fla. Case No. 22-02105
Chapter 11 Petition filed May 25, 2022
See
https://www.pacermonitor.com/view/L7EJF7Q/Tampa_Smoke_Shop_LLC__flmbke-22-02105__0001.0.pdf?mcid=tGE4TAMA
represented by: Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
E-mail: All@tampaesq.com
In re Jose Questell and Elizabeth Questell
Bankr. S.D. Fla. Case No. 22-14111
Chapter 11 Petition filed May 25, 2022
represented by: Chad Van Horn, Esq.
In re Lauri L. Cornell
Bankr. S.D. Fla. Case No. 22-14113
Chapter 11 Petition filed May 25, 2022
represented by: Bart Houston, Esq.
In re Mid South Utility Services, LLC
Bankr. S.D. Fla. Case No. 22-14081
Chapter 11 Petition filed May 25, 2022
See
https://www.pacermonitor.com/view/52HNPDY/Mid_South_Utility_Services_LLC__flsbke-22-14081__0004.0.pdf?mcid=tGE4TAMA
represented by: Craig I. Kelley, Esq.
KELLEY, FULTON & KAPLAN, P.L.
E-mail: craig@kelleylawoffice.com
In re Gregory Kwasnicki
Bankr. D.N.J. Case No. 22-14227
Chapter 11 Petition filed May 25, 2022
represented by: Geoffrey Neumann, Esq.
In re Luis Adrian Rivera Pomales
Bankr. D.P.R. Case No. 22-01482
Chapter 11 Petition filed May 25, 2022
represented by: Nydia Gonzalez, Esq.
In re Imagenation of Allen, LLC
Bankr. E.D. Tex. Case No. 22-40645
Chapter 11 Petition filed May 25, 2022
See
https://www.pacermonitor.com/view/FTMQWQQ/Imagenation_of_Allen_LLC__txebke-22-40645__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric A. Liepins, Esq.
ERIC A. LIEPINS
E-mail: eric@ealpc.com
In re Ying Liu and Zhiwen Yang
Bankr. W.D. Wash. Case No. 22-10855
Chapter 11 Petition filed May 25, 2022
represented by: Christopher Young, Esq.
In re Hail Mary, LLC
Bankr. D. Mass. Case No. 22-10740
Chapter 11 Petition filed May 26, 2022
See
https://www.pacermonitor.com/view/G3MCHDY/Hail_Mary_LLC__mabke-22-10740__0001.0.pdf?mcid=tGE4TAMA
represented by: Peter M. Daigle, Esq.
DAIGLE LAW OFFICE
E-mail: pmdaigleesq@yahoo.com
In re Mifate Cab Corp.
Bankr. S.D.N.Y. Case No. 22-10665
Chapter 11 Petition filed May 26, 2022
See
https://www.pacermonitor.com/view/5JFBW7Y/Mifate_Cab_Corp__nysbke-22-10665__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas A. Farinella, Esq.
LAW OFFICE OF THOMAS A. FAIRNELLA, PC
E-mail: tf@lawtaf.com
In re Tremont Beverage Inc.
Bankr. S.D.N.Y. Case No. 22-10664
Chapter 11 Petition filed May 26, 2022
See
https://www.pacermonitor.com/view/LAC7K5A/Tremont_Beverage_Inc__nysbke-22-10664__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael A. King, Esq.
MICHAEL A. KING, ESQ
E-mail: Romeo1860@aol.com
In re BMW Nationwide Security Inc.
Bankr. C.D. Cal. Case No. 22-12988
Chapter 11 Petition filed May 27, 2022
See
https://www.pacermonitor.com/view/B6ERA2Q/BMW_Nationwide_Security_Inc__cacbke-22-12988__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
E-mail:
michael.berger@bankruptcypower.com
In re Teresa Pacheco
Bankr. C.D. Cal. Case No. 22-12967
Chapter 11 Petition filed May 27, 2022
represented by: Michael Jones, Esq.
In re Qualitat Drywall, LLC
Bankr. S.D. Cal. Case No. 22-01405
Chapter 11 Petition filed May 27, 2022
See
https://www.pacermonitor.com/view/YTQJ2TQ/Qualitat_Drywall_LLC__casbke-22-01405__0001.0.pdf?mcid=tGE4TAMA
represented by: Steven E. Cowen, Esq.
S.E. COWEN LAW
E-mail: Cowen.steve@secowenlaw.com
In re 65 Team LLC
Bankr. S.D. Fla. Case No. 22-14201
Chapter 11 Petition filed May 27, 2022
See
https://www.pacermonitor.com/view/UN55F7Y/65_Team_LLC__flsbke-22-14201__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Daryl Anthony Green
Bankr. D. Md. Case No. 22-12906
Chapter 11 Petition filed May 27, 2022
represented by: Shannon McKenna, Esq.
In re Horse Carriage Enterprises, LLC
Bankr. E.D. Pa. Case No. 22-11370
Chapter 11 Petition filed May 27, 2022
See
https://www.pacermonitor.com/view/ATQ5V2I/Horse_Carriage_Enterprises_LLC__paebke-22-11370__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Jog's LLC
Bankr. D.P.R. Case No. 22-01525
Chapter 11 Petition filed May 27, 2022
See
https://www.pacermonitor.com/view/EZ4GN2A/JOGS_LLC__prbke-22-01525__0001.0.pdf?mcid=tGE4TAMA
represented by: Carmen D. Conde Torres, Esq.
C. CONDE & ASSOC.
E-mail: condecarmen@condelaw.com
In re Keith Steven Patrick Gilbert
Bankr. D. Utah Case No. 22-21988
Chapter 11 Petition filed May 27, 2022
represented by: George Hofmann, Esq.
In re H & H Investments, LLC
Bankr. C.D. Cal. Case No. 22-12998
Chapter 11 Petition filed May 30, 2022
See
https://www.pacermonitor.com/view/B7LHYVA/H__H_Investments_LLC__cacbke-22-12998__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael Kwasigroch, Esq.
LAW OFFICES OF MICHAEL D. KWASIGROCH
E-mail: attorneyforlife@aol.com
In re Todd E. Spahr
Bankr. D. Md. Case No. 22-12918
Chapter 11 Petition filed May 30, 2022
represented by: John Gordon, Esq.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
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On Thursdays, the TCR delivers a list of recently filed
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liabilities delivered to nation's bankruptcy courts. The list
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then-ending.
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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.
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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.
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