/raid1/www/Hosts/bankrupt/TCR_Public/220811.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, August 11, 2022, Vol. 26, No. 222
Headlines
1300U SPE LLC: SARE Files for Chapter 11 Bankruptcy
1713 208TH STREET: SARE Files Subchapter V Case
2111 ALBANY POST: Trustee Taps Joseph A. Broderick as Accountant
2111 ALBANY POST: Trustee Taps Klestadt as Bankruptcy Counsel
24-7 INTOUCH: Moody's Ups CFR to B2, Outlook Remains Stable
8E14 NETWORKS: Ananda Files Chapter 11 With Deal to Sell to VMWare
A MEN OF SARASOTA: Seeks to Hire Blanchard Law as Counsel
ALCON CONTRACTORS: Unsecureds Will Get 10% of Claims in 60 Months
ALPHATEC HOLDINGS: Incurs $37.3 Million Net Loss in Second Quarter
ARKANSAS HOUSE: Unsecureds Will Get 0.63% of Claims over 5 Years
ASSUNCAO BROS.: In Chapter 11 to Pursue Orderly Liquidation
ATLANTIS TRANSPORTATION: Taps Nelly Gofman as Tax Preparer
AVAYA HOLDINGS: Moody's Cuts CFR to Caa2, Outlook Remains Negative
BOONE HOSPITAL: Moody's Downgrades Revenue Bond Rating to Ba3
BOY SCOUTS: Council Unloads 2 Camps to Help Pay Settlements
BULLDOG PURCHASER: S&P Affirms 'CCC+' ICR on Revolver Extension
BURNS ASSET MANAGEMENT: Quickly Returns to Chapter 11 Bankruptcy
CARNIVAL CORP: Moody's Cuts CFR to B2 & Senior Secured Debt to Ba3
CELSIUS NETWORK: Creditors Committee to Probe Insiders
CHARLES DEWEESE: Wins Cash Collateral Access Thru Aug 29
CHEFS' WAREHOUSE: Moody's Ups CFR to B2, Outlook Remains Positive
CHEMBIO DIAGNOSTICS: Incurs $6.95-Mil. Net Loss in Second Quarter
CHRISTIAN CARE: Seeks to Hire 'Ordinary Course' Professionals
COLOR GRAPHICS R US: Unsecureds to Get Share of Income for 5 Years
COMMUNITY HEALTH: Fitch Alters Outlook on 'B-' IDR to Negative
CONDADO ROYAL: October 5 Hearing on Disclosure Statement
CORSAMI GROUP: Seeks to Hire Paul Reece Marr as Bankruptcy Counsel
CPV SHORE: Moody's Lowers Rating on Senior Secured Debt to Ba3
CROWN HOLDINGS: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
DACO CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
DIOCESE OF HARRISBURG: Reaches Clergy Abuse Survivors Settlement
DLVR INC: Gets OK to Hire Osborn Maledon as Bankruptcy Counsel
EDUCATIONAL TRAVEL: Seeks $87,467 in Cash Collateral Thru Aug 31
ENJOY TECHNOLOGY: Committee Taps Fox Rothschild as Legal Counsel
ENJOY TECHNOLOGY: Committee Taps FTI as Financial Advisor
FIRST HANOVER: Plan Proposes Sale After 6 Months
FREE SPEECH: Judge Orders Jones to Pay $45 Mil. Punitive Damages
FREEPORT GATE: Gets OK to Hire Paramount Realty as Auctioneer
FREEPORT GATE: Gets OK to Hire Spence Law Office as Counsel
GISSING NORTH AMERICA: Seeks Cash Collateral, $8.8MM DIP Loan
GWG HOLDINGS: Seeks to Hire Legal Counsel for Independent Directors
H. I. D. INTERIORS: Unsecureds Will Get 14% of Claims in Plan
HEMANI HOSPITALITY: Court Confirms Reorganization Plan
HIGHLAND PROPERTY: Unsecureds Owed $57K to Get 100% of Claims
HONX INC: Future Claimants' Rep Taps FTI as Financial Advisor
INTERSTATE UNDERGROUND: Oct. 4 Plan & Disclosure Hearing Set
J BOWERS: Seeks to Hire Gertz & Rosen as Bankruptcy Counsel
J. BOWERS: Wins Cash Collateral Access Thru Aug 31
JJS LOGISTICS: Creditors to Get Proceeds From Liquidation
JUST BELIEVE RECOVERY CENTER: Joins Affiliate in Chapter 11
KC PANORAMA: Expects Full Payment Plus Interest From Sale Plan
KDR SUPPLY: Wins Cash Collateral Access on Final Basis
KOSMOS ENERGY: S&P Lowers ICR to 'B' Following Downgrade of Ghana
LADO ENTERPRISES: Case Summary & Six Unsecured Creditors
LINKMEYER PROPERTIES: Unsecureds to Get Not More Than $10K in Plan
MAVENIR PRIVATE: S&P Alters Outlook to Negative, Affirms 'B-' ICR
MGA MANAGEMENT: Unsecureds Owed $3,588 Unimpaired in Plan
MINERVA RESOURCES: Voluntary Chapter 11 Case Summary
NEOVIA LOGISTICS: Moody's Cuts CFR to Caa3, Outlook Stable
NESV ICE: Wins Continued Cash Collateral Access
NEW COAT PAINTING: Family Business Starts Subchapter V Case
NFP CORP: Moody's Assigns B1 Rating to $350MM Senior Secured Notes
NN INC: Incurs $8.6 Million Net Loss in Second Quarter
NORTH BROOKLYN: Case Summary & Four Unsecured Creditors
NORTHWEST SENIOR: Unsecureds Owed $1.5M to Get Nothing
OFF-SPEC SOLUTIONS: Owner of 79 Trucks Seeks Chapter 11 Bankruptcy
ONE AND ONE: Unsecureds' Recovery to Depend on Sale Proceeds
OUTPUT SERVICES: S&P Downgrades ICR to 'D' on Chapter 11 Filing
PARK SUPPLY: Wins Cash Collateral Access Thru Aug 15
PAVERS INC: Seeks Cash Collateral Access Thru Jan 2023
PIKE CORP: Moody's Rates $300MM First Lien Term Loan 'Ba3'
PING IDENTITY: Moody's Puts 'B1' CFR Under Review for Downgrade
PROMEDICA HEALTHCARE: S&P Lowers Debt Rating to 'BB', On Watch Neg
QUANTUM CORP: Incurs $10.2 Million Net Loss in First Quarter
REVLON INC: Committee Taps Brown Rudnick as Bankruptcy Counsel
REVLON INC: Committee Taps Houlihan Lokey as Investment Banker
REVLON INC: Committee Taps Province LLC as Financial Advisor
ROYAL CARIBBEAN: Moody's Cuts CFR to B2 & Alters Outlook to Stable
SALAD & CO: Sept. 7 Disclosure Statement Hearing Set
SASHAY SAND: Voluntary Chapter 11 Case Summary
STARLIN LLC: Taps Getzler Henrich & Associates as Financial Advisor
STRAUSS COMPANY: Sept. 22 Disclosure Statement Hearing Set
TEMPUR SEALY: S&P Alters Outlook to Negative, Affirms 'BB+' ICR
TPC GROUP: Cole Schotz, Akin Gump Update on Creditors Committee
TPC GROUP: Goldstein, Cain Advise on Johnny Reed, Anthony Amos
TPC GROUP: SBEP, Hogan Advise on TPC Litigation Claimants
TRANSDIGM INC: Dividend Announcement No Impact on Moody's B1 CFR
TRANSOCEAN LTD: Incurs $68 Million Net Loss in Second Quarter
TRIUMPH GROUP: Incurs $10.3 Million Net Loss in First Quarter
VIRGINIA TRUE: Diatomite to Get 100% Ownership in Creditor Plan
VOYAGER DIGITAL: Intends to Resume Cash Withdrawals
WAYSTAR TECHNOLOGIES: Fitch Raises LongTerm IDR to 'B'
WILDWOOD VILLAGES: Plan Trustee Taps SoldNow LLC as Auctioneer
WIRELESS SYSTEMS: October 12 Plan Confirmation Hearing Set
WISECARE LLC: Wins Cash Collateral Access Thru Oct 1
WL HOUSTONS: Unsecured Creditors Will Get 100% of Claims in Plan
WMB HOLDINGS: New First Lien Debt No Impact on Moody's 'B1' CFR
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
1300U SPE LLC: SARE Files for Chapter 11 Bankruptcy
---------------------------------------------------
1300U SPE, LLC filed for chapter 11 protection without stating a
reason.
The Debtor, a Single Asset Real Estate, says its principal asset is
located at 1300 U Street Sacramento, CA 9581.
An affiliate, 12th & K St. Mall Partners, LLC, filed for Chapter 11
bankruptcy (Case No. 22-10061) on Jan. 6, 2022. In addition, its
managing member, Robert Wade Clippinger, filed on Oct. 27, 2020
(Case No. 20-19660) but the case has been dismissed.
According to court documents, 1300U SPE LLC estimates between 1 and
49 creditors. The petition states funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Sept. 7, 2022 at 11:00 AM at UST-LA2, TELEPHONIC MEETING.
CONFERENCE LINE: 1-866-816-0394, PARTICIPANT CODE:5282999.
About 1300U SPE LLC
1300U SPE LLC is a Single Asset Real Estate (as defined in 11
U.S.C. § 101(51B))
1300U SPE LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-14236) on August 4,
2022. In the petition filed by Robert W. Clippinger, as managing
member, the Debtor reported assets between $10 million and $50
million and liabilities between $1 million and $10 million.
Matthew D. Resnik, of RHM Law LLP, is the Debtor's counsel.
1713 208TH STREET: SARE Files Subchapter V Case
-----------------------------------------------
1713 208th Street E LLC has sought bankruptcy protection in
Washington. The Debtor filed as a small business debtor seeking
relief under Subchapter V of Chapter 11 of the Bankruptcy Code.
The Debtor disclosed $604,400 in assets against $556,730 in
liabilities in its schedules. The Debtor primarily owns real
property located at 1713 208th Street East, Spanaway, WA 98387.
According to court filings, 1713 208th Street E estimates between 1
and 49 creditors. The petition states that funds will not be
available to unsecured creditors.
About 1713 208th Street E, LLC.
1713 208th Street E, LLC is a Single Asset Real Estate (as defined
in 11 U.S.C. Sec. 101(51B)).
The Debtor filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No.
22-40968) on Aug. 5, 2022. In the petition filed by Dwayne
Johnson, as president, the Debtor reported assets between $500,000
and $1 million and liabilities between $500,000 and $1 million.
Virginia A. Burdette has been appointed as Subchapter V trustee.
2111 ALBANY POST: Trustee Taps Joseph A. Broderick as Accountant
----------------------------------------------------------------
Fred Stevens, the Chapter 11 trustee for 2111 Albany Post Road
Corp., seeks approval from the U.S. Bankruptcy Court for the
Southern District of New York to employ Joseph A. Broderick, PC as
his accountant.
The firm's services include:
a. reviewing and analyzing documents for potential causes of
action, including preferential transfers and fraudulent
conveyances;
b. assisting the trustee in preparing monthly operating
reports or cash receipts and disbursements reports;
c. preparing capital gains analysis;
d. preparing tax returns; and
e. assisting with such other matters as the trustee or his
counsel may request from time to time.
The firm will charge these hourly fees:
Partners $350
Seniors $190
Staff $100
Joseph Broderick, a certified public accountant and sole owner of
the firm, disclosed in a court filing that his firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Joseph A. Broderick, CPA
Joseph A. Broderick, PC
734 Walt Whitman Rd
Melville, NY 11747
Phone: +1 631-462-1779
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.
Judge Sean H. Lane oversees the case.
Anne J. Penachio, Esq., at Penachio Malara, LLP is the Debtor's
legal counsel.
Fred Stevens, the court-appointed Chapter 11 trustee, tapped
Klestadt Winters Jureller Southard & Stevens, LLP and Joseph A.
Broderick, PC as his legal counsel and accountant, respectively.
2111 ALBANY POST: Trustee Taps Klestadt as Bankruptcy Counsel
-------------------------------------------------------------
Fred Stevens, the Chapter 11 trustee for 2111 Albany Post Road
Corp., seeks approval from the U.S. Bankruptcy Court for the
Southern District of New York to employ Klestadt Winters Jureller
Southard & Stevens, LLP as his legal counsel.
The firm's services include:
a. advising the trustee on issues involving the operation of
the Debtor's properties, including without limitation, obtaining
insurance, collecting rent, and analyzing the Debtor's leases;
b. analyzing all agreements between the Debtor and its secured
creditors and analyzing corresponding secured claims, as well as
claims of other creditors;
c. meeting with creditors, owners, contract parties and other
principal parties in the case;
d. preparing, negotiating and seeking approval of the most
optimal and expedient exit strategy for the Debtor;
e. investigating the Debtor's assets and financial affairs
and determining whether there are assets or claims against third
parties that can be administered for the benefit of the estate and
its creditors;
f. reviewing and responding, as necessary, to all legal
papers filed with the court in the Debtor's Chapter 11 case;
g. represent' the trustee at all hearings and other
proceedings before the bankruptcy court or any other court; and
h. performing other necessary legal services for the trustee.
The firm's attorneys and paralegals will be paid at hourly rates as
follows:
Partners $595 to $825 per hour
Associates $425 to $475 per hour
Paralegals $195 per hour
Brendan Scott, Esq., at Klestadt, 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:
Brendan M. Scott, Esq.
Klestadt Winters Jureller Southard & Stevens, LLP
200 West 41st Street, 17th Floor
New York, NY 10036
Telephone: (212) 972-3000
Facsimile: (212) 972-2245
Email: bscott@klestadt.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.
Judge Sean H. Lane oversees the case.
Anne J. Penachio, Esq., at Penachio Malara, LLP is the Debtor's
legal counsel.
Fred Stevens, the court-appointed Chapter 11 trustee, tapped
Klestadt Winters Jureller Southard & Stevens, LLP and Joseph A.
Broderick, PC as his legal counsel and accountant, respectively.
24-7 INTOUCH: Moody's Ups CFR to B2, Outlook Remains Stable
-----------------------------------------------------------
Moody's Investors Service upgraded 24-7 Intouch Inc.'s corporate
family rating to B2 from B3, probability of default rating to B2-PD
from B3-PD, and senior secured first lien term loan and revolving
credit facility ratings to B1 from B2, and senior secured second
lien term loan rating to Caa1 from Caa2. The outlook remains
stable.
"The rating action reflects improvement in Intouch's financial
performance, good track record of deleveraging following
acquisitions, and Moody's view that the company's leverage will be
sustained below 4.5x over the next 12-18 months" said Aziz Al
Sammarai, Moody's Analyst.
Upgrades:
Issuer: 24-7 Intouch Inc.
- Corporate Family Rating, Upgraded to B2 from B3
- Probability of Default Rating, Upgraded to B2-PD from B3-PD
- Gtd Senior Secured 1st Lien Term Loan, Upgraded to B1 (LGD3)
from B2 (LGD3)
- Gtd Senior Secured 1st Lien Revolving Credit Facility,
Upgraded to B1 (LGD3) from B2 (LGD3)
- Gtd Senior Secured 2nd Lien Term Loan, Upgraded to Caa1 (LGD5)
from Caa2 (LGD5)
Outlook Actions:
Issuer: 24-7 Intouch Inc.
- Outlook, Remains Stable
RATINGS RATIONALE
Intouch's B2 CFR is constrained by its small scale, low barriers to
entry that allows for an easy replication of the company's business
strategy and for increased competition from new and existing
players, tendency for debt-funded acquisitions, and private equity
ownership with potential for shareholder friendly transactions.
The rating benefits from favorable EBITDA margins compared to
industry peers supported by disciplined pricing strategy, Moody's
expectation that leverage will remain around 4x in the next 12-18
months, good operating track record with a diverse client base that
value Intouch's ability to represent their brand culture to
customers, and good liquidity.
Intouch has good liquidity over the next year. Sources total about
$155 million, consisting of cash on hand of $25 million as of March
2022, Moody's expectation of about $30 million positive free cash
flow over the next 4 quarters (after principle lease and debt
payments), and full availability under its $80 million revolving
credit facility expiring in 2025. Uses are about $24 million over
the next 12 months, mainly in the form of mandatory term loan
amortizations and one-time earnout payment. The secured revolver is
subject to a springing first lien net leverage covenant when more
than 30% is drawn. If sprung, the company will have good cushion
under its revolving credit facility covenant. Alternate liquidity
is limited given that the company does not have sizeable tangible
assets that it could sell.
The stable outlook reflects Moody's expectation that Intouch will
be able to offset cost inflation pressure by growing EBITDA
organically keeping debt to EBITDA around 4x over the next 12-18
months.
Intouch has two classes of debt benefitting from both parent and
subsidiary guarantees: (1) senior secured first lien $350 million
term loan due 2025 and senior secured first lien $80 million
revolving credit facility due 2025, and (2) senior secured second
lien $140 million term loan due 2026. The security on both classes
of debt includes priority on substantially all assets of Intouch
and its guarantors. The first lien facilities are rated B1, one
notch above the B2 CFR, reflecting their first priority claim in
the assets and the loss absorption provided by the second lien
debt. The second lien debt is rated below the CFR at Caa1
reflecting its junior position in the capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A ratings upgrade could be considered if the company is able to
meaningful grow scale, debt to EBITDA is maintained below 3.5x, FCF
(free cash flow) to debt rises above 10%, maintenance of stable
margins and conservative financial policies, and good track record
of deleveraging following debt-fund acquisitions.
A ratings downgrade could be considered if debt to EBITDA is
sustained above 5x, FCF to debt sustained below 5%, margins fall on
a sustained basis, liquidity weakens, or top customers do not renew
contracts.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
24-7 Intouch Inc., a private company domiciled in Winnipeg, Canada,
provides outsourced customer care contact center services including
multi-channel alternatives such as chat, text, email and social
media, but also voice. Intouch generated $558 million in sales for
the twelve months ended in March 2022.
8E14 NETWORKS: Ananda Files Chapter 11 With Deal to Sell to VMWare
------------------------------------------------------------------
8e14 Networks Inc. d/b/a Ananda Networks, filed for chapter 11
protection in the District of Delaware. The Debtor filed as a
small business debtor seeking relief under Subchapter V of Chapter
11 of the Bankruptcy Code.
The Debtor operates a software company focused on the development
and
commercialization of security features, including virtual private
network connections, authentication tools, and encryption
capabilities, amongst other features.
According to court filings, 8E14 Networks Inc. estimates between 50
and 99 unsecured creditors. The petition states funds will be
available to unsecured creditors.
As of the Petition Date, the Debtor's liabilities consisted of a
secured loan extended by Venture Lending & Leasing IX, Inc., in the
amount of approximately $1.4 million, SAFE notes issued by the
Debtor in the amount of approximately $650,000, convertible notes
issued by the Debtor in the amount of approximately $6.3 million,
and other obligations of the Debtor in the amount of approximately
$1.6 million.
Over the past few months, the Debtor's management determined that
the Debtor would have a critical need for working capital in order
to continue operating and bridge to a sale of substantially all its
assets.
To finance the Chapter 11 case, VMware, Inc., has agreed to provide
the Debtor with DIP financing of up to $2 million.
VMware is also party to a stalking horse asset purchase agreement
(the "Stalking Horse APA") that provides for the sale of
substantially all of the Debtor's assets pursuant to section 363 of
the Bankruptcy Code. The Stalking Horse APA contemplates that the
bid contained therein will be subject to higher and better bids in
accordance with sale procedures to be submitted to the Bankruptcy
Court for approval in the coming days. The Debtor anticipates that
the $12.5 million in sale proceeds to be paid by the VMWare
pursuant to the Stalking Horse APA will greatly exceed the amount
of the Prepetition Loan, and may, in fact, be sufficient to satisfy
all claims against the Debtor's estate in full.
About 8e14 Networks Inc
8e14 Networks Inc. -- https://www.ananda.net/ -- doing business as
Ananda Networks, is a Cyber Security company that builds a network
that is fast and secure, replacing old cybersecurity and networking
products.
8e14 Networks Inc. filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Case No. 22-10708) on August 4, 2022. In the petition filed by Adi
Ruppin, as chief executive officer, the Debtor reported assets and
liabilities between $10 million and $50 million each.
Jami B Nimeroff has been appointed as Subchapter V trustee.
Matthew P. Ward, of Womble Bond Dickinson (US) LLP, is the Debtor's
counsel.
A MEN OF SARASOTA: Seeks to Hire Blanchard Law as Counsel
---------------------------------------------------------
The A Men of Sarasota, Inc. seeks approval from U.S. Bankruptcy
Court for the Middle District of Florida to hire Blanchard Law,
P.A. to serve as legal counsel in its Chapter 11 case.
Blanchard Law will charge $300 to $350 per hour for attorney's
services and $100 per hour for paralegal services. In addition, the
firm will seek reimbursement for its out-of-pocket expenses.
The firm received from the Debtor a retainer of $14,000, plus the
filing fee of $1,738.
Jake Blanchard, Esq., a partner at Blanchard Law, 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:
Jake C. Blanchard, Esq.
Blanchard Law, P.A.
1501 Belcher Road South Unit 6B
Largo, FL 33771
Tel: (727) 531-7068
Fax: (727) 535-2086
Email: jake@jakeblanchardlaw.com
About The A Men of Sarasota
Established in 2006 by Dr. Nicholas J. Angelastro, The A Men of
Sarasota Inc., doing business as Heal Strong, is family owned and
operates as a healthcare service provider in Sarasota, Fla. On the
Web: http://www.healstrongdoc.com/
The A Men of Sarasota filed a petition for relief under Subchapter
V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case
No. 22-02849) on July 15, 2022, listing $100,000 to $500,000 in
assets and $1 million to $10 million in liabilities. Amy Denton
Mayer has been appointed as Subchapter V trustee.
Jake C. Blanchard, Esq., at Blanchard Law, P.A. is the Debtor's
counsel.
ALCON CONTRACTORS: Unsecureds Will Get 10% of Claims in 60 Months
-----------------------------------------------------------------
Alcon Contractors LLC filed with the U.S. Bankruptcy Court for the
Western District of Texas a Plan of Reorganization under Subchapter
V dated August 8, 2022.
Initially, Debtor had just focused on residential site preparation.
In 2019, Debtor elected to venture into the commercial site
preparation market. The commercial market proved to be quite
competitive and the margins earned by the Debtor was less than
expected.
Additionally, the commercial market proved to be a slower paying
market which resulted in Debtor's cash flow problem. During that
time, Debtor had to result to borrowing money from merchant
lenders. Once these loans went into repayment Debtor was unable to
keep up with its other obligations.
In May of 2022, a merchant account lender resumed collection
activity against the Debtor and issued a levy on Debtor's bank
accounts. Debtor was left with no choice other than file another
chapter 11 bankruptcy. The Debtor is optimistic that the
significant advantages available under Subchapter V provide a
better opportunity to address outstanding obligations debt and
finally resolve the same.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow generated by net income generated by the operation
of Debtor's business. The Debtor plans to pay-off 10% of its
existing general unsecured creditor liabilities. All allowed
administration expenses, secured claims and priority unsecured
claims will be paid in full.
The Plan will treat claims as follows:
* Class 1 consists of Priority Tax Claims. Claim to be paid in
by monthly payments over the 60-month term of the Plan.
* Class 2 consists of the Secured Claim of U.S. Small Business
Administration. Claim to be paid as a secured claim to the extent
of the value of its collateral ($248,338.80) with interest at the
contract (3.75%) in monthly installments of $1,190.87) for the
remaining term of the contract (338 months). The remaining claim
amount shall be treated as a Class 5 Non-priority Unsecured Claim.
* Class 3 consists of the Secured Equipment Claims. Claims
will be paid in full over the 60-month term of the Plan with
interest at 6.5%.
* Class 4 consists of the Secured Claim of Bexar County. To be
paid in full at the Effective Date.
* Class 5 consists of Non-priority Unsecured Claims. All
claims to be paid in prorata monthly payment in a variable amount
over the 60- month term of the Plan for a total amount of
$78,517.20, or 10% of the unsecured claims total.
Debtor has sufficient cash flow to meet the obligation of monthly
plan payments in the amount of $6,100.00.
A full-text copy of the Plan of Reorganization dated August 8,
2022, is available at https://bit.ly/3BUXmFu from PacerMonitor.com
at no charge.
Attorney for Debtor:
Villa & White LLP
1100 NW Loop 410 #700
San Antonio, Texas 78213
(210)225-4500 Telephone
(210) 212-4649 Facsimile
Morris E. "Trey" White III
Texas Bar No. 24003162
treywhite@villawhite.com
About Alcon Contractors
Alcon Contractors -- https://www.alconcontractorstx.com/ -- is a
leader in the field for quality construction.
Alcon Contractors LLC sought Chapter 11 bankruptcy protection
(Bankr. W.D. Tex. Case No. 22-50498) on May 9, 2022. In the
petition filed by Mark Garcia, as manager, Alcon Contractors
reported assets up to $50,000 and estimated liabilities between $1
million and $10 million.
The case is overseen by Chief Bankruptcy Judge Craig A Gargotta.
Morris E. "Trey" White III, Esq., of VILLA & WHITE LLP, is the
Debtor's counsel.
ALPHATEC HOLDINGS: Incurs $37.3 Million Net Loss in Second Quarter
------------------------------------------------------------------
Alphatec Holdings, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $37.32 million on $84.15 million of total revenue for the three
months ended June 30, 2022, compared to a net loss of $38.21
million on $62.25 million of total revenue for the three months
ended June 30, 2021.
For the six months ended June 30, 2022, the Company reported a net
loss of $80.16 million on $155.08 million of total revenue compared
to a net loss of $61.11 million on $106.37 million of total revenue
for the six months ended June 30, 2021.
As of June 30, 2022, the Company had $511.93 million in total
assets, $121.31 million in total current liabilities, $313.40
million in long-term debt, $27.34 million in operating lease
liabilities (less current portion), $15.75 million in other
long-term liabilities, $23.60 million in redeemable preferred
stock, and $10.54 million in total stockholders' equity.
"By focusing on the entire surgical procedure and investing to
obviate clinical variability, we are bringing increased
predictability and reproducibility to spine surgery and fueling
sector-leading growth," said Pat Miles, chairman and chief
executive officer. "That growth has enabled us to begin to lever
sales channel investments while expanding our geographic footprint.
At our Investor Day in May, we shared a long-term financial
outlook that included a 23% revenue CAGR toward $555 million in
2025 and positive adjusted EBITDA in 2023. We are executing
against those commitments and I am confident that years of
sustainable growth and scale lie ahead."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1350653/000095017022014850/atec-20220630.htm
About Alphatec Holdings
Alphatec Holdings, Inc. (ATEC) (www.atecspine.com), through its
wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp
Surgical, Inc., is a medical device company dedicated to
revolutionizing the approach to spine surgery through clinical
distinction. ATEC architects and commercializes approach-based
technology that integrates seamlessly with the SafeOp Neural
InformatiX System to provide real-time, objective nerve information
that can enhance the safety and reproducibility of spine surgery.
Alphatec reported a net loss of $144.33 million for the year ended
Dec. 31, 2021, a net loss of $78.99 million for the year ended Dec.
31, 2020, a net loss of $57 million for the year ended Dec. 31,
2019, and a net loss of $28.97 million for the year ended Dec. 31,
2018.
ARKANSAS HOUSE: Unsecureds Will Get 0.63% of Claims over 5 Years
----------------------------------------------------------------
Arkansas House Works, Inc., submitted an Amended Plan of
Reorganization for Small Business dated August 8, 2022.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $3,460.
This Plan of Reorganization proposes to pay creditors of the Debtor
from future income.
Class 2 consists of the secured claim filed by Southern Bancorp
Bank in the amount of $110,553.98. This claim is secured by a
mortgage encumbering 130 E. Hwy 171, Hot Springs, AR 71913. The
secured claim of Southern shall be paid in full at 5.00% interest
with 60 consecutive monthly payments of principal and interest in
the amount of $2,086.29. Debtor shall keep all future real property
taxes paid on or before October 15th of each year of this plan.
The Debtor shall provide annual proof of Property Hazard Insurance
covering risks of loss for the 130 E. Hwy 171 property in an amount
to be sufficient to protect Southern and keep such property
insurance in full force and effect during the term of this Plan.
The premiums for said Property Hazard Insurance shall also be paid
by the Debtor and maintained in a regular manner during the term of
this Plan. Collection against any co-debtor or personal guarantor
shall be prohibited after confirmation of the Plan provided that
debtor is not in default with the terms of the Plan.
Class 3 consists of the secured claim filed by Citizens Bank
("Citizens 1") in the amount of $181,880.87. This claim is secured
by a lien on inventory, materials, liens, and equipment of the
debtor. The secured claim of Citizens 1 shall be paid the value of
the equity in the collateral securing the claim in the amount of
$181,880.87 at 4.50% interest with 60 consecutive monthly payments
of principal and interest in the amount of $3,390.81. The remaining
portion of the claim shall be allowed as a general unsecured
claim.
Class 4 class consists of the secured claim of Citizens Bank
("Citizens 2") in the amount of $520,957.81. This claim is secured
by a mortgage encumbering 130 E. Hwy 171, Hot Springs, AR 71913, in
addition to a lien on inventory, materials, liens and equipment of
the debtor, and is cross-collateralized with two other secured
claims held by this creditor. The secured claim of Citizens 2 shall
be paid the value of the remaining equity in its collateral in the
amount of $418,119.13 at 5.50% interest, with 60 consecutive
monthly payments of principal and interest in the amount of
$7,986.56. The remaining portion of the claim shall be allowed as a
general unsecured claim.
Class 6 consists of the allowed general unsecured, non-priority
claims, in the approximate amount of $548,712.23 and includes any
amounts of secured claims that exceed the value of the collateral
securing the claim. Debtor estimates that there will be a dividend
pool accumulated over the next 5 years of the Plan in the amount of
$3,459.60. Therefore, unsecured creditors will receive 0.63%
distribution on their claims. Any general unsecured claims not
presented to the court within that time frame are subject to
non-payment under Class 10. Existing filed unsecured claims do not
have to be refiled.
Equity security holders will retain their equity interest in the
property of the estate.
Upon confirmation, Debtor shall be charged with administration of
the case. Nicholas Chaich will continue to perform his current
position as President of Arkansas House Works, Inc., and payments
for the plan will be made from cash flow from this business. Debtor
may maintain bank accounts under the confirmed Plan in the ordinary
course of business. Debtor may also pay ordinary and necessary
expenses of the administration of the Plan in due course.
A full-text copy of the Amended Plan of Reorganization dated August
8, 2022, is available at https://bit.ly/3Pfd29p from
PacerMonitor.com at no charge.
Attorney for the Plan Proponent:
Marc Honey, Esq.
Jennifer Wyse, Esq.
Alexandra Honey, Esq.
Honey Law Firm, P.A.
PO Box 1254
Hot Springs, AR 71902
Tel: (501) 321-1007
Email: mhoney@honeylawfirm.com
About Arkansas House Works
Arkansas House Works, Inc. filed a petition under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. W.D. Ark. Case No.
22-70114) on Feb. 2, 2022, listing up to $50,000 in assets and up
to $1 million in liabilities. Beverly I. Brister, Esq., serves as
the Subchapter V trustee.
Judge Bianca M. Rucker oversees the case.
Marc Honey, Esq., at Honey Law Firm, P.A. and Thompson &
Associates, PLLC serve as the Debtor's legal counsel and
accountant, respectively.
ASSUNCAO BROS.: In Chapter 11 to Pursue Orderly Liquidation
-----------------------------------------------------------
Assuncao Bros. Inc. filed for chapter 11 protection in the District
of New Jersey. The Debtor filed as a small business debtor seeking
relief under Subchapter V of Chapter 11 of the Bankruptcy Code.
The Debtor is a multi-generational family-run business that was
founded in 1958 by Diamantino Assuncao and my uncle, Manuel
Assuncao, that began by installing foundations for homes and all
facets of masonry work. Diamantino's son, Martin Assuncao, is
presently president and 100% owner of the Debtor.
The Debtor specializes in concrete work, including, but not limited
to curb, sidewalk, bridge, barriers, and slabs. The Debtor's
principal place of business is located at a leased property at 29
Wood Avenue, Edison, New Jersey 08820, which consists of office,
warehouse space, and equipment yard.
As of the Petition Date, the Debtor employed 23 employees.
As of the Petition Date, and based in part on the Debtor's most
recent unaudited balance sheet through July 31, 2022, the Debtor
has total assets worth approximately $4.3 million inclusive of
accounts receivable on numerous executory construction contracts,
and total liabilities of approximately $7.6 million, inclusive of
disputed, unliquidated, and contingent claims.
Martin Assuncao notes that the Debtor is a family-run business that
has operated for approximately 64 years. Unfortunately, the
Debtor, like so many other businesses, experienced extraordinary
challenges and setbacks over the last 24 months due to the COVID-19
pandemic which resulted in delays starting projects and disruption
in management of projects by having to replace managers and workers
that were unfamiliar with the projects.
In addition, the Debtor initiated aggressive bidding to win
projects and was subject to losses, miscalculations, and
unprofitable jobs. The Debtor also hired new financial management
which led to significant errors in reporting and mis-projecting
profit and losses on jobs.
Additionally, several creditors have initiated litigation against
the Debtor and/or alleged guarantors, including NGM, American
Express, a vendor/supplier, and others.
While it has potential for a bright future, the Debtor believes an
orderly liquidation through bankruptcy is necessary at this time to
enable the Debtor to shed its burdens and effectuate an orderly
transition to a new owner that will help it realize its full
potential.
According to court filings, Assuncao Brs. estimates between 200 and
999 creditors. The petition states that funds will be available to
unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Sept. 1, 2022, 12:00 PM at Telephonic. Proofs of claim are due by
Oct. 12, 2022.
About Assuncao Bros. Inc.
Assuncao Bros. Inc. is a concrete contractor based in Edison, New
Jersey.
Assuncao Bros. Inc. filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D.N.J.
Case No. 22-16159) on August 4, 2022. In the petition filed by
Martin Assuncao, as president an CEO, the Debtor reported assets
and liabilities between $1 million and $10 million.
Scott S. Rever has been appointed as Subchapter V trustee.
Joseph J. DiPasquale, of Fox Rothschild, LLP, is the Debtor's
counsel.
ATLANTIS TRANSPORTATION: Taps Nelly Gofman as Tax Preparer
----------------------------------------------------------
Atlantis Transportation Services, Inc. seeks approval from the U.S.
Bankruptcy Court for the Eastern District of New York to hire Nelly
Gofman, P.A. to prepare its corporate income tax returns.
The firm will be paid at the rate of $1,200 per income tax return.
The yearly cost of services is estimated at $1,200.
As disclosed in court filings, Nelly Gofman is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Nelly Gofman
Nelly Gofman, P.A.
2216 Avenue X
Brooklyn, NY 11235
Phone: (718) 743-5357
About Atlantis Transportation
Atlantis Transportation Services, Inc. filed a petition for Chapter
11 protection (Bankr. E.D. N.Y. Case No. 22-40111) on Jan. 21,
2022, listing up to $50,000 in assets and up to $500,000 in
liabilities. Izrailov Karen, president, signed the petition.
Judge Elizabeth S. Stong oversees the case.
The Debtor tapped the Law Offices of Alla Kachan, P.C. as legal
counsel; Wisdom Professional Services, Inc. as accountant; and
Nelly Gofman, P.A. as tax preparer.
AVAYA HOLDINGS: Moody's Cuts CFR to Caa2, Outlook Remains Negative
------------------------------------------------------------------
Moody's Investors Service downgraded the Corporate Family Rating
of Avaya Holdings Corp. ("Avaya") to Caa2 from B3 following the
company's recent quarterly results, reflecting the company's
unsustainable capital structure and heightened governance risk.
Moody's also downgraded Avaya's Probability of Default Rating to
Caa2-PD from B3-PD. The Speculative Grade Liquidity (SGL) rating of
SGL-2 is changed to SGL-4, reflecting a weakened liquidity profile
going forward. Concurrently, Moody's downgraded Avaya Inc.'s (a
debt issuing subsidiary of Avaya) senior secured debt instrument
rating to Caa2 from B3. The outlook for both Avaya Holdings Corp.
and Avaya Inc. is negative.
Downgrades:
Issuer: Avaya Holdings Corp.
Corporate Family Rating, Downgraded to Caa2 from B3
Probability of Default Rating, Downgraded to Caa2-PD from B3-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-4 from
SGL-2
Issuer: Avaya Inc.
Senior Secured Bank Credit Facility, Downgraded to Caa2 (LGD3)
from B3 (LGD3)
Senior Secured Regular Bond/Debenture, Downgraded to Caa2 (LGD3)
from B3 (LGD3)
Outlook Actions:
Issuer: Avaya Holdings Corp.
Outlook, Remains Negative
Issuer: Avaya Inc.
Outlook, Remains Negative
RATINGS RATIONALE
Avaya's Caa2 CFR reflects the company's unsustainably high
financial leverage, sustained cash burn, and increased near term
performance challenges that may worsen substantially as customers
reassess Avaya's financial standing. Investigations surrounding the
company's reporting of fiscal 2022 third quarter results in
conjunction with June's debt refinancing, withdrawal of guidance,
and delay in filing its Form 10-Q underpin very highly negative
governance risk and uncertainty of the company's ongoing operating
turnaround. Free Cash Flow (FCF) is projected to remain severely
negative on the order of ($275) million to ($325) million over the
next 18 months, straining liquidity. These estimates are highly
uncertain given recent performance deterioration and lack of
forward guidance from the company. Avaya may need to rely on its
$200 million ABL revolver to meet basic cash needs that exceed
balance sheet cash, and could face a cash shortfall in the absence
of alternate sources of liquidity, which are limited.
Avaya reported results for fiscal 3Q22 that are materially worse
than guidance provided in May and relied upon by investors in
conjunction with the company's refinancing launched at the end of
June, corresponding with the end of the third fiscal quarter. Avaya
did not take questions on the earnings call and did not update its
previously withdrawn guidance. Concurrently, Avaya said the Audit
Committee of its Board of Directors has commenced an internal
investigation to review circumstances surrounding its 3Q22
financial results while separately commencing an internal
investigation related to a whistleblower letter, the subject of
which has not been disclosed. Moody's assessment of governance
risks is now very highly negative in light of these developments
and are a key consideration in today's rating actions.
While the June refinancing improved Avaya's maturity profile and
liquidity position, the company said it is currently engaging
advisors to assess its options with respect to addressing the 2023
convertible notes, casting doubt on prior assumptions regarding the
funding of the notes' maturity. An aggregate of approximately $221
million principal of the convertible senior notes due 2023 remains
outstanding, with a corresponding amount of restricted cash held in
escrow. The company reported unrestricted cash and cash equivalents
of $404 million pro forma to the $600 million refinancing. Moody's
increasingly doubts Avaya will maintain at least $150 million of
cash on hand and attain breakeven free cash flow in H2 2023/H1
2024, as previously expected.
The negative outlook reflects Moody's view that the probability of
default remains elevated, driven by substantially weaker operating
performance may lead to unsustainable, accelerating cash burn over
the near term and cash balances dropping below minimum operating
levels. Avaya's announced cost restructuring measures may be
insufficient to offset top line pressure and could lead to
operational missteps and customer losses. Indeed, the company
said it has determined there is substantial doubt about its ability
to continue as a going concern. Given its operating performance and
governance risks, Avaya may not be able to access financing markets
to fund sustained cash flow deficits, increasing the likelihood of
a default, including bankruptcy or a distressed restructuring.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Avaya's ratings could be downgraded if operational performance
worsens materially and/or investigations surrounding the company's
financial results and the separate whistleblower letter lead to
material penalties or litigation, liquidity falls below minimum
operating levels, all leading to an increased likelihood of a debt
restructuring including bankruptcy and distressed exchange or
payment default.
While unlikely in the near term, Avaya's ratings could be upgraded
if investigations surrounding the company's financial results and
the separate whistleblower letter are resolved without significant
material findings, operational performance in terms of revenue
growth and margin directionally improve towards levels consistent
with the 1H FY2022, and as a result liquidity improves materially
such that unrestricted cash balances are expected to be maintained
above minimum operating levels.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) CONSIDERATIONS
Avaya's ESG Credit Impact Score is very highly negative, reflecting
its heightened exposure to governance risk related to its financial
strategy & risk management, management credibility & track record,
and compliance & reporting. Exposure to social risks is moderately
high and could negatively pressure its ratings if they are not
properly mitigated in a timely and consistent manner. Avaya's
exposure to environmental risks are low and not expected to
influence its credit ratings over time.
Avaya's environmental risk exposure is low over the long term.
Avaya generates the majority of its revenues through software
solutions and services, which has limited exposure to environmental
risks.
Avaya's exposure to social risks is moderately negative over the
longer term, including moderate risks arising from the dependence
on highly skilled technical and engineering talent characteristic
of the sector broadly. Additionally, Avaya's call center services
are ingrained within the client facing operations of its customers
operations and elevates the exposure to customer relationship
risks. Moody's views Avaya's exposure to demographic and societal
trends as moderately negative, citing the rapid change in the work
environment and heightened levels of competition and industry
consolidation as key potential risks over the longer terms.
Avaya's exposure to governance related risk is very highly negative
and constrains Avaya's rating. The company has not provided
reliable public guidance and its management credibility and
compliance & reporting is severely curtailed in light of
investigations into its financial resorts corresponding with its
recent refinancing. Additionally, the company's CEO was removed and
replaced. Avaya's organizational structure and board structure
typical of a publicly listed company only partially mitigates
governance risk.
Avaya Inc. provides software products and solutions to improve and
simplify communication and collaboration between internal
stakeholders through the Unified Communications and Collaboration
segment (UC) and/or with external customers through the Contact
Center segment (CC). Only 11% of current revenue is derived from
hardware. Additionally, Avaya provides ancillary services ranging
from initial planning and design, to implementation and
integration, to ongoing managed operations, optimization, training
and support. The company generated GAAP revenues of roughly $2.9
billion for the last twelve months ending March 31, 2022.
The principal methodology used in these ratings was Diversified
Technology published in February 2022.
BOONE HOSPITAL: Moody's Downgrades Revenue Bond Rating to Ba3
-------------------------------------------------------------
Moody's Investors Service has downgraded Boone Hospital Center's
(MO) (BHC) revenue bond rating to Ba3 from Ba1. The outlook remains
negative. The system had approximately $70 million of debt
outstanding as of fiscal year 2021.
