/raid1/www/Hosts/bankrupt/TCR_Public/220725.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, July 25, 2022, Vol. 26, No. 205
Headlines
1116 MAPLE STREET: UST Seeks Case Trustee or Chapter 7 Conversion
1225 CLIFTON ST: Voluntary Chapter 11 Case Summary
2111 ALBANY POST: Court OKs Appointment of Stevens as Trustee
26 BOWERY: Exclusivity Period Extended Until Dec. 6
37 VENTURES: Unsecureds to Get 100% Plus Interest in Plan
4TH STREET MEDICAL: Unsecureds Will Get 100% of Claims in Plan
5AAB TRANSPORT: Sept. 8 Disclosure Statement Hearing Set
A10 BRIDGE 2020-C: DBRS Hikes Class G Notes Rating to B(high)
AKORN OPERATING: S&P Affirms 'CCC+' ICR, Outlook Stable
ALL YEAR HOLDINGS: Amends Disclosures to Address Objection
ALL YEAR HOLDINGS: General Unsecureds Unimpaired in Plan
ALPHA METALLURGICAL: Moody's Ups CFR to B2 & Alters Outlook to Pos.
ANDREW'S GARDEN: Gets Interim Cash Collateral Access Thru Sept 16
ANTECO PHARMA: To Seek Plan Confirmation on July 20
ARCHBISHOP OF AGANA: CNA Files Adversary Proceeding; Amends Plan
ASHFORD 2018-KEYS: DBRS Confirms B Rating on Class X-EXT Certs
AUTO WHOLESALE: Case Summary & 20 Largest Unsecured Creditors
AWKNG INC: Unsecureds to Get $140K Over 3 Years in Consensual Plan
B.E.C. BARAJAS: Files Chapter 11 Subchapter V Case
BK AUTUMN: Amends Plan to Include Mr. Cooper's Unsecured Claim
BUCKARDT TECHNOLOGIES: Unsecureds to Recover 16% in 60 Months
CADIZ INC: All Five Proposals Passed at Annual Meeting
CALIFORNIA INDEPENDENT: Unsecureds to Split $725K in Plan
CANOPY GROWTH: Fitch Hikes IDR to CCC on Exchange Completion
CANOPY GROWTH: S&P Upgrades ICR to 'CCC', Outlook Negative
CEC ENTERTAINMENT: Moody's Ups CFR to B3 & Alters Outlook to Stable
CELSIUS NETWORK: Has $130M Cash, $1.9 Billion of Deficit
CELSIUS NETWORKS: May Offer Creditors Loss Now, Long Bet in Crypto
CHARLOTTE BUYER: Moody's Assigns B3 CFR, Outlook Stable
CHESAPEAKE ENERGY: Fitch Alters Outlook on 'BB' IDR to Positive
CINEMA SQUARE: Unsecureds Will Receive 100% Under Plan
CLAREHOUSE LIVING: No Decline in Resident Care, PCO Report Says
CLEAN ENERGY: Seeks Interim Cash Collateral Access
CLEARDAY INC: Refinances Existing Facilities, Gets $233K Financing
CONSOLIDATED WEALTH: Combined Disclosure & Plan Confirmed by Judge
CORSAMI GROUP: Voluntary Chapter 11 Case Summary
CREDITO REAL S.A.B.: Chapter 15 Case Summary
CVR PARTNERS: Moody's Upgrades CFR & Senior Secured Notes to B1
DAWSON COUNTY HOSPITAL DISTRICT: S&P Raises Bonds Rating to 'CCC+'
DC TELECOMM: Unsecured Creditors to Split $60K in Consensual Plan
DOLPHIN ENTERTAINMENT: Incurs $792K Net Loss in First Quarter
ECO LIGHTING: Unsecureds Will Get 21% of Claims in 3 Years
ENACT HOLDINGS: Moody's Hikes LongTerm Issuer Rating to Ba1
ENJOY TECHNOLOGY: Taps Centerview Partners as Investment Banker
ENJOY TECHNOLOGY: Taps Richards, Layton & Finger as Legal Counsel
ENJOY TECHNOLOGY: Taps Todd Zoha of AP Services as CFO
ENVIA HOLDINGS: Seeks Cash Collateral Access
EVERGREEN ARBORISTS: Has Deal on Cash Collateral Access
EVERI HOLDINGS: S&P Upgrades ICR to 'BB-' on Strengthened Business
FOOD SERVICE PARTNERS: Seeks Cash Collateral Access
FRONT SIGHT: Class 8 Unsecureds to Split $500K in Plan
G.D. III: Court OKs Appointment of Scott W. Miller as Examiner
GABHALTAIS TEAGHLAIGH: Files Emergency Bid to Use Cash Collateral
GIRARDI & KEESE: Judge Orders Erika's Belongings Auctioned Off
GT REAL ESTATE: Owner Sues County to Block $21M SC Stadium Claim
HEBO FAMILY FOODS: Unsecureds Will Get 20% of Claims in 5 Years
INFOW LLC: Alex Jones No Show At Sandy Hook Defamation Case Hearing
ITURRINO AND ASSOCIATES: Unsecureds to Recover 10% in 36 Months
JADE INVESTMENTS: Wins Access to K&S Note's Cash Collateral
JAGUAR HEALTH: Unit Amends License Agreement With Napo Therapeutics
JP INTERMEDIATE: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
KAMC HOLDINGS: S&P Downgrades ICR to 'CCC+' on Tight Liquidity
KEYWAY APARTMENT: UST Appoints Scott W. Miller as Examiner
LAURA CANTOR: Continued Operations to Fund Plan Payments
MAGNACOUSTICS INC: Unsecured to Get At Least 43.5 Cents on Dollar
MASTER EQUITY: Unsecureds to Get Share of Income for 60 Months
MOHAMED A. EL RAFAE: Court Directs Chapter 11 Trustee Appointment
MONSTER INVESTMENTS: Creditor Seeks Trustee or Ch.7 Conversion
NINE DEGREES: Seeks 120-Day Extension for Plan Approval
O'BRIEN FAMILY LAND TRUST: U.S. Trustee Unable to Appoint Committee
ORGANICELL REGENERATIVE: Signs LOI Regarding $4M Investment
PADDOCK ENTERPRISES: Emerges From Chapter 11 Bankruptcy
PARETEUM CORP: Committee Taps AlixPartners as Financial Advisor
PATH MEDICAL: Court Confirms Amended Plan
PEACOCK INTERMEDIATE: S&P Cuts ICR to 'B-' on Elevated Leverage
PEGASUS SERVICES: UST Seeks Case Trustee or Chapter 7 Conversion
PETROTEQ ENERGY: ROC Deems June Filings in Compliance With TSXV
PHOTO HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B-' ICR
PRECISION AUTOMOTIVE: Lender Seeks to Prohibit Cash Access
PRINCESS PORT: Unsecureds Owed $4.2K to Get 100% of Claims
RANCHO CIELO: Needs to Abate Fire Hazard, Says Fire Chief
REHOBOTH PIPELINE: Seeks to Extend Exclusivity Period by 30 Days
RITE AID: Fitch Affirms 'B-' LongTerm IDR, Outlook Still Negative
RLI SOLUTIONS: Pipeline Biz. Files for Chapter 11 Bankruptcy
SK GLOBAL: Unsecureds Owed $794K to Get 5% in Plan
SKAUTO BODY: Case Summary & 13 Unsecured Creditors
SPEEDWAY MOTORSPORTS: S&P Upgrades ICR to 'BB' on Lower Leverage
TALEN ENERGY: Fitch Withdraws Ratings After Bankruptcy Filing
TELKONET INC: VDA Group Investors Hold 54.4% Equity Stake
TNBI INC: Continued Operations and Exit Facility to Fund Plan
TRAVEL + LEISURE CO: Fitch Affirms LT IDR at BB-, Outlook Negative
TRIDENT BRANDS: Delays Form 10-Q for Period Ended May 31
TROIKA MEDIA: Elects Randall Miles as Director, Chairman
UNITED BANCSHARES: Incurs $1.5 Million Net Loss in 2018
UNITED PROMOTIONS: Continued Operations to Fund Plan Payments
WALHONDE TOOLS: Subchapter V Plan Confirmed by Judge
WIRELESS SYSTEMS: Exclusivity Period Extended to Aug. 6
YAK ACCESS: S&P Lowers ICR to 'CCC' on Elevated Refinancing Risk
[^] BOND PRICING: For the Week from July 18 to 22, 2022
*********
1116 MAPLE STREET: UST Seeks Case Trustee or Chapter 7 Conversion
-----------------------------------------------------------------
Peter C. Anderson, United States Trustee for Region 16, will move
the U.S. Bankruptcy Court for the Central District of California on
August 30, 2022, for an order either directing the appointment of a
Chapter 11 Trustee, dismissing the case, or converting the Chapter
11 to Chapter 7 case of 1116 Maple Street, LLC.
On December 18, 2021, certain secured creditors filed a motion to
dismiss the Debtor's Chapter 11 case. One of the grounds for
dismissal includes unexcused failure to timely satisfy any filing
or reporting requirement established by Chapter 11 or by any rule
applicable to a case under Chapter 11 under Section 1112(b)(4)(F)
of the Bankruptcy Code.
On January 4, 2022, the Debtor opposed this motion, but did not
address its failure to timely file the required reporting
documents. That dismissal motion was initially set for hearing on
January 18, and has been continued from time to time. The current
date for the hearing on the creditor's dismissal motion is
September 27.
The Debtor operates a 17-unit apartment complex in Glendale. Based
on a review of the Debtor's amended disclosures statement and
motion for order confirming the Debtor's second amended plan, the
property is valued at $3.9 million and collects rental income of
about $28,000-$30,000 per month. The Debtor's Chapter 11 filing was
made to avoid foreclosure and preserve the business for the
Debtor's creditors.
Therefore, the U.S. Trustee contends, it appears that liquidation
of the asset through conversion may benefit the creditors, rather
than a foreclosure, which may occur on dismissal. Moreover, there
are no unusual circumstances that establish that dismissal or
conversion is not in the best interests of creditors and the
estate.
A copy of the U.S. Trustee's request is available for free at
https://bit.ly/3v9LsmG from PacerMonitor.com.
About 1116 Maple Street
1116 Maple Street, LLC, is a single asset real estate debtor (as
defined in 11 U.S.C. Section 101(51B)). It owns and operates a
17-unit apartment complex located at 1116 Maple Street, Glendale,
California 91205.
1116 Maple Street filed a petition for Chapter 11 protection
(Bankr. C.D. Cal. Case No. 20-16362) on July 14, 2020, listing
$5,057,759 in assets and $4,871,355 in liabilities. Mihran
Tcholakian, managing member, signed the petition. Judge Barry
Russell oversees the case. Margulies Faith LLP is the Debtor's
bankruptcy counsel.
1225 CLIFTON ST: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: 1225 Clifton ST DE LLC
1225 Clifton Street NW
Suite A
Washington, DC 20011
Business Description: The Debtor is a Single Asset Real Estate
as defined in 11 U.S.C. Section 101(51B).
The Debtor is the fee simple owner of the
real property located 1225 Clifton Street
NW, valued at $8 million.
Chapter 11 Petition Date: July 21, 2022
Court: United States Bankruptcy Court
District of Columbia
Case No.: 22-00126
Judge: Hon. Elizabeth L. Gunn
Debtor's Counsel: Anitra Ash-Shakoor, Esq.
CAPITAL JUSTICE ATTORNEYS, LLP
1325 G Street NW
Suite 500
Washington, DC 20005
Tel: (202) 465-0888
Fax: (202) 827-0089
Email: a.ashshakoor@capitaljustice.com
Total Assets: $8,000,050
Total Liabilities: $6,270,000
The petition was signed by Azam Mirza as managing member.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/U67O6WI/1225_Clifton_ST_DE_LLC__dcbke-22-00126__0001.0.pdf?mcid=tGE4TAMA
2111 ALBANY POST: Court OKs Appointment of Stevens as Trustee
-------------------------------------------------------------
Judge Sean H. Lane of the U.S. Bankruptcy Court for the Southern
District of New York approved the United States Trustee's
application to appoint Fred Stevens as Chapter 11 Trustee in the
case of 2111 Albany Post Road Corp.
Judge Lane further ordered that Fred Stevens shall post a $10,000
bond subject to adjustment after discussions with the United States
Trustee.
A copy of the order is available for free at https://bit.ly/3va91vZ
from PacerMonitor.com.
About 2111 Albany Post Road Corp.
2111 Albany Post Road Corp. owns a property in Montrose, N.Y.,
consisting of multi-family home, eight bungalows, an office
building, and an industrial property valued at $3 million.
2111 Albany filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-22207) on April 25,
2022, listing up to $10 million in assets and up to $1 million in
liabilities. Samuel Dawidowicz serves as Subchapter V trustee.
Anne J. Penachio, Esq., at Penachio Malara, LLP is the Debtor's
legal counsel.
26 BOWERY: Exclusivity Period Extended Until Dec. 6
---------------------------------------------------
26 Bowery, LLC and 2 Bowery Holding, LLC obtained a court order
extending their exclusivity periods to file a Chapter 11 plan until
Dec. 6 and solicit acceptances from creditors until Feb. 6 next
year.
The ruling by Judge Martin Glenn of the U.S. Bankruptcy Court for
the Southern District of New York gives the companies more time to
market for sale their real properties in New York.
To date, the companies have retained Rosewood Realty Group to
market the properties and De Lotto & Fajardo, LLP, which serves as
landlord-tenant counsel, to review the leases for the properties
and to determine if any steps should be taken with respect to the
tenants that would maximize the value of the properties.
About 26 Bowery
26 Bowery, LLC is the owner of the real property and improvements
located at 26 Bowery, N.Y. The property is a mixed-use commercial
property located in Manhattan's Chinatown neighborhood.
26 Bowery and its affiliate, 2 Bowery Holding, LLC, filed their
voluntary petitions for Chapter 11 protection (Bankr. S.D.N.Y. Case
Nos. 22-10412 and 22-10413) on March 31, 2022. Both reported as
much as $10 million in both assets and liabilities at the time of
the filing.
Judge Martin Glenn oversees the cases.
A. Mitchell Greene, Esq., at Leech Tishman Robinson Brog PLLC and
De Lotto & Fajardo, LLP serve as the Debtors' bankruptcy counsel
and landlord-tenant counsel, respectively.
37 VENTURES: Unsecureds to Get 100% Plus Interest in Plan
---------------------------------------------------------
37 Ventures, LLC, and Larada Sciences, Inc., submitted a Fourth
Amended Joint Chapter 11 Plan of Reorganization dated July 15,
2022.
Class 2 General Unsecured Claims against 37 Ventures will receive
the full amount of their Allowed Claims, plus Post Petition
Interest, on the Effective Date or as soon as practicable
thereafter. Every Allowed Class 2 Claim as to which the holder of
same has received a Pre-Confirmation Distribution shall be reduced
and adjusted to reflect the effect of all those Pre-Confirmation
Distributions (including Post-Petition Interest not included in
that amount), to such amount as 37 Ventures and the holder may
agree or as ordered by the Court after notice and an opportunity to
be heard. In the event there is a dispute requiring resolution by
Court order, 37 Ventures shall distribute so much as it contends is
required and hold the balance in a disputed claims reserve, for
distribution upon entry of a final and nonappealable order
resolving that dispute to the extent required by such order. Class
2 is impaired.
With respect to Class 6 General Unsecured Claims against Larada,
Not Including Alignment's Deficiency Claim, Larada shall pay in
full Allowed General Unsecured Claims against Larada, Pro Rata:
(i) Quarterly Larada Payments. Larada shall make Quarterly
Pro Rata payments to holders of Class 6 Claims, in the amount of 30
percent of the Remaining Larada Quarterly Amount until such Claims
are paid in full with interest, and
(ii) Final payment. Class 6 Claims shall be paid in full on or
before September 30, 2029 pursuant to section 5.10 hereof or as
otherwise provided in the Plan.
Class 6 is impaired.
Section 5.10 Larada Asset Sale Liquidity Event. If necessary to
ensure timely payment of all amounts it owes under the Plan (other
than payment of Class 7 Claims), Reorganized Larada shall, on or
before Sept. 30, 2029: (1) obtain a loan in an amount necessary to
pay its creditor claims in full ("Plan Loan"), or if such a Plan
Loan cannot be obtained, (2) sell all or substantially all of the
assets used by Larada in the conduct of its business operations
(upon consummation of such a transaction, a "Larada Asset Sale
Liquidity Event"). The proceeds of a Plan Loan or a Larada Asset
Sale Liquidity Event shall be paid (a) to Alignment, for credit to
the remaining balance of its secured claim, (or if applicable to 37
Ventures upon the existence of the 37 Ventures Subrogation Claim)
for credit to the secured portion thereof, (b) next to Class 6
General Unsecured Creditors of Larada on a Pro Rata Basis (or if
applicable to Reorganized 37 Ventures on account of the unsecured
portion of the 37 Ventures Subrogation Claim), (c) next to Subdebt
Holders, on a Pro Rata basis unless their claims have been
Desubordinated, in which case, they shall share Pro Rata with Class
6 General Unsecured Creditors, and (d) finally to holders of
Interests in Larada pursuant to their respective rights and
interests. Larada shall obtain this Court's advance approval of any
transaction that would result in a Plan Loan or a Larada Asset Sale
Liquidity Event; with notice and an opportunity to be heard on any
application for such approval being first given to the then holders
of Claims against Larada.
Distributions under the Plan will be made from the following
sources: the 37 Ventures Net Effective Date Cash, Liquidity Event
Net Proceeds, the Larada Quarterly Payments and, if applicable, the
Larada Asset Sale Liquidity Event net proceeds.
The Plan Confirmation Hearing will be on Aug. 15, 2022 at 10:00
a.m. via ZoomGov (until further notice) in Courtroom 201, 1415
State Street, Santa Barbara, CA 93101.
Attorneys for 37 Ventures, LLC:
Gary E. Klausner, Esq.
Eve H. Karasik, Esq.
Jeffrey S. Kwong, Esq.
LEVENE, NEALE, BENDER, YOO & GOLUBCHIK L.L.P.
2818 La Cienega Avenue
Los Angeles, CA 90034
Telephone: (310) 229-1234
Facsimile: (310) 229-1244
Email: gek@lnbyg.com
ehk@lnbyg.com
jsk@lnbyg.com
Attorneys for Larada Sciences, Inc.:
George Hofmann, Esq.
COHNE KINGHORN, P.C.
111 East Broadway, 11th Floor
Salt Lake City, Utah 84111
Telephone: (801) 363-4300
Email: ghofmann@ck.law
Derrick Talerico, Esq.
David B. Zolkin, Esq.
ZOLKIN TALERICO LLP
12121 Wilshire Blvd., Suite 1120
Los Angeles, CA 90025
Telephone: (424) 500-8557
Email: dtalerico@ztlegal.com
dzolkin@ztlegal.com
A copy of the Plan dated July 15, 2022, is available at
https://bit.ly/3Odv2AC from PacerMonitor.com.
About 37 Ventures
37 Ventures, LLC, a company based in Thousand Oaks, Calif., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Cal. Case No. 21-10261) on March 18, 2021. Its affiliate, Larada
Sciences, Inc., a Utah-based company that owns and operates clinics
dedicated to head lice prevention and treatment, filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 21-10269) on March 19, 2021.
The cases are jointly administered under Case No. 21-10261. Judge
Deborah J. Saltzman oversees the cases.
In their petitions, 37 Ventures and Larada Sciences disclosed
assets of between $1 million and $10 million and liabilities of
between $10 million and $50 million.
Levene Neale Bender Yoo & Brill, LLP serves as 37 Ventures' legal
counsel. Larada Sciences tapped Cohne Kinghorn, PC as bankruptcy
counsel, Zolkin Talerico LLP as local counsel, and Rocky Mountain
Advisory, LLC as financial advisor.
4TH STREET MEDICAL: Unsecureds Will Get 100% of Claims in Plan
--------------------------------------------------------------
4th Street Medical Building, LLC, filed with the U.S. Bankruptcy
Court for the Northern District of California a Combined Chapter 11
Plan of Reorganization and Disclosure Statement dated July 19,
2022.
The Debtor is a California Limited Liability Company. It presently
owns and manages the medical office building located at 1701 4th
Street, Santa Rosa, CA, plus the parking lot at 1623 4th Street,
across Proctor Drive from its building.
The Debtor was engaged, pre-petition, in an arbitration proceeding
against two of its members, Scott Lee, M.D., and Donna Chen. The
members sought to compel the Debtor to repurchase their membership
interests in the Debtor. Weeks before the petition date, the Debtor
received the arbitrator's tentative ruling. The ruling was adverse
to the Debtor. The Debtor filed the petition because it would not
have been able to satisfy the judgment in favor of Dr. Lee and Ms.
Chen.
Class 1 consists of the Poppy Bank Claim. The Debtor will pay the
claim in full from the escrow for the sale of its real properties
located at 1701 4th Street, Santa Rosa, CA, and 1623 4th Street,
Santa Rosa, CA. The Creditor in this class shall retain its
interest in the collateral until paid in full. This secured claim
is not impaired and is not entitled to vote on confirmation of the
Plan.
Class 2(a) consists of General Unsecured Claims. This claim is for
a tenant security deposit. Payment is contingent upon tenant
performing all of its obligations under the subject lease until the
end of the term of the lease and turnover of possession of the
premises. The Debtor retains its rights regarding the security
deposit.
Creditors will receive 100 percent of their allowed claim in 1
installment, due on the 14th day after the Debtor closes the sale
of its real properties located at 1701 4th Street, Santa Rosa, CA,
and 1623 4th Street, Santa Rosa, CA. The deadline for the closing
of the sale is December 31, 2023. This class is impaired and is
entitled to vote on confirmation of the Plan. The Debtor presently
does not dispute any of the claims.
The Class 2(b) claims are for security deposits provided by the
Debtor's current tenants. These creditors' legal, equitable, and
contractual rights remain unchanged. The security deposits will be
returned to these creditors at the end of the terms of the
creditors' leases in the event that and to the extent that under
applicable non-bankruptcy law the Debtor is obligated to do so. The
creditors in Class 2(b) are not impaired and are not entitled to
vote on confirmation of the Plan.
Class 5 consists of (a) all holders of membership interests in the
Debtor, (b) all holders of claims arising from the rescission of a
purchase or sale of a membership interest in the Debtor, (c) all
holders of claims for damages arising from the purchase or sale of
a membership interest in the Debtor, and (d) all holders of claims
for reimbursement or contribution allowed under Section 502 of the
Bankruptcy Code on account of such a claim. Class 5 is impaired
under the Plan.
The members of Class 5 will receive their pro rata portion of the
residue of the Debtor's assets, after payments in full to all other
creditors, distributed based upon the number of membership units
held by the Class 5 members. The distribution will be made within
30 business days after the Debtor closes the sale of its real
properties located at 1701 4th Street, Santa Rosa, CA, and 1623 4th
Street, Santa Rosa, CA. The deadline for the closing of the sale is
December 31, 2023.
On the Effective Date, all property of the estate and interests of
the Debtor will vest in the reorganized Debtor pursuant to §
1141(b) of the Bankruptcy Code free and clear of all claims and
interests except as provided in this Plan.
The obligations to creditors that Debtor undertakes in the
confirmed Plan replace those obligations to creditors that existed
prior to the Effective Date of the Plan. Debtor's obligations under
the confirmed Plan constitute binding contractual promises that, if
not satisfied through performance of the Plan, create a basis for
an action for breach of contract under California law. To the
extent a creditor retains a lien under the Plan, that creditor
retains all rights provided by such lien under applicable
non-Bankruptcy law.
A full-text copy of the Combined Plan and Disclosure Statement
dated July 19, 2022, is available at https://bit.ly/3J0RADw from
PacerMonitor.com at no charge.
Attorney for Debtor:
Steven M. Olson, Esq.
Bluestone Faircloth & Olson, LLP
1825 4th Street
Santa Rosa, CA 95404
Telephone: (707) 526-4250
Facsimile: (707) 526-0347
Email: steve@bfolegal.com
About 4th Street Medical
Building
4th Street Medical Building, LLC, a single asset real estate,
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. N.D. Cal. Case No. 22-10124) on March 28, 2022. In the
petition signed by Ruth Skidmore, chair of managers, the Debtor
disclosed up to $10 million in both assets and liabilities.
5AAB TRANSPORT: Sept. 8 Disclosure Statement Hearing Set
--------------------------------------------------------
Judge John E. Hoffman, Jr., of the U.S. Bankruptcy Court for the
Southern District of Ohio has entered an order within which Sept.
8, 2022 at 10:00 a.m. is the hearing on approval of the Disclosure
Statement of 5AAB Transport, LLC, et al.
In addition, Sept. 1, 2022, is fixed as the last day to file and
serve objections to the Disclosure Statement.
A copy of the order dated July 18, 2022, is available at
https://bit.ly/3J3k9R4 from PacerMonitor.com at no charge.
About 5AAB Transport
SJS Transport, LLC, Heavy Diesel Service, LLC, and 5AAB Holding,
LLC also simultaneously filed for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ohio Case Lead Case
No. 21-52150) on June 21, 2021. 5AAB Holding, LLC, also filed a
Chapter 11 petition but did not elect to proceed under Subchapter
V.
Judge John E. Hoffman, Jr., oversees the cases.
In its petition, 5AAB Transport disclosed total assets of up to
$50,000 and total liabilities of up to $10 million. Each of its
affiliates reported total assets of up to $500,000 and total debt
of up to $10 million at the time of the filing. Navdeep Sidhu,
member, signed the petitions.
The Debtor tapped Allen Stovall Neuman & Ashton, LLP as bankruptcy
counsel and RE/MAX Town Center Commercial as real estate broker.
A10 BRIDGE 2020-C: DBRS Hikes Class G Notes Rating to B(high)
-------------------------------------------------------------
DBRS Limited upgraded the ratings on the following classes of notes
issued by A10 Bridge Asset Financing 2020-C, LLC:
-- Class B Notes to AAA (sf) from AA (low) (sf)
-- Class C Notes to A (high) (sf) from A (low) (sf)
-- Class D Notes to A (low) (sf) from BBB (high) (sf)
-- Class E Notes to BBB (sf) from BBB (low) (sf)
-- Class F Notes to BB (high) (sf) from BB (sf)
-- Class G Notes to B (high) (sf) from B (sf)
In addition, DBRS Morningstar confirmed the rating on the following
class of notes:
-- Class A Notes at AAA (sf)
All trends are Stable.
The rating upgrades reflect the increased credit support to the
bonds as a result of loan repayment and scheduled loan amortization
as there has been collateral reduction of 50.5% since issuance,
according to the June 2022 remittance. In conjunction with this
press release, DBRS Morningstar has published a Surveillance
Performance Update report with in-depth analysis and credit metrics
for the transaction and with business plan updates on select loans.
For access to this report, please click on the link under Related
Documents below or contact us at info@dbrsmorningstar.com.
The initial collateral consisted of 58 loans secured by
cash-flowing assets, many of which are in a period of transition
with plans to stabilize and improve the asset value. The pool had
an initial trust balance of $398.2 million comprising loan assets
and $10.8 million held in reserve account to fund future funding
participations.
As of the June 2022 remittance report, 20 of the original 58 loans
remain in the pool. Nine of the loans are cross-collateralized and
cross-defaulted into three distinct portfolios with DBRS
Morningstar analyzing the transaction as a pool with 14 loans. The
current trust balance of $197.9 million consists of an outstanding
aggregate loan balance of $192.9 million with $5.0 million of held
in reserve, representing a collateral reduction of 50.5% since
issuance. Approximately $13.0 million of future funding has been
released to date on the outstanding loans in the pool to aid in
business plan completion, with $9.9 million of future funding
outstanding. No loans are in special servicing and five loans,
representing 23.2% of the aggregate loan balance, are on the
servicer's watchlist.
The transaction consists of recently originated loans and loans
that were originated in 2017 or earlier. There is the potential for
adverse selection in the transaction as properties secured by
seasoned loans have generally needed more time than originally
projected to stabilize; however, these loans also generally have
moderate leverage based on updated appraised values ordered prior
to the securitization of the subject transaction in September 2020.
As of the June 2022 reporting, the transaction had a
weighted-average as-is loan-to-value ratio of 55.7%.
Notes: All figures are in U.S. dollars unless otherwise noted.
AKORN OPERATING: S&P Affirms 'CCC+' ICR, Outlook Stable
-------------------------------------------------------
S&P Global Ratings affirmed its 'CCC+' issuer credit rating on
pharmaceutical manufacturer Akorn Operating Co. LLC.
The outlook remains stable, reflecting S&P's expectation for
adjusted debt to EBITDA sustained above 5x and moderate free
operating cash flow (FOCF).
Following the asset sale, Akorn is now a pure-play generic
pharmaceutical manufacturer. The sale of the branded business
closed in March and followed the sale of the over-the-counter
consumer health segment (Akorn Consumer Health; ACH) last year. The
remaining company is Akorn's generic business, which S&P estimates
has revenues of about $420 million, which includes the impact of
the Somerset plant decommissioning.
S&P said, "We expect Akorn will use proceeds from the sale largely
to pay down outstanding debt. Akorn's credit agreement requires
that proceeds from asset sales be used for debt repayment or
reinvestment into the business within 12 months. We assume it will
use a majority of the about $134 million to prepay the term loan,
which had $272 million outstanding on Dec. 31, 2021. This is
consistent with Akorn's use of proceeds from the ACH sale, which
were partially used to repay $100 million of the term loan in
December. We assume proceeds not used for debt paydown will be used
for increased reinvestment in the business.
"We expect that despite expected debt paydown, adjusted debt to
EBITDA will remain above 5x and FOCF negative.We forecast adjusted
debt to EBITDA above 10x at year-end 2022, reflecting the impact of
significant U.S. Food and Drug Administration (FDA) remediation and
other one-time costs. As they further wind down in 2023, we expect
adjusted debt to EBITDA to lower to the mid-5x area. We also expect
Akorn will continue to invest heavily in its plants, with the
resultant capex keeping FOCF below break-even.
"Our business risk assessment of vulnerable continues to reflect
our view that Akorn operates with limited scale and scope in the
highly competitive generic pharmaceutical market. It competes
against much larger participants with significantly greater
financial resources and other smaller generic drug manufacturers.
The company produces drugs that are harder to manufacture than oral
solids, such as injectables, topicals, and inhalants. Still,
pricing pressure on generic drugs will limit overall organic growth
rates. Akorn's margins have previously been depressed because two
of its facilities could not produce new products until it received
FDA clearance. The Decatur facility is now under voluntary action
indicated status, which will allow new product approvals to
resume.
"The stable outlook on Akorn reflects our expectation for a
deflationary, but a more stable generic price environment and a
decline in sizable one-time costs. It also reflects our expectation
for high adjusted leverage above 5x and cash outflows over the next
12 months.
"We could consider a lower rating if it is difficult for Akorn to
turn around operations over the next 12 months, increasing cash
outflows. This could occur because of delays at the Decatur, Ill.
facility or disruptions due to the decommissioning of the Somerset,
N.J. facility, impacting new product approvals and constraining
revenue growth.
"We could consider a higher rating if Akorn outperforms our base
case over the next 12 months, supporting free cash generation."
ESG credit indicators: E-2, S-3, G-3
S&P said, "Social and governance factors are moderately negative
considerations in our credit rating analysis of Akorn. It received
an FDA warning letter related to violations of procedures to
prevent drug contamination at its Decatur manufacturing plant and
faced data integrity allegations, factors that contributed to
credit deterioration and an eventual default. The company believes
these issues are now resolved, with the Somerset plant set for
decommissioning and the Decatur facility now under voluntary action
indicated status, however further delays could occur if the FDA
observations are not addressed."
ALL YEAR HOLDINGS: Amends Disclosures to Address Objection
----------------------------------------------------------
All Year Holdings Limited filed a reply in support of Disclosure
Statement and Solicitation Procedures Motion and in response to
Limited Objection and reservation of rights of Zelig Weiss.
The Debtor is pleased to report that it received only one formal
response to the Disclosure Statement and the Solicitation
Procedures Motion, and that was the Limited Objection filed by
Weiss. The Limited Objection requests the Debtor modify the
Disclosure Statement to include additional information on several
topics relating to, among other things, the William Vale hotel, the
Taz Claim, and the Sponsor. The Limited Objection does not
otherwise object to approval of the Disclosure Statement or any of
the other relief sought in the Solicitation Procedures Motion.
Contemporaneously hereto, the Debtor is filing an amended version
of the Disclosure Statement incorporating the proposed disclosures
to address the Limited Objection as well as several informal
comments received from counsel for the United States Trustee (the
"U.S. Trustee").
In addition to the Limited Objection, Weiss separately filed an
Adversary Proceeding in this Chapter 11 Case regarding the William
Vale hotel. The Adversary Proceeding is the latest in a series of
William Vale-related disputes fomented by Weiss. For example, Weiss
has been engaged in protracted litigation in New York State Supreme
Court, Commercial Division, with certain non-debtor subsidiaries of
the Debtor stemming from Weiss's failure to make payments due under
the ground lease for the William Vale hotel and certain other
defaults. Weiss also previously submitted bids to purchase the
Debtor's indirect interest in the William Vale hotel and the Series
C Noteholders' right, title, and interest under that certain loan
and mortgage on the William Vale property (the "Loan and
Mortgage"), which were rejected in favor of the offers submitted by
the Sponsor.
Weiss also previously filed in this Chapter 11 Case both a motion
to lift the automatic stay (the "Lift Stay Motion"), which was
thereafter withdrawn, as well as an objection to the Debtor's
debtor-in-possession financing motion [ECF No. 106] (the "DIP
Objection"), which was also withdrawn following the filing of the
Debtor's reply to that objection. In connection with the filing of
his prior Lift Stay Motion, Weiss threatened to commence further
litigation in New York State Supreme Court against YG WV LLC ("YG
WV") and Wythe Berry Member LLC ("Wythe Berry Member") to prevent
them from engaging in any transaction involving the transfer of YG
WV's interest in Wythe Berry Member and the William Vale hotel
without Weiss's consent. Representatives of the Debtor previously
relayed to Weiss's prior counsel that they did not believe his
threatened state court claims had any merit, and the Debtor was
willing to stipulate to the relief requested in Weiss's Lift Stay
Motion. However, as noted above, Weiss chose instead to withdraw
the Lift Stay Motion without explanation.
Now, Weiss has commenced the Adversary Proceeding and filed a Proof
of Claim against the Debtor. Given that the allegations and claims
in the Complaint are pertinent to the Limited Objection, and
constitute an attempt to interfere with the Plan, it is appropriate
for the Debtor to provide the Court with the relevant background
and the Debtor's views concerning Weiss's latest litigation ploy.
Most importantly, the Debtor does not believe that Weiss's claims
or the Adversary Proceeding can or should delay or disrupt
confirmation of the Plan. For the reasons described below, the
claims are groundless and, to the extent any exist to litigate, the
claims can be addressed post-confirmation.
It is undisputed that each of Weiss and YG WV, the Debtor's wholly
owned subsidiary, hold a 50% interest in Wythe Berry Member, which
in turn indirectly owns, through Wythe Berry Fee Owner LLC, the
William Vale hotel. The Complaint is based on an alleged violation
of an assignment restriction in the Wythe Berry Member operating
agreement (the "Member Operating Agreement"), to which Weiss and YG
WV are parties. That provision prohibits either member from
assigning without consent their respective 50% interest in Wythe
Berry Member. Weiss cites no provision of the Plan pursuant to
which YG WV's interest in Wythe Berry Member will be assigned and,
in fact, there is no such provision in the Plan.
Not to be deterred, Weiss asserts that the Debtor is somehow bound
by the anti-assignment restriction in the Member Operating
Agreement, an assertion that contradicts the plain and unambiguous
terms of the agreement. In any event, Weiss again cites no Plan
provision in which the Debtor will assign anything, including its
direct interest in YG WV or its indirect interest in Wythe Berry
Member, because no such provision exists. Rather, on the Effective
Date, the Sponsor will hold all of the new equity interests in the
Reorganized Debtor, and the Reorganized Debtor will continue to
hold all of the Debtor's interests in its non-debtor subsidiaries,
including YG WV and its 50% interest in Wythe Berry Member, other
than Excluded Assets under the Plan. Accordingly, Weiss has no
right of consent and no basis whatsoever to object to or interfere
with the Plan.
Finally, Weiss asserts that, although the Debtor retains an
economic interest, he is the sole member of Wythe Berry Member as a
result of the Debtor's bankruptcy filing. This too is groundless
both under applicable New York state and federal bankruptcy law.
The Debtor will not take the time now to correct every misstatement
and mischaracterization set forth in the Limited Objection and the
Complaint regarding Weiss's history with the Debtor or the
circumstances relating to the selection of the Sponsor's bids with
respect to the William Vale hotel, but a few issues must be
addressed now:
* The filing of the Adversary Proceeding and the Complaint have
no impact on confirmation or consummation of the Plan. Despite
Weiss's statements to the contrary in the Limited Objection, the
Debtor believes the filing of the Complaint has no impact on the
Debtor's timing or ability to confirm and consummate the Plan and
the Investment Agreement in accordance with the schedule set forth
in the Solicitation Procedures Motion. The Debtor believes that
consummation of the William Vale Purchase and the sale of the
Debtor's interest in YG WV are not conditions precedent to
confirmation of the Plan or the occurrence of the Effective Date.
In addition, the Debtor believes that the Sponsor does not have the
right to terminate the Investment Agreement if the relevant parties
fail to close on the MLPSA or if the Debtor is unable to deliver
its interest in YG WV until after the Effective Date or at all. The
Sponsor reserves all of its rights with respect to the foregoing.
* Weiss's offer to purchase YG WV's indirect interest in the
William Vale hotel was not eleven (11) times greater than the
Sponsor. In fact, Weiss's offer with respect to the William Vale
hotel was not greater than the Sponsor's in any respect. Both the
Sponsor and Weiss offered to pay the Debtor's estate $2.2 million
cash in connection with the William Vale transaction. However, the
added benefit of the Sponsor's offer to purchase the interests in
the William Vale hotel was that, because the Noteholders' agreed to
sell their interests in the Loan and Mortgage to the Sponsor, a
transaction with the Sponsor will result in a significant reduction
of the Series C Notes Claims against the estate, thereby materially
increasing recoveries to the other holders of Allowed Class 4
Remaining Unsecured Claims, the only class of impaired creditors
entitled to vote under the Plan. Disclosure Statement, Article
IV.A.9.
* The Debtor's actions with respect to the marketing and sale
of the William Vale have at all times been proper and designed to
maximize value for the estate. Notwithstanding Weiss's assertions
to the contrary, the Debtor has done nothing inappropriate with
respect to its efforts to sell its interests and consummate a
transaction with respect to the William Vale hotel. A process was
run to procure and select the highest and best offers with respect
to the William Vale hotel. After engaging in discussions with
various parties for approximately one year, the Notes Trustee, on
behalf of the Series C Noteholders, considered two final offers to
purchase the Series C Noteholders' rights, title, and interest in
the Loan and Mortgage. Weiss was an active participant in that
process but ultimately was not the successful bidder and, by filing
the Complaint, Weiss now seeks to prevent the Debtor and other
parties from moving forward with their agreed upon transactions.
* The Taz Claim is not being allowed under the Plan. Weiss's
incorrect statements notwithstanding, the Taz Claim is not being
allowed under the Plan; rather, it will ride through the Chapter 11
Case unimpaired along with any other potential Class 3 General
Unsecured Claims that may exist (although the Debtor is not aware
of any), subject to any available setoffs and defenses. The Debtor
has requested and is reviewing documents in connection with the Taz
Claim and is engaged in a continued dialogue regarding the claim
with representatives of Taz Partners LLC ("Taz Partners"). The
allowance of the Taz Claim, however, is not relevant to, and has no
impact on, recoveries to any other creditors under the Plan. As set
forth in the Disclosure Statement and the Plan, following the
Effective Date, any repayment on account of the Taz Claim will be
subordinated and will not be paid until the New Notes are repaid in
full and the Sponsor's contribution under the Plan to the holders
of Class 4 Remaining Unsecured Claims is satisfied in full.
* To the best of the Debtor's knowledge and belief, there is
no relationship between the Sole Shareholder and the Sponsor. The
Sponsor has confirmed to the Debtor in writing that, other than the
Taz Confession of Judgement between Taz Partners, an affiliate of
the Sponsor, and the Sole Shareholder, there is no relationship
between the Sole Shareholder and the Sponsor.
As his newly asserted claims can and should be dismissed out of
hand, Weiss's only connection to the Chapter 11 Case is that he is
a jilted and unsuccessful bidder with respect the William Vale
hotel. However, in hopes of consensually resolving the Limited
Objection, the Debtor has added additional information and
disclosures to the Amended Disclosure Statement as set forth below,
which were discussed with Weiss's counsel prior to filing this
Reply.
With the inclusion of these additional disclosures and other
revisions, the Debtor respectfully requests the Court approve the
Amended Disclosure Statement and the Solicitation Procedures
Motion.
Attorneys for the Debtor:
Matthew P. Goren, Esq.
Gary T. Holtzer, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
About All Year Holdings Limited
All Year Holdings Limited is a real estate development company
founded by American real estate developer Yoel Goldman. It operates
as a holding company, which, through its direct and indirect
subsidiaries, focuses on the development, construction,
acquisition, leasing and management of residential and commercial
income producing properties in Brooklyn, N.Y. The company's
portfolio includes 1,648 residential units and 69 commercial units
in Bushwick, Williamsburg, and Bedford-Stuyvesant.
All Year Holdings sought Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 21-12051) on Dec. 14, 2021. At the time of the
filing, the Debtor listed $1 billion to $10 billion in assets and
liabilities.
Judge Martin Glenn oversees the case.
Weil, Gotshal & Manges LLP, led by Matthew Paul Goren, Esq., is the
Debtor's bankruptcy counsel while Koffsky Schwalb, LLC and Bartov &
Co. serve as special counsels. Donlin Recano & Company, Inc. Is the
Debtor's administrative agent.
ALL YEAR HOLDINGS: General Unsecureds Unimpaired in Plan
--------------------------------------------------------
All Year Holdings Limited submitted an Amended Disclosure Statement
explaining its Chapter 11 Plan.
All Year Holdings Limited, a private company limited by shares
incorporated in the British Virgin Islands, as debtor and debtor in
possession (the "Debtor" and, together with its direct and indirect
non-debtor subsidiaries, the "Company") in the above-captioned
chapter 11 case (the "Chapter 11 Case"), submits this Disclosure
Statement, pursuant to section 1125 of the Bankruptcy Code, in
connection with the solicitation of votes to accept or reject the
Chapter 11 Plan of Reorganization of All Year Holdings Limited,
dated May 31, 2022 (as may be amended, modified, or supplemented
from time to time, and together with all schedules and exhibits
thereto, the "Plan"). A copy of the Plan is attached hereto as
Exhibit A.
On Dec. 14, 2021, the Debtor commenced a voluntary case under
chapter 11 of the Bankruptcy Code in the United States Bankruptcy
Court for the Southern District of New York (the "Bankruptcy
Court"). As described in further detail below, on December 16,
2021, the Debtor filed an application under the laws of the British
Virgin Islands with the Eastern Caribbean Supreme Court in the High
Court of Justice, Commercial Division Virgin Islands (the "BVI
Court") seeking the appointment of Paul Pretlove and Charlotte
Caulfield of Kalo (BVI) Limited as joint provisional liquidators
(the "JPLs" and, the appointment of the JPLs, the "JPL
Appointment") under the applicable provisions of the BVI Insolvency
Act 2003 (the "BVI Proceeding"). The BVI Court entered an order
appointing the JPLs on December 20, 2021 (the "JPL Order"). In
addition, on April 14, 2022, with the consent of the JPLs and the
approval of the BVI Court, the Debtor commenced a proceeding in the
District Court of Tel Aviv – Yafo (the "Israeli Court") for
recognition of the Chapter 11 Case as a foreign main proceeding
under the applicable provisions of Chapter I, Part C of the
Insolvency and Rehabilitation Law 5778-2018 (the "Israeli
Recognition Proceeding"). The Israeli Court entered an order
recognizing the Chapter 11 Case on May 4, 2022.
Following a robust sales and marketing effort, the Debtor entered
into an Investment Agreement, dated March 11, 2022 (as amended on
April 21, 2022 and May 27, 2022, and as may be further amended,
modified, or supplemented from time to time, and together with all
schedules and exhibits thereto, "Investment Agreement"), with
Paragraph Partners LLC (the "Sponsor"), among others, to implement
a comprehensive restructuring of the Debtor and present a path
forward for the Debtor's successful emergence from chapter 11. The
Investment Agreement is the cornerstone of, and is to be
implemented pursuant to, the Plan. A copy of the Investment
Agreement is annexed hereto as Exhibit B.
The Investment Agreement provides that, in exchange for one hundred
percent of the equity of the reorganized Debtor (the "Reorganized
Debtor"), the Sponsor will contribute $60,000,000 to the Debtor,
which is comprised of (a) $40,000,000 in cash and (b) promissory
notes in the aggregate amount of $20,000,000. As set forth in
further detail in Article IV below, the amount of (i) the
promissory notes will increase to $22,000,000 and (ii) the cash
contribution may increase by an additional $200,000, if the
Sponsor, or an affiliate of the Sponsor, consummates a transaction
involving the William Vale hotel. Importantly, as part of the
Investment Agreement, the Sponsor has agreed to assume all
unsecured claims against the Debtor other than the Claims of
holders of the Debtor's various series of notes (the "Notes" and
the holders thereof, "Noteholders") and certain other discrete
categories of Claims set forth therein and described below. The
Notes Trustee is a party to certain provisions of the Investment
Agreement and has preliminarily consented to the Debtor's entry
into the Investment Agreement.
The rights of holders of any Class 1 Priority Non-Tax Claims, Class
2 Other Secured Claims, and Class 3 General Unsecured Claims are
Unimpaired under the Plan. Except to the extent a holder of any
Unimpaired Claims is a Releasing Party, the holders of Unimpaired
Claims are not waiving or releasing any Claims against the Debtor
or the other Released Parties, including, without limitation, the
right (if any) to the payment of interest in accordance with, or as
provided under, any documents relevant to such Unimpaired Claims or
otherwise applicable law. The holders of Class 5 Subordinated
Securities Claims and Class 6 Equity Interests are not entitled to
receive or retain any property under the Plan and are, therefore,
deemed to reject and not entitled to vote on the Plan.
Accordingly, only holders of Class 4 Remaining Unsecured Claims are
Impaired and entitled to vote on the Plan. Class 4 is comprised of
the holders of any Noteholder Claims, Subsidiary Plan Administrator
Claims, and Non-Securities Indemnity Claims. The Plan provides for
material recoveries to the holders of Allowed Claims in Class 4
(Remaining Unsecured Claims) in the form of Cash, New Notes, and
any potential recoveries on account of certain Causes of Action
that have been preserved for the benefit of holders of Allowed
Class 4 Claims. The transactions contemplated under the Investment
Agreement will maximize the value of the Debtor's estate and
provide the basis for the expeditious conclusion of the Chapter 11
Case.
The Debtor commenced the Israeli Recognition Proceeding, with the
consent of the JPLs and the approval of the BVI Court, in
furtherance of its efforts to achieve a global resolution of Claims
against, and Interests in, the Debtor, including with respect to
the Debtor's various series of Israeli-issued Notes. Because the
Notes were issued by the Debtor on the Tel Aviv Stock Exchange
("TASE"), the Debtor is obligated to comply with certain reporting
requirements under applicable Israeli law, including, without
limitation, reporting obligations related to insolvency
proceedings, debt settlements, mergers or acquisitions, and company
actions outside of the ordinary course of business, and is subject
to the other Israeli laws applicable to reporting companies,
including the Israeli Insolvency and Financial Rehabilitation Law
5778-2018. The Debtor has been advised that, under the applicable
provisions of the Insolvency and Financial Rehabilitation Law
5778-2018, a company must seek approval of the applicable Israeli
court in order to present a debt settlement or plan of
reorganization to its creditors for approval. The Debtor further
understands that the Insolvency and Financial Rehabilitation Law
requires any debt settlement or plan of reorganization be approved
by the company's creditors at a meeting(s) of such creditors
convened in the manner approved by the Israeli court. Accordingly,
as the Debtor is a reporting company in Israel, the Debtor
determined that it was necessary to commence the Israeli
Recognition Proceeding to obtain court approval to convene a
Noteholder meeting to vote on the Plan and the Investment Agreement
(the "Noteholder Meeting") to comply with applicable Israeli
securities laws. Following confirmation of the Plan, the Debtor
intends to also seek recognition of the Plan and the Confirmation
Order in the Israeli Recognition Proceeding.
In addition, the Debtor is seeking authority from the BVI Court to
implement a plan of arrangement (the "BVI Plan of Arrangement")
following which, and subject to the occurrence of the Plan
Effective Date, among other things, (i) the existing Equity
Interests in the Debtor will be cancelled, and (ii) one hundred
percent of the equity in the Reorganized Debtor will be held by the
Sponsor. A hearing before the BVI Court on the Debtor's application
to approve the BVI Plan of Arrangement is scheduled for July 21,
2022. Approval of the terms of the Plan by each of the Israeli
Court and the BVI Court are conditions to closing under the
Investment Agreement.
In developing the Plan, the Debtor gave due consideration to
various exit alternatives and engaged in significant discussions
and negotiations with representatives of the Noteholders, the Notes
Trustee, and other parties in interest. The Debtor also conducted a
careful review of the operations of its direct and indirect
non-debtor subsidiaries, its prospects as an ongoing business,
financial projections developed by management, and estimated
recoveries in a liquidation scenario, and concluded that recoveries
to the Debtor's creditors will be maximized under the Plan. The
Debtor believes that its business and assets have significant value
that would not be realized in a liquidation, either in whole or in
substantial part. Consistent with the liquidation analysis,
appraisals, and other analyses prepared by the Debtor with the
assistance of its advisors, the value of the Debtor is
substantially greater as a going concern than in a liquidation. The
Debtor believes that any alternative to confirmation of the Plan
would result in significant delays, litigation, and additional
costs, which would ultimately lower the recoveries for all holders
of Allowed Claims.
