/raid1/www/Hosts/bankrupt/TCR_Public/220721.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, July 21, 2022, Vol. 26, No. 201
Headlines
327 HAYWOOD: Seeks to Hire Ivey McClellan as Bankruptcy Counsel
6200 NE 2ND AVENUE: Wins Cash Collateral Access Thru July 31
ALAMO DRAFTHOUSE: Wins Cash Collateral Access Thru Aug 29
ALTMEYER HOME STORES: Files for Chapter 7 Bankruptcy Protection
APEX CONVEYOR: Taps Rosenstein & Associates as Legal Counsel
ARMSTRONG FLOORING: Retiree Panel Taps Jenner & Block as Counsel
ASTECH ENGINEERED: Files Chapter 11 Subchapter V Case
BROOKS BROS: CEO Del Vecchio Accused of Using Ch.11 To Buck Debts
CAPACITY INSURANCE: A.M. Best Cuts Fin. Strength Rating to C++
CHRISTIAN CARE CENTERS: Seeks Court Okay for $44 Mil. Ch. 11 Sale
CINCINNATI TERRACE: Wins Final OK of DIP Loan from TBG Funding
COLORADO WORLD RESORTS: SARE Files for Chapter 11 Bankruptcy
DENT TECH: Seeks to Hire Wisdom Professional Services as Accountant
DENT TECH: Taps Law Offices of Alla Kachan as Bankruptcy Counsel
DOMTAR CORP: Fitch Affirms 'BB' IDR & Alters Outlook to Negative
E.L. SERVICES: Wins Interim Cash Collateral Access Thru Sept 14
EAGLE LEDGE: Gets Approval to Hire Ray Jones as Bookkeeper
FOODSERVICE PARTNERS: Georgia Unit Follows Parent in Chapter 11
FURNITURE FACTORY: Trustee Suit Says Chapter 11 Is Directors' Fault
GEO GROUP: S&P Lowers ICR to 'CC' on Proposed Debt Restructuring
GIRARDI & KEESE: California State Bar Probes Co.'s Ex-Attorneys
GIRARDI & KEESE: Tom, Erika's Furniture to Be Auctioned Off
HERBALIFE NUTRITION: Moody's Affirms 'Ba3' CFR, Outlook Stable
HERTZ CORP: False-Arrest Claimants File Lawsuit, Expands Dispute
HONEYWELL INT'L: Judge Questions Objection to Mesothelioma Claims
IAZ LAND: Seeks to Hire Stevenson & Bullock as Legal Counsel
INDIANA WELLNESS: Seeks to Hire Hester Baker Krebs as Legal Counsel
INFOW LLC: Alex Jones Defiant of Sandy Hook Hoax Lawsuit Deposition
INNOVATIVE GLOBAL: Gets OK to Hire Winsor Law Group as Counsel
JUUL LABS:Seeks New Funding To Boost Flexibility Amid Legal Battles
LECLAIRRYAN PLLC: Can Trustee Challenge $21 Mil. Deal, Judge Asks
LTL MANAGEMENT: Wants to Stop New Mexico, Mississippi Talc Suits
MATHESON TRUCKING: Joins Affiliates in Chapter 11
OBSIDIAN ENERGY: S&P Assigns Preliminary 'B-' ICR, Outlook Stable
PATAGONIA HOLDCO: Moody's Gives B1 CFR & Rates New Secured Loans B1
PATH MEDICAL CENTER: Could Be Sold Out of Bankruptcy for $20M
PELCO STRUCTURAL: Wins Cash Collateral Access Thru Oct 31
QBS PARENT: Fitch Lowers LongTerm IDR to 'B-'; Outlook Stable
REID'S EDUCATIONAL: Wins Interim Cash Collateral Access
SAS AB: Pilots Reach 5-Year Deal, Ends Strike After 15 Days
SAS AB: Scandinavian Airlines Lands Deal With Pilots
SMART BAKING: Wins Cash Collateral Access Thru Aug 22
SUMMIT LLC: Joins Owner in Chapter 11 Bankruptcy
TALEN ENERGY: Must Hand Over Retiree Docs for ERISA Lawsuit
TAVERN ON LAGRANGE: Wins Cash Collateral Access Thru Aug 2
TCN LIBERTY: Seeks to Hire Jacobs PC as Bankruptcy Counsel
THE A MEN OF SARASOTA: Heal Strong Files Subchapter V Case
THE SOUTH EDGE: Files Chapter 11 Subchapter V Case
TICONDEROGA FARMS: Taps Odin, Feldman & Pittleman as Legal Counsel
TIERPOINT LLC: Fitch Affirms LT IDR at 'B', Outlook Stable
TIERRA ADENTRO: Seeks to Hire Vilarino & Associates as Counsel
TORINO CAMPUS: Files Bare-Bones Chapter 11 Petition
TPC GROUP: Chapter 11 Loan Delayed Pending Appellate Stay Ruling
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
327 HAYWOOD: Seeks to Hire Ivey McClellan as Bankruptcy Counsel
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327 Haywood Check The Deed! LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of North Carolina to hire
Ivey, McClellan, Siegmund, Brumbaugh & McDonough, LLP to serve as
legal counsel in its Chapter 11 case.
The firm's services include:
a. advising the Debtor of its powers and duties in the
continued operation of its business and management of its
properties;
b. negotiating, preparing and pursuing confirmation of a
Chapter 11 plan and approval of a disclosure statement and all
reorganization agreements;
c. preparing court papers;
d. representing the Debtor in adversary proceedings;
e. representing the Debtor in litigation related to the case;
f. appearing in court; and
g. performing all other legal services.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Samantha K. Brumbaugh $400 per hour
Dirk W. Siegmund $400 per hour
Charles M. Ivey, III $500 per hour
Darren McDonough $400 per hour
Melissa Murrell $100 per hour
Tabitha Coltrane $100 per hour
Janice Childers $100 per hour
Dirk Siegmund, Esq., a partner at Ivey, disclosed in court filings
that he and his firm are "disinterested" within the meaning of
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Dirk W. Siegmund, Esq.
Ivey, McClellan, Gatton & Siegmund, LLP
100 South Elm Street, Suite 500
Greensboro, NC 27401
Telephone: (336) 274-4658
Facsimile: (336) 274-4540
Email: dws@iveymcclellan.com
About 327 Haywood Check The Deed!
327 Haywood Check The Deed! LLC is a single asset real estate (as
defined in 11 U.S.C. Sec. 101(51B)).
327 Haywood sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D.N.C. Case No. 22-10097) on June 30,
2022, listing up to $1 million in assets and up to $500,000 in
liabilities. Shawn Thomas Johnson, manager and member, signed the
petition.
Dirk W. Siegmund, Esq., at Ivey, McClellan, Siegmund, Brumbaugh &
McDonough, LLP is the Debtor's counsel.
6200 NE 2ND AVENUE: Wins Cash Collateral Access Thru July 31
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The U.S. Bankruptcy Court for the Southern District of Florida,
Miami Division, authorized 6200 NE 2ND Avenue, LLC and
debtor-affiliates to use cash collateral on an interim basis
through July 31, 2022.
The Court said all terms and conditions of the Interim Order
Authorizing Preliminary Use of Cash Collateral and Approving
Adequate Protection Arrangement are affirmed and continued.
A hearing on the continued use of cash collateral is scheduled for
July 19 at 2 p.m.
A copy of the order is available at https://bit.ly/3IVcF2j from
PacerMonitor.com.
About 6200 NE 2nd Avenue, LLC
6200 NE 2nd Avenue, LLC and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No.
22-10385) on January 18, 2022. In the petition signed by Mallory
Kauderer, manager, the Debtor disclosed up to $50,000 in assets and
up to $10 million in liabilities.
6200 NE 2nd Avenue, LLC and its affiliates are Florida limited
liability companies which together own 14 parcels of real property
in the Little Haiti/Upper East Side neighborhood largely on the
Northeast 2nd Avenue corridor of Miami. Each of the Debtors owns at
least one Property that currently or historically generated income,
but several of the properties are not generating income today,
largely as a result of the COVID-19 pandemic and after certain
properties were gutted in anticipation of renovation, the failure
of an investor to raise and invest sufficient funds to complete the
renovations.
Judge Robert A. Mark oversees the case. Steven Beiley, Esq., at
Aaronson Schantz Beiley P.A. is the Debtor's counsel.
ALAMO DRAFTHOUSE: Wins Cash Collateral Access Thru Aug 29
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware entered an
order amending the final cash collateral order dated April 1, 2021,
authorizing Alamo Drafthouse Cinemas Holdings, LLC et al. to use
cash collateral.
The Debtors are authorized to use so-called Excluded Cash to fund
pre-Sale Closing Date administrative expenses in accordance with
the Approved Budget and post-Sale Closing Date administrative
expenses through the date that is the earliest to occur of:
(a) August 29 2022;
(b) the date on which any of these events occurs unless
waived in writing by the Prepetition Agent, acting at
the direction of the Required Prepetition Lenders:
(i) entry of any order constituting a stay,
modification, appeal or reversal of the Order,
(ii) the appointment of any examiner with expanded
powers,
(iii) entry of any order dismissing the Chapter 11
Cases or converting the Chapter 11 Cases to
cases under Chapter 7, or
(iv) the Debtors' filing of a motion or other
request for relief seeking to modify or alter
or vacate the Order or any term thereof; and
(c) the expiration of the Remedies Notice Period, in each
case unless waived in writing by the Prepetition Agent.
The Court ruled that, except as modified by the Order Further
Amending Final Cash Collateral Order and Extending the Debtors'
Authority to Use Cash Collateral, all of the terms, conditions, and
provisions of the Final Cash Collateral Order and the Amended Order
are ratified and reaffirmed in all respects and will remain in full
force and effect, including (i) the validity and enforceability of
the Replacement Liens, Adequate Protection Superpriority Claims and
the DIP Liens (to the extent of the DIP Reversionary Interest in
the Excluded Cash); provided, however, the Debtors will not be
required to reimburse the fees and expenses of the Prepetition
Secured Parties as provided in the Final Cash Collateral Order from
and after the Sale Closing Date, and (ii) the prohibition on the
sale, transfer, lease, encumbrance or other disposition of any
portion of the Prepetition Collateral not subject to the Sale Order
other than in the ordinary course of business without the prior
consent of the Required DIP Lenders or Court order.
A copy of the order is available for free at https://bit.ly/3aOMrSx
from PacerMonitor.com.
About Alamo Drafthouse
The Alamo Drafthouse Cinema -- https://drafthouse.com/ -- is an
American cinema chain founded in 1997 in Austin, Texas, that is
famous for its strict policy of requiring its audiences to maintain
proper cinema-going etiquette. Known for offering full meal and
alcohol service at its theaters, the company also operates a movie
merchandise store and an annual genre film festival, Fantastic
Fest. Alamo Drafthouse had 41 locations as of March 31, 2021, with
23 of those locations ran by franchisees.
Alamo Drafthouse Cinemas Holdings, LLC and 33 affiliated companies
filed Chapter 11 petitions (Bankr. D. Del. Lead Case No. 21-10474)
on March 3, 2021. Alamo Drafthouse was estimated to have $100
million to $500 million in assets and liabilities as of the
bankruptcy filing.
The Hon. Mary F. Walrath is the case judge.
The Company tapped Young Conaway Stargatt & Taylor LLP as
bankruptcy counsel and Portage Point Partners as its financial
adviser. The Debtor tapped Houlihan Lokey Capital as its
investment banker, led by Russell Mason, director in the firm's
Financial Restructuring Group. Epiq Corporate Restructuring, LLC,
is the claims agent.
ALTMEYER HOME STORES: Files for Chapter 7 Bankruptcy Protection
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Tony Larussa of Triv Live reports that Altmeyer's, a family-owned
retail home goods chain that started in the basement of a New
Kensington tavern 81 years ago and grew to multiple locations in
the region, has filed for bankruptcy.
The company's board of directors on Sunday, July 10, 2022,
authorized its president, Robert Altmeyer, who is the grandson of
the chain's founder, to initiate bankruptcy proceedings in federal
court.
Attorney Kathryn L. Harrison of Campbell & Levine in Pittsburgh is
representing Altmeyer's in the case.
The company's website displays a "maintenance mode" message. It
does not permit customers to shop or conduct other business through
the portal.
The company, which specializes in home goods such as bedding, bath
and kitchenwares and window treatments, operated locations in the
Riverview Plaza in New Kensington along with stores in Greensburg,
Delmont, Butler, West Mifflin, Uniontown and Johnstown.
The bankruptcy petition, filed Monday, July 11, by Altmeyer in
federal court, is for Chapter 7 protection, which allows the
company to sell off its nonexempt property and distribute the
proceeds to creditors, according to court documents.
The case has been assigned to Judge Carlota M. Bohm.
Company officials estimated in the filing that between $100,000 and
$500,000 in debt is owed to creditors and that no money will be
left for unsecured creditors after administrative costs for the
filing are paid.
There are 125 creditors listed in court documents.
The Altmeyer's chain was launched in April 1941 when George
Altmeyer used $5,000 he scraped together and started selling dry
goods from the basement of Corbin's Bar and Grill on 10th Street in
New Kensington.
Altmeyer said his grandfather got the idea for the retail business
while working as a stock boy at the now-defunct Hart's Department
Store in New Kensington when he was a teenager and noticed that the
store didn't handle dry goods.
About Altmeyer's
Altmeyer's is a family-owned retail home goods chain founded in
April 1941 that specializes in home goods such as bedding, bath and
kitchenwares and window treatments, operated locations in the
Riverview Plaza in New Kensington along with stores in Greensburg,
Delmont, Butler, West Mifflin, Uniontown and Johnstown.
Altmeyer Home Stores, Inc., sought bankruptcy protection under
Chapter 7 of the U.S. Bankruptcy Code (Bankr. W.D. Penn. Case. No.
22-21334) on July 11, 2022. In the petition filed by Robert
Altmeyer, as president, the Debtor estimated liabilities between
$100,000 and $500,000.
The case is handled by Honorable Bankruptcy Judge Carlota M Bohm.
Kathryn L. Harrison, of Campbell & Levine, LLC, is the Debtor's
counsel.
The Debtor's counsel:
Kathryn L. Harrison
Campbell & Levine, LLC
412-261-0310
klh@camlev.com
The Chapter 7 trustee:
Robert H. Slone, Trustee
223 South Maple Avenue
Greensburg, PA 15601
APEX CONVEYOR: Taps Rosenstein & Associates as Legal Counsel
------------------------------------------------------------
Apex Conveyor Systems, Inc., seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire The
Law Firm of Rosenstein & Associates to serve as legal counsel in
its Chapter 11 case.
The firm's services include:
1. examining claims of creditors to determine their validity;
2. providing legal advice regarding the Debtor's bankruptcy
estate;
3. defending any actions brought for relief from the automatic
stay;
4. determining special treatment and payment of pre-bankruptcy
obligations;
5. complying with the U.S. trustee's reporting requirements;
6. drafting a plan of reorganization and disclosure
statement;
7. objecting to claims;
8. representing the Debtor in bankruptcy law matters; and
9. defending or prosecuting any matters related to litigation
filed before the bankruptcy court or any other court of appropriate
jurisdiction.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Robert Rosenstein $395 per hour
Associates $375 per hour
Paralegal $165 per hour
In addition, the firm will seek reimbursement for work-related
expenses.
The firm received a deposit of $20,000 prior to the Debtor's
bankruptcy filing
Robert Rosenstein, Esq., at Rosenstein & Associates, disclosed in a
court filing that his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Robert B. Rosenstein, Esq.
The Law Firm of Rosenstein & Associates
28600 Mercedes Street, Suite 100
Temecula, CA 92590
Tel: 951-296-3888
Email: robert@thetemeculalawfirm.com
About Apex Conveyor Systems
Apex Conveyor Systems Inc. designs and manufactures parts and
components for any conveyor system application. It is based in
Temecula, Calif.
Apex Conveyor Systems sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-12152) on June
6, 2022, listing up to $500,000 in assets and up to $10 million in
liabilities. Greg S. King, president of Apex Conveyor Systems,
signed the petition.
The case is assigned to Judge Magdalena Reyes Bordeaux.
Robert B. Rosenstein, Esq., at The Law Firm of Rosenstein &
Associates, is the Debtor's counsel.
ARMSTRONG FLOORING: Retiree Panel Taps Jenner & Block as Counsel
----------------------------------------------------------------
The committee of non-represented retirees appointed in the Chapter
11 cases of Armstrong Flooring, Inc. and its affiliates received
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Jenner & Block, LLP as its lead counsel.
The firm's services include:
a. providing legal advice regarding the retiree committee's
organization, duties and powers in the Debtors' cases;
b. evaluating and participating in the Debtors' restructuring
process;
c. assisting the retiree committee in its investigation of the
acts, conduct, assets, liabilities, and financial condition of the
Debtors, and participating in and reviewing any proposed asset
sales or dispositions, and any other matters relevant to the cases;
d. attending meetings and participating in negotiations;
e. taking all necessary action to protect and preserve the
interests of the retiree committee, including possible prosecution
of actions on its behalf and investigations concerning litigation
in which the Debtors are involved;
f. assisting the retiree committee in the review, analysis,
and negotiation of any financing or proposed use of cash
collateral;
g. assisting the retiree committee with respect to
communications with retirees about significant matters;
h. reviewing and analyzing claims filed against the Debtors'
estates;
i. representing the retiree committee in hearings;
j. assisting the retiree committee in preparing legal papers;
k. assisting the retiree committee in the review, formulation,
analysis, and negotiation of any Chapter 11 plan and accompanying
disclosure statement; and
l. providing such other legal assistance as the retiree
committee may deem necessary and appropriate.
The hourly rates charged by the firm's attorneys and
paraprofessionals are as follows:
Partners $980 to $1,700
Special Counsel $820 to $985
Associates $635 to $995
Staff Attorneys $515 to $595
Discovery Attorneys $300
Paraprofessionals $270 to $505
The primary attorneys expected to represent the retiree committee
are:
Catherine Steege Partner $1,450
Melissa Root Partner $1,150
William Williams Associate $920
Jenner & Block will receive reimbursement for work-related
expenses.
Catherine Steege, Esq., a partner at Jenner & Block, disclosed in a
court filing that the firm and its attorneys neither hold nor
represent any interest adverse to the retiree committee.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Ms.
Steege also disclosed the following:
1. Jenner & Block has not agreed to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement.
2. No Jenner & Block professional included in this engagement
has varied his rate based on the geographic location of the
Debtors' bankruptcy cases.
3. Jenner & Block has not represented the retiree committee in
the 12 months prior to the Debtors' bankruptcy filing.
4. Jenner & Block and the retiree committee are currently
formulating a budget and staffing plan, recognizing that in the
course of large cases like the Debtors' chapter 11 cases, it is
highly likely that there may be a number of unforeseen
circumstances that will need to be addressed by the retiree
committee and its counsel giving rise to additional fees and
expenses.
Jenner & Block can be reached at:
Catherine L. Steege, Esq.
Melissa M. Root, Esq.
William A. Williams, Esq.
Jenner & Block, LLP
353 N. Clark Street
Chicago, Illinois 60654
Telephone: (312) 923-2952
Fax: (312) 840-7352
Email: csteege@jenner.com
mroot@jenner.com
wwilliams@jenner.com
About Armstrong Flooring
Armstrong Flooring, Inc. (NYSE: AFI) --
https://www.armstrongflooring.com/ -- is a leading global
manufacturer of flooring products and one of the industry's most
trusted and celebrated brands. The company continually builds on
its resilient, 150-year legacy by delivering on its mission to
create a stronger future for customers through adaptive and
inventive solutions. Headquartered in Lancaster, Pennsylvania,
Armstrong Flooring safely and responsibly operates eight
manufacturing facilities globally.
Armstrong Flooring and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Case No.
22-10426) on May 8, 2022. In the petition signed by Michel S.
Vermette, president and chief executive officer, Armstrong Flooring
disclosed $517,000,000 in assets and $317,800,000 in liabilities.
Judge Mary F. Walrath oversees the cases.
Skadden, Arps, Slate, Meagher and Flom, LLP is the Debtors'
counsel. Riveron Consulting, LP is the financial advisor, Houlihan
Lokey is the investment banker, and Epiq Corporate Restructuring,
LLC, is the claims and noticing agent and administrative advisor.
On May 18, 2022, the Office of the U.S. Trustee for Region 3
appointed an official committee of unsecured creditors in these
Chapter 11 cases. The committee tapped Cole Schotz PC as counsel
and Province LLC as financial advisor.
On June 17, 2022, the Office of the U.S. Trustee for the District
of Delaware appointed a committee of non-represented retirees in
these Chapter 11 cases. The committee tapped Jenner & Block LLP as
its lead counsel and Saul Ewing Arnstein & Lehr LLP as co-counsel.
ASTECH ENGINEERED: Files Chapter 11 Subchapter V Case
-----------------------------------------------------
ASTECH Engineered Products, Inc., filed for chapter 11 protection
in the District of Delaware. The Debtor filed as a small business
debtor seeking relief under Subchapter V of Chapter 11 of the
Bankruptcy Code.
According to court filing, Astech Engineered Products estimates
between 100 and 199 unsecured creditors. The petition states funds
will be available to unsecured creditors.
About ASTECH Engineered Products
ASTECH Engineered Products Inc. produces welded honeycomb sandwich
structures. The Company manufactures metal and steel high
strength, heat resistant, and noise suppression structures. Astech
offers its products to the commercial, aerospace, marine,
transportation, and defense industries throughout the world.
ASTECH Engineered Products Inc. filed a petition for relief under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Del. Case No. 22-10635) on July 15, 2022. In the petition filed by
David Richeson, the Debtor estimated assets between $10 million and
$50 million and liabilities between $1 million and $10 million.
David M. Klauder has been appointed as Subchapter V trustee.
Brooks Wilkins Sharkey & Turco PLLC is the Debtor's bankruptcy
counsel. Cozen O'Connor, led by Thomas M. Horan, is the Debtor's
Delaware counsel.
BROOKS BROS: CEO Del Vecchio Accused of Using Ch.11 To Buck Debts
-----------------------------------------------------------------
Rick Archer of Law360 reports that the litigation trustee for
retailer Brooks Brothers has filed suit in Delaware against ex-CEO
Claudio Del Vecchio, claiming he took the company into Chapter 11
to try to avoid millions of dollars in personal liability for an
investment deal.
In a complaint filed Tuesday, July 12, 2022, in Delaware Chancery
Court, William Reid IV accused Del Vecchio of ending years of using
Brooks Brothers as a "personal asset and thriving vanity project"
by taking the company into bankruptcy in an attempt to avoid paying
out on a promise to personally guarantee a major investment.
A full-text copy of the article is available at
https://www.law360.com/bankruptcy/articles/1511034/brooks-bros-ceo-accused-of-using-ch-11-to-buck-liabilities
About Brooks Brothers Group
Brooks Brothers -- https://www.brooksbrothers.com -- is a clothing
retailer with over 1,400 locations in over 45 countries. While
famous for its clothing offerings and related retail services,
Brooks Brothers is known as a lifestyle brand for men, women, and
children, which markets and sells footwear, eyewear, bags, jewelry,
watches, sports articles, games, personal care items, tableware,
fragrances, bedding, linens, food items, beverages, and more.