RATINGS RATIONALE
The downgrade to Ba3 reflects the continued and material
deterioration of unrestricted cash, along with simultaneous
operational challenges facing BHC. Operating headwinds, along with
recent turnover in senior management, will contribute to challenges
in attaining performance improvements. These headwinds will include
elevated labor and supply costs, partly raised by supply chain
system implementation issues, and volume disruption, which has been
exacerbated by the on-going pandemic, as well as the absence of
state or federal funds in 2022. Along with management changes, BHC
will continue to face elevated startup costs as an independent
hospital given its recent termination of a long-term management
agreement with BJC Healthcare; this is viewed as a governance risk
under Moody's ESG classification. These issues in aggregate will
drive substantial operating losses over the next few years as the
system pares down labor and supply costs. While BHC's still
adequate cash levels will provide some cushion over the coming
year, Moody's anticipates continued material deterioration in cash
by the end of fiscal 2022 given the magnitude of operating losses
and payback of Medicare accelerated payments. Favorable factors
supporting the Ba3 rating include BHC's competitive advantage as a
regional tertiary referral center and relatively low Medicaid
levels. The rating also incorporates Moody's expectation that a
covenant breach is not likely over the coming year given the
inclusion of a special debt service reserve fund to cover debt
service shortfall and carve-outs for transfers to fund hospital
operations in the debt service coverage calculation.
RATING OUTLOOK
The negative outlook reflects material and multiple risks that
could result in greater than expected operating losses and cash
declines during the remainder of 2022 and beyond. However, Moody's
expects that cash to debt will remain comfortably over 1.0 times
through fiscal 2022. Greater than expected operating losses in
fiscal 2022 or inability to show material gains in operating cash
flow will likely pressure the rating. Additionally, the outlook
expects an unqualified fiscal 2021 audit for BHC.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
Materially improved and durable operating cash flow
margins
Significantly improved cash levels and metrics
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
Greater than anticipated losses in fiscal 2022 or inability
to materially improve operating cash flow
Greater than anticipated deterioration of cash levels, such
that unrestricted cash to debt falls below 1.0 times coverage
Inability to attain volume recovery or loss of market share
Additional debt
LEGAL SECURITY
The bonds are an obligation of the Board of Trustees of Boone
County Hospital (the Board of Trustees). The bonds are solely
payable from and secured by the net income and revenues collected
by the Board of Trustees from the operation of the hospital,
essentially the lease payment received by the Board from CH Allied
Services (CHAS), the operator and lessee of Boone Hospital Center.
The existing bonds are not considered debt of the hospital, Lessee
(CHAS) or Boone County. Pursuant to County Hospital Law, the Board
of Trustees maintains a separate account designated as the Hospital
Maintenance Fund. The County and the Board of Trustees will
covenant to administer and allocate all moneys held in the Hospital
Maintenance Fund in the following order so long as the Bonds remain
outstanding and unpaid: (a) to pay the reasonable and current costs
of operating and maintaining hospital facilities (provided, however
that during the term of the Lease, the Lessee is responsible for
maintaining the hospital); (b) to pay debt service on bonds; (c) to
maintain a debt service reserve account or accounts; (d) to be used
for any lawful purpose under the County Hospital Law, all as more
particularly set forth in the Indenture.
Financial covenants include a 1.1 times debt service coverage
requirement. The covenant is measured on the financial statements
of the Board of Trustees at fiscal year end. Per the MTI, one-time
transfers to hospital are added back as special items when
calculating the debt service coverage. Additionally, the system
maintains $32.6 million in the special debt service fund, which
provides additional coverage for debt service shortfall. Per the
MTI, if the debt service coverage is less than 1.1 times on the
board of trustee financials, but the special fund has over 3 times
coverage of debt service shortfall, the board is in compliance with
the covenant. If the debt service coverage is less than 1.1 times
on the board of trustee financials, but the special fund has over 2
times coverage of debt service shortfall, the board is in
compliance with the covenant, but must engage a consultant. If the
debt service coverage is less than 1.0 times on the board of
trustee financials, and the special fund has less than 2 times
coverage of debt service shortfall, an event of default has
occurred.
PROFILE
Boone Hospital Center is 392-licensed bed regional medical center
whose real estate is owned by the County. The buildings are owned
by the Board of Trustees and all other major movable equipment
assets are owned by CH Allied Services. Hospital operations are the
responsibility of the Board of Trustees for the benefit of the
residents of the County and surrounding areas. Day to day
operations of the hospital (but not all of the Hospital Facilities)
are managed via a lease agreement to CH Allied Services, Inc., a
private nonprofit corporation (the "Lessee").
METHODOLOGY
The principal methodology used in this rating was Not-For-Profit
Healthcare published in December 2018.
BOY SCOUTS: Council Unloads 2 Camps to Help Pay Settlements
-----------------------------------------------------------
Jay Tokasz of The Buffalo News reports that the the Town of
Lewiston will use the grant award announced to assist in its
purchase of Camp Stonehaven, a 66.9-acre forested property the
Greater Niagara Frontier Council of the Boy Scouts of America put
on the market last year to help pay for its share of a proposed
settlement in federal bankruptcy court for childhood sexual abuse
victims.
Lewiston town officials voted in March 2022 to sign a purchase
agreement for the camp for $665,000, with plans to turn it into a
nature preserve. The Council in May also sold Camp Schoellkopf in
Wyoming County for $2.6 million.
Lewiston Town Supervisor Steve Broderick said the town is waiting
for word on whether it will also get a $319,000 Greenway Ecological
Grant from the New York Power Authority before closing on the Boy
Scout property.
If the Greenway Ecological Grant comes through, the town will work
with the Western New York Land Conservancy to put a conservation
easement on a portion of the camp property that would protect
habitats for birds, bats and native plant species, Broderick said.
Lewiston was among four towns to receive DEC grants aimed at
establishing "community forests" that preserve biodiversity and
safeguard ecosystem benefits such as storm water mitigation,
temperature regulation, carbon sequestration and climate
resiliency.
DEC Commissioner Basil Seggos announced the awards Thursday.
The Boy Scouts of America bankruptcy case has yet to be finalized,
but 252 local councils have agreed to contribute a combined $519.6
million, plus a promissory note of about $100 million, toward a
$2.7 billion settlement trust for more than 80,000 abuse victims.
The Greater Niagara Frontier Council’s share of the settlement is
pegged at $1.5 million.
The Greater Niagara Frontier Council, which serves about 6,000
Scouts in Erie and western Niagara counties, closed on the Camp
Schoellkopf deal with Thalveg LLC of East Aurora for $2.6 million
on May 20, according to records filed with the Wyoming County
Clerk’s Office.
Camp Schoellkopf is in the Town of Bennington in Wyoming County and
includes 557 acres, multiple camp style buildings, two ponds,
forests and oil, gas and mineral rights.
A Council representative said in a written statement to The Buffalo
News in April that the undisclosed buyer at the time planned to
continue to use the property for environmentally friendly
recreation activities.
"While we are saddened to have to give them up, divesting of the
two camps allows the Council to participate in the settlement trust
while also strengthening the Council's financial position moving
forward," the statement said.
Council leaders have said they plan to keep Camp Scouthaven, which
includes 400 acres on Crystal Lake in Freedom, Cattaraugus County.
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC, as financial advisor. Omni
Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BULLDOG PURCHASER: S&P Affirms 'CCC+' ICR on Revolver Extension
---------------------------------------------------------------
S&P Global Ratings affirmed all its ratings including its 'CCC+'
issuer credit rating on Bulldog Purchaser Inc. (d/b/a Bay Club).
The negative outlook reflects S&P's expectation for very high
leverage and minimal or negative free cash flow through fiscal 2022
(ending in January 2023).
S&P said, "We affirmed our 'CCC+' rating on Bay Club despite a
slower-than-expected recovery of memberships, revenue, and cash
flow and high anticipated leverage over the next several years.
"We expect the revolver extension and cash equity infusion will
allow the company to maintain adequate liquidity for at least the
next 12 months. We now expect Bay Club could take until at least
until 2023 to recover to club billings from before the COVID-19
pandemic and that an EBITDA and cash flow recovery could take even
longer in an inflationary environment. The company is at
approximately 80% of pre-pandemic membership. While the $60 million
equity raise has significantly bolstered liquidity, our negative
outlook reflects Bay Club's very high leverage, a weakening
macroeconomic environment, and our expectation that the company
could use a significant portion of balance sheet cash for
acquisitions. It also reflects underperformance in its revenue
recovery relative to rated peers."
Bay Club's portfolio lacks scale and geographic diversity, with
fewer club and members than peers.
S&P said, "The small club base is a potential competitive
disadvantage, in our view, compared with other leisure clubs with
larger geographic reach. With concentration in California,
region-specific economic deterioration or statewide minimum wage
increases may reduce operating income. The acquisition of five
clubs from Leisure Sports included one in Portland, Ore., which
broadens the geographic footprint into the Pacific Northwest."
Bay Club offers members a variety of amenities and a high-quality
hospitality experience.
S&P said, "It provides this to affluent consumers, which we view
favorably because this demographic segment is less sensitive to
economic cycles. Bay Club's lower attrition rates than most fitness
club operators before the pandemic contributes to a predictable
stream of dues and lower overall historic profit volatility.
Despite its participation in a leisure club segment adjacent to the
highly competitive and fragmented fitness club industry, we believe
Bay Club has diverse amenities that result in higher barriers to
entry than fitness clubs face. In addition, Bay Club earns a
relatively high percentage of revenue from ancillary sources such
as family programs, personal training, and other services, which
supports high customer loyalty.
"The negative outlook reflects our expectation for very high
leverage and minimal or negative cash flow through fiscal 2022."
S&P could lower its rating on Bay Club if:
-- The recovery in its membership, revenue, EBITDA, and cash flow
significantly underperforms our base case due to a weak
macroeconomic environment; or
-- S&P anticipates the company's liquidity position will worsen or
a default or debt restructuring in the subsequent 12 months.
S&P could revise its outlook on Bay Club to stable or positive or
raise its ratings if:
-- The company's membership base, EBITDA, and cash flow recover in
such a way that it can comfortably cover its fixed charges and
modest acquisition spending, and S&P becomes confident its capital
structure is sustainable over the long term; or
-- S&P believes the company could sustain leverage of less than
7.5x.
ESG credit indicators: To S-3, E-2, G-3; from S-4, E-2, G-3
S&P said, "Social factors are now a moderately negative
consideration in our credit rating analysis of Bay Club compared to
a negative consideration before. We changed this because the
company's high-end clubs were significantly affected by the
pandemic in terms of temporary closures and membership losses,
leading to significantly lower revenue and cash burn from
operations, but the company has begun to grow memberships and
revenue towards pre-pandemic levels. The company's utilization was
approximately 102% of pre-pandemic utilization at the end of July
2022, with membership at about 86% of pre-pandemic levels. While we
believe the company's high-quality clubs are still attractive to
its members, we believe a full recovery to pre-pandemic billing
could take until 2023 or 2024.
"Governance factors, on a net basis, are a moderately negative
consideration. We view financial sponsor-owned companies with
aggressive or highly leveraged financial risk profiles as
demonstrating corporate decision-making that prioritizes the
interests of controlling owners, typically with finite holding
periods and a focus on maximizing shareholder returns."
BURNS ASSET MANAGEMENT: Quickly Returns to Chapter 11 Bankruptcy
----------------------------------------------------------------
Burns Asset Management Inc. has returned to Chapter 11 bankruptcy
less than a month after its prior bankruptcy case was dismissed.
The Debtor is a North Carolina corporation owned solely by James
Jerald Burns. The Debtor owns several rental properties.
On Dec. 14, 2020, Debtor filed a petition for relief under Chapter
11 of the Bankruptcy Code. The Debtor filed a Chapter 11 Plan of
Reorganization in January 2021, and the Plan was confirmed on Sept.
7, 2021.
In February 2022, Deutsche Bank National Trust Company, as Trustee
for Harborview Mortgage Loan Trust 2004-8 Mortgage Loan
Pass-Through Certificates, Series 2004-8, filed a motion for relief
from the automatic stay with respect to the Debtor's property at
6913 Glendower Road in
Raleigh, North Carolina on the grounds that defaults had occurred
on the note and the Debtor had not complied with the confirmed
Plan. The motion was granted on March 14, 2022, and authorized the
secured creditor to commence foreclosure proceedings.
In March, the Bankruptcy Administrator filed a motion for
dismissal, saying that the Debtor's failure to remain current with
Plan payments is cause for dismissal.
On July 21, 2022, the Court signed an order dismissing the case
after the Debtor consented to dismissal.
On Aug. 5, 2022, Burns Asset Management Inc. filed another Chapter
11 bankruptcy petition.
According to court documents, Burns Asset Management estimates
between 1 and 49 creditors. The petition states funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Aug. 31, 2022, at 10:00 AM at Raleigh 341 Meeting Room. Proofs of
claim are due by Nov. 29, 2022.
About Burns Asset Management
Burns Asset Management, which owns certain properties, first filed
a voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D.N.C. Case No. 20-03888) on Dec. 14, 2020. The
Court entered an order confirming the Plan in September 2021. The
Debtor subsequently missed monthly payments to secured creditor
Deutsche Bank National Trust Company. In July 2022, the Debtor
consented to the U.S. Trustee's motion for dismissal of the case.
Burns Asset Management Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-01721) on
August 5, 2022. In the petition filed by James Burns, as president,
the Debtor reported assets between $500,000 and $1 million and
liabilities of the same range.
J.M. Cook, of J.M. Cook, P.A., is the Debtor's counsel.
CARNIVAL CORP: Moody's Cuts CFR to B2 & Senior Secured Debt to Ba3
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Moody's Investors Service downgraded the ratings of Carnival
Corporation (combined herein with Carnival plc "Carnival")
including its corporate family rating to B2 from B1, its
probability of default rating to B2-PD from B1-PD, its senior
secured note and senior secured credit facility ratings to Ba3 from
Ba2, its senior unsecured note rating to B3 from B2 and its
speculative grade liquidity rating to SGL-3 from SGL-2. At the same
time, the company's senior secured second lien note rating was
affirmed at B1. The outlook is negative.
"The downgrade reflects weaker than expected recovery in 2022 which
will result in Carnival generating negative EBITDA this year",
stated Pete Trombetta, Moody's VP-Senior Analyst. The B2 also
reflects the risk around the company's ability to generate
sufficient free cash flow to materially reduce debt, particularly
in a rising interest rate environment. Moody's forecasts that
Carnival's debt/EBITDA will exceed 7x in 2023 and a higher interest
burden and new ship purchase commitments over the next two years
will constrain cash flow and the ability to reduce debt. This,
along with a substantial amount of debt that will need to be
refinanced over the next several years, likely at higher interest
rates, elevates the company's financial risk profile.
Several headwinds are impacting the company's earnings recovery,
including the impact on bookings and increased cancellations due to
the Omicron variant and Russia's invasion of Ukraine in early 2022,
materially higher fuel costs and food cost inflation. These
factors, which took place as more of the company's ships were
coming on line for the busy summer sailing season, resulted in a
shorter booking curve. As a result, the company has lowered select
prices to drive higher occupancy.
Downgrades:
Issuer: Carnival Corporation
Corporate Family Rating, Downgraded to B2 from B1
Probability of Default Rating, Downgraded to B2-PD from B1-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Senior Secured Bank Credit Facility, Downgraded to Ba3 (LGD2) from
Ba2 (LGD2)
Senior Secured Regular Bond/Debenture, Downgraded to Ba3 (LGD2)
from Ba2 (LGD2)
Senior Unsecured Regular Bond/Debenture, Downgraded to B3 (LGD4)
from B2 (LGD5)
Issuer: Carnival plc
Senior Secured Regular Bond/Debenture, Downgraded to Ba3 (LGD2)
from Ba2 (LGD2)
Senior Unsecured Regular Bond/Debenture, Downgraded to B3 (LGD4)
from B2 (LGD5)
Issuer: Long Beach (City of) CA
Senior Secured Revenue Bonds, Downgraded to Ba3 (LGD2) from Ba2
(LGD2)
Affirmations:
Issuer: Carnival Corporation
Senior Secured 2nd Lien Regular Bond/Debenture, Affirmed B1
(LGD3)
Senior Unsecured Commercial Paper, Affirmed NP
Issuer: Carnival plc
Senior Unsecured Commercial Paper, Affirmed NP
Outlook Actions:
Issuer: Carnival Corporation
Outlook, Remains Negative
Issuer: Carnival plc
Outlook, Remains Negative
RATINGS RATIONALE
Carnival's credit profile is supported by its adequate liquidity
given its sizeable cash balances, its pre-pandemic position as the
largest worldwide cruise line in terms of revenue, fleet size and
number of passengers carried and its brand diversification. Moody's
believes Carnival will also benefit over the long run from the
value proposition of a cruise vacation relative to land-based
destinations as well as a group of loyal cruise customers that will
support a base level of demand. Carnival's credit profile is
constrained by its very weak credit metrics – Moody's forecasts
that carnival's debt/EBITDA will exceed 7x at the end of 2023
(includes Moody's standard adjustments). The company's EBITDA is
expected to turn modestly positive in the third quarter of 2022 but
free cash flow available for debt reduction will continue to be
constrained by rising interest costs and new ship commitments. The
normal ongoing credit risks include the highly seasonal and capital
intensive nature of the cruise industry, competition with all other
vacation options and the cruise industry's exposure to economic and
industry cycles as well as weather related incidents and
geopolitical events.
The negative outlook reflects Moody's concerns that the company
will not be able to generate sufficient cash flow to reduce debt
such that debt/EBITDA approaches 6.5x.
The company's adequate liquidity is supported by sizeable cash
balances that are sufficient to cover its cash needs over the next
12 months. The company had cash of about $7.1 billion at May 31,
2022 and raised an additional $1 billion from a common stock
issuance that closed in July. This amount of cash is sufficient to
enable the company to cover its negative free cash flow over the
next 18 months and repay the approximate $4.4 billion of maturities
that are due in the second half of 2022 and 2023. Moody's forecasts
the company will end 2023 with just over $2 billion of liquidity.
Carnival's revolving credit facility is comprised of the following:
a US $1.7 billion, EUR1.0 billion and GBP150 million committed
multicurrency revolving credit facility that expires in August
2024. The company's $3.0 billion revolver has about $300 million of
availability. Carnival's debt facilities require it to comply with
several maintenance covenants including minimum interest coverage,
debt to capital and minimum liquidity. Moody's expect the company
will maintain adequate covenant cushion over the next 12 months.
The company's ability to access alternate forms of liquidity are
deemed to be modest in the current operating environment but
include the potential to sell ships or a brand.
The Ba3 rating on the company's secured debt and the B1 rating on
the second lien secured debt reflect the considerable amount of
unsecured debt (approximately $25 billion) below it in the capital
structure. The B3 rating on the unsecured debt – one notch below
the corporate family rating – reflects its structural
subordination to about $10 billion of secured debt ahead of it in
the capital structure.
Headquartered in Miami, Florida, USA and Southampton, UK, Carnival
Corporation and Carnival plc effectively operate as a dual listed
company and have executed appropriate cross guarantees that have,
in Moody's view, resulted in a unified economic entity. A dual
listed company structure allows the two companies to manage the
business as a single operation while remaining as separate legal
and publicly listed entities. Carnival Corporation is incorporated
in Panama. Incorporation in a foreign jurisdiction complicates the
prediction of recovery prospects in a bankruptcy scenario.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
An upgrade would require material debt reduction or earnings
expansion that resulted in debt/EBITDA maintained below 5.5x, with
consistently positive free cash flow and maintenance of good
liquidity. Ratings could be downgraded if liquidity weakened in any
way, including due to slower than anticipated earnings recovery,
which could raise refinancing risk. The ratings could also be
downgraded if it appears that debt/EBITDA will remain above 7.0x
over the longer term or the company will not be able to
consistently produce positive free cash flow.
Carnival Corporation and Carnival plc own the world's largest
passenger cruise fleet operating under multiple brands including
Carnival Cruise Line, Holland America, Princess Cruises, AIDA
Cruises, Costa Cruises and P&O Cruises, among others. Carnival
Corporation and Carnival plc operate as a dual listed company and
are headquartered in Miami, Florida, US and Southampton, UK. Net
revenue for the trailing 12 month period ended May 31, 2022 were
approximately $4.2 billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CELSIUS NETWORK: Creditors Committee to Probe Insiders
------------------------------------------------------
The Official Committee of Unsecured Creditors formed in Celsius
Network LLC's case says its goal is to maximize the recoveries of
account holders and unsecured creditors, and it is committed to
thoroughly investigating Celsius, including potential misconduct by
Celsius and its insiders.
Formed on July 27, 2022, the Creditors Committee is comprised of
seven members, each of whom holds crypto (or digital) assets
through the Celsius platform. The members of the Committee include
institutions and individuals who participated in each of Celsius'
various products and programs. The Committee members are Caroline
G. Warren, Thomas DiFiore, ICB Solutions, Christopher Coco, Andrew
Yoon, Mark Robinson, and Covario AG.
The Committee:
* first engaged the international law firm of White & Case LLP
as its counsel.
* then tapped restructuring advisor M3 Partners and the
blockchain consultant Elementus, which the committee considers a
"cutting edge" firm that has worked on some of the highest profile
forensic investigations of crypto exchanges, including Quadriga
CX.
* engaged Perella Weinberg Partners, one of the leading
restructuring investment banks, to advise on potential transactions
to maximize value for account holders and unsecured creditors.
* is in the process of engaging Kroll Inc. to establish a
website and call center to provide information regarding the
bankruptcy process to account holders and unsecured creditors,
including important deadlines and instructions on how to fill out
proof of claim forms.
The Committee said in an Aug. 8 filing with the Bankruptcy Court
its advisors have already rolled up their sleeves. The Committee
immediately sent diligence requests to dig into Celsius' current
financial position, operations, and other affairs. The Committee
has also reviewed, and begun preparing responses to, the various
motions filed by Celsius -- including the Debtors' request to
conduct a process to potentially sell mined bitcoin and its GK8
business. Although there remains much to do, those efforts have
already borne fruit. The Debtors have decided to withdraw the
motion to retain their ex-CFO following input from the Committee.
The Committee said it is committed to thoroughly investigating
Celsius, including potential misconduct by Celsius and its
insiders, and to pursuing a resolution that will maximize Celsius'
value for the benefit of its account holders and unsecured
creditors. There will likely be many novel legal issues involved
in this bankruptcy, but the Committee is mindful that the Debtors'
restructuring should be achieved as quickly as practicable and will
focus on these objectives:
* The Committee intends to ensure the Debtors are effectively
safeguarding their account holders' assets. The Committee intends
to investigate whether the Debtors are properly safeguarding
account holders' assets.
* The Committee intends to oversee the Debtors' efforts to
develop a viable business plan that reduces overhead and preserves
the Debtors' limited cash reserves.
* The Committee intends to thoroughly investigate the
prepetition conduct of CEO Alex Mashinsky and other Celsius
insiders, including the problematic asset deployment decisions,
prepetition transfers, and other issues. The Committee has already
started this investigation and will work to ensure causes of action
against Mashinsky and others are preserved and prosecuted for the
benefit of the Debtors' estate and the Committee's constituents.
* The Committee will explore strategic options to reorganize or
sell the business (or portions thereof) to maximize value for
account holders and unsecured creditors. Critically, the Committee
has heard from the community regarding the importance of account
holders receiving in-kind payment of the cryptocurrency they
transferred to Celsius (rather than USD or other fiat money). The
Committee will explore options for an in-kind recovery to provide
account holders with an opportunity to participate in a potential
future recovery in cryptocurrency prices.
* The Committee understands the importance of open
communication with its stakeholders. The Committee intends to file
a motion shortly to engage Kroll Inc. as its independent
information agent, as well as to establish procedures consistent
with the Bankruptcy Code to achieve appropriate transparency. The
Committee's advisors have set up the email address
CelsiusCommitteeInquiries@ra.kroll.com and a Twitter account
@CelsiusUcc
The Committee's counsel:
David M. Turetsky, Esq.
Keith H. Wofford, Esq.
Samuel P. Hershey, Esq.
WHITE & CASE LLP
1221 Avenue of the Americas
New York, NY 10020
Telephone: (212) 819-8200
Facsimile: (212) 354-8113
Email: david.turetsky@whitecase.com
kwofford@whitecase.com
sam.hershey@whitecase.com
- and -
Michael C. Andolina, Esq.
Gregory F. Pesce, Esq.
WHITE & CASE LLP
111 South Wacker Drive, Suite 5100
Chicago, IL 60606
Telephone: (312) 881-5400
Facsimile: (312) 881-5450
Email: mandolina@whitecase.com
gregory.pesce@whitecase.com
- and -
Aaron E. Colodny, Esq.
WHITE & CASE LLP
555 South Flower Street, Suite 2700
Los Angeles, CA 90071
Telephone: (213) 620-7700
Facsimile: (213) 452-2329
Email: aaron.colodny@whitecase.com
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, maintains the page https://cases.stretto.com/celsius
An official committee of unsecured creditors has been appointed in
the case. Each of the committee members holds crypto (or digital)
assets through the Celsius platform. The Committee has engaged
White & Case LLP as its counsel; M3 Partners as restructuring
advisor; Elementus as blockchain consultant; Perella Weinberg
Partners as investment banker; and Kroll Inc. to establish a
website and call center to provide information regarding the
bankruptcy process.
CHARLES DEWEESE: Wins Cash Collateral Access Thru Aug 29
--------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Kentucky,
Bowling Green Division, authorized Charles Deweese Construction,
Inc. to use cash collateral on an interim basis through August 29,
2022.
The Debtor is permitted to use cash collateral to meet ordinary and
necessary operating expenses.
As adequate protection to FBT and Avtech for the Debtor's interim
use of cash collateral, FBT and Avtech are granted, in priority and
scope and to the same extent as existed under applicable law prior
to the Petition Date, replacement liens upon all of the
post-petition property of the Debtor that is similar to their
respective interests in pre-petition collateral, including, without
limitation, all post-petition property of the types constituting
their respective collateral and the proceeds and products thereof,
to secure the amount of the cash collateral actually used by the
Debtor through the week of August 29.
Such post-petition security interests, liens, and other rights
granted to FBT and Avtech will be and are deemed to be effective,
valid, perfected, and enforceable as of the Petition Date.
The replacement liens granted to FBT and Avtech will not (1) prime
any pre-existing liens or security interests held by any other
party; or (2) include trust funds subject to Tennessee's Prompt Pay
Act, codified at Tenn. Code Ann. section 66-34-101 et. seq.
On or before August 15, 2022, the Debtor will provide to FBT,
Avtech, and the Official Committee of Unsecured Creditors a report
of all accounts receivable collected, all inventory sold, all
disbursements made during the period of July 1, 2022 through July
31, 2022, and an accounts receivable aging report updated through
August 8, 2022. In addition, beginning August 16, and continuing
weekly through September 6, the Debtor will provide FBT, Avtech,
and the Committee a weekly "true up" showing actual income and
expenses for the immediately preceding week (Monday-Sunday) as
compared with the budget filed with the Cash Collateral Motion.
A copy of the order is available at https://bit.ly/3SHcrjZ from
PacerMonitor.com.
About Charles Deweese Construction
Charles Deweese Construction --
https://www.charlesdeweeseconstruction.com/ -- is a construction
and engineering company that provides clients with quality projects
on time and within budget.
Charles Deweese Construction, Inc. sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. W.D. Ky. Case No. 22-10355)
on July 1, 2022. In the petition filed by Charles Weldon Deweese,
as president, the Debtor reports estimated assets and liabilities
between $50 million and $100 million.
Judge Joan A. Lloyd oversees the case.
Tyler R. Yeager, Esq., at Kaplan Johnson Abate & Bird, LLP, is the
Debtor's counsel.
CHEFS' WAREHOUSE: Moody's Ups CFR to B2, Outlook Remains Positive
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Moody's Investors Service upgraded The Chefs' Warehouse, Inc.'s
(Chefs) corporate family rating to B2 from B3 and probability of
default rating to B2-PD from B3-PD. Concurrently, Moody's assigned
a B2 rating to the company's proposed term loan due 2029 to be
issued by Chefs' Warehouse Parent, LLC and Dairyland USA
Corporation. The rating on the existing term loan due 2025 remains
unchanged. The speculative grade liquidity rating was upgraded to
SGL-1 from SGL-2. The outlook for The Chefs' Warehouse, Inc.
remains positive.
Proceeds from the proposed $250 million term loan will be used to
refinance the existing term loan with an outstanding amount of $168
million, add approximately $66 million of balance sheet cash and
pay for transaction fees and expenses.
"Chefs is benefiting from a strong recovery in dining out, with
earnings now exceeding pre-pandemic levels," said Moody's Vice
President-senior analyst Raya Sokolyanska. "While volatile product
costs and labor shortages remain a challenge, we expect growth in
operating performance to continue. Chefs' end customers, which tend
to have higher income levels, are also more protected from
macroeconomic pressures".
The CFR and PDR upgrades reflect the company's earnings recovery
and deleveraging. Pro-forma for the transaction, credit metrics
will remain solid, with Moody's-adjusted debt/EBITDA at 4.8 times,
from 4.2 times as of June 24, 2022 (equivalent to 3 times and 2.8
times, respectively, based on the company's net leverage
calculation), and EBITA/interest expense at an estimated 2.8 times.
The B2 rating on the proposed senior secured term loan reflects its
junior position in the capital structure relative to the recently
upsized $200 million asset-based revolver, and the support provided
by the subordinated convertible notes.
The upgrade of the speculative-grade liquidity rating to SGL-1 from
SGL-2 reflects Moody's expectations for positive free cash flow,
solid cash balances, ample revolver availability under the $200
million asset-based revolver, a springing covenant-only capital
structure and lack of debt maturities over the next 12-18 months.
The proposed term loan will be due 2029 and will have a springing
maturity of June 2024 if more than $40 million of the convertible
notes remain outstanding by that date or have not been refinanced
with indebtedness maturing at least 6 months after the term loan's
maturity.
Moody's took the following rating actions for:
Issuer: The Chefs' Warehouse, Inc.:
Corporate Family Rating, upgraded to B2 from B3
Probability of Default Rating, upgraded to B2-PD from B3-PD
Speculative Grade Liquidity rating, upgraded to SGL-1 from SGL-2
Outlook, remains positive
Issuer: Chefs' Warehouse Parent, LLC. Co-Borrower Dairyland USA
Corporation:
Proposed Gtd Senior Secured First Lien Term Loan due 2029,
assigned B2 (LGD4)
Outlook, assigned positive
RATINGS RATIONALE
The Chefs' Warehouse, Inc.'s B2 CFR reflects the company's position
as a premier distributor of specialty food products in the United
States and Canada. Chefs has a product portfolio with a deep
selection of specialty and center-of-the-plate food products that
differentiates its offering from the larger, traditional broadline
foodservice distributors. Chefs' focus on the independent
restaurant segment and scale within the segment should allow it to
maintain solid operating margins relative to its peers. The rating
also benefits from governance considerations, specifically the
company's overall balanced financial policies, including its
issuance of both debt and equity to support liquidity during the
pandemic.
At the same time, the credit profile reflects the high degree of
competition in the food distribution sector, and risks to operating
performance from the high volatility in food and fuel costs, which
could result in gross profit pressure and dent consumer spending on
discretionary categories such as food away from home. The rating
also incorporates Chefs' modest scale relative to its public
foodservice industry peers. Further, the rating incorporates Chefs'
high leverage. The company has publicly stated a 3-5 times
'comfort' net leverage range, which implies it could raise leverage
by over 1 time from the current 3 times pro-forma level. Chefs'
acquisitive growth strategy also increases event and execution
risk.
The positive outlook reflects Moody's expectation for revenue and
earnings growth that could lead to sustained deleveraging below 4.5
times Moody's-adjusted debt/EBITDA. The outlook could revert back
to stable if earnings do not increase as anticipated, or if the
company undertakes acquisitions that carry substantial execution
risk and/or could result in a prolonged period of elevated
leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could result in an upgrade include continued revenue
and earnings growth, such that debt/EBITDA is sustained below 4.5
times and EBITA/interest expense above 2.25 times. An upgrade would
also require at least good liquidity and balanced financial
strategies.
Factors that could result in a downgrade include a deterioration in
liquidity for any reason, or expectations for Moody's-adjusted
debt/EBITDA to be sustained above 5.5 times and EBITA/interest
expense below 1.5 times.
As proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following:
Incremental debt capacity up to the greater of $120 million or 1x
adjusted EBITDA, plus unlimited amounts subject to 2.75x first lien
net leverage for pari-passu debt, 3.25x for secured net leverage
for junior secured debt, and 5.00x total net leverage for unsecured
debt.
The credit agreement does not permit the designation of
unrestricted subsidiaries, preventing collateral "leakage" to
unrestricted subsidiaries
Non-wholly-owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees, with no
explicit protective provisions limiting such guarantee releases.
The credit agreement is expected to provide to-be-determined
limitations on up-tiering transactions.
Headquartered in Ridgefield, Connecticut, The Chefs' Warehouse,
Inc. distributes specialty food products to menu-driven independent
restaurants, fine dining establishments, country clubs, hotels,
caterers, culinary schools, bakeries, patisseries, chocolatiers,
cruise lines, casinos, and specialty food stores in the United
States and Canada. The company generated net sales of $2.2 billion
for the twelve months ended June 24, 2022.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
CHEMBIO DIAGNOSTICS: Incurs $6.95-Mil. Net Loss in Second Quarter
-----------------------------------------------------------------
Chembio Diagnostics, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $6.95 million on $9.16 million of total revenues for the three
months ended June 30, 2022, compared to a net loss of $9.06 million
on $6.46 million of total revenues for the three months ended June
30, 2021.
For the six months ended June 30, 2022, the Company reported a net
loss of $15.74 million on $27.98 million of total revenues compared
to a net loss of $13.56 million on $15.19 million of total revenues
for the six months ended June 30, 2021.
As of June 30, 2022, the Company had $56.06 million in total
assets, $36.15 million in total liabilities, and $19.90 million in
total stockholders' equity.
Cash and cash equivalents as of June 30, 2022 totaled $22.8
million, compared to $24.4 million at March 31, 2022.
"We are pleased with our performance in the second quarter
including strong sales growth driven by contributions from our core
products and a significant improvement in cash burn," said Richard
Eberly, Chembio's president and chief executive officer. "During
the quarter we made continued progress with our Global
Competitiveness Program – positioning the team to drive adoption
of our core higher margin products in high-growth markets, and
expanding manufacturing capabilities through automation and a
contract manufacturing agreement leveraging our facility in
Malaysia. Additionally, we are excited to advance key new product
development and regulatory initiatives, all of which help define a
path to more profitable growth."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001092662/000114036122028390/brhc10040263_10q.htm
About Chembio
Chembio Diagnostics, Inc. develops, manufactures and commercializes
point-of-care tests for the detection and diagnosis of infectious
diseases, including COVID-19, sexually transmitted disease, and
fever and tropical disease.
Chembio reported a net loss of $33.90 million for the year ended
Dec. 31, 2021, a net loss of $25.52 million for the year ended
Dec. 31, 2020, a net loss of $13.67 million for the year ended Dec.
31, 2019, and a net loss of $7.86 million for the year ended
Dec. 31, 2018. As of Dec. 31, 2021, the Company had $73.25 million
in total assets, $38.99 million in total liabilities, and $34.26
million in total stockholders' equity.
Jericho, New York-based Ernst & Young LLP, the Company's auditor
since 2020, issued a "going concern" qualification in its report
dated March 3, 2022, citing that the Company has suffered recurring
losses from operations and has stated that substantial doubt exists
about the Company's ability to continue as a going concern.
CHRISTIAN CARE: Seeks to Hire 'Ordinary Course' Professionals
-------------------------------------------------------------
Christian Care Centers, Inc. and Christian Care Centers Foundation,
Inc. seek approval from the U.S. Bankruptcy Court for the Northern
District of Texas to hire professionals utilized in the ordinary
course of business.
The "ordinary course" professionals are:
OCPs Services
---- ----------
Best & Spruill, PC Legal Services
Chaparral Consulting Insurance Claim Consulting
CliftonLarsonAllen, LLP Accounting Services
Jackson Walker, LLP Legal Services
Salus Claims Management Risk Management Consulting
Sj Consulting Software Consulting Services
Wipfli, LLP Accounting Services
Wise Resources Development Grant Services
Zachary Associates, Inc. Marketing Services
Hospital & Healthcare
Compensation Service Compensation Services
The Debtors will pay OCPs 100 percent of their fees and 100 percent
of their disbursements incurred with respect to post-petition
services.
As disclosed in court filings, the OCPs do not hold interest
materially adverse to the Debtors and their estates.
About Christian Care Centers
Christian Care Centers, Inc. (CCCI) was incorporated in 1947 as a
nonprofit Texas corporation. CCCI, a faith-based organization,
operates three senior living housing and health care campuses in
the Dallas/Fort Worth Metroplex. In addition, CCCI owns unimproved
real property in Dallas County and Tarrant County, adjacent to the
Mesquite and Fort Worth communities.
Meanwhile, Christian Care Centers Foundation, Inc. was incorporated
in 1994 also as a nonprofit Texas corporation. It is a supporting
organization that serves as an endowment organization for CCCI.
CCCI and Christian Care Centers Foundation sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Texas Lead Case
No. 22-80000) on May 23, 2022. In the petitions signed by Mark
Shapiro, chief restructuring officer, the Debtors disclosed up to
$100 million in both assets and liabilities.
Judge Stacey G. Jernigan oversees the cases.
The Debtors tapped Husch Blackwell, LLP as legal counsel;
Glassratner Advisory & Capital, LLC as restructuring advisor; and
Houlihan Lokey Capital, Inc. as investment banker. Epiq Corporate
Restructuring, LLC is the claims, noticing, and solicitation
agent.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on June 3,
2022. The committee is represented by Kane Russell Coleman Logan,
P.C.
Suzanne Koenig, the patient care ombudsman appointed in the
Debtors' cases, tapped Greenberg Traurig, LLP and SAK Management
Services, LLC as her legal counsel and medical operations advisor,
respectively.
COLOR GRAPHICS R US: Unsecureds to Get Share of Income for 5 Years
------------------------------------------------------------------
Color Graphics R US Design and Printing, Inc., filed with the U.S.
Bankruptcy Court for the District of New Jersey a Small Business
Plan of Reorganization dated August 8, 2022.
The Debtor is a design and printing company operating out of a
warehouse located at 341 Cortlant Street, Belleville, New Jersey.
The Debtor opened for business in 2007, and revenue was steadily
increasing year after year until 2020-2021.
As a result of the Covid-19 Pandemic, and interruptions of the
paper supply chain, the Debtor fell behind on rents owed to the
landlord, taxes owed to the State of New Jersey, and other
business-related obligations. As a result, the Debtor to sustained
income losses and could not operate profitably in 2021 and at the
beginning of 2022.
The delay in the paper supply chain due to the Covid-19 Pandemic,
forced the Debtor to sustain income losses and could not operate
profitably. As a result, the Debtor was forced to file for Chapter
11 bankruptcy to reduce its operating expenses and reorganize its
debts. The Debtor has restructured its lease agreement which has
reduced the Debtor's operating expenses, and other overhead items.
The Debtor believes that the paper supply chain will operate
normally in the coming months, allowing the Debtor to continue to
operate profitably post-bankruptcy.
Class Nineteen are holders of General Unsecured Claims, including
allowed deficiency claims of creditors in prior classes and the
claims of Creditors not otherwise classified under the Plan.
Subject to objection of claims in accordance with the Plan, the
Debtor estimates the amount of claims in this class to total
$1,557,737.82.
In accordance with the Debtor's Cash Flow Analysis the Debtor has a
5-Year Projected Disposable Income in the amount of $235,668.00,
all of which shall be paid as follows:
* Commencing on the first day of the fifth month following the
Effective Date of the Plan (the "Initial Payment") and quarterly
thereafter for a total of 20 quarters, the Debtor shall make
payments on a pro rata basis to undisputed, liquidated,
noncontingent claims as scheduled or filed, subject to timely
objection to the validity or extent of each claim holders (the
"Allowed Unsecured Claims") in an amount equal to 1/4 of the annual
projected disposable income in the corresponding year (as projected
in the Cash Flow Analysis).
Class 20 consists of Equity Interest holder Rudolph Keitt. The
ownership interests of the principal in the assets of the Debtor
shall not be altered as a consequence of the Plan.
The plan will be funded from a combination of (i) funds on hand in
the estate at the time of Confirmation; and (ii) net cash flow of
the Reorganized Debtor received during the sixty months of the Plan
beginning on the Effect Date of the Plan.
A full-text copy of the Small Business Plan of Reorganization dated
August 8, 2022, is available at https://bit.ly/3bGaFPt from
PacerMonitor.com at no charge.
About Color Graphics R Us Design and Printing
Color Graphics R Us Design and Printing Inc. is a commercial
printer in Belleville, New Jersey.
Color Graphics R Us Design and Printing sought bankruptcy
protection under Subchapter V of Chapter 11 of the Bankruptcy Code
(Bankr. D.N.J. Case No. 22-13858) on May 11, 2022. In the
petition filed by Rudolph Keitt, as president and CEO, Color
Graphics R Us Design and Printing estimated assets between $100,000
and $500,000 and liabilities between $500,000 to $1 million.
David L. Stevens, of Scura, Wigfield, Heyer & Stevens, is the
Debtor's counsel.
Nancy Isaacson has been appointed as Subchapter V trustee.
COMMUNITY HEALTH: Fitch Alters Outlook on 'B-' IDR to Negative
--------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDR) of Community Health Systems, Inc. and subsidiary
CHS/Community Health Systems, Inc. at 'B-'. In addition, Fitch has
affirmed the ratings on the company's senior secured notes and
asset-based loan facility at 'BB-'/'RR1', junior-priority secured
notes at 'CCC'/'RR6' and senior notes at 'CCC-'/'RR6'.
The Rating Outlook has been revised to Negative from Stable.
The Negative Outlook reflects a deterioration in operating
performance in 1H 2022, with significant increases in labor costs
and weakness in volumes and acuity mix driving a downturn in the
company's revenue and margin levels, resulting in a sizeable
reduction in its 2022 financial guidance and elevating leverage to
levels posing increased downgrade risk.
Fitch believes CHS still benefits from its strengthened balance
sheet and liquidity after numerous debt refinancing and exchange
transactions; its portfolio of hospitals and ambulatory facilities
repositioned via divestitures and cost reductions; and its
continuing investments expanding higher-acuity inpatient services
and outpatient care via freestanding emergency departments, ASCs
and urgent care clinics.
Given the seasonal 3Q softness and seasonal 4Q strength in its
financial results, Fitch expects 4Q22 results to carry notable
weight in the company's outlook. Fitch plans to closely monitor the
company's exposure to new COVID variants and a potential economic
downturn.
