/raid1/www/Hosts/bankrupt/TCR_Public/220627.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, June 27, 2022, Vol. 26, No. 177
Headlines
1 BIG RED: Recovery for Unsecureds in Wind-Down Plan Unknown
36TH STREET: Files Emergency Bid to Use Cash Collateral
388 ADOLPHUS: Voluntary Chapter 11 Case Summary
396 MEDICAL: Voluntary Chapter 11 Case Summary
85 FLATBUSH: Claims Will be Paid From Hagler Funding; Amends Plan
85 FLATBUSH: Says Its Own Plan Better Than TH Holdco's
AA FOOD: Evolve Bank Says Plan Projections Vague
AC NW RETAIL: Taps Lawrence J. Berger as Real Estate Tax Counsel
ADVANZEON SOLUTIONS: June 29 Status Conference on Plan
AFFINITY INTERACTIVE: Moody's Ups CFR to B2, Outlook Stable
AIR TRANSPORT: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
ALLEGHENY TECHNOLOGIES: Egan-Jones Retains B- Sr. Unsec. Ratings
ALLEN & HANDY: Wins Cash Collateral Access Thru July 20
AMERICAN DE ROSA: U.S. Trustee Appoints Creditors' Committee
AMERICAN DE ROSA: Wins Interim Cash Collateral Access
AMERICAN HARVEST: Unsecureds to Get 62 Cents on Dollar in Plan
AMERIVET SERVICES: Unsecureds Owed $1M to Split $125K in Plan
ANNALY CAPITAL: Egan-Jones Hikes Senior Unsecured Ratings to BB+
ANYWHERE REAL: Moody's Affirms B1 CFR & Alters Outlook to Positive
APEX CONVEYOR: Wins Cash Collateral Access Thru July 28
ARCHDIOCESE OF NEW ORLEANS: 3 New Committee Members Appointed
ASP NAVIGATE: Moody's Cuts CFR & First Lien Loans to 'B3'
BEASLEY BROADCAST: S&P Affirms 'B-' ICR, Alters Outlook to Neg.
BOY SCOUTS: Not Contributing $55 Mil. to Guam Clergy Abuse Fund
BRINKER INTERNATIONAL: Egan-Jones Retains B Sr. Unsecured Ratings
BRISTOL PROPERTIES: Unsecureds Will Get 100% Dividend in Plan
BRODIE HOLDINGS: Aug. 18 Plan & Disclosures Hearing Set
BROOKDALE SENIOR: Egan-Jones Retains CC Senior Unsecured Ratings
BUCKEYE TECHNOLOGIES: Egan-Jones Retains BB- Sr. Unsecured Ratings
BUENA VISTA GAMING: Moody's Reviews 'Caa1' CFR for Downgrade
c
CAESARS ENTERTAINMENT: Egan-Jones Retains CCC Sr. Unsec. Ratings
CAESARS HOLDINGS: Egan-Jones Keeps CCC Senior Unsecured Ratings
CALPLANT I: Plan Exclusivity Period Extended to Nov. 29
CARDINAL HEALTH: Egan-Jones Retains BB+ Senior Unsecured Ratings
CARPENTER REALTY: Joint Liquidating Plan Confirmed by Judge
CENTRAL GARDEN: Egan-Jones Retains BB Senior Unsecured Ratings
CES ENERGY: DBRS Confirms B(high) Issuer Rating, Trend Stable
CHANGE HEALTHCARE: S&P Retains 'B+' ICR on CreditWatch Positive
CHARTER NEXT: S&P Alters Outlook to Stable, Affirms 'B' ICR
CIRQUE DU SOLEIL: Moody's Ups CFR to B3 & Alters Outlook to Stable
CMC MATERIALS: Egan-Jones Retains BB- Senior Unsecured Ratings
COINBASE GLOBAL: Moody's Cuts CFR to Ba3, Placed On Further Review
COLFAX CORP: Moody's Withdraws 'Ba2' CFR Amid Debt Repayment
COLLECTIVE COWORKING: Disposable Income to Fund Plan Payments
COMPASS POINTE: Taps Jacob Morgner of Compass Pointe as Realtor
CONSOLIDATED ENERGY: Moody's Alters Outlook on B2 CFR to Positive
CORECIVIC INC: Egan-Jones Retains BB+ Senior Unsecured Ratings
CORSAIR GAMING: S&P Rates Senior Credit Facilities 'BB-'
CORSICANA BEDDING: Case Summary & 20 Largest Unsecured Creditors
CREATIVE CHOICE: U.S. Trustee Unable to Appoint Committee
CYPRESS ENVIRONMENTAL: Joint Prepackaged Plan Confirmed by Judge
DGS REALTY: Wins Cash Collateral Access Thru Aug 31
DIXON & SONS: Files Emergency Bid to Use Cash Collateral
DIXON AND SONS: NC Farm Files Subchapter V Case
DUSAN PITTNER: June 28 Hearing on Trustee's Boca Raton Asset Sale
EASTERDAY RANCHES: Gets Further Extension of Plan Exclusivity
ELEVATE TEXTILES: Moody's Alters Outlook on 'B3' CFR to Negative
EMPACADORA Y PROCESADORA: Aug. 11 Plan Disclosures Hearing Set
EMPIRE TODAY: Moody's Cuts CFR to B3 & Alters Outlook to Negative
ENVIVA INC: Fitch Gives BB- Rating on $300MM Unsec. Notes Due 2052
ENVIVA INC: Moody's Rates New $250MM Series 2022 Revenue Bonds 'B1'
EPIC CRUDE: Moody's Affirms 'Caa1' CFR & Alters Outlook to Stable
EQUANIMITY BEHAVIORAL: Wins Cash Collateral Access on Final Basis
ESCADA AMERICA: Seeks Cash Collateral Access
EVERI HOLDINGS: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
EXPEDIA GROUP: Egan-Jones Keeps B+ Senior Unsecured Ratings
FAIRMONT ORTHOPEDICS: Wins Cash Collateral Access Thru July 13
FAIRPORT BAPTIST: Wins Cash Collateral Access Thru July 15
FIBERFAST INC: Taps Falcone Law Firm as Bankruptcy Counsel
FIDELITY NATIONAL: Egan-Jones Retains BB+ Senior Unsecured Ratings
FITNESS INTERNATIONAL: S&P Raises ICR to 'B-', Outlook Positive
FREEDOM HOLDING: S&P Affirms 'B-' ICR, Off CreditWatch Negative
FREEPORT LNG: Fitch Puts 'B' IDR on Rating Watch Negative
FROZEN FOODS: Wins Interim OK of $2MM DIP Loan
GIRARDI & KEESE: Trustee Says Earrings Bought From Clients' Money
GLATFELTER CORP: Egan-Jones Retains BB Senior Unsecured Ratings
GLORIETA PARTNERS: S&P Lowers Housing Rev. Bonds Rating to 'CCC'
GOLD STANDARD: June 30 Deadline Set for Panel Questionnaires
GOODYEAR TIRE: Egan-Jones Retains BB- Senior Unsecured Ratings
GPS HOSPITALITY: Fitch Downgrades LongTerm IDR to 'CCC+'
GREEN PLAINS: Egan-Jones Retains B- Senior Unsecured Ratings
HANESBRANDS INC: Egan-Jones Retains B+ Senior Unsecured Ratings
HARDIN TRUCKING: Voluntary Chapter 11 Case Summary
HOLY REDEEMER: Fitch Affirms 'BB+' IDR, Outlook Stable
HUCKLEBERRY PARTNERS: May Use Cash Collateral Thru Aug. 2
INDIANA FINANCE: Moody's Rates Series 2022A/B Revenue Bonds 'Ba3'
IRONSIDE LLC: July 21 Plan & Disclosure Hearing Set
ISTAR INC: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
JSG II: Moody's Affirms 'Caa1' CFR & Alters Outlook to Stable
KEYWAY APARTMENT: Files for Chapter 11 With $4.25M in Debt
KINSEY & KINSEY: Seeks Cash Collateral Access Thru July 12
KOPPERS INC: Moody's Rates $800MM Revolver Credit Facility 'Ba3'
LTL MANAGEMENT: Lex Nova Law Represents DOBS Claimants
LTM SDLV 2020: Seeks to Hire Riggi Law Firm as Bankruptcy Counsel
LUCCI RESTAURANT: Asks for July 14 Extension for Plan
MAJOR MODEL: Models Lose on Chapter 11 Class Claim
MALLINCKRODT PLC: Updates Reorganizing Plan Disclosures
MANCHESTER HOUSING: Moody's Ups Rating on Series 2000 Bonds to B2
MAPLE LEAF: Business Income to Fund Plan Payments
MAPLE LEAF: Has Deal on Cash Collateral Access
MARS COLONY: Seeks Cash Collateral Access Thru July 2022
MARY A II: Unsecureds to Split $109K in a Non-Consensual Plan
MBIA INC: Moody's Affirms 'Ba3' Rating on Senior Unsecured Debt
MEGA-PHILADELPHIA LLC: Mega Unsecureds to Recover 100% in 60 Months
MERLIN ACQUISITION: Term Loan Increase No Impact on Moody's B3 CFR
MESO DELRAY: Case Summary & 20 Largest Unsecured Creditors
MGM RESORTS: Egan-Jones Keeps B- Senior Unsecured Ratings
MILFORD PARK CLO: Moody's Assigns B3 Rating to $1MM Class F Notes
MILLENNIUM SERVICES: Creditor Seeks Chapter 11 Trustee Appointment
MILLENNIUM SERVICES: Seeks to Use Cash Collateral
MORROW GA INVESTORS: Unsecured Creditors to Split $5K in Plan
MSCI INC: Moody's Rates $350MM Senior Unsecured Term Loan 'Ba1'
NCR CORP: Egan-Jones Lowers Senior Unsecured Ratings to CCC+
NEWELL BRANDS: Egan-Jones Lowers Senior Unsecured Ratings to BB-
NEWPARK RESOURCES: Egan-Jones Retains B- Senior Unsecured Ratings
NEXTSPORT INC: Wins Cash Collateral Access Thru July 1
OASIS PETROLEUM: Egan-Jones Hikes Senior Unsecured Ratings to BB
OLIN CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings
PARETEUM CORP: May Use $18MM of Circles DIP Loan
PATHWAY VET: S&P Cuts ICR to 'B-' on High Leverage, Outlook Stable
PBF ENERGY: Egan-Jones Retains CCC+ Senior Unsecured Ratings
PG&E CORP: Egan-Jones Lowers Senior Unsecured Ratings to BB-
PIER 1: Egan-Jones Retains B+ Senior Unsecured Ratings
PILGRIM'S PRIDE: Egan-Jones Retains B+ Senior Unsecured Ratings
PLANVIEW PARENT: New Incremental Loan No Impact on Moody's B3 CFR
PLUTO ACQUISITION I: Moody's Alters Outlook on B3 CFR to Negative
POCONO MOUNTAIN: Seeks to Hire John J. Martin as Bankruptcy Counsel
POCONO MOUNTAIN: Seeks to Hire Richard B. Henry as Special Counsel
POST HOLDINGS: Egan-Jones Retains B Senior Unsecured Ratings
PRECISION CASTPARTS: Egan-Jones Retains B- Sr. Unsecured Ratings
PRECISION DRILLING: Egan-Jones Retains B- Senior Unsecured Ratings
PROFESSIONAL TECHNICAL: Exclusivity Period Extended to Oct. 1
PROFRAC HOLDINGS: S&P Places 'B' ICR on CreditWatch Positive
PROS HOLDINGS: Egan-Jones Retains CCC Senior Unsecured Ratings
PUNYAKAM PLLC: Seeks to Hire Kimberly A. Eckert as Special Counsel
PUNYAKAM PLLC: Wins Interim Cash Collateral Access
QUALITAT DRYWALL: Files Emergency Bid to Use Cash Collateral
RAMBUS INC: Egan-Jones Retains B- Senior Unsecured Ratings
RENEWABLE ENERGY: Moody's Withdraws 'B1' Corporate Family Rating
RETROTOPE INC: Unsecured Creditors Will Get 100% of Claims in Plan
REVLON INC: Citigroup Could Lose $900 Million in Bankruptcy
REVLON INC: U.S. Trustee Appoints Creditors' Committee
RIDER HOTEL: Gets OK to Hire Stretto as Claims and Noticing Agent
ROYAL BLUE REALTY: Seeks to Extend Exclusivity Period to Aug. 31
ROYAL CARIBBEAN: Egan-Jones Keeps B- Senior Unsecured Ratings
RUBY PIPELINE: Taps Weil Gotshal & Manges as Co-Counsel
SAGEWOOD LLC: Returns to Chapter 11 Bankruptcy
SANITY DESK: Zollner-Led DIP Loan Wins Interim OK
SOUTHWEST AIRLINES: Egan-Jones Keeps BB Senior Unsecured Ratings
SPRING EDUCATION: Moody's Ups CFR to B3 & Sr. Secured Debt to B2
STAR US BIDCO: Moody's Affirms 'B3' CFR & Alters Outlook to Stable
STRATHCONA RESOURCES: Fitch Affirms B+ LongTerm IDR, Outlook Stable
SUMMIT FINANCIAL: Court OKs Deal on Cash Access Thru Sept 30
SWISSBAKERS INC: Wins Cash Collateral Access Thru Aug 18
SYMPHONY SOCIETY: Musicians Not Going Away Despite Bankruptcy
SYSCO CORP: Egan-Jones Retains BB Senior Unsecured Ratings
T AND E DIESEL: Unsecureds to Get Share of Income for 36 Months
TALEN ENERGY: Bankruptcy Filing Complicates Outlook for Colstrip
TAVERN ON LAGRANGE: Wins Cash Collateral Access Thru July 5
TENNECO INC: Egan-Jones Retains B+ Senior Unsecured Ratings
TEREX CORP: Egan-Jones Retains BB Senior Unsecured Ratings
TITAN IMPORTS: Unsecureds Will Get 16% of Claims in 3 Years
TRX HOLDCO: U.S. Trustee Appoints Creditors' Committee
TTM TECHNOLOGIES: Egan-Jones Retains B+ Senior Unsecured Ratings
TWO'S COMPANY: Seeks to Hire Gassner Company as Accountant
UNDER ARMOUR: Egan-Jones Retains BB Senior Unsecured Ratings
US CELLULAR: Egan-Jones Retains B+ Senior Unsecured Ratings
US SILICA: Egan-Jones Retains CCC Senior Unsecured Ratings
VERIS RESIDENTIAL: Fitch Affirms 'B' LongTerm IDR, Outlook Negative
VIDA CAPITAL: S&P Downgrades ICR to 'CCC', Outlook Developing
VISTAGE INTERNATIONAL: Moody's Assigns 'B2' CFR, Outlook Stable
WATERBRIDGE MIDSTREAM: Moody's Alters Outlook on 'B3' CFR to Pos.
WERNER FINCO: Moody's Lowers CFR to B3, Outlook Negative
WEX INC: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
WHITING PETROLEUM: Egan-Jones Retains BB Senior Unsecured Ratings
[*] Colorado Bankruptcies Dropped 31% in May 2022
[*] Pres. Joe Biden Signs Grassley-Led Bankruptcy Bill Into Law
[^] BOND PRICING: For the Week from June 20 to 24, 2022
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1 BIG RED: Recovery for Unsecureds in Wind-Down Plan Unknown
------------------------------------------------------------
1 Big Red, LLC, submitted a First Amended Disclosure Statement
explaining its Chapter 11 Plan.
The Disclosure Statement describes certain aspects of the Plan, the
Chapter 11 Case, Debtor's liquidation and wind-down and the
formation of the Liquidating Trust.
Under the Plan, (a) Holders of Allowed Fee Claims, Allowed
Administrative Claims, Allowed Priority Tax Claims, Allowed Other
Priority Claims, Allowed General Unsecured Claims and Allowed
Secured Claims will be deemed to hold interests in the Liquidating
Trust and (b) the Interests will be cancelled and terminated. The
Liquidating Agent will be charged with: (i) pursuing Remaining
Actions on behalf of Creditors; (ii) analyzing and reconciling
Claims that have been filed against the Estate; and (iii) making
distributions on account of Allowed Claims in accordance with the
Plan and the Liquidating Trust Agreement entered into with respect
thereto.
As of the Effective Date, the Liquidating Agent will assume
responsibility for any Remaining Actions. The Liquidating Agent
will also be authorized to analyze and, if appropriate, file
adversary proceedings under, inter alia, sections 544, 547, 548,
549 and 550 of the Bankruptcy Code to avoid and recover transfers.
The Debtor had several lawsuit pending at the time of the filing of
the bankruptcy and the Debtor intends to continue to pursue those
causes of action in state court or in the Bankruptcy Court. The
pending cases are 1 Big Red, LLC v. Cherokee Investments et al,
Case No. 2016-CV05338 and 1 Big Red, LLC et al v. Aloha Capital,
LLC et. al. Case No. 1916-CV-31526. The Debtor also has claims
against Anchor Assets II, LLC that are currently pending as a claim
objection, but may be filed as an adversary proceeding.
Class 2, consisting of all alleged Secured Claims, are impaired.
The Debtor's physical assets have been liquidated and distributed
pursuant to previous sale orders except for one property (7410
Sni-A-Bar Road, Kansas City, MO) which the Court granted relief
from stay. There will not be any additional distribution to the
holder of a secured claim except for the proceeds related to any
sale or foreclosure of the property located at 7410 Sni-A-Bar Road,
Kansas City, Mo). Any such remaining unpaid secured claims will be
treated as Class 3 General Unsecured Claims and paid accordingly.
General Unsecured Claims in Class 3 total $3,319,362 based upon the
Schedules and Statements and the proofs of claim filed. Many of
the claims were filed as Secured Claims were paid at closings.
Some of the Secured Claims will be amended to unsecured claims
which may increase the unsecured claims. The Debtor intends to
file objections to claims.
The holders of Allowed General Unsecured Claims shall receive their
Pro Rata share of the Trust Assets after payment of the Allowed
Administrative Claims, Priority Tax Claims, Fee Claims, and Class 1
Other Priority Claims. The holders of Claims in this Class are
entitled to vote.
Attorneys for the Debtor:
Colin N. Gotham, Esq.
EVANS & MULLINIX, P.A.
7225 Renner Road, Suite 200
Shawnee, KS 66217
Tel: (913) 962-8700
Fax: (913) 962-8701
E-mail: cgotham@emlawkc.com
A copy of the Disclosure Statement dated June 22, 2022, is
available at https://bit.ly/3NgmAAc from PacerMonitor.com.
About 1 Big Red LLC
1 Big Red, LLC, a Kansas City, Mo.-based company engaged in
activities related to real estate, filed a petition for Chapter 11
protection (Bankr. D. Kan. Case No. 21-20044) on Jan. 15, 2021,
listing total assets at $2.5 million and $3,094,099 in liabilities.
Judge Robert D. Berger oversees the case. The Debtor tapped Colin
Gotham, Esq., at Evans & Mullinix, P.A., as legal counsel.
36TH STREET: Files Emergency Bid to Use Cash Collateral
-------------------------------------------------------
36th Street Property Inc. and HR 442 Corp. ask the U.S. Bankruptcy
Court of the Eastern District of New York for authority to use cash
collateral to pay real estate taxes which are due on July 1, 2022,
in the amount of $178,086 and provide adequate protection to
Wilmington Trust, National Association, as Trustee for the Benefit
of the Registered Holders of UBS Commercial Mortgage Trust
2019-C17, Commercial Mortgage Pass-Through Certificates, Series
2019-C17.
Pursuant to a loan agreement, between the Debtors, as borrowers and
Ladder Capital Finance LLC, lender, the Original Lender made a loan
to the Debtors in the original principal amount of $14,200,000.
To evidence their indebtedness under the Loan Agreement, on
September 3, 2019, the Debtors executed and delivered to the
Original Lender that the Consolidated, Amended and Restated
Promissory Note in the original principal amount of $14,200,000.
To secure payment of the Note, on September 3, 2019, the Debtors
executed, acknowledged and delivered a mortgage to the Original
Lender. The Mortgage granted a first mortgage lien on the Property
and a security interest in the Debtors' personal property to the
Original Lender. On September 6, 2019, the Original Lender duly
recorded the Mortgage against the Property in the Office of City
Register of the City of New York as City Register File Number
("CRFN") 2019000286575 and duly paid the mortgage recording taxes.
As additional collateral security for the payment of the Loan, the
Debtors executed, acknowledged, and delivered to the Original
Lender an Assignment of Leases and Rents dated as of September 3,
2019, pursuant to which the Debtors, inter alia, granted to the
Original Lender a security interest in all Leases and Rents (as
defined in the Loan Agreement) generated by the Property, which
includes all Hotel revenue. On September 6, 2019, the Original
Lender duly recorded the ALR in the City Register's Office as CRFN
2019000286576. Id.
The Original Lender further perfected its security interests in its
collateral by filing UCC financing statements with the New York
Secretary of State and New York City's Register Office with respect
to the Debtors on September 3, 2019, bearing Filing Numbers
2019090930403150 and 2019090930403162.
As adequate protection for the use of cash collateral, the Secured
Noteholder will be granted replacement security interests and
liens on all the Debtors' assets and property whether now owned or
hereafter created or acquired, real or personal, assets or rights,
of any kind or nature, wherever located, and the income, revenues,
receipts, receivables, charges, proceeds, products, rents and
profits thereof.
The Postpetition Liens will be subject to any amounts payable to
the United States Trustee pursuant to 28 U.S.C. section 1930(a)(6).
The Replacement Lien and the Adequate Protection Lien will be
valid, binding, enforceable, non-avoidable and automatically
perfected, notwithstanding the automatic stay, without the
necessity of filing or recording any financing statement, deed of
trust, mortgage, or other instrument or document which otherwise
may be required under the laws of any jurisdiction to validate or
perfect such security interests and liens.
About 36th Street Property Inc.
36th Street Property Inc. is primarily engaged in renting and
leasing real estate properties. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No.
22-40563) on March 22, 2022. In the petition filed by Ae Sook Choi,
president, the Debtor disclosed up to $50,000 in assets and up to
$50 million in liabilities.
Judge Jil Mazer-Marino oversees the case.
Lawrence Morrison, Esq., at Morrison Tenenbaum is the Debtor's
counsel.
388 ADOLPHUS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: 388 Adolphus Ave LLC
33 Wood Avenue S.
Iselin, NJ 08830
Business Description: 388 Adolphus is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: June 24, 2022
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 22-15133
Debtor's Counsel: David Stevens, Esq.
SCURA WIGFIELD, HEYER, STEVENS & CAMMAROTA LLP
1599 Hamburg Turnpike
Wayne, NJ 07470
Tel: 201-490-4777
Email: dstevens@scura.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Silvano D'lppolito as member.
The Debtor filed an empty list of its 20 largest unsecured
creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/BH3CKLI/388_Adolphus_Ave_LLC__njbke-22-15133__0001.0.pdf?mcid=tGE4TAMA
396 MEDICAL: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: 396 Medical Management Corp
396 N Farview Avenue
Paramus, NJ 07652
Business Description: 396 Medical is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: June 24, 2022
Court: United States Bankruptcy Court
District of New Jersey
Case No.: 22-15125
Debtor's Counsel: Jeffrey B. Randoph, Esq.
LAW OFFICE OF JEFFREY RANDOLPH, LLC
139 Harristown Road, Ste 205
Glen Rock, NJ 07452
Tel: 201-444-1645
E-mail: jrandolph@jrlaw.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Stephen J. Conte as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/GC4PE5I/396_Medical_Management_Corp__njbke-22-15125__0001.0.pdf?mcid=tGE4TAMA
85 FLATBUSH: Claims Will be Paid From Hagler Funding; Amends Plan
-----------------------------------------------------------------
85 Flatbush RHO Mezz LLC, et al., submitted a Disclosure Statement
for Second Amended Chapter 11 Plan of Reorganization dated June 23,
2022.
Debtors seek approval of this Disclosure Statement and confirmation
of their Second Amended Plan which is premised upon an investment
of no less than $96,750,000 from the Hagler Funding in exchange for
which Hagler or his designee shall be admitted as an additional
equity member under the operating agreement of 85 Flatbush RHO Mezz
LLC.
The Debtors' amended plan is a plan of reorganization rather than a
sale-based plan. The Debtors' amended plan was to be implemented by
the Debtor procuring a long term lease from the Department of
Homeless Services which would enable the Debtors to obtain exit
financing and an equity contribution that would be sufficient to
satisfy the Allowed TH Holdco Secured Claim and all of the Debtors'
other Allowed Claims except for the 85 Flatbush Mezz claim, which
would be paid with an initial paydown and thereafter over a period
of 7 years.
TH Holdco objected to the amended plan and disclosure statement on
a variety of bases. The Debtors did not proceed to seek approval of
the amended plan and disclosure statement.
TH Holdco presents a different perspective than the Debtors with
respect to the communications between Franco Famularo, an executive
with Ohana Real Estate (which is an affiliate of TH Holdco), and
Isaac Hager, a minority owner of Mezz. Debtors believe TH Holdco's
acquisition of the Lender's mortgage and related loan documents
were carried out in a manner calculated to circumvent the exclusive
sales process being run by JLL and based on this inequitable and
bad faith conduct it should be disqualified from credit bidding for
the Property under its proposed sale plan. A motion seeking to
disqualify TH Holdco from confirming its plan and credit bidding
for the Property was filed on June 22, 2022.
On June 22, 2022, the Debtors filed their objection to confirmation
of the TH Holdco Plan, asserting, amongst other objections, that
the TH Holdco Plan cannot be confirmed as currently filed because
it provides TH Holdco with the opportunity to credit bid in excess
of the appraised value of the Property.
85 Flatbush Mezz asserts that TH Holdco's ability to pursue an
auction will ultimately be negated by a successful challenge under
the parties' Intercreditor Agreement in the Adversary Proceeding.
Debtors submit that any auction of the Property should not proceed
until the Adversary Proceeding is fully adjudicated.
Class 3 consists of the TH Holdco Secured Claim. The TH Holdco
Secured Claim is a Claim pursuant to the TH Holdco Prepetition Loan
Agreement, which is secured by the TH Holdco Mortgage and
constitutes a first priority security interest on the Hotel
Property and Residential Property. Nothing herein shall prejudice
TH Holdco's rights under the Intercreditor Agreement and under
orders of this Bankruptcy Court. TH Holdco is a creditor of Hotel
and Residential and reserves all rights under the Intercreditor
Agreement with respect to the ability to vote or direct the 85
Flatbush Mezz claim in the 85 Flatbush RHO Mezz case. The holder of
the TH Holdco Secured Claim shall receive on the Effective Date,
Cash in the amount of $85,158,816 or such amount as the Court
determines to be the amount of the Allowed TH Holdco Secured
Claim.
Class 6 consists of 85 Flatbush RHO Hotel General Unsecured Claims.
The allowed unsecured claims total $1,141,332.04. Except to the
extent that a holder of an Allowed 85 Flatbush RHO Hotel General
Unsecured Claim (Class 6) has agreed to less favorable treatment of
such Claim, each such holder shall receive Cash in an amount equal
to the amount of the Allowed Claim, together with interest at the
federal judgment rate on the Effective Date. Class 6 is Unimpaired
and holders of General Unsecured Claims in Class 6 are not entitled
to vote to accept or reject the Plan.
Class 10 consists of 85 Flatbush Mezz Claims. The allowed claims in
this Class total $4,600,000. The 85 Flatbush Mezz Claim is a
Secured Claim pursuant to the 85 Flatbush Mezz Loan Agreement,
which is secured by the 85 Flatbush Hotel Pledge Agreement and 85
Flatbush Residential Pledge Agreement. The holder of the 85
Flatbush Mezz Claim shall receive, on the Effective Date, Cash in
the amount of $4,600,000.
Class 12 consists of Insider General Unsecured Claims. The allowed
unsecured claims total $1,398,660. Except to the extent that a
holder of an Allowed Insider General Unsecured Claim (Class 12) has
agreed to less favorable treatment of such Claim, each such holder
shall receive Cash in an amount equal to the amount of the Allowed
Claim, together with interest at the federal judgment rate on the
Effective Date. Class 12 is Unimpaired and holders of Insider
General Unsecured Claims in Class 14 are entitled to vote to accept
or reject the Plan.
The Plan Fund shall be funded by (i) the Debtors' Available Cash
and (ii) the Hagler Funding. Creditor distributions to be made
separate from or later than the Effective Date shall be made by the
Disbursing Agent under the Plan. The Hagler Funding amount is no
less than $96,775,000.
Prior to the Confirmation Hearing, Hagler or his designee will
escrow the sum of $2,500,000 which will serve as liquidated damages
and be non-refundable if the Debtors' Plan is confirmed and Hagler
or his designee defaults in its funding obligations, but will be
refundable if the Debtors' Plan is not confirmed. The Hagler
Funding in conjunction with the Debtors' available Cash is more
than the amounts needed to make the required Plan payments in
accordance with the Plan Funding.
A full-text copy of the Disclosure Statement dated June 23, 2022,
is available at https://bit.ly/3xUl4hl from PacerMonitor.com at no
charge.
Counsel to the Debtors:
A Mitchell Greene, Esq.
LEECH TISHMAN ROBINSON BROG, PLLC
875 Third Avenue
9th Floor
New York, New York 10022
Telephone: (212) 603-6300
Facsimile: (212) 956-2164
E-mail:amgreene@leechtishman.com
About 85 Flatbush RHO Mezz
85 Flatbush RHO Mezz LLC is the 100% owner of 85 Flatbush RHO Hotel
LLC and 85 Flatbush RHO Residential LLC. RHO Hotel and RHO
Residential collectively own the property located at 85 Flatbush
Extension, Brooklyn, N.Y.
The property is a 132,641-square-foot, 12-story, mixed use property
consisting of a 174-room boutique hotel on the first six floors
known as the Tillary Hotel Brooklyn, a 58,652-square-foot 64-unit
luxury multi-family building and a 5,642-square-foot parking
garage. The residential component of the property has nine studios,
26 one-bedroom units and 29 two-bedroom units.
85 Flatbush RHO Mezz and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
20-23280) on Dec. 18, 2020. In its petition, 85 Flatbush RHO Mezz
disclosed between $50 million and $100 million in both assets and
liabilities.
Judge Robert D. Drain oversees the cases.
Fred B. Ringel, Esq., at Robinson Brog Leinwand Greene Genovese &
Gluck P.C., is the Debtor's legal counsel.
85 FLATBUSH: Says Its Own Plan Better Than TH Holdco's
------------------------------------------------------
Debtors 85 Flatbush RHO Mezz LLC, 85 Flatbush RHO Hotel LLC and 85
Flatbush RHO Residential LLC filed an objection to confirmation of
the Second Amended Chapter 11 Plan filed by creditor TH Holdco
LLC.
The TH Holdco Plan should be denied or, at best, adjourned to a
future date so the Debtors' creditors can determine whether they
want to be paid in full over the course of a year under the TH
Holdco Plan or in a shorter period of time under the Debtors'
proposed plan that pays their creditors on the proposed plan's
effective date, which is expected to occur as soon as possible
after the plan is confirmed, which may be as early as July 2022.
The Debtors point out that in providing the creditors with that
opportunity, the Court should consider that (i) the TH Holdco Plan
cannot be confirmed as currently filed because it provides itself
with the opportunity to credit bid in excess of the appraised value
of the Property in the amount of $72,000,000, (ii) the Debtors'
proposed plan pays all the creditors in full on account of their
allowed claims in a significantly shorter period of time than the
TH Holdco Plan, and Mezz, the 100% owner of Hotel and Residential,
retains its equity interest in Hotel and Residential, and (iii)
during the bankruptcy case TH Holdco's affiliates misled the
Debtors' principals, making them believe that they were interested
in being a plan sponsor or pursuing a joint venture with the
Debtors.
Instead, TH Holdco and its affiliates acted in bad faith and
pursued a disguised "loan to own" strategy that leaves the Debtors
with the prospect of losing the Property and equity will lose their
multimillion dollar investment in the Property, which they can't
afford to lose.
The Debtors further point out that one of the principals, Mr. Lipa
Rubin, a father and grandfather, has supported his family for the
past twenty-five years as a fish monger. During that time, he
managed to save some money and purchased his first property, a
three family home, in 2002. In the last twenty years, he purchased
a few other properties. In 2019, his longtime friend Isaac Hager
presented him with an opportunity to join him as a minor
shareholder in the Property that Mr. Hager was acquiring. As Mr.
Rubin never could have imagined being a part of a project this
size, he agreed to the opportunity. In order to participate, he
refinanced almost his entire portfolio and was able to obtain
$10,000,000 from his equity in his real estate holdings to commit
to the acquisition of the Property. After the purchase of the
Property was completed, the hotel on the Property was thriving
until Covid struck in March 2020 and turned the world upside down.
The hotel was shut down and Mr. Rubin was now at risk of losing his
life's savings, which, is necessary to sustain him and his family
in retirement, due to uncontrollable factors that could not be
foreseen. The Debtors' Plan gives Mr. Rubin and Mr. Hager an
opportunity to retain part of their investment in the Property as
Mezz retains its equity under the Debtors' Plan, and their proposed
plan is better for their creditors as they all get paid in full
within a very short time period. The Debtors seek an opportunity to
give the Debtors' Plan a chance to be confirmed and avoid wiping
out the equity of a man who cannot afford to lose his entire
investment in the Property.
Attorneys for the Debtors and Debtors in Possession:
A. Mitchell Greene, Esq.
LEECH TISHMAN ROBINSON BROG PLLC
875 Third Avenue
New York, New York 10022
About 85 Flatbush RHO Mezz
85 Flatbush RHO Mezz LLC is the 100% owner of 85 Flatbush RHO Hotel
LLC and 85 Flatbush RHO Residential LLC. RHO Hotel and RHO
Residential collectively own the property located at 85 Flatbush
Extension, Brooklyn, N.Y.
The property is a 132,641-square-foot, 12-story, mixed use property
consisting of a 174-room boutique hotel on the first six floors
known as the Tillary Hotel Brooklyn, a 58,652-square-foot 64-unit
luxury multi-family building and a 5,642-square-foot parking
garage. The residential component of the property has nine studios,
26 one-bedroom units and 29 two-bedroom units.
85 Flatbush RHO Mezz and its affiliates sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No.
20-23280) on Dec. 18, 2020. In its petition, 85 Flatbush RHO Mezz
disclosed between $50 million and $100 million in both assets and
liabilities.
Judge Robert D. Drain oversees the cases.
Fred B. Ringel, Esq., at Robinson Brog Leinwand Greene Genovese &
Gluck P.C., is the Debtor's legal counsel.
AA FOOD: Evolve Bank Says Plan Projections Vague
------------------------------------------------
Evolve Bank & Trust filed its objection to the Disclosure Statement
dated May 25, 2022, explaining the Plan of AA Food and Company,
LLC.
Evolve points out that the Debtor has failed to set forth
sufficient information regarding the potential leases and the
viability of same. The Gustove Lease is the only proposed lease
put forth by the Debtor. The only information available to
creditors, however, is the name of the proposed tenant, that he
expects to operate a restaurant, and that he intends "to rent a
portion of the building." The Debtor sets forth no information
whatsoever of who the other tenant is or even which portion of the
building the second tenant would occupy/operate. Moreover, the
Debtor offers no information or documentation with respect to any
necessary permits, applications, and/or other requirements for
remodeling the building and converting it into a multi-tenant
property from a single-tenant property.
Evolve further points out that Debtor's financial projections are
vague, baseless, and not even consistent with the proposed Gustove
Lease and cited income from the Gustove Lease. The Gustove Lease
is for $6,000 per month. Debtor's projections, attached to the
Disclosure Statement, state that Debtor will have $7,000 of income
for July 2022 through September 2022. Without explanation, the
projected monthly income increases to $9,500 in October 2022.
Evolve asserts that to compound the lack of information from the
Debtor with respect to evaluation of the Plan, the Debtor has only
filed one Monthly Operating Report in this case which was for
February 2022. This report has little to no information contained
in it.
According to Evolve, the creditors in this case are being kept in
the dark and cannot adequately evaluate the Debtor's financial
condition, much less evaluate any proposed plan based on vague and
inaccurate income projections and leases that don't exist.
Evolve asserts that this lack of detail is repeated throughout the
Debtor's Disclosure Statement and Plan, such that creditors will
not be able to make an informed decision on whether to vote for or
against the Plan. To compound the lack of sufficient information in
the Disclosure Statement, the information that is actually set
forth shows the Plan is not confirmable on its face.
Attorneys for the Evolve Bank & Trust:
Michael P. Menton, Esq.
Charles R. Curran, Esq.
SETTLEPOU
3333 Lee Parkway, Eighth Floor
Dallas, Texas 75219
Tel: (214) 520-3300
Fax: (214) 526-4145
E-mail: mmenton@settlepou.com
ccurran@settlepou.com
About AA Food and Company
AA Food and Company, Inc., is a single asset real estate debtor (as
defined in 11 U.S.C. Section 101(51B)). It owns a real estate
property located at 425 E. Main Street, Grand Prairie, Texas valued
at $700,000.
AA Food and Company filed a petition for Chapter 11 protection
(Bankr. N.D. Texas Case No. 22-30321) on Feb. 28, 2022, disclosing
$887,000 in assets and $1,086,000 in liabilities. Mumtaz Abbasi,
president, signed the petition.
Eric A. Liepins, Esq., serves as the Debtor's legal counsel.
AC NW RETAIL: Taps Lawrence J. Berger as Real Estate Tax Counsel
----------------------------------------------------------------
AC NW Retail Investment, LLC and Armstrong New West Retail, LLC
seek approval from the U.S. Bankruptcy Court for the Southern
District of New York to employ the Law Offices of Lawrence J.
Berger, P.C. as their special real estate tax counsel.
The Debtors need the firm's legal assistance to seek a reduction of
the real estate tax assessment of the Debtors' real property
located at 250 West 90th St., New York and to file a Real Property
Income and Expense statement.
As disclosed in court filings, the Law Offices of Lawrence J.
Berger is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Jeremy Friedman, Esq.
The Law Offices of Lawrence J. Berger, PC
200 Madison Ave., Ste 1902
New York, NY 10016
Phone: 212-532-0222
About AC NW Retail Investment and
Armstrong New West Retail
Armstrong New West Retail, LLC owns a commercial condominium unit
located at 250 West 90th Street, New York. The property is a
20,000-square-foot space that was occupied by Atlantic and Pacific
Tea Company until March 2016 under its Food Emporium brand.
Armstrong is 100% owned by AC NW Retail Investment, LLC, which is
100% owned by Benjamin Ringel.
AC NW Retail Investment and Armstrong New West Retail filed Chapter
11 petitions (Bankr. S.D.N.Y. Case Nos. 16-23085 and 16-23086) on
Aug. 9, 2016. Benjamin Ringel, sole equity member, signed the
petitions.
At the time of the filing, AC NW Retail estimated its assets at $10
million to $50 million and liabilities at $1 million to $10
million. Armstrong estimated its assets and liabilities at $10
million to $50 million.
Judge Robert D. Drain oversees the cases.
Arnold Mitchell Greene, Esq., at Leech Tishman Robinson Brog, PLLC
is the Debtors' bankruptcy counsel. The Law Offices of Lawrence J.
Berger, P.C. serves as special real estate tax counsel.
ADVANZEON SOLUTIONS: June 29 Status Conference on Plan
------------------------------------------------------
Judge Carl E. Delano on June 22, 2022, said he is conditionally
approving the Disclosure Statement of Advanzeon Solutions, Inc.,
subject to the filing of an amended Plan and Disclosure Statement.
On May 24, 2022, the Debtor filed its chapter 11 plan and
disclosure statement. The U.S. Securities & Exchange Commission
objected to the Debtor's proposed disclosure statement; other
creditors joined in the
SEC's objection.
Judge Carl E. Delano entered an order conditionally approving the
Disclosure Statement provided that the Debtor files an amended plan
and disclosure statement by June 22, 2022, that provides for a
liquidating trustee to pursue potential avoidance actions and
addresses the SEC's remaining objections regarding the adequacy of
information.
The Court will hold a status conference on confirmation on June 29,
2022, at 4:00 p.m., to discuss scheduling and discovery issues.
In its objection, the SEC complains (among other things) that the
disclosure statement fails to provide adequate information
regarding the feasibility and structure of the plan. What's more,
the SEC complains that the disclosure statement describes an
unconfirmable plan. According to the SEC, the Debtor cannot
confirm its current plan because it fails to provide for the
investigation-and potential avoidance-of between one to two million
dollars in alleged avoidable transfers to the Debtor's Chief
Executive Officer.
At the June 8 hearing on approval of the disclosure statement, the
Debtor conceded it was appropriate to amend its plan to provide for
a liquidating trustee to pursue potential avoidance actions against
the Debtor's CEO or others. For the reasons stated orally and
recorded in open court, the Court concludes it is appropriate to
require the Debtor to amend its plan and disclosure statement to
address the SEC's objections to the Debtor's disclosure statement.
About Advanzeon Solutions
Based in Tampa, Fla., Advanzeon Solutions, Inc., provides
behavioral health, substance abuse and pharmacy management
services, as well as sleep apnea programs, for employers,
Taft-Hartley health and welfare Funds, and managed care companies
throughout the United States.
Advanzeon Solutions sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-06764) on Sept. 7,
2020.
At the time of the filing, the Debtor had estimated assets of
between $500,000 and $1 million and liabilities of between
$1million and $10 million. The petition was signed by Clark A.
Marcus, chief executive officer.
Stichter, Riedel, Blain & Postler, P.A., is the Debtor's legal
counsel.
AFFINITY INTERACTIVE: Moody's Ups CFR to B2, Outlook Stable
-----------------------------------------------------------
Moody's Investors Service upgraded Affinity Interactive's Corporate
Family Rating to B2 from B3, it's Probability of Default Rating to
B2-PD from B3-PD, and the rating on its 6.875% senior secured 1st
lien notes to B2 from B3. The rating outlook is stable.
"The upgrade considers that Affinity has reduced its leverage to
below the level required for an upgrade. Debt-to-EBITDA for the
latest 12-months ended 31 March 2022 was 5.0x, which is below the
6.0x upgrade factor, and substantially below where Moody's
projected it would be at this time last year, between 6.0x and
7.0x," stated Keith Foley, a Senior Vice President at Moody's.
"Moody's believes the lower leverage is sustainable given the
expected continuation of the company's good operating performance
and limited capital spending needs, which benefits the company's
free cash flow and financial flexibility," added Foley.
The following ratings/assessments are affected by the action:
Upgrades:
Issuer: Affinity Interactive
Probability of Default Rating, Upgraded to B2-PD from
B3-PD
Corporate Family Rating, Upgraded to B2 from B3
Senior Secured Regular Bond/Debenture (Local Currency)
due December 15, 2027, Upgraded to B2(LGD4) from B3(LGD4)
Outlook Actions:
Issuer: Affinity Interactive
Outlook, Remains Stable
RATINGS RATIONALE
Affinity's credit profile reflects the company's strong operating
performance and ability to generate positive free cash flow. Key
concerns include Affinity's relatively small scale in terms of
revenue and earnings, relatively high leverage, at about 5.0x
debt/EBITDA, and historically aggressive financial policy evidenced
by payment of a leveraged dividend in early 2018 by ownership, Z
Capital Partners, LLC. Credit concerns also consider that
Affinity's casinos are still vulnerable to economic challenges that
will likely pressure consumer spending on discretionary forms of
entertainment such as gaming.
The stable rating outlook considers that Affinity will generate
positive free cash flow of between $40 million and $50 million
annually. The rating outlook also acknowledges that while there
will likely be slower year over year growth given difficult comps
– weaker COVID related periods will roll off -- and general
economic challenges that will likely pressure consumer spending on
discretionary forms of entertainment such as gaming.
The coronavirus outbreak, the government measures put in place to
contain it, and the weak global economic outlook continue to
disrupt economies and credit markets across sectors and regions.
Although an economic recovery is underway, it is tenuous, and its
continuation will be closely tied to containment of the virus and
other economic factors. As a result, the degree of uncertainty
around Moody's forecasts is unusually high. More specifically, the
weaknesses in Affinity's credit profile, including its exposure to
discretionary consumer spending have left it vulnerable to shifts
in market sentiment in these unprecedented operating conditions.
From a corporate governance perspective, Affinity's financial
policy is aggressive based on the company's prior debt funded
dividends and the inherent risks related to the company's 100%
ownership by a private equity firm. These risks include further
shareholder friendly policies in the form of distributions and
maximizing the use of leverage and expectations for continued
acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade requires that Affinity continues to generate
stable market share, consistent and positive free cash flow,
achieve and maintain debt-to-EBITDA below 4.0x, and adhere to
financial policies that maintain low leverage. Affinity's ratings
could be downgraded if there is a decline in EBITDA performance, a
deterioration in liquidity, or an inability to maintain
debt-to-EBITDA on an LTM basis below 6.0x
The principal methodology used in these ratings was Gaming
published in June 2021.
Affinity Interactive owns and operates eight casinos: five located
in Nevada, two in Missouri, and one in Iowa. Additionally, on July
1, 2021, Affinity closed the acquisition of Sports Information
Group, LLC ("SIG") from funds managed by affiliates of Z Capital
Group L.L.C., affiliates of which also indirectly own the Company.
SIG is a global omnichannel sports, technology, digital, media and
wagering business, with Daily Racing Form and DRF Bets as its
flagship brands. Affinity's consolidated financial position and
results of operations include SIG subsequent to July 1, 2021. Net
revenue for the last twelve months-ended March 31, 2022 was about
$340 million. Affinity is a private company that is 100% owned by
affiliates of Z Capital and does not disclose detailed financial
information to the public.
Affinity filed a form S-1 in January 2021 to sponsor the formation
of Gaming & Hospitality Acquisition Corp. (GHAC), a special purpose
acquisition corporation. The company intends to merge into GHAC in
connection with an initial acquisition of gaming assets by GHAC,
bbut the identity of any such target is unknown. GHAC is a
subsidiary of Affinity Gaming Holdings, who is also the indirect
parent of Affinity. GHAC is not part of Affinity's borrowing group
and not an obligor to the senior secured notes.
AIR TRANSPORT: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
----------------------------------------------------------------
Moody's Investors Service has upgraded the corporate family rating
of Air Transport Services Group, Inc. (ATSG) to Ba1 from Ba2 and
upgraded the backed long-term senior unsecured ratings of
subsidiary Cargo Aircraft Management, Inc. (CAM) to Ba2 from Ba3.
Moody's also revised the outlooks for both entities to stable from
positive.
Upgrades:
Issuer: Air Transport Services Group, Inc.
LT Corporate Family Rating, upgraded to Ba1 from Ba2
Issuer: Cargo Aircraft Management, Inc.
Backed Senior Unsecured Regular Bond/Debenture, upgraded to Ba2
from Ba3
Outlook Actions:
Issuer: Air Transport Services Group, Inc.
Outlook, Revised To Stable from Positive
Issuer: Cargo Aircraft Management, Inc.
Outlook, Revised To Stable from Positive
RATINGS RATIONALE
Moody's has upgraded ATSG's ratings in consideration of the
company's reduced debt-to-EBITDA and debt-to-tangible net worth
leverage measures, highlighting the company's strong earnings and
cash flow and lower debt levels as it has grown its fleet and base
of revenues. ATSG's ratings are also supported by its continued
strong position as one of the world's leading providers of air
cargo fleet leasing and related services, including crew,
maintenance and insurance (CMI) services, its balanced growth, and
its effective management of funding and liquidity. ATSG's credit
challenges include its high customer concentrations and the
company's exposure to the cyclicality of the air transportation
industry.
ATSG's air transport services operations have benefited over the
past several quarters from rising demand for air cargo services,
underscored by the continued growth of ecommerce and
freight-forwarding volumes. These trends have increased the
opportunity for ATSG to deploy additional aircraft into long-term
lease arrangements and CMI services with key customers,
particularly Amazon.com Inc. (A1 stable) and as well DHL (owned by
Deutsche Post AG, A3 stable). As a result, ATSG's earnings and cash
flow have been more resilient than lessors of passenger aircraft
due to the operating strength its leasing and CMI services
associated with the time-definite scheduled package delivery
operations.
Earnings and cash flow strength have helped to push ATSG's leverage
lower. The company's Moody's-adjusted debt-to-EBITDA declined to
2.2x (annualized) for the quarter ended March 31, 2022 from 2.8x
for the year-ended December 31, 2019 and its debt-to-tangible net
worth ratio declined to 1.5x from a negative value, respectively at
the same dates. Over this time horizon, ATSG's reported capital
position has also benefited from a reclassification of certain
warrants granted to Amazon from liabilities to equity as well as
Amazon's exercise of certain warrants. Moody's expects that ATSG's
leverage ratios will remain well-positioned in 2022, reflecting the
company's guidance of an 18% increase in EBITDA for the year, as
well as only an expected moderate use of leverage to fund the
company's capital expenditure program.
A key credit challenge is ATSG's high customer concentrations. In
2021, the US Department of Defense, Amazon, and DHL accounted for
31%, 30% and 12% of the company's revenues, respectively. This
challenge is partially offset by the benefits from the high credit
quality of these customers and their long-term need for the
services provided by ATSG. Positively, Moody's views Amazon's 19.5%
minority interest in ATSG as resulting in an alignment of interests
that reduces the risk that Amazon's business relationships with
ATSG will diminish. Moody's expects that as ATSG's operating scale
gradually increases, its concentration with its top three customers
will decline somewhat from current levels.
CAM's Ba2 senior unsecured notes' rating is one notch lower than
ATSG's Ba1 corporate family rating, reflecting the notes' relative
priority and proportion in ATSG's capital structure (being
subordinate to its secured revolving credit facility), and the
strength of the notes' asset coverage. The notes are guaranteed on
a senior unsecured basis by ATSG and certain restricted
subsidiaries of ATSG. The indenture includes certain covenants
restricting ATSG's ability to, among other things, incur additional
debt, pay dividends, create certain liens, merge and sell assets.
Moody's has revised ATSG's and CAM's outlooks to stable from
positive based on expectations that ATSG's capital position will
remain strong based on rising EBITDA and moderate use of debt to
fund fleet growth over the next 12-18 months. The stable outlooks
also reflects Moody's expectation that demand for air cargo
services will remain strong even as economic growth tapers under
the weight of rising inflationary pressures and supply chain
bottlenecks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade ATSG's ratings if the company maintains
debt-to-EBITDA of 2.0x or less, maintains profitability measured as
the ratio of net income to average assets that compares well with
peers, effectively manages its customer concentrations, and if its
capital expenditures and fleet growth occur at a moderate pace.
Moody's could downgrade ATSG's ratings if the company's operating
results deteriorate, its capital or liquidity profiles weaken as a
result of debt-financed acquisitions or capital expenditures, or if
the company loses a material customer or suffers a business
disruption that weakens its financial prospects.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
ALLEGHENY TECHNOLOGIES: Egan-Jones Retains B- Sr. Unsec. Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained 'B-' foreign
currency and local currency senior unsecured ratings on debt issued
by Allegheny Technologies, Inc. EJR also retains 'B' rating on
commercial paper issued by the Company.
Headquartered in Pittsburgh, Pennsylvania, Allegheny Technologies,
Inc. produces specialty materials.
ALLEN & HANDY: Wins Cash Collateral Access Thru July 20
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized Allen & Handy Investments LLC to use cash collateral on
an interim basis in accordance with the budget through and
including July 20, 2022, on the same terms and conditions as set
forth in the Order dated May 25, 2022, except as modified by the
Order.
The Debtor will use the funds in accordance with the budget filed
on June 16, 2022, subject to a 10% variance on any expenses. No
payment will be made with respect to attorneys' fees in the budget
absent further court order.
The Debtor will by July 12, 2022, submit (a) a reconciliation of
actual income and expenses on a cash basis to the budgeted income
and expenses for the period through June 30, 2022, and (b) if
appropriate, an updated projected budget through September 30,
2022.
A continued hearing on the matter is scheduled for July 19 at 10:45
a.m.
A copy of the order is available at https://bit.ly/3ycd3Wj from
PacerMonitor.com.
About Allen & Handy Investments LLC
Allen & Handy Investments LLC owns a three-unit residential
property known and numbered as 84 Esmond Street, Dorchester,
Massachusetts. Based on a 2022 appraisal, the property is estimated
to be worth $1,040,000.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 22-10681) on May 17,
2022. In the petition signed by Peter Handy, manager, the Debtor
disclosed up to $1 million in both assets and liabilities.
Judge Janet E. Bostwick oversees the case.
Michael Van Dam, Esq., at Van Dam Law LLP is the Debtor's counsel.
AMERICAN DE ROSA: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 on June 22 appointed an
official committee to represent unsecured creditors in the Chapter
11 cases of American De Rosa Lamparts, LLC and its affiliates.
The committee members are:
1. Chien Luen Industries Co., Ltd.
No. 69 Sungchu Road, Petiun District
Taichung, Taiwan, R.O.C. 406
2. Echo Global Logistics
600 W. Chicago Ave STE 725
Chicago, IL 60653
3. Jian Men MagicPower Electrical Appliances Co., Ltd.
No. 5 Fuihui Road, Xinhui District
Jiangmen City, Guangdong Province
People's Republic of China
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About American De Rosa Lamparts
American De Rosa Lamparts, LLC -- https://www.luminancebrands.com/
-- doing business as Magnum Asset Acquisition, is a full spectrum
lighting provider that offers comprehensive choices of residential
lighting, commercial lighting and industrial lighting products.
American De Rosa Lamparts and affiliates, Luminance Acquisition,
LLC, SV-ADL Holdings, LLC, ADL International, LLC, and Hallmark
Lighting, LLC, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ohio Lead Case No. 22-50654) on June 8, 2022. In
the petition filed by Amit Dixit, as chief financial officer,
American De Rosa listed as much as $10 million in liabilities.
Judge Alan M. Koschik oversees the cases.
Marc Merklin, Esq., at Brouse McDowell, LPA is the Debtors'
counsel.
AMERICAN DE ROSA: Wins Interim Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, authorized American De Rosa Lamparts, LLC and its
affiliates to use cash collateral on an interim basis.
The entities that assert an interest in the cash collateral are The
Resilience Fund IV, L.P, and The Resilience Fund IV-A, L.P.
On October 17, 2016, the Debtors entered into the Amended and
Restated Revolving Credit, Term Loan and Security Agreement. The
Credit Agreement was executed by and between Luminance Acquisition,
LLC and the Debtor as borrowers, Hallmark Lighting, LLC, SV-ADL
Holdings, LLC, and ADL International, LLC as guarantors, the
financial institutions that became a party to the Credit Agreement
as lenders, and PNC Bank, National Association, as agent for the
Lenders.
Pursuant to the Credit Agreement, the Borrowers were provided a
total credit facility with maximum borrowing of up to $31,500,000,
and which consisted of a term loan in the aggregate principal
amount of $14,000,000 and a revolving line of credit of up to
$17,500,000.
As adequate protection, the Agent, for the benefit of itself and
the other Secured Parties are granted a replacement valid, binding,
enforceable, nonavoidable, and automatically perfected, as of and
from and after the Petition Date, postpetition security interest in
and lien on all assets of the Debtors. The Adequate Protection
Liens will be subordinate to the statutory fees of the United
States Trustee pursuant to 28 U.S.C. section 1930(a).
As additional adequate protection, the Debtors will cooperate with,
and to the extent appropriate, comply with all reporting
requirements of the Borrowers set forth in the Prepetition Credit
Agreement.
The final hearing on the matter is scheduled for July 11, 2022, at
10 a.m.
A copy of the order and the Debtor's budget for the period from May
30 to September 2, 2022, is available at https://bit.ly/3n1ljlT
from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$274,600 for the week ending June 3, 2022;
$13,900 for the week ending June 10, 2022;
$191,500 for the week ending June 17, 2022;
$176,300 for the week ending June 24, 2022;
$150,900 for the week ending July 1, 2022;
$86,800 for the week ending July 8, 2022;
$130,900 for the week ending July 15, 2022;
$73,700 for the week ending July 22, 2022;
$330,800 for the week ending July 29, 2022;
$320,800 for the week ending August 5, 2022;
$21,600 for the week ending August 12, 2022;
$9,300 for the week ending August 19, 2022;
$30,700 for the week ending August 26, 2022; and
$8,900 for the week ending September 2,2022.
About American De Rosa Lamparts, LLC
American De Rosa Lamparts, LLC offers a collection of both
residential lighting fixtures, commercial and industrial lighting
fixtures, along with an expansive line of ceiling fans.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ohio Case No. 22-50654) on June 8,
2022. In the petition signed by Amit Dixit, chief financial
officer, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Alan M. Koschik oversees the case.
Marc B. Merklin, Esq., at Brouse McDowell, LPA is the Debtor's
counsel.
AMERICAN HARVEST: Unsecureds to Get 62 Cents on Dollar in Plan
--------------------------------------------------------------
American Harvest, Inc., filed with the U.S. Bankruptcy Court for
the District of Montana a Small Business Plan of Liquidation under
Subchapter V dated June 23, 2022.
AHI's Assets consist of machinery and equipment which, according to
an equipment appraisal dated November 9, 2021, had a fair market
value of $3,201,010, but which had a forced liquidation value of
$1,509,350. The goal of this Plan is to realize fair market value
from the sale of the equipment.
The Debtor has no ongoing business operations. This is a plan of
liquidation. All classes of creditors and equity security holders
will be paid from the proceeds of liquidation of the Debtor's
Assets. This Plan may be modified if pending motions for
substantive consolidation of the bankruptcy estate of ITC grain
into Debtor AHI's bankruptcy estate are granted in order to propose
a consolidated plan for the a coordinated sale of both the assets
of AHI and of ITC Grain.
This Plan of Liquidation proposes to pay creditors of the Debtor
from the sale of the Debtor's assets, consisting of the Debtor's
hemp fiber and oil extraction equipment and of the Debtor's
manufacturing equipment.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 62 cents on the dollar, but the return could be
higher. This Plan also provides for the payment of administrative
and priority claims.
Class 3 consists of Non-priority unsecured creditors. After payment
in full to allowed secured claims from the net proceeds of sale of
Debtor's assets, remaining proceeds of sale of Debtor's assets be
paid pro rata to the holders of allowed non-priority unsecured
claims. This Class is impaired.
Class 4 consists of Equity security holders of the Debtor. The
prepetition equity security holders will retain their equity
interests after the Confirmation Date.
The Debtor shall sell its Assets, and shall apply the net sales
proceeds to the Allowed Claims in the order of priority. Any
unpaid, allowed administrative expense claims shall be paid first
from the net proceeds of sale of the Debtor's Assets. The net
proceeds of sale are the gross proceeds of sale less applicable
commissions and sales costs. The Debtor anticipates generating
sufficient proceeds from these sources to meet all Plan payments,
costs and expenses.
A full-text copy of the Liquidating Plan dated June 23, 2022, is
available at https://bit.ly/3bh6U26 from PacerMonitor.com at no
charge.
Attorney for the Plan Proponent:
Steven M. Johnson, Esq.
Church, Harris, Johnson and Williams, P.C.
PO Box 1645
Great Falls, MT 59403-1645
Tel: 406-761-3000
Fax: 406-453-2313
About American Harvest
American Harvest, Inc., owns manufacturing equipment located in six
buildings on a 33.12 acres site in Sidney, Richland County,
Montana.
The Sidney real estate where AHI's hemp processing equipment is
located is owned by ITC Grain International, Inc., a wholly owned
subsidiary of AHI. AHI and ITC Grain formed a joint venture in 2019
with the goal of establishing the nation’s first vertically
integrated farm to manufacturing business capable of extracting
hemp fiber and oil and, with AHI’s manufacturing equipment,
capable of producing a variety of products from hemp including
fiber products, textiles and CBD oil products for veterinary and
medicinal purposes.
AHI spearheaded fund-raising for the joint venture and raised some
$20 million in capital which, however, fell approximately $15
million short of the total amounts needed to build out the
infrastructure for the joint venture. The Covid-19 pandemic in 2020
impeded fund-raising activities both from existing shareholders and
from outside source
ITC Grain International filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. D. Mont. Case No.
22-10063) on May 31, 2022, listing $2,883,998 in assets and
$1,351,958 and liabilities.
American Harvest Inc. filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. D. Mont. Case No. 22-10031) on
March 25, 2022, listing up to $10 million in assets and up to
$500,000 in liabilities. Gary L. Rainsdon serves as Subchapter V
trustee.
Judge Benjamin P. Hursh oversees the case.
Church, Harris, Johnson and Williams, P.C., led by Steven M.
Johnson, serves as the Debtors' legal counsel.
AMERIVET SERVICES: Unsecureds Owed $1M to Split $125K in Plan
-------------------------------------------------------------
Amerivet Services LLC submitted a First Amended Plan of
Reorganization.
Postpetition, the Debtor has taken numerous steps to improve its
bottom line. This was created by a conscious decision to cut costs
and to bid more business. While these steps have not resulted in
postpetition profits the Debtor does have $280,000 worth of
business on the books which contracts form the basis of the Debtors
financial projections to support this plan.
The Debtor's financial projections show that the Debtor will have
projected disposable income (as defined by s 1191(d) of the
Bankruptcy Code) for the period described in Sec. 1191(c)(2) of
$125,000 to be disbursed to general unsecured creditors. The
Debtor projects that there would be $91,104 available to general
unsecured creditors in a forced liquidation.
Under the Plan, Class 12 Unsecured Creditors total $1,014,520.
Unsecured creditors in Class 12 will share a total distribution of
$125,000 payable in 16 quarterly payments with the first payment
due 12 months from confirmation. Each quarterly installment shall
total $7,812.
Attorney for the Debtor:
George E. Jacobs, Esq.
2425 S. Linden Rd., Ste. C
Flint, MI 48532
Tel: (810) 720-4333
E-mail: george@bklawoffice.com
A copy of the Amended Plan of Reorganization dated June 22, 2022,
is available at https://bit.ly/3u0TqOB from PacerMonitor.com.
About Amerivet Services
Amerivet Services, LLC, a company in Brighton, Mich., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.
Mich. Case No. 22-30167) on Feb. 4, 2022, listing $1,183,528 in
assets and $1,289,581 in liabilities. Garret Brown, owner, signed
the petition. George E. Jacobs, Esq., is the Debtor's legal
counsel.
ANNALY CAPITAL: Egan-Jones Hikes Senior Unsecured Ratings to BB+
----------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, upgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Annaly Capital Management, Inc. to BB+ from BB.
Headquartered in New York, New York, Annaly Capital Management,
Inc. is a capital manager that invests in and finances residential
and commercial assets.
ANYWHERE REAL: Moody's Affirms B1 CFR & Alters Outlook to Positive
------------------------------------------------------------------
Moody's Investors Service revised Anywhere Real Estate Group LLC's
(formerly known as Realogy Group, LLC, "Anywhere Real Estate"
and"Anywhere") outlook to positive from stable. Moody's also
affirmed Anywhere's corporate family rating at B1, probability of
default rating at B1-PD, senior secured bank credit facilities at
Ba1 and senior unsecured notes at B2. The speculative grade
liquidity rating is SGL-1.
Although Moody's anticipates that headwinds from lower existing
home sale and mortgage refinance activity will drive declines in
revenue and profits in 2022, Anywhere's financial strategies
emphasizing debt repayment and extending its debt maturity profile
have led to stronger credit metrics, a better liquidity profile and
a far more flexible debt capital structure than the company had
before the coronavirus pandemic struck in early 2020. Given the
company's stated financial policies, Moody's expects Anywhere will
repay its approximately $400 million of remaining 4.875% notes due
June 2023 within the next 12 months. As such, governance
considerations are a key driver of the rating actions and outlook
statement.
RATINGS RATIONALE
The revision of the outlook to positive from stable reflects
anticipation for further debt reduction could keep debt to EBITDA
below 4.5 times despite Moody's expectation for a lower number of
existing home sale transactions in 2022 versus 2021.
The B1 CFR reflects Moody's expectations for debt to EBITDA of 3.8
times as of March 31, 2022 to rise above 4.5 times in 2022 due to
anticipated revenue and EBITDA declines from the high levels
recorded in the LTM period as the existing home sale market cools.
Moody's anticipates Anywhere will repay about $400 million of debt
due in 2023, either through a refinancing or with its cash and
generated free cash flow over the next 12 months. The company also
has ample revolving credit facility availability to meet the
upcoming maturity.
All financial metrics cited reflect Moody's standard adjustments.
Moody's expects the US existing home sales market will continue to
cool in 2022 and Anywhere's revenue will decline, driven by the
maturing of the post-COVID economic recovery and rising interest
rates, leading to fewer existing home sale transactions, mitigated
somewhat by still high average home sale prices. The large and
negative impacts of rising interest rates and reduced wealth in
financial assets could lead to both lower transaction counts and
declines in home prices, albeit from record high levels. Anywhere's
commission revenue is correlated to changes in both the number of
existing homes sold and the average selling price. Softening
conditions in the US housing market will likely drive Anywhere's
revenue and financial returns lower and credit metrics weaker in
2022 versus the strong 2021. Nevertheless, Anywhere's credit
metrics support the company's ratings and positive outlook, given
the expectations for continued strong free cash flow generation. A
prolonged downturn could weigh on Anywhere's ability to maintain
lower financial leverage despite the expected debt reduction.
Average existing homesale prices were at or near peak levels in the
LTM period and remain supportive to commission revenue. Worsening
market conditions could lead prices to decline along with the
number of transactions. Prices remain supported by still-thin
inventories and solid demand in many markets. Moody's expects
operating leverage in Anywhere's owned brokerage unit and ongoing
cost reduction initiatives should help EBITA margins remain in a
high single digit percentage range in 2022.