Brooks Brothers Group, Inc. is the Debtors' ultimate corporate
parent, which directly or indirectly owns each of the other Debtor
entities.
Brooks Brothers Group, Inc. and 12 of its affiliates filed for
Chapter 11 protection (Bankr. D. Del., Lead Case No. 20-11785) on
July 8, 2020. The petitions were signed by Stephen Marotta, chief
restructuring officer. The Debtors were estimated to have assets
and liabilities to total $500 million to $1 billion.
The Honorable Christopher S. Sontchi presides over the cases.
Richards, Layton & Finger, P.A., and Weil, Gotshal & Manges LLP
serve as counsel to the Debtors. PJ Solomon, L.P acts as investment
banker; Ankura Consulting Group LLC as financial advisor; and Prime
Clerk LLC as claims and noticing agent.
On July 21, 2020, the Office of the United States Trustee appointed
the Committee pursuant to section 1102 of the Bankruptcy Code. On
July 24, 2020, and July 27, 2020, respectively, the Committee
selected Akin Gump Strauss Hauer & Feld LLP and Troutman Pepper
Hamilton Sanders LLP as its counsel, and on July 27, 2020, the
Committee selected FTI Consulting, Inc., as its financial advisor.
CAPACITY INSURANCE: A.M. Best Cuts Fin. Strength Rating to C++
--------------------------------------------------------------
AM Best has downgraded the Financial Strength Rating to C++
(Marginal) from B (Fair) and the Long-Term Issuer Credit Rating to
"b" (Marginal) from "bb+" (Fair) of Capacity Insurance Company
(Capacity) (Sunrise, FL). The outlook of these Credit Ratings
(ratings) is negative. Concurrently, AM Best has withdrawn these
ratings as the company has requested to no longer participate in AM
Best's interactive rating process.
The ratings reflect Capacity's balance sheet strength, which AM
Best assesses as weak, as well as its marginal operating
performance, limited business profile and marginal enterprise risk
management (ERM).
The rating downgrades reflect a reassessment of Capacity's overall
balance sheet strength, operating performance and ERM practices.
The rating actions also reflect an unfavorable shift in the
company's risk-adjusted capitalization, as measured by Best's
Capital Adequacy Ratio (BCAR), which declined to the weak level
from strong since the last review. The shift is a product of a
surplus erosion in 2022 and larger net probable maximum losses,
more profoundly in the outlying periods. Furthermore, the company's
capital structure is dependent on a $7 million surplus note (due in
2029) that was issued in early 2022. The company has continued to
report adverse loss reserve development stemming primarily from
management's efforts to correct current reserves and subdue future
deficiencies. Concurrently, AM Best has lowered its operating
performance assessment as corrective actions implemented by
management did not result in the expected near-term improvement. As
a result of continued volatility, operating performance was
reassessed to marginal from adequate. Finally, Capacity's ERM was
revised to marginal given its extended volatility over numerous
years despite corrective actions implemented by management.
The negative outlooks reflect continued pressure on overall balance
sheet strength amid operating performance volatility that has
eroded the surplus position. While management has implemented a
number of ERM initiatives, volatility has persisted and continues
to challenge the overall strength of the company.
CHRISTIAN CARE CENTERS: Seeks Court Okay for $44 Mil. Ch. 11 Sale
-----------------------------------------------------------------
Nonprofit Dallas area nursing home operator Christian Care Centers
Inc. Friday, July 16, 2022, told a Texas bankruptcy judge that it
will be asking her to approve the sale of its assets to the
stalking horse bidder in its Chapter 11 sale for $44.25 million.
The company notified U.S. Bankruptcy Judge Stacey Jernigan that it
had canceled an auction scheduled for Thursday and accepted the bid
from North Texas Benevolent Holdings LLC, or NTBH, after receiving
no other qualified offers by the July 12, 2022 bid deadline.
Pursuant to the Asset Purchase Agreement, NTBH agreed to purchase
the Debtors' assets for $45 million, plus the assumption of certain
assumed liabilities and less a credit of $750,000 related to the
assumption of certain assumed liabilities.
A marketing process conducted by Houlihan Lokey before the
bankruptcy filing yielded another offer -- a restructuring proposal
from an interested party. The proposal outlined a restructuring of
the current bonds through (a) a modification to the current
governance structure, (ii) a forbearance agreement with the bond
trustee, and (ii) a new capital infusion for pre- and post-closing
operational shortfalls, projected transaction costs and capital
expenditures. The Debtors and bond trustee UMB Bank N.A.
determined that NTBH submitted the highest and best offer, and thus
the Debtors signed the stalking horse APA with NTBH.
To further market test the assets, Houlihan Lokey continued its
marketing process postpetition. However, no parties submitted a
competing bid by the July 12 bid deadline. No potential investor
who executed an NDA post-petition has indicated it has insufficient
time to conduct due diligence based on a July 12 bid date.
About Christian Care Centers
Christian Care Centers, Inc. (CCCI) was incorporated in 1947 as a
nonprofit Texas corporation. Christian Care Centers Foundation,
Inc. was incorporated in 1994 also as a nonprofit Texas
corporation. CCCI, a faith-based organization, operates three
senior living housing and health care campuses in the Dallas/Fort
Worth Metroplex. In addition, CCCI owns unimproved real property
in Dallas County and Tarrant County, adjacent to the Mesquite and
Fort Worth communities. The Foundation is a supporting organization
that serves as an endowment organization for CCCI.
CCCI and Christian Care Centers Foundation sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Texas Lead Case
No. 22-80000) on May 23, 2022. In the petitions signed by Mark
Shapiro, chief restructuring officer, the Debtors disclosed up to
$100 million in both assets and liabilities.
Judge Stacey G. Jernigan oversees the cases.
The Debtors tapped Husch Blackwell, LLP as counsel; Glassratner
Advisory & Capital, LLC as restructuring advisor; and Houlihan
Lokey Capital, Inc. as investment banker. Epiq Corporate
Restructuring, LLC is the claims, noticing, and solicitation
agent.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on June 3,
2022.
CINCINNATI TERRACE: Wins Final OK of DIP Loan from TBG Funding
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
authorized Cincinnati Terrace Associates, LLC to obtain
post-petition financing from TBG Funding LLC on a final basis.
The Debtor is permitted to obtain post-petition financing, in order
to, among other things, (i) permit the orderly preservation of the
estate; (ii) finance post-petition insurance obligations; and (iii)
advance marketing costs to Debtor's Proposed Broker for the
marketing and sale of the Debtor's hotel property located at 15
West Sixth Street, Cincinnati, Ohio.
The Debtor is authorized and empowered to obtain the DIP Loans from
the DIP Lender subject to the terms and conditions of the Order and
to execute any documents as may be required in the DIP Lender's
reasonable discretion to memorialize the terms contained therein.
Proceeds of the DIP Loans will be funded by the DIP Lender to the
payees, in the amounts, and on the dates reflected therein:
a. $65,480 to be paid by DIP Lender to US Premium Finance or
Stellar Insurance Brokerage Inc. on Debtor’s behalf on or before
May 27, 2022;
b. $16,403 to be paid by DIP Lender to Insurance Broker on
Debtor's behalf on or before June 27, 2022;
c. $16,403 to be paid by DIP Lender to Insurance Broker on
Debtor's behalf on or before July 27, 2022; and
d. $31,000 will be paid by DIP Lender to AWS Commercial LLC
dba Colliers or Rosewood Realty Group within three business days
following entry of an order from this Court authorizing the
Debtor's retention of the Proposed Broker.
Subject only to the Carve Out, the DIP Lender will be granted an
allowed super-priority administrative expense claim, pursuant to
Sections 364(b) and 503(b) of the Bankruptcy Code, for all amounts
advanced by the DIP Lender for the benefit of the Debtor in
accordance with thee Final Order, with such priority over all
administrative expenses or other claims of or against the Debtor.
The Super Priority Claim will be payable from and have recourse to
all pre-petition and post-petition property of the Debtor and all
proceeds thereof.
Subject only to the Carve Out, as security for the Debtor's
repayment of the DIP Loans, the DIP Lender is granted a valid,
binding, continuing, enforceable, fully-perfected first priority
senior priming security interests in and liens upon any and all
property as set forth below:
a. all real and personal property subject to the
first-priority mortgage dated August 1, 2018, and the assignment of
rents dated August 1, 2018 (executed by the Debtor in favor of TBG
Funding, LLC and as known as Document Numbers 2018-0072569 and
2018-0072570, respectively and as filed with the Hamilton County
Recorder's Office on August 17, 2018;
b. all cash and cash collateral of the Debtor;
c. to the extent not included above, all inventory, accounts
receivable, other rights to payment (including, but not limited to,
all rights to insurance refunds) whether arising before or after
the Petition Date, chattel paper, contracts, general intangibles,
documents, instruments, interests in leaseholds, patents,
copyrights, trademarks, trade names, other intellectual property,
and the proceeds and products of all the foregoing.
The "Carve Out" means: (i) quarterly fees, and interest thereon, of
the United States Trustee and other fees due to the United States
Bankruptcy Court pursuant to 28 U.S.C. section 1930 and any
applicable interest, and any fees due to the Clerk of the Court;
and (ii) any cost and fees of a Chapter 7 Trustee, should one be
appointed, however, not to exceed the amount of $10,000.
The Debtor's authorization to use the proceeds of the DIP Loans or
to receive further DIP Loans pursuant to the Final Order will
automatically terminate, and the DIP Loans will become due and
payable, without further notice or action by the Court following
the earliest to occur of any of the following:
a. the closing of a Sale as defined in the Bid Procedures
Order;
b. the Debtor's failure to comply with any provision of the
Final Order or the provisions of the Bid Procedures Order;
c. the occurrence of the Maturity Date;
d. the Court enters an order appointing, or the Debtor files a
motion seeking appointment of, a Chapter 11 trustee or examiner
with expanded powers in the Chapter 11 case;
e. the Court enters an order dismissing the Case or converting
the Case to a case under chapter 7 of the Bankruptcy Code; or
f. the Debtor purports to grant, or files a motions seeking to
grant, a third-party a security interest or lien (other than the
DIP Liens) upon all or any part of the DIP Collateral that has a
priority that is senior to, or equal with, any of the DIP Liens in
all or any portion of such property.
A copy of the order is available at https://bit.ly/3ySapUN from
PacerMonitor.com.
About Cincinnati Terrace Associates
Brooklyn, N.Y.-based Cincinnati Terrace Associates, LLC, filed for
Chapter 11 protection (Bankr. E.D.N.Y. Case No. 21-41548) on June
9, 2021, listing as much as $50 million in both assets and
liabilities. David Goldwasser, manager and restructuring officer
of FIA Capital Partners, signed the petition.
Judge Elizabeth S. Stong oversees the case.
Kevin J. Nash, Esq., at Goldberg Weprin Finkel Goldstein, LLP and
David Goldwasser of FIA Capital Partners, LLC serve as the Debtor's
legal counsel and chief restructuring officer, respectively. West
Shell Commercial Inc., doing business as Colliers
International/Greater Cincinnati, is the Debtor's property manager.
COLORADO WORLD RESORTS: SARE Files for Chapter 11 Bankruptcy
------------------------------------------------------------
Colorado World Resorts LLC filed for chapter 11 protection in the
District of Colorado, without stating a reason.
The Debtor claims to be a Single Asset Real Estate. Its principal
asset is located at 19302 Cottonwood Drive, Parker, Colorado
80138.
According to court filings, Colorado World Resorts estimates
between 1 and 49 creditors. The bare-bones petition states funds
will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Aug. 24, 2022, at 10:00 AM at Telephonic Chapter 11. Conference
number: 888-497-4718 Access code: 6026644# (dmu)
About Colorado World Resorts
Colorado World Resorts LLC is a is a Single Asset Real Estate (as
defined in 11 U.S.C. Sec. 101(51B)).
Colorado World Resorts LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Col. Case No. 22-12558) on July
15, 2022. In the petition filed by Ranko Mocavic, as manager and
member, the Debtor estimated assets and liabilities between $10
million and $50 million each.
Bonnie Bell Bond, of the Law Office of Bonnie Bell Bond, is the
Debtor's counsel.
DENT TECH: Seeks to Hire Wisdom Professional Services as Accountant
-------------------------------------------------------------------
Dent Tech Laboratory, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to hire Wisdom
Professional Services, Inc. as its accountant.
The firm's services include:
a. gathering and verifying all pertinent information required
to compile and prepare monthly operating reports; and
b. preparing monthly operating reports for the Debtor during
the pendency of its Chapter 11 case.
Wisdom Professional Services will be paid at the rate of $300 per
report and will be reimbursed for its out-of-pocket expenses.
The firm received a retainer in the amount of $3,600.
Michael Shtarkman, a partner at Wisdom Professional Services,
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:
Michael Shtarkman
Wisdom Professional Services Inc.
626 Sheepshead Bay Rd. # 640
Brooklyn, NY 11224
Tel: (718) 554-6672
Email: michael@shtarkmancpa.com
mshtarkmancpa@gmail.com
About Dent Tech Laboratory
Dent Tech Laboratory, Inc. operates a dental laboratories
business.
Dent Tech Laboratory sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-41469) on June 23,
2022, listing up to $50,000 in assets and up to $500,000 in
liabilities. Gregory B. Mashevich, president, signed the petition.
Judge Elizabeth S. Stong oversees the case.
Alla Kachan, Esq., at the Law Offices of Alla Kachan P.C. and
Wisdom Professional Services, Inc. serve as the Debtor's legal
counsel and accountant, respectively.
DENT TECH: Taps Law Offices of Alla Kachan as Bankruptcy Counsel
----------------------------------------------------------------
Dent Tech Laboratory, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to hire the Law Offices
of Alla Kachan, P.C. to serve as legal counsel in its Chapter 11
case.
The firm's services include:
a. assisting the Debtor in administering the case;
b. making such motions or taking such actions as may be
appropriate or necessary under the Bankruptcy Code;
c. representing the Debtor in prosecuting adversary
proceedings to collect assets of the estate and such other actions
as the Debtor deems appropriate;
d. taking such steps as may be necessary for the Debtor to
marshal and protect the estate's assets;
e. negotiating with creditors in formulating a plan of
reorganization for the Debtor;
f. drafting and prosecuting the Debtor's plan of
reorganization; and
g. rendering such additional services as the Debtor may
require in its bankruptcy case.
The Law Offices of Alla Kachan will be paid $475 per hour for
attorney's services and $250 per hour for paraprofessional
services. The firm will also receive reimbursement for its
out-of-pocket expenses.
The retainer fee is $15,000.
Alla Kachan, Esq., disclosed in a court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Alla Kachan, Esq.
Law Offices of Alla Kachan, P.C.
2799 Coney Island Avenue, Ste. 202
Brooklyn, NY 11235
Tel: (718) 513-3145
Email: alla@kachanlaw.com
About Dent Tech Laboratory
Dent Tech Laboratory, Inc. operates a dental laboratories
business.
Dent Tech Laboratory sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-41469) on June 23,
2022, listing up to $50,000 in assets and up to $500,000 in
liabilities. Gregory B. Mashevich, president, signed the petition.
Judge Elizabeth S. Stong oversees the case.
Alla Kachan, Esq., at the Law Offices of Alla Kachan P.C. and
Wisdom Professional Services, Inc. serve as the Debtor's legal
counsel and accountant, respectively.
DOMTAR CORP: Fitch Affirms 'BB' IDR & Alters Outlook to Negative
----------------------------------------------------------------
Fitch Ratings has revised the Rating Outlook of Domtar Corporation
to Negative from Positive. Fitch has also affirmed Domtar's Issuer
Default Rating (IDR) at 'BB'.
The ratings reflect the increased scale and product diversification
the Resolute Forest Product's acquisition will bring to Domtar's
business profile, offset by higher cash flow volatility driven by
cyclical lumber pricing. Pro-forma for the acquisition, and
assuming more normalized lumber pricing going forward, Fitch sees
leverage at the high end of the previously forecast range of 3.0x
to 4.0x total debt/EBITDA through the forecast period.
The Negative Outlook reflects uncertainty over longer-term strategy
and financial policies and the need for more conservative mid-cycle
leverage targeting to remain within the current rating.
KEY RATING DRIVERS
Increased Scale, Diversification and Cash Flow Volatility: Domtar's
proposed acquisition of Resolute Forest Products Inc. (RFP) roughly
doubles the size of the company, bringing annual sales to
approximately $7 billion, and adds a large wood products business
to Domtar's paper, pulp and containerboard operations. RPF is one
of the largest softwood lumber producers in North America, with an
annual capacity of 2.9 billion board feet. RFP's lumber operations
have been highly variable over the past several years, generating
EBITDA ranging from a recent annual low of $28 million during 2019
to $812 million in last twelve months (LTM) ended March 31, 2022.
While lumber prices have been highly elevated over the past several
years, Fitch expects more normalized lumber pricing in the near
term as rising U.S. interest rates cool the housing market. Pro
forma for the acquisition, Fitch estimates that over 50% of
Domtar's EBITDA will come from lumber, although this proportion
will likely be highly variable over time.
Less Clarity on Deleveraging: Domtar has announced its plans to
finance the cash portion (approximately $1.7 billion) of the $2.7
billion acquisition with a mix of equity ($500 million),
incremental debt (approximately $1.2 billion), and cash on hand,
which on a backward-looking basis (pro-forma combined as of March
31, 2022) yields a gross debt/EBITDA level of approximately 2.6x,
and on a forecast basis, incorporating Fitch's assumption of more
normalized commodity prices, will yield total debt/EBITDA at around
3.6x in 2023. The transaction is expected to close in the first
half of 2023.
The trajectory of leverage though the forecast period will be
highly sensitive to U.S. lumber prices, as well as financial and
leverage policies that have yet to be articulated by management.
Fitch expects some deleveraging capacity post close as lumber
prices are likely to remain supportive, and as the company's more
stable paper, pulp and containerboard segments are expected to
generate positive cash flows.
Domtar's Stand-Alone Performance: Domtar's stand-alone performance
for 2021 tracked modestly below Fitch expectations, due primarily
to lower than expected EBITDA generation from the paper segment,
which was negatively affected by the late year emergence of the
Omicron variant that stalled back to work related demand.
Fitch calculated total leverage at the end of 2021 was 4.4x,
slightly above downgrade sensitivity levels, although there was a
strong recovery of paper markets in Q1 2022, and Fitch believes
Domtar was tracking into the forecast range at mid-year 2022.
Importantly, Domtar management expects the Kingsport mill
conversion is on track for a Q4 2022 start-up, which Fitch
estimates will generate over $100 million in annual EBITDA in the
later forecast years.
Negative Outlook: The Outlook revision to Negative from Positive
reflects the shift in strategy at Domtar away from a focus on
deleveraging and organic growth, toward a strategy that Fitch now
assumes includes large, leveraging transactions across the forest
products sectors. Fitch believes that, based on the proposed
capital structure, ratings may remain in the 'BB' category provided
leverage policies are updated to accommodate the higher degree of
cash flow cyclicality going forward. Fitch sees an increased
challenge in navigating the previously described 3.0x to 4.0x
leverage band absent a robust deleveraging policy.
The resolution of the Negative Outlook will also depend upon
certainty around the announced financing plan, which is to include
$500 million in equity contributed by Domtar's parent, Paper
Excellence, and an assessment of whether the company will have
adequate through the cycle liquidity via its proposed ABL facility.
Fitch will also assess to what degree Domtar's strategy is
dependent on incremental synergies, production rationalizations or
changes in the tariff levels.
DERIVATION SUMMARY
Domtar is among the leading freesheet paper businesses in the
consolidated North American market, and holds market positioning
comparable with that of Berry, Sealed Air and Crown, which compete
in the more fragmented packaging market. Packaging peers' end
markets, however, are significantly more robust, driven by stable
consumer nondiscretionary food and beverage end markets, while
Domtar's freesheet paper segment is in secular volume decline, a
process which may accelerate with the work-from-home trend.
Domtar's approximately $500 million in annual EBITDA is
considerably smaller than forest products peers International Paper
($3 billion in annual EBITDA) and Packaging Corporation of America
($1.3 billion in annual EBITDA), as well as packaging peers
including Berry (EBITDA of $2.4 billion) and Silgan (EBITDA of $750
million).
Domtar's EBITDA margins have historically ranged between 11% and
14%, and are lower than Klabin's 30-40% typical margins due to the
latter's leading scale and low-cost position in commodity pulp
products. Domtar's margins are in the same low-mid teens area as
Crown and Sealed Air, and slightly lower than Berry, although
Domtar's margin volatility is somewhat higher than packaging peers
due to its exposure to cyclical pulp prices.
Fitch also notes that Domtar faces elevated capital investment
needs over the coming years due to the need to convert freesheet
capacity pulp and containerboard production, a demand which exceeds
that of peer packaging companies that typically face capital
investment requirements below 5% of sales of a more discretionary
nature.
Domtar's leverage, prior to the proposed acquisition, was expected
to remain lower than packaging peers, in the 3.0x area through the
forecast period, as compared with Berry, which is expected to
maintain total leverage in the 3.5-4x area, Silgan in the 4.0x
total leverage area, and Crown Holdings in the high 4x area.
Domtar's gross leverage is higher than International Paper's 2020
level of 2.5x and Packaging Corporation of America's 2.1x 2020
level.
KEY ASSUMPTIONS
-- Resolute Forest Products acquisition completed in the first
half of 2023;
-- Transaction funding as described by management, with $500
million in equity and $1.2 billion in incremental debt;
-- Lumber prices normalize in 2023 onward reflecting cooling U.S.
housing market;
-- Generally supportive paper, pulp and containerboard markets
throughout the forecast period;
-- Annual $95 million pension contribution post Resolute
acquisition.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Total debt/operating EBITDA consistently below 2.5x;
-- Maintenance of adequate liquidity commensurate with a more
highly cyclical business profile;
-- Adherence to credit conscious capital allocation policies.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Total debt/operating EBITDA consistently above 3.5x;
-- Failure to maintain adequate liquidity in support of a more
highly cyclical business profile;
-- Weakening in leverage targeting or credit policies, including
those involving shareholder payments;
-- Any change in policies or actions that erode the standalone
management of Domtar's financial policies.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: As of March 31, 2022, Domtar had cash on hand
of $56 million and $187 million available on their $400 million ABL
revolving facility (outstanding borrowings consisting of $150
million in borrowings and $63 million in LOCs). Cash flow
generation is expected to be positive after the acquisition and an
expansion capex is completed in 2022. Fitch expects Domtar to have
adequate liquidity to meet its financial commitments over the
forecast period. The company has indicated that it will upsize the
ABL to $1 billion concurrent with the proposed acquisition.
Manageable Debt Maturities: Debt consists of a First Lien Senior
Secured Term Loan B facility of $648 million and a Senior Secured
Notes of $642 million due in 2028. $265 million of Domtar's 2042
and 2044 Senior Unsecured Notes remain in the capital structure
following a tender process. There are no material maturities until
the ABL facility is due in 2026.
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
---- ------ -------- ----
Domtar Corp LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed RR4 BB
senior secured LT BBB- Affirmed RR1 BBB-
senior secured LT BB+ Affirmed RR2 BB+
E.L. SERVICES: Wins Interim Cash Collateral Access Thru Sept 14
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
authorized E.L. Services, Inc. to use cash collateral on an interim
basis in accordance with the budget attached to the Declaration of
Steve Baca Re Budget dated January 25, 2022.