Under the Plan, Class 3 General Unsecured Claims, except to the
extent that a holder of a General Unsecured Claim against the
Debtor agrees to less favorable treatment, the legal, equitable,
and contractual rights of the holders of Allowed General Unsecured
Claims are unaltered by the Plan. On and after the Effective Date,
the Reorganized Debtor shall continue to satisfy, dispute, pursue,
or otherwise reconcile General Unsecured Claims in the ordinary
course of business. The Debtor is not aware of any General
Unsecured Claims that may be asserted against it. However, the
Sponsor's determination to assume any such Claims pursuant to the
Investment Agreement will allow the Debtor to avoid the time and
expense associated with fixing and prosecuting a bar date for
filing proofs of Claim and undertaking a Claims reconciliation
process. Given this, the Debtor has established a separate class
for the General Unsecured Claims to the extent any such Claims are
asserted against the Debtor. To the extent any General Unsecured
Claims are asserted, the Reorganized Debtor shall retain the rights
to any defenses and setoffs against any General Unsecured Claims
available to the Debtor. Creditors will recover 100% of their
claims. Class 3 is unimpaired.
Class 4 Remaining Unsecured Claims will each receive (i) on the
Effective Date, from the Disbursing Agent (on behalf of the
Debtor), its Pro Rata Share of the Class 4 ED Distribution, (ii) in
the event the William Vale Purchase occurs subsequent to the
Effective Date, from the Disbursing Agent (on behalf of the
Debtor), its Pro Rata Share of any additional New Notes issued, and
(iii) on such other date(s) as determined from time to time by the
Plan Administrator, from Wind-Down Co, the amounts recovered, if
any, from the Excluded Assets (including, but without limitation,
from the prosecution of Avoidance Actions and other Causes of
Action) and any remaining Wind Down Cash Funding. Notwithstanding
anything to the contrary in the Plan, the Non-Securities Indemnity
Claims shall be estimated at zero dollars ($0) for all purposes
under the Plan, including for purposes of distributions under the
Plan. The Debtor will file a motion to estimate or objection to
such Non-Securities Indemnity Claims on proper notice to applicable
parties. The right to the foregoing distributions shall be
nontransferable except by will, intestate succession, or operation
of law. Creditors will recover 11-17% of their claims. Class 4 is
impaired.
On the Effective Date, in accordance with the Plan and the
Investment Agreement, subject to the satisfaction or waiver of all
applicable conditions under the terms thereof, the Sponsor shall:
(i) provide the Sponsor Contribution; and (ii) be the sole
shareholder of the Reorganized Debtor, and on the Effective Date,
shall hold 100% of the NewCo Shares free and clear of all Claims
and Liens.
On the Effective Date, in accordance with the Plan and the
Investment Agreement, subject to the satisfaction or waiver of all
applicable conditions under the terms thereof, the Disbursing Agent
(on behalf of the Debtor) shall distribute Pro Rata the Class 4 ED
Distribution to (i) the holders of Remaining Unsecured Claims that
are Allowed as of the Effective Date, and (ii) the Disbursing
Agent, to be held in the Class 4 Disputed Claims Reserve, on behalf
of holders of Disputed Remaining Unsecured Claims.
On the Effective Date, in accordance with the Plan and the
Investment Agreement, subject to the satisfaction or waiver of all
applicable conditions under the terms thereof, a single limited
liability company unit representing a non-economic 100% ownership
interest in Wind-Down Co shall be issued to the Plan Administrator.
The Pro Rata Share of the Class 4 ED Distribution allocated to
Disputed Remaining Unsecured Claims shall be held in one or more
segregated accounts in the Class 4 Disputed Claims Reserve until
such claims are Allowed or Disallowed, at which time the applicable
portion of the Class 4 ED Distribution (including any earnings
thereon, net of any allocable costs and expenses of the Class 4
Disputed Claims Reserve) shall be distributed to such holders of
newly Allowed Remaining Unsecured Claims or to the holders of
Remaining Unsecured Claims that were previously Allowed, as the
case may be.
Following the distribution of all amounts from the Class 4 Disputed
Claims Reserve, the liquidation of the Excluded Assets (including
the completion of the prosecution of any Avoidance Actions and
other Causes of Action held by Wind-Down Co), and the distribution
of the proceeds therefrom and any remaining Wind Down Cash Funding
in accordance with the Plan (including the payment of all costs and
expenses and other liabilities of Wind-Down Co), Wind-Down Co shall
be dissolved and the single unit shall be deemed cancelled and of
no further force and effect. The Plan Administrator shall have no
right to any distribution of property or value from Wind-Down Co by
reason of its ownership of the single limited liability company
unit.
In addition to the foregoing, in the event of a William Vale
Purchase on or before December 31, 2022, the Sponsor shall pay to
Wind-Down Co the WV Shares Consideration on the later date to occur
of the Effective Date and the WV Sale Date.
The terms of the Investment Agreement are fully incorporated into
the Plan and shall be binding and enforceable against the parties
thereto, including, without limitation, the releases and
indemnities set forth in Section 7.02(b) of the Investment
Agreement.
Neither the Reorganized Debtor nor the Sponsor shall have any
liability for (i) Fee Claims, (ii) any amounts owed to any current
officers or current directors of the Debtor or those serving in
similar capacities for the period up to and including the Effective
Date, or (iii) any payment to holders of Class 4 Remaining
Unsecured Claims or any Subordinated Securities Claim.
On the Effective Date, the Excluded Assets and the Wind Down Cash
Funding shall be transferred to Wind-Down Co. The Sponsor and/or
the Reorganized Debtor shall not bear any cost and expense and/or
liability related to the administration of Wind-Down Co, including
costs owed to the Plan Administrator and under Section 5.3(f) of
the Plan.
On the Effective Date, the Notes Trustee shall appoint the Plan
Administrator for the purpose of conducting the Wind Down of
Wind-Down Co on terms and conditions set forth in the Plan
Administration Agreement. The retention of the Plan Administrator
shall be pursuant to an agreement approved by the Notes Trustee and
filed as part of the Plan Supplement. Upon the conclusion of the
Wind Down in accordance with Section 5.1(d) of the Plan, Wind-Down
Co shall be dissolved by the Plan Administrator. The Plan
Administrator shall act for Wind-Down Co in the same capacity and
shall have the same rights and powers as are applicable to a
manager, managing member, board of managers, board of directors or
equivalent governing body, as applicable, and to officers, subject
to the provisions in the Plan (and all certificates of formation
and limited liability company agreements and certificates of
incorporation or by-laws, or equivalent governing documents and all
other related documents (including membership agreements,
stockholders agreements, or similar instruments), as applicable,
are deemed amended pursuant to the Plan to permit and authorize the
same) and the Plan Administrator will be a representative of
Wind-Down Co for purposes of section 1123(b)(3) of the Bankruptcy
Code. From and after the Effective Date, the Plan Administrator
shall be the sole representative of and shall act for Wind-Down Co
with the authority set forth in Section 5.3 of the Plan and the
Plan Administration Agreement. The Plan Administrator shall be
compensated and reimbursed for reasonable costs and expenses as set
forth in the Plan Administration Agreement included in the Plan
Supplement.
The Plan Administrator shall have the authority and right on behalf
of Wind-Down Co, subject to the express terms of the Plan
Administration Agreement but without the need for Bankruptcy Court
approval (unless otherwise indicated), to carry out and implement
all provisions of the Plan, including, without limitation, to: (i)
implement the Wind Down as expeditiously as reasonably possible and
administer the liquidation, dissolution, sale and/or abandonment or
similar action of the Excluded Assets after the Effective Date in
accordance with the Wind Down Budget; (ii) except to the extent
Claims have been previously Allowed or are Unimpaired, control and
effectuate the Claims reconciliation process; (iii) make
distributions to holders of Allowed Claims in accordance with the
Plan; (iv) retain and compensate professionals to assist in
performing its duties under the Plan; (v) complete and file, as
necessary, all final or otherwise required federal, state, and
local tax returns and other tax reports for Wind-Down Co; (vi)
represent the interests of Wind-Down Co before any taxing authority
in all matters including, without limitations, any action, suit,
proceeding, appeal or audit; and (vii) appoint and compensate an
agent to effectuate distributions under the Plan with the consent
of the Notes Trustee; and (viii) perform other duties and functions
that are consistent with the implementation of the Plan or required
by the Bankruptcy Code.
The Plan Supplement shall include the Wind Down Budget and, on the
Effective Date, the Plan Administrator shall retain within
Wind-Down Co funds sufficient to make the payments contemplated in
the Wind Down Budget.
Wind-Down Co shall indemnify and hold harmless the Plan
Administrator solely in its capacity as such and, where the
Disbursing Agent is the Plan Administrator or an entity designated
by the Plan Administrator, the Disbursing Agent solely in its
capacity as such for any losses incurred in such capacity, except
to the extent such losses were the result of the Plan
Administrator's or Disbursing Agent's (as the case may be) gross
negligence, willful misconduct, or criminal conduct.
The Plan Administrator shall effectuate the Wind Down in accordance
with the Wind Down Budget. The Plan Administrator shall pay any and
all reasonable and documented costs and expenses incurred in
connection with the Wind Down, including the reasonable fees and
expenses of its professionals and the reasonable fees and expenses
of the Debtor's professionals incurred for services rendered to the
Debtor and the Estate following the Effective Date, without further
order of the Bankruptcy Court, provided that such amounts are
consistent with the Wind Down Budget.
Subject to any necessary approvals in the BVI Proceeding, all
matters provided for in the Plan involving the corporate structure
of the Debtor, the Reorganized Debtor, or Wind-Down Co, to the
extent applicable, or any corporate or related action required by
the Debtor, the Reorganized Debtor, or Wind-Down Co, in connection
herewith shall be deemed to have occurred and shall be in effect,
without any requirement of further action by the JPLs, the
Authorized Managers, or the stockholders, members, or directors or
managers of the Debtor, the Reorganized Debtor, or Wind-Down Co,
and with like effect as though such action had been taken
unanimously by the stockholders, members, directors, managers, or
officers, as applicable, of the Debtor, the Reorganized Debtor, or
Wind-Down Co. The Plan Administrator shall be authorized to file on
behalf of Wind-Down Co, a certificate of dissolution and any and
all other corporate and company documents necessary to effectuate
the Wind Down without further action under applicable law,
regulation, order, or rule, including any action by the
stockholders, members, the board of directors, or board of
directors or similar governing body of Wind-Down Co.
The deadlines with respect to the Chapter 11 Case and the
proceedings in Israel and the BVI are:
* The Estimated Date for Obtaining BVI Court Approval of Plan of
Arrangement will be on July 29, 2022.
* The Plan Supplement Filing Deadline will be on September 12,
2022.
* The Plan Voting Deadline will be on September 19, 2022 at 5:00
p.m. (Eastern Time).
* The Plan Confirmation Objection Deadline will be on September
19, 2022 at 5:00 p.m. (Eastern Time).
* The Reply Deadline for Plan Objections will be on September
29, 2022 at 5:00 p.m. (Eastern Time).
* The Plan Confirmation Hearing will be on October 6, 2022 at 10
a.m. (Eastern Time).
* The Estimated Date for Obtaining Israeli Court Recognition of
Plan and Confirmation Order will be on October 13, 2022.
* The BVI Hearing to Approve Termination of JPL Appointment will
be on October 17, 2022.
* The Target Plan Effective Date / Closing Date will be on
October 20, 2022.
Attorneys for the Debtor:
Gary T. Holtzer, Esq.
Matthew P. Goren, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
A copy of the Disclosure Statement dated July 15, 2022, is
available at https://bit.ly/3Pw9Kzc from PacerMonitor.com.
About All Year Holdings Limited
All Year Holdings Limited is a real estate development company
founded by American real estate developer Yoel Goldman. It operates
as a holding company, which, through its direct and indirect
subsidiaries, focuses on the development, construction,
acquisition, leasing and management of residential and commercial
income producing properties in Brooklyn, N.Y. The company's
portfolio includes 1,648 residential units and 69 commercial units
in Bushwick, Williamsburg, and Bedford-Stuyvesant.
All Year Holdings sought Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 21-12051) on Dec. 14, 2021. At the time of the
filing, the Debtor listed $1 billion to $10 billion in assets and
liabilities.
Judge Martin Glenn oversees the case.
Weil, Gotshal & Manges LLP, led by Matthew Paul Goren, Esq., is the
Debtor's bankruptcy counsel while Koffsky Schwalb, LLC and Bartov &
Co. serve as special counsels. Donlin Recano & Company, Inc. Is the
Debtor's administrative agent.
ALPHA METALLURGICAL: Moody's Ups CFR to B2 & Alters Outlook to Pos.
-------------------------------------------------------------------
Moody's Investors Service upgraded Alpha Metallurgical Resources,
Inc.'s Corporate Family Rating to B2 from B3, upgraded the
probability of default rating to B2-PD from B3-PD, assigned a B1
rating to the company's ABL facility, and withdrew the B3 rating on
the Senior Secured Term Loan following full repayment. The
company's Speculative Grade Liquidity Rating ("SGL") of SGL-2 is
unchanged. The rating outlook is changed to positive from stable.
"Alpha prioritized and accelerated gross debt reduction using
strong free cash flow that resulted from historically high met coal
prices in the first half of 2022, which positions them well for a
more normalized coal price environment in future years," said
Sandeep Sama, Moody's Vice President – Senior Analyst and lead
analyst for Alpha Metallurgical Resources, Inc.
Upgrades:
Issuer: Alpha Metallurgical Resources, Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from B3-PD
Assignments:
Issuer: Alpha Metallurgical Resources, Inc.
Senior Secured Asset-Based Revolving Credit Facility, Assigned B1
(LGD3)
Withdrawals:
Issuer: Alpha Metallurgical Resources, Inc.
Senior Secured Term Loan, Withdrawn , previously rated B3 (LGD4)
Outlook Actions:
Issuer: Alpha Metallurgical Resources, Inc.
Outlook, Changed to Positive from Stable
RATINGS RATIONALE
Moody's expects that strong metallurgical coal prices will allow
Alpha to generate record earnings and cash flow in 2022, before
likely moderating to more normalized levels next year. The current
strong market environment also provides Alpha the opportunity to
lock-in relatively attractive pricing for 2023 for some of their
met coal output. Alpha prioritized excess cash flow for gross debt
reduction, and fully repaid their Term Loan, bringing their
unadjusted gross leverage close to zero, before turning to
shareholder returns by reinstating the dividend and ramping up the
share buyback program. That said, Alpha's relatively high cost
structure vs. peers, which can squeeze margins in a lower commodity
price environment, and a slower pace of anticipated decline in
non-debt liabilities (pension obligations, workers' comp and black
lung obligations, and asset retirement obligations), together with
ESG headwinds, are constraints to a higher rating.
Moody's believes that investor concerns about the coal industry's
ESG profile are still intensifying and coal producers will be
increasingly challenged by access to capital issues. An increasing
portion of the global investment community is reducing or
eliminating exposure to the coal industry with greater emphasis on
moving away from thermal coal. A clear shift toward metallurgical
coal, compared to a legacy position more focused on thermal coal,
is a positive development for Alpha from an ESG standpoint.
However, debt capital could become more expensive, especially if
investors do not differentiate meaningfully between thermal and met
coal, and other business requirements, such as surety bonds, which
together will lead to much more focus on individual coal producers'
ability to fund their operations and articulate clearly their
approach to addressing environmental, social, and governance
considerations -- including reducing debt in the near-to-medium
term. Alpha reported about $174 million of surety bonds to support
reclamation-related items at Mar 31, 2022.
The B2 CFR is constrained by the inherent volatility in the
metallurgical coal industry, and a relatively higher cost structure
vs. met coal peers. The rating also reflects ongoing regulatory
pressures on the coal mining industry in the United States,
inherent geological and operational risks associated with mining,
and heightened environmental and social risks associated with the
coal industry – including meaningful legacy liabilities, such as
asset retirement obligations related to the impact of coal mining
on the environment, black lung liabilities related to negative
health impacts on mining employees, and adverse policy risks in the
context of national decarbonization objectives. The rating benefits
from moderate operating diversity, meaningful coal reserves, access
to multiple transportation options, good liquidity, and limited
balance sheet leverage following the recent reduction. The rating
recognizes the potential for very strong earnings, cash flow
generation, and credit metrics when met coal prices are above
mid-cycle levels, like Moody's are seeing currently. Continued
progress on reducing cash costs, together with reduction of legacy
liabilities creates the potential for much better resilience in
future commodity and/or economic downturns. Alpha experienced
substantial earnings compression and erosion of liquidity following
the global outbreak of Coronavirus in early 2020.
The SGL-2 rating reflects good liquidity to support operations over
the next 12-15 months, including expectations for significant
positive free cash flow generation. As of Mar 31, 2022, Alpha had
$193 million of available liquidity, comprised of $159 million of
balance sheet cash and $34 million availability under a $155
million asset-based revolving credit facility. Subsequently in the
second quarter, Alpha used cash flow from operations to fully repay
the $550 million Term Loan and also received $57 million of
collateral releases which reduces letters of credit posting
requirements thereby improving ABL availability and overall
liquidity. The ABL, which has a December 2024 maturity date, is
governed by a borrowing base and has a springing fixed charge
coverage ratio test.
The B1 rating on the company's senior secured asset-based revolving
credit facility reflects the first lien on substantially all assets
of the company and guarantees from all of Alpha's direct and
indirect subsidiaries. The ABL facility also benefits from a higher
rating relative to the CFR given its seniority in the capital
structure as well as higher quality (more liquid) collateral.
Environmental, social, and governance considerations are important
factors influencing Alpha's credit quality. Alpha's ESG Credit
Impact Score is Very High (CIS-5). The score reflects very high
Environmental risk (E-5), very high Social risk (S-5), and high
Governance risk (G-4) – all of which are unchanged. Alpha's E-5
Environmental score is driven by very high carbon transition risk,
the S-5 score is driven by very high health & safety risk, and the
G-4 score is driven by high risk around financial policy. Given
Alpha's decision to prioritize debt reduction with excess cash
flow, Moody's are revising Moody's 'Financial Strategy & Risk
Management' score under the Governance category to 4 from 5.
From an environmental perspective the coal mining sector is viewed
as: (i) very high risk for air pollution and carbon regulations;
(ii) high risk for soil and water pollution, land use restrictions,
and natural and man-made hazards; and (iii) moderate risk for water
shortages. Social issues include factors such as community
relations, operational track record, and health and safety issues
associated with coal mining, such as black lung disease. Alpha is
exposed primarily to metallurgical coal, though the company's does
produce a small amount of byproduct coal sold into thermal coal
markets. Moody's believes that thermal coal carries greater
ESG-related risks than metallurgical coal. Governance-related risks
are higher than average for a publicly-traded mining company,
incorporating an aggressive approach to shareholder returns and use
of debt in the past few years, but current management has been more
conservative with respect to financial policies, as evidenced by
the recent debt reduction action.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The positive outlook reflects the potential for strong credit
metrics in the near-to-medium term. Moody's could upgrade the
rating if Alpha establishes a track record of operating the
business will little to no gross leverage, maintains adequate
liquidity and/or establishes a cash reserve to address their
non-debt liabilities before allocating excess cash to shareholder
returns, and takes actions to bring down cash costs in line with
peers. However, Moody's expect incremental rating upside to be
limited to one notch, given the ESG headwinds faced by the coal
sector.
Moody's could downgrade the rating with expectations for
substantial deterioration of liquidity, including negative free
cash flow, or with the pursuit of an aggressive shareholder returns
policy which results in an increase in gross leverage above 3.0x.
Headquartered in Tennessee, USA, Alpha operates 19 metallurgical
coal mines and 8 coal preparation plants. The company also owns 65%
of Dominion Terminal Associates coal port in Newport News,
Virginia. Alpha's met coal production mix is comprised of Low-Vol,
Mid-Vol, High Vol A, and High Vol B coals. The company also
produces byproduct coal sold into thermal markets. Alpha generated
$2.9 billion of revenue for the twelve months ended Mar 31, 2022.
The principal methodology used in these ratings was Mining
published in October 2021.
ANDREW'S GARDEN: Gets Interim Cash Collateral Access Thru Sept 16
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Andrew's Garden, Inc. to use cash
collateral on an interim basis to pay post-petition expenses during
the period of July 31 to September 16, 2022 to the extent set forth
in the budget, with a 10% variance.
In return, 24 Capital LLC, the U.S. Small Business Administration,
and TVT 2.0 LLC are granted the following as adequate protection
for their purported secured interests in the collateral:
a. The Debtor will permit the Secured Parties to inspect,
upon reasonable notice and within reasonable business hours, the
debtor's books and records.
b. The Debtor will maintain and pay premiums for insurance to
cover the Collateral from fire, theft and water damage.
c. The Debtor will, upon reasonable request, make available
to the Secured Parties evidence of their collateral or proceeds.
d. The Debtor will properly maintain the Collateral in good
repair and properly manage the Collateral.
e. The Secured Parties are granted replacement liens on the
Collateral to the extent of their prepetition liens.
A final hearing on the matter is scheduled for September 12 ay 10
a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3uYfIRK from PacerMonitor.com.
The Debtor projects $128,675 in total income and $68,656 in total
expenses for August 2022.
About Andrew's Gardens, Inc.
Based in Wheaton, Illinois, Andrew's Gardens is a European-style
flower shop and unique gift boutique specializing in couture floral
design for everyday deliveries, weddings, and other celebrations.
Andrew's Gardens, Inc., sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-01249) on
February 3, 2022. In the petition signed by Tonya Parravano, vice
president, the Debtor disclosed up to $50,000 in assets and up to
$500,000 in liabilities.
Judge A. Benjamin Goldgar oversee the case.
John Lynch, Esq., at Lynch Law LLC is the Debtor's counsel.
ANTECO PHARMA: To Seek Plan Confirmation on July 20
---------------------------------------------------
Judge Katherine Maloney Perhach has entered an order conditionally
approving the Disclosure Statement explaining the Plan of Anteco
Pharma, LLC.
A preliminary hearing on final approval of the Disclosure Statement
and confirmation of the Plan will be held on July 20, 2022 at 1:30
p.m. by telephone. Parties should call the Court conference line at
1-888-557-8511, access code 5616974##, to participate in this
telephonic hearing.
Unless an objection is filed on or before June 2, 2022, the Court
will enter an order extending the deadline for final confirmation
to July 29, 2022.
Objections to final approval of the Disclosure Statement and/or
confirmation of the Plan must be filed no later than July 6, 2022.
The deadline for accepting or rejecting the Plan is July 6, 2022.
The Debtor must file a written report summarizing the ballots on or
before July 13, 2022.
About Anteco Pharma
Anteco Pharma, LLC, is a Waunakee, Wis.-based company specializing
in freeze drying and related processing of pharmaceutical
intermediates, medical devices, specialty food and nutritional
ingredients.
Anteco Pharma filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Wis. Case No. 221-11012) on
May 7, 2021, disclosing total assets of up to $10 million and total
liabilities of up to $1 million. Howard R. Teeter, authorized
member, signed the petition.
Judge Catherine J. Furay oversees the case.
Krekeler Strother, S.C. and Boardman & Clark, LLP serve as the
Debtor's bankruptcy counsel and special counsel, respectively.
ARCHBISHOP OF AGANA: CNA Files Adversary Proceeding; Amends Plan
----------------------------------------------------------------
The Archbishop of Agana and the Official Committee of Unsecured
Creditors submitted a Third Amended Joint Disclosure Statement for
the Third Amended Joint Chapter 11 Plan of Reorganization dated
July 19, 2022.
The Plan is based on seven methods of funding. The first method of
funding is through the transfer of certain of the Debtor's real
property to a Trust, and the subsequent sale of that real property
to generate cash. The Plan Proponents estimate that the properties
identified to be sold have an estimated value of $18,358,034, but
the actual value is determined by the real property market in Guam
when the Trustee of the Trust chooses to sell the individual
parcels. Based on the variability of real property prices, the Plan
Proponents estimate the value of the real property could reasonably
vary anywhere between $16,500,000.00 and $23,000,000.00 based on
expected market.
Secondly, the Debtor will contribute $6,609,998.29 in cash
currently held in its bank accounts to fund the Trust.
Third, the Plan will be funded by the Debtor's insurance companies.
The Plan Proponents have reached a settlement in principle with one
of the Debtor's insurers, National Union, for $18,000,000.00, which
settlement will fund the Trust. In addition, the Debtor will
transfer its rights to insurance to a trust established for Tort
Claimants and the Trust will litigate to obtain judgments against
the non-settling insurance companies or, alternatively, the
Debtor's remaining insurance companies will settle with the Trust
for up to $9.3 million related to the Debtor's direct insurance
policies and $55 million related to policies issued to the Boy
Scouts of America.
Fourth, the Debtor will contribute an initial amount of
$200,000.00, funding to the Unknown Tort Claim reserve, which funds
will be used to pay claims by Tort Claimants who qualify as Unknown
Tort Claimants, with the Reorganized Debtor renewing the Unknown
Tort Claim Reserve until a maximum of $1,500,000.00, or whatever
amount is ultimately determined by the Unknown Claims
Representative, is paid to all Unknown Tort Claimants over a
five-year period. Unused amounts shall be returned to the
Reorganized Debtor.
Fifth, Debtor will market and sell, the advice and consent of the
Committee, the FHP/TakeCare Real Property and Chancery Real
Property. The proceeds of the sale will be used as follows (i) to
fund the treatment of the Class 7 Claim, (ii) up to $250,000.00 to
fund Administrative Claims, (iii) up to $500,000.00 to renovate and
outfit the Cathedral for use as the Reorganized Debtor's
headquarters and Chancery office and moving expenses, (iv)
$200,000.00 to fund the Unknown Tort Claim Reserve, and (v) after
the payment of the amounts in (i)-(iv) the remaining proceeds will
be distributed to the trust.
Sixth, the Debtor will provide 50 single-vault ground plot easement
rights at the Pigo Catholic Cemetery. The plots will be set aside
from the current ground inventory. The fifty easement rights
currently have a cash value of approximately $332,500. The fifty
easement rights are nontransferable. A contract will need to be
entered into by the Tort Claimant in the Cemeteries, and the
easement amount would be waived on the contract. Such contracts are
exclusive of the opening/closing fees and standard marker, which
under these contracts are collected at the time of need. The ground
plot easement rights will be distributed to Holders of Class 3
Claims pursuant to the Trust Distribution Plan.
Seventh, the Debtor will provide, for a period of 10 years, three
vouchers per Archdiocesan elementary school will be issued annually
that will encompass grades K through 8th. Such vouchers are
non-transferable and will be awarded only to a student related to a
survivor. For a period of 10 years, two vouchers per Archdiocesan
high school will be issued annually that will encompass 9th through
12th grade. Such vouchers are non transferable and will be awarded
only to a student related to a survivor. The vouchers will be
distributed to Holders of Class 3 Claims pursuant to Trust
Distribution Plan.
Thus, between the various forms of funding for the Plan, it is
expected the Tort Claimants will receive the grand total sum of
between $37,019,033.00 and $101,000,000.00, which will be payable
to the trust set up through the Plan and Disclosure Statement
process. These funds will be allocated pursuant to the Trust
Distribution Protocols attached to the Trust Agreement. In
addition, a fund in an amount to be determined will be established
by the Reorganized Debtor to pay Unknown Tort Claimants pursuant to
the Plan, the Trust Distribution Protocols, and the Trust.
The Plan Proponents do not believe any claims currently exist that
could qualify as Class 12 non-contingent Claims. The Plan provides
that if a Claim becomes noncontingent prior to entry of the
Confirmation Order, such Claim may still become a Class 12 Claim
pursuant to section 502(j) of the Bankruptcy Code and that no
contingent Claim shall become a Class 12 Claim unless it is allowed
prior to the Confirmation Date.
The BSA contends this treatment conflicts with section 502(j) of
the Bankruptcy Code, which permits reconsideration of a claim for
cause without a restriction that this occur prior to the
Confirmation Date. There is a risk that the BSA is correct and that
Claims may still become Class 12 Claims after entry of the
Confirmation Order.
On July 12, 2022, Continental Insurance Company and/or companies
affiliated with it, such as Commercial Insurance Company of Newark,
New Jersey (collectively, "CNA") filed an adversary proceeding
against the Debtor, Adv. No. 22-00001 (the "CNA Adversary
Proceeding"). The CNA Adversary Proceeding seeks a declaration from
the Court that (i) the Debtor cannot prove the existence of
insurance policies issued to the Debtor by CNA, (ii) the Debtor
cannot prove the material terms of insurance policies issued to the
Debtor by CNA, (iii) any terms of insurance policies issued to the
Debtor by CNA would not have covered Tort Claims based on the terms
of those policies, and (iv) the Debtor breached a settlement
agreement with CNA, and CNA is entitled to recover damages a
priority claim in the Bankruptcy Case.
If CNA succeeds in its claims the following could occur (i) there
would be no recovery against CNA, meaning the $9.3 million will not
be contributed to the Trust, and/or (ii) the Debtor would owe CNA
damages, which amounts would be paid before unsecured claims. Prior
to confirmation of the plan, the Debtor will likely incur
administrative expenses in responding to the CNA Adversary
Proceeding. After confirmation of the Plan, the Trust will likely
assume the Debtor's role in defending the CNA Adversary Proceeding
and the cost of this defense will come from the Trust. However, if
the Court determines that CNA has an allowed administrative expense
claim, the Plan provides that the Reorganized Debtor shall pay such
administrative expense claim and this will not reduce the amount
the Debtor will contribute to the Trust established to pay Abuse
Claims.
The Plan Proponents strongly disagree with the legal and factual
bases asserted in the CNA Adversary Proceeding, and the Debtor
intends to defend against the allegations.
The Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors:
* Each holder of a Class 5 General Unsecured Claims will
receive, directly from the Reorganized Debtor, payment in full of
such allowed Class 5 Claim, without interest, on the Effective
Date.
A full-text copy of the Third Amended Joint Disclosure Statement
dated July 19, 2022, is available at https://bit.ly/3OuADmm from
PacerMonitor.com at no charge.
Attorneys for the Official Committee of Unsecured Creditors for
the
Archbishop of Agana:
Robert T. Kugler, Esq.
Edwin H. Caldie, Esq.
Andrew J. Glasnovich, Esq.
STINSON, LLP
50 South Sixth Street, Suite 2600
Minneapolis, MN 55402
Telephone: 612-335-1500
Facsimile: 612-335-1657
E-mail: robert.kugler@stinson.com
ed.caldie@stinson.com
drew.glasnovich@stinson.com
Attorneys for the Debtor:
Ford Elsaesser, Esq.
Bruce A. Anderson, Esq.
ELSAESSER ANDERSON, CHTD.
320 East Neider Avenue, Suite 102
Coeur d'Alene, ID 83815
Tel: (208) 667-2900
Fax: (208) 667-2150
E-mail: ford@eaidaho.com
brucea@eaidaho.com
John C. Terlaje, Esq.
LAW OFFICE OF JOHN C. TERLAJE
Terlaje Professional Bldg., Suite 216, 194 Hernan Cortez
Ave.
Hagatna, Guam 96910
Tel: (671) 477-8894/5
E-mail: john@terlaje.net
About Archbishop of Agana
Roman Catholic Archdiocese of Agana -- https://www.aganaarch.org/
-- is an ecclesiastical territory or diocese of the Catholic Church
in the United States. It comprises the United States dependency of
Guam. The Diocese of Agana was established on Oct. 14, 1965, as a
suffragan of the Archdiocese of San Francisco, California. It is a
tax-exempt entity (as described in 26 U.S.C. Section 501).
The Archbishop of Agana, also known as the Roman Catholic
Archdiocese of Agana, sought Chapter 11 protection (D. Guam Case
No. 19-00010) on Jan. 16, 2019. Rev. Archbishop Michael Jude
Byrnes, S.T.D., Archbishop of Agana, signed the petition. The
Archdiocese scheduled $22,962,686 in assets and $45,662,941 in
liabilities as of the bankruptcy filing.
The Hon. Frances M. Tydingco-Gatewood is the case judge.
The archdiocese tapped Elsaesser Anderson, Chtd. as bankruptcy
counsel, Deloitte & Touche, LLP as human resource consultant, and
Pacific Human Resource Services, Inc. as accountant. Blank Rome
LLP, LegalWorks Apostolate PLLC, Davis & Davis P.C., and Camacho
Calvo Law Group serve as the archdiocese's special counsels.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on March 6, 2019. Stinson Leonard Street LLP,
The Law Offices of William Gavras, and Hiller Law, LLC serve as the
committee's bankruptcy counsel, local counsel, and special counsel,
respectively.
ASHFORD 2018-KEYS: DBRS Confirms B Rating on Class X-EXT Certs
--------------------------------------------------------------
DBRS Limited confirmed its ratings on all classes of the Commercial
Mortgage Pass-Through Certificates, Series 2018-KEYS issued by
Ashford Hospitality Trust 2018-KEYS as follows:
-- Class A at AAA (sf)
-- Class B at AA (high) (sf)
-- Class C at A (high) (sf)
-- Class D at A (low) (sf)
-- Class E at BBB (low) (sf)
-- Class X-EXT at B (sf)
-- Class F at B (low) (sf)
All trends are Stable. DBRS Morningstar also maintained the
Interest in Arrears designation on Class F. Although the
outstanding shortfall is a relatively nominal amount of $22,995,
based on information received from the servicer, the shortfall is
not expected to be reimbursed.
The rating confirmations and Stable trends reflect the overall
stable performance of the transaction since DBRS Morningstar's last
review in September 2021.
The subject transaction is collateralized by six loans, which are
not cross-collateralized. The senior mortgage loan proceeds of
$982.0 million, along with mezzanine debt of $288.2 million,
refinanced existing debt of $1.1 billion, funded $14.1 million of
upfront reserves and $25.6 million in closing costs, and
facilitated a $163.4 million cash-equity distribution. The loans
are interest only (IO) throughout the 24-month initial term with
five one-year extension options, with a fully extended maturity
date of June 2025. The loans are secured by a total of 34 hotel
properties located across 16 states with the largest concentration
by allocated loan balance in California at 34.7%. The hotels are
flagged by various brands owned by Marriott International, Hyatt
Hotels Corporation, and Hilton Hotels & Resorts with a combined
total room count of 7,270 keys consisting of 19 full-service hotels
with 4,767 keys, 10 select-service hotels with 1,160 keys, and five
extended-stay hotels with 893 keys.
At issuance, the collateral portfolio was valued at $1.7 billion in
aggregate and $1.6 billion on an individual basis. New appraisals
obtained by the special servicer as of February and March 2021
valued the collateral on an as-is basis at a combined figure of
$1.3 billion, a decline from the issuance figure but above the DBRS
Morningstar Value of $1.2 billion, derived in 2020. As of the most
recent financials, the loans reported a weighted-average (WA) debt
service coverage ratio (DSCR) of 1.81 times (x) for the trailing
twelve months (T-12) ended March 31, 2022, compared with the DSCR
of 1.50x for YE2021. On an individual basis Pools A, B, C, D, E and
F, reported DSCRs of 2.24x, 0.46x, 1.17x, 3.31x, 2.30x, and 1.18x,
respectively, for the T-12 ended March 31, 2021. Performance
continues to improve but remains depressed from pre-pandemic levels
when the DSCR was reported at 2.40x on a combined basis for
YE2019.
All six loans were previously in special servicing in June 2020 for
maturity default but the borrower was granted a six-month
forbearance period from April to October 2020 where debt service
payments and monthly reserve deposits were deferred. Repayment of
the deferred amounts was completed by June 2021 and the loans were
returned to the master servicer in March 2022. These loans are on
the servicer's watchlist because of the upcoming June 2022 maturity
date. Initially, Pool D was expected to be repaid but the borrower
has more recently submitted a request to exercise the third of five
maturity extension options that would extend the maturity to June
2023. In addition, Pools B and D are being monitored for late tax
payments. Pool B is also being monitored for a low DSCR.
STR reports, dated March and April 2022, were provided for all 34
properties. On a WA basis, occupancy, average daily rate (ADR), and
revenue per available room (RevPAR) figures were reported at 63%,
$152, and $103, respectively, for the T-12 ended March 31, 2022, or
April 30, 2022. The properties have seen minor improvements from
the figures of 49%, $127, and $62, respectively, for the T-12 ended
July 31, 2021, but remain depressed from the figures of 79%, $160,
and $126, respectively, at issuance. Although performance has not
rebounded to pre-pandemic levels, it is noteworthy that the
collateral hotels reported a WA RevPAR penetration figure of 107%
with individual penetration rates ranging from 98% to122%.
The loan sponsor is Ashford Hospitality Trust, Inc., a
well-established owner and operator of approximately 120 hotel
assets across the United States. The sponsor acquired or
constructed the hotels between 1998 and 2015, with most assets
acquired between 2003 and 2007, and invested approximately $227.7
million ($29,256 per key) between 2013 and 2017.
Notes: All figures are in U.S. dollars unless otherwise noted.
AUTO WHOLESALE: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Auto Wholesale of Boca, LLC
6560 West Rogers Circle, Suite B-27
Boca Raton, FL 33487
Chapter 11 Petition Date: July 22, 2022
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 22-15627
Judge: Hon. Erik P. Kimball
Debtor's Counsel: James B. Miller, Esq.
JAMES B. MILLER, P.A.
19 West Flagler St. #416
Miami, FL 33130
Tel: 305-374-0200
Email: bkcmiami@gmail.com
Total Assets: $3,350,652
Total Liabilities: $5,733,534
The petition was signed by Moshe Farache as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/4EOTMTA/Auto_Wholesale_of_Boca_LLC__flsbke-22-15627__0001.0.pdf?mcid=tGE4TAMA
AWKNG INC: Unsecureds to Get $140K Over 3 Years in Consensual Plan
------------------------------------------------------------------
AWKNG, Inc., filed with the U.S. Bankruptcy Court for the Middle
District of Florida a Plan of Reorganization dated July 19, 2022.
The Debtor is a Florida non-profit corporation which operates an
online school of theology and mission ministry, based in
Jacksonville, Florida. AWKNG was started in 2020 as part of
Celebration Church of Jacksonville, to serve as an internal school
of theology and mission ministry.
The Debtor was officially incorporated in late 2020 with
Celebration's founder and lead pastor, Stovall Weems, as acting
President of the Debtor. Unfortunately, throughout 2021 tensions
and disputes between Mr. Weems and Celebration began to mount, and
in January of 2022 Celebration's board initiated an internal
investigation into Mr. Weems and his management and financial
activities with regards to Celebration.
It became apparent by the summer of 2022 the Debtor could not make
the changes necessary to reorganize its operations without
protection from creditor collections which would jeopardize its
ability to generate revenue. The current leadership of the Debtor
has filed this Chapter 11 case to provide an orderly structure to
reorganize its operations, preserve its enrollment and structure
payments to its creditors.
Post-petition, the Debtor has continued to reorganize its business
in order to operate self-sufficiently and without reliance on
feeder donations from Celebration as its main source of revenue.
The Debtor has converted its course program offerings from
traditional scheduled semesters to fully on-demand classes to
increase flexibility for students. In addition to their current
five course offerings, the Debtor is in the process of rolling out
three to four new courses before the end of the year, with plans to
continuously add six new courses each year to retain current
students. Additionally the Debtor has partnered with a translation
service provider, which will convert Debtor's course offerings for
Spanish speaking students.
Class 1 consists of the claim of First Citizens Bank & Trust
Company. The Debtor Scheduled First Citizens as holding a
$167,241.57 debt secured by a UCC-1 lien on all of the Debtor's
cash collateral and personal property. The Debtor disputes the
secured status of this debt, and has filed an adversary proceeding
under 11 U.S.C. § 547 to avoid the security interest as a
preference (3:22-ap-00038) (the "First Citizens AP"). First
Citizens shall be treated as an Unsecured Claim under Class 2 of
this Plan, and shall not be entitled to any Distributions under
Class 1 or as a secured creditor. Class 1 is unimpaired.
Class 2 consists of General Unsecured Creditors. In full
satisfaction of Class 2 Claims, the Debtor will pay its Projected
Disposable Income to Allowed General Unsecured Creditors on a
quarterly basis, distributed pro rata, either directly to the
Allowed General Unsecured Creditors if confirmed under 1191(a) or
through the Subchapter V Trustee if confirmed under 1191(b), over
the next 36 months (12 quarters).
General Unsecured Creditors will likely receive a quarterly
Distribution of $11,665.50 over 12 quarterly payments if the Plan
is Consensually confirmed and there is no need for the Subchapter V
Trustee or continuing bankruptcy expenses post-confirmation.
Should the Subchapter V Trustee and continuing bankruptcy expenses
remain because the Plan has to confirmed as Non-consensual, the
Debtor estimates General Unsecured Creditors will likely receive a
quarterly Distribution of $9,187.50 over 12 quarterly payments due
to the Subchapter V Trustee and continuing bankruptcy expenses
post-confirmation. Class 2 is impaired.
Given the refined debt service as provided in this Plan, the Debtor
will continue its operations which will cover the required new debt
service payments.
The Projected Disposable Income is calculated by taking 75% of the
yearly Net After Operations income, and dividing by twelve, which
comes to $3,887.50 per month ($11,662.50 per quarter) for total
Distributions of Projected Disposable Income to Class 2 General
Unsecured Creditors of $139,950 (provided the Consensual Plan is
confirmed).
Based upon these projections and the 25% Reserve Withholdings to
offset cost and labor increases over the next 36 months, the Debtor
believes the Plan is feasible as proposed and not likely to be
followed by further reorganization.
A full-text copy of the Plan of Reorganization dated July 19, 2022,
is available at https://bit.ly/3IZPdB9 from PacerMonitor.com at no
charge.
Attorney for the Debtor:
LANSING ROY, P.A.
Kevin B. Paysinger, Esq.
Florida Bar No. 0056742
William B. McDaniel, Esq.
Florida Bar No. 0084469
1710 Shadowood Lane, Suite 210
Jacksonville, FL 32207
(905)391-0030
About AWKNG Inc.
AWKNG, Inc., is a Florida non-profit corporation which operates an
online school of theology and mission ministry, based in
Jacksonville, Florida. The Debtor filed Chapter 11 Petition (Bankr.
M.D. Fla. Case No. 22-01434) on July 19, 2022.
At the time of filing, the Debtor disclosed $50,001 to $100,000 in
assets and $100,001 to $500,000 in liabilities. The Debtor is
represented by William B McDaniel of Lansing Roy, PA.
B.E.C. BARAJAS: Files Chapter 11 Subchapter V Case
--------------------------------------------------
B.E.C Barajas Excavating Construction, LLC, filed for Chapter 11
bankruptcy protection in Colorado. The Debtor filed as a small
business debtor seeking relief under Subchapter V of Chapter 11 of
the Bankruptcy Code.
According to court filing, B.E.C. Barajas Excavating estimates
between 50 and 99 unsecured 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. 22, 2022, at 9:00 AM at Telephonic Chapter 11. Proofs of
claim are due by Sept. 26, 2022.
About B.E.C Barajas Excavating
B.E.C Barajas Excavating Construction LLC, doing business as BEC
Excavating, primarily operates in the Single-family Housing
Construction Industry.
B.E.C Barajas Excavating Construction LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Col. Case No.
22-12574) on July 17, 2022. In the petition filed by Jose A.
Barajas, as principal, the Debtor reports estimated assets and
liabilities between $1 million and $10 million each.
Mark David Dennis has been appointed as Subchapter V trustee.
Katharine S. Sender, of Cohen & Cohen, P.C., is the Debtor's
counsel.
BK AUTUMN: Amends Plan to Include Mr. Cooper's Unsecured Claim
--------------------------------------------------------------
BK Autumn 701 LLC submitted a Second Amended Disclosure Statement
and Second Amended Plan dated July 19, 2022.
The Debtor filed its Proposed Plan of Reorganization seeking to
provide a basis for resolving outstanding claims against the Debtor
through a refinancing of the property located at 1482 Bryant Ave.,
Bronx, NY 10460 ("Subject Property").
The Plan will accomplish its objectives through the repayment of
certain of the Debtor's obligations mainly through the Debtor's
future earnings and proceeds from certain litigation which the
Debtor has or will be commencing. The Debtor believes that
creditors will receive a higher overall return under the provisions
of the Plan than other alternatives, particularly liquidation of
all of the Debtor's assets.
The Debtor will be obtaining exit financing from Manhattan Bridge
Capital, Inc., ("Manhattan Bridge") in order to refinance the
Subject Property and fund its Plan of Reorganization.
The key terms are as follows: The loan is for four hundred and
twenty five thousand dollars ($425,000) for twelve months at 8%.
Two thousand Seven Hundred dollars ($2,700) of the loan proceeds
will be for a construction draw (8 draws, $300 per draw). The loan
will be personally guaranteed by Etai Vardi and Elliot Ambalo.
Manhattan Bridge will take a first position lien on the Subject
Property; the loan is also subject to Manhattan Bridge obtaining
clear title; the owner's insurance must name the lender as a lender
loss payee; final review of each purchase by Manhattan Bridge's
underwriting and clearance department; and adequate notice of the
closing date, time and place.
Class 2 consists of the unsecured portion of Mr. Cooper's claim in
the amount of $412,346.08. This amount shall be paid pro-rata at
2%. The funds to pay this shall come from the funds contributed by
the Debtor's interest holders. The estimated payout to Mr. Cooper
on account of its unsecured claim shall be $8,246.92.
Class 3 consists of the Secured Claim of the New York City Water
Board by virtue of its lien on the Subject Property for unpaid
water bills in the amount of $8,970.60. On June 28, 2022, the
Debtor filed a motion to reclassify this claim from secured to
unsecured. In the event this motion is granted Class 2 shall be
deemed unsecured.
The Debtor will pay the NYC Water Board pro rata at 2% on account
of its unsecured claim. The estimated payout to the NYC Water Board
shall be approximately $179.00. The funds to pay this claim shall
come from the new value being contributed to the Plan from the
Debtor's interest holders. This amount shall be paid at the time of
the closing of the loan with Exit Financier which shall take place
on the Effective Date in full satisfaction of its Claim. The
treatment and consideration to be received by holders of Class 2
Claims shall be in full settlement, satisfaction, release and
discharge of their respective Claims. Class 2 is impaired and thus,
the Creditors in Class 2 are entitled to vote to accept or reject
the Plan.
Class 4 consists of the claim of the New York City Environmental
Control Board ("NYC ECB") in the approximate amount of $6,250 by
virtue of ECB violations issued against the Subject Property. The
NYC ECB has not yet filed a proof of claim. The Debtor originally
scheduled NYC ECB as holding a secured claim in the amount of
$6,250. The initial basis for classifying the NYC ECB as secured
was pursuant to a title report dated March 29, 2021, which showed
NYC ECB violations acting as a lien against the Subject Property.
On July 14, 2022, the Debtor filed amended schedules D/E/F removing
the NYC ECB from Schedule D and placing it as an unsecured creditor
on schedule F. The Debtor's basis for this reclassification is
pursuant to 11 U.S.C. §506 in that there is no equity in the
Subject Property for which the NYC ECB lien can attach.
The Debtor will pay the NYC ECB 2% on account of its unsecured
claim. The estimated payout to the NYC ECB shall be approximately
$56.24. This amount shall be paid at the time of the closing of the
loan with Exit Financier which shall take place on the Effective
Date in full satisfaction of all claims held by NYC ECB against the
Subject Property. Class 3 is impaired and thus, the Creditors in
Class 3 are entitled to vote to accept or reject the Plan.
Class 5 consists of the claim of the New York City Department of
Buildings ("NYC DOB") in the approximate amount of $1,500 by virtue
of building code violations issued against the Subject Property.
Although NYC DOB has not yet filed a proof of claim the Debtor
originally scheduled scheduled NYC DOB as holding a secured claim
of $1,500. The initial basis for classifying the NYC DOB as secured
was pursuant to a title report dated March 29, 2021, which showed
NYC DOB violations purportedly acting as a lien against the Subject
Property. On July 14, 2022, the Debtor filed amended schedules
D/E/F removing the NYC DOB from Schedule D and placing it as an
unsecured creditor on schedule F. The Debtor's basis for this
reclassification is pursuant to 11 U.S.C. §506 in that there is no
equity in the Subject Property for which the NYC ECB lien can
attach.
The Debtor will pay the NYC DOB 2% on account of its unsecured
claim The estimated payout to the NYC DOB shall be approximately
$30.00. This amount shall be paid at the time of the closing of the
loan with Exit Financier which shall take place on the Effective
Date in full satisfaction of all claims held by NYC DOB against the
Subject Property Class 4 is impaired and thus, the Creditors in
Class 4 are entitled to vote to accept or reject the Plan.
Class 5 consists of all Interest Holders of the Debtor. The
Debtor's interest holders are Blackstone Real Estate Group, LLC
(40%), and The Business Account, LLC (60%). Upon confirmation of
the Plan, the Interest Holders shall retain their Interests in the
Reorganized Debtor. In exchange for retaining their interests,
Interest Holder will contribute $10,000 towards the funding of the
Plan. The Interest Holders shall not receive any monetary
distributions on account of such Interests.
The funds necessary for the implementation of the Plan shall be
utilized from the exit financing of Manhattan Bridge Capital and
the funds contributed by the Debtor's Interest Holders.
A full-text copy of the Second Amended Disclosure Statement dated
July 19, 2022, is available at https://bit.ly/3RXP70H from
PacerMonitor.com at no charge.
Counsel to the Debtor:
Btzalel Hirschhorn, Esq.
SHIRYAK, BOWMAN, ANDERSON, GILL & KADOCHNIKOV, LLP
8002 Kew Gardens, Suite 600
Kew Gardens, NY 11415
Tel: (718) 263-6800
Fax: (718) 520-9401
Email: Bhirschhorn@sbagk.com
About BK Autumn 701 LLC
BK Autumn 701, LLC, sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 21-42682) on Oct.