Additional support is provided by a strong portfolio of real estate
brokerage brands and leading existing homes sale brokerage market
position. Anywhere's owned brokerage operations are concentrated in
the largest US markets, including most luxury, vacation and second
home markets. Moody's considers the residential real estate
brokerage market volatile, cyclical and seasonal. Although
commission costs are variable, Anywhere's owned brokerages have a
high degree of fixed operating costs. A high proportion of its
profits reflect home sale market activity as opposed to
less-transactional franchise fees. Anywhere's leading position in
the residential real estate brokerage market positions the company
well to benefit when existing home sale volumes and average prices
grow. Competition from non-traditional technology-enabled
competitors including RedFin and Zillow, own-to-rent buyers and
home flippers has grown. Moody's notes that these alternative
providers are likely to underperform in a severe market downturn,
as buyers and sellers turn to traditional real estate
professionals. Additionally, Anywhere's high operating and
financial leverage could limit its flexibility if competition
increases or the negative impacts of elevated economic uncertainty
on the existing home sale market lingers for an extended period.
As a public company, Anywhere provides transparency into its
governance and financial results and goals. Anywhere's financial
strategies emphasize debt reduction and extension of its debt
maturity profile. Once the maturing 2023 notes are repaid,
Anywhere's debt maturity profile will feature mostly unsecured
fixed rate notes due in 2029 and 2030. The 11-person board of
directors is controlled by independent directors. Moody's expects
Anywhere to maintain conservative financial strategies including
repaying debt, building liquidity and eschewing large debt-funded
M&A or large share repurchase in 2022. A move by the company to
increase credit risk through, for instance, a substantial
debt-funded acquisition before economic and financial market
conditions stabilize would pressure Anywhere's credit profile and
the B1 CFR.
The secured and unsecured debt instrument ratings reflect the B1-PD
PDR and an overall loss given default ("LGD") assumption of 50%.
Anywhere, which is the issuer of the rated debts, is an indirect
subsidiary of publicly-traded Anywhere Real Estate Inc. (formerly
known as Realogy Holdings Corp.). Anywhere Real Estate Inc. does
not conduct any operations other than with respect to its indirect
ownership of Anywhere. As a result, the consolidated financial
positions, results of operations and cash flows of Anywhere and
Anywhere Real Estate Inc. are considered the same.
The Ba1 rating assigned to the senior secured bank credit
facilities reflects the B1-PD PDR and a LGD assessment of LGD2,
reflecting its priority position in the capital structure. The debt
is secured by a pledge of substantially all of the company's
domestic assets (other than excluded entities and excluding
accounts receivable pledged for the securitization of the facility)
and 65% of the stock of foreign subsidiaries. The Ba1 rating, three
notches above the CFR, benefits from loss absorption provided by
the substantial amount of junior ranking debt and non-debt
obligations.
The B2 rating assigned to the senior unsecured notes reflects the
B1-PD PDR and a LGD assessment of LGD4. The LGD assessment reflects
effective subordination to all the secured debt. The senior notes
are guaranteed by substantially all of the company's domestic
assets (other than excluded entities and excluding accounts
receivable pledged for the securitization facility) and 65% of the
stock of foreign subsidiaries). The unrated 0.25% exchangeable
notes due June 2026 are ranked pari passu with Anywhere's rated
unsecured notes in Moody's hierarchy of claims at default.
The SGL-1 speculative grade liquidity rating reflects Anywhere's
very good liquidity profile. As of March 31, 2022, Anywhere had a
cash balance of over $300 million. Moody's anticipates more than
$400 million of free cash flow in 2022 and full availability under
the company's $1.425 billion revolving credit facilities. A $477
million portion of the revolver matures in February 2023 while $948
million matures in 2025 so long as Anywhere repays or refinances
its 4.875% senior notes due June 2023 before March 2023. If the
revolver maturity extension is not effected in a timely manner,
free cash flow generation is weaker than Moody's currently
anticipates or debt balances are not reduced as expected, there
would be downward pressure on the SGL-1 speculative grade liquidity
rating. Anywhere's cash flow is seasonal, with negative cash flow
typically in the 1st fiscal quarter. Moody's expects Anywhere will
maintain a comfortable margin below the maximum senior secured net
debt to EBITDA (as defined in the facility agreement) financial
maintenance covenant applicable to the secured 1st lien debt over
the next 12 to 15 months. Anywhere has only around $10 million of
annual required term loan principal payments.
The positive outlook reflects Moody's anticipation that although
revenue and EBITDA will likely decline in 2022 as the post-pandemic
housing boom ends and interest rates rise, Anywhere could reduce
debt with free cash flow, maintain strong credit metrics and very
good liquidity. The outlook could be revised to stable from
positive if the severity or duration of adverse existing home sale
conditions causes Moody's to expect debt to EBITDA will remain
above 4.5 times or free cash flow to debt will drop to a low single
digit range in 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects Anywhere will
sustain through market cycles: (1) debt to EBITDA below 4.5 times,
(2) free cash flow to debt of at least 8%, (3) very good liquidity
and (4) balanced financial strategies, including an emphasis upon
repaying debt and extending its debt maturity profile.
The ratings could be downgraded if Moody's anticipates: (1) debt to
EBITDA to remain above 5.5 times, (2) diminished liquidity, or (3)
aggressive financial strategies featuring large, debt-financed
acquisitions or shareholder returns.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Moody's took the following actions and made the following outlook
statement:
Issuer: Anywhere Real Estate Group LLC
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD2)
Senior Unsecured Regular Bond/Debenture, Affirmed B2 (LGD4) from
(LGD5)
Outlook, Changed To Positive From Stable
Based in Madison, NJ, Anywhere Real Estate Inc (NYSE: HOUS)
provides franchise and brokerage operations as well as national
title, settlement, and relocation companies and nationally scaled
mortgage origination and underwriting joint ventures. Anywhere's
brand portfolio includes Better Homes and Gardens(R) Real Estate,
CENTURY 21(R), Coldwell Banker(R), Coldwell Banker Commercial(R),
Corcoran(R), ERA(R), and Sotheby's International Realty(R). Moody's
expects 2022 revenue of over $7.5 billion.
APEX CONVEYOR: Wins Cash Collateral Access Thru July 28
-------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
authorized Apex Conveyor Systems, Inc. to use cash collateral on an
interim basis to pay its business expenses pursuant to the updated
budget through July 28, 2022.
The Debtor is also authorized to use cash collateral to pay monthly
adequate protection, interest only payments, to secured creditor
David Hill and Barbara Hill (both as individuals and as Trustees of
the Hill Family Trust), in the amount of $3,733, and pay all
quarterly fees due to the United States Trustee's Office.
The Court said only adequate protection given will be to the Hills.
All other secured creditors may object and seek adequate protection
payments at the continued hearing on the matter.
A hearing on the matter is scheduled for July 28 at 2 p.m. via
ZoomGov. Objections are due July 21.
A copy of the order and the Debtor's budget for the period from
June to October 2022 is available at https://bit.ly/3n4hdJM from
PacerMonitor.com.
The Debtor projects $52,000 in total income and $45,103 in total
expenses.
About Apex Conveyor Systems Inc.
Apex Conveyor Systems Inc. designs and manufactures parts and
components for any conveyor system application.
Apex Conveyor Systems Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-12152) on
June 6, 2022. In the petition filed by Greg S. King, as president,
the Debtor estimated assets between $100,000 and $500,000 and
liabilities between $1 million and $10 million.
The case is assigned to Honorable Bankruptcy Judge Magdalena Reyes
Bordeaux.
Robert B. Rosenstein, Esq., at Rosenstein & Associates, is the
Debtor's counsel.
ARCHDIOCESE OF NEW ORLEANS: 3 New Committee Members Appointed
-------------------------------------------------------------
David Asbach, acting U.S. trustee for Region 5, appointed Sean
Oliver, Michael Robinson and John Aleman as new members of the
official committee of unsecured creditors in the Chapter 11 case of
The Roman Catholic Church of the Archdiocese of New Orleans.
As of June 21, the members of the committee are:
1. Patricia Moody
c/o Brittany R. Wolf-Freedman
Gainsburgh, Benjamin, David, Meunier & Warshauer, LLC
2800 Energy Centre
1100 Poydras Street
New Orleans, LA 70163
Phone: 504-522-2304
Fax: 504-528-9973
Email: bwolf@gainsben.com
2. George Coulon
c/o Damon J. Baldone, Esq.
Damon J. Baldone & Associates
162 New Orleans Blvd.
Houma, LA 70364
Phone: 985-868-3427
Fax: 985-872-2319
Email: dbaldone@hotmail.com
3. Sean Oliver
c/o Frank J. D'Amico, Jr.
Law Offices of Frank D'Amico, Jr.
4608 Rye Street
Metairie, LA 70006
Phone: 504-525-7272
Fax: 504-525-9522
Email: frank@damicolaw.net
beverly@damicolaw.net
4. Michael Robinson
c/o Frank E. Lamothe, III
Lamothe Law Firm
400 Poydras Street, Suite 1760
New Orleans, LA 70130
Phone: 504-704-1414
Fax: 504-262-0945
Email: felamothe@lamothefirm.com
kschubert@lamothefirm.com
5. John Aleman
c/o Andrew Van Arsdale
AVA Law Group, Inc.
2718 Montana Avenue, Suite 222
Billings, MT 59101
Phone: 800-777-4141
Fax: 619-374-2705
Email: andrew@avalaw.com
About The Roman Catholic Church of
the Archdiocese of New Orleans
The Roman Catholic Church of the Archdiocese of New Orleans --
https://www.nolacatholic.org/ -- is a non-profit religious
corporation incorporated under the laws of the State of Louisiana.
Created as a diocese in 1793, and established as an archdiocese in
1850, the Archdiocese of New Orleans has educated hundreds of
thousands in its schools, provided religious services to its
churches and provided charitable assistance to individuals in need,
including those affected by hurricanes, floods, natural disasters,
war, civil unrest, plagues, epidemics, and illness. Currently, the
archdiocese's geographic footprint occupies over 4,200 square miles
in southeast Louisiana and includes eight civil parishes:
Jefferson, Orleans, Plaquemines, St. Bernard, St. Charles, St. John
the Baptist, St. Tammany, and Washington.
The Roman Catholic Church for the Archdiocese of New Orleans sought
Chapter 11 protection (Bankr. E.D. La. Case No. 20-10846) on May 1,
2020. The archdiocese was estimated to have $100 million to $500
million in assets and liabilities as of the bankruptcy filing.
Judge Meredith S. Grabill oversees the case.
Jones Walker, LLP and Blank Rome, LLP, serve as the archdiocese's
bankruptcy counsel and special counsel, respectively. Donlin,
Recano & Company, Inc., is the claims agent.
The U.S. Trustee for Region 5 appointed an official committee of
unsecured creditors on May 20, 2020. The committee is represented
by the law firms of Pachulski Stang Ziehl & Jones, LLP and Locke
Lord, LLP. Berkeley Research Group, LLC is the committee's
financial advisor.
ASP NAVIGATE: Moody's Cuts CFR & First Lien Loans to 'B3'
---------------------------------------------------------
Moody's Investors Service downgraded the ratings of ASP Navigate
Acquisition Corp. including the company's Corporate Family Rating
to B3 from B2, Probability of Default Rating to B3-PD from B2-PD,
and senior secured first lien credit facilities to B3 from B2. The
rating outlook is stable.
The rating downgrades reflect Moody's expectation for debt/EBITDA
(on Moody's adjusted basis) to remain at or above 5.5x through
2023, as well Moody's expectation that the company will not
generate positive free cash flow in FY2022. While ASP is attempting
to raise prices on its OEM medical device customer base to offset
input cost inflation, and volume trends continue to trend
positively in the orthopedic end-market, Moody's expects a
persistent inflationary environment to continue to negatively
impact profitability in FY2022, slowing the pace of earnings growth
and deleveraging. To that end, Moody's projects debt/EBITDA at 6.2x
at the end of 2022, and 5.8x at the end of 2023. The company has
secured a strong pipeline of new business wins, which requires
elevated near-term investment in capital spend and working capital
that Moody's expects will inhibit positive free cash flow
generation in FY2022. Further, the rising interest rate environment
also presents a headwind to free cash flow generation, given the
company's debt capital structure is concentrated in floating rate
term loan instruments.
The downgrade of the senior secured credit facilities to B3
reflects the one-notch downgrade in the Corporate Family Rating and
the fact that the senior secured obligations represent the
preponderance of debt in the company's capital structure.
Downgrades:
Issuer: ASP Navigate Acquisition Corp.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Secured 1st Lien Revolving Credit Facility, Downgraded to
B3 (LGD4) from B2 (LGD4)
Senior Secured 1st Lien Term Loan, Downgraded to B3 (LGD4) from B2
(LGD4)
Outlook Actions:
Issuer: ASP Navigate Acquisition Corp.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
ASP's B3 Corporate Family Rating reflects the company's high
financial leverage with debt/EBITDA at 6.7x as of March 31, 2022.
While Moody's expects top-line trends to continue to improve over
the next 12-18 months, propelled by new business wins and
underlying orthopedic end-market market growth, Moody's expects
debt/EBITDA to remain at or above 5.5x through FY2023. Moody's
expects ongoing inflationary headwinds, driven by labor and supply
chain disruption, to continue to constrain earnings growth and
deleveraging. The rating also reflects the company's high customer
concentration, with its 6 largest customers accounting for a
significant majority of revenues, focused on orthopedic related
products. ASP's ratings reflect the business risks associated with
contract manufacturing, include potential fluctuations in medical
device customer demand and inventory levels, less favorable payment
terms offered by large medical device customers and industrywide
pricing pressure. The rating also reflects the company's limited
track record as a stand-alone company and Moody's expectations that
financial policies will remain aggressive due to ownership by a
private equity sponsor.
ASP's ratings benefit from the company's reasonable scale in the
highly fragmented medical device contract manufacturing industry,
strong market position and relatively good profit margins relative
to peers. While the company has high customer concentration, the
company has an established track record selling a wide range of
products to key OEM customers, with high switching costs due to
regulatory constraints.
ASP has an adequate liquidity profile. Moody's expects the company
will generate negligible free cash flow in FY2022. The company has
a cash balance of $20 million as of March 31, 2022, as well as $40
million of availability under its $60 million revolving credit
facility due 2025.
The stable outlook reflects Moody's expectation that the company
will be unable to achieve metrics that would support higher ratings
within the next 12-18 months. While Moody's expects that ASP's
financial leverage will remain high, the risk is somewhat tempered
by liquidity that is currently adequate, but may weaken in the
near-term if the company is unable to grow earnings and generate
positive free cash flow.
Social and governance considerations are material to the rating.
For ASP, the social risks are primarily associated with responsible
production including compliance with regulatory requirements for
the safety of medical devices as well as adverse reputational risks
arising from recalls associated with manufacturing defects. These
social risks are partially offset by favorable demographic and
societal trends, including an aging population and the rise in
chronic disease. Governance risk considerations include the
company's financial policies which Moody's expect to remain
aggressive, reflecting its ownership by a private equity
investors.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if the company's liquidity and/or
operating performance deteriorates. The ratings could also be
downgraded if the company pursues an aggressive debt-funded
acquisition strategy or if free cash flow becomes negative on a
sustained basis. If EBITA-to-interest falls below one times, it
could also put downward pressure on the company's ratings.
Ratings could be upgraded if the company demonstrates consistent
organic earnings growth and deleveraging, as well as sustained
positive free cash flow generation. Under this scenario, the
company would successfully manage through the inflationary
backdrop, with stable or growing profit margins. Quantitatively,
adjusted debt/EBITDA at or below 5.5 times would support an
upgrade.
The principal methodology used in these ratings was Medical
Products and Devices published in October 2021.
ASP Navigate Acquisition Corp is a contract manufacturer of
orthopedic and medical/surgical parts whose customers are some of
the world's largest medical device product companies. The company
reported revenues of approximately $316 million in fiscal year
2021. The company is owned by private equity firm American
Securities, LLC.
BEASLEY BROADCAST: S&P Affirms 'B-' ICR, Alters Outlook to Neg.
---------------------------------------------------------------
S&P Global Ratings affirmed all of its ratings on Beasley Broadcast
Group Inc., including the 'B-' issuer credit rating on the
company.
S&P said, "The negative outlook reflects our expectation that the
recovery in broadcast advertising will continue to slow over the
second half of 2022 and Beasley's leverage will remain elevated
above 7x.
"Beasley's leverage may permanently remain above our 6x downgrade
threshold given a slowing recovery in broadcast advertising. We
expect Beasley's leverage to decline toward 7x in 2022 from 8.8x as
of Dec. 31, 2021, but still remain above our 6x downgrade threshold
in 2022 and 2023. Multiple radio broadcasters have publicly
indicated that national advertising is slowing much faster than
local advertising in the second quarter. In previous downturns,
national advertising was the first radio category to experience
declines. We believe this indicates advertisers are likely
concerned about the economic outlook, and it is possible this is
the beginning of a broader pull-back in radio advertising. Given
the rapidly deteriorating macroeconomic environment, we expect this
slowdown in growth to persist over the second half of 2022 and
believe the full-year 2022 growth rate for broadcast radio will be
substantially lower than our previous expectations."
It would be difficult for Beasley to reduce leverage to 6x over the
next 12 months on EBITDA growth alone given secular declines facing
the broadcast radio industry. Beasley will rely on expanding its
digital business, to offset declines in broadcast radio. However,
the company's digital business is not yet at scale and will require
additional investment and expenditures that will pressure margins
over the next 12 months. As a result, Beasley would need to use its
free cash flow as well as a substantial portion of its cash balance
of $51 million to reduce leverage toward 6x to maintain the
long-term sustainability of its capital structure. S&P believes
that in a recessionary environment, even if Beasley used a
substantial portion of its cash to reduce debt, leverage would
still likely remain very high and at unsustainable levels in the
long term.
Beasley's leverage would increase further in a recession. If a
recession occurs, Beasley's revenue and EBITDA will be materially
weaker than our current forecast. Radio advertising has very short
lead times and is one of the first advertising mediums to
experience declines when the economy slows. S&P said, "Our previous
base case assumption was that the broadcast radio industry would
likely return to 85% of pre-pandemic levels in 2022. Since the
recovery is already slowing, we no longer believe that is
attainable in 2022. If a recession occurs, it is more likely the
industry would face additional losses that would widen the gap to
pre-pandemic industry revenue levels and radio companies with
elevated leverage, such as Beasley, may not be able to recover to
pre-pandemic credit metrics. The majority of Beasley's broadcast
revenue is derived from local advertisers, and local radio
advertising growth currently remains robust across the industry.
However, in a recession, we would expect significant declines in
local advertising because these advertisers are more likely to face
prolonged negative economic pressure given their smaller scale and
less diversification compared with larger national advertisers."
S&P said, "We expect Beasley to maintain sufficient liquidity over
the next 12 months to support its operations. Beasley had about $51
million of cash on its balance sheet as of March 31, 2022. We
expect this cash cushion would help Beasley withstand a sharp
decline in radio advertising in the event a recession were to
occur. We expect Beasley to generate about $2 million-$4 million of
cash available for debt repayment in 2022.
"The negative outlook reflects our expectation that the recovery in
broadcast advertising will continue to slow over the second half of
2022 and Beasley's leverage will remain elevated above 7x. It also
reflects the elevated risk of a recession over the next 12 months
and our view that Beasley's capital structure may become
unsustainable if leverage continues to rise with no clear path of
deleveraging."
S&P could lower the rating if:
-- Market conditions remained unfavorable and radio advertising
growth slowed faster than expected, such the company were unable to
consistently generate positive free cash flow;
-- The economy entered a prolonged recession and we expected
Beasley's leverage to spike and remain at unsustainable levels,
such that the company had no clear path to deleveraging back toward
6x; or
-- There were an increased likelihood of a distressed exchange
offer or redemption below par within the next 12 months.
S&P could revise its outlook back to stable if:
-- The company were on track to reduce its leverage below 6x, and
-- It were able to consistently generate positive free cash flow.
ESG credit indicators: E-2, S-2, G-2
BOY SCOUTS: Not Contributing $55 Mil. to Guam Clergy Abuse Fund
---------------------------------------------------------------
Haidee Eugenio Gilbert of The Guam Daily Post reports that the Boy
Scouts of America said it is not contributing $55 million to a Guam
clergy sex abuse trust fund, adding that this should be made clear
in order not to mislead survivors of priest sexual assaults.
Without a $55 million contribution from the Boy Scouts, Guam clergy
abuse survivors could be looking at a settlement of between $37
million and $52 million instead of up to $107 million under a
current proposal.
The Archdiocese of Agana may, at the most, claim an interest in a
narrow set of Boy Scouts insurance policies between 1976 and 1983,
the Boy Scouts said.
The Boy Scouts' filing, through attorney Patrick Civille, is the
latest objection to the archdiocese and its creditors committee's
joint disclosure statement and plan to get the archdiocese out of
bankruptcy.
Part of all this is a proposed settlement with more than 270
survivors of Guam clergy sexual assaults dating back to the 1950s.
But Civille said the plan and disclosure statement are "not just
ill-founded," but are "dangerously misleading."
The Boy Scouts counsel told the court that the disclosure statement
should not be approved in its current form because it fails to
provide adequate information the Bankruptcy Code requires, and
"inherently misleads creditors by describing a Plan that is
patently unconfirmable."
The plan provides for the distribution of assets contributed by the
Boy Scouts to the trust for survivors of clergy sexual assaults,
amounting to $55 million.
"However, the BSA is making no such contributions," Civille said.
"The Disclosure Statement must make clear that no such BSA
contribution is contemplated under the BSA Plan or expected."
Priest and scoutmaster
Most of the clergy sex abuse claims in the archdiocese's bankruptcy
case involved Father Louis Brouillard, who also served as a
scoutmaster for much of his stay in Guam, from his ordination on
the island in 1948 until his return to Minnesota in 1981.
Brouillard, before his death in 2018, admitted to sexually abusing
minors during his years in Guam.
Civille said the archdiocese and creditors' joint disclosure
statement made no mention of the fact that prior to 1976, BSA
insurance policies did not provide coverage for any chartered
organizations.
Instead, they identify substantially all BSA insurance policies
issued in or before 1983, including those that existed prior to
1976, the BSA attorney said.
Civille said the archdiocese may, at most, assert an interest in
only a narrow set of insurance policies between 1976 and 1983, and
its interest would be subject to prior depletion and existing
defenses.
"In particular, based on available information, the BSA believes
that the majority of 'Brouillard claims' would predate the Debtor's
coverage under the BSA Insurance Policies and thus cannot support a
settlement of BSA Insurance Policies," Civille said.
Conflicts
The Boy Scouts has its pending bankruptcy case in Delaware, also as
a result of sexual abuse claims involving scoutmasters and others
associated with scouting activities.
Civille said the joint archdiocese and creditors committee
disclosure statement and plan directly conflicts with the BSA plan
in its own bankruptcy case, as well as with executed BSA insurance
settlements.
While the archdiocese has yet to settle abuse claims, the Boy
Scouts has already settled with a number of Guam abuse claimants.
The settlement amounts have not been disclosed.
The Boy Scouts said it also reserves the right to object to any
modifications or amendments of the disclosure statement or plan,
among other things.
Chief Judge Frances Tydingco-Gatewood of the District Court of Guam
set a July 13 hearing on the disclosure statement and plan.
One of two insurers to the archdiocese, Continental Insurance Co.,
also filed objections to the disclosure statement, while the U.S.
Trustees asked for amendments to it.
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC, as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
About Archbishop of Agana
Roman Catholic Archdiocese of Agana -- https://www.aganaarch.org/
-- is an ecclesiastical territory or diocese of the Catholic Church
in the United States. It comprises the United States dependency of
Guam. The Diocese of Agana was established on Oct. 14, 1965, as a
suffragan of the Archdiocese of San Francisco, California. It is a
tax-exempt entity (as described in 26 U.S.C. Section 501).
The Archbishop of Agana, also known as the Roman Catholic
Archdiocese of Agana, sought Chapter 11 protection (D. Guam Case
No. 19-00010) on Jan. 16, 2019. Rev. Archbishop Michael Jude
Byrnes, S.T.D., Archbishop of Agana, signed the petition. The
Archdiocese scheduled $22,962,686 in assets and $45,662,941 in
liabilities as of the bankruptcy filing.
The Hon. Frances M. Tydingco-Gatewood is the case judge.
The archdiocese tapped Elsaesser Anderson, Chtd. as bankruptcy
counsel, Deloitte & Touche, LLP as human resource consultant, and
Pacific Human Resource Services, Inc. as accountant. Blank Rome
LLP, LegalWorks Apostolate PLLC, Davis & Davis P.C., and Camacho
Calvo Law Group serve as the archdiocese's special counsel.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on March 6, 2019. Stinson Leonard Street LLP,
The Law Offices of William Gavras, and Hiller Law, LLC serve as the
committee's bankruptcy counsel, local counsel, and special counsel,
respectively.
BRINKER INTERNATIONAL: Egan-Jones Retains B Sr. Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, retained the 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Brinker International, Inc.
Headquartered in Dallas, Texas, Brinker International, Inc. is a
restaurant operator who owns, operates, or franchises
establishments in the United States and Internationally.
BRISTOL PROPERTIES: Unsecureds Will Get 100% Dividend in Plan
-------------------------------------------------------------
Bristol Properties LLC filed with the U.S. Bankruptcy Court for the
District of Rhode Island a First Amended Combined Plan of
Reorganization and Disclosure Statement dated June 23, 2022.
On February 20, 2018, James McGown formed Bristol Properties LLC in
state of Rhode Island for the purpose of managing real estate owned
by the Debtor. James McGown is the managing member of the LLC.
The Debtor is the sole owner of property located at 331 High
Street, Bristol, Rhode Island ("Bristol Property") and operates an
Airbnb for said Property. The sole operating income for the Debtor
is the net proceeds from the operation of the Airbnb.
Since the filing of the Chapter 11, the Debtor resolved the
Providence Superior Court action for specific performance for the
sale of 331 High Street, Bristol, RI. ("Bristol Property") The
Debtor was able to negotiate a fair settlement in order to retain
the Bristol Property, which was critical and essential for the
operations of the Debtor.
The resolution of the suit resulted in the Debtor retaining the
income-generating Bristol Property, which is currently assessed by
the Town of Bristol at $542,600.00. There is no mortgage on the
Bristol Property.
Class 1 shall consist of general unsecured claims against the
Debtor allowed under 502 of the Code. Said Class shall receive a
100% dividend on their claim plus interest based on the Federal
Judgment Rate as of the Petition Date on the Distribution Date.
Class 1 is not impaired and shall not be entitled to vote to accept
or reject the Plan. Class 1 is deemed to accept the Plan.
General Unsecured Claims total $19,367.02.
Class 2 shall consist of priority tax claims against the Debtor
allowed under 502 of the Code. Class 2 shall receive a 100%
dividend on their claims on the Distribution Date. Class 2 is not
impaired and shall not be entitled to vote to accept or reject the
Plan. Class 2 is deemed to accept the Plan.
Class 3 consists of the interest of the Debtor's managing member,
James McGown. The value of the Class 3 equity interest is estimated
to be $950,000.00. The holder of the equity interest will not
receive any distributions on account of his interest in the Debtor
unless or until all payments contemplated under the Plan have been
made.
No payments of compensation to the Debtor or its principal, James
McGown have been made since the Petition Date. Neither the Debtor
nor its principal, James McGown shall be paid any compensation
until all allowed creditors are paid in full. The holder of Class 3
equity interests is not entitled to vote to accept or reject the
Plan and is conclusively deemed to have accepted the Plan.
The Debtor's proposed Plan will be funded exclusively from the
rental of property to Airbnb guests and/or a loan from the
principal to the Debtor. Based on the foregoing class of class,
anticipated Quarterly Trustee Fees and Administrative Claims,
Debtor contends that this is a 100% Plan of Reorganization.
A full-text copy of the First Amended Combined Plan and Disclosure
Statement dated June 23, 2022, is available at
https://bit.ly/3bsV84M from PacerMonitor.com at no charge.
Debtor's Counsel:
Lisa A. Geremia, Esq.
Geremia & DeMarco, Ltd.
620 Main Street, Unit CU-3A
East Greenwich, RI 02818
Tel: 401-885-1444
Fax: 401-471-6283
About Bristol Properties
Bristol Properties LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. R.I. Case No. 21-10619) on Aug. 11,
2021, disclosing up to $10 million in assets and up to $500,000 in
liabilities. James McGown, president of Bristol Properties,
signed the petition. Judge Diane Finkle oversees the
case. The Debtor tapped Lisa A. Geremia, Esq., at Geremia &
DeMarco, Ltd. as legal counsel.
BRODIE HOLDINGS: Aug. 18 Plan & Disclosures Hearing Set
-------------------------------------------------------
On June 17, 2022, Paul M. Cowan, Esq., as Curator for the Estate of
Beatrice Brodie and Barbara Reiser, as Guardian for Mindell Brodie,
and Liz C. Messianu as court−appointed attorney for Mindell
Brodie (collectively "Plan Proponents") filed a Disclosure
Statement referring to a Plan for Brodie Holdings, LLC and its
Debtor Affiliates.
On June 21, 2022, Judge Thomas J. Catliota conditionally approved
the Disclosure Statement and ordered that:
* Aug. 18, 2022, at 10:30 a.m. in Virtual Courtroom is the
hearing to consider the final approval of the Disclosure Statement
and the confirmation of the Plan.
* Aug. 8, 2022, is fixed as the last day for filing and
serving written objections to the conditionally approved Disclosure
Statement or confirmation of the Plan.
* Aug. 8, 2022, is fixed as the last day for filing written
acceptances or rejections of the Plan.
A copy of the order dated June 21, 2022, is available at
https://bit.ly/3QOsone from PacerMonitor.com at no charge.
About Brodie Holdings
Chestertown, Md.-based Brodie Holdings, LLC filed a petition for
Chapter 11 protection (Bankr. D. Md. Case No. 21-16309) on Oct. 5,
2021, listing as much as $10 million in both assets and
liabilities. Harry Kaiser, managing member, signed the petition.
Judge Thomas J. Catliota oversees the case.
The Debtor tapped Tate M. Russack, Esq., at RLC, PA Lawyers &
Consultants as legal counsel and Larry Strauss, Esq., CPA and
Associates, Inc. as accountant.
On Feb. 22, 2022, the court approved the appointment of Zvi Guttman
as Chapter 11 trustee. The trustee tapped Shapiro Sher Guinot &
Sandler as bankruptcy counsel; Gunster Yoakley & Stewart, PA as
litigation counsel; and A & G Realty Partners, LLC as real estate
advisor.
BROOKDALE SENIOR: Egan-Jones Retains CC Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, retained the 'CC'
foreign currency and local currency senior unsecured ratings on
debt issued by Brookdale Senior Living Inc. EJR also retained the
'C' rating on commercial paper issued by the Company.
Headquartered in Brentwood, Tennessee, Brookdale Senior Living Inc.
operates senior living facilities in the United States.
BUCKEYE TECHNOLOGIES: Egan-Jones Retains BB- Sr. Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company on May 31, 2022, retained the 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Buckeye Technologies Inc.
Headquartered in Memphis, Tennessee, Buckeye Technologies Inc.
manufactures and markets specialty cellulose and absorbent
products.
BUENA VISTA GAMING: Moody's Reviews 'Caa1' CFR for Downgrade
------------------------------------------------------------
Moody's Investors Service placed all of Buena Vista Gaming
Authority's ratings on review for downgrade, including its Caa1
Corporate Family Rating, Caa1-PD Probability of Default Rating, and
Caa1 $185 million ($205 million initial amount) outstanding 13%
senior secured notes.
The review for downgrade considers that Buena Vista's senior
secured notes that mature in April 2023, have become current, and
despite performing well over recent quarters, Buena Vista does not
have the financial resources to repay the senior notes in full at
maturity," stated Keith Foley, A Senior Vice President at Moody's.
The company has entered into an agreement with a financial
institution to provide up to $185 million of credit facilities.
However, there is always the possibility that this agreement will
not be consummated, or that an alternative refinancing method will
not be available prior to maturity. The agreed upon transaction is
still being negotiated, and assuming it does occur, is not expected
to close not close until several weeks from now. Buena Vista has
received a going concern opinion from its auditors.
On Review for Downgrade:
Issuer: Buena Vista Gaming Authority
Corporate Family Rating, Placed on Review for Downgrade, currently
Caa1
Probability of Default Rating, Placed on Review for Downgrade,
currently Caa1-PD
Senior Secured Regular Bond/Debenture, Placed on Review for
Downgrade, currently Caa1 (LGD4)
Outlook Actions:
Issuer: Buena Vista Gaming Authority
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Key credit concerns include Buena Vista's single asset profile and
small revenue base, competition from several large casinos
operating in the company's primary market area, and high leverage.
Another concern is that Buena Vista's revenue and earnings are
dependent on cyclical discretionary consumer spending, and there is
uncertainty regarding the sustainability of the current earnings
level when a broader range of competitive leisure activities
reopen. Also considered are the risks common to Native American
gaming issuers, including uncertainty as to enforceability of
lender's claims in bankruptcy or liquidation, and the regular
payment of cash distributions from Buena Vista to the Tribe, which
can be made even in the event of default.
Positive consideration is given to Harrah's NorCal's close
proximity to Sacramento, CA along with that market's favorable
demographics in terms of population density, and the benefits from
the company's affiliation with Caesars. Harrah's NorCal Casino
participates in Caesars highly popular and valuable Total Rewards
loyalty program and database of potential customers.
Ratings would be lowered if it appears Buena Vista will not be able
to complete a refinancing in a manner that does not result in any
impairment to existing lenders. A successful refinancing that
provides adequate liquidity and longer-term financial and operating
flexibility could result in a confirmation of the company's
existing Caa1 CFR.
The principal methodology used in these ratings was Gaming
published in June 2021.
Buena Vista is an unincorporated governmental instrumentality of
the Buena Vista Rancheria of Me-Wuk Indians, a federally recognized
Tribe. The Authority was created by tribal law on July 15, 2009, to
own, develop and operate the gaming and related businesses of the
Tribe. The Authority owns the Harrah's NorCal, a Class III gaming
facility that originally opened in April 2019 near Ione, California
in Amador County, about 45 miles southeast of Sacramento,
California. Net revenue for the latest 12-months ended March 31,
2022 was $120 million.
c
-
Egan-Jones Ratings Company on May 27, 2022, retained 'BB-' foreign
currency and local currency senior unsecured ratings on debt issued
by Belden Inc.
Headquartered in St. Louis, Missouri, Belden Inc. designs,
manufactures, and markets cable, connectivity, and networking
products.
CAESARS ENTERTAINMENT: Egan-Jones Retains CCC Sr. Unsec. Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'CCC'
foreign currency and local currency senior unsecured ratings on
debt issued by Caesars Entertainment Corporation. EJR also retains
'C' rating on commercial paper issued by the Company.
Headquartered in Reno, Nevada, Caesars Entertainment Corporation
provides entertainment, gaming, and lodging services.
CAESARS HOLDINGS: Egan-Jones Keeps CCC Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'CCC'
local currency senior unsecured ratings on debt issued by Caesars
Holdings, Inc. EJR also retains 'C' rating on commercial paper
issued by the Company.
Headquartered in Las Vegas, Nevada, Caesars Holdings, Inc. operates
as a gaming company.
CALPLANT I: Plan Exclusivity Period Extended to Nov. 29
-------------------------------------------------------
CalPlant I Holdco, LLC obtained an order from the U.S. Bankruptcy
Court for the District of Delaware extending to Nov. 29 the period
during which only the company can file a Chapter 11 plan.
The company can solicit acceptances for the plan until Jan. 27 next
year.
The extension will give the company more time to make operational
improvements to its manufacturing plant, the company's main asset,
and to collaborate with its chief equipment supplier, Siempelkamp
Maschinen-und Anlagenbau GmbH, to optimize the plant's production.
The company's attorney, Brya Keilson, Esq., at Morris James, LLP
said increasing the value of the manufacturing plant will be key
for the execution of a "successful, value-maximizing sale process."
CalPlant intends to focus its efforts on commencing the sale
process while continuing to optimize plant operations in the months
ahead. The company believes it is on track to conduct a marketing
process, with a target bid deadline this fall.
About CalPlant
CalPlant I, LLC -- http://www.eurekamdf.com/-- is a Northern
California-based company focused on manufacturing
sustainably-sourced building products, including the creation of
the world's first no-added-formaldehyde, rice straw-based medium
density fiberboard, Eureka MDF. CalPlant and its predecessor
company, CalAg, LLC, have spent many years researching, developing,
and patenting a process to make high-quality MDF using annually
renewable rice straw as the feedstock, the disposal of which has
posed environmental issues in California for decades.
CalPlant I and CalPlant I Holdco, LLC sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 21-11302) on Oct. 5, 2021. The cases
are handled by Honorable Judge John T. Dorsey.
CalPlant I Holdco listed up to $100 million in assets and up to
$50,000 in liabilities as of the bankruptcy filing while CalPlant I
listed as much as $500 million in both assets and liabilities.
The Debtors tapped Morrison & Foerster, LLP as bankruptcy counsel;
Morris James, LLP as local bankruptcy counsel; Paladin Management
Group as financial advisor; and KCoe Isom, LLP as auditor and tax
services provider. Prime Clerk, LLC is the claims, noticing and
administrative agent.
CARDINAL HEALTH: Egan-Jones Retains BB+ Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Cardinal Health, Inc.
Headquartered in Dublin, Ohio, Cardinal Health, Inc. provides
complementary products and services to healthcare providers and
manufacturers.
CARPENTER REALTY: Joint Liquidating Plan Confirmed by Judge
-----------------------------------------------------------
Judge Jerrold N. Poslusny, Jr., has entered an order confirming the
Joint Small Business Plan of Liquidation of Carpenter Realty
Corporation and its Debtor Affiliates.
All collateral documents, including the PBGC Settlement Agreement
and the Plan Administration Agreement are authorized and approved
and shall be implemented in accordance with their terms. The last
sentence of both Section 2.5(e) and Section 2.5(l) of the Plan be
and hereby are stricken.
Notwithstanding anything in the Plan or the Plan Administration
Agreement to the contrary, upon: (i) payments in full of all
creditors and (ii) the obligations of the Debtors in the PBGC
Settlement have been satisfied in full and (iii) in the event the
NJ Litigants obtain a final non-appealable Order from the NJ State
Court that establishes that the NJ Litigants as owners of the
majority of equity interest in the Debtors, the NJ Litigants may
petition the Plan Administrator to modify or terminate the terms of
Plan Administration Agreement, or to dispose or not dispose of
trust assets in any alternative manner they allege is in the best
interest of the Trust beneficiaries.
A copy of the Plan Confirmation Order dated June 21, 2022, is
available at https://bit.ly/3ndkLcr from PacerMonitor.com at no
charge.
Debtors' Counsel:
Damien Nicholas Tancredi, Esq.
William J. Burnett, Esquire
FLASTER GREENBERG PC - CHERRY HILL
1810 Chapel Ave West
Cherry Hill, NJ 08002
Tel: 856-661-1900
E-mail: damien.tancredi@flastergreenberg.com
About Carpenter Realty
Carpenter Realty Corp. and its affiliates are owners, landlords,
caretakers and managers of valuable real property and buildings
consisting of industrial lands, farms, commercial buildings,
residences, wetlands and other real estate. At the facility in
Bridgeton, NJ, Carpenter Warehousing Inc. performs various storage,
warehousing and logistics services, as well as assembling fence
panels for certain customers and assisting in antique automobile
restorations. Carpenter Warehousing trades under the name
"Thunderbolt Automotive" for its restoration services.
Carpenter Realty and its affiliates sought Chapter 11 protection
(Bankr. D.N.J. Lead Case No. 21-18789) on Nov. 12, 2021. At the
time of filing, Carpenter Realty disclosed $10 million to $50
million in assets and $1 million to $10 million in liabilities.
Damien Nicholas Tancredi, Esq. of FLASTER GREENBERG PC - CHERRY
HILL, is the Debtors' counsel.
CENTRAL GARDEN: Egan-Jones Retains BB Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company on May 26, 2022, retained the 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Central Garden & Pet Company.
Headquartered in Walnut Creek, California, Central Garden & Pet
Company manufactures and distributes branded and private label
products.
CES ENERGY: DBRS Confirms B(high) Issuer Rating, Trend Stable
-------------------------------------------------------------
DBRS Limited confirmed CES Energy Solutions Corp.'s Issuer Rating
and Senior Unsecured Notes rating at B (high) with Stable trends.
The recovery rating on the Senior Notes remains unchanged at RR4.
The rating confirmations are underpinned by CES' leading market
position in Canada and its growing market position in the U.S.,
both of which have strengthened since the downturn in 2020. The
Stable trends acknowledge the improvement in the Company's key
credit metrics in 2021 and reflect DBRS Morningstar's expectation
that the key credit metrics will continue to improve in 2022.
CES' earnings and operating cash flow (OCF) in 2021 were materially
higher as stronger commodity prices led to a rebound in drilling
and completion activity levels in North America. Although gross
margins have come under pressure because of inflationary pressure
on product and labor costs, the Company has been able to partially
offset the impact through product price increases and a strategic
buildup in inventory. Despite the reinstatement of dividends in
2021, the Company generated a material free cash flow (FCF; OCF
after capital expenditures and dividends) surplus in 2021. However,
materially higher activity levels and a strategic buildup in
inventory led to a significant working capital surplus, which the
Company funded through draws on its revolving credit facilities. As
a result, the Company's overall debt levels were materially higher
at YE2021 compared with YE2020. Nevertheless, higher earnings and
cash flow offset the impact of higher debt, and the Company's key
credit metrics improved in 2021. DBRS Morningstar notes that the
Company has an established track record of monetizing its working
capital during periods of lower activity levels with relatively
insignificant bad debt expense.
Earnings and OCF are expected to improve in 2022 based on DBRS
Morningstar's base-case crude oil and natural gas price
assumptions, and activity levels. Although inflationary pressures
on product and labor costs are expected to pressure margins in
2022, DBRS Morningstar expects the Company to achieve product price
increases with its customers through the year albeit with some lag.
DBRS Morningstar also expects the Company to generate a meaningful
FCF surplus in 2022, yet overall indebtedness is expected to remain
relatively flat as the FCF is primarily used to fund the working
capital surplus and shareholder returns. Consequently, DBRS
Morningstar expects the key credit metrics to improve modestly in
2022 with the lease-adjusted debt-to-cash flow ratio at or around
3.0 times (x) to 3.5x. DBRS Morningstar notes that the Company has
increased the size and extended the maturity date of its revolving
credit facilities, which should provide CES with adequate liquidity
to meet higher demand if commodity prices stay elevated for longer.
DBRS Morningstar also expects the Company to comply with applicable
financial covenants.
DBRS Morningstar may consider a positive rating action if CES
continues to improve its market position and/or increases
diversification. A meaningful reduction in indebtedness, including
the Senior Notes that mature in October 2024, could also trigger a
positive rating action. Although unlikely, DBRS Morningstar may
consider a negative rating action if activity levels and key credit
metrics are materially and consistently below DBRS Morningstar's
expectations.
Notes: All figures are in Canadian dollars unless otherwise noted.
CHANGE HEALTHCARE: S&P Retains 'B+' ICR on CreditWatch Positive
---------------------------------------------------------------
S&P Global Ratings' ratings on Change Healthcare Holdings LLC
(CHNG) remain on CreditWatch, where S&P placed them with positive
implications on Jan. 7, 2021, pending its merger with higher-rated
UnitedHealth Group Inc. (UHC).
CHNG's debt matures, on average, in less than two years and it is
prohibited from refinancing the maturities according to its merger
agreement with UHC, which expires in December 2022. S&P does not
think CHNG will face difficulty in refinancing its debt if the
merger is cancelled because we expect its credit metrics to
strengthen on its continued expansion and debt repayment.
S&P's ratings on CHNG remain on CreditWatch pending the completion
of its merger with UHC. The U.S. Department of Justice (DOJ) has
filed a lawsuit challenging the merger. However, UHC has
demonstrated its commitment to the transaction by extending the
merger agreement, publicly stating its intention to fight the DOJ
lawsuit, and agreeing to a $650 million break-up fee.
S&P said, "We believe our current 'B+' issuer credit rating on CHNG
is still appropriate because its S&P Global Ratings-adjusted debt
to EBITDA is declining to the 5x area and we think it could
deleverage further if the UHC transaction is cancelled.
Specifically, we assume CHNG would be able to refinance its debt
quickly if the UHC transaction is cancelled because of its
manageable debt burden, good cash flow to debt level
(high-single-digit percent area in 2022), good growth, and
improving profitability. The company's sales accelerated in fiscal
year 2022 as its ability to attract new business slightly exceeded
our expectations. We expect CHNG will increase its revenue by the
low- to mid-single digit percent range annually, which is similar
to our forecast for the overall health care services industry.
Beginning in 2023, we expect the company's margins to expand by at
least 30 basis points (bps) per year on continued improvements in
its operating leverage as it expands. Based on our assumptions, we
assume S&P Global Ratings-adjusted debt to EBITDA of about 5.0x in
2023 and about 4.5x in 2024 (excluding the $650 million break-up
fee).
"If the transaction is cancelled, we could consider upgrading CHNG
or assigning a positive outlook, which would reflect--in part--its
receipt of the $650 million break-up fee from UHC. A positive
outlook or higher rating would be contingent on CHNG's stand-alone
financial policy and expected use of the break-up fee. We will also
consider our future expectations for the company's performance and
any lingering reputational, competitive, or operational effects
from the protracted merger process.
"We plan to resolve the CreditWatch when the merger closes or is
abandoned. If the merger closes, we believe CHNG's outstanding debt
will likely be redeemed. If the merger is abandoned, we could
consider upgrading the company or assigning a positive outlook
depending on its performance, stand-alone financial policy, and
expected use of the break-up fee."
ESG credit indicators: E-2, S-2, G-2
CHARTER NEXT: S&P Alters Outlook to Stable, Affirms 'B' ICR
-----------------------------------------------------------
S&P Global Ratings affirmed its 'B' issue-level rating on Charter
Next Generation Inc.'s senior secured revolving credit facility and
first-lien term loan. The '3' recovery rating remains unchanged,
indicating its expectation for meaningful (50%-70%; rounded
estimate: 50%) recovery in the event of a payment default.
The stable outlook reflects S&P's expectation that volume growth
and the continued pass through of higher resin, freight, and
packaging costs will strengthen the company's earnings and improve
its leverage below 7x over the next 12 months.
S&P said, "We expect a reduction in Charter Next Generation's cash
transaction costs and the pass through of cost increases will
reduce its leverage below 7x in 2022.The combination of cash
transaction costs and unprecedented cost inflation depressed the
company's S&P Global Ratings-adjusted EBITDA in 2021, which caused
its leverage to rise above 8.5x. Specifically, Charter Next
Generation incurred about $59 million of transaction costs during
the year related to its acquisition and debt refinancing
activities, which we do not expect to recur in 2022. The company
also experienced a significant increase in its resin, freight, and
packaging costs. Although earnings were negatively impacted by the
temporary absorption of these higher costs, the majority of its
customer volume includes provisions for the monthly or quarterly
pass-through of fluctuations in its resin costs. The company has
also implemented pricing actions to offset the increase in its
freight, packaging, and labor costs. We expect the pass through of
higher costs, organic volume growth, and a favorable shift toward
its higher-margin business will support increased earnings and an
improvement in its S&P Global Ratings-adjusted debt to EBITDA to
6.25x-6.75x in 2022.
"Despite the challenging macroeconomic environment, we expect the
company's demand will remain steady.We anticipate Charter Next
Generation will continue to increase its volume by the mid- to
high-single digit percent area in 2022. The company benefits from
its exposure to stable, nondiscretionary end markets, such as food
and consumer goods. We believe the demand for packaged foods, which
accounts for about half of Charter Next Generation's sales, will
remain above pre-pandemic levels due to continued elevated levels
of at-home consumption as employers transition to hybrid work
models. Furthermore, recessionary pressures and prolonged inflation
could cause consumers to cut back on their discretionary spending
and dine out less. In addition to secular growth trends, we believe
Charter Next Generation's market share gains and new product
introductions will also drive volume growth.
"We believe the company will generate positive free cash flow while
investing in capacity expansion. We forecast Charter Next
Generation will generate reported free operating cash flow (FOCF)
of between $110 million and $120 million in 2022, following a
deficit of approximately $42 million in 2021. Through the first
quarter of 2022, higher resin costs have continued to negatively
affect its inventory and accounts receivable. The change in the
company's net working capital depressed cash flows $87 million in
2021, though we expect the effect on cash flow will reverse as its
input costs abate over the next 12 months. We expect Charter Next
Generation will increase its capital expenditure (capex) in 2022
due, in part, to delayed projects from the prior year, as well as
its continued investment in additional lines at its existing
plants. In 2021, the company added 12 additional lines and we
expect it to add at least 12 more in 2022. Therefore, we estimate
its total capex will temporarily rise to 7.5%-8.5% of its revenue
in 2022.
"The stable outlook on Charter Next Generation reflects our
expectation that volume growth and the continued pass through of
higher resin, freight, and packaging costs will strengthen the
company's earnings and improve its leverage below 7x over the next
12 months."
S&P could lower its ratings on Charter Next Generation if:
-- S&P believes its S&P Global Ratings-adjusted debt to EBITDA
will remain well above 7x on a sustained basis with no clear
prospects for improvement; or
-- The company pursues a more aggressive financial policy, such as
a debt-funded dividend to its owners.
S&P could raise its ratings on Charter Next Generation if:
-- The company's credit metrics strengthen materially such that it
sustains S&P Global Ratings-adjusted debt to EBITDA of below 5x;
and
-- S&P believes its financial sponsors are committed to
maintaining a less-aggressive financial policy.
ESG credit indicators: E-3, S-2, G-3
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of Charter Next
Generation Inc. The company produces polyethylene films used in
flexible plastic packaging applications. We view plastic packaging,
with its limited recyclability and overall low recycling rates, as
having a larger pollution impact compared to other substrates.
Governance is also a moderately negative consideration, as is the
case for most rated entities owned by private-equity sponsors. We
believe the company's highly leveraged financial risk profile
points to corporate decision-making that prioritizes the interests
of the controlling owners. This also reflects the generally finite
holding periods and a focus on maximizing shareholder returns."
CIRQUE DU SOLEIL: Moody's Ups CFR to B3 & Alters Outlook to Stable
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Moody's Investors Service upgraded Cirque du Soleil Holding USA
NewCo, Inc.'s corporate family rating to B3 from Caa1, and the
probability of default rating to B3-PD from Caa1-PD. The senior
secured first lien rating was upgraded to B1 from B2 and the senior
secured second lien rating was upgraded to Caa1 from Caa2. The
outlook was changed to stable from negative.
"The upgrade reflects Cirque du Soleil's strong execution
relaunching shows, including the successful rollout of its touring
division in the first half of 2022," said Whitney Leavens, Moody's
analyst. "We expect swift deleveraging to around 7x by year end
2022 with minimal cash consumption."
Upgrades:
Issuer: Cirque du Soleil Holding USA NewCO, Inc.
Corporate Family Rating, Upgraded to B3 from Caa1
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
Gtd Senior Secured First Lien Term Loan, Upgraded to B1 (LGD2)
from B2 (LGD2)
Gtd Senior Secured Second Lien Term Loan, Upgraded to Caa1 (LGD5)
from Caa2 (LGD5)
Outlook Actions:
Issuer: Cirque du Soleil Holding USA NewCO, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Cirque du Soleil's CFR is constrained by: (1) high leverage, with
Moody's adjusted debt/EBITDA remaining above 6x through 2023; (2)
the short track record of redeployed shows with execution risks
tied to macroeconomic pressures and the evolution of the pandemic;
and (3) substantial exposure to Las Vegas, which will account for a
significant share of EBITDA in 2022. The company benefits from: (1)
a strong operational track record and management's ample experience
developing, running, and acquiring shows; (2) the ability to
leverage a portfolio of long-lived shows requiring minimal
investments as the company rebuilds scale; (3) a partnership model
for resident shows minimizing capital outlays and supporting
operational stability; and (4) unique brand recognition and pricing
model targeting higher income households.
Cirque du Soleil has adequate liquidity. Sources total nearly $130
million, consisting of cash on hand of about $120 million as of
Q1'22 and Moody's forecast for positive free cash flow of around
$10 million (assuming the 2nd lien term loan PIK) over the next
twelve months through Q1'23. Although the term loan agreement
allows Cirque du Soleil to raise up to $55 million under a
revolving credit facility, there are no commitments to date and
Moody's will not give credit for these potential sources of future
liquidity until they are made available. The company has access to
a letters of credit facility with capacity of $30 million, of which
about $15 million is available. Cirque du Soleil is not subject to
any financial covenants. Assets are largely encumbered, however,
there is a permitted reinvestment period of twelve months and the
company has capacity to sell specific assets (as outlined in the
credit agreement) to raise cash without debt repayment or
reinvestment.
Cirque du Soleil's $316 million first lien term loan due 2025 is
rated B1, two notches above the B3 CFR, reflecting its senior
position in the capital structure. The B1 outcome incorporates a
one-notch override on Moody's Loss-Given Default model outcome of
Ba3 given the allowance under the terms of the credit agreement for
the issuance of up to $55 million in a revolving credit facility
that would have priority ranking senior to the first lien term
loan, and Moody's assessment of low asset protection. The $330
million second lien PIK term loan due November 2027 is rated Caa1,
one notch below the corporate family rating, reflecting its junior
position behind the first lien debt.
The stable outlook reflects Moody's expectation that Cirque du
Soleil will sustain leverage below 7x long-term while maintaining
adequate liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Cirque du Soleil sustains Moody's
adjusted debt/EBITDA below 5.5x and interest coverage (including
PIK) increases toward 1.5x while generating positive free cash flow
and improving liquidity.
The ratings could be downgraded if liquidity weakens, free cash
flow remains negative or Moody's adjusted debt/EBITDA is sustained
above 7.5x.
Cirque du Soleil is a provider of unique, live acrobatic theatrical
performances operating under three divisions: Resident Show
Division (RSD), Touring Show Division (TSD) and Touring, Theatrical
and Other (TTO). During the last twelve months ended Q1'22, the
company generated $370 million in revenue.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CMC MATERIALS: Egan-Jones Retains BB- Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by CMC Materials, Inc.
Headquartered in Aurora, Illinois, CMC Materials, Inc. supplies
slurries used in chemical mechanical planarization, a polishing
process used in the manufacture of integrated circuit devices.
COINBASE GLOBAL: Moody's Cuts CFR to Ba3, Placed On Further Review
------------------------------------------------------------------
Moody's Investors Service has downgraded Coinbase Global, Inc.'s
Corporate Family Rating to Ba3 from Ba2 and downgraded its
guaranteed senior unsecured notes to Ba2 from Ba1. The ratings were
placed under review for further downgrade.
Downgrades:
Issuer: Coinbase Global, Inc.
Corporate Family Rating, Downgraded to Ba3 from Ba2; Placed under
review for further downgrade
Backed senior unsecured notes, Downgraded to Ba2 from Ba1; Placed
under review for further downgrade
Outlook Actions:
Issuer: Coinbase Global, Inc.
Outlook: Changed To Rating Under Review From Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The rating action reflects Coinbase's substantially weaker revenue
and cash flow generation due to the steep declines in crypto asset
prices that have occurred in recent months and reduced customer
trading activity. Moody's expects the company's profitability to
remain challenged in the current environment despite its June 14
announcement of a reduction in its global workforce of around 1,100
employees.
Moody's said the steep declines in crypto asset prices during the
second quarter of 2022 follow a reduction in its first quarter
average transaction revenue per user. Coinbase management's
full-year 2022 outlook points towards pre-2021 level average
transaction revenue per user. Moody's noted that the rapid decline
in crypto asset prices accelerated during the second quarter of
2022 and will likely result in lower transaction revenue for the
remainder of the year, absent a significant sustained rebound in
crypto asset prices and trading volumes.
Between 2020 and 2021, Coinbase experienced rapid increases in
revenue due to higher asset prices, higher levels of volatility,
more users, and higher transaction revenue per user compared to
prior periods. The firm's rapid growth also fueled a rising expense
base needed to support its expanding operations and limiting the
firm's cost flexibility, a credit negative said Moody's. As of the
end of 2020, Coinbase had 1,249 employees, a number that nearly
tripled reaching 3,730 only one year later. After its June 2022
staff reduction announcement, Coinbase indicated that its global
workforce will be around 5,000 employees as of the end of the
second quarter. Much of the firm's rapid hiring was in areas to
support product innovation, international expansion, compliance,
scalability and reliability.
Coinbase's revenue model is tied to trading volumes, transaction
activity per user and overall crypto asset prices, said Moody's.
Coinbase's customers pay it a percentage of the notional value of
trades that are matched on its platform, a fee structure that can
be very lucrative in a rising market coupled with high transaction
volume, as was the case in 2021. However, Moody's indicated that
when crypto asset prices decline, the notional traded amount (price
of the traded instrument multiplied by the traded volume) and
transaction revenue generally decline too, unless trading volume
increases commensurately. Moody's said the downgrade also reflects
Coinbase's lack of revenue diversification (crypto asset
transaction-based revenue represented 87% of first quarter 2022 net
revenue) and an operating expense base that may be less flexible
than Moody's previously anticipated. Moody's noted that Coinbase's
continued efforts to invest in the company may result in increased
revenue diversification over the long-term, such as revenue from
subscriptions and other services.
Since the beginning of April, the price of Bitcoin have declined by
around half. The drop in crypto asset prices was exacerbated by
specific crypto market structure events, including large losses at
stablecoin TerraUSD and the announcements by a number of
decentralized finance platforms, that offer crypto earnings and
lending services, that they were halting customer withdrawals.
Moody's said that as at March 31, 2022, Coinbase had $6.1 billion
in cash and cash equivalents, a healthy position relative to its
$3.4 billion in long-term debt, including the $2 billion rated
senior guaranteed notes (due 2028 and 2031).
Coinbase's $2.0 billion senior guaranteed notes' Ba2 rating is a
notch higher than Coinbase's Ba3 CFR, based on the notes' priority
ranking in Coinbase's capital structure; with the notes ranking
ahead of the firm's $1.4 billion convertible debt notes, which
don't benefit from a guarantee from the firm's operating entities.
During its review of Coinbase's ratings for further downgrade,
Moody's will consider Coinbase's financial profile should the
deterioration in crypto asset prices and trading volumes remain at
current levels or worsen, its cash and non-cash expense trajectory
over the next twelve to eighteen months, the firm's ability to
reduce expenses while maintaining effective operational control,
the potential for crypto asset regulatory developments following
the recent adverse market events, and the firm's franchise strength
and ability to retain talent.
Moody's said that since the ratings are under review for downgrade,
there is currently no upward pressure on Coinbase's ratings. In the
longer-term, Coinbase's ratings could be upgraded if it (1)
sustains a cost structure that could reliably generate
profitability in current or lower crypto asset price and trading
volume environments and (2) achieves revenue diversification
through the development of profitable new revenue streams not tied
to trading volumes or crypto asset prices, without adding
significant credit risk.
Coinbase's ratings could be downgraded should Moody's conclude that
(1) its profitability will continue to be significantly challenged
in the current or lower crypto asset price and trading volume
environments, (2) its projected cash flow utilization would
significantly weaken its cash debt coverage, (3) there is evidence
that Coinbase's expansion has limited its expense flexibility, (4)
there is increased likelihood that regulatory or crypto asset
market structure changes could further lower trading volumes or
transaction revenue, or lead to regulatory restrictions, or (5)
there is likely to be a sustained deterioration in the firm's
franchise strength resulting in weaker ability to retain talent
following its restructuring efforts.
The principal methodology used in these ratings was Securities
Industry Service Providers Methodology published in November 2019.
COLFAX CORP: Moody's Withdraws 'Ba2' CFR Amid Debt Repayment
------------------------------------------------------------
Moody's Investors Service has withdrawn all ratings on Colfax
Corporation including the Ba2 corporate family rating, the Ba2-PD
probability of default rating, the Ba2 senior unsecured rating and
the SGL-2 Speculative Grade Liquidity Rating. The stable outlook
was also withdrawn.
Colfax completed the spin-off of its fabrication technology
business (ESAB Corporation - ESAB) in April 2022 through a
distribution of 90% of the outstanding common stock of ESAB to
Colfax stockholders. At the time of the separation, ESAB made a
$1.2 billion distribution to Colfax that in conjunction with other
sources of cash enabled Colfax to repay $1.4 billion of outstanding
debt and accrued interest, including the 2026 Notes and the 2025
Euro Notes.
Moody's took the following actions on Colfax Corporation:
Withdrawals:
Issuer: Colfax Corporation
Corporate Family Rating, Withdrawn , previously rated Ba2
Probability of Default Rating, Withdrawn , previously rated
Ba2-PD
Speculative Grade Liquidity Rating, Withdrawn , previously rated
SGL-2
Senior Unsecured Regular Bond/Debenture, Withdrawn , previously
rated Ba2 (LGD4)
Outlook Actions:
Issuer: Colfax Corporation
Outlook, Changed To Rating Withdrawn From Stable
RATINGS RATIONALE
All rated debt has been repaid, therefore all ratings are being
withdrawn.
Colfax Corporation was a diversified technology company that
provided fabrication technology and medical device products and
services, principally under the ESAB and DJO brands.
COLLECTIVE COWORKING: Disposable Income to Fund Plan Payments
-------------------------------------------------------------
Collective Coworking Holdings Corp., d/b/a CTRL Collective, filed
with the U.S. Bankruptcy Court for the Central District of
California a Chapter 11 Plan of Reorganization under Subchapter V
dated June 23, 2022.
The Debtor is a Delaware corporation headquartered in Pasadena,
California that provides co-working space to its members on
flexible lease commitment basis. While CTRL services clients from a
variety of industries, the majority of its clientele is engaged in
creative work.
In or about 2017 and 2018, after a significant amount of turnover
and disputes among company management and owners, the Debtor's
Board of Directors discovered evidence suggesting that there had
been misappropriation of funds, negligence, unpaid bills, and
indications of possible fraud by previous management, all of which
resulted in significant litigation.
Current management has worked hard to address these issues and
build a strategy to profitability which relies heavily on software
systems to decrease overhead costs while increasing efficiency and
accountability. Following significant discussions and investigation
of other alternatives, the Debtor elected to restructure its debts
through chapter 11 bankruptcy and reorganize around its one
remaining location in Pasadena.
As a result of (a) the changes implemented by the Debtor's new
management team, and (b) the continuing return to work outside the
home by more and more people, the Debtor is becoming significantly
more profitable and projects to have sufficient disposable income
to make the projected payments. Pre bankruptcy, the Debtor had
accumulated outstanding debt of more than $3.8 million, almost none
of which related to operational expenses of the Pasadena location.
Now that the Debtor has shed all of its locations other than
Pasadena, it projects to operate profitably on a cashflow basis
over the expected 3-year life of the Plan.
The Plan proposes to pay creditors an amount equal to Debtor's
projected disposable income for three years (the "Total Plan
Payments"). The amount of the Total Plan Payments is $196,590.16,
which is equal to the Debtor's total projected disposable income
for the three-year period following the Effective Date.
Class 1 is comprised of the allowed secured claim of the Los
Angeles County Treasurer and Tax Collector ("LACTTC"). LACTTC shall
retain its lien on the Debtor's collateral as provided by statute.
Paid in full, with interest, from Quarterly Payments after the
Trustee's Allowed Administrative Claim is paid in full; provided,
however, that if the amount of the Trustee's allowed claim has not
been determined by the Court at the time any Quarterly Payment is
due, then such Quarterly Payment shall be paid to LACTTC first.
Class 3 consists of All allowed general unsecured claims of the
Debtor. Total amount of Class 3 claims is estimated at
$3,446,918.21 but depends on the results of the Debtor's objection
to certain claims.
In full and final satisfaction of all allowed Class 3 claims
against the Debtor, each holder of an allowed Class 3 claim shall
receive a pro rata share of the Quarterly Payments for up to three
years, after payment in full of (1) all Allowed Administrative
Claims, (2) any allowed Class 1 Secured Claim, and (3) all allowed
Priority Tax Claims.
Class 4 consists of Holders of equity interests in the Debtor.
Class 4 interest holders will retain their rights and interests
without impairment. Members of Class 4 are not entitled to receive
any cash payments on account of their equity interests under the
Plan.
The Plan will be funded from projected disposable income from
operations over an approximately three-year period.
A full-text copy of the Subchapter V Plan dated June 23, 2022, is
available at https://bit.ly/3OAzdqY from PacerMonitor.com at no
charge.
Attorneys for Debtor:
MATTHEW A. LESNICK (SBN 177594)
matt@lesnickprince.com
LAUREN N. GANS (SBN 247542)
lgans@lesnickprince.com
LESNICK PRINCE & PAPPAS LLP
315 W. Ninth Street, Suite 705
Los Angeles, CA 90015
Telephone: (213) 493-6496
Facsimile: (213) 493-6596
About Collective Coworking Holdings Corp.
Collective Coworking Holdings Corp., dba CTRL Collective, provides
co-working space to its members on flexible lease commitment basis
at its location in Pasadena, California. While CTRL services
clients from a variety of industries, the majority of its clientele
is engaged in creative work, such as advertising and marketing
agencies, technology and film companies, photographers,
filmographers and website developers. Collective Coworking offers
office work space, meeting space, conference rooms and hosting for
small events, as well as special amenities, such as photo studios,
mailboxes, and lockers, among other things.