KEY RATING DRIVERS
Financial Flexibility in Flux: After years of divestitures, cost
rationalization and portfolio repositioning to expand outpatient
services and higher-acuity inpatient care, CHS recaptured mid-teens
EBITDA margins (~15%) in 2021, moving closer to the margins of its
higher-rated peers. However, despite CHS holding non-labor costs
flat yoy in 1H 2022, EBITDA margin retreated to 10% as labor costs
increased due in large part to the cost of and use of temporary
staffing, as profitable elective volumes proved elusive even as
Omicron volume waned, and as ALOS rose with discharges declining,
constrained by COVID-stressed post-acute settings. Temporary
staffing costs declined greater than 20% quarter over quarter in
2Q22. Fitch now assumes CY22 EBITDA margin rebounds to 11% with
contract labor costs subsiding further in 2H 2022.
Feasible Strategy Addressing Disruption: Recent variants of
COVID-19 and their impact on volumes has disrupted the favorable
trajectory CHS established in 2021, with both leverage and cash
flow shifting outside Fitch's negative Rating Sensitivity levels
for the 'B-' IDR. In affirming its medium-term targets for EBITDA
margin (greater than 16.0%), net leverage (less than 5.0x) and FCF
(positive), CHS displayed confidence in its strategy to boost FCF
and deleverage. This entails initiatives to: (1) reduce nursing
labor costs by improving both hiring and retention practices
(centralizing recruitment, establishing a new nursing college
relationship, expanding employee benefits); (2) capture
efficiencies in supplies and purchased services (consolidating
vendors, renegotiating insurance and rents); (3) optimize capacity
(reducing ALOS, adjusting staffing, eliminating certain service
lines and consolidating capacity in select markets having
outlier-level needs for contract labor); (4) negotiate higher
managed care reimbursement to offset labor cost inflation; and (5)
consider sales of select assets that have recently attracted
indications of interest. While much more conservative in
expectations for improvement, Fitch views this strategy overall as
prudent and credible.
Strengthened Balance Sheet Cushions Spike in Leverage: CHS reduced
debt in recent years by approximately $2 billion, extended debt
maturities and reduced cash interest via debt tenders and
refinancing transactions, the latest of which (the 5.250% 1L notes
due 2030 issued in February 2022 refinancing the 6.625% 1L notes
due 2025) eliminated all maturing debt until 2026. As of June 30,
2022, liquidity was also ample at $1.2 billion ($0.3 billion in
cash and $0.9 billion of ABL revolver availability).
With YE 2022 debt/EBITDA-NCI expected to rise to 10x per Fitch
calculations of EBITDA-NCI corresponding to the upper end of the
company's reduced 2022 guidance range, the balance sheet provides
time for margins to recover and CHS to deleverage back to 7x-8x per
Fitch's forecast, the latter driven primarily by EBITDA growth
rather than by FCF totaling 1.0%-2.0% of revenue per Fitch's
forecast. Fitch also assumes that the absence of debt maturities
until 2026 reduces risk of additional debt exchange offers in the
near term.
Liquidity and Cash Flow Support Growth: Like other acute care
providers, CHS has been focusing on expanding healthcare access
points to boost local market share and leverage on price
negotiations with commercial health insurers, the latter coming
into focus amid material labor cost inflation. In addition to ample
liquidity, Fitch expects cash from operations to be sufficient over
the rating horizon for CHS to devote 3.5%-4.0% of revenue to capex,
which Fitch believes is adequate to support maintenance needs and
strategic expansion of its presence in its 48 local markets.
The company's expansion strategy entails inpatient capacity
expansion focused on high-acuity services and outpatient
development including freestanding EDs, ASCs and urgent care
centers. Further supporting cash flow, while rising rates can
produce sizeable headwinds to large borrowers, CHS's atypical fully
fixed-rate debt capital structure sidesteps this risk.
DERIVATION SUMMARY
CHS's 'B-' IDR reflects moderate financial flexibility with
leverage well above that of its closest peers and increased
volatility in free cash flow generation. Its leverage reflects a
legacy operating profile focused on rural and small suburban
hospital markets facing secular headwinds to organic growth and a
recent setback from volume weakness and sharp increases in labor
costs. Divestitures have repositioned the company's facility
portfolio to boost exposure to higher-growth markets, improving
potential for EBITDA margin expansion to levels closer to
higher-rated industry peers HCA Healthcare, Inc. (HCA; BB+/Stable),
Tenet Healthcare Corp. (THC; B+/Stable) and Universal Health
Services, Inc. (UHS; BB+/Stable).
The IDRs of CHS/Community Health Systems Inc. and Community Health
Systems Inc. are the same due to strong legal and operational ties
between the entities. In applying its Parent and Rating Subsidiary
Linkage Criteria, Fitch applies the weak parent / strong subsidiary
approach as the only asset of parent Community Health Systems, Inc.
is its 100% ownership of CHS/Community Health Systems Inc., which
is the indirect owner of all CHS operating subsidiaries. Fitch
believes legal ring-fencing, access and control are open and
therefore assesses the issuers on a consolidated basis.
KEY ASSUMPTIONS
-- Revenue growth less than 1% in 2022 and 3%-6% thereafter (1%-
2% from volume; 2%-4% from pricing/mix);
-- Operating EBITDA margin of ~11% in 2022, increasing ~50 bps
annually thereafter;
-- Neutral to modestly negative FCF in 2022, increasing to 1%-2%
of revenue annually thereafter;
-- Gross leverage (after NCI distributions) of 10x at YE 2022,
declining via EBITDA growth to ~8x by YE 2024;
-- No material increases in gross debt or issuance/repurchases of
equity.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Leverage (total debt/EBITDA after NCI distributions)
maintained at 7.0x or below; and
-- CFO after capex to total debt sustained at or above 2.5%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Leverage (total debt/EBITDA after NCI distributions)
maintained at 8.0x or above; and
-- Neutral to negative CFO after capex to total debt.
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
Liquidity totaled $1.2 billion as of June 30, 2022, including $0.3
billion of cash on hand and $0.9 billion available under an undrawn
$1.0 billion asset-based loan (ABL) revolver (availability is
calculated net of both outstanding letters of credit and subject to
a borrowing base calculation). The company's debt agreements
contain no financial maintenance covenants. After its February 2022
refinancing, its next maturing debt is $2.1 billion of senior
secured notes (and its undrawn $1.0 billion ABL revolver) in 2026.
Debt Issue Notching: Fitch's recovery assumptions result in
recovery rates for the company's $1.0 billion super-priority ABL
revolver and $8.2 billion senior secured notes within the 'RR1'
range to generate a three-notch uplift from the IDR to their debt
instrument ratings to 'BB-'/'RR1'. The company's $3.2 billion
junior priority secured notes are notched down two levels to
'CCC'/'RR6' to reflect an estimated recovery in the 'RR6' range,
and the $0.8 billion unsecured senior notes are notched down three
levels to 'CCC-'/'RR6 to reflect an estimated recovery in the 'RR6'
range and their structural subordination relative to the
higher-ranking junior priority secured notes. Fitch assumes the
$1.0 billion ABL would be fully drawn prior to a bankruptcy
scenario and thus includes that amount within the claims
waterfall.
Fitch estimates an enterprise value (EV) on a going concern (GC)
basis of $8.82 billion for CHS, after a deduction of 10% for
administrative claims. The EV assumption is based on
post-reorganization EBITDA after distributions to noncontrolling
interests of $1.40 billion and a 7.0x EV/EBITDA multiple, the
latter reflecting a history of acquisition multiples for large
hospital operators with business profiles similar to CHS of
7.0x-10.0x since 2006 and the average public trading multiple
(EV/EBITDA) of its peer group (HCA, UHS and THC), which has ranged
from 6.5x to 9.5x since 2011.
The GC EBITDA after distributions to noncontrolling interests of
$1.40 billion compares to Fitch's 2022 expectations of $1.23
billion of operating EBITDA after distributions to noncontrolling
interests. This reflects Fitch's view that current EBITDA levels,
were they to persist, could potentially portend a restructuring and
that higher levels should be achievable from its asset base.
This in turn reflects Fitch's view that the spike in temporary
staffing costs burdening current EBITDA levels is unlikely to prove
durable over a period of several years. Fitch's GC EBITDA estimate
also considers attributes of the acute care hospital sector
including the high share of revenue generated by government payors
(30%-40%) posing risk of unforeseen regulatory changes, the legal
obligation to treat uninsured patients creating a potentially
material unfunded mandate, and the highly-regulated nature of the
hospital industry generally.
ISSUER PROFILE
CHS/Community Health Services, Inc., a subsidiary of publicly
traded Community Health Services, Inc., is the third largest
for-profit operator of general acute care hospitals in the U.S. by
revenue, operating 1,000+ sites of care in 48 distinct markets in
16 states.
ESG CONSIDERATIONS
CHS has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to societal and regulatory pressures to constrain
growth in healthcare spending in the U.S. This dynamic has a
negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
RATING ACTIONS
ENTITY/DEBT RATING RECOVERY PRIOR
---- ------ -------- -----
CHS/Community LT IDR B- Affirmed B-
Health Systems, Inc.
senior unsecured LT CCC- Affirmed RR6 CCC-
super senior LT BB- Affirmed RR1 BB-
senior secured LT BB- Affirmed RR1 BB-
senior secured LT CCC Affirmed RR6 CCC
2nd Lien
super senior LT BB- Affirmed RR1 BB-
Community Health LT IDR B- Affirmed B-
Systems, Inc.
CONDADO ROYAL: October 5 Hearing on Disclosure Statement
--------------------------------------------------------
Judge Edward A. Godoy will hold a hearing to consider approval of
the Disclosure Statement of Condado Royal Palm Inc. on Oct. 5, 2022
at 1:30 PM via Microsoft teams.
Objections to the form and content of the disclosure statement must
be filed and served not less than 14 days prior to the hearing.
As reported in the TCR, the Debtor filed a Plan of Reorganization
dated that contemplates monetize the only asset of the corporation,
the Debtor's property, while eliminating a monthly interest charge
which could exceed $50,000. Through the efforts of the real estate
broker, the Debtor has been able to procure a private sale over the
appraisal amount for $8,300,000. The Debtor moved the Court for
the consignment of net proceeds in the amount of $1,737,943, and to
date, the amount of $1,737,943 remain consigned with the Bankruptcy
Court.
Payouts to Class 3 General Unsecured Claims in the amount of
$6,816,500 are contingent to a court's adjudication on the disputes
with Class 2 ASFHORD R.J.F. INC.'s $4,007,814 claim. In the event
that the Debtor is successful in achieving a court judgment which
entitles the debtor to receive any or all of the consigned funds at
the Bankruptcy Court, then such funds, less any necessary fees or
expenses, will be distributed to Class 3 within 30 days upon being
received.
A full-text copy of the Disclosure Statement dated August 2, 2022,
is available at https://bit.ly/3bvpMv2 from PacerMonitor.com at no
charge.
About Condado Royal Palm
Condado Royal Palm, Inc., is a company in San Juan, P.R., engaged
in renting and leasing real estate properties. Condado is a single
asset real estate that was the owner of a real property:
* A- Land Parking lot with units #10, 11, 12 & 13 located at
Condado, San Juan, P.R. Land #572; Folio 214; Tomo 13 Property
Register Section San Juan I. Cadaster #040-039- 012-06 802.
* B- Land Parking lot with units #14, 15, 16 & 17 located at
Condado, San Juan, PR, Land #10,584; Folio 159; Tomo 281 " Property
Register Section San Juan I. Cadaster #040- 039-012-19 001.
Condado Royal Palm filed a petition for Chapter 11 protection
(Bankr. D.P.R. Case No. 22-01282) on May 4, 2022, listing
$8,300,995 in total assets and $15,493,286 in total liabilities.
Jose A. Ramirez de Arellano, president, signed the petition.
Judge Mildred Caban Flores oversees the case.
The Debtor tapped Wigberto Lugo Mender, Esq., at Lugo Mender Group,
LLC as legal counsel and MAM Group, LLC, as real estate consultant.
CORSAMI GROUP: Seeks to Hire Paul Reece Marr as Bankruptcy Counsel
------------------------------------------------------------------
Corsami Group, LLC seeks approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to hire Paul Reece Marr, P.C.
to serve as legal counsel in its Chapter 11 case.
The firm will be paid at these rates:
Paul Reece Marr, Esq. $395 per hour
Paralegal $195 per hour
Clerical $50 per hour
As disclosed in court filings, Paul Reece Marr is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Paul Reece Marr, Esq.
Paul Reece Marr, P.C.
1640 Powers Ferry Road
Building 24, Suite 350
Marietta, GA 30067
Tel: 770-984-2255
Email: paul.marr@marrlegal.com
About Corsami Group
Corsami Group, LLC, a carrier company in Suwanee, Ga., filed a
petition for relief under Subchapter V of Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-55576) on July 22,
2022, listing $1 million to $10 million in both assets and
liabilities. Gary M. Murphey has been appointed as Subchapter V
trustee.
Judge Wendy L. Hagenau oversees the case.
Paul Reece Marr, Esq., at Paul Reece Marr, P.C. is the Debtor's
legal counsel.
CPV SHORE: Moody's Lowers Rating on Senior Secured Debt to Ba3
--------------------------------------------------------------
Moody's Investors Service downgraded CPV Shore Holdings, LLC ("CPV
Shore" or the "Project") senior secured credit facilities to Ba3
from Ba2, affecting approximately $368 million of outstanding
senior secured term loans and a $120 million revolving credit
facility. The rating outlook remains negative.
Ratings Downgraded:
Issuer: CPV Shore Holdings, LLC
Senior Secured Term Loan, Downgraded to Ba3 from Ba2
Senior Secured Revolving Credit Facility, Downgraded to Ba3 from
Ba2
Outlook Actions:
Issuer: CPV Shore Holdings, LLC
Outlook, Remains Negative
RATINGS RATIONALE
The rating action reflects the declining financials trends
impacting CPV Shore's cash flows leading to a deterioration of its
credit metrics over the past two years, and an expectation that
this trend will continue through 2022. These trends factor in the
combined impact of the expiration of the Project's initial heat
rate call option(HRCO) in 2021, lower realized energy margins and
higher than anticipated carbon emission costs associated with the
Northeast Regional Greenhouse Gas Initiative (RGGI) which New
Jersey joined in 2020. The Project's EBITDA has declined to about
$47 million in 2021 from approximately $68 million in 2019, and is
expected to reduce further in FY 2022 due to the additional impact
of lower PJM Base Residual Auction (BRA) capacity prices based on
the 2022/2023 auction for the EMAAC region. CPV Shore's DSCR has
reduced to 1.72x from 2.34x with net debt to EBITDA increasing to
7.8x from 5.8x, each over the three year period ending FY 2021.
Both metrics are anticipated to weaken further in FY 2022. Cash
available for debt paydown has been further impacted by higher cash
collateral posting requirements under its hedging program.
Moreover, a combination of higher cash collateral postings related
to its power and gas hedges, as well as increased working capital
needs have reduced the project's ability to paydown the level of
term debt initially anticipated. The term loan balance stood at
$368.2 million at the end of FY 2021, with no additional
repayments expected during 2022. The Project's term loan balance
is currently at approximately 87% of the initially issued face
amount, relative to the original expectation of achieving a 74%
level by the end of 2022, all of which likely increases the amounts
needing to be refinanced at the 2025 maturity date relative to
initial expectations.
That said, Moody's anticipate that CPV Shore will benefit
positively from increasing power market prices and spark spreads
being realized in the JCPL market node as the forward curves
suggest going into 2023 and beyond. These power market dynamics
will be expected to boost the Project's cash flows going into 2023,
offsetting the adverse impact from the lower PJM BRA capacity
prices which have declined to $98 MW-day for 2022/2023, and further
declined to $49 MW-day based on the most recent 2023/2024 capacity
auction for the PJM EMAAC region.
The rating recognizes certain proactive measures taken by CPV Shore
to prefund certain capital outlays including reserving for the
Project's upcoming major maintenance overhaul expected during the
Spring of 2023, and strategic purchases of RGGI related CO2 credits
and RECs/SRECs associated with its hedges. While this use of cash
has limited the Project's ability to repay its term debt, it does
provide a liquidity buffer going into 2023 and 2024. The Project's
overall liquidity is supported by its $120 million revolving credit
facility with a $25 million sublimit fully available for working
capital purposes, and $110 million of the facility available for
posting letters of credit in support of collateral posting
requirements for hedging purposes. Moody's note that the revolver
matures in 2023, and it is Moody's expectation that the current
lenders will extend the revolver for the remainder of the term debt
duration.
The rating also reflects the Project's competitive operating
profile demonstrating a heat rate below 6,900 Btu/kWh and
historically operating at nearly a 70% capacity factor, though the
Project experienced some deterioration in the dispatch levels due
to the lower demand dynamics during Covid. The Project's strong
competitive position is supported by the use of highly efficient
combined-cycle generating technology and its location in the
capacity constrained EMAAC region of PJM. The Project's relative
efficiency and competitive profile positions it to benefit from
recent run up in power prices. Furthermore, while capacity prices
are experiencing a downward trend within PJM, the capacity prices
in EMAAC typically clear at a premium relative to the RTO clearing
price and regional barriers to entry limit the number of new
entrants.
RATING OUTLOOK
CPV Shore's negative outlook reflects the expectation for further
weakening of its cash flow and credit metrics in FY 2022. The
negative outlook also reflects the adverse cash flow impact from
continued deterioration in PJM BRA pricing for EMAAC and reflects
the less predictable financial results going into 2023-24 due to a
greater reliance on more volatile wholesale power market for energy
margins.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade
In light of the negative rating outlook, The rating currently has
limited prospects for an upgrade. The rating could stabilize should
the Project repay greater debt than expected enabling it to
generate financial metrics in line with the Ba rating category
including debt-to-EBITDA of less than 6.0x on a sustained basis.
Factors that could lead to a downgrade
The rating could be downgraded if CPV Shore faces lower than
anticipated power market pricing conditions in 2023 and beyond, or
face operational performance issues resulting in a further
deterioration of its credit metrics, such that the Project's DSCR
remains below 1.5x and/or the debt-to-EBITDA ratio exceeds 6x on a
sustained basis.
PROFILE
CPV Shore owns Woodbridge Energy Center, a 725 MW combined cycle
electricity generating facility located in Woodbridge Township in
Middlesex County, New Jersey. CPV Shore is owned by by affiliates
of CPV Power Holdings, LP, Toyota Tsusho Corporation, Osaka Gas
Co., Ltd and John Hancock Life Insurance Company.
The principal methodology used in these ratings was Power
Generation Projects Methodology published in January 2022.
CROWN HOLDINGS: Moody's Affirms 'Ba1' CFR, Outlook Remains Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed Crown Holdings, Inc.'s Ba1
corporate family rating and Ba1-PD probability of default rating,
reflecting the group's refinancing of the existing credit
facilities, including its senior secured revolver and senior
secured term loans. The company's speculative grade liquidity (SGL)
rating was maintained at SGL-2. The rating outlook is stable.
The term loans, including its US dollar term loan and Euro term
loan at the group's US and European subsidiaries, will be
refinanced and upsized by about $1 billion. The upsized amount will
be used to redeem the two senior unsecured Euro notes issued by
Crown European Holdings S.A., totaling close to $1 billion and
maturing in February 2023. The amount of the revolver remains the
same. The revolver includes the US dollar, multicurrency and
Canadian dollar tranches. Ratings on the existing revolvers, term
loans and the two senior unsecured Euro notes will be withdrawn
after closing of the transaction.
"The refinancing, including the early redemption of senior
unsecured notes, does not affect Crown's leverage on a consolidated
basis, supporting the affirmation of the corporate family rating,"
said Motoki Yanase, VP - Senior Credit Officer at Moody's.
"The ratings of the new senior secured credit facilities, including
the revolver and the senior secured term loans, are rated Baa2 and
brought closer to the corporate family rating to reflect the
increased proportion of secured debt in Crown's debt capital
structure," adds Yanase. "The senior unsecured facility ratings
remain at the same level."
Moody's took the following actions:
Assignments:
Issuer: Crown Americas LLC
Gtd Senior Secured Bank Credit Facility, Assigned Baa2 (LGD2)
Issuer: Crown European Holdings S.A.
Gtd Senior Secured Bank Credit Facility, Assigned Baa2 (LGD2)
Issuer: Crown Metal Packaging Canada LP
Gtd Senior Secured Bank Credit Facility, Assigned Baa2 (LGD2)
Affirmations:
Issuer: Crown Holdings, Inc.
Corporate Family Rating, Affirmed Ba1
Probability of Default Rating, Affirmed Ba1-PD
Issuer: Crown Americas LLC
Senior Unsecured Regular Bond/Debenture, Affirmed Ba2 (LGD5)
Issuer: Crown Cork & Seal Company, Inc.
Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD6)
Issuer: Crown European Holdings S.A.
Senior Unsecured Regular Bond/Debenture, Affirmed Ba1 (LGD3)
Outlook Actions:
Issuer: Crown Holdings, Inc.
Outlook, Remains Stable
Issuer: Crown Americas LLC
Outlook, Remains Stable
Issuer: Crown Cork & Seal Company, Inc.
Outlook, Remains Stable
Issuer: Crown European Holdings S.A.
Outlook, Remains Stable
Issuer: Crown Metal Packaging Canada LP
Outlook, Remains Stable
RATINGS RATIONALE
The refinancing also extends the group's debt maturity, a credit
positive. The maturity of senior secured credit facilities,
including the revolver and the term loan, are extended to August
2027. The earliest maturity of the group's debt is now September
2024 when its senior unsecured Euro note issued by Crown European
Holdings S.A. matures.
Crown's credit profile is supported by the consolidated industry
structure in the can segment, which demonstrates solid growth, and
serving the stable alcoholic/non-alcoholic beverage and food end
markets. Its credit profile is also supported by a large base of
installed equipment in the transit packaging segment that drives a
high percentage of recurring sales of consumables. Crown also
benefits from geographic diversification to Europe.
On the other hand, the credit profile is constrained by the
company's high customer and product concentration of sales and
exposure to cyclical end markets in the transit packaging segment.
Additionally, the fragmented and competitive industry structure in
the transit packaging segment makes growth and margin expansion
difficult. The company also has an outstanding asbestos liability,
which Moody's adds to total debt as a part of Moody's adjustments.
The stable outlook reflects Moody's expectation that Crown's profit
and cash flow will be supported by solid demand for the beverage
cans business for the next 12-18 months and that the company will
manage its cash outflow to restrain total debt and leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the ratings if Crown sustainably improves its
credit metrics within the context of a stable competitive
environment and maintains good liquidity. An upgrade would also
require a more streamlined debt capital structure and the
flexibility of an unsecured capital structure. Specifically, the
ratings could be upgraded if total debt/EBITDA is below 3.5x and
free cash flow/debt is over 10%.
Moody's could downgrade the ratings if credit metrics, liquidity or
the competitive environment deteriorate. Specifically, the rating
could be downgraded if total debt/EBITDA rises above 4.25x, free
cash flow/debt falls below 6.0%, or EBITDA/Interest expense is
below 5.0x.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
Headquartered in Yardley, Pennsylvania, Crown Holdings, Inc. (NYSE:
CCK), is a global manufacturer of steel and aluminum containers for
food, beverage, and consumer products. Crown also manufactures
protective packaging products and solutions. For 2021, the company
generated about $9.8 billion in revenue, excluding its divested
European tinplate business.
DACO CONSTRUCTION: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: DACO Construction Corporation
819 Reece Road
# 375
Severn, MD 21144
Business Description: The Debtor is part of the nonresidential
building construction industry.
Chapter 11 Petition Date: August 10, 2022
Court: United States Bankruptcy Court
District of Maryland
Case No.: 22-14371
Judge: Hon. Michelle M. Harner
Debtor's Counsel: Marc R. Kivitz, Esq.
LAW OFFICE OF MARC R. KIVITZ
201 N. Charles Street, Suite #1330
Baltimore, MD 21201-4107
Tel: 410-625-2300
Fax: 410-576-0140
Email: mkivitz@aol.com
Total Assets: $1,830,279
Total Liabilities: $5,712,808
The petition was signed by Pedro Couto as chief operating officer.
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/DMAYMMA/DACO_Construction_Corporation__mdbke-22-14371__0001.0.pdf?mcid=tGE4TAMA
DIOCESE OF HARRISBURG: Reaches Clergy Abuse Survivors Settlement
----------------------------------------------------------------
8WGAL reports that the Diocese of Harrisburg has reached an
agreement to settle claims of people who say they were victims of
clergy sexual abuse.
The Diocese has agreed to set up a $7.5 million trust as part of a
proposed settlement that will allow the Diocese to come out of
bankruptcy protection.
The Diocese filed for bankruptcy in 2020. Since then, it said more
than 50 people have filed claims that they were abused by priests.
"The steps we take today continue our commitment and responsibility
to support survivors of clergy abuse, and to make restitution for
the suffering they have endured," Bishop Ronald Gainer said in a
news release on Thursday. "While I have acknowledged many times
that no amount of money could ever compensate for the abuse these
survivors have experienced, it is my prayer that this settlement
will be the next step toward healing."
About Roman Catholic Diocese of Harrisburg
The Diocese of Harrisburg is comprised of 89 parishes in 15
counties in Central Pennsylvania.
The Roman Catholic Diocese of Harrisburg sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No.
20-00599) on Feb. 19, 2020, listing up to $10 million in assets and
up to $100 million in liabilities. Judge Henry W. Van Eck oversees
the case.
The Debtor tapped Waller Lansden Dortch & Davis, LLP as legal
counsel; Kleinbard, LLC as special counsel; Keegan Linscott &
Associates, PC as financial advisor; and Epiq Corporate
Restructuring, LLC as claims and noticing agent. The Hon. Michael
Hogan has been tapped as unknown abuse claims representative.
The U.S. Trustee for Regions 3 and 9 appointed a committee to
represent tort claimants in the Chapter 11 case of the Roman
Catholic Diocese of Harrisburg. The Tort Claimants' Committee is
represented by Stinson, LLP.
DLVR INC: Gets OK to Hire Osborn Maledon as Bankruptcy Counsel
--------------------------------------------------------------
DLVR Inc. received approval from the U.S. Bankruptcy Court for the
District of Arizona to employ Osborn Maledon, P.A. to serve as
legal counsel in its Chapter 11 case.
The firm's services include:
a. advising the Debtor of its rights, powers and duties in
this case;
b. assisting the Debtor in the preparation of its statement of
financial affairs and bankruptcy schedules;
c. assisting the Debtor in the formulation, preparation and
prosecution of a plan of reorganization, disclosure statement and
agreements that may be necessary or proper to implement such plan;
d. assisting the Debtor with regard to litigation and other
matters related to the administration and conduct of its case;
e. assisting the Debtor in its discussions with creditors;
f. assisting the Debtor in reviewing claims asserted against
it and in negotiating with creditors asserting such claims;
g. assisting the Debtor in examining and investigating
potential preferences, fraudulent conveyances, and other causes of
action;
h. representing the Debtor at all hearings and other
proceedings;
i. preparing legal papers;
j. reviewing legal papers filed by parties in interest with
the court;
k. performing other necessary legal services for the Debtor.
The usual hourly rates charged by the firm are as follows:
Attorneys $250 - $750
Paralegals $155 - $235
Osborn Maledon holds a retainer of $17,424.
As disclosed in court filings, Osborn Maledon and its attorneys are
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Christopher C. Simpson, Esq.
Warren J. Stapleton, Esq.
Osborn Maledon, P.A.
2929 N. Central Avenue, Suite 2100
Phoenix, AZ 85012
Tel: 602-640-9349
Fax: 602-640-9050
Email: csimpson@omlaw.com
About DLVR Inc.
DLVR Inc. -- https://www.dlvr.com/ -- is a developer of a cloud
infrastructure platform designed to optimize, measure and simplify
internet videos. It is based in Phoenix, Ariz.
DLVR filed a voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ariz. Case No. 22-04935) on July 27,
2022. The Debtor has elected to proceed under Subchapter V of
Chapter 11. Jennifer A. Giamo has been appointed as Subchapter V
trustee.
In the petition filed by Michael Gordon, chief executive officer
and president, the Debtor listed $1 million to $10 million in both
assets and liabilities.
Judge Daniel P. Collins oversees the case.
Christopher C. Simpson, Esq., and Warren J. Stapleton, Esq., at
Osborn Maledon, P.A. are the Debtor's bankruptcy attorneys.
EDUCATIONAL TRAVEL: Seeks $87,467 in Cash Collateral Thru Aug 31
----------------------------------------------------------------
Educational Travel Services, Inc. asks the U.S. Bankruptcy Court
for the District of Oregon for authority to use cash collateral up
to $87,467 through August 31, 2022, and grant a replacement lien.
The Debtor requires the use of cash collateral to have enough funds
to operate its business, which will result in lost sales and the
inability to fund the Plan.
The Debtor's secured creditors are Columbia Bank and the U.S. Small
Business Administration. The secured creditors have UCC liens filed
on bank accounts and accounts receivable recorded in the Office of
The Secretary of the State. They are dated January 5, 2011, for
Columbia Bank and June 5, 2020 for the SBA. Columbia Bank's first
lien has a current balance of approximately $500,000. The SBA's
second lien has a balance of approximately $200,000.
A preliminary hearing on the matter is scheduled for August 12 at
10 a.m.
The Debtor needs to use the account receivables and cash to
continue operation of their business.
The bank accounts and accounts receivable total approximately
$513,153 as of the day of filing.
As for adequate protection, the Secured Creditors will be granted a
security interest and replacement lien, dollar for dollar, in all
of the post-petition accounts and accounts receivables to replace
their security interest and liens in collateral to the extent of
Pre-Petition cash collateral utilized by the Debtor during the
pendency of this bankruptcy proceeding. Columbia Bank also has a
security interest in collateral owned by the company shareholders.
The Debtor will pay monthly adequate protection payments of $5,000
to Columbia Bank. The Debtor will pay the SBA the regular payment
due on the EIDL loan as they are due.
A copy of the motion and the Debtor's six-month budget through
January 2023 is available at https://bit.ly/3QkFbNW from
PacerMonitor.com.
The budget provides for total expenses, on a monthly basis, as
follows:
$50,656 for the month of August 2022;
$50,656 for the month of September 2022;
$50,656 for the month of October 2022;
$50,656 for the month of November 2022;
$50,656 for the month of December 2022; and
$50,656 for the month of January 2023.
About Educational Travel
Gladstone, Ore.-based Educational Travel Services, Inc. sought
Chapter 11 protection (Bankr. D. Ore. Case No. 22-31272) on August
5, 2022. The Debtor disclosed $516,453 in assets and $1,419,136 in
liabilities. Ted A. Troutman, Esq., at Troutman Law Firm P.C. is
the Debtor's counsel.
ENJOY TECHNOLOGY: Committee Taps Fox Rothschild as Legal Counsel
----------------------------------------------------------------
The official committee of unsecured creditors of Enjoy Technology,
Inc. and its affiliates seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to hire Fox Rothschild, LLP as
its legal counsel.
The firm's services include:
(a) providing legal advice with respect to the committee's
powers and duties as appointed under Bankruptcy Code Section 1102;
(b) assisting in the investigation of the acts, conduct,
assets, liabilities and financial condition of the Debtors, the
operation of the Debtors' businesses, and any other matter relevant
to the Debtors' Chapter 11 cases or to the formulation of a plan of
reorganization or liquidation;
(c) preparing legal papers;
(d) reviewing, analyzing and responding to pleadings filed in
these cases and appearing before the court;
(e) representing the committee in hearings and other judicial
proceedings;
(f) advising the committee of its fiduciary duties and
responsibilities;
(g) advising the committee and its other professionals on
practice and procedure in the Delaware bankruptcy court; and
(h) performing other legal services for the committee.
The firm will be paid at these rates:
Attorneys $355 - $995 per hour
Associates $355 - $580 per hour
Paraprofessionals $130 - $435 per hour
Jeffrey L. Widman, Partner $650 per hour
Howard A. Cohen, Partner $625 per hour
Gordon E. Gouveia, Partner $600 per hour
Diana L. McGraw, Partner $560 per hour
Stephanie J. Slater, Associate $405 per hour
Marcia Steen, Paralegal $400 per hour
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Fox
Rothschild disclosed that:
-- For purposes of these Chapter 11 cases, the firm has agreed
to cap its blended hourly rate for all professionals at $600 per
hour.;
-- No Fox Rothschild professional included in the engagement
has varied his rate based on the geographic location of the
bankruptcy cases.
-- The firm has not represented the committee in the 12 months
prior to the Debtors' Chapter 11 filing.
-- The firm expects to develop a budget and staffing plan to
reasonably comply with the U.S. trustee's request for information
and additional disclosures, as to which the firm reserves all
rights. The committee has approved Fox Rothschild's proposed hourly
billing rates.
Howard Cohen, Esq., a partner at Fox Rothschild, disclosed in court
filings that the firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Howard A. Cohen, Esq.
Stephanie J. Slater, Esq.
Fox Rothschild, LLP
919 North Market Street, Suite 300
Wilmington, DE 19899-2323
Telephone: (302) 654-7444
Facsimile: (302) 656-8920
Email: hcohen@foxrothschild.com
Email: sslater@foxrothschild.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; PricewaterhouseCoopers, LLP as auditor; 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. Fox Rothschild, LLP and FTI Consulting,
Inc. serve as the committee's legal counsel and financial advisor,
respectively.
ENJOY TECHNOLOGY: Committee Taps FTI as Financial Advisor
---------------------------------------------------------
The official committee of unsecured creditors of Enjoy Technology,
Inc. and its affiliates seeks approval from the U.S. Bankruptcy
Court for the District of Delaware to hire FTI Consulting, Inc. as
its financial advisor.
The firm's services include:
(a) assisting in the review of financial-related disclosures
required by the court.
(b) assisting in the preparation of analyses required to
assess any proposed debtor-in-possession (DIP) financing or use of
cash collateral;
(c) assisting in the assessment and monitoring of the Debtors'
short-term cash flow, liquidity, and operating results;
(d) assisting in the analysis of hedging and risk management
activities and issues;
(e) assisting in the review of the Debtors' proposed key
employee incentive, management incentive, and any key employee
retention and other employee benefit programs;
(f) assisting in the review of the Debtors' analysis of core
business assets, new business development initiatives and
investments, and joint ventures;
(g) assisting in the review of the Debtors' cost/benefit
analysis with respect to the assumption or rejection of various
executory contracts and leases;
(h) assisting in the review of the Debtors' identification of
potential cost savings;
(i) assisting in the review of any tax issues;
(j) assisting in the review of the claims reconciliation and
estimation process;
(k) assisting in the review of the Debtors' corporate
structure;
(l) assisting in analyzing entity-level value waterfalls and
potential recoveries with respect to any proposed plan of
reorganization;
(m) assisting in the review of other financial information
prepared by the Debtors;
(n) assisting in the analysis of regulatory issues;
(o) attending meetings and assisting in discussions with the
Debtors, potential investors, secured lenders, ad hoc creditor
groups, unsecured creditors' committee or any other official
committees organized in these Chapter 11 proceedings, the U.S.
trustee and other concerned parties;
(p) assisting in the review or preparation of information and
analysis necessary for the confirmation of a Chapter 11 plan and
related disclosure statement;
(q) assisting in the evaluation and analysis of avoidance
actions;
(r) assisting in the prosecution of committee responses and
objections to the Debtors' motions;
(s) supporting the committee in its duties to share
information with all unsecured creditors; and
(t) other general business consulting services.
The hourly rates of FTI Consulting's professionals are as follows:
Senior Managing Directors $975 - $1,325
Directors/Senior Directors/Managing Directors $735 - $960
Consultants/Senior Consultants $395 - $695
Administrative/Paraprofessionals $160 - $300
In addition, the firm will seek reimbursement for expenses
incurred.
Clifford Zucker, a senior managing director at FTI Consulting,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Clifford Zucker
FTI Consulting, Inc.
1166 Avenue of the Americas, 15th Floor
New York, NY 10036
Telephone: (212) 247-1010
Email: andrew.scruton@fticonsulting.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; PricewaterhouseCoopers, LLP as auditor; 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. Fox Rothschild, LLP and FTI Consulting,
Inc. serve as the committee's legal counsel and financial advisor,
respectively.
FIRST HANOVER: Plan Proposes Sale After 6 Months
------------------------------------------------
First Hanover Swiss Avenue Historic Townhomes, LLC submitted a
Liquidating Plan and a Disclosure Statement.
The Debtor owns real property in the form of an undeveloped lot on
Swiss Avenue, a designated historic district in Dallas, Texas, (the
"Property"). The Debtor is in the process of constructing a 4-unit
residential townhome building on the Property.
The Plan proposes to sell all Assets of the Debtor, including the
Property, for fair market value and use the proceeds to pay allowed
claims in the order of priority authorized under the Bankruptcy
Code, to the extent cash is available. The sale of the Debtor's
Assets will occur no later than 6 months following the Effective
Date.
As of the Petition Date, the Debtor owned real property consisting
of the Property, the value of which is scheduled by the Debtor as
$1,300,000.
Under the Plan, Class 4 General Unsecured Claims total $179,974.
These Claims will be paid pro rata and in full in one lump sum
payment out of the sale proceeds no later than 6 months after the
Effective Date, to the extent cash is available after payment of
Classes 1, 2 and 3. Interest will begin to accrue on the Effective
Date at the rate of 1% per annum. Class 4 is impaired.
Within 6 months after the Effective Date the Debtor will sell all
its Assets, including the Property, for fair market value and use
the funds raised by such sale to pay all Claims.
Attorneys for the 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
A copy of the Disclosure Statement dated July 30, 2022, is
available at https://bit.ly/3Jz0MPL from PacerMonitor.com.
About Hanover Swiss Avenue
Hanover Swiss Avenue Historic Townhomes LLC is a Single Asset Real
Estate (as defined in 11 U.S.C. Sec. 101(51B)).
Hanover Swiss Avenue Historic Townhomes sought Chapter 11
bankruptcy protection (Bankr. N.D. Tex. Case No. 22-30814) on May
3, 2022. In the petition filed by Phillip E. Snoddy, as manager,
Hanover Swiss Avenue estimated assets between $1 million and $10
million and estimated liabilities between $500,000 and $1 million.
The case is assigned to Honorable Bankruptcy Judge Stacey G.
Jernigan.
Joyce W. Lindaue, of Joyce W. Lindauer Attorney PLLC, is the
Debtor's counsel.
FREE SPEECH: Judge Orders Jones to Pay $45 Mil. Punitive Damages
----------------------------------------------------------------
Janet Miranda, Kaustuv Basu and James Nani of Bloomberg Law report
that Alex a Texas jury on Friday ordered Alex Jones to pay $45.2
million in punitive damages to the parents of a Sandy Hook victim,
a day after he was ordered to pay $4.1 million in actual damages
for claiming that the school shooting was a hoax.
The combined award -- which is likely to be reduced -- is well
below the $150 million that parents Neil Heslin and Scarlett Lewis
sought for the InfoWars host's assertions that the 2012 massacre in
Newtown, Conn., was fabricated. Their six-year-old, Jesse Lewis,
was killed in the shooting.
"Punitive damages are typically more of a bellwether or a barometer
of where we are culturally; they are more iconic messages sending
verdicts from the public to the defendant directly," Jamie Abrams,
law professor at American University, told Bloomberg Law. "And so,
on that front, this trial is uniquely interesting, because it
really is a political barometer of how much misinformation the
public is willing to accept."
Friday's, July 30, 2022, unanimous ruling closes the two-week trial
in Travis County, Texas.
Friday's damages are punishment for Jones’ statements, while
Thursday's, July 29, 2022, damages were meant to compensate the
parents for economic and noneconomic damages like emotional
distress.
"I am asking you to take the bullhorn away from Alex Jones and all
others who believe they can profit off fear and misinformation,"
plaintiffs' lawyer Wesley Ball said during closing arguments
Friday, July 30, 2022.
"I suggest to you to return a verdict that is proportionate,"
Jones' attorney Andino Reynal countered during his own closing,
asking jurors to order just $270,000 in punitive damages. "You've
already sent a message. A message for the first time to a talk show
host, to all talk show hosts, that their standard of care has to
change."
Damage Caps
In Texas, there are statutory limits on punitive damages, with a
per-defendant cap of two times the amount of economic damages, plus
the amount of noneconomic damages found by the jury -- the latter
part not to exceed $750,000.
Judge Maya Guerra Gamble of the 459th District Court in Travis
County may reduce the punitive damages given those caps, and Jones'
attorneys said immediately after the verdict that they would file a
motion to reduce the punitive award.
The Texas law "protects companies and bad actors like Alex Jones,
so that they're never going to be punished to the full extent that
would be needed to truly deter them from future actions and to
teach other people that this is bad behavior," said Carrie Goldberg
of the C.A. Goldberg Law Firm in New York. "Texas is unusual."
The very purpose of punitive damages gets frustrated when there's a
cap, she said.
"We do not believe punitive damage caps are constitutional as
applied to our case and will certainly litigate that issue if
necessary," Mark Bankston, one of the plaintiffs' attorneys, told
Bloomberg.
Jones and InfoWars' parent company, Free Speech Systems LLC, were
co-defendants in the case.
The trial was shocking at times, including when Bankston told Jones
earlier in the week that his defense team had accidentally sent the
plaintiffs' lawyers a record of previously requested text messages.
Bankston also said that the US House committee investigating the
Jan. 6, 2021 insurrection at the US Capitol had requested the
texts, and Gamble hinted Friday that she wouldn't stand in the way
of that.
Immediately after the Friday ruling, Bankston said he would seek
sanctions against Jones' attorneys for their handling of evidence
and their conduct at trial.
Reynal said he'd tell the court which communications he would seek
to reseal, and Gamble said she would set a hearing on those
motions.
'100% Real'
Jones conceded under oath earlier this week that the massacre was
"100% real." He also admitted that it was irresponsible of him to
declare the shooting a hoax.
The defamation case vindicates Jesse's memory, Ball said during
closing arguments on Friday.
The court already determined in a 2021 default judgment that Jones
was liable for defamation and intentional infliction of emotional
distress.
Farrar & Ball LLP represented the parents. Reynal Law Firm PC
represented Jones.
The case is Helsin v. Jones, Tex. Dist. Ct., No. D-1-GN-18-001835,
8/5/22.
About Free Speech Systems LLC
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC 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.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden added to case as trustee has been appointed as
Subchapter V trustee.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is the Debtor's counsel.
FREEPORT GATE: Gets OK to Hire Paramount Realty as Auctioneer
-------------------------------------------------------------
Freeport Gate, LLC received approval from the U.S. Bankruptcy Court
for the Eastern District of New York to hire Paramount Realty USA,
LLC, an auction firm in Great Neck, N.Y.
The Debtor requires the services of an auctioneer in connection
with the sale of its real property located at 55 Hudson Ave.
Freeport, N.Y.
Paramount Realty will receive commissions for its services and
reimbursement for work-related expenses.
As disclosed in court filings, Paramount is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Misha Haghani, Esq.
Paramount Realty USA, LLC
10 Cuttermill Road, Suite 403
Great Neck, NY 11021
Phone: 212-867-3333
About Freeport Gate
Freeport Gate, LLC, a company in Great Neck, N.Y., filed a petition
for relief under Subchapter V of Chapter 11 of the Bankruptcy Code
(Bankr. E.D.N.Y. Case No. 22-71639) on July 7, 2022, listing $1
million to $10 million in both assets and liabilities. Gerard R.