A further hearing on the matter is scheduled for September 14, 2022
at 10:30 a.m.
The status conference is continued to September 14 at 10:30 a.m.
A copy of the order is available at https://bit.ly/3cjjVsB from
PacerMonitor.com.
About E.L. Services, Inc.
E.L. Services, Inc., a landscape and maintenance company located in
Dublin, California, filed a Chapter 11 petition (Bankr. N.D. Cal.
Case No. 21-41087) on August 25, 2021. On the Petition Date, the
Debtor estimated $50,000 to $100,000 in assets and $1 million to
$10 million in liabilities. The petition was signed by Steven P.
Baca, general manager.
Judge William J. Lafferty oversees the case.
The Debtor tapped Kornfield, Nyberg, Bendes, Kuhner & Little P.C.
to serve as its counsel.
EAGLE LEDGE: Gets Approval to Hire Ray Jones as Bookkeeper
----------------------------------------------------------
Eagle Ledge Foundation, Inc. received approval from the U.S.
Bankruptcy Court for the Eastern District of California to hire Ray
Jones, an independent contractor, to provide bookkeeping and
administrative support services.
Mr. Jones will charge $20 per hour for his services.
In court papers, Mr. Jones disclosed that he does not hold or
represent any interest adverse to the Debtor and its estate.
Mr. Jones holds office at:
Ray Jones
2123 E. Axelson Drive
Fresno, CA 93730
About Eagle Ledge Foundation
Formed in 2009, Eagle Ledge Foundation, Inc. is a California
not-for-profit religious corporation. It launched a loan fund
focused on serving the small local church, which often lacked
financing options with commercial lenders. ELF issued bond
certificates to individuals who made, either directly or through
their retirement accounts, contributions to ELF.
Eagle Ledge Foundation sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Calif. Case No. 22-90160) on May
18, 2022. In the petition signed by Chester L. Reid, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Ronald H. Sargis oversees the case.
Lubin Olson & Niewiadomski LLP and Bush Ross, P.A. represent the
Debtor as legal counsels. Jim Wren, CPA of Wren Kelly CPAs, LLP is
the Debtor's accountant.
FOODSERVICE PARTNERS: Georgia Unit Follows Parent in Chapter 11
---------------------------------------------------------------
FoodService Partners Georgia LLC has followed parent FSPH Inc. into
Chapter 11 bankruptcy.
FoodService Partners provides meals and co-packaged products out of
its current facilities in California, New York and Georgia. FSPH
has several operations in Georgia:
* Milledgeville, GA (FSPGA). This location began full
production on March 20, 2021. FSPGA lined up clientele from FSP's
other US facilities who wished to begin production and distribution
in Georgia. The estimated maximum capacity after renovation is
750,000 pounds of food products per day.
* Milledgeville, GA (GrownStrong FarmHouse - GSFH). This
facility provides the necessary distribution, logistics,
transportation, fulfillment and infrastructure to the GIFC.
* Milledgeville, GA (PrimalRock GroceryHouse - PRGH). FSP's
Clean Label & Humanely Raised Animal - Direct to Consumer Grocery
Store Platform that was launched on January 1st, 2022. The store
is still in development stages and pre-order are expected to go
through July 26, 2022. Going into the fall of 2022, the store is
expected to be fully operational and have PrimalRock Scavengers
products available for purcahse from companies all over Georgia.
The company is expecting to have over 250 items available in the
online Grocery Store beginning in 2024.
* Milledgeville, GA (Hustle & Grinders - HG). This division
runs the Public Cafeteria, Community Events, Catering and The
PrimalRock Food Truck (known as the "Chicken Cariot") located at
the Parham Kitchen. It is expected to open in June of 2022.
According to court filings, FoodService Partners Georgia LLC
estimates between 200 and 999 unsecured creditors. The petition
states funds will be available to unsecured creditors.
About FSPH Inc.
FSPH, Inc., is a co-packing and food production company based in
Barnesville, Maryland and was incorporated in 1998 in Delaware.
FSPH Inc. then had facilities established in South San Francisco,
California in 1998; Roanoke, Virginia in 2002; Brooklyn, New York
in 2005; Amarillo, Texas in 2018; and Milledgeville, Georgia in
2020.
The Brooklyn location provides over 33,000 meals per day to the
Health and Hospital Corporation of New York City pursuant to a
long-term contract among Sodexo, FSP and the City of New York.
FSPH Inc. sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 22-10575) on June 29, 2022. In the
petition filed by Angelo Bizzarro, as CEO, the Debtor estimated
liabilities between $10 million and $50 million against assets
between $50,000 and $100,000.
FoodService Partners Georgia LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10633) on
July 15, 2022. The Debtor estimated assets between $1 million and
$10 million and estimated liabilities between $10 million and $50
million.
Jack Shrum, of Jack Shrum, P.A., is the Debtors' counsel.
FURNITURE FACTORY: Trustee Suit Says Chapter 11 Is Directors' Fault
-------------------------------------------------------------------
The liquidating trustee of bankrupt retailer Furniture Factory
Outlet filed a suit in Delaware bankruptcy court July 13, 2022,
alleging the company's Chapter 11 was caused by the board of
directors and controlling investor Sun Capital Partners Inc. when
they took on unnecessary debt to fund expansion.
The Trustee is seeking damages of at least $53 million plus costs,
attorney fees and interest. The complaint alleges the directors
and officers failed to conduct meaningful analysis of a Kentucky
business they were acquiring and did not secure proper guidance
from advisers before completing the deal.
Steven Balasiano, not individually, but solely in his capacity as
trustee of the FFO Liquidation Trust established in the chapter 11
case of the above-captioned debtor, Furniture Factory Ultimate
Holding, L.P., filed a complaint to seek to redress the harm
inflicted on FFO by Directors and Officers, namely Jonathan H.
Borell, Chad Crosby, Jeff Feinberg, Margie Kaufman, Melissa
Klafter, Michael J. McConvery, Hank Mullany, Beth Neumann, David
Rogalski, and Lawrence Zigerelli, (collectively the "D&Os"),
defendants Sun Capital Partners, Inc., Sun Capital Partners
Management VI, LLC and Furniture Factory Note Holdings LLC.
Prior to Sun Capital's involvement, FFO was a furniture retailer
which targeted the middle-to-lower income market in 6-10 states in
the southern and central United States. In early 2016, Sun Capital
acquired FFO through the equivalent of a leveraged buyout, which
burdened FFO with excessive debt and granted Sun Capital
substantial control over FFO's business and operational
decision-making. Shortly thereafter, in late 2017 and early 2018,
Sun Capital caused FFO to expend critical cash to over-expand
through the acquisition of two Kentucky-based retail businesses
that were incompatible with FFO's existing businesses and business
model. This acquisition needlessly strained FFO's liquidity (due
to, among other things, the unsupported and ill-researched purchase
price of the transaction and related integration and conversion
costs), forced FFO to take on significant and otherwise unnecessary
debt, severely and irreversibly drained FFO's management and other
resources, and directly resulted in FFO's bankruptcy.
According to the Trustee, FFO's bankruptcy could have been avoided
had the D&Os simply exercised their fiduciary duties and conducted
appropriate due diligence with respect to the acquisition of the
Kentucky businesses. To the contrary, the D&Os failed to (i)
conduct any meaningful analysis or diligence of the businesses they
were acquiring, (ii) retain sufficient advisors to guide their
review and analysis, or (iii) even question for one moment Sun
Capital's flawed direction. Instead, the D&Os, at the behest of Sun
Capital (which initially proposed and then shepherded the
transaction to consummation), blindly raced to complete the
acquisition to suit Sun Capital's pursuit of growth and greater
returns to equity, rather than to independently assess the benefit
of the transaction to FFO.
According to the Trustee, the D&Os and Sun Capital admit their
failures in internal documents and presentations, including the
failure to consider or even attempt to gather material and
reasonably available information to inform their decision making.
For example, the D&Os and Sun Capital admit that they "did not do a
good job" with the acquisition, giving "inadequate consideration"
to the conflicting business models of the entities to be acquired,
while "warning signals of declining core business were ignored,"
and noting that going forward they should “get the facts on
shifts in the industry" and "spend more time upfront to understand
the local model and market." The limited internal documents
obtained by FFO to date further reveal that the D&Os and Sun
Capital ignored serious but readily apparent problems within FFO,
including an ineffective, disorganized and uncommunicative
management team, which proved grossly negligent and incapable of
managing any integration of the newly acquired businesses. Despite
acknowledging the deeply flawed and ill-informed acquisition
process and the acquisition's utter failure, Sun Capital continued
to siphon off crucial funds from FFO. While FFO bled cash
attempting to salvage the business in the wake of the acquisition,
Sun Capital, among other things, caused FFO to approve the payment
of hundreds of thousands of dollars in so-called "consulting fees"
and the distribution of nearly $1.5 million in connection with Sun
Capital's "grid note loan."
At the same time, FFO stretched or failed to make payment to their
other creditors, including the creditors owed millions of dollars
which are the beneficiaries of the Liquidation Trust. Not
surprisingly, Sun Capital, the architect of the failed acquisition
(designed to benefit Sun Capital as equity holder), was the only
party who benefited.
The Trustee brings this Complaint seeking, among other things: (i)
damages for the D&Os' breaches of their fiduciary duties to FFO;
(ii) damages for Sun Capital's aiding and abetting those breaches
of fiduciary duties by the D&O's; (iii) equitable subordination of
Sun Capital's claims to those of general unsecured creditors; (iv)
recharacterization of the purported debt owed by FFO to Sun Capital
to equity; (v) avoidance and recovery of constructive fraudulent
transfers made to Sun Capital; (vi) damages resulting from, and
disgorgement of, illegal dividends paid to Sun Capital; and (vii)
damages for the D&Os' breaches of Section 9 of the applicable
Limited Liability Company Agreement of Furniture Factory Outlet,
LLC and Furniture Factory Holdings, LLC.
The case is STEVEN BALASIANO, NOT INDIVIDUALLY BUT SOLELY IN HIS
CAPACITY AS TRUSTEE OF THE LIQUIDATION TRUST OF FURNITURE FACTORY
ULTIMATE HOLDING, L.P., et al., Plaintiff, vs. JONATHAN H. BORELL,
CHAD CROSBY, JEFF FEINBERG, MARGIE KAUFMAN, MELISSA KLAFTER,
MICHAEL J. MCCONVERY, HANK MULLANY, BETH NEUMANN, DAVID ROGALSKI,
LAWRENCE ZIGERELLI, SUN CAPITAL PARTNERS, INC., SUN CAPITAL
PARTNERS MANAGEMENT VI, LLC, AND FURNITURE FACTORY NOTE HOLDING,
LLC, Adversary Case No. 22-50390, In re FURNITURE FACTORY ULTIMATE
HOLDING, L.P. (Bankr. D. Del. Case No. 20-12816).
Counsel for the Liquidation Trustee:
Christopher M. Samis (No. 4909)
L. Katherine Good (No. 5101)
Jesse L. Noa (No. 5973)
Aaron H. Stulman (No. 5807)
POTTER ANDERSON & CORROON LLP
1313 N. Market Street, 6th Floor
Wilmington, Delaware 19801
E-mail: csamis@potteranderston.com
kgood@potteranderson.com
jnoa@potteranderson.com
astulman@potteranderson.com
- and -
SEWARD & KISSEL LLP
John R. Ashmead
Robert J. Gayda
Mark D. Kotwick
Laura E. Miller
Catherine V. LoTempio
One Battery Park Plaza
New York, New York 10004
Telephone: (212) 574-1200
Facsimile: (212) 480-8421
E-mail: ashmead@sewkis.com
gayda@sewkis.com
kotwick@sewkis.com
millerl@sewkis.com
lotempio@sewkis.com
About Furniture Factory Outlet
Furniture Factory Outlet, LLC, retailed furniture and accessories
products. The Company retails reclining and sectional sofas,
chairs, tables, ottomans, recliners, bedroom sets, beds, dressers,
mirrors, chests, dining sets, and accessories. As of November
2020, FFO had 31 stores in Arkansas, Indiana, Kentucky, Missouri
and Oklahoma. Furniture Factory was founded in 1984 in Muldrow,
Oklahoma around an original concept of providing quality furniture
at highly competitive prices with the Company's"lowest price every
day" guarantee, a differentiator from the competition.
Furniture Factory Ultimate Holding, LP, including Furniture Factory
Outlet, LLC, sought Chapter 11 protection (Bankr. D. Del. Lead Case
No. 20-12816) on Nov. 5, 2020.
Furniture Factory was estimated to have $10 million to $50 million
in assets and liabilities.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped KLEHR HARRISON HARVEY BRANZBURG LLP as general
counsel; FOCALPOINT SECURITIES, LLC as investment banker; and RAS
MANAGEMENT ADVISORS, LLC, as restructuring advisor. STRETTO is the
claims agent.
GEO GROUP: S&P Lowers ICR to 'CC' on Proposed Debt Restructuring
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on criminal
detention and residential reentry facilities provider The GEO Group
Inc. to 'CC' from 'CCC'. At the same time, S&P lowered its
issue-level rating on the company's secured debt to 'CC' from 'B-'
and its issue-level rating on its unsecured debt to 'C' from
'CCC'.
S&P said, "The negative outlook reflects the likelihood that we
will lower our issuer credit rating on GEO to 'SD' (selective
default) and our issue-level ratings on its debt to 'D' upon the
completion of the transaction. Subsequently, we will review the
company's new capital structure and financial plan.
"The downgrade reflects our view that GEO's proposed restructuring
agreement is distressed and tantamount to a default. The company
has reached a restructuring agreement with its debtholders that we
expect will close in mid-August 2022. The proposed transaction, if
completed, will extend the maturities of GEO's secured debt and
2023, 2024, and 2026 senior unsecured notes beyond their original
terms. In addition, any secured lenders that choose not to
participate in the exchange will rank junior to the enhanced
collateral provided to the secured lenders under the new
facilities. Furthermore, the participating unsecured noteholders
will have a second-lien on the collateral whereas the
non-participating noteholders will have none.
"Still, the proposed transaction will significantly reduce GEO's
upcoming maturity wall, which includes $259 million due in 2023,
$1.9 billion due in 2024, and $580 million due in 2026 (outstanding
amounts). Based on current commitments and minimum participation
requirements, revised debt maturities are expected to be about $170
million in 2023, $430 million in 2024, and $340 million in 2026.
The maturities may be less pending final participation. We note
that GEO intends to pursue additional debt repayment as a result of
the terms of the proposed transactions, which require at least 80%
of GEO's excess cash flow to be allocated towards the repayment of
debt. While the company will incur higher interest expense under
the proposed terms, its operating performance and free operating
cash flow have been solid and we believe it may be well positioned
to repay or refinance its remaining 2023 and 2024 maturities while
continuing to reduce its leverage. We will reassess our ratings on
GEO and assign ratings to the new debt once the restructuring
transaction closes."
Environmental, social, and governance (ESG) credit factors for this
credit rating change:
-- Social capital
S&P said, "The negative outlook reflects the likelihood that we
will lower our issuer credit rating on GEO to 'SD' and our
issue-level ratings on its debt to 'D' upon completion of the
restructuring. Subsequently, we will review the company's new
capital structure and financial plan."
ESG credit indicators: E-2, S-5, G-3
S&P said, "Social factors are a very strong negative consideration
in our ratings analysis of GEO Group. The controversial topic of
human rights, combined with evolving public sentiment and policy
views on criminal justice reform, expose privately operated
criminal detention facilities operators to ongoing social and
governance risks. The company is often criticized for various human
rights issues--including its confinement practices, prisoner
violence, and mistreatment--and is subject to ongoing litigation.
In recent years, select banks have chosen to end their lending
relationship with GEO once their commitments matured because of
pressure from activist advocacy groups."
GIRARDI & KEESE: California State Bar Probes Co.'s Ex-Attorneys
---------------------------------------------------------------
Brandon Lowrey of Law360 reports that the State Bar of California
wants copies of sealed records as part of a previously undisclosed
investigation into two former Girardi Keese lawyers accused of
helping the firm steal more than $2 million from settlements meant
for widows and orphans of plane crash victims, according to a
motion filed Friday, July 15, 2022, in Chicago federal court.
The filing offers the first public indication that the bar is
investigating Los Angeles-based attorneys David Lira and Keith
Griffin, coming more than a year and a half after the settlement
theft became public and six weeks after their former boss, Thomas
V. Girardi, was disbarred.
A full-text copy of the article is available at:
https://www.law360.com/bankruptcy/articles/1512170/calif-bar-investigating-ex-girardi-attys-new-filing-shows
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
GIRARDI & KEESE: Tom, Erika's Furniture to Be Auctioned Off
-----------------------------------------------------------
Ryan Naumann of Radar Online reports that a federal judge ordered
any personal property or furniture still left inside the former
mansion of Real Housewives of Beverly Hills star Erika Jayne and
her estranged husband Tom Girardi to be auctioned off, Radar has
learned.
According to court documents obtained by RadarOnline.com, the judge
presiding over Girardi's Chapter 7 signed off on an auction company
being hired to handle the sale.
Girardi and Jayne's former Steinway piano, religious icons,
statues, lamps, rugs, ceramics, glassware, clothing and shoes, and
sports memorabilia will all be sold.
The auction is scheduled for September 21, 2022 and is expected to
bring in between $191k to $280k.
The Bravo star and the once-respected lawyer lived in the $10
million home during their marriage. Jayne filed for divorce from
Girardi in November 2020 as his legal and financial problems
started to mount.
She said she only took a couple of pieces of furniture when she
booked it to her new rental home near West Hollywood.
Girardi was kicked out of the pad in February 2021 after the
trustee in charge of the bankruptcy took control of the home.
His family claimed the now-disbarred attorney was diagnosed with
dementia and moved him into a senior assisted living home in the
city of Burbank.
The home in question has sat on the market for over a year without
any bites. It was listed for $16 million but the price has been
slashed down to $8 million.
Recently, a creditor owed $2 million from Girardi demanded the home
be sold at a foreclosure auction and taken off the market. He
argued it would be more beneficial to the creditors if the property
was sold than if it sat on the market.
The judge has yet to rule.
As RadarOnline.com previously reported, Jayne was recently ordered
to hand over a pair of diamond earrings that Girardi purchased her
during their marriage. He allegedlly bought the set worth $1.4
million using his client's funds. The judge said while there was no
evidence that the Bravo star knew of the alleged embezzlement she
still had to turn over the earrings.
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
HERBALIFE NUTRITION: Moody's Affirms 'Ba3' CFR, Outlook Stable
--------------------------------------------------------------
Moody's Investors Service affirmed all ratings of Herbalife
Nutrition Ltd., including the company's Ba3 Corporate Family Rating
and Ba3-PD Probability of Default Rating. Moody's also affirmed all
of HLF Financing SaRL, LLC's ratings. The outlook is stable for
both issuers. The company's SGL-2 speculative grade liquidity
rating is unchanged.
Moody's affirmed Herbalife's ratings because the company
continues to generate solid free cash flow, maintain good
liquidity, and leverage is projected to remain within Moody's
expectations for the rating over the next year despite a recent
increase. Moody's also anticipates Herbalife will continue to take
steps to mitigate cost pressures and navigate challenges
maintaining the representative base amid a tight labor market and a
recovery in away-from-home employment opportunities as pandemic
related restrictions ease. Herbalife will also manage share
repurchases to maintain the company's 3.0x gross debt-to-adjusted
EBITDA target (based on the company's calculation; 3.1x as of March
2022).
The following ratings/assessments are affected by the action:
Ratings Affirmed:
Issuer: Herbalife Nutrition Ltd.
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD4)
Issuer: HLF Financing SaRL, LLC
Senior Secured Bank Credit Facility, Affirmed Ba1 (LGD2)
Senior Unsecured Regular Bond/Debenture, Affirmed B1 (LGD4)
Outlook Actions:
Issuer: Herbalife Nutrition Ltd.
Outlook, Remains Stable
Issuer: HLF Financing SaRL, LLC
Outlook, Remains Stable
RATINGS RATIONALE
Herbalife's Ba3 CFR focuses on its niche product and service
offering and its aggressive financial strategy due to a history of
debt financed share buybacks. The company has been in existence for
more than 40 years and offers a combination of meal replacement
products and customer support, which offers clients an avenue to
weight loss and improved nutrition. That said, its global
multi-level marketing structure has been under scrutiny for years
by several regulatory agencies. The company's business model is
highly reliant upon its ability to recruit and retain sales
representatives around the world, which will be tested as
work-from-home options continue to proliferate due to
pandemic-driven workplace flexibility. There is long term risk
inherent to multi-level marketers ("MLM") in developing markets as
increasing retail penetration, e-commerce activity, and competition
can gradually diminish legacy distribution advantages. Developing
markets also tend to include more volatile economies and foreign
exchange exposure. As a result, Herbalife must maintain stronger
credit metrics than comparably rated companies that have more
stable and less-risky business profiles. Historically, there is a
consistent pattern of meaningful debt financed share buybacks as it
manages its leverage within its target level (3.0x gross
debt-to-adjusted EBITDA, based on the company's calculation) and
Moodys expectations for the rating. Herbalife's credit profile is
supported by its predictable profitability and free cash flow and
excellent geographic diversity. Finally, nutrition and wellness is
a sector that will continue to see strong long-term demand driven
by the aging population, obesity trends, and consumers' continued
focus on wellness even as the impact of the coronavirus recedes.
Herbalife's SGL-2 speculative grade liquidity rating reflects the
company's good liquidity, supported by a sizable $570 million cash
balance as of March 2022, Moody's projection for more than $300
million of free cash flow over the next 12 months, and no
maturities in 2022 and 2023 aside from modest and manageable term
loan amortization. Liquidity is also supported by unused capacity
on the $330 million revolver ($150 milion drawn as of March 2022).
The cushion within the 3.75x maximum debt-to-EBITDA leverage
covenant is good as of March 2022 but could tighten if earnings
weaken without a corresponding reduction in debt over the next
year.
ENVIRONMENTAL SOCIAL AND GOVERNANCE CONSIDERATIONS
Herbalife's overall CIS-4 score recognizes the risks involved in
Herbalife's multi-level marketing model, with a high-level of
regulatory scrutiny and necessity of managing both customer and
sales representative turnover.
Herbalife's E-3 environmental issuer profile score, representing
moderately negative risk, considers waste and pollution as the
overriding factor. That said, Moody's acknowledges Herbalife's
focus on reducing its environmental footprint as it continues to
identify carbon emission and resource conservation projects. For
example, Herbalife has utilized technology in its manufacturing
operations that allows for significantly faster production than the
industry standard, using less electricity and resources. In
packaging, Herbalife focuses on reductions in single-use plastics
and plastic bags.
Herbalife's S-4 social issuer profile score, which reflects highly
negative risk, is driven by the impact of its multi-level marketing
structure, which has been under scrutiny for years by a number of
regulatory agencies. The company's business model is also highly
reliant upon its ability to recruit and retain sales
representatives around the world, which is reflected in Moody's
view of its human capital risk. Customer relations are also
important with headline risk acute as any adverse publicity could
negatively impact brand image and consumer demand. The nutrition
and wellness sector will continue to see strong demand over the
longer term driven by the aging population, obesity trends and the
focus that consumers now have on wellness, which was accentuated by
the coronavirus pandemic.