Collective Coworking sought protection under Chapter 11 of the U.S
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-11664-DS) on March
25, 2022. In the petition signed by Charles "Duke" Runnels,
president, the Debtor disclosed up to $100,000 in assets and up to
$10 million in liabilities.
Matthew A. Lesnick, Esq., at Lesnick Prince & Pappas LLP is the
Debtor's counsel.
COMPASS POINTE: Taps Jacob Morgner of Compass Pointe as Realtor
---------------------------------------------------------------
Compass Pointe Off Campus Partnership B, LLC seeks approval from
the U.S. Bankruptcy Court for the Eastern District of California to
hire Jacob Morgner, a realtor at The Tinetti Realty Group.
The Debtor requires the services of a realtor to handle the sale
and other disposition relative to its property located at 3700
Horizons Avenue, #16 Merced, Calif.
Mr. Morgner will receive a commission equal to 3 percent of the
sale price, with a total commission of 6 percent to be divided
between him and the buyer's agent, if any.
In court papers, Mr. Morgner disclosed that he does not have an
interest materially adverse to the interest of the Debtor or its
estate.
Mr. Morgner can be reached through:
Jacob Morgner
The Tinetti Realty Group
2390 G ST
Merced, CA 95340
Tel: 209 354-2830
Email: jacob@mercedrealestate.com
About Compass Pointe
Compass Pointe Off Campus Partnership B, LLC is a single asset real
estate debtor (as defined in 11 U.S.C. Section 101 (51B)).
Compass Pointe filed its voluntary petition for Chapter 11
protection (Bankr. E.D. Calif. Case No. 22-10778) on May 8, 2022,
disclosing $1 million to $10 million in assets. David Sowels,
manager, signed the petition.
Judge Jennifer E. Niemann presides over the case.
Noel Christopher Knight, Esq., at The Knight Law Group serves as
the Debtor's counsel.
CONSOLIDATED ENERGY: Moody's Alters Outlook on B2 CFR to Positive
-----------------------------------------------------------------
Moody's Investors Service affirmed Consolidated Energy Limited's
(CEL or the company) B2 corporate family rating and B2-PD
probability of default rating. Concurrently Moody's affirmed the B1
rating of the guaranteed senior secured instruments and the B3
ratings of the guaranteed senior unsecured instruments, both issued
by Consolidated Energy Finance, S.A. Moody's has changed the
outlook on all ratings to positive from stable.
RATINGS RATIONALE
The change of the outlook on CEL's ratings reflects Moody's
expectation that in the current pricing environment the company
will over the next 12-18 month generate levels of cash flows, which
create capacity to reduce debt beyond the $160 million repayment of
the floating rate notes in June 2022 and at the same time maintain
an adequate liquidity profile. Further debt repayments would then
position CEL's capital structure at a level to reach and maintain a
higher rating given the highly volatile pricing environment for
CEL's products, and, hence, operating profitability of CEL.
Based on the current pricing environment for methanol, ammonia and
UAN Moody's expects that CEL's Moody's adjusted gross debt/EBITDA
will be around 3x in 2022 and that the company will be generating
Moody's adjusted free cash flows of close to $300 million. This
view assumes a continued strong pricing environment through the
rest of the year 2022, and also does not take into account any
additional cost related to the currently ongoing anti-dumping and
countervailing duty investigation of the US International Trade
Commission (USITC) and US Department of Commerce on UAN imports
into the US. Moody's also understands that the company is currently
not selling any UAN into the US Market.
Based on its current capital structure, which contains around $3.1
billion of Moody's adjusted debt (excluding the cash collateralized
Big Lake Fuels LLC Project revenues bonds, and including 100% of
debt at Natgasoline level), a return to a Methanol price of $440
(currently USGC $615) per metric ton and an UAN price of $270
(currently $623) would still imply Moody's adjusted gross leverage
of around 6.0x (with EBITDA also including 100% of Natgasoline
EBITDA) and Moody's adjusted EBITDA to interest of around 3x, both
still consistent with the current B2 rating.
The positive outlook reflects Moody's expectation that company
would apply a substantial amount of FCF generated in 2022 to reduce
gross debt, which in turn positions the company's capital structure
more solidly to withstand the cyclicality inherent to the methanol
and UAN markets. Moody's estimates that CEL has the capacity to
generate FCF of close to $300 million in 2022, of which a
substantial proportion could be applied to debt reduction thus
creating capacity to reduce mid cycle leverage towards 5x on a
Moody's adjusted basis and improving the companies interest
coverage while maintaining an adequate liquidity profile.
The positive outlook on CEL's rating also reflects Moody's
expectation that the company will maintain an adequate liquidity
profile at all times, which includes a timely refinancing of the
currently undrawn $225 million guaranteed senior secured revolving
credit facility (RCF), which is due in May 2023.
LIQUIDITY PROFILE
CEL's liquidity is adequate. As of March 2022 the company had $172
million of cash on balance sheet of which $28.6 million were at
Natgasoline LLC. The group furthermore had access to $60 million
($45 million available for cash drawings) senior secured revolving
credit facility at Natgasoline LLC and $225 million of availability
under its RCF at the CEL level. In combination with expected FFO
generation of close to $600 million these sources are sufficient to
accommodate swings in working capital, capital expenditures of
around $100 million and the repayment of the remaining floating
rate notes of around $160 million which happened in mid-June 2022.
CEL's $225 million RCF (currently undrawn) is due in May 2023 and
Moody's would expect that the company will address a refinancing
well ahead of maturity.
ESG CONSIDERATIONS
CEL is 100% owned by Proman Holding AG (Proman), which in turn is
privately owned. Privately owned companies tend to have less
independent board representation compared to listed companies.
Proman has other operations outside of CEL, as well as additional
cash resources and outstanding indebtedness. The CEL perimeter
represents a material part of Proman's operations. CEL's operations
and the operations of its shareholder are highly interdependent,
entities controlled or related to Proman provide distribution,
logistics and manufacturing services to CEL at arms- length terms,
resulting in substantial related party transactions.
In the past, Proman Holding AG has demonstrated its willingness to
support CEL through equity contributions or deferring the purchase
price consideration for the minority stake in G2X, which CEL
acquired from a Proman entity in 2018. CEL is holding minority
shares in ammonia producers N2000 and CNC, with Proman also holding
minority shares in these companies. In Moody's view the group and
capital structure of Proman/CEL remains rather complex.
STRUCTURAL CONSIDERATIONS
Consolidated Energy Finance, S.A.'s (CEF) outstanding guaranteed
senior unsecured bonds are rated B3, one notch below the B2 CFR,
reflecting the priority ranking of the guaranteed senior secured
term facilities and the $225 million RCF which are rated B1. The
rating of the guaranteed senior unsecured bonds also reflects the
structural subordination of CEF's creditors to those of its US
based operating subsidiary Natgasoline LLC which is not a guarantor
to CEF's bonds and whose financial debt is largely secured against
respective assets. The rating of the guaranteed senior secured term
facilities is B1, one notch above CEL's CFR, because of their
priority ranking in the capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade CEL's rating, if the company reduces Moody's
adjusted debt to below $2.5 billion translating into Moody's
adjusted gross leverage of below 5x under mid-cycle conditions with
EBITDA to Interest Expense close to 4x. Evidence that the company
can maintain at least break-even free cash flow under trough cycle
conditions would also support an upgrade of the ratings.
Furthermore, an upgrade would require further evidence of a
financial policy focused on improving and maintain credit quality,
which includes addressing refinancing needs well ahead of
maturity.
Moody's could consider downgrading CEL's rating, if the company
could not maintain leverage below 6x at midcycle conditions on a
sustainable basis. This could materialize in case of consistently
lower than anticipated production volumes or curtailments to the
company's gas supply. Material cash leakage to CEL's shareholder
resulting in an increase in leverage or a weakening in CEL's
liquidity profile could also lead to a downgrade of its ratings.
LIST OF AFFECTED RATINGS
Affirmations:
Issuer: Consolidated Energy Limited
Probability of Default Rating, Affirmed B2-PD
LT Corporate Family Rating, Affirmed B2
Issuer: Consolidated Energy Finance, S.A.
BACKED Senior Secured Bank Credit Facility, Affirmed B1
Senior Secured Bank Credit Facility, Affirmed B1
BACKED Senior Unsecured Regular Bond/Debenture, Affirmed B3
Outlook Actions:
Issuer: Consolidated Energy Finance, S.A.
Outlook, Changed To Positive From Stable
Issuer: Consolidated Energy Limited
Outlook, Changed To Positive From Stable
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
COMPANY PROFILE
Consolidated Energy Limited (CEL), along with its subsidiaries, is
a global group whose principal activities are focused on the
production of petrochemical products; its main products are
methanol, ammonia and UAN, with investments in Trinidad and Tobago,
the US and Oman. The group is one of the world's largest producers
of methanol. In 2021 the group generated sales of close to $1.8
billion and the company reported EBITDA of close to $700 million
and in Q1 2022 revenue of $593 million and reported EBITDA of $372
million.
CORECIVIC INC: Egan-Jones Retains BB+ Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company on May 27, 2022, retained the 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by CoreCivic, Inc.
Headquartered in Nashville, Tennessee, CoreCivic, Inc. provides
detention and corrections services to governmental agencies.
CORSAIR GAMING: S&P Rates Senior Credit Facilities 'BB-'
--------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level and '3' recovery
rating to Corsair Gaming Inc.'s $100 million revolving credit
facility and $250 million first-lien term loan, both maturing in
2026.
The credit facilities were put in place in September 2021 to
refinance the company's previous senior credit facilities. Proceeds
from term loan were used to repay the previous term loan. S&P's
issue-level and recovery ratings on Corsair are unchanged. The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 60%) recovery in the event of a payment default.
S&P said, "Our 'BB-' issuer credit rating reflects our view that
Corsair will continue to benefit from increasing demand for
high-performance gaming and streaming hardware, despite challenges
to revenue growth and profitability over the next 12 months due to
supply chain constraints and the global semiconductor shortage. Our
stable outlook reflects our expectation that an improved
macroeconomic backdrop toward the second half of the year should
prompt a return to top-line growth in 2023 with a moderately
improving margin profile."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P values Corsair as a going concern, given its strong brand
equity and market leadership in the niche PC gaming hardware
sector. This is offset by a weak presence in markets with limited
growth prospects because of its narrow focus and exposure to
fluctuating prices of memory, which can affect profitability.
-- S&P assumes Corsair would likely restructure rather than
liquidate in its modeled bankruptcy scenario because of the
considerable value of the company's intellectual property.
-- S&P estimates Corsair's recovery value available to creditors
on an EBITDA estimate basis with a distressed valuation multiple of
5.5x, reflecting industry volatility and customer concentration.
-- S&P's recovery analysis models a hypothetical default in 2026.
Simulated default assumptions
-- Year of default: 2026
-- Emergence EBITDA: $38 million
-- EBITDA multiple: 5.5x
-- Jurisdiction: U.S.
Simplified waterfall
-- Gross recovery value: $206 million
-- Net recovery value after administrative expenses (5%): $196
million
-- Valuation split in%(obligors/nonobligors): 100/0
-- Value available for first-lien claims: $196 million
-- Secured first-lien debt claims: $308 million
--Recovery expectations: 50%-70% (rounded estimate: 60%)
All debt amounts include six months of prepetition interest.
Ratings List
CORSAIR GAMING INC.
Issuer Credit Rating BB-/Stable/--
NEW RATING
CORSAIR GAMING INC.
Senior Secured
US$100 mil revolver bank ln due 09/30/2026 BB-
Recovery Rating 3(60%)
US$250 mil term loan bank ln due 09/30/2026 BB-
Recovery Rating 3(60%)
CORSICANA BEDDING: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Corsicana Bedding, LLC
1420 W. Mockingbird Lane, Suite 800
Dallas, TX 75247
Business Description: Corsicana is a U.S. based manufacturer of
mattresses and foundations that offers a
full range of products featuring the latest
in sleep technology. The Company is
headquartered in Texas and operates
manufacturing facilities located in Texas,
Arizona, Connecticut, Florida, North
Carolina, Tennessee, Washington, and
Wisconsin. Corsicana owns, directly or
indirectly, each of the Debtor-affiliates.
Chapter 11 Petition Date: June 25, 2022
Court: United States Bankruptcy Court
Northern District of Texas
Judge: Hon. Edward L. Morris
Twelve affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Corsicana Bedding, LLC (Lead Case) 22-90016
1420 W. Mockingbird Lane
Suite 800
Dallas, TX 75247
Thetford Leasing LLC 22-90017
4901 Fitzhugh Avenue
Richmond, VA 23230
Olive Branch Building, LLC 22-90018
4901 Fitzhugh Avenue
Richmond VA 23230
Eastern Sleep Products Company 22-90019
4901 Fitzhugh Avenue
Richmond VA 23230
Englander-Symbol Mattress of Mississippi, LLC 22-90020
8300 Industrial Drive
Olive Branch MS 38654
Hylton House Furniture, Inc. 22-90021
Luuf, LLC 22-90022
Symbol Mattress of Florida, Inc. 22-90023
Symbol Mattress of Pennsylvania, Inc. 22-90024
Symbol Mattress of Wisconsin, Inc. 22-90025
Symbol Mattress Transportation, Inc. 22-90026
Master Craft Sleep Products, Inc. 22-90027
Debtors'
Bankruptcy
Counsel: Stephen M. Pezanosky, Esq.
Ian T. Peck, Esq.
David L. Staab, Esq.
HAYNES AND BOONE, LLP
301 Commerce Street, Suite 2600
Fort Worth, TX 76102
Tel: 817.347.6600
Fax: 817.347.6650
Email: stephen.pezanosky@haynesboone.com
Email: ian.peck@haynesboone.com
Email: david.staab@haynesboone.com
Debtors'
Financial
Advisor: HOULIHAN LOCKEY, INC.
Debtors'
Financial
Advisor: CR3 PARTNES, LLC
Debtors'
Claims &
Administrative
Agent: DONLIN RECANO & COMPANY, INC.
Corsicana's Total Assets as of May 30, 2022: $151 million
Corsicana's Total Liabilities as of May 30, 2022: $260 million
The petitions were signed by Eric Rhea as chief executive officer.
A full-text copy of the Lead Debtor's petition is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/EFCOCMA/Corsicana_Bedding_LLC__txnbke-22-90016__0001.0.pdf?mcid=tGE4TAMA
List of Corsicana Bedding's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. UFP Southwest LLC Trade Payable $4,935,936
UFP Dallas dba Bigs PKG
& Lmbr
2829 Sea Harbor Rd
Dallas, TX 75212
Kimberly Pierce
Tel: 616-364-6161
Email: ar@ufpi.com;
mbrewer@ufpi.com;
bbigham@bigspacking.com
2. Iskeceli Celik Yay Tel Trade Payable $4,370,007
Yan Urunleri
Gumusyaka Mah, Lutfu
Vardar Cad.
No 180 Silivri
Istanbul 34588
Turkey
Turker Ciplak
Tel: 90-212-7215518
Email: tugay.kilic@iskeceli.com.tr;
turker.ciplak@iskecili.com.tr
3. FXI, Inc. Trade Payable $2,501,144
100 Matsonford Rd
5 Radnor Corporate
Ctr, Suite 300
Radnor pA 19087-4560
Pat Donahue, CR Dept.
Tel: 610-744-2372
Email: mTorres@fxi.com;
accountsreceivable@fxi.com;
MRisi@fxi.com
4. Agro International Trade Payable $1,972,264
Senfdamm 21
Bad Essen 49152
Germany
Lisa Drews/
Kim Alessandra Grammatico
Tel: +49 0 5472 9420-270
Email: akchin@asinnersprings.com
grammatico@agro.eu
5. JB Hunt Transport, Inc. Trade Payable $1,790,054
PO Box 130
615 Corporate Dr
Lowell AR 7245
Pat Tabor
Tel: 800-643-3622 X-73946
Email: AR_Customer_Remits@jbhunt.com;
rusty.steele@jbhunt.com
6. United States Customs Importation $1,560,651
and Border Protection of Goods
6650 Telecom Drive Suite 100
Indianapolis IN 46278
Nina Howard
Tel: 281-441-2628 ext. 2003
Email: Nina.Howard@cbp.dhs.gov
7. Yilmar Dis Ticaret Ltd Trade Payable $1,268,292
STI
Dosab All Osman
Sonmez Cadbursa 16369
Turkey
Gokhan Usar
Tel: 90-530-7877471
Email: Gohan.usar@yilmartrade.com
8. Axle Logistics LLC Trade Payable $660,551
835 N Central Street
Knoxville, TN 37917
Mitchell Petty
Tel: 855-230-2953
Email: accounting@axlelogistics.com;
remit@axlelogistics.com
9. Visual Productions Trade Payable $602,558
Group Inc.
30303 Beck Road
Wixom MI 48393
Eric Thompson
Tel: 348-356-4399
Email: arbluewater@bluewatertech.com;
ethompson@bluewatertech.com
10. All American Poly Trade Payable $593,032
Corporation
40 Turner Place
Piscataway NJ 08854
Jed Sussman, Cr. Mgr.
Tel: 732-752-3200
Email: jed@allampoly.com
11. TWE Nonwovens US, Inc. Trade Payable $545,395
DBA Vita Nonwovens, LLC
2215 Shore St
High Point NC 27263
Tim Warrington
Tel: 336-431-7187
Email: ar.twe.hpo@twe-group.com;
anita.huffman@twe-group.com
12. Pioneer & Legend Trade Payable $480,130
Canada Ltd
387 Limestone Crescent
North York ON M3J 2R1
Canada
Lei Ping
Tel: 647-686-5626
Email: plc@pioneerlegend.com;
lei@bomeitexgroup.com
13. OHM Systems Inc. Trade Payable $436,187
10895 Indeco Drive
Cincinnati OH 45241
Catherine
Tel: 513-771-0008
Email: finance@ohmworld.com
14. UT+C Trade Payable $432,535
KKGF LLC dba UT+C
745 Kentuck Rd
Danville VA 24540
John P Meyer
Tel: 434-797-9701
Email: p.meyer@ebillc.com;
berdardino.temus@ebillc.com
15. CULP Inc. Trade Payable $317,775
1823 Eastchester Drive
High Point NC 27265
Holly Holt
Tel: 336-889-5161
Email: ARemit@culp.com;
drwalker@culp.com
16. FedEx Trade Payable $256,645
P.O. Box 94515
Palatine IL 60094-4515
Selena Coleman
Tel: 800-622-1147
Email: reply1@synterresource.com
17. Sidley Austin LLP Professional $242,943
One South Dearborn Street Fees
Chicago, IL 60603
Matthew Clemente
Tel: 212-839-5300
Email: mclemente@sidley.com
18. Les Tricots Maxime Inc. Trade Payable $222,219
828 Deslauriers Street
St-Laurent QC H4N1X1
Canada
Line Dussault, Contrlr
Tel: 514-336-0445
Email: asemergiu@maximenitting.com
19. Future Foam, Inc. Trade Payable $214,760
PO Box 30113
Omaha NE 68103-1213
Bonnie Baker, Karen Anthony
Tel: 336-885-4121
Email: bbaker@futurefoam.com;
kanthony@futurefoam.com
20. Crowe LLP Professional $201,955
320 East Jefferson Blvd Fees
South Bend IN 46624-0007
Patrick Folwer
Tel: 574-239-7883
Email: arremitadv@crowe.com
List of Eastern Sleep Product's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- -----------
1. Pioneer & Legend Trade Payable $324,333
Canada Ltd
387 Limestone Cres
North York ON M3J 2R1
Canada
Nicky Zhano
Tel: 647-686-5626
Email: nickyzbomeitex@gmail.com;
plc@pioneerlegend.com
2. FXI, Inc. Trade Payable $275,025
Innocor Collections
P.O. Box 747067
Atlanta GA 30374-7067
Michael Risi
Tel: 404-585-5095
Fax: 484-229-0214
Email: mrisi@fxi.com
3. TForce Freight Trade Payable $245,572
28013 Network Place
Chicago IL 60673-1280
Anetria Saunders
Tel: 800-333-7400
Email: tforcefreight.com
4. CULP Inc. Trade Payable $158,211
PO Box 751007
Charlotte NC 28275
Debbie Walker
Tel: 336-643-7751
Email: drwalker@culp.com
5. Southside Woodcraft Trade Payable $95,391
PO Box 3515
Pawleys Island SC 29585
Tel: 843-235-6764
Email: jmsouthside@frontier.com
6. UT+C Trade Payable $84,207
745 Kentuck Road
Danville, VA 24540
Angelika Matczak
Tel: 434-797-9701
Email: a.matczak@ebillc.com
7. UFP Trade Payable $79,930
UFP Dallas, LLC
2829 Sea Harbor Road
Dallas TX 75212
Kimberly Pierce/Matt Brewer
Tel: 817-866-3306
Email: kpierce@ufpi.com
8. Yilmar Dis Ticaret Ltd Trade Payable $67,944
STI
Dum Osb.Mah. Ali Osman
Son Cadno.25
Osmagazi Bursa
Turkey
Gokhan Usar
Tel: 90-224-2611-1765
Fax: 90-224-261-17 67
Email: gokhan.usar@yilmartrade.com
9. Federal Express Corp. Trade Payable $65,098
PO Box 371461
Pittsburgh PA 15250-7461
Selena Coleman
Tel: 800-622-1147
Email: reply1@synterresource.com
10. ID.Me Inc. Trade Payable $58,140
PO Box 392625
Pittsburgh PA 15251-3625
Spence Kinnier
Tel: 571-253-6002
Email: spence.kinnier@id.me
11. OHM Systems Inc. Trade Payable $45,149
10895 Indeco Drive
Cincinnati OH 45241
Catherine
Tel: 513-771-0008
Email: finance@ohmworld.com
12. C3 Corporation Trade Payable $39,740
3300 E. Venture Drive
Appleton WI 54911
Ashley Peterson
Tel: 920-749-9265
Email: ashleyp@c3ingenuity.com
13. Hill Electrical, Inc. Trade Payable $35,000
PO Box 158
Mechanicsville VA 23111-0000
Cathy Foster
Tel: 804-746-3122
Email: cathy@hillelectrical.net
14. Hill Express, Inc. Trade Payable $28,889
4204 Cedar Tree Drive
Memphis TN 38141
Tel: 901-619-4624
15. Thetford Associates, Inc. Trade Payable $28,222
5516 Falmouth Street
Suite 300
Richmond VA 23230-1819
Tel: 804-782-9338
16. Standard Fiber LLC Trade Payable $27,532
577 Airport Blvd Suite 200
Burlingame CA 94010
Jinnifer Le
Tel: 650-872-6528 ext213
Fax: 650-872-1586
Email: jenniferle@standardfiber.com
17. Coyote Logistics LLC Trade Payable $24,284
P.O. Box 742636
Atlanta GA 30374-2639
Tel: 877-626-9683
Fax: 847-235-7629
Email: billing@coyotelogistics.com
18. A to Z Packaging Trade Payable $23,817
Enterprises, Inc.
3605 Sandy Plains Road
Ste #240
Marietta GA 60066
Sid Abramowitz
Tel: 770-321-1906
Email: sid@atozpackaging.net
19. Packaging Corporation Trade Payable $23,757
of America
PO Box 532058
Atlanta GA 30353-2058
Pamela A. Barnes
Tel: 804-232-1292
Email: bsessions@packagingcorp.com;
pbarnes@packagingcorp.com
20. Wright of Thomasville Trade Payable $21,808
P.O. Box 306186
Nashville TN 37230-6186
Tel: 336-472-4200
Fax: 336-476-8554
List of Englander-Symbol Mattress of Mississippi's 20 Largest
Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Diamond Road Resawing LLC Trade Payable $279,993
1635 Diamond Station Road
Ephrata PA 17522
Deborah Barrett
Tel: 717-738-3741
Email: deborah@diamondroadllc.com
2. UFP Trade Payable $196,280
UFP Dallas, LLC
2829 Sea Harbor Road
Dallas, TX 75212
Kimberly Pierce/Matt Brewer
Tel: 817-866-3306
Email: kpierce@ufpi.com
3. Pioneer & Legend Trade Payable $161,321
Canada Ltd
387 Limestone Cres
North York ON M3J 2R1
Canada
Nicky Zhano
Tel: 647-686-5626
Email: nickyzbomeitex@gmail.com/
plc@pioneerlegend.com
4. FXI, Inc. Trade Payable $95,534
Innocor Collections
P.O. Box 747067
Atlanta, GA 30374-7067
Michael Risi
Tel: 404-585-5095
Fax: 484-229-0214
Email: mrisi@fxi.com
5. Texas Pocket Springs Trade Payable $85,928
Tech
PO Box 2469
Cleburne TX 76033-2469
Martin Wolfson
Tel: 817-645-7666
Email: martin.wolfson@tps-mfg.com
6. Yilmar Dis Ticaret Ltd Trade Payable $69,944
STI
Dum Osb.Mah. Ali Osman
Son Cadno.25
Osmangazi Bursa
Turkey
Gokhan Usar
Tel: 90-224-2611765
Fax: 90-224-261 17 67
Email: gokhan.usar@yilmartrade.com
7. Jones Fiber Products LLC Trade Payable $58,961
Jones Fiber Products Inc.
PO Box 385
Humboldt TN 38343-0000
Georgia Warrington
Tel: 423-586-4200
Email: accountsreceivable@jonesyarn.com
8. CULP Inc. Trade Payable $58,561
PO Box 751007
Charlotte NC 28275-0000
Debbie Walker
Tel: 336-643-7751
Email: drwalker@culp.com
9. Leggett & Platt Trade Payable $51,287
Incorporated
Gribetz International
Drawer CS198747
Atlanta, GA 30384-0000
Laurie Martin
Tel: 417-358-8131 ext 23106
Fax: 417-358-2736
Email: laurie.martin@leggett.com
10. Precision Fabrics Trade Payable $44,434
Group Inc
PO Box 60944
Charlotte NC 28260
Kathy Bryan
Tel: 800-284-8070
Email: kathy.bryan@precisionfabrics.com
11. Schneider National Inc. Trade Payable $39,937
2567 Paysphere Circle
Chicago IL 60674
Kayla Metzler
Tel: 920-592-3130
Email: metzlerk@schneider.com
12. TWE Nonwovens US Inc. Trade Payable $37,263
2215 Shore Street
High Point NC 27263
Tim Warrington
Tel: 336-431-7187
Email: ar.twe.hpo@twe-group.com
anita.huffman@twe-group.com
13. Carpenter Company Trade Payable $27,675
P.O. Box 27205
Richmond VA 23261
Susie Gillespie
Tel: 804-359-0800
Email: susie.gillespie@carpenter.com
14. UT+C Trade Payable $18,040
745 Kentuck Road
Danville VA 24540
Angelika Matczak
Tel: 434-797-9701
Email: a.matczak@ebillc.com
15. Custom Nonwoven, Inc. Trade Payable $16,713
1015 Munsford Drive
New Albany MS 38652
Jay
Email: jay@custom-nonwoven.com
16. All American Poly Trade Payable $14,765
Corporation
PO Box 10148
New Brunwsick NJ 08906-0000
Jed Sussman
Tel: 732-752-3200
Fax: 732-752-8918
Email: jed@allampoly.com
17. Carolina Industrial Trade Payable $10,314
Resources
4303 Oak Level Road
Rocky Mount NC 27803
Tel: 800-849-1819
Email: ljohnson1@carolinais.com
18. Bekaertdeslee USA Inc. Trade Payable $9,716
Dept. 3785
P.O. Box 123785
Dallas TX 75312-3785
Michelle Bullock
Tel: 336-747-4936
Email: michelle.bullock@bekaertdeslee.com
19. Lava Experts In Knitting Trade Payable $9,611
Lava USA
55 Sleepy Time Drive
Waterloo SC 20384-0000
Koen Vanderheeren
Tel: 864-554-6982
Fax: 864-998-4892
Email: koen@lavatextiles.com
20. Estes Express Lines Trade Payable $9,292
PO Box 105160
Atlanta GA 30348-5160
Ceanna Fisher
Tel: 804-833-36.53
Email: ceanna.fisher@estes-express.com
CREATIVE CHOICE: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Creative Choice Homes XXX, LLC, according to court
dockets.
About Choice Homes XXX
Creative Choice Homes XXX LLC, a Florida limited liability company
based in Palm Beach Gardens, was originally formed on Sept. 19,
2002, as a corporation and converted to a limited liability company
on May 11, 2012. It is the general partner of Creative Choice Homes
XXX, LTD., which is a limited partnership that operates a 132-unit
multifamily apartment complex intended for rental to persons with
low and moderate income. The apartment complex is located at 1301
Floating Fountain Circle, Tampa, Fla.
Creative Choice Homes XXX and affiliate, Creative Choice Homes
XXXI, LLC, sought Chapter 11 bankruptcy protection (Bankr. S.D.
Fla. Lead Case No. 22-13550) on May 4, 2022. In the petitions
filed by Yashpal Kakkar, authorized agent, the Debtors listed as
much as $10 million in both assets and liabilities.
Judge Erik P. Kimball oversees the cases.
Robert C. Furr, Esq., at Furr and Cohen, P.A., is the Debtors'
legal counsel.
CYPRESS ENVIRONMENTAL: Joint Prepackaged Plan Confirmed by Judge
----------------------------------------------------------------
Judge Marvin Isgur has entered findings of fact, conclusions of law
and order confirming the Second Modified Joint Prepackaged Chapter
11 Plan of Reorganization of Cypress Environmental Partners, L.P.
and its Debtor Affiliates.
The Plan satisfies the requirements of section 1129(a)(3) of the
Bankruptcy Code. The Debtors have proposed the Plan in good faith
and not by any means forbidden by law. In so determining, the Court
has examined the totality of the circumstances surrounding the
filing of these Chapter 11 Cases, the Plan itself, the
Restructuring Support Agreement, and the process leading to
Confirmation of the Plan, including the support of holders of
Claims and Interests for the Plan, and the transactions to be
implemented pursuant thereto.
The Debtors and each of the constituents who negotiated the Plan,
and each of their respective officers, directors, managers,
members, employees, advisors, and professionals (a) acted in good
faith in negotiating, formulating, and proposing, where applicable,
the Plan and the agreements, compromises, settlements,
transactions, transfers, and documentation contemplated by the Plan
and (b) will be acting in good faith in proceeding to (i)
consummate the Plan and the agreements, compromises, settlements,
transactions, transfers, and documentation contemplated by the
Plan, and (ii) take any actions authorized and directed or
contemplated by this Confirmation Order.
The Commitment is an essential element of the Plan, and entry into
the Commitment is in the best interests of the Debtors, their
estates, and their creditors. The Debtors have exercised sound
business judgment in determining to enter into the Commitment and
have provided adequate notice thereof. The Commitment documentation
has been negotiated in good faith and at arm's length among the
Debtors and the lenders thereto, and any credit extended and loans
made to the Reorganized Debtors pursuant to the Commitment, as
applicable, and any fees paid thereunder are deemed to have been
extended, issued, and made in good faith.
A full-text copy of the Plan Confirmation Order dated June 21,
2022, is available at https://bit.ly/3QFZIge from PacerMonitor.com
at no charge.
About Cypress Environmental Partners
Cypress Environmental Partners LP's 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. Its
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.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Paul Hastings, LLP as legal counsel; FTI
Consulting, Inc. as financial advisor; and Piper Sandler & Co.,
through its restructuring group TRS Advisors, as investment banker.
Kurtzman Carson Consultants, LLC is the claims agent.
DGS REALTY: Wins Cash Collateral Access Thru Aug 31
---------------------------------------------------
The U.S. Bankruptcy Court for the District of New Hampshire
authorized DGS Realty, LLC to use the cash collateral of PHH
Mortgage Services, as servicer for U.S. Bank National Trust
Association, as Trustee for Lehman Brothers Small Balance
Commercial Mortgage Pass Through Certificates, Series 2006-3.
The Debtor is permitted to use and expend the proceeds of cash
collateral to pay the costs and expenses incurred in the ordinary
course of its business during the period from July 1 through August
31, 2022, or the date on which the Court enters an order revoking
the Debtor's right to use cash collateral in accordance with the
budget.
The Debtor will pay PHH Mortgage its monthly payment of $6,750,
plus real estate tax escrow in the amount of $2,802, each month
commencing February 1, 2022. These payments will be the normal
payments going forward. These payments will continue pending
further Court order.
Absent the Court's entry of a further order extending the
authorization, authority to use cash collateral will terminate upon
the earliest of:
a. the last day of the Use Period;
b. the earliest date on which a final hearing on cash
collateral requirements can be held under the notice and service
requirements of Bankruptcy Rules 4001(b) and (d) and 7004(h);
c. appointment of a Trustee pursuant to Bankruptcy Code
Section 1104;
d. conversion of the Debtor's case to one under Chapter 7 of
the Bankruptcy Code;
e. dismissal of the Debtor's case; or
f. entry of an order granting a Motion for Relief from
Automatic Stay with respect to any property that is PHH Mortgage's
collateral.
A hearing on the Debtor's further use of cash collateral will be
held on August 17 at 11 a.m.
A full-text copy of the order and the Debtor's budget for the
period from July to August 31, 2022, is available at
https://bit.ly/3bqiHvn from PacerMonitor.com.
The Debtor projects $97,266 in total income and $9,802 in total
expenses for July 2022.
About DGS Realty
Based in Concord, New Hampshire, DGS Realty, LLC, is a real estate
limited liability company. Formed around May 10, 2017, the company
is owned by David H. Booth, Manager, Stephen W. Booth, and Gregory
A. Booth, each having a 1/3 interest.
DGS Realty filed a Chapter 11 petition (Bankr. D.N.H. Case No.
22-10028) on January 24, 2022. In the petition signed by David H.
Booth, the manager, the Debtor estimated assets and debts between
$1 million and $10 million.
Judge Bruce A. Harwood oversees the case.
Representing the Debtor as counsel is Eleanor Wm Dahar, Esq., at
Victor W. Dahar Professional Association.
DIXON & SONS: Files Emergency Bid to Use Cash Collateral
--------------------------------------------------------
Dixon and Sons asks the U.S. Bankruptcy Court for the Eastern
District of North Carolina, Raleigh Division, for authority to use
cash collateral and provide adequate protection.
The use of cash collateral will be necessary to allow the Debtor to
pay its operational needs including the cost of maintaining the
farm operation, payment of wages, purchase and use of inventory,
and other normal expenses incurred in the ordinary course of the
farm operation. At this time, the Debtor is unable to obtain
unsecured credit to enable it to properly obtain the necessary
funds for operation of the business and further anticipates it will
be on a C.O.D. or cash only basis in the Chapter 11 proceeding with
its vendors and suppliers.
The Debtor owes approximately $117,268 to Meherrin Agricultural &
Chemical Company pursuant to a properly perfected first priority
lien encumbering the Debtor's crops, supplies, accounts receivables
and bank account, pursuant to Promissory Note, Security Agreement
and UCC Financing Statement dated on January 2, 2020.
Meherrin also holds a third priority lien encumbering the Debtor's
equipment. However, Union Bank holds a first and second priority
lien encumbering the equipment. The amount due to Union Bank is
greater than the value of the equipment.
Meherrin will be adequately protected by continuing to allow it to
maintain a security interest in the same described property
post-petition which was held pre-petition having the same priority
and rights in the collateral as it had pre-petition to the
including post-petition account and inventory. Use of the
pre-petition and post-petition account and inventory will assist in
the Debtor preserving the ability to maintain the business
operations. Not allowing the Debtor to maintain the collateral and
operations would severely diminish the value of the estate and
substantially decrease the profitability of the business,
diminishing the amount of money available to the payment of
creditors. Furthermore, allowing the Debtor to use the cash
collateral will allow it to create replacement collateral of
greater value.
The Debtor takes the position that Meherrin's security in cash
collateral assets does not exceed the value of its lien. As such
and to ensure that Meherrin is in fact adequately protected, the
Debtor proposes to pay Meherrin monthly adequate protection
payments in the amount of $ 1,225 per month beginning July 10,
2022. This proposed payment was calculated by amortizing the
Petition Date balance at the current till rate of interest 6% per
annum for 84 months. This amortization will not be binding on the
parties and application of the adequate protection payments to
payment and interest will be determined at a later date.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3b8F3B8 from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$1,888 for the week ending June 28, 2022;
$12,066 for the week ending July 5, 2022;
$10,742 for the week ending July 12, 2022; and
$3,700 for the week ending July 19, 2022.
About Dixon and Sons
Dixon and Sons operates a farm in Granville County, North Carolina,
where it cultivates grain/hay, tobacco, soy and produce. The farm
has been a family operation since 1948. The farm seeks to add an
agritourism stream of income to the farm this year. The Debtor
farms on property owned by James Noah Dixon, also a Chapter 11
debtor and the father of Jack and Jason Dixon, the general partners
of the Debtor. The Debtor also rents approximately 400 acres of
farmland from other individuals/farms in the community.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-01346) on June 21,
2022. In the petition filed by Jason W. Dixon, partner, the Debtor
disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Samantha K. Brumbaugh, Esq., at Ivey, McClellan, Siegmund,
Brumbaugh & McDonough, LLP represents the Debtor as counsel.
DIXON AND SONS: NC Farm Files Subchapter V Case
-----------------------------------------------
Dixon and Sons filed for chapter 11 protection in the Eastern
District of North Carolina. The Debtor filed as a small business
debtor seeking relief under Subchapter V of Chapter 11 of the
Bankruptcy Code.
The Debtor operates a farm in Granville, North Carolina where it
cultivates grain/hay, tobacco, soy and produce. The farm has been
a family operation since 1948. The farm seeks to add an
agritourism stream of income to the farm this year. The Debtor
farms on property owned by James Noah Dixon, also a Chapter 11
debtor and the father of Jack and Jason Dixon, the general partners
of the Debtor. The Debtor also rents 400 acres of farmland from
other individuals/farms in the community.
The Debtor finds itself in Chapter 11 due to several years of bad
yield due to circumstances beyond the Debtor's control. The Debtor
has operated a profit for the past several years; however, it has
been unable to meed the debt obligations it incurred during those
catastrophic years.
The Debtor says its assets, comprised of accounts receivable, crops
and equipment, total at least $151,750. The Debtor owes $117,268
to Meherrin Agricultural & Chemical Company, which has a first
priority lien on the Debtor's assets.
According to court documents, Dixon and Sons estimates between 1
and 49 creditors. The petition states funds will not be available
to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 19, 2022 at 10:00 AM at Raleigh 341 Meeting Room. Proofs of
claim are due by Oct. 17, 2022.
About Dixon and Sons
Dixon and Sons filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No.
22-01346) on June 21, 2022. In the petition filed by Jason W.
Dixon, as partner, the Debtor reports estimated assets between
$100,000 and $500,000 and estimated liabilities between $500,000
and $1 million.
Brian Behr has been appointed as Subchapter V trustee.
Samantha K. Brumbaugh, of Ivey, McClellan, Siegmund, Brumbaugh &
McDonough, LLP, is the Debtor's counsel.
DUSAN PITTNER: June 28 Hearing on Trustee's Boca Raton Asset Sale
-----------------------------------------------------------------
Judge Janet E. Bostwick of the U.S. Bankruptcy Court for the
District of Massachusetts, Eastern Division, will convene a hearing
on June 28, 2022, at 11:30 a.m., via video to consider the proposed
sale by David B. Madoff, the Trustee for the estate of Dusan
Pittner, of the real property located at 365 Northeast 3rd Street,
in Boca Raton, Florida.
Objections to the Motion and higher offers will be filed by June
27, 2022, at 4:30 p.m.
The Order Regarding Procedures for Hearings by Video dated May 23,
2022, will govern the hearing. Any pro se parties or counsel must
provide the Notice of Participation required under Paragraph II, 2
of the order by June 27, 2022, at 12:00 p.m., to the Courtroom
Deputy, Regina Brooks, at Regina_Brooks@mab.uscourts.gov.
The Trustee will immediately give notice of the Motion, the
hearing, and the objection deadline by (i) serving copies of the
Motion, the Notice of Sale, and the Order on the Debtor, all
creditors, interested parties, and parties having filed an
appearance, by electronic mail or other method designed to provide
immediate notice, or (ii) giving telephonic notice of the objection
deadline, the hearing date and the contents of the Motion followed
by service of copies of the Motion, the Notice of Sale, and this
Order by first class mail, postage prepaid. The Trustee will file a
certificate of service (including the manner of service).
Dusan Pittner filed a Chapter 11 petition (Bankr. D. Mass. Case
No.
21-11009) on July 8, 2021, and is represented by David Baker, Esq.
EASTERDAY RANCHES: Gets Further Extension of Plan Exclusivity
-------------------------------------------------------------
Easterday Ranches, Inc. and Easterday Farms on June 22 received
court approval to remain in control of their bankruptcy.
Judge Whitman Holt of the U.S. Bankruptcy Court for the Eastern
District of Washington extended the exclusivity period for
Easterday Ranches and Easterday Farms to file a Chapter 11 plan to
Aug. 1 and 8, respectively.
Meanwhile, the bankruptcy judge extended the exclusivity period to
solicit acceptances from creditors to Oct. 3 for Easterday Ranches
and Oct. 10 for Easterday Farms.
The companies' attorney, Thomas Buford, III, Esq., at Bush
Kornfeld, LLP said the companies had requested for an extension
"out of an abundance of caution" in case their third amended joint
Chapter 11 plan of liquidation is withdrawn or not accepted within
the previously approved solicitation deadline.
The companies filed the latest version of their liquidating plan on
May 27, which incorporates the terms of the global settlement they
entered into with the unsecured creditors' committees, Tyson Fresh
Meats, Inc. and Segale Properties, LLC. The global settlement
provides for a comprehensive settlement of all issues concerning
the companies' bankruptcy.
On May 31, the court approved the disclosure statement detailing
the liquidating plan.
About Easterday Ranches and Easterday Farms
Easterday Ranches, Inc., is a privately held company in the cattle
ranching and farming business.
Easterday Ranches sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Wash. Case No. 21-00141) on Feb. 1,
2021. Its affiliate, Easterday Farms, a Washington general
partnership, filed a Chapter 11 bankruptcy petition (Bankr. E.D.
Wash. Case No. 21-00176) on Feb. 8, 2021. The cases are jointly
administered under Case No. 21-00141.
At the time of the filing, the Debtors disclosed assets of between
$100 million and $500 million and liabilities of the same range.
Judge Whitman L. Holt oversees the cases.
The Debtors tapped Pachulski Stang Ziehl & Jones LLP as their lead
bankruptcy counsel, Bush Kornfeld LLP as local counsel, and Davis
Wright Tremaine LLP as special counsel. T. Scott Avila and Peter
Richter of Paladin Management Group serve as restructuring
officers.
On Feb. 16, 2021, the Office of the United States Trustee for the
Eastern District of Washington appointed a Ranches Official
Committee of Unsecured Creditors. The Ranches Committee initially
retained Dentons US LLP as its counsel and B. Riley Advisors as its
financial advisor. The Ranches Committee subsequently retained
Cooley LLP as its counsel, replacing Dentons US LLP.
On Feb. 22, 2021, the U.S. Trustee appointed a Farms Official
Committee of Unsecured Creditors. The Farms Committee retained
Buchalter, a Professional Corporation as its counsel and Dundon
Advisers LLC as its financial advisor.
The Debtors filed their joint Chapter 11 plan of liquidation on
Aug. 2, 2021.
ELEVATE TEXTILES: Moody's Alters Outlook on 'B3' CFR to Negative
----------------------------------------------------------------
Moody's Investors Service changed Elevate Textiles, Inc.'s outlook
to negative from stable. Concurrently, Moody's affirmed Elevate's
ratings, including its B3 corporate family rating, B3-PD
probability of default rating, B3 senior secured first lien term
loan rating, and Caa2 senior secured second lien term loan rating.
The outlook change to negative from stable reflects the company's
growing refinancing risk as its 2024 debt maturities approach.
Elevate's leverage is high at 6.6 times Moody's-adjusted
debt/EBITDA (5.9x based on credit agreement calculations). While
demand is currently strong, rising macroeconomic pressures can
impede the company's ability to significantly reduce leverage and
address its capital structure in a timely and economical manner.
Moody's took the following rating actions for Elevate Textiles,
Inc.:
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Gtd Senior Secured 1st Lien Term Loan, Affirmed B3 to (LGD3) from
(LGD4)
Gtd Senior Secured 2nd Lien Term Loan, Affirmed Caa2 (LGD5)
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
Elevate's B3 CFR is constrained by its high leverage and 2024
maturities. While demand has been strong in the majority of
Elevate's end markets, including apparel, denim, military and
industrial, labor challenges and inflationary pressures have
resulted in continued high debt/EBITDA. Moody's expects earnings
growth over the next several quarters, benefiting from price
increases to offset inflationary cost pressures, a solid backlog
that has allowed Elevate to operate near full capacity, and
productivity improvements. However, demand is likely to weaken
subsequently due to increased macroeconomic pressures, which could
hamper the company's ability to reduce leverage and address its
capital structure in a timely and economical manner. The rating
also reflects governance risks associated with private equity
ownership, particularly acquisition strategies and dividend and
capital allocation policies. Elevate's high debt levels largely
stem from the May 2018 acquisition of American & Efird Global
Holdings, LLC (A&E), a transformative transaction that more than
doubled the company's size. In 2019, Elevate experienced earnings
declines and transformation costs that were not anticipated at the
time of the transaction, resulting in high leverage heading into
2020.
At the same time, the rating incorporates Elevate's solid market
position in the fragmented global threads and textile manufacturing
markets, with diverse product end markets and geographical
footprint. It also benefits from the company's established
long-term key customer relationships, which should drive longer
term revenue stability.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the Company does not
substantially reduce leverage over the next few quarters, such that
the risk surrounding its ability to refinance its debt in a timely
and economical manner is significantly diminished. Worsening
macroeconomic conditions, including lower demand or increased
interest rates could also lead to a downgrade, as they would
diminish the company's free cash flow generation and ability to
service debt. Quantitatively, the ratings could be downgraded with
expectations of EBITA/interest expense sustained below 1.25 times.
The ratings could also be downgraded is the company does not take
steps towards a refinancing transaction ahead of the debt becoming
current, or if liquidity deteriorates for any other reason.
The ratings could be upgraded if the company demonstrated sustained
revenue and earnings growth and conservative financial policies,
including the use of free cash flow for material debt reduction.
Quantitative metrics include EBITA/interest expense sustained above
1.75 times. An upgrade would also require good liquidity, including
solid positive free cash flow, good revolver availability and
long-dated debt maturities.
Headquartered in Charlotte, North Carolina, Elevate Textiles, Inc.
is a global textiles and threads manufacturer serving diverse end
markets, including apparel, denim, military, fire, auto and
industrials. Elevate is a direct subsidiary of Elevate Textiles
Holding Corporation. The company is owned by affiliates of private
equity firm Platinum Equity LLC. Revenues for the twelve months
ended March 31, 2022 were approximately $1.3 billion.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
EMPACADORA Y PROCESADORA: Aug. 11 Plan Disclosures Hearing Set
--------------------------------------------------------------
Judge Maria de Los Angeles Gonzalez has entered an order within
which August 11, 2022 at 9:30 AM via Microsoft Teams is the hearing
on approval of disclosure statement of Empacadora y Procesadora del
Sur, Inc.
In addition, objections to the form and content of the disclosure
statement should be in writing and filed with the court and served
upon parties in interest at their address of record not less than
14 days prior to the hearing. Objections not timely filed and
served will be deemed waived.
A copy of the order dated June 21, 2022, is available at
https://bit.ly/3OAKdo4 from PacerMonitor.com at no charge.
Counsel for the Debtor:
Alexis Fuentes-Hernandez, Esq.
Fuentes Law Offices, LLC
PO BOX 9022726
San Juan, PR 009022726
Phone: +1 787 722 5216
Fax: +1 787 722 5206
Email: fuenteslaw@icloud.com
About Empacadora Y Procesadora Del Sur
Empacadora Y Procesadora Del Sur, Inc., is engaged in the business
of packaging and manufacturing meats and chicken, and its income is
derived essentially from amounts collected from sales of such
inventories to business clients in Puerto Rico and the U.S.
mainland.
Empacadora Y Procesadora Del Sur sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 22-00354) on
Feb. 15, 2022. In the petition signed by Carlos C. Rodriguez
Alonso, president, the Debtor disclosed $11,604,565 in assets and
$10,598,204 in liabilities.
Alexis Fuentes Hernandez, Esq., at Fuentes Law Office, is the
Debtor's counsel.
EMPIRE TODAY: Moody's Cuts CFR to B3 & Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service downgraded Empire Today, LLC's corporate
family rating to B3 from B2, its probability of default rating to
B3-PD from B2-PD and its senior secured revolving credit facility
and term loan ratings to B3 from B2. The outlook was changed to
negative from stable.
The downgrade of the CFR to B3 reflects Empire's weaker than
expected operating performance and very high leverage with Moody's
adjusted debt/EBITDA over 7x for the LTM period ended March 31,
2022. The company almost tripled its funded debt in 2021 following
the debt-financed dividend under its former ownership and the
subsequent acquisition of Empire by Charlesbank Capital Partners.
At the time, Empire was benefitting from strong demand in the home
category. This led to strong top line growth and lower operating
costs including advertising which grew margins. While pricing
actions have offset higher inventory costs and lower volumes,
operating costs have risen which has been a drag on EBITDA margins.
Part of the increase in operating costs are related to advertising
which helps combat declining sales leads. However, there is risk
that this does not lead to volume growth given the challenging
inflationary environment which could possibly cause further margin
compression.
The negative outlook reflects the growing risk that weak consumer
sentiment and inflationary pressures coupled with rising interest
rates could negatively impact demand for home remodeling and
prevent the company from deleveraging.
Downgrades:
Issuer: Empire Today, LLC
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Secured Revolving Credit Facility, Downgraded to B3 (LGD4)
from B2 (LGD4)
Senior Secured Term Loan, Downgraded to B3 (LGD4) from B2 (LGD4)
Outlook Actions:
Issuer: Empire Today, LLC
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Empire's B3 CFR reflects its very high leverage and its small scale
in a highly competitive business environment with very large and
well capitalized competitors. It also reflects the discretionary
nature of the company's products, as well as its high
susceptibility to macroeconomic factors. Governance is a key rating
factor particularly Empire's financial strategies under private
equity ownership. The company's direct to consumer asset light
business model makes its cost structure quite flexible but an
increase in costs to combat slowing demand could continue to
negatively impact margins. Due to the company's small scale even
small declines in EBITDA can impact credits metrics significantly.
The CFR also reflects the company's adequate liquidity supported by
Moody's expectation for positive free cash flow in 2022 and a $60
million revolving credit facility which had approximately $13
million outstanding as of April 1, 2022. Ratings are supported by
the solid market position Empire has established in the highly
fragmented floor covering market, and in the direct to consumer
segment of that market in particular.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if there is a sustained improvement in
operating performance and Empire maintains good liquidity.
Specifically, an upgrade would require debt/EBITDA to be sustained
below 5.5 times and EBITA/interest expense sustained above 2
times.
Ratings could be downgraded if operating performance continues to
weaken, should financial policies become more aggressive, or
liquidity deteriorates. Specifically, the ratings could be
downgraded if debt/EBITDA remains above 6.5x or if EBITA/interest
expense is sustained below 1.25 times.
Headquartered in Northlake, IL, Empire Today, LLC is a specialty
retailer of carpet, hard floor, and window treatments. The company
offers shop-at-home sales in the largest metropolitan markets in
the U.S. Revenue is about $870 million.
The principal methodology used in these ratings was Retail
published in November 2021.
ENVIVA INC: Fitch Gives BB- Rating on $300MM Unsec. Notes Due 2052
------------------------------------------------------------------
Fitch Ratings has assigned a 'BB-'/'RR4' rating to Enviva Inc.'s
(EVA; IDR BB-) issuance of up to $300 million of 30-year tax-exempt
unsecured notes due in 2052. The senior unsecured notes rank pari
passu with existing senior unsecured debt. Proceeds will be used in
part to fund the construction of a new $300 million (includes
financing and other costs) 1.1 MPTY pellet production plant in
Epes, Alabama as Enviva continues to scale the business to meet
growing demand. The Rating Outlook is Stable.
EVA's ratings reflect the stable and predictable nature of
contracted cashflows generated by its growing portfolio of wood
pellet production plants, and also reflect its growing customer
base, increasing scale of operations and regulatory support for
biomass.
KEY RATING DRIVERS
New Plant Increases Scale: Enviva is moving forward with the
construction of its new 1.1 MPTY pellet production plant in Epes,
Alabama to meet growing customer demand in Asia. The plant is
Enviva's largest to date and is fully contracted and will increase
production capacity by approximately 18%. The plant is projected to
cost $300 million(includes financing and other costs) and generate
approximately $65 million of EBITDA per annum, representing an
EBITDA investment multiple of approximately 5.0x, a savings of
roughly two turns as compared to previous investment multiples for
new plants under the old MLP structure.
The equity component of the financing for the new plant was
provided through an issuance of $346 million of common stock in
January. The new plant is expected to enter service in the second
half of 2023.
Volume Growth Under Long-Term Contracts: EVA maintains a robust
pipeline of projects and contracts under negotiation that provide a
pathway for significant growth over the next few years. EVA has a
weighted average remaining term of approximately 14.5 years and
contracted revenue backlog of approximately $21 billion for its
overall contract portfolio. In addition, EVA has a robust backlog
of contracts under negotiation that, if finalized, will allow for
accelerated intermediate-term growth.
EVA's counterparty contracts are primarily take-or-pay contracts
with a fixed price for the entire term of the contract subject to
annual inflation-based adjustment and price escalation.
Creditworthy Counterparties: Enviva's contracts are primarily with
large creditworthy counterparties, and Fitch expects a significant
increase in the diversification of EVA's customer base over the
next few years as Enviva continues to sign additional contracts and
expands its operations in the U.K., Europe (mainly Germany) and,
increasingly, Japan. Recently, Enviva announced it is finalizing
two new contracts with new customers in Germany for deliveries in
2023 and 2024.
Enviva signed a MOU for a 10-15-year contract with a utility to
supply 1.0 MTPY of wood pellets annually, and signed a LOI for a
10-year contract with industrial customer to supply 100,000 MTPY
annually. By 2025, the company projects that 50% of its revenues
will come from Japanese customers, with the largest customers
representing no more than 15% of its contracts mix.
In 2021, nearly all of EVA's revenue was generated from six major
customers, including Drax Power Limited (a subsidiary of Drax Group
Holdings Limited [BB+/Stable]), Lynemouth Power Limited, MGT Power,
RWE AG (BBB+/Stable), Orsted A/S (BBB+/Stable) and Sumitomo Corp.
Corporate Reorganization Neutral to Ratings: Fitch believes
Enviva's organizational transformation to a corporate structure
from an MLP will be manageable within its current credit profile.
In Fitch's view, construction risk is largely mitigated by EVA's
portfolio of long-term contracted cashflows with creditworthy
counterparties, the experience of the management team, and the
maturity of the design of the wood pellet production facilities
including a relatively short 18-month construction timeline.
Limited Size Constrains Ratings: EVA is growing rapidly, but at
this time its limited size constrains its ratings, with projected
EBITDA ranging from $230 million to $270 million in 2022. This is
modestly lower than prior expectations of $275-$300 million in
EBITDA as the company has faced pandemic-related labor, production,
and logistics challenges, a three-month delay of the in service
date of their Lucedale production plant and higher costs for
purchased wood pellets. These headwinds are largely expected to be
temporary with EBITDA projected to increase to $305 million-$335
million in 2023, consistent with prior expectations.
Leverage Pressured; Deleveraging Expected: Fitch expects leverage
metrics to remain elevated over the next two years as Enviva
focuses on accelerating its capital spending program to support its
growing contract backlog. Fitch expects EBITDA leverage to increase
to 4.5x in 2023 as capex peaks and decline to less than 4.0x in
2025 as capital spending subsides. Due to strong demand the company
is moving forward with ongoing plant expansions and the
construction of its Epes and Bond plants in Alabama and
Mississippi, each with a 1 million MTPY (metric tons per year)
capacity in 2022 and 2023, respectively.
Deleveraging will be primarily due to the realization of a full
year of earnings following the in service date of the new
production plants, but also reflects organic growth, including
ongoing plant expansions, and assumes the company will maintain its
conservative acquisition financing mix and lower its future plant
EBITDA investment multiples to approximately 5.0x from 7.0x as a
result of the simplification of its organizational structure.
Conservative Financial Strategy: Fitch expects that Enviva will
build six new greenfield plants over the next five years (averaging
one new plant per year), that future cash flows will be fully
contracted with creditworthy counterparties, and that they will be
financed by a balanced 50/50 mix of equity and debt. Fitch believes
EVA's publicly stated financial policy supports the current
ratings. This includes achieving a 3.5x-4.0x leverage ratio,
maintaining a forward-looking annual dividend coverage of 1.5x, and
targeting a balanced 50/50 capital structure of equity and debt.
Regulatory Environment Should Remain Supportive: Fitch is concerned
about nascent proposals in the European Union to legislate biomass
as a carbon emitting fuel and not as renewable resource but
believes the regulatory environment in jurisdictions that EVA
serves should remain favorable in the near term. The proposed
change in law can be approved as soon as September as part of the
EU's Renewable Energy Directive and could serve to damper strong
customer demand.
Meanwhile, EVA's core markets in Germany, the U.K. and Japan have
announced aggressive renewable targets and carbon reduction goals,
which should allow EVA to continue to gain market share as European
and Asian utilities, power generators and industrial customers
increasingly use biomass as an economic replacement in coal-fired
generating facilities to meet emissions targets.
The U.K. recently announced that it will cease all coal-fired
generation by October 2024, Germany will phase out coal generation
by 2038 and Japan recently doubled its renewable target to 36%-38%
by 2030.
DERIVATION SUMMARY
EVA is the world's leading supplier of utility-grade wood pellets
to major power generators across the globe. The company's cash flow
is supported by long-term take-or-pay contracts with utilities and
power generators that are currently subsidized by their local
government to produce electricity using renewable energy sources,
such as biomass. There are limited publicly traded comparable
companies for EVA given the size of the biomass sector as well as
the competitive landscape.
EVA is growing rapidly, but exhibits a much smaller scale of
operations than peers with expected annual EBITDA of more than $300
million in the near term. While EVA's credit profile is currently
hindered by its small scale of operations, its ratings are
reflective of long-term take-or-pay contract profile and a
supportive regulatory environment for the biomass industry.
Atlantica Sustainable Infrastructure Plc (AY; BB+/Stable) is a
comparable for EVA in the renewable energy space.
AY is a dividend, growth-oriented company that owns and manages a
diversified portfolio of contracted assets underpinned by long-term
contracts with credit-worthy counterparties in the power and energy
markets. Like EVA, AY generates cash flow under contract prices
with counterparties that benefit from supportive government
policies. However, AY is roughly 3.0x larger than EVA by size and
cash flow.
Fitch projects EVA's FFO leverage will average 4.4x over the next
three years (2022-2024), which is higher compared to AY's gross
leverage ratio (HoldCo debt/CAFD) in the mid- to high-3x range but
is positioned well with respect to the higher rated YieldCo's
negative sensitivity threshold of 4.0x. Sunoco LP (BB/Positive) is
a comparable within the midstream space, given that Sunoco also
operates in a highly fragmented, competitive wholesale motor fuel
sector. Similar to EVA, Sunoco also has 12-year, take-or-pay fuel
supply agreement with a 7-Eleven subsidiary, under which Sunoco
will supply approximately 2.2 billion gallons of fuel annually.
While EVA's projected leverage is similar to Sunoco's, with YE 2021
FFO leverage at 4.3x and a long-term target of 4.0x, EVA is
one-third the size of Sunoco. Additionally, Fitch also does not
expect Sunoco to have major funding needs in the near term.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
-- Revenue and EBITDA growth driven by increasing wood pellet
export volumes as well as annual inflation and price
adjustment under existing and new contracts;
-- Accretive cash flow from construction of new wood pellet
production plants;
-- Future construction of production plants averaging one per
year are assumed in forecast periods financed with 50/50 mix
of equity and debt;
-- Capex averages $338 million per annum in 2022-2025 with peak
spending in 2023 and declines thereafter;
-- Regulatory environment remains supportive for the biomass
industry in the jurisdictions that EVA's customers operate in.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Continued increase in size and scale of operations with EBITDA
greater than $300 million;
-- Total debt with equity credit to EBITDA below 4.3x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Significant credit event with counterparties, including multi-
notch downgrade at EVA's major counterparties, which will
impair future cash flow into EVA;
-- Unfavorable changes in regulatory environment with regard to
treatment and subsidies supporting biomass power generation as
renewable generation;
-- Capex spending or unfavorable dividend policy that
significantly reduces liquidity or increases leverage;
-- Total debt with equity credit to EBITDA above 5.0x.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Enhanced Liquidity: In December 2021, EVA increased its financial
flexibility by amending its secured revolving credit facility. The
credit facility was upsized to $570 million from $525 million,
borrowing costs remain the same, and the maturity remains unchanged
with expiry in April 2026.
As of March 31, 2022, EVA had approximately $280 million of
liquidity available under its $570 million revolving credit
facility including $5 million of unrestricted cash and cash
equivalents. Fitch expects the company to have adequate liquidity
to finance plant expansions and construction, fund its working
capital needs and dividend distributions in the near term.
To alleviate financing needs in the short term, management has
issued approximately $346 million of equity in January.
ISSUER PROFILE
Enviva Inc. is the world's largest supplier of utility-grade wood
pellets to major power generators by production capacity. The
company procures wood fiber and processes it into utility-grade
wood pellets, which are then transported to their customers
overseas through vessels.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING RECOVERY
---- ------ --------
Enviva Inc.
senior unsecured LT BB- New Rating RR4
ENVIVA INC: Moody's Rates New $250MM Series 2022 Revenue Bonds 'B1'
-------------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to Enviva Inc.'s
proposed issuance of $250 million tax-exempt facilities revenue
bonds, Series 2022, issued by The Industrial Development Authority
of Sumter County, Alabama on behalf of Enviva Inc. The senior
unsecured notes will rank pari passu with the exiting senior
unsecured debt and are fully and unconditionally guaranteed by
Enviva Inc. The company intends to use the net proceeds from the
bond issuance to fund a portion of the capex required for the Epes,
Alabama plant construction as well as working capital, related
financing fees and expenses and capitalized interest.
Moody's also affirmed Enviva's Ba3 Corporate Family Rating, Ba3-PD
Probability of Default Rating (PDR) and B1 rating on the senior
unsecured notes due 2026. The Speculative Grade Liquidity Rating
(SGL-3) remains unchanged. The outlook is revised to negative from
stable.
"The proposed exempt facilities revenue bond issuance would allow
Enviva to finance at a more favorable interest rate than in the
corporate bond market; however, the company's recent
underperformance combined with additional debt to finance the plant
construction in a more challenging environment as well as a
potential adverse regulatory outcome in the EU have created more
uncertainty in its credit profile leading to the outlook revision,"
said Domenick R. Fumai, Vice President and lead analyst for Enviva
Inc.
Assignments:
Issuer: THE INDUSTRIAL DEVELOP AUTHORITY OF SUMTER
Senior Unsecured Revenue Bonds, Assigned B1 (LGD4)
Affirmations:
Issuer: Enviva Inc.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
GTD Senior Unsecured Global Notes, Affirmed B1 (LGD4)
Outlook Actions:
Issuer: Enviva Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
The outlook revision to negative reflects financial performance
that has missed Moody's previous expectations resulting in
higher-than-expected leverage. Enviva has encountered headwinds on
the cost front, particularly for diesel fuel and labor, as well as
delays in ramping up production at its Lucedale plant which has
caused the company to significantly lower its EBITDA guidance for
FY 2022 to $230-$270 million from $275-$300 million. While Moody's
expects Enviva to offset some of the cost pressure based on
contractual inflation escalation clauses, balance sheet debt
continues to grow as the company will finance the Epes plant with
the proposed facilities revenue bond issued by The Industrial
Development Authority of Sumter County, Alabama on behalf of Enviva
Inc. Moody's now projects adjusted Debt/EBITDA to be in the low-6x
in FY 2022, compared to Moody's previous estimate of about 4.5x.
However, Moody's currently expects leverage to recover and approach
mid-4x in FY 2023 because of incremental contribution from
Lucedale, capacity expansions, increased pricing due to escalators
and additional contract growth. Positively, the Russia-Ukraine
military conflict has expanded the cost advantage of wood pellets
compared to coal and should support higher prices for new
contracts.
The negative outlook also reflects the risks associated with the
recent European Parliament's Environmental Committee's decision to
remove certain types of biomass, including primary wood biomass
from trees, from the EU's renewables targets. While there are still
a number of steps before adoption, Moody's base case is that the
final decision will not be passed. However, at the least, Moody's
believes it will likely cause some customers to defer new contract
signings. Although Enviva has signed a number of memorandum of
understandings (MOUs) and letters of intent (LOIs) since the middle
of last year, the company has not yet converted these to firm
contracts. While management has indicated that it generally takes
6-12 months to enter the backlog, uncertainty around the EU
decision could also defer realizing the MOUs into firm
commitments.
Enviva's Ba3 Corporate Family Rating (CFR) reflects its leading
industry position in the global wood pellets industry driven by
currently positive fundamentals for the biomass market in Europe
and Asia as a result of an increase in renewable energy regulation
in order to reduce carbon emissions. The rating is underpinned by
long-term take-or-pay contracts with a backlog of $21 billion and a
weighted average remaining term of 14.5 years, which provides
increased revenue and EBITDA generation visibility. The company
also benefits from its access to abundant and relatively low-cost
supply of wood fiber in the Southeast US in close proximity to its
manufacturing facilities and transportation. Recently added
contracts by Enviva with highly rated Japanese counterparties and
improved customer diversification further support the rating.