Luckman has been appointed as Subchapter V trustee.
Judge Robert E. Grossman oversees the case.
Robert J. Spence, Esq., at Spence Law Office, P.C. represents the
Debtor as counsel.
FREEPORT GATE: Gets OK to Hire Spence Law Office as Counsel
-----------------------------------------------------------
Freeport Gate, LLC received approval from the U.S. Bankruptcy Court
for the Eastern District of New York to hire Spence Law Office,
P.C. to serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) advising the Debtor regarding its power and responsibility
in the continued management of its property;
(b) attending creditors' meetings and Section 341 hearings;
(c) negotiating with creditors in formulating a plan of
reorganization and taking the necessary legal steps in order to
institute the plan;
(d) preparing legal papers;
(e) appearing before bankruptcy court; and
(f) performing all necessary legal services for the Debtor.
The firm's attorneys and paralegals will be paid at hourly rates as
follows:
Partners $475
Associates/Of Counsel $325 - $475
Paralegals $125
Spence Law Office received a retainer in the aggregate amount of
$20,000, and a filing fee of $1,717.
Robert Spence, Esq., at Spence Law Office, 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:
Robert J. Spence, Esq.
Spence Law Office, P.C.
55 Lumber Road, Suite 5
Roslyn, NY 11576
Tel: (516) 336-2060
Fax: (516) 605-2084
Email: rspence@spencelawpc.com
About Freeport Gate
Freeport Gate, LLC, a company in Great Neck, N.Y., filed a petition
for relief under Subchapter V of Chapter 11 of the Bankruptcy Code
(Bankr. E.D.N.Y. Case No. 22-71639) on July 7, 2022, listing $1
million to $10 million in both assets and liabilities. Gerard R.
Luckman has been appointed as Subchapter V trustee.
Judge Robert E. Grossman oversees the case.
Robert J. Spence, Esq., at Spence Law Office, P.C. represents the
Debtor as counsel.
GISSING NORTH AMERICA: Seeks Cash Collateral, $8.8MM DIP Loan
-------------------------------------------------------------
Gissing North America LLC, a Delaware limited liability company et
al, ask the U.S. Bankruptcy Court for the Eastern District of
Michigan, Southern Division, for authority to use cash collateral
and obtain postpetition financing.
The salient terms of the proposed DIP Credit Facility include:
a. Maximum Amount: Loan commitment of $30,000,000 consisting
of a revolving loan and the sum of advances on the DIP loan plus
advances outstanding on the prepetition revolver that will not
exceed $30,000,000 in the aggregate.
b. Interim Financing: Prior to entry of a Final Order, the DIP
Lenders will provide up to $8,800,000 of interim financing subject
to the entry of an Interim Order approving the same. The Interim
and Final Orders will be in form and substance acceptable to the
DIP Lenders.
c. Maturity Date and Events of Default: The earlier of (i)
October 31, 2022 and (ii) the occurrence of a Termination Event,
which includes: (i) any of the Cases are either dismissed or
converted to a case under chapter 7 of the Bankruptcy Code or if
venue of any of the Cases is transferred to another district; (ii)
a trustee or an examiner with expanded powers is appointed in any
of the Cases; (iii) any plan(s) of reorganization of the Debtors is
filed entered an order confirming, a plan of reorganization, which
plan is not in form and substance acceptable to the DIP Lenders or
the Prepetition Lenders; (xii) the Sale Milestones, attached to the
Motion as Exhibit 6c, will not have been met within the period
specified therefor, as the same may be extended in the sole
discretion of the Lenders; or (xiii) the termination of the Term of
the Accommodation Agreement.
d. As adequate protection to the prepetition lenders, Debtors
will continue to pay accrued interest on the prepetition loans
monthly, as well as continued monthly principal payments on the
prepetition term loans. The prepetition lenders will also receive
replacement liens on all assets of Debtors (e.g., newly generated
accounts and newly acquired inventory), which will be junior to the
liens securing the DIP loan and a section 507(b) priority claim. As
adequate protection to Tesla, Tesla will also receive replacement
liens and a section 507(b) priority claim which will be junior to
the prepetition lenders' replacement liens and 507(b) claim. Tesla
has agreed to this form of adequate protection.
e. A $300,000 commitment fee (1% of commitment amount) deemed
fully earned and nonrefundable on receipt.
On an interim basis, the Debtors request that the Court authorize
them to borrow and use up to $8,800,000 through August 28, 2022.
This amount anticipates a final hearing on the Motion on or before
August 28, 2022, and that the Court approves the financing on the
terms requested in the Interim Order by that date as required by
the DIP Credit Facility.
The Debtor requires the use of cash collateral and postpetition
financing to maintain liquidity sufficient to continue operating
the Debtors' businesses during the period prior to the asset sales,
which are to be completed by October 31, 2022.
The Debtors' four major customers, Tesla, General Motors, Toyota,
and BMW have agreed to provide financial and other accommodations
to the Debtors in connection with their purchase of component
parts. These accommodations are memorialized in the Accommodation
Agreement with an effective date of July 18, 2022, the original
parties to which were the Debtors, General Motors, Toyota, BMW, and
The Huntington National Bank, as administrative agent, and Comerica
Bank, as documentation agent. The Debtors, GM, and Toyota re also
the original parties to a related Access and Security Agreement
with an effective date of July 18, 2022 (as amended by the
Joinder). Tesla and the other parties to the Accommodation
Agreement and Access Agreement executed Tesla's Joinder to
Accommodation and Access Agreement effective as of July 29, 2022.
The Accommodating Customers have agreed to fund the Debtors'
projected liquidity shortfall of over $14 million between now and
the expected closing of a sale of the Debtors' assets by October
31, 2022, via a combination of subordinated participations,
surcharges, expedited payment terms, and limitations on their
setoff rights. The credit enhancements the Accommodating Customers
have agreed to provide are the foundation for the Debtors'
requested DIP Facility, and the Court's approval of the
Accommodation Agreement and Access Agreement is a condition
precedent to the Debtors' ability to obtain post-petition financing
to continue operations and bridge to an expected going concern
sale.
The Debtors' day-to-day financing is provided through credit
facilities from the Lenders.
The Debtors and non-debtors, Conform Automotive, LLC, a Michigan
limited liability company, and DTI Molded Products, Inc., a
Michigan corporation, are borrowers under a Fifth Amended and
Restated Credit Agreement dated June 18, 2019
The Credit Agreement is secured by a first priority lien on
substantially all of the Debtors' assets as more particularly
described in the Credit Agreement and the related loan documents
Under the Credit Agreement, the Debtors had access to revolving
credit and term loan facilities evidenced by these notes: (a)
Eighth Amended and Restated Revolving Note, (b) Second Amended and
Restated Equipment Term Loan Note, (c) Second Amended and Restated
Real Estate Term Loan Note, (d) Second Amended and Restated CapEx
Note, and (e) Amended and Restated Second Amendment CapEx Note, in
each case, dated October 29, 2021.
The Debtors defaulted under the Loan Documents, which led to a
Forbearance Agreement dated November 30, 2021.
GNA is also indebted to GAS, William H. Vaughn and Steven B.
Phillips under a Third Amended and Restated Subordinated Promissory
Note dated June 18, 2019, in the original principal amount of
$7,300,000. The Seller Note matures on January 1, 2025, and is
guaranteed by, and secured by a lien on the assets of, Sidney
(f/k/a FFT Sidney, LLC), Sumter (f/k/a FFT Sumter, LLC), Auburn
(f/k/a FFT Auburn, LLC), and Technologies (f/k/a Formed Fiber
Technologies, LLC). The obligations under the Seller Note accrue
interest at 5.5% per annum, payable in kind on a quarterly basis.
As of the Petition Date, there is $5,037,059 owing under the Seller
Note.
Also on June 18, 2019, the Permitted Holders and Lenders entered
into a Keepwell Agreement, pursuant to which the Permitted Holders
agreed to make investments in Debtors in the form of extending
loans or making capital contributions to cure Debtors' financial
covenant defaults under the Loan Documents. Under the Keepwell
Agreement, GAS advanced loans to GNA evidenced by the following (a)
a First Amended and Restated Promissory Note dated June 18, 2019,
in the original principal amount of $1,000,000; (b) a Demand
Promissory Note dated October 18, 2019, in the original principal
amount of $2,000,000; (c) a Demand Promissory Note dated April 1,
2020, in the original principal amount of $2,000,000; (d) a Demand
Promissory Note dated April 5, 2021, in the original principal
amount of $1,000,000; and (e) a Subordinated Promissory Note dated
May 28, 2021, in the original principal amount of $6,825,000. As of
the Petition Date, there is $12.956 million owing under the GAS
Notes.
In addition, one of the Accommodating Customers, Tesla, provided
financing pursuant to the following : (a) Note Payable executed by
GNA dated April 25, 2022, in the original principal amount of
$2,850,000; (b) Credit Note and Set Off Agreement by and between
GNA and Tesla dated April 22, 2022, in the original principal
amount of $9,000,000, and (iii) Tesla Purchase Order No. 4700350669
dated December 3, 2021, in the original principal amount of
$3,118,371, which was reduced by the amount shown in Line #240 of
that order because the order was cancelled. The Tesla Notes are
secured by a second priority lien on substantially all of the
Debtors' assets up to $5.7 million, and are subordinated to the
Lenders pursuant to a Subordination Agreement dated July 29, 2022.
A combination of macroeconomic volatility and lower than expected
operating efficiencies have resulted in significant and
unsustainable financial losses for the Debtors, disrupting their
growth strategy.
From a macroeconomic perspective, the COVID-19 pandemic caused
production to halt for approximately three months, resulting in
losses, some of which were covered by a now-forgiven Payroll
Protection Program loan. Significant price increases for all input
costs -- material, labor, burden -- have presented unprecedented
challenges to the Debtors and auto suppliers across North America.
The Debtors' core raw material, resin, has increased in price by
approximately 49% since 2019. Two of GNA's top resin suppliers'
average price per pound has increased approximately 57% since
2019.
Not only have labor costs increased significantly, but there is a
profound shortage of capable workers. This shortage forced Debtors,
from November 2021 through April 2022, to use temporary employees
from North Carolina in its Sidney OH facility, incurring their
lodging and meal costs in addition to paying them above-market
wages.
Inflationary and geopolitical headwinds continue to drive increases
in fuel and freight costs.
The Debtors have experienced a number of unique setbacks in
addition to the generally inhospitable manufacturing environment.
The General Motors strike began in September 2019 and lasted six
weeks. At the time, GM was the Debtors' largest customer, and the
shutdown had a significant negative effect on borrowing capacity
and profitability.
The Debtors also experienced two major cyber-attacks on their
computer network in late 2021, and a water main break at the Auburn
facility in March 2022.
The Debtors have attempted to grow their manufacturing capabilities
since 2020, including multiple program launches. Scrap issues and
labor inefficiencies have driving margin erosion since 2021. The
Debtors are actively recruiting an experienced Chief Operating
Officer.
Greenville leased space in Fountain Inn SC in anticipation of an
award of new business from an OEM. That award did not happen.
Greenville incurred approximately $500,000 of sunk costs but has
subleased part of the space to a Tier 1 supplier covering
approximately 50% of the monthly lease cost.
The Debtors' ultimate parent is a Chinese entity, Wuxi Gissing Auto
Parts Co., Ltd. From 2019 through 2021, Wuxi funded over $36
million to support existing operations, viewing the Debtors as a
strategic growth asset to increase North American market share.
Total Wuxi contributions exceed $45 million in various forms of
equity and debt, in addition to funding approximately 100 expats
from China to support the Debtors' launches.
The Debtors unsuccessfully attempted to refinance their senior
secured debt owing to the Lenders in the first quarter of 2022.
Steven R. Wybo was retained as CRO of the Debtors in May 2022 as a
condition of the Lenders' extension of the Forbearance Agreement.
The Debtors retained Wolfson Bolton PLLC on July 25, 2022 to begin
preparing these chapter 11 cases. The Debtors' Chief Executive
Officer and President, Claudio Calado, resigned effective August 2,
2022.
Following Mr. Wybo's retention as CRO, the Debtors explored their
options for preserving and maximizing value for all stakeholders.
Toward that end, the Company retained investment banking firm
Livingstone Partners LLC on July 3, 2022 to advise them with
respect to a potential sale of the Debtors. During the period, the
Debtors continued to experience severe liquidity constraints and
were unable to manage them with only the support and cooperation of
the Lenders.
The credit and financial accommodations provided under the DIP
Credit Facility and the use of the Cash Collateral will enable the
Debtors to continue to satisfy their vendors, service their
customers, pay employees, and operate their businesses in the
ordinary course and in an orderly and reasonable manner to preserve
and enhance the value of their estates for the benefit of all
stakeholders.
The Debtors have agreed to a sale process with these milestones:
i. The Debtors shall file for bankruptcy under chapter 11 of
the Bankruptcy Code on or before August 8, 2022;
ii. The Debtors shall file with the Bankruptcy Court, on or
before Aug. 19, 2022 at 5:00 p.m. (Eastern Time), a motion, in form
and substance reasonably satisfactory to Collateral Agent, the
Required Lenders, and Accommodating Customers, requesting entry by
the Bankruptcy Court of an order approving auction, bid and sale
procedures for the sale of the Debtors' assets to one or more
"Qualified Buyers";
iii. The Debtors will obtain from the Bankruptcy Court, on or
before Sept. 12, 2022, an order approving the bidding procedures,
and providing that all bids are due by Oct. 7, 2022;
iv. The Debtors shall conduct, on or before Oct. 11, 2022, at or
before 5:00 p.m. (Eastern Time), an auction for the sale of their
assets to one or more Qualified Buyers and at the conclusion of the
auction selected one or more Qualified Buyers, acceptable to the
Collateral Agent and the Required Lenders;
v. A hearing to approve the proposed sale to the Accepted
Bidders pursuant to Section 363 of the Bankruptcy shall be
conducted by the Bankruptcy Court on or before Oct. 17, 2022 at
5:00 p.m. (Eastern Time), or as soon as reasonably practicable
thereafter based upon the Bankruptcy Court's availability;
vi. The Debtors shall obtain, within two business days of the
Sale Hearing, an order from the Bankruptcy Court approving the
proposed sale to the Accepted Bidder(s); and
vii. The closing of the sale(s) to the Accepted Bidder(s) shall
occur on or before Oct. 31, 2022.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3QgACE0 from PacerMonitor.com.
About Gissing North America
Gissing North America LLC, f/k/a Conform Gissing International,
LLC, and its affiliates are innovative and technology-driven
suppliers of acoustic systems and weight reduction solutions for
the automotive industry. They provide customers products that
minimize noise, vibration, and harshness throughout a vehicle and
reduce vehicle weight by using proprietary technology.
On Aug. 8, 2022, Gissing North America LLC and its affiliates
sought Chapter 11 protection (Bankr. E.D. Mich. Lead Case No.
22-46160).
Gissing North America reported assets of $50 million to $100
million and liabilities of $50 million to $100 million as of the
bankruptcy filing.
The Debtors tapped Wolfson Bolton PLLC as bankruptcy counsel.
Riveron Management Services' Steven R. Wybo is serving as CRO of
the Debtors. Investment banking firm Livingstone Partners LLC was
retained to advise on a potential sale.
GWG HOLDINGS: Seeks to Hire Legal Counsel for Independent Directors
-------------------------------------------------------------------
GWG Holdings, Inc. and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ
Katten Muchin Rosenman, LLP as legal counsel for their independent
directors.
Katten will provide legal assistance to Jeffrey Stein, Anthony
Horton and David Chavenson with respect to their duties as members
of the board of directors and the board's special committee. The
firm will also provide legal advice to Messrs. Stein and Horton
regarding their duties as members of the board's investigation
committee.
Katten will charge the following hourly fees:
Partners $835 - $1,795 per hour
Of Counsel $735 - $1,440 per hour
Associates $300 - $935 per hour
Paraprofessionals $90 - $650 per hour
Steven Reisman, Esq., at Katten disclosed in a court filing that
his firm is a "disinterested person" within the meaning of Section
101(14) of the Bankruptcy Code.
The firm can be reached through:
Steven J. Reisman, Esq.
Katten Muchin Rosenman LLP
50 Rockefeller Plaza
New York, NY 10020-1605
Tel: 212-940-8800
Email: sreisman@katten.com
About GWG Holdings Inc.
Headquartered in Dallas Texas, GWG Holdings, Inc. (NASDAQ: GWGH)
conducts its life insurance secondary market business through a
wholly-owned subsidiary, GWG Life, LLC, and GWG Life's wholly-owned
subsidiaries.
GWG Holdings Inc. and affiliates sought Chapter 11 bankruptcy
protection (Bankr. S.D. Texas Lead Case No. 22-90032) on April 20,
2022. In the petition filed by Murray Holland, president and chief
executive officer, GWG Holdings estimated assets between $1 billion
and $10 billion and estimated liabilities between $1 billion and
$10 billion.
The cases have been assigned to Judge Marvin Isgur.
The Debtors tapped Mayer Brown, LLP and Jackson Walker, LLP as
bankruptcy counsels; Tran Singh, LLP as special conflicts counsel;
FTI Consulting, Inc. as financial advisor; and PJT Partners, LP as
investment banker. Donlin Recano & Company is the Debtors' notice
and claims agent.
National Founders LP, a debtor-in-possession (DIP) lender, is
represented by Michael Fishel, Esq., Matthew A. Clemente, Esq., and
William E. Curtin, Esq., at Sidley Austin, LLP.
H. I. D. INTERIORS: Unsecureds Will Get 14% of Claims in Plan
-------------------------------------------------------------
H.I. D. Interiors, Inc., filed with the U.S. Bankruptcy Court for
the Southern District of California a Plan of Reorganization for
Small Business dated August 8, 2022.
The Debtor began business operations in 2019 and maintains a
General Contractor's License with the State of California. The
Debtor is a Drywall and Interior Plastering company.
The company is managed and run by Alma Belen Gastelum as President
and CEO, Andrew Zorre as the Contractor's License Holder and Daniel
Gastelum as the Project Manager. The Debtor currently employs, on
the average, 4 to 6 employees. As contract projects are completed,
the Debtor receives payment to pay for the materials supplied by
the various vendors with the balance paid to the Debtor. From this
amount, the Debtor pays its employees as well as other business
expenses incurred.
A project that the Debtor was involved with in 2018 was to provide
labor and materials to a company known as Westport Construction
Inc. The debtor did provide materials and labor and was paid a
certain amount by Westport. Thereafter a dispute arose between the
Debtor and Westport pertaining to the terms of the contract to the
point that Westport terminated the contract with the Debtor
preventing the Debtor from completing the project. Continuing with
the lawsuit would have been a financial disaster for the Debtor.
On May 9, 2022, the Debtor filed a petition for bankruptcy
protection under Chapter 11. It is the Debtor's intent to continue
business operations and prepare a consensual Chapter 11 repayment
plan.
A liquidation analysis shows that in a Chapter 7 liquidation,
unsecured creditors are projected to share pro-rata in a pool of
$70,032.00 and under this Chapter 11 Plan, they are projected to
share pro-rata in a pool of $90,500.00. These values equate to a
Chapter 7 liquidation percentage of 9.00% versus a Chapter 11
dividend of 14.0%.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $100,500.00. These
projections are forward-looking, based on assumptions that my not
come to fruition, and actual results may vary. The final Plan
payment is expected to be paid on August 15. 2027.
This Plan of Reorganization proposes to pay creditors of the Debtor
from net proceeds of business operations.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 14 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 3 consists of Non-priority unsecured creditors. Each holder
of a Class 3 Claim will receive its pro rata share of the Debtor's
projected disposable income available after payment of senior
classes, if any. At present, it appears unsecured creditors may
receive approximately 14.3 cents on the dollar. This Class is
Impaired.
The allowed unsecured claims total $644,719.00.
Class 4 consists of Equity security holders of the Debtor. The
Debtor will retain its interest in property of the estate subject
to provisions in the Plan.
Plan payments shall be funded by net income generated by the
Debtor's business operations for a period of 60 months following
the date the first payment is due under the Plan. Debtor's
projections show funds will be available to pay creditors under the
Plan in an amount that exceeds the Chapter 7 liquidation amount.
All recurring payments under the Plan will be made on a quarterly
basis.
In the event that the Debtor fails to make a payment required under
the Plan and such default remains uncured for 90 days, the payee
suffering the default may request that the Bankruptcy Court order
the liquidation of the Debtor's remaining assets sufficient to cure
such default.
A full-text copy of the Plan of Reorganization dated August 8,
2022, is available at https://bit.ly/3SCmKWl from PacerMonitor.com
at no charge.
Attorney for the Plan Proponent:
Craig E. Dywer, Esq.
8745 Aero Drive, Suite 301
San Diego, CA 92123
Tel: (858) 268-9909
Fax: (619) 582-1980
Email: craigedwyer@aol.com
About H. I. D. Interiors
H. I. D. Interiors Inc., doing business as H.I.D. Drywall, operates
in the business services industry. It holds a Drywall license
according to the California license board.
H. I. D. Interiors filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Calif. Case No.
22-01228) on May 9, 2022, listing as much as $1 million in both
assets and liabilities. Barbara R. Gross serves as Subchapter V
trustee.
Judge Margaret M. Mann oversees the case.
Craig E. Dwyer, Esq., a practicing attorney in San Diego, Calif.,
represents the Debtor in its Chapter 11 case.
HEMANI HOSPITALITY: Court Confirms Reorganization Plan
------------------------------------------------------
Judge Henry W. Van Eck has entered an order confirming the Plan of
Reorganization of Hemani Hospitality, LLC.
The Debtor owns and operates a 73-room Baymont by Wyndham hotel in
Chambersburg, Pennsylvania at 1122 Wayne Road, Chambersburg,
Pennsylvania 17201 (the "Hotel").
The Debtor's Small Business Amended Plan of Reorganization proposes
to pay the Debtor's creditors from the cash flow from the
operations of the Debtor and a refinancing. The Amended Plan
proposes to pay administrative, secured tax and priority claims in
full unless otherwise agreed. The Debtor estimates approximately
25% will be paid on account of general unsecured claims pursuant to
the Amended Plan. Class 4 General Unsecured Claims are estimated
to total $210,100.
A full-text copy of the Amended Plan dated May 2, 2022, is
available at https://bit.ly/387DeDE from PacerMonitor.com at no
charge.
Counsel for the Debtor:
Beverly Weiss Manne, Esq.
Michael A. Shiner, Esq.
Maribeth Thomas, Esq.
Tucker Arensberg, P.C.
1500 One PPG Place
Pittsburgh, PA 15222
Telephone: (412) 566-1212
Facsimile: (412) 594-5619
Email: bmanne@tuckerlaw.com
mshiner@tuckerlaw.com
mthomas@tuckerlaw.com
About Hemani Hospitality
Hemani Hospitality, LLC is a New Jersey limited liability company
formed in 2005. It owns and operates the Baymont by Wyndham Hotel
in Chambersburg, Pa.
Hemani Hospitality filed its voluntary petition for Chapter 11
protection (Bankr. M.D. Pa. Case No. 21-02416) on Nov. 11, 2021,
listing as much as $10 million in both assets and liabilities.
Niranjan Khatiwala, managing member, signed the petition. Beverly
Weiss Manne, Esq., at Tucker Arensberg, PC is the Debtor's legal
counsel.
HIGHLAND PROPERTY: Unsecureds Owed $57K to Get 100% of Claims
-------------------------------------------------------------
Highland Property, LLC, submitted an Amended Disclosure Statement
explaining its Chapter 11 Plan.
The Debtor's plan for future operations will concentrate on the
residential rental market business in the Mon Valley area. The
Debtor's business consists of over 55 properties that have an 85%
occupancy rate. The company is owned and operated by Mr. Bruce
Roberts, a financial analyst and property manager. Mr. Roberts
started the business in 2010 and has managed all aspects of the
business since its inception. Mr. Roberts has acquired and
assembled a reliable crew of technical contractors for the repair
and renovation of his properties. In addition to maintaining the
rental properties, Mr. Roberts has forged a business relationship
with the local utility companies and building inspectors to address
any issues that may affect his rental business. Mr. Roberts has
also established a good working relationship with certain employers
in the community that require temporary housing for their
employees. This relationship has contributed to the high occupancy
rate that the company has achieved over the last 9 months.
All classes under the plan, priority, secured, and unsecured will
be paid from the cash flow generated from the Debtor's business.
The Debtor's principal, Mr. Bruce Roberts, will provide additional
capital contributions, if needed, to fund the payment requirement
under the plan. Debtor has also contemplated the sale of certain
properties to reduce the secured value of claims. Under the current
real estate market, certain properties may have a premium value
that can be liquidated to fund plan payments.
Under the Plan, Class 3 Unsecured Creditors totaling $57,045.00.
Class 3 creditors will receive 100% of their claims over a 60-month
period, paid on a quarterly basis. Class 3 creditors will not
receive any interest on their allowed claims. Class 3 is impaired.
The source of funds for planned payments, including funds necessary
for capital replacement, repairs, or improvements:
* Profits from business operations
* Equity contributions from Debtor's owner, Mr. Bruce Roberts, and
sale of real estate inventory.
Attorney for the Debtor:
Dennis J. Spyra, Esq.
3265 Long Hollow Road
Elizabeth, PA 15037
A copy of the Disclosure Statement dated July 30, 2022, is
available at https://bit.ly/3daHG6J from PacerMonitor.com
About Highland Property
Highland Property, LLC, filed a voluntary petition for Chapter 11
protection (Bankr. W.D. Pa. Case No. 21-22083) on Sept. 22, 2021.
Judge Thomas P. Agresti oversees the case. Dennis J. Spyra, Esq.,
serves as the Debtor's legal counsel.
HONX INC: Future Claimants' Rep Taps FTI as Financial Advisor
-------------------------------------------------------------
Barbara Houser, a retired judge and legal representative for future
asbestos claimants in Honx, Inc.'s Chapter 11 case, seeks approval
from the U.S. Bankruptcy Court for the Southern District of Texas
to employ FTI Consulting, Inc. as her financial advisor.
The firm's services include:
(a) Assistance in the review of financial related disclosures
required by the court, including schedules of assets and
liabilities, statement of financial affairs, and monthly operating
reports;
(b) Assistance in the assessment and monitoring of the
Debtor's short-term cash flow, liquidity, and operating results;
(c) Assistance in the review of any tax issues associated
with, but not limited to, claims/stock trading, preservation of net
operating losses, refunds due to the Debtor, plans of
reorganization, and asset sales;
(d) Assistance in the review of the funding agreement,
including, but not limited to, identification of any funding
agreement deficiencies, monitoring the funding account, assessing
compliance with the key terms of the funding agreement, and
monitoring compliance with the funding agreement covenants;
(e) Assistance in the review of the claims reconciliation and
estimation process;
(f) Assistance in the review of other financial information
prepared by the Debtor, including, but not limited to, cash flow
projections and budgets, business plans, trust funding, go-forward
shared service agreements, and the non-debtor periodic reports;
(g) Attendance at meetings and assistance in discussions with
the Debtor, potential investors, banks, other secured lenders, the
future claimants' representative, the unsecured creditors'
committee and any other official committees organized in these
chapter 11 proceedings, the U.S. Trustee, other parties in interest
and professionals hired by the same, as requested;
(h) Assistance in the review and/or preparation of information
and analysis necessary for the confirmation of a plan and related
disclosure statement in the Debtor's Chapter 11 proceedings;
(i) Assistance in the evaluation and analysis of avoidance
actions, including fraudulent conveyances and preferential
transfers;
(j) Assistance with financial analysis surrounding the
mediation process and the development of economic analysis in
connection with a settlement framework;
(k) Assistance in the prosecution of responses or objections
of the future claimants' representative to the Debtor's motions,
including attendance at depositions and provision of expert reports
or testimony on case issues as required by the future claimants'
representative; and
(l) other general business consulting services.
The firm will charge these hourly fees:
Senior Managing Directors $975 - 1,325
Directors/Senior Directors
Managing Directors $735 - 960
Consultants/Senior Consultants $395 - 695
Administrative/Paraprofessionals $160 - 300
Conor Tully, senior managing director at FTI, disclosed in a court
filing that the firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Conor P. Tully
FTI Consulting, Inc.
1166 Avenue of the Americas, 15th Floor
New York, NY 10036
Phone: +1 212 247 1010
Email: conor.tully@fticonsulting.com
About Honx Inc.
Honx Inc. is a subsidiary of Hess Corporation, a publicly-traded
global energy company. HONX is the corporate successor of Hess Oil
Virgin Islands Corporation, which owned and operated an oil
refinery in St. Croix, U.S. Virgin Islands from the beginning of
its construction in 1965 until a non-operating entity with minimal
assets consisting primarily of a 50% ownership in a joint venture
from 1998 to 2016, and post-2016 it has continued its corporate
existence solely to manage its alleged asbestos liabilities related
to the Refinery.
Honx sought Chapter 11 bankruptcy protection (Bankr. S.D. Texas
Case No. 22-90035) on April 28, 2022. In the petition signed by
Todd R. Snyder, chief administrative officer, the Debtor disclosed
up to $50 million in estimated assets and up to $1 billion in
estimated liabilities.
Judge Marvin Isgur oversees the case.
The Debtor tapped Kirkland & Ellis and Jackson Walker, LLP as
bankruptcy counsels; Piper Sandler Companies/TRS Advisors, LLC as
investment banker and financial advisor; and Bates White, LLC as
asbestos consultant. Stretto, Inc. is the claims, noticing and
solicitation agent.
The Honorable Barbara J. Houser (Ret.) was appointed as the legal
representative for future asbestos claimants in this Chapter 11
case. Young Conaway Stargatt & Taylor, LLP, O'ConnorWechsler, PLLC
and FTI Consulting, Inc. serve as her bankruptcy counsel, local
counsel and financial advisor, respectively.
INTERSTATE UNDERGROUND: Oct. 4 Plan & Disclosure Hearing Set
------------------------------------------------------------
On Aug. 5, 2022, Debtor Interstate Underground Warehouse and
Industrial Park, Inc., filed with the U.S. Bankruptcy Court for the
Western District of Missouri a Chapter 11 Plan and Disclosure
Statement.
On Aug. 8, 2022, Judge Dennis R. Dow conditionally approved the
Disclosure Statement and ordered that:
* Oct. 4, 2022, at 10:00 a.m., is fixed for the hearing on
final approval of the disclosure statement, (if a written objection
has been timely filed), and for the hearing on confirmation of the
plan.
* Sept. 23, 2022, is the deadline for filing with the Court
objections to the disclosure statement or plan confirmation.
* Sept. 23, 2022, is the deadline for submitting to counsel
for the plan proponent ballots accepting or rejecting the plan.
A copy of the order dated August 8, 2022, is available at
https://bit.ly/3Ac5Zu1 from PacerMonitor.com at no charge.
Attorneys for the Debtor:
Erlene W. Krigel, Esq.
KRIGEL & KRIGEL, P.C.
4520 Main Street Suite 700
Kansas City, Missouri 64111
Telephone: (816) 756-5800
Facsimile: (816) 756-1999
About Interstate Underground Warehouse
Interstate Underground Warehouse and Industrial Park, Inc., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
W.D. Mo. Case No. 21-40834) on July 1, 2021. In the petition
signed by CEO Leslie Reeder, the Debtor disclosed up to $10 million
in assets and up to $50 million in liabilities.
Judge Dennis R. Dow is assigned to the case.
Pamela Putnam, Esq., at Armstrong Teasdale LLP, is the Debtor's
legal counsel.
J BOWERS: Seeks to Hire Gertz & Rosen as Bankruptcy Counsel
-----------------------------------------------------------
J. Bowers Construction, Inc. and its affiliate, Restoration
Services of Akron, Inc., seek approval from the U.S. Bankruptcy
Court for the Northern District of Ohio to hire Gertz & Rosen, Ltd.
to serve as legal counsel in their Chapter 11 cases.
Gertz & Rosen's hourly rates are as follows:
Marc P. Gertz $395
Peter G. Tsarnas $275
Colin G. Skinner $250
Paralegals $ 75
The Debtors paid the firm a retainer in the amount of $8,524.
Peter Tsarnas, Esq., a partner at Gertz & Rosen, 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:
Peter G. Tsarnas, Esq.
Gertz & Rosen, Ltd.
11 South Forge Street
Akron, OH 44304
Tel: 330-376-8336
Email: ptsarnas@gertzrosen.com
About J Bowers Construction
J. Bowers Construction Inc. is a fire restoration company in Akron,
Ohio, which provides detailed, itemized estimates and appraisals
required when dealing with all manners of insurance losses,
including storm and water losses, vehicle damage repairs, and all
types of fire and smoke damage, as well as water mitigation and
restorative drying services.
J. Bowers Construction and its affiliate, Restoration Services of
Akron, Inc., filed their Chapter 11 voluntary petitions (Bankr.
N.D. Ohio Lead Case No. 22-50878) on July 29, 2022. Kyle Bowers,
authorized representative, signed the petitions.
At the time of the filing, J. Bowers Construction listed $1,059,836
in total assets and $2,464,220 in total liabilities while
Restoration Services listed $71,397 in total assets and $678,532 in
total liabilities.
Peter G. Tsarnas, Esq., at Gertz & Rosen, Ltd. represents the
Debtors as legal counsel.
J. BOWERS: Wins Cash Collateral Access Thru Aug 31
--------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, authorized J. Bowers Construction, Inc. to use
cash collateral on an interim basis in accordance with the budget,
nunc pro tunc from the Petition Date through August 31, 2022.
The Debtors were jointly and severally indebted to Peoples Bank in
the amount of $136,519 for loans taken in 2015, that the Debtors
were indebted to the United States of America Small Business
Administration for EIDL loans taken in 2020, and that Debtor J.
Bowers Construction Inc. was indebted to Global Merchant Cash, Inc.
in the amount of $374,659 for transactions in 2021 and 2022.
The Prepetition Indebtedness owed to Peoples Bank, the United
States of America Small Business Administration and Global Merchant
Cash, Inc. is secured by substantially all of the Debtors' cash,
accounts, accounts receivables, inventory, furniture, fixtures and
equipment.
As adequate protection, the Secured Creditors are granted security
interests in property acquired by the Debtors that is of the same
type as the cash collateral against which the Lender asserted a
lien prior to the filing of the Debtors' Petitions to the extent of
the diminution of the value of the Secured Creditors' collateral
securing the indebtedness. The Replacement Liens will have the same
validity, priority, and extent (if any) as the liens on cash
collateral that existed at the time of the commencement of the
bankruptcy cases. The Replacement Liens granted are deemed
perfected without the necessity for filing or execution of
documents which might otherwise be required under nonbankruptcy
laws for the perfection of security interests. The Replacement
Liens will be subordinate to the payment of the fees of the United
States Trustee, fees of the Subchapter V Trustee, if applicable, as
well as those professional fees of any professionals retained
pursuant to an Order of the Court and fees of any unsecured
creditors committee, if such committee will be formed.
In addition to the Replacement Liens, and in order to provide
additional adequate protection, Global Merchant Cash, Inc. will be
granted an additional security interest in the Debtor's 5.98%
ownership interest of DKI Ventures LLC to the extent of any
diminution of the value of the collateral from and after the
Petition Date. The Additional Replacement Lien granted is deemed
perfected without the necessity for filing or execution of
documents which might otherwise be required under nonbankruptcy
laws for the perfection of security interests. The Additional
Replacement Lien will be subordinate to the payment of the fees of
the United States Trustee, fees of the Subchapter V Trustee, if
applicable, as well as those professional fees of any professionals
retained pursuant to an Order of the Court and fees of any
unsecured creditors committee, if such committee will be formed.
An additional hearing on the matter is scheduled for August 23 at 2
p.m.
A copy of the order is available at https://bit.ly/3SAdceF from
PacerMonitor.com.
About J. Bowers Construction Inc.
J. Bowers Construction, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Ohio. Case No. 22-50878) on
July 29, 2022. In the petition filed by Kyle Bowers, authorized
representative, the Debtor disclosed up to $10 million in both
assets and liabilities.
Restoration Services of Akron, Inc. sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. N.D. Ohio. Case No.
22-50879) on July 29, 2022.
The Hon. Alan M. Koschik serves as bankruptcy judge.
Peter G. Tsarnas, Esq., at Gertz & Rosen, Ltd. is the Debtors'
counsel.
JJS LOGISTICS: Creditors to Get Proceeds From Liquidation
---------------------------------------------------------
JJS Logistics of Florida, Inc. filed with the U.S. Bankruptcy
Court for the Middle District of Florida a Subchapter V Plan of
Liquidation dated August 8, 2022.
The Debtor is a Florida profit corporation, established August 31,
2020, which provides local FedEx delivery commercial and
residential services in western Pasco County. The shareholders of
the Debtor are Joshua Smiley (85%) and Matthews McIntyre Funding,
LLC (15%).
On May 6, 2022, Mr. Smiley agreed to the appointment of Andrew
Yurasko as Chief Restructuring Officer of JJS Florida. Mr. Yurasko
filed a petition for relief under Chapter 11 of the United States
Bankruptcy Code on May 10, 2022, to reorganize the affairs of the
Debtor.
The Debtor continues to provide delivery services for FedEx, its
only customer, paying its operating expenses as they accrue. At the
beginning of this case, the Debtor hoped to use this Case to
reorganize and continue its operations. However, the Debtor's cash
flow proved insufficient to meet its monthly expenses and payroll
taxes and required adequate protection payments and requirements
under the approved Cash Collateral Order as originally
anticipated.
The Debtor has received an offer to purchase its assets from a
prospective buyer. The Debtor has also received interest from other
perspective buyers to purchase the assets of the Debtor. Thus, the
Debtor believes it is in the best interest of creditors to market
facilitate a sale of its assets under a plan of liquidation and
auction sale to the highest bidder.
The assets of the estate are primarily the Debtor's Fedex routes,
vehicles, Cash, Causes of Action, and minimal personal property and
equipment. Primary Secured Creditor, First Citrus Bank, asserts a
senior lien on most of these assets. The Net Sale Proceeds of the
Debtor's assets, minus the causes of action, will be liquidated and
remitted to Holders of Allowed Claims in accordance with the
priority scheme set forth in the Bankruptcy Code and this Plan. To
the extent applicable, all disposable income will be used to make
distributions under the Plan.
Class 1 consists of the Allowed Secured Claim of First Citrus Bank.
Except to the extent that a holder of an Allowed Class 1 Claim
agrees to less favorable treatment, the holder of an Allowed Class
1 Claim shall receive, on account of its Allowed Class 1 Claim,
payment, up to the amount of its Allowed Class 1 Claim, from the
Net Sale Proceeds, net proceeds (after expenses) and/or abandonment
of the First Citrus Bank Collateral on the Effective Date or as
soon thereafter as such Class 1 Claim becomes an Allowed Claim and
distribution is economically feasible.
Class 2 consists of the Allowed Secured Claim of 1st Source Bank.
Except to the extent that a holder of an Allowed Class 2 Claim
agrees to less favorable treatment, the holder of an Allowed Class
2 Claim shall receive, on account of its Allowed Class 2 Claim,
payment, up to the amount of its Allowed Class 2 Claim, from the
Net Sale Proceeds, net proceeds (after expenses) and/or abandonment
of the 1st Source Bank Collateral on the Effective Date or as soon
thereafter as such Class 2 Claim becomes an Allowed Claim and
distribution is economically feasible.
Class 3 consists of the Allowed Secured Claim of Ford Motor Credit.
Except to the extent that a holder of an Allowed Class 3 Claim
agrees to less favorable treatment, the holder of an Allowed Class
3 Claim shall receive, on account of its Allowed Class 3 Claim,
payment, up to the amount of its Allowed Class 3 Claim, from the
Net Sale Proceeds, net proceeds (after expenses) and/or abandonment
of the Ford Motor Credit's Collateral on the Effective Date or as
soon thereafter as such Class 3 Claim becomes an Allowed Claim and
distribution is economically feasible.
Class 4 consists of the allowed Secured Claims of the MCA's, which
are disputed. The Debtor shall seek to determine the Secured status
of the MCAs pursuant to Sections 506(a) and Federal Rule of
Bankruptcy Procedure. The Debtor shall file and prosecute a motion
and/or objection to any asserted Secured Claims of MCA's, seeking a
determination that all MCA claims are unsecured. In the event the
Bankruptcy Court finds that any MCA claims partially or fully
secured, the Debtor shall pay the allowed secured portion from any
net proceeds of the Asset Sale attributable to any Collateral that
is subject to any Lien securing any Allowed Claim of any MCA claim
holder, after payment of any senior Liens.
Class 5 consists of the Allowed Unsecured Claims not otherwise
classified under the Plan. The holder(s) of Allowed Unsecured
Claims will receive their pro rata share of any funds available
from the liquidation of any unencumbered assets and/or net
recoveries from Chapter 5 Claims and other Causes of Action minus
costs of recovery, including any costs of litigation and attorneys'
fees, and after payment in full of Allowed Administrative Expense
Claims, Allowed Priority Tax Claims, Allowed Class 1, 2, 3 and 4
Claims. Class 5 is Impaired. The unsecured claims total $300,000.
Class 6 consists of ownership interests currently issued or
authorized in the Debtor. All Allowed Equity Interests in the
Debtor shall be canceled and reissued to CBR, LLC, Rick Dulaney or
to a third party in exchange for paying the Effective Date payments
and for additional consideration to be negotiated. CBR, LLC,
Dulaney, LLC, or a company managed and directed by Rick Dulaney,
will take over day to day operations. CBR, LLC is owned by Rick
Dulaney, who has 40+ years in the trucking logistics industry and
his sons. Admin Support LLC, is owned by Andrew Yurasko, Richard
McIntyre, Marc Matthews, and Joshua Smiley.
The Debtor will fund payments to be made under the Plan through the
following: (A) Cash on hand on the Effective Date, (B) sale of any
remaining assets of the Estate, and (C) net Proceeds from the
recovery of Causes of Action pursued by the Liquidating Trustee.
A full-text copy of the Subchapter V Liquidating Plan dated August
8, 2022, is available at https://bit.ly/3p5IUmi from
PacerMonitor.com at no charge.
Counsel for the Debtor:
David S. Jennis, Esq.
Daniel E. Etlinger, Esq.
David Jennis, P.A.
dba Jennis Morse Etlinger
606 East Madison Street
Tampa, FL 33602
Tel: (813) 229-2800
Email: djennis@jennislaw.com
detlinger@jennislaw.com
ecf@jennislaw.com
About JJS Logistics of Florida
JJS Logistics of Florida Inc. is a Florida profit corporation which
provides local FedEx delivery commercial and residential services
in western Pasco County. JJS Logistics of Florida sought
protection under Subchapter V of Chapter 11 of the U.S. Bankruptcy
Court (Bankr. M.D. Fla. Case No. 22-01884) on May 10, 2022. In the
petition filed by Andrew Yurasko, III, chief restructuring officer,
the Debtor disclosed up to $500,000 in both assets and
liabilities.