Herbalife's G-3 governance issuer profile score, representing
moderately negative risk, recognizes Moody's view that its
financial strategy is aggressive, particularly when viewed through
the lens of share repurchases, which have been substantial over the
past five years. Share repurchases are discretionary, and the
company is also focused on managing buybacks while maintaining its
3.0x gross debt-to-adjusted EBITDA leverage target. Because free
cash flow has been insufficient to fully fund share repurchases
over the last five years, some level of debt financing was
necessary.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's view that Herbalife will grow
revenue and earnings over the next year, continue to generate solid
free cash flow of at least $300 million annually, and maintain
debt-to-EBITDA in a mid 3x range. Moody's also assumes in the
stable outlook that there will be no disruptions to the business
model or adverse regulatory actions.
Ratings could be upgraded if Moody's is able to become more
comfortable with the industry's regulatory environment and the
company's business model, and if the company maintains a more
conservative financial strategy which would indicate a commitment
to a higher rating.
Ratings could be downgraded if operating performance deterioration
or a more aggressive financial strategy results in debt/EBITDA
sustained above 4x or retained cash flow (RCF)/net debt falling
below the mid-20% range. An adverse shift in the industry's
regulatory environment or deterioration in liquidity could also
lead to a downgrade.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
Based in Los Angeles, CA, Herbalife LTD. is a direct seller of
weight management products, nutritional supplements, and related
services, as well as personal care products intended to support a
healthy lifestyle. The company operates through individual
distributors that consists of approximately 6.3 million global
members across 95 countries. Revenues for the publicly-traded
company were $5.6 billion for the 12 months ended March 2022.
HERTZ CORP: False-Arrest Claimants File Lawsuit, Expands Dispute
----------------------------------------------------------------
Steven Church of Bloomberg News reports that dozens of people who
have accused Hertz Corp. of having them wrongly arrested filed a
new lawsuit against the rental car giant on Thursday, July 14,
2022, exposing the company to potentially higher court losses.
The new lawsuit, seen by Bloomberg, is based on allegations that
had been bogged down in federal bankruptcy court, where there are
are no juries and where it can be more difficult to win punitive
damages against a corporation.
A full-text copy of the article is available at
https://news.bloomberglaw.com/bankruptcy-law/hertz-false-arrest-claimants-file-new-suit-expanding-dispute
About Hertz Corp.
Hertz Corp. and its subsidiaries -- http://www.hertz.com/--
operate a worldwide vehicle rental business under the Hertz,
Dollar, and Thrifty brands, with car rental locations in North
America, Europe, Latin America, Africa, Asia, Australia, the
Caribbean, the Middle East, and New Zealand. They also operate a
vehicle leasing and fleet management solutions business.
On May 22, 2020, The Hertz Corporation and certain of its U.S. and
Canadian subsidiaries and affiliates filed voluntary petitions for
reorganization under Chapter 11 in the U.S. Bankruptcy Court for
the District of Delaware (Bankr. D. Del. Case No. 20-11218).
Judge Mary F. Walrath oversees the cases.
The Debtors have tapped White & Case LLP as their bankruptcy
counsel, Richards, Layton & Finger, P.A., as local counsel, Moelis
& Co. as investment banker, and FTI Consulting as financial
advisor. The Debtors also retained the services of Boston
Consulting Group to assist the Debtors in the development of their
business plan. Prime Clerk LLC is the claims agent.
The U.S. Trustee for Regions 3 and 9 appointed a Committee to
represent unsecured creditors in Debtors' Chapter 11 cases. The
Committee has tapped Kramer Levin Naftalis & Frankel LLP as its
bankruptcy counsel, Benesch Friedlander Coplan & Aronoff LLP as
Delaware counsel, UBS Securities LLC as investment banker, and
Berkeley Research Group, LLC, as financial advisor. Ernst & Young
LLP provides audit and tax services to the Committee.
* * *
Hertz Global and its subsidiaries emerged from Chapter 11
bankruptcy at the end of June 2021. Hertz won approval of a Plan
of Reorganization that unimpaired all classes of creditors (who are
legally deemed to have accepted it) and was approved by more than
97% of voting shareholders. The Plan provided for the existing
shareholders to receive more than $1 billion of value.
Recovery by shareholders of close to $8 a share was made possible
after a fierce competition among bidders for control in the
company. Initial offers from potential bidders for Hertz in its
bankruptcy offered nothing for equity. Hertz in May 2021 selected
investment firms Knighthead Capital Management LLC and Certares
Management LLC, joined by other investors including Apollo Global
Management Inc. and a group of existing shareholders, as the
winning bidders for control of the bankrupt company. A rival group
that included Centerbridge Partners LP, Warburg Pincus LLC and
Dundon Capital Partners LLC was outbid at auction.
Hertz's Plan eliminated over $5 billion of debt, including all of
Hertz Europe's corporate debt, and will provide more than $2.2
billion of global liquidity to the reorganized Company. Hertz also
emerged with (i) a new $2.8 billion exit credit facility consisting
of at least $1.3 billion of term loans and a revolving loan
facility, and (ii) an $7 billion of asset-backed vehicle financing
facility, each on favorable terms.
HONEYWELL INT'L: Judge Questions Objection to Mesothelioma Claims
-----------------------------------------------------------------
Mesothelioma.net reports that over the last several decades, many
asbestos companies have established settlement trusts that provide
compensation to mesothelioma victims and others suffering
asbestos-related diseases following exposure to their products.
Arranged as part of bankruptcy filings, the trusts have allowed
companies to walk away from millions of dollars in liability for
individual personal injury lawsuits. Still, some companies chafe at
having to pay sums to victims, as was the case in a recent hearing
in Pennsylvania. A bankruptcy judge pushed back on the company's
objections.
The case heard by U.S. Bankruptcy Judge Thomas Agresti was filed by
Honeywell, a company whose asbestos-contaminated products have been
blamed for countless cases of malignant mesothelioma and other
asbestos-related injuries. On behalf of Honeywell, attorney Greg
Primis gave voice to an assertion that the administrators of the
$2.3 billion trust set up for their subsidiary, the North American
Refractories Company asbestos trust, was using "formulaic
allegations of exposure" and paying sums out of the fund too
easily. He argued that the trust had promised to stop approving
claims based on "check-the-box" affidavits that did not contain
enough detail or proof of asbestos exposure.
When Mr. Primis indicated that the NARCO trust was submitting
asbestos-related disease and mesothelioma claims from "81 different
people all over the country saying the same thing," Judge Agresti
interrupted him, asking "How many other ways can you say it?
They're saying the same thing." When Honeywell's attorney repeated
his objection to the rubberstamped language, the judge reiterated,
saying "Maybe 81 people over the country have the same exposure
experience. How many different ways can you say it?"
While Honeywell's attorney continued to argue that having multiple
mesothelioma and asbestos-related disease claims use the same
language diminished their veracity, the judge repeatedly pushed
back, indicating that the attorney had not answered his question as
to why different language needed to be evident on each form. "You
say just because there's some commonality, you can't believe the
affiant? It seems like we're dancing around the same thimble. I
just wanted to hear what you thought, but frankly you didn't clear
me up on that."
Echoing the judge's words, the attorney representing the trust
agreed that Honeywell's argument against the language used on the
mesothelioma and asbestos injury claims was insufficient to warrant
compensation or reflected a lack of due diligence on the part of
the trust's administrators. Joseph Baio noted that when the trust
was established, the language used in documents between Honeywell
and the trust administrators specifically noted that an affidavit
"contains exposure allegations that use identical descriptive
language as the language contained in other exposure affidavits
submitted to the trust."
Many mesothelioma victims are eligible to file claims with asbestos
settlement trusts, and to quickly receive the compensation they
need and deserve. For more information, contact the Patient
Advocates at Mesothelioma.net at 1-800-692-8608.
About Honeywell International
Honeywell is a diversified technology and manufacturing leader,
serving customers worldwide with aerospace products and services;
control technologies for buildings, homes and industry;
turbochargers; automotive products; specialty chemicals; fibers;
plastics; and electronic and advanced materials. Based in Morris
Township, N.J., Honeywell is one of 30 stocks that make up the Dow
Jones Industrial Average and is a component of the Standard &
Poor's 500 Index. Its shares are wwwtraded on the New York Stock
Exchange under the symbol HON, as well as on the London, Chicago
and Pacific Stock Exchanges. On the Web http://www.honeywell.com/
In 1979, Honeywell purchased North American Refractories Company,
known as NARCO, which made asbestos refractory materials.
Honeywell Inc. merged with Allied Signal Inc. in 1999 to form a
company with interests in aerospace, chemical products, automotive
parts and building controls. After the merger, the combined
company was renamed Honeywell International.
By 2010, Honeywell found itself a defendant in thousands of
asbestos lawsuits resulting from the operations of its former
subsidiaries. At the time, Honeywell estimated its potential
liability from asbestos litigation at $1.1 billion.
On Oct. 1, 2019, Honeywell spun off a subsidiary known as Garrett
Motion Inc. and shouldered the company with its estimated $1
billion in asbestos liability.
Honeywell's other asbestos subsidiary, North American Refractories
Company, filed for bankruptcy and established a trust fund in 2013
with $6.32 billion to handle asbestos claims stemming from its
refractory products. The bankruptcy plan assigned certain asbestos
liabilities to Honeywell so that claims arising from bankrupt
companies supplied by NARC must file a claim with Honeywell.
About North American Refractories Co.
Based in Pittsburgh, Pennsylvania, North American Refractories
Company manufactured and sold refractory products.
The Company and its affiliates sought Chapter 11 protection on Jan.
4, 2002 (Bankr. W.D. Pa. Case No. 02-20198) after suffering a slump
in the domestic economy and encountering an overwhelming number of
claims from individuals asserting injuries or illnesses caused by
exposure to asbestos containing products it manufactured. The
Company reported $27.5 billion in assets and $18.6 billion in
liabilities at the time of the filing.
The Hon. Judith K. Fitzgerald confirmed a Third Amended Plan of
Reorganization filed by North American Refractories Company and its
debtor-affiliates, I-Tec Holding Corp., Intertec Company, and
Tri-Star Refractories, Inc., on Sept. 24, 2007. That plan estimated
that unsecured non-asbestos creditors would recover about 90
cents-on-the-dollar. Asbestos claims were channeled to a 524(g)
trust funded by Honeywell International Inc. and 79% of the stock
of the Reorganized Debtor.
James J. Restivo, Jr., Esq., Robert P. Simmons, Esq., and David
Ziegler, Esq., at Reed Smith LLP represents the Debtor. Kroll Zolfo
Cooper LLC is the Debtors' bankruptcy consultants and special
financial advisors. The Official Committee of Unsecured Creditors
is represented by McGuire Woods, LLP. KPMG, LLP, is the Creditors
Committee's financial advisor. The Asbestos Claimants Committee is
represented by attorneys at Caplin & Drysdale, Chartered and
Campbell & Levine, LLC. L. Tersigni Consulting, PC was the Asbestos
Committee's financial advisor.
Lawrence Fitzpatrick was appointed as the Future Asbestos Claimants
Representative. Mr. Fitzpatrick is represented by attorneys at
Young Conaway Stargatt & Taylor LLP and Meyer, Unkovic & Scott LLP.
IAZ LAND: Seeks to Hire Stevenson & Bullock as Legal Counsel
------------------------------------------------------------
IAZ Land, LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Michigan to hire Stevenson & Bullock, P.L.C. as
its legal counsel.
The firm will provide services in connection with the Debtor's
Chapter 11 case, which include legal advice regarding its powers
and duties under the Bankruptcy Code and representation in
negotiations.
The firm received $2,500 for pre-bankruptcy fees and expenses.
Ernest Hassan, III, Esq., a member of Stevenson & Bullock,
disclosed in a court filing that he and his firm are disinterested
persons as defined by Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Ernest M. Hassan, III, Esq.
Stevenson & Bullock, P.L.C.
26100 American Drive, Suite 500
Southfield, MI 48034
Phone: (248) 354-7906
Facsimile: (248) 354-7907
Email: ehassan@sbplclaw.com
About IAZ Land
IAZ Land, LLC filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Mich. Case No.
22-45083) on June 28, 2022, listing up to $500,000 in assets and up
to $1 million in liabilities. Charles M. Mouranie has been
appointed as Subchapter V trustee.
Ernest M. Hassan, III, Esq., at Stevenson & Bullock, P.L.C. is the
Debtor's counsel.
INDIANA WELLNESS: Seeks to Hire Hester Baker Krebs as Legal Counsel
-------------------------------------------------------------------
Indiana Wellness, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Indiana to hire Hester Baker Krebs,
LLC as its legal counsel.
The firm will render these services:
(a) give the Debtor legal advice with respect to its powers
and duties, and management of its property;
(b) take necessary action to avoid the attachment of any lien
against the Debtor's property threatened by secured creditors
holding liens;
(c) prepare legal papers; and
(d) perform all other necessary legal services for the
Debtor.
Hester Baker Krebs will be paid based upon its normal and usual
hourly billing rates and will be reimbursed for its out-of-pocket
expenses.
The retainer fee is $10,988.
David Krebs, Esq., a partner at Hester Baker Krebs, 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.
Hester Baker Krebs can be reached at:
David R. Krebs, Esq.
Hester Baker Krebs, LLC
1 Indiana Square, Suite 1600
Indianapolis, IN 46204
Tel: (317) 833-3030
Email: dkrebs@hbkfirm.com
About Indiana Wellness
Indiana Wellness, LLC is a company in Lafayette, Ind., which is
primarily engaged in general out-patient care services.
Indiana Wellness filed a petition under Chapter 11, Subchapter V of
the Bankruptcy Code (Bankr. N.D. Ind. Case No. 22-40176) on July
11, 2022, listing $190,785 in assets and $3,710,496 in liabilities.
Douglas R. Adelsperger serves as Subchapter V trustee.
David R. Krebs, Esq., at Hester Baker Krebs, LLC represents the
Debtor as counsel.
INFOW LLC: Alex Jones Defiant of Sandy Hook Hoax Lawsuit Deposition
-------------------------------------------------------------------
CBS News reports that radio host Alex Jones was defiant and cited
free speech rights during a lawsuit deposition in April 2022 when
questioned about calling the Sandy Hook Elementary School shooting
a hoax and the effect the statement had on families who lost loved
ones, according to court documents released Thursday, July 14,
2022.
Jones insisted he wasn't responsible for the suffering that Sandy
Hook parents say they have endured because of the hoax conspiracy,
including death threats and harassment by Jones' followers,
according to partial transcripts of the deposition in Bridgeport,
Connecticut, on April 5 and 6, 2022. Several Sandy Hook families
are suing Jones for defamation over the hoax claim.
"No, I don't (accept) responsibility because I wasn't trying to
cause pain and suffering," Jones said, according to the
transcripts. "And this is they are being used and their children
who can't be brought back being used to destroy the First
Amendment."
Jones added, "If questioning public events and free speech is
banned because it might hurt somebody's feelings, we are not in
America anymore. They can change the channel. They can come out and
say I'm wrong. They have free speech."
After first promoting the hoax conspiracies on his Infowars show
and other media platforms, Jones later said he did believe the
shooting happened but has maintained he had the right to say it
didn't.
A gunman killed 20 first graders and six educators at the Newtown,
Connecticut, school on Dec. 14, 2012. Families of eight of the
victims and an FBI agent who responded to the school are suing
Jones and his company, Free Speech Systems.
Connecticut Judge Barbara Bellis found Jones liable for damages to
the families in November. Jury selection for a trial to determine
how much money he should pay them is scheduled to begin Aug. 2 in
Waterbury.
Bellis found in favor of the Sandy Hook families' claims and
defaulted Jones without a trial on the liability issue, as
punishment for what she called Jones' repeated failures to follow
court orders and turn over documents. Jones has criticized Bellis
and denies he failed to turn over documents to the Sandy Hook
families' lawyers.
A judge in Texas, where Jones and Infowars are based in Austin,
issued similar default rulings and found Jones liable for damages
to Sandy Hook families who filed lawsuits in that state over the
hoax conspiracy promoted by Jones. Trials on damages also are
pending there, with the jury selection in the first one scheduled
to begin July 25.
The partial transcripts were released ahead of a court hearing
before Bellis on Thursday to prepare for the trial. They were
included in a motion by the families' lawyers, Alinor Sterling and
Christopher Mattei, asking the judge to bar Jones from challenging
her liability finding against Jones during the trial.
Questioned by Mattei during the deposition, Jones called Bellis'
ruling "fraudulent," accused her of lying and alleged she was
friends with a lawyer in Sterling and Mattei's firm, Koskoff,
Koskoff & Bieder.
"I'm sure your pet judge will do whatever you want," Jones said.
Mattei asked Jones if he had said the Sandy Hook shooting wasn't
real. Jones' lawyer, Norman Pattis, objected to the question. Jones
then said, "It is my right as an American citizen. ... I have said
that in context I could see how people would believe it's totally
staged and synthetic."
Mattei later asked Jones if he considered the Sandy Hook families
to be "unwitting pawns" in a plot against him.
"I have just seen really a lot of sad people that lost their
children using me to keep the story of their children in the news
and gun control in the news. And so ... then I see the accusations
by you guys that I made all this money off Sandy Hook when I know I
didn't."
In April 2022, Jones' radio show Infowars and two other companies
he owns filed for Chapter 11 bankruptcy protection in light of
several defamation lawsuits. The filings were made in the U.S.
Bankruptcy Court for the Southern District of Texas.
Chapter 11 bankruptcy procedures put a hold on pending civil
litigation while letting a business keep running as it prepares a
turnaround plan.
Court documents seen by CBS News show that the companies that filed
were Infowars, IWHealth aka Infowars Health, and Prison Planet TV.
Thursday's, July 14, 2022, court hearing was held to deal with
various scheduling matters and motions filed by both sides in the
case. Bellis did not issue any major rulings.
Jones has filed motions to bar certain evidence from being
presented at the Connecticut trial, including information about
"white supremacy and right-wing extremism."
Pattis also objected to media coverage of Thursday's hearing,
saying pretrial publicity could undermine Jones' right to a fair
trial. Bellis denied the objection, saying it did not outweigh the
presumption of open courtrooms.
Pattis noted that on Tuesday, Jones figured prominently in a
hearing of the U.S. House committee investigating the Jan. 6, 2021,
insurrection at the nation's Capitol. The panel played videos of
Jones and others vowing that Jan. 6 would be the day they would
fight for Donald Trump.
About InfoW LLC
InfoW, LLC, also known as InfoWars, is an American far-right
conspiracy theory and fake news website that is owned by Alex
Jones.
InfoW and affiliates, IWHealth, LLC and Prison Planet TV, LLC,
filed petitions under Chapter 11, Subchapter V of the Bankruptcy
Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April 18, 2022.
Melissa A. Haselden serves as Subchapter V trustee.
In the petition filed by W. Marc Scwartz, chief restructuring
officer, InfoW listed up to $50,000 in assets and up to $10 million
in liabilities.
Judge Christopher M. Lopez oversees the cases.
Kyung S. Lee, Esq., is the Debtor's legal counsel.
* * *
In June 2022, U.S. Bankruptcy Judge Christopher M. Lopez agreed to
sign an order approving dismissal of the cases of InfoW LLC,
IWHealth LLC and Prison Planet TV LLC, all entities that hold
intellectual property assets connected to Jones' podcast network.
Mr. Jones was criticized for abusing the bankruptcy system by
having his companies file for bankruptcy in April 2022 to limit
their liability after a defamation judgment against him and
InfoWars for making false statements about the Sandy Hook
Elementary School shooting. The Debtors later reached an agreement
with the U.S. Trustee for the dismissal of the Chapter 11 cases in
light of the dismissal with prejudice of the Debtors from the
lawsuits against them by the Texas and Connecticut plaintiffs.
INNOVATIVE GLOBAL: Gets OK to Hire Winsor Law Group as Counsel
--------------------------------------------------------------
Innovative Global Distributions, LLC received approval from the
U.S. Bankruptcy Court for the District of Arizona to hire Winsor
Law Group, PLC as its bankruptcy counsel.
The firm's services include:
a. advising the Debtor with respect to its rights, powers and
duties in the continued operation and management of its business;
b. preparing and pursuing confirmation of a plan of
reorganization and approval of a disclosure statement;
c. preparing legal papers and reviewing all financial reports
to be filed;
d. preparing responses to legal documents, which may be filed
by other parties;
e. appearing in court;
f. representing the Debtor in connection with the use of cash
collateral or obtaining post-petition financing;
g. assisting in the negotiation and documentation of financing
agreements, cash collateral orders and related transactions;
h. investigating the nature and validity of liens asserted
against the property of the Debtor, and advising the Debtor
concerning the enforceability of said liens;
i. investigating and advising the Debtor concerning, and
taking such action as may be necessary, to collect income and
assets in accordance with applicable law, and the recovery of
property for the benefit of the Debtor's estate;
j. advising and assisting the Debtor in connection with any
potential property dispositions;
k. advising the Debtor concerning executory contract and
unexpired lease assumption, assignment or rejection, lease
restructuring, and re-characterizations;
l. assisting the Debtor in reviewing, estimating and resolving
claims asserted against the estate;
m. commencing and conducting litigation to assert rights held
by the Debtor, protect assets of the Debtor's estate or otherwise
further the goal of completing the Debtor's successful
reorganization; and
n. performing all other necessary legal services for the
Debtor.
The firm's attorneys and paraprofessionals will be paid at varying
rates currently ranging from $125 per hour to $250 per hour.
Joseph Urtuzuastegui III, Esq., attorney at Winsor, disclosed in a
court filing that his firm is a disinterested person within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Joseph G. Urtuzuastegui III, Esq
Winsor Law Group, PLC
6401, 1237 S Val Vista Dr
Mesa, AZ 85204
Phone: +1 480-505-7044
Email: Joe@winsorlaw.com
About Innovative Global Distributions
Innovative Global Distributions, LLC, a company in Scottsdale,
Ariz., filed a voluntary petition seeking relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Ariz. Case No. 22-04498) on July
11, 2022, listing as much as $10 million in both assets and
liabilities. Pamela J. Gorrie, member, signed the petition.
Joseph G. Urtuzuastegui III, Esq., at Winsor Law Group, PLC
represents the Debtor as counsel.
JUUL LABS:Seeks New Funding To Boost Flexibility Amid Legal Battles
-------------------------------------------------------------------
Rachel Butt of Bloomberg Law reports that Juul Labs Inc. is seeking
new financing to help it navigate uncertainty as the embattled
company navigates lawsuits and a potential US Food and Drug
Administration ban.
The embattled e-cigarette maker's bankers at Centerview Partners
are sounding out investors for a possible $400 million first-lien
term loan due August 2023, according to people with knowledge of
the matter, who asked not to be identified because the discussions
are private. Proceeds would help refinance an existing term loan,
which has around $394 million outstanding and matures on the same
date, the people said.
A full-text copy of the article is available at
https://news.bloomberglaw.com/bankruptcy-law/juul-seeks-new-financing-to-boost-flexibility-amid-legal-battles
About Juul Labs Inc.
JUUL Labs, Inc., formerly known as Pax Labs, Inc., is an American
electronic cigarette company, with its principal place of business
in San Francisco, California.