The rating is constrained by its relatively small scale, though
Moody's expects the company to continue growing over time by adding
capacity and new contract awards. Significant operational
concentration in the Southeast US is another factor that tempers
the rating. The company is highly dependent on their customers
receiving continued government tax support, tariffs and subsidies
in Europe and Asia in order to displace coal with biomass. The high
rate of growth and need to finance capex with additional debt
and/or equity financing requires access to the capital markets and
is also a risk to the credit. Despite the conversion form an MLP to
a C-Corp, free cash flow is also negatively impacted by an
aggressive dividend policy. Additionally, Enviva faces the risk of
adverse changes in the regulatory environment. Other challenges
include the threat of technological advances that continue to make
other renewable resources more competitive as compared to biomass.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The company's outlook could be revised to stable if financial
leverage returns towards mid-4x in FY 2023 and is maintained at
that level. An outlook change to stable would also require the
regulatory environment to remain supportive of industry
fundamentals. Moody's would also need to see further progress in
converting MOUs to firm contracts.
The rating could be downgraded if adjusted Debt/EBITDA is sustained
above 5.0x, the distribution coverage ratio falls below 1.0x on a
sustained basis, upon a material adverse change in the regulatory
environment in the company's key markets, particularly in the
European Union, a significant deterioration in liquidity, or a
change in the financial policy that includes using more debt in the
capital structure to finance new construction projects or a major
customer loss.
Although not likely in the near-term given the negative outlook,
Moody's could upgrade the rating if Debt/EBITDA including Moody's
standard adjustments is sustained below 3.5x, the company maintains
a distribution coverage above 1.2x, and experiences further
significant organic growth and geographic diversity through new
contract awards.
ESG CONSIDERATIONS
Moody's considers environmental, social and governance risks into
the rating. Governance risks are a key driver in today's rating
action. Enviva's Credit Impact Score (CIS-3) reflects the
moderately negative impact of environmental and social risks on the
company's rating, most notably changes in government regulation for
tax support, subsidies and tariffs in key regions where the company
generates a majority of its sales. Enviva's exposure to governance
risks (G-3) is moderately negative. Financial strategy and risk
management are moderately negative as leverage has remained
elevated. Positively, the change in corporate structure from an MLP
to a C-Corp reduces governance risks and more closely aligns the
interests of shareholders, creditors and other stakeholders.
Enviva's environmental risk (E-3) is moderately negative and
comparable to other companies within the manufacturing sector;
however, this is balanced against a favorable assessment of carbon
transition risk as the company has targeted a net-zero GHG
emissions by 2030 as well as effective water management. Enviva has
moderately negative waste and pollution and natural capital risks
due to its dependence upon wood fiber as the key raw material
input, but these risks are consistent with the broader
manufacturing sector.
Enviva's social risks (S-3) are moderately negative and comparable
with the manufacturing sector but benefits from responsible
production in the sourcing of wood fiber used to manufacture the
company's products and good customer relations. Enviva's products
are considered renewable and sustainable.
LIQUIDITY
The SGL-3 Speculative Grade Liquidity rating reflects expectations
for Enviva to maintain adequate liquidity over the next 12 months.
As of March 31, 2022, the company had cash of approximately $5.2
million and $275.2 million of availability, net of $0.8 million of
letters of credit outstanding, under its unrated $570 million
senior secured revolving credit facility. The revolving credit
facility contains a total leverage ratio covenant of equal to or
below 5.0x and a minimum interest coverage of not less than 2.25x.
Moody's expect the company to be in compliance with the covenants
over the next 12 months.
STRUCTURAL CONSIDERATIONS
The B1 rating assigned to the senior unsecured notes and tax-exempt
facilities revenue bonds reflects their subordinated position
relative to the amount of senior secured debt with priority claims
on the company's assets.
Enviva Inc., headquartered in Bethesda, MD, is engaged in the
production of utility-grade wood pellets. The company aggregates
and processes wood fiber into transportable wood pellets sold under
long-term take-or-pay supply contracts to major power generators in
Europe and Asia who use the pellets in dedicated biomass or
co-fired coal plants. Enviva is the largest supplier of industrial
wood pellets as measured by production capacity, enjoying an
estimated 14% market share of global pellet supply. For the twelve
months ended March 31, 2022, the company generated $1.03 billion in
revenues.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
EPIC CRUDE: Moody's Affirms 'Caa1' CFR & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed EPIC Crude Services, LP's
Corporate Family Rating at Caa1, Probability of Default Rating at
Caa1-PD, super priority revolving credit facility rating at B1 and
senior secured Term Loan B rating at Caa1. The outlook was changed
to stable from negative.
"The change in ratings outlook of EPIC Crude's to stable reflects
our expectation that increased drilling in the Permian Basin will
drive higher EBITDA and improving interest coverage, as well as
continued support from its equity owners," said Jonathan Teitel, a
Moody's analyst. "The affirmation of the Caa1 CFR reflects our view
that financial leverage will remain very high, and that rising
interest costs will offset some of the benefit of rising cash
flow."
Affirmations:
Issuer: EPIC Crude Services, LP
Corporate Family Rating, Affirmed Caa1
Probability of Default Rating, Affirmed Caa1-PD
Gtd. Senior Secured Revolving Credit Facility, Affirmed B1 (LGD1)
Senior Secured 1st Lien Term Loan B, Affirmed Caa1 (LGD4)
Outlook Actions:
Issuer: EPIC Crude Services, LP
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
EPIC Crude's Caa1 CFR reflects high financial leverage, low debt
service coverage and weak liquidity. Moody's expects increased
development activities in the Permian Basin to drive higher EBITDA.
However, there are risks to the company achieving sufficient EBITDA
growth and free cash flow to reduce debt and leverage to achieve a
sustainable capital structure. The ability to do so will depend on
the degree to which demand for the company's pipeline capacity
supports higher volumes and transportation rates for uncontracted
capacity and contract renewals. The rating benefits from supportive
equity owners. During 2020, the company raised funds by issuing
equity and debt. EPIC Crude's owners made additional equity
contributions in 2021 and in early 2022 to support the business.
EPIC Crude's contracts are fixed fee, limiting direct commodity
price risk though volumes are sensitive to capital spending by
producers. The company benefits from acreage dedications and a
portion of EPIC Crude's capacity has minimum volume commitments.
The majority of volumes on the company's system are in the Permian
Basin, which is one of the most economic oil production areas in
the US and where oil production is increasing. Some of EPIC Crude's
owners are customers which aligns incentives for them to move
volumes on the system.
Moody's views EPIC Crude's liquidity as weak through 2023. As of
March 31, 2022, EPIC Crude had a fully drawn $75 million revolver
due March 2024. The revolver and term loans have minimum debt
service coverage ratio covenants of 1.1x. The revolver also has a
maximum super-priority leverage ratio of 1x. Moody's expects the
company to maintain compliance with these covenants through 2023,
although headroom could become tight as interest expense rises with
higher interest rates and that needs to be more than offset by
EBITDA growth.
EPIC Crude's senior secured Term Loan B due 2026 is rated Caa1. The
company's senior secured Term Loan C due 2026 (unrated) ranks pari
passu with the Term Loan B. The company has a super-priority
revolver due 2024 rated B1. The term loans comprise the
preponderance of debt, resulting in the Term Loan B being rated the
same as the CFR. The super-priority position of the revolver and
its small size relative to the term loans outstanding results in
the facility being rated B1.
The stable outlook reflects Moody's expectation that increased
activities in the Permian Basin will drive higher EBITDA, rising
interest coverage and lower leverage, as well as Moody's
expectation for equity owners to remain supportive.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade include volumes sustained at
higher levels supporting EBITDA growth and a clearer pathway
towards substantial debt repayment from free cash flow;
EBITDA/interest above 2.5x; and adequate liquidity.
Factors that could lead to a downgrade include weaker than
anticipated financial performance and declining interest coverage,
worsening liquidity, or Moody's view that default risk is
increasing.
EPIC Crude Services, LP (a subsidiary of EPIC Crude Holdings, LP)
is a privately owned midstream energy business with oil pipelines
running from the Permian and Eagle Ford Basins to Corpus Christi.
EPIC Crude is owned by Ares Management, Noble Midstream Partners
(owned by Chevron Corporation), Kinetik Holdings, Inc. (formerly
known as Altus Midstream Company) and Rattler Midstream (owned by
Diamondback Energy, Inc.).
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
EQUANIMITY BEHAVIORAL: Wins Cash Collateral Access on Final Basis
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Fort Lauderdale Division, authorized Equanimity Behavioral Services
Co. to use cash collateral on an interim basis in accordance with
the budget, with a 10% variance.
The Alleged Secured Creditors will have a replacement lien on cash
used by the Debtor to the same extent, validity and priority that
existed prior to the commencement of the case.
The Debtor and Kapitus Servicing, Inc. are parties to the Future
Receivables Factoring Agreement.
The Debtor stipulates and acknowledges that as of the Petition
Date, it owed Kapitus at least $53,720.
The Debtor pledged all of its personal property assets, including,
without limitation, accounts receivable, equipment, inventory, and
general intangibles as collateral to secure its obligations to
Kapitus. As of the Petition Date, all cash and cash equivalents of
the Debtor were part of Kapitus' Pre-Petition Collateral or
proceeds of the Pre-Petition Collateral.
The Debtor acknowledges that pursuant to the Agreement, Kapitus has
a valid, perfected, enforceable, unavoidable, lien on all of the
Debtor's property, including the cash collateral, that is junior
only to the SBA lien.
As additional adequate protection for the use of cash collateral
and for any diminution in value of the Prepetition Collateral, if
any, and post-petition interest, costs, and fees, if any, and as
security of the Post-petition Indebtedness Kapitus is granted a
valid, perfected, unavoidable lien upon, and security interest in,
to the extent and in the order of priority of any valid lien
pre-petition, all cash or other proceeds generated post-petition by
the pre-petition Collateral.
Kapitus' liens will extend
to any account holding such cash collateral, regardless of whether
KAPITUS has control over such account, and encumbers any cash
collateral held in the debtor-in-possession accounts required by
applicable law. KAPITUS will have a perfected post-petition
replacement lien against cash collateral without the need to file
or execute any document as may otherwise be required under
applicable non-bankruptcy law.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3HzZseN from PacerMonitor.com.
The Debtor projects $65,000 in income and $59,454 in liabilities.
About Equanimity Behavioral Services, Co.
Equanimity Behavioral Services, Co. sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No.
22-13153-PDR) on April 22, 2022. In the petition signed by Kelly D.
Negron, president/owner, the Debtor disclosed up to $100,000 in
assets and up to $1million in liabilities.
Judge Peter D. Russin oversees the case.
Thomas L. Abrams, Esq., at Gamberg & Abrams serves as the Debtor's
counsel.
ESCADA AMERICA: Seeks Cash Collateral Access
--------------------------------------------
Escada America LLC asks the U.S. Bankruptcy Court for the Central
District of California, Los Angeles Division, for authority to use
cash collateral and provide adequate protection to secured
creditors.
The Debtor's retail business is generally known to the public and
branded as "Escada." The Debtor uses the "Escada" brand via a
license agreement and does not own any intellectual property rights
in connection with the "Escada" brand. For several decades, Escada
had been a global retail brand for high-fashion, high-end,
ready-to-wear apparel for women, with an emphasis on high-fashion
evening wear. On a global scale, Escada has various retail stores
and subsidiaries in several countries in Europe, including but not
limited to Spain, England and Germany. Escada also has retail
stores in North America, including the Debtor, which operates
Escada’s brick-and-mortar retail business only in the U.S. By
2019, the Escada business on a global scale was in deep distress
and could not continue. At that time, the Debtor, together with
other subsidiaries of Escada's then-parent company, was acquired by
new ownership (which is now the current ownership and management).
At the time of the acquisition of the Debtor in 2019, Escada had 29
subsidiaries in 22 countries, all of which were financially
distressed. In December 2019, the Debtor devised and began
implementation of a plan to turn around the United States Escada
retail business. The Debtor believed the business could be operated
at a profit if fundamental business-model changes were implemented,
such as overhauling the Debtor's technological suite and reducing
speed to market by shifting supply chains from Asia to Europe. The
Debtor's turnaround plan was also contingent upon its ability to
sell product at its physical locations because ecommerce sales were
minimal. However, what was not -- and could not be -- known at the
time of the acquisition in November 2019, was that an
unprecedented, global, catastrophic, and lifechanging event with
severe economic consequences was on the immediate horizon -- the
Covid19 pandemic.
In December 2019, just one month after the acquisition and just as
the Debtor's transformation plan was being put into effect,
COVID-19 was quietly spreading in certain regions of Asia,
unbeknownst to the rest of the world. From December 2019 through
February 2020, the Debtor prepared to implement a number of
business model and operational changes with the goal of making the
United States Escada retail business profitable. However, in March
2020, the world drastically change, and set the Debtor on course
for the bankruptcy filing. On March 15, 2020, the City of Los
Angeles declared a state of emergency with shelter in place orders.
In the following days, many business and financial centers across
the United States came to a near total standstill as the nation was
gripped by the COVID-19 crisis. In the span of just 12 days, all 15
of the Debtor's then-active stores in eight States were shuttered
due to lockdown restrictions.
In late March 2020, the United States federal government responded
with historic economic aid, passing the CARES Act and providing
approximately $3 trillion of stimulus to the economy, which may
have bolstered the stock market's recovery, but such economic
stimulus did nothing to help retail businesses such as the Debtor,
which rely on foot traffic from customer shopping in stores to
generate sales. Unfortunately, the Debtor was not eligible for any
of these stimulus payments and was left with no support during
these unprecedented times. In addition, as long as the pandemic
lockdowns continued and stores remained closed, or shoppers
refrained from shopping due to deep concerns about their health and
safety, the COVID-19 recession for retail businesses would
continue.
The Debtor negotiated workouts with some, but not all, of its
various landlords during 2020 and 2021, but with the consequences
of the COVID-19 pandemic that the Debtor was forced to file
bankruptcy to restructure its business affairs. The Debtor cannot
survive ongoing litigation with these landlords and the attendant
litigation costs and potential liability for breach of those
leases.
To keep the Debtor operating through its reorganization, the Debtor
requires the use of cash collateral through October 8, 2022, in
accordance with the proposed budget, with a 15% variance.
The Debtor has three secured creditors. Eden Roc International, LLC
has a first-position security interest perfected by the filing of a
UCC-1 on substantially all the Debtor's assets and a secured debt
of approximately $579,025. Mega International, LLC has a
second-position security interest perfected by the filing of a
UCC-1 on substantially all the Debtor's assets and a secured debt
of approximately $1,506,953. Escada Sourcing and Production, LLC is
a true consignor, and substantially all of the Debtor's inventory
is owned by ESP via a consignment agreement between the parties.
ESP recorded a UCC-1 to give the world notice of its consignment;
additionally, ESP has a security interest on the proceeds and
products of ESP's inventory.
To provide the Secured Creditors with adequate protection against
any potential post-petition decline in the value of the Secured
Creditors' collateral, the Debtor proposes that the Secured
Creditors receive: (i) replacement liens against the Debtor's
post-petition assets, with such replacement liens to have the same
validity, priority, and extent as the prepetition liens held by the
Secured Creditors; and (ii) a super-priority administrative claim
pursuant to section 507(b) of the Bankruptcy Code.
A hearing on the matter is scheduled for July 13, 2022 at 10 a.m.
A copy of the motion is available at https://bit.ly/3HSz9jZ from
PacerMonitor.com.
About Escada America
Escada America, owns and operates a clothing store in New York,
sought Chapter 11 bankruptcy protection (Bankr. C.D. Cal. Case No.
22-10266) on Jan. 18, 2022. In the petition filed by Kevin Walsh,
director of finance, the Debtor estimated assets and liabilities
between $1 million and $10 million.
The case is handled by the Honorable Judge Sheri Bluebond.
John Patrick M. Fritz, Esq., at Levene, Neale, Bender, Yoo &
Golubchik LLP is the Debtor's counsel.
On May 18, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors in this Chapter 11 case. Kelley Drye &
Warren, LLP serves as the committee's bankruptcy counsel.
EVERI HOLDINGS: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Everi Holdings Inc.'s Issuer Default
Rating (IDR) at 'BB-'. Fitch has also affirmed Everi's senior
secured credit facility at 'BB+'/'RR1' and unsecured notes at
'BB-'/'RR4'. The Rating Outlook is Stable.
Fitch has affirmed and withdrawn the IDR of Everi Payments Inc. as
it is no longer a debt-issuing entity following the 2021
refinancing and is no longer relevant to Fitch's coverage.
KEY RATING DRIVERS
Good Leverage Headroom: Everi's gross leverage was 2.8x as of March
31, 2022 and is marginally below Fitch's upgrade threshold at the
'BB-' level. Fitch forecasts gross leverage to remain around 3.0x
during 2023-2024 due to Everi's larger installed base of premium
slots, but also due to a pull-back in broader gaming demand off of
recent strong performance. The company has reached its 2.5x-3.0x
net leverage target, and any additional upward rating momentum will
reflect Everi's commitment toward managing leverage more
conservatively than in its stated financial policy. Fitch assumes a
majority of FCF is allocated toward M&A and shareholder returns,
given the already conservative leverage position and limited
rationale for further delevering.
Business Mix: About 64% of Everi's EBITDA comes from gaming and 36%
from financial technology (FinTech) on a LTM basis. About
two-thirds of the gaming revenue is generated on a participation
basis, whereby Everi earns fees based on game performance. FinTech
revenues mostly come from ATM and cash advance service fees, which
are tied to contracts generally with three- and five-year terms and
high renewal rates. Although revenue in both segments depends on
the gaming sector's health, Everi is less dependent on replacement
sales and new casino openings, relative to other gaming suppliers.
Solid EGM Strategy Execution: Everi has been investing heavily in
its electronic gaming machine (EGM) content and hardware with
strong results to date. Everi has been able to grow its
participation in EGM steadily and had 17,328 participation games as
of March 31, 2022 — 8,079 of which were premium units. The
premium unit installed base has grown by an approximate 33% CAGR
since 2016, while also experiencing an approximate 8% CAGR in
average daily wins.
Fitch expects the premium segment to continue to grow, albeit at a
decelerating rate, given the intense competition in this segment
and tough yoy comparisons for Everi. During 2019, Everi was a
roughly 6% ship-share supplier (according to Eilers & Krejcik
Gaming), which increased to 9% in 2021, partially due to its new
Empire Flex cabinet. Machine sales were at an all-time high of
5,962 for the LTM period ending March 31, 2022.
Technology-Related Risks: New, cashless technologies employed by
other participants in the gaming and FinTech industries represent a
long-term risk to disintermediate Everi's cash access services
(roughly one-third of total revenues). However, the company's
diverse FinTech product portfolio, investments made in new
technologies and its own cashless solutions (including maintenance
of money transmitter licenses) reduces this risk and positions
Everi well to defend its market position.
The gaming industry is highly regulated on a state-by-state basis
and has been slow to adopt new technologies on the casino floor,
where cash remains prevalent. The pandemic has increased operators'
interest in cashless technologies, with Nevada and Native American
gaming jurisdictions the most notable early adopters. Greater
adoption of digital wallets in the long term should not materially
disrupt the meaningful fee revenues casino operators and their
supplier partners generate from ATM transactions, as digital wallet
economics tend to be similar.
DERIVATION SUMMARY
Everi's 'BB-' IDR reflects the company's low leverage, good
diversification, strong momentum in growing its class III slots
business, and solid market position in cash access systems and
class II slots. Negative credit considerations include Everi's
niche position within the slots segment, relative to larger
suppliers, despite ship share improving over the last few years.
The long-term disintermediation risk associated with its FinTech
business is also a negative credit consideration, but to a lesser
extent given Everi's own cashless offerings and the industry's
regulators slow adoption of new technology. Everi's gaming peers
include Light & Wonder, Inc. (BB(EXP)/Stable), International Game
Technology plc and Aristocrat Leisure Ltd. (BBB-/Stable), which all
have slightly stronger credit profiles due to greater scale; higher
ship share; international diversification; and product
diversification, including lottery and table games. Scientific
Games Holdings LP (B/Stable) is a lottery peer with much higher
leverage than Everi, but less cyclical cash flow that exhibits
long-term growth.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
Include
-- Total revenues grow by high single digits in 2022 due to
continued strong performance in Everi's gaming operations and
FinTech segments. Fitch assumes a modest mid-single-digit
pullback in Everi's topline and broader gaming demand in 2023,
given current macroeconomic headwinds, with low-single-digit
growth thereafter;
-- EBITDA margins remain around 50%;
-- FCF is around $150 million in both 2022 and 2023, settling
around $100 million thereafter, as cash taxes increase and
variable interest rates remain higher than prior reviews.
Fitch assumes manageable capex near 20% of revenues. Fitch
assumes settlement receivables and liabilities are cash flow
neutral in its forecast;
-- Everi utilizes its healthy FCF to grow its product portfolio
through additional tuck-in acquisitions. Fitch assumes
shareholder returns balance out the remainder of available
FCF, primarily in the form of share repurchases. Fitch does
not assume incremental debt paydown, aside from $6 million of
annual amortization of the term loan.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Sustained market share gains in the U.S. gaming equipment
industry, particularly in its Class III business;
-- Continued diversification away from payment processing;
-- Gross debt/EBITDA sustaining below 3.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Gross debt/EBITDA sustaining above 3.5x;
-- Significant deterioration and/or loss of market share in the
gaming and FinTech segments;
-- Adoption of a more aggressive financial policy, either toward
target leverage or shareholder returns, which negatively
affects the credit profile.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Everi had $121 million of excess cash ($269 million gross of net
settlement liabilities) and full availability on its $125 million
revolver as of March 31, 2022. Everi also generated about $150
million in Fitch-defined FCF (cash flow from operations minus capex
and controlling for settlement working-capital swings) for the TTM
period. Amortization of its term loan is minimal relative to the
company's FCF generating ability. Fitch expects Everi to focus its
capital allocation on tuck-in acquisitions and shareholder returns,
with no incremental debt paydown assumed over the term loan
amortization. There are no maturities until 2028, when the $597
million term loan matures.
ISSUER PROFILE
Everi is a provider of slot machines, gaming equipment and cash
services to the casino industry.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING RECOVERY PRIOR
---- ------ -------- -----
Everi Payments Inc. LT IDR BB- Affirmed BB-
LT IDR WD Withdrawn BB-
Everi Holdings Inc. LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR1 BB+
EXPEDIA GROUP: Egan-Jones Keeps B+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on May 24, 2022, retained the 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Expedia Group, Inc.
Headquartered in Seattle, Washington, Expedia Group, Inc. provides
online travel services for leisure and small business travelers.
FAIRMONT ORTHOPEDICS: Wins Cash Collateral Access Thru July 13
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota authorized
Fairmont Orthopedics & Sports Medicine, P.A. to use cash collateral
on an interim basis in accordance with the Debtor's stipulation
with Profinium, Inc. through July 13, 2022.
The Debtor is permitted to use up to $230,000 of cash, including
cash collateral consistent with the budget. The use of this amount
is necessary to avoid immediate and irreparable harm to the estate
pending a final hearing on the Motion.
As adequate protection, Profinium is granted a replacement lien to
the same extent, validity and priority as existed prior to the
Petition Date if any; provided, however, that the replacement liens
will be granted to the extent necessary to replenish the
post-petition diminution in value as of the Petition Date of such
liens.
In addition, the Debtor will continue to insure the collateral and
provide the reporting and inspection rights to which the Lender is
entitled under the Stipulation.
A copy of the order is available at https://bit.ly/3QyCNTX from
PacerMonitor.com.
About Fairmont Orthopedics
Fairmont Orthopedics & Sports Medicine, P.A., treats injuries and
diseases of the knee, hip, back, shoulder, hand and foots. The
Company offers pain management, surgery, orthopedics, podiatry,
back and spine, physical therapy, and other related services.
Fairmont Orthopedics serves customers in the State of Minnesota.
Fairmont Orthopedics & Sports Medicine filed a petition for relief
under Subchapter V of Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Minn. Case No. 22-30926) on June 9, 2022. In the
petition filed by Corey Welchlin MD, as president, the Debtor
estimated assets and liabilities between $1 million and $10 million
each.
The case is assigned to the Hon. Bankruptcy Judge Katherine A.
Constantine.
Kenneth C. Edstrom, Esq., at Sapientia Law Group, is the Debtor's
counsel.
Steven B. Nosek has been appointed as Subchapter V trustee.
FAIRPORT BAPTIST: Wins Cash Collateral Access Thru July 15
----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of New York
authorized Fairport Baptist Homes to use cash collateral on an
interim basis in accordance with its agreement with Berkadia
Commercial Mortgage LLC, assignee of Capmark Finance, Inc. and the
Official Committee of Unsecured Creditors of Fairport Baptist Homes
et al.
The Debtor requires the use of cash collateral to fund its
day-to-day operations, including payroll for its employees and
ongoing services to its residents.
The Debtor is permitted to use cash collateral through and
including the earlier of (a) July 15, 2022, (b) the conclusion of
the final hearing on the Debtor's use of Cash Collateral, or (c)
termination of the Order following issuance of a Termination
Notice, authorized pursuant to Bankruptcy Code sections 105, 361,
362, and 363, and Bankruptcy Rules 2002, 4001, 6003, and 9014.
Berkadia Commercial Mortgage LLC is the Debtors' main secured
creditor. As of petition date, the Debtor owes $6,369,443 to the
lender in accordance with the Loan Documents.
As adequate protection, the Lender is granted senior priority
replacement liens upon all assets and property of the Debtor and
its estate of any kind or nature, subject and subordinate to the
Carve-Out. The Replacement Liens granted are in addition to all
security interests, liens, and rights of setoff existing in favor
of the Lender on the Petition Date, and are and will be valid,
perfected, enforceable, and effective as of the Petition Date
without any further action of the Debtor or the Lender and without
the necessity of the execution, filing or recording of any
financing statements, security agreements, deeds of trust, or other
documents, or of obtaining control agreements over bank accounts.
The Lender is also granted an administrative claim with a priority
equivalent to a claim under Bankruptcy Code sections 503(b) and
507(b), on a dollar-for-dollar basis for and solely to the extent
of any Diminution in Value, which administrative claim will, among
other things, have priority over all other costs and expenses of
the kind specified in, or ordered pursuant to, Bankruptcy Code
sections 105, 328, 330, 331, 503(a), 503(b), 506(c), 507(a),
507(b), 546(c), 1113, and 1114, except for the Carve-Out. The
Lender will have the burden of establishing the Diminution in Value
which constitutes the Superpriority Administrative Claim.
The Carve-Out means: (a) all budgeted accrued but unpaid fees and
expenses incurred until the earlier of (1) 45 days from the date of
entry of the Order; (2) the entry of the Final Order, or (3) the
delivery of a Termination Notice of the attorneys, accountants or
other professionals retained by the Debtor and the Committee; (b)
Professional Fees and Expenses in the maximum amount of $50,000
incurred after delivery of a Termination Notice; and (c) the
payment of fees pursuant to 28 U.S.C. section 1930, provided that
all such fees and expenses (other than those of the United States
Trustee) will be subject to approval by a final order of the Court
pursuant to sections 326, 328, 330, 331 or 363 of the Bankruptcy
Code.
These events constitute an "Event of Default":
a. entry of an order converting this Chapter 11 case to a case
under Chapter 7 of the Bankruptcy Code;
b. entry of an order dismissing this Chapter 11 case;
c. entry of an order appointing or directing the election of a
trustee or examiner for the Debtor under section 1104 or section
1106(b) of the Bankruptcy Code;
d. without the prior written consent of the Lender, the entry
of any order (or other judicial action which has the effect of)
amending, reversing, supplementing, staying the effectiveness of,
vacating, or otherwise modifying the Order;
e. the Debtor uses cash collateral for any purpose or in a
manner other than as permitted in the Order and in the Budget or
otherwise fails to comply with any term of the Order;
f. entry of an order by the Bankruptcy Court authorizing
relief from stay by any person (other than the Lender) on or with
respect to all or any portion of the Prepetition Collateral with a
value in excess of $50,000 absent consent from the Lender, which
consent will not be unreasonably withheld;
g. the filing by the Debtor of any pleading objecting to or
seeking to challenge the Lender's claims with respect to the
Prepetition Obligations or the Lender's lien upon cash collateral
or the Prepetition Collateral or otherwise asserting rights, claims
or causes of action against the Lender with respect to the
Prepetition Obligations;
h. the material breach by the Debtor of its obligations to the
Lender under the Order;
i. the filing by the Debtor of any debtor-in-possession
financing pleadings or any documents directly affecting the
Prepetition Collateral, post-petition collateral subject to the
Replacement Lien, and/or cash collateral and pertaining to a
debtor-in-possession financing not acceptable to and supported by
the Lender, which acceptance and support will not be unreasonably
withheld;
j. the filing by the Debtor of any bid procedure and/or sale
documents relating to the sale of the Prepetition Collateral,
post-petition collateral subject to the Replacement Lien, and/or
Cash Collateral not acceptable to and supported by the Lender,
which acceptance and support shall not be unreasonably withheld;
or
k. the Debtor voluntarily or involuntarily dissolves or is
dissolved, liquidates or is liquidated or ceases the operation of
any material portion of its business.
A final hearing on the matter is scheduled for June 28 at 12 p.m.
A copy of the order and the Debtor's 13-week budget through August
8, 2022, is available at https://bit.ly/3QzTUou from
PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$408,100 for the week beginning May 9, 2022;
$229,800 for the week beginning May 16 2022;
$306,300 for the week beginning May 232022;
$202,600 for the week beginning May 30 2022;
$431,100 for the week beginning June 6, 2022;
$229,800 for the week beginning June 13, 2022;
$306,300 for the week beginning June 20, 2022;
$200,600 for the week beginning June 27, 2022;
$370,100 for the week beginning July 4, 2022;
$193,800 for the week beginning July 11, 2022;
$357,300 for the week beginning July 18, 2022;
$192,495 for the week beginning July 25, 2022;
$541,100 for the week beginning August 1, 2022; and
$153,800 for the week beginning August 8, 2022.
About Fairport Baptist Homes
Fairport Baptist Homes and its affiliates operate skilled nursing
care facilities. The Debtors sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D.N.Y. Case No. 22-20220) on May
6, 2022. In the petition signed by Thomas H. Poelma, president,
the Debtors disclosed up to $10 million in assets and up to $50
million in liabilities.
Judge Paul R. Warren oversees the case.
John A. Mueller, Esq., at Lippes Mathias LLP is the Debtors'
counsel.
FIBERFAST INC: Taps Falcone Law Firm as Bankruptcy Counsel
----------------------------------------------------------
Fiberfast Inc. seeks approval from the U.S. Bankruptcy Court for
the Northern District of Georgia to hire Falcone Law Firm, P.C. to
serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. advising the Debtor regarding its rights, powers and duties
in the administration of its Chapter 11 case and assets of the
bankruptcy estate;
b. assisting the Debtor in connection with the analysis of its
assets, liabilities, financial condition and other matters related
to its business;
c. assisting in the preparation, negotiation and
implementation of a plan of reorganization;
d. advising the Debtor with regards to objections to or
subordination of claims and other litigation matters;
e. representing the Debtor with regard to the investigation of
the desirability and feasibility of the rejection and potential
assignment of any executory contracts or unexpired leases;
f. advising the Debtor with regard to all applications,
motions or complaints concerning reclamation, adequate protection,
sequestration, relief from stays, use of cash collateral,
disposition or other use of assets of the estate and other similar
matters;
g. assisting the Debtor in the sale or disposition of assets
of its bankruptcy estate;
h. preparing pleadings, applications, motions, reports and
other papers incidental to administration, and conducting
examinations;
i. providing assistance to the Debtor with regard to the
proper receipt, disbursement and accounting of funds and property
of the estate; and
j. providing other legal services related to the case.
The hourly rates charged by the firm for its services are as
follows:
Attorneys $400 per hour
Associates $250 per hour
Paralegals $175 per hour
Staffs $75 per hour
Falcone Law Firm will also seek reimbursement for out-of-pocket
expenses.
The Debtor provided the firm a $20,000 retainer as security
deposit, of which $2,100 was used to pay the firm's pre-bankruptcy
services while $1,738 was used to pay the filing fee. The remaining
balance of 16,162 will only be used to cover the shortfall, if any,
in the payment of court-approved fees. Any unused portion will be
returned to the Debtor.
Ian Falcone, Esq., a partner at Falcone Law Firm, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Ian M. Falcone, Esq.
Falcone Law Firm, P.C.
363 Lawrence Street
Marietta, GA 30060
Tel: (770) 426-9359
Email: Imffalconefirm.com
About Fiberfast Inc.
Fiberfast Inc. -- https://fiberfastinc.com/ -- is a licensed and
bonded freight shipping and trucking company running freight
hauling business
Fiberfast Inc. sought protection under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-54217) on
June 3, 2022, listing up to $1 million in assets and up to $100,000
in liabilities. Gary Murphey has been appointed as Subchapter V
trustee.
Ian M. Falcone, Esq., at The Falcone Law Firm, P.C. is the Debtor's
counsel.
FIDELITY NATIONAL: Egan-Jones Retains BB+ Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company on May 27, 2022, retained the 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Fidelity National Information Services, Inc.
Headquartered in Jacksonville, Florida, Fidelity National
Information Services, Inc. is a payment services provider.
FITNESS INTERNATIONAL: S&P Raises ICR to 'B-', Outlook Positive
---------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Fitness
International LLC to 'B-' from 'CCC+'. At the same time, S&P raised
its rating on its first-lien senior secured facility to 'B' from
'CCC+' and revised its recovery rating to '2' from '3' on better
expected recovery due to a lower debt balance in its simulated
default scenario.
S&P said, "The positive outlook reflects our view that Fitness
International could end 2022 with leverage below our 6.5x upgrade
threshold, but that heightened macroeconomic risks and very thin
covenant headroom when the company begins measuring its covenants
again in the third quarter of this year limits upward rating
movement to one notch at this time.
"The upgrade reflects our expectation that Fitness International
will comfortably cover its fixed charges and that lease and
preferred share adjusted leverage could be in the mid-5x area at
the end of 2022. Under our base-case forecast, we expect 2022
revenues could recover to approximately 5%-10% below 2019 revenues,
which would be up approximately 15%-20% from 2021. For the twelve
months ended Mar. 31, 2022, Fitness International had approximately
16% fewer active paying members and a 15% smaller total membership
base (including frozen memberships) than its year-end 2019 levels.
We expect the company could recover to about historical EBITDA
margin in the 30% area by the end of 2022, resulting in the mid- to
high-20% area for the full year. We expect Fitness International
could end the year with net leverage in the mid-5x area, including
preferred shares that pay-in-kind at 13.5% annually. In addition,
we expect fixed charge coverage will improve to around low to
mid-1x, from around 1x currently. For comparability across the
fitness and broader leisure sector, we measure adjusted debt to
EBITDA based on generally accepted accounting principles (GAAP)
EBITDA, which is significantly higher than the company's measure of
its modified-cash-basis EBITDA because its cash rent expense is
higher than GAAP rent expense. As a result, our measure of
lease-adjusted debt to GAAP EBITDA is lower than it would be
otherwise. Consequently, we supplemented our analysis of leverage
with our free cash flow to debt measure, which benefits from
eliminating the impact of accounting accruals. Under our base-case
forecast, we expect free operating cash flow (FOCF) to debt in the
5%-7% area in 2022, increasing to about 10% in 2023.
"Heightened recessionary risk in the U.S. and inflationary pressure
could result in weaker-than-expected revenue and margin improvement
in 2022 and 2023; these pressures could be exacerbated by
competitive pressures from low-cost fitness operators. While our
base-case forecast incorporates good revenue and EBITDA growth in
2022 and 2023, we believe that in a moderate recession Fitness
International could underperform our revenue and EBITDA forecast.
Additionally, inflationary pressure could result in weaker EBITDA
margin and lower cash flow if it cannot offset cost increases with
some combination of membership base growth and membership price
increases.
"Fitness International operates in the highly competitive fitness
club industry, which has low barriers to entry and high customer
attrition. We believe the rise of boutique studios and no-frills,
low-cost clubs presents the greatest risk to retaining members over
time. Members may choose budget-friendly alternatives with fewer
services that still satisfy their fitness needs, a targeted fitness
option, or both. Over the past few years, Fitness International has
introduced a moderately smaller club format, as well as clubs that
offer additional services and amenities it believes enhance the
member experience. The company generates significant cash flow and
can invest in innovation including multiple club formats over time,
which gives it the ability to address significant anticipated new
competition.
"The positive outlook reflects our base-case forecast that Fitness
International could end 2022 with leverage below our 6.5x upgrade
threshold, but that heightened macroeconomic risks and very little
covenant headroom when the company begins measuring its covenants
again in the third quarter limits upward rating movement to one
notch at this time."
S&P could lower its rating on Fitness International or revise its
outlook to negative if it believed:
-- It could have difficulty covering its fixed charges; or
-- Lease and preferred share adjusted leverage could increase and
remain above 7.5x.
S&P could raise its ratings on Fitness International if it believed
it could:
-- Sustain good FOCF;
-- Meet its 1.2x EBITDAR fixed-charge coverage threshold covenant
with at least 5% headroom on a last-12-months basis; and
-- Sustain leverage below 6.5x even accounting for leveraging
acquisitions.
ESG credit indicators: E-2, S-3, G-2
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis of Fitness International, revised
from a negative consideration. As with other gym operators, Fitness
International branded gyms were impaired by the COVID-19 pandemic
with temporary closures, member losses, and memberships placed on
hold, leading to significantly lower revenue and a cash burn from
operations. We now expect that Fitness International' membership
will take until at least 2023 to fully recover from its pandemic
trough. We believe its value-oriented, mid-tier offering will
ultimately bring many core members back. However, we anticipate its
member base will continue to recover more slowly than low-cost gym
memberships, which had fewer cancellations and a faster recovery
despite residual COVID-19-related safety concerns."
Environmental, Social, And Governance(ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Health and safety
FREEDOM HOLDING: S&P Affirms 'B-' ICR, Off CreditWatch Negative
---------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' long-term and 'B' short-term
issuer credit ratings on Freedom Holding Corp. (FRHC) and its
subsidiaries Freedom Finance JSC, Bank Freedom Finance Kazakhstan,
Freedom Finance Europe Ltd., and Freedom Finance Global PLC. The
ratings were also removed from CreditWatch negative, where they
were placed on March 17, 2022. The outlook on the holding company
is stable and the outlooks on the operating subsidiaries are
positive.
S&P said, "We also raised our Kazakhstan national scale ratings on
Freedom Finance JSC and Bank Freedom Finance Kazakhstan to 'kzBB'
from 'kzBB-'.
"We expect FRHC to successfully carve out its Russian subsidiaries
over 2022. This transaction will reduce the group's exposure to
sanction-related disruptions. At the same time, we do not expect it
to materially affect the group's earnings. It will likely continue
serving Russian clients, subject to regulatory restrictions, that
are onboarded outside Russia and act as a broker for the carved-out
businesses as well.
"FRHC's capital adequacy should stay adequate despite losses and
merger and acquisition (M&A) activities. We project that FRHC's
pro-forma capital adequacy, as measured by our risk-adjusted
capital (RAC) ratio, will fall moderately over the next 12-18
months amid completed or planned corporate activities. These
include the acquisition of insurance companies in Kazakhstan in May
2022, the carve out of Russian businesses, and other planned M&A.
Nevertheless, we expect the reduction to be modest--to just above
8% from about 9% on March 31, 2022. We expect that the group's
earnings strength will remain supportive of its loss absorption
capacity.
"We believe that Bank Freedom Finance Kazakhstan's intrinsic credit
quality has improved.Bank Freedom Finance Kazakhstan's online
mortgage offering allowed it to capture a 30% market share in
state-subsidized mortgage programs. We expect that the bank's
digital offerings will allow it to further expand its market share.
Although this rapid growth will likely test the bank's underwriting
processes, we nevertheless expect it to maintain adequate capital
adequacy levels with a RAC ratio above 7%. We revised up our view
of its standalone credit profile to 'b' from 'b-', but our
long-term issuer credit rating remains aligned with the 'b-' group
credit profile and the ratings on its broker affiliates.
"Our ratings on Freedom Finance Insurance and Freedom Finance Life
are unaffected by this rating action.We rate them above the 'b-'
GCP since we see them as inherently more creditworthy and somewhat
insulated from the broader group.
"The positive outlooks on FRHC's bank and brokerage operating
subsidiaries reflect our view that the group's operations will
remain resilient to disruptions in capital markets stemming from
the Russia-Ukraine conflict and sanctions on Russian businesses
over the next 12 months and successfully complete its corporate
restructuring initiatives.
"We may raise the ratings on Freedom Finance Europe Ltd., Freedom
Finance Global PLC, Freedom Finance JSC, and Bank Freedom Finance
Kazakhstan if the group successfully carves out its Russian
business activities. This will reduce risks linked to possible
sanctions or disruptions in operations and most importantly allow
it to provide clients with access to U.S. markets. Sustained solid
financial performance is also a prerequisite for an upgrade.
Moreover, we see initiatives to simplify the corporate structure as
supportive of an upgrade.
"We may revise the outlooks on the operating subsidiaries to stable
if the group fails to carve out its Russian business or if we see
that the restructuring has a negative effect on its operations.
Headwinds from ever tighter market conditions may also result in an
outlook revision.
"The stable outlook on FRHC reflects our view that the ratings on
the holding company are structurally subordinated to those on the
operating entities, with default prospects not materially improving
even if the group's creditworthiness moderately strengthens."
ESG credit indicators: E-2, S-2, G-4
FREEPORT LNG: Fitch Puts 'B' IDR on Rating Watch Negative
---------------------------------------------------------
Fitch Ratings has placed the ratings of Freeport LNG Investments,
LLLP (FLNGI) on Rating Watch Negative (RWN). FLNGI's Long-Term
Issuer Default Rating (IDR) is 'B'. The secured debt rating is
affirmed at 'B+'/'RR3'. Prior to the current rating action, FLNGI's
Rating Outlook was Stable.
The RWN reflects the credit impacts resulting from a release of
liquefied natural gas (LNG) at a pipe rack array that is used by
all three LNG trains at FLNGI's Brazoria County, Texas LNG facility
(Freeport Plant). The release of the LNG resulted in a damaging
fire. FLNGI is structurally subordinated to multiple senior secured
debt instruments that have cash traps, among other contractual
rights.
Fitch expects that FLNGI will need to avail itself of one of the
measures provided under its debt structure in order to timely make
the next two quarterly debt service payments. Fitch expects these
payments to be made.
Fitch will be evaluating certain operational and financial matters
over the next 100 days in order to judge whether FLNGI has
either/both a distressed liquidity condition, and/or less robust
long-term cash flows than the flows that were incorporated into the
award of the 'B' IDR.
KEY RATING DRIVERS
Incidents: The midstream sector generally is less complicated in an
engineering sense than other parts of the Oil & Gas Industry. That
feature notwithstanding, the midstream sector from time to time
does witness a company experiencing a catastrophic incident.
Midstream managements have an array of tools available to mitigate
catastrophe-risk, and for the most part catastrophes do not
severely degrade credit quality. One exception is the non-rated
company EdgeMarc Energy Holdings LLC, where an explosion played a
part in a bankruptcy filing.
FLNGI's main tool, but not only one, for mitigating catastrophe
risk is a debt service reserve letter of credit sized for
approximately two quarterly debt service payments. Entities, upon
which FLNGI's credit quality depends, below FLNGI in the ownership
structure enjoy the benefit of business interruption insurance, as
well as have debt service reserve structures.
Fitch expects FLNGI to be able to make the debt service payments
coming due in 2022. Fitch will be monitoring a variety of financial
flows pertaining to this expectation.
Structural Subordination: The primary rating concern for FLNGI is
that the sole source of revenue is dividends from the three
liquefaction plants, owned by three operating companies (Opcos). In
parallel, FLNGI's debt is structurally subordinate to the cash flow
needs at the Opcos, which have approximately $12 billion of project
debt. FLNGI's debt is also structurally subordinated to an
approximately $1.2 billion note at FLEX Intermediate Holdco, LLC
(FLEX), an intermediate holding company.
FLNGI and FLNGI Option Holdco, LLC collectively hold an indirect
63.4% limited partnership interests in FLEX. The multiple
indentures of the Opcos and FLEX contain provisions, among other
limits on financial flexibility, preventing upstream distributions
ultimately to FLNGI if debt service coverage ratios (DSCR) fall
below 1.25x and 1.15x, respectively.
Customers: The Freeport Plant has five long-term customers,
representing almost all nameplate capacity. These customers have
entered into arrangements with the Freeport Plant under 20-year
long-term agreements (LTAs) under take-or-pay payment terms. These
customers are large global energy companies with ratings of 'BBB-'
or better. Evidencing their skill set, the customers bear the risk
of natural gas supply under tolling agreements.
Fitch expects that the three Opcos and the customers of each Opco
will be engaged in discussions about LTA rights and obligations,
with the biggest one being about force majeure-related provisions.
Fitch believes each of the Opcos five customers have taken and will
continue to take a view far into the future as to global energy
flows. Fitch notes in this regard that from loan inception to right
up to the June 8 incident, the Freeport Plant functioned properly
and financial flows were as forecast.
Low Coverage: Offsetting the expected stability of a 20-year
take-or-pay payment stream from strong customers, the FLNGI credit
profile features low interest coverage metrics. For instance, in
2021 Fitch forecasted that 2022 standalone Adjusted EBITDA interest
coverage would be approximately 2.0x. The 'B' IDR had little
cushion, insofar as Fitch stated at that time that such coverage
metric value below 1.5x might give rise to a negative rating action
Fitch at present expects 2022 to feature a value for this metric
significantly below 1.5x. Fitch will be evaluating whether the
Freeport Plant can bounce back by early 2023 so as to restore the
FY23 financial condition to something consistent with Fitch's
original base case.
DERIVATION SUMMARY
The Negative Rating Watch at the 'B' IDR is, in aggregate, a
circumstance that causes Fitch to view FLNGI as having a useful
comparable in Altera Infrastructure L.P. (Altera; CCC+/Stable).
Altera operates marine vessels engaged in providing services to
offshore oil producers. Both FLNGI and Altera have a similar
customer base, large global energy companies. Altera is smaller
than FLNGI. Yet, this pair goes against the typical rule that
larger companies have better options for boosting liquidity from
asset sales. Altera is better able to so boost liquidity.
Both companies have significant structural subordination. On a
consolidated basis, Altera in 2022 is expected by Fitch to have
leverage of above 7.0x. In order to make for comparability, Fitch
looks at FLNGI through a proportional consolidated leverage view,
and Fitch last year forecast FLNGI with proportional consolidated
leverage of approximately 8.0x.
The difference in IDRs relates to Altera having near-term and
severe contract cliffs, as well as liquidity issues that FLGNI did
not have when Fitch awarded the 'B' IDR. Altera itself has a
meaningful 2023 bond maturity, and the Altera family of companies
have multiple revolvers that are highly utilized, and some
vessel-project finance debts that come due in the short-term.
KEY ASSUMPTIONS
-- One of the loan structure elements is utilized in order to pay
the two remaining quarterly coupons in 2022;
-- Starting on Jan. 1, 2023, the project returns to its base case
performance;
-- Fitch price deck;
-- Interest expense reflects a base rate as per the Fitch Global
Economic Outlook. Through the Fitch Outlook forecast horizon,
interest rate risk is well contained by a high level of
hedging put in place at around the inception of the loans.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- The RWN could be removed as a positive action in the event
that FLNGI distributions-received levels were expected to be
restored to near-normal levels by about YE 2022;
-- Though not expected in the medium-term, an increase in
dividends to FLNGI that results in leverage, as measured by
expected standalone total debt to distributions, decreasing
below 7.0x on a sustained basis;
-- Though not expected in the medium-term, a forecast showing
proportionally consolidated total debt with equity credit to
operating EBITDA below 9.5x on a sustained basis.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Any significant diminution of FLNGI's currently straitened
liquidity resources. A negative rating action related to this
sensitivity may potentially include a multiple notch
downgrade;
-- Any significant shortfall against Fitch's expectations for
hitting milestones related to bringing the Freeport Plant back
to an operating condition approximately the same as had been
achieved in 1Q22;
-- A multi-notch downgrade or financial distress of any LTA
counterparty;
-- An increase in debt at the opcos or FLEX;
-- Adjusted EBITDA interest coverage sustained below 1.5x, or
other conditions that raise a concern for liquidity.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Challenged Liquidity: FLNGI's liquidity consists of a letter of
credit to fund a debt service reserve equal to six months of debt
service under both the term loan A and term loan B. The reserve is
part of the collateral package of FLNGI, and is created for the
express purpose of paying debt service in the case of calamitous
events. If drawn, the obligation to repay the letter of credit is
an obligation of FLNGI.
While FLNGI's debt is structurally subordinate to the opco and FLEX
debt, the next upcoming maturity is FLNGI's $1.2 billion term loan
A due December 2026, followed by the $1.2 billion term loan B due
in December 2028. Both loans feature amortizations before final
maturity. The LTA remains in place until 2038 and will generate
stable cashflow to support refinancing of the loans in 2026 and
2028.
ISSUER PROFILE
Freeport LNG Investments, LLLP holds Mr. Michael Smith's 55.25%
limited partnership interest in Freeport LNG Development L.P
(FLNG). FLNG operates an approximately 15 metric tonnes per annum
natural gas liquefaction and LNG export facility consisting of
three 5+ MPTA trains located near Freeport, TX.
ESG Considerations
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch utilizes combined financial statements of Freeport LNG
Investments, LLLP (FLNGI) and FLNGI Option HoldCo, LLC collectively
to evaluate FLNGI. Additionally, Fitch adjusts the financial
statements to reflect the dividends from Freeport Development as
revenue. As an equity owner of Freeport Development, dividends to
FLNGI are reported on the cash flow statement as "Distributions
from Freeport LNG Development, L.P." not operating revenue. Fitch
views FLNGI's financial condition by, among other methods, looking
at standalone, or de-consolidated HoldCo, credit metrics and
proportional consolidation metrics.
DEBT RATING RECOVERY PRIOR
---- ------ -------- -----
Freeport LNG LT IDR B Rating Watch On B
Investments, LLLP
senior secured LT B+ Affirmed RR3 B+
FROZEN FOODS: Wins Interim OK of $2MM DIP Loan
----------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Frozen Foods Partners, LLC, d/b/a Gourmet Express, LLC,
d/b/a Gourmet Express, to continue using cash collateral on an
interim basis and obtain postpetitition financing.
The Debtor is authorized to sell its postpetition accounts
receivable to Marco Capital, Inc., which sales will be free and
clear of all claims and encumbrances, with advances against
uncollected accounts receivable under the DIP Factoring Agreement
not to exceed the amount of $2,000,000.
The Debtor is also authorized to continue using the cash collateral
of Iron Horse Credit LLC.
The Court acknowledged the Debtor has demonstrated that it has an
immediate need to obtain the DIP Factoring Facility and obtain
further authorization to use cash collateral on an interim basis,
in order to, among other things, (i) permit the orderly
continuation of its respective businesses, maintain business
relationships with its vendors, suppliers, customers and other
parties, (ii) make payroll, (iii) pay the costs of the
administration of the Chapter 11 Case and (iv) satisfy other
working capital and general corporate purposes of the Debtor. The
Debtor requires immediate access to sufficient working capital and
liquidity through the sale of its pre- and postpetition accounts
receivable and the other financial accommodations provided for
under the DIP Factoring Facility, and the continued use of cash
collateral, in order to avoid irreparable harm by, among other
things, preserving and maintaining the going concern value of the
Debtor's business.
On December 16, 2019, the Debtor entered into secured financing
arrangements with Iron Horse, pursuant to various agreements,
documents and instruments, including, without limitation, (a) the
Credit and Security Agreement, dated as of December 16, 2019, by
and among the Debtor and Iron Horse, and (b) together with all
other agreements, guaranties, documents, notes, instruments and
Uniform Commercial Code filings executed and/or delivered to or for
the benefit of Iron Horse in connection with or related to the Iron
Horse Credit Agreement. Pursuant to the Iron Horse Credit Agreement
and the other Iron Horse Loan Documents, Iron Horse made Advances
and provided other credit and financial accommodations to the
Debtor secured by substantially all of the assets and properties of
the Debtor.
As collateral security for all Obligations, the Debtor granted to
Iron Horse a lien upon all of its right, title and interest in, to
and under all existing and after acquired personal property and
other assets of the Debtor.
As of the Petition Date, the Debtor was indebted to Iron Horse
under the Iron Horse Credit Agreement and Iron Horse Loan
Documents, in respect of outstanding Advances in the aggregate
principal amount of not less than $1,999,429, plus interest accrued
and accruing thereon, together with all costs, fees, termination
fees, fees and expenses.
Prior to the Petition Date, substantially all proceeds of the Iron
Horse Prepetition Collateral derived from the Debtor's business
were, in the ordinary course, collected in a Lock Box with Wells
Fargo, N.A. and an account with BankUnited, Inc. owned by Summar
Financial, LLC, the Debtor's prepetition factor, and, pursuant to
the terms of the Iron Horse Credit Agreement, a Factoring and
Security Agreement between the Debtor and Factor, dated November
22, 2019, and an Intercreditor Agreement, dated December 24, 2019,
by and among, Iron Horse, Prepetition Factor and the Debtor,
Prepetition Factor thereafter deposited the collected funds into
the Lender's Account established pursuant to the Iron Horse Loan
Documents. Funds deposited into the Lender's Account, together with
all proceeds and products of the Iron Horse Prepetition Collateral
and the DIP Collateral, constitute "Cash Collateral" within the
meaning section 363(a) of the Bankruptcy Code.
As adequate protection, Iron Horse is granted valid, binding,
enforceable, non-avoidable and perfected first priority replacement
liens on and security interests in all currently owned and
hereafter acquired assets and properties of Debtor and its estate.
Subject to the DIP Lien Priorities, Iron Horse is granted, pursuant
to sections 507(b) and 361 Bankruptcy Code, an allowed
superpriority administrative expense claim to the extent of any
diminution in the value of the Iron Horse Prepetition Collateral,
including, without limitation, as a result of the use by the Debtor
of any cash collateral following the commencement of the Debtor's
bankruptcy case, having priority over any and all administrative
expenses.
Iron Horse will be paid as follows: (i) Marco is authorized and
directed on the Debtor's behalf to remit to Iron Horse, from the
proceeds payable to the Debtor for the sale of its accounts
receivable the amount of $120,000 from the initial purchase by
Marco of the Debtor's Qualified Accounts as additional cash
adequate protection; and thereafter the Debtor will directly pay
Iron Horse (ii) the amount of $20,000 a week as additional cash
adequate protection, which will be payable on Friday of each week;
and (iii) the Debtor will directly pay Iron Horse the amount of
$20,000 per month as additional cash adequate protection, which
will be payable on Friday of the third week of each month; provided
that, the Debtor and Iron Horse have agreed that the Debtor will be
permitted to cease making cash adequate protection payments at such
time as the Specified Overadvance has been fully repaid and the
Debtor's Eligible Inventory is in formula, as determined by Iron
Horse in its sole discretion, upon reviewing the weekly Borrowing
Base Certificate.
A further cash collateral hearing is scheduled for July 26 at 11
a.m.
A copy of the order and the Debtor's budget from May 23 to June 27,
2022 is available at https://bit.ly/3NaN2v1 from PacerMonitor.com.
The budget provided for total expenses, on weekly basis, as
follows:
$217,524 for the week starting May 23, 2022;
$159,625 for the week starting May 30, 2022;
$208,171 for the week starting June 6, 2022;
$625,708 for the week starting June 13, 2022; and
$372,412 for the week starting June 20, 2022
----------
$6,416,199 Total
About Frozen Foods Partners, LLC
Frozen Foods Partners, LLC is a Delaware limited liability company,
which was established in 2015. Frozen Foods is a consumer products
company engaged in the production, distribution and marketing of
frozen skillet meals under multiple consumer brands. It offers a
diversified portfolio of frozen products including meal kits,
skillet meals, combination of proteins, sauces, pastas and
vegetables, Asian and Mediterranean cuisines, as well as authentic
Latin specialties. Its products offer a quality dining solution for
working families and young adults. Its brands include Gourmet
Dining, Rosetto, La Sabrosa, and Tru Earth, which can presently be
found in many retailers, including Associated Grocers and
SuperValu, as well as private label brands.
Frozen Foods is a privately owned limited liability company.
Genesis Merchant Partners LP and Genesis Merchant Partners II LP
collectively own approximately 72% of the membership equity in
Frozen Foods. Several Class A Preferred members own 28.6% of
Frozen Foods.
Frozen Foods sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-11897) on November 1,
2021. In the petition signed by Jeffrey Lichtenstein as chief
executive officer, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Martin Glenn oversees the case.
Adam P. Wofse, Esq., at LaMonica Herbst and Maniscalco, LLP, is the
Debtor's counsel.
GIRARDI & KEESE: Trustee Says Earrings Bought From Clients' Money
-----------------------------------------------------------------
Ryan Naumann of Radar Online reports that the trustee presiding
over Erika Jayne's husband Tom Girardi's bankruptcy has come out
swinging against the Bravo star in a bombshell new court filing.
As Radar previously reported, Jayne is in the middle of a nasty
battle over a pair of diamond earrings worth $1.4 million. Her
estranged husband purchased the set in 2007 for $750,000 and the
jewelry's value has increased over time.
In 2020, Girardi and his law firm Girardi Keese were both forced
into bankruptcy by creditors who claimed they were owed millions.
Court records revealed over $500 million in claims filed in the
firm's case.
The federal judge presiding over the bankruptcy appointed a trustee
to take over control of Girardi's finances. Recently, the trustee
demanded Jayne hand over the diamond earrings — claiming Girardi
bought them using his client's money.
Specifically, the money Girardi used came was supposed to be
"settlement proceeds" for a group of people who "suffered serious
health issues from their use of the drug Rezulin."
The trustee's plan is to sell off the earrings to the highest
bidder and to use the proceeds to pay creditors.
Jayne objected to the request as RadarOnline.com first reported.
"During our marriage, I believed [Tom Girardi] and [his firm] were
financially successful, extremely wealthy, and made large amounts
of money," she said. Her lawyer argued the statute of limitations
had run out on the claims brought forth by the trustee.
The RHOBH star also revealed the California Franchise Tax Board
(FTB) recently informed her she owes $2.2 million for 2019. She
admitted in court documents, "I do not have the ability to pay the
FTP tax bill. I also do not know if the FTB is claiming any sort of
lien on my assets, which include the diamond earrings."
The earrings are currently in a safety deposit box where they will
stay until the outcome of the case. Jayne's lawyer demanded the
jewelry not be sold off at auction and be returned to Jayne.
Now, the trustee has fired back at Jayne's attempt to keep the
earrings. They said the reality star should not be allowed to "keep
the fruits of her husband's poisonous tree because of the time that
has passed since the crime occurred."
The trustee said Jayne admitted in her declaration that she first
learned of her husband's embezzlement when the issue surfaced in
this case — November 2021.
"At that time, [Jayne] had an obligation to return the earrings to
the Trustee. She did not, and the Trustee was compelled to file her
Motion. [Jayne's] response, because of the passage of time, she
gets to keep the fruit of the embezzlement. Not so," the filing
argued.
The trustee then cited Penal Code §496(a) which states, "every
person who withholds any property from the owner . . . knowing the
property to be stolen.. . . shall be punished by imprisonment in a
county jail for not more than one year, or imprisonment pursuant to
subdivision (h) of Section 1170."
"Her conduct appears to be a new crime," the trustee wrote. "Her
refusal to now turn over the Diamond Earrings is conversion, for
which she can be held accountable in damages. She can also be
civilly liable for the value of the Diamond Earrings, plus
statutory interest and punitive damages, which with prejudgment
interest could easily be $5.4 million."
The potential $5.4 million was broken down as $10% per annum on the
$750k principal which translates to $75k per year for 15 years, or
$1,125,000 for a total of $1,875,000. The trustee said they could
also seek punitive damages of $3.6 million for a grand total of
$5.4 million.
[Jayne] makes much of the fifteen years that passed since Girardi
helped himself to $750,000 from the Rezulin Client Trust Account so
that she could have sparkling earlobes,” the trustee wrote. "But
not once did she argue or present evidence that the beneficiaries
of the Trust, the clients who were deprived of funds needed to pay
for their special needs from the damages sustained from taking the
drug, had any inkling of the embezzlement that took place."
Jayne's lawyer tells Radar, "The trustee for Girardi Keese (GK)
stands in the shoes of the law firm, and inherits GK’s knowledge
of the transaction in 2007, which involved a check written by two
GK partners. The clock began to run in 2007 and all statutes of
limitation have expired. The “new crime” allegation is
meritless."
He added, "As the GK trustee knows, Erika offered to put the
earrings in an escrow pending a final judicial resolution. And
guess what? The GK trustee took us up on that offer and the
earrings are in a safe deposit box to which the GK trustee has the
key, pending a final decision. Not exactly a new crime."
"Once again, everyone piles on Erika, this time for actions of her
ex-husband of 15 years ago about which she had no knowledge
whatsoever. Why aren't the trustees going after Tom Girardi or the
estate of Mr. O’Callahan, the other GK partner who signed the
check in 2007? Putting the blame on Erika, an entertainer without a
law degree who never worked at the law firm, is a diversion tactic.
Why not focus on all the attorneys, accountants, and funders who
were closer to TG and GK’s inside operations?" he asked.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese.
It served clients in California in a variety of legal areas. It
was known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
Telephone: (310) 640-1200
GLATFELTER CORP: Egan-Jones Retains BB Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on May 24, 2022, retained the 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Glatfelter Corporation.
Headquartered in Charlotte, North Carolina, Glatfelter Corporation
manufactures and supplies papers and engineered materials.
GLORIETA PARTNERS: S&P Lowers Housing Rev. Bonds Rating to 'CCC'
----------------------------------------------------------------
S&P Global Ratings lowered its rating to 'CCC' from 'CCC+' on the
Capital Trust Agency, Fla.'s multifamily housing revenue bonds (The
Gardens Apartments Project) series 2015, issued on behalf of the
borrower, Glorieta Partners Ltd. (Glorieta or the company). The
outlook is negative.
"The downgrade and negative outlook are due to damage to the
property from flooding, which led to materially lower revenues and
higher expenses, continued failure to obtain the low-income housing
tax credit (LIHTC) allocation from the Florida Housing Finance
Corp. (FHFC), and a non-payment event of default due to the
project's failure to meet the debt service coverage (DSC) ratio
requirement for fiscal 2021 as outlined in transaction documents,"
said S&P Global Ratings credit analyst Joan Monaghan.
S&P said, "We rate an obligation 'CCC' when we believe it is likely
the issuer will default without an unforeseen positive development
and specific default scenarios are envisioned, including, but not
limited to, a near-term liquidity crisis, violation of financial
covenants, or an issuer is likely to consider a distressed exchange
offer or redemption in the next 12 months. In our view, the
transaction has these credit characteristics."
Challenges for the Gardens Apartments Project continued in fiscal
2021 as the property lost substantial revenues and it incurred very
high expenses related to the June 2020 flooding incident that took
43 units offline and displaced tenants, leading to the reported DSC
of negative 0.50x for the period and resulting in the non-payment
event of default. Management submitted for reimbursement from the
U.S. Department of Housing and Urban Development, which would
partially offset the revenue losses, and the company expects to
receive the funds with the June voucher receipt. Still, financial
performance and the liquidity position of the project is extremely
vulnerable, compounded by the fact that the project has yet to
secure the LIHTC allocation after several years of applications.
S&P views the LIHTC award, and subsequent receipt of capital
contribution receivables from the investor limited partner, as
essential to keeping the limited partner invested in the project
and the long-term financial feasibility of the project.
S&P said, "We have analyzed the project's environmental, social,
and governance risks relative to coverage and liquidity, management
and governance, and market position. We consider the obligor's
governance risk as a negative influence in our credit rating
analysis for the project given the management's poor oversight,
weak track record, and lack of risk-mitigation policies and
strategic plans, leaving the project vulnerable to financial and
operational volatility. Environmental risks are also a credit
weakness in our analysis due to the property's location in a flood
zone, its vulnerability to physical damage from flooding and
hurricanes, and the subsequent influence on the project's financial
performance. Finally, while we consider the health and safety risks
related to the COVID-19 pandemic to be social risks, we find the
overall associated risks less severe for properties that receive a
federal Section 8 subsidy.
"The negative outlook reflects our expectation that the transaction
could experience financial stress to the point that a default is
likely to occur under current business, financial, and economic
conditions."
GOLD STANDARD: June 30 Deadline Set for Panel Questionnaires
------------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy case of Gold Standard Baking,
LLC.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://bit.ly/3u5d1gx and return by email it to
Joseph Cudia -- Joseph.Cudia@usdoj.gov -- at the Office of the
United States Trustee so that it is received no later than 4:00
p.m., on June 30, 2022.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About Gold Standard
Gold Standard Baking, LLC and its affiliates are industrial bakers
specializing in croissants and a variety of other laminated
dough-based sweet goods. The Company's is located in Chicago,
Illinois and, until recently, ran a second bakery in Pleasant
Prairie, Wisconsin.
Gold Standard Baking, LLC, et al., sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10559)
on June 22, 2022.
In the petition filed by John T. Young, Jr. as chief restructuring
officer, Gold Standard Baking estimated assets between $100 million
to $500 million and liabilities between $100 million to $500
million.