Amy Denton Mayer has been appointed as Subchapter V trustee.
Daniel E. Etlinger, Esq., at Jennis Morse Etlinger, is the Debtor's
counsel.
JUST BELIEVE RECOVERY CENTER: Joins Affiliate in Chapter 11
-----------------------------------------------------------
Just Believe Recovery Center LLC followed affiliate Just Believe
Recovery Center of Port Saint Lucie LLC in Chapter 11 bankruptcy.
According to court filings, Just Believe Recovery Center estimates
between 1 and 49 creditors. The petition states funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Sept. 7, 2022, at 9:00 AM by TELEPHONE. Proofs of claim are due by
Oct. 13, 2022.
About Just Believe Recovery Center
Just Believe Recovery Center --
https://justbelieverecoverycenter.com/ -- is a drug & alcohol
addiction rehabilitation and detox facility with locations in
Florida and Pennsylvania.
Just Believe Recovery Center of Port Saint Lucie LLC is a fully
licensed, Joint Commission accredited, comprehensive drug and
alcohol treatment center located in Port Saint Lucie, Florida.
Just Believe Recovery Center LLC ("JBRC") is a management and
administrative entity which provides managerial and support
services to JBRC-PSL and other entities under the Just Believe
Recovery Center umbrella of entities.
Both JBRC-PLC and JBRC are managed by Cynthia Bellino with Ms.
Bellino being a majority owner of both entities
Just Believe Recovery Center of Port Saint Lucie LLC sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Fla. Case No. 22-15739) on July 27, 2022. In the petition
filed by Cynthia Bellino, as manager, the Debtor reported assets up
to $50,000 and estimated liabilities between $1 million and $10
million.
Just Believe Recovery Center LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-16046) on
August 4, 2022. The Debtor reported assets up to $50,000 and
estimated liabilities between $1 million and $10 million.
The Debtors have sought joint administration of their Chapter 11
cases under Case No. 22-15739.
Craig I. Kelley, of Kelley, Fulton & Kaplan, P.L., is the Debtors'
counsel.
KC PANORAMA: Expects Full Payment Plus Interest From Sale Plan
--------------------------------------------------------------
KC Panorama, LLC, et al. submitted a Plan and a Disclosure
Statement.
If the Plan is confirmed by the Bankruptcy Court, KHRE will receive
on account of its Allowed Secured Claims, in full satisfaction and
discharge of their Claims, the proceeds of the sales of certain
collateral during the Debtors' Chapter 11 Cases, which will provide
for the payment in full, with interest, of KHRE's claim. Remaining
Sale Proceeds will pay all Administrative and Priority Unsecured
Claims, if any, and fund the payments to holders of General
Unsecured Claims in full and with interest.
Under the Plan, Class 4 General Unsecured Claims totaling
$1,800,000. On the Effective Date, Holders of an Allowed General
Unsecured Claim will receive cash equal to the amount of such
Claim, together with interest, from the Sale Proceeds. Unsecured
creditors will recover 100% of their claims.
The Holders of any Deficiency Claims and General Unsecured Claims
will receive their pro rata share of the Unsecured Recovery Pool.
That percentage shall be 100%.
The value of the Debtors' assets, which principally consist of real
estate, forms the basis of the Plan's treatment of all Claims. The
Plan contemplates that the Stuart Street Property is worth
$5,150,000.00 (the market value at which it sold). The Plan
contemplates that the Congress Street Property is worth $14,000,000
(the market value at which it sold). Lastly, the Plan contemplates
that the Weston Road Property is worth $17,980,000 (as described in
the Comparative Market Analysis attached to this Disclosure
Statement as Exhibit B). In addition, the Debtors have a relatively
nominal amount of cash in their DIP Accounts, as well a certificate
of deposit, valued at $50,000.
Pursuant to Section 4.1(a) of the Plan, on the Effective Date: (i)
KHRE will be paid on its claim in full, plus applicable interest,
from any portion of the Sale Proceeds not previously remitted to it
pursuant to the Sale Orders, after which said claim will be
satisfied and discharged; (ii) Holders of any unsecured claims,
including the KHRE Deficiency Claim (if applicable) shall be paid,
out of the remaining sale proceeds, an amount equal to not less
than the total value of their claims plus applicable interest,
after which the respective Claims will be satisfied and discharged.
The Sale Proceeds shall be sufficient to pay all claims in full and
with interest.
Attorneys for the Debtors:
Matthew M. Hamel, Esq.
Cynthia R. Ravosa, Esq.
RAVOSA LAW OFFICES, P.C.
One South Avenue
Natick, MA 01760
Tel: (508)-655-3013
Fax: (617) 720-1104
E-mail: mhamel@ravosalaw.com
massachusettsbankruptcycenter@gmail.com
A copy of the Disclosure Statement dated August 3, 2022, is
available at https://bit.ly/3SFyAzd from PacerMonitor.com.
About KC Panorama
KC Panorama LLC, a Waltham, Mass.-based company engaged in renting
and leasing real estate properties, sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Mass Case No. 21-10827) on
June 4, 2021, listing total assets of $11,703,396 and total
liabilities of $23,507,162. KC Panorama President Kai Zhao signed
the petition. Judge Frank J. Bailey oversees the case. Ravosa Law
Offices, P.C. is the Debtor's legal counsel.
KDR SUPPLY: Wins Cash Collateral Access on Final Basis
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas,
Beaumont Division, authorized KDR Supply, Inc. to use cash
collateral on a final basis in accordance with the budget, with a
10% variance, through confirmation of a bankruptcy-exit plan,
conversion of the case to Chapter 7 or dismissal.
The Texas Comptroller of Public Accounts and the Small Business
Administration have agreed that the Debtor may utilize cash
collateral under certain terms and conditions.
The Debtor requires the use of cash collateral to maintain its
assets, sell or otherwise liquidate its assets, provide financial
information, pay necessary employees, payroll taxes, charges of
vendors, overhead, and other expenses necessary to maintain the
value of the Debtor's assets.
Other than the amount of the Comptroller's adequate protection
payment which may be modified the Order, the Budget may be modified
in writing only with the prior written consent of the Comptroller
and the SBA.
In accordance with the Budget, the Debtor will maintain, with
financially sound and reputable insurance companies, insurance of
the kind covering the Collateral, and in accordance with the Loan
Documents.
A copy of the order and the Debtor's monthly budget is available at
https://bit.ly/3zDafkI from PacerMonitor.com.
The Debtor projects $285,000 in gross monthly income and $242,181
in total monthly expenses.
About KDR Supply, Inc.
KDR Supply, Inc. was founded in 1981 to support the local oilfield
service industry. KDR Supply offers, subsurface pumps, industrial
supplies, oilfield supplies, pumps, and tools.
KDR Supply sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 22-10115) on April 6,
2022. In the petition signed by president Rocky Fisher, the Debtor
disclosed $2,668,765 in total assets and $6,793,314 in total
liabilities.
Judge Joshua P. Searcy oversees the case.
Julie M. Koenig, Esq., at Cooper and Scully, PC is the Debtor's
counsel.
KOSMOS ENERGY: S&P Lowers ICR to 'B' Following Downgrade of Ghana
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Dallas-based
oil and gas exploration and production (E&P) company Kosmos Energy
Ltd. to 'B' from 'B+'. Given the company's material exposure to
Ghana, S&P caps its issuer credit rating (ICR) at two notches above
our T&C assessment on Ghana.
At the same time, S&P lowered its issue-level rating on Kosmos'
unsecured debt to 'B' from 'B+'. S&P's '3' recovery rating on the
debt is unchanged.
The negative outlook reflects that S&P would likely lower its
rating on Kosmos if it further lower its T&C assessment on Ghana
given the company's material exposure to the sovereign and the
potential it will implement tighter capital or foreign-exchange
controls.
S&P lowered its foreign and local currency ratings on Ghana, which
cap its ICR on Kosmos at 'B'.
S&P said, "On Aug. 5, 2022, we lowered our foreign and local
currency sovereign ratings and T&C assessment on Ghana to reflect
its increased financing and external pressures. While Kosmos'
exposure to Ghana, based on its production and EBITDA, is material
at about 55%, the company exports all of its Ghanaian oil
production and receives the proceeds from its oil sales in U.S.
dollars, which it deposits directly into offshore bank accounts.
Nevertheless, there remains a risk that in a default scenario Ghana
could enact stricter capital or foreign currency controls on
exporters. Therefore, we cap our ICR on Kosmos at 'B', which is two
notches above our T&C assessment on Ghana.
"Our 'b+' stand-alone credit profile (SACP) on Kosmos reflects its
improving credit measures, due to strong commodity prices, as well
as its increasing production and debt reduction.
"Based on our current commodity price deck assumptions and forecast
for production growth of 20% this year and about 25% in 2023, we
expect the company's cash flow will materially improve over the
next 12-18 months, which we anticipate it will use to continue
funding phase 1 of its Tortue project (located offshore Mauritania
and Senegal) as well as for debt reduction. Year to date, Kosmos
has paid down $300 million of the outstanding balance on its
reserve-based lending (RBL) facility, including $200 million in the
second quarter. We now expect the company's funds from operations
(FFO) to debt will average about 60% in both 2022 and 2023 while it
maintains debt to EBITDA in the 1.2x-1.5x range. Despite the
anticipated increase in its production, Kosmos' proved reserve base
and production levels are smaller than those of its 'B+' peers."
The company has continued to strengthen its liquidity position.
Following the pay down of $200 million on its RBL facility in the
second quarter, Kosmos' availability under the facility improved to
$550 million. Combined with the $223 million of cash on its balance
sheet and its undrawn $250 million corporate revolver due 2024, the
company had over $1.0 billion of total liquidity as of June 30,
2022. Over the next 12-18 months, we expect Kosmos will likely use
excess cash to pay down additional debt, including amounts
remaining under the RBL and its $160 million Gulf of Mexico term
loan due 2025, which will further its progress toward achieving its
1.5x leverage target.
S&P said, "The negative outlook reflects that we would likely lower
our rating on Kosmos if we lower our T&C assessment on Ghana given
the company's material exposure to the sovereign and the potential
it will implement tighter capital or foreign-exchange controls. Any
potential negative rating action on Kosmos would depend on the
nature of the specific default scenario we contemplate in Ghana and
the implications for its oil and gas exporters. If we expect a
potential default to be short-term and technical in nature, we
would base our ICR on Kosmos on our expected post-default sovereign
rating and T&C assessment on Ghana.
"We could lower our rating on Kosmos if we lower our sovereign
rating or T&C assessment on Ghana and we expect it will limit
Kosmos' ability to access the foreign currency cash flows its
generates from its assets in the country. Alternatively, we could
lower our ICR on the company if we expect its leverage to increase
such that its FFO to debt will fall below 20%, its debt to EBITDA
will increase above 4.0x for a sustained period, or its liquidity
will decline. This would most likely occur if oil prices fall below
our price deck assumptions and the company does not reduce its
capital spending.
"We could revise our outlook on Kosmos to stable if we revise our
outlook on Ghana to stable or if the company reduces its exposure
to Ghana below 50% and we expect it would sustain its exposure at
this level. We would also require the company to maintain FFO to
debt of comfortably above 45% for a sustained period before raising
our rating."
ESG credit indicators: To E-4, S-3, G-4; From E-4, S-3, G-3
S&P said, "Our recent downgrade of Ghana highlights the potential
financial risks stemming from Kosmos' exposure to the country,
which accounts for about 55% of its total production and EBITDA.
The company also faces additional governance risks related to its
operating focus on large-scale, deepwater projects located in
offshore West Africa (Ghana, Equatorial Guinea, Mauritania, and
Senegal). Therefore, we now view its governance factors as a
negative consideration in our credit rating analysis (compared with
a moderately negative influence previously).
"Environmental factors remain a negative consideration in our
rating analysis of Kosmos because the E&P industry is contending
with the accelerating energy transition and adoption of renewable
energy sources. We believe falling demand for fossil fuels will
lead to declining profitability and returns for the industry as it
fights to retain and regain investors that seek higher return
investments. Given its material deepwater exposure relative to its
overall assets, Kosmos Energy faces higher environmental risks than
onshore producers due to the susceptibility of the deepwater assets
to interruption. Additionally, social factors are moderately
negative because its offshore operations are more likely to
experience fatal accidents given the inherent risks of operating
oil rigs, which involve air and water transportation of personnel,
among other activities that could be life-threatening without
proper care."
LADO ENTERPRISES: Case Summary & Six Unsecured Creditors
--------------------------------------------------------
Debtor: Lado Enterprises Inc.
dba Lado International College;
dba Lado International Institute
1400 Spring Street
Suite 250
Silver Spring MD 20910
Business Description: Lado Enterprises provides educational
services.
Chapter 11 Petition Date: August 9, 2022
Court: United States Bankruptcy Court
District of Maryland
Case No.: 22-14357
Judge: Hon. Maria Ellena Chavez-Ruark
Debtor's Counsel: Steven H. Greenfeld, Esq.
LAW OFFICE OF STEVEN H. GREENFELD, LLC
325 Ellington Blvd., Box 610
Gaithersburg, md 20878
Tel: (301) 881-8300
Email: steveng@cohenbaldinger.com
Total Assets: $657,396
Total Liabilities: $1,447,002
The petition was signed by Margaret Lado Schepis as CEO.
A copy of the Debtor's list of six unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/35FAYEQ/Lado_Enterprises_Inc__mdbke-22-14357__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/3XAAWDY/Lado_Enterprises_Inc__mdbke-22-14357__0001.0.pdf?mcid=tGE4TAMA
LINKMEYER PROPERTIES: Unsecureds to Get Not More Than $10K in Plan
------------------------------------------------------------------
Linkmeyer Properties, LLC, submitted a Corrected Second Amended
Disclosure Statement.
Distribution of creditors under the Plan shall come from a
combination of partial liquidation of some portions of the Real
Estate, entering into contracts for the sale of dirt, member
contributions and development of the Real Estate.
Under the Plan, holders of Class 4 Unsecured Non-Priority Claims of
the Internal Revenue Service and any other unsecured creditors that
may exist will have their claims be paid from a pro rata
distribution of not more than $10,000, to be paid in equal annual
installments of $2,000, over a 5-year period commencing December
31, 2022, and continuing for 4 years thereafter. Class 4 is
impaired.
The Plan is proposed by Debtors to reorganize through a combination
of partial liquidation of some portions of the Real Estate,
entering into contracts for the sale of dirt, member contributions
and development of the Real Estate.
Attorney for Debtor:
David R. Krebs, Esq.
HESTER BAKER KREBS LLC
One Indiana Square, Suite 1330
Indianapolis, IN 46204
Tel: (317) 833-3030
A copy of the Second Amended Disclosure Statement dated August 3,
2022, is available at https://bit.ly/3Ss8uPW from
PacerMonitor.com.
About Linkmeyer Properties
Linkmeyer Properties, LLC, Linkmeyer Kroger, LLC, and Linkmeyer
Development II, LLC filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Lead Case No.
20-90898) on Aug. 13, 2020. At the time of the filing, each Debtor
disclosed estimated assets of less than $50,000 and estimated
liabilities of between $1 million and $10 million. Judge Andrea K.
McCord oversees the cases. Hester Baker Krebs, LLC serves as
Debtors' legal counsel.
MAVENIR PRIVATE: S&P Alters Outlook to Negative, Affirms 'B-' ICR
-----------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based network
infrastructure provider Mavenir Private Holdings II Ltd. to
negative from stable and affirmed all the ratings, including the
'B-' issuer credit rating and 'B-' issue level rating. The '3'
recovery rating on the existing secured debt is unchanged and
indicates its expectation of meaningful (50%-70%; rounded estimate:
50%) recovery in the event of payment default.
S&P said, "The negative outlook reflects our view that the company
could be challenged to reduce leverage over the next year, which
could render the capital structure unsustainable.
"We expect that Mavenir's leverage will be elevated in 2022 due to
weak operating and financial performance. We expect Mavenir's
adjusted leverage will increase to low-13x in 2022 compared with
12x in our previous forecast due to lower-than-expected EBITDA
growth. Revenue from one of Mavenir's key customers is expected to
be significantly under budget given delays in migrating from one
product to another." Lower EBITDA for 2022 is also because of
accelerated investments in R&D related to the company's OpenRAN
product as well as inflationary pressures.
Inflation and global supply chain issues continue to be a headwind
for Mavenir. While the company has some ability to pass along
higher costs to its customers, its pricing power remains limited in
this environment. S&P estimates that labor makes up about 50% of
its cost structure and, like most other corporate issuers, labor
costs have been increasing. As a result, it expects gross margins
to decline by 2%-4% in 2022 from 57% in 2021. Additionally, Mavenir
sources hardware components for a portion of their production
process, which has been impacted by longer lead times and pricing
pressure. Mavenir is addressing this through order management where
appropriate.
Mavenir bolstered its liquidity with the new term loan as well as
recent equity infusions. S&P said, "We expect the company to record
a free operating cash flow (FOCF) deficit of $120 million to $130
million in 2022 and $40 million to $60 million in 2023. The 2022
outflows are mitigated by $120 million of proceeds from the $95
million term loan and $10 million equity infusion. We anticipate
the company will need another $50 million-$70 million of additional
capital fund FOCF deficits in 2023."
S&P said, "The negative outlook reflects our view that the company
could be challenged to reduce leverage over the next year, which
could render the capital structure unsustainable.
"We could lower the rating if leverage remains elevated such that
we viewed the capital structure as unsustainable or if the company
faced a near-term liquidity crunch and it was no longer able to
access additional debt or equity funding."
This could occur if:
-- Supply chain constraints disrupt order fulfillment or reduced
demand results in lower general purpose server shipments and
subscriber growth.
-- S&P said, "The company's operating performance is substantially
weaker than we expect because of increased competition and pricing
pressure, which would cause EBITDA to decline more than our current
base case forecast while FOCF deficits accelerate, such that the
company's financial commitments appear unsustainable over the long
term."
S&P could revise the outlook to stable if:
-- Mavenir stems EBITDA declines over multiple quarters while
stabilizing its margins through cost reduction initiatives; and
-- S&P comes to the conclusion the capital structure is
sustainable longer term.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance is a moderately negative consideration in our
credit rating analysis of Mavenir. Our assessment of the company's
financial risk profile as highly leveraged reflects corporate
decision-making that prioritizes the interests of controlling
owners, in line with our view of most rated entities owned by
private-equity sponsors. Our assessment also reflects their
generally finite holding periods and a focus on maximizing
shareholder returns."
ESG credit indicators: E-2, S-2, G-3
Governance structure
MGA MANAGEMENT: Unsecureds Owed $3,588 Unimpaired in Plan
---------------------------------------------------------
MGA Management, LLC and MGAE, Inc. submitted a Plan of
Reorganization.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income for the period described in
section 1191(c)(2) of $14,780.00 per month.
The final Plan payment is expected to be paid on the 14th day after
the effective date.
This Plan of Reorganization under chapter 11 of the Bankruptcy Code
proposes to pay creditors of MGAE Inc. from cash assets and cash
flow from operations.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 100 cents on the dollar.
Under the Plan, Class 3 Non-Priority Unsecured Claims total
$3,588.29. Unsecured Claims will be paid 100% in a lump sum 14 days
after the effective Date from the DIP account. Class 3 is
unimpaired.
The Debtor intends to fund all plan payments through revenues
generated through its normal business operations and funds in the
DIP Accounts.
A copy of the Plan of Reorganization dated August 3, 2022, is
available at https://bit.ly/3P6rlNn from PacerMonitor.com.
About MGA Management
MGA Management, LLC, is the fee simple owner of a real property
located in Hartford, Connecticut, having a current value of $3
million.
MGA Management filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Conn. Case No.
22-20315) on May 9, 2022. In the petition signed by Michael Ancona,
member, the Debtor listed $3,041,461 in total assets and $1,452,000
in total liabilities.
Judge James J. Tancredi oversees the case.
Joseph J. D'Agostino, Jr., Esq., serves as the Debtor's counsel.
MINERVA RESOURCES: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Minerva Resources, LLC
433 E Las Colinas Blvd., Suite 840
Irving, TX 75039
Case No.: 22-32291
Business Description: Minerva Resources is part of the oil and
gas extraction industry.
Chapter 11 Petition Date: August 10, 2022
Court: United States Bankruptcy Court
Southern District of Texas
Judge: Hon. Christopher M. Lopez
Debtor's Counsel: Joshua W. Wolfshohl, Esq.
PORTER HEDGES LLP
1000 Main Street, 36th Floor
Houston, TX 77002
Tel: (713) 226-6000
Email: jwolfshohl@porterhedges.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Drew McManigle as chief restructuring
officer.
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/XVPGGLA/Minerva_Resources_LLC__txsbke-22-32291__0001.0.pdf?mcid=tGE4TAMA
NEOVIA LOGISTICS: Moody's Cuts CFR to Caa3, Outlook Stable
----------------------------------------------------------
Moody's Investors Service downgraded the ratings of Neovia
Logistics, LP, including the corporate family rating to Caa3 from
Caa2 and probability of default rating to Ca-PD from Caa2-PD.
Moody's also downgraded the rating on the company's first lien
senior secured term loan to Ca from Caa1. The outlook is stable.
The rating action follows Neovia's announcement that it has entered
an agreement with its lenders to engage in a recapitalization
transaction. Under the proposed recapitalization, the company
announced that lenders have agreed to the equitization of
approximately $420 million in total debt. The transaction is
subject to regulatory approvals prior to closing. If executed as
proposed, Moody's would consider the transaction a distressed
exchange.
Governance risk considerations are material to the rating action.
Under private equity ownership, Neovia has operated with very high
financial leverage and weak liquidity. The proposed debt
restructuring reflects a financial policy that will leave existing
creditors disadvantaged.
Downgrades:
Issuer: Neovia Logistics, LP
- Corporate Family Rating, Downgraded to Caa3 from Caa2
- Probability of Default Rating, Downgraded to Ca-PD from Caa2-PD
- Gtd Senior Secured 1st Lien Term Loan, Downgraded to Ca (LGD4)
from Caa1 (LGD3)
Outlook Actions:
Issuer: Neovia Logistics, LP
- Outlook, Remains Stable
RATINGS RATIONALE
Neovia's Caa3 CFR reflects the company's weak liquidity and very
high financial leverage at the time of the announced
recapitalization transaction. Despite steady top line growth,
Neovia's earnings have been pressured over the last twelve months
and high cash interest expense has contributed to negative free
cash flow.
Neovia's Ca-PD probability of default rating reflects the very high
probability of default following the announced recapitalization
plans. Moody's will append the /LD to the Ca-PD probability of
default rating if the proposed recapitalization is completed as
contemplated acknowledging the distressed exchange as a limited
default.
The Ca rating on the first lien secured term loan reflects Moody's
expectation for recovery given the material amount of first lien
debt expected to be converted into equity.
The stable outlook reflects Moody's expectation that the
recapitalization will be executed as proposed over the near-term.
Moody's expects Neovia's financial leverage to be materially
improved following the recapitalization based on current
expectations for debt reduction and earnings. Moody's will evaluate
Neovia's credit profile based on the newly executed capital
structure and future operating profile, including any material
changes to current customer contracts.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Neovia materially improves its
earnings and liquidity, and Moody's believes there to be no
significant impact to Neovia's customer relationships as a result
of the recapitalization. An upgrade would also require at least
breakeven free cash flow and reduced reliance on external credit
facilities.
Neovia's ratings could be downgraded if the expected recovery rate
declines or the company pursues a more aggressive debt
restructuring than currently proposed.
Neovia Logistics is a global provider of logistics services. The
company offers integrated supply chain solutions to its clients,
primarily in the automotive, industrial and aerospace service
parts, as well as retail, fulfillment and inbound to manufacturing
logistics. The company is owned by affiliates of Goldman Sachs and
Rhone Capital. Revenue for the twelve months ended June 30, 2022
was approximately $872 million.
The principal methodology used in these ratings was Surface
Transportation and Logistics published in December 2021.
NESV ICE: Wins Continued Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Eastern Division, authorized NESV Ice, LLC and its
debtor-affiliates to use continue using cash collateral on an
interim basis.
SHS ACK, LLC asserts a security interest in Ice's property,
including the cash proceeds thereof, and Ice's deposit accounts.
The Court held that, as adequate protection, SHS is granted
replacement liens in and to all property of the kind presently
securing the prepetition obligations of Ice to SHS. The Replacement
Liens will only attach to and be enforceable against the same types
of property, to the same extent, and in the same order of priority
as existed immediately prior to the Petition Date.
Ice is directed to pay the City of Attleboro real estate taxes and
other municipal charges as they become due postpetition, as well as
interest on prepetition amounts. In addition, Ice will maintain its
insurance policies and remain current postpetition on any premiums
that must be paid.
A continued hearing on the Debtor's request is scheduled for
October 24, 2022, at 2 p.m.
Ice's authority to use cash collateral will terminate upon the
occurrence of any of these events, unless waived by SHS in
writing:
a. Default by Ice in reporting the information specified in
section 6 above, if such default will remain uncured for three
business days following written notice from SHS to Ice;
b. Reversal, vacatur, or modification of the Eighth Interim
Order; or
c. Dismissal of the case or conversion of Ice's case to
chapter 7.
A copy of the Court order and the Debtors' budget is available at
https://bit.ly/3BUYl8n from PacerMonitor.com.
The budget provided for total cash disbursements, on a weekly
basis, as follows:
$100,841 for the week ending August 5, 2022;
$58,172 for the week ending August 12, 2022;
$82,328 for the week ending August 19, 2022;
$55,486 for the week ending August 26, 2022;
$13,646 for the week ending September 2, 2022;
$37,561 for the week ending September 9, 2022;
$55,463 for the week ending September 16, 2022;
$39,386 for the week ending September 23, 2022;
$8,000 for the week ending September 30, 2022;
$51,207 for the week ending October 7, 2022;
$47,976 for the week ending October 14, 2022;
$42,574 for the week ending October 21, 2022; and
$4,400 for the week ending October 28, 2022.
About NESV Ice, LLC
NESV Ice, LLC and affiliates NESV Swim, LLC, NESV Field, LLC, NESV
Hotel, LLC, NESV Tennis, LLC, NESV Land, LLC, and NESV Land East,
LLC, offer fitness and sports training services. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Mass. Case No. 21-11226) on August 26, 2021. The petitions were
signed by Stuart Silberberg as manager.
Judge Christopher J. Panos oversees the case.
William McMahon, Esq., at Downes McMahon LLP is the Debtor's
counsel.
NEW COAT PAINTING: Family Business Starts Subchapter V Case
-----------------------------------------------------------
New Coat Painting Inc. filed for chapter 11 protection in the
Northern District of Georgia. The Debtor filed as a small business
debtor seeking relief under Subchapter V of Chapter 11 of the
Bankruptcy Code.
The Debtor is a corporation with two shareholders: Newton Beasley
(51%) and William Beasley (49%). Newton Beasley started the company
as a family business in the mid-1980s and officially incorporated
it in 1987. He continues to act as the superintendent of the
company who oversees projects and communicates with general
contractors. William Beasley is the Chief Financial Officer of the
company and manages the company by overseeing all projects from the
bidding phase to completion. Connie Beasley is the office manager
who handles the accounts receivables and payables. She is the
secretary/treasurer of the company.
The Debtor provides commercial and residential painting and
wallpapering services. Since its inception, Debtor has operated
proudly and profitably until 2021 when a growth explosion created a
strain on the company's financial resources.
In 2021, the Debtor's workload exploded and it could not sustain
the growth. Debtor began losing money on projects as its customers
failed to pay timely which trickled down to Debtor being unable to
pay its suppliers and subcontractors timely. This trickle down
effect was the result of the Covid aftermath. The Debtor's
subcontractors were unable to hire enough competent workers to
complete projects. As the projects lagged, the project owners
refused to pay on a timely basis or at all. The Debtor lost
approximately $750,000 on projects during this time period. The
losses and disruption in income flow caused Debtor to look to
merchant capital advance companies ("MCAs") to fund the shortfalls.
The Debtor obtained funds from three MCAs and from the factoring
firm it had used for many years.
As business continued to explode in 2021, the Debtor had the
ability to meet the payment demands of the MCAs and the factoring
firm. The Debtor, however, realized it could not continue the
growth given the labor conditions and made the decision to
downsize. A consequence of Debtor's decision to downsize was its
inability to continue to meet the payment demands of the MCAs and
the factoring firm. The Debtor attempted to make arrangements with
the MCAs to reduce the weekly payments without success.
Accordingly, the Debtor has determined in its business judgment
that filing this chapter 11 bankruptcy case would best enable the
Debtor to obtain a short breathing spell and reorganize its debt,
while continuing to operate and earn income.
The Debtor is a borrower under a factoring agreement with Advance
Financial Corporation ("AFC") in the original principal amount of
$250,000 with a current balance of approximately $200,000.
Prepetition, the Debtor also obtained funds from certain merchant
cash advance companies, Fundbox, Kabbage, Breakout Capital, LLC,
and Legend Advance Funding II, LLC (the "MCAs Advances").
According to court documents, New Coat Painting estimates between 1
and 49 creditors. The petition states that funds will be available
to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Sept. 1, 2022, at 2:00 PM. Non-Government proofs of claim are due
by Oct. 13, 2022.
About New Coat Painting Inc.
New Coat Painting Inc. provides commercial and residential painting
and wallpapering services. The Debtor is a corporation with two
shareholders: Newton Beasley (51%) and William Beasley (49%).
Newton Beasley founded the company in the 1980s, and continues to
act as the superintendent. William Beasley is the CFO.
New Coat Painting Inc. filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga.
Case No. 22-20742). In the petition filed by William Beasley, as
chief financial officer, the Debtor reported assets up to $50,000
and estimated liabilities between $1 million and $10 million.
Cameron McCord has been appointed as Subchapter V trustee.
Will B. Geer, of Rountree, Leitman, Klein & Geer, LLC, is the
Debtor's counsel.
NFP CORP: Moody's Assigns B1 Rating to $350MM Senior Secured Notes
------------------------------------------------------------------
Moody's Investors Service has assigned a B1 rating to $350 million
of eight-year senior secured notes being issued by NFP Corp. (NFP,
corporate family rating B3). The notes are being offered to
qualified institutional investors under Rule 144A of the Securities
Act of 1933, and are secured on a pari passu basis with NFP's first
priority senior secured debt and credit facilities. The company
intends to use net proceeds of the offering to fund its acquisition
pipeline and pay related fees and expenses. The rating outlook for
NFP is unchanged at negative.
RATINGS RATIONALE
According to Moody's, NFP's ratings reflect its expertise and solid
market position in insurance brokerage, particularly providing
employee benefits and property & casualty products and services to
mid-sized firms. The company also offers insurance and wealth
management services to high net worth individuals. NFP ranks among
the 15 largest US insurance brokers, and its business is well
diversified across products, clients and regions, primarily in the
US. NFP generates healthy EBITDA margins and maintains good
liquidity, including cash on hand and revolving credit capacity.
The company also generated strong organic revenue growth through
the first quarter of 2022.
Offsetting these strengths are NFP's persistently high financial
leverage and limited interest coverage, leaving the company little
room for error in managing its existing and acquired operations.
Given its acquisition strategy, NFP also has contingent earnout
liabilities that consume a significant portion of its free cash
flow. Moody's expects that NFP will continue to pursue a
combination of organic growth and acquisitions, the latter giving
rise to integration and contingent risks (e.g., exposure to errors
and omissions), although NFP has a favorable track record of
absorbing small and mid-sized brokers.
The negative rating outlook reflects the company's continued
elevated financial leverage and uncertainty over the pace at which
it might reduce leverage toward historical levels. Giving effect to
the incremental borrowing, NFP has pro forma debt-to-EBITDA above
7.5x, per Moody's calculations, with (EBITDA - capex) interest
coverage in the low single digits, and a free-cash-flow-to-debt
ratio in the low single digits. These metrics incorporate Moody's
adjustments for operating leases, contingent earnout obligations,
certain unusual/non-recurring items, and run-rate EBITDA from
acquisitions.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could return the rating outlook to stable include: (i)
debt-to-EBITDA ratio at or below 7.5x, (ii) (EBITDA - capex)
coverage of interest above 1.2x, (iii) free-cash-flow-to-debt ratio
above 2%.
Factors that could lead to a rating downgrade include: (i)
debt-to-EBITDA ratio remaining above 7.5x, (ii) (EBITDA - capex)
coverage of interest below 1.2x, (iii) free-cash-flow-to-debt ratio
below 2%.
Moody's has assigned the following rating:
-- $350 million backed of eight-year senior secured notes at
B1 (LGD2).
The following NFP ratings remain unchanged:
-- Corporate family rating at B3;
-- Probability of default rating at B3-PD;
-- $440 million backed senior secured revolving credit facility
maturing in February 2025, at B1 (LGD2);
-- $1,925 million ($1,888 million outstanding) backed senior
secured 1st lien term loan maturing in February 2027, at
B1 (LGD2);
-- $550 million backed senior secured notes maturing in
August 2028, at B1 (LGD2);
-- $2,075 million senior unsecured notes maturing in August
2028, at Caa2 (LGD5).
The rating outlook for NFP is unchanged at negative.
The principal methodology used in this rating was Insurance Brokers
and Service Companies published in June 2018.
Based in New York City, NFP Corp. provides a range of insurance
brokerage, consulting and advisory services, including benefits and
life, property and casualty, and wealth and retirement solutions,
largely in the US. The company generated revenue of $2 billion for
the 12 months through March 2022.
NN INC: Incurs $8.6 Million Net Loss in Second Quarter
------------------------------------------------------
NN, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss of $8.57
million on $125.36 million of net sales for the three months ended
June 30, 2022, compared to a net loss of $5.39 million on $123.16
million of net sales for the three months ended June 30, 2021.
For the six months ended June 30, 2022, the Company reported a net
loss of $11.87 million on $253.43 million of net sales compared to
a net loss of $10.30 million on $249.96 million of net sales for
the same period in 2021.
As of June 30, 2022, the Company had $573.16 million in total
assets, $307.83 million in total liabilities, $59 million in series
D perpetual preferred stock, and $206.32 million in total
stockholders' equity.
Warren Veltman, president and chief executive officer, said, "I am
pleased with our team's focus and commitment during the second
quarter, and we made meaningful progress towards achieving our
long-term strategic goals. While supply chain disruptions have
persisted longer than anticipated and inflation has created
additional cost and pricing pressures, we delivered a net sales
increase of 1.8% versus the second quarter of 2021. We remain
focused on the growth opportunities created by the transition to
electric vehicles and the transformation of the electric grid, and
we are determined to convert our growing pipeline of opportunities
into new business wins as we leverage capabilities across our Power
and Mobile Solutions businesses. As we evaluate the evolving state
of the global economy, we are committed to improving our overall
cost structure through facility and labor optimization initiatives
to provide flexibility for any economic downturn and to improve
overall margins, while continuing to exceed our customers'
expectations. We firmly believe our unique manufacturing
capabilities and global platform will enable us to grow and create
increased value for all our stakeholders."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000918541/000091854122000111/nnbr-20220630.htm
About NN Inc.
NN, Inc. -- www.nninc.com -- is a global diversified industrial
company that combines advanced engineering and production
capabilities with in-depth materials science expertise to design
and manufacture high-precision components and assemblies primarily
for the electrical, automotive, general industrial, aerospace and
defense, and medical markets. Headquartered in Charlotte, North
Carolina, NN has 31 facilities in North America, Europe, South
America, and China.
NN, Inc. reported a net loss of $13.23 million for the year ended
Dec. 31, 2021, a net loss of $100.59 million for the year ended
Dec. 31, 2020, a net loss of $46.74 million for the year ended Dec.
31, 2019, and a net loss of $262.99 million for the year ended Dec.
31, 2018. As of March 31, 2022, the Company had $595.85 million in
total assets, $316.48 million in total liabilities, $56.35 million
in series D perpetual preferred stock, and $223.03 million in total
stockholders' equity.
NORTH BROOKLYN: Case Summary & Four Unsecured Creditors
-------------------------------------------------------
Debtor: North Brooklyn Real Estate Initiative Corp.
56 Martense Street
Brooklyn, NY 11226
Business Description: North Brooklyn Real Estate Initiative Corp.
is a Single Asset Real Estate (as defined in
11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: August 10, 2022
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 22-41926
Judge: Hon. Elizabeth S. Stong
Debtor's Counsel: David J. Doyaga, Esq.
DAVID J. DOYAGA, ATTORNEYS AT LAW
26 Court Street, Suite 1601
Brooklyn, NY 11242
Tel: 718 488 7500
Fax: 718 488 7505
Email: david.doyaga.sr@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Federico Frazer as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/KIKJNUQ/North_Brooklyn_Real_Estate_Initiative__nyebke-22-41926__0001.0.pdf?mcid=tGE4TAMA
NORTHWEST SENIOR: Unsecureds Owed $1.5M to Get Nothing
------------------------------------------------------
Northwest Senior Housing Corporation, et al. submitted a Plan and a
Disclosure Statement.
The Debtors propose the following transactions (together, the
"Refinancing Transaction"), which is contingent upon the Debtors
achieving a successful outcome with respect to the Landlord
Litigation, which can be accomplished in one of the following ways:
(i) equitable subordination of the Landlord's rights and Claims, to
the extent allowable, under the Lease such that the Landlord is
entitled to Distributions of no more than $20,000,000 in total for
the remaining term of the Lease, with such amount being paid to the
Landlord over a period of years; or (ii) an extension of the term
of the Lease by at least 25 years and reduction of the contractual
rent amount to no more than $2,200,000 per year (each a "Successful
Outcome"):
* Entering into the Bond Transaction, which provides for, among
other things, (a) the issuance of new Series 2023A-1 Bonds and
Series 2023A-2 Bonds that will provide approximately $30,000,000 in
new capital to the Debtors and (b) the exchange of the outstanding
Original Bonds in the aggregate principal amount of $109,185,000
for new Series 2023B Bonds in the approximate amount of
$92,807,250;
* Obtaining a Sponsor Contribution of $13,500,000 in Cash and
additional liquidity support from the Sponsor in the form of an
unfunded $6,000,000 LSA and approximately $20,000,000 in Deferred
Sponsor Fees; and
* Implementing (through consensual agreement or order of the
Court) the Successful Outcome through a restructuring of Edgemere's
existing obligations under that certain Ground Lease, dated
November 5, 1999, between Intercity Investments Properties, Inc.
(the "Landlord"), as lessor, and Edgemere, as lessee (the
"Lease").
Under the Plan, Class 5 General Unsecured Claims total $1,500,000.
Amounts relating to Resident and/or Rejection Damages Claims are
not included in this estimated total. There will be no Distribution
to holders of Allowed General Unsecured Claims. Class 5 is
impaired.
The Reorganized Debtors will fund Distributions under the Plan
with: (i) available Cash, including Cash from operations, the DIP
Facility, and any monetary judgment entered in favor of Edgemere in
the Landlord Litigation; (ii) proceeds from the Bond Transaction,
which shall include, without limitation, proceeds from the Series
2023 Bond issuances; (iii) the Sponsor Support; and (iv) funds
available from the Entrance Fee Escrow.
Counsel to the Debtors:
Trinitee G. Green, Esq.
POLSINELLI PC
2950 N. Harwood, Suite 2100
Dallas, TX 75201
Telephone: (214) 397-0030
Facsimile: (214) 397-0033
E-mail: tggreen@polsinelli.com
- and -
Jeremy R. Johnson, Esq.
Brenna A. Dolphin, Esq.
POLSINELLI PC
600 3rd Avenue, 42nd Floor
New York, NY 10016
Telephone: (212) 684-0199
Facsimile: (212) 684-0197
E-mail: jeremy.johnson@polsinelli.com
bdolphin@polsinelli.com
A copy of the Disclosure Statement dated August 3, 2022, is
available at https://bit.ly/3vGp8BG from PacerMonitor.com.
About Northwest Senior Housing Corp.
Northwest Senior Housing Corporation, doing business as Edgemere,
is a Texas non-profit corporation and is exempt from federal income
taxation as a charitable organization described under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
Northwest Senior Housing Corporation was formed for the purpose of
developing, owning and operating a senior living community now
known as Edgemere.
Northwest Senior Housing Corporation and its affiliates sought
Chapter 11 bankruptcy protection (Bankr. N.D. Tex. Lead Case No.
22-30659) on April 14, 2022. The petitions were signed by Nick
Harshfield, treasurer.  At the time of the filing, Northwest
Senior Housing listed $100 million to $500 million in both assets
and liabilities.
Judge Michelle V. Larson oversees the cases.
Polsinelli, PC and FTI Consulting Inc. serve as the Debtors' legal
counsel and business advisor, respectively.  Kurtzman Carson
Consultants, LLC, is the Debtors' notice, claims and balloting
agent and administrative advisor.
The Official Committee of Unsecured Creditors tapped Foley &
Lardner LLP as counsel, and Ankura Consulting Group, LLC, as
financial advisor.
OFF-SPEC SOLUTIONS: Owner of 79 Trucks Seeks Chapter 11 Bankruptcy
------------------------------------------------------------------
Off-Spec Solutions LLC sought bankruptcy protection in Idaho. The
Debtor filed as a small business debtor seeking relief under
Subchapter V of Chapter 11 of the Bankruptcy Code.
Cool Mountain is a limited liability company formed under the laws
of Delaware. Cool Mountain's principal executive office is located
at 1428 Madison Avenue, Nampa, ID 83651.
Cool Mountain owns and operates 79 trucks nationally across the
lower 48 states. Cool Mountain is one of the Intermountain West's
larger transportation providers, serving regional and national food
producers for refrigerated transportation as well as some local
routes hauling agricultural byproducts.
Founded in 2009 and headquartered in Nampa, Idaho, Cool Mountain is
a leading asset-based over-the-road ("OTR") trucking company that
provides refrigerated and dry van transportation services to
leading food services companies and agricultural producers
throughout the United States. OTR hauling includes longer hauls
where the driver or drivers will sleep in their sleeper cabs when
not on the road. Cool Mountain also hauls dedicated freight from
Franz Bakery; in contrast to OTR hauling, dedicated drivers work
very consistent lanes and generally only run those consistent
lanes; those lanes are contracted to Cool Mountain.
Cool Mountain has expanded its services and steadily increased its
revenue and establishing itself as a regional transportation leader
in the greater Idaho marketplace and eventually through the entire
United States.
The primary business cause of the Chapter 11 filing was the drastic
reduction in revenues over the past several years from the Covid
pandemic. For example, Cool Mountain's revenues were $16,400,000
in 2019, then dipped for several months and ultimately ended at
$18,100,000 during the first Covid year, 2020, and rose to
$19,700,000 in 2021. The Debtor anticipates that 2022 will be
significantly better as we continue to exit the Covid pandemic.