LECLAIRRYAN PLLC: Can Trustee Challenge $21 Mil. Deal, Judge Asks
-----------------------------------------------------------------
Andrew Strickler of Law360 reports that the Virginia federal judge
leading the LeClairRyan LLC bankruptcy case questioned Thursday,
July 14, 2022, whether the U. S. trustee could challenge a $21
million settlement struck by a Chapter 7 trustee with legal
services giant UnitedLex.
At an omnibus hearing, U.S. Bankruptcy Judge Kevin R. Huennekens
said he was "deeply disappointed" by the office's decision to
"interfere" in the recently approved deal. "I don't remember the
Office of the U. S. Trustee ever substituting its business judgment
for that of the standard Chapter 7 trustee," he said. "And quite
frankly, I didn't think that was the providence of the Office of
the U. S. Trustee."
About LeClairRyan PLLC
Founded in 1988, LeClairRyan PLLC is a national law firm with 385
attorneys, including 160 shareholders, at its peak. The firm
represented thousands of clients, including individuals and local,
regional, and global businesses.
Following massive defections by its attorneys LeClairRyan, members
of the firm in July 2019 voted to effect a wind-down of the
Debtor's operations.
LeClairRyan PLLC sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 19-bk-34574) on Sept. 3, 2019, to effect the wind-down of its
affairs.
In its Chapter 11 petition, the firm listed a range of 200-999
creditors owed between $10 million and $50 million. The firm claims
assets of $10 million to $50 million.
The Hon. Kevin R Huennekens is the case judge.
Richmond attorneys Tyler Brown and Jason Harbour of Hunton Andrews
Kurth represented LeClairRyan in the case. Protiviti was the
Debtor's financial adviser for the liquidation.
The bankruptcy case was converted to a Chapter 7 liquidation on
Oct. 24, 20219. Lynn L. Tavenner was named a Chapter 7 trustee, and
then Benjamin C. Ackerly, a successor trustee.
The Chapter 7 trustee Ackerly's counsel:
Tyler P. Brown
Hunton Andrews Kurth LLP
Tel: 804-788-8200
E-mail: tpbrown@huntonak.com
LTL MANAGEMENT: Wants to Stop New Mexico, Mississippi Talc Suits
----------------------------------------------------------------
Johnson & Johnson's talc unit, LTL Management, is asking a New
Jersey bankruptcy court to halt newly resumed suits by Mississippi
and New Mexico over its talc sales, saying they will endanger its
efforts to settle its talc liability in Chapter 11.
In July 14, 2022, filing, LTL Management said U.S. Bankruptcy Judge
Michael B. Kaplan should exercise his power to keep its Chapter 11
case on track by issuing a restraining order and injunction
blocking the attorneys generals of the two states from restarting
suits claiming Johnson & Johnson's talc sales violated state laws.
In the adversary proceeding, LTL Management LLC seeks an order of
the Bankruptcy Court temporarily enjoining the continued
prosecution of State of New Mexico ex rel. Balderas v. Johnson &
Johnson, et al., No. D-101-CV-2020-00013, pending in the First
Judicial District Court for the County of Santa Fe, New Mexico (the
"NM State Action") and State of Mississippi ex rel. Hood v. Johnson
& Johnson, et al., No. G2014-0001207, pending in the First Judicial
District Court for the County of Hinds, Mississippi (the "MS State
Action" and together with the NM State Action, the "State Actions")
against the Debtor and certain non-debtor entities while the
Chapter 11 Case remains pending.
Ongoing Mediation
A fundamental dispute in the Chapter 11 case relates to the alleged
merits of the talc-related claims against the Debtor (collectively,
the "Talc Claims"). The Debtor and the defendants in the State
Actions maintain that cosmetic talc products manufactured or
distributed by the Debtor's predecessors or Johnson & Johnson
("J&J"), including Johnson's Baby Powder and Shower to Shower
(collectively, the "Talc Products") are safe, did not contain
asbestos, and do not cause disease (and that public statements to
that effect were truthful). By contrast, the talc claimants allege
that such talc products contained asbestos and cause mesothelioma
or ovarian cancer. This dispute about the safety of cosmetic talc
products is also central to the claims asserted in the State
Actions. In fact, the State Actions rely on the same underlying
allegations and evidence relied upon by the talc claimants, and the
plaintiffs in those actions are represented by the same counsel
that represents talc claimants in this chapter 11 case, including
some claimants on the Official Committee of Talc Claimants. Thus,
if the State Actions are permitted to continue, a key issue in the
Chapter 11 case will be adjudicated outside of the Bankruptcy Court
at the same time that parties in the Chapter 11 Case are attempting
to resolve the exact same issue in the Court and formulate a
consensual plan of reorganization.
Moreover, the pursuit of the State Actions would undermine the
ongoing mediation with an ad hoc group of states that are
attempting consensually to resolve consumer protection claims that
are virtually identical to the claims asserted in the State
Actions.
The defendants in this adversary proceeding are the State of New
Mexico ("New Mexico") and the State of Mississippi ("Mississippi").
The named defendants in the State Actions are: (a) the former
Johnson & Johnson Consumer Inc. ("Old JJCI")5; (b) Johnson &
Johnson ("J&J"); and (c) Bausch Health Companies Inc. f/k/a Valeant
Pharmaceuticals International, Incorporated; Bausch Health
Americas, Inc. f/k/a Valeant Pharmaceuticals International; and
Bausch Health US, LLC f/k/a Valeant Pharmaceuticals North America
LLC f/k/a Valeant Pharmaceuticals North America, all three of which
the Debtor is contractually obligated to indemnify (the "Bausch
Defendants" and, collectively with Old JJCI and J&J, the "State
Protected Parties").
State Actions
The State Actions are brought by New Mexico and Mississippi
(together, the "States"), by and through their respective attorneys
general. In the NM State Action, New Mexico alleges that the State
Protected Parties deceptively marketed and sold talcum powder
products by making misrepresentations about the safety of the
products and the presence of carcinogens, including asbestos
(collectively, the "NM Claims"). Similarly, in the MS State
Action, Mississippi alleges that J&J and Old JJCI violated the
Mississippi Consumer Protection Act by failing to disclose alleged
health risks associated with female consumers' use of talc
contained in talc products and seeks injunctive and monetary relief
(collectively, the "MS Claims" and collectively with the NM Claims,
the "State Claims"). All of the State Claims are based ultimately
on the disputed allegation that talc products manufactured and/or
distributed by the Debtor's predecessors or J&J were contaminated
with asbestos or otherwise may cause injury. These allegations
create substantial factual overlap with the Talc Claims. Proving
these allegations in the State Actions will thus directly implicate
the Debtor's ability to resolve the Talc Claims in the Chapter 11
Case. Indeed, the continued prosecution of the State Actions would
interfere with or impact the valuation of the Talc Claims in the
ongoing mediation, in any separate settlement discussions and in
any claims estimation proceedings.
In addition, permitting the State Actions to proceed would
undermine and disrupt the ongoing mediation with over forty states
that seeks to consensually resolve the consumer protection claims
alleged by those states. The claims of these states are based on
the very same allegations as the State Claims at issue in the
adversary proceeding. The relief requested in this adversary
proceeding has not been necessary until recently. Mississippi was
part of a group of forty-one states and the District of Columbia
that formed an ad hoc committee (the "Ad Hoc Committee") for
purposes of engaging in mediation with the Debtor to attempt to
resolve the consumer protection claims asserted or alleged by the
member states (collectively, the "Mediating States"). To facilitate
mediation with the Mediating States, the Debtor entered into a
reimbursement agreement with the Ad Hoc Committee pursuant to which
the Debtor agreed to reimburse certain costs of the Ad Hoc
Committee's professionals in connection with settlement efforts. In
turn, the Ad Hoc Committee agreed to participate in mediation and,
while the reimbursement agreement is in effect, the Mediating
States, including Mississippi, agreed to stay and not commence
actions against the Debtor or its affiliates related to talc
products. Although New Mexico was not a member of the Ad Hoc
Committee, it separately agreed to stay prosecution of the NM State
Action for a period of sixty days.
New Mexico and Mississippi
However, Mississippi recently elected to resign from the Ad Hoc
Committee and has resumed prosecuting the MS State Action. It
insists that the Debtor move forward with a proposed scheduling
order that contemplates a trial date in February 2023 and extensive
expert and fact discovery in the upcoming months.
Likewise, New Mexico has resumed its prosecution of the NM State
Action and has refused to agree to a further stay of the action. It
has insisted on a trial setting in April 2023, with numerous
deadlines and extensive discovery to be conducted in the near term.
In fact, the deposition of J&J's and Old JJCI's corporate
representative is scheduled for July 26, 2022.
Given these recent developments, the Debtor requests that the Court
issue a preliminary injunction under section 105(a) of title 11 of
the United States Code (the "Bankruptcy Code") temporarily
enjoining the States from prosecuting the State Actions against the
State Protected Parties and the Debtor because they are
inextricably intertwined with the Talc Claims and the consumer
protection claims of the Mediating States that the Debtor seeks to
globally and equitably resolve in the Chapter 11 Case. The State
Actions should also be enjoined as to the State Protected Parties
because continued prosecution of the claims against those parties
would amount to continued prosecution against the Debtor for the
reasons set forth by the Debtor in support of the current
preliminary injunction. In particular, the Debtor would be
responsible for any judgment in the State Actions against Old JJCI
or J&J. See Adv. Pro. No. 21-03032, ECF No. 128 at 19–22,
41–42; In re LTL Mgmt., LLC, No. 21-30589, Adv. Pro. No. 21-03032
(MBK), 638 B.R. 291, 303–06 (Bankr. D.N.J. 2022) ("N.J. Mem.
Op."). The
Debtor also has indemnity obligations to the Bausch Defendants in
the NM State Action. Because the States now are vigorously
pursuing the State Actions, including by insisting that scheduling
orders be entered setting trial dates for early 2023 in their
respective cases and that extensive discovery be conducted in the
near term (including J&J's and Old JJCI's corporate representative
deposition, scheduled for July 26, 2022 in the NM State Action),
the Debtor additionally seeks a temporary restraining order
following an expedited, emergency hearing to promptly effectuate
the requested relief on an interim basis pending a further hearing
on this Motion.
Along with this Motion, the Debtor has filed the Debtor's Verified
Complaint for Injunctive Relief (I) Preliminarily Enjoining the
Prosecution of the New Mexico and Mississippi State Actions and
(II) Granting a Temporary Restraining Order Pending a Final Hearing
(the "Complaint") that initiated this adversary proceeding.
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.
About Johnson & Johnson
Johnson & Johnson is an American multinational corporation founded
in 1886 that develops medical devices, pharmaceuticals, and
consumer packaged goods. It is the world's largest and most broadly
based healthcare company.
Johnson & Johnson is headquartered in New Brunswick, New Jersey,
the consumer division being located in Skillman, New Jersey. The
corporation includes some 250 subsidiary companies with operations
in 60 countries and products sold in over 175 countries.
The corporation had worldwide sales of $82.6 billion in 2020.
MATHESON TRUCKING: Joins Affiliates in Chapter 11
-------------------------------------------------
Matheson Trucking Inc. filed for chapter 11 protection in the
Eastern District of California.
MTI manages Matheson Flight Extenders, Inc. and Matheson Postal
Services, Inc., which provide extensive mail handling services
under contracts with the United States Postal Service and others.
MTI has 80 employees. MTI supplies senior management to MFE and
MPS, and it handles all of the accounting, legal, human resources,
and other administrative services essential to MFE and MPS's
businesses operations.
MTI is a co-obligor, guarantor, and/or jointly liable for
obligations of both MFE and MPS; these common obligations are in
material amounts. When MFE and MPS filed their respective Chapter
11 proceedings, they each stopped paying prepetition obligations
and have sought to reject certain contracts and leases. These
events, among others, caused numerous creditors to demand payment
from, and begin enforcement proceedings against, MTI.
On June 27, 2022, 121 Wawarme Investment Partners LLC, a landlord
for a lease recently rejected by MFE, obtained a pre-judgment writ
of attachment against all of MTI bank accounts based upon MTI's
guarantee of MFE’s lease obligations. The total claim is more
than $1 million. 121 Wawarme Investment Partners served the writ
of attachment on Bank of America, N.A. on or about July 1, 2022.
As a consequence, BofA froze all of MTI's accounts. Having MTI's
bank accounts frozen caused a massive disruption in operations not
only for MTI, but also for MFE and MPS. It is also taking MTI, MPS,
and MFE management's attention away from other critical issues
facing MFE and MPS (i.e. negotiations with USPS). MTI expects more
of these situations to arise, eroding the effect of the automatic
stay to the detriment of MPS and MFE.
MTI has therefore determined that it is in the best interests of
its creditors to seek Chapter 11 protection.
According to court filings, Matheson Trucking estimates between
1,000 and 5,000 creditors. The petition states funds will be
available to unsecured creditors.
About Matheson Trucking Inc.
Matheson Trucking Inc. -- https://mathesoninc.com/ -- is a leading
transportation and logistics services provider for USPS and other
commercial carriers.
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.,
provide extensive mail handling services under contracts with the
United States Postal Service and others. MTI's business
essentially is to manage MFE and MPS's operations.
MTI is owned by The Mark and Sherrie Matheson Family Trust
Established
December 15, 2009, The Mark B Matheson 2009 Irrevocable Trust, and
The Robert B. Matheson 2006 Trust.
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. E.D. Cal. Case No. 22-21148) on May 5, 2022.
On July 14, 2022, Matheson Trucking, Inc., filed for chapter 11
protection (Bankr. E.D. Cal. Case No. 22-21758). In the petition
filed by Charles J. Mellor, as CRO chief restructuring officer, the
Debtor estimated assets and liabilities between $10 million and $50
million each.
Gregory Nuti, Esq. at Nuti Hart, LLP is the Debtors' counsel.
OBSIDIAN ENERGY: S&P Assigns Preliminary 'B-' ICR, Outlook Stable
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S&P Global Ratings assigned its preliminary 'B-' issuer credit
rating to Calgary-based Obsidian Energy Ltd., an exploration and
production company. S&P Global Ratings also assigned its
preliminary 'B' issue-level rating and '2' preliminary recovery
rating to the company's proposed C$125 million senior unsecured
notes.
The ratings reflect Obsidian's relatively small scale of production
offset by a diversified product mix and low decline rate. S&P's
ratings also incorporate projected strength in credit measures,
with an adjusted funds from operations (FFO)-to-debt ratio
averaging 145% in 2022 and 2023.
The stable outlook reflects S&P's view that, with the successful
completion of its proposed debt refinancing, the company should
have sufficient availability under the credit facility and not face
any near-term refinancing concerns.
Obsidian is proposing to issue C$125 million of senior unsecured
notes. The company intends to use proceeds from this bond issue,
along with the first-lien term loan proceeds, to repay amounts
outstanding on its existing notes and use the balance to repay the
portion outstanding under its credit facility, resulting in a
leverage neutral transaction.
S&P said, "The final ratings will depend on successful completion
of the proposed notes issuance as well as our receipt and
satisfactory review of all final transaction documentation. The
preliminary ratings should not be construed as evidence of final
ratings. Our preliminary ratings reflect our expectation that the
contemplated transaction will close with no significant changes
from the proposed structure. We will finalize our ratings following
the completed issuance of the senior secured notes. We reserve the
right to revise the ratings if the transaction does not occur; we
do not receive final documentation within a reasonable time; or the
final documentation and final terms of the transaction depart
materially from the issue documents and terms reviewed. In case the
transaction does not proceed as expected, we are likely to lower
the rating by multiple notches given the impending November 2022
maturity.
If successful, the proposed issuance, combined with the first-lien
debt offering, alleviates near-term refinancing concerns. Obsidian
is proposing to issue C$125 million of senior unsecured notes that,
along with a first-lien term loan of up to C$50 million, are
expected to be used to redeem US$34.7 million of existing notes,
and the balance used to repay the portion outstanding under the
credit facility. The C$340.7 million credit facility was close to
85% drawn at the end of June 30, 2022. Concurrently with the notes
offering, Obsidian is proposing to replace the existing facility
with a new C$175 million credit facility. S&P said, "We believe the
proposed transactions, if completed, alleviate the near-term
refinancing risks, as both the existing notes and credit facility
are due in November 2022. In addition, we believe the company
should have sufficient liquidity under the new credit facility at
the end of 2022."
S&P's view of the business risk assessment reflects the relatively
small scale of operations offset by a diversified product mix and
low-decline assets. Obsidian's vulnerable business risk profile
reflects the company's small daily production profile, low net
proved reserves of 104 million barrels of oil equivalent (mmboe),
and relatively high operating costs. The The company's projected
production of about 32,000 boe per day (/day) in 2022 lags that of
higher-rated peers such as Tamarack Valley Energy Ltd.
(B/Stable/--; 45,000 boe/day) and Northern Oil & Gas (B/Stable/--;
71,000/per day). The company has operations in Cardium, Peace
River, and Viking, but the Cardium basin accounts for approximately
80% of production. Although the Willesden Green area in Cardium has
relatively stronger well economics, in S&P's view, Obsidian's
limited geographic diversity heightens the company's exposure to
regional commodity prices and makes it vulnerable to adverse price
movements. Partially offsetting this is the company's diversified
product mix (about 40% light oil, 30% gas, 20% heavy oil, and 8%
natural gas liquids).
In addition, the company's cash operating costs are modestly higher
than those of peers, in part due to the proportion of heavy oil in
the product mix and increased transportation expenses to move the
Peace River production volumes. Nevertheless, S&P assesses the
company's profitability, calculated based on a five-year average
EBIT/thousand cubic feet basis, in the middle quartile of the
global peer group. Also supporting the assessment is Obsidian's
lower finding and development (F&D) costs relative to those of
peers and that reflect the cost advantage of operating in the
Cardium region, benefitting from horizontal drilling as well as
ownership of major facilities at its sites. Obsidian's competitive
F&D costs, along with the company's base decline rate of 21% in the
Cardium, lessen the amount of capital spending required to sustain
and increase its reserve base and fuel the company's competitive
full-cycle cost profile. In addition, the company's reserve base
has a high proved developed producing component of 63% and a
moderate reserve life index of eight years, which further mitigates
the future risk and cost of development. While these benefits
provide reasonably good visibility to near- and medium-term
production and cash flow generation, they are not sufficient to
offset the risks inherent to the company's small scale and
geographic concentration.
S&P said, "The rating is also supported by our expectation of
strong credit measures, with an adjusted FFO-to-debt ratio
projected to average 145% in 2022 and 2023 and adjusted
debt-to-EBITDA ratio averaging below 1x. We project Obsidian will
generate meaningfully higher cash flows in 2022 and 2023,
underpinned by the strength in oil and gas prices. Based on our
revised pricing assumptions ("S&P Global Ratings Raises Oil And
Natural Gas Price Assumptions On Further Market Price Step-Ups,"
published June 8, 2022, on RatingsDirect), we estimate Obsidian
will generate adjusted FFO averaging C$475 million annually over
the next two years, a significant increase from 2020 and 2021 FFO
of about C$125 million and C$230 million, respectively. Although we
expect the company to increase capital spending in 2022 with 60
wells planned, we believe it will generate positive free cash flows
of about C$150 million annually. We believe the company will
prioritize repaying down the credit facility from the free cash
flows; the new credit facility is expected to be almost 80% drawn
at the close of the transaction but we project it will be about 55%
drawn at the end of 2022. While we assume that management is also
likely to distribute a portion of excess cash flows to
shareholders, we estimate reported debt to fall to C$225 million in
2023 from close to C$400 million in 2021. In our view, the lower
absolute debt and higher cash flows underpin the strength in credit
measures, with adjusted FFO to debt expected to average well above
60% and adjusted debt to EBITDA below 1x in the next two years. We
also believe Obsidian can sustain the current financial risk
assessment under our long-term pricing assumptions, assuming
absolute debt does not increase above C$225 million."
Management needs to demonstrate a conservative financial policy.
Although the company is benefitting from strong commodity prices
and has an absolute debt reduction target, its recent history of
extending maturities on its notes and inability of the management
team to have resolved the refinancing well in advance of the
November 2022 maturity are reflected in S&P's rating. It believes
the company needs to establish a track record of maintaining a
conservative financial policy, specifically demonstrating absolute
debt reduction to levels it can sustain in a lower pricing
environment and lengthening its weighted-average debt maturity to
mitigate refinancing risk.
The stable outlook is predicated on the assumption that the company
will successfully complete the proposed refinancing and extend its
debt maturity profile, while ensuring sufficient availability under
the new credit facility. The outlook also reflects our view that
Obsidian will generate strong credit measures over the next two
years supported by favorable commodity prices. Specifically, S&P
projects the company will generate an adjusted FFO-to-debt ratio
averaging 145% in 2022 and 2023.
S&P said, "We could lower the rating by several notches if the
company fails to complete the proposed refinancing. Pro forma the
completion of its proposed refinancing, we could lower the rating
over the next 12 months if the availability under the credit
facility decreases meaningfully or if the FFO-to-debt ratio dropped
to an unsustainable level, that is below 12%. We believe this could
occur if commodity prices fell sharply or management failed to
correspondingly reduce capital spending, resulting in material
negative free cash flow generation.
"We could raise our ratings on Obsidian if it is able to improve
its operational scale to closely align with that of higher-rated
peers. In our view, this would help mitigate the impact of
unanticipated commodity price volatility on cash flow generation.
In this scenario, we would also expect the company to demonstrate a
conservative financial policy. Specifically, we would expect
management to demonstrate absolute debt repayment such that the
company can sustain an FFO-to-debt ratio above 30% under our
long-term pricing assumptions."
ESG credit indicators: E-4, S-2, G-3
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis of Obsidian, an upstream oil and gas
producer of light oil (about 40% of forecast 2022 production),
heavy oil (about 20%), and natural gas (33%). Risks from
accelerating energy transition, declining profitability, adoption
of renewable energy sources, and environmental risks inherent in
hydrocarbon production are reflected in our rating. The company is
investing in initiatives such as minimizing freshwater use, with
monthly average freshwater use having reduced by 55% in 2021 from
2018 levels. In addition, the company is working on decommissioning
abandoned wells and restoring land to its pre-development use.
While we expect operating and full-cycle costs associated with
meeting environmental standards to increase, we do not expect them
to have a rating impact. Although we believe the company's social
practices are in line with the broader oil and gas industry, we
believe risk management practices lag those of peers given the lack
of track record in achieving the company's debt management goals in
the recent past."
PATAGONIA HOLDCO: Moody's Gives B1 CFR & Rates New Secured Loans B1
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Moody's Investors Service has assigned a B1 corporate family rating
to Patagonia Holdco LLC and a B1 rating to its proposed senior
secured facilities comprised of a $800 million first-lien term loan
due in 2029, a $200 million senior secured first-lien revolving
credit facility due 2027, and $500 million senior secured notes due
2029.
The proceeds from the senior secured term loan and senior secured
notes, together with equity investment from Stonepeak Partners LP,
will be used to fund the recently announced acquisition of Lumen
Technologies, Inc.'s Latin American business for an enterprise
value of $2.7 billion. Patagonia is a holding company fully owned
and stablished by Stonepeak, a private equity firm specializing in
infrastructure and real estate investments and will hold the Latin
American assets acquired from Lumen Technologies.