Klehr Harrison Harvey Branzburg LLP serves as the Debtors' counsel.
Houlihan Lokey Capital, Inc. is the Debtors' investment banker.
Riveron Consulting, LLC is the Debtors' financial and restructuring
advisor. Omni Agent Solutions acts as the Debtors' notice, claims
and balloting agent.
GOODYEAR TIRE: Egan-Jones Retains BB- Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, retained the 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Goodyear Tire & Rubber Company.
Headquartered in Akron, Ohio, Goodyear Tire & Rubber Company
develops, manufactures, distributes, and sells tires for most
applications.
GPS HOSPITALITY: Fitch Downgrades LongTerm IDR to 'CCC+'
--------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Rating
(IDR) of GPS Hospitality Holding Company LLC to 'CCC+' from
'B-'/Stable. The super-senior revolving credit facility has been
downgraded to 'B+'/'RR1' from 'BB-'/'RR1' and the senior secured
notes to 'CCC+'/'RR4' from 'B-'/'RR4'.
The downgrade follows several quarters of yoy sales declines and
margin contraction due to challenges at the company's primary
brand, Burger King (83% of units), and as the restaurant industry
as a whole adjusts to increased delivery fees as well as labor
availability and commodity cost challenges. Fitch expects weakness
in earnings to result in modestly negative FCF through 2023 though
adequate liquidity should bridge the company to 2024 when Fitch
expects FCF to return to neutral. Fitch-adjusted leverage
(capitalizing leases at 8.0x) could approach 10x in 2022 and
improve to the 8.0x area over time.
KEY RATING DRIVERS
GPS, Burger King Comps Lag: Despite tailwinds from the pandemic
which benefited the quick-serve dining segment as a whole, Burger
King (83% of GPS units) results in the U.S. have been weak. While
Burger King peer McDonald's U.S. same-store sales (SSS) have
trended up in the mid-teens area compared to pre-pandemic levels
over the last several quarters, Burger King's U.S. systemwide SSS
compared to pre-pandemic have been flat to negative since early in
the pandemic as Burger King tried but failed to replicate
McDonald's success with offerings such as the chicken sandwich and
celebrity meals and as the company has struggled to transition from
paper coupons to digital promotions.
Sales at GPS's Burger King locations have lagged that of the
broader Burger King U.S. system over the last several quarters due
to tougher comps as well as staffing challenges and weather
disruptions resulting in LTM (through 1Q22) sales of $630 million,
down 2% yoy and flat to calendar 2019 levels. While Burger King
parent Restaurant Brands Inc. has instituted management and
strategy changes in an attempt to turn around the brand, Fitch
expects it could take at least several more quarters before its
franchisees like GPS can deliver meaningful improvement.
Labor, Commodity, Delivery Costs Weigh on Margins: Fitch-calculated
EBITDA margins dropped from the mid-7% area in 2020 to the mid-6%
area in 2021 due in part to commodity and labor inflation, as well
as pandemic and weather-related costs. Delivery costs have also
weighed on margins given high fees and accelerated consumer
adoption of the service prompted by the pandemic.
The contraction in EBITDA margins has continued into 2022 with 1Q22
margins of around 4.5%, down from around 11.5% yoy as labor and
commodity costs have risen faster than prices given competitive
dynamics. Risks to the top line and a structural shift in costs
have reduced Fitch's confidence in GPS's ability to get EBITDA in
the $60 million range such that adjusted leverage would return
below 7.0x as appropriate for a 'B-' rating.
Moderate Diversity, Reasonable Scale: GPS is a multi-brand
restaurant operator managing a modestly diversified portfolio of
475 franchised restaurants under three leading brands: Burger King
(83% of units), Pizza Hut (13%) and Popeyes (4%) yielding a
relatively balanced mix by daypart with about a third of sales
coming from lunch, 21% each from dinner and snack, with the
remainder evenly split between breakfast and late night.
Fitch views greater scale within a franchisor system as positive
and with nearly 400 Burger King locations, GPS is the third largest
franchisee of the brand in the U.S. Burger King is one of the three
largest hamburger chains both globally and domestically, with
nearly $23.5 billion in systemwide sales in 2021 across over 19,000
restaurants. GPS's scale provides the company with direct access to
management not available to smaller franchisees, which provides the
company with a voice in strategic and operational decisions made by
Burger King through GPS's representations in various franchisee
councils.
QSR Business Model Proves Resilient: The quick-serve restaurant
(QSR) model has proven resilient through economic cycles as
increased spending power provides a tailwind during periods of
strong economic activity while a reputation for value and the
trading down by consumers from more expensive options limit
downside during economic slowdowns. While GPS was established after
the Great Recession, North American SSS at the Burger King brand
were largely flat during the 2008 to 2009 period while SSS for
casual dining and fine dining competitors quickly turned sharply
negative and, in many cases, remained negative through much of the
period illustrating the brand's resilience during economic
downturns.
QSR's, including Burger King, meaningfully outperformed other
restaurant formats during the pandemic as mandated and proactive
dining room closures throughout the industry had less of an impact
on QSRs given a primarily off-premise consumption model and also
due to a low-touch transaction environment facilitated by the
prevalence of drive-thru's and a well-developed digital
infrastructure.
High Leverage, Adequate Liquidity for Now: GPS ended 2021 with
adjusted leverage around 9.0x, up from around 8.0x yoy, and
leverage could approach 10x in 2022 as delivery fees, inflation and
pricing pressure continue to weigh on margins. Considering some
flexibility on capex spend, Fitch believes GPS has adequate
liquidity to fund modest near-term expected cash burn given cash at
1Q22 quarter-end of around $25 million and full access to an
undrawn $70 million revolver (less around $8.4 million in LOC's
outstanding).
Persistent earnings pressure combined with a return to increased
spend on remodels and new builds could, however, raise concerns
about liquidity given a springing 7.5x net leverage covenant when
more than 35% of available capacity ($24.5 million) is being used.
Fitch-calculated FCF has historically been negative and Fitch
expects deferred capex spend and a return to new unit development
could result in neutral to negative FCF going forward.
DERIVATION SUMMARY
GPS's 'CCC+' rating considers its elevated leverage expected to
trend in the high single digits, small scale with EBITDA under $50
million, and near-term negative FCF as well as its moderately
diversified restaurant portfolio across leading U.S. quick-serve
brands.
GPS's rating is below fellow QSR franchisee Sizzling Platter, LLC's
'B-' despite similar scale and diversification, given leverage
expectations for Sizzling Platter in the 6.5x to 7.0x area.
GPS's rating is below retailer Party City Holdco Inc.'s 'B-'
rating. Party City's ratings continue to recognize a weak
pre-pandemic operating trajectory, which resulted in EBITDA
declines during 2018-2019; while Fitch's confidence regarding
competitive positioning has modestly improved, Party City's ability
to stabilize market share longer term remains unknown.
GPS is also a notch below Legends Hospitality Holding Company at
'B-'. Legends' rating reflects the continuing recovery of the
company's financial metrics following severe pandemic-related
disruptions to its business. Fitch expects improving trends for
live events in 2H21 will continue into 2022, with full attendance
at all U.S. facilities supporting a return above pre-pandemic
revenues owing to new business wins.
KEY ASSUMPTIONS
-- Revenue grows around 2.5% to 3% organically largely due to
price increases;
-- EBITDA margins, which declined to around 6.5% in 2021 from
7.5% in 2020, decline further to around 5% in 2022 as cost
inflation outpaces price increases. Margins return to the mid-
6% area in 2023 as inflationary pressures abate, and over 7%
by 2024;
-- GPS burns around $10 million of cash in 2022 given weakness in
EBITDA though FCF burn moderates in 2023 before turning flat.
FCF beyond 2023 is neutral as cash flow is absorbed by
spending on remodels and new builds;
-- Adjusted debt/EBITDA increases towards 10x in 2022 given the
decline in EBITDA and remains elevated, in the high single
digits thereafter.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive trends in SSS and unit growth with a recovery in
EBITDA margins to the high-single digits, resulting in total
adjusted debt/EBITDAR sustained below 7.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Continued margin and/or revenue pressure resulting in
persistently negative FCF and leading to medium-term liquidity
concerns and/or heightened refinancing risk.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
GPS's liquidity at quarter-end 1Q22 totaled around $86 million
including cash of $24.6 million and full access to an undrawn $70
million revolver (net of around $8.5 million in LOC's outstanding)
maturing in 2026. Fitch expects annual cash burn in the $5 million
to $10 million range in 2022 and 2023 as the company minimizes
capex for new builds and remodels before turning flat in 2024.
While Fitch views current liquidity as adequate to fund the
expected cash burn, persistent earnings pressure and/or a return to
increased spend on remodels and new builds could raise concerns
about liquidity given a springing 7.5x net leverage covenant when
more than 35% of available capacity ($24.5 million) is being used.
In addition to the revolver, the company's debt structure includes
$400 million of 7% senior secured notes due 2028. While the
revolver and notes include a first lien on substantially all assets
and equity interests of the company, the revolver benefits from
super-senior status.
Recovery Considerations
The recovery scenario assumes the enterprise value of the company
is maximized from a going-concern basis. Fitch assumes persistent
sales and earnings pressures cause the balance sheet to become
untenable and force a restructuring. Fitch assumes a
post-restructuring going concern EBITDA of around $40 million
assuming the company closes around 20% of its weakest restaurants
which, combined with sales weakness at surviving restaurants,
results in proforma revenue of around $500 million. Fitch assumes
proforma EBITDA margins in the 8% area, in line with peer margins
achieved during steady-state periods and adjusted downwards for a
structural increase in delivery fees.
Fitch applies a 6.0x enterprise value/EBITDA multiple, modestly
below the 6.3x median multiple for food, beverage and consumer
bankruptcy reorganizations Fitch analyzes. The multiple reflects
the company's strong position across the brands it franchises and
those brands strong long-term performance within the QSR segment.
Fitch assumes 20% leakage related to administrative claims, higher
than the 10% leakage Fitch often applies in restructuring scenarios
due to claims and delays that can arise related to franchise
agreements. After deducting the 20% for administrative claims,
GPS's super-senior credit facility is expected to have excellent
recovery prospects (90%-100%) and has been assigned 'B+'/'RR1'
ratings while the first-lien notes are expected to have average
recovery prospects (30%-50%) and have been assigned 'CCC+'/'RR4'
ratings.
ISSUER PROFILE
GPS is a multi-brand restaurant operator managing a modestly
diversified portfolio of 475 franchised restaurants including
Burger King (83% of units), Pizza Hut (13%) and Popeyes (4%) across
the southern U.S., the mid-Atlantic region and Michigan.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING RECOVERY PRIOR
---- ------ -------- -----
GPS FINCO Inc.
senior secured LT CCC+ Downgrade RR4 B-
GPS Hospitality
Holding Company LLC
LT IDR CCC+ Downgrade B-
senior secured LT B+ Downgrade RR1 BB-
senior secured LT CCC+ Downgrade RR4 B-
GREEN PLAINS: Egan-Jones Retains B- Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on May 24, 2022, retained the 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Green Plains Inc. EJR also retains 'B' rating on
commercial paper issued by the Company.
Headquartered in Omaha, Nebraska, Green Plains Inc. owns and
operates ethanol plants located in the Midwest U.S.
HANESBRANDS INC: Egan-Jones Retains B+ Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Hanesbrands, Inc.
Headquartered in Winston-Salem, North Carolina, Hanesbrands, Inc.
manufactures apparels and clothing products.
HARDIN TRUCKING: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Hardin Trucking Co., Inc.
441 S Pontotoc Road
Bruce, MS 38915
Business Description: Hardin Trucking is a full service trucking
company specializing in the transport of raw
wood products.
Chapter 11 Petition Date: June 24, 2022
Court: United States Bankruptcy Court
Northern District of Mississippi
Case No.: 22-11453
Debtor's Counsel: Craig M. Geno, Esq.
LAW OFFICES OF CRAIG M. GENO, PLLC
587 Highland Colony Parkway
Ridgeland, MS 39157
Tel: 601-427-0048
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Harvey L. Hardin, vice president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/NCUV7NQ/Hardin_Trucking_Co_Inc__msnbke-22-11453__0001.0.pdf?mcid=tGE4TAMA
HOLY REDEEMER: Fitch Affirms 'BB+' IDR, Outlook Stable
------------------------------------------------------
Fitch Ratings has affirmed Holy Redeemer Health System's (AKA
Redeemer Health or RH) 'BB+' Issuer Default Rating (IDR) and 'BB+ '
rating on the revenue bond issued by Montgomery County Higher
Education & Health Authority on behalf of RH.
The Rating Outlook is Stable.
SECURITY
Debt payments are secured by a pledge of the gross receipts of the
obligated group, a mortgage on Holy Redeemer Hospital and Medical
Center (HRHMC) and a debt service reserve fund.
ANALYTICAL CONCLUSION
The 'BB+' ratings reflects RH's history of weak operating
performance with losses accelerating through the third quarter of
fiscal 2022 (ended March 31), driven by continued pressures related
to the pandemic and escalating operating expenses. Fitch expects
operating results will remain pressured over the near term due to
the lingering effects of the pandemic, particularly in the
long-term care division, and continued competitive pressures in
RH's service area. The rating is bolstered by RH's sound liquidity
that provides some flexibility as RH manages through current
headwinds in the sector. Liquidity has diminished recently due to
high operating losses, but Fitch expects key metrics will remain
adequate for the rating category, as there no plans for additional
debt or major capitals projects.
RH recently announced it is seeking a strategic partnership to help
alleviate some pressure related to staff retention and recruitment
and to provide capital support. Management has indicated that this
partnership is not intended to be a merger or acquisition and will
not include its population health services, long-term care or
homecare/hospice divisions. Fitch has not factored the potential
for a partnership into the rating, given RH is in an early phase of
this process and the ultimate structure has not been determined.
However, given RH's weak operating performance and location in a
very competitive service area, Fitch view's management's decision
to seek a partner favorably.
KEY RATING DRIVERS
Revenue Defensibility: 'bb'
Competitive Market; Solid Payor Mix
RH's payor mix has moderate concentration of Medicaid and self-pay,
accounting for just over 20% of gross revenue in fiscal 2021. The
payor mix is partially a reflection of RH's location in Montgomery
County, which has favorable demographics. Redeemer Health also
benefits somewhat from its diversified revenue stream, which
comprises the entire spectrum of inpatient and outpatient services,
including acute care, long-term care, residential care/services and
home health and hospice care in Pennsylvania and New Jersey. This
offsets some of the revenue defensibility challenges originating
from RH's position as a smaller, independent provider with limited
leverage in a highly competitive region of southeastern
Pennsylvania which includes several large and well-capitalized
health systems. RH's modest 11% market share (hospital only) has
been relatively stable over the past three years.
Operating Risk: 'bb'
Ongoing Operating Pressure
RH's operating risk profile assessment is considered 'weak' based
on the system's persistent operating losses and Fitch's expectation
that operating EBITDA is likely to remain below 4% for the
foreseeable future. Through the nine-month interim period ended
March 31, RH reported a $23 million operating loss and negative
0.8% operating EBITDA margin. As with most in the sector, RH is
experiencing escalating pressure on expenses related to staffing
shortages, supply chain issues and inflation. These pressures
mounted in fiscal 2022, as RH also faced the Omicron variant surge
at the end of calendar-year 2021. Management does not expect that
losses will worsen through year end and also expects that some
year-end adjustments will help reduce losses. Management does not
expect RH to violate its debt service coverage ratio in 2022. Fitch
expects that RH will continue to face operating pressure, as
staffing, supply and reimbursement pressures are expected to affect
the sector beyond fiscal 2022. This is in addition to existing
challenges related to its position as a small independent health
system in a very competitive and consolidated Philadelphia market.
Deferred capital needs are expected to grow if the system does not
find a partner, as RH is not expected to have excess cash flow
available for significant strategic investments. Capital spending
is expected to be low in fiscal 2022 due to ongoing cash
preservation measures, However, prior to the pandemic, spending was
in excess of deprecation, averaging 114% over the last five years.
Continued lower levels of capital spending are a concern, as it
could result in a competitive disadvantage for the system.
Financial Profile: 'bb'
Leverage Metrics Affected by Increased Operating Losses
RH's unrestricted reserves totaled $190 million equal to 161 days'
cash on hand and 135% of cash to adjusted-to-debt as of March 31,
2022, which is down from $221 million at fiscal YE 2021. Management
attributes the lower cash to investment market volatility and
increased operating losses. RH has some exposure to a frozen
defined benefit (DB) pension plan. The DB plan was frozen on Dec.
31, 2017 and was 71% funded at fiscal YE 2021, relative to a
projected benefit obligation of $168 million. Fitch includes the
portion of the pension that is funded below 80% when calculating
RH's total adjusted debt. This translates into a debt equivalent of
$15 million as of fiscal YE 2021.
Fitch's forward look reflects the expectation RHS will continue to
generate operating losses, which would result in flat to declining
leverage, even with capital spending expected to remain below
depreciation. RH's net adjusted debt-to-adjusted EBITDA remains
favorably negative, and cash-to-adjusted debt remains slightly
above 100%. This scenario does not include the potential
partnership, which Fitch believes could be favorable to RH's
overall financial profile.
Asymmetric Additional Risk Considerations
There are no asymmetric additional risk considerations affecting
the IDR and revenue bond rating determinations.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Sustained operating EBITDA margins close to or above 7% that
leads to an improved operating risk assessment;
-- A sustainable increase in unrestricted cash and investments
that leads to cash-to-adjusted debt being maintained at well
above 120%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Continuation of the current operating trend without any
reduction in operating losses;
-- Material decline in unrestricted reserves, with cash-to-
adjusted debt declining below 100%.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance
and Infrastructure issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of three notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
RH's obligated group consists of HRHMC, a 239 licensed-bed (163
staffed) acute care hospital in Meadowbrook, PA, approximately 20
miles from downtown Philadelphia; St. Joseph Manor, a 63-unit
assisted living (AL) facility and a 296-bed skilled nursing
facility (SNF); Lafayette Redeemer, a Type C (fee for service)
continuing care retirement community (CCRC), with 240 independent
living units (ILUs), 56 AL beds and 120 SNF beds; hospice and home
care operations in Pennsylvania; and HR Physician Services. The
obligated group represents approximately 79% of total system
revenues and 78% of total system assets, with the acute care
hospital representing 43% the system's revenues. The consolidated
system includes a number of non-obligated entities, including home
care agencies and senior living facilities. In fiscal 2021, the
consolidated system had $445.8 million of total revenues.
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING PRIOR
---- ------ -----
Holy Redeemer LT IDR BB+ Affirmed BB+
Health System (PA)
Holy Redeemer LT BB+ Affirmed BB+
Health System (PA) /
General Revenues/1 LT
HUCKLEBERRY PARTNERS: May Use Cash Collateral Thru Aug. 2
---------------------------------------------------------
Huckleberry Partners, LLC sought and obtained authority from the
U.S. Bankruptcy Court for the Middle District of Florida, Orlando
Division, to use the cash collateral of Emerald Creek Capital 3,
LLC, on an interim basis, and provide adequate protection.
The Debtor may access cash collateral through August 2, 2022. The
Court will hold another hearing that day at 1:30 p.m. to consider
the Debtor's continued access to cash collateral.
The Debtor requires the use of cash collateral to fund ordinary
business operations and necessary expenses in accordance with the
cash budget. The Debtor sought expedited consideration of its
request, arguing that its business operations and reorganization
efforts will suffer immediate and irreparable harm if the Debtor is
not permitted to use cash collateral.
The cash collateral is comprised of cash on hand and funds to be
received during normal operations which may be encumbered by liens
of secured creditor Emerald Creek Capital 3, LLC. As of the
Petition Date, the Debtor's cash on hand was approximately
$68,089.
The Debtor requires the use of approximately $40,301 of cash
collateral to continue operating its business for the next six
weeks, and, depending on the circumstances, a greater or lesser
amount will be required each comparable period thereafter. The
Debtor will use the cash collateral to pay its mortgage, sales
taxes, utilities and management fees, along with other ordinary
course expenses to maintain its business.
As adequate protection for the use of cash collateral, the Debtor
proposes to grant Emerald a replacement lien on its post-petition
cash collateral to the same extent, priority, and validity as its
pre-petition lien. The Debtor will also maintain all liability and
property insurance and will not pay any insider compensation if
ordinary course non-insider expenses have not been paid. The Debtor
will also continue to pay the ordinary mortgage payment during the
interim period.
As demonstrated by its Budget, the Debtor will operate on a
positive cash flow basis during the interim six-week period and
asserts all interests on cash collateral are adequately protected
by replacement liens and the other protections.
A copy of the motion is available at https://bit.ly/3QA8UTz from
PacerMonitor.com.
About Huckleberry Partners
Huckleberry Partners LLC owns and operates a shopping center called
Waterford Commons, which is located at 12789 Waterford Lakes
Parkway, Orlando, Florida. Huckleberry Partners is a
member-managed company -- the only member with decision making
authority is Henry James Herborn, III.
Huckleberry Partners sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-02159). In the
petition filed by Henry James Herborn, Ill, as managing member, the
Debtor estimated assets and liabilities between $1 million and $10
million each. Justin M Luna, of Latham, Luna, Eden & Beaudine,
LLP, is the Debtor's counsel.
The Debtor's Chapter 11 Plan and Disclosure Statement are due by
Oct. 17, 2022.
INDIANA FINANCE: Moody's Rates Series 2022A/B Revenue Bonds 'Ba3'
-----------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 ratings to the Indiana
Finance Authority's Educational Facilities Revenue Bonds, Series
2022A (Indiana Math and Science Academy - North Indianapolis Inc.
Project) and Taxable Educational Facilities Revenue Bonds, Series
2022B (Indiana Math and Science Academy - North Indianapolis Inc.
Project). The bonds have an expected par value of $12.7 million and
$285,000, respectively. The outlook is stable.
RATINGS RATIONALE
The Ba3 rating assignment reflects the Indiana Math and Science
Academy - North's (IMSA) generally stable enrollment and likelihood
of moderate growth. The rating also reflects IMSA's broad
Indianapolis service area which includes strong competition from a
large number of traditional public and charter school options.
The school's demonstrated ability to manage competition will be
challenged by historically poor academic performance that has
recently improved from very low levels and is showing some
indications of weakening as a result of COVID-driven learning loss.
The short-term impact of learning loss appears limited, as both the
state and the authorizer have shown leniency in recognition of the
effects of the pandemic, and as of a mid-cycle charter review, the
school remains in good standing with its authorizer. As a result,
charter renewal is expected in 2024. The credit profile benefits
from an established history of charter renewal and has solid
prospects for additional renewal.
The financial performance of IMSA shows currently satisfactory
liquidity, coverage and stable operations. These factors will be
challenged by a material increase in debt resulting from the
current issue. The rating is also reflective of the structure of
the bonds, in which $12 million of debt service will be due after
10 years. As a result, the district will be heavily reliant on
market access to rollover the bonds prior to maturity. The rating
also considers IMSA's adequate legal covenants and governance,
which is a key driver for all initial ratings and is a key
component to managing the charter renewal process.
RATING OUTLOOK
The stable outlook reflects Moody's expectation that IMSA will
avoid material enrollment declines and effectively manage the
charter renewal process. The outlook also anticipates that cash and
coverage will remain in line with the rating and that the
renovation project will be completed on time and foster some
additional enrollment growth.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Sustained operating surpluses that result in material
improvement to liquidity and coverage
-- Steady and material enrollment growth
-- Consistent improvement to academic outcomes and
stronger competitive profile
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Operating deficits that drive declines to debt
service coverage and liquidity
-- Deterioration of academic performance resulting
in pressure on charter renewal
-- Enrollment declines
LEGAL SECURITY
The bonds are issued by the Indiana Finance Authority but are not a
debt, liability or general obligation of the IFA.
The bonds will be payable and secured by the Trust Estate, which
consists of gross revenues and amounts derived from recourse to the
mortgage including land.
USE OF PROCEEDS
Proceeds of the sale will be used to acquire IMSA's currently
leased facility and finance a renovation project that will add ten
classrooms and other facilities totaling approximately 14,000
additional square feet to the existing 80,000 square feet of
space.
PROFILE
Indiana Math and Science Academy - North was incorporated in 2008
and opened in 2010-11. The school opened as a K-8 facility and then
added one grade per year until it reached grades K-12 in 2014-15.
IMSA operates pursuant to charter authorized by the Mayor's office
of Indianapolis. The charter was initially granted for a period of
seven years in 2010 and has since been renewed once with current
expiration date of June 30, 2024. Current enrollment is
approximately 677 students.
METHODOLOGY
The principal methodology used in these ratings was US Charter
Schools published in September 2016.
IRONSIDE LLC: July 21 Plan & Disclosure Hearing Set
---------------------------------------------------
On June 20, 2022, Liquidating debtors Ironside LLC and Ironside
Lubricants LLC filed with the U.S. Bankruptcy Court for the
Southern District of Texas a Combined Chapter 11 Plan of
Liquidation and Disclosure Statement.
On June 21, 2022, Judge Eduardo Rodriguez conditionally approved
the Disclosure Statement and ordered that:
* July 14, 2022 is the deadline for filing and serving written
objections to confirmation of the Plan.
* July 18, 2022 is the deadline for filing ballots accepting
or rejecting the Plan.
* July 21, 2022 11:00 a.m. at the United States Bankruptcy
Court, Bob Casey Federal Building, Courtroom #402, 515 Rusk,
Houston Texas, 77002 is fixed for the hearing on confirmation of
the Plan and final approval of the Disclosure Statement.
A copy of the order dated June 21, 2022, is available at
https://bit.ly/3nm0em0 from PacerMonitor.com at no charge.
About Ironside LLC
Ironside, LLC -- https://ironsidemfg.com/ -- designs and builds a
line of thru-tubing mud motors and other components for the
oilfield industry. Its products include bearings, transmissions,
components, motors, agitator, and dual flapper valve.
Ironside, LLC and its affiliate, Ironside Lubricants, LLC, filed
voluntary petitions for relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Lead Case No. 20-34222) on Aug.
20, 2020. Randy Riney, managing member, signed the petitions.
At the time of the filing, Ironside, LLC disclosed estimated assets
of $1 million to $10 million and estimated liabilities of $500,000
to $1 million. Judge Eduardo V. Rodriguez oversees the cases.
Pendergraft & Simon, LLP, serves as the Debtors' legal counsel.
ISTAR INC: Fitch Affirms 'BB' LongTerm IDRs, Outlook Stable
-----------------------------------------------------------
Fitch Ratings has affirmed iStar Inc.'s Long-Term Issuer Default
Rating (IDR) at 'BB'. Fitch has also affirmed iStar's unsecured
debt rating at 'BB+' and preferred stock rating at 'B'. The Rating
Outlook is Stable.
KEY RATING DRIVERS
The affirmation of iStar's ratings reflect its unique platform
relative to other commercial real estate (CRE) finance and
investment companies, as well as its improving asset quality, low
leverage, fully unsecured funding profile, demonstrated access to
the debt markets and solid liquidity profile. The ratings are
supported by continued improvement in the firm's risk profile,
given the monetization of legacy assets.
Rating constraints include long-term strategic uncertainty; iStar's
focus on the CRE market, which exhibits volatility through the
credit cycle; and the still challenging environment for certain CRE
property types, which Fitch believes could result in weaker asset
quality and earnings over the medium term. Other rating constraints
include multiple shifts in the firm's strategy over time;
continued, albeit declining, exposure to land and other legacy
noncore assets; and key person risk associated with CEO Jay
Sugarman. Additionally, iStar's performance will be highly
dependent upon continued growth at Safehold, Inc. (SAFE;
BBB+/Stable), which has a relatively limited track record, and
accounted for an increased proportion of total assets following the
sale of the net lease portfolio.
In February 2022, iStar announced it had entered into a definitive
agreement to sell its portfolio of net lease assets for $3.07
billion to The Carlyle Group Inc. (BBB+/Positive), resulting in net
cash proceeds of about $1.2 billion. Fitch expects these proceeds
will be deployed over time into leasehold loans, transitional
ground leases, equity investments in SAFE and share repurchases.
Fitch believes this portfolio shift creates additional strategic
linkage with SAFE, although it remains unclear how the relationship
will evolve. Fitch believes this strategic and structural
uncertainly limits iStar's positive rating momentum.
iStar's current focus is to seek investment opportunities that
target the origination and acquisition of predevelopment phase
ground leases (Ground Lease Plus) and leasehold loans made in
conjunction with a SAFE ground lease. At 1Q22, the company had a
total of seven assets split between Ground Lease Plus ($93 million)
and leasehold loans ($5 million). Fitch believes there is
uncertainty regarding the scalability of these business lines, and
whether they can contribute to a more consistent earnings profile
for iStar, particularly with the sale of the net lease book and the
continued exit from legacy assets. iStar had one legacy NPL
remaining in its portfolio at 1Q22 — a $59.6 million senior
mortgage. Excluding legacy NPLs, credit performance has been solid
since the onset of the pandemic, with strong rent and interest
collection trends. Still, Fitch believes asset quality metrics
could face pressure in the medium term, given iStar's exposure to
entertainment/leisure and hotels.
Fitch's benchmark leverage ratio for iStar is debt-to-tangible
equity, with 50% equity credit afforded to the preferred
securities. On this basis, leverage was 1.4x at March 31, 2022,
which is down from 3.0x at YE 2021 and 4.6x at YE 2020. The
decrease was largely driven by the retirement of secured debt
associated with the sale of the net lease portfolio. Pro forma
leverage is 1.7x when accounting for the full impact of
distributions and other activity related to the net lease
transaction, which were not completed by quarter-end. Fitch expects
leverage will increase as capital is redeployed, but still remain
below Fitch-calculated leverage of 5.0x.
At March 31, 2022, 100% of iStar's outstanding debt was unsecured,
unlike many similarly rated balance sheet-intensive finance and
leasing companies. Fitch believes unsecured debt enhances the
company's operational and financial flexibility, and expects
unsecured debt to continue to account for the majority of iStar's
funding.
At March 31, 2022, iStar had $1.5 billion of unrestricted cash and
$350 million of undrawn capacity on its revolving credit facility.
Cash balances are expected to decline as proceeds from the net
lease portfolio sale are redeployed into leasehold loans and
transitional ground leases. The firm's next debt maturity is in
September 2022, when approximately $93 million of convertible notes
come due. Fitch expects iStar to refinance these loans with some
combination of opportunistic issuance, availability on the credit
facilities and/or balance sheet cash.
iStar's management team has sufficient industry experience, but
Fitch believes CEO Jay Sugarman leads to key person risk. In
February 2022, iStar announced that Brett Asnas was promoted to CFO
after 12 years with the company. Fitch views the appointment of a
long-tenured iStar employee favorably, given the role's turnover in
recent years.
The Stable Outlook reflects Fitch's view that iStar's stable NPL,
financial flexibility and experienced management team are
appropriate for the rating. Additionally, Fitch believes the
company will maintain sufficient liquidity and manage the debt
maturity profile accordingly.
The company's unsecured debt rating is one notch above iStar's
Long-Term IDR and reflects the availability of sufficient
unencumbered assets, which provide support to unsecured creditors,
and the lack of secured debt in the firm's funding profile. This
profile indicates good recovery prospects for unsecured debtholders
under a stressed scenario. In addition, iStar adheres to a 1.3x
unencumbered assets-to-unsecured debt covenant, which provides
protection to bondholders during periods of market stress.
HYRBID CAPITAL
The preferred stock rating is three notches below iStar's Long-Term
IDR, reflecting deeply subordinated securities with loss absorption
elements that would likely lead to low recovery prospects.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade:
Strategic clarity around the long-term ownership in and
relationship with SAFE, demonstrated solid credit performance in
the challenging environment, continued execution on efforts to
further reduce exposure to legacy assets and the redeployment of
proceeds in assets viewed as core, thereby resulting in improved
operating performance and a reduced reliance on gain on sale income
would be positive for the ratings. An upgrade would also depend on
continued growth and solid performance in the SAFE business, the
maintenance of sufficient liquidity, adequate capitalization for
the portfolio's risk profile and continued management of the
company's debt maturities. Sustained Fitch-calculated leverage
below 4.0x could result in positive rating action.
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade:
An inability to generate consistent operating performance from
failing to execute on growth in the leasehold loan and ground lease
businesses; a material weakening in asset quality, weaker
performance at SAFE, and/or a sustained increase in
Fitch-calculated leverage above 5.0x could lead to negative rating
action.
The unsecured debt rating and preferred stock ratings are sensitive
to changes in iStar's Long-Term IDR, as well as changes in the
firm's secured and unsecured funding mix and collateral coverage
for each class of debt. If unencumbered asset coverage of unsecured
debt were to decline, it is possible that the upward notching for
the unsecured debt, relative to the IDR, could begin to compress.
Additionally, as the IDR approaches investment-grade, Fitch would
expect more compression in the unsecured notching.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Financial Institutions and
Covered Bond issuers have a best-case rating upgrade scenario
(defined as the 99th percentile of rating transitions, measured in
a positive direction) of three notches over a three-year rating
horizon; and a worst-case rating downgrade scenario (defined as the
99th percentile of rating transitions, measured in a negative
direction) of four notches over three years. The complete span of
best- and worst-case scenario credit ratings for all rating
categories ranges from 'AAA' to 'D'. Best- and worst-case scenario
credit ratings are based on historical performance.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING PRIOR
---- ------ -----
iStar Inc. LT IDR BB Affirmed BB
senior unsecured LT BB+ Affirmed BB+
preferred LT B Affirmed B
JSG II: Moody's Affirms 'Caa1' CFR & Alters Outlook to Stable
-------------------------------------------------------------
Moody's Investors Service has changed the outlook for JSG II, Inc.
(dba Justrite Safety Group, "Justrite") to stable from negative and
affirmed the Caa1 Corporate Family Rating. Simultaneously, Moody's
affirmed Justrite's Caa1-PD probability of default rating and B3
senior secured bank credit facility ratings.
The revision of the outlook to stable from negative reflects the
improvement in leverage driven by a solid rebound in operating
performance from COVID-19 lows in 2020. Further, Moody's expects
that the positive momentum will continue into 2023, driven by a
combination of volume growth, price increases and expense
management strategies in the current inflationary environment.
While liquidity remains adequate, working capital investments and
rising interest expense will limit free cash flow.
Affirmations:
Issuer: JSG II, Inc.
Corporate Family Rating, Affirmed Caa1
Probability of Default Rating, Affirmed Caa1-PD
Senior Secured Bank Credit Facility, Affirmed B3 (LGD3)
Outlook Actions:
Issuer: JSG II, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Justrite's Caa1 CFR reflects high financial leverage, measured by
Moody's adjusted Debt/EBITDA, of 7.9x through the first quarter of
2022 and its modest scale. Justrite operates in a competitive and
fragmented market alongside other brands and private label products
providing industrial safety solutions. Justrite's aftermarket
revenue is limited and replacement of safety equipment, while not
discretionary, can be delayed if there are fewer workers in plants
– such as in times of the pandemic or economic weakness. Moody's
expects financial policies will remain aggressive under private
equity ownership though no transformative acquisitions or debt
funded dividends are expected.
Despite the high leverage, Moody's expects Justrite to continue to
delever to below 7.5x by year end 2022 from a high of above 14.0x
in 2020. While some pent-up demand exists, the improvement in
leverage will continue to be supported by a durable rebound in
customer demand following COVID-19 induced lows as customers
re-open facilities. Justrite's brands are well recognized and
benefit from global safety standards specific to different
countries that drive demand. The company also benefits from a
diverse customer and vendor base with relatively reliable demand
for its products that operate on a modest lifecycle (3 to 7 years
on average) but are viewed as non-discretionary to maintain safety
standards and avoid regulatory penalties.
Justrite's liquidity is adequate. Moody's expects the company to
cover cash requirements over the near term without additional draws
on its revolver. There is currently $23 million available on the
revolver. However, given Justrite's variable rate debt structure
and rising interest rates and high working capital investments,
Moody's expects breakeven to moderately negative free cash flow.
The stable outlook reflects Moody's view that the momentum
generated from recent strong operating results will continue. As a
result, Moody's expects leverage to decline to below 7.5x by year
end 2022 but remain high. Moody's expects breakeven to moderately
negative free cash flow driven by elevated commodity prices and
interest expense. Moody's also expects Justrite will continue to
pursue tuck-in acquisitions to supplement product offerings.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company reduces Debt/EBITDA
below 7.0x, maintains interest coverage (EBITDA less
Capex/Interest) of at least 1.5x and generates positive free cash
flow.
Alternatively, the ratings could be downgraded if Debt/EBITDA rises
above 8.0 times, interest coverage declines to 1.0 time, or the
company's liquidity deteriorates for any reason including weak or
negative free cash flow.
Headquartered in Deerfield, IL, JSG II, Inc. (dba Justrite Safety
Group) is a leading global manufacturer and supplier of
non-personal protective equipment ("Non-PPE") safety solutions for
industrial and compliance-oriented end markets. Justrite is private
and does not publicly disclose its financials. The company has been
majority owned by Audax Group since 2015. The company generated
$497 million during the last twelve months ending April 2, 2022.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
KEYWAY APARTMENT: Files for Chapter 11 With $4.25M in Debt
----------------------------------------------------------
Keyway Apartment Rentals, LLC, filed for chapter 11 protection in
the District of Maryland.
The Debtor disclosed $6.653 million in assets against $4.252
million in its schedules. The Debtor owns apartment buildings at
113 Kinship Road, 122 Kinship road, and 123 Willow Spring Road in
Dundalk, Maryland. The apartments are valued at $6.5 million and
secures a $4.153 million debt to Wells Fargo Commercial Mortgage
Trust.
The petition states funds will be available to Unsecured
Creditors.
The Debtor's Chapter 11 Plan filing exclusivity expires Oct. 19,
2022.
About Keyway Apartment Rentals
Keyway Apartment Rentals, LLC, is a Single Asset Real Estate (as
defined in 11 U.S.C. Sec. 101(51B)).
Keyway Apartment Rentals sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Md. Case No. 22-13389) on June 22,
2022. In the petition filed by George Divel, III, as managing
member, the Debtor estimated assets and liabilities between $1
million and $10 million. Joseph Michael Selba, of Tydings &
Rosenberg LLP, is the Debtor's counsel.
KINSEY & KINSEY: Seeks Cash Collateral Access Thru July 12
----------------------------------------------------------
Kinsey & Kinsey, Inc. asks the U.S. Bankruptcy Court for the
Northern District of Illinois, Eastern Division, for authority to
use cash collateral on an interim basis in accordance with the
budget and provide adequate protection through July 12, 2022.
As of the Petition Date, Byline Bank is owed not less than
$274,000, plus fees and costs from the Debtor.
The Byline Indebtedness arises from a loan the bank made to the
Debtor as evidenced by, among other things, a Promissory Note dated
December 28, 2021 in the principal amount of $750,000.
The Byline Indebtedness is secured by (a) a Commercial Security
Agreement dated November 13, 2020, which grants Byline a lien on
all of the Debtor's assets, including but not limited all
inventory, equipment and accounts of the Debtor; and (b) a
financing statement filed with the Illinois Secretary of State on
August 19, 2011, by First Bank & Trust which was continued on July
12, 2016 and March 15, 2021.
The Small Business Administration and the Debtor stipulate that as
of the Petition Date, the Debtor it owed the SBA approximately
$200,000. The SBA Indebtedness arises from loans made by the SBA to
the Debtor as evidenced by the (a) Loan Authorization and Agreement
(LA&A), (b) Note dated March 31, 2022, and (c) Security Agreement
Group Exhibit 2.
Bellin Memorial Hospital holds a judgement entered against the
Debtor and in favor of Bellin in the amount of $786,749. The Debtor
disputes its liability to Bellin. Bellin holds what the Debtor
believes to be a citation lien upon all of the Debtor's assets to
secure its claim against the Debtor. Bellin's citation lien arose
from its service of a Citation to Discover Assets upon the Debtor
on March 21, 2022, which is the 87th day prior to the Petition
Date.
As of the Petition Date, the Debtor's assets were worth
approximately $851,664.
If the Debtor is allowed to use its cash and the proceeds of its
accounts receivable collections for the weeks ending on June 222,
June 28, July 5 and July 12, 2022:
(a) the Debtor is expected to a net aggregate profit during
this period of $155,674, and
(b) the aggregate value of its cash and accounts collateral
will also increase.
A hearing on the matter is scheduled for June 23, 2022, at 10 a.m.
A copy of the motion is available at https://bit.ly/3biemtN from
PacerMonitor.com.
About Kinsey & Kinsey, Inc.
Kinsey & Kinsey, Inc. provides a broad range of expertise in the
areas of financials, procurement, human resources, payroll,
budgeting, planning, distribution, manufacturing and more. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ill. Case No. 22-06775) on June 16, 2022. In the
petition filed by Bradley J. Kinsey, vice-president, the Debtor
disclosed $851,664 in assets and $1,396,477 in liabilities.
Judge Carol A. Doyle oversees the case.
Chester H. Foster, Jr., Esq., at Foster Legal Services, PLLC is the
Debtor's counsel.
KOPPERS INC: Moody's Rates $800MM Revolver Credit Facility 'Ba3'
----------------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to Koppers
Inc.'s $800 million senior secured revolving credit facility due
2027. Moody's also affirmed Koppers Holdings Inc.'s (Koppers) Ba3
Corporate Family Rating, Ba3-PD Probability of Default Rating and
B1 rating on the 6% senior unsecured notes due 2025 issued by
Koppers Inc. The Speculative Grade Liquidity Rating (SGL) remains
unchanged at SGL-2. The outlook is stable.
The assigned ratings are subject to transaction completing as
proposed and review of final documentation.
"The refinancing of the revolver will allow Koppers to extend its
maturity profile, improve liquidity and manage operations," said
Domenick R. Fumai, Moody's Vice President and lead analyst for
Koppers Holdings Inc.
Ratings Assigned:
Issuer: Koppers Inc.
Gtd Senior Secured 1st Lien Revolving Credit Facility, Assigned
Ba3 (LGD3)
Ratings Affirmed:
Issuer: Koppers Holdings Inc.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Issuer: Koppers Inc.
Gtd Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD5)
Outlook Actions:
Issuer: Koppers Holdings Inc.
Outlook, Remains Stable
Issuer: Koppers Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The ratings affirmation of Koppers reflects Moody's expectations
for continued solid performance in its three main business
segments, relatively stable credit metrics appropriate for the Ba3
CFR and for the company's capital allocation policy to remain
fairly balanced between growth initiatives and returning cash to
shareholders.
Moody's expects Koppers' operating performance to continue
benefitting from favorable trends. In Performance Chemicals, repair
and remodeling activity and new home construction should remain
fairly healthy and Carbon Material & Chemcials (CMC) end markets,
including aluminum, continue to be strong despite raw material
price inflation and higher transportation costs. Railroad and
Utility Products Services (RUPS) has been challenged by limited
crosstie supply due to sawmills curtailing production during the
pandemic that led to significant prices increases thereby causing
Class I railroads to defer purchases. Moody's expects gradual
improvement in crosstie replacement volume during 2022; however,
demand should remain below prior years. The outlook for the utility
pole business is also expected to be flat to slightly higher.
Moody's forecasts Koppers' sales will increase to approximately
$1.8 billion and generate around $230 to $235 million in EBITDA in
FY 2022, with further growth evidenced in FY 2023 as sales and
EBITDA increase to $1.9 billion and about $240 million,
respectively. As a result of raw material price inflation and
higher logistics costs, EBITDA margins are expected to contract in
FY 2022 and hold relatively flat in FY 2023 despite some pressure
from copper hedges rolling off in 2022. Moody's does not expect any
significant debt reduction following the repayment of about $125
million in gross debt in 2020. Koppers' financial leverage
(Debt/EBITDA) of 3.9x in FY 2022, including standard adjustments to
debt of about $140 million for pensions and operating leases, is
estimated to be slightly higher than 3.7x in FY 2021 but gradually
approach mid-3x by 2024. Moody's anticipates retained cash
flow-to-debt to remain in the mid-to-upper teens over the next
several years, which is appropriate for the rating.
Koppers Ba3 rating reflects the relatively steading earnings
generated by the Railroad and Utility Products and Services (RUPS)
segment, which benefits from a significant portion of sales under
long-term contracts. Koppers rating is further underpinned by its
leading positions in the North American wood railroad crosstie and
wood-treating chemicals industries. The rating also reflects the
benefits of operational restructuring and solid retained cash flow
generation. Koppers has taken steps over the past several years to
improve the inherent stability and profitability of its business by
consolidating its operational footprint and shifting focus towards
higher margin businesses like wood preservation chemicals.
The rating is tempered Koppers' narrow business focus in the wood
preservation industry. Moreover, many of its end markets have
modest organic growth prospects given their mature nature and has
resulted in a strategy that requires acquisitions to augment
organic growth. In the past, acquisitions have caused credit
metrics to exceed Moody's threshold for the rating. The rating also
factors the company's environmental liabilities that, although
currently manageable, could adversely affect its financial
condition in the long run. In addition, significant customer
concentration with the company's top 10 customers representing
roughly 38% of FY 2021 sales is another offsetting factor as the
loss of a key customer could have material impact on profitability.
Koppers' rating is constrained by raw material price fluctuations
and exposure to cyclical end markets including construction,
aluminum, steel and tires.
LIQUIDITY
The SGL-2 Speculative Grade Liquidity Rating (SGL) indicates good
current liquidity to support operations in the near-term with cash
of $47 million and will have pro forma availability of about $328
million as of March 31, 2022. The proposed revolving credit
facility is expected to have a total leverage ratio covenant, net
of cash up to $125 million, of 5.00x, stepping down to 4.75x after
six quarters and 4.50x after eight subsequent quarters and a
minimum interest coverage ratio covenant of 2.0x. Moody's expects
the company to be in compliance over the next 12 months.
The stable outlook assumes that Koppers maintains relatively flat
debt levels and that demand in key end markets remains sufficient
so earnings and cash flows will continue to support credit metrics
appropriate for the rating.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's would likely consider a downgrade if Debt/EBITDA is
sustained above 4.0x, retained cash flow-to-debt (RCF/Debt) to debt
is sustained below 12%, the company adopts a more aggressive
financial policy, including a large debt-financed acquisition or
significant increase in debt to finance shareholder returns.
Moody's does not view an upgrade as likely over the next 12-18
months given expectations for modest improvements in credit
metrics, but would consider an upgrade if financial leverage,
including Moody's standard adjustments, is sustained below 3.0x,
retained cash flow-to-debt consistently in excess of 20% and
the company maintains solid liquidity to cover operating
activities and growth initiatives. An upgrade would also be
contingent upon no material change in estimates for environmental
remediation or liabilities and further progress towards resolution
of the coal tar pitch cases.
ESG CONSIDERATIONS
Moody's also evaluates environmental, social and governance factors
in the company's rating assessment, but are not a factor in today's
actions. Koppers is exposed to very high environmental risks and
high social risks typical for a chemical company. Koppers Inc. is
involved in a number of pending lawsuits and various proceedings
surrounding environmental laws and regulations (current and legacy
sites), and some product liability exposure. The potential impact
of these liabilities are not known, but the company's filings state
that the unfavorable resolution in any of these legal matters
could be material to its financial condition. Although the yearly
cash costs related to environmental expenditures has been, and are
expected to be manageable, environmental risks negatively impact
Koppers' credit profile due to the uncertainty over the size of the
ultimate liability from these issues and has constrained the
rating. As of Marchr 31, 2022, Koppers has $10.4 million in accrued
liabilities for environmental matters, primarily for remediation.
Koppers Inc. is one of several named defendants in lawsuits by
individuals alleging illness related to exposure to coal tar pitch.
Koppers Inc. has experienced a continued decline in the number of
cases and plaintiffs over the past five years and stood at 57
plaintiffs in 30 cases pending as of March 31, 2022. Litigation and
settlement costs have thus far been manageable. Trial dates have
not been set in coal tar pitch lawsuits. As a result of the
uncertainty surrounding the outcome of the cases or amount of loss,
if any, the company has not established a reserve for the
lawsuits.
As a public company, Koppers has good governance policies. The
board structure has separated the CEO role from the chairman role
and the members have extensive industry and financial expertise.
The board composition also demonstrates good diversity with a mix
of female and minority members. Management has a very good track
record of meeting guidance, for example, the debt reduction plan it
carried out in 2020 was completed on schedule. The management team
is highly experienced and has successfully executed on its
strategic initiatives. Koppers has a net leverage policy of between
2-3x based on management's calculation, and was 3.5x as of March
31, 2022.
STRUCTURAL CONSIDERATIONS
The new senior secured revolving credit facility is assigned a Ba3
rating commensurate with the Ba3 CFR. The B1 rating on the senior
unsecured notes, one notch below the CFR, reflects the amount of
secured debt that has claims on the company's assets and thus
limits recovery prospects.
The principal methodology used in these ratings was Chemical
Industry published in March 2019.
Koppers Holdings Inc. is an integrated global provider of treated
wood products, wood treatment chemicals and carbon compounds. Their
products and services are used in a variety of niche applications
in a diverse range of end markets, including the railroad,
specialty chemical, utility, residential lumber, agriculture,
aluminum, steel, rubber, and construction industries. Headquartered
in Pittsburgh, PA., the company generated $1.73 billion of revenue
for the twelve months ended March 31, 2022.
LTL MANAGEMENT: Lex Nova Law Represents DOBS Claimants
------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Lex Nova Law LLC submitted a verified statement to
disclose that Dean Omar Branham Shirley, LLP representing the
holders of talc personal injury claimants in the Chapter 11 cases
of LTL Management LLC.
Each of the DOBS Claimants has, individually, retained DOBS to
represent him or her as counsel in connection with, among other
things, talc personal injury claims against the above debtor, its
predecessor corporation and certain affiliated entities.
On January 26, 2022, DOBS retained Lex Nova Law LLC, as bankruptcy
counsel in connection with the instant Chapter 11 case.
DOBS does not represent the DOBS Claimants as a "committee" or a
"group" and does not represent the interests of, and are not
fiduciaries for, any creditor, party in interest, or other entity
that has not signed a retention agreement with DOBS.
The names of each of the DOBS Claimants, as of the date of this
Verified Statement, together with the nature and amount of the
disclosable economic interests held by each of them in relation to
the Debtor, are set forth in Exhibit A attached hereto. Exhibit A
also includes the home addresses and type of disease for each of
the DOBS Claimants but such information has been filed under seal.2
DOBS will, however, provide such information to the Court and the
United States Trustee and, upon request and subject to appropriate
confidentiality protections or protective orders, to counsel to the
Debtor, counsel to the Official Committee of Talc Claimants, and
counsel to the Future Talc Claimants Representative.
The information set forth in Exhibit A is based on information
provided to DOBS by the DOBS Claimants and is intended to comply
with Bankruptcy Rule 2019 and not for any other purpose.
Each of the DOBS Claimants have signed an engagement letter with
DOBS and/or an Authorization of Consent for Representation in
Bankruptcy Proceedings Related to Asbestos Exposure. Exemplars of
the DOBS Retainer Agreement and Asbestos Bankruptcy Authorization
are attached at Exhibit B and verified as true and accurate copies
as signed by the DOBS Claimants. The contingency fee percentage on
the DOBS Retainer Agreement is redacted. DOBS will, however,
provide such fee information under seal to the Court and the United
States Trustee, and, upon request and subject to appropriate
confidentiality protections or protective orders, to counsel to the
Debtor, counsel to the Official Committee of Talc Claimants and
counsel to the Future Talc Claimants Representative.
DOBS reserves the right to amend and/or supplement this Verified
Statement in accordance with the requirements of the Bankruptcy
Rule 2019 at any time in the future.
Counsel for Dean Omar Branham Shirley, LLP can be reached at:
LEX NOVA LAW LLC
E. Richard Dressel, Esq.
10 E. Stow Road, Suite 250
Marlton, NJ 08053
Telephone: (856)382-8211
E-mail: rdressel@lexnovalaw.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3HUXoOG
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP, as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee
for Regions 3 and 9 reconstituted the talc claimants' committee and
appointed two separate committees: (i) the official committee of
talc claimants I, which represents ovarian cancer claimants, and
(ii) the official committee of talc claimants II, which represents
mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
LTM SDLV 2020: Seeks to Hire Riggi Law Firm as Bankruptcy Counsel
-----------------------------------------------------------------
LTM SDLV 2020, LLC seeks approval from U.S. Bankruptcy Court for
the District of Nevada to hire Riggi Law Firm to serve as legal
counsel in its Chapter 11 case.
The firm's services include:
1. instituting, prosecuting or defending any contested matters
arising out of this bankruptcy proceeding in which the Debtor may
be a party;
2. assisting the Debtor in seeking court approval to recover,
liquidate and protect estate assets;
3. assisting in determining the priorities and status of
claims and in filing objections thereto where necessary;
4. assisting in the preparation of a disclosure statement and
Chapter 11 plan;
5. performing all other legal services for the Debtor.
The firm received a retainer in the amount of $5,762.
The hourly rates charged by the firm's attorneys are as follows:
Partners $450
Associates $100
As disclosed in court filings, Riggi Law Firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
David A. Riggi, Esq.
Riggi Law Firm
5550 Painted Mirage Rd. Suite 320
Las Vegas, NV 89149
Tel: (702) 463-7777
Fax: (888) 306-7157
Email: RiggiLaw@gmail.com
About LTM SDLV 2020
LTM SDLV 2020, LLC filed a petition under Chapter 11, Subchapter V
of the Bankruptcy Code (Bankr. D. Nev. Case No. 22-11375) on April
21, 2022, listing as much as $1 million in both assets and
liabilities. Brian Shapiro serves as Subchapter V trustee.
Judge Natalie M. Cox oversees the case.
David Riggi, Esq., at Riggi Law Firm serves as the Debtor's
counsel.
LUCCI RESTAURANT: Asks for July 14 Extension for Plan
-----------------------------------------------------
Lucci Restaurant Group, LLC, Agim Arifi, and Bashkim Arifi and
Fatima Arifi, Joint Debtors, move the Bankruptcy Court to enter an
order granting a short extension of their due date for filing of
their plans from June 23, 2022, to and including July 14, 2022.
The Debtors have been working toward adjusting their business
operation and personal expenses in order to present a fair and
equitable Plan to their creditors and the Court and have had a few
moving parts which have been beyond their control.
The closing on the sale of the residence owned by Augie Arifi was
delayed and remained uncertain until the recent closing actually
occurred. As a result, the required expenses of the Debtor
relating to his home expenses and subsequent rental expenses
remained fluid and remain undetermined as he attempts to relocate
to a rental unit. An accomplishment which is complicated by his
being a debtor in a Chapter 11.
Bashkim and Fatima Arifi have been attempting to obtain financing
on their home and have been unsuccessful in finding financing as
Chapter 11 Debtors until they have a confirmed plan, at which point
it is hoped that they will be able to obtain financing. Structuring
their plan and expenses has been difficult and their Plan will
address their options. Their expenses related thereto are now
just coming into focus.
The Plan of LRG is so related to the terms of the individual cases
and the valuation of these assets that it is likely that any Plan
filed timely will have to be amended before confirmation can be
sought.
The Debtors have been fastidiously attending to their obligations
as Chapter 11 parties and will continue to do so.
Attorney for the Debtors:
Richard N. Golding, Esq.
THE GOLDING LAW OFF ICES, PC
500 N. Dearborn Street, 2nd Floor
Chicago, IL 60654
Tel: (312) 832-7885
Fax: (312) 755-5720
Email: rgolding@goldinglaw.net
About Lucci Restaurant Group
Lucci Restaurant Group, LLC, owner of a full-service restaurant in
Deerfield, Ill., filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-03452) on March
25, 2022, listing up to $500,000 in assets and up to $10 million in
liabilities.
Judge David D. Cleary oversees the case.
Richard N. Golding, Esq., at The Golding Law Offices, P.C. serves
as the Debtor's legal counsel.
MAJOR MODEL: Models Lose on Chapter 11 Class Claim
--------------------------------------------------
Jonathan Capriel of Law360 reports that a New York bankruptcy judge
on Tuesday, June 21, 2022, rejected a model's request to pause
Major Model Management's Chapter 11 proceedings and allow her
proposed punitive class action to go forward, saying the bankruptcy
process could better handle the talents' mismatched stalled payment
claims.
U.S. Bankruptcy Judge Martin Glenn said that lead plaintiff Jasmine
Burgess was not a good fit to represent the nearly 300 models who
her lawsuit claimed suffered a breach of fiduciary duty at the
hands of Major Model. That's because Burgess was represented by at
least three agencies at the time of the payment dispute.
About Major Model Management
Major Model Management Inc. -- http://www.majormodel.com/-- is a
modelling agency based in New York City. Major Model Management
Inc. filed a petition under Chapter 11 Subchapter V of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10169) on Feb. 11,
2022. The case is handled by Honorable Judge Martin Glenn.
Melissa A. Pena is the Debtor's counsel.
MALLINCKRODT PLC: Updates Reorganizing Plan Disclosures
-------------------------------------------------------
Mallinckrodt PLC, et al. submitted a Modified Fourth Amended Joint
Plan of Reorganization (with Technical Modifications) dated June
21, 2022.
The Debtors shall fund Cash distributions under the Plan with Cash
on hand, including Cash from operations, and the proceeds of the
New Term Loan Facility.
The Modification, specifically modifies Article X.F. as follows:
Notwithstanding the entry of the Confirmation Order and the
occurrence of the Effective Date, except to the extent set forth
herein or under applicable federal law, the Bankruptcy Court shall
retain exclusive jurisdiction over all matters arising out of, or
related to, the Chapter 11 Cases and the Plan pursuant to sections
105(a) and 1142 of the Bankruptcy Code, including jurisdiction to:
* adjudicate, decide, or resolve any and all matters related
to Causes of Action; provided, however, that the Bankruptcy Court
shall have concurrent jurisdiction to adjudicate, decide, or
resolve any and all matters related to any Causes of Action
assigned to the Opioid MDT II hereunder;
Class 6(d) consists of all Legacy Unsecured Notes Claims. Except to
the extent that a Holder of an Allowed Legacy Unsecured Notes Claim
agrees to less favorable treatment, in exchange for full and final
satisfaction, settlement, release, and discharge of each Allowed
Legacy Unsecured Notes Claim, each Holder of an Allowed Legacy
Unsecured Notes Claim shall receive its Pro Rata Share of the
Legacy Unsecured Notes Recovery.
Class 6(f) consists of all Other General Unsecured Claims. Except
to the extent that a Holder of an Allowed Other General Unsecured
Claim agrees to less favorable treatment, in exchange for full and
final satisfaction, settlement, release, and discharge of each
Allowed Other General Unsecured Claim, each Holder of an Allowed
Other General Unsecured Claim shall receive its Pro Rata Share of
the Environmental Claims/Other General Unsecured Claims Recovery.
Class 6(g) consists of all 4.75% Unsecured Notes Claims. Except to
the extent that a Holder of an Allowed 4.75% Unsecured Notes Claim
agrees to less favorable treatment, in exchange for full and final
satisfaction, settlement, release, and discharge of each Allowed
4.75% Unsecured Notes Claim, each Holder of an Allowed 4.75%
Unsecured Notes Claim shall receive its Pro Rata Share of the 4.75%
Unsecured Notes Recovery.
Counsel to the Debtors:
Mark D. Collins, Esq.
Michael J. Merchant, Esq.
Amanda R. Steele, Esq.
Brendan J. Schlauch, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square
920 N. King Street
Wilmington, DE 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
E-mail: collins@rlf.com
merchant@rlf.com
steele@rlf.com
schlauch@rlf.com
- and -
George A. Davis, Esq.
George Klidonas, Esq.
Andrew Sorkin, Esq.
Anupama Yerramalli, Esq.
LATHAM & WATKINS LLP
1271 Avenue of the Americas
New York, New York 10020
Telephone: (212) 906-1200
Facsimile: (212) 751-4864
E-mail: george.davis@lw.com
george.klidonas@lw.com
andrew.sorkin@lw.com
anu.yerramalli@lw.com
- and -
Jeffrey E. Bjork, Esq.
LATHAM & WATKINS LLP
355 South Grand Avenue, Suite 100
Los Angeles, California 90071
Telephone: (213) 485-1234
Facsimile: (213) 891-8763
E-mail: jeff.bjork@lw.com
- and -
Jason B. Gott, Esq.
LATHAM & WATKINS LLP
330 North Wabash Avenue, Suite 2800
Chicago, Illinois 60611
Telephone: (312) 876-7700
Facsimile: (312) 993-9767
E-mail: jason.gott@lw.com
About Mallinckrodt PLC
Mallinckrodt PLC -- 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.
MANCHESTER HOUSING: Moody's Ups Rating on Series 2000 Bonds to B2
-----------------------------------------------------------------
Moody's Investors Service has upgraded the rating of Manchester
Housing and Redevelopment Authority's Revenue Bonds, Series 2000 to
B2 from B3. Concurrently, Moody's has changed the rating outlook to
positive from negative. The bonds are secured by the city's
allocation of a statewide tax on meals and rooms. There are $41.1
million outstanding on the Series 2000 bonds.
RATINGS RATIONALE
The rating upgrade to B2 reflects that the state meals and room tax
(MRT) revenues have recovered from the lows of the pandemic and
state distributions to Manchester have exceeded the previous trend
of sum sufficient appropriations. The MRT revenue stream is a
narrow pledge with annual appropriations controlled by the state.
While recent history suggests that the state will continue to fund
at or above amounts equal to debt service, the state has, in the
past, also appropriated amounts less than debt service. While no
bond payments have been missed, the debt service reserve sustained
draws between 2010 and 2015 and remains below the covenanted
levels. A $2.5M partial replenishment was made in the most recent
year.
RATING OUTLOOK
The positive outlook reflects recent positive trends for both the
statewide MRT and allocations of the MRT to local governments. MRT
revenues are expected to be funded in 2022 at levels similar to
2021 levels based on very strong MRT receipts through the first
half of fiscal 2022.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
-- Fully funded debt service reserve
-- Continued trend of increased MRT distributions
from the state in excess of debt service
-- Very strong economy driving MRT receipts
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
-- Decline in pledged revenues and debt service coverage
ratio
-- Reduction or delay in the state's MRT distribution
to Manchester
-- Material reduction in Manchester's proportional share
of the state's total population
LEGAL SECURITY
The bonds are secured solely by the City of Manchester's allocation
of state meals and rooms taxes received in excess of $454,927. The
meals and rooms tax is a statewide 8.5% levy on prepared meals and
rooms that is remitted monthly to the NH Department of Revenue. The
state distributes a portion of the tax to cities and towns annually
based on their proportionate share of state population.
PROFILE
In 2000, the Manchester Housing and Redevelopment Authority (MHRA)
issues the bonds to fund a 12,000 seat arena, secured by State
meals and room (MRT) taxes passed through the city of Manchester
(Aa3 stable) via appropriation. The debt is non-recourse to either
Manchester or the MHRA; although the city owns the site and the
MHRA the center itself, the Civic Center is not a component or
other operation of either entity and appears in neither audit.
Manchester has a population of 110,231 and is the largest city in
New Hampshire. The city is located on the Merrimack River in south
central part of the state, approximately 58 miles north of Boston.
METHODOLOGY
The principal methodology used in this rating was US Public Finance
Special Tax Methodology published in January 2021.
MAPLE LEAF: Business Income to Fund Plan Payments
-------------------------------------------------
Maple Leaf, Inc., filed with the U.S. Bankruptcy Court for the
Western District of Wisconsin a Plan of Reorganization dated June
21, 2022.
The Debtor is a subchapter S corporation, incorporated in the state
of Wisconsin in 1994. Since 1994, the Debtor has been in the
business of landscaping construction and services, lawn
maintenance, and snow removal.
Like most businesses, the COVID-19 pandemic caused setbacks in
revenue in 2020 and 2021. WBT declared a default and filed a
lawsuit, seeking a money judgment, and replevin of substantially
all of Maple Leaf's assets. After some discussions with WBT
regarding potential forbearance options, Maple Leaf determined that
it needed to petition for relief under Chapter 11 to preserve its
assets and going-concern value.
The Debtor's financial projections show that the Debtor will have
projected Disposable Income of approximately $180,000. The amount
of actual Disposable Income for that period could vary depending on
the performance of the Debtor's business.
The final Plan payment is expected to be made by June 30, 2025 (or
July 30, 2025 based on disposable income through June 30, 2025, if
the plan is confirmed under § 1191(b)).
Class 2 consists of the Allowed Secured Claims of Wisconsin Bank &
Trust ("WBT") and Capital Dude. The Allowed Secured Claim of WBT,
with reduction for any pre-confirmation payments applied to
principal, shall be paid in full pursuant to the terms of the loan
documents existing on the Petition Date except as otherwise altered
by the Plan and as further addressed in a loan modification
agreement to be executed by the Reorganized Debtor and other
obligors upon confirmation of the Plan.
The Allowed Secured Claim of Capital Dude, LLC, as set forth in its
proof of claim No. 35 on file in this case in the amount of
$220,217.00, shall be paid in full without interest in equal
monthly installments of $4,000, over approximately 55 months, with
credit for pre-confirmation payments which reduce the balance due.
Class 3 consists of Allowed Secured Claims of Purchase Money
Security Lenders. Holders of such claims shall be paid in full
pursuant to the terms of the loan documents existing on the
Petition Date, except that such loan documents are altered (i) to
eliminate any provision that provides for a default due to the
Debtor's insolvency, filing the Case or financial condition of the
Debtor's business, and (ii) to increase the number of monthly
installments to pay any accrued interests, late fees, attorney fees
or other costs.