21, 2021, listing under $1 million in both assets and liabilities.
Judge Elizabeth S. Stong oversees the case.
Btzalel Hirschhorn, Esq., at Shiryak, Bowman, Anderson, Gill &
Kadochnikov, LLP, and Singer & Falk CPA's serve as the Debtor's
legal counsel and accountant, respectively.
BUCKARDT TECHNOLOGIES: Unsecureds to Recover 16% in 60 Months
-------------------------------------------------------------
Buckardt Technologies, Inc., d/b/a Konsultek, filed with the U.S.
Bankruptcy Court for the Northern District of Illinois a Subchapter
V Plan of Reorganization dated July 18, 2022.
Debtor is an information and security technology consulting firm.
The Debtor had operated its business under the name Konsultek and
provides technology security systems to a wide variety of companies
throughout Northern Illinois.
The Debtor's financial difficulties began in 2018 when medical and
personal issues of the Debtor management took them away from the
day to day management of the corporation. The Debtor also borrowed
additional funds at a rate that did not correspond to the ability
to meet its repayment requirements, and it fell behind in its tax
obligations to the IRS, and other trade creditors.
At this point in time, the Debtor has eliminated a second location,
and lease expense associated with that location. Debtor management
is concentrating on getting its financial reporting in order, and
has scaled back to a more optional level of employees and business.
The Debtor believes that these cost-cutting measures will enable it
to propose a feasible plan.
Each secured claimant asserts an interest in all of the assets of
the Debtor. The Debtor believes that those assets consist of its
bank accounts with cash $85,754.37 at filing, its office furniture
with a value of $3,500.00, its machinery, fixtures, and equipment
with a value of $5,000.00, its domain name with a value of
$10,000.00, and its current receivables valued at $350,000.00. The
total value of the collateral is therefore $443,500.00.
Class 7 consists of General unsecured creditors. Unsecured
creditors shall receive approximately 16% of claims, pro rata over
60 months. Unsecured dividends shall be paid quarterly in the sum
of $10,500.00 per quarter beginning with the end of the 1st Quarter
of 2023. (March 30, 2023) with a final payment at the end of the
4th Quarter of 2027 (December 31, 2027). The total unsecured
payment is $210,000.00.
Equity security holder will retain her interest in the Debtor.
The Plan will be funded by the continued operations of the Debtor
and income derived from operations of the Debtor.
A full-text copy of the Subchapter V Plan dated July 18, 2022, is
available at https://bit.ly/3omHCTC from PacerMonitor.com at no
charge.
Attorney for the Plan Proponent:
Richard Larsen, Esq.
Springer Larsen Greene, LLC
300 S. County Farm Road, Suite, Suite G
Wheaton, IL 60187
Tel: 630-510-0000
Email: rlarsen@springerbrown.com
About Buckardt Technologies
Buckardt Technologies, Inc., doing business as Konsultek, provides
information technology services. It offers vulnerability
assessment, penetration testing, disaster planning and recovery,
infrastructure lifecycle, and application traffic management
services. Konsultek serves clients worldwide.
Buckardt Technologies sought Chapter 11 bankruptcy protection
(Bankr. N.D. Ill. Case No. 22-04420) on April 18, 2022. In the
petition filed by Judith A. Buckard, as president, Buckardt
Technologies estimated assets up to $50,000 and liabilities between
$1 million and $10 million.
The case is assigned to Honorable Bankruptcy Judge Lashonda A.
Hunt.
Richard G Larsen, of Springer Larsen Greene, LLC, is the Debtor's
counsel.
CADIZ INC: All Five Proposals Passed at Annual Meeting
------------------------------------------------------
Cadiz Inc. held its 2022 Annual Meeting of Stockholders at which
the stockholders:
(1) elected Keith Brackpool, Stephen E. Courter, Maria Echaveste,
Geoffrey Grant, Winston Hickox, Susan Kennedy, Kenneth T. Lombard,
Scott S. Slater, and Carolyn Webb de Macias as directors;
(2) approved an amendment to the Company's Certificate of
Incorporation to provide additional opportunity for stockholders to
call special meetings;
(3) approved an amendment No. 1 to the Cadiz Inc. 2019 Equity
Incentive Plan to increase the total number of shares reserved for
issuance under the Plan;
(4) approved PricewaterhouseCoopers LLP as the Company's
independent auditors for the fiscal year 2022; and
(5) approved, on an advisory basis, the compensation of the
Company's named executive officers.
Amendment to Certificate of Incorporation
On July 12, 2022, Cadiz Inc. filed a Certificate of Amendment of
Certificate of Incorporation of the Company with the Secretary of
State of the State of Delaware deleting the text of Part D of
Article FIFTH (governing the calling of special meetings of
stockholders) of its certificate of incorporation in its entirety
and replacing the same with "Intentionally Omitted".
Amendment to Bylaws
On July 12, 2022, the Company's Board of Directors approved an
amendment to the Company's bylaws to require that the Board call a
special meeting of stockholders of the Company upon the appropriate
written request of a stockholder or stockholders of record of the
Company holding not less than 20% of the voting power of the then
outstanding shares of our capital stock generally entitled to
vote.
About Cadiz Inc.
Founded in 1983 and headquartered in Los Angeles, California, Cadiz
Inc. -- http://www.cadizinc.com-- is a natural resources
development company dedicated to creating sustainable water and
agricultural opportunities in California. The Company owns 70
square miles of property with significant water resources in
Southern California and are the largest agricultural operation in
San Bernardino, California, where we have sustainably farmed since
the 1980s. The Company is also partnering with public water
agencies to implement the Cadiz Water Project, which was named a
Top 10 Infrastructure Project that over two phases will create a
new water supply for approximately 400,000 people and make
available up to 1 million acre-feet of new groundwater storage
capacity for the region.
Cadiz reported a net loss and comprehensive loss of $31.25 million
for the year ended Dec. 31, 2021, a net loss and comprehensive loss
of $37.82 million for the year ended Dec. 31, 2020, a net loss and
comprehensive loss applicable to common stock of $29.53 million for
the year ended Dec. 31, 2019, and a net loss and comprehensive loss
of $26.27 million for the year ended Dec. 31, 2018. As of March
31, 2022, the Company had $119.74 million in total assets, $74.13
million in total liabilities, and $45.61 million in total
stockholders' equity.
CALIFORNIA INDEPENDENT: Unsecureds to Split $725K in Plan
---------------------------------------------------------
California Independent Petroleum Association filed with the U.S.
Bankruptcy Court for the Eastern District of California a First
Amended Plan of Reorganization under Subchapter V dated July 18,
2022.
The Debtor is a long-standing not-for-profit, non-partisan trade
association based in Sacramento, California, which has been in
business for over 46 years. The Debtor represents approximately
350 crude oil and natural gas producers, royalty owners, and
service and supply companies operating in various locations in the
State of California.
This Amended Plan is intended to provide a proposed means for
restructuring Debtor. On the Petition Date, Debtor commenced this
bankruptcy case by filing a voluntary petition under Chapter 11,
Subchapter V, of the Bankruptcy Code, which permits Debtor, as the
plan proponent, to propose a plan of reorganization that allows
Debtor to reorganize by continuing to operate.
The Amended Plan is a reorganization plan in which Debtor has
reorganized its business operations to enable it to make orderly
distributions to creditors of Debtor's Estate on their prepetition
claims. This Amended Plan provides for one class of secured claims
(Class 1), one class of Priority Unsecured Claims (Class 2) and one
class of General Unsecured Claims (Class 3).
Because the Debtor is a California corporation incorporated
pursuant to Internal Revenue Code Sec. 501(c)(6), Debtor is not
organized for profit and no part of Debtor's net earnings inures to
the benefit of any private shareholder or individual. As such,
there is no class of interest holders receiving any distributions
under the Amended Plan.
This Amended Plan provides, subject to confirmation of the Amended
Plan, for the Plan Payments to be distributed on account of Allowed
Secured Claims, Allowed Administrative Claims, Allowed Priority Tax
Claims, Allowed Priority Unsecured Claims and Allowed General
Unsecured Claims. The Holders of Allowed General Unsecured Claims
also will be entitled to a pro rata share of the Net Insurance
Proceeds, if any, in addition to the $725,000 Aggregate Plan
Payment Amount allocated to such Holders.
Plan Payments under the Amended Plan will be made from Cash on Hand
that Debtor has accumulated as of the Effective Date, as further
set forth in the Feasibility Model, which estimated Cash on Hand
includes, among other things, cash obtained from the $1,500,000
Term Loan from TCB and certain payments made to Debtor from its
subsidiaries.
Substantial consummation of the Amended Plan by satisfaction of the
Plan Payments will be accomplished on, as soon as practicable
after, the Effective Date of the Amended Plan, and Debtor expects
to file a motion to close the Bankruptcy Case following the entry
of a Final Order approving the Administrative Claims of all
Professionals and payment of all such Allowed Administrative Claims
by Debtor.
The exact percentage distribution on account of General Unsecured
Claims will depend on the total amount of Claims Allowed in this
Case, as well as whether and to what extent any Net Insurance
Proceeds are paid to Debtor or the Reorganized Debtor, as
applicable.
Class 3 consists of General Unsecured Claims. Except to the extent
that the Holder of an Allowed General Unsecured Claim has agreed to
a less favorable treatment of such Claim, Allowed General Unsecured
Claims shall receive; (i) a pro rata share of the Aggregate Plan
Payment Amount; plus (ii) a pro rata share of the Net Insurance
Proceeds, if any. For clarity purposes, no Allowed General
Unsecured Claim shall accrue, or otherwise be entitled to receive,
any interest.
Debtor shall pay the Aggregate Plan Payment Amount to each Holder
of Allowed General Unsecured Claims in Cash equal to its pro rata
distribution of the Aggregate Plan Payment Amount on the latest of
(a) the Effective Date or as soon as reasonably practicable
thereafter, (b) the date on which such Disputed General Unsecured
Claim becomes an Allowed General Unsecured Claim, and (c) such
other date as mutually may be agreed to by and between Debtor and
the Holder of such Allowed General Unsecured Claim.
The estimated percentage recovery to Holders of Allowed General
Unsecured Claims in Class 2 on account of the Aggregate Plan
Payment Amount is estimated to be between 27% to 28%, based upon
all of the General Unsecured Claims, which claims shall be
considered Allowed Claims. The anticipated percentage recovery on
account of General Unsecured Claims, however, may be further
adjusted and subject to change based on the recovery of any Net
Insurance Proceeds, or subsequent claims or amendment of claims as
allowed by the Court. The allowed unsecured claims total
$2,637,732.98.
The Plan Payments will be funded by Debtor's Cash on Hand as of the
Effective Date. Holders of General Unsecured Claims also will be
entitled to share pro rata in any Net Insurance Proceeds received
by the Reorganized Debtor.
A full-text copy of the First Amended Plan dated July 18, 2022, is
available at https://bit.ly/3RXzXsn from PacerMonitor.com at no
charge.
Counsel for Debtor:
Ian S. Landsberg, Esq.
Sklar Kirsh, LLP
1880 Century Park East, Ste. 300
Los Angeles, CA 90067
Tel: (310) 845-6416
Fax: (310) 929-4469
Email: ilandsberg@sklarkirsh.com
About CIPA
California Independent Petroleum Association (CIPA) --
http://www.cipa.org/-- is a non-profit, non-partisan trade
association representing approximately 500 independent crude oil
and natural gas producers, royalty owners, and service and supply
companies operating in California.
CIPA filed a petition for Chapter 11 protection (Bankr. E.D. Cal.
Case No. 21-23169) on Sept. 5, 2021, listing $2,097,356 in assets
and $1,194,070 in liabilities. CIPA CEO Rock Zierman signed the
petition.
Judge Christopher D. Jaime oversees the case.
Ian S. Landsberg, Esq., at Sklar Kirsh, LLP is the Debtor's
bankruptcy counsel. Manatt, Phelps & Phillips, LLP and Alcorn
Law Corporation serve as special counsel.
CANOPY GROWTH: Fitch Hikes IDR to CCC on Exchange Completion
------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Issuer Default Ratings
(IDR) for Canopy Growth Corporation (Canopy) and 11065220 Canada
Inc. to 'RD' from 'C' on the completion of Canopy's exchange offer
for a portion of the convertible notes due July 2023. Subsequently,
Fitch has reassessed and upgraded the IDRs to 'CCC' post completion
of the exchange. Fitch has affirmed the 'B'/'RR1'ratings for the
senior secured term loan facility at Canopy and the co-issuer,
11065220 Canada, Inc.
The post-exchange IDR of 'CCC' reflects Canopy's ongoing
operational risks with executing its operating strategies, the high
cash burn rates and uncertain path to profitability that has
reduced liquidity. The exchange only partially addresses the 2023
maturity, with CAD337 million remaining outstanding of which
Constellation Brands, Inc. (CBI) continues to hold CAD100 million.
As such, Fitch could take further negative rating actions if Canopy
pursues a repayment/refinancing of the remaining 2023 notes that
Fitch considers a distress debt exchange per criteria, a lack of
execution on the premiumization cultivation strategy, or if Fitch
views that the strategic incentive for CBI to support Canopy has
lessened. The current rating incorporates a one-notch uplift from
the standalone credit profile (SCP) at 'CCC-'.
KEY RATING DRIVERS
Exchange Offering Completed: Fitch considers the debt exchange,
which closed on July 18, 2022, as a distressed debt exchange (DDE)
under Fitch's DDE criteria. Per criteria, Canopy's IDR was lowered
to 'RD' on completion of the exchange.
The exchange of the convertible notes only partially addresses the
2023 maturity, with CAD337 million remaining outstanding of which
CBI continues to hold CAD100 million. Fitch expects Canopy will
continue to assess options ahead of the maturity for the repayment
of the remaining outstanding notes during the next couple of
quarters. The company could pursue further repayment options that
Fitch views as a DDE. Canopy's cash and short-term investments were
around CAD1.4 billion at March 31, 2022.
Canadian Market Share Losses: 2021 Canadian cannabis retail sales
grew by around 50% to CAD4 billion, according to Statistics Canada.
However, Canopy materially underperformed Fitch's and the company's
own expectations of growth in line with or better than the market,
with revenues in the Canadian cannabis channel decreasing by 10% in
fiscal 2022 to CAD258 million. Canopy lost share, in part, due to
its pivot away from the value segment.
Marketplace dynamics are challenging, including evolving consumer
preferences and the competitive environment with significant
pricing compression, particularly in the value segment that has
caused material profitability pressures. Consequently, Canopy has
recognized significant asset impairments.
In response to the operating challenges, Canopy announced
restructuring actions that it expects to generate CAD100 million to
CAD150 million in savings during the next 12 to 18 months, focusing
on right-sizing cost structure, reducing cultivation costs and
increasing efficiencies across the supply chain.
Consistent Cultivation Strategy Key: A key strategy to improve
profitability is a change in Canopy's genetics and cultivation
strategy to higher quality cannabis with the right attributes (i.e.
higher THC, single-strain, good terpenes) for the premium and
mainstream flower, pre-rolls, edible and vape markets, while using
the value segment as an outlet strategy. Canopy has several brands
to leverage this strategy including DOJA, 7ACRES, Tweed and Deep
Space. However, the transition has been challenging and taken
longer than expected to produce a consistent, higher-quality supply
at commercial scale.
Fitch views Canopy's premiumization strategy and increased
distribution for BioSteel as coherent, but there are still
significant execution risks. The company believes it made material
progress with its strategy given growth and positive mix shift
during 4Q22 and expects to have 100% of internally sourced cannabis
available for 2H23, supplemented by partnerships with craft growers
of selective strains. However, Canopy will also need to drive
retail velocities focused on budtender education and point-of-sale
merchandising. BioSteel plans to materially increase distribution
to more than 50,000 points by FYE 2023 as the company invests in
the brand.
Parent-Subsidiary Linkage: Canopy's ratings receive a one-notch
uplift from its SCP due to the stake CBI holds in the company.
CBI's investment totals CAD5.8 billion to date in the form of
equity and convertible debentures. CBI holds a 35.7% stake at July
18, 2022 with additional warrants to increase its stake.
Fitch believes a medium strategic linkage exists between the two
companies given Canopy's portfolio adjacencies that could support
moderate growth potential and reasonable financial value to CBI's
future group profile following U.S. federal legalization of THC.
Canopy has leveraged some of CBI's capabilities in support of its
strategic initiatives with market research, product development,
manufacturing, government relations and distribution capabilities
including BioSteel.
CBI holds four of seven board seats at Canopy, and several past
senior CBI executives hold key positions at Canopy. Fitch could
revisit our views with the strategic linkage based on lack of
execution with its premiumization strategy and/or lack of material
U.S. cannabis reform.
U.S. THC Optionality: Canopy has taken steps to bolster its
competitive position with good optionality in the U.S. upon federal
permissibility of THC, due to several delayed acquisition
agreements. However, U.S. federal legalization timing is highly
uncertain, with significant hurdles given Congressional inaction
due to political uncertainties around differing party views on
cannabis reforms.
In addition, it is uncertain whether Canopy could exercise rights
to full control prior to U.S. federal legalization of THC in the
event Congress passes a bill around potential federal banking
reforms. Thus, while these entities generate around USD500 million
in revenue and more than USD100 million in EBITDA, Canopy's
financial profile does not currently benefit from these
investments.
DERIVATION SUMMARY
Canopy's 'CCC' rating reflects the significant market share losses
in the Canadian market given execution missteps and challenges with
pivoting its cultivation strategy, which has resulted in weak
operating results with an uncertain path to profitability and
reduced liquidity. As a result, Canopy has pursued actions to
right-size cost structure, improve efficiencies, and is in the
midst of pivoting its genetics and cultivation strategy away from
value to the premium and mainstream segments that has been slower
than expected.
The rating also considers Canopy's position as a scaled Canadian
licensed producer with an extensive cannabis portfolio in the
medical and recreational market with leading premium market shares,
significant licensed cultivation and production operations,
portfolio of related CPG brands, and a pathway to a potentially
much larger U.S. THC market upon federal permissibility of THC or
at Canopy's discretion due to several delayed acquisition
agreements.
The company has approximately CAD1.4 billion in cash, cash
equivalents and short-term investments. CBI's equity stake and
strategic partnership meaningfully expands Canopy's capabilities
while also presenting another potential source of capital. Canopy's
ratings receive a one-notch uplift from its 'CCC-' SCP due to CBI's
minority interest in the company.
Canopy is rated lower than Legends Hospitality Holding Company, LLC
(B-/Stable); Knowlton Development Corporation Inc. (KDC,
B-/Stable); and WeWork Companies LLC (CCC+).
Legends' rating reflects the ongoing recovery of the company's
financial metrics following pandemic-related disruptions to its
business model, which drove EBITDA negative in 2020, with Fitch
expecting leverage to return to the low-7x in 2022 and FCF
approaching neutral in 2023.
WeWork's 'CCC+' IDR reflects Fitch's view that the business model
appears viable exiting the coronavirus pandemic having right sized
its footprint and cost structure. FCF has remained consistently
negative but has improved over the past year. However, the
company's FCF outlook is subject to risks and uncertainties,
particularly to the extent office demand is structurally weak over
the medium term. WeWork's financial policy while supportive of
providing needed liquidity may not be sufficient in the medium term
to protect creditors.
KDC's 'B-' IDR reflects KDC's status as a global leader in custom
formulation, packaging and manufacturing solutions for beauty,
personal care and home care brands, supported by a diverse product
portfolio and customer base, ranging from blue-chip names to
"indie" brands, with whom the company typically maintains long-term
relationships.
Fitch expects KDC's broadening platform, including the recent
Aerofil acquisition, and investment in R&D will enable the company
to sustain modest organic revenue growth over the long term. While
the recent strategic investment by KKR affords the company
significant financial flexibility in the near term, the ratings are
constrained by KDC's highly acquisitive strategy, which Fitch
expects could result in debt/EBITDA trending in the 7.0x range over
time, up from around 6.0x today pro forma for the KKR investment.
KEY ASSUMPTIONS
-- Revenue increase of approximately 8% in fiscal 2023 to mid-
CAD500 million range supported by successful execution on the
genetics cultivation strategy reflecting increased premium and
mainstream market shares, increased distribution of BioSteel
and volume growth in Storz and Bickel products. Growth in
fiscal 2024 to around CAD 700 million driven by similar
factors;
-- EBITDA deficit in the mid CAD200 million range versus negative
CAD410 million in fiscal 2022, reflecting improved operating
leverage supported by top-line growth, margin/mix benefits
from premiumization strategy and efficiency cost savings
initiatives. EBITDA deficit narrowing but remaining negative
through fiscal 2025;
-- Capital spending of around CAD 50 million;
-- FCF deficit of close to CAD500 million in fiscal 2023,
decreasing to around CAD250 million in fiscal 2024;
-- Bolt-on M/A transaction structured similar to Jetty Extracts
targeting the U.S. THC market utilizing structured investments
prior to federal permissibility;
-- Successful repayment/refinancing of convertible notes
maturity;
-- Forecast does not assume any changes in U.S. Cannabis laws
regarding federal THC permissibility or federal banking
reforms.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Good execution with on-going strategic initiatives that
results in greater clarity around a pathway to profitability
that generates positive EBITDA, significant reduction in
operating deficits and improved liquidity to fund ongoing
operations and necessary investments over the next 24 to 36
months;
-- Positive changes in the regulatory environment.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Canopy enters into an agreement with convertible bondholders
that could be classified as a Distress Debt Exchange Rating
per Fitch's Criteria;
-- Lack of execution on premiumization strategy and profitability
improvement that is materially lower than expectations of
Canopy reaching EBITDA positive in fiscal 2024 excluding
investments in BioSteel and U.S. THC that raises concerns
about the sustainability of its capital structure;
-- A material adverse change in the strategic relationship with
CBI or Fitch's assessment that the moderate strategic linkage
between CBI and Canopy has weakened.
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
High Cash Burn, Weakening Liquidity: The ongoing cash burn and M&A
strategy combined with current market conditions have eroded
Canopy's liquidity position and could hamper its ability to access
additional capital. Cash, cash equivalents and short-term
investments totaled CAD1.4 billion at the end of fiscal 2022. This
compares to around CAD2.3 billion for fiscal 2021.
Canopy's liquidity was supplemented in March 2021 with a USD750
million senior secured term loan facility due 2026. The company
also has a USD500 million accordion feature on the term loan
facility. Fitch does not assume Canopy will draw on the accordion
as the company reviews alternatives to repay/refinance the
remaining CAD337 million convertible notes following the completion
of the exchange offer. The term loan facility has a minimum
liquidity covenant of USD200 million.
The recovery considerations have not changed from Fitch's last
review.
ISSUER PROFILE
Canopy is a leading global diversified cannabis and hemp company
based in Canada that primarily produces, distributes and sells
recreational and medical cannabis and hemp-based products. Canopy
offers a large portfolio of branded cannabis and CBD product
offerings, cannabis vaporizers and non-cannabis consumer packaged
goods.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch adjusted the fair value of debt to reflect debt amount
payable on maturity, stock-based compensation, transactions
expenses, impairments and restructuring costs.
ESG CONSIDERATIONS
Canopy Growth Corporation has an ESG Relevance Score of '4' [+] for
Exposure to Social Impacts. This is due to Canopy's core business
focusing on a portfolio of cannabis product offerings benefits from
shifting consumer preferences toward recreational, medicinal and
health/wellness usage, and ongoing legalization that is in various
stages in Canada, the U.S. and other international markets, which
has a positive impact on the credit profile, and is relevant to the
ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING PRIOR
---- ------ -----
11065220
Canada, Inc. LT IDR RD Downgrade C
LT IDR CCC Upgrade RD
senior secured LT B Affirmed RR1 B
Canopy Growth
Corporation LT IDR RD Downgrade C
LT IDR CCC Upgrade RD
senior secured LT B Affirmed RR1 B
CANOPY GROWTH: S&P Upgrades ICR to 'CCC', Outlook Negative
----------------------------------------------------------
S&P Global Ratings raised its ICR on Smiths Falls, Ont.-based
Canopy Growth Corp. (CGC) to 'CCC' from 'SD'. At the same time, S&P
Global Ratings affirmed its 'CCC+' issue-level rating on the
company's senior secured term loan. Our '2' recovery rating on the
term loan facilities is unchanged.
The negative outlook reflects S&P's view that Canopy's operating
challenges will continue through fiscal 2023, which would pressure
the company's already negative free operating cash flow and
liquidity such that a conventional default becomes likely in the
near term.
On July 18, Ontario-based vertically integrated cannabis company
CGC completed an exchange offer, acquiring and canceling about
C$263 million of its C$600 million convertible notes outstanding
due July 2023 (2023 notes) in exchange for common shares and about
C$5.4 million in cash for accrued and unpaid interest.
S&P said, "Following the completion of the exchange offer, we
continue to highlight the enhanced refinancing risk on the
remaining amount outstanding on the company's 2023 notes amid
substantial cash burn projected, which will weaken the company's
liquidity position. We expect access to conventional capital
markets will remain weak in the current environment reflecting weak
profitability and less favorable capital market conditions. We
anticipate that during the next six-12 months, CGC will explore
various options and address the remainder of the 2023 notes
outstanding.
"Our view of the business is largely unchanged since our downgrade
in June, which followed the company's fourth quarter and fiscal
year end (ending March 31, 2022). We view the exchange offer as
marginally positive, as it reduces CGC's call on cash in the next
12 months, but the pressure on operating performance is unchanged.
For more information on CGC, see our research update, published
June 17, 2022, on RatingsDirect.
"The negative outlook reflects the high risk that CGC will face a
liquidity shortfall due to our projections for significant negative
cash flow resulting from operational underperformance. Therefore,
absent a successful near-term refinancing or maturity extension, we
believe there is a high likelihood of a conventional default within
the next six-12 months.
"We could downgrade CGC if it maintains a high cash burn rate,
leading to a liquidity shortfall and a conventional default. This
could occur if the company's operating performance deteriorates
meaningfully due to unfavorable regulatory developments,
intensifying competition, or slower-than-expected revenue growth in
the recreational cannabis and consumer products segment.
"We could revise the outlook to stable if we believe CGC's
operating prospects and liquidity sources, including its cash
position, availability under its credit facility, and future cash
flow generation prospects, would be sufficient to support
operations."
CEC ENTERTAINMENT: Moody's Ups CFR to B3 & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service upgraded CEC Entertainment, LLC's ratings
including its corporate family rating to B3 from Caa1, its
probability of default rating to B3-PD from Caa1-PD, amd its senior
secured rating to B3 from Caa1. The outlook is stable.
Upgrades:
Issuer: CEC Entertainment, LLC
Corporate Family Rating, Upgraded to B3 from Caa1
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
Senior Secured Regular Bond/Debenture, Upgraded to B3 (LGD3) from
Caa1 (LGD4)
Outlook Actions:
Issuer: CEC Entertainment, LLC
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
"The upgrade reflects CEC's earnings recovery over the last few
quarters driven by pent up consumer demand for childrens'
gatherings and special events. Moody's expects that these demand
trends will continue over the second half of the year driving
leverage to improve to about 5.0x over the next 12-18 months
despite a challenging inflationary environment that has affected
commodity costs and labor expenses," said Matt Furbish, Moody's
Analyst. For the LTM period ending May 1, 2022, Moody's adjusted
debt/EBITDA was 5.3x.
CEC's B3 CFR is supported by its improved debt/EBITDA, meaningful
scale in terms of number of locations, the brand awareness of
"Chuck E. Cheese", its good margins versus restaurant peers driven
by its mix of entertainment/gaming offerings, and its good
liquidity. The credit profile, however, is constrained by high
inflation that has impacted labor and food costs industrywide and
meaningfully compressed margins. The level to which inflation
further weakens CEC's earnings could result in negative free cash
flow during the fiscal year ending January 2023, due to growth
capital expenditures needed for investment in store remodels and
other upgrades. However, CEC's meaningful cash balances provides it
with a solid buffer to support any potential cash flow deficits.
CEC's credit profile is also constrained by its currently weak
EBIT/interest of less than 1.0x. The credit profile also
incorporates the company's high seasonality with annual earnings
typically concentrated in the first quarter and its store
concentration in California, Texas and Florida.
The stable outlook reflects CEC's good liquidity and Moody's view
that EBIT/interest coverage will strengthen even as the company
navigates a challenging macro-economic backdrop.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded should operational improvement be
sustained to a level where debt/EBITDA is maintained around 5.5x
and EBIT/interest coverage above 1.5x. An upgrade would also
require the maintenance of good liquidity including positive free
cash flow.
Ratings could be downgraded if earnings were to deteriorate or
negative free cash flow were to weaken liquidity for any reason.
Quantitatively, a downgrade could occur should EBIT/interest
coverage remain below 1.0x.
Headquartered in Irving, Texas, CEC Entertainment, LLC owns,
operates and franchises about 675 Chuck E. Cheese and Peter Piper
Pizza locations that provide family-oriented dining and
entertainment in 47 states and 17 foreign countries. CEC is owned
by a group that includes prepetition debt lenders. Revenue for the
fiscal year ending January 2022 was about $668 million.
The principal methodology used in these ratings was Restaurants
published in August 2021.
CELSIUS NETWORK: Has $130M Cash, $1.9 Billion of Deficit
--------------------------------------------------------
Cryptocurrency lending company Celsius Network LLC and its
subsidiaries sought Chapter 11 bankruptcy protection to get a
"breathing spell" to negotiate and implement a plan that will
maximize the value of its business and generate meaningful
recoveries to stakeholders as quickly as possible.
According to court filings, Celsius' platform was launched in 2018
and by the end of 2018, over $50 million of crypto had been
transferred onto its platform by users. By May 2019 that number
grew to $200 million. By March 2021 that number had grown to more
than $10 billion.
In October 2021, the Company expanded its business by purchasing
non-debtor GK8 Ltd., an Israeli company that provides a "cold"
storage platform for crypto assets, for $115 million. In December
2021, Celsius announced the first closing of its Series B equity
funding with a capital raise of $600 million from various investors
at an implied enterprise value of approximately $3 billion. By May
2022, the Company had raised approximately $690 million from its
Series B financing, with all but $6 million of that amount funded.
By July 2022, Celsius had approximately 1.7 million registered
users and approximately 300,000 active users with account balances
of more than $100, and approximately $6.0 billion in assets and was
preparing to go forward with an initial public offering of debtor
Celsius Mining LLC.
Crypto Winter
Several negative events in the crypto space, including the
implosion of Terra LUNA ("Luna") and its TerraUSD (UST) stablecoin
("UST"), accelerated the onset of a "crypto winter" and an
industry-wide sell-off in 2022. The Luna crash also triggered
massive layoffs across the crypto industry, including Coinbase,
which laid off approximately 18% of its workforce (around 1,100
employees).
Luna's collapse had a significant effect on the cryptocurrency
industry. The collapse of Three Arrows Capital ("3AC") directly
impacted Celsius and other crypto companies such as Voyager Digital
Holdings, Inc. Celsius had extended two loans totaling $75 million
to 3AC. When 3AC failed to meet a margin call, Celsius liquidated
the collateral that 3AC had pledged, and its claim against 3AC now
totals $40.6 million.
In May and June 2022, Celsius made the difficult decision to forgo
providing one of its lenders, Tether, issuer of USDT, a stablecoin,
additional collateral and agreed to an orderly liquidation of its
loan. During the market crash, Tether issued a margin call to
Celsius with regard to an outstanding $841 million USDT loan.
Although Celsius had always provided sufficient collateral to
support its loan, and had never previously been liquidated by
Tether, the Company agreed to an orderly liquidation and settlement
of its loan with Tether to preserve the remaining collateral in
excess of the value of the loan. This resulted in a loss of
approximately $97 million.
Amid rumors Celsius had lost hundreds of millions of dollars on
Luna, users accelerated withdrawals of over $1 billion from the
platform over five days in May 2022 at a time when distrust of
cryptocurrency was at an all-time high. Dealing with an
unexpected and rapid "run on the bank," on June 12, 2022, Celsius
decided to pause all withdrawals, swaps, and transfers on its
platform.
On June 19, 2022, Celsius retained Centerview Partners LLC, as
financial advisor and investment banker, and Alvarez & Marsal North
America, LLC, as restructuring advisor to advise on potential
transactions. On June 28, Celsius retained Kirkland & Ellis LLP as
restructuring counsel.
Chapter 11 Filing
The Company said the Chapter 11 filing provides it with the best
opportunity to stabilize its business, consummate a comprehensive
restructuring transaction that maximizes value for all
stakeholders, and emerge from Chapter 11 positioned for success in
the cryptocurrency industry. To date, the Company has taken
significant strides to preserve assets by stopping its traditional
asset deployment strategies.
As a result, on the Petition Date, the Company now holds
approximately $4.31 billion in assets with only $780 million in
non-user liabilities.
To bridge this gap in its balance sheet, the Company plans to
engage with all constituencies, including the official committee of
unsecured creditors (which will likely include mostly users), in a
productive dialogue with the hope of building consensus around the
Debtors' potential Chapter 11 plan of reorganization and,
ultimately, a transaction that will maximize the value of the
Company's business for the benefit of its creditors. One way the
Debtors intend to achieve this goal is by using the Bitcoin
"minted" by Mining to address its current cryptocurrency deficit.
The Debtors are aiming to file a plan that will provide users with
choices and enable Celsius to return to normal operations. To fund
plan recoveries, the Company may sell one or more of its assets
and/or consider an investment from third-party strategic or
financial investors in exchange for equity in a "reorganized"
Celsius.
Celsius' goal since its inception has been to take care of its
global community. That promise remains true now, and with the
support of its community, the Debtors intend to actively engage
with its community members to develop a viable exit from Chapter 11
that will result in maximum recoveries to its stakeholders.
$1.9 Billion Deficit
As of the Petition Date, the Debtors do not have any long-term or
funded debt.
The Debtors have 1.7 million registered users, including
approximately 300,000 active users with account balances greater
than $100.
As of the Petition Date, the Debtors have $130 million in cash on
hand.
In his affidavit in support of the Chapter 11 petitions, CEO Alex
Mashinsky disclosed that as of July 13, 2022, a day before the
bankruptcy filing, Celsius Networks had a deficit of $1.9 billion:
Liabilities:
User Liabilities ($4,720 million)
CEL Liabilities (210 million)
Custody Liabilities (180 million)
Other (390 million)
--------------
Total Liabilities ($5,500 million)
Assets:
Bank Cash 170 million
Crypto Assets 1,750 million
Loans 930 million
Allowance For Doubtful Accounts (310 million)
--------------
Net Loans 620 million
Mining Assets 720 million
Custody Assets 180 million
CEL Token 600 million
Other 270 million
Total Assets $4,310 million
--------------
Surplus / (Deficit) ($1,190 million)
The Celsius Network
According to CEO Mashinsky, Celsius' primary operations consist of:
(a) financial services through which retail and institutional users
can (i) earn rewards on cryptocurrency they transferred to Celsius,
(ii) securely store and access cryptocurrency, (iii) borrow fiat
using cryptocurrency as collateral, and (iv) send and receive
cryptocurrency using Celsius' CelPay services; and (b) Bitcoin
mining through Mining:
* Through the Company's "Earn" program, users who transfer
certain cryptocurrencies to Celsius earn "rewards" in the form of
payment in-kind interest ("PIK Interest") or CEL Tokens on their
assets. As of April 2022, the Earn program is only offered to
international-based users and U.S. accredited users. As of the
Petition Date, there were over 600,000 Earn users, who had
transferred 2 billion in digital assets, in the aggregate, with a
market value of approximately $4.2 billion as of July 10, 2022, to
Celsius. As of the Petition Date, Celsius no longer offers rewards
on digital assets transferred to Celsius through the Earn program.
* In March 2018, Celsius launched its own cryptocurrency, CEL
Tokens ("CEL"), for use on its platform and raised capital through
an initial coin offering. CEL Tokens are primarily issued in
connection with the Company's loyalty and rewards program. On July
12, 2022, the CEL price was approximately $0.71 USD with a market
cap of approximately $170.3 million.
* As of July 13, 2022, Celsius Lending LLC had approximately
23,000 outstanding loans to retail borrowers in the aggregate
amount of approximately $411 million backed by collateral with a
market value of approximately $765.5 million in digital assets.
* Celsius Network Limited engaged in bespoke lending and
borrowing relationships with institutional clients, such as hedge
funds and market-makers, which helps Celsius generate revenue. As
of July 11, 2022, CNL had approximately 47 institutional borrowers,
with approximately $93 million of aggregate outstanding performing
loans and the Company held collateral, with a market value of
approximately $98.5 million in digital assets to cover such loans.
* In April 2022, the Company began providing a new type of
service marketed to its users located in the U.S. called the
Celsius Custody Service. For eligible users, "Custody Service"
serves as the central hub of their digital asset account at
Celsius, enabling the user to navigate from Celsius' "Custody
Wallet" to various Celsius products. As of the Petition Date,
approximately 58,000 users were utilizing the Custody Service, with
digital assets worth a market value of approximately $180 million,
as of July 10, 2022, held by Celsius.
* Celsius Mining LLC operates one of the largest crypto mining
enterprises in the United States. To expand Mining's operations,
and thus generate a greater yield, effective as of November 1,
2020, and through 2021, Celsius Network Limited ("CNL") entered
into an intercompany revolver facility with Mining for up to $750
million. Currently Mining owns 80,850 rigs with 43,632 in
operation, and prior to the Petition Date, had an investment plan
to operate approximately 120,000 rigs by end of 2022. Mining is
currently generating approximately 14.2 Bitcoins per day for the
past seven days and generated a total of 3,114 Bitcoin during 2021.
For 2022, it is projecting to generate 10,118 Bitcoin. For 2023,
assuming at least 110,000 rigs will be online, Mining is projecting
to generate approximately 15,000 Bitcoin. As of May 31, 2022, the
outstanding loan balance owed to CNL is $576 million.
* Decentralized finance ("DeFi") is an emerging system of
financial products made available to the public. DeFi is an
umbrella term that refers to an ecosystem of "peer-to-peer"
financial services. Similar to cryptocurrencies, DeFi, which was
created in 2017 and became popular in 2020, eliminates the typical
intermediaries in borrowing and lending, such as banks, by using
peer-to- peer financial networks that use protocols, connectivity,
software, and hardware advancements. Prior to the Petition Date,
on June 27, 2022, the Company had approximately $648 million in
DeFi borrows collateralized by approximately $1.61 billion in
digital assets based on a market valuation of June 27, 2022. As of
the Petition Date, the Company has unwound nearly all of its DeFi
loans and the FTX loan, with only one loan remaining in an amount
of approximately $3.2 million co lateralized by $6.6 million in
digital assets.
* To further generate yield, the Company also engages in
"staking." Utilizing the Lido Finance DeFi protocol, Celsius
"staked" its digital assets in ETH on the Ethereum 2.0 Beacon Chain
-- a network that is supposed to be merged with the main Ethereum
network that will transition the blockchains from PoW to PoS (the
"Merge"). In exchange for staking its ETH on the Beacon Chain, Lido
Finance provided Celsius with staked ETH ("stETH"). The stETH that
Celsius received can then be lent, staked, and traded for other
tokens. As of July 10, 2022, the Company holds 410,421 stETH, and
as a result, approximately $467 million of the Company's ETH, based
on the market value of ETH as of July 10, 2022, is illiquid but is
earning an approximate 5% APY pending the Merge.
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtor estimated assets and liabilities between $1
billion and $10 billion.
Joshua A. Sussberg, of Kirkland & Ellis LLP, is serving as legal
counsel, Centerview Partners is serving as financial advisor, and
Alvarez & Marsal is serving as restructuring advisor.
Kirkland & Ellis LLP is serving as legal counsel, Centerview
Partners is serving as financial advisor, and Alvarez & Marsal is
serving as restructuring advisor to Celsius.
Stretto, the claims agent, maintain the page
https://cases.stretto.com/celsius
CELSIUS NETWORKS: May Offer Creditors Loss Now, Long Bet in Crypto
------------------------------------------------------------------
Steven Church and Jeremy Hill of Bloomberg News report that
cryptocurrency lender Celsius Network LLC may use its bankruptcy
case to give creditors a choice between taking less than they are
owed in cash, or making a bet on the long-term value of the
cryptocurrencies at the heart of the company's failure.
The company opened its first Chapter 11 court hearing Monday, July
18, 2022, with a promise not to force its customers to accept any
repayment they may be owed in US dollars or any other so-called
fiat currency.
"This is not a liquidation," Patrick Nash, a bankruptcy lawyer for
Celsius, told the judge overseeing the bankruptcy case in
Manhattan.
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtor estimated assets and liabilities between $1
billion and $10 billion.
Joshua A. Sussberg, of Kirkland & Ellis LLP, is serving as legal
counsel, Centerview Partners is serving as financial advisor, and
Alvarez & Marsal is serving as restructuring advisor.
Kirkland & Ellis LLP is serving as legal counsel, Centerview
Partners is serving as financial advisor, and Alvarez & Marsal is
serving as restructuring advisor to Celsius.
Stretto, the claims agent, maintain the page
https://cases.stretto.com/celsius
CHARLOTTE BUYER: Moody's Assigns B3 CFR, Outlook Stable
-------------------------------------------------------
Moody's Investors Service assigned a B3 Corporate Family Rating and
a B3-PD Probability of Default Rating to Charlotte Buyer, Inc.
(also known as "Kindred at Home Hospice" or "KAH Hospice").
Concurrently, Moody's assigned B2 ratings to the company's proposed
$400 million revolving credit facility, $1.2 billion first lien
term loan, and $400 million term loan A. Moody's also assigned a
Caa2 rating to the company's proposed $450 million second lien term
loan. The rating outlook is stable.
Proceeds from the revolving credit facility, term loan A, first
lien term loan and second lien term loans, along with nearly $1.4
billion of new and rolled over equity, will be used to fund the
$3.4 billion, 60% majority stake of KAH Hospice, and pay
transaction related expenses, by private equity sponsor Clayton,
Dubilier & Rice ("CD&R"). Humana will maintain a 40% stake in KAH
Hospice.
The following ratings have been assigned:
Assignments:
Issuer: Charlotte Buyer, Inc.
Corporate Family Rating, Assigned B3
Probability of Default Rating, Assigned B3-PD
Senior Secured 1st Lien Revolving Credit Facility, Assigned B2
(LGD3)
Senior Secured 1st Lien Term Loan, Assigned B2 (LGD3)
Senior Secured Term Loan A, Assigned B2 (LGD3)
Senior Secured 2nd Lien Term Loan, Assigned Caa2 (LGD6)
Outlook Actions:
Issuer: Charlotte Buyer, Inc.
Outlook, Assigned Stable
ESG considerations are material to the ratings assignment. KAH
Hospice faces negative social risk exposures stemming from its high
reliance on government reimbursement, especially Medicare, and the
government's focus on reducing health care costs. However, over the
long term, hospice services should benefit from favorable growth
prospects that are driven by aging demographics. Among governance
risk considerations, the company's financial policies are expected
to remain aggressive under majority private equity ownership.
RATINGS RATIONALE
The B3 CFR reflects KAH Hospice's modest size and scale, the
presence of considerable competition in a highly fragmented
industry and high initial Moody's adjusted debt-to-EBITDA of
approximately 7 times based on the LTM period ended December 31,
2021, following the financing of a majority ownership stake by
CD&R. The rating also reflects the risk arising from the company's
predominantly narrow focus on providing hospice services and the
high revenue concentration from Medicare, each accounting for over
80% of total revenue. Moody's expects that there will be a
continued focus by the government on implementing measures to
contain increasing health care costs, which may unfavorably impact
future reimbursement rates. Further, the rating is constrained by
the risk that financial policies will be aggressive under majority
private equity ownership including debt-funded acquisitions to
drive growth.
The rating is supported by KAH Hospice's market position as one of
the leading hospice providers in the US. The company is
well-diversified geographically with over 350 locations in 35
states. Moody's also believes that the hospice industry should
benefit from favorable long-term growth prospects that are driven
by aging demographics and a growing awareness of the benefits of
hospice service for patients experience.
Moody's anticipates KAH Hospice will maintain very good liquidity,
with modest capital expenditure requirements and positive free cash
flow generation. Liquidity will be supported by $25 million of cash
at close and the expectation for $60-$70 million of positive free
cash flow generation over the next 12 to 18 months. Further
supporting liquidity is the new proposed $400 million 5-year
revolving credit facility, which is expected to be $103 million
drawn at close. This facility will have a springing First Lien Net
Leverage Covenant of 9.5x that will be tested when the revolver is
more than 40% drawn. Moody's expects the company to have sufficient
cushion under this covenant if the revolver were to be drawn. There
is no financial covenant on the term loans. Alternative sources of
liquidity are limited as substantially all assets are pledged.
The B2 ratings assigned to the proposed $400 million first lien
revolving credit facility, $1.2 billion first lien term loan, and
$400 million term loan A reflect their senior secured interest in
substantially all assets of the borrower and the level of junior
debt in the company's capital structure, comprised of a proposed
$450 million second lien term loan. The Caa2 rating assigned to the
proposed second lien term loan reflects its junior ranking in the
capital structure.
The borrower under the credit agreement is Charlotte Buyer, Inc.
There is a downstream guarantee from an intermediate holding
company, but not from KAH Hospice Company, Inc., i.e. the future
filer of the financial statements. Moody's anticipates receiving
adequate financial information to ascertain that there are no
material operations, cash flow, assets or liabilities at the parent
entity and intermediate entities other than equity interests in
their subsidiaries.
The stable outlook reflects Moody's expectation that KAH Hospice
will operate with debt-to-EBITDA levels that will remain above 6
times over the next 12 to 18 months but that the company will also
maintain very good liquidity.
ESG considerations are material to KAH Hospice's ratings. KAH
Hospice faces negative social risk exposures primarily associated
with its high reliance on Medicare for reimbursement and the
government's continued focus on reducing health care costs.
However, the company should benefit from an aging demographics in
the long-term. With respect to governance, KAH Hospice is majority
private equity owned, which could lead to an increasingly
aggressive financial policy over time.
As proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following:
The proposed first and second lien term loans are expected to have
no financial maintenance covenants while the proposed revolving
credit facility will contain a springing maximum total first lien
net leverage ratio of 9.5x that will be tested when the revolver is
more than 40% drawn.
In addition, the first lien credit facility contains incremental
facility capacity up to the greater of $325 million and 100% of
EBITDA, plus any unused amounts under the general debt basket, plus
unlimited amounts subject to a 5.25x pro forma Total First Lien
Leverage Ratio (if pari passu secured to the first lien, with
additional incremental amounts permitted (if secured on a pari
passu basis with the second lien) up to the greater of $80 million
and 25% of EBITDA, plus unlimited amounts subject to 6.65x pro
forma total secured leverage. Amounts up to the greater of $485.0
million and 150% of EBITDA, along with any indebtedness incurred in
connection with a permitted acquisition or investment may have an
earlier maturity date than the initial term loans.
The credit agreement permits the transfer of assets to
unrestricted subsidiaries, up to the carve-out capacities, subject
to "blocker" provisions which prohibit the transfer of intellectual
property, that is material to the operations of the company, taken
as a whole, by way of sale, conveyance, transfer or other
disposition to an unrestricted subsidiary.
Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees subject to
protective provisions which only permit guarantee releases if such
transfer is not done in connection with a non-bona fide transaction
(as determined by the parent borrower conclusively and in good
faith) and for the primary purpose to cause such subsidiary to
become an excluded subsidiary and be released from the guarantee.
There are no express protective provisions prohibiting an
up-tiering transaction.
The proposed terms and the final terms of the credit agreement may
be materially different.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if KAH Hospice's operating
performance deteriorates, liquidity weakens, or if the company
experiences material disruptions from its transition to operating
as a standalone entity. Further, debt-funded shareholder
distributions, large acquisitions or other aggressive financial
policies could also result in a downgrade.
The ratings could be upgraded if KAH Hospice effectively manages
its growth with prudent financial policies. Increased scale and
business line diversity could also support an upgrade. Further, the
ratings could be upgraded if adjusted debt to EBITDA is sustained
below 6.0 times.
Headquartered in Atlanta, GA, KAH Hospice is one of the leading
hospice providers in the US. The company has 369 hospice and 8
palliative care branches in 35 states, as well as 48 personal care
branches. For the twelve months ended December 31, 2021, the
company generated nearly $1.5 billion in revenue and over $300
million in adjusted EBITDA. KAH Hospice is 60 percent
majority-owned by equity sponsor Clayton, Dubilier & Rice (CD&R),
with the remaining 40 percent owned by Humana.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CHESAPEAKE ENERGY: Fitch Alters Outlook on 'BB' IDR to Positive
---------------------------------------------------------------
Fitch Ratings has affirmed Chesapeake Energy Corporation's
(Chesapeake) Long-Term Issuer Default Rating (IDR) at 'BB', senior
secured Reserve Based Loan (RBL) credit facility at 'BBB-'/'RR1',
senior secured term loan at 'BB+'/'RR2' and senior unsecured notes
at 'BB'/'RR4'. The Rating Outlook has been revised to Positive from
Stable.
The Positive Outlook reflects the improved strength of forecast
after dividend FCF, leverage, improving clarity on its longer-term
asset profile and post-bankruptcy emergence to date financial
discipline. Fitch could resolve the Outlook ahead of its typical
timeframe as Chesapeake continues to develop a track record in line
with its stated financial policy.
Chesapeake's ratings reflect Fitch's forecast leverage of less than
1.0x, its backend weighted maturity profile and multi-basin
production scale. The ratings also take into account Chesapeake's
gas weighting, which typically generates lower netbacks than E&P's
that are more oil weighted.