The ratings assume that the senior secured facilities' final terms
and conditions will not be materially different from draft legal
documentation reviewed by Moody's to date and that these agreements
are legally valid, binding and enforceable.
Assignments:
Issuer: Patagonia Holdco LLC
Corporate Family Rating, Assigned B1
Proposed $800 million Senior Secured 1st Lien Term Loan due in
2029, Assigned B1
Proposed $500 million Senior Secured Notes due 2029, Assigned B1
Proposed $200 million Senior Secured 1st Lien Revolving Credit
Facility due 2027, Assigned B1
Outlook:
Issuer: Patagonia Holdco LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The B1 CFR considers Patagonia's relevant position in the Latin
American market as a pan-regional independent fiber network
provider, connecting 12 countries across the region. The company
operates a majority owned, extensive and integrated network
comprised of strategic backbone fiber, subsea assets and data
center infrastructure, which differentiates it from other regional
competitors. The rating also considers Patagonia's diversified and
stable customer base, with a high percentage of recurring revenue
contracts and historically high renewal rates, which supports a
predictable and stable revenue base.
The B1 rating also takes into consideration the comfortable
amortization schedule, pro-forma for the proposed senior secured
term loan and senior secured notes, with the proposed total amount
of $1.3 billion maturing in 2029. Moody´s expects pro-forma
adjusted gross leverage to peak in 2022 at around 4.6x and start to
decrease towards 3.7x and 3.1x in 2023 and 2024, respectively,
driven by a combination of EBITDA growth and gross debt reduction.
Once the company starts operating on a stand-alone basis, Moody's
expects it to generate enough free cash flow to fund organic growth
and prepay part of the outstanding debt over time.
The rating is constrained by Patagonia's relatively small revenue
scale, when compared to rated international peers and weaker FFO
Margin than Moody's expects for a B-rated company, of about 28% as
of December 2021. In addition, the rating incorporates the
execution risk owing to transitioning to a standalone operation and
implementing the new business strategy.
On a standalone basis, Patagonia has been able to sustain steady
revenue growth in all key markets over time, despite periods of
economic instability and change in ownership. The company's
Moody's-adjusted EBITDA margin has been stable, averaging 30.3%
from 2019 to 2021. From 2022 through 2024, Moody's expects adjusted
EBITDA margins to gradually improve, averaging 37%, supported by a
strategic shift in segment mix towards higher-margin products
within Data Products and the Data Center segment, as well as
improvements to the current cost structure. For the last twelve
months ending March 2022, the company generated on a stand-alone
basis $833 million in revenue and reported $322 million in EBITDA.
The company's main markets are Brazil, Argentina, Colombia, Chile
and Peru, which together accounted for 76% of total revenue in the
same period.
Patagonia's pro-forma liquidity is adequate, with enough cash to
meet debt obligations up to 2026. At transaction closing, Patagonia
is expected to have $108 million in cash as well as a fully
available $200 million revolving credit facility due in five
years.
Patagonia's assets include more than 86 thousand kilometers of
fiber, 18 data centers with over 4,300 cross connects and 10 cloud
on-ramps, the second largest on-ramp concentration in Latin
America. The fiber network is further divided in 19 thousand km of
metro fiber, 31 thousand km of long-haul and 36 thousand km of
subsea fiber.
The company's ability to offer a variety of lit-and dark-fiber
solutions, network dense colocation, and subsea connectivity
confers a relatively unique product offering that helps to attract
and retain a diverse set of customers. Patagonia has a diversified
and stable customer base of over 6,400 customers. The company's
clients are hyperscale and cloud operators, as well as network
centric telecom carriers. Service contracts range from 12 to 60
months with automatic renewable clauses, supporting a predictable,
recurring MRR-linked revenue base. Revenue from these contracts is
highly diversified, with the top 10 customers representing about
17.1% of net revenues in 2021.
Patagonia's business model also benefits from high barriers to
entry for competitors and high barriers to exit for customers. The
company owns 99.9% of its metro fiber routes and 69% of its
terrestrial network, with the remainder controlled through
irrefutable rights of usage contracts (IRUs) and asset swaps. This
existing infrastructure, which has an estimated replacement value
of approximately $3 billion, would require significant capital and
time investment to replicate. A large number of regulatory
permissions not easily obtained would also be required to provide
the same level of cross-country connectivity. Exit barriers for
customers, on the other hand, are also significant. The process of
integrating to a new network is time consuming and costly,
involving not only the change in connectivity and equipment, but
also the training of employees across multiple geographies.
As a communications infrastructure provider, Patagonia has overall
a low direct business exposure to environmental and social risks.
However, governance considerations are relevant for the company'
credit quality. As a private company, Patagonia is not subject to
the same level of corporate governance, financial reporting and
compliance procedures required from a publicly traded company. Once
the transaction is completed, the company will follow Stonepeak's
financial and compliance policies and procedures. The private
equity firm has pledged to maintain conservative financial
policies, including prudent liquidity and capital structure
management. As part of Lumen Technologies, Patagonia currently
maintains a robust Foreign Corrupt Practices Act (FCPA) training
and compliance regime. Stonepeak intends to work closely with
Patagonia's management to support and promote the maintenance of
this strong FCPA culture at the company. Patagonia's management is
comprised of experienced industry professionals and counts on a
group of six independent advisory members with deep experience in
the industry.
The stable rating outlook reflects Moody's expectation that
Patagonia will be able to successfully execute the transition to a
stand-alone company while maintaining its strong market presence in
Latin America and steady revenue stream. The stable outlook
incorporates the premise that the company will maintain prudent
financial policies and solid credit metrics over the next 12-18
months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Patagonia demonstrates a
successful transition to a stand-alone operation and track record
of conservative financial policies while maintaining a strong
liquidity position and positive free cash flow on a consistent
basis. Quantitatively, an upgrade would require the company to
maintain leverage below 3.5x adjusted total debt/EBITDA and
FCF/debt ratio above 5% on a sustained basis.
The ratings could be downgraded if liquidity indicators or credit
metrics deteriorate. Quantitatively, the rating could be downgraded
if leverage exceeds 4.5x Moody's-adjusted total debt/EBITDA for a
prolonged period without a clear path to subsequent deleveraging or
the company generates negative free cash flow on a sustained
basis.
The principal methodology used in these ratings was Communications
Infrastructure published in February 2022.
Patagonia Holdco LLC is a holding company fully owned and
stablished by Stonepeak Partners LP ("Stonepeak"), a private equity
firm specializing in infrastructure and real estate investments and
will hold the Latin American assets acquired from Lumen
Technologies, Inc. (Ba3 stable). Patagonia's assets include more
than 86 thousand kilometers of fiber, 18 data centers with over
4,300 cross connects and 10 cloud on-ramps, the second largest
on-ramp concentration in Latin America. The fiber network is
further divided in 19 thousand km of metro fiber, 31 thousand km of
long-haul and 36 thousand km of subsea fiber. For the last twelve
months ending March 2022, the company generated on a stand-alone
basis $833 million in revenue and reported $322 million in EBITDA.
PATH MEDICAL CENTER: Could Be Sold Out of Bankruptcy for $20M
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Brian Bandell of South Florida Business Journal reports that Path
Medical, which has two dozen trauma and imaging centers across
Florida, could be sold through bankruptcy court for $20.25
million.
The Fort Lauderdale-based medical company filed for Chapter 11
reorganization protection in August 2021, listing $30 million in
assets and $86.5 million in liabilities. At the time, it had 281
employees. All of the treating physicians at its
chiropractic/orthopedic centers are independent contractors.
When it filed Chapter 11, the company cited a reduction in patient
visits due to the Covid-19 pandemic. Most of its patients were auto
accident victims.
On July 1, 2022, Path Medical filed a motion to sell the company
for $20.25 million to resolve the case. The proposed buyer is Path
Medical Acquisition Co., managed by Vincent J. Payne of Physicians
Group LLC in Sarasota.
The motion to sell will go before U.S. Bankruptcy Judge Scott M.
Grossman on July 15, 2022.
Miami-based attorney Brett D. Lieberman, who represents Path
Medical in Chapter 11, said the sale would clean up its balance
sheet by resolving the debts of the company, and allow it to move
forward under a new operator. Almost all of the employees will be
retained, and only one or two locations will be closed, he added.
"This is a very positive outcome, as far as business continuity
goes," Lieberman said. "We worked hard with the secured creditors,
who were owed over $75 million. We knew we could not pay them
100%."
About Path Medical Center Holdings
Path Medical Center Holdings, Inc., is the 100% owner and sole
member of Path Medical, LLC. In addition to its ownership of Path,
Holdings is an employee leasing company for Path. Path is a
healthcare company with 24 clinics across the state of Florida.
Path Medical, LLC, and Path Medical Center Holdings filed their
voluntary petitions for Chapter 11 protection (Bankr. S.D. Fla.
Lead Case No. 21-18338) on Aug. 28, 2021. Manual Fernandez, chief
executive officer, signed the petitions.
At the time of the filing, Path Medical listed $30,047,477 in
assets and $86,494,715 in liabilities while Path Medical Center
listed $220,060 in assets and $76,988,419 in liabilities.
Judge Scott M. Grossman oversees the cases.
Brett Lieberman, Esq., at Edelboim Lieberman Revah Oshinsky, PLLC,
is the Debtor's legal counsel. The Official Committee of Unsecured
Creditors tapped Greenberg Traurig, P.A., to serve as its counsel,
and Province Inc. to serve as its financial advisor.
PELCO STRUCTURAL: Wins Cash Collateral Access Thru Oct 31
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The U.S. Bankruptcy Court for the Southern District of Texas,
Victoria Division, authorized Pelco Structural, L.L.C. to use cash
collateral on an interim basis in accordance with the budget.
The Debtor requires the use of funds, in which certain parties may
assert an interest, to pay the day-to-day operating expenses
associated with its business, maintain its property interests, make
payments authorized by the Court, cover the administrative costs
incurred in the case, and for such other expenses necessary to
preserve the value of the Debtor's estate.
Pelco Industries, Inc. claims an interest in the Debtor's cash on
account of security interests granted by the Debtor prior to the
Petition Date. Exelon Business Services Company, LLC also asserts
an interest in certain of the Debtor's cash by virtue of
supplementary proceedings on a prepetition judgment.
Pursuant to the Cash Collateral Order, the Debtor is permitted to
use cash collateral through the date which is the earliest to occur
of (a) the occurrence of an Event of Default; or (b) October 31,
2022, subject to renewal by the entry of a further Order. The
Budgeted expenses will not exceed 120% of the amount set forth for
the respective expense category set forth in the Budget.
An "Event of Default" will occur if the Debtor fails to perform
fully and in a timely manner any provision, term, or condition of
the Order. Upon the occurrence of an Event of Default, any person
claiming an interest in cash collateral, including Industries and
Exelon, will give notice to the Debtor, Industries, and Exelon
describing the alleged Event of Default and stating that the
Debtor's right to use cash collateral will automatically terminate
if the Debtor does not cure such Event of Default within 10
business days.
As adequate protection against any diminution in value of their
validly perfected and unavoidable prepetition security interest or
lien (if any) as a result of the use of cash collateral, Industries
and Exelon will receive adequate protection in the form of
Replacement Liens up to the value of that creditor's validly
perfected and unavoidable prepetition security interest or lien (if
any) as of the Petition Date.
Subject to the Carve-Out, the Replacement Liens will be (i) first
priority perfected liens on all of the Post-petition Collateral as
to which such relevant creditor had a valid and perfected first
priority lien or security interest as of the Petition Date; and
(ii) junior perfected liens on all Post-petition Collateral that is
subject to a validly perfected lien or security interest with
priority over such creditor's liens or security interests as of the
Petition Date, in the same priority as existed prior to the
Petition Date.
The Carve-Out means: (i) statutory fees payable to the United
States Trustee; (ii) fees payable to the clerk of the Bankruptcy
Court; (iii) reasonable and documented expenses payable to any
statutory committee appointed in the case; and (iv) professional
fees and expenses incurred by professionals retained by the Debtor
pursuant to 11 U.S.C. sections 327(a) and 1103 and allowed by the
Court.
The Replacement Liens are deemed valid and perfected without the
need to file any document as may otherwise be required by law.
As additional adequate protection, to the extent that the
Replacement Liens prove insufficient to provide adequate protection
against any diminution in value of their validly perfected and
unavoidable prepetition security interest or lien, Industries and
Exelon are granted allowed superpriority administrative expense
claims.
A further hearing on the matter is scheduled for October 12 at 10
a.m.
A copy of the order is available at https://bit.ly/3IMObYW from
PacerMonitor.com.
About Pelco Structural LLC
Pelco Structural LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Okla. Case No. 21-11926) on July 16,
2021. In the petition signed by Stephen P. Parduhn, president and
CEO, the Debtor disclosed up to $50 million in both assets and
liabilities.
Clayton D. Ketter, Esq., at Phillips Murrah P.C. is the Debtor's
counsel.
Pelco Industries, Inc., as lender, is represented by Stephen J.
Moriarty, Esq., at Fellers, Snider, Blankenship, Bailey & Tippens,
P.C.
Exelon Business Services Company, LLC, as lender, is represented by
Kiran A. Phansalkar, Esq. at Conner & Winters, LLP; and Charles S.
Stahl, Jr., Esq., and Joseph P. Kincaid, Esq., at Swanson, Martin &
Bell, LLP.
QBS PARENT: Fitch Lowers LongTerm IDR to 'B-'; Outlook Stable
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Fitch Ratings has downgraded the Long-Term Issuer Default Rating
(IDR) for QBS Parent, Inc. (Quorum) one notch to 'B-' from 'B'.
Fitch has also downgraded the first-lien secured revolver and term
loan to 'B+' from 'BB-' and the recovery rating remains unchanged
at 'RR2'. The Outlook is Stable.
The 'B-' rating reflects concerns about elevated leverage which has
been higher than Fitch previously forecasted as well as interest
coverage which has been weaker than expected. Liquidity remains
intact in the near-term, however, the $35 million secured revolver
becomes current in September 2022. The rating also considers
Quorum's strong retention rate for software renewal bookings which
was 95%. The recurring revenue for software license, maintenance
and support revenues rose to above 65% from ~60% in the prior
year.
KEY RATING DRIVERS
Leverage Drives Downgrade: Quorum's leverage has remained above
Fitch's expectations and previously Fitch stated the IDR would be
downgraded if gross leverage and FFO leverage were above 7.0x on a
sustained basis. Leverage was 10.1x at the end of 2021 and Fitch
forecasts it may only modestly decline by the end of 2022 to 9.2x
to 9.8x. In 2021, revenues fell by 5.5% and free cash flow was
negative.
Going forward, high commodity prices should provide midstream and
energy companies with strong cash flows which may help reverse the
decline in Quorum's revenues yet leverage will remain elevated.
Over the longer term, the company's private equity ownership is
likely to focus on maximizing ROE versus reducing leverage.
Near-Term Revolver Maturity: As of March 31, 2022, Quorum had over
$20 million of cash on the balance sheet, up from ~$6 million at
the end of 2021. There is full availability on the $35 million
secured revolver due on Sept. 21, 2023. Fitch does not anticipate
any issues with Quorum extending the revolver, however, should an
extension not occur the company's liquidity will be significantly
diminished. Quorum has utilized the revolver from time to time.
Revenue Declines May Reverse: Quorum's strategy has been to
increase recurring revenues. Professional services revenues were
expected to decline since software upgrades and maintenance
services would be included with software subscriptions or offered
at a discount. Declines have been significant in professional
services (some related to the end markets holding back on
projects), while revenue growth in software license, maintenance
and support has been lackluster. Overall revenues have been
modestly declining. At the moment, Quorum's end markets have
favorable tailwinds and because of that, Fitch expects revenues to
increase over the remainder of 2022.
High Retention/Recurring Revenues Growth: In 2021, renewal bookings
for software license, maintenance and SaaS contracts rose in the
low single digits. The retention rate for software renewal bookings
was 95% indicating that Quorum's software remain mission critical.
In addition, software license, maintenance and support revenues
grew in the low single digits in 2021 and impressively, the
recurring revenue mix rose to 66% from 61% in the prior year.
Although revenues increased for this segment, it did not offset the
declines in professional services which accounted for 17% of 2021
revenues.
Pace of Acquisitions Slowed: Historically, Quorum had been very
active with acquisitions and the last one was completed in October
2020 and integration of all past acquisitions is nearly complete.
Past acquisitions were done to expand the product platform and the
largest one in recent history was Coastal Flow Measurement. Fitch
does not anticipate any acquisitions in the near term given
Quorum's high leverage and limited liquidity.
Diversified Customer Base: Quorum serves a diverse set of customers
which total over 1,300, with no significant customer concentration.
Historically, its top 10 recurring customers tend to account for
15% to 20% of revenues. In February 2021, Quorum's parent acquired
Calgary-based Aucerna and Finland-based TietoEVRY which has the
potential to diversify Quorum's revenue stream. Over 90% of
Quorum's revenues are from the U.S., indicating that Quorum remains
highly concentrated in one country.
Exposure to Energy Industry Cyclicality: Quorum's software products
are generally considered mission critical and resilient through the
energy industry cycles; however, its services segment is more
susceptible to industry cyclicality. During 2015-2016 energy
industry down cycle, Quorum's software subscription revenue and
support revenue continued to grow at a steady pace; however, total
revenue declined as services revenue contracted. The operating
leverage of the software products enabled the company to limit
downside to its EBITDA margins during the down cycle.
DERIVATION SUMMARY
Quorum's 'B-' rating is supported by its strong position offering
software solutions to the upstream and midstream energy sectors. It
also reflects its high leverage which is expected to remain
elevated over Fitch's forecast horizon. The company's EBITDA
margins and FCF margins are in line with other similarly rated
issuers in Fitch's software universe.
The company has high financial leverage and Fitch views its
financial flexibility with more concern than other peers in the
technology sector. Quorum has relied upon the revolver for funding
from time to time and it will be current in September 2022. It's
revenue scale, leverage and liquidity are consistent with the 'B-'
rating. Like other private equity owned issuers, Fitch believes
that the company's focus is ultimately ROE rather than debt
reduction.
KEY ASSUMPTIONS
Quorum's 'B-' rating is supported by its strong position offering
software solutions to the upstream and midstream energy sectors. It
also reflects its high leverage which is expected to remain
elevated over Fitch's forecast horizon. The company's EBITDA
margins and FCF margins are in line with other similarly rated
issuers in Fitch's software universe.
The company has high financial leverage and Fitch views its
financial flexibility with more concern than other peers in the
technology sector. Quorum has relied upon the revolver for funding
from time to time and it will be current in September 2022. It's
revenue scale, leverage and liquidity are consistent with the 'B-'
rating. Like other private equity owned issuers, Fitch believes
that the company's focus is ultimately ROE rather than debt
reduction.
KEY RECOVERY RATING ASSUMPTIONS
-- The recovery analysis assumes that Quorum would be reorganized
as a going-concern (GC) in bankruptcy rather than liquidated;
-- Fitch assumes a 10% administrative claim and a small
concession payment.
Going-Concern Approach
In estimating a distress enterprise value (EV) for Quorum, Fitch
assumes a going concern EBITDA of $47 million reflecting lower
revenues from reduced upstream and midstream projects in a less
favorable commodity environment. To a lesser extent, it also
reflects lower recurring revenues as a result of less upstream
activity. The current GC EBITDA is modestly lower than $50 million
previously used reflecting Fitch's revised expectations over the
forecast horizon.
Fitch assumes a 6.5x EV multiple in our recovery analysis. In the
21st edition of Fitch's Bankruptcy EVs and Creditor Recoveries case
studies, Fitch notes nine past reorganizations in the Technology
sector with recovery multiples ranging from 2.6x to 10.8x. Of these
companies, only three were in the Software sector, Allen Systems
Group, Inc., Avaya, Inc. and Aspect Software Parent, Inc. and
received recovery multiples of 8.4x, 8.1x and 5.5x, respectively.
Fitch believes Quorum's strong position in software solution for
the energy sector and highly visible revenue outlook support a
recovery multiple in the middle of this range.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- (Cash from operations-capex)/total debt with equity credit
above 3% on a sustained basis;
-- Organic growth for software license, maintenance and support
revenues in the mid-single digits on a sustained basis;
--Expectations for gross leverage below 7.5x on a sustained basis.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Reduced liquidity which may come from the inability to
refinance the revolver due September 2023;
-- (Cash from operations-capex)/total debt with equity credit
trending toward 0%;
-- Operating EBITDA/interest paid sustaining below 1.2x;
-- Organic revenue growth sustained near or below 0%.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity Near Term: As of March 31, 2022, Quorum had
adequate liquidity with over $20 million of cash on the balance
sheet and an undrawn $35 million secured revolver. Fitch notes this
revolver will soon become current as it is due Sept. 21, 2023 and
Fitch anticipates that lenders will work with Quorum to extend the
maturity. The company's liquidity profile is further supported by
EBITDA and FCF generation. Fitch notes that Quorum was FCF negative
in 2021 but projects that the company should once again generate
positive FCF beginning in 2022.
Debt Structure: Quorum's debt consists of a $35 million senior
secured revolving credit facility (undrawn) due 2023; $348 million
senior secured first lien term loan due 2025; and $125 million
senior secured second lien term loan due 2026.
ISSUER PROFILE
QBS Parent is a provider of mission critical business process
software to energy companies in the upstream (oil and gas
production) and midstream sectors (gathering and processing as well
as pipelines), effectively digitalizing operations and transactions
through the energy value chain.
DEBT RATING RECOVERY PRIOR
---- ------ -------- -----
QBS Parent, Inc. LT IDR B- Downgrade B
senior secured LT B+ Downgrade RR2 BB-
REID'S EDUCATIONAL: Wins Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized Reid's Educational Child Care
Centre, LLC to use the cash collateral of James P. Flanders and the
U.S. Small Business Administration, on an interim basis in
accordance with the budget.
The Debtor contends that without the use of this cash collateral,
it would not be able to pay its monthly obligations, which would
frustrate any effort to successfully reorganize under Chapter 11 of
the Bankruptcy Code.
As of the Petition Date, the Debtor owed Flanders $85,000. The
Debtor's obligation is evidenced by a Promissory Note and Wrap
Around Mortgage and Security Agreement and Assignment of Leases and
Rents executed on June 18, 2013. The Debtor was secondarily
obligated to the SBA in the amount of $125,000 secured by a UCC-1
filed with the Florida Secretary of State.
The Debtor's cash and accounts receivable generated by the
operation of its business, prepetition and post-petition,
constitute cash collateral pursuant to 11 U.S.C. section 363(a).
The Debtor is directed to pay only expenses necessary for the
operation of the business and not any pre-petition expenses,
salaries, professional fees, or insiders without further Court
order. If an order is entered, the necessary pre-petition expenses,
salaries, professional fees, or insider payments will not be paid
unless the Debtor is current on its ordinary course of business
expenses.
As a further limitation on the use of cash collateral, the Debtor
will be limited to expenses of not more than $4,000 per month in
excess of any salary ordered by the Court for Officers, Subchapter
V Trustee fees or cash collateral payments.