Class 4 consists of Unsecured Convenience Claims. Class 4 is
unimpaired by this Plan, and each holder of a Class 4 Convenience
Claim will be paid in full, in cash, upon the later of (a) the
Effective Date, or (b) the date on which the Claim is allowed by a
Final Order.
Class 5 consists of Allowed NonPriority Unsecured Claims:
* Scenario A: If the Plan is confirmed under § 1191 (a),
Allowed Claims of unsecured creditors in Class 5 shall be paid by
the Debtor making quarterly distributions of $15,000 each,
beginning on September 30, 2022, and continuing until June 30, 2025
(12 quarterly payments totaling up to $180,000), or until all
Allowed Claims of this class are paid in full, without interest,
whichever is earlier. The quarterly distributions shall be shared
on a Pro-Rata Basis by holders of Allowed Claims in Class 5. The
distributions shall be made on or before the final day of each
applicable quarter.
* Scenario B: Alternatively, if the plan is confirmed under §
1191 (b), Allowed Claims of unsecured creditors in Class 5 shall be
satisfied by the Debtor making quarterly distributions of the
Debtor’s Disposable Income over a 3- year period following the
Effective Date. The 3-year period shall begin with the quarter
ending September 30, 2022, and continue until the quarter ending
June 30, 2025 (12 quarterly payments), or until all Allowed Claims
of this class are paid in full, without interest, whichever is
earlier. Distributions shall be made on or before the 30th day
following each quarter.
Class 6 consists of Equity Interests of the Debtor. The current
holder of the Debtor's equity interests shall retain those
interests in the same character and amount as existed
pre-petition.
Cash necessary to fund payments on or shortly after the Effective
Date shall be from the regular business income of the Reorganized
Debtor. In addition, Debtor's counsel retains $59,672.50 in a law
firm trust account for payment of approved fees of professionals,
including counsel for the Debtor, the Debtor's consultant, the
Debtor's accountant (if employed), and the Subchapter V Trustee.
A full-text copy of the Plan of Reorganization dated June 21, 2022,
is available at https://bit.ly/3Nj5Dos from PacerMonitor.com at no
charge.
Counsel to the Debtor:
Craig E. Stevenson, Esq.
DeWitt, LLP
Two E. Mifflin Street, Ste. 600
Madison, WI 53703
Tel: 608-252-9263
Fax: 608-252-9243
Email: ces@dewittllp.com
About Maple Leaf
Maple Leaf, Inc., a company in Verona, Wis., filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. W.D. Wis.
Case No. 22-10420) on March 25, 2022, listing as much as $10
million in both assets and liabilities. William E. Wallo serves as
Subchapter V trustee.
Judge Catherine J. Furay oversees the case.
Craig E. Stevenson, Esq., at DeWitt, LLP is the Debtor's legal
counsel.
MAPLE LEAF: Has Deal on Cash Collateral Access
----------------------------------------------
Maple Leaf, Inc., secured creditor Wisconsin Bank & Trust, and
interested party Capital Dude, LLC, advised the U.S. Bankruptcy
Court for the Western District of Wisconsin that they have reached
an agreement regarding Maple Leaf's use of cash collateral and now
desire to memorialize the terms of this agreement into an agreed
order.
The Debtor, Wisconsin Bank & Trust and Capital Dude entered into a
stipulation, filed with the Court on April 11, 2022, for a final
order for use of cash collateral and granting adequate protection.
As requested in the stipulation, the Court entered an Agreed Final
Order Authorizing Use of Cash Collateral and Granting Adequate
Protection, authorizing the Debtor to use cash collateral according
to the terms set forth in the Final Order until June 30.
The Debtor anticipates filing its plan of reorganization on or
before the deadline set by the Court, which is June 23, 2022;
however, the confirmation process will likely take several more
weeks. Therefore, the Debtor has sought the consent of the Bank and
Capital Dude to extend the term of the Final Order.
The parties agree that the term of the Final Order is extended from
June 30 to July 31, provided the Court holds and concludes the
hearing on confirmation of the Debtor's plan on July 21, 2022. If
the Court reschedules, adjourns or continues the confirmation
hearing, the term of the Final Order will be automatically extended
to the date that is ten days following the rescheduled, adjourned
or continued confirmation hearing, but in any event, not beyond
August 31, 2022.
The Debtor agrees that, if the Bank does not receive $1.455 million
from the refinance of the "Shop Property" owned by Grant
Properties, LLC by the later of (a) July 31, 2022, or (b) 10 days
following the conclusion of the confirmation hearing, the Debtor
will cause Grant Properties to grant the Bank an additional
mortgage on the Shop Property to secure an additional $200,000 of
the Debtor's obligations to the Bank.
The proposed Agreed Order tracks most of the material provisions of
the Agreed Final Order entered by the Court on April 14, 2022, with
a few updates. The proposed extension Agreed Order provides that
the Debtor will adjust its monthly payment to the Bank to $23,800,
beginning with the payment due on June 26, of which $10,000 will
continue to be paid from a portion of the rent due Grant Properties
(Grant Properties will continue to receive the remaining $6,000).
The Agreed Order continues to provide that Capital Dude will
receive monthly payments of $4,000 beginning with a payment due the
week ending June 16, 2022.
Capital Dude and the Bank continue to agree that they will refrain
from any actions to collect from any guarantors or co-debtors
unless and until (a) the Termination Date of the Agreed Order, or
any extension(s) thereto; or (b) an Event of Default is not cured
within the time permitted under the Agreed Order.
A copy of the stipulation is available at https://bit.ly/3n9c8zG
from PacerMonitor.com.
About Maple Leaf, Inc.
Maple Leaf, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. W.D. Wis. Case No. 3-22-10420) on March
25, 2022. In the petition signed by Joel Grant, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Craig E. Stevenson, Esq. at DeWitt LLP is the Debtor's counsel.
Wisconsin Bank and Trust, as secured creditor, is represented by
David J. Van Lieshout, Esq. at Van Lieshout Law Office.
Capital Dude, LLC, as interested party, is represented by Shanna M.
Kaminski, Esq., at Kaminski Law, PLLC.
MARS COLONY: Seeks Cash Collateral Access Thru July 2022
--------------------------------------------------------
Mars Colony, LLC asks the U.S. Bankruptcy Court for the Western
District of Texas, Austin Division, for authority to use cash
collateral and recover funds that have been frozen in a Bank of
America account due to a pre-petition garnishment action against
the Debtor's checking account.
Evan Whitehead filed the pre-petition garnishment action.
The funds are property of the estate and the Debtor needs the money
to assist with operations and to fund other certain obligations. By
lifting the freeze on the account, the Debtor will also be able to
close the account and prevent distributors from accidently
depositing post-petition funds into the frozen account.
Bank of America has indicated it will release the funds in the
account upon the receipt of $1,526 in legal fees and expenses to
cover its efforts in defending the garnishment action. The Debtor
has agreed to allow Bank of America to recoup those fees from the
balance in the Account.
While not initially emergent, the situation took on a new dynamic
when a distributor inadvertently sent two payments to the account
that should have otherwise been sent to the Debtor and deposited in
the DIP account for product sold during the bankruptcy. This
payment of $7,048 has caused a real financial crunch for the Debtor
in that expected income has now been frozen.
The Debtor has an imminent need to use the cash in the Bank of
America accounts and close them to prevent any future income from
inadvertently being deposited there.
Whitehead asserts an interest in the cash held in the Bank of
America account as a result of the stayed garnishment action. The
Debtor disputes Whitehead has any security interest in those funds
as Whitehead is simply a pre-petition judgment creditor and the
garnishment action should have been stayed by the bankruptcy
petition.
Despite the dispute about whether Whitehead has a valid security
interest in the cash, the Parties agree to the Motion which will
preserve the dispute for another day and allow the release of the
funds to the Debtor.
The Debtor proposes to use the cash collateral in accordance with
the terms of the Budget covering the eight-week period from June
through July 2022.
Given that, to the extent they existed, Whitehead's interest in the
cash collateral holding cash collateral will be preserved, it is in
the best interest of the Debtor, its estate, and all of its
creditors for the Debtor to be able to continue operations and for
the Debtor to be authorized to use cash collateral.
A copy of the motion is available at https://bit.ly/3nb0WCS from
PacerMonitor.com.
About Mars Colony
Mars Colony, LLC is an Austin, Texas-based company operating in the
beverage manufacturing industry.
Mars Colony filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. W.D. Texas Case No. 22-10109) on Feb. 23,
2022, listing up to $500,000 in assets and up to $10 million in
liabilities. Brad W. Odell serves as Subchapter V trustee.
Judge Tony M. Davis oversees the case.
The Debtor tapped Todd Headden, Esq., at Hayward, PLLC as
bankruptcy counsel; Terrazas, PLLC as special counsel; and
Cloudbooks, LLC as bookkeeper.
MARY A II: Unsecureds to Split $109K in a Non-Consensual Plan
-------------------------------------------------------------
The Mary A II, LLC filed with the U.S. Bankruptcy Court for the
Middle District of Florida a Subchapter V Plan of Reorganization
dated June 23, 2022.
As of the filing of the Chapter 11 Petition, The Mary A II, LLC's
primary assets consist of a Mitigation Bank and a potential
litigation claim.
The Mitigation Bank consists of approximately 2,068 acres of real
property in Brevard County, Florida (the "Property"). The Property
was originally acquired in 2004 and was permitted as the Mary A
Ranch Mitigation Bank (the "Mitigation Bank") with the St. Johns
River Water Management District (the "SJRWMD" or "District") and
the U.S. Army Corps of Engineers (the "USACE" and together with the
SJRWMD the "Agencies").
As part of its reorganization efforts, the Debtor is in the process
of securing the available funds so that the Debtor can cure all
regulatory and licensing defaults with the Agencies and resume
operations.
On May 19, 2022, Erndit, LLC and MWH Holdings, LLC ("Objecting
Creditors") filed an Objection to Subchapter V Eligibility. The
Objection, among other things, alleges that the Debtor is not
eligible to file a Subchapter V Small Business Chapter 11 because
the total non contingent, non-insider claims exceed $7.5 million.
The Objection has not been resolved as of the filing of this Plan.
If it is determined that the Debtor is not eligible to proceed as a
Sub V Case, the Debtor will seek to convert its Sub V Case to a
traditional Chapter 11 case. Whether this Chapter 11 proceeds as a
Sub V Case or a traditional Chapter 11, the Debtor asserts that the
treatment offered to creditors will not change materially.
The Debtor's equity ownership or Class 5 has obtained a commitment
from Ranch Lending II, LLC ("Exit Lender") to fund a sufficient
amount via a post confirmation loan in order to meet all Plan
related obligations to allow Debtor to confirm the Debtor's Plan
("Exit Financing"). Exit Lender is an affiliated entity related to
the Debtor.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income in the range of approximately
$25,000 to $885,000 per year in order to fund the Plan. Depending
upon future cash flows the Debtor reserves the right to pay the
class 3 creditors plan payments on a quarterly basis. The final
Plan payment is expected to be paid within 5 years of the Effective
Date of the Plan.
The Debtor's Plan will be initially funded by the Exit Financing,
which will among other things result in the (a) funding of the
Trust fund in the approximate amount of $1.1 million dollars,
required to secure approval from the District for the Debtor to
operate as a mitigation bank post confirmation; (b) pay all
administrative expenses of the chapter 11 case which are currently
estimated to be $160,000 for all professional fees including the
fees of the chapter 11, subchapter V Trustee; (c) a guaranteed
payment of a pro-rata share of $350,000 to unsecured creditors on
account of their allowed unsecured claims (in the event of the
confirmation of a Consensual Plan) and (d) the initial plan
payments required under the plan which includes environmental
restoration costs, working capital and contingent guaranteed
payments to Class 1 and Class 2 (collectively, the "Exit
Financing").
Class 3 consists of all non-priority unsecured claims. Class 3 has
two treatments, Option A and Option B, which are dependent on
whether the non-priority unsecured creditors vote to accept the
Plan. The Debtor estimates that the total amount due to Class 3
general unsecured creditors is approximately $3,959,614.43 but
could be as much as $6,000,000.00.
* Option A: Consensual Plan. Option A is only available if Class
3 Claimants vote to accept Option A so that the Debtor's Plan is
confirmed consensually. Under the Consensual Plan, the Debtor shall
pay the claims of the general unsecured creditors of Class 3 as
follows:
-- a guaranteed pro-rata share of $350,000 based on their
allowed claim as of the Effective Date. Payment would be made no
later than the 15th day from the Effective Date. The payment will
be funded from the Exit Financing.
-- In the event that the Debtor obtains Bank Litigation
Proceeds, Class 3 Option A Claimants shall receive their pro-rata
share of 40% of the Bank Litigation Proceeds and the Exit Lender
would release its lien on the 40% distribution. The remaining 60%
of the Bank Litigation Proceeds shall be paid to the Exit Lender to
reduce the Debtor's Exit Financing claim.
* Option B: Non-Consensual Plan. Under Plan B, if the Plan is
confirmed non-consensually ("Non-Consensual Plan"), Class 3
Claimants shall receive a pro-rata distribution of any net income,
if any, during the 5 year term of the Plan. Currently the Debtor
projects Net Income after other required payments of $109,290 over
the five years from the Effective Date of the Plan.
Class 4 consists of Unknown Unsecured Creditors. The Debtor shall
pay any general unsecured creditors who are unknown to the Debtor
as of the Effective Date but then subsequently assert a claim
against the Debtor within the 5-year Plan term. Class 4 Claimants,
if any exist, shall be paid a pro-rata distribution of a total of
$50,000, no later than 15 days from the Effective Date $50,000
shall be deposited into an escrow account for the exclusive benefit
of Class 4 Claimants.
Class 5 consists of Equity Security Holders. All equity interests,
which consists of MA Holdings 1, LLC with 90% membership interest
and MA Holdings 2, LLC with 10% ownership interest, will be
retained by the Debtor's equity security holder upon confirmation.
The Plan of Reorganization proposes to pay creditors of the Debtor
from the Exit Financing, the Bank Litigation Proceeds and the
projected net disposable income derived from the Mitigation Bank.
The Exit Financing will be a guaranteed amount paid as part of the
Plan confirmation. The Bank Litigation and the income generated
from operations are based upon projections and are therefore not
guaranteed.
The Exit Financing will be in the approximate amount of
$3,335,000.00. The Exit Financing amount may be adjusted as needed
and as approved by the Court as part of the Debtor's confirmation
of its plan.
A full-text copy of the Subchapter V Plan dated June 23, 2022, is
available at https://bit.ly/3u2XsGk from PacerMonitor.com at no
charge.
Debtor's Counsel:
Alberto F. Gomez, Jr., Esq.
Johnson Pope Bokor Ruppel & Burns, LLP
401 East Jackson Street, Suite 3100
Tampa, FL 33602
Tel: 813-225-2500
Fax: 813-223-7118
Email: al@jpfirm.com
About The Mary A
II
The Mary A II, LLC, a company in Tampa, Fla., filed a petition
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D.
Fla. Case No. 22-01177) on March 25, 2022, listing as much as $10
million in both assets and liabilities. Ruediger Mueller serves as
Subchapter V trustee.
Judge Caryl E. Delano oversees the case.
Alberto F. Gomez, Jr., Esq., of Johnson Pope Bokor Ruppel & Burns,
LLP and William Long, Jr. of Jonah Consulting Group, LLC serve as
the Debtor's legal counsel and chief restructuring officer,
respectively.
MBIA INC: Moody's Affirms 'Ba3' Rating on Senior Unsecured Debt
---------------------------------------------------------------
Moody's Investors Service has affirmed the senior unsecured debt
rating of MBIA Inc. (MBIA) at Ba3, the insurance financial strength
(IFS) rating of National Public Finance Guarantee Corporation
(National) at Baa2 and the IFS rating of MBIA Insurance Corporation
(MBIA Corp.) at Caa1. The surplus notes rating of MBIA Corp. was
downgraded to C(hyb) from Ca(hyb). The outlook for the ratings of
MBIA, National and MBIA Corp. was changed to stable from negative.
RATINGS RATIONALE
RATING RATIONALE SUMMARY
The change in the rating outlook to stable for National and MBIA
reflects reduced uncertainty regarding ultimate losses on
National's Puerto Rico exposures. Following the expected
restructuring of Puerto Rico Highway and Transportation Authority
(PRHTA) bonds later this year, National will have less than $900
million of remaining Puerto Rico exposure, primarily to bonds
issued by Puerto Rico Electric Power Authority (PREPA).
The change in MBIA Corp.'s rating outlook to stable reflects
expected improvements in the firm's risk-adjusted capital adequacy
as a number of large exposures mature during 2022. However, Moody's
notes that MBIA Corp.'s policyholders' surplus remains just above
minimum regulatory levels and the firm's longer-term solvency
remains dependent on the outcome of the firm's asset recovery
efforts.
The downgrade of MBIA Corp.'s surplus notes rating to C(hyb)
reflects Moody's view that expected recovery rates of principal and
accrued interest on these defaulted securities is likely to be
lower than 35%.
RATING RATIONALE – National Public Finance Guarantee Corporation
National's Baa2 IFS rating reflects the insurer's sizable capital
resources, the meaningful delinking from its weaker affiliates and
the continued amortization of its insured portfolio, which
gradually increases risk-adjusted capital adequacy over time
(assuming a static capital position). Offsetting these strengths is
National's run-off status, which results in a weak alignment of
interests between shareholders and policyholders, its exposure to
below investment grade credits (including Puerto Rico), which
represented approximately 8.1% of its insured book (gross par plus
accreted interest on capital appreciation bonds (CABs)) and 139% of
qualified statutory capital at Q1 2022, as well as use of the
firm's capital to purchase MBIA common stock, which weakens the
company's asset quality and liquidity and reduces the benefits of
portfolio amortization on capital adequacy. At 1Q 2022, National
held more than 86 million MBIA shares with a market value of
approximately $1 billion. National's MBIA Inc. common stock
holdings are non-admitted assets for statutory accounting purposes
and thus these funds are not considered to be available to pay
claims.
At Q1 2022, National had approximately $1.5 billion of gross par
exposure to the debt securities of Puerto Rico issuers (including
accreted interest on CABs). Following the expected resolution of
National's PRHTA exposures later this year, National's Puerto Rico
exposure will be less than $900 million, with approximately 90% of
this exposure represented by PREPA.
RATING RATIONALE -- MBIA Inc.
The Ba3 senior unsecured debt rating of MBIA reflects the credit
profiles of its subsidiaries and its adequate liquidity profile
stemming from the firm's liquid cash and invested assets held at
the holding company level ($216 million at Q1 2022). Moody's expect
ordinary dividend payments from National to continue, but MBIA has
been unable to receive funds from the tax escrow account due to
losses arising from National's Puerto Rico exposures. MBIA's debt
burden is slowly improving and the firm's debt service obligations
are manageable over the next several years. The notching between
MBIA Inc.'s senior debt rating and the IFS rating of its lead
insurance subsidiary, National, is four notches, reflecting the
group's high financial leverage, lower projected cash flows from
National and the significantly weaker credit profile of MBIA Corp.
RATING RATIONALE -- MBIA Insurance Corporation
MBIA Corp.'s Caa1 IFS rating reflects the firm's improving capital
adequacy position offset by the uncertainty associated with the
outcomes of ongoing loss recovery efforts. MBIA Corp.'s liquidity
has improved since the firm's $600 million settlement with Credit
Suisse regarding RMBS put-back claims. At Q1 2022, MBIA Corp. had
liquid assets of approximately $272 million.
MBIA Corp.'s longer-term viability rests on its ability to recover
the substantial majority of the firm's $299 million of expected
salvage recoverables, primarily relating to excess spread
recoveries on second-lien RMBS securities, recoveries from sales of
collateral backing the defaulted Zohar I and Zohar II
collateralized loan obligation transactions and from purchasing
MBIA Corp. wrapped securities as part of its loss mitigation
strategies. The inability of MBIA Corp. to realize substantial
recoveries from these efforts would likely result in regulatory
intervention, which could result in a claims payment freeze,
partial claims payments, or rehabilitation proceedings.
Moody's added that the C(hyb) ratings on MBIA Corp.'s surplus notes
and preferred stock reflects Moody's expectation that recovery
rates on these securities are likely to be very low given their
deeply subordinated status and the limited amount of capital
resources available at the company.
Moody's notes that credit deterioration at MBIA Corp. has only a
limited impact on the broader MBIA group given the substantial
delinking following the removal of the cross-default provision with
MBIA Inc.'s debt in 2012.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
National Public Finance Guarantee Corporation
Given National's business and financial profile as a run-off
financial guarantor, its rating is unlikely to be upgraded.
However, the following factors could positively influence the
firm's credit profile: 1) Resolution of remaining Puerto Rico
exposures in line with Moody's current expectations; and 2)
improved risk-adjusted capital adequacy. Conversely, the following
factors could result in a downgrade of National's rating: 1)
significant deterioration in the credit quality of its insured
portfolio; 2) capital extraction in excess of the firm's ordinary
dividend capacity without a commensurate reduction of insured risk;
3) significant additional purchases of MBIA common stock for its
investment portfolio; and 4) provision of material capital support
to MBIA Corp.
MBIA Inc.
The following factors could lead to an upgrade of MBIA's senior
debt rating: (1) an upgrade of National; and/or (2) a significant
reduction in adjusted financial leverage. Conversely, the following
factors could result in a downgrade: (1) a downgrade of National;
and/or (2) constrained liquidity at the holding company with
visible projected cash inflows and existing liquid assets covering
less than two years of debt service.
MBIA Insurance Corporation
The following factors could result in an upgrade of MBIA Corp.'s
ratings: (1) improved capital adequacy and liquidity profile; (2) a
reduction in exposure to large single risks; and (3) substantial
recoveries from Zohar collateral sales. Conversely, the following
factors could result in a downgrade: (1) failure to secure
substantial recoveries on Zohar collateral; (2) portfolio losses
meaningfully in excess of current expectations; and (3)
deterioration in the company's liquidity profile.
RATING LIST
The following ratings have been affirmed:
MBIA Inc. – senior unsecured debt at Ba3;
National Public Finance Guarantee Corporation – insurance
financial strength at Baa2;
MBIA Insurance Corporation – insurance financial strength at
Caa1, non-cumulative preferred stock at C(hyb) and preferred stock
at C(hyb);
The following rating has been downgraded:
MBIA Insurance Corporation – surplus notes to C(hyb) from
Ca(hyb);
Outlook Actions:
MBIA Inc., National Public Finance Guarantee Corporation and MBIA
Insurance Corporation – outlooks to Stable from Negative.
The principal methodology used in these ratings was Financial
Guarantors Methodology published in November 2019.
MBIA Insurance Corporation and National Public Finance Guarantee
Corporation are financial guaranty insurance companies domiciled in
New York State and are wholly owned subsidiaries of MBIA Inc. As of
March 31, 2022, MBIA Inc. had consolidated gross par outstanding of
approximately $50 billion (including accreted interest on CABs) and
total claims paying resources at its operating subsidiaries of
approximately of $3.7 billion.
MEGA-PHILADELPHIA LLC: Mega Unsecureds to Recover 100% in 60 Months
-------------------------------------------------------------------
Debtors Mega-Philadelphia LLC and M.S. Acquisitions & Holdings, LLC
filed with the U.S. Bankruptcy Court for the Middle District of
Florida a Joint Subchapter V Plan of Reorganization dated June 23,
2022.
Mega is a music and radio station business that provides radio
broadcasting services in Philadelphia, Pennsylvania; South New
Jersey; and Atlantic City, New Jersey. Mega's corporate
headquarters is located at 14366 Charthouse Circle, Naples, Florida
34114.
MS is the 100% owner and sole member of Mega. MS also holds, among
other things, a 51% ownership interest in America's Business
Capital, LLC ("ABC"). ABC is a commercial lending brokerage
business.
The Debtors filed the Bankruptcy Cases to settle certain financial
obligations and reorganize their financial affairs, resolve
contentious litigation, and to emerge from bankruptcy as a healthy,
sufficiently capitalized company capable of continuing their
operations and providing distributions to creditors greater than a
liquidation outcome. The Debtors believe that based on the Debtors'
income stream, accounts receivable and value being contributed by
the Debtors' principal, they will be able to successfully
reorganize and confirm the Plan.
The Debtors estimate that the Undersecured and Unsecured Creditors
in the Mega case hold total aggregate claims in the amount of
$393,948.00, and in the MS case hold total aggregate claims in the
amount of approximately, $5,169,216.62.
Since the Petition Date, Mega has continued operations and is
funding its going concern expenses. MS has overseen same and as
well as other businesses in which it holds an interest. As
reflected in the Debtors' projections it is anticipated that the
Debtors will operate profitable business during the next five years
and will be able to fund the payments to Creditors as provided for
in this Plan.
Class 5 consists of General Unsecured Creditors against Mega. Pro
rata payment of net disposable income of Mega on a monthly basis
after payment of senior secured creditors in classes 1-2 and pro
rata distribution of interests in Litigation Trust, in full and
final satisfaction of all claims. Payments Begin on thirty days
after the Effective Date through the 60th month after the Effective
Date. Estimated percent of claim paid shall be 100%.
Class 6 consists of General Unsecured Creditors against MS. The
class will receive a pro rata payment of net disposable income of
MS on a quarterly basis and pro rata distribution of interests in
Litigation Trust, in full and final satisfaction of all claims.
Payments begin 30 days after the Effective Date and conclude after
the 60th month after the Effective Date. Estimated percent of claim
paid shall be 3%.
Class 10 consists of Equity Interest Holders. Mr. Sciore shall
retain his interest in MS. MS shall retain its interest in the
Mega.
The Debtor intends to implement the Plan by raising capital from
certain funding sources and by generating sufficient income from
the Debtor's operations to fund the required payments to
creditors.
* Plan Contribution: The Plan Sponsors will contribute
$90,000.00 in cash to assist in funding the distributions to MS
creditors additionally, Mr. Sciore is willing to accept a
discounted salary during the life of the Plan (discount valued at
approximately $1,160,000.00). In exchange for such contribution,
except as otherwise provided in this Plan, the Plan Sponsors will
be released by the Debtors and the Debtors' creditors who will be
permanently enjoined from any efforts to collect from the Plan
Sponsors for any obligations, liabilities, claims or debts.
* Property Contribution: The Plan Sponsors will contribute the
Plan Sponsor Properties of an approximate value of $700,000.00 to
assist in funding the distributions to certain of the MS secured
creditors. In exchange for such contribution, except as otherwise
provided in this Plan, the Plan Sponsors will be released by the
Debtors and the Debtors' creditors who will be permanently enjoined
from any efforts to collect from the Plan Sponsors for any
obligations, liabilities, claims or debts.
* Net Disposable Income: Mega will commit disposable income to
the fund the Plan in the total amount of $1,470,236.00 in
accordance with the Projections. MS will commit disposable income
to the fund the Plan in the total amount of $200,000.00 of
distributions from ABC in accordance with the Projections.
* Litigation Trust: The Debtors will create a Litigation Trust
with two classes of beneficiaries: (i) Mega GUC claim holders; and
(ii) MS GUC claim holders. All claims and causes of action of all
kinds shall be transferred to the Litigation Trust to be pursued by
the Litigation Trustee for the benefit of its beneficiaries.
Litigation Trust distributions shall be made consistent with the
Litigation trust to the Beneficiaries pro rata with respect to each
class of claim holders.
A full-text copy of the Joint Subchapter V Plan dated June 23,
2022, is available at https://bit.ly/3HUtCcT from PacerMonitor.com
at no charge.
Counsel for the Debtors:
Brett D. Lieberman, Esq.
Edelboim Lieberman Revah, PLLC
20200 W. Dixie Highway, Suite 905
Miami, FL 33180
Tel: (305) 768-9909
Fax: (305) 928-1114
Email: brett@elrolaw.com
About Mega-Philadelphia
and
M.S.
Acquisitions
Mega-Philadelphia, LLC is a music and radio station business that
provides radio broadcasting services in Philadelphia, South New
Jersey, and Atlantic City, N.J. Based in Naples, Fla.,
Mega-Philadelphia generates advertisement revenue through broadcast
radio and live promotional events. M.S. Acquisitions & Holdings,
LLC is the 100% owner and sole member of Mega-Philadelphia.
Mega-Philadelphia and M.S. Acquisitions filed petitions under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla.
Lead Case No. 22-00340) on March 25, 2022. Amy Denton Harris serves
as Subchapter V trustee.
In the petitions signed by Michael Sciore, chief executive officer,
Mega-Philadelphia listed $346,574 in assets and $2,285,961 in
liabilities while M.S. Acquisitions listed $196,427 in assets and
$5,526,926 in liabilities.
Judge Caryl E. Delano oversees the Debtors' cases.
Brett Lieberman, Esq., at Edelboim Lieberman Revah, PLLC and
KapilaMukamal, LLP serve as the Debtors' legal counsel and
financial advisor, respectively.
MERLIN ACQUISITION: Term Loan Increase No Impact on Moody's B3 CFR
------------------------------------------------------------------
Moody's Investors Service said that Merlin Acquisition
Corporation's (dba "Bettcher Industries") B3 corporate family
rating is unaffected by the company's decision to increase its
first lien term loan by $200 million to $500 million total. The
proceeds will be used to fund the acquisition of Frontmatec.
Simultaneously, Bettcher Industries will increase its senior
secured first lien revolving credit facility by $30 million to $90
million total. On May 24, Bettcher Industries signed a definitive
agreement to purchase Frontmatec from private equity firm Axcel.
The acquisition will expand scale and enhance product offerings,
but elevate integration risk.
MESO DELRAY: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: Meso Delray LLC
d/b/a Meso Beach House
22 Elm Pl
Rye, NY 10580-2974
Business Description: Meso Delray operates a restaurant in in
Delray Beach, Fla. specializing in
Mediterranean cuisine.
Chapter 11 Petition Date: June 24, 2022
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 22-22388
Judge: Hon. Sean H. Lane
Debtor's Counsel: H. Bruce Bronson, Esq.
BRONSON LAW OFFICE, P.C.
480 Mamaroneck Ave
Harrison, NY 10528-1621
Tel: (877) 385-7793
E-mail: hbbronson@bronsonlaw.net
Total Assets: $2,823,153
Total Liabilities: $3,697,657
The petition was signed by Alan Schoening as managing member of the
Manging Member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/XSS77MQ/MESO_DELRAY_LLC_DBA_MESO_BEACH__nysbke-22-22388__0001.0.pdf?mcid=tGE4TAMA
MGM RESORTS: Egan-Jones Keeps B- Senior Unsecured Ratings
---------------------------------------------------------
Egan-Jones Ratings Company on May 27, 2022, retained the 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by MGM Resorts International. EJR also retains 'B'
rating on commercial paper issued by the Company.
Headquartered in Las Vegas, Nevada, MGM Resorts International
operates gaming, hospitality, and entertainment resorts.
MILFORD PARK CLO: Moody's Assigns B3 Rating to $1MM Class F Notes
-----------------------------------------------------------------
Moody's Investors Service has assigned ratings to three classes of
notes issued by Milford Park CLO, Ltd. (the "issuer").
Moody's rating action is as follows:
US$272,000,000 Class A-1 Senior Secured Floating Rate Notes due
2035, Assigned Aaa (sf)
US$48,000,000 Class A-2 Senior Secured Fixed Rate Notes due 2035,
Assigned Aaa (sf)
US$1,000,000 Class F Junior Secured Deferrable Floating Rate Notes
due 2035, Assigned B3 (sf)
The notes listed are referred to herein, collectively, as the
"Rated Notes."
RATINGS RATIONALE
The rationale for the ratings is based on Moody's methodology and
considers all relevant risks, particularly those associated with
the CLO's portfolio and structure.
Milford Park CLO, Ltd. is a managed cash flow CLO. The issued notes
will be collateralized primarily by broadly syndicated loans. At
least 90.0% of the portfolio must consist of first lien loans,
cash, and eligible investments, and up to 10.0% of the portfolio
may consist of second lien loans, first lien last out loans,
unsecured loans and senior secured bonds, provided that not more
than 5% of the portfolio may consist of senior secured bonds. The
portfolio is approximately 90% ramped as of the closing date.
Blackstone Liquid Credit Strategies LLC (the "Manager") will direct
the selection, acquisition and disposition of the assets on behalf
of the Issuer and may engage in trading activity, including
discretionary trading, during the transaction's five year
reinvestment period. Thereafter, subject to certain restrictions,
the Manager may reinvest unscheduled principal payments and
proceeds from sales of credit risk assets.
In addition to the Rated Notes, the Issuer issued four other
classes of secured notes and one class of subordinated notes.
The transaction incorporates interest and par coverage tests which,
if triggered, divert interest and principal proceeds to pay down
the notes in order of seniority.
Moody's modeled the transaction using a cash flow model based on
the Binomial Expansion Technique, as described in Section 2.3.2.1
of the "Moody's Global Approach to Rating Collateralized Loan
Obligations" rating methodology published in December 2021.
For modeling purposes, Moody's used the following base-case
assumptions:
Par amount: $500,000,000
Diversity Score: 60
Weighted Average Rating Factor (WARF): 3136
Weighted Average Spread (WAS): 3.50%
Weighted Average Coupon (WAC): 5.00%
Weighted Average Recovery Rate (WARR): 47.0%
Weighted Average Life (WAL): 8 years
Methodology Underlying the Rating Action:
The principal methodology used in these ratings was "Moody's Global
Approach to Rating Collateralized Loan Obligations" published in
December 2021.
Factors That Would Lead to an Upgrade or Downgrade of the Ratings:
The performance of the Rated Notes is subject to uncertainty. The
performance of the Rated Notes is sensitive to the performance of
the underlying portfolio, which in turn depends on economic and
credit conditions that may change. The Manager's investment
decisions and management of the transaction will also affect the
performance of the Rated Notes.
MILLENNIUM SERVICES: Creditor Seeks Chapter 11 Trustee Appointment
------------------------------------------------------------------
Assurance Mezzanine Fund III, L.P., moves the U.S. Bankruptcy Court
for the Middle District of Florida for entry of an order appointing
a Chapter 11 Trustee to oversee the estate of Millennium Services
of Florida, LLC.
Assurance alleges the Debtors have mismanaged and squandered
millions of dollars, breached their obligations on secured loans,
wasted company assets and cash collateral, and made
misrepresentations on their own financial statements in an effort
to conceal their defaults on loan obligations and other breaches of
contract.
In addition, hours before a state-court hearing was set to appoint
a receiver over the Debtors' assets to prevent further waste and
preserve the Debtors' business as a going concern, the Debtors
filed for Chapter 11 protection to prevent that receivership, thus,
placing the bankruptcy estate "in the hands of the same fiduciary
responsible for this dishonesty, incompetence, and gross
mismanagement of the Debtors' affairs."
Assurance believes this case requires an independent fiduciary to
marshal the estate's assets for the benefit of all of the estate's
stakeholders. Permitting a Chapter 11 trustee to marshal the assets
of the Debtor will provide order and control to what is now an
unwieldy process playing out in the state court system, and it will
ensure that all of the estate's interested stakeholders' interests
are preserved and protected in accordance with the Bankruptcy
Code.
A copy of the motion is available for free at
https://bit.ly/3HMRMWy from PacerMonitor.com.
Attorneys for Creditor Assurance Mezzanine:
Suzanne Barto Hill, Esq.
Florida Bar No. 0846694
RUMBERGER, KIRK & CALDWELL
A Professional Association
300 South Orange Avenue, Suite 1400
Post Office Box 1873
Orlando, FL 32802-1873
Telephone: (407) 872-7300
Telecopier: (407) 841-2133
E-mail: shill@rumberger.com
docketingorlando@rumberger.com
shillsecy@rumberger.com
- and -
R.Scott Williams, Esq.
RUMBERGER, KIRK & CALDWELL
A Professional Association
Renasant Place, Suite 1300
2001 Park Place North
Birmingham, AL 35203
Telephone: (205) 327-5550
Telecopier: (205) 326-6786
E-Mail: swilliams@rumberger.com
- and -
S. Scott Shuker, Esq.
SHUKER & DORRIS, P.A.
121 S. Orange Avenue, Suite 1120
Orlando, FL 32801
Telephone: (407) 337-2051
Telecopier: (407) 547-9283
Email: bankruptcy@shukerdorris.com
rshuker@shukerdorris.com
mfranklin@shukerdorris.com
About Millennium Services of Florida
Millennium Services of Florida, LLC
--http://www.millenniumservicesfl.com/ --provides residential and
commercial landscaping services.
Millennium Services of Florida filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 22-02173) on June 20, 2022. In the petition filed by
Michael T. Cox, as manager, the Debtor estimated assets between
$500,000 and $1 million and liabilities between $1 million and $10
million.
Affiliate MTC Holdings, LLC, also sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-02178)
on June 20, 2022.
Kenneth D. Herron, Jr., Esq., at Herron Hill Law Group, PLLC, is
the Debtors' counsel.
MILLENNIUM SERVICES: Seeks to Use Cash Collateral
-------------------------------------------------
Millennium Services of Florida, LLC asks the U.S. Bankruptcy Court
for the Middle District of Florida Orlando Division, for authority
to use cash collateral and provide adequate protection.
The cash collateral the Debtor seeks to use is comprised of funds
on deposit in the bank and accounts receivable. As of the Petition
Date, the Debtor had approximately $30,000 in bank accounts and
approximately $521,000 in accounts receivable.
Based upon a review of business records, UCC filings and judgment
lien certificates, the undersigned has determined that Assurance
Mezzanine Fund III, L. P., Corporation Service Company, as
representative, and C T Corporation System, as representative, may
assert liens on the cash collateral.
The Debtor will use the cash collateral to make payroll, pay
utilities, pay suppliers and vendors, and pay other ordinary course
expenses to maintain its business, which may be subject to the
alleged liens of the Secured Creditor.
As adequate protection for the use of cash collateral, the Debtor
proposes to grant the Secured Creditor a replacement lien on the
Debtor's post-petition cash collateral with the same extent,
priority, and validity as their pre-petition lien(s).
The Debtor believes it will operate on a positive cash flow basis
during the interim six-month period and asserts all interests in
cash collateral will be adequately protected by replacement liens
and that the proposed adequate protection is fair and reasonable
and sufficient to satisfy any diminution in value of the Secured
Creditor's alleged prepetition collateral.
A copy of the motion and the Debtor's budget for the period from
January to December 2022 is available at https://bit.ly/3Ndlvcf
from PacerMonitor.com.
The Debtor projects $514,802 in total income and $165,304 in total
expenses for June 2022.
About Millennium Services of Florida
Millennium Services of Florida, LLC --
http://www.millenniumservicesfl.com/-- provides residential and
commercial landscaping services.
Millennium Services of Florida filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla.
Case No. 22-02173) on June 20, 2022. In the petition filed by
Michael T. Cox, as manager, the Debtor estimated assets between
$500,000 and $1 million and liabilities between $1 million and $10
million.
Affiliate MTC Holdings, LLC, also sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-02178)
on June 20, 2022.
Kenneth D. Herron, Jr, Esq., at Herron Hill Law Group, PLLC, is the
Debtors' counsel.
MORROW GA INVESTORS: Unsecured Creditors to Split $5K in Plan
-------------------------------------------------------------
Morrow GA Investors, LLC, filed with the U.S. Bankruptcy Court for
the Northern District of Georgia a Disclosure Statement describing
Plan of Reorganization dated June 23, 2022.
The Debtor is a Delaware Corporation (LLC) that owns property
located at 1590 Adamson Parkway, Morrow, GA 30260 (referred to
herein as "The Property"). The property is a four story commercial
building that currently has 18 suites, with 8 vacant and 10
occupied by tenants.
Approximate Monthly rental income from rents received from property
located at 1590 Adamson, Morrow GA shall be $62,232 and $62,232 is
the total anticipated monthly income from all sources.
Class 2 consists of Secured claim of: 1590 Adamson, LLC. Debtor
will restructure the debt, including any arrearages as follows:
Monthly payments of $18,788.76. This is based on the loan amount of
$3,500,000.00 @ 5% interest, amortization for 30 years with a 1
year balloon note.
Class 3 consists of General Unsecured Claims in the total amount of
$18,338.01. The timely filed, allowed claims of general,
undisputed, liquidated, unsecured, non-priority creditors will be
paid a pro rata share of $5,000.00 of their allowed claims at 0%
interest.
Class 4 consists of Unsecured creditors who are insiders. An
insider is defined under 11 U.S.C. §101(31)(B) as a director of
the debtor, officer of the debtor, person in control of the debtor,
partnership in which the debtor is a general partner, general
partner of the debtor, or relative of a general partner, director,
officer, or person in control of the debtor. Unsecured insiders
will be paid 0% of their claims.
Class 5 consists of Unsecured Disputed and un-liquidated claims
(Skymark Properties III, LLC claim). These creditors will be paid
0% of their claims. They will be allowed to participate in class 3
if this court allows their claim.
Class 6 consists of Equity Security Holders. The Debtor's principal
proposes to retain his interest in the reorganized Debtor despite
the fact that unsecured creditors will be paid less than 100% of
their claims. On a certain date to be determined, the principal, in
order to retain his equity ownership, will contribute to the Plan
as new value, the amount of $5,000.00.
The principal will devote his time and effort during the course of
reorganization to manage and reorganize the Debtor. The
contribution will increase the repayment to the unsecured creditors
from 0% without the principal's contribution to 27.3% with the
principal's contribution. The Debtor is a small closely held
business and there is no market for selling the principal's
interest in Debtor. Creditors are free to submit competing bids for
ownership of Debtor.
On the effective date of the Plan, the Debtor shall be allowed to
control all aspects of the Debtor's operations. The Chapter 11
Trustee shall be relieved of her duties.
A full-text copy of the Disclosure Statement dated June 23, 2022,
is available at https://bit.ly/3yjWmZ9 from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Brian S. Limbocker
2230 Towne Lake Parkway, 100-140
Woodstock, GA 30189
678-401-6836
bsl@limbockerlawfirm.com
About Morrow GA Investors LLC
Morrow GA Investors, LLC is a single asset real estate debtor (as
defined in 11 U.S.C. Section 101(51B)). It owns a real property
located at 1590 Adamson Parkway, Morrow, Ga., having an appraised
value of $5.5 million.
Morrow GA Investors filed a Chapter 11 petition (Bankr. N.D. Ga.
Case No. 21-55706) on July 31, 2021, listing $5,502,000 in total
assets and $2,698,079 in total liabilities. Judge James R. Sacca
oversees the case.
Limbocker Law Firm serves as the Debtor's legal counsel.
The U.S. Trustee for Region 21 appointed Tamara Miles Ogier as
trustee in this Chapter 11 case. The bankruptcy trustee tapped
Ogier, Rothschild & Rosenfeld PC as bankruptcy counsel, Wiles &
Wiles LLP as special counsel, and Stonebridge Accounting &
Forensics LLC as accountant.
MSCI INC: Moody's Rates $350MM Senior Unsecured Term Loan 'Ba1'
---------------------------------------------------------------
Moody's Investors Service rated MSCI Inc.'s ("MSCI") $350 million
senior unsecured term loan due 2027 at Ba1. MSCI's Ba1 corporate
family rating, Ba1-PD probability of default rating and existing
Ba1 senior unsecured note and revolving credit facility ratings, as
well as the SGL-1 speculative grade liquidity rating, remain
unchanged. The outlook remains stable.
On June 9, MSCI amended its credit agreement to add the new term
loan.
RATINGS RATIONALE
MSCI's Ba1 CFR is supported by a growing, recurring subscription
base of investment risk management and decision support tools and
equity index products. Revenue of about $2.1 billion for the 12
months ended March 31, 2022 is small and debt to EBITDA of almost
4.0 times (pro forma for the new term loan) is high compared to
many other service industry issuers also rated at Ba1. However,
impressive EBITA margins of around 55% and strong free cash flow to
debt anticipated to be around 13% provide ratings support.
All financial metrics cited reflect Moody's standard adjustments.
Assets under management ("AUM") -based fees could be volatile
because they are correlated to the value of exchanged-traded funds
linked to its indices. Given recent declines in global equity
values, MSCI may experience a decline in AUM-linked revenue and
profits in 2022. Because AUM-based fees are among the company's
most profitable businesses, profits could decline at a faster rate
than revenue. That said, Moody's anticipates MSCI's overall revenue
and profits will grow in 2022, although profit rates and free cash
flow may decline from March 2022 LTM levels. Moody;s expects highly
recurring subscription fees for index, asset management software
and other products will mitigate the anticipated AUM-based fee
declines. Rating pressure is unlikely to develop unless
subscription renewal rates decline while equity markets remain
disrupted for a prolonged period.
The SGL-1 speculative grade liquidity rating reflects Moody's
assessment of MSCI's liquidity profile as very good. Moody's
expects MSCI will maintain over $500 million of cash and cash
equivalents. Including the net proceeds of the new $350 million
term loan, the company had about $1.0 billion of cash as of March
31, 2022. Additional liquidity support is provided by robust free
cash flow anticipated to fall from $583 million for the LTM period
ended March 2022 to around $300 million annually over the next 12
to 15 months. Full availability of the $500 million unsecured
revolving credit facility which expires in 2027, provides
additional support.
The term loan and revolver require the company to maintain a
maximum net leverage ratio (as defined in the legal agreement; not
Moody's adjusted) below 4.25 times (or 4.50 times for two fiscal
quarters following a material acquisition) and a minimum interest
coverage of at least 4.0 times. Moody's anticipates MSCI will
maintain a healthy cushion compared to required levels.
The Ba1 rating assigned to the new term loan reflects both the
Ba1-PD PDR and a loss given default assessment of LGD4, the same as
all other rated MSCI debt. The term loan is unsecured and
guaranteed by all existing and subsequently acquired material
domestic subsidiaries of MSCI.
The stable outlook reflects Moody's expectations for low-to-mid
single-digit rate revenue growth, EBITA margins above 50% and debt
to EBITDA to remain around 3.5 times.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
The ratings could be upgraded if revenue scale expands, customer
and industry scope widens and revenue and profits become less
sensitive to changes in global equity market valuations.
Quantitatively, positive rating pressure could develop if Moody's
expects debt to EBITDA will remain below 3.0 times and free cash
flow to debt will stay above 10%.
The ratings could be downgraded if Moody's notes a meaningful
increase in competition, MSCI's client retention rates deteriorate
or a more difficult pricing environment evolves. The ratings could
also be downgraded if Moody's anticipates low revenue growth, a
substantial erosion in rates of profitability, debt to EBITDA
sustained above 4.0 times, or free cash flow to debt under 8%.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
Assignments:
Issuer: MSCI Inc.
Senior Unsecured Term Loan A, Assigned Ba1 (LGD4)
MSCI is a global provider of investment risk and decision support
tools, including indices and portfolio risk and performance
analytics products and services. Moody's expects revenues of over
$2.0 billion in 2022.
NCR CORP: Egan-Jones Lowers Senior Unsecured Ratings to CCC+
------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, downgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by NCR Corporation to CCC+ from B-.
Headquartered in Atlanta, Georgia, NCR Corporation manufactures
financial transaction machines and other products.
NEWELL BRANDS: Egan-Jones Lowers Senior Unsecured Ratings to BB-
----------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, downgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Newell Brands, Inc. to BB- from B+.
Headquartered in Atlanta, Georgia, Newell Brands, Inc. retails
consumer products.
NEWPARK RESOURCES: Egan-Jones Retains B- Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on May 31, 2022, retained 'B-' foreign
currency and local currency senior unsecured ratings on debt issued
by Newpark Resources, Inc. EJR also retains 'B' rating on
commercial paper issued by the Company.
Headquartered in The Woodlands, Texas, Newpark Resources, Inc.
provides environmental services to the oil and gas exploration and
production industry, primarily in the Gulf Coast market.
NEXTSPORT INC: Wins Cash Collateral Access Thru July 1
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
authorized Nextsport, Inc., on an interim basis, to use cash
collateral, including any funds held in the Debtor's accounts at
Bank of the West, Royal Bank of Canada and PayPal.
As previously reported by the Troubled Company Reporter, the Debtor
sought authority to use cash collateral in the form of accounts
receivables on an interim basis through and including July 1, 2022,
to pay necessary operation expenses, including payroll (pre and
post-petition), the Debtor's business normal operations pending a
hearing on the entry of a final order, at which time the Debtor
will seek authority to use cash collateral through an expiration
date by court order.
The parties that assert an interest in the cash collateral are
Strata Trust Company, the Robert and Ava Family Trust, Barry
Gilbert, Edward Dua, Julio Deulofeu, Quiby, Inc. (Kickfurther),
Amazon Capital Services, Inc., Wells Fargo Bank, Small Business
Administration, JBS Logistics, Tigers International Logistics BV,
Lane Sales Canada, Tigers, UK, and Tigers International Solutions
Pty. Ltd.
The Debtor said the Secured Creditors are adequately protected.
First, the Secured Creditors' liens on accounts receivables only
attach to the Debtor's prepetition revenues, but do not attach to
the post-petition revenues other than those revenues generated by
the use or sale of the Creditors' pre-petition collateral
inventory.
Second, the Debtor's continued use of cash collateral to conduct
the business operations will preserve, and indeed, maximizes the
value of the Secured Creditors' collateral.
Third, there is a significant equity cushion protecting the Secured
Creditors since the total value of the Debtor's assets securing the
various loans owed to the secured Creditors is $13,334,897.
The total amount of the Secured Creditors' debt is $2,550,124,
which, according to the Debtor, means there is an 80% equity
cushion equal to $10,784,773 protecting Secured Creditors' liens.
The Debtor proposed in order to provide adequate protection to the
Creditors, postpetition replacement liens in the same amounts and
priority as the secured parties existing rights in the cash
collateral (as may later be determined in the case) with the
exception that no replacement lien will be given in any new
inventory and/or receivables generated as a direct result of any
court approved debtor-in-possession financing to fund production of
specific new inventory and in avoidance claims.
The Court said a final hearing on the matter is scheduled for June
29 at 3:30 p.m.
A copy of the order is available at https://bit.ly/3QApjHD from
PacerMonitor.com.
About Nextsport, Inc.
Nextsport, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. N.D. Cal. Case No. 2-40569) on June 13,
2022. In the petition signed by David Lee, chief executive officer,
the Debtor disclosed $13,381,220 in assets and $10,668,143 in
liabilities.
Judge William J. Lafferty oversees the case.
Eric A. Nyberg, Esq., at Kornfeld, Nyberg, Bendes, Kuhner and
Little PC is the Debtor's counsel.
OASIS PETROLEUM: Egan-Jones Hikes Senior Unsecured Ratings to BB
----------------------------------------------------------------
Egan-Jones Ratings Company on May 26, 2022, upgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by Oasis Petroleum Inc. to BB from BB-.
Headquartered in Houston, Texas, Oasis Petroleum Inc. operates as
an oil and gas exploration company.
OLIN CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on May 27, 2022, retained the 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Olin Corporation.
Headquartered in Clayton, Missouri, Olin Corporation manufactures
chemicals and ammunition products.
PARETEUM CORP: May Use $18MM of Circles DIP Loan
------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Pareteum Corp. and its debtor-affiliates to, among other
things, use cash collateral and obtain postpetition financing on a
final basis.
The Debtors have entered into a superpriority senior secured
priming and superiopriority debtor-in-possession credit facility in
an aggregate principal amount of up to $18 million, provided by
Circles MVNE Pte. Ltd., a prepetition senior secured lender and
agented by Circles.
As of the Petition Date, the Debtors were parties to (A) the
Prepetition Bridge Loan Agreement, (B) the Prepetition First Lien
Note, and (C) the second lien notes issued by Pareteum in favor of
Channel Ventures Group LLC under a Securities Purchase Agreement
dated February 22, 2021.
As of the Petition Date, the aggregate amount owed by the Debtors
under the Prepetition Bridge Loan and the prepetition Senior
Secured Convertible Note due 2025 among Pareteum, as issuer, and
High Trail Investments SA LLC, as initial holder, subsequently sold
to Circles, as holder, in respect of the Prepetition Documents was
not less than $27,754,262, made available to the Borrowers pursuant
to the Prepetition Loans.
As of the Petition Date, the Debtors also owed approximately
$26,253,904 under the Prepetition Second Lien Notes.
The Debtors' need to use cash collateral and to obtain credit as
set forth in the DIP Facility Agreement is immediate and critical
in order to enable the Debtors to continue operations and to
administer and preserve the value of their estates.
As adequate protection, the Prepetition Secured Parties are granted
a lien on and a security interest in all DIP Collateral,
subordinate only to the DIP Liens, the Carve-Out, and the Permitted
Prior Liens. As further adequate protection, the Prepetition
Secured Parties are granted an allowed administrative expense
claims with priority pursuant to section 507(b) of the Bankruptcy
Code to the extent the Adequate Protection Lien is insufficient to
protect the Prepetition Secured Parties' interests in the
Prepetition Collateral.
The Carve-Out means (a) the payment of fees under 28 U.S.C. section
1930, (b) all reasonable fees and expenses up to $50,000 incurred
by a trustee under Section 726(b) of the Bankruptcy Code, (c) the
payment of any fees and expenses owing to the clerk of the Court or
any agent thereof, subject to the Approved Budget, (d)(i) the
payment of unpaid and outstanding reasonable fees and disbursements
of attorneys and other professionals retained by the Debtors and
any statutory committees appointed in the chapter 11 cases under
sections 327 or 1103(a) of the Bankruptcy Code actually incurred
from the Petition Date through the occurrence of an Event of
Default or other Termination or Maturity Date, whether allowed
prior to or after delivery by the DIP Lender of a Carve-Out Trigger
Notice, and (ii) allowed professional fees of retained
professionals of the Debtors in an aggregate amount of $300,000 and
allowed professional fees of retained professionals of any
statutory committees in an amount not to exceed $100,000, in each
case incurred after the first day following delivery by the DIP
Lender of the Carve-Out Trigger Notice, to the extent allowed at
any time.
A copy of the order is available at https://bit.ly/3bqmyIR
PacerMonitor.com.
About Pareteum Corporation
Pareteum Corporation is a cloud software communications platform
company which provides communications platform-as-a-service (CPaaS)
solutions offering mobility, messaging, and connectivity and
security services and applications. It has operations in North
America, Latin America, Europe, Middle East, Africa, and the
Asia-Pacific region.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10615) on May 15,
2022. In the petition signed by Laura W. Thomas, interim chief
financial officer, the Debtor disclosed $52,043,000 in assets and
$10,486,000 in liabilities.
Judge Lisa G. Beckerman oversees the case.
The Debtor tapped TOGUT, SEGAL & SEGAL LLP as bankruptcy counsel,
KING & SPALDING LLP as special counsel, FTI CAPITAL ADVISORS, LLC
as investment banker, FTI CONSULTING, INC. as financial advisor,
and KURTZMAN CARSON CONSULTANTS LLC as claims, noticing, and
balloting agent.
PATHWAY VET: S&P Cuts ICR to 'B-' on High Leverage, Outlook Stable
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Pathway Vet
Alliance LLC (Pathway) to 'B-' from 'B'. S&P also lowered its
issue-level rating on the senior secured credit facility to 'B-'
from 'B'. The recovery ratings are unchanged at '3'.
S&P said, "The stable outlook reflects our expectation that revenue
will grow in the mid-single-digit percent area organically for the
next 12 months, mostly as a result of pricing increases. While we
expect leverage will stay elevated at over 8x in 2023, industry
fundamentals remain healthy and we expect margins could stabilize
at about 18% as cost pressures subside.
"The downgrade reflects our expectation that Pathway will sustain
S&P Global Ratings-adjusted leverage of more than 8x and
free-operating cash flow (FOCF) to debt below 3% as revenue growth
slows and expenses and capex spending remain elevated. The
company's 2021 cash flow generation was moderately lower than our
previous forecast of about $50 million to $60 million, due to high
doctor turnover, rising wages and benefit expenses. We believe
customer volume growth in 2022 will be minimal to modestly negative
as the pet adoption rate continues to drop relative to its peak and
pent-up demand following the pandemic continues to subside. As a
result, we forecast the company's pace of organic revenue growth
will slow to about 5% for 2022 and 2023 (mostly driven by price
increases), from the high-single-digit area in 2021. Additionally,
we expect the tight labor market will continue in 2022 and 2023.
The company has introduced various programs to increase
compensation and address doctor and staff retention, which we
expect will be a burden to margin and cash flow in 2022. While we
believe these actions have helped to reduce the spike in attrition
experienced in 2021, we believe rising wages and turnover will
continue to be a source of pressure as the company looks to remain
competitive, especially in the specialty practice clinics, where
doctor departures are more difficult to replace.
"Despite slowing topline growth and rising wages and interest
expenses (due to a rising interest rate), we expect the company
will continue to issue debt to fund acquisitions based on its
financial-sponsor ownership and acquisitive track-record, which
will lead to S&P Global Ratings-adjusted leverage of about 9x-10x
for 2022 and more than 8x in 2023 (depending on the pace of
acquisitions). We also expect Pathway's cash flow to be less than
$10 million for 2022 due to increased capex on de novo facilities
and return to about $30 million to $40 million in 2023, roughly low
3% FOCF to debt.
"High acquisition multiples in the veterinarian market are a key
credit risk. We believe there's been a modest stabilization in
market acquisition multiples, although they remain very high at
over 12x, on average, and could rise again if financial markets
stabilize. We see high acquisition multiples as a key credit risk
because the company will likely need to issue more debt to fund its
acquisitions, which will make it more difficult to generate
adequate synergies to justify the higher purchase price. This will
increase the level of execution risk for its management team,
especially amid a rising interest rate environment.
"Although we believe there is significant white space in the market
for acquisitions, the company will face intense competition from
its larger peers (such as NVA Holdings Inc. and VCA Inc.[owned by
Mars Inc.]), which have provided further fuel to the elevated
purchase multiples.
"Partly offsetting the above risks, we view the veterinary
operating industry as attractive due to its secular tailwinds and
note the company is more diversified than peers that only focus on
general practice or specialty services. The level of pet ownership
continues to increase in the U.S. and owners are spending more on
their pets. Veterinary services are primarily cash pay, which means
that veterinary operators face very little health care
reimbursement risk. While the discretionary nature of the spending
on veterinary services could leave companies more exposed during
economic downturns, the sector's history over the last few cycles
indicates greater stability relative to more cyclical sectors.
Moreover, Pathway is more diversified compared to some other peers
by providing general practice, specialty, low cost Thrive services,
and Veterinary Growth Partners. We believe this could reduce
revenue volatility as general practice and specialty services
recover at different paces post pandemic, and specialty tends to
hold up better in an economic downturn.
"The stable outlook reflects our expectation that revenue will grow
at the mid-single-digit percent area organically for the next 12
months, mostly as a result of pricing increases. While we expect
leverage will stay elevated at over 8x in 2023, industry
fundamentals remain healthy and we expect margins could stabilize
at about 18% as cost pressures subside.
"We could lower our rating on Pathway if free cash flow is
insufficient to cover fixed charges, including debt amortization or
if we believe the capital structure appears unsustainable
longer-term due elevated leverage and depressed organic growth.
This could happen as a result of mid— to high-single-digit
percent volume decline, rising labor costs, or slow ramp up in de
novo facilities/acquisitions.
"We could consider a higher rating if the company sustains pro
forma adjusted leverage below 9x and free cash flow to debt
comfortably above 3.5%. Any upgrade would also require relative
stability in transaction volumes and continued positive organic
revenue growth."
ESG credit indicators: E-2; S-2; G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of the
controlling owners, in line with our view of the majority of rated
entities owned by private-equity sponsors. Our assessment also
reflects the generally finite holding periods and a focus on
maximizing shareholder returns."
PBF ENERGY: Egan-Jones Retains CCC+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, retained the 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by PBF Energy Inc. EJR also retains 'B' rating on
commercial paper issued by the Company.
Headquartered in Parsippany-Troy Hills, New Jersey, PBF Energy Inc.
operates as an independent petroleum refiner and supplier.
PG&E CORP: Egan-Jones Lowers Senior Unsecured Ratings to BB-
------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, downgraded the foreign
currency and local currency senior unsecured ratings on debt issued
by PG&E Corporation to BB- from B+.
Headquartered in San Francisco, California, PG&E Corporation is a
holding company that holds interests in energy based businesses.
PIER 1: Egan-Jones Retains B+ Senior Unsecured Ratings
------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Pier 1 Imports, Inc.
Headquartered in Fort Worth, Texas, Pier 1 Imports, Inc. retails
decorative home furnishings, gifts, and related items.
PILGRIM'S PRIDE: Egan-Jones Retains B+ Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'B+' local
currency senior unsecured ratings on debt issued by Pilgrim's Pride
Corporation.
Headquartered in Greeley, Colorado, Pilgrim's Pride Corporation
produces prepared and fresh chicken products in the United States
and Mexico.
PLANVIEW PARENT: New Incremental Loan No Impact on Moody's B3 CFR
-----------------------------------------------------------------
Moody's Investors Service says that Planview Parent, Inc.'s
proposed incremental $195 million first lien term loan and
incremental $25 million second lien team loan is credit negative
but does not impact ratings. All existing ratings, including the B3
Corporate Family Rating, the B3-PD Probability of Default Rating,
the B2 Senior Secured First Lien Credit Facilities (First Lien
Facilities), and the Caa2 Senior Secured Second Lien Credit
Facilities (Second Lien Facilities) remain unchanged. Following
the incremental funding, the aggregate size of the company's first
lien term loan (due 2027) and second lien term loan (due 2028) will
increase to about $771 million and $341 million, respectively.
Net proceeds from the incremental term loans will be used in
conjunction with cash on hand and rollover equity to fund the
acquisition of SEP Vulcan Holdings Canada Inc. (dba "Tasktop").
Tasktop is a provider of value stream management (VSM) solutions.
The transaction is credit negative due to the increased leverage
and heightened integration execution risk related to the proposed
and prior acquisitions. Pro forma for the transaction, Planview's
adjusted cash based leverage (Moody's adjusted), including change
in deferred revenue and unbilled receivable, and adjusting for
purchase accounting effects, is around 11x as of March 31, 2022
(excluding non-recurring items leverage is about 8x). As increased
indebtedness and rising interest rates will burden free cash flow,
Moody's expects Planview's free cash flow to debt to be in the low
single digits range over the next 12-18 months.
Still, Moody's expects that revenue growth of at least mid-single
digit range, similar to historical growth, and actioned and planned
synergies will allow Plainview to reduce its cash adjusted leverage
to around 7x by the end of 2023. Planview's acquisition strategy of
complementary products enhances the company's niche position and
product offering, creating cross-sell opportunities for its
existing project and portfolio management (PPM) products. Revenue
and cash flow stability is supported by Planview's large base of
recurring revenues, accounting for about 85% of revenues, diverse
customer profile and low capital requirements.
Planview's liquidity is good. Moody's expects Planview to generate
annualized FCF of at least $25 million over the next 12-18 months.
Moody's expects that Planview will maintain at least $50 million of
balance sheet cash and an undrawn $75 million Senior Secured First
Lien Revolving Credit Facility (Revolver). Although there are no
financial covenants governing the debt, the Revolver is subject to
a usage based financial covenant, a first lien net leverage ratio
(as defined), when utilization of the Revolver exceeds 35%. Moody's
expects that Planview will maintain a substantial cushion on the
first lien net leverage covenant, at least over the near term.
Planview, headquartered in Austin, Texas is a provider of portfolio
management and work management software across a broad set of
enterprise customers. Pro forma annual revenue is about $400
million as of March 31, 2022. Planview is owned by funds affiliated
with private equity sponsors Thoma Bravo, TPG, and TA Associates.
PLUTO ACQUISITION I: Moody's Alters Outlook on B3 CFR to Negative
-----------------------------------------------------------------
Moody's Investors Service affirmed all of its ratings assigned to
Pluto Acquisition I, Inc. (d/b/a "AccentCare") including the
company's B3 Corporate Family Rating, B3-PD Probability of Default
Rating, and B2 ratings on the senior secured revolving credit
facility and first lien term loan. Moody's changed the ratings
outlook to negative from stable.
The change in outlook to negative from stable reflects
deteriorating operating performance, partly due to persistent labor
issues including wage inflation that will continue to pressure the
company's EBITDA and margins, resulting in high financial leverage
and a weaker liquidity position. Moody's views AccentCare's
significant and constant add-backs to EBITDA as an impediment to
positive free cash flow generation, especially in light of rising
interest rates.
The affirmation of AccentCare's B3 Corporate Family Rating reflects
Moody's expectation that the company will continue to grow on the
top-line as demand for home care services remains strong, but that
factors such as wage inflation will remain elevated and interest
costs will rise, further pressuring the company's ability to
generate positive free cash flow.
Affirmations:
Issuer: Pluto Acquisition I, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured Bank Credit Facilities, Affirmed B2 (LGD3)
Outlook Actions:
Issuer: Pluto Acquisition I, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Pluto Acquisition I, Inc.'s (dba AccentCare) B3 Corporate Family
Rating reflects its high financial leverage, modest scale compared
to larger rated peers, and moderate geographic diversification. The
credit profile is further constrained by the company's limited free
cash flow generation relative to its high debt balances and high
reliance on Medicare and Medicaid reimbursement. AccentCare's
credit profile is also constrained by labor issues including wage
inflation, which are pressuring the company's margins. Moody's
expects AccentCare's debt/EBITDA to remain above 7 times for the
next 12 to 18 months.
The rating is supported by AccentCare's strong organic growth
prospects, driven by growing demand for home health services.
AccentCare also has a strong competitive presence in Texas,
supported by its strong relationships with key medical centers. The
rating is also supported by the general low capital expenditure
requirements which provide substantial cost advantages compared to
facility based care.