Expenses Fuel prices have doubled in 2022 over 2021 and supply
chain issues keep trucks Cool Mountain continues to pay on in the
shops for several months generating no revenue. New more efficient
equipment is not available increasing repair costs to maintain an
older fleet.
The immediate cause for this Chapter 11 filing was the need to
restructure Cool Mountain's truck fleet to achieve profitable
operations.
According to court filings, Off-Spec Solutions estimates between
200 and 999 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
Sept. 13, 2022, at 10:00 AM via Telephonic Hearing. Proofs of
claim are due by Oct. 14, 2022.
About Off-Spec Solutions
Off-Spec Solutions LLC, doing business as Cool Mountain Transport,
is a trucking company located in Nampa, Idaho.
Off-Spec Solutions LLC filed a petition for relief under Subchapter
V of Chapter 11 of the Bankruptcy Code on (Bankr. D. Idaho Case No.
22-00346) on August 5, 2022. In the petition filed by Richard
Coyle, as president, the Debtor reported assets between $1 million
and $10 million and liabilities between $1 million and $10 million.
Matthew Todd Christensen, of Johnson May, PLLC, is the Debtor's
counsel.
The Subchapter V trustee:
Matthew W. Grimshaw
Grimshaw Law Group, P.C.
800 W. Main Street, Ste. 1460
Boise, ID, 83702
E-mail: matt@grimshawlawgroup.com
Tel: (208) 391-7860
ONE AND ONE: Unsecureds' Recovery to Depend on Sale Proceeds
------------------------------------------------------------
One and One Holdings LLC submitted a First Amended Disclosure
Statement and a Second Amended Plan.
The Debtor owns and operates real property located at 422 East 161
Street, Bronx, New York 10451. The Real Property is the only asset
of the Debtor. The Real Property has a total of 10 residential
apartments which generate income. The Real Property has a Mortgage
held by Fannie Mae, a first Mortgagee asserting a secured claim in
the approximate amount of $2,516,268.65 inclusive of interest.
The Debtor has made one minor clarification to the Second Amended
Plan and First Amended Disclosure Statement. This amendment
clarifies that the Debtor does not anticipate that there exists any
junior secured claims, or priority tax and non-tax priority claims
in this case, but, if such claims do exist after a review of the
filed claims after the expiration of the Bar Dates(August 15,2022
(non-governmental units) and September 26, 2022 (governmental
units)), such claims will be paid as required, by, and, to the
extent of, the confirmation requirements of s 1129(a)(9)(A) and (B)
of the Bankruptcy Code.
The Plan provides for a sale of the Real Property and for certain
Allowed claims to be paid, in full, from the sales proceeds from
the sale of the Real Property. If the sales proceeds are
insufficient to pay all Allowed claims in full, the Allowed claim
of the Mortgagee would receive all the proceeds except for Allowed
Chapter 11 administration claims, Allowed prior liens and the
Allowed Receiver fees consented to in the Stipulation. The Debtor
does not believe that there are secured creditor liens, the
mortgage lien or priority non-tax and priority tax claims, but, if
there are, such claims would be paid as required under sections
1129(a)(9)(A) and (B)of the Bankruptcy Code), Receiver's fees and
expenses (required under section 1129(a)(9)(A) of the Bankruptcy
Code). The Debtor believes that the unsecured creditors will not
receive any distribution. If the Bar Date has not expired before
the sales proceeds are collected, the Debtor will seek to reserve
amounts which the Debtor believes will become due in order to
assure that the above referred to claims are paid.
The Plan provides for the Debtor to sell the Real Property, free
and clear of claims which shall attach to the proceeds. The Auction
will take place after on or about the Confirmation Date unless
extended under the terms of the Auction for an additional limited
period of time not to exceed an additional 30 days. The
Distribution should take place to creditors with Allowed claims
within 15 days after the Closing on the sale and to any disputed
creditors entitled to Distribution within 15 days after entry of a
Final Court Order approving and affirming the validity and priority
of the claims of such disputed creditors. It is anticipated that
after the Allowed Priority Distribution Claims have been determined
distributions shall be made to the Mortgagee upon a Final Order
allowing the Mortgagee's claims. The net sales proceeds shall be
deposited in the Debtor's attorney's escrow account for
distribution. Reserves shall be set for disputed claims. The
Debtor's counsel shall undertake and complete the closing of the
sale of the Real Property and report with respect to the sale and
arrange for the distributions to be made from the Debtor's
attorney's escrow account. The Debtor shall deliver the Title
Company bill to the Mortgagee for its review.
Under the Plan, holders of Class 7 Allowed claims of unsecured
creditors including deficiency claims and unsecured non-priority
claims will be paid on a pari pasu basis from the proceeds of sale
of the Real Property after payments of the Allowed Priority
Distribution Claims and the Allowed Mortgagee claim. Class 7 is
impaired.
Attorney for the Debtor and Debtor-in-Possession:
Leo Fox, Esq.
630 Third Avenue - 18 Floor
New York, NY 10017
Tel: (212) 867-9595
Fax: (212) 949-1857
E-mail: leo@leofoxlaw.com
A copy of the First Amended Disclosure Statement dated August 3,
2022, is available at https://bit.ly/3JMh48p from
PacerMonitor.com.
About One And One
One And One Holdings, LLC owns a 10-unit residential building
located at 422 East 161st St., Bronx, N.Y.
One And One Holdings filed for Chapter 11 protection (Bankr.
S.D.N.Y. Case No. 22-10400) on March 30, 2022, disclosing up to $10
million in both assets and liabilities. Isaac Dubov, managing
member, signed the petition.
Judge James L. Garrity Jr. oversees the case.
Leo Fox, Esq., a New York City attorney, serves as the Debtor's
bankruptcy counsel.
OUTPUT SERVICES: S&P Downgrades ICR to 'D' on Chapter 11 Filing
---------------------------------------------------------------
S&P Global Ratings lowered its long-term issuer credit rating on
Output Services Group Inc. (OSG) to 'D' from 'CC'. At the same
time, S&P lowered its issue-level ratings on its first-lien debt to
'D' from 'CC', and on its second-lien debt to 'D' from 'C'.
The downgrade follows OSG's filing for bankruptcy under Chapter 11
of the U.S. Bankruptcy Code. The filing follows an extended period
of financial strain from the company's high debt burden and
deteriorating operating performance, and its tightening liquidity
position given its large upcoming debt maturities. OSG's earnings
have weakened amid a secular shift to digital services in the U.K.,
and rising labor and other input costs in the U.S.
OSG has agreed with its lenders on the terms of a debt
restructuring to reduce its interest expense, extend its debt
maturities and inject capital to support its business turnaround
plan. S&P said, "We plan to update our ratings once the new credit
facilities are issued, which we expect following the conclusion of
the Chapter 11 hearing process over the next few weeks. The company
will operate under usual business conditions through the
proceedings."
ESG credit indicators: E-2, S-2, G-3
PARK SUPPLY: Wins Cash Collateral Access Thru Aug 15
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Minnesota authorized
Park Supply of America, Inc., to use cash collateral on an interim
basis in accordance with the budget through August 15, 2022.
The Debtor will continue to retain Alliance Management to provide a
chief restructuring officer, with these powers:
a. Any expense over $10,000 must be pre-approved by the CRO;
b. The CRO will have final authority for the Debtor (subject
to Bankruptcy Court approval) with respect to a sale of the
Debtor's business and assets under 11 U.S.C. Section 363; and
c. The CRO will have final authority for the Debtor to
determine whether a sale of the Debtor's business and assets under
Section 363 or any plan of reorganization is in the best interest
of the estate.
The Debtor will make adequate protection payments to DCR Mortgage
10 Sub 2, LLC in the amount of $10,000 per month. The Debtor agreed
to make the adequate protection payments by the fifth of each
month. The application of these payments to the amounts due to the
Bank is reserved for later determination.
As adequate protection, the Bank is granted a valid, perfected
replacement security interest in and lien on all pre-petition and
post-petition property and assets of the Debtor and its estate
(including but not limited to the DIP Account), in an amount equal
to the diminution in value of the interests in the pre-petition
collateral from and after the filing of the bankruptcy petition.
The replacement liens and security interests granted to the Bank
will have the same dignity, priority and effect as the Bank's liens
and security interests on pre-petition assets of the Debtor. The
Bank will not be required to file any financing statement, notice
of lien or similar instrument in any jurisdiction or take any other
action in order to perfect the post-petition security interests and
liens granted by the Order.
The Bank has consented to a carve-out of up to $100,000 for payment
of professional expenses related to pursuing a sale process.
Subject to this carveout, absent further Court order, the Debtor is
not permitted to use cash to pay any professional fees.
A copy of the order is available at https://bit.ly/3vTX6mi from
PacerMonitor.com.
About Park Supply of America, Inc.
Park Supply of America, Inc. is a merchant wholesaler of hardware,
and plumbing and heating equipment and supplies.
Park Supply of America sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Minn. Case No. 22-40003) on January
3, 2022.
In the petition signed by James Dada, COO/CFO, the Debtor disclosed
$1,706,019 in assets and $2,593,406 in liabilities.
Judge William J. Fisher oversees the case.
Cameron A. Lallier, Esq., at Foley and Mansfield PLLP is the
Debtor's counsel.
PAVERS INC: Seeks Cash Collateral Access Thru Jan 2023
------------------------------------------------------
Pavers, Inc. asks the U.S. Bankruptcy Court for the District of
Kansas for authority to use cash collateral in accordance with the
budget and to surcharge secured collateral for the creation of cash
resources for the payment of costs incurred therein.
The Debtor requires the use of cash collateral to pay its ongoing
expenses for labor, utilities, maintenance and repairs,
professionals, and other ordinary operational costs, together with
the costs of preparing its assets for liquidation and related
marketing expenses.
The Debtor seeks authority to use income generated by the Debtor
from sales and facilities rentals, all of which has been pledged to
The Plains State Bank, dba Bank IV a division of The Plains State
Bank, among others, during the Specified Period, in a manner
consistent with the Debtor's budget.
The Debtor proposes to deposit the cash collateral into the
Debtor's debtor-in-possession accounts with PSB. To the extent that
the cash collateral is generated from the sales of any of PSB's
Collateral after the DIP Account balance has reached $50,000, all
excess proceeds from such sales may thereafter be applied by PSB to
its claims therein. The application of such proceeds will not
require further authorization from the Court, and to the extent
necessary, PSB will be granted relief from the automatic stay to
apply the proceeds in this manner.
As adequate protection, the Debtor will grant a replacement lien
and post-petition lien on post-petition assets to PSB and the
Junior Lienholders. Additionally, Debtors propose that PSB will
hold a continuing lien on post-petition rents pursuant to 11 U.S.C.
section 552(b)(2). Such replacement lien and continuing lien will
be in proportion to and to the extent that the cash collateral is
used by Debtor on a postpetition basis, and in the same order and
priority as such liens existed on the Petition Date.
PSB has a properly perfected first-priority security interest in
the cash collateral, as well as all other real property, equipment,
accounts, inventory and personal property of the Estate. Westfield
Insurance Company holds a properly perfected second priority
security interest in the Debtor's accounts, receivables, non-titled
machinery and equipment, general intangibles, goods, and other
forms of personal property. Bobcat of Salina, Inc. may assert a
first priority purchase money security interest in certain Bobcat
parts, tracks, and rentals, though the Debtor asserts that Bobcat
holds no claims therein. The US Small Business Administration holds
a properly perfected third priority security interest in the
Debtor's accounts, receivables, non-titled machinery and equipment,
general intangibles, goods, and other forms of personal property.
The Guarantee Company of North America USA holds a properly
perfected fourth priority security interest in the Debtor's
accounts, receivables, non-titled machinery and equipment, general
intangibles, goods, and other forms of personal property.
As of the Petition Date, PSB claims that the balance due to PSB by
the Debtor was at least $4.3 million. The Debtor reserves the right
to dispute and contest this claim. The Debtor believes its assets
have a collective value of approximately $4,250,000. PSB asserts
the value of these assets is significantly lower. Thus, whether
using the Debtor's value or PSB's value, it appears that there is
only equity available in any of the Collateral for PSB and possibly
Westfield (and Bobcat to the extent it has any remaining
collateral). Westfield, Bobcat, the SBA, and GCNA are collectively
known as the Junior Lienholders.
The Debtor seeks interim authority to use cash collateral only
until a final hearing can be held. Thereafter, and subject to the
Debtor's right to request additional cash collateral authority for
further periods on proper notice, the Debtor seeks authority to use
cash collateral through January 31, 2023, at 11:59 p.m. The
Specified Period may be extended by agreement of the Debtor, PSB,
and Westfield, or upon further order of the Court. It is
anticipated that PSB is not adequately protected during the
Specified Period.
These events constitute an "Event of Default:"
a. The entry of an order by the Court granting relief from or
modifying the automatic stay of Section 362 of the Bankruptcy Code
(i) to allow any creditor to execute upon or enforce a lien on or
security interest in any of the Collateral;
b. Dismissal of the case or conversion of the case to Chapter
7 case;
c. The sale after the Petition Date of any portion of any of
the Debtor's assets outside the ordinary course of dealing and
without approval by the Court under 11 U.S.C. section 363;
d. The failure by the Debtor to perform, after notice from
PSB, in any respect, any of the material terms, provisions,
conditions, covenants, or obligations under the Order granting this
Motion or under the requirements of the underlying loan documents
between the Debtor and PSB, to the extent such requirements
materially affect the Collateral and are not otherwise inconsistent
with the terms of the Order or bankruptcy law.
As partial adequate protection, PSB will be granted a valid,
automatically perfected replacement lien against the assets of the
Debtors, for the full amount of the cash collateral which is
utilized pursuant to the Order granting the Motion. The replacement
liens will have the same validity, avoidability and priority as the
security interests and liens existing against the Cash Collateral
as of the date of the Order on the Motion. The replacement liens
will be declared to be valid and perfected without the need for the
execution, recording or filing of any further document or
instrument or the taking of any further act otherwise required
under nonbankruptcy law.
PSB, for its benefit, will receive, (i) an additional and
replacement continuing valid, binding, enforceable, non-avoidable,
and automatically perfected post-petition security interest in and
lien on any and all presently owned and hereafter acquired personal
property and all other assets of the Debtors and the estate,
together with any proceeds thereof, including, without limitation,
as set forth in the loan documents; (ii) to the extent provided by
Sections 503(b) and 507(b) of the Bankruptcy Code, an allowed
superpriority administrative expense claim in the case and any
Successor Case; (iii) payments from the proceeds from the auction
or sale of its Collateral at the closing of the sale of any such
transaction, with such payments to be made to PSB according to its
relative priority in the assets as of the Petition Date; and (iv)
any refunds paid or payable to the Debtor, including but not
limited refunds of insurance premiums.
The Junior Lienholders will receive the same adequate protection
set forth but only (i) if PSB will have had its allowed claims
therein paid in full, (ii) with the same relative order and
priority as existed on the Petition date, and (iii) only to the
extent that its equity position in any item of Collateral has been
diminished by the Debtor's use of such Collateral. The
Post-Petition Replacement Adequate Protection Lien granted to PSB
will have the same priority as the priority PSB enjoyed in the
Debtor's assets as of the Petition Date, and nothing set forth
therein is intended to grant PSB or any other creditor a priming
lien on or security interest in the Debtor's assets and property.
As further adequate protection, upon the request of PSB, the Debtor
intends to provide proof of adequate insurance coverage for the
Collateral and the Debtor's operations in compliance with the terms
of the underlying loan documents.
The Carve-Out means:
1) Fees payable to the Subchapter V trustee, in an amount not
to exceed $5,000;
2) The allowed professional fees and disbursements for the
Debtor's accountant in the case, in an amount not to exceed $5,000;
and
3) The allowed professional fees and disbursements for the
Debtor's counsel in the case, in an amount not to exceed $40,000;
and
4) Any costs of sale associated with the sale of the
Collateral, including broker commissions, marketing fees, property
taxes, escrow fees, recording costs, and similar expenses, to the
extent authorized by any section 363 order approving of such
sales.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3PaqICw from PacerMonitor.com.
The budget provides for total expenses, on a monthly basis, as
follows:
$46,392 for the month of August 2022;
$50,429 for the month of September 2022;
$24,029 for the month of October 2022;
$23,699 for the month of November 2022;
$19,129 for the month of December 2022;
$19,234 for the month of January 2023.
About Pavers, Inc.
Pavers, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Kan. Case No. 22-40463) on August 8,
2022. In the petition signed by Jeffrey B. Wilson, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
David Prelle Eron, Esq., at Prelle Eron and Bailey, PA is the
Debtor's counsel.
PIKE CORP: Moody's Rates $300MM First Lien Term Loan 'Ba3'
----------------------------------------------------------
Moody's Investors Service has assigned a Ba3 rating to the $300
million first-lien term loan to be issued by Pike Corporation. Pike
plans to use the term loan proceeds to fund an acquisition and to
repay a $75 million bridge loan it borrowed to partially fund the
redemption of Lindsay Goldberg's equity stake in Pike's parent
company.
The issuance of an additional $300 million debt to fund the
acquisition and equity redemption is credit negative, as it will
increase Pike's debt leverage and reduce its financial buffer
against unexpected cost overruns from electric construction and
engineering projects. The company has been pursuing aggressive
financial policy, which elevates the risk of a rating decline if
business integration or project execution goes against plan. This
incremental debt issuance will likely exhaust the existing headroom
for the Pike's B2 Corporate Family Rating ("CFR") with a stable
outlook.
The Ba3 rating on the incremental first-lien term loan reflects its
first priority lien on the assets of Pike and its seniority
relative to the unsecured notes.
The ratings are subject to the transaction closing as proposed and
receipt and review of the final documentation.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Pike Corporation
GTD Senior Secured 1st Lien Term Loan, Assigned Ba3 (LGD3)
RATINGS RATIONALE
Moody's expects the incremental debt issuance will result in
limited headroom for Pike's B2 Corporate Family Rating, which
requires debt leverage below 5.5x. Pike's gross debt will increase
to $1.8 billion, including $1 billion first-lien term loan (incl.
$300 million incremental issuance) due January 2028 and $725
million senior unsecured notes due September 2028. Pro-forma debt
leverage, including the incremental debt and Moody's adjustment for
operating lease, will increase to low-five times versus 4.7x at the
end of March 2022.
Business execution risks are increasing with recent acquisitions.
The current acquisition target is a service provider of vegetation
management to electric transmission and distribution utilities in
the Southern and Midwestern US. Although the acquisition target's
business profile is complementary and helps expand Pike's service
offerings, it remains to be seen whether the acquisition target can
sustain its strong earnings once integrated into Pike. The
integration of the acquired Entregado in early 2022 is still
ongoing. Entregado had weak operating performance prior to Pike's
acquisition from undertaking lump-sum contracts over the last three
years; however, such lump-sum contracts have been completed. Pike
is working towards significant earnings improvement from cost
synergies, including more favorable lease agreements and back
office consolidation.
Management has become more aggressive in financial policy. This
elevates the risk of a rating decline, if cost overruns or quality
issues cause earnings or cash flows to fall below expectation. The
company has embarked on more frequent and sizable shareholder
distributions, including $125 million in January 2022, $100 million
in April 2021 and $60 million in August 2020. The recent change in
ownership structure resulted from an equity redemption partially
funded by a $75 million bridge loan. Additionally, Moody's expect
Pike will continue to pay dividends to its parent holding company
that issued preferred stock to partially facilitate the equity
redemption of Lindsay Goldberg.
Moody's expects the new ownership structure will not change the
company's business strategy or financial policy. Governance risks
remain high due to the concentrated voting rights by the founder,
leveraged capital structure, frequent shareholder distributions,
debt-funded acquisitions and related party transactions. Eric Pike,
the Company's chairman and CEO, has gained the majority voting
rights in the company and Lindsay Goldberg has become a minority
shareholder with a 22% equity stake (down from 50.1%).
Fundamentally, Pike's credit profile is constrained by its limited
geographic and end market diversity since it mostly provides
engineering, maintenance, repair, replacement, and upgrade work for
electric utilities. It also incorporates its customer
concentration, moderate scale and the competitive nature of the
utility and telecommunications services sectors.
At the same time, Pike's credit profile is supported by favorable
industry fundamentals as utilities continue to focus on replacing
aging infrastructure, modernizing, and expanding the electricity
grid and outsourcing more engineering and construction services to
third parties. The company's master service agreements also support
revenue stability.
The company's liquidity profile is supported by its available
revolving credit facility and expected free cash flows. At the end
of June 2022, the company had $106 million availability under its
$203 million revolver. The revolver has a 5.8x springing senior
secured leverage covenant, against which Pike has ample cushion.
Pike's liquidity profile was burdened by the spending on a major
transmission project in 2021 and the first half of 2022. As the
project has been recently completed, Moody's expect working capital
release and positive free cash flow in the next 12 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company increases its scale
and geographic diversity and strengthens its cash generating
ability as evidenced by FFO/debt increasing to more than 17.5%,
while maintaining good margins and a leverage ratio (debt/EBITDA)
below 4.0x.
A downgrade could occur if deteriorating operating results,
debt-financed acquisitions or shareholder distributions result in
the company's leverage ratio increasing to above 5.5x, or FFO/debt
sustained below 12.5%. A weakening of its liquidity profile could
also result in downward pressure.
The principal methodology used in these ratings was Construction
published in September 2021.
Headquartered in Mount Airy, North Carolina, Pike Corporation
provides installation, repair and maintenance and storm restoration
services for investor-owned, municipal, and cooperative electric
utilities and telecommunications companies in the United States.
The company provides engineering and design services and constructs
and maintains substations, underground and overhead distribution
networks, and transmission lines. Eric Pike and his affiliates hold
approximately 87% of the voting rights and 34% economic interests
in the company. Revenue for the twelve months ended March 2022 was
approximately $2.1 billion.
PING IDENTITY: Moody's Puts 'B1' CFR Under Review for Downgrade
---------------------------------------------------------------
Moody's Investors Service placed Ping Identity Corporation's B1
Corporate Family Rating, B1-PD Probability of Default Rating, and
the B1 ratings for its 1st lien credit facilities under review for
downgrade. The SGl-2 speculative grade liquidity rating is
unchanged. The rating action was prompted by the announcement that
Ping Identity Holding Corp. has entered into a definitive agreement
to be acquired by affiliates of Thoma Bravo in an all-cash
transaction with an enterprise value of approximately $2.8 billion.
Ping Identity Corporation is an indirect wholly-owned subsidiary of
Ping Identity Holding Corp. ("Ping Identity"). The acquisition is
expected to close in the fourth quarter of 2022 and closing of the
acquisition is not subject to any financing contingency.
On Review for Downgrade:
Issuer: Ping Identity Corporation
Corporate Family Rating, Placed on Review for Downgrade,
currently B1
Probability of Default Rating, Placed on Review for Downgrade,
currently B1-PD
Senior Secured Bank Credit Facility, Placed on Review for
Downgrade, currently B1 (LGD4)
Outlook Actions:
Issuer: Ping Identity Corporation
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Although Thoma Bravo or Ping Identity have not disclosed their
financing plans for the acquisition, Moody's put Ping Identity's
ratings under review for downgrade to reflect governance
considerations, specifically, the potential for a large increase in
debt at Ping Identity upon the acquisition. Moody's expects that
the acquisition will enable Ping Identity to accelerate its
business model transition toward Subscription as a Service
offerings without the pressure to manage short-term profitability.
Ping Identity's Annual Recurring Revenues (ARR) grew over 20% in
the YTD 2Q '22 period but its non-GAAP operating income declined to
negative $11 million in the YTD 2Q '22 period, from about $21
million in the comparable period a year ago. The pressure on
profitability reflects the company's shift toward ratable revenues
in the fast-growing subscription offerings and higher investments
to capitalize on growth opportunities. Ping Identity maintains good
liquidity comprising $210 million in cash balances at the end of 2Q
'22 and access to an undrawn $150 million revolving credit
facility.
Ping Identity's credit profile is constrained by its modest
operating scale and the highly competitive and fragmented Identity
and Access Management (IAM) products market. Moody's had expected
good growth in ARR but negative free cash flow in 2022. The company
benefits from strong secular tailwinds driving demand for IAM
solutions in workforce and customer use cases and its growing
portfolio of cloud platform offerings that create opportunities to
further expand within the installed base. Its credit profile is
additionally supported by its high proportion of recurring revenues
with strong revenue retention rates.
Moody's expects to conclude the review of Ping Identity's ratings
around the time the acquisition closes. To the extent there is any
rated debt outstanding, Moody's review will focus on the company's
capital structure upon the close of the acquisition and its
financial and business strategy under its new shareholders.
Ping Identity Holding Corp.'s Identity and Access Management
solutions provide secure access to employees, partners and
consumers of its enterprise customers that allows users to connect
to software applications.
The principal methodology used in these ratings was Software
published in June 2022.
PROMEDICA HEALTHCARE: S&P Lowers Debt Rating to 'BB', On Watch Neg
------------------------------------------------------------------
S&P Global Ratings lowered its rating on ProMedica Healthcare,
Ohio's debt outstanding to 'BB' from 'BBB-' and placed the rating
on CreditWatch with negative implications.
"The downgrade reflects our view of the acceleration of operating
losses beyond expectations through the interim period ended March
31, 2022, spurred by what we view as elevated human capital social
risk that we capture under our environmental, social, and
governance factors," said S&P Global Ratings credit analyst Anne
Cosgrove.
Also contributing to S&P's rating action is the heightened business
and execution risk associated with a potential change in strategy
with the skilled nursing business.
The CreditWatch placement reflects S&P's view that there is a
one-in-two chance it could lower the rating in the next 90 days
pending June 30, 2022, results as well as an update on management
strategy given recent turnover.
ProMedica reported a significant loss of $154.5 million for the
interim period ended March 31, 2022, generating very weak operating
lease maximum annual debt service coverage (DSC) of 0.18x. Most of
the loss was in the senior care business, although the provider
business also struggled. Previous management struggled to execute
on its strategy of turning operations around and stabilizing this
service line.
S&P said, "We view ProMedica's human capital social risk as
elevated and a negative credit factor given the heightened
operating pressures in the skilled nursing business (and at the
provider business) that we do not expect will abate in the near
term (for skilled nursing). In addition, we view some social
capital risk around ProMedica's exposure to Medicaid in both the
acute-care and post-acute-care sectors with less offsets as the
overall business continues to be challenged.
"ProMedica's potential change in strategy regarding the skilled
nursing business reflects risk management culture and oversight
uncertainties that we believe could be positive in the long term
should the new management team execute on shoring up operations in
the senior care business. However, we will monitor this governance
aspect, as there remains significant industry and business risk in
this line of business. We view the system's environmental risk as
neutral in our credit analysis.
"We expect to receive more detailed information from management
during the CreditWatch period to understand strategic priorities as
well as performance through the interim period ended June 30, 2022.
Further deterioration in the financial profile, particularly
unrestricted reserves and operating margins, could result in a
downgrade. Future rating actions will also be based on our
assessment of management's near-term strategic and operational
plans."
QUANTUM CORP: Incurs $10.2 Million Net Loss in First Quarter
------------------------------------------------------------
Quantum Corporation filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $10.22 million on $97.07 million of total revenue for the three
months ended June 30, 2022, compared to a net loss of $4.15 million
on $89.10 million of total revenue for the three months ended June
30, 2021.
As of June 30, 2022, the Company had $221.67 million in total
assets, $290.46 million in total liabilities, and a total
stockholders' deficit of $68.79 million.
Quantum stated, "We consider liquidity in terms of the sufficiency
of internal and external cash resources to fund our operating,
investing and financing activities. Our principal sources of
liquidity include cash from operating activities, cash and cash
equivalents on our balance sheet and amounts available under our
PNC Credit Facility. We require significant cash resources to meet
obligations to pay principal and interest on our outstanding debt,
provide for our research and development activities, fund our
working capital needs, and make capital expenditures. Our future
liquidity requirements will depend on multiple factors, including
our research and development plans and capital asset needs. We are
subject to the risks arising from COVID-19 and substantial
financial market volatility which have adversely affected both the
U.S. and the global economy. We have experienced negative impacts
on sales due to global supply chain constraints, inflationary
concerns and overall uncertainty in the macroeconomic environment
which has resulted in a significant increase in our sales backlog
compared to our historical levels. The extent of the impacts will
depend, in part, on how long the negative trends in customer demand
and supply chain levels will continue. We expect the impact of
COVID-19 and market instability to continue to have a significant
impact on our liquidity and capital resources.
"We had cash and cash equivalents of $26.5 million as of June 30,
2022, which consisted primarily of bank deposits and money market
accounts. As of June 30, 2022 we had $11.8 million available to
borrow under the PNC Credit Facility.
"We are subject to various debt covenants under our debt agreements
including a net leverage covenant and a $25 million minimum
liquidity covenant. Our failure to comply with our debt covenants
could materially and adversely affect our financial condition and
ability to service our obligations. On April 25, 2022, we amended
the covenant levels for our financial covenants under our term debt
and PNC Credit Facility. We believe we were in compliance with all
covenants under our debt agreements as of the date of filing of
this Quarterly Report on Form 10-Q."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/709283/000070928322000034/qtm-20220630.htm
About Quantum Corp.
Based in San Jose, California, Quantum Corp. (NYSE:QTM) --
http://www.quantum.com-- provides technology and services that
stores and manages video and video-like data delivering streaming
for video and rich media applications, along with low cost, high
density massive-scale data protection and archive systems. The
Company helps customers capture, create and share digital data and
preserve and protect it for decades.
Quantum reported a net loss of $32.28 million for the year ended
March 31, 2022, a net loss of $35.46 million for the year ended
March 31, 2021, and a net loss of $5.21 million for the year ended
March 31, 2020. As of March 31, 2022, the Company had $201.63
million in total assets, $328.32 million in total liabilities, and
a total stockholders' deficit of $126.68 million.
REVLON INC: Committee Taps Brown Rudnick as Bankruptcy Counsel
--------------------------------------------------------------
The official committee of unsecured creditors of Revlon, Inc. and
its affiliates seeks approval from the U.S. Bankruptcy Court for
the Southern District of New York to employ Brown Rudnick, LLP as
its legal counsel.
The firm's services include:
a. assisting and advising the committee in its discussions
with the Debtor and other parties-in-interest regarding the overall
administration of the Debtors' Chapter 11 cases;
b. representing the committee at hearings to be held before
this court and communicating with the committee regarding the
matters heard and the issues raised as well as the decisions and
considerations of this court;
c. assisting and advising the committee in its examination and
analysis of the conduct of the Debtors' affairs;
d. reviewing pleadings, orders and other documents filed and
to be filed with this court by interested parties in this Chapter
11 case, and consenting or objecting to such documents;
e. assisting the committee in preparing legal papers;
f. conferring with the professionals retained by the Debtors
and other parties-in-interest;
g. coordinating the receipt and dissemination of information
prepared by and received from the Debtors' professionals and from
professionals engaged by the committee or other
parties-in-interest;
h. participating in the examinations of the Debtors and other
witnesses in order to analyze and determine, among other things,
the Debtors' assets and financial condition, whether the Debtors
have made any avoidable transfers of property, or whether causes of
action exist on behalf of the Debtors' estates;
i. representing the committee in connection with any proposed
sale or other disposition of assets of the estates;
j. representing the committee in connection with any proposed
post-petition financing;
k. negotiating and, if necessary or advisable, formulating a
plan of reorganization for the Debtors; and
l. performing other necessary legal services for the
committee.
The hourly rates charged by the firm for its services are as
follows:
Attorney $565 to $1,875 per hour
Paraprofessional $415 to $490 per hour
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Brown
Rudnick disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- no Brown Rudnick professional included in the engagement
has varied his rate based on the geographic location of the
Debtors' bankruptcy cases;
-- the firm has not represented the committee in the 12 months
prior to the Debtors' Chapter 11 filing; and
-- the committee has approved Brown Rudnick's general staffing
plan.
As disclosed in court filings, Brown Rudnick neither holds nor
represents an interest adverse to the Debtor's estate with respect
to the matters for which the firm is to be employed.
The firm can be reached through:
Robert J. Stark, Esq.
Brown Rudnick LLP
7 Times Square
New York, NY 10036
Phone: 212-209-4800
Fax: 212-209-4801
Email: rstark@brownrudnick.com
About Revlon Inc.
Revlon Inc. manufactures, markets and sells an extensive array of
beauty and personal care products worldwide, including color
cosmetics; fragrances; skin care; hair color, hair care and hair
treatments; beauty tools; men's grooming products; anti-perspirant
deodorants; and other beauty care products. Today, Revlon's
diversified portfolio of brands is sold in approximately 150
countries around the world in most retail distribution channels,
including prestige, salon, mass, and online.
Since its breakthrough launch of the first opaque nail enamel in
1932, Revlon has provided consumers with high quality product
innovation, performance and sophisticated glamour. In 2016, Revlon
acquired the iconic Elizabeth Arden company and its portfolio of
brands, including its leading designer, heritage and celebrity
fragrances.
Revlon is among the leading global beauty companies, with some of
the world's most iconic and desired brands and product offerings in
color cosmetics, skin care, hair color, hair care and fragrances
under brands such as Revlon, Revlon Professional, Elizabeth Arden,
Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy
Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos,
Christina Aguilera and AllSaints.
Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
22-10760) on June 15, 2022. Fifty affiliates, including Almay,
Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also
sought bankruptcy protection on June 15 and June 16, 2022.
Revlon disclosed total assets of $2,328,093,000 against total
liabilities of $3,689,240,395 as of April 30, 2022.
The Hon. David S. Jones is the case judge.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
bankruptcy counsel; Mololamken, LLC as special litigation counsel;
PJT Partners, LP as investment banker; KPMG, LLP as tax services
provider; and Alvarez & Marsal North America, LLC as restructuring
advisor. Robert M. Caruso of Alvarez & Marsal serves as the
Debtors' chief restructuring officer. Meanwhile, Kroll
Restructuring Administration, LLC is the Debtors' claims agent and
administrative advisor.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on June 24, 2022.
Brown Rudnick, LLP, Province, LLC and Houlihan Lokey Capital, Inc.
serve as the committee's legal counsel, financial advisor and
investment banker, respectively.
REVLON INC: Committee Taps Houlihan Lokey as Investment Banker
--------------------------------------------------------------
The official committee of unsecured creditors of Revlon, Inc. and
its affiliates seeks approval from the U.S. Bankruptcy Court for
the Southern District of New York to employ Houlihan Lokey Capital,
Inc. as its investment banker.
The firm's services include:
a. analyzing business plans and forecasts of the Debtors;
b. evaluating the assets and liabilities of the Debtors;
c. assessing the financial issues and options concerning (i)
the sale of the Debtors, either in whole or in part, and (ii) the
Debtors' Chapter 11 plan of reorganization or liquidation or any
other Chapter 11 plan;
d. analyzing and reviewing the financial and operating
statements of the Debtors;
e. providing such financial analyses as the Committee may
require in connection with the Debtors' Chapter 11 cases;
f. assisting in the determination of an appropriate capital
structure for the Debtors;
g. assisting in the review of the Debtors' employee benefit
programs, including key employee retention, incentive, pension and
other post-retirement benefit plans;
h. analyzing strategic alternatives available to the Debtors;
i. evaluating the Debtors' debt capacity in light of its
projected cash flows;
j. assisting in the review of claims and the reconciliation,
estimation, settlement, and litigation with respect thereto;
k. assisting the committee in identifying potential
alternative sources of liquidity in connection with any
debtor-in-possession financing, any Chapter 11 plan or otherwise;
l. representing the committee in negotiations with the Debtors
and third parties with respect to any of the foregoing;
m. providing testimony in court, if necessary; and
n. providing other necessary investment banking services.
The firm will be compensated as follows:
a. Houlihan Lokey shall be paid in advance a non-refundable
monthly cash fee of $200,000. Beginning with the seventh monthly
fee, 50 percent of the monthly fees timely received by Houlihan
Lokey and approved by the final order of the court shall be
credited against the deferred fee to which the firm becomes
entitled, except that, in no event, shall such deferred fee be
reduced below zero.
b. The Debtors shall pay Houlihan Lokey a fee to be paid in
cash of $4 million. The deferred fee shall be earned and payable
upon the consummation of a transaction and in accordance with the
terms specified in the engagement agreement.
Saul Burian, managing director at Houlihan Lokey, disclosed in a
court filing that his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Saul E. Burian
Houlihan Lokey Capital, Inc.
245 Park Avenue, 20th Fl.
New York, NY 10167
Tel: 212-497-4100
Fax: 212-661-3070
About Revlon Inc.
Revlon Inc. manufactures, markets and sells an extensive array of
beauty and personal care products worldwide, including color
cosmetics; fragrances; skin care; hair color, hair care and hair
treatments; beauty tools; men's grooming products; anti-perspirant
deodorants; and other beauty care products. Today, Revlon's
diversified portfolio of brands is sold in approximately 150
countries around the world in most retail distribution channels,
including prestige, salon, mass, and online.
Since its breakthrough launch of the first opaque nail enamel in
1932, Revlon has provided consumers with high quality product
innovation, performance and sophisticated glamour. In 2016, Revlon
acquired the iconic Elizabeth Arden company and its portfolio of
brands, including its leading designer, heritage and celebrity
fragrances.
Revlon is among the leading global beauty companies, with some of
the world's most iconic and desired brands and product offerings in
color cosmetics, skin care, hair color, hair care and fragrances
under brands such as Revlon, Revlon Professional, Elizabeth Arden,
Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy
Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos,
Christina Aguilera and AllSaints.
Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
22-10760) on June 15, 2022. Fifty affiliates, including Almay,
Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also
sought bankruptcy protection on June 15 and June 16, 2022.
Revlon disclosed total assets of $2,328,093,000 against total
liabilities of $3,689,240,395 as of April 30, 2022.
The Hon. David S. Jones is the case judge.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
bankruptcy counsel; Mololamken, LLC as special litigation counsel;
PJT Partners, LP as investment banker; KPMG, LLP as tax services
provider; and Alvarez & Marsal North America, LLC as restructuring
advisor. Robert M. Caruso of Alvarez & Marsal serves as the
Debtors' chief restructuring officer. Meanwhile, Kroll
Restructuring Administration, LLC is the Debtors' claims agent and
administrative advisor.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on June 24, 2022.
Brown Rudnick, LLP, Province, LLC and Houlihan Lokey Capital, Inc.
serve as the committee's legal counsel, financial advisor and
investment banker, respectively.
REVLON INC: Committee Taps Province LLC as Financial Advisor
------------------------------------------------------------
The official committee of unsecured creditors of Revlon, Inc. and
its affiliates seeks approval from the U.S. Bankruptcy Court for
the Southern District of New York to employ Province, LLC as its
financial advisor.
The firm's services include:
(a) becoming familiar with and analyzing the Debtors' budget,
assets and liabilities, and overall financial condition;
(b) reviewing financial and operational information furnished
by the Debtors and other parties;
(c) assessing the Debtors' various pleadings and proposed
treatment of unsecured creditor claims therefrom;
(d) preparing or reviewing, as applicable, avoidance action
and claim analyses;
(e) assisting the committee in reviewing the Debtors'
financial reports, including, but not limited to, statements of
financial affairs, schedules of assets and liabilities, and monthly
operating reports;
(f) preparing analyses relating to the estimation of the
number and value of present and future personal injury claims;
(g) developing claims procedures to be used in the development
of financial models of payments and assets of a claims resolution
trust;
(h) advising the committee on the current state of the
Debtors' Chapter 11 cases;
(i) advising the committee in negotiations with the Debtors
and other parties as necessary;
(j) assisting committee counsel in its investigation of the
Debtors' assets, liabilities and financial conditions, and
pre-bankruptcy transactions including those between the Debtors and
non-debtor affiliates;
(k) if necessary, participating as a witness in hearings
before the court with respect to matters upon which Province has
provided advice; and
(l) performing other necessary legal services.
The firm will be paid at these rates:
Managing Directors and Principals $860 -
$1,180
Vice Presidents, Directors, and Senior Directors $580 -
$860
Analysts, Associates, and Senior Associates $300 -
$580
Paraprofessionals $220 -
$300
Michael Atkinson, a principal at Province, disclosed in a court
filing that his firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael Atkinson
Province, LLC
2360 Corporate Circle, Suite 340
Henderson, NV 89074
Phone: +1 (702) 685-5555
Email: matkinson@provincefirm.com
About Revlon Inc.
Revlon Inc. manufactures, markets and sells an extensive array of
beauty and personal care products worldwide, including color
cosmetics; fragrances; skin care; hair color, hair care and hair
treatments; beauty tools; men's grooming products; anti-perspirant
deodorants; and other beauty care products. Today, Revlon's
diversified portfolio of brands is sold in approximately 150
countries around the world in most retail distribution channels,
including prestige, salon, mass, and online.
Since its breakthrough launch of the first opaque nail enamel in
1932, Revlon has provided consumers with high quality product
innovation, performance and sophisticated glamour. In 2016, Revlon
acquired the iconic Elizabeth Arden company and its portfolio of
brands, including its leading designer, heritage and celebrity
fragrances.
Revlon is among the leading global beauty companies, with some of
the world's most iconic and desired brands and product offerings in
color cosmetics, skin care, hair color, hair care and fragrances
under brands such as Revlon, Revlon Professional, Elizabeth Arden,
Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy
Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos,
Christina Aguilera and AllSaints.
Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
22-10760) on June 15, 2022. Fifty affiliates, including Almay,
Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also
sought bankruptcy protection on June 15 and June 16, 2022.
Revlon disclosed total assets of $2,328,093,000 against total
liabilities of $3,689,240,395 as of April 30, 2022.
The Hon. David S. Jones is the case judge.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
bankruptcy counsel; Mololamken, LLC as special litigation counsel;
PJT Partners, LP as investment banker; KPMG, LLP as tax services
provider; and Alvarez & Marsal North America, LLC as restructuring
advisor. Robert M. Caruso of Alvarez & Marsal serves as the
Debtors' chief restructuring officer. Meanwhile, Kroll
Restructuring Administration, LLC is the Debtors' claims agent and
administrative advisor.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on June 24, 2022.
Brown Rudnick, LLP, Province, LLC and Houlihan Lokey Capital, Inc.
serve as the committee's legal counsel, financial advisor and
investment banker, respectively.
ROYAL CARIBBEAN: Moody's Cuts CFR to B2 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service downgraded Royal Caribbean Cruises Ltd.'s
ratings including its corporate family rating to B2 from B1,
probability of default rating to B2-PD from B1-PD, senior secured
rating to Ba3 from Ba2 and senior unsecured rating to B3 from B2.
At the same time, Moody's downgraded the company's speculative
grade liquidity rating to SGL-3 from SGL-2. The outlook was changed
to stable from negative.