As additional adequate protection of the lender's interest and the
estate's interest in cash collateral, the lender is granted a
replacement lien to the same nature, priority, and extent that the
lender may have had immediately prior to the date that the case was
commenced nunc pro tunc to the Petition Date. Further, the lender
is granted a replacement lien and security interest on property of
the bankruptcy estate to the same extent and priority as that which
existed pre-petition on all of the cash accounts, accounts
receivable and other assets and property acquired by the Debtor's
estate or by the Debtor on or after the Petition. The replacement
lien in the Post-Petition Collateral will be deemed effective,
valid and perfected as of t he Petition Date, without the necessity
of filing with any entity of any documents or instruments otherwise
required to be filed under applicable non-bankruptcy law.
The Debtor is ordered to pay adequate protection payments of
$943.67 per month to Flanders and $100 per month to the SBA
commencing July 1 and on the first day of the month thereafter or
further Court order.
As additional adequate protection of the lender's interest in the
cash collateral, the Debtor will (a) maintain all necessary
insurance coverage on the lender's collateral and under no
circumstances will the Debtor allow its insurance coverage to
lapse, (b) continue to pay such monthly insurance payment in a
timely manner, and (c) within two days of the request of the
lender, the Debtor will provide to lender's counsel a written
statement supported by evidence of Debtor's compliance with the
foregoing.
The Debtor's authority to use the cash collateral will terminate
immediately and upon the earlier of (a) order of the Court; (b) the
conversion of the case to a Chapter 7 case or the appointment of a
Chapter 11 trustee without the consent of the lender; (c) the entry
of an Order that alters the validity or priority of the replacement
liens granted therein to the Bank; (d) the Debtor ceasing to
operate all or substantially all of its business; (e) the entry of
an order granting relief from the automatic stay that allows any
entity to proceed against any material assets of the Debtor that
constitute cash collateral; (f) the entry of an Order authorizing a
security interest under section 364(c) or 364(d) of the Bankruptcy
Code in the collateral to secure any credit obtained or debt
incurred that would be senior to or equal to the replacement lien;
or (g) the dismissal of the Chapter 11 case. Occurrence of any of
the foregoing will constitute the "Expiration Date."
The Court will hold a continued cash collateral hearing on August
10 at 1:30 p.m. before the Honorable Jacob A. Brown.
A copy of the order is available at https://bit.ly/3aUziqZ from
PacerMonitor.com.
About Reid's Educational Child Care Centre, LLC
Reid's Educational Child Care Centre, LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
3:22-bk-01037) on May 23, 2022. In the petition signed by Nickesha
V. Reid, manager, the Debtor disclosed up to $500,000 in both
assets and liabilities.
Judge Jacob A. Brown oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP is the Debtor's counsel.
SAS AB: Pilots Reach 5-Year Deal, Ends Strike After 15 Days
-----------------------------------------------------------
After 15 days of strike, SAS and SAS Scandinavia pilots' unions
have concluded mediation. The parties have agreed on new 5.5-year
collective bargaining agreements and flights operated by SAS
Scandinavia will resume according to their regular traffic program
as soon as possible.
Following a 15-day strike action, SAS and SAS Scandinavia pilots'
unions have reached an agreement on new collective bargaining
agreements and the pilot strike has ended.
"I am pleased to report that we now have come to an agreement with
all four pilot unions for SAS Scandinavia and the strike has ended.
Finally, we can resume normal operations and fly our customers on
their much longed-for summer holidays. I deeply regret that so many
of our passengers have been impacted by this strike, said Anko van
der Werff, President & CEO.
The 5.5-year agreements between SAS and the SAS Scandinavia pilots'
unions are a key element of SAS' comprehensive business
transformation plan SAS FORWARD, as they provide the stability and
predictability required by potential investors.
The agreements include cost savings in line with the set targets in
the SAS FORWARD plan relating to the pilots' terms and conditions,
taking SAS one important step closer to achieving its SAS FORWARD
target of SEK 7.5 billion in annual cost savings.
In short, the agreements imply increased productivity for the SAS
Scandinavia pilots and increased flexibility in seasonal
production. The terms and conditions of the agreements also yield a
lowered unit cost for the SAS Scandinavia pilots.
Additionally, as part of the agreement between SAS and SAS
Scandinavia pilots' unions, a number of pending litigation
previously initiated by the pilots' unions and/or individual pilots
against SAS will be withdrawn. In accordance with a restructuring
support agreement to be entered into between the parties in the
chapter 11 process, SAS has granted the unions a general unsecured
pre-petition claim for the pilots in the amount of SEK 1.0 bn in
SAS voluntary financial restructuring process. Distributions under
that unsecured claim will be capped at SEK 100 million and made
over 5.5 years, corresponding to the term of the agreements.
Finally, SAS has committed to the rehire, and subsequent full-time
employment, of 450 pilots in tandem with the ramp-up of flight
operations until 2024.
With these labor agreements in place, SAS will now be able to
proceed with its process to secure funding to support the company's
on-going operations -- which it expects to finalize within the next
few weeks -- throughout its voluntary financial restructuring
process.
"With these agreements in place, the pilots are doing their part in
this difficult situation. We now get on with the important work of
progressing our transformation plan SAS FORWARD and building a
strong and competitive SAS for generations to come, with the
support of our pilots’ unions and all other stakeholders. The
strike has been a tough situation for our customers, for our
employees, and for our company as a whole. I would like to extend
my sincere gratitude to all of my SAS colleagues who have worked
tirelessly these past weeks to help our customers," Anko van der
Werff concludes.
The agreements between SAS and the SAS Scandinavia pilots' unions
are subject to approval by the members of all four unions and, as
SAS is currently undergoing a voluntary financial restructuring in
the U.S., the final agreements are also subject to approval by a
U.S. federal court. The company expects to receive the necessary
approvals within the next few weeks.
As previously announced, the estimated effect of the strike is
approximately SEK 100-130 million per day (US$9.5-$12.5 million) in
lost revenue and costs. To date, the financial impact of the
strike is expected to exceed SEK 1.5 billion (US$145 million). It
is too early to provide more specific information about the total
financial impact of the strike, but after 15 days of strike action
approximately 380,000 passengers have been affected by
approximately 3,700 canceled flights.
Some traffic disruptions will continue during the following days
while normal traffic is resumed. For up-to-date information on
traffic disruptions, please visit
https://www.flysas.com/en/traffic-information/message/
* SPF (Svensk Pilotförening), NSF/NF (Norsk Flygerforbund), SNF
(SAS Norge Pilotforening) and DPF (Dansk Pilotforening)
About Scandinavian Airlines
SAS SAB, Scandinavia's leading airline, with main hubs in
Copenhagen, Oslo and Stockholm, is flying to destinations in
Europe, USA and Asia. Spurred by a Scandinavian heritage and
sustainable values, SAS aims to be the global leader in sustainable
aviation. The airline will reduce total carbon emissions by 25
percent by 2025, by using more sustainable aviation fuel and our
modern fleet with fuel-efficient aircraft. In addition to flight
operations, SAS offers ground handling services, technical
maintenance and air cargo services. SAS is a founder member of the
Star Alliance, and together with its partner airlines offers a wide
network worldwide. On the Web: https://www.sasgroup.net
SAS AB and its affiliates, including Scandinavian Airlines Systems
Denmark-Norway-Sweden and Scandinavian Airlines of North America
Inc., sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 22-10925) on July 5, 2022. In the
petition filed by Erno Hildén, as authorized representative, the
Debtor SAS AB estimated assets between $10 billion and $50 billion
and liabilities between $1 billion and $10 billion.
Weil, Gotshal & Manges LLP is serving as global legal counsel and
Mannheimer Swartling Advokatbyra AB is serving as Swedish legal
counsel to SAS. Seabury Securities LLC and Skandinaviska Enskilda
Banken AB are serving as investment bankers, Seabury is also
serving as restructuring advisor. FTI Consulting is serving as
financial advisor. Kroll Restructuring Advisors is the claims
agent.
SAS AB: Scandinavian Airlines Lands Deal With Pilots
----------------------------------------------------
Reuters reports that SAS (SAS.ST) and pilot unions have reached a
wage deal, the Scandinavian airline confirmed on Tuesday, ending a
15-day strike over a new collective bargaining agreement that had
grounded 3,700 flights and put the carrier's future in doubt.
Shares in SAS jumped 12% in early morning trade, but then steadied
and were up around 4% at 1223 GMT. They are still down about 40%
since the beginning of the year.
The airline, which filed for U.S. bankruptcy protection on the
second day of the strike, said the industrial action had cost it
more than $145 million to date and affected 380,000 passengers in
the peak summer travel season.
The deal will allow the airline to finalise plans in the next few
weeks to raise $700 million of fresh financing needed to see it
through the bankruptcy protection process, it said.
"The agreement we've made is what you could call an appetizing
investment case," SAS Chairman Carsten Dilling told Danish
broadcaster TV 2, adding that landing a long-term agreement had
been "crucial" for SAS.
The airline said the new 5-1/2-year deal with four pilot unions
would help it achieve part of the $700 million of annual cost
savings set out in a business transformation plan, known as SAS
FORWARD, that also includes measures such as handing back unwanted
planes to lessors. read more
SAS still needs to "find a couple of hundred million" in annual
cost savings to reach its target, Dilling said.
Even before the pandemic hit, SAS, which has branded itself as a
premium airline, was losing money amid rising competition from
low-cost carriers.
"I have good hope that they find the position in the market for the
future, as a quality airline," investor Gerald Engstrom, who has a
0.96% stake in SAS, told Reuters.
"Because SAS cannot be the cheapest, not even with those
improvements. So they need to find a type of Lufthansa, British
Airways style of doing this."
Wallenberg Investments, SAS's third-biggest shareholder with a 3.4%
stake, said it viewed the agreement positively as did government
ministers in Denmark and Sweden, with both governments each holding
a 21.8% stake in the airline.
Danish Finance Minister Nicolai Wammen told Reuters all parties
involved now needed to "make adequate contributions" as SAS
implemented its transformation plan.
Denmark has pledged to write off some of SAS' debt and convert some
more into equity, as well as to inject new cash, if private
investors participate too. Sweden backs a debt conversion but says
no to injecting more cash. read more
The labour strife was the latest across Europe's aviation sector as
millions of workers struggle with rising costs of living, prompting
trade unions to demand wage increases and stage walkouts,
disrupting travel. read more
"Finally, we can resume normal operations and fly our customers on
their much longed-for summer holidays," SAS Chief Executive Anko
van der Werff said in a statement.
Some flight disruptions will continue while the airline works to
resume normal traffic, the company said. On Tuesday, about a third
of SAS flights were cancelled, according to flight tracker website
Flightaware.com.
REHIRING PILOTS
SAS said the agreement with pilots involved higher productivity,
increased flexibility in seasonal capacity and a commitment, as
operations ramp up until 2024, to rehire 450 pilots laid off during
the pandemic.
Pilots had agreed to around a 25% cut in wages and terms as well as
up to 60 working hours per week, up from the current 47, chairman
of the Danish pilot union, Henrik Thyregod, told Danish media.
SAS had also met a key demand from unions that the laid-off pilots
shouldn't have to compete with external applicants for jobs with
less attractive terms at newly started subsidiaries SAS Link and
Ireland-based SAS Connect, Swedish Air Line Pilots Association said
in a statement.
The deal remained subject to approval by union members and a U.S.
federal court, which is expected within a few weeks, SAS said.
SAS confirmed on Tuesday the new agreement would apply to Link and
Connect pilots as well.
However, the Flight Personnel Union (FPU), which represents 180
pilots employed in the Link and Connect subsidiaries, said its
pilots would stay on their current agreements until 2025 and 2027,
respectively.
Danish union negotiator Keld Baekkelund said the new deal was a
parallel agreement, and that SAS had pledged not to hire new pilots
under the Link and Connect agreements and that those agreements
would not be renewed.
About Scandinavian Airlines
SAS SAB, Scandinavia's leading airline, with main hubs in
Copenhagen, Oslo and Stockholm, is flying to destinations in
Europe, USA and Asia. Spurred by a Scandinavian heritage and
sustainable values, SAS aims to be the global leader in sustainable
aviation. The airline will reduce total carbon emissions by 25
percent by 2025, by using more sustainable aviation fuel and our
modern fleet with fuel-efficient aircraft. In addition to flight
operations, SAS offers ground handling services, technical
maintenance and air cargo services. SAS is a founder member of the
Star Alliance, and together with its partner airlines offers a wide
network worldwide. On the Web: https://www.sasgroup.net
SAS AB and its affiliates, including Scandinavian Airlines Systems
Denmark-Norway-Sweden and Scandinavian Airlines of North America
Inc., sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 22-10925) on July 5, 2022. In the
petition filed by Erno Hildén, as authorized representative, the
Debtor SAS AB estimated assets between $10 billion and $50 billion
and liabilities between $1 billion and $10 billion.
Weil, Gotshal & Manges LLP is serving as global legal counsel and
Mannheimer Swartling Advokatbyra AB is serving as Swedish legal
counsel to SAS. Seabury Securities LLC and Skandinaviska Enskilda
Banken AB are serving as investment bankers, Seabury is also
serving as restructuring advisor. FTI Consulting is serving as
financial advisor. Kroll Restructuring Advisors is the claims
agent.
SMART BAKING: Wins Cash Collateral Access Thru Aug 22
-----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized Smart Baking Company, LLC to use cash
collateral on an interim basis in accordance with the budget
through August 23, 2022.
As adequate protection, Mareth Collective Trusts, LLC and the
United States Small Business Administration will have perfected
postpetition liens against cash collateral to the same extent and
with the same validity and priority as their prepetition liens,
without the need to file or execute any documents as may otherwise
be required under applicable non-bankruptcy law.
The Debtor will maintain insurance coverage for its property and
operations in accordance with their obligations as
debtors-in-possession and as required under the loan and security
documents with the Secured Creditors. Proof of such coverage will
be provided upon request.
A continued hearing on the matter is scheduled for August 23 at 10
a.m.
A copy of the order and the Debtor's budget for the period from
July 11 to August 11, 2022 is available at https://bit.ly/3zgKtnu
from PacerMonitor.com.
The Debtor projects $230,000 in starting cash balance and $241,046
in total expenses.
About Smart Baking Company, LLC
Smart Baking Company, LLC is a food manufacturer in Florida. It
offers snack cakes, hamburger buns and breakfast items.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-02365) on July 5,
2022. In the petition signed by Harvey F. Heuvel, chief executive
officer, the Debtor disclosed up to $10 million in both assets and
liabilities.
Justin M. Luna, Esq., at Latham Luna Eden and Beaudine LLP is the
Debtor's counsel.
SUMMIT LLC: Joins Owner in Chapter 11 Bankruptcy
------------------------------------------------
Summit LLC filed for chapter 11 protection, without stating a
reason.
According to court filings, Summit LLC estimates between 1 and 49
creditors. The petition states funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Aug. 25, 2022, at 9:30 AM at UST-LA2, TELEPHONIC MEETING.
CONFERENCE LINE:1-866-816-0394, PARTICIPANT CODE:5282999.
About Summit LLC
Summit LLC is a limited liability company in California.
Moussa Kashani, the 100% member and sole managing member of Summit,
commenced his personal Chapter 11 bankruptcy proceeding (Bankr.
C.D. Cal. Case No. 2:22-bk-13500) on June 24, 2022.
Summit LLC sought Chapter 11 bankruptcy protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-13853) on
July 15, 2022. In the petition filed by Moussa Kashani, as managing
member, the Debtor estimated assets between $10 million and $50
million and liabilities between $10 million-$50 million.
David B Golubchik, of Levene, Neale, Bender, Yoo & Golubchik
L.L.P., is the Debtors' counsel.
TALEN ENERGY: Must Hand Over Retiree Docs for ERISA Lawsuit
-----------------------------------------------------------
Matthew Santoni of Law360 reports that Talen Energy will have about
two weeks to produce a raft of documents related to its 2016
creation and discussions surrounding benefits for retirees, like
the four pursuing a proposed Employee Retirement Income Security
Act class action against the company, under a Pennsylvania federal
judge's order.
U.S. District Judge Jeffrey L. Schmehl said Talen Energy Corp., the
Talen Energy Retirement Plan and its retirement plan committee have
until July 30, 2022 to turn over 16 different categories of
documents being sought by former employees who claim the company
forced them into early retirement by eliminating their positions.
A full-text copy of the article is available at
https://www.law360.com/bankruptcy/articles/1511992/talen-energy-must-hand-over-retiree-records-for-erisa-suit
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 Aug 2
----------------------------------------------------------
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
August 2, 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 August 1 at 10
a.m.
A copy of the order and the Debtor's budget for the period from May
11 to July 19, 2022, is available at https://bit.ly/3uXwLTW from
PacerMonitor.com.
The budget provides for total disbursements, on a weekly basis, as
follows:
$144,725 for the week ending June 28, 2022;
$73,095 for the week ending July 5, 2022;
$125,548 for the week ending July 12, 2022;
$77,525 for the week ending July 19, 2022;
$121,000 for the week ending July 26, 2022; and
$92,926 for the week ending August 2, 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.
TCN LIBERTY: Seeks to Hire Jacobs PC as Bankruptcy Counsel
----------------------------------------------------------
TCN Liberty Management, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of New York to hire
Jacobs P.C. as its bankruptcy counsel.
The firm's services include:
a. advising the Debtor with respect to its powers and duties;
b. assisting the Debtor in the preparation of its schedules of
assets and liabilities, statements of financial affairs and other
reports and documentation required pursuant to the Bankruptcy Code
and the Bankruptcy Rules;
c. representing the Debtor at all hearings on matters
pertaining to its affairs;
d. prosecuting and defending litigated matters that may arise
during this Chapter 11 case;
e. counseling and representing the Debtor in connection with
the assumption or rejection of executory contracts and leases,
administration of claims and numerous other bankruptcy-related
matters arising from this Chapter 11 case;
f. counseling the Debtor with respect to various general and
litigation matters relating to this Chapter 11 case;
g. assisting the Debtor in obtaining approval of a disclosure
statement, confirmation of a plan of reorganization, and all other
matters related thereto; and
h. performing all other necessary legal services for the
Debtor.
The firm will be paid at these rates:
Leo Jacobs, Esq. $600 per hour
Partners $600 per hour
Associates $250 and $450 per hour
In addition, the firm will receive reimbursement for its
out-of-pocket expenses.
As disclosed in court filings, Jacobs P.C. is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Leo Jacobs, Esq.
Jacobs P.C.
450 Lexington Avenue, 4th Floor
New York, NY 10017
Phone: (718) 772-8704
Email: Leo@jacobspc.com
About TCN Liberty
New York-based TCN Liberty Management, Inc. filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
E.D.N.Y. Case No. 22-41452) on June 22, 2022, listing up to $1
million in assets and up to $10 million in liabilities. Avraam
Boruchov, chief executive officer, signed the petition.
Judge Nancy Hershey Lord presides over the case.
Leo Jacobs, Esq., at Jacobs P.C. represents the Debtor as counsel.
THE A MEN OF SARASOTA: Heal Strong Files Subchapter V Case
----------------------------------------------------------
The A Men of Sarasota, Inc.,. d/b/a Heal Strong, filed for chapter
11 protection in the Middle District of Florida. The Debtor filed
as a small business debtor seeking relief under Subchapter V of
Chapter 11 of the Bankruptcy Code.
The Debtor is a Florida corporation with its principal place of
business located at 1151 Tamiami Trail S., Suite 201, Venice, FL
34285 with mailing address of 3604 Torrey Pine Blvd., Sarasota, FL
34238.
The Debtor was established in 2006 by Dr. Nicholas J. Angelastro.
The Debtor is family owned and operates as a health-care service
provider in Sarasota, FL.
The Debtor has two employees, including the Debtor's principal, Dr.
Nicholas J. Angelastro who owns 100% of the outstanding stock of
the Debtor.
The Debtor has two employees, including the Debtor's principal, Dr.
Nicholas J. Angelastro who owns 100% of the outstanding stock of
the Debtor. The other employee is Debtor's office manager, and she
is a non-insider.
In June, 2020, Debtor borrowed funds in the amount of $200,000 from
the U.S. Small Business Administration under its economic disaster
loan program, which was initiated as a response to the global
COVID-19 pandemic. In exchange for the funds, the SBA was granted
a first priority lien on substantially all of its assets, which is
indicated in its UCC filing dated June 29, 2022. As of the
Petition Date, it is believed the SBA will allege a balance due of
$200,000.
According to court filing, The A Men of Sarasota Inc. estimates
between 1 and 49 unsecured creditors. The petition states funds
will be available to unsecured creditors.
About The A Men of Sarasota
Established in 2006 by Dr. Nicholas J. Angelastro, The A Men of
Sarasota Inc. doing business as Heal Strong, is family owned and
operates as a health-care service provider in Sarasota, FL. On the
Web: http://www.healstrongdoc.com/
The A Men of Sarasota, Inc., filed a petition for relief under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D.
Fla. Case No. 22-02849). In the petition filed by Nicholas J.
Angelastro, as president, the Debtor reports estimated assets
between $100,000 and $500,000 and estimated liabilities between $1
million and $10 million.
Amy Denton Mayer has been appointed as Subchapter V trustee.
Jake C Blanchard, of Blanchard Law, P.A., is the Debtor's counsel.
THE SOUTH EDGE: Files Chapter 11 Subchapter V Case
--------------------------------------------------
The South Edge has returned to bankruptcy court. The Debtor filed
as a small business debtor seeking relief under Subchapter V of
Chapter 11 of the Bankruptcy Code.
According to court filings, The South Edge estimates between 1 and
49 creditors. The petition states funds will be available to
unsecured creditors.
About the South Edge
The South Edge is primarily engaged in renting and leasing real
estate properties.
The South Edge, Inc., previously sought Chapter 12 bankruptcy
protection on Nov 30, 2017 (Bankr. N.D. Cal. Case No. 17-bk-10875)
and on Sept. 15, 2018 (Case No. 18-bk-10638).
The South Edge filed a petition for relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No.
22-10269) on July 14, 2022. In the petition filed by JoAnn
Claeyssens, as president, the Debtor estimated assets and
liabilities between $1 million and $10 million.
The case is assigned to Honorable Bankruptcy Judge Roger L.
Efremsky.
Mark M. Sharf has been appointed as Subchapter V trustee.
The Debtor's counsel:
Gina R. Klump, Esq.
LAW OFFICE OF GINA R. KLUMP
30 5th Street, Suite 200
Petaluma, CA 94952
Tel: 707-778-0111
Fax: 707-778-1086
E-mail: klumplaw@gmail.com
TICONDEROGA FARMS: Taps Odin, Feldman & Pittleman as Legal Counsel
------------------------------------------------------------------
Ticonderoga Farms, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Virginia to hire Odin, Feldman &
Pittleman, P.C. as its legal counsel.