KEY RATING DRIVERS
Increased FCF Generation: Fitch forecasts Chesapeake to generate
positive annual FCF in excess of dividends of over $1 billion in
each of 2022 and 2023 under its base case forecast before
moderating in 2024 and 2025. Supported by strong gas prices, this
compares with between $100 million-$200 million FCF annually
previously forecast for 2022 and 2023 under Fitch's prior published
forecast in November 2021.
Chesapeake emphasizes capital return in its financial policy and
distributes FCF through a fixed dividend, currently approximately
$230 million annually, and a variable dividend equal to 50% of
quarterly post fixed dividend FCF. It also returns capital through
share buybacks, which are approved for up to $2 billion through
2023. The fixed component is adequately is covered by pre-dividend
FCF through Fitch's forecast period, while the variable dividend
component and discretionary nature of share buybacks would provide
a buffer for Chesapeake to be able maintain positive FCF in a lower
oil and gas environment.
Forecast Sub 1.0x Leverage: Fitch forecasts sub 1.0x gross leverage
and debt to flowing barrel of approximately $3,000/boe through its
forecast. Chesapeake conservatively targets maintaining net debt at
sub-1.0x and emphasizes FCF generation over drill bit growth in its
capital allocation.
The path for Chesapeake to its current capital structure affects
Fitch's rating, as it benefited from the equitization of $7.8
billion of debt when it emerged from voluntary bankruptcy in
February 2021. This history increases the importance of seeing
management demonstrate commitment to maintaining a conservative
financial policy, which can be observed relative to other E&Ps over
time. Broad discipline within the E&P space has provided few
opportunities to demonstrate relative conservatism, but Chesapeake
has maintained its financial position since bankruptcy emergence.
Multi-Basin Production: Chesapeake's credit profile benefits from
basin diversity within meaningful production in each of the
Marcellus, Haynesville and Eagle Ford plays. Chesapeake has been
active in the M&A market closing the acquisition of Vine Energy in
4Q21, as well as the closing the acquisition of Chief Oil & Gas and
coinciding disposition of its Powder River Basin position in 1Q22.
Fitch anticipates Chesapeake to continue to utilize opportunistic
M&A, which could increase funding and execution risk as well as
diminishes current visibility on longer term asset profile.
Significant Natural Gas Assets: Chesapeake's Marcellus position has
approximately 16 years of inventory life at current rig pace, with
its Haynesville and Eagle Ford positions having an estimated
approximately 15 and 14 years, respectively. The acquisition of
Chief Oil & Gas increased Chesapeake's production in the Marcellus
by approximately 835MMcfepd, supporting 2022 production guidance of
670Mboepd-690Mboepd, which is strong for the 'BB' rating level.
Chesapeake has one of the largest operations in the Haynesville,
where it potentially benefits from lower consolidation within the
basin compared with more mature gas basins. This provides
opportunity for future drill-bit and consolidator growth, as well
as to be a meaningful supplier to the Gulf Coast where there is
expected to be increasing LNG demand. Chesapeake's position in the
Eagle Ford (90Mboepd in 1Q22) is the smallest of its segments, but
the contribution to its netbacks due to the play's NGLs and oil
cuts helps support a relatively strong netback compared to more dry
gas peers.
Hedges Support Cash Flow Visibility: From 2Q22 to YE22 Chesapeake
has 71% and 58% of its expected gas and oil production hedged,
respectively, as well as, approximately 40% and 35% respective
Fitch forecast gas and oil production for 2023. Additionally,
Chesapeake adds cash flow visibility through its Marcellus and
Haynesville basis hedge programs. Fitch expects the company will
continue to hedge future production at similar levels to reduce
pricing volatility and de-risk cash flows.
DERIVATION SUMMARY
At 1Q22, Chesapeake's production of 3.7Bcfepd (13% liquids) trailed
gas peers EQT Corporation's (BBB-/Stable) 5.5Bcfepd (5% liquids)
and Southwestern Company's (BB/Stable) 4.4Bcfepd (5% liquids), and
leads CNX Resources' (BB+/Stable) 1.7Bcfepd (6% liquids) of
production. Chesapeake's 1Q22 netback $4.3/Mcfe is stronger than
these peers' respective netbacks of $3.5/Mcfe, $3.4/Mcfe and
$3.8/Mcfe due in large part to the liquids weighting of
Chesapeake's Eagle Ford production.
Compared with Coterra Energy Inc. (BBB/Stable), whose production at
3.8Bcfepd (25% liquids) is comparable to Chesapeake's, Coterra's
rating benefits from the historically conservatively managed
balance sheets of its predecessor companies and a better netback of
$4.8/Mcfe due to the oil weighting of Coterra's Permian and
Anadarko basins production.
KEY ASSUMPTIONS
-- WTI (USD/bbl) of $100 in 2022, $81 in 2023, $62 in 2024 and
$50 thereafter;
-- Henry Hub (USD/mcf) of $6.25 in 2022, $4.00 in 2023, $3.25 in
2024 and $2.75 thereafter;
-- Organic production growth in low single digits through
forecast;
-- Annual capex of approximately $1.7 billion during forecast
period;
-- Marketing revenues and expenses are break-even;
-- Fixed component of dividend maintained at $0.50/quarter
through forecast;
-- Tranche B loan repaid and not refinanced;
-- Approximately $0.5 billion annually in share repurchases 2023-
2025.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Commitment to its stated financial policy resulting in post
dividend FCF generation through the cycle;
-- Credit conscious longer-term asset strategy, M&A or organic
driven, that maintains financial flexibility;
-- Midcycle total debt with equity credit/operating EBITDA
sustained at or below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Failure to maintain a clear, conservative financial and
operational policy;
-- A trend of negative FCF contributing to diminished liquidity
or utilization of revolver commitment above 50%;
-- Midcycle total debt with equity credit/operating EBITDA
sustained over 2.5x;
-- Loss of operational momentum with organic production trending
below 450Mboepd or materially increasing production costs.
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
Back Weighted Maturity Schedule: Chesapeake's revolving facility
matures in 2024, followed by its term loan in 2025. Both of these
facilities were established pursuant to Chesapeake's bankruptcy
exit plan with the $221 million term loan balance available to be
repaid prior to maturity when the revolving facility has a $0
balance. Chesapeake's next senior notes issue matures in 2026, with
the following maturities not until 2029 when $1.45 billion matures.
$950 million of the 2029 maturities were acquired during the Vine
acquisition and with $1.45 billion of approximately $2.8 billion of
total debt maturing in 2029, Chesapeake's medium-term refinancing
risk is low.
Liquidity is provided by Chesapeake's $1.75 billion RBL facility,
which $500 million was drawn from in 1Q22 to partially fund the
Chief Oil & Gas acquisition. The undrawn $1.25 billion revolving
facility portion along with post dividend FCFs are expected to
support liquidity needs through Fitch's forecast period.
ISSUER PROFILE
Chesapeake is a U.S.-based oil and gas exploration and production
company that produced an average of 620Mboepd (87% natural gas and
13% liquids) in 1Q22. Its operations are within the Eagle Ford,
Haynesville and Marcellus shales.
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
---- ------ -------- -----
Chesapeake
Energy 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+
CINEMA SQUARE: Unsecureds Will Receive 100% Under Plan
------------------------------------------------------
Cinema Square, LLC, submitted a Chapter 11 Plan of Reorganization
and a Disclosure Statement.
The Plan may provide for the Debtor to reorganize by continuing to
operate, to liquidate by selling assets of the estate, or a
combination of both.
Under the Plan, holders of Class 3 General Unsecured Claims will
receive 100% of their allowed claims 90 days after the effective
date, or upon allowance, whichever is later. Class 3 is impaired.
The Debtor will collect rents from its tenants and make the
necessary payments under the Plan.
A hearing on Disclosure Statement will be held on September 13,
2022 at 11:30 a.m. in 1415 State Street, Courtroom 201, Santa
Barbara, CA 93101.
Attorneys for the Debtor:
William C. Beall, Esq.
Eric W. Burkhardt, Esq.
BEALL & BURKHARDT, APC
1114 State Street, La Arcada Building, Suite 200
Santa Barbara, California 93101
Tel: (805) 966-6774,
Fax: (805) 963-5988
A copy of the Disclosure Statement dated July 15, 2022, is
available at https://bit.ly/3AQGOhk from PacerMonitor.com.
About Cinema Square
Cinema Square, LLC, is the owner of a small shopping center located
at 6917 El Camino Real, Atascadero, CA 93422. There are several
tenants, the primary tenant is a movie theater, the Galaxy
Theater.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-10634) on June 14,
2021. In the petition signed by Jeffrey C. Nelson, president, the
Debtor disclosed up to $50 million in assets and up to $10 million
in liabilities.
Judge Deborah J. Saltzman oversees the case.
William C. Beall, Esq., at Beall & Burkhardt, APC, is the Debtor's
counsel.
CLAREHOUSE LIVING: No Decline in Resident Care, PCO Report Says
---------------------------------------------------------------
Melanie S. McNeil, Esq., the duly appointed Patient Care Ombudsman
for Clarehouse Living, Inc., filed with the U.S. Bankruptcy Court
for the Northern District of Georgia a Third Patient Care Ombudsman
report regarding the Debtor's health care facility.
The Ombudsman Representative visited Clare House 1 with 10
residents, and direct care staff. No complaints were made.
Residents seemed happy with the level of care they were receiving.
The OR observed three staff on duty at the time of the visit. The
OR noted that the staff were friendly and helpful. The home was
well stocked especially with canned goods. No decline in care was
noted.
The OR also visited Clare House II with 3 residents, and direct
care staff. No complaints were made. Residents seemed happy with
their care. The OR received no complaints, the residents' rooms
were clean, and the OR did not observe any safety concerns. It was
reported that the staff are stable. The facility was well supplied.
No decline in care was noted.
The PCO did not find any new surveys posted since the last report.
The most recent survey report available for Clare House I is dated
September 24, 2021. It was a complaint survey with three violations
cited. The first violation was related to lack of CPR training for
one staff person, the second was for failure to obtain a
satisfactory criminal background check for one of the staff, and
the third was related to physical plant concerns including missing
floor tiles, floors were cracked, a quarter sixed hole in the
hallway wall and a baseball sized hole in the porch floor.
The PCO is not aware of any significant change in facility
conditions or decline in resident care for this personal care home
since the PCO's appointment.
A copy of the Ombudsman Report is available for free at
https://bit.ly/3v9FBOg from PacerMonitor.com.
The Ombudsman may be reached at:
Melanie S. McNeil, Esq.
2 Peachtree Street NW, 33rd Floor (Mail)
Atlanta, GA 30303
Telephone: 404-416-0211 (Cell)
Facsimile: 404-463-8384
Email: Melanie.McNeil@osltco.ga.gov
About Clarehouse Living
Clarehouse Living, Inc., an operator of a licensed personal care
home for elderly or disabled residents in Georgia, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 22-50035) on Jan. 3, 2022. In the petition signed by
Clarence Williams III, chief executive officer, the Debtor
disclosed up to $1 million in both assets and liabilities.
Judge Lisa Ritchey Craig oversees the case.
Ian M. Falcone, Esq., at Falcone Law Firm, PC is the Debtor's
counsel.
CLEAN ENERGY: Seeks Interim Cash Collateral Access
--------------------------------------------------
Clean Energy Renewables, LLC ask the U.S. Bankruptcy Court for the
Central District of Illinois, Peoria Division, for entry of an
order granting, among other things, preliminary determination that
specified creditors do not hold cash collateral lien rights against
the Debtor and as alternative relief, authority to use cash
collateral on an interim basis.
The continued use of "cash collateral", as defined by Bankruptcy
Code Section 363, is a necessity for the Debtor to remain a going
concern for the benefit of the bankruptcy estate.
According to records of the Debtor, the following pre-petition
creditors lent funds to the Debtor through "Merchant Cash
Advances," whereby funds are lent based on a volume or percentage
of anticipated accounts receivable rather than assigning (or
"factoring") specific accounts receivable:
* Bizfund LLC,
* CFG Merchant Solutions, LLC,
* Everest Business Funding,
* Fox Capital Group,
* KTK Capital LLC,
* Secured Lender Solutions LLC, and
* The Avanza Group LLC.
The Debtor asserts that the Specified Creditors do not hold valid
and perfected liens against cash collateral, as defined by section
363.
The Debtor requests entry of an order that makes a preliminary
determination that the Specified Creditors do not have cash
collateral lien rights against the Debtor, without prejudice to any
of the Specified Creditors seeking subsequent order(s) of the Court
that make a final determination concerning the existence and extent
of any asserted lien rights.
As alternative relief, the Debtor requests authority to use cash
collateral on an interim basis pursuant to the six-month projected
income and expense budget and provide adequate protection remedies
for use of cash collateral to any of the Specified Parties as
directed by the Court until the rights can be adjudicated.
A copy of the motion is available at https://bit.ly/3PmhPH4 from
PacerMonitor.com.
About Clean Energy Renewables, LLC
Clean Energy Renewables, LLC provides instrument tower
installation and maintenance services on a nationwide basis, with
26 employees that travel to customer locations, from its
headquarters location in Moline, Illinois.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. C.D. Ill. Case No. 22-80432) on July 18,
2022. In the petition signed by Matthew Cumberworth, Sr., the
Debtor disclosed up to $10 million in both assets and liabilities.
Sumner A. Bourne, Esq., at Rafool & Bourne, P.C. is the Debtor's
counsel.
CLEARDAY INC: Refinances Existing Facilities, Gets $233K Financing
------------------------------------------------------------------
Clearday, Inc. refinanced existing factoring facilities and
obtained additional financings in the amount of approximately
$233,000, net of repayment of such facilities and prior to the
payment of fees and expenses, including placement fees. The net
proceeds from these financings will be used to fund innovative
services at Clearday, including robotic services and expansion of
additional services to be provided in Clearday's residential care
communities.
MCA New Braunfels
A subsidiary of Clearday, MCA New Braunfels Operating Company LLC,
entered into a Future Receipts Sale and Purchase Agreement with an
institutional financing party to sell $434,700 of future sales of
MCA New Braunfels for a purchase price of $315,000. Such amount
was used to pay an existing similar facility and general working
capital. The outstanding amount of the existing facility that was
repaid in full was approximately $207,000 and was paid in full
after a discount provided by the Buyer. The Buyer extended a
discount of approximately. Under the NB Agreement, MCA New
Braunfels sold to Buyer a specified percentage of its future
receipts (as defined by the NB Agreement), which include the future
resident revenues in the residential care facility. MCA New
Braunfels paid origination and other fees, which resulted in a net
aggregate amount of $96,983.
The NB Agreement provides the Buyer specified customary collection
procedures for the collection and remittance of the weekly payable
amount including direct payments from a specified authorized bank
account of approximately $15,525, an increase of approximately
$5,665 from the weekly remittances payable under the facility that
was repaid in full. The NB Agreement expressly provides that the
sale of the future receipts shall be construed and treated for all
purposes as a true and complete sale of receivables at a discount,
and not a loan; that the title to the sold future sales is
transferred to Buyer under such agreement free and clear of all
liens; and includes customary remedies that may be exercised by
Buyer upon a breach or default, including payment of attorney fees
and costs of collection. The NB Agreement also provides customary
provisions regarding, among other matters, representations,
warranties and covenants, further assurances, indemnification,
arbitration, governing law and venue. The NB Agreement also
provides for the grant by MCA New Braunfels of a security interest
in the future receivables and other related collateral under the
Uniform Commercial Code in accounts and proceeds in the event that
the future receipts are "accounts" or "payment intangibles" under
the Uniform Commercial Code.
James Walesa, the Company's chairman and chief executive officer
signed a separate Personal Guaranty of Performance to Buyer that
provides his irrevocable, absolute, and unconditional personal
guaranty of all of the obligations under the NB Agreement to the
Buyer. Such guaranty provides customary provisions, including
representations, warranties and covenants. Affiliates of MCA New
Braunfels also guaranteed the obligations under the NB Agreement.
MCA Westover
A subsidiary of Clearday, MCA Westover Hills Operating Company LLC,
entered into a Revenue Purchase Agreement with an institutional
financing party to sell $345,000 of future sales of MCA Westover
for a purchase price of $250,000. Such amount was used to pay
existing similar facilities and general working capital. The
outstanding amount of the existing facilities that were repaid in
full was approximately $129,698 and was paid in full after a
discount provided by the Funder. Under the Westover Agreement, MCA
Westover sold to the Funder a specified percentage of its future
receipts (as defined by the Westover Agreement), which include the
future resident revenues in the residential care facility. MCA
Westover paid origination and other fees, which resulted in a net
aggregate amount of $96,983. The Westover Agreement provides
Funder specified customary collection procedures for the collection
and remittance of the weekly payable amount including direct
payments from a specified authorized bank account of approximately
$12,321, an increase of approximately $4,950 from the facility that
was repaid in full. The Westover Agreement expressly provides that
the sale of the future receipts shall be construed and treated for
all purposes as a true and complete sale of receivables at a
discount, and not a loan; that the title to the sold future sales
is transferred to Funder under such agreement free and clear of all
liens; and includes customary remedies that may be exercised by
Funder upon a breach or default, including payment of attorney fees
and costs of collection in an amount that is equal to 30% of the
then outstanding obligations under the Westover Agreement. The
Westover Agreement also provides customary provisions regarding,
among other matters, representations, warranties and covenants,
further assurances, indemnification, arbitration, governing law and
venue. MCA Westover also signed a Security Agreement and Guaranty
of Performance to Funder that provides for the grant by MCA
Westover of the accounts, proceeds and other collateral stated
therein under the Uniform Commercial Code.
James Walesa, the Company's chairman and chief executive officer
signed a separate Guaranty of Performance to the Funder that
provides his irrevocable, absolute, and unconditional personal
guaranty of all of the obligations under the Westover Agreement to
Funder. Such guaranty provides customary provisions, including
representations, warranties and covenants.
About Clearday
Clearday, Inc. (fka Superconductor Technologies, Inc.) is an
innovative non-acute longevity health care services company with a
modern, hopeful vision for making high quality care options more
accessible, affordable, and empowering for older Americans and
those who love and care for them. Clearday has
decade-longexperience in non-acute longevity care through its
subsidiary Memory Care America, which operates highly rated
residential memory care communities in four U.S. states. Clearday
at Home -- its digital service -- brings Clearday to the
intersection oftelehealth, Software-as-a-Service (SaaS), and
subscription-based content.
Clearday reported a net loss of $19.51 million for the year ended
Dec. 31, 2021, compared to a net loss of $13.78 million for the
year ended Dec. 31, 2020. As of March 31, 2022, the Company had
$46.14 million in total assets, $69.55 million in total
liabilities, $18.48 million in temporary equity, and a total
deficit of $41.89 million.
Dallas, Texas-based Turner, Stone & Company, LLP, the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated April 15, 2022, citing that the Company has suffered
recurring losses from operations and has insufficient working
capital to fund future operations both of which raise substantial
doubt about its ability to continue as a going concern.
CONSOLIDATED WEALTH: Combined Disclosure & Plan Confirmed by Judge
------------------------------------------------------------------
Judge David R. Jones has entered findings of fact, conclusions of
law and order confirming the First Amended Combined Chapter 11 Plan
and Disclosure Statement of Consolidated Wealth Holdings, Inc., et
al.
The Court finds and concludes that the Debtors have proposed the
Plan in good faith and not by any means forbidden by law, and the
Debtors and their respective members, advisors, and professionals,
have acted, and are presently acting, in good faith in conjunction
with all aspects of the Plan. The Plan (including the Plan
Supplement and all other documents and agreements necessary to
effectuate the Plan) satisfies the requirements of section
1129(a)(3) of the Bankruptcy Code.
In determining that the Plan has been proposed in good faith, the
Court has examined the totality of the circumstances surrounding
the formulation and solicitation of the Plan. Furthermore, the Plan
is in the best interests of the Debtors' estates and holders of
Claims and Equity Interests.
The Court finds and concludes that with respect to Impaired Classes
of Claims and Interests each holder of a Claim or Equity Interest
has accepted the Plan or will receive or retain under the Plan, on
account of such Claim or Interest, property of a value, as of the
Effective Date, that is not less than the amount that such holder
would so receive or retain if the Debtors were liquidated under
chapter 7 of the Bankruptcy Code on such date.
If a Current FLS Interest Holder, the Debtors and the Plan Sponsor
agree in writing, then a Current FLS Interest Holder may change its
treatment election (i.e., FLS Swap Option, Retention Option, Cash
Out Option) prior to the Effective Date.
Counsel to the Debtors:
Lenard M. Parkins PLLC
Charles M. Rubio P.C.
PARKINS & RUBIO LLP
Pennzoil Place, 700 Milam Street, Suite 1300
Houston, Texas 77002
Tel: (713) 715-1660
E-mail: lparkins@parkinsrubio.com
crubio@parkinsrubio.com
About Consolidated Wealth
Consolidated Wealth Holdings Inc. --
https://consolidated-wealth.com/investor-login/ -- is a holding
company based in Houston, Texas. The company and its affiliates
manage a portfolio of roughly 28 life settlement contracts with 380
investors. Consolidated Wealth is no longer engaged in the sale of
new life insurance today.
Consolidated Wealth and affiliates filed for Chapter 11 protection
(Bankr. S.D. Texas Lead Case No. 22-90013) on April 7, 2022. In
the petition filed by Deanna Osborne, owner, Consolidated Wealth
listed up to $500,000 in assets and up to $50,000 in liabilities.
The case is assigned to Judge David R. Jones.
Perkins, Lee and Rubio, LLP is the Debtor's legal counsel. Epiq
Bankruptcy Solutions is the claims agent.
CORSAMI GROUP: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Corsami Group, LLC
2600 Northlake Drive
Suwanee, GA 30024
Chapter 11 Petition Date: July 22, 2022
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 22-55576
Debtor's Counsel: Paul Reece Marr, Esq.
PAUL REECE MARR, P.C.
Building 24, Suite 350
1640 Powers Ferry Road
Marietta, GA 30067
Tel: (770) 984-2255
Email: paul.marr@marrlegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Senei Perez as manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/KCPMFWY/Corsami_Group_LLC__ganbke-22-55576__0001.0.pdf?mcid=tGE4TAMA
CREDITO REAL S.A.B.: Chapter 15 Case Summary
--------------------------------------------
Chapter 15 Debtor: Credito Real, S.A.B. de C.V., SOFOM, E.N.R.
Av. Insurgentes Sur, No. 730, 20th Floor
Col. Del Valle Norte, Alcadia Benito Juarez
Mexico City, 03103
Mexico
Business Description: The Chapter 15 Debtor is a publicly-traded
entity with variable capital (Sociedad
Anonima Bursatil de Capital Variable or
S.A.B. de C.V.) and unregulated multiple-
purpose financial entity organized in
Mexico under the Mexican Corporations Law,
the Ley General de Organizaciones y
Actividades Auxiliares del Credito, and the
Ley del Mercado de Valores.
Chapter 15
Petition Date: July 14, 2022
Court: United States Bankruptcy Court
District of Delaware
Case No.: 22-10630
Judge: Hon. John T. Dorsey
Foreign Representative: Robert Wagstaff
600 Brickell Avenue, Suite 2550
Miami, FL 33131
United States of America
Foreign Proceeding: Mexican Liquidation Proceeding
(Case No. 691/2022) pending in the 52nd
Civil State Court of Mexico City
Foreign
Representative's
Counsel: John H. Knight, Esq
RICHARDS LAYTON & FINGER, P.A.
One Rodney Square 920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Email: knight@rlf.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Chapter 15 petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/J5FTIDY/Credito_Real_SAB_de_CV_SOFOM_ENR__debke-22-10630__0001.0.pdf?mcid=tGE4TAMA
CVR PARTNERS: Moody's Upgrades CFR & Senior Secured Notes to B1
---------------------------------------------------------------
Moody's Investors Service upgraded the corporate family rating for
CVR Partners, LP to B1 from B2, the probability of default rating
to B1-PD from B2-PD and senior secured notes to B1 from B2. Moody's
also upgraded CVR's speculative grade liquidity rating to SGL-1
from SGL-2. The ratings outlook remains stable.
"The upgrade of the corporate family rating reflects anticipated
strong credit metrics due to elevated ammonia and UAN prices and a
better position to withstand the next trough pricing cycle due to
the reduction in balance sheet debt," said Anastasija Johnson, a
senior analyst at Moody's.
Ratings Downgraded:
Issuer: CVR Partners, LP
Corporate Family Rating, Upgraded to B1 from B2
Probability of Default Rating, Upgraded to B1-PD from B2-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Gtd Senior Secured Regular Bond/Debenture, Upgraded to B1 (LGD4)
from B2 (LGD4)
Outlook Actions:
Issuer: CVR Partners, LP
Outlook, Remains Stable
RATINGS RATIONALE
The B1 corporate family rating reflects CVR's small scale as
measured by revenues, concentration of earnings in two production
facilities, Coffeyville, Kansas and East Dubuque, Illinois, and
significant improvement in credit metrics (Moody's adjusted
debt/EBITDA of 1.6x in the twelve months ended March 31, 2022) due
to higher nitrogen fertilizer prices as a result of dislocations in
fertilizer supply and natural gas availability in Europe. Even
though prices are expected to come off recent highs in 2023, the
company will likely maintain leverage around 1 time in 2023. The
company also benefits from a completed debt reduction earlier in
2022 and refinancing of its capital structure in 2021, which leaves
it better positioned for the next cyclical trough in nitrogen
pricing and improved its interest coverage. Using recent trough
EBITDA levels and assuming normal operations, leverage should not
exceed 6.4x at the trough of the cycle and interest coverage would
remain around 2.5x. The credit profile is constrained by CVR's
structure as a variable rate master limited partnership (MLP),
which typically distributes all available free cash flows to
unitholders, reducing financial flexibility during downturns. This
also reduces flexibility to fund growth projects and lowers
RCF/Debt metrics relative to peers. Management has control over the
size of distributions and had suspended them during downturns. The
current capital structure would allow management to continue to pay
some distributions at the trough of the cycle, but Moody's would
also expect management to manage its distributions and build cash
if it pursues growth projects.
The rating reflects limited operational diversity, somewhat offset
by the advantaged location of its facilities. CVR benefits from its
geographic footprint with access to the Corn belt, through the East
Dubuque site location, as well as the Southern plains, via the
Union Pacific and BNSF rail lines from the Coffeyville site.
Despite having only two production sites, CVR benefits from its
back integration into ammonia production and diversity of supply
though the Coffeyville facility faces higher costs when the
Coffeyville refinery cannot fully supply its feedstock needs and
largely depends on the ultimate viability of the refinery. The
company relies on third-party contracts to suplement its pet coke
supply. Concentration of sales in commodity nitrogen fertilizers,
limited growth prospects, seasonality and exposure to adverse
weather are constraining factors for the rating.
As a commodity chemicals manufacturer, Moody's views CVR as having
highly negative environmental and social credit risks because its
operations could have a negative impact on employees or the local
communities. Moody's believes the company has established expertise
in complying with environmental regulations dealing with production
of hazardous substances and air and water emissions and has
incorporated procedures to address them in its operational planning
and business models. CVR is currently utilizing nitrous oxide
abatement and carbon dioxide (CO2) sequestration technologies to
mitigate over 1mm metric tons of CO2 equivalents per year and is
seeking to benefit from various opportunities related to lowering
its greenhouse gas emissions, such as qualifying for tax credits
under Section 45Q aimed at encouraging CO2 sequestration. CVR has
highly negative governance credit risk due to concentrated
ownership, variable distribution master limited partnership
structure (MLP) and shareholder friendly financial policies.
CVR's SGL-1 speculative grade liquidity rating indicates
expectations of very good liquidity over the next 12 to 18 months,
supported by cash balances, projected operating cash generation and
full availability under its $35 million ABL revolver due on
September 30, 2024. The company had $137 million of cash on hand as
of March 31, 2022. Moody's does not expect the company to use the
revolver, with the exception of possible support for seasonal
working capital needs. The revolver has a springing fixed charge
coverage ratio of 1.0x if availability falls below 10% or $5
million. Moody's does not expect the covenant to be tested. All
assets are encumbered by the revolver and the notes.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectations that credit
metrics will remain strong in 2022 and 2023 on higher average
nitrogen fertilizer prices. Moody's expects UAN and ammonia prices
to retreat from recent highs but restricted natural gas
availability in Europe will keep prices above recent averages,
supporting CVR's credit metrics.
A further rating upgrade is remote at this time, given the
company's small scale, limited operational diversity and the
limited financial flexibility created by the MLP structure. In
addition, current fixed capital structure, which will result in
leverage metrics above 6 times during the trough of the cycle.
Moody's could consider an upgrade if the company further lowers
debt or improves its business profile or earnings diversity while
maintaining strong credit metrics.
Moody's could downgrade the rating if credit metrics deteriorate
such that Debt/EBITDA is consistently above 5.5x and
EBITDA/Interest declines below 2x. Moody's could also downgrade the
rating if the company increases debt to pursue growth projects, if
unplanned outages become an ongoing issue for the company or of
there are significant changes in its key raw material supplier,
Coffeyville refinery.
The principal methodology used in these ratings was Chemicals
published in June 2022.
CVR, a Delaware limited partnership headquartered in Sugar Land,
Texas, is a producer of nitrogen fertilizer products, principally
Ammonia and UAN. CVR is a public variable distribution master
limited partnership (ticker: UAN) which is 37% owned by CVR Energy
Inc., a publicly traded company 71% owned and controlled by Carl C.
Icahn through Icahn Enterprises L.P. CVR has two operating
facilities located in Coffeyville, Kansas and East Dubuque,
Illinois. CVR had revenues of $695 million for the twelve months
ending March 31, 2022.
DAWSON COUNTY HOSPITAL DISTRICT: S&P Raises Bonds Rating to 'CCC+'
------------------------------------------------------------------
S&P Global Ratings raised its long-term rating on Dawson County
Hospital District, Texas' series 2015 general obligation (GO) bonds
to 'CCC+' from 'CCC'. The outlook is stable.
The bonds are secured by and payable from revenue from an ad
valorem tax on all taxable property in the district, within the
bounds of state statute, of 75 cents per $100 of assessed value
(AV).
"The upgrade reflects our view of the district's lessened default,
bankruptcy, and liquidity risk over the next 12 months," said S&P
Global Ratings credit analyst Patrick Zagar. The rating further
reflects the district's small size and precarious financial profile
that, though improved from prior years, is expected to continue to
attenuate over the outlook period and remain exposed to the severe
industry pressures facing rural health care providers such as
heightened labor costs. The district's next interest payment is on
Aug. 15, 2022, and S&P expects continued timely debt service
payments over the next 12-18 months, which supports the current
rating and outlook.
DC TELECOMM: Unsecured Creditors to Split $60K in Consensual Plan
-----------------------------------------------------------------
DC Telecomm, LLC, submitted a Second Amended Plan of Reorganization
for Small Business under Subchapter V.
The Plan provides for immediate payment and full satisfaction of
Administrative Expenses and Secured Claims, to the extent Allowed;
and consistent Distributions to Holders of Allowed Unsecured Claims
over the four-year Plan Term.
On July 5, 2022, the Debtor filed the Sale Motion, whereby seeking
authorization to sell the Drill and Trailer to TNT Underground
Utilities, Inc. for the purchase price of $150,158.89 by and
through an Agreement to Purchase and Sale of Equipment dated July
5, 2022 and a Bill of Sale executed on June 8, 2022 (hereinafter,
collectively "Sale Agreement"). The execution of such Sale
Agreement arose only after DLL afforded written consent to the sale
of the Collateral on May 17, 2022.
Furthermore, the Debtor proposes to apply the entirety of the sale
proceeds towards the full amount owing under loan numbers ending in
x5132 and x2509, even though Proof of Claim 15-2 filed by DLL on
January 26, 2022 provides that the Security Interests encumbering
the Collateral provides for an Undersecured Claim in the amount of
$86,362.10, as the Buyer paying 2 of the 3 secured claims held by
DLL in the entirety shall enable the Debtor to distribute a greater
Pro-Rata Share of disposable income to Holders of Allowed Unsecured
Claims.
Notwithstanding Holders of Allowed Unsecured Claims, the Plan shall
treat each Class of Priority and Secured Claims under a Cramdown
Confirmation in a manner identical to the Treatment that follows a
Consensual Confirmation. Holders of Allowed Secured Claims shall
receive Plan Payments in accordance with the consensual agreements
executed and Security Interests granted Pre-Petition.
Distributions to Holders of an Allowed Unsecured Claim shall depend
on whether Consummation follows a Consensual Confirmation or a
Cramdown Confirmation, as follows: (a) recovery shall be limited to
the fixed amount of $60,000.00 upon a Consensual Confirmation of
this Plan, which equals a Pro-Rata Distribution in the approximate
amount of twelve cents on the dollar (i.e. 11.83%); or (b) if
Consummation follows a Cramdown Confirmation, Holders of Allowed
Unsecured Claims shall receive a Pro-Rata Share of all Disposable
Income that the Debtor generates during the 60 month Plan Term.
Pursuant to the Cash Flow Analysis, the Debtor projects that the
Class of Allowed Unsecured Claims may receive the amount of
$18,812.26, which equals an approximate Pro-Rata Distribution of
five cents on the dollar (i.e. 3.71%).
Class 20 consists of the Unsecured Claims against the Bankruptcy
Estate. The Debtor estimates that Allowed Unsecured Claims – on
account of Claims not Scheduled as contingent, disputed, and/or
unliquidated; Proofs of Claim filed on or before the Claims Bar
Date; and Claims not otherwise Disallowed by the Bankruptcy Court
– is the sum of $507,165.32.
The Treatment and amount Distributed to Holders of Class 20 Claims
shall depend on whether Unsecured Claimant vote to accept or reject
the Plan, as follows:
* Consensual Treatment. Holders of Allowed Unsecured Claims
shall receive a Pro-Rata Share of $60,000.00, which shall derive
from Cash maintained within the Operating Account as of the
Effective Date and revenues generated during the Plan Term. The
Debtor shall deposit the sum of $1,250.00 into the Unsecured
Reserve Account commencing on the 5th Business Day following the
Effective Date up to and through the 5th Business Day of the 48th
month following the Effective Date. The Debtor shall warrant the
Consensual Treatment of the Plan Payments Distributed to Unsecured
Claimants by prioritizing the monthly sum of $1,250.00 payable to
the Class 20 Claimants each and every bi-monthly payment of wages
due and owing to Mr. Howard as the managing member for the Debtor
and/or Plan Proponent, as applicable, by and through agreeing to
accept a bi-monthly paycheck on, or after, the 15th and 30th day of
each month throughout the Plan Term, conditioned upon, as follows:
(a) the 1st payroll period follows Distribution of all Plan
Payments into the Disbursement Account for the benefit of Secured
Claimants and the Reserve Account for the benefit of Class 20
Claimants on or before the 5th Business Day of each month; and (b)
the 2nd bi monthly paycheck shall be for an amount not to exceed
the lesser of: (i) his ordinary bi-monthly salary of $3,500.00, or
(ii) the balance within the Operating Account less the sum of
$14,009.49 as conserved for the subsequent month of Plan Payments.
* Cramdown Treatment. Holders of Allowed Unsecured Claims
shall receive a Pro-Rata Share of all Disposable Income realized
during the Plan Term, which the Debtor projects as the sum of
$18,812.26. The Debtor shall deposit the Disposable Income realized
during the preceding Calendar Quarter into the Unsecured Reserve
Account on or before the 15th day following the close of each
Calendar Quarter commencing on the Effective Date up to and through
the 48th month following the Effective Date, for which the 1st
deposit into the Unsecured Reserve Account of Disposable Income
realized from the Effective Date up to and through September 30,
2021 shall arise on or before October 15, 2021, and the final Plan
Payment shall be deposited on or before the 15th day of the 1st
month following the 4th Anniversary. Class 20 is impaired.
Class 21 consists of the Equity Interests in the Debtor, for which,
Mr. Howard controlled a 100.0% ownership interest as of the
Petition Date. On the Effective Date of the Plan, the Class 21
Claimant, to the extent Allowed, shall retain all existing rights,
privileges, and interest in the Debtor.
In accordance with 11 U.S.C. Secs. 1190(2) and 1191(c)(2), as
applicable, the Debtor shall fund the Plan using Cash generated
from one, or a combination of such sources, as follows:
* Cash arising from Net Income realized Post-Petition, of
which the Debtor maintains within the Operating Account as of the
Confirmation, shall be Distributed to certain and specific
Claimants as consideration for full payment of an Allowed Claim, or
such portion thereof as mutually agreed upon by and the between the
Debtor and such relevant Claimant(s), in such order more-fully
identified within the Cash Flow Analysis, and on such basis, as
follows: (a) Allowed Professional Fees Claims in the maximum sum of
$29,000.00; (b) final installments of Adequate Protection Payments
in the amount of $3,961.46; (c) the reasonable Post-Petition fees
payable on account of Oversecured Claims in the amount of
$21,507.39; and (d) the amount necessary to Cure an assumed
Executory Contract and/or Unexpired Lease, if any.
* The Plan Proponent shall preserve the balance of any and all
Cash maintained within the Operating Account remaining thereinafter
for the benefit of Holders of Allowed Claims and future operations
of the Plan Proponent, depending on the method of Confirmation, as
follows: (a) following Consensual Confirmation, protect against
default hereunder upon generating insufficient Net Income for Plan
Payments by (i) depositing the sum of $14,000.00 into the
Disbursement Account for the benefit of Allowed Professional Fee
and Secured Claims; (ii) depositing the sum of $7,500.00 within the
Reserve Account for the benefit of Allowed Unsecured Claims, and
(iii) maintaining the remaining Cash within the Operating Account
to pay costs and overhead expenses incurred in the ordinary course
of business after the Effective Date; or (ii) following Cramdown
Confirmation, maintain all remaining Cash within the Operating
Account.
* The Plan Proponent shall deposit into the Disbursement
Account such portion of the Net Income equal to the collective
monthly sum of Plan Payments due and owing to Holders of Allowed
Secured Claims on or before the 5th day of each month commencing on
the Effective Date up to and through the 5th day of the 48th
following the Effective Date.
* The Debtor shall deposit Plan Payments to Holders of Allowed
Unsecured Claims into the Creditor Disbursement Fund in such
periods of time, manner and amount.
A full-text copy of the Second Amended Plan dated July 19, 2022, is
available at https://bit.ly/3zvZMsC from PacerMonitor.com at no
charge.
Counsel for Debtor:
BERKEN CLOYES, P.C.
Joshua B. Sheade, Esq.
1159 Delaware Street
Denver, Colorado 80204
E-mail: joshua@berkencloyes.com
About DC Telecomm
LLC
La Veta, Colo.-based DC Telecomm, LLC, is part of the Electrical
Contractors and Other Wiring Installation Contractors industry.
DC Telecomm filed its voluntary petition for Chapter 11 protection
(Bankr. D. Colo. Case No. 21-14940) on Sept. 28, 2021, listing
$509,400 in assets and $1,335,008 in liabilities. David Howard,
member and manager, signed the petition.
Stephen Berken, Esq., at Berken Cloyes, PC and Tax & Accounting
Professionals, Inc. serve as the Debtor's legal counsel and
accountant, respectively.
DOLPHIN ENTERTAINMENT: Incurs $792K Net Loss in First Quarter
-------------------------------------------------------------
Dolphin Entertainment, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $792,481 on $9.18 million of revenues for the three months ended
March 31, 2022, compared to a net loss of $5.27 million on $7.18
million of revenues for the three months ended March 31, 2021.
As of March 31, 2022, the Company had $54.14 million in total
assets, $29.43 million in total liabilities, and $24.72 million in
total stockholders' equity.
Net cash provided by operating activities was $0.8 million for the
three months ended March 31, 2022, a change of $0.9 million from
cash used in operating activities of $52.0 thousand for the three
months ended March 31, 2021.
Net cash flows used in investing activities for the three months
ended March 31, 2022 were $1.5 million, and consisted primarily of
issuances of notes receivable.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1282224/000155335022000617/dlpn_10q.htm
About Dolphin Entertainment
Headquartered in Coral Gables, Florida, Dolphin Entertainment, Inc.
-- http://www.dolphinentertainment.com-- is an independent
entertainment marketing and premium content development company.
Through its subsidiaries, 42West LLC, The Door Marketing Group LLC
and Shore Fire Media, Ltd, the Company provides expert strategic
marketing and publicity services to many of the top brands, both
individual and corporate, in the entertainment, hospitality and
music industries.
Dolphin Entertainment reported a net loss of $6.46 million for the
year ended Dec. 31, 2021, a net loss of $1.94 million on $24.05
million of revenues for the year ended Dec. 31, 2020, and net loss
of $2.33 million for the year ended Dec. 31, 2019.
ECO LIGHTING: Unsecureds Will Get 21% of Claims in 3 Years
----------------------------------------------------------
Eco Lighting USA, LLC, filed with the U.S. Bankruptcy Court for the
District of New Jersey a Small Business Plan of Reorganization
dated July 18, 2022.
The Debtor is in the business of the manufacture and wholesale
distribution of energy efficient lighting. It operates from its
facility located at 217 Huyler Street, South Hackensack, New Jersey
07606.
The Debtor has struggled during the pandemic. Since the date of
the filing, the Debtor's business has begun to improve. During the
bankruptcy proceeding the Court entered Orders allowing the Debtor
to use the cash collateral of the SBA by providing replacement
liens on all of the Debtor's assets.
This Plan provides for the Debtor to pay the administrative and
priority claims on the effective date.
The secured claim of the United States Small Business
Administration ("SBA") in the amount of $718,530.39 will be
unaffected under the Plan. Monthly payments to the SBA will
commence on January 27, 2023 in the amount of $3,473.00.
Class 2 consists of unsecured claims. Class 2 creditors include MJL
Enterprises, LLC ($300,000.00); Carmen Williams ($100,000); and IRS
($12,006.66). Class 2 creditors will be paid the amount of the
Debtor's monthly disposable income over three years from the
effective date. Currently the Debtor projects that the disposable
income will be no less than $2,500.00 per month or a total of
$90,000 payable over the three year period.
Distributions will be made in six month intervals. This Class will
receive a distribution of 21% of their allowed claims.
The current equity holders will retain their interests in all
assets.
Pursuant to Section 1191 of the Bankruptcy Code, the Debtor is
required to pay into the Plan its disposable income for a period of
3 years. At present, the Debtor projects that the disposable income
will be at least $2,500.00 per month. That amount, or such other
amount as may represent the Debtor's disposable income over the
life of the Plan, shall be paid to Class two creditors over the
three year period from the Plan effective date.
A full-text copy of the Plan of Reorganization dated July 18, 2022,
is available at https://bit.ly/3OId6hX from PacerMonitor.com at no
charge.
About Eco Lighting USA LLC
Eco Lighting USA LLC manufactures standard and custom lighting
solutions using the latest LED chip and electronic Induction
Lighting Technologies. The Company manufactures a wide selection
of LED and Induction light fixtures, retrofits, and bulbs that are
designed to save money through reduced energy consumption, vastly
reduced maintenance, and reduced installation costs.
Eco Lighting USA filed for Chapter 11 protection (Bankr. D.N.J.
Case No. 22-11314) on Feb. 18, 2022. In the petition signed by Sean
Blackman, member, the Debtor disclosed up to $500,000 in assets and
up to $10 million in liabilities.
Judge Vincent F. Papalia oversees the case.
Bruce H. Levitt, Esq., at Levitt and Slafkes, P.C. is the Debtor's
counsel.
ENACT HOLDINGS: Moody's Hikes LongTerm Issuer Rating to Ba1
-----------------------------------------------------------
Moody's Investors Service has upgraded Enact Mortgage Insurance
Corporation (EMICO) insurance financial strength (IFS) rating to
Baa1 from Baa2, and Enact Holdings, Inc. (NASDAQ: ACT) (Enact) long
term issuer rating and senior unsecured debt rating to Ba1 from
Ba2. In addition, Moody's has upgraded Genworth Holdings, Inc.
(Genworth Holdings) backed senior unsecured debt rating to Ba2 from
B1. The outlook for the ratings is stable.
RATINGS RATIONALE
Enact
The overall credit profile of the US mortgage insurance sector has
shown continued improvement since the initial spike in delinquent
mortgages due to the economic shutdowns from the coronavirus
pandemic in Q2 2020. Strong house price appreciation and improving
unemployment rates have provided a supportive macroeconomic
environment for mortgage credit, and default rates among the
mortgage insurers' portfolios have trended steadily lower over the
past couple of years as delinquent loans in forbearance have cured.
Firms in the sector have also reported strong net income returns on
capital and very strong risk-adjusted capital adequacy metrics. The
significant utilization of excess of loss reinsurance through
insurance-linked notes (ILNs) and the traditional reinsurance
market also bolsters the credit profiles of the US mortgage
insurers. The $14.3 billion of current reinsurance limit available
among firms in the sector dampens the potential for earnings and
capital volatility that has historically impacted the mortgage
insurance sector during adverse economic environments.
The upgrade of Enact's ratings also reflect improvements to the
company's overall credit profile, including its market position,
profitability, capital adequacy and financial flexibility. During
Q1 2022, Enact's market share of the private mortgage insurance
market was approximately 18%, up from 16.6% during 2021. Enact
reported net income of $546.7 million and a combined ratio of 38%
in 2021, and Moody's expects Enact's profitability to remain strong
during the second half of 2022 and into 2023 as increasing
persistency rates and higher interest rates boost revenues even as
mortgage loan origination volumes are expected to trend lower.
Enact's Baa1 IFS rating also reflects the company's solid position
in the US mortgage insurance market and good client
diversification, and its consistent GSEs' PMIERs sufficiency ratio
(approx. 176% at the end of Q1 2022). The firm's conservative
investment portfolio, together with underwriting discipline aimed
at improved profitability and market presence, and extensive
reinsurance program also support the ratings. Moody's expects
Enact's leverage ratios to be around 15% in the near term. These
strengths are tempered by the commodity-like nature of the mortgage
insurance product and the fact that the MI sector's fortunes are
greatly influenced by lenders, the GSEs, public policy decisions,
and other uncontrollable variables, including competition from
government-sponsored mortgage insurers.
Since Q4 2019, Enact has transferred approximately $1.8 billion of
risk to the capital markets through 5 Triangle Re ILN transactions,
and has also sourced additional risk transfer protection through
excess of loss and quota-share coverage in the traditional
reinsurance market. Through these arrangements, Enact has
reinsurance covering nearly all of its business written between
January 2018 and Q2 2021, providing almost $1.1 billion of current
reinsurance coverage to absorb losses during periods of elevated
mortgage credit losses.
Genworth Holdings
The rating upgrade reflects the company's improved liquidity
position and financial flexibility following the improvement in its
debt ladder that includes the expected retirement of its 2024
senior debt in Q3 2022, and the upgrade of Enact's ratings. The
rating action also reflects the expectation for continued dividends
from its ownership in Enact (senior debt, Ba1 stable). The
company's strengths are offset by the challenges to organically
expand liquidity sources, and the pressure on financial flexibility
from reduced dividends from Enact during a stressed scenario or
economic downturn. Genworth Holdings' ratings also reflect the
structural subordination of the holding company's liabilities to
the liabilities of Enact and the risks associated with the dividend
inflows from its insurance companies.
The stable outlook reflects the company's good liquidity and the
expectation that Genworth Holdings will further increase liquidity
with periodic dividends from Enact subject to its board approval
and the continued emergence of cash tax payments from its
subsidiaries as part of its tax sharing arrangements, albeit, lower
over the next few years as compared to 2021.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Enact
According to Moody's, the following could lead to an upgrade of
Enact's ratings: 1) Maintaining adjusted financial leverage (excl.
AOCI) in the 20% range, or below; 2) Continued maintenance of
comprehensive reinsurance program; and 3) Sustained PMIERSs
sufficiency ratio around 140% or higher.
Conversely, the following factors could lead to a downgrade of
Enact's ratings: 1) Non-compliance with PMIERs; 2) A material and
consistent decline in shareholders' equity by more than 10% over a
rolling twelve month period; 3) a significant deterioration in the
firm's profitability metrics; or 4) Adjusted financial leverage
(excl. AOCI) above 30%.
Genworth Holdings
The following factors could result in an upgrade of Genworth
Holdings' ratings: 1) An improvement of financial flexibility
including increased dividend capacity; 2) Further reduction in its
debt ladder with financial leverage (excluding U.S. life business
equity) that is around the 20% range; and 3) An upgrade of Enact's
ratings.
The following factors could lead to a downgrade in the company's
rating: 1) A downgrade of Enact's ratings; 2) A deterioration in
financial flexibility including decreased dividend capacity or
higher leverage; or 3) A public policy decisions that significantly
diminish the role of mortgage insurance in the US housing finance
market
AFFECTED RATINGS:
The following ratings have been upgraded:
Enact Mortgage Insurance Corporation:
Insurance Financial Strength to Baa1 from Baa2;
The rating outlook for EMICO is stable.
Enact Holdings, Inc.:
Long-term issuer rating to Ba1 from Ba2;
Senior unsecured to Ba1 from Ba2;
The rating outlook for Enact and its operating subsidiaries is
stable.
Genworth Holdings, Inc.:
Backed senior unsecured to Ba2 from B1;
Backed senior unsecured shelf to (P)Ba2 from (P)B1;
Backed junior subordinate to Ba3 (hyb) from B2 (hyb);
Backed subordinate shelf to (P)Ba3 from (P)B2;
The rating outlook for Genworth Holdings is stable.
Genworth Holdings is the intermediate holding company of Genworth,
an insurance and financial services holding company headquartered
in Richmond, Virginia. Genworth Holdings also acts as a holding
company for its respective life insurance subsidiaries. The company
also maintains majority control of Enact which is traded on the
Nasdaq. In addition, Genworth Holdings relies on the financial
resources of Genworth including Enact to meet its obligations. As
of March 31, 2022, Genworth reported total assets of $93.5 billion
and shareholders' equity of $15.2 billion, and Enact reported total
assets of $5.8 billion and shareholders' equity of $4.0 billion
respectively.
The principal methodology used in these ratings was Mortgage
Insurers Methodology published in November 2019.