"The downgrade reflects weaker than expected recovery in 2022 which
will result in Royal Caribbean generating less than $1 billion of
EBITDA this year", stated Pete Trombetta, Moody's VP-Senior
Analyst. The B2 also reflects the risk around the company's ability
to generate sufficient free cash flow to materially reduce debt,
particularly in a rising interest rate environment. Moody's
forecasts that Royal Caribbean's debt/EBITDA will exceed 6.5x in
2023 as its higher interest burden and new ship purchase
commitments over the next several years will constrain cash flow
and the ability to reduce debt. This, along with a substantial
amount of debt that will need to be refinanced over the next
several years, likely at higher interest rates, elevates the
company's financial risk profile.
Several headwinds impacted the company's earnings recovery in early
2022, including the impact on bookings and increased cancellations
due to the Omicron variant and Russia's invasion of Ukraine,
materially higher fuel costs and food cost inflation. However,
Royal Caribbean's smaller, younger fleet and greater mix of higher
end or luxury offerings is supporting pricing power.
Downgrades:
Issuer: Royal Caribbean Cruises Ltd.
Corporate Family Rating, Downgraded to B2 from B1
Probability of Default Rating, Downgraded to B2-PD from B1-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Senior Secured Regular Bond/Debenture, Downgraded to Ba3 (LGD2)
from Ba2 (LGD2)
Senior Unsecured Regular Bond/Debenture, Downgraded to B3 (LGD4)
from B2 (LGD4)
Affirmations:
Issuer: Royal Caribbean Cruises Ltd.
Senior Unsecured Commercial Paper, Affirmed NP
Outlook Actions:
Issuer: Royal Caribbean Cruises Ltd.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Royal Caribbean's credit profile is supported by its adequate
liquidity and its solid market position as the second largest
global ocean cruise operator based upon capacity and revenue which
acknowledges the strength of its brands. Royal Caribbean is well
diversified by geography, brand, and market segment. Moody's
believes that over the long run, the value proposition of a cruise
vacation, as well as a group of loyal cruise customers will support
a base level of demand. Royal Caribbean's credit profile is
constrained by its weak credit metrics including debt/EBITDA that
will be above 6.5x at the end of 2023 (includes Moody's standard
adjustments). The company's EBITDA will begin to approach 2019
levels in 2023, but free cash flow available for debt reduction
will be modest until 2024 at the earliest. The normal ongoing
credit risks include the highly seasonal and capital intensive
nature of cruise companies, competition with all other vacation
options and the cruise industry's exposure to economic and industry
cycles as well as weather related incidents and geopolitical
events.
The stable outlook reflects Royal Caribbean's adequate liquidity
and Moody's forecast that the company will generate positive
earnings leading to debt/EBITDA improving to above 6.5x in 2023.
Royal Caribbean's liquidity is adequate as reflected in its good
cash balances – about $2.1 billion at June 30, 2022 – and
modest availability under its $3.2 billion revolving credit
facility that expires in 2024 ($500 million available at June 30,
2022). The company recently completed a $1.15 billion convertible
note issuance, with proceeds used to repurchase 2023 convertible
note maturities. The company also has access to a backstop
committment from Morgan Stanley, which will help the company
address about $5.8 billion of debt maturities and mandatory
amortization in 2023. Moody's forecasts the company will have
sufficient cash on hand to repay the remaining maturities if it is
unable to refinance. The company is subject to a fixed charge
coverage ratio covenant and net debt-to-capital covenant which
Moody's forecasts the company will have adequate cushion over the
next 12 months. The company's alternate liquidity options are
limited to the sale of a ship or a brand, with the proceeds
required to repay debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company's earnings improve to a
level that allows for material debt reduction with debt/EBITDA
maintained below 5.5x, consistently positive free cash flow and
maintenance of good liquidity. Ratings could be downgraded if
liquidity weakened in any way, including due to slower than
anticipated earnings recovery, which could raise refinancing risk.
Further, if it appears that debt/EBITDA will remain above 7.0x over
the longer term or the company cannot produce positive free cash
flow, the ratings could be downgraded.
Royal Caribbean (operating under the name Royal Caribbean Group) is
a global vacation company that operates three wholly-owned cruise
brands, including Royal Caribbean International, Celebrity Cruises
and Silversea. Net revenue for the trailing 12 months ended June
30, 2022 was about $3.7 billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
SALAD & CO: Sept. 7 Disclosure Statement Hearing Set
----------------------------------------------------
On Aug. 5, 2022, Debtor Salad & Co. Inc. filed with the U.S.
Bankruptcy Court for the Southern District of Florida a Disclosure
Statement and Plan. On August 8, 2022, Judge Laurel M. Isicoff
ordered that:
* September 7, 2022 at 3:00 p.m. in the United States
Bankruptcy Court 301 North Miami Avenue, Courtroom 8 Miami, Florida
33128 is the hearing to consider approval of the disclosure
statement.
* August 31, 2022 is the last day for filing and serving
objections to the disclosure statement.
A copy of the order dated August 8, 2022, is available at
https://bit.ly/3AcFgNZ from PacerMonitor.com at no charge.
About Salad & Co. Inc.
Salad & Co. Inc. is a single asset real estate debtor (as defined
in 11 U.S.C. Section 101(51B)). It owns an investment property
located at 1245 SW 22 St Miami, Fla., valued at $630,000.
Salad & Co. filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 21-21629) on
Oct. 13, 2021, listing $630,000 in assets and $1,262,353 in
liabilities.
Judge Laurel M. Isicoff oversees the case.
Michael A. Frank, Esq., at the Law Offices of Frank & De La Guardia
serves as the Debtor's legal counsel.
Armando Gutierrez, Jr. and Victor Bao, as secured creditors, are
represented by:
Denise Pichardo, Esq.
Pichardo Law Group
2114 N. Flamingo Road, #1133
Pembroke Pines, FL 33028
Email: denise@pichardolawgroup.com
SASHAY SAND: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Sashay Sand LLC
9461 Charleville Blvd., No. 829
Beverly Hills, CA 90212
Chapter 11 Petition Date: August 9, 2022
Court: United States Bankruptcy Court
Central District of California
Case No.: 22-14332
Judge: Hon. Julia W. Brand
Debtor's Counsel: Louis J. Esbin, Esq.
LAW OFFICES OF LOUIS J. ESBIN
27451 Tourney Road, Suite 120
Valencia, CA 91355
Tel: 661-254-5050
Fax: 661-254-5252
Email: Louis@Esbinlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kasher Mehrdad as managing member.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/BPYSDMQ/Sashay_Sand_LLC__cacbke-22-14332__0001.0.pdf?mcid=tGE4TAMA
STARLIN LLC: Taps Getzler Henrich & Associates as Financial Advisor
-------------------------------------------------------------------
Starlin, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Getzler Henrich & Associates, LLC as their financial advisor.
The firm's services include:
(a) assisting with the preparation of financial and cash flow
projections and analyses as required;
(b) assisting with the development of a plan of
reorganization;
(c) supporting a Section 363 sale process, if necessary;
(d) assisting with the analysis and reconciliation of claims
against the Debtors and other bankruptcy avoidance actions;
(e) assisting with the preparation of any motion, if
necessary;
(f) assisting with compliance with the reporting requirements
of the Bankruptcy Code, Bankruptcy Rules and Local Rules, including
monthly operating reports;
(g) consulting with lenders and other concerned parties;
(h) participating in court hearings and providing testimony,
if necessary;
(i) performing other necessary tasks for the Debtors.
The firm's hourly rates are as follows:
Principal/Managing Director $595 - $750 per hour
Director/Specialist $485 - $695 per hour
Associate Professionals $175 - $485 per hour
The Debtors paid the firm a retainer fee in the amount of $50,000.
William Henrich, co-chairman of Getzler, 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:
William H. Henrich
Getzler Henrich & Associates LLC
295 Madison Ave., 22nd Floor
New York, NY 10017
Telephone: (212) 697-2400
Fax: (212) 697-4812
Email: rkuhn@getzlerhenrich.com
About Starlin LLC
Starlin, LLC and affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case No. 22-10888)
on June 28, 2022. In the petition signed by Robert Gans, as
authorized signatory, Starlin listed up to $50,000 in assets and up
to $50 million in liabilities.
Judge Martin Glenn oversees the cases.
Fred B. Ringel, Esq., at Leech Tishman Robinson Brog, PLLC and
Getzler Henrich & Associates, LLC are the Debtors' legal counsel
and financial advisor, respectively.
STRAUSS COMPANY: Sept. 22 Disclosure Statement Hearing Set
----------------------------------------------------------
On Aug. 5, 2022, debtor The Strauss Company, Inc. filed with the
U.S. Bankruptcy Court for the Eastern District of Tennessee a
Disclosure Statement and Plan. On August 8, 2022, Judge Shelley D.
Rucker ordered that:
* Sept. 22, 2022 at 10:30 A.M. in Bankruptcy Courtroom 3 A,
Historic U. S. Courthouse 31 East 11th Street Chattanooga, TN 37402
is the hearing to consider approval of the disclosure statement.
* Sept. 19, 2022 is the last date to file and serve written
objections to the disclosure statement.
A copy of the order dated August 8, 2022, is available at
https://bit.ly/3SFil4S from PacerMonitor.com at no charge.
About The Strauss Company
Creditors Truitt Ellis, Carrie Ellis, Kathleen Pennington, VanBuren
LLC, and Germantown Hammer LLC filed an involuntary Chapter 7
petition against The Strauss Company, Inc. (Bankr. E.D. Tenn. Case
No. 18-12972) on July 6, 2018. The petitioning creditors are
represented by R. Mark Donnell Jr., Esq.
The Chapter 7 case was converted to one under Chapter 11 upon
request by the Debtor. Judge Shelley D. Rucker presides over the
case.
The Debtor tapped Farinash & Stofan as its legal counsel.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Sept. 21, 2018. The committee tapped
Waypoint Law PLLC as its legal counsel.
TEMPUR SEALY: S&P Alters Outlook to Negative, Affirms 'BB+' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based Tempur Sealy
International Inc. to negative from stable. S&P affirmed its 'BB+'
issuer credit rating on Tempur Sealy.
S&P said, "At the same time, we affirmed our 'BB+' rating on the
company's senior unsecured notes. The recovery rating remains '3',
indicating our expectation for a meaningful recovery (50%-70%;
rounded recovery: 65%).
"The negative outlook reflects the possibility that we could lower
the ratings on Tempur Sealy over the next 12 months if it sustains
leverage above 3x.
"The outlook revision to negative from stable reflects Tempur
Sealy's higher-than-expected leverage and weakening profitability
and cash flow through the second quarter of 2022. We now expect
leverage will remain about 3x through fiscal 2022 and the company
will modestly deleverage to below 3x in fiscal 2023. We previously
expected the company to maintain leverage at the lower end of its
stated policy range of 2x-3x. Aggressive, debt-funded share
repurchases over the past four quarters totaling about $1 billion
and a pullback in consumer spending on bedding led to the increase
in leverage. We believe the deteriorating macroeconomic environment
and consumer pull-forward purchases during the COVID-19 pandemic
contributed to the lower spending.
"At the same time, Tempur Sealy continues to invest in new product
launches, advertising, and promotion. The company also invested in
safety stock to maintain high customer service ahead of its peak
selling season in the third quarter and incremental capacity
expansion projects. As a result, free operating cash flow (FOCF)
for the 12 months ended June 30 declined to $344 million from $731
million for the same prior-year period. Tempur Sealy also borrowed
on its revolver and accounts receivable securitization to fund its
working capital investments and share repurchases. Tempur Sealy
drew $429 million on its revolver and fully used up $131.3 million
available under its accounts receivable securitization program at
quarter end.
"We believe Tempur Sealy is better positioned to withstand another
downturn, given improved market position, scale, and
diversification; however, leverage headroom is limited. In recent
years the company has expanded its scale and direct-to-consumer
business, integrated vertically, and diversified geographically
through the Dreams acquisition. Tempur Sealy has leading brands in
the mid- to high-price range, which tend to be less challenged
during economic downturns. As a result, we believe Tempur Sealy is
better positioned than in the past to sustain an economic downturn.
Nonetheless, the company is entering an increasingly weaker
economic environment with leverage at the higher end of its stated
2x-3x target range and already at our 3x downside scenario
threshold. As a result, its leverage headroom is very limited.
While we expect these investments to strengthen the company's
market position when demand returns, they leave Tempur Sealy
exposed at a time of high economic uncertainty. Tempur Sealy's
company-owned retail store expansion and manufacturing footprint
have improved its position in the U.S. market. However, a higher
fixed-cost structure may lessen financial flexibility during an
economic downturn.
"A meaningful improvement in cash flow generation and leverage may
be difficult amid low consumer confidence and declining
discretionary spending. We estimate S&P Global Ratings-adjusted
EBITDA margins contracted 330 basis points (bps) during the
12-month period ended June 30, 2022, to 21.4% from 24.7% due to
persistently high inflation. While we expect Tempur Sealy's price
increases and brand mix to increasingly restore some lost
profitability, a substantial improvement will be difficult over the
near term amid a weakening macroeconomic environment. Our
economists estimate a 35%-45% chance of a recession within the next
12 months.
"We expect consumer discretionary spending to remain challenged
through the first half of 2023, particularly for big ticket
discretionary items such as mattresses. Additionally, we expect
housing starts to decline to 1.48 million units in 2023 from 1.62
million units in 2022. A housing market slowdown will likely put
additional downward pressure on demand for bedding. We believe mid-
and lower-income consumers will defer replacing their mattresses,
which is a key driver of category demand. Moreover, because of
extraordinary inflation, we expect consumers to prioritize spending
on necessary goods such as food and energy. As a result, we expect
Tempur Sealy's unit volumes to decline and sales to be flat to
moderately down in fiscal 2022. Tempur Sealy's cost structure is
flexible, but it will take some time for results to reflect the
adjustment to a lower demand environment.
"The negative outlook reflects the possibility that we could lower
the ratings on Tempur Sealy over the next 12 months if it sustains
adjusted leverage above 3x."
S&P could lower the ratings if:
-- The company maintains aggressive financial policies, including
continued debt-financed share repurchases amid a weakening demand
and economic environment;
-- Macroeconomic weakness causes consumers to trade down or delay
mattress purchases; or
-- The company cannot offset inflationary and supply chain
pressures.
S&P could revise the outlook to stable if the company sustains
adjusted leverage below 3x with progress toward reducing leverage
below 2.5x to maintain cushion for a down cycle. This could happen
if the company:
-- Does not execute additional, large debt-financed share
repurchases;
-- Adapts its cost structure to a weaker demand environment; and
-- Generates sustained positive discretionary cash flow.
ESG credit indicators: E-2, S-2, G-2
S&P said, "ESG factors are an overall neutral consideration in our
credit rating analysis of Tempur Sealy. While demand surged during
the pandemic as consumers shifted more discretionary dollars toward
home expenditures, Tempur's strong operating results also reflect
its substantial market share, distribution gains, and successful
acquisitions that have diversified its channel and customer mix.
These factors outweigh the temporary surge in industry demand and
support the company's long-term performance prospects."
TPC GROUP: Cole Schotz, Akin Gump Update on Creditors Committee
---------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Cole Schotz P.C. and Akin Gump Strauss Hauer &
Feld LLP submitted an amended verified statement to disclose an
updated list of members of the Official Committee of Unsecured
Creditors in the Chapter 11 cases of TPC Group Inc., et al.
The Debtors' chapter 11 cases were precipitated by, among other
things, a series of operational issues beginning with multiple
explosions that occurred in 2019 at the Debtors' chemical
processing plant in Port Neches, Texas, then used by the Debtors to
manufacture 1,3-butadiene and other chemicals. Specifically, at
approximately 12:56 a.m. on November 27, 2019, a vapor cloud formed
as a result of a rupture of a closed system used in the butadiene
production process and was ignited, resulting in an initial
explosion and pressure wave that heavily damaged the site and
caused damage to persons, buildings and houses well beyond the
facility's premises. According to officials, the blast could be
felt up to 30 miles away and toxic plumes could be seen for miles.
Investigations into the cause of the explosion indicated that the
rupture was reportedly caused by the presence of "popcorn polymer,"
a material that can form during the butadiene production process
and grow exponentially if left uninhibited, generating high
pressure that can lead to ruptures. CSB Factual Update at 2. The
petrochemical industry has been aware of the dangers of popcorn
polymer for decades, and popcorn polymer was known to form in the
South Unit of the Port Neches Facility where the explosion occurred
prior to the incident. Id. at 10.
At least two additional explosions occurred at the Port Neches
Facility in the 24 hours following the initial blast, including an
explosion that propelled one of the facility's towers into the air.
The explosions caused flammable process chemicals to release from
damaged equipment, resulting in fires that burned for over a month,
and released chemicals into the surrounding environment. Id. at
5-6. Officials continued to measure elevated levels of 1,3-
butadiene in the air days after the explosions, leading the City of
Port Neches to issue a shelter-in- place order on December 4, 2019.
Due to the explosions, local officials imposed a mandatory
four-mile radius evacuation order, forcing the evacuation of 60,000
people. Id.; CSB Factual Update at 1. Port Neches schools did not
fully reopen until December 9, 2019, after efforts to remove
debris, complete structural inspections and repair school buildings
were completed and local officials determined that air quality
issues had been resolved.
Following the incident, the Debtors and various other parties,
including the Debtors' equity sponsors, were named as defendants in
approximately 7,800 lawsuits filed in various Texas state courts,
most of which have been consolidated in a multi-district litigation
in the District Court of Orange County, Texas, 128th Judicial
District, In re: TPC Group Litigation, Cause No. A2020-0236-MDL.
The lawsuits allege, among other things, personal injury, property
damage, property diminution in value, personal loss of income,
business loss of income and relocation expense claims. Del Genio
Declaration ¶ 39. The Debtors also implemented a voluntary claims
settlement program in which certain injured parties elected to
participate. Id. at 40.
Due in large part to the aftermath of the explosions and other
business interruption and operational issues, including the
foregoing litigation and the impact of the shutdown of the Port
Neches Facility on operations, the Debtors commenced voluntary
cases under chapter 11 of title 11 of the United States Code on
June 1, 2022. The Debtors filed for chapter 11 with a restructuring
support agreement supported by their equity sponsors and a
significant percentage of holders of their prepetition funded debt.
On June 16, 2022, the Debtors filed a proposed plan of
reorganization incorporating the terms of the RSA.
Among other things, the Plan provides that (i) if the General
Unsecured Claims class accepts the Plan, such creditors will
receive their pro rata share of $5 million in cash on the effective
date of the Plan, with the possibility of receiving an additional
$5 million if the Debtors meet certain EBITDA goals in 2024 and
(ii) if the General Unsecured Claims class rejects the Plan, such
creditors will not receive a recovery. Plan § 4.4.10 The Plan
requires all creditors who vote to accept the Plan to grant broad
releases of claims against various third parties, including the
Debtors' equity sponsors, and all creditors who are solicited to
vote on the Plan but fail to opt out of the proposed releases will
be deemed to have consented to such releases. See Plan §§ 1.1,
10.7. Proposed recoveries for the Debtors' funded debt holders
include default rate interest and prepayment penalties and payment
in full of the Debtors’ prepetition funded debt claims that were
rolled up into administrative expense claims pursuant to the
Debtors' debtor in possession financing facility. Id. § 2.3.
On June 14, 2022, the Office of the United States Trustee for
Region 3 appointed the Committee. Notice of Appointment of
Unsecured Creditors Committee [ECF No. 207]. On July 22, 2022,
following the assumption of their contracts and payment of their
prepetition claims, Chevron Phillips Chemical Company LP and Sasol
Chemicals North America LLC resigned from the Committee. The
Committee currently comprises the following members: (i) Amber
Harms; (ii) Chris Johnson; (iii) Emily Teasley; (iv) Farmers
Insurance; and (v) Suzanne Williamson.
The Committee members include the following unsecured creditors:
* Amber Harms, individually and on behalf of Christopher Harms,
Harms Real Estate, LLC, Harms Properties, Anthony Harms Real
Estate, LLC, Anthony Harms, Sarah Harms, Joyce E. Harms and
Robert Harms, has unliquidated property damage claims of at
least $4,175,265.79, based on a professional adjuster's estimate
of losses and repair costs, related to 78 properties with
individual losses caused by the explosions at the Port Neches
Facility.
* Chris Johnson, his wife Pamela and their 8-year old grandson
were asleep in their home in Port Neches when the initial
explosion occurred. Within seconds of being awoken by the
extremely loud sound, all the windows in the back of their home
shattered. The Johnsons ran into their living room to find it
littered with glass and debris and their Christmas tree laying
on the ground, destroyed, as the loud roar from the explosion
continued. The Johnsons could see the Port Neches Facility
burning as they ran into their truck and fled their home. In
addition to their personal residence, the Johnsons own multiple
rental properties and a commercial building used to operate a
local business, all of which experienced damage as a result of
the explosions. The Johnsons were forced to spend the
Thanksgiving holiday away from their home as a result of the
mandatory evacuation order. The Johnsons' claims are
unliquidated and include claims based on property damage in the
amount of approximately $860,000.
* Emily Teasley was a contractor working on a catwalk at the Port
Neches Facility within a few hundred feet of the source of the
initial explosion. Ms. Teasley was blown into the wall of her
office trailer by the force of the explosion, and she was
subsequently transported by ambulance to a hospital for
treatment of extensive bodily injuries, including a brain
injury, injuries to her back and spine that required surgery,
two ruptured ear drums and continued tinnitus, injuries to
wrist, hand and shoulder and bruising and cuts on various parts
of her body. As a result of the incident, Ms. Teasley now
suffers from nerve damage, causing numbness in her right wrist
and right leg. She has also suffered mental, emotional and
cognitive damage, and has been diagnosed with post-traumatic
stress disorder, anxiety, insomnia, depression and trauma-
induced bipolar disorder, for which she requires continued
therapy. Ms. Teasley has unliquidated claims in the amount of at
least $5,000,000 based on personal injury, medical costs and
loss of earning capacity.
* Farmers Insurance, a national insurance company, has
unliquidated claims based on subrogation interests acquired in
connection with insurance payments of $4,053,887.58 related to
damage caused by the November 27, 2019 explosions.
* Suzanne Williamson and her family resided less than one mile
from the Port Neches Facility and were in their home when the
initial explosion occurred. At the time, Ms. Williamson's son
attended Port Neches-Groves High School, which is located within
walking distance of the Port Neches Facility. Ms. Williamson has
testified before state and local governmental agencies regarding
the incident, including the Texas Commission on Environmental
Quality, which has commenced an investigation into the
explosions. Following her testimony before the TCEQ, Ms.
Williamson was contacted by the Office of the Attorney General
of the State of Texas in connection with its efforts to monitor
TPC's treatment of affected persons during the recovery phase.
Ms. Williamson also was contacted by and has communicated with
the Environmental Protection Agency during its investigation of
TPC. Ms. Williamson's claims are unliquidated and comprise
property damage claims in the amount of at least $165,658.26,
personal injury claims in the amount of at least $503,675.00 and
other economic damages in the amount of at least $13,304.98.
As of Aug. 8, 2022, each Committee member and their disclosable
economic interests are:
Amber Harms
c/o Mitchell A. Toups
Weller, Green, Toups & Terrell, LLP
P.O. Box 350
Beaumont, TX 77704-0350
* Unliquidated unsecured claims of at least $4,175,265.79 on the
basis of property damage.
Chris Johnson
c/o Troy O'Brien Farrar & Ball, LLP
1117 Herkimer Street
Houston, TX 77008
* Unliquidated unsecured claims of at least $860,000 on the basis
of property damage.
Emily Teasley
c/o Darren Brown
Provost Umphrey Law Firm L.L.P.
350 Pine Street, Suite 1100
Beaumont, TX 77701
* Unliquidated unsecured claims of at least $5,000,000 on the
basis of personal injury, including medical costs and loss of
earning capacity.
Farmers Insurance
PO Box 268994
Oklahoma City
OK 73126-8994
* Unliquidated unsecured claims of at least $4,053,887.58 on the
basis of insurance subrogation interests.
Suzanne Williamson
c/o Jane Leger, Mark Sparks
The Ferguson Law Firm
350 Pine Street, Suite 1440
Beaumont, TX 77701
* Unliquidated unsecured claims of at least $682,638.24 on the
basis of property damage, personal injury and other economic
damages.
Counsel to the Official Committee of Unsecured Creditors of TPC
Group Inc., et al. can be reached at:
COLE SCHOTZ P.C.
Justin R. Alberto, Esq.
Patrick J. Reilley, Esq.
Andrew J. Roth-Moore, Esq.
500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Telephone: (302) 652-3131
Facsimile: (302) 652-3117
E-mail: jalberto@coleschotz.com
preilley@coleschotz.com
aroth-moore@coleschotz.com
- and –
AKIN GUMP STRAUSS HAUER & FELD LLP
Philip C. Dublin, Esq.
Arik Preis, Esq.
Naomi Moss, Esq.
Edan Lisovicz, Esq.
One Bryant Park
New York, NY 10036
Telephone: (212) 872-1000
Facsimile: (212) 872-1002
E-mail: pdublin@akingump.com
apreis@akingump.com
nmoss@akingump.com
elisovicz@akingump.com
Marty L. Brimmage, Jr., Esq.
Lacy M. Lawrence, Esq.
2300 N. Field St., Suite 2300
Dallas, TX 75201
Telephone: (214) 969-2800
Facsimile: (214) 969-4343
E-mail: mbrimmage@akingump.com
llawrence@akingump.com
A copy of the Rule 2019 filing is available at
https://bit.ly/3BZ2dp0 at no extra charge.
About TPC Group
TPC Group, headquartered in Houston, is a producer of value-added
products derived from petrochemical raw materials such as C4
hydrocarbons, and provider of critical infrastructure and logistics
services along the Gulf Coast. The Company sells its products into
a wide range of performance, specialty and intermediate markets,
including synthetic rubber, fuels, lubricant additives, plastics
and surfactants. With an operating history of more than 75 years,
TPC Group has a manufacturing facility in the industrial corridor
adjacent to the Houston Ship Channel and operates product terminals
in Port Neches, Texas and Lake Charles, Louisiana.
TPC Group Inc. and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group
estimated assets and debt of $1 billion to $10 billion to $10
billion.
The Hon. Craig T. Goldblatt is the case judge.
Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arshtn
& Tunnell LLP is the co-counsel; Moelis & Company LLC is the
investment banker; and FTI Consulting is the financial advisor.
Simpson Thacher & Bartlett LLP is the special finance counsel.
Kroll Restructuring Administration is the claims agent.
Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd.
Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as
counsel to the Ad Hoc Noteholder Group that supports the Debtors'
restructuring. Evercore Group L.L.C., is the Group's financial
advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to
the Ad Hoc Noteholder Group. The Supporting Noteholders are funds
controlled by FIG LLC and Fortress Capital Finance III(A) LLC,
Monarch Alternative Capital LP., PGIM Inc., Redwood Capital
Management LLC, and Strategic Value Partners LLC.
Pachulski Stang Ziehl & Jones LLP, Proskauer Rose LLP, and Selendy
Gay Elsberg PLLC are serving as counsel to an Ad Hoc Group of
Non-Consenting Noteholders, led by Bayside Capital, Inc., and
Cerberus Capital Management, L.P. Milbank LLP previously served as
the group's counsel but was later replaced by Pachulski and SGE.
TPC GROUP: Goldstein, Cain Advise on Johnny Reed, Anthony Amos
--------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firms of Cain & Skarnulis PLLC and Goldstein & McClintock
LLLP submitted a verified statement to disclose that they are
representing Johnny Reed and Anthony Amos in the Chapter 11 cases
of TPC Group Inc., et al.
Johnny Reed
c/o Arnold & Itkin LLP
6009 Memorial Drive
Houston, Texas 77007
* Nature of Claim: Personal injury claimant with claims against
TPC Group Inc. and TPC Group LLC.
* Amount of Claim: Unliquidated
Anthony Amos
c/o Arnold & Itkin LLP
6009 Memorial Drive
Houston, Texas 77007
* Nature of Claim: Personal injury claimant with claims against
TPC Group Inc. and TPC Group LLC.
* Amount of Claim: Unliquidated
Counsel for Johnny Reed and Anthony Amos can be reached at:
Maria Aprile Sawczuk, Esq.
GOLDSTEIN & MCCLINTOCK LLLP
501 Silverside Road, Suite 65
Wilmington, DE 19809
Tel: 302-444-6710
E-mail: marias@goldmclaw.com
- and -
Ryan E. Chapple, Esq.
CAIN & SKARNULIS PLLC
303 Colorado Street, Suite 2850
Austin, TX 78701
Tel: 512-477-5000
E-mail: rchapple@cstrial.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3PliRm0
About TPC Group
TPC Group, headquartered in Houston, is a producer of value-added
products derived from petrochemical raw materials such as C4
hydrocarbons, and provider of critical infrastructure and logistics
services along the Gulf Coast. The company sells its products into
a wide range of performance, specialty and intermediate markets,
including synthetic rubber, fuels, lubricant additives, plastics
and surfactants. With an operating history of more than 75 years,
TPC Group has a manufacturing facility in the industrial corridor
adjacent to the Houston Ship Channel and operates product terminals
in Port Neches, Texas and Lake Charles, La.
TPC Group and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group
estimated assets and debt of $1 billion to $10 billion.
The Hon. Craig T. Goldblatt is the case judge.
The Debtors tapped Baker Botts LLP and Morris, Nichols, Arsht &
Tunnell LLP as bankruptcy counsels; Simpson Thacher & Bartlett, LLP
as special finance counsel; FTI Consulting, Inc. as financial
advisor; Moelis & Company, LLC as investment banker, financial
advisor and capital markets advisor; and PricewaterhouseCoopers,
LLP as tax compliance and tax consulting services provider. David
Dunn of Province, LLC serves as Vice President of Restructuring of
the Debtors. Meanwhile, Kroll Restructuring Administration, LLC is
the claims agent and administrative advisor.
Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd.
Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as
counsel to the Ad Hoc Noteholder Group that supports the Debtors'
restructuring. Evercore Group L.L.C., is the Group's financial
advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to
the Ad Hoc Noteholder Group. The Supporting Noteholders are funds
controlled by FIG LLC and Fortress Capital Finance III(A) LLC,
Monarch Alternative Capital LP, PGIM Inc., Redwood Capital
Management LLC, and Strategic Value Partners LLC.
Milbank LLP, and Pachulski, Stang, Ziehl & Jones are serving as
counsel to an Ad Hoc Group of Non-Consenting Noteholders, led by
Bayside Capital, Inc., and Cerberus Capital Management, LP.
On June 14, 2022, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in these Chapter 11
cases. The committee tapped Akin Gump Strauss Hauer & Feld, LLP and
Cole Schotz, PC as counsels and Dundon Advisers, LLC as financial
advisor.
TPC GROUP: SBEP, Hogan Advise on TPC Litigation Claimants
---------------------------------------------------------
In the Chapter 11 cases of TPC Group Inc., et al., the law firms of
Stutzman, Bromberg, Esserman & Plifka, A Professional Corporation
and Hogan McDaniel submitted a verified statement under Rule 2019
of the Federal Rules of Bankruptcy Procedure, to disclose that they
are representing the TPC Group Litigation Plaintiffs.
The Represented Parties in the Multi-District Litigation are:
Brent Coon
Brent Coon & Associates
215 Orleans
Beaumont, TX 77701
E-mail: brent@coonlaw.com
Mark C. Sparks
Jane Leger
Ferguson Law Firm
350 Pine St. Suite 1440
Beaumont, TX 77701
E-mail: mark@thefergusonlawfirm.com
jleger@thefergusonlawfirm.com
William R. Ogden
Farrar & Ball, LLP
1117 Herkimer St.
Houston, TX 77008
E-mail: bill@fbtrial.com
Mitchel A. Toups
Mitchell A. Toups, Ltd.
2615 Calder Ave., Suite 400
Beaumont, TX 77702
E-mail: matoups@wgttlaw.com
Darren Brown
Provost Umphrey Law Firm
490 Park Street
Beaumont, TX 77701
E-mail: DBrown@provostumphrey.com
Benny Agosto, Jr.
Abraham, Watkins, Nichols, Sorrels, Agosto & Aziz
800 Commerce St.
Houston, TX 77002
E-mail: BAgosto@awtxlaw.com
Aaron Heckaman
Bailey Cowan Heckaman PLLC
1360 Post Oak Blvd #2300
Houston, TX 77056
E-mail: aheckaman@bchlaw.com
Gabriel Assaad
McDonald Worley, PC
1770 St. James Place, Ste. 100
Houston, TX 77056
E-mail: gassaad@mcdonaldworley.com
Cristobal Galindo
Law Offices of Cristobal M. Galindo, P.C.
4151 Southwest Freeway, Suite 602
Houston, TX 77027
E-mail: service@galindolaw.com
Richard L. Coffman
The Coffman Law Firm
350 Pine Street, Suite 700
Beaumont, TX 77701
E-mail: rcoffman@coffmanlawfirm.com
William D. Mahoney
Boteler, Mahoney & Gray, LLP
4201 Wingren Drive, Suite 208
Irving, Texas 75062
E-mail: bmahoney@bmg-law.com
As to the nature and amount of the disclosable economic interests
held by each Represented Party in relation to Debtors as of the
date of this Verified Statement, each of the Represented Parties
have sustained damages as a result of the tortious acts of Debtors
as set forth in the MDL Action. Each Represented Party's claim for
such damages is unsecured and unliquidated. Fed. R. Bankr. P.
2019(c)(3)(B).
SBEP and Hogan McDaniel, through the undersigned counsel, may
represent other persons or entities who also hold claims against
one or more of the Debtors or their predecessors in interest,
however, as of the date of this Verified Statement, such persons or
entities have not requested that SBEP or Hogan McDaniel appear on
their behalf in these cases. Other than as outlined herein, as of
the filing of this Verified Statement SBEP and Hogan McDaniel do
not purport to act, represent, or speak on behalf of any parties in
connection with these cases other than the Represented Parties.
SBEP and Hogan McDaniel reserve the right to amend or supplement
this Verified Statement, as necessary, in accordance with
Bankruptcy Rule 2019.
Counsel for TPC Group Litigation Plaintiffs can be reached at:
HOGAN♦MCDANIEL
Daniel K. Hogan, Esq.
1311 Delaware Avenue
Wilmington, DE 19806
E-mail: dkhogan@dkhogan.com
Telephone: (302) 656-7540
- and –
STUTZMAN, BROMBERG, ESSERMAN & PLIFKA
A Professional Corporation
Sander L. Esserman, Esq.
Peter C. D'Apice, Esq.
2323 Bryan Street, Suite 2200
Dallas, TX 75201-2689
Telephone: (214) 969-4900
Facsimile: (214) 969-4999
A copy of the Rule 2019 filing is available at
https://bit.ly/3BZ2dp0 at no extra charge.
About TPC Group
TPC Group, headquartered in Houston, is a producer of value-added
products derived from petrochemical raw materials such as C4
hydrocarbons, and provider of critical infrastructure and logistics
services along the Gulf Coast. The Company sells its products into
a wide range of performance, specialty and intermediate markets,
including synthetic rubber, fuels, lubricant additives, plastics
and surfactants. With an operating history of more than 75 years,
TPC Group has a manufacturing facility in the industrial corridor
adjacent to the Houston Ship Channel and operates product terminals
in Port Neches, Texas and Lake Charles, Louisiana.
TPC Group Inc. and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group
estimated assets and debt of $1 billion to $10 billion to $10
billion.
The Hon. Craig T. Goldblatt is the case judge.
Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arshtn
& Tunnell LLP is the co-counsel; Moelis & Company LLC is the
investment banker; and FTI Consulting is the financial advisor.
Simpson Thacher & Bartlett LLP is the special finance counsel.
Kroll Restructuring Administration is the claims agent.
Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd.
Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as
counsel to the Ad Hoc Noteholder Group that supports the Debtors'
restructuring. Evercore Group L.L.C., is the Group's financial
advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to
the Ad Hoc Noteholder Group. The Supporting Noteholders are funds
controlled by FIG LLC and Fortress Capital Finance III(A) LLC,
Monarch Alternative Capital LP., PGIM Inc., Redwood Capital
Management LLC, and Strategic Value Partners LLC.
Pachulski Stang Ziehl & Jones LLP, Proskauer Rose LLP, and Selendy
Gay Elsberg PLLC are serving as counsel to an Ad Hoc Group of
Non-Consenting Noteholders, led by Bayside Capital, Inc., and
Cerberus Capital Management, L.P. Milbank LLP previously served as
the group's counsel but was later replaced by Pachulski and SGE.
TRANSDIGM INC: Dividend Announcement No Impact on Moody's B1 CFR
----------------------------------------------------------------
Moody's Investors Service said that TransDigm Inc.'s announcement
of a dividend to shareholders is credit negative but has no impact
on the company's ratings at this time. The dividend is expected to
be about $1.1 billion and Moody's anticipates that the transaction
will be funded entirely through cash-on-hand, requiring no
incremental borrowings. All ratings, including the company's B1
Corporate Family Rating, B1-PD Probability of Default Rating, and
the Ba3 senior secured bank credit facility and B3 senior
subordinated rating, remain unchanged. The outlook remains stable.
The B1 CFR balances TransDigm's aggressive financial policy defined
by its sustained high funded debt and financial leverage and
recurring substantial distributions to shareholders, against its
strong business profile. TransDigm garners very strong margins from
its sole source provider position across a majority of its products
as well as its proprietary designs reflected in its significant
patent portfolio. TransDigm's debt-to-EBITDA of around 9x as of
June 2022 is very high and is an outlier for the B1 rating. That
said, Moody's recognizes the uniqueness of TransDigm's business
model that has enabled the company to maintain its industry leading
margins and healthy cash generation, despite earnings pressures.
Moody's believes that demand in commercial aerospace markets, after
having troughed several quarters ago, will experience a sustained,
albeit measured, recovery. This will support a gradual reduction in
leverage and Moody's expects TransDigm's debt-to-EBITDA to revert
to historical levels (around 7x) by late fiscal 2023/early fiscal
2024.
Moody's expects that TransDigm's liquidity profile (SGL-1) will
remain strong and provide some of the necessary financial
flexibility to support its high leverage and aggressive financial
policies. Moody's estimates June 2022 cash balances of around $3.8
billion and the company has no near-term principal repayment
obligations. Moody's anticipates substantial free cash generation
during 2022, with FCF-to-debt (before dividends) in the
mid-single-digits, and near full availability under the company's
$810 million revolving credit facility which doesn't expire until
May 2026.
TransDigm Inc., headquartered in Cleveland, Ohio, is a manufacturer
of engineered aerospace components for commercial airlines,
aircraft maintenance facilities, original equipment manufacturers
and various agencies of the US Government. TransDigm Inc. is the
wholly-owned subsidiary of TransDigm Group Incorporated (TDG).
Revenues for the last twelve-month period ending June 2022 are
approximately $5.2 billion.
TRANSOCEAN LTD: Incurs $68 Million Net Loss in Second Quarter
-------------------------------------------------------------
Transocean Ltd. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $68
million on $692 million of contract drilling revenues for the three
months ended June 30, 2022, compared to a net loss of $103 million
on $656 million of contract drilling revenues for the three months
ended June 30, 2021.
For the six months ended June 30, 2022, the Company reported a net
loss of $243 million on $1.28 billion of contract drilling revenues
compared to a net loss of $201 million on $1.31 billion of contract
drilling revenues for the same period during the prior year.
As of June 30, 2022, the Company had $20.55 billion in total
assets, $1.53 billion in total current liabilities, $7.84 billion
in total long-term liabilities, and $11.18 billion in total
equity.
At June 30, 2022, the Company had $729 million in unrestricted cash
and cash equivalents and $432 million in restricted cash and cash
equivalents. In the three months ended June 30, 2022, the
Company's primary sources of cash were net cash proceeds from the
issuance of shares under the ATM Program and net cash provided by
its operating activities. The Company's primary uses of cash were
debt repayments and capital expenditures.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1451505/000145150522000068/rig-20220630x10q.htm
About Transocean
Transocean Ltd. is an international provider of offshore contract
drilling services for oil and gas wells. The Company specializes in
technically demanding sectors of the offshore drilling business
with a particular focus on ultra-deepwater and harsh environment
drilling services.
Transocean reported a net loss of $591 million for the year ended
Dec. 31, 2021, a net loss of $568 million for the year ended Dec.
31, 2020, and a net loss of $1.25 billion for the year ended Dec.
31, 2019. As of June 30, 2022, the Company had $20.55 billion in
total assets, $1.53 billion in total current liabilities, $7.84
billion in total long-term liabilities, and $11.17 billion in total
equity.
* * *
As reported by the TCR on July 11, 2022, S&P Global Ratings lowered
its issuer credit rating on Switzerland-based offshore drilling
company Transocean Ltd to 'CCC-' from 'CCC'. S&P's 'CCC-' issuer
credit rating reflects its view that the Company will execute a
distressed exchange or debt restructuring over the next six months.
TRIUMPH GROUP: Incurs $10.3 Million Net Loss in First Quarter
-------------------------------------------------------------
Triumph Group, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $10.34 million on $349.38 million of net sales for the three
months ended June 30, 2022, compared to a net loss of $30.35
million on $396.65 million of net sales for the three months ended
June 30, 2021.
As of June 30, 2022, the Company had $1.66 billion in total assets,
$543.53 million in total current liabilities, $1.59 billion in
long-term debt (less current portion), $287.62 million in accrued
pension and other postretirement benefits, $7.26 million in
deferred income taxes, $47.27 million in other noncurrent
liabilities, and a total stockholders' deficit of $805.29 million.
"TRIUMPH generated organic sales growth in our continuing
operations driven by improving commercial OEM and MRO demand," said
Dan Crowley, TRIUMPH's chairman, president and chief executive
officer. "Our actions to mitigate supply chain constraints and work
with our customers and suppliers to ensure continuity and
affordability continue to differentiate TRIUMPH. With a growing
and profitable backlog, TRIUMPH is well positioned to benefit from
continued strength across nearly all of our end markets."
Mr. Crowley continued, "Consistent with our strategic plan, TRIUMPH
recently completed the divestiture of its last remaining large
structures operation. Our first quarter results keep us on track
to achieve our full year objectives, and with our goal to double
profitability over fiscal years 2022 to 2025, driven by improved
OEM production rates, expanded MRO volumes, enhanced pricing from
recent contract extensions and a lower cost structure. We remain
focused on investing in our people, operations, and products for
the benefit of all stakeholders."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1021162/000095017022014222/tgi-20220630.htm
About Triumph
Headquartered in Berwyn, Pennsylvania, Triumph Group, Inc. --
http://www.triumphgroup.com-- designs, engineers, manufactures,
repairs and overhauls a broad portfolio of aerospace and defense
systems, components and structures. The company serves the global
aviation industry, including original equipment manufacturers and
the full spectrum of military and commercial aircraft operators.