The firm will render these services:
a) advise the Debtor with respect to its rights, powers, and
duties;
b) advise and consult with the Debtor on the conduct of its
Chapter 11 case, including all legal and administrative
requirements of operating in Chapter 11 and concerning the Debtor's
rights and remedies with regard to the estate's assets and the
claims of secured and unsecured creditors and other parties in
interest;
c) attend meetings and negotiate with creditors, equity
security holders, and other parties in interest in the case;
d) advise the Debtor in connection with any contemplated sale
of assets or business combinations;
e) advise the Debtor in connection with post-petition
financing, cash collateral, and exit financing arrangements;
f) advise the Debtor on matters relating to the assumption,
rejection, assignment, restructuring or re-characterization of
unexpired leases and executory contracts;
g) consult with and advise the Debtor in connection with the
operation of or the termination of the operation of its
businesses;
h) take necessary actions to protect and preserve the Debtor's
estate, including the prosecution and defense of actions and
proceedings arising in or related to the case, and reviewing,
objecting to, and resolving claims against the Debtor's estate;
i) prepare legal papers;
j) advise the Debtor concerning, and prepare responses to,
legal documents filed by other parties;
k) advise the Debtor regarding, and prepare, file and obtain
confirmation of a plan of reorganization or liquidation, disclosure
statement and related documents;
l) appear before the bankruptcy court and other courts,
panels, Office of the U.S. Trustee to protect the interests of the
Debtor's estate in such proceedings;
m) meet and coordinate with other counsel and other
professionals retained on behalf of the Debtor;
n) perform all other necessary legal services for the Debtor.
The hourly rates charged by the firm's attorneys and
paraprofessionals are as follows:
Alexander M. Laughlin, Esq. $425 per hour
Bradley D.Jones, Esq. $390 per hour
Marse Hammond $150 per hour
Valerie Settles $175 per hour
Kelly Maloney $190 per hour
The firm holds a retainer in the amount of $50,000.
As disclosed in court filings, Odin, Feldman & Pittleman is a
disinterested person within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Alexander M. Laughlin, Esq.
Bradley D. Jones, Esq.
Odin, Feldman & Pittleman, P.C.
1775 Wiehle Avenue, Suite 400
Reston, VA 20190
Phone: 703-218-2134/703-218-2176
Fax: 703-218-2160
Email: Alex.Laughlin@ofplaw.com
Brad.Jones@ofplaw.com
About Ticonderoga Farms
Ticonderoga Farms, LLC, doing business as Amazing Farm Fun, offers
year-round outdoor fun for all ages. On the Web:
https://www.amazingfarmfun.com/
Ticonderoga Farms sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Va. Case No. 22-10794) on June 22,
2022. In the petition filed by Peter Knop, managing member, the
Debtor listed assets between $10 million and $50 million and
liabilities between $1 million and $10 million.
Odin, Feldman & Pittleman, P.C. is the Debtor's legal counsel.
TIERPOINT LLC: Fitch Affirms LT IDR at 'B', Outlook Stable
----------------------------------------------------------
Fitch Ratings has affirmed TierPoint, LLC's Long-Term Issuer
Default Rating (IDR) at 'B'. The Rating Outlook is Stable. In
addition, Fitch has affirmed the company's senior secured term loan
and revolving credit facility at 'B+'/'RR3'. The IDR and security
ratings affect approximately $900 million of debt, including unused
capacity on the company's $232 million revolving facilities.
TierPoint's ratings and Outlook reflect its solid performance
through the pandemic and Fitch's expectation that demand for
colocation and public cloud solutions will be robust over the
rating horizon. TierPoint's profitability and margins improved in
2019-2020 after earlier execution challenges, and TierPoint has
sustained its performance through 2021 and the start of 2022.
KEY RATING DRIVERS
Improved, but High Leverage: TierPoint's gross debt/EBITDA has
materially improved since the end of 2019 when it was more than
8.0x. Fitch forecasts the company will operate with more manageable
leverage in the 4.0x-5.0x range in the next few years. Management
has reiterated its focus on improving organic trends and
profitability in order to manage its leverage profile. However,
this may prove challenging in a competitive industry.
TierPoint closed an equity investment in February of $500 million,
primarily used to provide liquidity to existing investors, but also
enabled the company to pay down $25 million of its revolver
balance. TierPoint's leverage position had already improved
following a March 2020 preferred equity injection of $320 million
and a 2021 credit amendment that reduced borrowing costs (lowered
interest modestly).
Capital Intensive Business: TierPoint operates in a competitive and
capital-intensive industry and must continue to invest in order to
maintain customers and drive growth. Fitch does not expect this
dynamic to change over the ratings horizon. Consequently, this
limits the company's ability to reduce leverage absent EBITDA
expansion and/or additional equity contributions.
Fitch expects the company to rely on its revolver and capital
markets access to support capex needs in the future. Capex ranged
from 20%-30% of revenue annually over the past few years, and Fitch
expects elevated levels of spend will limit material FCF generation
throughout Fitch's ratings horizon.
Secular Data Center Growth: Data center demand increased
significantly over the past decade driven by factors such as global
internet adoption, increased smartphone usage, and enterprise
outsourcing. Fitch believes these market forces will continue in
the coming years. Fitch believes DC traffic growth, combined with
an increasingly positive enterprise sentiment toward hybrid
deployments, could favor carrier-neutral DC providers such as
TierPoint.
Fragmented and Competitive Market: Despite a favorable demand
backdrop, the fragmented nature of the DC industry makes it
susceptible to pricing pressure and excess capacity from new
builds. In addition to industry supply risks, hyperscale/cloud
providers represent a material competitive threat. Cloud providers
such as Amazon's AWS and Microsoft's Azure are witnessing
substantial growth and could over time threaten the core value
proposition for traditional data center providers. This threat may
be somewhat mitigated by TierPoint's managed-service offerings, if
customers come to rely on TierPoint's staff for operations that
Amazon and Microsoft do not provide.
Diversified Customer Base: TierPoint operates 40 facilities in 20
markets and serves thousands of customers, with its largest
customer at near 2% of monthly recurring revenue (MRR). This
results in a fragmented customer base with its top 25 customers
comprising only 20% of MRR. The fragmented customer base reduces
customer concentration risk and earnings volatility. Fitch views
this favorably as it enhances predictability of the company's
future financial performance. Additionally, TierPoint strategically
targets secondary markets where competition is less intense and
focuses on small to medium sized enterprises (SMEs).
High Mix of Recurring Revenue: Approximately 98% of the company's
revenue is recurring in nature, with typical service contracts
extending for three years, creating a high level of visibility into
future revenue streams. Data center customers tend to look for
long-term stability as IT infrastructure is critical for
enterprises, and there are some switching costs, albeit less so
than five or 10 years ago. This results in a lengthy sales cycle
and fairly sticky customer base, as evidenced by average monthly
churn of 0.9%-1.3% from 2019 through 2021. In the most recent
quarterly results, TierPoint has reported churn below 1%.
Shift to Managed Services: TierPoint generates nearly 50% of its
total revenue from retail colocation but the mix has shifted to
more managed services since 2015. The company is focused on
providing a comprehensive portfolio of solutions, and the increased
exposure to a greater part of the value chain is expected to
increase customer stickiness. A greater mix of managed cloud
services is also projected to increase capital efficiency as it
tends to be less capital intensive. Fitch believes this mix shift
provides some diversification beyond colocation, but it is unclear
how the shift will impact margins over time.
DERIVATION SUMMARY
TierPoint competes with various companies including: (i) wholesale
and retail colocation providers such as Digital Realty Trust, Inc.
(BBB/Stable), Equinix, Inc. (BBB+/Stable), CyrusOne, Inc. and
others; (ii) cloud service providers such as Amazon.com, Inc.'s
(AA-/Stable) AWS, (iii) managed hosting vendors such as Rackspace
Technology, Inc., as well as a range of other competitors including
telecom operators, regional providers, private equity participants,
etc. TierPoint provides IT and data center services, including both
retail colocation and managed services, the latter of which has
become a bigger piece of its business through both M&A and organic
growth.
Relative to some of its larger investment grade-rated peers,
TierPoint targets secondary U.S. markets where competition is less
severe, and the company focuses on small to mid-sized enterprises
(SMEs) in these markets. TierPoint also operates with a materially
smaller scale versus its larger competitors and leases the majority
of its DC footprint, unlike peers that own the real estate.
Fitch believes TierPoint fits in the 'B' rating category due to its
small scale, lower margins and lower level of asset protection
versus its larger peers, and significant competitive challenges.
Fitch expects competition will remain significant in the DC
segment, and Fitch would look for sustained execution from
TierPoint as well as a prudent approach to managing cash flows.
KEY ASSUMPTIONS
-- Organic growth in the mid-single digit percentage range over
the ratings horizon;
-- EBITDA margins dipping slightly in 2022 and 2023 on the
assumption of higher energy costs and a tight labor market but
returning to low 30% range in the following years;
-- Capex remains a material use of cash in the range of 20% of
revenue.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Sustained improvement in operating fundamentals, including
consistent mid-single digit or higher revenue and/or EBITDA
growth;
-- Gross leverage, Fitch-defined as total debt with equity
credit/operating EBITDA, sustained near 4.5x or below;
-- CFO-capex/Total Debt expected to remain consistently at or
above 5%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Gross leverage sustained at 5.5x or higher;
-- FCF generation expected to be consistently negative;
-- Fitch expects liquidity to become pressured, which could be
evidenced by operating EBITDA/interest paid sustained below
2.5x, material and sustained draw-downs on revolving
facilities and/or capital markets access in sector becoming
tighter.
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: The company's key sources of liquidity include:
(i) $13 million of cash on its balance sheet at March 22, (ii) $232
million of senior secured revolving credit facilities, which had
$24.5 million outstanding at March 22, and (iii) cash from
operations, although much of this was used historically to fund
capex to grow the business. Fitch believes the company is targeting
break-even or positive FCF in the near term, but this may prove
challenging to sustain given the capital-intensive nature of the DC
industry. The availability of more than $200 million on the
revolver provides adequate liquidity over the short term.
Debt Structure: TierPoint's debt consists of credit facilities
including: (i) a $232 million revolving credit facility maturing in
April 2025 and (ii) a $675 million first lien term loan maturing in
May 2026. In early 2021, the company executed an amend/extend of
its first lien term loan that included: extending the maturity date
of its TL by two years to May 2026, reduced the first lien LIBOR
floor to 0.75%, and increased the debt incurrence basket for
capital leases. There are no near-term maturities and only moderate
amounts of amortization payments in the coming years. Thus, Fitch
views limited maturity and/or refinancing risk in the near term.
ISSUER PROFILE
TierPoint is a provider of colocation, cloud, and managed services
to small and medium-sized enterprises in underserved markets. The
company operates 40 interconnected data centers (DCs) across 20
different U.S. markets, with 9 DCs being owned and the remainder
being leased.
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
---- ------ -------- -----
TierPoint, LLC LT IDR B Affirmed B
senior secured LT B+ Affirmed RR3 B+
TIERRA ADENTRO: Seeks to Hire Vilarino & Associates as Counsel
--------------------------------------------------------------
Tierra Adentro Restaurants LLC seeks approval from the U.S.
Bankruptcy Court for the District of Puerto Rico to hire Vilarino &
Associates, LLC as its legal counsel.
The firm's services will include:
a) advising the Debtor with respect to its duties, powers and
responsibilities in its Chapter 11 case under the laws of the
United States and Puerto Rico;
b) advising the Debtor as to whether reorganization is
feasible and, if not, assisting the Debtor in the orderly
liquidation of its assets;
c) negotiating with creditors in the formulation and
confirmation of a viable plan of reorganization;
d) preparing legal papers;
e) appearing before the bankruptcy court or any court where
the Debtor asserts a claim interest or defense related to its
bankruptcy case;
f) other legal services necessary to administer the case; and
g) employing other professional services, if necessary.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Javier Vilarino, Esq. (Senior Attorney) $275 per hour
Associates $200 per hour
Paralegals $125 per hour
As disclosed in court filings, Vilarino & Associates is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Javier Vilarino, Esq.
Vilarino & Associates, LLC
1519 Avenida de la Constitucion 5th Floor
San Juan, PR 00918
Phone: +1 787-565-9894
Email: office@vilarinolaw.com
About Tierra Adentro Restaurants
Tierra Adentro Restaurants, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-01965)
on July 5, 2022, listing up to $50,000 in assets and up to $500,000
in liabilities. Javier Vilarino, Esq., at Vilarino & Associates,
LLC serves as the Debtor's counsel.
TORINO CAMPUS: Files Bare-Bones Chapter 11 Petition
---------------------------------------------------
Torino Campus LLC filed for chapter 11 protection in the Southern
District of Florida, without stating a reason.
The Debtor claims to be a Single Asset Real Estate. Its principal
asset is located at 5481 NW East Torino Pkwy Port Saint Lucie, FL
34986.
According to court filings, Torino Campus estimates between 1 and
49 creditors. The petition states that funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Aug. 22, 2022, at 1:00 PM by TELEPHONE. Proofs of claim are due by
Sept. 23, 2022.
About Torino Campus LLC
Torino Campus LLC is a Single Asset Real Estate (as defined in 11
U.S.C. Sec. 101(51B).
Torino Campus LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-15442) on July 15,
2022. In the petition filed by Jose Toledo, as managing member,
the Debtor estimated assets between $1 million and $10 million and
liabilities between $1 million and $10 million.
Brian K. McMahon, of Brian K. McMahon PA, is the Debtor's counsel.
TPC GROUP: Chapter 11 Loan Delayed Pending Appellate Stay Ruling
----------------------------------------------------------------
Vince Sullivan of Law360 reports that petrochemical maker TPC Group
told a Delaware bankruptcy judge Friday, July 15, 2022, that it
needed to await a decision from the local district court before
moving forward with final approval of its Chapter 11 financing.
During a virtual hearing, debtor attorney Scott R. Bowling of Baker
Botts LLP said the Delaware district court had issued a temporary
stay in an appeal brought by Cerberus Capital Management and
Bayside Capital Inc. over a bankruptcy court decision from last
week that dismissed claims TPC had improperly reclassified millions
of notes.
About TPC Group
TPC Group, headquartered in Houston, is a producer of value-added
products derived from petrochemical raw materials such as C4
hydrocarbons, and provider of critical infrastructure and logistics
services along the Gulf Coast. The Company sells its products into
a wide range of performance, specialty and intermediate markets,
including synthetic rubber, fuels, lubricant additives, plastics
and surfactants. With an operating history of more than 75 years,
TPC Group has a manufacturing facility in the industrial corridor
adjacent to the Houston Ship Channel and operates product terminals
in Port Neches, Texas and Lake Charles, Louisiana.
TPC Group Inc. and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group
estimated assets and debt of $1 billion to $10 billion to $10
billion.
The Hon. Craig T. Goldblatt is the case judge.
Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arsht
& Tunnell LLP is the co-counsel; Moelis & Company LLC is the
investment banker; and FTI Consulting is the financial advisor.
Simpson Thacher & Bartlett LLP is the special finance counsel.
Kroll Restructuring Administration is the claims agent.
Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd.
Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as
counsel to the Ad Hoc Noteholder Group that supports the Debtors'
restructuring. Evercore Group L.L.C., is the Group's financial
advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to
the Ad Hoc Noteholder Group. The Supporting Noteholders are funds
controlled by FIG LLC and Fortress Capital Finance III(A)LLC,
Monarch Alternative Capital LP., PGIM Inc., Redwood Capital
Management LLC, and Strategic Value Partners LLC.
Milbank LLP, and Pachulski, Stang, Ziehl & Jones are serving as
counsel to an Ad Hoc Group of Non-Consenting Noteholders, led by
Bayside Capital, Inc., and Cerberus Capital Management, L.P.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Fieldstone Property Management, LLC
Bankr. N.D. Cal. Case No. 22-50597
Chapter 11 Petition filed July 12, 2022
See
https://www.pacermonitor.com/view/NNOSWDI/Fieldstone_Property_Management__canbke-22-50597__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Kenneth Paul King
Bankr. N.D. Fla. Case No. 22-40205
Chapter 11 Petition filed July 12, 2022
represented by: Robert Bruner, Esq.
In re Scott A. Corridan
Bankr. D. Nev. Case No. 22-50366
Chapter 11 Petition filed July 12, 2022
represented by: Kevin Darby, Esq.
In re Mangum Trust, LLC
Bankr. N.D. Ga. Case No. 22-55281
Chapter 11 Petition filed July 13, 2022
See
https://www.pacermonitor.com/view/B22J65Y/Mangum_Trust_LLC__ganbke-22-55281__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re John Stacy Davidson and Laurie Lofton Davidson
Bankr. S.D. Miss. Case No. 22-01352
Chapter 11 Petition filed July 13, 2022
represented by: James McGee, Esq.
In re Beach Kodosh LLC
Bankr. E.D.N.Y. Case No. 22-41676
Chapter 11 Petition filed July 13, 2022
See
https://www.pacermonitor.com/view/VUCLMYQ/Beach_Kodosh_LLC__nyebke-22-41676__0001.0.pdf?mcid=tGE4TAMA
represented by: Vivian Sobers, Esq.
SOBERS LAW, PLLC
E-mail: vsobers@soberslaw.com
In re Iyar Post LLC
Bankr. E.D.N.Y. Case No. 22-41679
Chapter 11 Petition filed July 13, 2022
See
https://www.pacermonitor.com/view/ZGUAYCQ/Iyar_Post_LLC__nyebke-22-41679__0001.0.pdf?mcid=tGE4TAMA
represented by: Vivian Sobers, Esq.
SOBERS LAW, PLLC
E-mail: vsobers@soberslaw.com
In re Franco A. Damiano
Bankr. S.D.N.Y. Case No. 22-22443
Chapter 11 Petition filed July 13, 2022
represented by: James Rufo, Esq.
THE LAW OFFICE OF JAMES J. RUFO
Email: jrufo@jamesrufolaw.com
In re Mesa Terrace Condominium Association
Bankr. D. Ariz. Case No. 22-04590
Chapter 11 Petition filed July 14, 2022
See
https://www.pacermonitor.com/view/PIIYSII/MESA_TERRACE_CONDOMINIUM_ASSOCIATION__azbke-22-04590__0001.0.pdf?mcid=tGE4TAMA
represented by: D. Lamar Hawkins, Esq.
GUIDANT LAW, PLC
E-mail: lamar@guidant.law
In re Liquiguard Technologies, Inc.
Bankr. S.D. Fla. Case No. 22-15388
Chapter 11 Petition filed July 14, 2022
See
https://www.pacermonitor.com/view/ZU2WJ3Y/Liquiguard_Technologies_Inc__flsbke-22-15388__0001.0.pdf?mcid=tGE4TAMA
represented by: Chad Van Horn, Esq.
VAN HORN LAW GROUP, P.A.
E-mail: chad@cvhlawgroup.com
In re Esco Rental, LLC
Bankr. N.D. Ga. Case No. 22-20650
Chapter 11 Petition filed July 14, 2022
See
https://www.pacermonitor.com/view/PN3A7AA/ESCO_RENTAL_LLC__ganbke-22-20650__0001.0.pdf?mcid=tGE4TAMA
represented by: Benjamin Keck, Esq.
KECK LEGAL, LLC
E-mail: bkeck@kecklegal.com
In re Gulf Coast Brake and Motor, Inc.
Bankr. W.D. La. Case No. 22-50450
Chapter 11 Petition filed July 14, 2022
See
https://www.pacermonitor.com/view/F46W4UA/Gulf_Coast_Brake_and_Motor_Inc__lawbke-22-50450__0001.0.pdf?mcid=tGE4TAMA
represented by: H. Kent Aguillard, Esq.
H. KENT AGUILLARD
E-mail: kent@aguillardlaw.com
In re Affordable Housing Foundation Inc.
Bankr. D. Md. Case No. 22-13811
Chapter 11 Petition filed July 14, 2022
See
https://www.pacermonitor.com/view/X5B2YJQ/Affordable_Housing_Foundation__mdbke-22-13811__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re 220 Lebanon Street LLC
Bankr. D. Mass. Case No. 22-10997
Chapter 11 Petition filed July 15, 2022
See
https://www.pacermonitor.com/view/QBRBH7Y/William_Fletcher_220_Lebanon_Street__mabke-22-10997__0002.0.pdf?mcid=tGE4TAMA
represented by: Bradford Eliot Keene, Esq.
LAW OFFICES OF BRADFORD ELIOT KEENE, PC
E-mail: brad@bradlaw.com
In re Rachel E. Hall
Bankr. D.S.C. Case No. 22-01877
Chapter 11 Petition filed July 15, 2022
represented by: Jane Downey, Esq.
MOORE BRADLEY MYERS LAW FIRM, PA
In re Philip Gus Randazzo
Bankr. C.D. Cal. Case No. 22-11186
Chapter 11 Petition filed July 16, 2022
In re El Calamar, Inc El Calamar, Inc.
Bankr. C.D. Cal. Case No. 22-11188
Chapter 11 Petition filed July 17, 2022
See
https://www.pacermonitor.com/view/TVWOQHA/El_Calamar_Inc_El_Calamar_Inc__cacbke-22-11188__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
E-mail:
michael.berger@bankruptcypower.com
In re 270 Berger Real Estate, LLC
Bankr. D.N.J. Case No. 22-15665
Chapter 11 Petition filed July 17, 2022
See
https://www.pacermonitor.com/view/AXBAJSA/270_Berger_Real_Estate_LLC__njbke-22-15665__0001.0.pdf?mcid=tGE4TAMA
represented by: Timothy P. Neumann, Esq.
BROEGE, NEUMANN, FISCHER & SHAVER LLC
E-mail: tneumann@bnfsbankruptcy.com
In re Timothy Dean Riedel and Ann J Ridel
Bankr. D. Ariz. Case No. 22-04684
Chapter 11 Petition filed July 18, 2022
represented by: Ronald J. Ellett, Esq.
ELLETT LAW OFFICES, P.C.
In re Wade Todd Lancaster
Bankr. D. Colo. Case No. 22-12583
Chapter 11 Petition filed July 18, 2022
represented by: Jonathan Dickey, Esq.
KUTNER BRINEN DICKEY RILEY PC
E-mail: JMD@KutnerLaw.com
In re Joy Adebola Adewopo
Bankr. S.D. Ind. Case No. 22-02781
Chapter 11 Petition filed July 18, 2022
represented by: Harley Means, Esq.
In re Andrews Farm Water Company, Inc.
Bankr. D. Mass. Case No. 22-11004
Chapter 11 Petition filed July 18, 2022
See
https://www.pacermonitor.com/view/4KJRNAY/Andrews_Farm_Water_Company_Inc__mabke-22-11004__0001.0.pdf?mcid=tGE4TAMA
represented by: James Grillo, Esq.
DAVAGIAN GRILLO & SEMPLE LLP
E-mail: jgrillo@dgslawllp.com
In re 194-8 Schenck Ave. Corp
Bankr. E.D.N.Y. Case No. 22-41712
Chapter 11 Petition filed July 18, 2022
See
https://www.pacermonitor.com/view/UD472AI/194-8_Schenck_Ave_Corp__nyebke-22-41712__0001.0.pdf?mcid=tGE4TAMA
represented by: Nigel Blackman, Esq.
EASTBROOK LEGAL GROUP
In re Vanguard Roofing LLC
Bankr. W.D. Va. Case No. 22-60697
Chapter 11 Petition filed July 18, 2022
See
https://www.pacermonitor.com/view/VMP36DQ/Vanguard_Roofing_LLC__vawbke-22-60697__0001.0.pdf?mcid=tGE4TAMA
represented by: Martin C. Conway, Esq.
CONWAY LAW GROUP, PC
E-mail: martin@conwaylegal.com
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
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Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
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than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
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liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
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The Sunday TCR delivers securitization rating news from the week
then-ending.
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2022. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***