ENJOY TECHNOLOGY: Taps Centerview Partners as Investment Banker
---------------------------------------------------------------
Enjoy Technology, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire
Centerview Partners, LLC as their investment banker.
The firm's services include:
a. General Financial Advisory and Investment Banking Services:
(i) familiarize itself with the business, operations,
properties, financial condition and prospects of the Debtors;
(ii) review the Debtors' financial condition and outlook;
(iii) assist in the development of financial data and
presentations to the Debtors' Board of Directors, various creditors
and other parties;
(iv) evaluate the Debtors' debt capacity and capital
structures alternatives;
(v) participate in negotiations among the Debtors, and related
creditors, suppliers, lessors and other interested parties with
respect to any of the transactions contemplated by the Engagement
Letter; and
(vi) perform such other financial advisory services as may be
specifically agreed upon in writing by the Debtors and Centerview.
b. Restructuring Services:
(i) analyze various restructuring scenarios and the potential
impact of these scenarios on the value of the Debtors, and the
recoveries of those stakeholders impacted by the restructuring;
(ii) provide financial and valuation advice and assistance to
the Debtors in developing and seeking approval of a restructuring
plan;
(iii) provide financial advice and assistance to the Debtors
in structuring any new securities to be issued pursuant to the plan
in connection with the restructuring;
(iv) assist the Debtors or participate in negotiations with
entities or groups affected by the restructuring; and
(v) participate in hearings before the bankruptcy court with
respect to the matters upon which Centerview has provided advice,
including, as relevant, coordinating with the Debtors' counsel with
respect to testimony in connection therewith.
c. Financing Services:
(i) provide financial advice and assistance to the Debtors in
structuring and effecting a financing, identifying potential
investors, and, at the Debtors' request, contacting such investors;
and
(ii) assist in arranging a financing and in negotiating the
terms of any proposed financing.
d. Sale Services:
(i) provide financial advice and assistance to the Debtors in
connection with a sale, identifying potential acquirors and, at the
Debtors' request, contacting such potential acquirors; and
(ii) assist the Debtors or participate in negotiations with
potential acquirors.
Centerview will be compensated as follows:
a. A monthly financial advisory fee of $150,000, the first of
which shall be due and paid by the Debtors upon execution of the
Engagement Letter and thereafter on each monthly anniversary
thereof during the term of Centerview's engagement. After receipt
of aggregate monthly advisory fees of $450,000, 50 percent of the
amount of any subsequent monthly advisory fee paid to Centerview
will be credited (but only once) against any transaction fee
payable to Centerview pursuant to subparagraph 2(b) of the
Engagement Letter.
b. Except as set forth below, if at any time during the term
of Centerview's engagement or within the 12 full months following
the termination of Centerview's engagement, (1) the Debtors
consummate any restructuring or sale or (2) the Debtors enter into
an agreement in principle, definitive agreement or plan to effect a
restructuring or sale, and at any time (including following the
expiration of the fee period), any such restructuring or sale is
consummated, Centerview shall be entitled to receive a transaction
fee, contingent upon the consummation of a restructuring or sale
and payable at the closing thereof equal to either (i) $3 million
upon consummation of a restructuring or (ii) the greater of $5
million and 2.00 percent of aggregate consideration upon
consummation of a sale (for the avoidance of doubt, Centerview
shall only be entitled to exclusively (ii) in the event of a
restructuring and sale); it being understood and agreed that if
more than 50 percent of the outstanding voting equity securities of
the Debtors on a fully diluted basis is acquired through a sale (a
"control transaction"), Centerview shall, upon the consummation of
such control transaction, be entitled to and shall be paid its full
transaction fee calculated pursuant to subparagraph 2(b) of the
Engagement Letter as though 100 percent of the outstanding voting
equity securities of the Debtors had been acquired.
c. If at any time during the fee period (1) the Debtors
consummate a financing provided by an entity or person who is not a
current or former member of the Board of Directors of the Debtors
or any of their subsidiaries, or an entity controlled by a current
or former member of the Board of Directors of the Debtors or any of
their subsidiaries, or (2) the Debtors receive and accept written
commitments for one or more financings provided by an entity or
person who is not a company-related person (the execution by a
potential financing source and the Debtors of a commitment letter
or securities purchase agreement or other definitive documentation
shall be deemed to be the receipt and acceptance of such written
commitment), and at any time (including following the expiration of
the fee period) any financing is consummated, the Debtors will pay
to Centerview the following:
a. 1.00 percent of the aggregate amount of financing
commitments of any indebtedness issued that is secured by a first
lien including any debtor-in-possession financing;
b. 2.00 percent of the aggregate amount of financing
commitments of any indebtedness issued that (i) is secured by a
second or junior lien, (ii) is unsecured, or (iii) is subordinated;
and
c. 3.00 percent of the aggregate amount of financing
commitments of any equity or equity-linked securities or
obligations issued.
Marc Puntus, a partner at the Debt Advisory and Restructuring
Practice of Centerview, disclosed in court filings that his firm is
a "disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Marc Puntus
Centerview Partners, LLC
31 West 52nd Street, 22nd Floor,
New York, NY 10019
Telephone: (212) 380-2650
Facsimile: (212) 380-2651
About Enjoy Technology
Enjoy Technology, Inc. provides a commerce-at-home experience for
consumers through their network of mobile retail stores. It is
based in Palo Alto, Calif.
Enjoy Technology and affiliates, Enjoy Technology Operating Corp.
and Enjoy Technology, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10580) on June
30, 2022. In the petition signed by Tiffany N. Meriweather, chief
legal officer and corporate secretary, Enjoy Technology, Inc.
disclosed $111,661,000 in total assets and $69,956,000 in
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Cooley, LLP and Richards, Layton, and Finger
P.A. as legal counsels; Centerview Partners, LLC as investment
banker; and Todd Zoha of AP Services, LLC as chief financial
officer. Stretto, Inc. is the claims, noticing agent and
administrative advisor.
Asurion, LLC, a Delaware Limited Liability Company, as DIP lender,
is represented by Gibson, Dunn & Crutcher LLP, Bass, Berry & Sims
PLC, and Pachulski Stang Ziehl & Jones, LLP.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases on July 11, 2022. The committee is represented by Howard
Cohen, Esq.
ENJOY TECHNOLOGY: Taps Richards, Layton & Finger as Legal Counsel
-----------------------------------------------------------------
Enjoy Technology, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire
Richards, Layton & Finger, P.A. as their counsel.
The firm will provide these services:
(a) advising the Debtors of their rights, powers and duties
under Chapter 11 of the Bankruptcy Code;
(b) preparing legal papers;
(c) taking all necessary actions to protect and preserve the
Debtors' estate, including the prosecution of claims and causes of
action on the Debtors' behalf, the defense of actions commenced
against the Debtors, the negotiation of disputes and the filing of
objections to claims against the Debtors;
(d) assisting the Debtors in the sale of their assets;
(e) preparing a plan of reorganization, disclosure statement
and related documents necessary to solicit votes on the plan;
(f) prosecuting any proposed plan and seeking approval of all
transactions contemplated therein and in any amendments thereto;
and
(g) performing all other necessary and desirable legal
services in connection with the Debtors' Chapter 11 cases.
The hourly rates charged by the firm's attorneys and
paraprofessionals are as follows:
Directors $850 to $1,300 an hour
Counsel $725 to $750 an hour
Associates $425 to $700 an hour
Paraprofessionals $315 an hour
The principal attorneys and paraprofessionals designated to
represent the Debtor and their standard hourly rates are:
Daniel J. DeFranceschi $1,100 per hour
Paul N. Heath $1,000 per hour
Brendan J. Schlauch $700 per hour
Sarah E. Silveira $600 per hour
James F. McCauley $475 per hour
Rebecca V. Speaker $315 per hour
Prior to the petition date, the Debtors paid the firm a retainer in
the total amount of $175,000.
As disclosed in court filings, Richards, Layton & Finger is
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Daniel J. DeFranceschi, Esq.
Paul N. Heath, Esq.
Brendan J. Schlauch, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square
920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Email: defranceschi@rlf.com
heath@rlf.com
schlauch@rlf.com
About Enjoy Technology
Enjoy Technology, Inc. provides a commerce-at-home experience for
consumers through their network of mobile retail stores. It is
based in Palo Alto, Calif.
Enjoy Technology and affiliates, Enjoy Technology Operating Corp.
and Enjoy Technology, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10580) on June
30, 2022. In the petition signed by Tiffany N. Meriweather, chief
legal officer and corporate secretary, Enjoy Technology, Inc.
disclosed $111,661,000 in total assets and $69,956,000 in
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Cooley, LLP and Richards, Layton, and Finger
P.A. as legal counsels; Centerview Partners, LLC as investment
banker; and Todd Zoha of AP Services, LLC as chief financial
officer. Stretto, Inc. is the claims, noticing agent and
administrative advisor.
Asurion, LLC, a Delaware Limited Liability Company, as DIP lender,
is represented by Gibson, Dunn & Crutcher LLP, Bass, Berry & Sims
PLC, and Pachulski Stang Ziehl & Jones, LLP.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases on July 11, 2022. The committee is represented by Howard
Cohen, Esq.
ENJOY TECHNOLOGY: Taps Todd Zoha of AP Services as CFO
------------------------------------------------------
Enjoy Technology, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to hire AP
Services, LLC and designate Todd Zoha as their chief financial
officer.
The firm will render these services:
-- Prepare budgets and 13-week cash forecasts and evaluate
variances thereto, as required by the debtor-in-possession lender.
-- Direct the activities of the Debtors' finance organization,
particularly in the areas of cash management, planning, general
accounting, internal and external financial reporting, and
information management.
-- Support the Debtors' business planning processes and prepare
such other related forecasts as may be required by the Debtors' DIP
lender and potential transaction partners in connection with the
anticipated and planned asset sale process.
-- Support the Debtors' restructuring initiatives, principally
the anticipated and planned sale of substantially all of the
Debtors' domestic United States assets.
-- Assist the Debtors' management team in taking reasonable
actions to preserve operations, maintain the customer base and
assembled workforce, and sustain key vendor relationships in
connection with maximizing the value of the anticipated and planned
asset sale transaction.
-- Create and communicate materials for third-party diligence
support purposes and manage the flow of information to potential
acquirers in connection with the anticipated and planned asset sale
process.
-- Assist in developing and implementing cash management
strategies, tactics and processes.
-- Advise and support the Debtors' management and investment
banker in the negotiation and implementation of a sale and in the
evaluation of potential value preserving and enhancing strategies
associated with the anticipated and planned asset sale process.
-- Assist in negotiations with stakeholders and their
representatives, including creditors and equity holders.
-- Develop and prepare management and Board of Directors
reporting materials.
-- Communicate or negotiate with outside constituents, including
potential transaction partners and their advisers.
-- Evaluate and quantify claims against the Debtors and prepare
related analyses to support a Chapter 11 plan process.
-- Assist and support in the development, negotiation, and
implementation of a Chapter 11 plan.
-- Assist the Debtors with filings and other communications as
may be required under the rules and regulations promulgated by the
U.S. Securities and Exchange Commission.
-- Serve in the capacity as principal financial and accounting
officer for purposes of SEC disclosures.
-- Assist the Debtors in other matters.
The firm will charge these hourly fees:
Managing Director $1,060 - $1,335
Director $840 - $990
Senior Vice President $700 - $795
Vice President $510 - $685
Consultant $190 - $505
Paraprofessional $320 -$340
AP Services received a retainer in the amount of $350,000.
As disclosed in court filings, AP Services is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Todd A. Zoha
AlixPartners, LLP
AP Services LLC
909 3rd Ave Fl 30
New York, NY 10022-5002
Phone: 212 490 2500
Fax: 212 490 1344
Email: tzoha@alixpartners.com
About Enjoy Technology
Enjoy Technology, Inc. provides a commerce-at-home experience for
consumers through their network of mobile retail stores. It is
based in Palo Alto, Calif.
Enjoy Technology and affiliates, Enjoy Technology Operating Corp.
and Enjoy Technology, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10580) on June
30, 2022. In the petition signed by Tiffany N. Meriweather, chief
legal officer and corporate secretary, Enjoy Technology, Inc.
disclosed $111,661,000 in total assets and $69,956,000 in
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Cooley, LLP and Richards, Layton, and Finger
P.A. as legal counsels; Centerview Partners, LLC as investment
banker; and Todd Zoha of AP Services, LLC as chief financial
officer. Stretto, Inc. is the claims, noticing agent and
administrative advisor.
Asurion, LLC, a Delaware Limited Liability Company, as DIP lender,
is represented by Gibson, Dunn & Crutcher LLP, Bass, Berry & Sims
PLC, and Pachulski Stang Ziehl & Jones, LLP.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases on July 11, 2022. The committee is represented by Howard
Cohen, Esq.
ENVIA HOLDINGS: Seeks Cash Collateral Access
--------------------------------------------
Envia Holdings, LLC ask the U.S. Bankruptcy Court for the Northern
District of California, San Jose Division, for authority to use its
secured creditor's cash collateral.
At the time of the bankruptcy filing, the Debtor's assets consisted
of real properties at 0 Denio Ave. Gilroy, CA and 325 Denio Ave. #B
Gilroy, CA (APN 835-07-023 and 835-07-024) including two mobile
homes affixed thereto.
The Debtor is proposing a Chapter 11 exit plan premised on the sale
of the Improved Property or Unimproved Property or both to pay
secured creditors in full. Unsecured creditors will also be paid in
full from the sale proceeds or, in the unlikely event the proceeds
of sale are insufficient and also to pay general unsecured
creditors in full, in payments over time from the Debtor's sole
member. In the interim, the Property is now generating rents.
The Debtor proposes to be allowed to use all cash collateral to pay
for:
1. The U.S. Trustee fees estimated at $325/quarter with the
first payment due in July 2022.
2. Post-petition property taxes with the next payment due on
Nov. 1, 2022 and delinquent Dec. 10, 2022 in the estimated amount
of $14,444
3. Insurance with the next payment due Feb. 2023 in the
estimated amount of $1,300.
There will be no disbursements to the Debtor's principal. All funds
not reserved for the payments set forth above will be paid to The
Richard Vazquez and Robin C. Silvera Vasquez Revocable Trust.
Property is encumbered by a note secured by a first trust deed in
favor of The Richard Vazquez and Robin C. Silvera Vasquez Revocable
Trust made on May 30, 2019.
The County of Santa Clara County Department of Tax and Collections
has a statutory lien on the Property for property taxes. As of the
petition date, there were arrears of $51,291. As to the Improved
Property, (APN 835-07-023), the property taxes are $9,528 due
semiannually. As to the Unimproved Property (APN835-07-024) the
property taxes are $4,916 semiannually. The next installment is due
on Nov. 1, 2022 and delinquent on Dec.10, 2022.
The Debtor's sole principal will be responsible for payment of:
1. The Franchise Tax Board fees estimated at $800 with the
first post-petition payment due on March 15, 2023.
2. All Property maintenance and repairs.
3. All other expenses associated with the Property.
The Debtor proposes that these payments, absent further order of
the Court, continue until the sooner of confirmation, dismissal or
conversion.
A copy of the motion is available at https://bit.ly/3RNjF5d from
PacerMonitor.com.
About Envia Holdings
Envia Holdings, LLC is a single asset real estate (as defined in 11
U.S.C. Sec. 101(51B)). The company is based in San Jose, Calif.
Envia Holdings sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Calif. Case No. 22-50489) on June 2, 2022,
listing between $1 million and $10 million in both assets and
liabilities. Nathaniel Villareal, sole member, signed the
petition.
The case is assigned to Judge M. Elaine Hammond.
Lars T. Fuller, Esq., at The Fuller Law Firm is the Debtor's
counsel.
EVERGREEN ARBORISTS: Has Deal on Cash Collateral Access
-------------------------------------------------------
Evergreen Arborists, Inc. and secured creditor Commercial Credit
Group, Inc. advised the U.S. Bankruptcy Court for the Eastern
District of California, Sacramento Division, that they have reached
an agreement regarding the Debtor's use of cash collateral and now
desire to memorialize the terms of this agreement into an agreed
order.
The Debtor filed the Chapter 11 case as a result of (1) losing one
of its major forest division contracts with its biggest vendor,
Pacific Gas & Electric; (2) overwhelming debt it took on over the
past two years during the COVID-19 pandemic to stay operational;
and (3) within the last 60 days one of its larger customers
withheld over $447,000 in receivables due to disputes related to
performance of work completed.
The Debtor has since resolved the performance dispute with its
customer and anticipates receiving the $447,000 held back
receivables in the next 30 days and with pre-Petition Date debt
taken out of the calculation, the Debtor's operations are on
average cash-flow positive.
As of the Petition Date, the Debtor was obligated to CCG on seven
commercial equipment loans, which are evidenced by the following
Negotiable Promissory Note and Security Agreements payable to CCG.
Pursuant to the Notes, which are cross-collateralized, the Debtor
granted to CCG security interests and liens in and upon equipment
more particularly described in the Description of Property in each
of the Notes, as well as all of the Debtor's accounts, equipment,
contract rights, goods, inventory, and other items of personal
property, which in part, constitute cash collateral.
CCG properly perfected its pre-petition security interests in the
Cash Collateral and Equipment Collateral by filing UCC-1 Financing
Statements with the California Secretary of State and having its
lien noted on certificates of title, as appropriate.
CCG asserts, and holds, a senior security interest against the
Debtor's receivables to secure a $3,850,323 claim.
Miguel Chavarin dba Chavarin Trucking asserts a second-priority
security interest against the Debtor's receivables to secure a
$77,000 claim.
The U.S. Small Business Administration asserts a third-priority
security interest against the Debtor's receivables to secure a
$500,000 claim.
Illahee Ranch, LLC asserts a fourth-priority security interest
against the Debtor's receivables to secure a $219,760 claim.
Vox Funding, LLC asserts a fifth-priority security interest against
the Debtor's receivables to secure a $1,822,500 claim.
The parties agree the Debtor may use cash collateral to pay
postpetition expenses incurred in the ordinary course of its
business activities, pursuant to the budget.
As adequate protection, CCG is granted post-petition liens against
the same types of property of the Debtor, to the same validity,
extent, and priority as existed as of the Petition Date. The liens
will be deemed for all purposes to have been properly perfected,
without filing, as of the Petition Date.
Commencing on August 15 through November 15, 2022, the Debtor will
remit monthly post-petition payments to CCG in the monthly amount
of $120,813, and beginning December 15 and continuing on the 15th
day of each month thereafter until further Court order, the Debtor
shall remit monthly post-petition payments to CCG in the monthly
amount of $90,810. The Debtor and CCG acknowledge that the payments
specified therein account for the surrender of so-called
Surrendered Collateral and will not be adjusted solely on the basis
of the surrender and/or disposition of the Surrendered Collateral.
The Debtor will at all times maintain such insurance on the
Equipment Collateral as is required under the Notes with one or
more insurance companies and will name CCG as sole loss payee on
such insurance policies. The Debtor will provide CCG with written
evidence of adequate insurance immediately, and upon request
thereafter.
These events constitute an "Event of Default:"
1. The Debtor will violate or fail to timely satisfy,
post-petition, any term or condition of the Consent Order or the
Loan Documents.
2. A trustee or examiner (other than a Subchapter V trustee)
is appointed under Chapter 11 of the Code without the consent of
CCG.
3. The Debtor sells or encumbers any item of property subject
to CCG's liens, without the prior written consent of CCG.
4. The Debtor's Chapter 11 proceeding is converted to a
Chapter 7 proceeding or dismissed.
5. The Debtor's business operations materially change.
6. Insurance required under the Notes is not maintained,
allowed to lapse by the Debtor, or is otherwise terminated, or the
Equipment Collateral is subject to use or conditions which could
result in a loss that would not be covered under Debtor's insurance
policy.
7. The Debtor's failure to turnover the Surrendered
Collateral.
A copy of the motion is available at https://bit.ly/3aMFzVX from
PacerMonitor.com.
About Evergreen Arborists
Evergreen Arborists Inc. -- https://www.evergreenarboristsinc.com/
-- is a team of ISA certified arborists and tree service experts
that provide tree removal, trimming and more in Woodland, Davis,
Dixon, Capay Valley, Esparto, Madison, Winters and the surrounding
areas in California.
Evergreen Arborists Inc. filed a petition for relief under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.
Cal. Case No. 22-21692) on July 7, 2022. In the petition filed by
Michael B. Pryor Jr., as president, the Debtor estimated assets
between $500,000 and $1 million and liabilities between $1 million
and $10 million.
The case is assigned to the Hon. Fredrick E. Clement.
The Subchapter V trustee:
Walter R. Dahl
2304 "N" Street
Sacramento, CA 95816
Phone: (916) 446-8800
Email: wdahl@dahllaw.net
The Law Offices of Gabriel Liberman, APC, is the Debtor's counsel.
EVERI HOLDINGS: S&P Upgrades ICR to 'BB-' on Strengthened Business
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
gaming and payments equipment and software provider Everi Holdings
Inc. to 'BB-' from 'B+'. The outlook is stable. At the same time,
S&P raised all issue-level ratings by one notch.
The stable outlook reflects S&P's expectation that continued growth
in operations, coupled with good free cash flow, will support
adjusted leverage in the mid-to-high-2x area through 2023, which
provides good cushion to our 4x downgrade threshold.
Everi's competitive position has improved over the past couple of
years.
Over the past five years Everi consistently increased its revenue
base and improved its operating performance through technology
investments and consolidating and ramping up its various tuck-in
acquisitions, which have helped it diversify its product offerings,
grow its installed base, enhance its existing products, expand into
newer geographies, and lower its client concentration. The
improvement in Everi's scale is evidenced by revenues and EBITDA
increasing by about 60% since 2017, a significant improvement in
its cash flow generation, and improvement in its ship share to
9%-10% from 5% in 2017. Additionally, Everi has consistently grown
its installed base year-over-year, and as of March 31, 2022, its
installed base was 30% higher than in 2017. Everi has also
significantly increased the proportion of premium units in its
installed base to 47% at the end of March 31, 2022, from 19% in
2017. Premium units command a higher average win per unit,
supporting Everi's improved profitability. Moreover, Everi's
equipment sales have recovered faster than its competitors because
of the investments the company has made to grow its product
portfolio, including new game content and cabinets. At the end of
2021, Everi's equipment sales were about 10% above 2019 levels,
while its competitors (Light & Wonder, Inc. (formerly known as
Scientific Games Corporation) and International Game Technology,
plc) have recovered to between 55%-60% of 2019 levels.
Everi also continues to diversify its product offering and most
recently acquired assets from loyalty technology company XUVI and
acquired Historical Horse Racing (HHR) game developer Intuicode.
Everi also purchased game development technology, intellectual
property, and a developer and provider of cash handling and
financial payment solutions (through the acquisitions of Atlas and
eCash). These acquisitions provide Everi with an opportunity to
further diversify internationally and expand its offerings into
Australia. (Currently, Everi derives the majority of its revenues
and EBITDA in North America.) S&P believes Everi's acquisitions
will help it to further broaden its product offerings, drive
further operating performance growth, and enhance its competitive
position.
The gaming equipment space remains highly competitive.
Everi competes with larger suppliers (IGT, Light & Wonder, Konami
Co. Ltd., and Aristocrat Technologies) that have higher cash flow
bases to support greater levels of research and development (R&D)
spending for new products and content. Product and content
introductions and innovation are a key competitive advantage in the
gaming equipment space because operators demand popular titles and
new technology that resonate with their customers.
Furthermore, although Everi currently has a good position in its
financial technology segment, the company must continually compete
for contract renewals or win contracts at new casinos. It faces
competition in this segment from a variety of market participants,
including financial institutions and other providers of financial
solutions for casinos. Although Everi's R&D spend is overshadowed
by its competitors, the investments that it continues to make and
increases in its cash flow base has helped strengthen its
competitive position.
S&P believes Everi will generally maintain S&P Global
Ratings-adjusted leverage between 2.75x-3.25x over the long term.
Everi began articulating a more conservative financial policy with
respect to leverage, reducing its long-term net leverage target
range to 2.5x-3.0x from 3.0x-3.5x. The revised policy range
followed the repayment of approximately $145 million of debt in the
second half of 2021 in conjunction with its June 2021 refinancing.
S&P sid, "Our 'BB-' issuer credit rating assumes Everi's S&P Global
Ratings-adjusted net leverage will be in the 2.75x-3.25x range,
with some M&A spending. (Our adjustments add about 0.25x-0.5x to
management's measure of leverage.) Although we generally would net
excess cash against debt balances, we believe excess cash available
for netting will be relatively modest in our forecast period
because there is a high level of volatility with Everi's net cash
position, which includes the impact of settlement receivables and
settlement liabilities from its fintech segment. Cash associated
with settlement receivables and liabilities is not available to
Everi for debt repayment and we would therefore exclude it from our
net debt calculation. At the end of March 2022, Everi was operating
slightly below its target range and therefore we expect that going
forward Everi will focus on shareholder returns and/or
acquisitions."
S&P said, "Our forecast for adjusted leverage incorporates our
assumption that Everi's 2022 EBITDA is about flat to slightly up
year-over-year as revenue growth in the company's gaming and
fintech segments is partially offset by increased R&D spend, as the
company continues investing in its internal product development and
scaling recent tuck-in acquisitions.
"The stable outlook reflects our expectation that continued growth
in operations, coupled with good free cash flow will support
adjusted leverage in the mid-to-high-2x area through 2023, which
provides good cushion to our 4x downgrade threshold. The outlook
also incorporates our belief that Everi's financial policy is to
maintain its measure of net debt to EBITDA between 2.5x-3x over
time.
"Lower ratings are unlikely at this time given our forecast for
Everi to maintain a good cushion relative to our 4x downgrade
threshold. Notwithstanding, we could lower our ratings if we expect
Everi to maintain adjusted leverage above 4x. We believe such an
increase in leverage would most likely be caused by a significant
decrease in operating performance combined with a more aggressive
financial policy with respect to acquisitions, capital spending, or
other uses of capital.
"We could raise our ratings if we expect Everi would sustain
adjusted leverage below 3x, incorporating potential operating
volatility, increased investments or acquisitions, and shareholder
returns. Additionally, we would also need to see management
demonstrate a longer track record of operating inside its revised
net leverage target range of 2.5x-3.0x."
ESG credit indicators: E-2, S-3, G-2
FOOD SERVICE PARTNERS: Seeks Cash Collateral Access
---------------------------------------------------
FSPH, Inc. and Food Service Partners Georgia, LLC ask the U.S.
Bankruptcy Court for the District of Delaware for authority to use
cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to fund the
operations of its businesses and the administrative expenses of
these bankruptcy cases, as set forth in the Budget.
Austin Financial Services, Inc. and Greenline CDF Subfund XXX LLC
assert an interest in the cash collateral.
Austin and the Debtors entered into a Loan and Security Agreement
dated February 5, 2020, with a commitment amount of $6,250,000. The
Austin Loan is purportedly secured by a first priority lien on
substantially all of the Debtors' assets. The current balance due
under the Austin Loan is approximately $900,000.
Greenline as lender, FPS GA as borrower, FPS as co-borrower and
FPSH as guarantor entered into a Junior Credit and Security
Agreement dated October 1, 2019 pursuant to which Greenville
extended to the Debtors a term loan in the amount of $2,000,000.
The Greenville Loan is purportedly secured by a second priority
lien on substantially all of the Debtors' assets. The current
balance due under the Greenville Loan is approximately $1,300,000.
The Debtors believe the indebtedness to the Secured Lenders is
substantially less than the value of the collateral and that the
Secured Lenders are oversecured.
The Debtors assert that the Secured Lenders are adequately
protected by (i) periodic payments, (ii) the granting of
replacement liens (only to the extent their prepetition security
interests are perfected and enforceable), and (iii) the
continuation of the Debtors' businesses, which will permit the
Debtors to continue to generate receivables.
A copy of the Debtors' motion is available at
https://bit.ly/3ISaigT from PacerMonitor.com.
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 reports
estimated liabilities between $10 million and $50 million against
its estimated assets between $50,000 and $100,000.
Jack Shrum, Esq., at Jack Shrum, P.A., is the Debtor's counsel.
FRONT SIGHT: Class 8 Unsecureds to Split $500K in Plan
------------------------------------------------------
Front Sight Management LLC submitted a Chapter 11 Plan of
Reorganization and a Disclosure Statement.
Front Sight Management LLC is still in the process of (i)
negotiating with various creditors and parties interest as to the
terms of the plan and disclosure statement, and (ii) determining
membership terms for its business going forward. The bar date for
filings claims in this case has also not yet passed which also will
affect the terms of the Debtor's plan. The Debtor will be filing an
amended disclosure statement and plan on or before August 4, 2022
that includes more detailed information and financial projections.
The Debtor reserves the right to make further amendments and
modifications.
The Plan provides for a recapitalization as follows: (a) $5 million
of presently available New Secured Debt through a conventional loan
and/or credit facility which will have a first priority lien
against substantially all of the Reorganized Debtor's assets.
Class 7 Champions Club Member and Platinum Member General Unsecured
Claims. As of the Petition Date, Champions Club Members held
$5,671,709 in unsecured claims, and Platinum Members were owed
$880,000. Class 7 claimants who remain active members of Front
Sight have the option of choosing the following treatment:
* Option 1: Class 7 Claimants can choose to participate in go
forward membership program [to be described in amended Plan filed
by August 4, 2022].
* Option 2: Class 7 claimants can choose to be treated as Class
7 general unsecured claimants.
* Option 3: Class 7 claimants can choose to accept no recovery
on their claim.
Class 7 is impaired.
Class 8 All Other General Unsecured Claims total approximately $4
million to $20 million plus. (This number is subject to change as
follows: (a) the bar date is not until August 8, 2022; (b) the
amount of Class 7 claimants who choose to receive treatment under
Class 8; (c) the resolution of objections to Disputed Claims; and
(d) the amount of rejection damages claims asserted by members who
do not choose to remain active or inactive members of Front Sight.)
Currently, the total amount of unsecured claims scheduled and
filed against the Debtor is over $25 million. This number is
grossly inflated due to several claims including one $21 million
claim asserted by a former member who was terminated prepetition
and who was refunded in full for all amounts he paid for his
membership.
Holders of Class 8 Allowed General Unsecured Claims will receive
their pro rata share of $500,000 within 45 days of the Effective
Date (or as soon as practicable thereafter). The treatment is in
full settlement and satisfaction of all obligations of the Debtor
to holders of Claims in Class 8. Class 8 is impaired.
The Disclosure Statement Hearing will be on September 1, 2022 at
9:30 a.m.
Attorneys for the Chapter 11 Debtor:
Steven T. Gubner, Esq.
Susan K. Seflin, Esq.
Jessica S. Wellington, Esq.
BG LAW LLP
300 S. 4th Street, Suite 1550
Las Vegas, NV 89101
Telephone: (702) 835-0800
Facsimile: (866) 995-0215
Email: sgubner@bg.law
sseflin@bg.law
jwellington@bg.law
A copy of the Disclosure Statement dated July 15, 2022, is
available at https://bit.ly/3chU6sU from Stretto, the claims
agent.
About Front Sight Management
Front Sight Management LLC specializes in providing courses in gun
training, self-defense martial arts training, and personal safety
-- with firearms or without. Front Sight sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No.
22-11824) on May 24, 2022. In the petition signed by Ignatius
Piazza, manager, the Debtor disclosed up to $50 million in both
assets and liabilities.
Steven T. Gubner, Esq., at BG Law LLP is the Debtor's counsel.
FS DIP, LLC, as DIP agent, is represented by Samuel A. Schwartz,
Esq., and Bryan A. Lindsey, Esq., at Schwartz Law, PLLC.
G.D. III: Court OKs Appointment of Scott W. Miller as Examiner
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland approves the
appointment by the United States Trustee for Region Four of Scott
W. Miller to serve as Chapter 11 Examiner for G.D. III, Inc.
The U.S. Trustee named Mr. Miller as Examiner on July 21, 2022. The
U.S. Trustee's counsel has consulted the respective counsel for the
Debtor and that of creditor Pegah Touradji before appointing Mr.
Miller.
To the best of the U.S. Trustee's knowledge, the Examiner has no
connections with the Debtor, creditors, and other
parties-in-interest, their respective attorneys and accountants,
the United States Trustee, and persons employed in the Office of
the United States Trustee.
A copy of the order is available for free at https://bit.ly/3b8dWGG
from PacerMonitor.com.
Attorney for the U.S. Trustee:
Katherine A. Levin, Trial Attorney
101 W Lombard Street, Suite 2625
Baltimore, MD 21201
E-mail: Katherine.A.Levin@usdoj.gov
Telephone: (410) 962-4300
About G.D. III
G.D. III, Inc. is a Baltimore-based company engaged in renting and
leasing real estate properties.
G.D. III filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Md. Case No. 22-12393) on May 3,
2022, listing $6,500,000 in assets and $7,549,273 in liabilities.
George Divel, III, president of G.D. III, signed the petition.
Judge Michelle M. Harner oversees the case.
Timothy Mummert, Esq., at Mummert Law Firm and Richard Fleischer,
CPA serve as the Debtor's legal counsel and accountant,
respectively.
GABHALTAIS TEAGHLAIGH: Files Emergency Bid to Use Cash Collateral
-----------------------------------------------------------------
Gabhaltais Teaghlaigh LLC asks the U.S. Bankruptcy Court for the
Eastern Division, District of Massachusetts, for authority to use
cash collateral and provide adequate protection to secured
parties.
The Debtor requires the use of cash collateral to maintain and
reorganize its financial affairs.
The Debtor believes, after reviewing the mortgages, that the
mortgagees have or may have an assignment of rents from the
properties. The cash collateral and accounts receivable (rents) of
the Debtor are the only sources of operating funds available to the
Debtor at present.
The Debtor and the lenders had entered into purchase money mortgage
loans at the time the properties were purchased at various times
between 2006 and 2019; some purchase money mortgages may have been
refinanced.
When the Debtor was organized, the sole member was William Gately,
the husband of Dr. Virginia Hung, and Dr. Hung was the manager.
However, he died on or about February 12, 2021, and Dr. Hung was
the sole heir. A probate of the will is pending. After his death,
DevCo was retained to assist Dr. Hung in managing and operating the
properties. Some properties were sold, and on the petition date,
sales of some of the six remaining properties were planned. The
second mortgagee of four of the properties, however, refused to
cooperate in resolving the problems stemming largely from
accounting issues, and foreclosed. An adversary proceeding to set
aside the foreclosure is in preparation.
The Lenders appear to be secured by the six parcels of real estate.
Some of the lenders -- particularly Synergy Funding, LLC -- have
only second mortgages.
The Lenders appear to have a security interest in all cash and
accounts receivable of the Debtor pursuant to the Loan Documents,
i.e., rents. As of the Petition Date, the Debtor has insufficient
unencumbered cash on hand to operate and make any neeeded repairs
without the use of the cash on hand and post-petition proceeds of
rents. Specifically, without the use of said cash collateral, the
Debtor cannot purchase the materials or supplies needed to maintain
the properties, or pay mortgages, taxes, and insurance. The debtor
has no resources other than rents and possibly cash contributions
from Dr. Hung, personally.
A copy of the motion and the Debtor's budget is available at
https://bit.ly/3oeDxAH from PacerMonitor.com.
About Gabhaltais Teaghlaigh
Gabhaltais Teaghlaigh, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 22-10839) on
June 15, 2022. In the petition filed by Virginia Hung, as member,
Gabaltais Teaghlaigh LLC listed as much as $50,000 in both assets
and liabilities.
The case is assigned to Judge Christopher J. Panos.
David G. Baker, Esq., at Baker Law Offices is the Debtor's counsel.
GIRARDI & KEESE: Judge Orders Erika's Belongings Auctioned Off
--------------------------------------------------------------
Lindsay Cronin of Reality Blurb reports that Erika Jayne and Thomas
Girardi's home furnishings and personal belongings are headed to
the auction block after a federal judge signed off on the hiring of
an auction company to host the sale.
As the estranged couple's Pasadena mansion remains on the market
for $7.5 million, a number of her and Thomas' items, including
their "Steinway piano, religious icons, statues, lamps, rugs,
ceramics, glassware, clothing and shoes, and sports memorabilia,"
are headed for a September sale.
According to court documents obtained by Radar Online on July 14,
2022 the judge presiding over the bankruptcy proceedings of the
Real Housewives of Beverly Hills star's soon-to-be-ex-husband
approved a sale scheduled for September 21, 2022, which is expected
to capture between $191,000 to $280,000 for Thomas' estate.
As the outlet noted, Erika, who currently resides in a $9,500/month
rental near West Hollywood, has stated that she took only a couple
of pieces of furniture from her former home when she moved out in
late 2020. Meanwhile, Thomas remained in the home with their
belongings until months later in February 2021, at which point he
was diagnosed with dementia and relocated to a senior assisted
living community.
As RHOBH fans well know, Erika and Thomas' former marital mansion
has been on the market for over a year, and currently, his
creditors and victims are hoping to see the home put into
foreclosure and sold. And while that hasn’t happened quite yet,
attorney Ronald Richards announced plans to offer $6.9 million for
the property earlier this week.
"[Lauren Boyette-Richards] and I are attempting to purchase [Erika
Jayne]'s house from the Trustee," Ronald wrote on Instagram on July
13, 2022. "This is so our followers can see how the victims money
was spent and to get a piece of the decadence. We will also use it
for a public forum on first amendment activities, something Erika
and her legal team strongly are against. They want secret hearings
and trials, not public scrutiny. We will have her deposition there
along with other players in the case."
The Real Housewives of Beverly Hills season 12 airs Wednesdays at
8/7c on Bravo.
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
GT REAL ESTATE: Owner Sues County to Block $21M SC Stadium Claim
----------------------------------------------------------------
A bankrupt real estate venture owned by an interest of Carolina
Panthers owner David Tepper has sued a South Carolina county in
Delaware's bankruptcy court, challenging the county's suit in state
court seeking a return of $21 million it contributed to a scuttled,
$800 million practice complex.
GT Real Estate Holdings LLC argued July 14, 2022, before U.S.
Bankruptcy Judge Karen B. Owens that York County, South Carolina,
violated the bankruptcy's automatic stay protection for debtors
when it launched a complaint in South Carolina seeking recovery of
the $21 million from GT's non-debtor affiliates.
In GT Real Estate Holdings, LLC, vs. York County, South Carolina,
Adv. Pro No. 22-50391, In re GT Real Estate Holdings, LLC (Bankr.
D. Del. Case No. 22-10505), the Debtor brings an adversary
proceeding against York County, South Carolina, to vindicate the
protection of the automatic stay from a direct and willful
violation by the County, acting by and through its individual
agents and representatives, and to determine the rights and
obligations of the parties with respect to a $21 million
prepetition payment the County made to the Debtor with no binding
contractual obligations governing its use.
Debtor GT Real Estate recounts in court filings that beginning in
April 2020, the County, the City of Rock Hill, South Carolina and
the Debtor entered into a number of discrete agreements to support
the development of a mixed-use, pedestrian friendly community,
sports and entertainment venue, which would also include a new
headquarters and practice facility for the Carolina Panthers, a
National Football League team (the "Project"). These agreements
memorialized, among other things, the terms, conditions, rights and
obligations of the County, the City and the Debtor with respect to
a standard package of public financial support for an undertaking
like the Project, which contemplated the development of public
space and public infrastructure. The County agreed to support the
Project with a direct payment of $21 million (the "County Payment")
and certain tax benefits. For its part, the City also agreed to
make a direct payment to the Debtor and to use reasonable best
efforts to issue $225 million in bonds to finance public
infrastructure related to the Project. This public financial
support was to be matched -- indeed, far exceeded -- with hundreds
of millions of dollars of private investment by the Debtor. The
various agreements among the parties were uniformly clear that the
Debtor had no obligation to proceed with construction of the
Project unless the City issued an agreed minimum amount of bonds.
In early 2020, the parties contemplated that the City would issue
the required bonds no later than October 31, 2020. By late 2020,
with certain agreements still under final negotiation, the Debtor
agreed with the City to extend that deadline to Feb. 26, 2021. The
City failed to issue the bonds by the extended deadline.
Nevertheless, the Debtor proceeded to expend approximately $240
million dollars on the Project in anticipation that the City would
eventually issue the required bonds. More than a year later, the
City still had not issued any bonds.
In early March 2022, having lost confidence that the City would
ever deliver on the agreed bond financing, the Debtor suspended
construction of the Project. In the succeeding weeks and months,
the Debtor made efforts to engage the City and the County in
discussions about the future of the Project.
On May 31, 2022, the County sent a letter (the "Demand Letter") to
the Debtor demanding the return of the County Payment as a
non-negotiable condition to participating in any negotiations about
the Project.
The Debtor filed its Chapter 11 Case on June 1, 2022. Pursuant to
Section 362 of title 11 of the United States Code, the automatic
stay went into immediate effect on the Petition Date.
Approximately one week after the Petition Date, on June 9, 2022,
the County commenced a lawsuit in South Carolina state court (the
"State Court Action") seeking to recover the County Payment, not
from the Debtor, to which the County had paid the funds, but rather
from the Debtor's direct and indirect parent companies, another
non-Debtor affiliate, and the City.
The Debtor seeks a judgment declaring that the State Court Action
violates the automatic stay for these reasons:
* The County Complaint asserts claims against the Affiliate
Non-Debtor Defendants (i.e., civil conspiracy, negligence,
interference with contractual relations, and negligent
misrepresentation) that are premised on an alter ego theory of
liability.
* The nature of the County's claims against the Affiliate
Non-Debtor Defendants is that those defendants committed their
supposedly wrongful acts acting by and through the Debtor, as it is
undisputed that the funds at issue were held by, and used by, the
Debtor.
* The County has improperly exercised dominion and control over
contractual claims that the Debtor holds against the City. The
County Complaint alleges that the City breached its contract with
the County by failing to issue the public bonds. However, no
document under which the County has any rights against the City
imposes any obligation on the City to issue the bonds.
About GT Real Estate Holdings
GT Real Estate Holdings is a real estate company owned by David
Tepper. It was created to own and develop a mixed-use,
pedestrian-friendly community, sports, and entertainment venue,
that would also include a new headquarters and practice facility
for the Carolina Panthers, a National Football League team,
situated on a 234-acre site located in Rock Hill, South Carolina.
The company suspended further development of the Project in March
2022.
GT Real Estate Holdings sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10505) on June 2,
2022. In the petition filed by Jonathan Hickman, as chief
restructuring officer, the Debtor reports estimated assets and
liabilities between $100 million and $500 million each.
The Hon. Karen B. Owens is the case judge.
The Debtor tapped White & Case LLP as restructuring counsel; Farnan
LLP, as Delaware counsel; and Alvarez & Marsal as financial
advisor. Kroll Restructuring Administration LLC is the claims
agent.
HEBO FAMILY FOODS: Unsecureds Will Get 20% of Claims in 5 Years
---------------------------------------------------------------
Hebo Family Foods, Inc., filed with the U.S. Bankruptcy Court for
the District of Massachusetts a Chapter 11 Subchapter V Plan of
Reorganization dated July 18, 2022.
The Debtor is the manufacturer of Landry's Meat Pies, a fresh meat
pie distributed to supermarkets and other retailers, including
Market Basket and Stop & Shop, its two largest customers by
volume.
Prior to the Petition Date, the Debtor was substantially current on
its financial obligations except for a disputed unsecured claim
held by E.W. Mailhot Sausage Co. a former vendor of the Debtor. In
connection with that dispute, E.W. Mailhot sought and obtained a
trustee process attachment on amounts due to the Debtor by Market
Basket, although the attachment froze only approximately $1,400.00.
Market Basket ceased ordering from the Debtor upon being served
with the trustee process attachment, thereby causing the Debtor's
overall sales to plummet. Market Basket agreed to resume orders
once the trustee process was resolved. The Debtor then filed this
Chapter 11 case. Market Basket has, since the Petition Date,
resumed doing business with the Debtor.
Under the Plan, secured claims will be reduced to the value of the
collateral. The payments to unsecured creditors under the Plan are
based on the Debtor's projected net disposable income over the
course of the Plan. Such amount will exceed the liquidation value
of the Debtor's assets. In addition, any net recoveries from the
Malpractice Claim shall be payable to the unsecured creditors.
The Plan contemplates that the Debtor will stay in business and
return to positive cash flow. Under the Plan: (i) Allowed Secured
Claims are paid in full based on the value of the security; (ii)
Allowed Administrative and Priority Claims are paid in full; and
(ii) the Debtor's projected disposable income is submitted to the
payment of Allowed General Unsecured Claims over a 60 month period
from the Effective Date of the Plan.
The Debtor is currently discussing the Malpractice Claim with
potential special counsel. However, at present the Debtor does not
have funds to pay for those legal services. Special Counsel has
indicated that the gross recovery on account of the Malpractice
Claim could range from a low of from $0.00 to a high of roughly
$113,000.00. In the event of a gross recovery in the full amount of
$113,000.00, the projected net recovery after payment of
anticipated attorney's fees and litigation costs is estimated to be
in the range of $53,000.00 to $60,000.00.
The Plan proposes to pay General Unsecured Claimants a dividend, on
account of such Claims, of 20% over the life of the Plan based on
the Debtor's net disposable income as projected in the Budget which
is more than such Claimants would receive in the absence of a
recovery on account of the legal Malpractice Claim. The Plan
further proposes that in the event of a recovery on account of the
Malpractice Claim, the full amount of the net proceeds actually
received by the Debtor will be used to fund an additional one-time
lump sum pro rata distribution to General Unsecured Claimants.
Class 4 is comprised of all holders of Allowed General Unsecured
Claims against the Debtor. Based upon the Proofs of Claim that have
been filed and the Debtor's Schedules, the Debtor estimates that
there will be approximately $141,000.00 in Allowed Class 4 Claims.
In full and complete settlement, satisfaction and release of all
Allowed Class 4 Claims, each holder of an Allowed Class 4 Claim
shall receive a total distribution equal to 20% of its Allowed
Claim, to be paid in quarterly installments over five years from
the Effective Date. Such distribution shall require a quarterly
payment of $1,410.00 from the Debtor for each of the 20 quarters.
This amount is based on its pro rata share of the Debtor's net
disposable income to be received over the five-year period
following the Effective Date as set forth in the Budget. In
addition, each holder of an Allowed Class 4 Claim shall receive its
pro rata share of the net proceeds actually received by the Debtor
on account of the Malpractice Claim.
Payment on account of Allowed Class 4 Claims based on the Debtor's
net proceeds from the Malpractice Claim shall be in the form of a
one-time lump sum payment made within ten days of the close of the
quarter in which such proceeds are fully and finally received by
the Debtor. Class 4 is impaired.
Class 5 consists of Equity Interests. Sean Healey, who is the sole
equity interest holder of the Debtor, shall receive no distribution
under the Plan on account of such interests, but will retain
unaltered, the legal, equitable and contractual rights to which
such interests were entitled as of the Petition Date. Class 5 is
unimpaired.
The Plan will be funded from the Debtor's future earnings and
income. Upon the Effective Date, the Debtor is authorized to take
all action permitted by law, including, without limitation, to use
its cash and other assets for all purposes provided for in the Plan
and in its business operations, and to borrow funds and to transfer
funds for any legitimate purpose.
A full-text copy of the Subchapter V Plan dated July 18, 2022, is
available at https://bit.ly/3yX0KMZ from PacerMonitor.com at no
charge.
Debtor's Counsel:
David B. Madoff, Esq.
Steffani M. Pelton, Esq.
Madoff & Khoury LLP
124 Washington Street
Foxboro, MA 02035
Tel.: 508-543-0040
Email: madoff@mandkllp.com
About HeBo Family Foods
HeBo Family Foods, Inc. is the manufacturer of Landry's Meat Pies,
a fresh meat pie distributed to supermarkets and other retailers,
including Market Basket and Stop & Shop.
HeBo Family Foods sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 22-10497) on April 19,
2022. In the petition filed by Sean Healey, president, the Debtor
disclosed up to $100,000 in assets and up to $500,000 in
liabilities.
Judge Christopher J. Panos oversees the case.
David B. Madoff, Esq., at Madoff & Khoury LLP, is the Debtor's
counsel.
INFOW LLC: Alex Jones No Show At Sandy Hook Defamation Case Hearing
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Michael Murney of Chron reports that Alex Jones, Austin-based
founder of the far-right conspiracy-driven media company Infowars,
failed to show up Friday, July 15, 2022 for a hearing in the latest
ongoing defamation lawsuit brought by Sandy Hook parents against
Jones.
Friday's, July 15, 2022, was the only pre-trial hearing in a
lawsuit brought by Sandy Hook parents Neil Heslin and Scarlett
Lewis, whose six-year-old son Jesse was killed by the Sandy Hook
gunman. Their case was originally filed in 2018. Since then,
Jones has "intentionally disobeyed the court's order" by refusing
to hand over documents in compliance with the discovery process,
Judge Guerra Gamble wrote in a court order last year.
Attorneys for Heslin and Lewis say Jones' no-show in an Austin
court on Friday is just the latest example of the right-wing
provocateur's ongoing "lack of respect for the discovery process."
In fact, Jones "abused the discovery process so much," according to
Bill Ogden, one of Heslin and Lewis' attorneys, that the court
issued a default ruling in favor of the plaintiffs months ago.
This means that Heslin's and Lewis' legal team "just have to prove
the damages at this point, because he abused the discovery process
so much," Ogden said.
In most civil court proceedings, plaintiffs' attorneys have to
prove that what their client claims happened actually occurred,
also called "liability"; and that their clients suffered
consequences because of what happened, also called "damages." The
families' attorneys will only now have to show that Jones'
conspiracy-peddling caused the damages during the upcoming jury
trial, Ogden explained.
A Connecticut judge also defaulted Jones without trial on the issue
of liability in November 2021 for failing to comply with the
discovery process in another Sandy Hook defamation case. Jones’
legal team did not respond to requests for comment in time for
publication.