Moody's expects AccentCare to maintain an adequate liquidity
position over the next 12 months. As of March 31, 2022, the company
has approximately $21 million of cash on hand. However,
approximately $18 million of deferred employer payroll taxes will
need to be returned to the government by the end of 2022. Moody's
expects the company to generate negative free cash flow in the next
12 months, which includes mandatory term loan amortization of
approximately $9 million. AccentCare has access to about $18
million of its $40 million revolving credit facility, as well as
approximately $100 million on its asset based lending facility.
Moody's anticipates the company to have sufficient cushion under
its springing first lien net leverage covenant on the revolver if
it were to be tested.
ESG considerations are material to AccentCare's credit profile.
AccentCare faces social risks, such as the rising concerns around
the access and affordability of healthcare services. However,
Moody's does not consider home health to face the same level of
social risk as hospitals as care at home is viewed as an affordable
alternative to hospitals or skilled nursing facilities. Further,
given its high percentage of revenue generated from Medicare and
Medicaid, AccentCare is exposed to regulatory changes. AccentCare
is also exposed to wage inflation, particularly as it must maintain
a large workforce with both skilled labor (nurses and therapists),
of which there are shortages, and unskilled labor, which is
experiencing rising minimum wages in certain markets. In terms of
governance, AccentCare is owned by private equity sponsors, and as
such, Moody's expects financial policies to remain aggressive,
leverage to remain high and actions to continue benefiting
shareholders.
The negative outlook reflects AccentCare's deteriorating operating
performance and Moody's expectation that wage inflation will
continue to pressure the company's margins and rising interest
costs will weigh on the company's ability to generate consistent
positive free cash flow going forward.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if AccentCare demonstrates a notable
improvement in earnings quality following recent acquisition
integration. The ratings could also be upgraded if the company
generates consistently positive free cash flow. Quantitatively,
ratings could be upgraded if leverage is sustained below 6.0 times
on a Moody's adjusted basis.
Ratings could be downgraded if AccentCare experiences further
material operating disruptions or margin degradation. Negative
changes to Medicare or Medicaid reimbursement could result in a
ratings downgrade. Large debt-funded acquisitions or shareholder
distributions could result in a ratings downgrade. Substantial
weakening of liquidity, including further significant utilization
of the ABL facility or sustained negative free cash flow, could
also result in a ratings downgrade.
AccentCare is one of the largest for-profit home healthcare
providers in the U.S. The Company offers home health, hospice and
personal care services ("PCS"). For the last twelve months ended
March 31, 2022, AccentCare generated revenues of approximately $1.6
billion. The company is owned by private equity firm Advent
International.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
POCONO MOUNTAIN: Seeks to Hire John J. Martin as Bankruptcy Counsel
-------------------------------------------------------------------
Pocono Mountain Lake Forest Community Assn, Inc. seeks approval
from the U.S. Bankruptcy Court for the Middle District of
Pennsylvania to hire the Law Offices of John J. Martin as its legal
counsel.
The firm's services include:
(a) bankruptcy planning;
(b) preparation of bankruptcy schedules and statement of
financial affairs;
(c) preparation of records and reports including monthly
operating reports as required by the Bankruptcy Code and Rules and
the Local Bankruptcy Rules;
(d) preparation of applications and proposed orders to be
submitted to the court for the retention of professionals; and
(e) identification and prosecution of claims and causes of
action assertable by the Debtor, including potential claims against
former board members;
(f) examination of proofs of claim previously filed and to be
filed, and the possible prosecution of objections to certain of
such claims;
(g) preparation of a plan of reorganization; and
(h) other necessary legal services.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Partners $250
Associates $200
Paralegals $75
The firm will also seek reimbursement for all reasonable costs and
expenses.
The firm received a pre-bankruptcy retainer in the amount of
$6,738.
As disclosed in court filings, the Law Offices of John J. Martin
does not represent interests adverse to the estate in the matters
upon which it is to be employed.
The firm can be reached through:
John J. Martin, Esq.
Law Offices of John J. Martin
1022 Court Street
Honesdale, PA 18431
Phone: (570) 253-6899
Email: jmartin@martin-law.net
About Pocono Mountain Lake Forest
Community Assn
Pocono Mountain Lake Forest Community Assn, Inc. filed a petition
for Chapter 11 protection (Bankr. M.D. Pa. Case No. 22-01084) on
June 10, 2022, listing up to $1 million in assets and up to
$500,000 in liabilities. Judge Mark J. Conway oversees the case.
John J. Martin, Esq., at the Law Offices of John J. Martin serves
as the Debtor's legal counsel.
POCONO MOUNTAIN: Seeks to Hire Richard B. Henry as Special Counsel
------------------------------------------------------------------
Pocono Mountain Lake Forest Community Assn, Inc. seeks approval
from the U.S. Bankruptcy Court for the Middle District of
Pennsylvania to hire Richard B. Henry and Associates, LLC as its
special counsel.
The Debtor requires a special counsel to handle all non-bankruptcy
legal matters, including but not limited to, the collection of dues
and assessments; issues concerning and enforcement of the
association's rules and regulations; and attendance at board
meetings and general membership meetings.
The firm will charge these hourly fees:
Attorneys $250
Support Staff $75
The firm received a retainer in the amount of $5,000.
As disclosed in court filings, Richard B. Henry and Associates does
not represent interests adverse to the Debtor's estate in the
matters upon which the firm is to be employed.
The firm can be reached through:
Richard B. Henry, Esq.
Richard B. Henry and Associates, LLC
1105 Court Street
Honesdale, PA 18431
Phone: (570) 253-7991
About Pocono Mountain Lake Forest
Community Assn
Pocono Mountain Lake Forest Community Assn, Inc. filed a petition
for Chapter 11 protection (Bankr. M.D. Pa. Case No. 22-01084) on
June 10, 2022, listing up to $1 million in assets and up to
$500,000 in liabilities. Judge Mark J. Conway oversees the case.
John J. Martin, Esq., at the Law Offices of John J. Martin and
Richard B. Henry and Associates, LLC serve as the Debtor's
bankruptcy counsel and special counsel, respectively.
POST HOLDINGS: Egan-Jones Retains B Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on May 31, 2022, retained the 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Post Holdings, Inc.
Headquartered in St. Louis, Missouri, Post Holdings, Inc. operates
as a holding company.
PRECISION CASTPARTS: Egan-Jones Retains B- Sr. Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, retained the 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Precision Castparts Corp. EJR also retained the 'B'
rating on commercial paper issued by the Company.
Headquartered in Portland, Oregon, Precision Castparts Corp
manufactures and sells metal components.
PRECISION DRILLING: Egan-Jones Retains B- Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, retained the 'B-' local
currency senior unsecured ratings on debt issued by Precision
Drilling Corporation. EJR also retained the 'B' rating on
commercial paper issued by the Company.
Headquartered in Calgary, Canada, Precision Drilling Corporation is
an integrated oilfield drilling and energy service company
providing services to the oil and gas industry.
PROFESSIONAL TECHNICAL: Exclusivity Period Extended to Oct. 1
-------------------------------------------------------------
Professional Technical Security Services, Inc. has been given more
time to file its plan for emerging from Chapter 11 protection.
Judge Hannah Blumenstiel of the U.S. Bankruptcy Court for the
Northern District of California extended the exclusivity periods
for the company to file its Chapter 11 plan and solicit acceptances
to Oct. 1 and Nov. 30, respectively.
The extension will give Professional Technical Security Services
more time to complete the sale process already initiated by the
company, according to its attorney, Kimberly Fineman, Esq., at
Finestone Hayes, LLP.
"The terms of [the company's] plan will be dictated by the results
of the sale process already initiated by [the company]. That sale
may be of assets, equity, or some combination thereof to maximize
value to the estate," Ms. Fineman said in court papers.
One of the company's most significant assets is a roughly $9
million net operating loss carryover tax credit. In addition to the
$9 million NOL tax credit, the company continues to generate almost
$3 million in monthly accounts receivable, which demonstrates the
significant value to be obtained by a purchaser.
About Professional Technical
Professional Technical Security Services, Inc. is a company in San
Francisco, Calif., that provides professional security staffing. It
conducts business under the name Protech Bay Area.
Professional Technical sought Chapter 11 bankruptcy protection
(Bankr. N.D. Calif. Case No. 22-30062) on Feb. 1, 2022, disclosing
assets of more than $14 million and liabilities of more than $26
million.
Judge Hannah L. Blumenstiel oversees the case.
Stephen D. Finestone, Esq., at Finestone Hayes, LLP and Constangy,
Brooks, Smith & Prophete, LLP serve as the Debtor's bankruptcy
counsel and special counsel, respectively. Bachecki, Crom & Co.,
LLP is the Debtor's accountant, while GlassRatner Advisory &
Capital Group, LLC serves as the Debtor's financial advisor.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors on May 9, 2022. Daren Brinkman, Esq., at
Brinkman Portillo Ronk, PC and Dundon Advisers, LLC serve as the
committee's legal counsel and financial advisor, respectively.
PROFRAC HOLDINGS: S&P Places 'B' ICR on CreditWatch Positive
------------------------------------------------------------
S&P Global Ratings placed its ratings on ProFrac Holdings LLC on
CreditWatch with positive implications.
ProFrac Holdings Corp. has announced that it is acquiring U.S. Well
Services (USWS) in a stock for stock transaction that issues $270
million of equity, including the conversion of USWS' preferred
stock and convertible debt to ProFrac common equity.
The acquisition, combined with the company's existing planned fleet
construction, will materially increase the scale of its operations
to 44 fleets (of which 12 will be electric) by year-end 2022.
The CreditWatch reflects that S&P could raise its ratings on the
company, including its 'B' issuer credit rating, by one notch
following the close of the transaction, which it expects in the
fourth quarter.
S&P said, "We placed our ratings on ProFrac Holdings on CreditWatch
with positive implications following its announced acquisition of
peer USWS in an all-equity transaction for $270 million, including
the conversion of USWS' preferred stock and convertible debt to
ProFrac common equity.
"We expect the acquisition to materially expand ProFrac's
completion fleets to a total 44, including 12 electric fleets, by
the end of 2022. In addition, the company expects to realize up to
$35 million of synergies from the transaction in 2023. Given the
equity financing and favorable market conditions for the
completions sector, including the potential re-contracting of the
currently active USWS' fleet at current market rates, we expect
ProFrac to maintain strong financial measures pro forma for the
acquisition."
CreditWatch
S&P said, "We expect to resolve the CreditWatch around the close of
the acquisition, which we expect will occur during the fourth
quarter of 2022. At that time, we could raise our ratings on the
company by one notch assuming the transaction closes as expected
and its financial measures remain strong for the rating, supported
by robust cash flows that will allow for both deleveraging and
shareholder returns."
PROS HOLDINGS: Egan-Jones Retains CCC Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company on May 24, 2022, retained the 'CCC'
foreign currency and local currency senior unsecured ratings on
debt issued by PROS Holdings, Inc. EJR also retained the 'C' rating
on commercial paper issued by the Company.
Headquartered in Houston, Texas, PROS Holdings, Inc. operates as a
holding company.
PUNYAKAM PLLC: Seeks to Hire Kimberly A. Eckert as Special Counsel
------------------------------------------------------------------
Punyakam, PLLC seeks approval from the U.S. Bankruptcy Court for
the District of Arizona to employ The Law Offices of Kimberly A.
Eckert as its special counsel.
The Debtor needs the firm's legal assistance in the following
lawsuits:
a. RWI Construction Services, Inc. v. Skyz, LLC, et al.;
b. Punyakam PLLC v. Cynosure, LLC;
c. MMP Capital v. Punyakam, PLLC, Chad Gammage;
d. Midfirst Bank v. Punyakam, PLLC, Chad Gammage;
e. Chadwick Gammage v. Desert Floor Coatings, Inc., et al.;
and
f. Punyakam, PLLC v. Med Services LLC, et al.
The hourly rates charged by the firm for its services are as
follows:
Attorneys $280 per hour
Legal Assistance $150 per hour
As disclosed in court filings, The Law Offices of Kimberly A.
Eckert does not represent interests adverse to the Debtor or the
bankruptcy estate.
The firm can be reached through:
Kimberly A. Eckert, Esq.
The Law Offices of Kimberly A. Eckert
5235 S. Kyrene Rd., Ste.206
Tempe, AZ 85283
Tel: (480) 4s6-4497
Fax: (866) 583-6073
Email: keckert@arizlaw.biz
About Punyakam PLLC
Punyakam, PLLC filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. D. Ariz. Case No. 22-03615) on June 6,
2022, listing up to $500,000 in assets and up to $1 million in
liabilities. Jody Corrales serves as Subchapter V trustee.
D. Lamar Hawkins, Esq., at Guidant Law, PLC is the Debtor's legal
counsel.
PUNYAKAM PLLC: Wins Interim Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona authorized
Punyakam, PLLC to use cash collateral in accordance with the budget
on an interim basis.
The Debtor is permitted to use cash collateral to pay post-petition
operating expenses in the ordinary course of its business.
The Court said any creditor holding a valid and enforceable
prepetition security interest in any pre-petition property of the
estate, will have a post-petition replacement lien on the same type
of post-petition assets acquired by the Debtor after the Petition
Date, if any, and in the same validity, priority, and extent as
such creditor possessed a lien on property on the Petition Date,
and shall have all the rights and remedies of a secured creditor in
connection with the replacement liens granted by the Order, except
to the extent that the Bankruptcy Code may affect such rights and
remedies. The liens will be effective without perfection and as
against any successors of the Debtor, including any trustee.
A final hearing on the matter is scheduled for June 30, 2022 at 2
p.m. via Zoom.
A copy of the order is available at https://bit.ly/3N9NRUG from
PacerMonitor.com.
About Punyakam, PLLC
Punyakam, PLLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 22-03615) on June 6,
2022. In the petition signed by Punya R. Gammage, member, the
Debtor disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Judge Scott H. Gan oversees the case.
D. Lamar Hawkins, Esq., at Guidant Law, PLC is the Debtor's
counsel.
QUALITAT DRYWALL: Files Emergency Bid to Use Cash Collateral
------------------------------------------------------------
Qualitat Drywall, LLC asks the U.S. Bankruptcy Court for the
Southern District of California for authority to use cash
collateral on an interim basis, pending a final hearing, to pay any
and all expenses in the ordinary course of its business.
All secured creditors are adequately protected by equity in their
collateral with these exceptions:
a. The loan by Bank of America secured by the 2020 Ford F150
Lariat is under secured. The value of the collateral is
$30,619. Pursuant to the Proof of Claim filed by Bank of
America (POC #3) the lien is $33,686.
As adequate protection, the Debtor proposes to start
making regular monthly payments effective August 1, 2022.
b. CDC Small Business Finance, pursuant to a UCC-1 filing,
has a blanket lien on the cash, accounts receivable and
unencumbered equity in company property.
As adequate protection, the Debtor proposes a $500 a
month payment commencing August 1, 2022, as well as
replacement liens on future accounts receivable and cash.
The bankruptcy filing was precipitated by underbid contracts and
increased labor and material costs.
The creditors with Secured Interests in Specific Property are:
a. Bank of America vehicle loan:
-- Proof of Claim: yes, #2.
-- Collateral: 2018 Chevrolet Silverado.
-- Value of the collateral: $27,494.
-- Secured lien: $15,605.
-- Adequate protection: the equity cushion provides
adequate protection.
b. Bank of America vehicle loan:
-- Proof of Claim: yes, #3.
-- Collateral: 2020 Ford F150 Lariat.
-- Value of the collateral: $30,619.
-- Secured lien: $33,686.
-- Adequate protection: the collateral is under secured,
and the Debtor proposes commencement of regular
monthly payment effective July 1, 2022.
c. Toyota Financial Services:
-- Proof of Claim: no. ____
-- Collateral: 2019 Toyota Prius.
-- Value of the collateral: $25,270.
-- Secured lien: $12,041.
-- Adequate protection: the equity cushion provides
adequate protection.
d. Foundation Building Materials, a supplier of
drywall and related materials to the Debtor:
-- Proof of Claim: no. ____
-- Collateral: The Debtor believes that Foundation
Building Materials has filed preliminary notices
on all projects to which it supplied material so
they have fully secured mechanic's liens.
The Creditors with UCC-1 liens are:
a. CDC Small Business Finance, which has a Partially Secured
Blanket Lien:
-- As noted on Schedules A/B, and the Declaration of
Steven E. Cowen, Esq., the Debtor has $123,810 of
unencumbered equity in company property. As further
noted in the declaration of Steven E. Cowen, Esq.,
there are 2 UCC -1 liens. The first was filed by CDC
Small Business Finance on December 17, 2019. The total
debt owed to CDC is $209,000. $123,810 of that debt is
secured. $85,190 is unsecured. The property securing
the CDC blanket lien is depreciating in value. As
adequate protection, Debtor would propose replacement
liens on the future accounts receivable and a monthly
payment of $500 commencing July 15, 2022, to cover the
depreciation in office equipment and the vehicles.
b. The U.S. Small Business Administration, whose Blanket
Lien, the Debtor says, is wholly unsecured:
-- The remaining UCC-1 lien held by the SBA filed on
July 24, 2020, is wholly unsecured as there is no
equity in company property not already encumbered by
the CDC blanket lien. Since its lien is wholly
unsecured, adequate protection payments should not be
required.
The Debtor asserts it will return to profitability by the end of
July 2022, and that the expense categories in its budget are
reasonable.
A copy of the motion is available at https://bit.ly/3y8eZiN from
PacerMonitor.com.
About Qualitat Drywall
Qualitat Drywall LLC -- https://qualitatdrywall.com/ -- is a
drywall contractor in Southern California.
Qualitat Drywall sought protection under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Cal. Case No. 22-01405) on
May 27, 2022. In the petition filed by Heriberto Gonzalez, as
managing member, Qualitat Drywall estimated assets between $100,000
and $500,000 and estimated liabilities between $500,000 and $1
million.
Jean Goddard has been appointed as Subchapter V trustee.
Steven E. Cowen, Esq., at S.E. Cowen Law is the Debtor's counsel.
RAMBUS INC: Egan-Jones Retains B- Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Rambus Inc. EJR also retained the 'B' rating on
commercial paper issued by the Company.
Headquartered in Sunnyvale, California, Rambus Inc. designs,
develops, licenses, and markets high-speed chip-to-chip interface
technology to enhance the performance and cost-effectiveness of
consumer electronics, computer systems, and other electronic
products.
RENEWABLE ENERGY: Moody's Withdraws 'B1' Corporate Family Rating
----------------------------------------------------------------
Moody's Investors Service has withdrawn all of Renewable Energy
Group, Inc.'s (REGI) ratings, including the B2 rating on its senior
secured notes. This concludes the review for upgrade on REGI's
ratings that was initiated on February 28, 2022.
Withdrawals:
Issuer: Renewable Energy Group, Inc.
Corporate Family Rating, Withdrawn, previously rated B1
Probability of Default Rating, Withdrawn, previously rated B1-PD
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-2
Senior Secured Regular Bond/Debenture, Withdrawn, previously rated
B2 (LGD4)
Outlook Actions:
Issuer: Renewable Energy Group, Inc.
Outlook, Changed To Rating Withdrawn From Rating Under Review
RATINGS RATIONALE
Chevron Corporation (Chevron, Aa2 stable) completed the acquisition
of REGI on June 13, 2022.[1] On June 22nd, Chevron completed the
previously announced full redemption of the REGI 5.875% senior
secured green notes due 2028, and therefore Moody's has withdrawn
all of REGI's ratings since all of its rated debt is no longer
outstanding.
Renewable Energy Group, Inc. is one of North America's largest
producers of advanced biofuels through converting natural fats,
oils and greases into transportation biofuels. The company is a
wholly-owned subsidiary of Chevron Corporation.
RETROTOPE INC: Unsecured Creditors Will Get 100% of Claims in Plan
------------------------------------------------------------------
Retrotope, Inc., filed with the U.S. Bankruptcy Court for the
District of Delaware a First Amended Chapter 11 Plan of Liquidation
or Reorganization dated June 23, 2022.
Launched in 2006, the Company is a clinical-stage biopharmaceutical
company focused on the development of first-in class therapies for
degenerative diseases ranging from orphan neurodegenerative
indications to large market degenerative conditions.
The Debtor and its advisors, specifically their investment banker
SSG Capital Advisors LLP, immediately engaged in a robust marketing
process since the Petition Date in order to facilitate the Debtor's
emergence from this chapter 11 case. On May 19, 2022, the Court
entered the Order Approving the Bidding Procedures which approved
the sale process and the entry by the Debtor into the Stalking
Horse APA.
Accordingly, this Plan sets a floor for recovery to creditors based
on the procedures from the proposed Stalking Horse APA, which
provides for a purchase price of (i) the amount of the secured debt
in its entirety as of the date of the Confirmation Hearing, plus
(ii) ten million dollars ($10,000,000.00) in cash. The Stalking
Horse APA also provides for the assumption of cure liabilities.
The Debtor is soliciting offers for a Restructuring Transaction.
The Court has approved a Stalking Horse APA that contemplates an
Asset Sale Restructuring, subject to higher or otherwise better
offers. The Sale Proceeds from the Stalking Horse APA are
sufficient to pay classes 1-3 under the Plan in full, and a portion
of interests in class 4. The Stalking Horse APA is subject to
higher or otherwise better offers and therefore, the proposed
treatment of Claims and Interests under the Plan may improve. Bids
are due on June 22, 2022 and if multiple bids are received, an
auction is scheduled to occur on June 27, 2022.
The net proceeds received by the Debtor upon the close of an Asset
Sale or Equitization Restructuring are to be used to make payments,
to the extent of available Cash, to holders of Allowed Claims in
the order of priority under section 507 of the Bankruptcy Code,
including DIP Claims, Allowed Administrative Claims (including
Professional Fee Claims), Allowed Priority Tax Claims and Allowed
Claims in Class 1, Class 2, Allowed General Unsecured Claims in
Class 3, and Pro Rata Distributions to holders of Class 4 Series D
Interests. It is not expected that there will be remaining funds to
make distributions to Holders of Interests other than Series D
Interests; however, if there are sufficient funds to make
additional distributions, the distributions under the Plan adhere
to the distribution waterfall in the Debtor's Amended and Restated
Certificate of Incorporation.
Class 3 consists of all General Unsecured Claims. Each Holder of an
Allowed General Unsecured Claim will receive (a) if an Asset Sale
Restructuring occurs, payment in Cash, in full, from the Plan
Administrator Assets, including payment of any interest if such
right to receive interest was preserved in any proof of claim and
is required by the underlying agreement that gave rise to the
Allowed General Unsecured Claim (b) if an Equitization
Restructuring or a Licensing Transaction occurs, payment in Cash,
in full, including payment of any interest if such right to receive
interest was preserved in any proof of claim and is required by the
underlying agreement that gave rise to the Allowed General
Unsecured Claim from the Reorganized Debtor. Class 3 is unimpaired.
The allowed unsecured claims total $2,256,000. This Class will
receive a distribution of 100% of their allowed claims.
Class 10 consists of all Holders of Common Interests. If the Sale
Proceeds from any Restructuring Transaction exceed the amount
required to pay the Series A Interests $0.23 per share, plus all
declared but unpaid dividends on such shares of Series A Interests,
then each Holder of Common Interests shall receive its Pro Rata
share of the remaining Sales Proceeds.
If there is a Licensing Transaction or Equitization Transaction
that does not cancel existing shares, the New Retrotope Interests
may be reissued in the same manner as existing interests as of the
Distribution Record Date.
The Reorganized Debtor will fund distributions under the Plan with
Cash on hand on the Effective Date and the revenues and proceeds of
all assets of the Debtor, including proceeds from all Causes of
Action not settled, released, discharged, enjoined, or exculpated
under the Plan or otherwise on or prior to the Effective Date.
A full-text copy of the First Amended Plan dated June 23, 2022, is
available at https://bit.ly/3ODTeg7 from PacerMonitor.com at no
charge.
Counsel to the Debtor:
Matthew P. Ward, Esq.
Ericka F. Johnson, Esq.
Morgan L. Patterson, Esq.
Womble Bond Dickinson (US) LLP
1313 North Market Street, Suite 1200
Wilmington, DE 19801
Tel: (302) 252-4320
Email: matthew.ward@wbd-us.com
Email: ericka.johnson@wbd-us.com
Email: morgan.patterson@wbd-us.com
About Retrotope Inc.
Retrotope Inc., a biopharma company in Los Altos, Calif., filed a
petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. D. Del. Case No. 22-10228) on March 21, 2022, listing up to
$1 million in assets and up to $10 million in liabilities. Jami B
Nimeroff serves as Subchapter V trustee.
Judge John T. Dorsey oversees the case.
The Debtor tapped Matthew P. Ward, Esq., at Womble Bond Dickinson
(US), LLP as legal counsel; SSG Advisors, LLC as investment banker;
and Rock Creek Advisors, LLC as financial advisor. BMC Group, Inc.
is the claims and noticing agent and administrative advisor.
REVLON INC: Citigroup Could Lose $900 Million in Bankruptcy
-----------------------------------------------------------
Georgina Caldwell of Global Cosmetics News reports that Citigroup's
two-year quest to recoup cash paid to Revlon debtors in a notorious
blunder has hit another bump in the road, according to a report
published by Bloomberg. The US cosmetics giant filed for
bankruptcy last week and has yet to list the bank as a creditor,
meaning the bank may fail to recoup any of the missing cash.
Revlon lenders, Brigade Capital Management, HPS Investment Partners
and Symphony Asset Management, refused to repay money sent to them
in error by a Citi employee back in August 2020, and a subsequent
lawsuit found in favor of the trio. Citigroup's appeal is
pending.
It's not difficult to see why Revlon would be tempted to challenge
Citi's claim to the cash -- the debt amounts to some 15 percent of
the cosmetics company's US$3.4 billion total. However, to do so
would amount to burning bridges with an important financing
partner, Bloomberg points out.
About Revlon Inc.
Revlon Inc. manufactures, markets and sells an extensive array of
beauty and personal care products worldwide, including color
cosmetics; fragrances; skin care; hair color, hair care and hair
treatments; beauty tools; men's grooming products; anti-perspirant
deodorants; and other beauty care products. Today, Revlon's
diversified portfolio of brands is sold in approximately 150
countries around the world in most retail distribution channels,
including prestige, salon, mass, and online.
Since its breakthrough launch of the first opaque nail enamel in
1932, Revlon has provided consumers with high quality product
innovation, performance and sophisticated glamour. In 2016, Revlon
acquired the iconic Elizabeth Arden company and its portfolio of
brands, including its leading designer, heritage and celebrity
fragrances.
Revlon is among the leading global beauty companies, with some of
the world's most iconic and desired brands and product offerings in
color cosmetics, skin care, hair color, hair care and fragrances
under brands such as Revlon, Revlon Professional, Elizabeth Arden,
Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy
Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos,
Christina Aguilera and AllSaints.
Revlon, Inc., sought Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 22-10760) on June 15, 2022. Fifty affiliates, including Almay,
Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also
sought bankruptcy protection on June 15 and June 16, 2022.
Revlon disclosed total assets of $2,328,093,000 against total
liabilities of $3,689,240,395 as of April 30, 2022.
The Hon. David S. Jones is the case judge.
PJT Partners is acting as financial advisor to Revlon and Alvarez &
Marsal is acting as restructuring advisor. Paul, Weiss, Rifkind,
Wharton & Garrison LLP is acting as legal advisor to the Company.
Mololamken, LLC, is the conflicts counsel. Kroll, LLC, is the
claims agent.
REVLON INC: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Revlon
Inc. and its affiliates.
The committee members are:
1. US Bank Trust Company, National Association
60 Livingston Avenue
St. Paul, MN 55107
Attention: Timothy Sandell
Senior Vice President
Telephone: (651) 466-5867
2. Pension Benefit Guaranty Corporation
1200 K Street, N.W.
Washington, DC 20005
Attention: Cynthia Wong
Corporate Finance & Restructuring Department
Telephone: (202) 229-3033
3. Orlandi, Inc.
131 Executive Blvd
Farmingdale, NY 11735
Attention: Per Dobler – Senior Vice President
Telephone: (631) 756-0010
4. Quotient Technology, Inc.
1260 East Stringham Avenue, Suite 600
Salt Lake City, UT 84106
Attention: Phillips Sweet
Director Commercial Transactions
Telephone: (650) 605-4600
5. Stanley B. Dessen
2 Melby Lane
Roslyn, NY 11576
Telephone: (516) 484-6134
6. Eric Biljetina
Independent Executor of the Estate of Jolynne Biljetina
819 Prairie Lawn Road
Glenview, IL 60025
Telephone: (847) 309-1895
7. Catherine Poulton
c/o MRHFM Law
1015 Locust Street, Suite 1200
St. Louis, MO 63101
Telephone: (314) 241-2003
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Revlon Inc.
Revlon Inc. manufactures, markets and sells an extensive array of
beauty and personal care products worldwide, including color
cosmetics; fragrances; skin care; hair color, hair care and hair
treatments; beauty tools; men's grooming products; anti-perspirant
deodorants; and other beauty care products. Today, Revlon's
diversified portfolio of brands is sold in approximately 150
countries around the world in most retail distribution channels,
including prestige, salon, mass, and online.
Since its breakthrough launch of the first opaque nail enamel in
1932, Revlon has provided consumers with high quality product
innovation, performance and sophisticated glamour. In 2016, Revlon
acquired the iconic Elizabeth Arden company and its portfolio of
brands, including its leading designer, heritage and celebrity
fragrances.
Revlon is among the leading global beauty companies, with some of
the world's most iconic and desired brands and product offerings in
color cosmetics, skin care, hair color, hair care and fragrances
under brands such as Revlon, Revlon Professional, Elizabeth Arden,
Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy
Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos,
Christina Aguilera and AllSaints.
Revlon, Inc., sought Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 22-10760) on June 15, 2022. Fifty affiliates, including Almay,
Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also
sought bankruptcy protection on June 15 and June 16, 2022. The
bankruptcy cases are jointly administered with Revlon's case.
Revlon disclosed total assets of $2,328,093,000 against total
liabilities of $3,689,240,395 as of April 30, 2022.
The Hon. David S. Jones is the case judge.
PJT Partners is acting as financial advisor to Revlon and Alvarez &
Marsal is acting as restructuring advisor. Paul, Weiss, Rifkind,
Wharton & Garrison LLP is acting as legal advisor to the Company.
Mololamken, LLC, is the conflicts counsel. Kroll, LLC, is the
claims agent.
RIDER HOTEL: Gets OK to Hire Stretto as Claims and Noticing Agent
-----------------------------------------------------------------
Rider Hotel, LLC received approval from the U.S. Bankruptcy Court
in the District of Delaware to hire Stretto, Inc. as its claims and
noticing agent.
The firm will oversee the distribution of notices and will assist
in the maintenance, processing and docketing of proofs of claim
filed in the Debtors' Chapter 11 cases.
The firm will charge these hourly fees:
Consultant $70 - $200
Director/ Managing Director $210 - $250
Solicitation Associate $230
Director of Securities & Solicitations $250
Sheryl Betance, a senior managing director at Stretto's Corporate
Restructuring, disclosed in court filings that her firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Sheryl Betance
Stretto Inc.
410 Exchange, Ste. 100
Irvine, CA 92602
Telephone: (714) 716-1872
Email: Sheryl.betance@stretto.com
About Rider Hotel
Rider Hotel, LLC owns The Iron Horse Hotel located at 500 W.
Florida St., in Milwaukee, Wis. The hotel, which opened in 2008,
has about 100 rooms, two banquet facilities and two restaurants;,
and features a motorcycle theme and decor building off the nearby
Harley-Davidson Museum.
Rider Hotel sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Del. Case No. 22-10522) on June 9, 2022, listing
between $10 million and $50 million in both assets and liabilities.
Timothy J. Dixon, president of Rider Hotel, signed the petition.
Judge John T. Dorsey oversees the case.
Mark Minuti, Esq., at Saul Ewing Arnstein & Lehr is the Debtor's
counsel.
ROYAL BLUE REALTY: Seeks to Extend Exclusivity Period to Aug. 31
----------------------------------------------------------------
Royal Blue Realty Holdings, Inc. asked the U.S. Bankruptcy Court
for the Southern District of New York to extend its exclusivity
periods to file a Chapter 11 plan of reorganization and solicit
acceptances for the plan to Aug. 31, and Oct. 31, respectively.
The extension, if granted by the court, will give the company
enough time to complete the evaluation of its residential
apartments in New York, which it intends to convert into
condominiums and sell them to the public.
"Until the architect's report and plans are completed, construction
bids obtained from general contractors, and engineering and legal
analyses of the steps needed to legalize the apartments as
condominiums and file an offering plan, it is virtually impossible
to formulate a reorganization plan," said the company's attorney,
Robert Rattet, Esq., at Davidoff Hutcher & Citron, LLP.
The exclusivity motion is on the court's calendar for June 29.
About Royal Blue Realty Holdings
Royal Blue Realty Holdings, Inc. is a New York-based company
engaged in renting and leasing real estate properties.
Royal Blue filed a voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-10802) on April
26, 2021, disclosing total assets of up to $10 million and total
liabilities of up to $50 million. Andrew Nichols, chief
restructuring officer, signed the petition.
Judge Lisa G. Beckerman oversees the Debtor's case.
The Debtor tapped Davidoff Hutcher & Citron, LLP as bankruptcy
counsel and Lester, Bleckner & Shaw as special litigation counsel.
Elaine Shay was appointed as temporary receiver with respect to the
Debtor by order of the Supreme Court of New York on March 9, 2021.
ROYAL CARIBBEAN: Egan-Jones Keeps B- Senior Unsecured Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Royal Caribbean Cruises Ltd. EJR also the retained
'B' rating on commercial paper issued by the Company.
Headquartered in Miami, Florida, Royal Caribbean Cruises Ltd.
operates as a global cruise company operating a fleet of vessels in
the cruise vacation industries.
RUBY PIPELINE: Taps Weil Gotshal & Manges as Co-Counsel
-------------------------------------------------------
Ruby Pipeline, LLC seeks approval from the U.S. Bankruptcy Court
for District of Delaware to hire Weil Gotshal & Manges, LLP as
co-counsel with Richards, Layton & Finger, P.A.
The firm's services include:
(a) taking all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on the
Debtor's behalf, the defense of any actions commenced against the
Debtor, the negotiation of disputes in which the Debtor is involved
and the preparation of objections to claims filed against the
Debtor's estate;
(b) taking necessary actions in connection with any chapter 11
plan and related disclosure statement and all related documents,
including in connection with any post-petition sale process, and
such further actions as may be required in connection with the
administration of the Debtor's estate;
(c) taking necessary action to protect and preserve the value
of the Debtor's estate and all related matters;
(d) if necessary, taking all appropriate actions in connection
with the sale of the Debtor's assets pursuant to section 363 of the
Bankruptcy Code;
(e) preparing on behalf of the Debtor, as debtor in
possession, necessary motions, applications, answers, orders,
reports and other papers in connection with the administration of
the Debtor's estate, or otherwise;
(f) performing other necessary legal services in connection
with the prosecution of this chapter 11 case.
The firm will be at these hourly rates:
Partners/Counsel $1,250 to $1,950
Associates $690 to $1,200
Paraprofessionals $275 to $495
Ray Schrock, Esq., a partner at Weil, disclosed in a court filing
that his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, Weil
Gotshal disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm has not represented the Debtor prepetition; and
-- Weil is developing a prospective budget and staffing plan
for this chapter 11 case.
The firm can be reached through:
Ray C. Schrock, Esq.
Sunny Singh, Esq.
WEIL, GOTSHAL & MANGES LLP
Ray C. Schrock, P.C.
767 Fifth Avenue
New York, NY 10153
Telephone: (212) 310-8000
E-mail: ray.schrock@weil.com
sunny.singh@weil.com
About Ruby Pipeline
Ruby Pipeline, LLC, a Houston-based natural gas pipeline company,
sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No.
22-10278) on March 31, 2022. In the petition filed by Will W.
Brown, as commercial vice-president, Ruby Pipeline listed $500
million to $1 billion in both assets and liabilities.
Judge Craig T. Goldblatt oversees the case.
Richards, Layton & Finger, P.A. and Weil Gotshal & Manges, LLP are
the Debtor's bankruptcy counsels while PJT Partners, LP is the
investment banker. Kroll Restructuring Administration, LLC,
formerly known as Prime Clerk, LLC, is the claims and noticing
agent and administrative advisor.
Counsel to the Ad Hoc Group and Special Counsel to the Indenture
Trustee are Morris, Nichols, Arsht & Tunnell LLP, and Davis Polk &
Wardwell LLP.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on April 19, 2022. Brown Rudnick, LLP and
Benesch, Friedlander, Coplan & Aronoff LLP serve as the committee's
bankruptcy counsel and Delaware counsel, respectively.
SAGEWOOD LLC: Returns to Chapter 11 Bankruptcy
----------------------------------------------
Sagewood LLC returned to chapter 11 bankruptcy in Idaho. The
Debtor filed a new bankruptcy petition as a small business debtor
seeking relief under Subchapter V of Chapter 11 of the Bankruptcy
Code.
According to court filings, Sagewood LLC estimates between 1 and 49
unsecured creditors. The petition states funds will not be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
July 21, 2022 at 10:00 AM via Telephonic Hearing. Proofs of claim
are due by Aug. 30, 2022.
About Sagewood LLC
Sagewood LLC is a Single Asset Real Estate (as defined in 11 U.S.C.
Sec. 101(51B)).
Sagewood LLC filed for Chapter 11 protection several times in the
past: on March 10, 2011 (Bankr. D. Idaho Case No. 11-40286), on
April 14, 2011 (Case No. 11-4052), and on Oct. 15, 2013 (Case No.
13-41282).
Sagewood LLC filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Idaho Case No.
22-40242) on June 21, 2022. In the petition filed by Peter J.
Estay, as managing member, the Debtor reports estimated assets
between $1 million and $10 million and estimated liabilities
between $100,000 and $500,000. Quentin W. Lackey, of LTM Law Group,
is the Debtor's counsel.
SANITY DESK: Zollner-Led DIP Loan Wins Interim OK
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Sanity Desk Inc. to use cash collateral on an interim basis and
obtain senior secured postpetition financing in an aggregate
maximum principal amount of $164,000, including up to $145,000 on
an interim basis, on a superpriority basis pursuant to the terms
and conditions of a Debtor-in-Possession Credit and Security
Agreement. The lending consortium includes the Debtor's Interim
Chief Executive Officer, Mark Zollner.
The Debtor requires access to postpetition financing in an amount
necessary to fund (i) business operations, (ii) the administrative
costs of the Chapter 11 Case, and (iii) the pursuit of confirmation
of a plan of reorganization.
The Debtor requires both additional financing under the DIP
Financing and the continued use of cash collateral under the terms
of this Interim DIP Order to satisfy its postpetition liquidity
needs.
The DIP Financing may be used in accordance with the terms of the
Interim DIP Order and the DIP Agreement to fund the day-to-day
working capital needs of the Debtor's operations and the chapter 11
administrative expenses incurred during the pendency of the Chapter
11 Case and to allow the Debtor, if subsequently approved by the
Court, to confirm a chapter 11 plan.
As adequate protection, the DIP Lender is granted a valid, binding,
continuing, enforceable, fully perfected first priority senior
security interest in and lien upon all pre- and postpetition
property of the Debtor or its estate.
The DIP Liens will not be subject or subordinate to (i) any lien or
security interest that is avoided and preserved for the benefit of
the Debtor's estate under section 551 of the Bankruptcy Code, or
(ii) any liens arising after the Petition Date.
The DIP Obligations will bear interest at an interest rate of 10%
per annum as provided in the DIP Agreement. After an Event of
Default, the interest shall accrue at an interest rate of 15%
percent per annum payable monthly as provided in the DIP Agreement.
The DIP Agreement requires the Debtor to meet these milestones:
* Within 15 days of the execution of the Agreement, the Debtor
must begin developing a marketing process for all or substantially
all of its assets;
* On or before August 15, 2022, receive initial expressions of
interest from potential purchasers;
* On or before September 15, 2022, receive final, binding
offers of purchase and/or investment from potential purchasers;
* On or before October 15, 2022, receive approval from the
Bankruptcy Court to enter into a purchase and sale agreement or
other agreement related to a sale transaction; and
* On or before October 31, 2022, complete the sale
contemplated by the Transaction Agreements.
These events constitute an "Event of Default:"
1. Borrower (i) fails to make any payment of principal of, or
interest on, the DIP Loan or any of the other DIP Obligations when
due and payable, or (ii) fails to pay or reimburse DIP Lenders for
any expense reimbursable hereunder or under any other DIP Facility
Document.
2. Borrower fails or neglects to perform, keep or observe any
provision of the Interim DIP Order, the DIP Agreement, the DIP
Note, or any other DIP Documents, in any material respect;
3. Any representation or warranty made by Borrower herein or
in any of the DIP Facility Documents, any financial statement, or
any statement or representation made in any other certificate,
report or opinion delivered in connection herewith or therewith
proves to have been incorrect or misleading in any material respect
when made;
4. There occurs any uninsured damage to or loss, theft or
destruction of any portion of the Collateral that could reasonably
be expected to have a Material Adverse Effect;
5. Borrower breaches or violates any term of the Final
Financing Order;
6. Borrower uses the proceeds of the DIP Facility for purposes
not authorized under the Budget (subject to the Permitted
Variance);
7. The funding of the requested Advance would cause the
aggregate outstanding amount of the DIP Loan to exceed the amount
then authorized by the Final Financing Order, as the case may be,
or any order modifying or vacating the Final Financing Order will
have been entered, or any appeal of the Final Financing Order will
have been timely filed;
8. The funding of a requested Advance would cause the
aggregate outstanding amount of the DIP Loan to exceed either (i)
the Maximum Amount, subject to any adjustments in the Agreement, or
(ii) any of the limitations set forth in the Budget (subject to the
Permitted Variance);
9. The creation, existence or allowance of any Indebtedness,
whether recourse or nonrecourse, and whether superior or junior,
resulting from borrowings, DIP Loan, advances, or the granting of
credit, whether secured or unsecured, except (i) Indebtedness to
DIP Lenders arising under or as a consequence of this Agreement or
the other DIP Facility Documents and (ii) Indebtedness existing on
the Petition Date or otherwise expressly permitted under the
Agreement, the Final Financing Order or the other DIP Facility
Documents;
10. Other than potential Liens arising from any unpaid Taxes,
the creation, existence or allowance of any Liens on any of
Borrower's properties or assets except the Liens existing as of the
Petition Date and the Liens created or permitted under the
Agreement, the Final Financing Order or the other DIP Facility
Documents;
11. Except as occasioned by the commencement of the Bankruptcy
Case and the actions, proceedings, and investigations related
thereto, any event or circumstance having a Material Adverse Effect
will have occurred since the Closing Date;
12. Any representation or warranty by Borrower contained
therein or in any other DIP Facility Document is untrue or
incorrect as of such date as determined by DIP Lender, except to
the extent that such representation or warranty expressly relates
to an earlier date and except for changes therein expressly
permitted or expressly contemplated by the Agreement; and
13. The occurrence of any of the following in the Bankruptcy
Case: (xiv) the bringing of a motion or the filing of any plan of
reorganization or disclosure statement attendant thereto by
Borrower: (w) to sell assets of Borrower (other than as provided in
Section 7.6 of the DIP Agreement or otherwise agreed to by the DIP
Lenders); (x) to obtain additional financing under Section 364(c)
or (d) of the Bankruptcy Code not otherwise permitted pursuant to
this Agreement; (y) to grant any Lien upon or affecting any
Collateral; or (z) or any other action or actions adverse to DIP
Lenders or its rights and remedies thereunder or its interest in
the Collateral, unless the DIP Obligations are indefeasibly paid
pursuant to such motion, plan of reorganization.
14. The payment of, or application for authority to pay, any
prepetition claim without DIP Lenders' prior written consent or
pursuant to an order of the Bankruptcy Court after notice and
hearing unless otherwise permitted under the Agreement;
15. The appointment of an interim or permanent trustee in the
Bankruptcy Case or the appointment of a receiver or an examiner in
the Bankruptcy Case with expanded powers to operate or manage the
financial affairs, the business, or reorganization of Borrower
without DIP Lenders' consent; or the sale without DIP Lenders'
consent, of all of Borrower's assets either through a sale under
Section 363 of the Bankruptcy Code, through a confirmed plan of
reorganization in the Bankruptcy Case, or otherwise that does not
provide for payment in full of the DIP Obligations and termination
of DIP Lenders' commitment to make the Advances;
16. The dismissal of the Bankruptcy Case, or the conversion of
the Bankruptcy Case from one under Chapter 11 to one under Chapter
7 of the Bankruptcy Code or the filing of a motion or other
pleading by Borrower seeking the dismissal of the Bankruptcy Case
under Section 1112 of the Bankruptcy Code or otherwise;
17. The entry of an order by the Bankruptcy Court granting
relief from or modifying the automatic stay of Section 362 of the
Bankruptcy Code to allow any creditor to execute upon or enforce a
Lien on any Collateral;
18. Subject to a Final Order, the commencement of a suit or
action against DIP Lenders and, as to any suit or action brought by
any Person other than Borrower or a subsidiary, officer or employee
of Borrower, the continuation thereof without dismissal for 30
days after service thereof on DIP Lender, that asserts by or on
behalf of Borrower, any state agency in the Bankruptcy Case or any
creditor, any claim or legal or equitable remedy for subordination
of the claim or Lien of DIP Lender;
19. The failure to file a plan of reorganization or motion for
asset sale pursuant to Section 363 of the Bankruptcy Code on or
before the statutory limitations and the Maturity Date;
20. The entry of an order in the Bankruptcy Case granting any
other superpriority administrative claim or Lien equal or superior
to the claims and Liens granted to DIP Lender.
The final hearing on the matter is scheduled for July 13, 2022 at
10 a.m.
A copy of the order is available at https://bit.ly/3xGVX1l from
PacerMonitor.com.
About SanityDesk, Inc.
SanityDesk, Inc. -- https://sanitydesk.com/ -- is a digital
marketing strategist and funnel builder.
SanityDesk, Inc., filed a petition for relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10527) on June
10, 2022. The Debtor estimated less than $500,000 in assets and $1
million to $10 million in liabilities as of the bankruptcy filing.
Michael G. Busenkell, Esq., at Gellert Scali Busenkell & Brown,
LLC, is the Debtor's counsel.
Judge John T. Dorsey oversees the case.
Jami B. Nimeroff has been appointed as Subchapter V trustee.
SOUTHWEST AIRLINES: Egan-Jones Keeps BB Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on May 25, 2022, retained the 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Southwest Airlines Co.
Headquartered in Dallas, Texas, Southwest Airlines Co. is a
domestic airline that provides primarily short-haul,
high-frequency, and point-to-point services.
SPRING EDUCATION: Moody's Ups CFR to B3 & Sr. Secured Debt to B2
----------------------------------------------------------------
Moody's Investors Service upgraded Spring Education Group, Inc.'s
Corporate Family Rating to B3 from Caa1 and Probability of Default
Rating to B3-PD from Caa1-PD. Moody's also upgraded the rating for
the company's first lien senior secured credit facilities to B2
from B3 and second lien term loan to Caa2 from Caa3. The outlook is
stable.
The upgrade of CFR to B3 reflects Moody's expectation that
operating performance including enrollment and utilization rates
will continue to improve over the next year as the threat from the
coronavirus pandemic subsides. Spring Education's lease adjusted
debt-to-EBITDA leverage (adjusted for both operating leases and
capitalized leases) is about 10x for the LTM period ended March 31,
2022 and is expected to decline to the mid 8x range by the end of
fiscal year 2023 (ending June 30, 2023) due to a continued earnings
recovery. The upgrade also reflects Moody's expectation for
adequate liquidity over the next year with an expected cash balance
of about $130 million at June 30, 2022 (end of FY22), access to its
$90 million revolver ($10 million drawn at March 31, 2022; expected
to be undrawn by June 30, 2022) and expectation for modestly
positive free cash flow generation in the $10 million range in
FY23. Additionally, Moody's expects the company will proactively
address the revolver refinancing ahead of its maturity in July
2023.
Moody's took the following rating actions:
Issuer: Spring Education Group, Inc.
Corporate Family Rating, upgraded to B3 from Caa1
Probability of Default Rating, upgraded to B3-PD from Caa1-PD
Senior Secured First Lien Bank Credit Facility (Revolver and Term
Loan), upgraded to B2 (LGD3) from B3 (LGD3)
Senior Secured Second Lien Term Loan, upgraded to Caa2 (LGD5) from
Caa3 (LGD5)
Outlook Actions:
Issuer: Spring Education Group, Inc.
Outlook, remains Stable
RATINGS RATIONALE
Spring Education's B3 CFR reflects its very high leverage with
Moody's lease adjusted (Moody's lease adjustment includes both
operating and capital leases) debt-to-EBITDA at about 10x for the
LTM period ended on March 31, 2021. Moody's expects debt-to-EBITDFA
leverage will decline to a mid 8x level on a Moody's lease adjusted
basis as the result of earnings growth over the next year.
Additionally, the rating is constrained by the company's history of
aggressive financial policies as evidenced by three primarily debt
funded acquisitions (prior to the pandemic) since the leveraged
buyout by Primavera Capital in 2017, its modest scale, and
operation in the competitive primary and early childhood education
school market. School enrollment is somewhat tied to general
economic conditions due to the relatively cyclical nature of the
for-profit education industry, especially in the early childhood
education segment where employment levels affect demand. However,
the B3 CFR is supported by the company's established base of
schools with strong brand recognition for some of its schools
(specifically Stratford and BASIS K-12 schools) and good revenue
visibility in the K-12 segment including Laurel Springs that
combined represent about two thirds of total revenue in FY22 due
to the pre-paid nature of those tuition contracts.
Moody's regards 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, its continuation will be closely tied to containment of
the virus. As a result, there is uncertainty around Moody's
forecasts.
Social risks also exist because the operations are focused on
education and early childhood education where reputation is vital
to sustaining the business. The company must continually strive to
safeguard the health and well-being of the children in its
programs. Customer relations are vital because adverse publicity
could meaningfully and negatively affect enrollment, revenue and
cash flow.
Moody's views Spring Education's governance risk as high due to its
private equity ownership by Primavera Capital Group, an Asia-based
growth private equity firm. Given this, Moody's expects an
aggressive financial and acquisition strategy that relies heavily
on debt financing and that focuses on shareholder returns. Spring
Education's board of directors consists of the management team and
representatives from its sponsor. Financial disclosures are also
more limited than for public companies.
Environment concerns are not considerable for this issuer.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's view that Spring Education's
leverage will decline to a mid 8x range by the end of FY23 (June
30, 2023) due to continued improvement in operating performance and
earnings. The stable outlook also reflects Moody's expectation for
at least adequate liquidity over the next year including modestly
positive free cash flow as well as the expectation that the company
will proactively refinance its revolver in advance of expiration in
July 2023.
The ratings could be upgraded if enrollment and operating
performance continue to improve with Moody's lease adjusted
debt-to-EBITDA sustained below 6x and maintenance of at least good
liquidity with free cash flow to debt in a mid-single digit
percentage range.
The ratings could be downgraded if there is deterioration of
operating performance including from enrollment declines, pricing
weakness or cost increases, or if liquidity deteriorates. EBITA to
interest falling below 1.0x or free cash flow generation less than
1% of debt could also prompt a downgrade.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Spring Education Group, Inc. is a for-profit provider of early
childhood education and K-12th grade education. At March 31, 2022,
the company operated about 200 schools across the United States.
Spring Education is privately owned by Primavera Capital Group, an
Asia-based private equity firm that acquired the company in 2017.
Revenue was about $658 million for the trailing twelve months ended
on March 31, 2022.
STAR US BIDCO: Moody's Affirms 'B3' CFR & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Star US Bidco,
LLC (aka Sundyne) including its B3 Corporate Family Rating and
B3-PD Probability of Default Rating. Concurrently, Moody's upgraded
the company's first lien senior secured bank credit facility
ratings by one notch to B2 from B3. The rating outlook was changed
to stable from positive.
The change in outlook to stable from positive reflects the material
increase in financial leverage and interest expense that will
result from the proposed shareholder dividend. The dividend will be
funded with new second lien term debt and cash, reflecting a
shareholder friendly financial policy – a governance
consideration.
The upgrade of the existing first lien bank debt ratings reflects
the manageable leverage through the first lien debt, which remains
unchanged with this transaction.
Moody's took the following rating actions:
Affirmations:
Issuer: Star US Bidco, LLC
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Upgrades:
Senior Secured 1st Lien Bank Credit Facility, Upgraded to B2
(LGD3) from B3 (LGD3)
Outlook Actions:
Issuer: Star US Bidco, LLC
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Sundyne's B3 CFR reflects the company's high financial leverage and
relatively modest size balanced against strong cash generation and
good liquidity. The company is also not immune to current
macroeconomic supply chain and inflationary cost pressures. The
ratings reflect the company's considerable exposure to the cyclical
energy sector, albeit with increasing exposure in other end
markets.
With a large installed base of its equipment currently serving
customers across multiple industries, Sundyne generates a
significant portion of its revenue and gross profit from the
higher-margin aftermarket business. This provides stability to a
large portion of Sundyne's business, offsetting much of the risk of
its OE energy exposure. As well, the company benefits from the
mission-critical nature of its products, robust EBITDA margins, and
well-established relationships with a blue-chip customer base
supported by strong brands in niche markets. The rating is also
supported by the strong outlook in several of its end markets
including petrochemical, LNG and refining.
The ratings outlook is stable, reflecting Moody's expectation that
the company's healthy order activity will support revenue and
earnings growth, contributing to deleveraging over the next 12 to
18 months. Moody's also expects that the company will maintain good
liquidity, underscored by continued healthy cash generation.
Sundyne has good liquidity. Moody's expects that the company will
generate healthy free cash flow over the next few years while
maintaining cash reserves in excess of $25 million. Sundyne has an
undrawn $100 million revolver and separate letters of credit
facilities, with ample headroom under its springing financial
maintenance covenant.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Sundyne's ratings could be downgraded if there is an erosion in
liquidity or if leverage (Moody's-adjusted debt/EBITDA) exceeds 8x,
annual free cash flow turns negative, or EBITA/interest trends
towards 1x. The loss of a major customer, with volumes not
replaced, could also drive negative ratings pressure.
Ratings could be upgraded if the company demonstrates steady
revenue and earnings growth such that debt/EBITDA improves to and
is sustained below 6x and EBITA/interest improves to above 2x. The
continued strong free cash flow and evidence of a less aggressive
financial policy would also be required to support a ratings
upgrade.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Headquartered in Arvada, Colorado, Sundyne is a manufacturer of
pumps and compressors sold to the mid and downstream oil & gas
end-market in addition to chemicals and industrial sectors. The
company was carved-out from Accudyne Industries, LLC in February
2020 and is owned by private equity sponsor Warburg Pincus
International LLC.
STRATHCONA RESOURCES: Fitch Affirms B+ LongTerm IDR, Outlook Stable
-------------------------------------------------------------------
Fitch Ratings has affirmed Strathcona Resources Ltd's (Strathcona)
Long-Term Issuer Default Rating (IDR) of 'B+', its secured
revolving credit facility at 'BB+'/'RR1' and senior unsecured notes
at 'B+'/'RR4'. The Rating Outlook is Stable.
Strathcona's ratings reflect its low decline asset base, proved
reserve size, FCF expectations and sub 1.0x leverage during Fitch's
forecast period. The ratings also consider execution risks around
the company's M&A growth strategy, exposure to West Texas
Intermediate (WTI) and Western Canadian Select (WCS) spreads, and
the company's higher operating cost profile.
KEY RATING DRIVERS
FCF Provides Financial Flexibility: Fitch forecasts FCF generation
of approximately CAD500 million in 2022 and in excess of cumulative
CAD2.2 billion through 2025. Excluding further potential M&A
activity, FCF generation provides meaningful financial flexibility
and the option to fully repay its outstanding revolver balance in
2023.
Fitch forecasts sub 1.0x gross leverage through the forecast period
under its base case which assumes USD100/bbl WTI in 2022, USD81/bbl
in 2023, USD62/bbl in 2024 and USD50/bbl longer-term. Strathcona
targets a longer term 1.0x to 1.3x leverage at USD70/bbl and has
identified a 2.0x leverage target at USD40 WTI as a threshold for
potentially distributing a dividend.
M&A Executed Growth: With the closing of the Caltex Resources Ltd.
(Caltex) and the Tucker thermal asset (Tucker) transactions, as
well as the subsequent acquisition of outstanding economic
interests in these in March 2022, Strathcona has grown proforma
from January 1, 2022 gross of inter-field transaction production,
to 107mboepd at 1Q22, which is a meaningful production level for
the 'B' rating category. Fitch anticipates Strathcona to continue
to utilize M&A as an active element of its strategy. Its success to
date in finding good value assets stuck in challenging corporate
situations may be more difficult to emulate under the current
strength of the oil and gas prices.
Low Decline, Large Reserve Asset Base: The benefits of Strathcona's
corporate decline rate of 18%, which positions favorably against
typical E&P's, results in lower sustaining capital requirements for
Strathcona. This balances a more intensive operating cost
structure, reflected in its CAD37.1/boe expenses and Fitch
calculated unhedged netback of CAD44.3 in 1Q22. Pro-forma the
Tucker and Caltex acquisitions, Strathcona held approximately one
billion boe of 1P reserves. This provides approximately 26 years of
inventory at current production and although a large portion of the
asset base is lower value proved undeveloped (PUD) reserves
associated with oil sands, Strathcona's reserve base size is
consistent with the 'BB' rating category.
Exposure to Differential Risks: Strathcona's operations consist of
Cold Lake Thermal in Alberta (45% of 2022 midpoint 101mboepd
guidance), condensate-rich Montney (33% of 2022 guidance) and
Lloydmnster Heavy Oil (22% of 2022 guidance). These three plays
provide good operational diversification for an E&P of Strathcona's
size. The overall basin diversification of these benefits of these
plays are tempered as they are located in Canada's Western Canadian
Sedimentary Basin, exposing Strathcona to sometimes volatile
WCS-WTI spreads.
WCS-WTI Spreads have recently expanded to approximately USD19/bbl,
the exposure of which adds a layer of volatility to realized prices
given the company's bitumen and heavy oil production represented
approximately 2/3rds of the companies proforma production 1Q22
production.
Natural and Financial Hedges: Strathcona benefits from its ability
to use natural gas and condensate that it produces in its Montney
operations to partially cover fuel for steam generation and diluent
requirements in its thermal and heavy oil operations. Natural gas
production in excess of consumption needs and condensate production
in excess of 20% of consumption needs act as these natural hedges.
This hedge from its operations reduces exposure to pricing
fluctuations in natural gas and condensate that otherwise would
need to be sourced externally. Additionally, Strathcona also uses
differential and price hedges to improve visibility on future cash
flows with hedges generally on 25% to 30% of the following 12 to 18
months expected production.
DERIVATION SUMMARY
Pro-forma a full quarter Caltex and Stickney Resources Ltd.
contributions Strathcona produced 106.7mboepd (82% liquids) gross
or intercompany uses. This compares against other 'B+' rated
Canadian heavy oil producers MEG Energy (101.1mboepd, 100% liquids)
and Baytex (80.9mboped, 83% liquids). It is above Canadian producer
Vermilion (BB-; 86.2mboepd, 53% liquids), whose rating benefits
from its international diversification and higher price exposure.
Strathcona's 1Q22 netback of CAD44.3/boe is below Canadian peers
MEG, Baytex and Vermilion generating netbacks of CAD60.1/boe,
CAD51.1/boe and CAD69.9/boe respectively. Compared to Matador
Resources, whose operations are in the Permian Basin but compares
as a 'B+' rated peer, Stathcona's netback trails its CAD72.7/boe.
Strathcona has a notably large reserve base for the 'B+' rating
category with proforma Stickney, 1.0 billion boe proved reserves.
This trails MEG at 1.3 billion boe and is materially above Baytex
and Vermilion respective proved reserves.
At YE2022 debt/EBITDA is forecast to be approximately 1.0x, which
is comparable within the peer group of MEG, Baytex, Vermilion and
Matador, who each are forecast to be at or below 1.0x leverage. In
terms of debt/flowing barrel, at CAD20.4M/bbl Strathcona trails the
peer group with the exception of MEG energy at 24.3M/bbl, whose
absolute debt level of CAD2.5 billion, compares to Strathcona's
CAD1.5 billion.
KEY ASSUMPTIONS
-- WTI prices of USD100/bbl in 2022, USD81/bbl in 2023, USD62/bbl
in 2024 and USD50/bbl thereafter;
-- Henry Hub prices of USD6.25/mcf in 2022, USD4/mcf in 2023,
USD3.25/mcf in 2023 and USD2.75/mcf thereafter;
-- Intercompany eliminations grow in step with bitumen and heavy
oil growth;
-- Capex of approximately CAD500 million annually between 2023-
2025 with organic net production trending towards 130mboepd in
2025;
-- Repay CAD500MM against revolver in 2022 and full balance
through 2024;
-- G&A scale efficiencies on a per BOE basis.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Continued demonstration of credit-friendly M&A funding policy
that leads to, gross of intercompany consumption, production
above 125mboepd;
-- Improving relative cash netback through lower and sustainable
operating costs;
-- Mid-cycle total debt/operating EBITDA maintained below 2.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Deviation from stated M&A and financial policy, especially in
regards to funding of future acquisitions;
-- Loss of operational momentum leading to production sustained
below 80mboepd;
-- Deteriorating liquidity and financial flexibility, including
inability to reduce revolver borrowings;
-- Mid-cycle total debt/operating EBITDA sustained above 3.0x.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
FCF Forecast Supports Revolver: As of 1Q22, Strathcona had CAD614.2
million available on its CAD1.5 billion credit facility that
matures in February 2026, ahead of the USD500 million senior
unsecured notes that mature in August 2026. At closing of the
Caltex and Stickney acquisitions on March 11, 2022 Strathcona's
credit facility was amended, and removed mandatory prepayment
provisions. As the credit facility is covenant based, there is no
risk of negative reserve base redeterminations affecting liquidity.
Forecast FCF generation should provide further liquidity.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that Strathcona would be reorganized
as a going-concern (GC) in bankruptcy rather than liquidated. Fitch
has assumed a 10% administrative claim and a 100% drawn on its
secured revolving facility, reflecting Strathcona's revolving
credit facility is not affected by redetermination risk.
Going-Concern Approach
Strathcona's GC EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA level upon which Fitch
bases the enterprise valuation (EV).
Strathcona's bankruptcy scenario considers a structurally lower
priced crude oil and natural gas environment, resulting in reduced
operational and financial flexibility, in line with stress case
assumptions beyond Strathcona's existing financial hedges in 2023.
The lower stress case price environment results in a maintenance
capital program that benefits from Strathcona's relatively lower
decline rate and experiences negative FCF's.
The GC assumption reflects Fitch's stressed case price deck, which
assumes WTI oil prices of USD42.00 in 2023, USD32.00 in 2024 and
USD42.00 in 2025. An EV multiple of 4.0x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization enterprise value. The
choice of this multiple considered the following factors:
-- The historical bankruptcy case study exit multiples for peer
companies ranged from 2.8x-7.0x, with an average of 5.2x and a
median of 5.4x;
-- The multiple has been increased from 3.5x in the previous
review reflecting the successful integration and scale from
the Caltex and Tucker acquisitions. Further upside to the
multiple is likely limited by a less concentrated asset base,
which may limit potential buyers in a stressed environment.
-- The 4.0x multiple is consistent with MEG Energy and Baytex
Energy's, who similarly are producers of Canadian heavy oil.
Baytex and MEG each also have covenant based revolving
facilities with USD850 million (CAD1.1 billion) and CAD800
million commitments compared to CAD1.5 billion for Strathcona.
Liquidation Approach
The liquidation estimate reflects Fitch's view of transactional and
asset-based valuations, including recent transactions in the
Canadian oil sands, Montney and Western Saskatchewan on a CAD/boepd
basis. This data was used to determine a reasonable sale price for
the company's assets during a stressed environment. Metrics from
Husky Energy and Cenovus Energy's merger, as well as Strathcona's
own acquisition of Caltex Resources and Tucker from Cenovus
informed the heavy oil portion valuation.
The allocation of value in the liability waterfall results in a
'RR1' recovery rating for Strathcona's revolving credit facility,
notching up three levels to 'BB+'. The senior unsecured notes have
a 'RR4' recovery, notching in line with the company's IDR at 'B+'.
ISSUER PROFILE
Strathcona is a private E&P company with operations in western
Canada that are focused on thermal oil, enhanced heavy oil recovery
and condensate-rich natural gas. Strathcona has three core
operating areas: Cold Lake Thermal Division, Montney Division and
Lloydminster Heavy Oil Division.
ESG CONSIDERATIONS
Strathcona has an ESG Relevance Score of '4' for Governance
Structure due to the WEF ownership concentration, which has a
negative impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING RECOVERY PRIOR
---- ------ -------- -----
Strathcona
Resources Ltd. LT IDR B+ Affirmed B+
senior unsecured LT B+ Affirmed RR4 B+
senior secured LT BB+ Affirmed RR1 BB+
SUMMIT FINANCIAL: Court OKs Deal on Cash Access Thru Sept 30
------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Santa Ana Division, approved the Third Stipulation for Continued
Use of Cash Collateral Through and Including September 30, 2022,
entered into by Summit Financial, Inc., CalPrivate Bank and the
U.S. Small Business Administration.
The Court approved the Stipulation in its entirety. The Debtor may
continue using cash collateral from July 1 through and including
September 30, pursuant to the Revised Budget and pursuant to the
same terms and conditions that were approved by the Court in its
Third Cash Collateral Order.