Soon after a gunman killed 19 students and six teachers at Sandy
Hook Elementary School in 2012, Jones began spreading the lie that
the shooting was faked by the government and that grieving parents
were actually "crisis actors." Jones' followers doxxed and harassed
parents of victims for years afterwards.
Sandy Hook parents have since filed a series of defamation lawsuits
against Jones in Connecticut and Texas; he has paid out millions in
damages and court sanctions after losing those cases.
Heslin's and Lewis' case was also delayed when Jones filed for
bankruptcy in Texas court in April; the bankruptcy case was
dismissed last month after attorneys for Sandy Hook families
accused Jones of trying to shield his assets from courts as juries
in the Sandy Hook cases are set to decide how much Jones owes the
families in damages later this 2022.
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.
ITURRINO AND ASSOCIATES: Unsecureds to Recover 10% in 36 Months
---------------------------------------------------------------
Iturrino and Associates, Inc., filed with the U.S. Bankruptcy
Court for the Northern District of Texas a Plan of Reorganization
under Subchapter V dated July 18, 2022.
The Debtor owns and operates a Dry Clean Super Center located in
Keller, Texas. The Debtor also owns the real property located at
4624 Golden Triangle Blvd., Keller, Texas on which the dry cleaning
business is located.
The Debtor's revenue has declined during the COVID-19 pandemic,
which led to the Debtor's inability to fully service its debt and
ultimately the filing of this case. The use of dry cleaning for
business clothes has declined since 2020 with more people working
from hoe. This has negatively impacted the w hole cleaning
industry.
Under this Plan, Secured Creditors will receive payment of 100% of
their Allowed Secured Claims and Unsecured Creditors will receive
10% of their Allowed Unsecured Claims. Therefore, pursuant to the
liquidation analysis all Creditors will receive at least as much
under this Plan as they would in a Chapter 7 liquidation.
Class 1 consists of Allowed Secured Claims of Tarrant County. This
Claim shall be paid in full in monthly installments of principal
with interest thereon at the rate of 12% per annum. Payments will
commence on the first day of the first month following the
Effective Date and continuing until the expiration of 60 months
from the Petition Date. Interest shall begin to accrue on the
Petition Date. This Claim is Impaired.
Class 2 consists of Allowed Secured Claims of Lendstream Small
Business Finance, LLC, as servicer for U.S. Bank, N.A. This Claim
will be paid over 15 years including principal and interest at the
rate of 4% per annum. Payments will commence on the first day of
the first month following the Effective Date and continue on the
first day of each month thereafter until paid in full. This Claim
is Impaired.
Class 3 consists of Allowed Secured Claim of Kwik Industries, Inc.
To the extent the Claims of Kwik Industries are Secured, they will
be paid in full in 60 equal monthly installments of principal and
interest at the rate of 5% per annum. Payments will commence on the
first day of the first month following the Effective Date and
continue on the first day of each month thereafter until paid in
full. To the extent there is no collateral value remaining for this
Claim after the first lien claim of Lendstream/US Bank (which the
Debtor believes is the case), this Claim will be treated as a Class
4 General Unsecured Claim. This Claim is Impaired.
Class 4 consists of Allowed General Unsecured Claims. Class 4
Claimants shall be paid 10% of their Claims over 36 months from the
Effective Date, without interest. These Claims will be paid in
equal monthly installments of principal and interest commencing on
the first day of the first month following the Effective Date and
continuing on the first day of each month thereafter. These Claims
are Impaired.
Class 5 Equity Interests shall be retained.
The Debtor intends to make all payments required under the Plan
from available cash and income from the business operations of the
Debtor.
A full-text copy of the Subchapter V Plan dated July 18, 2022, is
available at https://bit.ly/3vaqdRP from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Joyce W. Lindauer, Esq.
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
Email: joyce@joycelindauer.com
About Iturrino and
Associates
Iturrino and Associates, Inc., doing business as Dry Clean
Supercenter at Golden Triangle, operates a Dry Clean Super Center
located in Keller, Texas.
Iturrino and Associates sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 22-40850-elm11) on
April 18, 2022. In the petition signed by Josh Iturrino, president
and chief executive officer, the Debtor disclosed up to $1 million
in assets and up to $10 million in liabilities.
Joyce Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC is the
Debtor's counsel.
JADE INVESTMENTS: Wins Access to K&S Note's Cash Collateral
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of West
Virginia authorized Jade Investments, LLC to use the cash
collateral of K&S Note 1, LLC on an interim basis in accordance
with the parties' agreement.
The Debtor requires the use of the Lender's cash collateral to
operate its business and make necessary repairs and maintain
insurance on the property.
The Debtor owes K&S $1,600,000 on a promissory note acquired by the
Lender from B2R. The original note was dated May 27, 2015, in the
original principal amount of $925,000.
To secure the Debtor's obligation, the Debtor granted to the
original Lender a first priority security interest on various
rental properties and the rents and proceeds from those properties.
The properties include real property as described in the deed of
trust of record in the Office of the Clerk of the County Commission
of Raleigh County, West Virginia, as Instrument Number 50589163.
As adequate protection, the Lender is granted a valid and perfected
first priority replacement lien on all post-petition cash
collateral in the properties, without the necessity of filing any
documents in the Office of the Secretary of State of West Virginia
or in the Office of the Clerk of the County Commission of Raleigh
County, West Virginia.
The parties agree Joseph Supple, Chapter V Trustee, will be
entitled to a payment of up to $6,000 for his services as Chapter V
Trustee and that payment will be made from cash collateral after
approval by the Court from monies escrowed by the Debtor. In
addition, First Property Solutions, the management company, shall
be entitled to reimbursement up to $600 based upon proof of unpaid
invoices.
The balance of cash collateral will be paid over to K&S upon the
anticipated dismissal of the case.
The Debtor will use its best efforts to generate new rents and
accounts receivable. The Debtor agrees to maintain insurance on the
property and cooperate with K&S's representatives regarding the
operations of the property.
The Agreed Order will terminate should the bankruptcy be dismissed
or converted to a Chapter 7.
A copy of the order is available at https://bit.ly/3yRduVe from
PacerMonitor.com.
About Jade Investments
Jade Investments, LLC owns several residential rental properties in
Beckely, West Virginia. The Debtor sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No. 22-50044) on
May 17, 2022. In the petition filed by Joshua Conaway, managing
member, the Debtor disclosed up to $1 million in assets and up to
$10 million in liabilities.
Judge Mckay B. Mignault oversees the case.
Joseph W. Caldwell, Esq., at Caldwell and Riffee represents the
Debtor as counsel.
JAGUAR HEALTH: Unit Amends License Agreement With Napo Therapeutics
-------------------------------------------------------------------
Napo Pharmaceuticals, Inc., the wholly-owned subsidiary of Jaguar
Health, Inc., entered into an amended and restated license
agreement with Napo Therapeutics S.p.A. (f/k/a Napo EU S.p.A.), an
Italy law joint stock company and majority-owned subsidiary of Napo
Pharma, which agreement amended and restated in its entirety the
License Agreement, dated Aug. 18, 2021, by and between Napo Pharma
and Napo Thera, as amended.
Pursuant to the Original License Agreement, Napo Pharma granted
Napo Thera (i) an exclusive license to develop, commercialize and
manufacture pharmaceutical products utilizing crofelemer or
lechlemer as its active drug substance in Europe for short bowel
syndrome with intestinal failure, HIV-related diarrhea, and
symptomatic relief and treatment in patients with congenital
diarrheal disorders and (ii) options to licenses to develop,
commercialize and manufacture Products in Europe for additional
indications. The Original License Agreement provided that Napo
Pharma would have sole control over all manufacturing activities
for CMC, clinical and commercial supply of Products in Europe for
all licensed indications; provided, however, that Napo Thera would
be entitled to utilize its license to manufacture such Products
only to the extent that Napo Pharma was unable to supply. The
Amended License Agreement modifies, among other things, Napo
Thera's rights to manufacture finished Products for certain
licensed indications. Pursuant to the Amended License Agreement,
Napo Thera will now be able to use a mutually acceptable, third
party contract manufacturer to manufacture (i) commercial supply of
finished Products for certain licensed indications involving
intestinal failure (e.g., short bowel syndrome with intestinal
failure and symptomatic relief and treatment in patients with
congenital diarrheal disorders) at any time following receipt of
regulatory approval such Product and (ii) commercial scale batches
of Products as required in order to validate a process to obtain
regulatory approval in Europe. Napo Thera will, consistent with
the terms Original License Agreement, still be entitled to utilize
its license to manufacture Products for licensed indications other
than IFD Indications, but only to the extent that Napo Pharma is
unable to supply Product.
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar Health reported a net loss and comprehensive loss of $52.60
for the year ended Dec. 31, 2021, a net loss and comprehensive loss
of $33.81 million for the year ended Dec. 31, 2020, a net loss and
comprehensive loss of $38.54 million for the year ended Dec. 31,
2019, and a net loss of $32.15 million for the year ended Dec. 31,
2018. As of March 31, 2022, the Company had $52.91 million in total
assets, $44.80 million in total liabilities, and $8.11 million in
total stockholders' equity.
Larkspur, California-based RBSM, LLP, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
March 11, 2022, citing that the Company has an accumulated deficit,
recurring losses, and expects continuing future losses. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
JP INTERMEDIATE: Moody's Cuts CFR to Caa1 & Alters Outlook to Neg.
------------------------------------------------------------------
Moody's Investors Service downgraded JP Intermediate B, LLC's (dba
as The Juice Plus Company, "Juice Plus") Corporate Family Rating to
Caa1 from B3 and its Probability of Default Rating to Caa1-PD from
B3-PD. Moody's also downgraded Juice Plus' first lien senior
secured revolving credit facility and term loan ratings to B3 from
B2. The rating outlook is negative.
The rating downgrades reflect Moody's expectation for
debt-to-EBITDA (Moody's adjusted) to remain elevated above 10x in
fiscal year 2023 given inflationary cost pressures and high
distributor churn, which factors are adversely impacting operating
performance. Juice Plus has experienced double digit sales declines
in its fiscal year ending April 2022, reflecting declines in sales
force and volumes. The sales force is a significant driver of
revenue across the company's direct selling business model, and
declines in distributors is negatively impacting business
performance. Juice Plus continues to invest in IT systems, tools,
training, and incentives to drive enrollment, but these investments
have not halted the erosion of sales and earnings. Moody's
anticipates it will be challenging to quickly and meaningfully
improve the distributor base due to other opportunities for
workplace flexibility brought about by increasing hybrid work
arrangements. Juice Plus will likely benefit from the fall 2022
launch of a reformulated Omega Plus product in Europe that will
replace the Omega product that was previously taken off the market
in the EU. Moody's nevertheless projects EBITDA is likely to be
relatively flat in 2023 as the full impact of distributor losses is
realized and costs remain elevated, leading to continued negative
free cash flow and high leverage. Moody's also expects liquidity to
weaken, as operating cash flow will continue to deteriorate over
the next 12 months, and the upcoming expiration of the revolving
credit facility in November 2023 approaches. Moody's forecasts the
EBITDA margin will remain constrained in the low double digits,
well below pre-pandemic levels, even after pricing initiatives
offset some of the cost pressures.
The following ratings/assessments are affected by the action:
Ratings Downgraded:
Issuer: JP Intermediate B, LLC
Corporate Family Rating, Downgraded to Caa1 from B3
Probability of Default Rating, Downgraded to Caa1-PD from B3-PD
Senior Secured 1st Lien Bank Credit Facility, Downgraded to B3
(LGD3) from B2 (LGD3)
Outlook Actions:
Issuer: JP Intermediate B, LLC
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Juice Plus' Caa1 CFR reflects its high leverage, high distributor
churn, upcoming November 2023 revolver expiration, and economic
headwinds will continue to create challenges for the company. The
company's direct selling model also increases the risk of adverse
regulatory and/or legal actions, and the potential for actions by
regulatory authorities. Moody's is concerned that the company will
face difficulty mitigating distributor, revenue and earnings
declines because increased hybrid work arrangements create
competition for sales consultants that desire work flexibility.
This will impact Juice Plus' credit metrics, constrain its ability
to generate positive free cash flow to repay debt, and pressure the
company's liquidity. The rating is supported by the company's
existing product suite that is largely focused on wellness products
and weight loss. The rating is also supported by a high percentage
of variable costs given the outsourced manufacturing model, as well
as sales commissions and marketing expenses that fluctuate with
sales volume. Social factors driven by an aging population and
obesity trends that support demand for health, wellness and weight
loss products also benefit the credit profile.
Liquidity is weak considering projected negative free cash flow and
November 2023 revolver expiration. Juice Plus had $45 million of
cash as of January 2022 and $7.5 million drawn on its $50 million
revolving credit facility as of the last twelve months ending
January 31, 2022. Moody's projects negative $11 million of free
cash flow in the fiscal year ended April 2023. Moody's believes the
cash balance may not be sufficient to fund the free cash flow burn,
the $22.5 million of required annual term loan amortization, and
repayment of the $7.5 million revolver if the facility is not
extended. A revolver maturity extension would improve the
company's liquidity though it is not assumed in Moody's liquidity
analysis. The credit facility has a maximum net leverage covenant
of 3.75x and Moody's expects the company to be in compliance with
the covenant, although with diminishing cushion. The maturity
profile is weak with the revolving facility expiring in November
2023 and the term loan maturing in November 2025.
Environmental considerations are not considered material to Juice
Plus' credit profile, but the company must monitor the land, water,
energy, and raw material usage of its contract manufacturers.
Social risks are a key consideration to Juice Plus' credit profile
particularly human capital and customer relations. The company
depends on its distributor sales force to sell its products.
Distributors can sell products to the public — often by word of
mouth, social media, and direct sales. Distributors can also earn
commissions, not only for their own sales, but also for sales made
by the people they recruit, which can lead to unfavorable
regulatory scrutiny. The Federal Trade Commission has taken action
in the past on a number of multi-level marketing companies and in
some instances has made those companies pay fines. In addition,
changes to consumer preferences can also drive shifts in demand.
Juice Plus products and labeling are also subject to FDA
oversight.
Governance factors consider aggressive financial policies under
private equity ownership including the willingness to operate with
a high amount of financial leverage, and potential for debt funded
acquisitions and dividend distributions. The company's control
Altamont Capital also creates risks from concentrated decision
making that can favor shareholders over debt holders and create
event risk. However, Juice Plus will likely focus on business
reinvestment and stabilizing operations over the next 12 to 18
months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects Moody's expectation that Juice Plus'
operating initiatives will stabilize EBITDA but that free cash flow
will continue to be negative over the next 12-18 months. The
negative outlook also reflects the increasing liquidity pressure
due to the upcoming revolving credit facility expiration and the
high amount of required annual term loan amortization. These
factors could increase the risk of a distressed exchange or other
default.
The ratings could be downgraded if the company does not stabilize
membership, the distributor count, revenue, and earnings. Increased
likelihood of a distressed exchange, or deterioration of liquidity
including an inability to proactively refinance the revolver,
increasing revolver utilization, or continued negative free cash
flow, could also lead to a downgrade.
An upgrade would require that the company stabilize and improve
earnings including successfully increase its distributor count. An
upgrade would also require Juice Plus to generate consistent
positive free cash, maintain debt-to-EBITDA below 7x, and improve
liquidity including improving the maturity profile.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
JP Intermediate B, LLC (dba The Juice Plus Company, "Juice Plus")
headquartered in Collierville, Tennessee, is a direct-seller of
whole-food, plant based nutritional supplements (98% of revenue)
and growing products. Products are available in a variety of
delivery formats including capsules, soft chewable (gummies),
shakes and bars. The company operates through a multi-level
marketing system in North America and a number of international
markets. Juice Plus generated approximately $580 million in annual
revenue for the latest twelve months ending January 31, 2022, and
was acquired by private equity firm Altamont Capital Partners in a
November 2018 leveraged buyout.
KAMC HOLDINGS: S&P Downgrades ICR to 'CCC+' on Tight Liquidity
--------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Port
Washington, Wis.-based provider of energy efficiency and
demand-side management (DSM) solutions and products, KAMC Holdings
Inc.'s (d/b/a Franklin Energy) to 'CCC+' from 'B-'. At the same
time, S&P lowered its ratings on the company's first- and
second-lien debt to 'CCC+' and 'CCC-', respectively. The recovery
ratings are unchanged.
The negative outlook reflects the risk that S&P could lower its
ratings over the next 12 months if it expects a payment default.
The downgrade reflects Franklin's continued underperformance
leading to negative cash flow generation, tight liquidity, and
elevated leverage, factors S&P expects to persist into 2023. The
company's profitability has weakened in recent quarters resulting
in a smaller EBITDA base and reduced S&P Global Ratings-adjusted
EBITDA margins. Franklin Energy's earnings have been under pressure
since the onset of the COVID-19 pandemic, which impaired the
company's ability to run its field service operations.
Uncertainties surrounding COVID-19 variants have continued to
impair operating performance into the first half of 2022 due to
pandemic-related delays to some service programs. In addition, the
company had two profitable large product kit programs come to an
end, which further affected its top line.
S&P expects headwinds from the macroeconomic environment will
increase costs and pressure the company's bottom line in 2022 and
2023. Key operating risk factors for Franklin include the
inflationary environment, supply chain inefficiencies, higher debt
servicing costs, and wage pressures amid the tight labor market.
S&P believes the company's ability to pass on increasing costs to
its customers may be limited in certain cases. For example,
Franklin's energy-efficiency program revenue, which spans both the
services and products segments, has some contracts that are based
on fixed fees or performance with limited price escalators.
Franklin is working through a number of cost-savings initiatives
that have not yet had a material impact on profitability. S&P's S&P
Global Ratings-adjusted EBITDA calculation does not add back a
number of pro forma adjustments for future expected cost savings
that the company's management includes in its own calculation. If
the company is able to execute on its cost-savings initiatives and
reduce one-time expenses, profitability could improve.
Liquidity remains tight, and S&P expects total liquidity to fall
below $20 million in the second half of 2022. The company has
generated negligible free operating cash flow over the past two
years, and we expect negative cash flow generation in 2022 and 2023
with our forecast for lower profitability, increased capital
expenditures, and higher interest expense due to the company's
variable rate capital structure. S&P believes the company faces
significant execution risk to manage its costs, pass on price
increases, and manage its working capital in a challenging
macroeconomic environment. Execution missteps could deepen cash
flow deficits.
In addition, the company has relied heavily on its revolver,
drawing more than 65% as of the first quarter ended March 2022,
causing covenant headroom to fall to less than 5% under its 7.3x
first-lien net leverage covenant requirement. S&P believes Franklin
could breach this covenant if it fails to stabilize its EBITDA base
or improve its cash flow generation.
Although the company has no near-term debt maturity, adjusted
leverage is very high and unsustainable given the company's small
EBITDA base and negative cash flow generation. Franklin Energy has
a highly leveraged balance sheet with about $450 million of debt
outstanding as of the first quarter of 2022 and adjusted leverage
well above 10x. S&P expects leverage will remain above 10x through
2023. While the company has no near-term maturities until its $35
million revolver comes due in 2024 and first-lien term loan in
2026, we believe the company will need to significantly reduce
leverage to eventually refinance or repay this debt at full value
as promised at origination.
While S&P continues to view that the company's industry
fundamentals as favorable, execution challenges increase downside
risk. The DSM energy-efficiency solutions industry fundamentals are
favorable and supported by regulation with state mandates and
federally funded energy programs, high energy costs, activism
around climate change and clean energy as well as the proposed
government infrastructure bill, which earmarked funds for state
energy-efficiency programs. Despite those positive tailwinds, the
company has been facing operating challenges that were exacerbated
by the weaker macroeconomic environment. Additionally, there is
execution risks associated with the company's recent management
team changes including a new chief executive in late 2020 and an
interim chief financial officer in April 2022. Franklin Energy has
invested heavily on its business-optimization initiative over the
past few years and has recently focused on working capital
management. To date, these initiatives have not translated into
improved earnings or profitability.
The negative outlook reflects the risk that S&P could lower its
ratings over the next 12 months if S&P expects a payment default.
S&P could lower its ratings on Franklin Energy if sustained cash
flow deficits lead to a heightened risk of payment default,
covenant violation, or a distressed debt restructuring within 12
months. This could occur from:
-- Further delays in programs that were affected by the pandemic
or as a result of the economic uncertainties and recession risks;
-- A contract loss; or
-- Business execution risks from the new leadership team's
turnaround efforts.
S&P could revise the outlook to stable or raise its rating on
Franklin Energy to 'B-' if:
-- The company can pass higher input costs on to its customers,
execute on its cost savings initiatives; and
-- The company operates in a pricing environment where margins
expand near its pre-pandemic levels resulting in sustained positive
free operating cash flow generation.
ESG credit indicators: E-1, S-2, G-3
KEYWAY APARTMENT: UST Appoints Scott W. Miller as Examiner
----------------------------------------------------------
The United States Trustee for Region Four asked the U.S. Bankruptcy
Court for the District of Maryland to approve the appointment of
Scott W. Miller as Examiner for Keyway Apartment Rentals, LLC.
The U.S. Trustee's counsel has consulted the respective counsel for
the Debtor and that of creditor Pegah Touradji before appointing
Mr. Miller.
To the best of the U.S. Trustee's knowledge, the Examiner has no
connections with the Debtor, creditors, and other
parties-in-interest, their respective attorneys and accountants,
the United States Trustee, and persons employed in the Office of
the United States Trustee.
A copy of the application is available for free at
https://bit.ly/3PurZFv from PacerMonitor.com.
Attorney for the U.S. Trustee:
Katherine A. Levin, Trial Attorney
101 W Lombard Street, Suite 2625
Baltimore, MD 21201
E-mail: Katherine.A.Levin@usdoj.gov
Telephone: (410) 962-4300
About Keyway Apartment Rentals
Keyway Apartment Rentals, LLC is a single asset real estate (as
defined in 11 U.S.C. Section 101(51B)). The Debtor owns apartment
buildings valued at $6.5 million.
Keyway Apartment Rentals filed a voluntary petition for relief
under Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. D.
Md. Case No. 22-13389) on June 21, 2022. In the petition signed by
George Divel, III, managing member, the Debtor disclosed $6,653,350
in total assets and $4,252,151 in total liabilities.
Joseph M. Selba, Esq., at Tydings & Rosenberg LLP serves as the
Debtor's counsel.
LAURA CANTOR: Continued Operations to Fund Plan Payments
--------------------------------------------------------
Laura Cantor Inc., filed with the U.S. Bankruptcy Court for the
District of New Jersey a Plan of Reorganization under Subchapter V
dated July 18, 2022.
Prior to the entry of the Show Cause Order, the Debtor had two
sources of revenue, (i) the import and sale, through ecommerce and
other channels, of women's apparel products under the brands Sonja
by Sonja Morgan and Sonja Morgan New York (collectively, "SBSM"),
and (ii) internet marketing services provided under the Debtor's
trade name "Eleven Commerce" ("Eleven Commerce").
Several converging events have led the Debtor to this filing, which
include, (i) decreased sales of SBSM products, which were further
affected by the pandemic and the seasonality of the Debtor's
business, (ii) returns of SBSM products, (iii) outsourced
bookkeeping services which make it hard for the Debtor to
understand its current financial condition, (iv) supply chain
delays and increased costs of products, both from manufacturing and
delivery, and (v) a suit commenced against the Debtor and Cantor
(individually) by Aggarwal and his affiliated entities
(collectively, the "Plaintiffs") in Bergen County Chancery Court,
which, among other claims, seeks a receiver be appointed for the
Debtor (the "Litigation").
This Plan provides for a comprehensive reorganization of the Debtor
to preserve its going concern value and future business. Under this
Plan, the Debtor, will (i) pay all of its Administrative and
Priority Claims in full and (ii) make a distribution to each of its
Allowed General Unsecured Creditors at the conclusion of the Claims
Reconciliation Process in the estimated approximate amount of [*]%
of each Allowed General Unsecured Creditor's Claim (the exact
amount of the distribution will depend on the Claims Reconciliation
Process and the entry of the Settlement Approval Order).
The Debtor believes this Plan satisfies the primary goal of Chapter
11, which is to enable the Debtor to reorganize, restructure, and
emerge as a productive business. The Debtor submits that this Plan
will accomplish these goals and that Confirmation of the Plan will
provide the best possible return to Holders of Claims and is in the
best interests of the Debtor, its Creditors, and Interest holders.
This Plan provides for a reorganization of the Debtor to preserve
its going concern value and future business. Subchapter V
contemplates under 1191(c) of the Bankruptcy Code that the Debtor's
plan provides a payout to creditors of all of the Debtor's
Disposable Income over a 3 to 5 year commitment period.
Class 1 Secured Claim. The SBA is the maker of the EIDL, and is
secured to the Debtor's Assets. Except to the extent that the SBA
agrees to less favorable treatment, in exchange for full and final
satisfaction, settlement, and release of such Claim, the SBA shall
receive payment of its Allowed Claim pursuant to the terms of the
EIDL. Estimated Amount of Claims in Class 1 is $150,000.00. Class 1
is Unimpaired and the SBA is conclusively deemed to have accepted
the Plan and is not entitled to vote on the Plan.
Class 2 consists of General Unsecured Claims. Each Holder shall, in
exchange for full and final satisfaction, settlement, and release
of such Claim, receive its pro rata portion of the Class 2
Distribution Amount pursuant to the terms of this Plan, and only
after the Debtor has concluded the Claims Reconciliation Process.
Upon payment of the entire Class 2 Distribution Amount, all
obligations to Class 2 General Unsecured Creditors under this Plan
are fully satisfied. Class 2 is Impaired. Estimated Amount of
Claims in Class 2 is $34,000.00.
Class 3 consists of Interest Holder. Cantor is the only Interest
Holder, and, pursuant to the terms of this Plan and the Bankruptcy
Code, Cantor shall retain all of her Interests. This Class is
Unimpaired.
All distributions under this Plan will be provided by distributions
from the Disposable Income derived from the Debtor's future
postconfirmation operations. The Reorganized Debtor will continue
to operate with the primary purpose of continuing to conduct the
Debtor's business through its Eleven Commerce business.
A full-text copy of the Subchapter V Plan dated July 18, 2022, is
available at https://bit.ly/3ooq0Xw from PacerMonitor.com at no
charge.
Counsel to Laura Cantor:
SILVERMAN LAW PLLC
4 Terry Terrace
Livingston, New Jersey 07039
Brett S. Silverman, Esq.
Brett@getconciergelaw.com
T: 646.779.7210
F: 888.896.5886
About Laura Cantor Inc.
Laura Cantor operates the Eleven Commerce business. The Debtor
filed Chapter 11 Petition (Bankr. D.N.J. Case No. 22-10406) on
January 18, 2022.
The Debtor is represented by Brett Silverman, Esq. of SILVERMAN LAW
PLLC.
MAGNACOUSTICS INC: Unsecured to Get At Least 43.5 Cents on Dollar
-----------------------------------------------------------------
Judge Robert E. Grossman has entered an order approving and
confirming the First Amended Plan of Reorganization of
Magnacoustics, Inc.
The Plan is confirmed as a 3.5-year plan, and the Court fixes 3.5
years from the Effective Date as the date when the last payment is
due under the Plan; provided, however, that the Reorganized Debtor
may terminate the Plan at any time by making a prepayment of all
remaining payments due under the Plan or by selling the assets of
the Reorganized Debtor for an amount which will net at least 10%
more to General Unsecured Creditors and distributing the proceeds.
The sale process contemplated by the Plan is fair and appropriate
under the circumstances and is likely to lead to a fair valuation
of the assets of the Debtor. The Debtor is authorized to sell the
assets without further order of this Court; provided, that such
sale is consistent with the terms of the Plan and that the Plan
Ombudsman does not object to the sale.
Salvatore LaMonica is appointed to serve as the Plan Ombudsman
without bond commencing on the Initial Distribution Date and
continuing until the earlier of (a) 12 months following the
Effective Date, or (b) the consummation of a sale of substantially
all of the Debtor's assets; provided, however, if an offer to
purchase the company is either being negotiated or has been
accepted, but the sale has not yet closed by the time the term
would otherwise expire, the term shall be extended through the
close of such sale.
In addition to Administrative Claims, Professional Fee Claims and
Priority Tax Claims, which need not be classified, the Plan
designates the following Classes of Claims and Equity Interests:
Class 1 (Allowed Priority Non-Tax Claims), Class 2 (Allowed General
Unsecured Claims) and Class 3 (Equity Interests). The Plan
satisfies S ections 1122 and 1123(a)(1) of the Bankruptcy Code.
In accordance and in compliance with Section 1123(b)(5) of the
Bankruptcy Code, the Plan properly modifies the rights of holders
of Claims in Class 1 (Allowed Priority Non-Tax Claims), Class 2
Allowed General Unsecured Claims), and leaves unaffected the rights
of the Holders of Class 3 (Equity Interests).
Class 2 in the Plan is Impaired, while Classes 1 and 3 are
Unimpaired. Class 2 has voted 100% to accept the Plan in accordance
with Section 1126(c) of the Bankruptcy Code. While Class 2 had one
insider vote, the remaining Claimant's voting accepted the plan
100%. Accordingly, the requirements of Sections 1129(a)(7), (8) and
(10) are met because every Impaired Class with creditors has
accepted the Plan.
Amended Plan
Magnacoustics filed an First Amended Plan of Reorganization.
Magnacoustics has been exploring various ways to maximize value to
creditors. Although the Debtor believes that it can successfully
reorganize, it currently does not have a primary product, and this
challenge will make reorganization expensive and difficult, and
leave very little Disposable Income available to creditors.
As a result, the Debtor is proposing a two-pronged approach to its
reorganization. It will implement its business plans and begin to
conduct business as a Reorganized Debtor. The Debtor estimates
that by doing so, it will be able to provide payments to General
Unsecured Creditors of $249,364 over the three and one-half years
ending September 30, 2025, and pay priority and administrative
claims. At the same time as it is implementing its business
reorganization, the Debtor will engage the services of Sherwood
Partners, Inc., as sales agent to try to sell all of the assets of
the company as a going concern. If the company can be sold for an
amount that will net at least 10% more than $249,364 to General
Unsecured Creditors pursuant to an offer received prior to that
date which is 12 months from the Confirmation Date, the Debtor will
sell the company and distribute the proceeds first to the cost of
the sale and current payables (including, provision for taxes due
upon the sale), second to the payment of administrative and
priority claims, third to General Unsecured Creditors up to the
Face Amount of their Claims, and any remaining amount to Equity
Interests. The Debtor will not sell the company unless it produces
a higher return by at least 10% for General Unsecured Creditors
than payments proposed. Thus, the plan sets a floor for payment to
the General Unsecured Creditors over three and one-half years of
what the Debtor estimates to be approximately 43.5 cents on the
dollar, with the possibility of an upside should the company be
sold.
Pursuant to this Plan, Mr. Salvatore LaMonica will be appointed as
the Plan Ombudsman commencing on the Initial Distribution Date and
continuing for 12 months (or longer if a sale is in prospect) to
ensure that a robust and fair sale process is taking place.
Under the Plan, Class 2 General Unsecured Claims totaling $571,812.
If the Debtor can sell its business pursuant to an offer which is
received by the date that is 12 months from the Confirmation Date
for an amount that would net at least 10% more for Allowed Class 2
Creditors than $249,364, it will close the sale and distribute to
each Holder of an Allowed Class 2 Claim its Pro Rata share of the
net proceeds of the sale after payment of all costs of sale and
current payables (including provision for taxes due upon the sale),
Administrative Expenses, the KERP, and Allowed Priority Claims and
Professional Fee Claims, up to the Face Amount of the Holder's
Allowed Claim. The Debtor may close the sale without further order
of the Bankruptcy Court if the Plan Ombudsman consents to the sale,
but reserves the right to seek Bankruptcy Court approval of the
sale and/or to run an auction process pursuant to section 363 of
the Bankruptcy Code. Debtor must seek Court approval of the sale if
the Plan Ombudsman does not approve the sale.
To ensure that the Debtor is making a good faith effort to sell the
company, the Plan Ombudsman shall remain in place for 12 months
following the Initial Distribution Date to monitor the sale process
and advise the Debtor with respect to same, subject to extension of
such term as provided below in Section 7.4. The Plan Ombudsman
shall receive regular updates on the sale process from both the
Debtor and Sherwood, and may, but is not required to, participate
in the sale negotiations if Sherwood believes it would be helpful.
The Plan Ombudsman shall promptly notify the Court if he believes
the Debtor is not making a good faith effort to sell the company.
Should the Debtor be unable to consummate such a sale pursuant to
an offer received prior to that date which is 12 months after the
Effect Date, the Debtor will continue to operate its reorganized
business and will make the following Distributions to General
Unsecured Creditors on the dates indicated, each General Unsecured
Creditor to receive its Pro Rata share of such Distribution:
April 30, 2023 $36,747
January 31, 2024 $30,000
March 31, 2024 $49,095
August 31, 2024 $57,000
April 30, 2025 $51,522
September 30, 2025 $25,000
The first Distribution may be delayed at the discretion of the
Debtor, with the approval of the Plan Ombudsman, if the Debtor in
good faith believes that a sale of the business is in prospect, and
such payment shall not be deemed a late payment. In no event shall
the first payment be delayed beyond August 31, 2023. In no event
shall the first Distribution be delayed without the consent of the
Plan Ombudsman.
Currently, there is approximately $571,803 of General Unsecured
Claims either Scheduled or Filed against the Debtor. Although the
Debtor hopes to reduce this amount through Claims Objections,
should the entire amount be Allowed, the approximate Distribution
to each Holder of an Allowed Class 2 Claim would be approximately
43.5 cents on the dollar. This would be the floor for distributions
to Class 2. The Debtor hopes to increase the Distribution through a
sale of the Debtor's Assets. The Debtor may prepay the amounts owed
pursuant to this paragraph at any time after six months from the
Confirmation Date without penalty or premium. Class 2 is impaired.
The Debtor intends to aggressively market the Debtor's Assets for
sale. The Debtor has interviewed numerous potential sales agents,
but has had difficulty attracting a quality sales agent due to the
relatively small size of the transaction. The Debtor has reached an
agreement, however, to retain Sherwood Partners, Inc., a recognized
sales agent in the distressed arena. Sherwood was particularly
attractive to the Debtor because, with its headquarters in Silicon
Valley, it has great experience in selling technology companies.
The Debtor filed an application to retain Sherwood Partners as the
exclusive sales agent for the Debtor on January 18, 2022, [Docket
No. 82], but has adjourned the hearing in order to coincide with
the Confirmation hearing. Although one should look to the
engagement letter attached to the motion for the full terms of the
engagement, the terms include: (a) a small down payment, which
would be credited against the success fee, (b) all approved
expenses, (c) a monthly fee (which may be accrued and paid from the
proceeds of the sale if the Debtor does not have current cash
available) of $7500 a month for the first three months, and $3,750
per month for each month thereafter, and (d) a success fee of 10%
of the proceeds of the sale. Sherwood will begin to aggressively
market the Debtor for sale as soon its retention is approved by the
Bankruptcy Court.
The Debtor intends to sell its assets free and clear of all liens,
claims, and encumbrances. The Debtor may sell its assets without
further order of the Court pursuant to this Plan, but reserves the
right to either seek court approval of a sale or sell its assets
through an auction procedure pursuant to Section 363 of the
Bankruptcy Code. In either case, the Debtor will consult with the
Plan Ombudsman as to the method of the proposed sale.
The Reorganized Debtor will operate the business until such time as
the Debtor can be sold, or if it is not sold, until the payments
under the Plan are made.
Proposed Counsel for the Debtor:
Sandra E. Mayerson, Esq.
David H. Hartheimer, Esq.
MAYERSON & HARTHEIMER, PLLC
845 Third Avenue, 11th floor
New York, NY 10022
Tel: (646) 778-4380
A copy of the Order dated July 15, 2022, is available at
https://bit.ly/3aI3tSe from PacerMonitor.com.
A copy of the First Amended Plan of Reorganization dated July 15,
2022, is available at https://bit.ly/3PeDS2t from
PacerMonitor.com.
About Magnacoustics Inc.
Magnacoustics, Inc., sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 21-70670) on April
9, 2021, listing as much as $1 million in both assets and
liabilities. Judge Robert E. Grossman oversees the case.
Sandra E. Mayerson, Esq., at Mayerson & Hartheimer, PLLC and A.
Jonathan Trafimow, Esq., at Moritt Hock & Hamroff, LLP serve as the
Debtor's bankruptcy counsel and special counsel, respectively.
CliftonLarsonAllen LLP is the Debtor's bookkeeper, accountant, tax
advisor and IT consultant.
MASTER EQUITY: Unsecureds to Get Share of Income for 60 Months
--------------------------------------------------------------
Master Equity Group, LLC, filed with the U.S. Bankruptcy Court for
the Western District of Michigan a Small Business Plan of
Reorganization under Subchapter V dated July 19, 2022.
The Debtor is a Michigan limited liability company. The Debtor
operates as a holding and management company for several related
entity businesses operating in the cannabis industry.
Prepetition, the Debtor was embroiled in litigation with one of its
lessors, with whom it intended to establish operations for the
affiliated entities. After spending considerable amounts on
improvements to the subject property, the Debtor was forced to
abandon the property after it was constructively evicted as a
result of the lessor's refusal to repair the roof of the property.
As litigation ensued, the legal fees associated with the lawsuit,
as well as potential liability associated with the lawsuit,
threatened the Debtor's viability. Debtor pro-actively filed its
Subchapter V bankruptcy to maximize its value for its employees,
creditors, and all parties in interest.
Classes of Secured Claims:
* Robert Griffin, as Trustee of the Robert M. Griffin
Revocable Trust dated October 20, 2016 [$25,000 lien on computer
equipment with liquidation value of $7,000]; Griffin shall be
unimpaired and paid at the contract terms which are as follows: no
payments for 6 months, then 7% interest only payments for 2 years
and principal due 2 years from date of note (April 20, 2022).
* Chrysler Financial [$50,000 lien on Dodge Ram with
liquidation value of $30,000]; Chrysler Financial shall be
unimpaired and paid at the contract terms.
General unsecured Claims are not secured by property of the estate
and shall comprise Class GUC under this Plan. Debtor shall commit
its projected disposable income to be paid monthly on a pro-rata
basis to Class 4 General Unsecured Creditors over 60 months.
Such payments will be made by the Debtor directly, and may be
prepaid. Only allowed claims shall be paid, however, if there is a
pending claims objection as is the case with Shamrock and O'Connor,
the Debtor shall escrow sufficient funds for their pro-rata
treatment until there is a final order not subject to appeal
resolving the objections.
Estimated Unsecured Claims based on scheduled claims and filed
proofs of claim, without taking into account the objection to
claims filed by Debtor total $5,487,378.03.
Adam Tucker and Rick McDowell are the primary equity security
holders of the Debtor, and their continued support and services
provided to the Debtor are essential to its successful operation,
both during this case and following confirmation. Notwithstanding
anything else in this Plan or 11 U.S.C. § 1141(d)(1)(B), they
shall retain their equity interests in the reorganized Debtor in
the same manner, nature, and extent as prior to the Petition Date.
The Debtor must commit all or such portion of the future earnings
or other future income of the Debtor as is necessary for the
execution of the Plan.
The Debtor's financial projections show that the Debtor anticipates
a 60-month plan with quarterly payments totaling $728,487.55. Of
this amount, approximately $87,000 will likely be paid to the
Subchapter V Trustee and Debtor's professionals, on account of
their respective administrative expense claims; and the remaining
amount of the $641,487.55 will be paid to general unsecured
creditors, on a pro-rata basis.
The final Plan payment is expected to be paid on or about 60 months
after the Effective Date. Assuming a base amount of $641,487.55
being distributed among the face amount of general unsecured claims
of $5,487,378.03, general unsecured creditors will receive a
distribution of approximately 12.6%.
A full-text copy of the Plan of Reorganization dated July 19, 2022,
is available at https://bit.ly/3IZriBQ from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Mark H. Shapiro, Esq.
Steinberg Shapiro & Clark
25925 Telegraph Road, Suite 203
Southfield, MI 48033
Telephone: (248) 352-4700
Email: shapiro@steinbergshapiro.com
Robert Bassel, Esq.
P.O. Box T.
Clinton, MI 49236-0018
Telephone: (248) 677-1234
Email: bbassel@gmail.com
About Master Equity Group
Master Equity Group, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Mich. Case No. 22-00818) on April 20,
2022, listing up to $500,000 in both assets and liabilities. Adam
Tucker, chief executive officer, signed the petition.
Judge John T. Gregg oversees the case.
The Debtor tapped Steinberg Shapiro & Clark and Robert Bassel,
Esq., as the Debtor's legal counsel.
MOHAMED A. EL RAFAE: Court Directs Chapter 11 Trustee Appointment
-----------------------------------------------------------------
Judge Klinette H. Kindred of the U.S. Bankruptcy Court for the
Eastern District of Virginia granted the motion of Hanan Khalil for
appointment of a Chapter 11 Trustee in the case of Mohamed A. El
Rafaei.
Judge Kindred directed the United States Trustee to promptly select
a Chapter 11 trustee and that the Chapter 11 trustee shall
thereafter seek to qualify under Section 322 of the Bankruptcy Code
upon selection.
A copy of the order is available for free at https://bit.ly/3BaIn9Q
from PacerMonitor.com.
About Mohamed A. El Rafaei
Mohamed A. El Rafaei sought Chapter 11 protection (Bankr. E.D. Va.
Case No. 20-12583) on Nov. 23, 2020. The Debtor is represented by
Christopher L. Rogan and James P. Campbell.
MONSTER INVESTMENTS: Creditor Seeks Trustee or Ch.7 Conversion
--------------------------------------------------------------
WCP Fund I LLC as servicer for LH-NP-ABS Income Owner Trust, Cayman
LLC and 1Sharpe Opportunity Intermediate Trust, moves the U.S.
Bankruptcy Court for the District of Maryland to convert Monster
Investments, Inc.'s Chapter 11 case to Chapter 7 or, in the
alternative, appoint a Chapter 11 trustee.
WCP asserts the Debtor has (i) paid pre-petition payroll
obligations without leave of court; (ii) made at least one such
pre-petition payroll payment to an insider; (iii) used the cash
collateral of creditors without agreement or leave of court; (iv)
over-drafted a non-DIP checking account post-petition on multiple
occasions; (v) placed monies into a non-DIP checking account post
petition; (vi) withdrawn large amounts of cash from a DIP account;
(vii) expended estate monies on video streaming services; and
(viii) loitered in bankruptcy for nearly 10 months without showing
any signs of a confirmable plan approaching even the most distant
corner of the horizon.
WCP further asserts the Debtor is simply not in a position to be
trusted as being in possession of its own bankruptcy estate. Even
putting aside any number of potential pre-petition irregularities
that might inspire an absence of confidence, the Debtor's own,
demonstrable actions in connection with the filing of this case and
the maintenance of the resulting estate more than-adequately
demonstrate cause for conversion to Chapter 7 or the appointment of
a Chapter 11 trustee.
WCP (as servicer) is the beneficiary of deeds of trust on, inter
alia, (i) 7 Shelton Court, Indian Head, MD 20640; (ii) 8 Shelton
Court, Indian Head, MD 20640; (iii) 14 Shelton Court, Indian Head,
MD 20640; (iv) 19 Shelton Court, Indian Head, MD 20640; (v) 28
Shelton Court, Indian Head, MD 20640; and (vi) 30 Shelton Court,
Indian Head, MD 20640. Each of the properties is owned by the
Debtor. According to WCP, an "Event of Default" (as that term is
defined in each deed of trust) occurred, in connection with each
deed of trust, before the Debtor sought bankruptcy protection; each
promissory note underlying a correlative deed of trust had matured,
come fully due, and not been paid. The Debtor has continued to
collect rent on the properties post-petition, without paying the
same over to WCP.
A copy of the Creditor's request is available for free at
https://bit.ly/3OyaZwO from PacerMonitor.com.
Counsel for WCP Fund I LLC:
Maurice B. VerStandig, Esq.
The VerStandig Law Firm, LLC
9812 Falls Road, #114-160
Potomac, MD 20854
Phone: (301) 444-4600
Facsimile: (301) 444-4600
E-mail: mac@mbvesq.com
About Monster Investments
Monster Investments, Inc. is a Hughesville, Md.-based company
primarily engaged in renting and leasing real estate properties. It
is the fee simple owner of 28 real properties in Maryland and
Florida having an aggregate value of $9.95 million.
Monster Investments filed its voluntary petition for Chapter 11
protection (Bankr. D. Md. Case No. 21-16592) on Oct. 19, 2021,
listing $10,018,848 in assets and $16,529,878 in liabilities.
Donald Bernard, president, signed the petition.
Judge Lori S. Simpson oversees the case.
Michael G. Wolff, Esq., at Wolff & Orenstein, LLC represents the
Debtor as legal counsel.
NINE DEGREES: Seeks 120-Day Extension for Plan Approval
-------------------------------------------------------
Nine Degrees Hacking Corp., et al., filed a motion to extend time
to confirm a Plan of Reorganization for 120 days, through and
including December 26, 2022.
This is the Debtor's first request, and this request is not made
for the purposes of delay. This requested extension of the time
period for confirmation, is necessary due to the fact, that the
time to confirm a plan is set to expire on Aug. 28, 2022, but the
hearing on the Debtors' Disclosure Statement is scheduled to Aug.
30, 2022. Consequently, the Debtors need a time to approve a
Disclosure Statement and thereafter to confirm a Plan of
reorganization. Furthermore, the Debtors will need an additional
time in the event the filed Disclosure Statement and Plan need to
be amended.
Thus, this extension of the time period for confirmation will allow
the Debtor to amend and to confirm a Chapter 11 plan without
violating the Bankruptcy Code and to provide a treatment to its
Creditors.
Attorney for the Debtors:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
2799 Coney Island Avenue, Suite 202
Brooklyn, NY 11235
Tel: (718) 513-3145
About Nine Degrees
Nine Degrees Hacking Corp. filed a petition for Chapter 11
protection (Bankr. E.D. N.Y. Case No. 21-42356) on Sept. 17, 2021,
listing up to $500,000 in assets and up to $1 million in
liabilities. David Navaro, president, signed the petition.
Judge Nancy Hershey Lord oversees the case.
The Debtor tapped the Law Offices of Alla Kachan, P.C. as legal
counsel and Wisdom Professional Services, Inc. as accountant.
O'BRIEN FAMILY LAND TRUST: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of The O'Brien Family Land Trust, according to court
dockets.
About The O'Brien Family Land Trust
The O'Brien Family Land Trust is a Single Asset Real Estate (as
defined in 11 U.S.C. Sec. 101(51B)).
The O'Brien Family Land Trust sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-14760) on
June 20, 2022, listing up to $10 million in both assets and
liabilities. Judge Peter D. Russin oversees the case.
Susan D. Lasky, Esq., at Sue Lasky, PA is the Debtor's counsel.
ORGANICELL REGENERATIVE: Signs LOI Regarding $4M Investment
-----------------------------------------------------------
Effective July 13, 2022, Organicell Regenerative Medicine, Inc.
entered into (a) a binding letter of intent with Skycrest Holdings,
LLC and Greyt Ventures LLC to invest $2,000,000 in the Company
through the purchase of 100,000,000 shares of the Company's common
stock at a price of $0.02 per Share; and (b) effective July 16,
2022, a second binding letter of intent with Beyond 100 FZE, a
Dubai company to invest $2,000,000 in the Company through the
purchase of 100,000,000 Shares at a price of $0.02 per Share.
Pursuant to the binding letters of intent, the Company has agreed
to (a) make certain corporate governance changes, including
allowing the Investors to appoint new independent directors who
will comprise a majority of the members of the Board; (b) enter
into 36-month consulting agreements with each of Skycrest and
Greyt, pursuant to which (i) Skycrest and Greyt will provide
certain advisory services to the Company as more fully set forth in
the LOIs; and (ii) Skycrest and Greyt shall each be compensated for
their services by the Company issuing to each of them ten
year-warrants to purchase 150,000,000 Shares at an exercise price
of $0.02 per Share, which Warrants will be exercisable on a
"cashless" basis; (c) implement certain changes in management,
including Albert Mitrani stepping down as chief executive officer;
and (d) make modifications to management compensation, all as more
fully set forth in the LOIs.
Contemporaneously with entering into the respective LOIs, the
Skycrest/Greyt Group and Beyond 100 each advanced Organicell
$300,000 (a total of $600,000) as good faith deposits against the
$2,000,000 (a total of $4,000,000) purchase price for the Shares.
Consummation of the transaction is subject to drafting and
executing definitive transaction documentation, waiver of the right
of first refusal or participation held by Organicell's existing
lender, approval of our board of directors and the satisfaction of
other customary closing conditions.
It is anticipated that the transactions contemplated by the LOIs
will be consummated on or before Aug. 30, 2022 (subject to
extension by the parties). In the event the transactions
contemplated by the LOIs do not close by such date (unless extended
by the parties) as a result of the Company's failure to satisfy the
conditions set forth above, Organicell shall be required to refund
the good faith deposit made by and issue 100,000,000 Shares to the
Skycrest/Grey Group as a break-up fee and offer Beyond 100 the
option to either receive its advance or apply it to the purchase of
Shares at a price of $0.015 per Share. In the event the Investors
do not consummate the transaction, except as set forth in the
previous sentence, the Company will be entitled to specific
performance of the purchase and sale of the Shares without having
to comply with the other agreements set forth in the LOIs.
About Organicell
Headquartered in Miami, FL, Organicell Regenerative Medicine, Inc.
-- www.organicell.com -- is a clinical-stage biopharmaceutical
company principally focusing on the development of innovative
biological therapeutics for the treatment of degenerative diseases
and to provide other related services. Its proprietary products are
derived from perinatal sources and manufactured to retain the
naturally occurring microRNAs, without the addition or combination
of any other substance or diluent. Its RAAM Products and related
services are principally used in the health care industry
administered through doctors and clinics.
Organicell Regenerative reported a net loss of $12.76 million for
the year ended Oct. 31, 2021, compared to a net loss of $12.58
million for the year ended Oct. 31, 2020. As of April 30, 2022, the
Company had $2.21 million in total assets, $6.41 million in total
liabilities, and a total stockholders' deficit of $4.19 million.
Fort Lauderdale, FL-based Marcum LLP, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
Feb. 14, 2022, citing that the Company has a significant working
capital deficiency, has incurred significant losses and needs to
raise additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
PADDOCK ENTERPRISES: Emerges From Chapter 11 Bankruptcy
-------------------------------------------------------
O-I Glass, Inc. disclosed that its wholly owned subsidiary, Paddock
Enterprises, LLC, has emerged from Chapter 11 protection, following
affirmation by the U.S. District Court for the District of Delaware
on June 22, 2022 of an order confirming Paddock's Plan of
Reorganization (the "Plan"). The Plan was previously confirmed by
the U.S. Bankruptcy Court for the District of Delaware on May 26,
2022.
Paddock emerges from Chapter 11 having achieved a final and fair
resolution of its asbestos-related legacy liabilities under the
Plan. The centerpiece of the Plan is a trust established under
section 524(g) of the Bankruptcy Code (the "Asbestos Trust") that
processes and pays asbestos personal injury claims ("Asbestos
Claims") pursuant to Asbestos Trust Distribution Procedures. The
Plan channels all Asbestos Claims to the Asbestos Trust.
Latham & Watkins LLP represented Paddock in the transaction with a
team led by Los Angeles partner and Global Vice Chair of the
Restructuring and Special Situations Practice Jeff Bjork and Los
Angeles partners Kim Posin and Helena Tseregounis, New York partner
and Global Chair of the Restructuring & Special Situations Practice
George Davis, and Washington, D.C. counsel Chris Craige, with
associates Brian Rosen, Jon Weichselbaum, Markus von der Marwitz,
Deniz Irgi, and Isaac Ashworth. Advice was also provided on
bankruptcy litigation matters by Los Angeles partner Amy
Quartarolo, and on environmental matters by New York partner Kegan
Brown, with associates Taylor West and Youlan Xiu.
About Paddock Enterprises
Paddock Enterprises, LLC's business operations are exclusively
focused on (i) owning and managing certain real property and (ii)
owning interests in, and managing the operations of, its non debtor
subsidiary, Meigs, which is developing an active real estate
business. It is the successor-by-merger to Owens-Illinois, Inc.,
which previously served as the ultimate parent of the company.
Paddock Enterprises is a direct, wholly-owned subsidiary of O-I
Glass.
Paddock Enterprises sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Del. Case No. 20-10028) on Jan. 6, 2020.
At the time of the filing, the Debtor disclosed assets of between
$100 million and $500 million and liabilities of the same range.
Judge Laurie Selber Silverstein oversees the case.
The Debtor tapped Richards, Layton & Finger P.A. and Latham &
Watkins LLP as legal counsel, Alvarez & Marsal North America LLC as
a financial advisor, Riley Safer Holmes & Cancila, LLP as special
counsel, and David J. Gordon of DJG Services, LLC as a chief
restructuring officer. Prime Clerk, LLC is the claims, noticing,
and solicitation agent and administrative advisor.
PARETEUM CORP: Committee Taps AlixPartners as Financial Advisor
---------------------------------------------------------------
The official committee of unsecured creditors of Pareteum
Corporation and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
AlixPartners, LLP as its financial advisor.
The firm's services include:
a. reviewing and evaluating the Debtors' current financial
condition, business plans, and cash and financial forecasts, and
periodically reporting to the committee regarding the same;
b. reviewing the Debtors' cash management, tax sharing and
intercompany accounting systems, practices and procedures;
c. reviewing and investigating (i) related party transactions,
including those between the Debtors and non-debtor subsidiaries and
affiliates, and (ii) selected other pre-bankruptcy transactions;
d. identifying and reviewing potential preference payments,
fraudulent conveyances and other causes of action that the various
Debtors' estates may hold against third parties;
e. analyzing the Debtors' assets and claims, and assessing
potential recoveries to the various creditor constituencies under
different scenarios, in coordination with the committee's
investment banker;
f. supporting the committee's investment banker's evaluation of
proposed asset sales, as required;
g. assisting in the development and review of the Debtors' plan
of reorganization and disclosure statement;
h. evaluating court motions filed or to be filed by the Debtors
or any other parties-in-interest, as appropriate;
i. rendering expert testimony and litigation support services,
including e-discovery services, as requested from time to time by
the committee and its counsel, regarding any of the matters to
which the firm is providing services;
j. attending committee meetings and court hearings as may be
required in the role of advisors to the committee; and
k. assisting in other matters that fall within the firm's
expertise and that are mutually agreeable.
The hourly rates charged by the firm for its services are as
follows:
Managing Director $1,060 to $1,335 per hour
Director $840 to $990 per hour
Senior Vice President $700 to $795 per hour
Vice President $510 to $685 per hour
Consultant $190 to $505 per hour
Paraprofessional $320 to $340 per hour
In addition, the firm will seek reimbursement for its out-of-pocket
expenses.
Kathryn McGlynn, managing partner at AlixPartners, 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:
Kathryn McGlynn
AlixPartners, LLP
909 Third Avenue, Floor 30
New York, NY 10022
Tel: (212) 490-2500
Email: dmacgreevey@alixpartners.com
About Pareteum Corporation
Pareteum Corporation is a cloud software communications platform
company which provides communications platform-as-a-service (CPaaS)
solutions offering mobility, messaging, and connectivity and
security services and applications. It has operations in North
America, Latin America, Europe, Middle East, Africa, and the
Asia-Pacific region.
Pareteum Corporation and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-10615) on May 15, 2022. In the petition signed by Laura W.
Thomas, interim chief financial officer, Pareteum Corporation
disclosed $52,043,000 in assets and $10,486,000 in liabilities.
Judge Lisa G. Beckerman oversees the cases.
The Debtors tapped Togut, Segal & Segal, LLP as bankruptcy counsel;
King & Spalding, LLP as special counsel; FTI Capital Advisors, LLC
as investment banker; FTI Consulting, Inc. as financial advisor;
and Saccullo Business Consulting, LLC as provider of wind-down
officer and additional personnel. Kurtzman Carson Consultants, LLC
is the claims, noticing, and balloting agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors in the Debtors' cases on May 24, 2022. Sidley
Austin, LLP and AlixPartners, LLP serve as the committee's legal
counsel and financial advisor, respectively.
PATH MEDICAL: Court Confirms Amended Plan
-----------------------------------------
Judge Scott M. Grossman has entered an order confirming the Amended
Plan of Path Medical LLC and Path Medical Center Holdings, Inc.
All of the terms and provisions of the Amended Plan are approved.
Under the Amended Plan, Classes 1, 4, and 5 are impaired and
entitled to vote. Classes 1, 4, and 5 voted to accept the Amended
Plan. Classes 2 and 3 were deemed to have accepted the Amended
Plan. Classes 6 and 7 were deemed to have rejected the Amended
Plan. No Class voted to reject the Amended Plan.
Pursuant to Article IX of the Plan, any Executory Contract or
unexpired lease not assumed and assigned, not subject to a pending
motion to assume and assign as of the Effective Date, and not
rejected before the Effective Date, shall be rejected as of the
Effective Date. If the rejection by the Debtors, under the Plan or
otherwise, of an Executory Contract gives rise to a Claim for
rejection damages in accordance with section 502(g) of the
Bankruptcy Code, a proof of Claim must be filed with the Bankruptcy
Court at the following address, 299 E. Broward Blvd., Room 112, Ft.
Lauderdale, FL 33301 by no later than 30 days after the entry of
this Confirmation Order. Any proofs of Claim with respect to a
Rejection Damages Claim not filed within such time shall be forever
barred from assertion against the Debtors, the Estates, the
Liquidating Trust, the Liquidating Trust Assets, and their property
and such Persons holding such Claims will not receive and will be
barred from receiving any Distributions on account of such untimely
Rejection Damages Claims. All Rejection Damages Claims will be
treated as General Unsecured Claims under the Plan and, to the
extent they are deemed Allowed General Unsecured Claims, will
receive the treatment afforded Allowed General Unsecured Claims.
Attorneys for the Debtors:
Brett D. Lieberman, Esq.
EDELBOIM LIEBERMAN REVAH PLLC
20200 W. Dixie Highway, Suite 905
Miami, FL 33180
Fax: 305-928-1114
E-mail: brett@elrolaw.com
About Path Medical
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.
PEACOCK INTERMEDIATE: S&P Cuts ICR to 'B-' on Elevated Leverage
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on
California-based Peacock Intermediate Holding II L.P. to 'B-' from
'B'. At the same time, S&P lowered its rating on the company's
first-lien term loan to 'B-' from 'B'. The '3' recovery rating is
unchanged.
The negative outlook reflects S&P's expectation that S&P Global
Ratings-adjusted debt to EBITDA will remain elevated, above 9x, and
that free operating cash flow (FOCF) is likely to be negative over
the next 12 months.
The downgrade reflects Peacock's elevated leverage and weak
operating performance during the first quarter of 2022. Although
demand for the company's products remains strong, labor constraints
during the first quarter caused a significant under absorption in
manufacturing overhead. Specifically, labor availability at the
company's manufacturing facilities was impacted by the latest wave
of the coronavirus in late 2021 and early 2022. S&P believes the
under absorption was limited to the first quarter and the company
has taken steps to mitigate its operating inefficiencies. However,
Peacock is also likely to face inflationary headwinds from
continuously rising input costs, similar to that of other capital
goods peers. While S&P anticipates the company to remain diligent
in its ability to combat these headwinds, margins are likely to
remain pressured through the remainder of the year and a moderate
lag in pricing passthrough could cause some near-term earnings
volatility.
S&P said, "We forecast FOCF to remain negative for the remainder of
the year. Lower operating margins and higher inventory levels
during the fourth quarter led to negative FOCF for 2021. While the
company was able to sell off a large portion of existing inventory
in the first quarter of 2022, working capital remained negative due
to transaction related payments. In addition, we expect the company
will increase its capital expenditures (capex) to support new
product initiatives in the BioThermal segment. This, coupled with
the lower-than-expected income from operations, is likely to cause
negative FOCF for the second consecutive year. However, we
anticipate this trend to reverse in 2023 as the company recognizes
higher income from operations and the roll-off of accrued
compensation expenses.
"In our view, the company will maintain adequate liquidity and
covenant headroom. With about $37 million of cash on the balance
sheet and a combined $48 million of availability between its
revolving credit facility (RCF) and asset-based lending facility
(ABL) as of March 31, 2022, Peacock should have adequate sources to
cover its uses over the next 12 months even when taking into
consideration higher working capital needs. While EBITDA headroom
is more limited than our prior forecast, we anticipate the company
to remain compliant with its covenants on both the ABL and RCF. In
addition, its nearest maturity is not until 2026 and we, therefore,
believe refinancing risk to be limited.
"The negative outlook reflects our view that the company's leverage
will remain elevated and FOCF is likely to be negative for the
second consecutive year. Specifically, we expect leverage to be
greater than 9x over the next 12 months and that the company could
underperform our base-case forecast if it faces slowing demand,
pricing pass-through pressure, or additional under-absorption in
its manufacturing process."
S&P could lower its rating on Peacock over the next 12 months if:
-- Weak profitability and negative cash flow generation persists
such that S&P views its capital structure as unstainable.
Specifically, if it expects leverage will remain above 9x with
limited to no prospects for improvement; or
-- The company's liquidity position weakens significantly due to
underperformance; or
-- Peacock increases its reliance on its revolver such that it
triggers the leverage covenant and S&P believes it cannot maintain
headroom of at least 15%.
S&P could revise its outlook on Peacock to stable if:
-- S&P believes the company is able to generate operating profit
such that it will be able to improve and maintain leverage below
9x; and
-- Its S&P Global Ratings-adjusted FOCF is positive; and
-- Liquidity remains adequate.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of Peacock Intermediate
Holding II L.P., as is the case for most rated entities owned by
private-equity sponsors. We believe the company's highly leveraged
financial risk profile points to corporate decision-making that
prioritizes the interests of the controlling owners. This also
reflects the generally finite holding periods and a focus on
maximizing shareholder returns."
PEGASUS SERVICES: UST Seeks Case Trustee or Chapter 7 Conversion
----------------------------------------------------------------
Mary Ida Townson, United States Trustee for Region 21, moves the
U.S. Bankruptcy Court for the Middle District of Florida for the
appointment of a Chapter 11 trustee, or, in the alternative,
appoint an examiner, dismiss the case, or convert to a Chapter 7
case of Pegasus Services Group, LLC.
The United States Trustee contends the Debtor should not be
permitted to continue as a debtor-in-possession. The Debtor's
management has a history of white-collar crime, and the operation
of the Debtor resembles a bust out. The Debtor incorporated only
six months prior to the petition date. In those six months, the
Debtor deposited more than $306,000 into its bank accounts, which
the Debtor borrowed from merchant cash advance lenders.
Contrary to sworn representations in the Debtor's statement of
financial affairs, over $164,000 was transferred to a personal bank
account controlled by the Debtor's insiders. This conduct
demonstrates dishonesty, incompetence, gross mismanagement, and the
risk of harm to the Debtor's creditors should the Debtor remain a
debtor-in-possession.
Consequently, the Court should order the United States Trustee to
appoint a Chapter 11 trustee in this case. In the alternative, the
Court should appoint an examiner, dismiss this case, or convert
this case to a case under Chapter 7.
A copy of the motion is available for free at
https://bit.ly/3cCbg4I from PacerMonitor.com.
About Pegasus Services Group
Pegasus Services Group LLC -- http://www.pegasussupport.com/ --
belongs to the Defense and Space Manufacturing. It provides
Facilities Operations & Maintenance (O&M) and Logistics Support
Services to a wide range of Government customers. It is based in
Woodstock, GA and provides services nationwide.
Pegasus Services Group sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01043) on May
23, 2022. In the petition filed by CRO Neil Metzger, Pegasus
Services Group estimated assets up to $50,000 and estimated
liabilities between $100,000 and $500,000.
Judge Jason A. Burgess oversees the case.
Thomas C Adam, Esq., at Adam Law Group, P.A., is the Debtor's
counsel.
PETROTEQ ENERGY: ROC Deems June Filings in Compliance With TSXV
---------------------------------------------------------------
Petroteq Energy Inc. disclosed that as per the Company's
announcement dated May 24, 2022 introducing the appointment of
the founding members of the Company's Regulatory Oversight
Advisory Committee (ROC) and its mandate, the Company and the
ROC reported that all transactions put forth before the ROC
during the month of June have been reviewed by its members and
all necessary filings with the TSX Venture Exchange have been made
and in ROC's view the filings made are in compliance with TSXV
policies. ROC has confirmed via internal control procedures
including due inquiry, that all matters that should have been
presented to ROC have been.
About Petroteq Energy Inc.
Petroteq Energy Inc. -- www.Petroteq.energy -- is a clean
technology company focused on the development, implementation and
licensing of a patented, environmentally safe and sustainable
technology for the extraction and reclamation of heavy oil and
bitumen from oil sands and mineable oil deposits. Petroteq is
currently focused on developing its oil sands resources at Asphalt
Ridge and upgrading production capacity at its heavy oil extraction
facility located near Vernal, Utah.
Petroteq Energy reported a net loss and comprehensive loss of $9.47
million for the year ended Aug. 31, 2021, a net loss and
comprehensive loss of $12.38 million for the year ended Aug. 31,
2020, and a net loss and comprehensive loss of $15.79 million for
the year ended Aug. 31, 2019. As of Nov. 30, 2021, the Company had
$79.79 million in total assets, $10.67 million in total
liabilities, and $69.12 million in total shareholders' equity.
Vancouver, British Columbia, Canada-based Hay & Watson, the
Company's auditor since 2012, issued a "going concern"
qualification in its report dated Dec. 14, 2021, citing that the
Company has had recurring losses from operations and has a net
capital deficiency, which raises substantial doubt about its
ability to continue as a going concern.
PHOTO HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B-' ICR
----------------------------------------------------------------
S&P Global Ratings revised the outlook to negative from stable and
affirmed all ratings, including the 'B-' issuer credit rating on
U.S.-based online personalized products manufacturer Photo Holdings
LLC (d/b/a Shutterfly Inc.).
The negative outlook reflects S&P's view that economic uncertainty
and rising interest rates reduce financial flexibility and could
result in a lower rating if the company is unable to generate
breakeven free operating cash flows and it believes the capital
structure has become unsustainable.
The company's product offerings are more discretionary in nature
and could be significantly affected by an economic downturn.
Shutterfly offers personalized picture-related products including
home decor, prints, and fabrics. As consumers discretionary income
tightens, consumer spending on non-essentials will drop. The
company's business, especially the consumer segment which comprises
over 60% of total revenue, falls into this discretionary bucket.
S&P siad, "In addition, the company's lifetouch segment has been
slower to return to pre-COVID-19 levels and we do not expect this
segment to be back to full capacity from an EBITDA perspective
until 2024. Further, we do not expect this segment to return to
pre-COVID-19 levels of revenue as less profitable accounts have
been permanently culled, resulting in a higher level of revenue
concentration in the consumer segment."
Shutterfly has significant exposure to rising interest rates.
S&P said, "The company's capital structure is composed of nearly
60% floating-rate debt that will increase interest expense more
than we previously forecast. The U.S. Federal Reserve has increased
its benchmark interest rate by 150 basis points (bps) since the
beginning of March 2022, including a 75-bps increase in June. This
is the largest jump in interest rates since 1994, aimed to combat
significant inflation. S&P Global economists now expect the Federal
Reserve to be even more aggressive, and push rates from zero at the
beginning of the year to 300 bps by year-end and reach 3.50%-3.75%
by mid-2023. Given that monetary policy affects economic activity
with a lag, we expect the full impact of cumulative rate hikes to
be felt in 2023. We expect the Fed to hold rates steady until the
first rate cut in third-quarter 2024 as the Fed waits for inflation
to near the 2.0% target, which will occur in second-quarter 2024.
As a result of a higher LIBOR base rate on Shutterfly's debt, we
project that interest expense could exceed $200 million in 2023
compared with our original forecast of about $180 million. Combined
with pressure on the consumer and lifetouch segments stemming from
an economic slowdown, we project free operating cash flow (FOCF) to
debt of about 1% in 2022 compared with our prior expectations
approaching 5%.
"Still, our base-case calls for EBITDA growth through 2023 that
supports the rating. We project cost-cutting actions and
integration of the Spoonflower acquisition will generate synergies
that drive EBITDA growth. Cost reductions along with
mid-single-digit revenue growth over the next two years such that
debt to EBITDA falls to the 8.0x area by the end of 2023 from about
10.0x at the end of 2022. However, we believe there is some
execution risk associated with cost actions, such as potential
disruptions in customer or supplier relationships stemming from
headcount reductions. Additionally, the company experienced some
key personnel changes in its senior management team in late 2021
and has a relatively short track record at Shutterfly, although the
team does have substantial collective experience in the industry
and a history of working together at previous companies.
"The negative outlook reflects our view that economic uncertainty
and rising interest rates reduce financial flexibility and could
result in a lower rating if the company is unable to generate
breakeven free operating cash flows and we believe the capital
structure has become unsustainable."
S&P could lower the rating on Shutterfly if it believes the capital
structure has become unsustainable. This could occur if:
-- Rising interest rate pressure results in negligible free
operating cash flows in 2022 and 2023; or
-- S&P believes the company no longer has a viable path to
reducing leverage to around 7x due to weaker EBITDA, which could be
caused by lower demand for declining consumer discretionary income
or operational missteps associated with cost-cutting initiatives.
The outlook could be revised to stable if:
-- The company successfully executes cost actions that results in
FOCF to debt approaching 5%; and
-- The company is able to reduce leverage to the mid-7x area.
ESG credit indicators: E-2, S-3, G-3
PRECISION AUTOMOTIVE: Lender Seeks to Prohibit Cash Access
----------------------------------------------------------
Floorplan Xpress LLC-OK asks the U.S. Bankruptcy Court for the
Middle District of Tennessee, Columbia Division, to prohibit
Precision Automotive, LLC from using cash collateral.
FX asserts a $114,195 claim against the Debtor secured by five
automobiles and the proceeds thereof.
FX agreed to the Debtor's interim use of cash collateral as
authorized by the Court in its July 8, 2022 Order.
However, FX objects to the use of its cash collateral from July 19
on unless the Order so authorizing the use also adequately protects
its interests in its collateral and the proceeds thereof.
A copy of the motion is available at https://bit.ly/3ojn7Hv from
PacerMonitor.com.
About Precision Automotive LLC
Precision Automotive LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Tenn. Case No. 22-02067) on July
1, 2022. In the petition signed by Renicia Williams, chief manager,
the Debtor disclosed up to $50,000 in assets and up to $1 million
in liabilities.
Judge Marian F. Harrison oversees the case.
Steven L. Lefkovitz, Esq., at Lefkovitz and Lefkovitz is the
Debtor's counsel.
PRINCESS PORT: Unsecureds Owed $4.2K to Get 100% of Claims
----------------------------------------------------------
Princess Port Bed and Breakfast, Inc., submitted a Second Amended
Combined Plan of Reorganization and Tentatively Approved Second
Amended Disclosure Statement.
If the Plan is confirmed, the payments promised in the Plan
constitute new contractual obligations that replace the Debtor's
pre-confirmation debts. Creditors may not seize their collateral
or enforce their pre-confirmation debts so long as Debtor performs
all obligations under the Plan. If the Debtor defaults in
performing Plan obligations, any creditor can file a motion to have
the case dismissed or converted to a Chapter 7 liquidation or
enforce their non-bankruptcy rights. The Debtor will be discharged
from all pre-confirmation debts (with certain exceptions) if Debtor
makes all Plan payments. Enforcement of the Plan, discharge of the
Debtor, and creditors' remedies if Debtor defaults are described in
detail in Parts 5 and 6 of the Plan.
Under the Plan, holders of Class 2 General Unsecured Claims
(including allowed claims of creditors whose executory contracts or
unexpired leases are being rejected under this Plan) is impaired.
Creditor JPMorgan Chase Bank, N.A., will receive a pro-rata share
of a fund totaling $4,200, created by Debtor's payment of $350.00
per month for a period of 12 months, starting on the Effective
Date.
A copy of the Combined Plan & Disclosure Statement dated July 15,
2022, is available at https://bit.ly/3AWN0nO from
PacerMonitor.com.
About Princess Port Bed and Breakfast
Princess Port Bed and Breakfast, Inc., is the fee simple owner of a
real property located at 445 Mirada Road, Half Moon Bay, Calif.,
valued at $2.57 million.
Princess Port Bed and Breakfast filed its voluntary petition for
Chapter 11 protection (Bankr. N.D. Cal. Case No. 21-30775) on Nov.
23, 2021, disclosing $2,585,562 in assets and $1,429,200 in
liabilities. Maria Boruta, principal at Princess Port Bed and
Breakfast, signed the petition.
Judge William J. Lafferty oversees the case.
E. Vincent Wood, Esq., at The Law Offices of E. Vincent Wood, is
the Debtor's legal counsel.
RANCHO CIELO: Needs to Abate Fire Hazard, Says Fire Chief
---------------------------------------------------------
David McQuead, a fire chief for the Rancho Santa Fe Fire Protection
District ("RSFFPD"), objects to approval of First Amended
Disclosure Statement Describing First Amended Chapter 11 Plan of
Rancho Cielo Estates, Ltd.
McQuead points out that the Debtor, Rancho Cielo Estates, Ltd., has
failed to comply with RSFFPD ordinance by not maintaining
defensible space on its property since the filing of the
bankruptcy, placing the public safety of the community at risk.
After due notice and failure to correct the fire hazard, RSFFPD was
required to force abate the fire hazards. Since the filing of the
Bankruptcy RSFFPD has had to expend $18,675 in 2020 and $20,825 in
2021 to abate the fire hazards caused by Debtor's failure to comply
with RSFFPD Ordinance. The RSFFPD has limited public resources to
continue to pay for abatement of the fire hazards for the Debtor.
The failure of the Debtor to abate the fire hazards causes a
serious risk to persons and property within the Rancho Cielo
community. The Debtor must abate these fire hazards immediately and
continue to abate them until the sale occurs. RSFFPD has provided
Debtor written notice by RSFFPD to immediately abate the fire
hazards on May 3, 2022 and a second notice on June 1, 2022. In
addition, the Debtor's property was posted with legal notice on
June 20, 2022. To date the Debtor has failed and continues to fail
to abate these serious fire hazard.
Attorney for Rancho Santa Fe Fire District:
Bernard M. Hansen, Esq.
3465 Camino Del Rio South, Suite 250
San Diego, CA 92108-3905
Tel: (619) 283-3371
Fax: (619) 282-8900
E-mail: bernardmhansen@sbcglobal.net
About Rancho Cielo Estates
Rancho Cielo Estates, LTD, based in Gardena, CA, filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 20-12306) on Feb. 29, 2020. In
the petition signed by Peter Fagrell, president, the Debtor
disclosed $3,207,977 in assets and $142,576,987 in liabilities. The
Hon. Sheri Bluebond oversees the case. Jeffrey S. Shinbrot, Esq.,
at Jeffrey S. Shinbrot, APLC, serves as bankruptcy counsel to the
Debtor.
REHOBOTH PIPELINE: Seeks to Extend Exclusivity Period by 30 Days
----------------------------------------------------------------
Rehoboth Pipeline Construction Services, LLC seeks approval from
the U.S. Bankruptcy Court for the Western District of Pennsylvania
to remain in control of its bankruptcy for another 30 days.
The company's attorney, Aurelius Robleto, Esq., at Robleto Kuruce,
PLLC, will give the company more time to re-evaluate its strategy
for a plan of reorganization.
"During the pendency of this case, the [company's] management and
professionals have continuously monitored the development of
certain circumstances affecting the viability of its efforts to
reorganize," Mr. Robleto said. "Consequently, [Rehoboth] is
re-evaluating its reorganizational strategy and requests further
time to finalize certain decisions regarding its path forward."
The exclusivity motion is on the court's calendar for Aug. 9.
About Rehoboth Pipeline
Rehoboth Pipeline Construction Services, LLC is a Washington,
Pa.-based company that offers gas and oil construction services.
Rehoboth filed a petition for Chapter 11 protection (Bankr. W.D.
Pa. Case No. 21-22573) on Dec. 2, 2021, listing up to $50,000 in
assets and up to $10 million in liabilities. Christopher P. Walker,
managing member, signed the petition.
The Debtor tapped Robleto Kuruce, PLLC as bankruptcy counsel and
Springer & Steinberg, P.C. as special counsel.
RITE AID: Fitch Affirms 'B-' LongTerm IDR, Outlook Still Negative
-----------------------------------------------------------------
Fitch Ratings has affirmed Rite Aid Corporation's Long-Term Issuer
Default Rating (IDR) at 'B-'. The Rating Outlook remains Negative.
Rite Aid's IDR reflects ongoing operational challenges, which have
brought to the forefront questions regarding the company's
longer-term market position and the sustainability of its capital
structure. Persistent EBITDA declines have led to volatile FCF and
elevated adjusted debt/EBITDAR in the low to mid-7x range in recent
years.
The Negative Outlook reflects accelerating operating weakness,
including EBITDA projected in the low $400 million range relative
to the low $500 million range just prior to the pandemic, and
Fitch's reduced confidence in the company's ability to stabilize
EBITDA at around $500 million. These issues are mitigated by Rite
Aid's ample liquidity of well over $1.5 billion under its revolver,
supported by a rich asset base of pharmaceutical inventory and
prescription files, and no note maturities before 2025.
KEY RATING DRIVERS
Structural Disadvantages: Although Rite Aid has good local market
share positions, its scale and geographic concentration relative to
Walgreens Boots Alliance, Inc. and CVS Health Corp. may negatively
affect its ability to compete for inclusion in pharmaceutical
contracts. Rite Aid's footprint of 2,361 stores as of May 28, 2022,
almost half of which are in four states, compares with the national
footprints of approximately 10,000 and 9,000 for CVS (including
pharmacies within Target stores) and Walgreens U.S., respectively.
In addition, Rite Aid's weak FCF limits its ability to make
customer-facing investments to drive loyalty and traffic,
particularly as larger competitors accelerate investments and newer
entrants such as Amazon.com, Inc. (AA-/Stable) fight for share.
Complex Industry Fundamentals: Despite projections of continued
modest growth in pharmaceuticals revenue, the healthcare industry
remains complex, with intricate relationships among critical
industry constituents, strategic initiatives by large participants
and regulatory overlay. Rite Aid benefits from close relationships
with end customers, which Fitch believes is a critical structural
advantage for drug retailers, and some business diversification
through its pharmacy benefit manager (PBM) Elixir. However, Rite
Aid's challenged operations and regional focus following store
divestiture weakened its competitive positioning, particularly
given the rise of preferred and narrow pharmaceutical networks.
Gross Margin Pressure: Retail pharmacy reimbursement pressure on
gross margins is intense. Pressure has resulted from increased
penetration of the government as a pharmaceutical payer under the
Medicare/Medicaid programs, ongoing pressure from commercial payers
and a mix shift toward the "90-day at retail" offering. Growth in
preferred/narrow networks may also be a factor, as participants
sacrifice margins for network inclusion to drive volume.
Challenging EBITDA Trend: Rite Aid's operating performance has been
weak, with EBITDA declining from approximately $850 million in 2015
(pro forma following the transfer of about 40% of the store base to
Walgreens Boots Alliance) to approximately $530 million in 2019,
prior to the coronavirus pandemic. Fitch believes EBITDA declines
are the consequence of Rite Aid's structural challenges and
somewhat subpar execution.
EBITDA for the TTM ending May 2022 eroded further to approximately
$430 million, due to ongoing coronavirus-related expenses and
investments in longer term growth at Elixir. Fitch expects EBITDA
to trend near TTM results in 2022 but improve to around $460
million in 2023, assuming some benefit from reduced
pandemic-related expenses and the recent closure of unprofitable
locations.
New Initiatives to Stabilize EBITDA: The company is implementing
several initiatives to improve top-line results. To drive revenue
growth, the company sees opportunities to cross-market its PBM and
retail assets to mid-market employers, Medicare Part D participants
and other target groups. The company also is investing in a more
holistic care approach with its pharmacy customers to drive loyalty
and incremental purchases, and is adding omnichannel capabilities
such as improved digital/mobile shopping experience and in-store
pick-up options, including lockers.
Evidence of success of these initiatives is somewhat limited given
the company's overall revenue and EBITDA trend, despite some
occasionally positive indications like good Elixir client growth in
2020. Fitch expects these initiatives, combined with the company's
recent cost reduction efforts, could allow EBITDA to stabilize from
current levels toward the mid-$400 million range in 2023.
Elevated Leverage; Limited FCF; Good Liquidity: Rite Aid's
operating challenges resulted in elevated adjusted leverage, which
averaged 7.4x over the past four years. Given Fitch's EBITDA
assumptions, adjusted leverage could be in the mid-7x range in 2022
and return to the low-7x range thereafter. Following several recent
debt exchanges and repayments, the company's next maturity is
approximately $485 million (pro forma for a July 2022 tender) of
secured notes due July 2025.
FCF has been somewhat volatile although generally negative in
recent years due to EBITDA declines and working capital movements.
Fitch expects FCF to be close to breakeven in 2022 and could be
modestly positive thereafter, from approximately negative $200
million in 2020 and positive $155 million in 2021, on improved
EBITDA and somewhat lower cash interest expense following recent
debt reduction.
Greater confidence in Rite Aid's ability to return EBITDA to around
$500 million, yielding adjusted leverage in the low-7x vicinity and
modestly positive FCF, would lead to a stabilization of its
Outlook. Mitigating these concerns is Rite Aid's ample liquidity of
approximately $1.7 billion under its revolver, which allows the
company flexibility to navigate through its operating challenges.
DERIVATION SUMMARY
Rite Aid's 'B-' rating and Negative Outlook incorporate its weak
position in the relatively stable U.S. drug retail business, its
limited to negative FCF, and its high lease adjusted leverage
(capitalizing rent expense at 8x), projected in the mid-7x range in
2022.
Rite Aid has significantly smaller scale and weaker operating
metrics than Walgreens Boots Alliance and CVS, which may have a
negative effect on its relative ability to compete for inclusion in
pharmacy networks. Rite Aid's cash flow is minimal to modestly
negative, and its leverage profile is significantly higher than
that of its larger peers, limiting its ability to invest
meaningfully in its business.
Retail peers rated in the 'B' category include LSF9 Atlantis
Holdings, LLC (Victra; B/Positive) and Party City Holdco Inc.
(B-/Stable).
Victra's 'B' rating reflects its stable position as the largest
authorized retailer for leading personal communications provider
Verizon Communications Inc. (A-/Stable) and the company's good
long-term operating track record, albeit mitigated by some declines
in recent years. The rating considers the company's narrow product
and brand focus within the U.S. retail industry. The Positive
Outlook reflects the company's improving operating trajectory,
which, in combination with achievement of synergies and debt
reduction following the GoWireless acquisition, could yield
adjusted leverage declining below 5.5x.
Party City Holdco Inc.'s 'B-' rating reflects improved confidence
in Party City's longer-term operating trajectory, following good
2021 performance including EBITDA modestly above pre-pandemic
levels of $230 million on cost management efforts, and projections
of modestly positive FCF. Adjusted leverage in 2021 improved from
recent levels although remains elevated in the high-6 range. Party
City's ratings continue to recognize a weak pre-pandemic operating
trajectory, which resulted in EBITDA declines during 2018/2019;
while Fitch's confidence regarding competitive positioning has
modestly improved, Party City's ability to stabilize market share
longer term remains unknown.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
Revenue declines around 4% to $23.7 billion in 2022 from $24.6
billion in 2021, largely due to approximately 90 store closures,
coronavirus vaccine volume declines and some client loss at Elixir,
somewhat offset by modestly positive same store sales. Revenue is
projected to grow modestly beginning 2023 given slight same store
sales growth.
EBITDA, which was approximately $475 million in 2020, could decline
to the $415 million range in 2022 given topline declines, somewhat
mitigated by the benefit of unprofitable store closures. Margins
could trend in the 1.7% range relative to the high-1% range the
prior two years and the mid-2% range in pre-pandemic 2019. Given
ongoing cost reduction efforts and some topline growth, margins
could improve toward 2% beginning 2023, with EBITDA growing toward
$500 million by 2024.
FCF could be slightly negative in 2022 given weak EBITDA but be
positive $50 million in 2023 assuming EBITDA improvement and lower
interest expense following recent debt reduction.
Adjusted debt/EBITDAR (capitalizing leases at 8x) could trend in
the mid-7x range in 2022 and in the low-7x range thereafter. Debt
levels are expected to remain near $2.7 billion.
No impact is modeled for total coverage, volume or pricing based on
any legislative activity affecting the pharmaceutical industry.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Stabilization of Rite Aid's Outlook would result from
increased confidence in the company's ability to sustain
EBITDA near $500 million, modestly positive FCF, and adjusted
debt/EBITDAR (capitalizing leases at 8x) below 7.5x;
-- An upgrade would result from sustained positive revenue
trends, EBITDA toward $600 million, adjusted leverage below
7.0x and positive FCF.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Deteriorating sales and profitability trends that lead to
EBITDA sustained well below $500 million, consistently
negative FCF and adjusted debt/EBITDAR (capitalizing leases at
8x) toward 8.0x;
-- An inability to stabilize operations would raise concerns
regarding the company's capital structure sustainability,
which is more representative of the 'CCC' category.
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
Ample Liquidity: Rite Aid had liquidity of $1.7 billion at May 28,
2022, supported by nearly $1.7 billion in availability under the
$2.8 billion ABL facility, net of letters of credit, and
approximately $56 million of invested cash.
The company announced on Aug. 23, 2021 that it had extended its ABL
and FILO term loan maturities to August 2026; the ABL was upsized
by $100 million, to $2.8 billion, and the FILO term loan was
downsized by $100 million, to $350 million. The ABL and FILO term
loan are and secured by first liens against Rite Aid's strong asset
base of inventory, including pharmaceutical inventory, receivables
and valuable prescription files.
The company has undertaken a series of debt repayment and exchange
activities over the past several years. Most recently, in July 2022
the company is executing a tender offer in which approximately $192
million in principal value of debt is being purchased for $150
million, partially financed through an ABL draw. While the tender
represents a below-par repurchase, Fitch does not view this as a
distressed debt exchange given it is voluntary and the company is
not avoiding bankruptcy.
Pro forma for the current tender offer, the company's capital
structure consists of its ABL and $350 million FILO term loan,
$1.33 billion of senior secured notes in two tranches due 2025 and
2026, and approximately $188 million of unsecured notes due 2027
and 2028. The secured notes are secured by a second lien on ABL
collateral and a first lien on most of Rite Aid's remaining assets,
including property, plant and equipment. The company owned 101
stores, two distribution centers and its corporate headquarters as
of Feb. 26, 2022.
Rite Aid maintains solid liquidity, given its valuable asset base,
despite a history of operating challenges. The value of Rite Aid's
asset base is supported by the 11.5x EBITDA multiple implied by
Walgreens' original offer to buy Rite Aid in October 2015 for $17.2
billion and the 16.0x multiple Walgreens paid for 1,932 stores
during 2017-2018. Following the purchase, Walgreens announced plans
to close 600 of the stores and transfer prescription files to
nearby Walgreens locations, further illustrating the value placed
on prescription files.
Recovery
Rite Aid's business profile could yield a distressed enterprise
value of approximately $4.4 billion on its estimated $3.4 billion
liquidation value on inventory, receivables, prescription files and
owned real estate and a $1.0 billion enterprise value for Elixir.
Fitch notes that its approximately $7.25 value ascribed per
prescription file could prove conservative, given recent
transaction multiples in the low- to mid-teens.
The $1.0 billion for the Elixir business values the company at 7.0x
EBITDA of $145 million, close to Fitch's 2022 Elixir EBITDA
projection although below historical and projected results. This is
well below the $2 billion, or 13.0x EBITDA, Rite Aid paid for the
business in 2015. PBM valuations have declined over the past
several years, although Express Scripts Holding Company
(BBB+/Stable) was acquired by Cigna Corporation at an enterprise
valuation of approximately 9.0x TTM EBITDA in December 2018.
The $4.4 billion in resulting liquidation value exceeds Fitch's
assessment of Rite Aid's $3.0 billion valuation as a going concern.
The going concern valuation is based on $500 million in distressed
EBITDA, modestly below 2019 results, as Fitch views Rite Aid's
pre-pandemic operating trajectory as somewhat distressed. Fitch
assumes Rite Aid could generate a 6.0x EBITDA multiple in a
going-concern sale, somewhat lower than valuations implied in the
Walgreens sale process due to ongoing declines in the company's
operations.
Given a $4.4 billion liquidation value and a 10% reduction for
administrative claims, the ABL, which Fitch assumes to be 80%
drawn, the $350 million FILO term loan and $1.33 billion in secured
notes (following the July 2022 repayment) would be expected to have
outstanding recovery prospects (91%-100%) and are thus rated
'BB-'/'RR1'. The approximately $188 million unsecured notes
(following the July 2022 repayment) would be expected to have poor
(0%-10%) recovery prospects and are therefore rated 'CCC'/'RR6'.
ISSUER PROFILE
Issuer Profile: Rite Aid is the third-largest drugstore chain in
the U.S. based on revenues and number of stores (2,361 as of May
28, 2022) and filled approximately 238 million prescriptions in
2021. The company serviced 1.0 million customers daily in 2021.
SUMMARY OF FINANCIAL ADJUSTMENTS
Summary of Financial Statement Adjustments: Historical and
projected EBITDA is adjusted to add back non-cash stock-based
compensation and exclude charges related to LIFO adjustments,
mergers & acquisitions, restructuring, and legal settlements. Fitch
has adjusted historical and projected debt by adding 8x yearly
operating lease expense.
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
---- ------ -------- -----
Rite Aid
Corporation LT IDR B- Affirmed B-
senior unsecured LT CCC Affirmed RR6 CCC
senior secured LT BB- Affirmed RR1 BB-
RLI SOLUTIONS: Pipeline Biz. Files for Chapter 11 Bankruptcy
------------------------------------------------------------
RLI Solutions Company, d/b/a Ronald Lane, Inc., filed for chapter
11 protection in the Western District of Pennsylvania.
The Debtor operates a pipeline business that operates throughout
the
eastern United States of America. In addition to its primary
business operations, the Debtor owns several pieces of real estate
in Pennsylvania and West Virginia.
The Debtor currently employs approximately 36 employees to conduct
its normal business operations.
The Debtor filed motions to pay prepetition employee wages and use
its bank accounts.
According to court filing, RLI Solutions Company estimates between
50 and 99 unsecured creditors. The petition states funds will be
available to unsecured creditors.
About RLI Solutions Company
RLI Solutions Company, doing business as Ronald Lane Inc., provides
a family of companies with a range of products and services to meet
the demands of our region's most rugged industries. For over 40
years, the executive team at RLI Solutions Company has operated in
the Mid Atlantic region with a focus on safety, environment and
quality throughout every aspect of our operation.
RLI Solutions Company sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Penn.Case No. 22-21375) on July
17, 2022. In the petition filed by Christopher Lane, as president,
the Debtor estimated assets and liabilities between $1 million and
$10 million.
Donald R. Calaiaro, of Calaiaro Valencik, is the Debtor's counsel.
SK GLOBAL: Unsecureds Owed $794K to Get 5% in Plan
--------------------------------------------------
SK Global Trading Inc. submitted a Fifth Amended Disclosure
Statement explaining its Chapter 11 Plan.
The Debtor operates a wholesale perfume and watch business, and
sought Chapter 11 relief on March 23, 2018 to address a sales tax
claim of more than $390,000. During the Chapter 11 case, the Debtor
was able to obtain a substantial reduction of its sale tax ability
to approximately $26,597.98 (including interest) in the context of
a series of conciliation conferences conducted by Linda Foppiano of
the New York State Department of Taxation. The substantial tax
reduction was based on the Debtor's production of dozens of resale
certificates, obtained from its customers, which established that
the vast majority of transactions were wholesale, and not subject
to the retail sales tax. This reduction in sales tax liability has
made it possible for the Debtor to emerge from bankruptcy and
promulgate the accompanying Plan.
Previously, the Debtor proposed a plan proposing to pay general
unsecured creditors in installments. Ballots were sent to creditors
to vote on the proposed plan just as the Covid-19 lockdown began,
and no ballots were returned, making it impossible for the Debtor
to proceed with confirmation. Moreover, the pandemic also
substantially reduced the Debtor's profitability, which was always
marginal.
The Debtor was able to take advantage of loans obtained through the
Covid-19 relief programs established by the Federal government
under the CARE Act to stabilize its business and accumulate
sufficient cash to fund a revised Plan. A so-called PPP loan, in
the amount of $15,275 has been repaid in full. A second loan
through the SBA in the original principal amount of $103,000 will
be repaid according to its terms over 30 years.
The other claims remaining to be paid are the administrative costs
of the case, consisting primarily of legal fees to the Debtor's
counsel, and general unsecured claims of vendors and suppliers.
Counsel for the Debtor has agreed to limit its claim to $35,000
plus the unused portion of the pre-petition retainer, and expenses,
to be paid upon confirmation of the Plan.
The Plan also provides that general unsecured creditors will
receive their pro rata share of a lump sum payment of $40,000,
which the Debtor projects will equate to approximately 5% percent
of each allowed claim, an amount which is reduced from earlier
versions of the Plan due to the impact of the Covid-19 pandemic on
the Debtor's operations.
Under the Plan, holders of Class 3 General Unsecured Claims will
receive a pro rata share of $40,000, payable in a lump sum payment
on the Effective Date of the Plan in full satisfaction of all
pre-petition claims and causes of action that exist or may exist
against the Debtor by any Class 3 creditor. Scheduled and filed
claims of non-insider general unsecured creditors total
$794,179.60. The Debtor estimates that the $40,000 payment will
result in a dividend equal to 5% of each Allowed General Unsecured
Claim.
Although Mr. Shamim has a pre-petition general unsecured claim,
that claim will not be included in the distribution to Class 4
creditors, as Mr. Shamim is waiving all claims against the Debtor.
The Plan fixes a deadline of the hearing on confirmation for the
Debtor to object to any claims; however, the Debtor has reviewed
the claims and does not anticipate filing any objections.
There are no releases being given to the Debtor's sole Equity
Interest Holder, Abdul Shamim, for any personal liability he may
have to any Class 3 creditor. Class 3 is impaired.
The Plan shall be implemented by the Debtor based on funds
available from current operations. The Debtor has committed to
depositing the monies required to fund the payments due on the
Effective Date into the Confirmation Account to be maintained in
escrow by the Debtor's counsel so that there are no issues of
feasibility. Ongoing monthly payments of $503 to the SBA on account
of its Class 1 Claim shall be paid from future profits.
Attorneys for the Debtor:
J. Ted Donovan, Esq.
GOLDBERG WEPRIN FINKEL GOLDSTEIN LLP
1501 Broadway 22nd Floor
New York, New York 10036
A copy of the Fifth Amended Disclosure Statement dated July 15,
2022, is available at https://bit.ly/3aMpEqw from
PacerMonitor.com.
About SK Global Trading
Organized in 2013, SK Global Trading Inc. operates a wholesale
business selling perfume products, fragrances and watches. SK
Global generated total sales revenues of approximately $2.14
million in 2016 and approximately $2.37 million in 2017.
SK Global Trading filed a voluntary petition under Chapter 11 of
the Bankruptcy Code (Bankr. S.D.N.Y. Case No. 18-10793) on March
23, 2018. In the petition signed by Abdul Shamim, president, the
Debtor disclosed $554,500 in total assets and $2.22 million in
total liabilities. The case is assigned to Judge James L. Garrity
Jr. J. Ted Donovan, Esq., and Kevin J. Nash, Esq., at Goldberg
Weprin Finkel Goldstein LLP, serve as the Debtor's counsel.
SKAUTO BODY: Case Summary & 13 Unsecured Creditors
--------------------------------------------------
Debtor: SKAuto Body Repair, Inc.
f/k/a S.K. Abernathy, Inc.
2490 S. Main Street, Suite C
Kennesaw, GA 30144
Chapter 11 Petition Date: July 22, 2022
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 22-55573
Debtor's Counsel: Paul Reece Marr, Esq.
PAUL REECE MARR, P.C.
Building 24, Suite 350
1640 Powers Ferry Road
Marietta, GA 30067
Tel: (770) 984-2255
Fax: (678) 623-5109
Email: paul.marr@marrlegal.com
Total Assets: $349,234
Total Liabilities: $1,650,771
The petition was signed by Shannon Abernathy as CEO & CFO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 13 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/Z4YYNBY/SKAuto_Body_Repair_Inc__ganbke-22-55573__0001.0.pdf?mcid=tGE4TAMA
SPEEDWAY MOTORSPORTS: S&P Upgrades ICR to 'BB' on Lower Leverage
----------------------------------------------------------------
S&P Global Ratings raising the issuer credit rating on Speedway
Motorsports LLC to 'BB' from 'BB-'.
The stable outlook reflects S&P's expectation for continued
improvements in live attendance, sponsorships, and
advertising-related revenue in 2022 with net leverage declining to
the mid-3x area.
S&P said, "Speedway's revenue has recovered to pre-pandemic levels
and its leverage has declined below our 4x upgrade threshold.
Admissions and event-related revenue outperformed our expectations
in 2021 by recovering to above 80% of 2019 levels, despite ongoing
COVID concerns. The recovery continued into the first quarter of
2022 as pent-up demand for out-of-home activities has overcome high
inflation and slowing economic growth. We expect cost inflation to
offset most of the organic revenue increases in 2022, which will
lead to minimal organic EBITDA growth, but still expect the company
to generate free operating cash flow to debt in the 13% to 15%
range. Net leverage declined to 3.8x at the end of 2021 and we
believe leverage will decline to the mid-3x area in 2022 mainly due
to free cash flow generation and debt reduction.
"We believe Speedway has a conservative financial policy and will
use its discretionary cash flow to repay debt. We believe Speedway
plans to reduce leverage and maintain it at a lower level. The
controlling Smith family operated Speedway with low levels of
leverage before the take-private transaction in 2019; our measure
of Speedway's adjusted net leverage prior to the take-private
transaction was in the 1x-2x range. While there could be leveraging
events from time to time--including cash distributions to the Smith
family-controlled parent, Sonic Financial Corp., related to estate
taxes--we believe Speedway would be motivated to reduce leverage
subsequently. We also believe there are few large-scale acquisition
opportunities available that could significantly increase leverage
above 4x, the threshold for the 'BB' rating."
Speedway's event-driven business model is exposed to economic
cyclicality and the spending power of its fans. Speedway's core fan
base struggled during the economic recovery after the 2008
recession. This contributed to lower event attendance over time,
which was exacerbated by the retirement of star NASCAR drivers that
previously brought in large fanbases. S&P said, "While we believe
interest in NASCAR has increased in recent years due to the
emergence of new talent, Speedway's admissions revenue will
continue to be exposed to economic cyclicality. S&P Global Ratings
economists believe the risk of recession has increased
significantly over the past six months as inflation has remained
above expectations and the Federal Reserve has become more
aggressive with its interest rate policy. If a recession does
occur, we believe there would be declines in Speedway's admissions
and event-related revenue that outpace declines in GDP. However,
the company demonstrated in 2020 that it can significantly scale
back the costs associated with these revenue sources and that
profitability and cash flow can be supported by contractual TV
revenue in a downturn. We believe Speedway's leverage will increase
in a downturn, but it will likely remain below 4x. If the downturn
is severe and leverage does spike above 4x, we believe the company
would have sufficient cash flow generation to quickly reduce
leverage back below 4x, even if the recovery is slow."