As provided in the Stipulation, all other terms and conditions of
the Third Cash Collateral Order will remain in full force and
effect.
The secured creditors, solely to the extent of any diminution in
the value of the cash collateral, will receive replacement liens in
assets of the same kind, type, and nature as the collateral in
which the secured creditors held a lien that are acquired after the
Petition Date, and the proceeds thereof, to the same extent,
validity, and priority as any lien held by the secured creditor in
such Assets as of the Petition Date.
The Debtor will pay CalPrivate Bank its contractual monthly payment
at $8,950.32 per month.
The Debtor will pay the SBA its contractual monthly payment at $731
per month.
A copy of the order is available at https://bit.ly/3Ot2F1M from
PacerMonitor.com.
About Summit Financial, Inc.
Summit Financial, Inc., which operates six high-end luxury nail
salons in Southern California, sought Chapter 11 protection (Bankr.
C.D. Cal. Case No. 21-12276) on September 18, 2021. On the
Petition Date, the Debtor estimated $100,000 to $500,000 in assets
and $1,000,000 to $10,000,000 in liabilities. The petition was
signed by Hao Tang as chief executive officer.
The Honorable Scott C. Clarkson presides over the case.
Arent Fox LLP is the Debtor's counsel.
SWISSBAKERS INC: Wins Cash Collateral Access Thru Aug 18
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized Swissbaker Inc. to use cash collateral on an interim
basis through August 18, 2022, on the same terms and conditions as
set forth in the Order Granting Interim Use of Cash Collateral
dated March 23, 2022, except as modified by this order.
The Court said the Debtor may use funds in accordance with the
Revised Budget attached to the Status Report filed on June 14,
2022. The funds will be used subject to (i) an upward variance in
cost of goods sold proportionate to an increase in sales over
budget, and (ii) an aggregate variance of up to 10% on all other
budgeted amounts for each four week period.
On or before August 12, 2022, the Debtor will file: (a) a written
report through July 31, 2022, and (b) projections for the further
use of cash collateral through November 30, 2022.
A further hearing on the matter is scheduled for August 17, at 10
a.m.
A copy of the order is available at https://bit.ly/3zSqqfB from
PacerMonitor.com.
About Swissbakers, Inc.
Swissbakers, Inc. is a family-owned European bakery. Swissbakers
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Mass. Case No. 22-10357) on March 18, 2022. In the
petition signed by Nicolas Stohr, chief executive officer, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Janet E. Bostwick oversees the case.
Joseph S.U. Bodoff, Esq., at Rubin and Rudman LLP is the Debtor's
counsel.
SYMPHONY SOCIETY: Musicians Not Going Away Despite Bankruptcy
-------------------------------------------------------------
Kathleen Petty of San Antoniomag.com reports that the musicians of
the San Antonio Symphony will continue performing despite the
organization's bankruptcy filing and dissolution.
After playing three concerts this spring, the Musicians of the San
Antonio Symphony is making plans for a fall season in which it
hopes to stage one to two performances per month, says Brian
Petkovich, president of the MOSAS Performance Fund.
"The orchestra is here. We will be on stage," says Petkovich, a
bassoonist who joined the San Antonio Symphony in 1996. "Just
because there's a bankruptcy with the Symphony Society doesn't mean
that the orchestra is going away. We are here."
Mary Ellen Goree, MOSAS chair and violinist who was involved with
negotiations with the Symphony Society, agrees and says while they
are certainly disappointed with the San Antonio Symphony's
dissolution, it did not come as a surprise. The Symphony Society's
board announced June 16 that it had voted unanimously to close and
file for Chapter 7 bankruptcy. It shared the news in an email to
supporters and past ticketholders and on social media but did not
directly notify musicians.
"The timing seemed a little abrupt, but I think this has been
coming for a very long time," Goree says. "They have refused to
budge from their insistence that a city the size of San Antonio can
only support an orchestra similar to what much, much smaller cities
support. They were holding to a budget that would have resulted in
the destruction of the symphony anyway."
Now, she says, MOSAS will work to organize the type of professional
orchestra that a metropolitan area like San Antonio deserves.
"There's absolutely a future here," Goree says. "The Musicians of
the San Antonio Symphony remain committed to providing our
community with orchestra concerts of the highest caliber."
Petkovich says even before the news of the symphony's closure,
MOSAS was planning to perform in the fall. "(The San Antonio
Symphony) is an 83-year-old organization that's really one of the
finest orchestras in the country," Petkovich says, referring to the
musicians who plan to carry on that legacy through continued
performances. "It really has been a serious ensemble for a long
time and to think that it was just going to go away is just almost
unthinkable."
First Baptist Church, which hosted MOSAS events in the spring, has
offered to continue hosting the musicians and Petkovich says they
are working to schedule visiting conductors to lead performances.
What a fall season of concerts will cost is still something they're
determining, though Petkovich says they anticipate applying for
grants. MOSAS also is fundraising through its website.
Goree says some symphony musicians have already won permanent
positions or one-year contracts with orchestras in other cities,
which they understand and applaud. For the most part, though, she
expects longtime musicians to remain in San Antonio.
"I certainly hope that most of my colleagues are on stage with us
and I expect that to be the case," she says.
About Symphony Society of San Antonio
Symphony Society of San Antonio is an orchestra in San Antonio,
Texas that aims to delight, inspire, and engage its entire
community through excellent performance, education, and outreach.
Symphony Society Of San Antonio previously filed for Chapter 11
bankruptcy (Bankr. W.D. Tex. Case No. 5:03-bk-53720) on July 3,
2003. Following bankruptcy in the summer of 2003, the following
season was canceled before the revived symphony returned for a
26-week season in 2004.
But years of financial struggles followed, with regular deficits
resulting in a nearly canceled 2018 season.
The Symphony Society of San Antonio board of directors announced
mid-June 2022, that it had reached a unanimous decision to dissolve
the orchestra and file for Chapter 7 bankruptcy. In its
announcement, the board cited the withdrawal from negotiations of
the musicians' union, American Federation of Musicians (AFM) Local
23, in April, and musicians' demands for "a budget that is millions
of dollars in excess of what the Symphony can afford."
SYSCO CORP: Egan-Jones Retains BB Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on May 27, 2022, retained the 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Sysco Corporation.
Headquartered in Houston, Texas, Sysco Corporation distributes food
and related products primarily to the foodservice industry.
T AND E DIESEL: Unsecureds to Get Share of Income for 36 Months
---------------------------------------------------------------
T and E Diesel Repair, LLC, filed with the U.S. Bankruptcy Court
for the Northern District of Mississippi a Subchapter V Plan of
Reorganization dated June 21, 2022.
Prior to the filing of the Petition, Debtor entered into what is
commonly known as factoring arrangement with Phoenix Capital Group,
LLC. Phoenix was willing to continue this same factoring
arrangement, post-petition. The Debtor has been operating its
business with the assistance of Phoenix and the financing order
subsequent to the entry thereof.
The Debtor has continued to operate its business, successfully, and
has enjoyed positive cash flow and a continuing excellent business
relationship with its customer base and its broker. The Debtor's
post-petition performance indicates a viable, ongoing business
operation.
Class 7 consists of General, Unsecured Creditors. General,
unsecured creditors will receive the Debtor's projected disposable
income over the 36 month life of the Plan. Projected disposable
income will be determined by the Debtor's gross income less costs
of operating and managing its business, including salaries of its
employees, less taxes and related overhead.
The Debtor's equity security holder will maintain his ownership in
the Debtor.
The Debtor's means of execution of the Plan will be provided from
the operation of its trucking firm and repair shop. This income
will provide the Debtor the ability to pay creditors with which it
can fund the Plan.
A full-text copy of the Subchapter V Plan dated June 21, 2022, is
available at https://bit.ly/3AiJfZV from PacerMonitor.com at no
charge.
Debtor's Counsel:
Craig M. Geno, Esq.
Law Offices of Craig M. Geno, PLLC
587 Highland Colony Parkway
P.O. Box 3380
Ridgeland, MS 39158-3380
Telephone: (601) 427-0048
Facsimile: (601) 427-0050
Email: cmgeno@cmgenolaw.com
About T and E Diesel Repair
T and E Diesel Repair, LLC, was formed on May 1, 2019, with its
principal place of business in Greenwood, Mississippi. While the
company started out as a truck repair shop, it gradually evolved
into a trucking firm.
T and E Diesel Repair sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Miss. Case No. 22-10586) on March 21,
2022, listing as much as $1 million in both assets and liabilities.
Craig M. Geno, Esq., at Law Offices of Craig M. Geno, PLLC serves
as the Debtor's legal counsel.
TALEN ENERGY: Bankruptcy Filing Complicates Outlook for Colstrip
----------------------------------------------------------------
Benjamin Storrow of ClimateWire reports that in the fall of 2020,
one of the West's largest coal plants was due for repairs. So the
operator of Colstrip Generating Station in Colstrip, Montana, fired
off a letter to its five co-owners with a $56 million plan to fix
it. The proposal quickly went sideways.
Four utilities with a stake in Colstrip balked, saying they could
not support spending money on repairs that would keep the plant
open beyond 2025. Instead, they demanded the plant's operator,
Talen Energy, reduce the plant's budget and "successfully execute a
strategy that provides a framework for our individual exits from
the Colstrip project within the next 60 months."
The exchange, outlined in federal bankruptcy filings, captures the
fight over the future of Colstrip. The coal-burning behemoth has
long sent power generated on the Montana prairie to Pacific
metropolises such as Seattle and Portland. Four utilities from
Oregon and Washington collectively own 70 percent of the
1,480-megawatt coal plant.
But in recent years Colstrip has come to symbolize the fight over
the future of the Western electric grid. The Pacific utilities --
Avista Corp., PacifiCorp, Portland General Electric and Puget Sound
Energy — are seeking to close the plant to comply with state
climate laws. Their efforts have been opposed by minority owners
NorthWestern Corp. and Talen, which argue the plant's closure would
decimate Montana's economy and jeopardize the future of the West's
electric grid.
Now, however, the fight over Colstrip's future is on hold. Talen's
power division filed for bankruptcy protection last month,
resulting in an automatic stay of a federal court case that was set
to decide the rules for negotiating the plant's future. Talen has
resisted efforts by its five fellow owners to lift the stay and
allow that case to continue.
Analysts said the bankruptcy has injected a new layer of
complication into grid planning at a time when the West is
grappling with how to address climate change without jeopardizing
electricity supplies.
"The longer we wait, the harder it becomes," said Diego Rivas, a
senior policy associate at the NW Energy Coalition. "Some utilities
have already planned for transition out of ownership either because
they are required to or it's uneconomic or both. Some of the owners
are behind on that planning."
NorthWestern, he noted, is still planning on the plant operating
until 2042.
"They have not provided any notification formally or otherwise that
has changed," he said.
Colstrip is one of the largest polluters in America, emitting 144
million tons of carbon dioxide between 2012 and 2021, according to
EPA data. Only eight power plants in the country belched more CO2
into the atmosphere over that time. A Washington state law requires
the state's utilities to cease supply of coal-generated electricity
by 2025. Oregon's utilities face a similar 2030 deadline.
Colstrip once boasted four generating units, but in 2020 two of its
smaller units built in the 1970s were shut down as part of a
settlement agreement with environmental groups.
More recently, talk of closing the two remaining units has been
animated by mounting concerns over Western utilities' ability to
keep the power flowing during searing heat waves that have baked
the West in recent years.
The North American Electric Reliability Corp. recently said the
region is at growing risk of power outages when electricity demand
surges at the same time there's limited hydropower availability and
wildfire damage to power lines.
"Overall, there is a lot of concern about the big changes to the
west coast power supply and with the added reserves required for
wind and solar to account for their variability," John Fazio, a
senior power systems analyst at the Northwest Power and
Conservation Council, wrote in an email.
As concerns over power supplies have mounted, so have efforts to
integrate power markets to share electricity across the West, he
said.
"The loss of the Colstrip projects and the uncertainty surrounding
the timing of their retirement is adding to planners' concerns, but
it is not the major issue facing them," Fazio said.
Talen's bankruptcy has strained already frayed relations among
Colstrip's owners, and it has opened a divide with its ally
NorthWestern. While the two companies want to keep operating
Colstrip beyond 2025, NorthWestern is increasingly pushing for a
resolution on Colstrip's future.
In bankruptcy proceedings, NorthWestern asked the court to lift the
automatic stay on court proceedings in Montana triggered by the
Chapter 11 filing to pave the way for negotiations to begin.
"Any delay in addressing closure would severely damage NorthWestern
and create potential electricity shortfalls for the citizens of
Montana — NorthWestern's primary customers," the utility wrote to
the U.S. Bankruptcy Court for the Southern District of Texas.
NorthWestern's position is especially notable because it supported
two laws enacted by Montana lawmakers last 2021 that sought to make
it harder to close Colstrip.
The first would change where and how arbitration proceedings would
occur — shifting the venue from Washington to Montana and
installing a three-person arbitration panel instead of the one
person called for in the plant’s operating agreement. The second
law would impose a $100,000 a day fine on owners who refused to
contribute to the plant’s upkeep.
But the future of both laws is now in question. A federal judge in
Montana issued a preliminary injunction staying the twin pieces of
legislation after they were challenged by the Pacific owners. They
argued the laws violated the owners' preexisting contract. In
issuing a preliminary injunction, the Montana court said the
Pacific owners had shown they were likely to prevail on the merits
of the case.
NorthWestern, in the meantime, has sought to force Colstrip's
owners to the bargaining table by seeking to compel arbitration via
the courts. At an April hearing before the U.S. District Court for
the District of Montana, the company argued Colstrip's owners "need
help" to decide the rules of arbitration.
"The delay — and God bless us for supporting the legislation and
creating the whole mess that brings us here in part today — but
the delay hurts us and potentially hurts the citizens of the state
of Montana that rely upon us to provide electricity," NorthWestern
attorney David Jackson told the court.
'Another wrench, another hurdle'
One key question in Colstrip's future is whether the contract
requires unanimity among the owners to shut down the plant. If
arbitration proceedings find a unanimous vote to close Colstrip is
not needed, "we need to find another source of electricity to meet
our duty and obligation and to provide electricity to the citizens
and the customers in the state of Montana, and that takes a while
to plan for," Jackson said.
Talen did not provide an on-the-record comment for this story. In
court proceedings, it argued the Montana court case would divert
resources at a time when the company is trying to reemerge from
bankruptcy. It estimated its monthly legal costs could rise to
$300,000 during arbitration hearings.
Talen secured a $1.76 billion loan to finance its operations during
bankruptcy.
A NorthWestern spokesperson expressed disappointment “that some
Colstrip Power Plant owners have chosen to file multiple lawsuits
in multiple jurisdictions” delaying negotiations over the plant's
closure.
"The Colstrip Power Plant is a reliable on-demand resource,
providing a cost-effective resource to provide energy for our
Montana customers during critical times," Jo Dee Black, the
NorthWestern spokesperson, wrote in an emailed statement.
The Pacific owners said they were committed to safely operating the
plant until 2025, when they would begin transitioning to cleaner
forms of electricity generation. A spokesperson for Puget called
Talen's bankruptcy a "troubling development" and said the
Washington-based power company was awaiting further information.
Portland General Electric struck a similar tone, saying:
"Uncertainty and delays are not in the best interest of co-owners,
the community and our customers. Talen's bankruptcy proceeding is a
significant source of uncertainty, which may preclude any agreement
on transition."
The bankruptcy filings add a new level of detail to an already
bitter public fight over Colstrip.
As the plant's operator, Talen is charged with proposing a budget
for Colstrip. In 2020, Talen's budget for the following year
identified the need for an overhaul at Unit 3 to maintain its
safety and compliance standards. Overhauls refer to extended
outages for maintenance. Each of Colstrip's units was on a
four-year overhaul cycle, according to Talen's budget proposal.
In past years, the Pacific owners likely would have signed off on
the repairs. But in 2020 they balked, saying they "cannot support
any work that is to be performed to extend the life of Colstrip
Unit 3 beyond the end of 2025."
Specifically, the group called for cutting Colstrip’s proposed
2021 operating budget by nearly $15 million,, decreasing spending
on capital projects by $10 million and implementing annual $10
million reductions in the operating budget over the next three
years.
The correspondence does not give exact details on the agreed-on
budget or the scope of the work. But a follow-up letter from Talen
indicates Colstrip's operator conceded to some of the Pacific
owners' demands, including a $10 million reduction in the Unit 3
repair budget.
"Because an agreement appears to be within reach, let's please put
aside our disagreement about whether any of these capital projects
would extend Unit 3's life beyond the scheduled 2025 overhaul and
whether that is a reasonable basis to oppose a capital project,"
Neil Dennehy, Colstrip’s plant manager, wrote in a Jan. 18, 2021,
letter.
For now, Colstrip continues to churn out power. In the first three
months of the year, federal statistics show the plant generated
more than 3,000 gigawatt-hours of electricity — its highest
first-quarter total since 2019. But how much longer it will operate
is anyone's guess.
"Certainty is necessary to make sure the plant closes in an orderly
fashion," the NW Energy Coalition's Rivas said. "It's necessary not
just for the utilities but the community to know what they’re
planning for."
Talen's bankruptcy, he added, is "another wrench, another hurdle in
an unfortunately delayed and already complicated process."
About Talen Energy Corp.
Allentown, Pennsylvania-based Talen Energy Corp. is an independent
power producer founded in 2015. Riverstone Holdings LLC completed
its acquisition of the remaining 65% stake of Talen Energy in 2016
for $5.2 billion.
Talen Energy Corporation, through subsidiary Talen Energy Supply
LLC, is one of the largest competitive power generation and
infrastructure companies in North America. Through subsidiary
Cumulus Growth, TEC is developing a large-scale portfolio of
renewable energy, battery storage, and digital infrastructure
assets across its expansive footprint. On the Web:
https://www.talenenergy.com/
TES owns and/or controls approximately 13,000 Megawatts of
generating capacity in wholesale U.S. power markets, principally in
the Mid-Atlantic, Texas and Montana. Woodlands, Texas-based TES
runs 18 power generation facilities, at eight of which rely on
natural gas to make electricity.
Talen Energy Supply, LLC, and 71 affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 22-90054) on May 9,
2022. The Hon. Marvin Isgur is the case judge.
Talen Energy Corporation (TEC), its Cumulus Growth subsidiary, and
TES' LMBE subsidiaries are excluded from the in-court process.
TES has retained Weil Gotshal & Manges LLP as its legal advisor,
Evercore as its investment banker and Alvarez & Marsal as its
financial advisor for its restructuring. Kroll is the claims
agent.
TEC is represented by PJT Partners as financial advisors and Vinson
& Elkins as legal counsel.
Cumulus Growth is represented by Ardea Partners and DH Capital as
its investment bankers, and Gibson Dunn as legal counsel.
The Consenting Noteholders are represented by Kirkland & Ellis LLP
and Rothschild & Co US Inc.
TAVERN ON LAGRANGE: Wins Cash Collateral Access Thru July 5
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Matthew Brash, the Subchapter V
trustee of Tavern on Lagrange Corp., to use cash collateral through
July 5, 2022, under the terms of the Agreed Order entered May 9,
2022.
As previously reported by the Troubled Company Reporter, the Debtor
and its creditors Fox Capital Group, Inc., Swift Financial, LLC as
Servicing Agent for WebBank, and Kapitus Servicing, Inc, as agent
of Kapitus LLC, agreed that Fox claims an interest in the cash
collateral on account of a prepetition security interest that the
Debtor granted. In addition, Fox has a prepetition judgment against
the Debtor and also claims a secured interest in the Debtor's cash
collateral by virtue of a UCC-1 filing on February 17, 2021.
Swift claims an interest in the cash collateral on account of a
prepetition security interest that the Debtor granted. Swift also
claims an interest in the Debtor's cash collateral by virtue of a
UCC-1 filing on June 28, 2018.
Kapitus claims an interest in the cash collateral resulting from a
perfected, unavoidable lien on, and in, prepetition collateral, and
asserts the Debtor owes Kapitus at least $75,249 as of the petition
date, as detailed in the Kapitus proof of claim filed in the case.
In the May 9 order, the Debtor was permitted to use cash collateral
to pay its employees, except that no payments may be made to any
insider, or any relative of any insider, or to Gregory Perkins or
Tiffany Perkins. No person may be paid any amount in excess of the
statutory priority amount in 11 U.S.C. section 507(a)(4).
The Debtor may also use cash collateral for other necessary
expenses to preserve the value of the Debtor's estate.
As adequate protection, Fox, Swift and Kapitus were granted
replacement liens attaching to their collateral, but only to the
extent of their prepetition liens and only to the extent of
priority on the petition date, and each is granted a valid,
perfected lien upon, and security interest in, to the extent and in
the order of priority of any valid prepetition lien.
A further hearing on the matter is scheduled for July 5 at 1:15
p.m.
A copy of the order and the Debtor's budget for the period from May
11 to July 5, 2022, is available at https://bit.ly/3QKtErx from
PacerMonitor.com.
The budget provides for total disbursements, on a weekly basis, as
follows:
$163,650 for the week ending May 17, 2022;
$65,146 for the week ending May 24, 2022;
$59,502 for the week ending May 31, 2022;
$114,313 for the week ending June 7, 2022;
$98,318 for the week ending June 14, 2022;
$128,881 for the week ending June 21, 2022;
$113,747 for the week ending June 28, 2022; and
$93,164 for the week ending July 5, 2022.
About Tavern on Lagrange Corp.
Tavern on Lagrange Corp. is a privately held company that operates
an upscale bistro at 5403 South La Grange Road, Countryside, IL
60525. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-04773) on April 26,
2022. In the petition signed by Estevein G. Perkins, as manager and
designated corporate representative, the Debtor disclosed up to
$50,000 in assets and up to $10 million in liabilities.
Judge Benjamin A. Goldgar oversees the case.
J. Kevin Benjamin, Esq., at Benjamin Legal Services is the Debtor's
counsel.
TENNECO INC: Egan-Jones Retains B+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on May 24, 2022, retained the 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Tenneco Inc.
Headquartered in Lake Forest, Illinois, Tenneco Inc. designs,
manufactures, and markets emission control and ride control
products and systems for the automotive original equipment market
and the aftermarket.
TEREX CORP: Egan-Jones Retains BB Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on May 24, 2022, retained the 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Terex Corporation.
Headquartered in Westport, Connecticut, Terex Corporation is a
global manufacturer of lifting and material processing products and
services that deliver lifecycle solutions.
TITAN IMPORTS: Unsecureds Will Get 16% of Claims in 3 Years
-----------------------------------------------------------
Titan Imports, Inc., filed with the U.S. Bankruptcy Court for the
District Court of Guam a Small Business Plan of Reorganization
dated June 23, 2022.
The Debtor is a premium and luxury wines and spirits distribution
company for Guam and the Northern Marianas Islands. The Debtor was
incorporated on April 23, 2004, and has approximately 17 employees
who work out of a warehouse at 142 Guerrero Street, Harmon
Industrial Park, Tamuning, Guam, 96913.
The bankruptcy was filed to address the Debtor's significant
alcoholic beverage tax ("ABC") arrears for the period from 2015 to
2019 owed to the Guam Department of Revenue and Taxation ("DRT").
After the Petition Date, the Debtor began discussions to resolve
the prepetition ABC with John Ryan, the Qui Tam plaintiff. Ryan
provided the Debtor with the Declination filed in the whistleblower
lawsuit by DRT, declining to intervene in the matter. Thus, the
Debtor has treated Ryan as the duly authorized agent of DRT in
accordance with the Guam False Claim and Whistleblower Statute.
Class 4 consists of John Ryan Legal Fee Claim. Pro Rata of net
disposable income over three years resulting in approximately 16%
of claim being paid over term of Plan provided, Debtor may prepay
this amount. Payments shall be made in quarterly intervals starting
the end of March, 2023.
Class 5 consists of General Unsecured Creditors (Excluding DRT
Penalties, Employee Claims). Pro rata of net disposable income over
three years, totaling about 16% upon confirmation. Payments shall
be made in quarterly intervals starting the end of March, 2023. The
allowed unsecured claims total $50,000. This Class is impaired.
Class 6 consists of Equity Interest holders who shall retain
interest in Debtor.
The Debtor will continue its business operations and pay Plan
obligations from its net disposable income. If necessary, the
Debtor intends to liquidate its mutual funds necessary to fund the
payment of Allowed administrative expense claims.
The Debtor believes that the Debtor will have enough cash on hand
on the Effective Date of the Plan to pay all the Claims and
expenses that are entitled to be paid on that date. As of May 31,
2022, the Debtor had approximately $574,000 in cash in bank
accounts. Assuming that the Effective Date is September 30, 2022,
the Debtor estimates that it will approximately $445,000 in cash on
the Effective Date, which is sufficient to pay all claims and
expenses entitled to be paid on the Effective Date.
The Debtor's financial projections show that the Debtor will have
an aggregate annual average cash flow, after paying operating
expenses and post-confirmation taxes, of approximately $41,000.00
over the three-year period. The final Plan payment is expected to
be paid in December 2025.
A full-text copy of the Plan of Reorganization dated June 23, 2022,
is available at https://bit.ly/3bxVBTD from PacerMonitor.com at no
charge.
Attorneys for Debtor:
David W. Dooley, Esq.
ROBERTS FOWLER & VISOSKY LLP
865 South Marine Corps Drive
Suite 201, Orlean Pacific Plaza
Tamuning, Guam 96913
Tel: (671) 646-1222
Fax: (671) 646-1223
Email: dooley@guamlawoffice.com
Chuck C. Choi, Esq.
Allison A. Ito, Esq.
CHOI & ITO
700 Bishop Street, Suite 1107
Honolulu, HI 96813
Telephone: (808) 533-1877
Fax: (808) 566-6900
Email: cchoi@hibklaw.com;
aito@hibklaw.com
About Titan Imports,
Inc.
Titan Imports, Inc. is a premium and luxury wines and spirits
distribution company in Guam and the Northern Marianas Islands. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Guam Case No. 22-00007) on March 25, 2022. In the
petition filed by John D. Antenorcruz, president, the Debtor
disclosed up to $10 million in both assets and liabilities.
Judge Frances M. Tydingco-Gatewood oversees the case.
David W. Dooley, Esq., at Roberts Fowler and Visosky LLP, is the
Debtor's counsel.
TRX HOLDCO: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------
The U.S. Trustee for Region 16 on June 22 appointed an official
committee to represent unsecured creditors in the Chapter 11 case
of Fitness Anywhere, LLC, an affiliate of TRX Holdco, LLC.
The committee members are:
1. United Parcel Service, Inc. and its affiliated entities
Attention: Farah C. Spainhour
55 Glenlake Parkway
Atlanta, GA 30328
2. Core Health & Fitness, LLC
Attention: Sy Mares
4400 NE 77th Avenue, Suite 250
Vancouver, WA 98662
3. Exemplar Design, LLC
Attention: Matt Nelson
4680 Parkway Drive, Suite 300
Mason, OH 45040
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About TRX Holdco, LLC
TRX Holdco, LLC and Fitness Anywhere LLC, dba TRX and TRX Training,
provide sporting and athletic goods. They sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Lead Case
No. 22-10948) on June 8, 2022. In the petition signed by Brent
Leffel, chairman of the Board of Managers of TRX Holdco, LLC, the
Debtor disclosed up to $50 million in both assets and liabilities.
Judge Scott C. Clarkson oversees the case.
Ron Bender, Esq., at Levene, Neale, Bender, Yoo and Golubchick LLP,
is the Debtor's counsel.
TTM TECHNOLOGIES: Egan-Jones Retains B+ Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company on May 23, 2022, retained the 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by TTM Technologies, Inc.
Headquartered in Costa Mesa, California, TTM Technologies, Inc. is
an independent provider of time-critical, one-stop manufacturing
services for printed circuit boards.
TWO'S COMPANY: Seeks to Hire Gassner Company as Accountant
----------------------------------------------------------
Two's Company Restaurant & Lounge, LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of Wisconsin to employ
Gassner Company, S.C. as its accountant.
The firm's services include tax preparation; payroll services; cash
flow analysis and projections; and the preparation of reports,
balance statements and bankruptcy documents.
The firm's fees are as follows:
General Accounting $125 per hour
Quarterly Reports $150 - $200 per quarter
W-2s and Annual Reports $100 - $200 per year
Corporate Tax Return $1,000 - $1,500 per year
Depreciation Schedules $100 - $200 per year
Tax Planning & Consulting $100 per hour
As disclosed in court filings, Gassner does not hold any interest
adverse to the Debtor or its estate.
The firm can be reached through:
Alex Gassner, CPA
Gassner Company, S.C.
117 D 3rd Ave
Wausau, WI 54401
Phone: 715-845-9231
Email: alex@gassnercompany.com
About Two's Company Restaurant & Lounge
Two's Company Restaurant & Lounge, LLC filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code(Bankr. W.D. Wisc.
Case No. 21-12177) on Oct. 22, 2021, listing up to $500,000 in
assets and up to $1 million in liabilities. William E. Wallo serves
as Subchapter V trustee.
Judge Catherine J. Furay oversees the case.
Goyke & Tillisch, LLP serves as the Debtor's legal counsel.
Business Consultants and Gassner Company, S.C. are the Debtor's
accountants.
UNDER ARMOUR: Egan-Jones Retains BB Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company on May 26, 2022, retained the 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Under Armour, Inc.
Headquartered in Baltimore, Maryland, Under Armour, Inc. develops,
markets, and distributes branded performance products for men,
women, and youth.
US CELLULAR: Egan-Jones Retains B+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company on May 31, 2022, retained the 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by United States Cellular Corporation.
Headquartered in Chicago, Illinois, United States Cellular
Corporation provides wireless telecommunications services.
US SILICA: Egan-Jones Retains CCC Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company on May 26, 2022, retained the 'CCC'
foreign currency and local currency senior unsecured ratings on
debt issued by U.S. Silica Holdings, Inc. EJR also retained the 'C'
rating on commercial paper issued by the Company.
Headquartered in Katy, Texas, U.S. Silica Holdings, Inc. operates
as a producer of industrial silica and sand proppants.
VERIS RESIDENTIAL: Fitch Affirms 'B' LongTerm IDR, Outlook Negative
-------------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDR) for Veris Residential, Inc. (NYSE: VRE, or Veris) and its
operating subsidiary Veris Residential, L.P. at 'B'. The Rating
Outlook is Negative. Veris Residential's IDR reflects the company's
persistently high leverage, weak liquidity coverage, limited
unsecured debt and equity capital access and moderate complexity
from joint venture (JV) investments, which also limit the company's
strategic and operational control and reduce financial reporting
transparency.
The Negative Outlook is based on Fitch's concern about the
prospects for backfilling leases in Veris's Jersey City waterfront
office portfolio. However, this may become less relevant to the
extent that Veris is able to execute a sale of its remaining office
portfolio.
The ratings were withdrawn for commercial purposes.
KEY RATING DRIVERS
Speculative Grade Credit Metrics: Fitch expects Veris's leverage
will remain elevated at around 14.0x in Fitch's one-to-two year
forecast horizon. This is caused by projected relative strength in
the company's multifamily portfolio offset to some extent by
continuing struggles with regard to leasing at the company's New
Jersey waterfront office portfolio, where VRE has made minimal
progress backfilling vacant space since when the Waterfront office
portfolio was over 90% leased, as evidenced by 530bps of lost
occupancy in 2021.
Office Leasing Remains Challenged: After occupancy remained at a
low but stable level in 2020 for the Jersey City waterfront, 2021
saw office same-store occupancy decline by 530bps due to moveouts
that will be a challenge to replace. A further 70bps office
occupancy decline in 1Q22 combined with an environment where rents
appear to be modestly declining, results in Fitch's expectation of
continued SSNOI declines in the office portfolio in 2022 as the
company continue to pursue a sale of the portfolio.
Apartment Revenue Becoming Vast Majority: Multifamily comprised
approximately 51% of 4Q21 NOI given the sales of the suburban
office portfolio and multifamily development projects delivered
over the last couple years. The company estimates that pro forma
for the sale of the office asset, 101 Hudson and the acquisition of
The James apartment asset in 1Q22 that multifamily contribution
will be around 80%. The company's growing multifamily portfolio
offers better growth and liquidity prospects, albeit elevates
development risk.
Suburban Asset Sale Mostly Complete: VRE has almost completed its
disposition program of selling its entire NJ suburban office
portfolio, aside from one remaining asset, having sold $352 million
of office assets in 2020 with an incremental $741 million of sales
in 2021. This is the culmination of a seven-year process that began
in earnest in 2015. Fitch views the disposition program as executed
within initial valuation expectations. The company is now in the
process of attempting to sell its Jersey City office portfolio.
Fitch views the de-emphasis of the office portfolio favourably
since NJ as a secondary office market, has weaker institutional
lender and investor interest than core, 24-hour gateway CBD office
markets, such as New York, Washington, D.C., Boston and San
Francisco. Positively, VRE's portfolio repositioning towards the
Jersey City Waterfront had focused on one of the strongest NJ
office submarket, which generally has above average occupancy and
rental rates for class A NJ office space and mass transit access.
However, leasing activity in 2021 was minimal in comparison to
expiring space. The company's growing multifamily portfolio offers
better growth and liquidity prospects.
Transition to Exclusive Secured Financing Strategy: In the last few
years, VRE had increasingly relied on secured mortgage debt,
unsecured bank term loans, JV and redeemable preferred equity and
asset sales proceeds to fund refinancing its maturing obligations
and new investments, and debt capital. VRE fully transitioned its
balance sheet to a secured strategy in 2021. In May 2021, the
company replaced its prior $600 million unsecured credit facility
with a new $400 million secured credit facility and term loan.
Subsequently, the company drew on the new credit facility, along
with cash to pay off its two existing public unsecured bonds
outstanding in full. Therefore, VRE no longer has any remaining
unsecured borrowings. This results in less financial flexibility
and weaker relative capital access for the company, especially in
the context of limited access to attractively priced public
equity.
Elevated Rental Risk Profile: Challenging NJ market fundamentals,
combined with high asset level concentrations and VRE's growing
exposure to shorter lease duration multifamily assets are key
factors contributing to a higher rental income risk profile for
VRE, which will likely result in greater relative cash flow
volatility through the cycle. In addition, as of March 31, 2022,
the top 10 tenants for the remaining office portfolio represent
approximately 64% of commercial property annualized base rent,
which is considerably higher than office REIT peers. Positively,
only 28% of Waterfront office rents expire through the end of
2025.
DERIVATION SUMMARY
VRE owns a concentrated portfolio, consisting of metro and
remaining suburban New Jersey office assets and multifamily
properties. The company's portfolio markets have more challenging
office market demand fundamentals and lower supply barriers than
higher rated peers SL Green and Vornado. The company's operating
strategy also entails elevated development risk exposure, which is
partially offset by related residential property portfolio with
better growth and liquidity elements.
VRE has not publicly committed to financial policy targets, with
current metrics consistent with high-speculative grade REITs. The
company has weaker access to unsecured debt and equity capital,
notwithstanding its prior long-tenure as a regular public unsecured
bond issuer.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
-- Low-to-mid blended single-digit SSNOI growth in 2022-2024 in
the combined office/multifamily portfolio;
-- Development spend of approximately $30 million in 2022 and
$200 million per annum from 2023-2024 with anticipated
delivery volumes of approximately $470 million in 2022 and $50
million-$200 million per year in 2023-2024 at an average of
6.3% yields;
-- Dispositions of approximately $275 million to $350 per annum
from 2022-2024.
RATING SENSITIVITIES
Rating Sensitivities are not applicable, given the withdrawal of
the ratings.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
]
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: VRE should have a sufficient liquidity
position. The company's sources cover its uses by 0.9x, based on
Fitch's base case liquidity analysis for the April 1, 2022 to
December 31, 2023 forecast period, which does not include any
further asset dispositions beyond what has been announced through
1Q22. In addition, it incorporates VRE's projected development and
capital expenditure spend. The company's liquidity improves to
2.0x, if it is assumed that 80% of secured debt is refinanced.
The size of VRE's unencumbered asset pool has decreased
considerably during the last few years. Fitch did not calculate the
company's unencumbered assets coverage of its net unsecured debt as
secured debt is now 100% of total debt.
ISSUER PROFILE
Veris Residential, Inc, (formerly known as Mack-Cali Realty
Corporation) is an owner, manager and developer of office and
multifamily properties, primarily located in the northeastern
United States with a concentration on the Jersey City waterfront.
The company is process of a transition to becoming exclusively
focused on the multifamily sector.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING PRIOR
---- ------ -----
Veris Residential, Inc. LT IDR B Affirmed B
LT IDR WD Withdrawn B
Veris Residential, L.P. LT IDR B Affirmed B
LT IDR WD Withdrawn B
VIDA CAPITAL: S&P Downgrades ICR to 'CCC', Outlook Developing
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Vida Capital
Inc. to 'CCC' from 'B-'. The outlook is developing.
S&P said, "We also lowered our rating on Vida Capital's first-lien
secured debt to 'CCC' from 'B-'. The recovery rating on the
company's first-lien secured debt remains at '4', indicating our
expectation of average recovery (40%) in a hypothetical default
scenario.
"The downgrade reflects our expectation that Vida Capital's EBITDA
will decline in 2022 due to lower management and origination fees.
Assets under management (AUM) declined over the past two years due
to the 10.3% write-down of its flagship Vida Longevity Fund (VLF)
following changes to life expectancy assumptions in fourth-quarter
2020 and subsequent redemptions from the fund. The company granted
fee waivers in an effort to retain investors, which is likely to
continue weighing on the company's earnings in 2022. The company's
revenue in 2021 included $15.7 million in origination fees, which
are lumpy in nature. We expect the company to make fewer purchases
of life settlement plans over the next 12 months and therefore do
not expect origination fees to be a significant revenue driver in
2022. As of March 31, 2022, the company's AUM was around $3.95
billion.
"The downgrade and outlook also reflect our view that the company's
liquidity position is under stress, and without a favorable
operating environment or other liquidity sources, the company will
not be able to meet its liquidity needs over the next 12 months. As
of March 31, 2022, the company's cash balance was $3.4 million,
down from $8.3 million as of year-end 2021 and $16.6 million as of
March 31, 2021. The company has a springing maximum 7.0x first-lien
net leverage ratio covenant at 35% drawdown on its revolving credit
facility. We think that Vida will end the quarter near or above
this leverage level, limiting the company's ability to draw on its
revolver to meet mandatory payments.
"The company's liquidity uses in the next 12 months include
mandatory quarterly amortization of its term loan B, which amounts
to around $20 million in full-year 2022, as well as interest
payment on its revolving credit facility and term loan B. The
company's next amortization and interest payment, an aggregate of
around $6.7 million, is due on July 1, 2022. Furthermore, we
project the company will operate with negative operating cash flow
over the next 12 months. We therefore think that Vida could default
on its debt obligations in the next 12 months without an unforeseen
positive development.
"The developing outlook reflects the increasing risk that Vida's
liquidity sources may be insufficient to cover its debt
obligations, including significant upcoming amortization and
interest payments. Therefore, absent an unforeseen positive
development, we believe there is a high likelihood of a
conventional default or a debt restructuring transaction over the
next 12 months.
"We could lower the ratings over the next 12 months if Vida
Capital's liquidity further deteriorates such that it is unable to
fund operations or meet mandatory debt obligations, resulting in a
default. We could also lower the ratings if the company announces
an exchange or restructuring that we deem tantamount to a default.
"We could raise the ratings over the next 12 months if we think
Vida Capital's liquidity improves and could sufficiently cover the
company's liquidity needs on an ongoing basis while EBITDA interest
coverage remains comfortably above 1.0x.
"Our recovery analysis is unchanged and includes the company's $250
million first-lien term loan and assumes 35% usage of the $40
million secured revolving credit facility signed in conjunction
with the term loan.
"We apply a 5.0x multiple for all asset managers because we believe
this represents an average multiple for asset managers emerging
from a default scenario.
"Our simulated default scenario includes substantial market
depreciation leading to a substantial reduction in EBITDA
sufficient to trigger a payment default."
-- Emergence EBITDA: $22.5 million
-- Multiple: 5.0x
-- Gross recovery value: $112.3 million
-- Net recovery value for waterfall after administrative expenses
(5%) (and pensions, if applicable): $106.7 million
-- Obligor/non-obligor valuation split: 100%/0%
-- Estimated priority claims (ABL or other): None
-- Remaining recovery value: $106.7 million
-- Estimated first-lien claim: $254.3 million
-- Value available for first-lien claim: $106.7 million
--Recovery range: 40%
VISTAGE INTERNATIONAL: Moody's Assigns 'B2' CFR, Outlook Stable
---------------------------------------------------------------
Moody's Investors Service assigned to Vistage International, Inc.
(New) a corporate family rating at B2, probability of default
rating at B2-PD, and a B1 rating to the proposed senior secured
first lien credit facility consisting of a $50 million revolver
expiring 2027 and a $445 million term loan due 2029. The company
is also raising a proposed $135 million senior secured second lien
term loan due 2030 (not rated). The outlook is stable.
The proceeds of the proposed term loans and equity from Gridiron
Capital and members of Vistage's executive management team will be
used to purchase the company and pay transaction-related fees and
expenses. Governance is a key consideration given the company's
private equity ownership. Ratings currently assigned to Vistage
International, Inc. (Old) will be withdrawn upon repayment of the
existing debt.
Pro-forma for the proposed transaction, Vistage's debt-to-EBITDA
leverage is high at 7.3x. While entering a highly levered capital
structure during the current macroeconomic environment is a credit
risk, Moody's believes that Vistage's business model has proven to
be resilient through economic downturns and recessions and is
further supported by its track record of meeting or exceeding its
forecasts. Moody's expects that Vistage's solid market position as
a leading provider of peer advisory services will be the key driver
of near-term revenue growth, which in turn with mandatory debt
amortization and excess cash flow sweeps, should lead to financial
leverage declining below 6.5x over the next 12 months. The rating
also incorporates Moody's expectation that Vistage will maintain a
good liquidity profile including continued free cash flow
generation. Vistage is weakly positioned for the B2 CFR due to it
high financial leverage which leaves little room for operational
mis-steps. If Vistage underperforms, which includes membership
declines or profitability erosion, or pursues any debt-funded
acquisitions or dividends before sustaining financial leverage
below 6.5x, a negative rating action would likely ensue.
Assignments:
Issuer: Vistage International, Inc. (New)
Corporate Family Rating, Assigned B2
Probability of Default Rating, Assigned B2-PD
Gtd Senior Secured 1st Lien Revolving Credit Facility, Assigned B1
(LGD3)
Gtd Senior Secured 1st Lien Term Loan, Assigned B1 (LGD3)
Outlook Actions:
Issuer: Vistage International, Inc. (New)
Outlook, Assigned Stable
The assigned ratings are subject to review of final documentation
and no material change to the size, terms and conditions of the
transaction as advised to Moody's. The transaction is expected to
close in July 2022 and is subject to customary closing conditions.
RATINGS RATIONALE
Vistage's B2 CFR reflects the company's high pro-forma financial
leverage of 7.3x as of LTM March 31, 2022, small size by revenue
and narrow business profile as a provider of peer advisory services
to CEO's, C-level executives and owners of small- and mid-sized
businesses, and financial policies associated with private equity
ownership which could lead to dividend outflows over time. The
rating is supported by Vistage's solid market position as a leading
provider of peer advisory services and benefits from good sales
growth with a visible recurring subscription-based revenue model.
The company also benefits from its highly variable cost structure,
a track record of successfully weathering downturns or recessions,
and a good liquidity profile supported by modestly positive free
cash flow and access to its proposed $50 million revolver over the
next 12 months.
All financial metrics cited reflect Moody's standard adjustments.
Moody's anticipates that Vistage will maintain good liquidity over
the next 12 to 18 months, supported by positive free cash flow and
full revolver availability. Moody's expects the company to generate
positive free cash flow in the mid-single digit percent range of
debt balances. Free cash flow benefits from minimal capital
expenditures and negative working capital dynamics. Vistage is
expected to have minimal cash on the balance sheet upon closing of
the financing and an undrawn $50 million revolver expiring 2027.
Moody's expects the company will use excess free cash flow to build
liquidity for debt repayment. The company's liquidity sources
provide good coverage for its $4.5 million of required annual first
lien term loan amortization payments. The first lien term loan is
expected to be subject to a 50% excess cash flow sweep that reduces
to 25% and 0% subject to first lien leverage at 4.7x and 4.2x,
respectively. The term loan is not expected to contain any
financial maintenance covenants while the revolver is expected to
have a springing maximum first-lien net leverage ratio of 8x that
is tested when more than $17.5 million of the facility is drawn.
Moody's believe a good EBITDA cushion will be maintained throughout
the testing period.
As proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following:
Incremental debt capacity up to the greater of $85.5 million and
100% of EBITDA, plus unlimited amounts subject to 5.2x pro forma
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: (i) the designation of a subsidiary that
owns or holds an exclusive license in intellectual property that is
material or strategically significant to the business of the
company, as an unrestricted subsidiary or (ii) the contribution,
sale, transfer or disposition of any material intellectual property
to an unrestricted subsidiary.
Non-wholly-owned subsidiaries are not required to provide
guarantees ; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees, with no
explicit protective provisions limiting such guarantee releases.
The credit agreement provides some limitations on up-tiering
transactions, including the requirement that each lender directly
and adversely affected consents to the subordination of liens on
the collateral securing the first lien facilities or payment
priority.
The proposed terms and the final terms of the credit agreement may
be materially different.
The B1 (LGD3) rating on the first lien credit facility, one notch
above the CFR, reflects the priority lien with respect to
substantially all assets of the company relative to the second lien
term loan, which is not rated. The B2-PD PDR is in line with the B2
CFR, reflecting Moody's expectation for an average family recovery
level.
The stable outlook reflects Moody's expectations of at least low
single-digit organic revenue growth from new member wins and price
increases and solid double-digit EBITA margins. The stable outlook
also encompasses Moody's expectations for steady debt repayment and
no debt-funded acquisitions or dividends over the next 12 months,
leading to financial leverage declining below 6.5x.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could result in a downgrade include financial leverage
sustained above 6.5x, free cash flow-to-total debt sustained below
5%, a contraction in revenue, debt-financed acquisitions or
dividends, or a deterioration in liquidity.
While unlikely in the near term, factors that could warrant
consideration of an upgrade include financial policies supportive
of financial leverage sustained below 4.5x, free cash flow-to-total
debt sustained above 10%, and increased scale and service offerings
while maintaining solid margins and good liquidity.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Vistage, headquartered in San Diego, California, provides CEOs,
other senior executives and business owners with peer advisory
board membership and coaching services. Following the proposed
transaction, the company will be owned by Gridiron Capital.
WATERBRIDGE MIDSTREAM: Moody's Alters Outlook on 'B3' CFR to Pos.
-----------------------------------------------------------------
Moody's Investors Service changed WaterBridge Midstream Operating
LLC's outlook to positive from stable. Concurrently, Moody's
affirmed WaterBridge's Corporate Family Rating at B3, Probability
of Default Rating at B3-PD and senior secured term loan rating at
B3.
"The change of WaterBridge's rating outlook to positive reflects
our expectation for declining leverage as volumes grow on the
company's scalable midstream system, driving increased EBITDA and
free cash flow that is applied toward debt repayment," said
Jonathan Teitel, a Moody's analyst.
Affirmations:
Issuer: WaterBridge Midstream Operating LLC
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured Bank Credit Facility, Affirmed B3 (LGD4)
Outlook Actions:
Issuer: WaterBridge Midstream Operating LLC
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
WaterBridge's B3 CFR reflects Moody's expectation for WaterBridge's
leverage to decline as customers grow production volumes, driving
more EBITDA and free cash flow used for debt repayment. WaterBridge
owns and operates produced water midstream infrastructure important
for oil production. The company's integrated produced water
disposal solutions are supported by a scalable network of water
pipelines and saltwater disposal wells. WaterBridge can support
growing volumes on its system with modest capital expenditures
because of available capacity on its existing infrastructure. The
company benefits from its sponsor's support. Since 2019, the
sponsor has invested additional common equity to support growth and
liquidity. The company is concentrated in a single region but the
Permian Basin is one of the most economic oil production areas in
the US. WaterBridge benefits from its customers' large quantity of
dedicated acreage as well as areas of mutual interest (AMI)
acreage. Long-term, fixed fee contracts limit direct commodity
price risks though volumes are sensitive to capital spending by
producers. The company has a small amount of contracted minimum
volume commitments.
Moody's expects WaterBridge to maintain adequate liquidity
supported by its cash on the balance sheet, positive free cash flow
and revolver availability. As of March 31, 2022, the company had
$21 million of cash and $45 million of borrowings on its $100
million revolver due June 2024. If the preferred equity remains
outstanding at WaterBridge in September 2023, the revolver will
mature then and the term loan due 2026 will mature in November
2023. As of March 31, 2022, about $138 million of such preferred
equity was outstanding. The owner of this preferred equity has a
put right that begins in 2024. Moody's expects WaterBridge will
address the springing maturity before the debt goes current. The
revolver has a springing net leverage covenant of 5x when revolver
usage is more than $45 million, which currently limits additional
borrowings on the facility. Both the revolver and term loan are
subject to a debt service coverage ratio (DSCR) covenant of at
least 1.1x. Moody's expects that WaterBridge will maintain cushion
to comply with the DSCR through 2023.
WaterBridge's $975 million senior secured term loan (amount
outstanding as of March 31, 2022) is rated B3, the same as the CFR
because of the small size of the $100 million super-priority
revolver (unrated) relative to the term loan. In addition to about
$138 million of preferred equity at WaterBridge, there is roughly
$175 million of perpetual preferred equity (with no investor put
rights) at the parent company outside of the credit group on
which the company can elect to PIK dividends.
The positive outlook reflects Moody's expectation for leverage to
decline over the next 12-18 months as EBITDA and free cash flow
continue to improve due to rising volumes, and support proactive
refinancing by the company.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade include addressing the
springing maturity while maintaining adequate liquidity;
debt/EBITDA below 5.5x; and consistent EBITDA and free cash flow
growth.
Factors that could lead to a downgrade include debt/EBITDA above
6x; EBITDA/interest below 2x; or weakening liquidity.
WaterBridge, headquartered in Houston, Texas, owns and operates
water midstream infrastructure in the Southern Delaware Basin (in
the broader Permian Basin) in Texas and the Arkoma Basin in
Oklahoma. The company is majority owned by Five Point Energy.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
WERNER FINCO: Moody's Lowers CFR to B3, Outlook Negative
--------------------------------------------------------
Moody's Investor Service downgraded Werner FinCo LP ratings
including its Corporate Family Rating to B3 from B2 and its
Probability of Default Rating to B3-PD from B2-PD. Moody's also
downgraded the secured bank credit facility to B2 from B1 and
unsecured notes to Caa2 from Caa1. The outlook is negative.
"The ratings downgrade and negative outlook are driven by Werner's
very high leverage as a result of margin pressure from elevated
input costs including aluminum, steel, and freight. Weaker than
expected profitability and working capital use has meaningfully
reduced liquidity," said Justin Remsen, Assistant Vice President at
Moody's.
"Price increases and supply chain improvements will help, but
sustained improvements in profitability and cash flow will be a
challenge," added Remsen.
Ratings Downgraded:
Issuer: Werner FinCo LP
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Secured Term Loan, Downgraded to B2 (LGD3) from B1 (LGD3)
Senior Unsecured Regular Bond/Debenture, Downgraded to Caa2 (LGD5)
from Caa1 (LGD5)
Outlook Actions:
Issuer: Werner FinCo LP
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Werner's B3 CFR reflects Moody's expectation that over the next 12
to 18 months the company will maintain high leverage exceeding
Moody's downgrade guidance at 6.25x for B2 CFR. Moody's forward
view assumes the company's leverage will decline from 9.4x for the
twelve months ending March 2022 through realization of price
increase, hedging of key input costs, and manufacturing
efficiencies. Moody's expect free cash flow will improve from
negative $104 million for the twelve months to March 2022 but will
remain modestly negative for 2022 given pressured margins, high
interest burden, and working capital use with higher inventory
costs and growing receivables.
The rating also reflects cyclical end markets, where the
residential construction market can contract quickly and have an
acute impact on the company's financial profile. The company also
has customer concentration with The Home Depot, Inc. (A2 stable)
and Lowe's Companies, Inc. (Baa1 stable) representing a material
portion of sales. These retailers are high-volume purchasers with
strong bargaining power. Strengths include the company's leading
market position for its products, especially Werner-branded
ladders. The company also has a track record of developing
innovative products that fulfill needs in the marketplace.
Moody's forecasts that Werner will have weak liquidity over the
next 12 to 18 months. As of March 31, 2022, Werner had $36
million of total liquidity available, including $6 million cash and
$30 availability under the company's $130 million asset-based
lending (ABL) revolver. The company's ABL has a springing
maturity of 91 days before the term loan maturing July 2024.
Moody's anticipates roughly negative $10 million in free cash flow
in 2022 and positive $15 million in free cash flow in 2023, with
margin and working capital improvements leading to a modest
recovery in cash flow. Moody's projects Werner will maintain
adequate cushion under the ABL's fixed charge coverage ratio over
the next 12 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if operating performance improves
significantly, the company reduces debt/EBITDA to below 6x,
EBITA/interest above 2x, and strengthens liquidity with free cash
flow to debt above 5% and reduced revolver borrowings.
The ratings could be downgraded if operating performance fails to
improve, liquidity deteriorates including negative cash flow or
increasing refinancing risk, EBITA/interest falls below 1.0x or
debt/EBITDA is above 7x.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Werner, headquartered in Itasda, Illinois, is a global manufacturer
and distributor of ladders, jobsite storage and truck and van tool
storage products and other equipment used in the construction
industry. For the twelve months that ended March 2022, the company
recorded a revenue of about $1.3 billion. Triton Partners, through
its affiliates, is primary owner of Werner.
WEX INC: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
--------------------------------------------------------
S&P Global Ratings revised its outlook on Wex Inc. to stable from
negative. At the same time, S&P affirmed its 'BB-' issuer credit
rating on Wex. S&P also affirmed its 'BB-' issue rating on Wex's
term loan A and B. The recovery rating remains '3', reflecting its
expectation of meaningful recovery in a simulated default
scenario.
S&P said, "Our outlook revision is driven by strong performance
across WEX's divisions. We expect WEX to sustain EBITDA interest
coverage of 3.0x-6.0x with leverage of 5.0x-6.0x going forward,
although strategic debt funded acquisitions occur semi-regularly
which could pressure our metrics. As of March 31, 2022, net debt to
EBITDA was 6.3x and EBITDA interest coverage was 6.8x. Given high
oil prices and increasing diversification into less economic
sensitive businesses, we believe that operating performance can be
sustained.
"Wex's adjusted EBITDA grew to $935 million for the 12 months
ending March 31, 2022, up from $900 million in 2021, and $538
million in 2020. We believe EBITDA could surpass $1 billion over
the next 12 months driven by its fleet solutions and travel and
corporate solutions segments, which have benefited from recovering
global economic conditions and higher fuel spend." The company will
also likely benefit from interest income generated by its recently
acquired health savings account assets in the health care and
employee benefit solutions segment.
For the first quarter ended March 31, 2022, total revenue was up
about 26% year over year to $518 million driven by 27% growth in
payment processing revenue. Within payment processing revenue,
revenues from fleet solutions increased by 37% year over year to
$151.9 million driven by higher payment processing transactions and
payment processing dollar due to higher oil prices.
S&P said, "The stable outlook over the next 12 months reflects our
expectations of EBITDA coverage of interest to be 3.0x-6.0x and net
debt to EBITDA of 5.0x-6.0x on a sustained basis. Our outlook also
considers the company's existing market position, adequate
liquidity, and expected organic growth in revenues and EBITDA due
to higher fuel spend and continued recovery in the travel and
corporate segment.
"We could lower the rating over the next 12 months if we expect net
debt to EBITDA to remain above 6.5x and EBITDA coverage of interest
less than 3.0x because of higher leverage or a decline in EBITDA.
Large debt-financed acquisitions that meaningfully increase debt or
deplete surplus cash could also lead to a downgrade, all else
equal.
"An upgrade is unlikely over the next 12 months. Over time, we
could raise the rating if the company maintains its market
position, we expect EBITDA coverage of interest to rise well above
6.0X and net debt to EBITDA to declines below 5.0x on a sustained
basis."
WHITING PETROLEUM: Egan-Jones Retains BB Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company on May 24, 2022, retained the 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Whiting Petroleum Corporation.
Headquartered in Denver, Colorado, Whiting Petroleum Corporation
operates as an oil and gas exploration company.
[*] Colorado Bankruptcies Dropped 31% in May 2022
-------------------------------------------------
Christopher Wood of Loveland Reporter-Herald reports that Colorado
bankruptcy filings dropped 30.9% in May 2022 compared with the same
period a year ago, continuing a pattern of declines seen throughout
2021 and thus far in 2022.
Filings also dropped in Larimer, Boulder and Weld counties compared
with the year-ago period, with only Broomfield County recording a
slight uptick.
That's according to a BizWest analysis of U.S. Bankruptcy Court
data. Numbers cited include all new filings, including open, closed
and dismissed cases. Colorado recorded 446 bankruptcy filings in
May 2022, compared with 646 in May 2021.
Year to date, the state has recorded 1,960 bankruptcy filings,
compared with 2,971 in the first five months of 2021, down 34%.
Among counties in Northern Colorado and the Boulder Valley:
* Larimer County filings totaled 27 in May, compared with
36 a year ago. Filings in the first five months of the
year totaled 118, compared with 142 in the first five
months of 2021, a drop of 16.9%. Larimer County recorded
28 bankruptcy filings in April 2022.
* Weld County bankruptcy filings totaled 32 bankruptcy
filings in May, down from 45 recorded a year ago. Year-
to-date filings totaled 148, compared with 219 a year
ago, down 32.4%. Weld County recorded 27 bankruptcy
filings in April 2022.
* Boulder County recorded 13 bankruptcy filings in May,
compared with 14 in May 2021. The county recorded 68
filings year to date, down from 108 in the first five
months of 2021, down 37%. Boulder County recorded 12
bankruptcy filings in April 2022.
* Broomfield recorded nine bankruptcy filings in May, up
from seven in May 2021. Year-to-date filings totaled 26,
compared with 30 a year ago, down 13%. Broomfield
recorded two bankruptcy filings in April 2022.
[*] Pres. Joe Biden Signs Grassley-Led Bankruptcy Bill Into Law
---------------------------------------------------------------
On June 21, 2022, President Joe Biden signed into law a bipartisan
bill authored by Sen. Chuck Grassley (R-Iowa) to help small
businesses and individuals stay afloat during bankruptcy. The
Bankruptcy Threshold Adjustment and Technical Corrections Act (S.
3823) becomes law at a time when Americans are battling 40-year
high inflation, rising interest rates and fears of a looming
recession. As Judiciary Committee’s ranking member, Grassley
partnered with Sens. Sheldon Whitehouse (D-R.I.), Dick Durbin
(D-Ill.) and John Cornyn (R-Texas) to advance the bill, which
unanimously cleared the Senate and passed in the House of
Representatives with an overwhelmingly bipartisan vote of 392-21.
"As American families and small businesses face mounting economic
uncertainty amid historic inflation and spiking interest rates,
it's more important than ever that we remove hurdles to
reorganizing when folks fall on hard times. Our bipartisan bill –
now law – builds on my Small Business Reorganization Act in 2019
with Sen. Whitehouse to streamline the bankruptcy process for small
businesses by eliminating onerous paperwork requirements designed
for major corporations," Grassley said.
"The bankruptcy process should assist small businesses and working
families to weather financial hardship and emerge stronger. This
new law will help them do that. I'm gratified to see President
Biden sign this bipartisan effort. I was pleased to work with
Senators Grassley, Durbin, and Cornyn to improve our bankruptcy
process," Whitehouse said.
"Too many mom-and-pop shops are getting caught up in a complicated
bankruptcy system while working to get back on their feet. At the
same time, many families are struggling with overwhelming levels of
debt. This bipartisan bill brings relief to both. I'm grateful to
my Senate colleagues for their partnership on this critical
legislation, and applaud President Biden for acting swiftly to sign
this into law—a testament to this Congress's, and this
Administration's, commitment to supporting American businesses and
families," Durbin said.
"For small businesses and families who fought their way through the
pandemic and are now facing economic hardship, our complicated
bankruptcy process can be another barrier to survival. I'm glad we
could come together on this reprieve from burdensome requirements,
especially given record-high inflation and rising interest rates,"
Cornyn said.
Whitehouse and Grassley passed the Small Business Reorganization
Act in 2019 to establish streamlined bankruptcy procedures that
help small business owners keep their companies afloat and preserve
jobs. The CARES Act of 2020 temporarily allowed more small
businesses to qualify for those streamlined procedures by
increasing the upper debt limit for small businesses from $2.7
million to $7.5 million. That increase expired on March 27, 2022.
The Bankruptcy Threshold Adjustment and Technical Corrections Act,
which is now law, provides a two-year extension to the CARES Act
increase to $7.5 million, and makes minor technical fixes to the
Small Business Reorganization Act. It also increases the debt limit
for individuals to qualify for Chapter 13 bankruptcy for two years,
allowing more individuals the opportunity to try to save their
homes from foreclosure.
[^] BOND PRICING: For the Week from June 20 to 24, 2022
-------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
Accelerate Diagnostics AXDX 2.500 66.100 3/15/2023
Accuray Inc ARAY 3.750 92.023 7/15/2022
BPZ Resources Inc BPZR 6.500 3.017 03/01/2049
Basic Energy Services BASX 10.750 3.004 10/15/2023
Basic Energy Services BASX 10.750 3.004 10/15/2023
Buckeye Partners LP BPL 6.375 79.644 1/22/2078
Buffalo Thunder
Development Authority BUFLO 11.000 50.000 12/09/2022
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 26.568 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 6.625 13.484 8/15/2027
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 27.000 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 26.579 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 6.625 14.232 8/15/2027
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 26.352 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 32.000 8/15/2026
Diebold Nixdorf Inc DBD 8.500 53.343 4/15/2024
Dow Chemical Co/The DOW 3.625 98.565 5/15/2026
Dow Chemical Co/The DOW 3.625 98.566 5/15/2026
EnLink Midstream
Partners LP ENLK 6.000 69.000 N/A
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Energy Transfer LP ET 6.250 77.500 N/A
Enterprise Products
Operating LLC EPD 4.875 79.431 8/16/2077
Envision Healthcare Corp EVHC 8.750 30.831 10/15/2026
Envision Healthcare Corp EVHC 8.750 30.603 10/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 34.701 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 64.892 7/15/2023
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 34.408 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 64.892 7/15/2023
Florida Power & Light Co NEE 1.280 89.224 03/01/2071
GNC Holdings Inc GNC 1.500 0.770 8/15/2020
GTT Communications Inc GTTN 7.875 8.250 12/31/2024
GTT Communications Inc GTTN 7.875 9.000 12/31/2024
General Electric Co GE 4.200 70.500 N/A
Goldman Sachs
Group Inc/The GS 5.000 88.500 N/A
Horizon Global Corp HZN 2.750 98.750 07/01/2022
JPMorgan Chase & Co JPM 4.625 87.579 N/A
Lannett Co Inc LCI 4.500 28.590 10/01/2026
MAI Holdings Inc MAIHLD 9.500 30.000 06/01/2023
MAI Holdings Inc MAIHLD 9.500 30.000 06/01/2023
MAI Holdings Inc MAIHLD 9.500 30.000 06/01/2023
MBIA Insurance Corp MBI 12.304 11.486 1/15/2033
MBIA Insurance Corp MBI 12.304 11.486 1/15/2033
Macquarie Infrastructure
Holdings LLC MIC 2.000 95.400 10/01/2023
Macy's Retail Holdings M 6.700 96.102 7/15/2034
Macy's Retail Holdings M 6.700 96.102 7/15/2034
Morgan Stanley MS 1.800 75.757 8/27/2036
Nine Energy Service Inc NINE 8.750 62.879 11/01/2023
Nine Energy Service Inc NINE 8.750 63.082 11/01/2023
Nine Energy Service Inc NINE 8.750 62.926 11/01/2023
OMX Timber Finance
Investments II LLC OMX 5.540 0.783 1/29/2020
Plains All American
Pipeline LP PAA 6.125 72.770 N/A
Renco Metals Inc RENCO 11.500 24.875 07/01/2003
Revlon Consumer
Products Corp REV 6.250 10.250 08/01/2024
RumbleON Inc RMBL 6.750 46.402 01/01/2025
Sears Holdings Corp SHLD 8.000 1.595 12/15/2019
Sears Holdings Corp SHLD 6.625 2.275 10/15/2018
Sears Holdings Corp SHLD 6.625 2.549 10/15/2018
Sears Roebuck
Acceptance Corp SHLD 7.000 1.069 06/01/2032
Sears Roebuck
Acceptance Corp SHLD 6.500 1.027 12/01/2028
Sears Roebuck
Acceptance Corp SHLD 7.500 1.060 10/15/2027
TPC Group Inc TPCG 10.500 53.500 08/01/2024
TPC Group Inc TPCG 10.500 53.600 08/01/2024
TerraVia Holdings Inc TVIA 5.000 4.644 10/01/2019
Wayfair Inc W 0.375 98.150 09/01/2022
Wesco Aircraft Holdings WAIR 8.500 51.708 11/15/2024
Wesco Aircraft Holdings WAIR 13.125 32.235 11/15/2027
Wesco Aircraft Holdings WAIR 8.500 51.415 11/15/2024
fuboTV Inc FUBO 3.250 31.500 2/15/2026
*********
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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are not intended to reflect actual trades. Prices for actual
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*********
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