Speedway's broadcasting media rights fees help provide revenue
stability. S&P expects media rights revenue to contribute about
55%-65% of Speedway's total revenue over the next two years.
Through NASCAR, Speedway has a 10-year (through the 2024 season)
broadcast media rights agreement for three national touring series
with NBC Sports Group and Fox Sports Media Group. The agreement
provides Speedway high-margin contractual revenue with annual price
escalators. Broadcasting-related media rights revenue mitigated
declines from other revenue channels in 2020 and will continue to
be a source of revenue stability as long as Speedway and NASCAR
deliver full race schedules.
Sports programming remains the glue holding the linear TV bundle
together, which should benefit NASCAR's next TV contract. Sports
programming continues to be a must-have genre for television.
Sports generates higher audience ratings and has smaller declines
than other genres like scripted drama and comedy. Unlike sports,
other genres also face growing competition from similar content on
streaming platforms. As a result, S&P believes the broadcast
networks will continue to pay a premium for live sports relative to
other content.
S&P said, "We believe NASCAR is well positioned, as audience
ratings for its races have increased over the past couple of years
after many years of declining popularity. We believe this dynamic
could benefit Speedway through the league's next round of
negotiations with its broadcast partners. Nonetheless, NASCAR's
television ratings are down significantly since it was last awarded
its media rights contract in 2013. We expect NASCAR will be able to
negotiate an increase to its TV contract when it renews, but the
increase will likely be less than other sports have seen in recent
contract renewals. How the league decides to allocate its digital
rights will also be a significant factor for Speedway in the next
round of contract negotiations with the broadcast networks.
"The stable outlook reflects our expectation for continued
improvements in live attendance, sponsorships, and
advertising-related revenue in 2022 with net leverage declining to
the mid-3x area."
S&P could lower the rating if leverage increases above 4x on a
sustained basis. This could occur if:
-- A severe and prolonged recession erodes the spending ability of
its fans such that admissions and event-related revenues face steep
declines and never recover.
-- The company pursues a large debt-funded acquisition or
dividend.
-- The NASCAR TV contract is renewed at a lower annual fee.
S&P could raise the rating if:
-- S&P expects leverage to decline and remain below 3x;
-- The NASCAR TV contract is extended at an increase to the
current fee with a term length similar to the previous contract;
and
-- The risk of recession declines, and S&P expects stability in
admissions and event related revenue.
ESG Credit Indicators: E-2, S-2, G-2
TALEN ENERGY: Fitch Withdraws Ratings After Bankruptcy Filing
-------------------------------------------------------------
Fitch Ratings has withdrawn Talen Energy Supply, LLC's (Talen)
Long-Term Issuer Default Rating (IDR) of 'D'. In addition, the
long-term rating for the senior secured debt 'CCC-'/'RR2' and the
senior unsecured notes 'C'/'RR6' were also withdrawn.
The ratings were withdrawn because Talen entered Chapter 11 of the
U.S. Bankruptcy Code on May 9, 2022. Fitch will no longer provide
ratings or analytical coverage for Talen.
KEY RATING DRIVERS
Not applicable as the ratings have been withdrawn.
DERIVATION SUMMARY
Not Applicable.
KEY ASSUMPTIONS
Not Applicable.
RATING SENSITIVITIES
Not applicable given the bankruptcy filing.
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
Not applicable given the bankruptcy filing.
ISSUER PROFILE
Talen, a subsidiary of Talen Energy Corporation, is an independent
power producer that owns approximately 13,000MW of generation
capacity and is owned by the private equity firm, Riverstone
Holdings, LLC.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
DEBT RATING PRIOR
---- ------ -----
Talen Energy LT IDR WD Withdrawn D
Supply, LLC
senior unsecured LT WD Withdrawn C
senior secured LT WD Withdrawn CCC-
TELKONET INC: VDA Group Investors Hold 54.4% Equity Stake
---------------------------------------------------------
VDA Group, S.p.A., VDA Holding S.A, Meti Holding Sarl, and Flavio
De Paulis disclosed in a Schedule 13D/A filed with the Securities
and Exchange Commission that as of May 16, 2022, they beneficially
owned 162,900,947 shares of common stock of Telkonet, Inc.,
representing 54.4% based upon 299,212,282 Shares outstanding as of
March 29, 2022, as reported in the Issuer's Definitive Proxy
Statement on Schedule 14A filed with the Securities and Exchange
Commission on April 12, 2022. A full-text copy of the regulatory
filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1094084/000168316822004997/telkonet_sc13da.htm
About Telkonet
Telkonet, Inc., formed in 1999 and incorporated under the laws of
the state of Utah, is the creator of the EcoSmart and the Rhapsody
Platforms of intelligent automation solutions designed to optimize
energy efficiency, comfort and analytics in support of the emerging
Internet of Things. The platforms are deployed primarily in the
hospitality, educational, governmental and other commercial
markets, and is specified by engineers, HVAC professionals,
building owners, and building operators. The Company currently
operates in a single reportable business segment.
Telkonet reported a net loss of $412,785 in 2021, a net loss of
$3.15 million in 2020, and a net loss attributable to common
stockholders of $1.93 million in 2019.
TNBI INC: Continued Operations and Exit Facility to Fund Plan
-------------------------------------------------------------
TNBI, Inc., filed with the U.S. Bankruptcy Court for the District
of Delaware a First Amended Plan of Reorganization dated July 18,
2022.
TNBI, Inc., (stands for "The Next Big Thing"), was created as a
revolutionary new payment system company that makes running a
laundry business more efficient and more economical than ever
imagined. The Debtor's corporate headquarters is located at 2550
Eisenhower Ave., Suite C209, Trooper, PA 19403.
The Debtor was sued by two organizations/people including the law
firm Stradley Ronan and Dan Gerrity of RMD Group. These two
lawsuits, combined with other debt service totaling approximately
$2,900,000.00 that the company is carrying, caused significant
strain on the company and affected its ability to operate
effectively. These lawsuits are currently stayed as a result of the
bankruptcy filing.
Since the Petition Date, the Debtor sought up to $500,000 in
financing from Aisling Investments LP to finance the Debtor's
post-petition operations pending the filing of this Plan. The
interim portion of the DIP loan, $125,000, was provided on an
unsecured basis subordinate to allowed general unsecured claims.
The Plan provides for the full payment of administrative, and
priority claims. General unsecured creditors with allowed claims
will be given an option of: (i) the payment of 20% lump sum within
60 days of confirmation; (ii) 10% lump sum with 20% being paid over
the period of 24 months or (iii) 0% initial lump sum and 35% over
36 months.
Class 1 consists of General Unsecured Claims. Allowed general
unsecured claims will select one of two options: (i) payment of 20%
of their allowed claim within 60 days of the Effective Date of the
Plan; (ii) 10% payment of their allowed claim within 60 days of the
Effective Date and an additional 20% to be paid pro rata over 24
months or (iii) $0 lump sum payment and 35% over 36 months
following the Effective Date. The allowed unsecured claims total
$200,000.00 (estimated).
Class 2 consists of Pasquale Claim. In exchange for mutual releases
that remain subject to Bankruptcy Court approval pursuant to Rule
9019, the Pasquale Claim shall be waived and released as of the
Petition Date. Accordingly, Pasquale will receive no distribution
on account of its claim.
Class 3 consists of Aisling Claim. Aisling asserts a pre-petition
secured claim in an amount no less than $700,000. In exchange for
releasing its rights to a secured or unsecured claim, Aisling will
receive 28% of the new equity to be issued by the Debtor. For
avoidance of doubt, Aisling will also receive additional shares
based upon the DIP which it already provided to the Debtor as well
as additional shares based upon the amount of additional funding it
will provide under the Exit Facility.
The Class 4 interest holders shall receive no payments under the
Plan and all existing shares will be extinguished. However, all
current equity holders, other than Pasquale and his related
entities, will be invited to and entitled to contribute new capital
into the proposed Exit Facility in the dollar amount which schedule
identifies the percentage of ownership in the newly issued shares
of the reorganized Debtor.
The Plan will be funded by the proceeds realized from the continued
operations of the Debtor with the assistance of capital obtained
through Exit Facility in the amount of up to $1,500,000. The Exit
Facility will be funded via an offering to both Aisling (Class 3)
and existing shareholders (Class 4). Existing shareholders will
have the opportunity to participate in the Exit Facility and will
receive shares for so doing.
To the extent that equity holders choose not to participate with
new equity, Aisling will contribute all funds necessary to satisfy
all obligations arising from this Plan. In addition, Aisling will
continue to provide funding under the Exit Facility, up to a total
of $1,500,000, upon the Debtor's demonstration of need and assuming
Debtor is in compliance with its covenants to be established with
Aisling.
A full-text copy of the First Amended Plan dated July 18, 2022, is
available at https://bit.ly/3B7btal from PacerMonitor.com at no
charge.
Debtor's counsel:
Ronald S. Gellert, Esq.
Gellert Scali Busenkell & Brown, LLC
1201 N. Orange Street, Suite 300
Wilmington, DE 19801
Phone: 302-425-5806
Email: rgellert@gsbblaw.com
About TNBI Inc.
TNBI Inc. is the creator of a mobile application for using the most
advanced laundromat payment system.
TNBI Inc. sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Case No. 22-10343) on April 14, 2022. In the
petition signed by CEO James Garrity, the Debtor disclosed $717,963
in assets and $2,787,751 in liabilities.
Judge J. Kate Stickles oversees the case.
Ronald S. Gellert, Esq., at Gellert Scali Busenkell and Brown, LLC,
is the Debtor's counsel.
TRAVEL + LEISURE CO: Fitch Affirms LT IDR at BB-, Outlook Negative
------------------------------------------------------------------
Fitch Ratings has affirmed the 'BB-' Long-Term Issuer Default
Rating (IDR) for Travel + Leisure Co. (TNL). The rating reflects
TNL's strong competitive position, the diversification benefits of
its less capital-intensive exchange business, and its strong
profitability and cash flow profile. The rating also considers the
discretionary nature of timeshare sales and TNL's moderately high
financial leverage.
Fitch expects TNL will restore leverage back below Fitch's negative
leverage sensitivity sometime in early 2024. However, the Rating
Outlook remains Negative since this reduction will be later in the
rating horizon and due to the increasing macroeconomic headwinds.
Fitch could stabilize the Outlook should the already strong
recovery in TNL's underlying cash flows continue (or Fitch has a
higher degree of confidence it will continue) and drive
faster-than-anticipated de-levering.
Fitch identified an error in its recovery analysis of TNL that
incorrectly led to the senior secured debt receiving a recovery
rating of 'RR1'. Correcting the error led to the senior secured
debt to receive an 'RR2' recovery rating, but the +2 instrument
notching from the IDR to 'BB+' is unchanged. Fitch considers TNL's
secured debt to be a Category 2 first lien under its Corporates
Recovery Ratings and Instrument Ratings Criteria (April 9, 2021)
due to excessively high fully-drawn secured gross leverage under
Fitch's calculations (which exclude TNL's financing subsidiary's
cashflows).
KEY RATING DRIVERS
Focus on Reducing Leverage: Should timeshare sales continue to show
strength and exceed pre-pandemic levels in 2023, Fitch expects TNL
to reduce its leverage (total adjusted debt/operating EBITDAR)
below 5.0x by early 2024. Fitch's leverage calculation excludes
TNL's net interest margin from timeshare financing and the related
non-recourse debt but includes an adjustment to ensure proper
capitalization of the company's captive finance operations (as
defined in Fitch's criteria and described below). The forecasted
deleveraging results from a combination of EBITDA growth and
Fitch's belief that there will be excess readily available cash to
allow for Fitch's captive finance adjustment to be increasingly
reflected as a reduction to readily available cash rather than an
increase in gross debt.
TNL has a public leverage target of 2.25x-3.0x "net debt to
adjusted EBITDA", which includes financing income and nets the
gross reported debt with cash, securitized debt and gross
receivables eligible for securitization. Fitch estimates TNL's
company calculated leverage was 3.7x at 1Q22.
Cash Flows Rebounding Quickly: Fitch expects TNL's total revenues
to exceed 2019 levels by 2023 due to a combination of strong VOI
sales growth, higher tours flow, improving volume per guest (VPG),
and increasing occupancy rates. TNL's FY21 revenues and gross VOI
sales were 78% and 64% of 2019 levels respectively.
Fitch notes that TNL generates a substantial portion of its
revenues from recurring sources (60% in FY21) including consumer
financing; service, membership, and exchange fees; and rental and
property management fees. Fitch expects TNL to generate substantial
FCF through the rating horizon due to limited development capex
under its 'just-in-time' model and modest inventory spend.
Recovery Meeting Expectations: As economies reopened through 2021,
domestic occupancy rates improved due to pent-up demand for
vacations. TNL's domestic resorts ended 1Q22 with occupancies in
line with or better than 2019 levels, while international resorts
occupancies continue slowly rebounding given travel challenges and,
to a lesser extent, customer risk aversion. Fitch notes that TNL's
provisions for loan losses and default rates in FY21 were in line
with FY19 levels, reflecting its focus on targeting higher-FICO
score customers and improved performance of its notes receivable
portfolio.
Increasing Focus on New Buyers: Fitch positively views TNL's
increasing focus on new owner sales, particularly to Gen-Xers and
millennials, and expects new owner sales as a percentage of total
sales to grow to more than 35% through 2025. New buyers are
particularly important in the timeshare industry as companies rely
heavily on existing owner purchases for revenue. Having a strong
exchange network is a major selling point for new buyers, who
contributed 28% of TNL's FY21 revenues. New buyers bring lower VPG
but are still profitable because of the relatively low tour cost,
commission structure, and the fact that new owners tend to come
back and purchase more points in the future.
Inflation Risks Manageable: Fitch's assumptions for the timeshare
industry include a heightened level of inflation and an increasing
prevalence of recessionary risks. However, Fitch expects inflation
risks to be manageable for the timeshare industry. Rising inflation
can improve the value proposition for timeshare properties relative
to the increased cost of alternative products such as hotels and
vacation rentals. Moreover, wages and other expenses at the
property level are borne by the homeowners' associations and TNL's
marketing and sales positions are commission-based. Fitch expects
inflation to have a limited impact on TNL's development spending as
no material construction projects are underway and it has ample
excess inventory with the ability to reacquire low cost inventory.
Well Positioned in a Competitive Industry: With 245 resorts
concentrated in destination cities, TNL is the largest timeshare
operator based on owner families, which provides some economies of
scale and facilitates third-party marketing relationships. TNL is
well positioned within the timeshare industry and has a diversified
portfolio of vacation ownership brands operating under the Wyndham
Destinations business line including Club Wyndham, WorldMark by
Wyndham, Shell Vacations Club, Margaritaville Vacation Club by
Wyndham and Presidential Reserve by Wyndham.
TNL also operates one of the two largest timeshare exchange
networks through its Resorts Condominium International (RCI)
subsidiary. Finally, TNL has one of the strongest loyalty programs
in the industry, Wyndham Rewards, with 92 million members. Loyalty
programs are crucial for chains like Wyndham, as these programs
drive repeat business which translates into repeat selling
opportunities in the timeshare industry.
Cyclicality of Timeshare Industry: The domestic timeshare market is
mature, with above average economic cyclical sensitivity owing to
the consumer discretionary nature of the product. During the Great
Financial Crisis, industry-wide VOI sales declined over 40%, which
exceeded most other Gaming, Lodging & Leisure sub-sectors' degrees
of cyclicality. The industry has limited barriers to entry as well
as a variety of competitive alternatives, including the rapid
growth and adoption of alternative lodging accommodation
businesses, such as Airbnb, Inc., Vrbo and FlipKey.
DERIVATION SUMMARY
TNL's ratings reflect its strong position in the timeshare industry
and the diversification benefits of its less capital-intensive
exchange business. The ratings also consider its moderately high
financial leverage and the discretionary nature of timeshare
sales.
TNL is the largest timeshare operator with close to 900,000 owner
families in its system. Hilton Grand Vacations (HGV; BB-/Negative)
is TNL's closest peer with 710,000 owner families, following by
Marriott Vacations Worldwide (VAC) with 700,000, Holiday Inn Club
Vacations with 345,000 and Bluegreen Vacations Holding Corp. with
219,000.
TNL and VAC's revenues are diversified relative to HGV due to the
inclusion of their timeshare exchange networks, RCI and Interval
International respectively. VAC gained access to Interval's network
through its 2018 acquisition of Interval Leisure Group (ILG).
Additionally, VAC has greater brand diversification relative to HGV
and TNL through its relationship with Marriott International and
ILG's exclusive licenses to use the Starwood and Hyatt timeshare
brands.
Under Fitch's Corporate Rating Criteria treatment for corporate
issuers with captive finance subsidiaries, Fitch calculates an
appropriate target debt-to-equity ratio for the finance subsidiary
based on its asset quality, funding, and liquidity. If the finance
subsidiary's target debt-to-equity ratio, based on Fitch's
calculations, is lower than the actual ratio, Fitch assumes that
the parent injects additional equity into the finance subsidiary to
bring the debt-to-equity ratio down to the appropriate target
level. Fitch's Corporate Rating Criteria assumes that the corporate
entity (TNL) funds the capital injection either by an increase in
gross debt, a reduction in cash, or a combination of the two. On an
as-reported basis, Fitch considers the effect of this equity
injection in its analysis of TNL's credit profile vis-à-vis an
increase in gross debt.
For TNL's captive finance subsidiary, Fitch calculates an
appropriate target debt-to-equity ratio of 1.0x, which is below the
actual ratio in the high-single digits as of FYE21. As a result,
Fitch makes an adjustment by adding $852 million of non-recourse
timeshare receivable debt to its adjusted leverage calculation for
TNL. This represents the capital injection needed to bring its
captive finance subsidiary's debt-to equity ratio down to 1.0x.
Given the strong free cash flow profile of TNL, Fitch expects cash
will accumulate through the forecast years above an assumed minimum
amount required for operations through the cycle. On a forward
basis, Fitch assumes TNL will build readily available cash with
retained free cash flow after assumed share buybacks, net working
capital requirements and net acquisitions. This results in Fitch's
captive finance debt adjustment beginning to be allocated in
forecasted metrics as a reduction to cash rather than solely an
increase to gross debt. This is due to Fitch's forecast of TNL
having sufficient cash to support the hypothetical capitalization
of the finance subsidiary and what Fitch assumes to be its
operational cash needs.
KEY ASSUMPTIONS
-- Revenues and net VOI sales exceed FY19 levels in 2023 due to a
recovery in timeshare industry fundamentals. Fitch forecasts
total revenues of 93%, 104%, 109% and 105% of FY19 levels in
FY22, FY23, FY24 and FY25 respectively;
-- EBITDA margins maintained in the 17% to 20% range through
2025;
-- Share repurchases of $200 million-$250 million annually
through 2025;
-- No material acquisitions or dispositions occur (e.g. >$50
million) through 2025.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Total adjusted debt/operating EBITDAR sustaining below 4.0x;
-- Greater cash flow diversification by brand and/or business
line;
-- Evidence of through-the-cycle sustainability in the company's
capital light inventory sources such that it does not
materially affect TNL's financial flexibility and operational
strategy.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Total adjusted debt/operating EBITDAR and FCF/debt above 5.0x
and/or lower than 5.5% respectively;
-- Severe disruption in the ABS markets such that TNL needs to
provide material support to its captive finance subsidiary;
-- Material decline in profitability leading to EBITDAR margins
sustaining below 15%;
-- Consistently negative FCF.
BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Non-Financial Corporate
issuers have a best-case rating upgrade scenario (defined as the
99th percentile of rating transitions, measured in a positive
direction) of three notches over a three-year rating horizon; and a
worst-case rating downgrade scenario (defined as the 99th
percentile of rating transitions, measured in a negative direction)
of four notches over three years. The complete span of best- and
worst-case scenario credit ratings for all rating categories ranges
from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are
based on historical performance.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity Profile: At 1Q22, TNL has $381 million in cash and
cash equivalents, and $998 million of available capacity under its
$1.0 billion revolving credit facility. The debt maturity profile
is well-staggered, with some intermediate-term maturities including
$400 million and $300 million of senior secured notes in 2023 and
2024 respectively.
Since TNL is reliant on the asset-backed securities (ABS) market to
help fund its timeshare customer lending activities, Fitch notes
that a significant economic downturn resulting in tightened credit
markets could pressure TNL's securitization market access and
potentially require the company to provide support to its finance
subsidiary. This risk is mitigated by the company's annual
extension of its two-year $600 million receivable securitization
warehouse facility.
At 1Q22, TNL has $533 million of available liquidity across its USD
($600MM of total capacity) and AUD/NZD ($224MM of total capacity)
bank conduit facilities, which should provide sufficient liquidity
to finance the sale of VOIs through 2023. TNL completed a $275
million securitization of vacation ownership loans in March 2022 at
a weighted average interest rate of 3.84% and an advance rate of
98%.
ISSUER PROFILE
Travel + Leisure, Co. (NYSE:TNL) is a timeshare company that
operates in two segments. Within its Vacation Ownership segment,
TNL develops, markets, sells and manages VOIs and provides consumer
financing in connection with the VOI sales. Through the Travel and
Membership segment, TNL operates the world's largest vacation
exchange network, Resorts Condominium International.
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
---- ------ -------- -----
Travel +
Leisure Co. LT IDR BB- Affirmed BB-
senior secured LT BB+ Affirmed RR2 BB+
TRIDENT BRANDS: Delays Form 10-Q for Period Ended May 31
--------------------------------------------------------
Trident Brands Incorporated filed a Form 12b-25 with the Securities
and Exchange Commission notifying the delay in the filing of its
Quarterly Report on Form 10-Q for the period ended May 31, 2022.
The Company was unable to file, without unreasonable effort and
expense, its Form 10-Q Quarterly Report because the Company's
auditor has not completed their review of the Form 10-Q. The Form
10-Q will be filed on or before the 5th calendar day following the
prescribed due date of the Company's Form 10-Q.
The Company anticipates that its loss from operations for the
quarter ended May 31, 2022 will be approximately $429,000 compared
with a net loss from operations of approximately $516,000 in the
comparable prior period. The approximate $87,000 decrease in loss
from operations was due primarily to an approximately $130,000
decrease in General and administrative and a decrease of
approximately $43,000 in gross margin, which resulted from an
approximate $79,000 increase in revenue.
About Trident Brands
Based in Brookfield, Wisconsin, Trident Brands Incorporated, f/k/a
Sandfield Ventures Corp., was initially formed to engage in the
acquisition, exploration and development of natural resource
properties, but has since transitioned and is now focused on
branded consumer products and food ingredients. The Company is in
the early growth stage and has commenced commercial activities
following a period of organization and development of its business
plan.
Trident Brands reported a net loss of $3.08 million for the 12
months ended Nov. 30, 2021, a net loss of $5.39 million for the 12
months ended Nov. 30, 2020, compared to a net loss of $12.22
million for the 12 months ended Nov. 30, 2019. As of Aug. 31,
2021, the Company had $1.61 million in total assets, $31.59 million
in total liabilities, and a total stockholders' deficit of $29.97
million.
MaloneBailey, LLP, in Houston, Texas, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
March 16, 2021, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
TROIKA MEDIA: Elects Randall Miles as Director, Chairman
--------------------------------------------------------
Randall Miles was elected as a director as well as Chairman of the
Board of Directors of Troika Media Group, Inc.
Mr. Miles, age 66, serves as Chairman & CEO of SCM Capital Group, a
global transaction and strategic advisory firm. In addition, Mr.
Miles sits on the boards of eXp World Holdings, Inc. as vice
chairman, and private equity backed Arthur H Thomas Companies as
vice chairman, and Kuity, Inc. as chairman.
For over 30 years Mr. Miles has held senior executive leadership
positions in global financial services, financial technology, and
investment banking companies. His extensive investment banking
background at bulge bracket, regional and boutique firms advising
companies on strategic and financial needs, has crossed many
disciplines while serving as CEO, Executive Committee Chair, Head
of FIG, Head of M&A, and other responsibilities. Mr. Miles'
transactional and advisory experience is complemented by leadership
of public and private equity backed financial technology, specialty
finance, and software companies: Chairman and CEO at LIONMTS, where
he was nominated for the Ernst & Young Entrepreneur of the Year
award, CEO at Syngence Corporation, COO of AtlasBanc Holdings
Corp., and CEO of Advantage Funding / NAFCO Holdings.
Mr. Miles has broad public, private and nonprofit board experience
and has been active for many years in leadership roles with the
Make-A-Wish Foundation. Mr. Miles holds a BBA from the University
of Washington and holds FINRA licenses Series 7, 24, 63 and 79.
The Board has determined that Mr. Miles is an independent director
under the Nasdaq listing standards. There are currently no
arrangements or understandings between Mr. Miles and any other
person pursuant to which Mr. Miles was elected to serve as a member
of the Board. The Company is not aware of any transaction
involving Mr. Miles requiring disclosure under Item 404(a) of
Regulation S-K promulgated under the Securities Exchange Act of
1934, as amended.
As compensation for his services, Mr. Miles will receive annual
compensation of $300,000 paid in monthly installments on the first
day of each calendar month, prorated for partial months; options
for 2,000,000 shares of the Company's contingent equity which will
vest over three years beginning on the date of grant, with an
exercise price to be fixed at the time of issuance in accordance
with the Company's equity granting policies; and discretionary
grants of options for shares of the Company's common shares as may
be authorized by the Compensation Committee of the Board of
Directors, with an exercise price to be fixed at the time of
issuance in accordance with the Company's equity granting
policies.
Mr. Miles will also serve as the Chairman of the Audit Committee of
the Board and as a member of the Compensation Committee of the
Board.
Director Resignations
On July 13, 2022, Jeff Kurtz, a member of the Board, notified the
Company of his resignation from the Board, effective immediately.
Mr. Kurtz has served on the Board since September, 2017.
On July 13, 2022, Daniel Jankowski, a member of the Board, notified
the Company of his resignation from the Board, effective
immediately. Mr. Jankowski has served on the Board since March,
2019.
Messrs. Kurtz's and Jankowski's decisions to resign from the Board
are due to the Company's ongoing efforts to align its resources
with its current strategy and operations - not the result of a
disagreements with the Company on any matter relating to the
Company's operations, policies or practices, as disclosed in a Form
8-K filed with the Securities and Exchange Commission.
The Company wishes to express its gratitude to Mr. Kurtz and Mr.
Jankowski for their contributions to the Board.
About Troika
Troika Media Group (fka M2 nGage Group, Inc.) -- www.thetmgrp.com
-- is an end-to-end brand solutions company that creates both
near-term and long-term value for global brands in entertainment,
sports and consumer products. Applying emerging technology, data
science, and world-class creative, TMG helps brands deepen
engagement with audiences and fans throughout the consumer journey
and builds brand equity. Clients include Apple, Hulu, Riot Games,
Belvedere Vodka, Unilever, UFC, Peloton, CNN, HBO, ESPN, Wynn
Resorts and Casinos, Tiffany & Co., IMAX, Netflix, Sony and
Coca-Cola.
For the six months ended Dec. 31, 2021, the Company reported a net
loss attributable to common stockholders of $6.25 million. Troika
Media reported a net loss of $16 million for the year ended June
30, 2021, followed by a net loss of $14.45 million for the year
ended June 30, 2020. As of Sept. 30, 2021, the Company had $42.05
million in total assets, $24.44 million in total liabilities, and
$17.61 million in total stockholders' equity.
UNITED BANCSHARES: Incurs $1.5 Million Net Loss in 2018
-------------------------------------------------------
United Bancshares Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$1.49 million on $2.68 million of total interest income for the
year ended Dec. 31, 2018, compared to a net loss of $319,426 on
$2.54 million of total interest income for the year ended Dec. 31,
2017.
As of Dec. 31, 2018, the Company had $50.19 million in total
assets, $48.43 million in total liabilities, and $1.76 million in
total shareholders' equity.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/944792/000109690622001652/uboh_10k.htm#i1
About United Bancshares
United Bancshares, Inc. is a holding company for United Bank of
Philadelphia. UBS was incorporated under the laws of the
Commonwealth of Pennsylvania on April 8, 1993. The Company became
the bank holding company of the Bank, pursuant to the Bank Holding
Company Act of 1956, as amended, on Oct. 14, 1994. The Bank
commenced operations on March 23, 1992. UBS provides banking
services through the Bank. The principal executive offices of UBS
and the Bank are located at The Graham Building, 30 S 15th Street,
Suite 1200, Philadelphia, Pennsylvania 19102.
UNITED PROMOTIONS: Continued Operations to Fund Plan Payments
-------------------------------------------------------------
United Promotions, Inc., filed with the U.S. Bankruptcy Court for
the Northern District of Georgia a Plan of Reorganization under
Subchapter V dated July 18, 2022.
The Debtor is a top-tier distributor of cleaning, disinfectant,
sanitization, bactericide, biocide, fungicide, virucide, algaecide,
and degreasing products worldwide.
This Plan will permit the Debtor to preserve the Debtor's going
concern value while maintaining the Debtor's business operations
and its Interests.
Under the Plan, the Debtor will devote its disposable income, not
to exceed its Projected Disposable Income, for the three-year
period following the Effective Date toward the payment of Allowed
Claims. The Plan will be funded with the funds that are not used
for the payment of expenditures necessary for the continuation,
preservation, or operation of the business of the Debtor.
In the event that the Debtor's business operations do not provide
sufficient funds for the Debtor to make all Plan payments, such
funds will be loaned to the Debtor by Fernando Figueredo. The Plan
provides for payment in full of Administrative Expense Claims,
Priority Claims, including Priority Tax Claims, and Other Priority
Unsecured Claims in accordance with the Bankruptcy Code, and
projects a distribution to General Unsecured Claims.
The Debtor has no secured debt. As of the Petition Date, the Debtor
has certain priority tax debt. The Internal Revenue Service ("IRS")
filed a proof of claim asserting a Priority Tax Claim in the amount
of $126,726.74. The Georgia Department of Revenue filed a proof of
claim asserting a Priority Tax Claim in the amount of $30,342.39.
As of the Petition Date, the Debtor was largely current on the
payment to its vendors and other trade creditors. Trade creditors
have been paid in the ordinary course of business through the
duration of this Chapter 11 Case so that operations continue to run
smoothly with minimal disruption. The largest General Unsecured
Claim asserted against the Debtor is the Interim Damages Award,
which the Debtor disputes and intends to challenge.
Class 1 consists of all Other Priority Unsecured Claims. If the
Plan is confirmed under Bankruptcy Code section 1191(a), each
Holder of an Allowed Other Priority Unsecured Claim shall receive,
in full and complete satisfaction, settlement, discharge, and
release of, and in exchange for, its Allowed Other Priority
Unsecured Claim: (i) payment in full, in Cash, on the later of the
Effective Date and the date on which such Other Priority Unsecured
Claim becomes Allowed; (ii) payment in the ordinary course of
business between Debtor or the Reorganized Debtor, as applicable,
and the Holder of such Allowed Other Priority Unsecured Claim; or
(iii) such other treatment as Debtor or the Reorganized Debtor, as
applicable and the Holder of such Allowed Other Priority Unsecured
Claims may agree. Distributions to Holders of Class 1 Claims shall
be made in full and complete satisfaction, settlement, discharge,
and release of the Allowed Other Priority Unsecured Claims.
If the Plan is confirmed under Bankruptcy Code section 1191(b),
each Holder of an Allowed Other Priority Unsecured Claim shall
receive in full and final satisfaction, settlement, release, and
discharge of, and in exchange for, its Allowed Other Priority
Unsecured Claim, its Pro Rata share of the Debtor's Projected
Disposable Income. Class 1 is Unimpaired.
Class 2 consists of all General Unsecured Claims. If the Plan is
confirmed under Bankruptcy Code section 1191(a), each Holder of an
Allowed General Unsecured Claim, except for the Holder of the UCC
Claim, shall receive its Pro Rata share of $100,000, which shall be
payable in installments every three months for three years
commencing on the first Business Day of the first month following
the Effective Date.
If the Plan is confirmed under Bankruptcy Code section 1191(a), (i)
the Debtor shall assume the REDA with a cure amount of $250,000
payable in installments every three months for three years
commencing on the first Business Day of the first month following
the Effective Date; (ii) the Parties shall enter into an amended
REDA, which shall be filed in a supplement to the Plan and will be
effective upon the occurrence of the Effective Date; (iii) no
further distribution shall be made by the Debtor or Reorganized
Debtor, as applicable, for the Allowed UCC Claim; and (iv) UCC and
the Debtor or Reorganized Debtor, as applicable, shall dismiss the
Arbitration Proceeding.
If the Plan is confirmed under Bankruptcy Code section 1191(b),
each Holder of an Allowed General Unsecured Claim shall receive its
Pro Rata share of the Debtor's Projected Disposable Income. Class 2
is Impaired.
Class 3 consists of the all Interests in the Debtor. On the
Effective Date, Holders of Interests shall receive Interests in the
Reorganized Debtor in the same amount as they had in the Debtor.
Class 3 is Unimpaired.
The Reorganized Debtor shall continue the Debtor's business
operations. In the event that the Debtor's business operations do
not provide sufficient funds to make all Plan payments, such funds
will be loaned to the Debtor by Fernando Figueredo.
If a plan is confirmed under section 1191(a) of the Bankruptcy
Code, except as otherwise provided in the Plan or in the
Confirmation Order, (i) confirmation of the Plan vests all of the
property of the estate in the Debtor, and (ii) after confirmation
of the Plan, the property dealt with by the Plan is free and clear
of all Claims and Interests of creditors, equity security holders,
and of general partners in the Debtor.
If a plan is confirmed under section 1191(b) of the Bankruptcy
Code, property of the estate includes, in addition to the property
specified in section 541 of the Bankruptcy Code, all property of
the kind specified in that section that the Debtor acquires, as
well as earnings from services performed by the Debtor, after the
date of commencement of the case but before the case is closed,
dismissed, or converted to a case under chapter 7, 12, or 13 of the
Bankruptcy Code, whichever occurs first. Except as provided in
section 1185 of the Bankruptcy Code, the Plan, or the order
confirming the Plan, the Debtor shall remain in possession of all
property of the estate.
A full-text copy of the Plan of Reorganization dated July 18, 2022,
is available at https://bit.ly/3v8ITkO from PacerMonitor.com at no
charge.
Counsel to the Debtor:
Kilpatrick Townsend & Stockton LLP
Todd C. Meyers, Esq.
Colin M. Bernardino, Esq.
1100 Peachtree Street, NE, Suite 2800
Atlanta, GA 30309-4530
Telephone: (404) 815-6500
Facsimile: (404) 815-6555
Email: tmeyers@kilpatricktownsend.com
cbernardino@kilpatricktownsend.com
- and -
Kelly E. Moynihan
The Grace Building
1114 Avenue of the Americas
New York, New York 10036-7703
Telephone: (212) 775-8700
Facsimile: (212) 775-8800
Email: kmoynihan@kilpatricktownsend.com
About United Promotions
United Promotions Inc. -- https://www.upitrading.com/ -- is an
Atlanta, Georgia-based international trading company that innovates
sanitizing and biochemical products.
United Promotions sought Chapter 11 bankruptcy protection (Bankr.
N.D. Ga. Case No. 22-52993) on April 19, 2022. In the petition
filed by Catalina Figueredo, executive vice president and marketing
director, the Debtor disclosed up to $1 million in estimated assets
and up to $10 million in estimated liabilities.
Todd C. Meyers, Esq., at Kilpatrick Townsend & Stockton, LLP, is
the Debtor's counsel.
WALHONDE TOOLS: Subchapter V Plan Confirmed by Judge
----------------------------------------------------
Judge B. McKay Mignault has entered an order confirming the
Subchapter V Plan of Reorganization of Walhonde Tools, Inc.
The Court found, among other things, that the Debtor offered a
unique product that had generated substantial income in the past,
and that the Debtor had made efforts and achieved results since the
filing of the bankruptcy petition to increase its marketing
position, which had lately resulted in additional sales.
That with the $420,000 post-petition funding previously approved by
this Court through the SBA, which provided for a 30 month
moratorium on repayment, and provided the Debtor with a $20,000
operating cushion, along with the Debtor's plan to pay BB&T now
Truist Bank $400,000 on its secured claim from the SBA financing
and, with respect to the balance of the secured claim in the amount
of $150,000, accruing interest at the rate of 4.5%, monthly
payments in the amount of $948.97 over forty-eight months
commencing May, 2022 and a balloon payment in April, 2026 with the
remaining balance to be satisfied by a non-debtor guarantor through
the sale of property.
The Court also cited the Debtor's compliance with its reporting
function and fulfilling its obligations by timely filing its
operating report and an acknowledgement by the U.S. Trustee's
Office of the Debtor's admirable work and integrity which the Court
believes bodes well for the Plan's success and satisfies the public
policy in favor of an unfortunate honest debtor attempting to repay
its obligation.
The Court specifically finds that discharge of the Debtor's
obligation will take place upon the completion of the Plan
payments, and not at the time of the closure of this case.
A full-text copy of the Plan Confirmation Order dated July 18,
2022, is available at https://bit.ly/3cCJuVx from PacerMonitor.com
at no charge.
About Walhonde Tools
Walhonde Tools, Inc., is a South Charleston, W.Va.-based company
that produces and markets precision tube and pipe fitting tools for
the power, pulp and paper, petro-chemical, food and drug
processing, shipbuilding, and repair industries worldwide.
Walhonde Tools filed a Chapter 11 petition (Bankr. S.D. W.Va. Case
No. 21-20150) on June 29, 2021. In the petition signed
by Matthew McClure, president, the Debtor disclosed $866,207 in
assets and $1,660,552 in liabilities. Judge Mckay B. Mignault
presides over the case. The Debtor tapped Pepper and Nason as its
bankruptcy counsel and Jeremy B. Simms of Simms and Company as its
accountant.
WIRELESS SYSTEMS: Exclusivity Period Extended to Aug. 6
-------------------------------------------------------
Wireless Systems Solutions, LLC obtained a court order extending
their exclusive right to file a Chapter 11 plan to Aug. 6 and
solicit acceptances from creditors to Oct. 5.
The ruling by Judge Joseph Callaway of the U.S. Bankruptcy Court
for the Eastern District of North Carolina allows the company to
pursue a plan to exit bankruptcy without the threat of a competing
plan while it awaits the completion of the examiner's report.
The examiner's report will allow Wireless Systems Solutions to
better evaluate its ongoing and future business prospects, project
its income, and determine the appropriate plan payments, according
to the company's attorney, Kathleen O'Malley, Esq., at Stevens
Martin Vaughn & Tadych, PLLC.
On May 10, the bankruptcy court ordered the appointment of an
examiner in Wireless Systems Solutions' Chapter 11 case to, among
other things, evaluate whether the company's post-petition work
violates an injunction in favor of SmartSky Networks, LLC, entered
in an arbitration proceeding styled SmartSky Networks, LLC v.
Wireless Systems Solutions, LLC, DAG Wireless Ltd., DAG Wireless
USA, LLC, Laslo Gross, Susan Gross, and David Gross (Civil Case No.
1:20-cv-00834-TDS-LP).
About Wireless Systems Solutions
Wireless Systems Solutions, LLC is a North Carolina limited
liability company formed in 2015 with principal offices and assets
in Cary and Morrisville, N.C. It is a designer and developer of
multi-standard, frequency band agnostic, cellular network solutions
that leverage its expertise in cellular and wireless communications
technology at large. The company is able to offer a portfolio of
products and platforms suitable for multiple markets including
defense, first-responders, utilities, telcos, and general network
infrastructure solutions.
Wireless Systems Solutions filed a petition for Chapter 11
protection (Bankr. E.D.N.C. Case No. 22-00513) on March 9, 2022,
listing $1 million to $10 million in assets and $1 billion to $10
billion in liabilities. Susan Gross, its vice president, signed the
petition.
Judge Joseph N. Callaway oversees the case.
The Debtor tapped Stevens Martin Vaughn & Tadych, PLLC as legal
counsel and Coats & Bennett, PLLC as special counsel.
On May 10, 2022, the court entered an order appointing Peter D.
Siddoway as examiner in the Debtor's Chapter 11 case.
YAK ACCESS: S&P Lowers ICR to 'CCC' on Elevated Refinancing Risk
----------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on Yak Access
LLC to 'CCC' from 'CCC+'. At the same time, S&P lowered its ratings
on the company's first-lien credit facilities to 'CCC' from 'CCC+'
and on its second-lien term loan to 'CC' from 'CCC-'. S&P's
recovery ratings are unchanged.
The negative outlook reflects the company's constrained liquidity
position and the risk that it could pursue a loan modification or
restructuring that we consider tantamount to a default.
S&P said, "We believe Yak's capital structure is unsustainable,
increasing the risk of a distressed exchange over the next 12
months. We view Yak's capital structure as unsustainable because we
believe the company will not be able to maintain its mat fleet
while still meeting interest and scheduled amortization
requirements. Decreased investment in mat fleet in 2020 allowed the
company to generate free operating cash flow (FOCF) of $62 million.
Fleet investment net of fleet sales was roughly flat in 2021, but
the company did not generate FOCF and its liquidity position
worsened. Given a higher cash interest expense in 2022 as interest
rates increase and debt amortization of $50 million due over the
next 12 months, we do not believe the company can sustain a
maintenance level of capital expenditures even if it extends its
revolving credit maturity. An unsustainable capital structure
increases the risk that the company will restructure its debt,
especially if business or credit market conditions do not
sufficiently improve. If lenders receive less than the original
promise, we will likely view the restructuring as a distressed
exchange tantamount to default and lower our ratings to 'D'
(default) or 'SD' (selective default).
"Yak faces the risk of a payment default over the next 12 months.
We think the company will extend the RCF before it matures in July
2023. However, if it is unable to do so, it would face a payment
default within the next 12 months. We exclude the RCF as a source
of liquidity because it is current. Even if the RCF is extended,
availability under the facility was only $5 million on March 31,
2022. Combined with balance sheet cash of $11 million as of March
31, 2022, sales of mats from the fleet, and our forecast for cash
funds from operations of roughly $70 million-$80 million over the
next 12 months, total sources of liquidity could be insufficient to
meet scheduled debt amortization, working capital, and capital
expenditure (capex).
"Covenant headroom will remain extremely limited over the next 12
months. The company's $125 million revolving credit facility is
subject to a 4.5x springing first-lien net leverage ratio if the
company utilizes 35% of the facility, which we forecast to be the
case over the next 12 months. There are no financial covenants on
the first- or second-lien term loans. We expect the company will
remain in compliance with the covenant over the next 12 months,
although we expect headroom to be limited and, by our estimates,
could be lower than 10%. If Yak underperforms our forecast, the
company could breach the covenant level.
"We forecast Yak's revenue and EBITDA will be roughly flat in 2022
and slightly higher in 2023 compared to 2021 levels, which is
unlikely to significantly improve its liquidity, covenant headroom,
or likelihood of refinancing. Lower U.S. pipeline investment has
hurt Yak's revenue growth and mix over the past two years.
Powerline business has partially offset the decrease in pipeline
work in 2021 but powerline customers are more likely to purchase
than rent mats as compared to pipeline customers. This skews Yak's
revenue toward less-profitable mat sales. More profitable mat
rental revenue fell again year-over-year in the first quarter of
2022, but we expect this to reverse over the remainder of the year
as pipeline projects typically pick up seasonally in the second and
third quarters. However, we expect U.S. pipeline project activity
will remain muted over the next two years. We expect Yak's 2022
sales will come roughly 60% from powerline, 20%-30% from pipeline,
and the remainder from industrial and renewable markets.
"The negative rating outlook reflects the risk that we could lower
our rating on Yak if the likelihood of a distressed restructuring
or payment default increases, in our view, over the next year."
S&P could lower its ratings on Yak over the next six to 12 months
if it believes:
-- A payment default over the subsequent six months is inevitable,
which could occur, for instance, if unfavorable business and
financial conditions prevent the company from repaying its
quarterly scheduled term loan amortization or its July 2023 debt
obligations; or
-- The company will likely pursue a restructuring that we consider
distressed.
S&P could raise its ratings on Yak if:
-- It addresses its near-term maturities in full and on time; and
-- S&P expects the company will not face a liquidity crunch over
the next 12 months.
ESG credit indicators: E-2, S-2, G-3
S&P siad, "Governance factors are a moderately negative
consideration in our credit rating analysis of Yak Access LLC, as
is the case for most rated entities owned by private-equity
sponsors. Platinum Equity has owned 50.1% of the company since
2018. We believe the company's highly leveraged financial risk
profile points to corporate decision-making that prioritizes the
interests of the controlling owners. This also reflects the
generally finite holding periods and a focus on maximizing
shareholder returns. Environmental factors are an overall neutral
consideration in our credit rating analysis of Yak Access LLC's mat
rental, sales, and logistics business. We believe the climate
transition is a long-term demand challenge for the U.S. midstream
industry. However, we expect electric transmission demand to
benefit from the climate transition as the grid plays an increasing
role in decarbonizing the U.S. economy."
[^] BOND PRICING: For the Week from July 18 to 22, 2022
-------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
Accelerate Diagnostics AXDX 2.500 66.100 3/15/2023
Ahern Rentals Inc AHEREN 7.375 76.725 5/15/2023
Ahern Rentals Inc AHEREN 7.375 77.537 5/15/2023
BPZ Resources Inc BPZR 6.500 3.017 03/01/2049
Basic Energy Services BASX 10.750 13.000 10/15/2023
Basic Energy Services BASX 10.750 15.000 10/15/2023
Bed Bath & Beyond Inc BBBY 3.749 44.708 08/01/2024
Buckeye Partners LP BPL 6.375 79.502 1/22/2078
Buffalo Thunder
Development Authority BUFLO 11.000 53.730 12/09/2022
Colgate-Palmolive Co CL 1.205 94.467 8/22/2042
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 20.475 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 6.625 8.940 8/15/2027
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 27.000 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 21.103 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 6.625 9.455 8/15/2027
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 21.501 8/15/2026
Diamond Sports Group
LLC / Diamond Sports
Finance Co DSPORT 5.375 32.000 8/15/2026
Diebold Nixdorf Inc DBD 8.500 48.537 4/15/2024
EnLink Midstream
Partners LP ENLK 6.000 68.000 N/A
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Energy Transfer LP ET 6.250 76.750 N/A
Enterprise Products
Operating LLC EPD 4.875 79.340 8/16/2077
Envision Healthcare EVHC 8.750 29.000 10/15/2026
Envision Healthcare EVHC 8.750 29.529 10/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 29.276 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 65.590 7/15/2023
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 29.116 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 65.590 7/15/2023
Federal Home Loan Banks FHLB 0.070 99.819 7/26/2022
Florida Power & Light NEE 1.280 91.658 03/01/2071
GNC Holdings Inc GNC 1.500 0.913 8/15/2020
GTT Communications Inc GTTN 7.875 8.250 12/31/2024
GTT Communications Inc GTTN 7.875 7.000 12/31/2024
General Electric Co GE 4.200 71.375 N/A
Goldman Sachs Group GS 5.000 88.600 N/A
Lannett Co Inc LCI 7.750 48.500 4/15/2026
Lannett Co Inc LCI 4.500 29.382 10/01/2026
Lannett Co Inc LCI 7.750 41.294 4/15/2026
MAI Holdings Inc MAIHLD 9.500 30.000 06/01/2023
MAI Holdings Inc MAIHLD 9.500 30.000 06/01/2023
MAI Holdings Inc MAIHLD 9.500 30.000 06/01/2023
MBIA Insurance Corp MBI 13.772 11.153 1/15/2033
MBIA Insurance Corp MBI 13.772 11.153 1/15/2033
Macy's Retail Holdings M 6.700 95.776 7/15/2034
Macy's Retail Holdings M 6.700 95.776 7/15/2034
Morgan Stanley MS 1.800 79.009 8/27/2036
National Commerce Corp CSFL 6.500 91.667 6/30/2027
Nine Energy Service Inc NINE 8.750 62.634 11/01/2023
Nine Energy Service Inc NINE 8.750 63.481 11/01/2023
Nine Energy Service Inc NINE 8.750 63.480 11/01/2023
OMX Timber Finance
Investments II LLC OMX 5.540 0.783 1/29/2020
Patriot National
Bancorp Inc PNBK 6.250 72.357 6/30/2028
Patriot National
Bancorp Inc PNBK 6.250 72.357 6/30/2028
Plains All American
Pipeline LP PAA 6.125 75.250 N/A
Renco Metals Inc RENCO 11.500 24.875 07/01/2003
Revlon Consumer
Products Corp REV 6.250 8.125 08/01/2024
Rolta LLC RLTAIN 10.750 1.324 5/16/2018
RumbleON Inc RMBL 6.750 46.945 01/01/2025
Sears Holdings Corp SHLD 8.000 1.070 12/15/2019
Sears Holdings Corp SHLD 6.625 3.971 10/15/2018
Sears Holdings Corp SHLD 6.625 3.971 10/15/2018
Sears Roebuck
Acceptance Corp SHLD 7.000 1.071 06/01/2032
Sears Roebuck
Acceptance Corp SHLD 7.500 1.065 10/15/2027
Sears Roebuck
Acceptance Corp SHLD 6.500 1.044 12/01/2028
Sears Roebuck
Acceptance Corp SHLD 6.750 0.558 1/15/2028
Shift Technologies Inc SFT 4.750 29.750 5/15/2026
TPC Group Inc TPCG 10.500 54.250 08/01/2024
TPC Group Inc TPCG 10.500 53.942 08/01/2024
TerraVia Holdings Inc TVIA 5.000 4.644 10/01/2019
US Renal Care Inc USRENA 10.625 40.261 7/15/2027
US Renal Care Inc USRENA 10.625 39.752 7/15/2027
Wayfair Inc W 0.375 91.494 09/01/2022
Wesco Aircraft Holdings WAIR 8.500 50.403 11/15/2024
Wesco Aircraft Holdings WAIR 13.125 31.205 11/15/2027
Wesco Aircraft Holdings WAIR 8.500 50.426 11/15/2024
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
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*********
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