Triumph Group reported a net loss of $42.76 million for the year
ended March 31, 2022, compared to a net loss of $450.91 million for
the year ended March 31, 2021. As of March 31, 2022, the Company
had $1.76 billion in total assets, $602.14 million in total current
liabilities, $1.59 billion in long-term debt (less current
portion), $301.30 million in accrued pension and other
postretirement benefits, $7.21 million in deferred income taxes,
$51.71 million in other noncurrent liabilities, and a total
stockholders' deficit of $787.42 million.
* * *
As reported by the TCR on Aug. 18, 2021, Moody's Investors Service
upgraded its ratings for Triumph Group, Inc., including the
company's corporate family rating to Caa2 from Caa3 and Probability
of Default Rating to Caa2-PD from Caa3-PD. The upgrades reflect
Moody's expectations for stronger operating performance that will
result in a gradual improvement in credit metrics through 2023. In
June 2020, S&P Global Ratings lowered its issuer credit rating on
Triumph Group Inc. to 'CCC+' from 'B-'.
VIRGINIA TRUE: Diatomite to Get 100% Ownership in Creditor Plan
---------------------------------------------------------------
Plan proponents Diatomite Corporation of America, Anthony
Cipollone, and Domenick Cipollone submitted a Second Joint Amended
Disclosure Statement in connection with proposed Chapter 11
Creditor Plan of Reorganization for Virginia True Corporation.
After a careful consideration of Debtor's business and prospects,
the Plan Proponents have concluded that Diatomite's advancing of
Creditor Plan Funding to pay: (i) all Allowed Administrative
Expense Claims, Allowed Compensation and Reimbursement Claims,
Allowed Priority Tax Claims, and United States Trustee Fees that
are Allowed as of the Effective Date; (ii) distributions to the
Holders of Allowed General Unsecured Claims (other than the Plan
Proponents); and (iii) $2 million Cash to the Cipollones, and then
$1 million Cash one year after the Effective Date, all as set forth
in Sections 4.1 and 4.2 of the Creditor Plan is the only
reasonable, but also best means of providing a recovery for
creditors of the Estate in a reasonable time frame that does not
subject their Claims to further unnecessary risk taking and
speculation by the Debtor. In exchange for this Creditor Plan
Funding of almost $4 million, Diatomite shall receive 100% of the
New Equity of the Reorganized Debtor and such Reorganized Debtor
shall retain the Debtor's sole asset-a 977-acre parcel of
undeveloped land located within the environmentally-protected Fones
Cliffs area in Richmond County, Virginia (the "Property"). The
Debtor appears to agree that the Debtor cannot reasonably retain
the property without some change in control of either the Debtor or
the Property, but instead of the guaranteed Creditor Plan Funding
provided for in the Creditor Plan, the Debtor is trying to market
the Property for sale through a bankruptcy auction, with an
affiliate of the Debtor's principals serving as the stalking horse
bidder, who seeks to purchase the Property at a low price,
nullifying the prospect of material creditor recovery.
The Debtor has also proposed an amended plan that is unconfirmable
on its face. Among other problems with the Debtor's proposed plan,
it provides no mechanism for resolution of and/or appropriate
treatment of the Cipollone Claim. Additionally, while there have
been multiple hearings and revisions to the bid procedures proposed
to govern the Auction, the Plan Proponents still have grave doubts
as to whether the Auction proposed by the Debtor will maximize
value. Among other things, shortly before filing its motion for
approval of the bid procedures, the Debtor disclosed that it had
obtained an appraisal valuing the Property at approximately $4
million, which was a 180-degree about-face from its prior
representations as to the Property's value (including scheduling
the Property as having a value of $18.3 million). Because the
Debtor's principals have equity in the proposed stalking horse
bidder, they have an interest in that bidder acquiring the Property
at the lowest possible price.
The Plan Proponents, as holders of more than 90% of the secured and
unsecured debt in this case totaling over $12 million, through this
Creditor Plan and Disclosure Statement, seek to provide a superior
alternative to the proposed sale process that sets an upset price
that the Plan Proponents believe is below the market value, so as
to protect against the Debtor's machinations to transfer the
Property out of the Estate to an affiliate. Under the Creditor
Plan, Diatomite will advance the Creditor Plan Funding which
guarantees the resolution and reduction of the Cipollone Claim, the
resolution of the Diatomite Claim, full payment of Allowed
Administrative Expense Claims, and guaranteed value to Holders of
Allowed General Unsecured Claims.
This is a necessary protective measure in light of the inherent and
overlooked conflict of interest between the Estate and the Debtor's
principals.
Specifically, in exchange for 100% of the New Equity of the
Reorganized Debtor and the resolution of the Diatomite Claim,
Diatomite shall advance funds as Creditor Plan Funding to pay: (i)
all Allowed Administrative Expense Claims, Allowed Compensation and
Reimbursement Claims, Allowed Priority Tax Claims, and United
States Trustee Fees that are Allowed as of the Effective Date; (ii)
distributions to the Holders of Allowed General Unsecured Claims
(other than the Plan Proponents); and (iii) $2 million Cash to the
Cipollones and, additionally, the Reorganized Debtor shall provide
a first priority mortgage and note on the Property for $1 million
payable in one year, without interest, in full satisfaction of the
Cipollone Claim and the Cipollone Note and Deed of Trust. No
interest will accrue on that note until one year after the
Effective Date, after which time interest will begin to accrue on
any unpaid sums at the rate of 6% per annum.
While the Debtor has proposed its own amended Chapter 11 plan, the
Creditor Plan presents a more favorable outcome for Debtor's
creditors than the Debtor's plan because this Creditor Plan
provides for resolution of the outstanding litigation involving
Diatomite, the Cipollones, and the Debtor, thus ensuring that
additional Estate funds are not expended on litigation and allowing
for Distributions to be made within a matter of weeks or months
after the Auction, rather than being held in limbo indefinitely, as
the Debtor's plan contemplates, until the conclusion of the
litigation in the Adversary Proceeding.
By way of example: if the Debtor were to confirm its plan, lawsuits
will continue between and among the Debtor and the Plan Proponents
regarding, among other things, the parties' respective rights to
entitlement to the proceeds, which proceeds will be received after
the payment to the professionals litigating those matters, which
professional fees recover before general unsecured creditors.
Under the Plan, Class 2(a) General Unsecured Claims totaling
$1,664,754.34. Each Holder of an Allowed General Unsecured Claim,
will be paid as follows:
In exchange for exchange Diatomite's treatment as set forth in
Class 2(b), Diatomite will advance funds as Creditor Plan Funding
and, after all senior Allowed Claims are paid in full, Holders of
Allowed General Unsecured Claims in Class 2(a), excluding the Plan
Proponents' Unsecured Claims (Class 2(b)), shall be paid their Pro
Rata Share of the remaining portion of such Creditor Plan Funding
up to the full Allowed amount of their Claims. Creditors will
recover approximately 93% of their claims. Class 2(a) is impaired.
With respect to Class 2(b) Plan Proponents' Unsecured Claims, the
Holders of the Plan Proponents' Unsecured Claims will be paid as
follows:
* The Diatomite Claim shall be the only claim in Class 2(b). In
exchange for advancing funds as Creditor Plan Funding to pay: (i)
all Allowed Administrative Expense Claims, Allowed Compensation and
Reimbursement Claims, Allowed Priority Tax Claims, and United
States Trustee Fees that are Allowed as of the Effective Date; (ii)
distributions to the Holders of Allowed General Unsecured Claims
(other than the Plan Proponents); and (iii) $2 million Cash to the
Cipollones, all as set forth in Sections 4.1 and 4.2 of the
Creditor Plan, Diatomite shall receive 100% of the New Equity of
the Reorganized Debtor .
* Diatomite, its assignee, or the Reorganized Debtor, as
applicable, will receive the Property free and clear of all Liens,
claims, charges, encumbrances or interests of any kind or nature,
but subject to the non-economic terms of the Consent Decree, if it
is approved and implemented in full prior to the Effective Date.
The Creditor Plan shall be funded by the Creditor Plan Funding.
These funds shall be utilized to satisfy payments consistent with
the terms of this Creditor Plan. As set forth fully in the Creditor
Plan, the "Creditor Plan Funding" means sums used to effectuate the
terms of this Creditor Plan from sums contributed by Diatomite.
Such funds shall be in an amount sufficient to cover all Allowed
Administrative Expense Claims, the $2,000,000.00 payment to be made
on account of the Cipollone Claim pursuant to the treatment of the
same in Class 1, and the treatment of Allowed General Unsecured
Claims pursuant to the treatment of the same in Class 2(a),
provided, however, that the Creditor Plan Funding shall not exceed
the aggregate amount of $3,250,000.00. The Plan Proponents estimate
that Holders of Allowed General Unsecured Claims (other than the
Plan Proponents) shall receive distributions in the amount of
approximately 93% of such Allowed General Unsecured Claims. The
Plan Proponents believe this will greatly exceed any distributions
to such Holders in the event the Debtor's patently unconfirmable
plan were confirmed and the Debtor's proposed sale were brought to
fruition.
Either (i) each holder of an impaired unsecured Claim receives or
retains under the plan property of a value equal to the amount of
its allowed Claim or (ii) the Holders of Claims and Interests that
are junior to the Claims of the Dissenting Class will not receive
any property under the Plan. Here, no junior Claim Holders will
receive more than the General Unsecured Creditors and shall each
receive their Pro Rata Share of the Creditor Plan Funding amount
and all senior Allowed Claims are paid in full.
Diatomite, the largest holder of an Unsecured Claim, will acquire
the Property. The remaining Holders of General Unsecured Claims
will also receive their Pro Rata Share of Creditor Plan Funding
after all senior Allowed Claims are paid in full, pursuant to the
Bankruptcy Code's priority scheme. No junior Claim Holders will
receive more than the General Unsecured Creditors.
Counsel for Diatomite Corporation of America:
Joseph A. Pack, Esq.
PACK LAW
51 Northeast 24th Street, Suite 108
Miami, FL 33137
Tel: (212) 949-9300
Co-Counsel to Anthony Cipollone and Domenick Cipollone:
Avrum J. Rosen, Esq.
Nico G. Pizzo, Esq.
LAW OFFICES OF AVRUM J. ROSEN, PLLC
38 New Street
Huntington, NY 11743
Tel: (631) 423-8527
A copy of the Disclosure Statement dated August 3, 2022, is
available at https://bit.ly/3QnKGLm from PacerMonitor.com.
About Virginia True Corporation
Virginia True Corporation, a New York-based golf resort owner and
developer, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. E.D.N.Y. Case No. 19-42769) on May 3, 2019. At the
time of the filing, the Debtor disclosed between $10 million and
$50 million in both assets and liabilities.
Judge Nancy Hershey Lord oversees the case.
Pick & Zabicki LLP is the Debtor's legal counsel.
VOYAGER DIGITAL: Intends to Resume Cash Withdrawals
---------------------------------------------------
Voyager Digital LLC, which filed for bankruptcy protection last
month, said it expects to resume user access to the app for cash
withdrawals this week.
The withdrawal is anticipated to start Aug. 11 for dollars holdings
only, the company said in its blog on July 30, 2022. The
announcement came after the Bankruptcy Court approved its proposal
to restore access to cash held for customers at Metropolitan
Commercial Bank.
Voyager anticipates resuming access to the Voyager app for cash (US
dollar) withdrawals only, starting on Thursday, August 11th.
Customers with cash in their accounts will receive an email with
more details before cash withdrawal access in the app becomes
available. Customers will receive their funds in about 5-10
business days after making their requests. Once cash withdrawals
are enabled, customers can request withdrawals of up to $100,000
via ACH in a 24-hour period.
Voyager also provided updates with respect to its restructuring
process:
* As part of its efforts to maximize the value of crypto on the
platform, Voyager is simultaneously pursuing a standalone
restructuring process and a potential sale of the company.
* The Court approved our bidding procedures which will govern
the sale process. Under these rules, bids are due by August 26th,
and a Sale Hearing, if applicable, will be held on September 8th.
* The Court approved Monday, October 3rd, as the deadline for
customers to file claims against Voyager, including claims for
crypto holdings. See more details below on the claims process and
who should file a claim.
* Finally, the Official Committee of Unsecured Creditors (UCC)
was set up last month. The UCC has set up a website for customers
at https://dm.epiq11.com/case/voyagercommittee/info and intends to
host periodic town halls for customers.
About Voyager Digital
Based in Toronto, Canada, Voyager Digital Holdings Inc. --
https://www.investvoyager.com/ -- runs a cryptocurrency platform.
Voyager claims to offer a secure way to trade over 100 different
crypto assets using its easy-to-use mobile application. Through
its subsidiary Coinify ApS, Voyager provides crypto payment
solutions for both consumers and merchants around the globe.
Voyager Digital Holdings Inc. and two affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead
Case No. 22-10943) on July 5, 2022. In the petition filed by
Stephen Ehrlich, as chief executive officer, the Debtor estimated
assets and liabilities between $1 billion and $10 billion.
The Debtors tapped KIRKLAND & ELLIS LLP as general bankruptcy
counsel; BERKELEY RESEARCH GROUP, LLC, as financial advisor; MOELIS
& COMPANY as investment banker; and CONSELLO GROUP as strategic
financial advisor. STRETTO, INC., is the claims agent.
WAYSTAR TECHNOLOGIES: Fitch Raises LongTerm IDR to 'B'
------------------------------------------------------
Fitch Ratings has upgraded the Long-Term Issuer Default Rating
(IDR) of Waystar Technologies, Inc. (Waystar) to 'B' from 'B-' with
a Stable Rating Outlook.
Fitch has also upgraded the senior secured first lien term loan to
'BB-'/'RR2' from 'B+'/'RR2'. Fitch's actions affect approximately
$1.8 billion of debt.
KEY RATING DRIVERS
Decreased Leverage: After the acquisitions of Patientco and
eSolutions in 2020 and 2021, respectively, both of which raised pro
forma gross leverage to above 9x, Waystar has successfully reduced
leverage, with Fitch forecasting a decline to 6.8x by YE 2022.
Leverage now compares favorably with the 8.2x median and 4.3x -
10.2x range for Health Care IT (HCIT) peers. While Fitch believes
leverage tolerance is likely higher over the longer term, a lack of
acquisition targets leaves prepayment of high interest debt as the
highest return on use of cash.
As a result, in a relative rarity for PE-sponsored HCIT issuers,
management prepaid $47 million of the second lien loan with
capacity to reduce debt further in Q2 given robust FCF. Fitch
expects the ongoing decline in corporate valuations will allow the
company to return to its acquisitive posture. However, Fitch
believes the increased scale and profitability of Waystar will
allow for a material debt-funded transaction without a substantial
increase in leverage. As a result, Fitch forecasts leverage to
remain below 7.5x over the ratings horizon, within the agency's
typical sensitivity range of 5.5x-7.5x for 'B'-rated HCIT issuers,
which is the primary driver of the ratings upgrade.
Successful Integrations: Waystar has successfully completed the
integrations of the transformative eSolutions and Patientco
acquisitions, achieving synergy targets with no disruption to
go-to-market efforts or client retention. As a result, Waystar has
quickly scaled to become a leading RCM provider with a continuing
pace of share gains. In addition, the company has assembled a
unique RCM offering with processing capabilities across commercial
and governmental payors and a strong patient engagement/payments
platform. As a result, Fitch expects Waystar's pace of growth in
excess of the market and share gains to persist.
Strong Growth Opportunity: Fitch expects Waystar's organic growth
rate to be sustained at double-digit levels as a result of strong
secular trends in U.S. healthcare spending and utilization, as well
as the company's successful go-to-market and cross sales effort.
The Centers for Medicare and Medicaid Services (CMS) forecasts
national health expenditure growth of 5.4% annually through 2028
due to long-standing trends including an aging demographic, medical
procedure/drug cost inflation and utilization growth.
In addition, increased regulatory burdens, claims processing
complexity and pressures on provider profitability serve as strong
tailwinds for continued software adoption by providers. The
company's growth prospects are further supported by strong
retention rates resulting from high switching costs that include
staff training, implementation costs, business interruption risks
and reduced productivity when swapping platforms. Fitch believes
that the secular tailwinds and high switching costs produce a
dependable growth trajectory that benefits Waystar's credit
profile.
Low Cyclicality: Fitch expects Waystar, which has experienced
positive growth in every year since its inception, including during
the pandemic-driven downturn in healthcare visit volumes, to
continue exhibiting low cyclicality for the foreseeable future.
Fitch believes the company will exhibit continued strong
correlation to overall U.S. healthcare spending and utilization,
which is highly non-discretionary and has experienced uninterrupted
growth since at least 2000 according to CMS. As a result, Fitch
believes Waystar will demonstrate a stable credit profile with
little sensitivity to macroeconomic cycles.
Strong Margin Profile: Fitch forecasts EBITDA margins of 47% for
the combined Waystar, eSolutions and Patientco, at the high end of
the 28%-47% range for Fitch-rated HCIT peers. In addition, the
strong margins and low capital intensity contribute to robust FCF
margins, which reached 14.9% in FY 2021 with Fitch forecasting an
increase to high-teens levels, despite a heavy interest expense
burden and past acquisitive activity. Fitch believes Waystar stands
out amongst PE-sponsored HCIT issuers with its high EBITDA to FCF
conversion and use of excess funds to reduce debt.
Strategy Risks: Waystar's sales strategy targets the broad
healthcare provider market by leading with a strong technology
offering, rather than focusing on a narrow niche in the healthcare
universe. This presents competitive risks given direct competition
with larger RCM providers that could quickly scale up investment in
their product offerings and go-to-market efforts. This risk is
somewhat mitigated by the 2020 acquisition of eSolutions' NSV
offerings that require direct contracts with CMS and, as a result,
experience limited competition.
Evolving Marketplace: Waystar faces risks from an evolving
healthcare marketplace where efforts to slow cost growth will
require all constituents to modify their strategies. The nascent
efforts to shift to value-based care, where reimbursements are
directed toward successful outcomes rather than volume of
procedures, will require Waystar to re-examine its go-to-market and
pricing strategies to align more closely with the emerging
incentives that are based on medical outcomes. While the transition
to value-based case is slow-moving, Fitch believes that the shift
introduces risk of disruption and rejection from the marketplace
that may result in decreased growth.
DERIVATION SUMMARY
Fitch is evaluating Waystar post its acquisitions of eSolutions and
Patientco, having now had sufficient time to digest the
transactions. Fitch believes the company benefits from a favorable
growth opportunity as medical claim processing volumes continue to
expand due to long-standing trends in the U.S. healthcare industry
including, an aging demographic, medical procedure/drug cost
inflation and utilization growth.
The company exhibits strong client growth prospects with a leading
technology platform that addresses the increased regulatory
burdens, claims processing complexity and profitability pressures
that serve to promote continued software adoption by providers.
Fitch believes growth is further ensured by strong client retention
rates, high switching costs, robust sales efforts and a history of
share gains.
Similar to the company's continued positive organic growth during
the pandemic-led downturn, Fitch expects Waystar to demonstrate
minimal cyclicality and durable resistance to economic cycles due
to the non-discretionary nature of healthcare spending. As the
company has completed the integrations of recent transactions,
leverage has been reduced to a forecast 6.8x by YE22, compared with
the 8.2x median and 4.3x-10.2x range for peers. Leverage is now
within Fitch's typical sensitivity range of 5.5x-7.5x for 'B' rated
HCIT issuers, which, along with a robust FCF margin profile in the
mid- to high-teens, Fitch views as the primary determinant of the
upgrade to the 'B' rating. No country-ceiling, parent/subsidiary or
operating environment aspects had an impact on the rating.
KEY RECOVERY RATING ASSUMPTIONS
-- The recovery analysis assumes that Waystar would be
reorganized as a going-concern in bankruptcy rather than
liquidated;
-- 10% administrative claim;
-- 2% concession payment to junior lenders.
Going-Concern (GC) Approach
-- The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which the agency bases
the enterprise valuation (EV). Fitch contemplates a scenario
in which platform consolidation into a unified RCM offering
leads to increased client churn, slowing revenue growth, and
increases in sales and R&D expenses to address the challenges.
As a result, Fitch expects that Waystar would likely be
reorganized with a similar product strategy and higher than
planned levels of operating expenses as the company reinvests
to ensure customer retention and defend against competition;
-- Under this scenario, Fitch believes revenue growth would slow
significantly to low single digits per annum with EBITDA
margins declining such that the resulting going-concern EBITDA
is approximately 10% below 2022 EBITDA;
-- An EV multiple of 7x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value.
The choice of this EV multiple considered the following factors:
-- Comparable Reorganizations: In Fitch's 13th edition of its
"Bankruptcy Enterprise Values and Creditor Recoveries" case
study, the agency notes seven past reorganizations in the
technology sector, where the median recovery multiple was
4.9x. Of these companies, only two were in the software
subsector: Allen Systems Group, Inc. and Aspect Software
Parent, Inc., which received recovery multiples of 8.4x and
5.5x, respectively. Fitch believes the Allen Systems Group,
Inc. reorganization is highly supportive of the 7.0x multiple
assumed for Waystar given the mission critical nature of both
companies' offerings;
-- M&A Multiples: A study of M&A transactions in the healthcare
IT industry from 2015 to 2020, particularly those competing in
the RCM space, establishes a median EV/EBITDA transaction
multiple of 15x. The acquisition of eSolutions represented a
21.3x multiple, not including synergies, while the acquisition
of Patientco represented a 7.3x multiple of revenue.
The recovery model implies a 'BB-' and 'RR2' Recovery Rating for
the company's first-lien senior secured facilities, reflecting
Fitch's belief that lenders should expect to recover 71%-90% in a
restructuring scenario.
KEY ASSUMPTIONS
Fitch's key assumptions within the rating case for the issuer:
-- FY22 revenue growth of 20% due to growth in patient volumes,
cross-sell efforts, strong bookings, and full-year
contribution from Patienco, with organic growth in the low
double-digits thereafter due to client growth, cross-selling
opportunities, price increases, increasing medical procedure
volumes and rising healthcare expenditure; plus contribution
from acquisitions;
-- EBITDA margins of 47% due to synergy achievement, with minimal
margin expansion thereafter due an optimized cost structure;
-- Capital intensity of 2.5%-3.5% due to completion of new data
center, consistent with history and peers;
-- $1 billion acquisition in FY23, funded with $900 million of
incremental debt, completed at an EV/Revenue transaction
multiple of 7.0x.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- (Cash flow from operations-capex)/total debt with equity
credit sustained above 6.5%;
-- Reduction in debt leading to total debt with equity
credit/operating EBITDA sustained below 5.5x;
-- Revenue growth consistently in excess of Fitch's forecasts;
-- Strengthened competitive positioning and increased scale.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- (Cash flow from operations-capex)/total debt with equity
credit sustained below 3%;
-- Total debt with equity credit/operating EBITDA sustained above
7.5x;
-- Revenue declines resulting from market share losses or
deterioration in competitive position.
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
Fitch expects Waystar to maintain strong liquidity given moderate
operating expense requirements that result in strong margins, a
highly variable cost structure, a short cash conversion cycle due
to monthly billing, and low capital intensity. Liquidity is
currently comprised primarily of the undrawn $200 million revolving
credit facility (RCF). This constitutes a considerable RCF
commitment in relation to the company's revenue scale.
Liquidity is further supported by Fitch's forecast for over $240
million in aggregate FCF generation over 2022-2023. Fitch forecasts
steady growth in liquidity to over $310 million by 2023 due to
accumulation of FCF and the expectation for the RCF to remain
undrawn.
ISSUER PROFILE
Waystar is a provider of cloud-based revenue cycle management (RCM)
software that healthcare providers use to track patient care and
data from registration through appointment with a high degree of
accuracy in order to ensure final payment and avoid reimbursement
denials, allowing providers to lower processing costs and increase
collections.
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.
RATING ACTIONS
ENTITY/DEBT RATING RECOVERY PRIOR
---- ------ -------- -----
Waystar LT IDR B Upgrade B-
Technologies, Inc.
senior secured LT BB- Upgrade RR2 B+
WILDWOOD VILLAGES: Plan Trustee Taps SoldNow LLC as Auctioneer
--------------------------------------------------------------
Ross Johnston, the plan trustee appointed in Wildwood Villages,
LLC's Chapter 11 case, received approval from the U.S. Bankruptcy
Court for the Middle District of Florida to employ SoldNow, LLC as
its auctioneer.
SoldNow, doing business as Tranzon Driggers, will assist the
trustee in liquidating approximately 48 lots located within the
Debtor's properties, any rights under the declarations of Hearty
Host Lake Resort and Heritage Wood 'N Lakes Estates, and any common
areas of the properties.
SoldNow has agreed to a 10 percent buyer's premium, to be added to
the high bid, subject to the following adjustments: (i) SoldNow
will receive 70 percent of the buyer's premium, the buyer's broker,
if any, will receive 20 percent while the trustee will retain 10
percent; or (ii) if no buyer's broker, then the trustee will retain
30 percent of the buyer's premium.
Jon Barber, vice president of SoldNow, disclosed in court filings
that he and other employees of the firm do not hold an interest
adverse to the Debtor and its estate.
The firm can be reached through:
Jon K. Barber
SoldNow dba Tranzon Driggers
101 E. Silver Springs Blvd., Suite 206
Ocala, FL 34470
Phone: +1 877-374-4437
Email: jbarber@tranzon.com
About Wildwood Villages
Wildwood Villages, LLC is a company engaged in activities related
to real estate. The company is based in Wildwood, Fla.
Wildwood Villages filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
20-02569) on Aug. 28, 2020, listing $3,150,861 in assets and
$3,428,386 in liabilities. Jonathan Woods, manager, signed the
petition.
Matthew S. Kish, Esq., Esq. at Shapiro Blasi Wasserman & Hermann,
P.A. is the Debtor's legal counsel.
On Feb. 23, 2022, the court confirmed the Debtor's Chapter 11 plan
and approved the selection of Ross Johnston to oversee the
liquidating trust created under the plan. Ryan E. Davis, Esq., at
Winderweedle, Haines, Ward & Woodman, P.A. serves as the plan
trustee's legal counsel.
WIRELESS SYSTEMS: October 12 Plan Confirmation Hearing Set
----------------------------------------------------------
On Aug. 5, 2022, Debtor Wireless Systems Solutions, LLC, filed with
the U.S. Bankruptcy Court for the Eastern District of North
Carolina a Disclosure Statement and Plan.
On Aug. 8, 2022, Judge Joseph N. Callaway conditionally approved
the Disclosure Statement and ordered that:
* Sept. 19, 2022 is fixed as the last day for filing and
serving written objections to the disclosure statement.
* Oct. 12, 2022, at 10:00 AM, in Randy D. Doub United States
Courthouse, 2nd Floor Courtroom, 150 Reade Circle, Greenville, NC
27858 is the hearing on confirmation of the plan.
* Sept. 19, 2022, is fixed as the last day for filing written
acceptances or rejections of the plan.
* Sept. 19, 2022, is fixed as the last day for filing and
serving written objections to confirmation of the plan.
A copy of the order dated August 8, 2022, is available at
https://bit.ly/3QfXaVA from PacerMonitor.com at no charge.
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.
WISECARE LLC: Wins Cash Collateral Access Thru Oct 1
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland, Baltimore
Division, approved the stipulation that Wisecare, LLC entered into
with Steans Bank, NA regarding the Debtor's use of cash
collateral.
The Debtor is authorized to use cash collateral only to fund the
expenses provided on the August and September budget, the Adequate
Protection Payments, and the administrative claim escrow payments.
The authorization granted to the Debtor under the Second Interim
Order will terminate upon the earlier of: (a) October 1, 2022; (b)
the entry by the Court of an order denying the Debtor's
authorization to use cash collateral; or (c) at the option of the
Lender, upon the occurrence of an Event of Default after notice and
the expiration of the cure period as set forth in the First Interim
Order.
Notwithstanding any termination, the rights and obligations of the
Debtor and the rights, claims, security interests, liens and
priorities of the Lender with respect to all transactions that
occurred prior to the occurrence of any termination, including,
without limitation, all replacement liens granted to the Lender as
adequate protection and priority claims under Section 507(b) of the
Bankruptcy Code, which are provided, will remain unimpaired and
unaffected by any termination of the Order, will survive any
termination of the Order, and will be binding upon the Debtor, its
estate, all successors in-interest to the Debtor, including any
Chapter 11 trustee or any Chapter 7 trustee, and all creditors and
other parties in interest.
In addition, as adequate protection, the Lender is granted
replacement liens and superpriority treatment on the same terms as
provided by the First Interim Order.
A copy of the order is available at https://bit.ly/3vStG85 from
PacerMonitor.com.
The Debtor projects $144,259 in monthly total expenses.
About WiseCare LLC
WiseCare, LLC offers a variety of diagnostic and treatment services
for the urgent care needs of patients of all ages. Severn,
Md.-based WiseCare filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 21-17794)
on Dec. 14, 2021, listing $100,000 to $500,000 in assets and $1
million to $10 million in liabilities. Perry Weisman, its owner,
signed the petition. Joseph Selba, Esq., at Tydings & Rosenberg,
LLP serves as the Debtor's legal counsel.
Judge David E. Rice oversees the case.
Stearns Bank NA, as lender, is represented by Robert B. Scarlett,
Esq., at Scarlett & Croll, P.A.
WL HOUSTONS: Unsecured Creditors Will Get 100% of Claims in Plan
----------------------------------------------------------------
W L Houstons Business Investments LLC submitted an Amended Plan of
Reorganization dated August 8, 2022.
At present, the Debtor is not actively conducting any business. The
Debtor has no employees.
The Debtor plans to fund the plan by selling the single real estate
asset at its fair market value.
Class 2 consists of Security Claims. Ad Valorem Taxes include
estimated amounts for pre-petition tax year 2022 and are subject to
change at a later date pursuant to the Texas Property Tax Code. The
estimated amounts do not constitute a final amount of the tax
claims, and the Debtor shall be bound to the final tax amount as
determined under applicable non-bankruptcy law.
Notwithstanding any other provisions contained herein, Fort Bend
Independent School District, Sienna Municipal Utility District #2,
Sienna Parks and Levee Improvement District, and Fort Bend County
are the holders of pre-petition Secured Tax Claims for ad valorem
property taxes for the 2022 tax year and the Debtor shall pay such
taxes in the ordinary course of business prior to delinquency. In
the event the 2022 taxes and any subsequent tax years are not paid
prior to delinquency as required under applicable non-bankruptcy
law, interest shall accrue as provided under applicable non
bankruptcy law, and Fort Bend Independent School District, Sienna
Municipal Utility District #2, Sienna Parks and Levee Improvement
District, and Fort Bend County are authorized to immediately
commence any and all collection actions authorized under such laws
in state court without further order of this Court.
The allowed security claims total $317,314.88. Fort Bend
Independent School District, Sienna Municipal Utility District #2,
Sienna Parks and Levee Improvement District, and Fort Bend County
shall retain their tax liens for prepetition and post-petition
taxes until the taxes are paid in full with statutory interest. The
failure to make a payment required under this section shall be an
event of default and authorize Fort Bend Independent School
District, Sienna Municipal Utility District #2, Sienna Parks and
Levee Improvement District, and Fort Bend County to immediately
initiate collection action in state court under Texas law for the
recovery of all statutory amounts provided under Texas law without
further order of the bankruptcy court.
Class 3 consists of the General Unsecured Claims of Broadmark
Realty Capital, Inc ($12,000.00) and TXU Energy Retail Company, LLC
($1,351.01). This Class will receive a distribution of 100% of
their allowed claims. A term within 6 months from confirmation or
order to market and sell the single real estate asset, whichever
comes first.
Class 4 consists of Equity Security Holder Warren L. Houston.
Warren L. Houston is owed $30,000 for pre-petition capital
contributions and labor. This debt will not be paid, unless and
until all other debts are paid in full.
On the Effective Date, all property of the Debtor shall vest in the
Reorganized Debtor, free and clear of all liens, claims, interests,
and charges arising on or before the Confirmation of the Plan,
except as provided in this Plan or the Confirmation Order, on the
condition that the Reorganized Debtor complies with the terms of
the Plans, including the making of all payments to creditors
provided for in such Plan.
If the Reorganized Debtor defaults in performing under the
provisions of this Plan and this case is converted to a case under
chapter 7 before substantial consummation of its Plan, all property
vested in the Reorganized Debtor and all subsequently acquired
property owned as of or after the conversion date shall re-vest
and constitute property of the bankruptcy estate in the converted
case.
A full-text copy of the Amended Plan dated August 8, 2022, is
available at https://bit.ly/3vXUPq7 from PacerMonitor.com at no
charge.
Attorney for Debtor:
SAMUEL L. MILLEDGE
State Bar No. 14055300
2500 East T.C. Jester Blvd., Suite 510
Houston, Texas 77008
Telephone: (713)812-1409
Telecopier: (714)812-1418
About W L Houstons Business
Investments
W L Houstons Business Investments LLC is a Single Asset Real Estate
(as defined in 11 U.S.C. Sec. 101(51B)).
W L Houstons Business Investments LLC sought protection under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.
Tex. Case No. 22-31575) on June 6, 2022. In the petition filed by
Warren Houston, as managing member, the Debtor estimated assets and
liabilities of up to $50,000 each. Samuel L Milledge, of The
Milledge Law Firm, PLLC, is the Debtor's counsel.
WMB HOLDINGS: New First Lien Debt No Impact on Moody's 'B1' CFR
---------------------------------------------------------------
Moody's Investors Service said WMB Holdings, Inc.'s ("Corporation
Service Company" or "CSC") new first lien credit facilities tranche
amounts do not affect the ratings. CSC issued in total
approximately $3,500 million of senior secured first lien credit
facilities that will consist of a $250 million multi-currency
revolver due 2027, an approximately $1,208 million term loan A due
2027, a EUR775 million term loan A due 2027 and a $1,250 million
term loan B due 2029. Previously the capital structure contemplated
a $250 million revolver due 2027, a $1,000 million Euro denominated
Term Loan A due 2027 and a $2,350 million first lien term loan B
due 2029. The change in tranche amounts does not affect the
instrument ratings of B1 since the tranches are pari passu in
seniority. The overall debt quantum is lower by approximately $100
million. Proceeds from the debt will be used to finance the
previously announced acquisition of Intertrust N.V. ("Intertrust")
(Ba2, RUR) that is expected to close in 4Q of this year. The B1
corporate family rating as well as the stable outlook, remain
unchanged at this time.
The facilities are secured by all stock and assets of material US
entities and 65% of stock on foreign subsidiaries, subject to
customary exceptions. The facilities are guaranteed by the parent
and wholly owned restricted subsidiaries in the U.S., subject to
customary exceptions. Moody's expects liquidity will remain good
since the larger term loan A and smaller term loan B amount will
reduce interest expense given lower interest cost for the term loan
A. However annual amortization will increase since the term loan A
will have a higher mandatory amortization amount. Moody's expects
the company to be able to manage these changes to cash flows. The
revolver and term loan A are subject to a maximum Net Total
Leverage of 6.0x with step-downs
Terms of the credit facilities include the ability of the company
to incur additional debt. Incremental debt capacity is up to the
greater of $640 million and 100% of Consolidated EBITDA, plus
unlimited amounts subject to a pro forma Secured Net Leverage Ratio
(after giving effect to the incremental term loans) that does not
exceed the pro forma Secured Net Leverage Ratio as of the closing
date of the facilities. The borrower is permitted to incur
incremental first lien debt in an aggregate principal amount not to
exceed the greater of $320 million and 50% of Consolidated EBITDA
that has a maturity date prior to the term loan B but not before
the maturity date of the revolver and term loan A. There is basket
for debt that can be incurred by non-guarantors that is limited to
the greater of $160 million and 25% of consolidated EBITDA.
Headquartered in Wilmington, Delaware CSC provides business, legal,
tax, and digital brand services to companies, law firms, and
financial institutions around the world. The company operates in
four business segments: Corporate &Legal Solutions, Digital Brand
Services, Global Financial Markets, and Tax & Business Solutions.
Intertrust is a similar T&CS solutions provider that is
concentrated in Europe and provides fund and corporate services,
capital market solutions, and private wealth and employee benefit
solutions to multinationals, fund managers, financial institutions,
and business entrepreneurs. CSC is privately owned by three
families.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Sos S. Arutyunyan
Bankr. C.D. Cal. Case No. 22-10901
Chapter 11 Petition filed August 2, 2022
represented by: Anthony Egbase, Esq.
In re Weird Vending, LLC
Bankr. M.D. Fla. Case No. 22-02772
Chapter 11 Petition filed August 2, 2022
See
https://www.pacermonitor.com/view/O3ABCDI/Weird_Vending_LLC__flmbke-22-02772__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Velasquez, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
E-mail: dvelasquez@lathamluna.com
In re 96 Ward Street LLC
Bankr. D.N.J. Case No. 22-16090
Chapter 11 Petition filed August 2, 2022
See
https://www.pacermonitor.com/view/CT36GZI/96_WARD_STREET_LLC__njbke-22-16090__0001.0.pdf?mcid=tGE4TAMA
represented by: Avram D. White, Esq.
LAW OFFICE OF AVRAM WHITE
E-mail: avram.randr@gmail.com
In re Barbara Dunn
Bankr. E.D.N.Y. Case No. 22-71985
Chapter 11 Petition filed August 2, 2022
represented by: Marc Pergament, Esq.
In re Triniti DME Solutions, LLC
Bankr. E.D. Tex. Case No. 22-40975
Chapter 11 Petition filed August 2, 2022
See
https://www.pacermonitor.com/view/ORQSRGA/Triniti_DME_Solutions_LLC__txebke-22-40975__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert C. Lane, Esq.
THE LANE LAW FIRM
E-mail: notifications@lanelaw.com
In re Richard Kevin Russell
Bankr. N.D. Tex. Case No. 22-41753
Chapter 11 Petition filed August 2, 2022
represented by: Stephanie Curtis, Esq.
In re Vanessa Hyman
Bankr. S.D. Tex. Case No. 22-32211
Chapter 11 Petition filed August 2, 2022
In re Merritt Enterprises, Inc.
Bankr. E.D. Va. Case No. 22-11010
Chapter 11 Petition filed August 2, 2022
See
https://www.pacermonitor.com/view/ZM44ESQ/Merritt_Enterprises_Inc__vaebke-22-11010__0001.0.pdf?mcid=tGE4TAMA
represented by: David K. Spiro, Esq.
SPIRO & BROWNE, PLC
E-mail: dspiro@sblawva.com
In re Custom Construction of Louisiana, LLC
Bankr. M.D. La. Case No. 22-10393
Chapter 11 Petition filed August 3, 2022
See
https://www.pacermonitor.com/view/WJLA4RA/Custom_Construction_of_Louisiana__lambke-22-10393__0001.0.pdf?mcid=tGE4TAMA
represented by: Arthur A. Vingiello, Esq.
THE STEFFES FIRM, LLC
E-mail: avingiello@steffeslaw.com
In re Trusential, LLC
Bankr. N.D. Ohio Case No. 22-31144
Chapter 11 Petition filed August 3, 2022
See
https://www.pacermonitor.com/view/TY23BKA/Trusential_LLC__ohnbke-22-31144__0001.0.pdf?mcid=tGE4TAMA
represented by: Patricia A. Kovacs, Esq.
PATRICIA A. KOVACS, ATTORNEY AT LAW
E-mail: patricia.a.kovacs@gmail.com
In re Rocky Day Fisher
Bankr. E.D. Tex. Case No. 22-10280
Chapter 11 Petition filed August 3, 2022
represented by: Julie M. Koenig, Esq.
COOPER & SCULLY, P.C.
E-mail: julie.koenig@cooperscully.com
In re ClearedDirect, LLC
Bankr. W.D. Tex. Case No. 22-10497
Chapter 11 Petition filed August 3, 2022
See
https://www.pacermonitor.com/view/PEMHTKY/ClearedDirect_LLC__txwbke-22-10497__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert C. Lane, Esq.
THE LANE LAW FIRM
E-mail: notifications@lanelaw.com
In re Mathis & Mathis, Inc.
Bankr. E.D. Va. Case No. 22-11022
Chapter 11 Petition filed August 3, 2022
See
https://www.pacermonitor.com/view/ZC3SGWY/Mathis__Mathis_Inc__vaebke-22-11022__0001.0.pdf?mcid=tGE4TAMA
represented by: Jonathan B. Vivona, Esq.
VIVONA PANDURANGI, PLC
E-mail: jvivona@vpbklaw.com
In re Justin Lattimore
Bankr. E.D. Tex. Case No. 22-40981
Chapter 11 Petition filed August 3, 2022
represented by: Howard Spector, Esq.
In re GMS Medical Company, LLC
Bankr. N.D. Tex. Case No. 22-31412
Chapter 11 Petition filed August 3, 2022
See
https://www.pacermonitor.com/view/LWIAEBI/GMS_Medical_Company_LLC__txnbke-22-31412__0001.0.pdf?mcid=tGE4TAMA
represented by: Guy Holman, Esq.
GUY HARVEY HOLMAN, PLLC
E-mail: gholman@debtreset.net
In re Elite Metal Building and Roofing, LLC
Bankr. S.D. Fla. Case No. 22-16032
Chapter 11 Petition filed August 4, 2022
See
https://www.pacermonitor.com/view/FR4WLFQ/Elite_Metal_Building_and_Roofing__flsbke-22-16032__0001.0.pdf?mcid=tGE4TAMA
represented by: Susan D. Lasky, Esq.
SUE LASKY, PA
E-mail: Jessica@SueLasky.com
In re Chad Steven McKnight
Bankr. S.D. Ind. Case No. 22-03084
Chapter 11 Petition filed August 4, 2022
represented by: John Allman, Esq.
In re B+H Development 1 Corp
Bankr. E.D.N.Y. Case No. 22-72004
Chapter 11 Petition filed August 4, 2022
See
https://www.pacermonitor.com/view/CJSO42Q/BH_Development_1_Corp__nyebke-22-72004__0001.0.pdf?mcid=tGE4TAMA
represented by: Kafi Harris, Esq.
KAFI HARRIS + ASSOCIES PC
E-mail: kharrislaw@gmail.com
In re JVNLDG, LLC
Bankr. E.D.N.Y. Case No. 22-41899
Chapter 11 Petition filed August 4, 2022
See
https://www.pacermonitor.com/view/NVTFSYA/JVNLDG_LLC__nyebke-22-41899__0001.0.pdf?mcid=tGE4TAMA
represented by: Francis E. Hemmings, Esq.
LAW OFFICES OF FRANCIS E. HEMMINGS PLLC
E-mail: general@hemmingssnell.com
In re Sandpiper Management, LLC
Bankr. S.D. Cal. Case No. 22-02071
Chapter 11 Petition filed August 5, 2022
See
https://www.pacermonitor.com/view/FRYZXJA/Sandpiper_Management_LLC__casbke-22-02071__0001.0.pdf?mcid=tGE4TAMA
represented by: Jorge I. Hernandez, Esq.
LAW OFFICE OF JORGE I. HERNANDEZ
E-mail: jorge@jihlaw.com
In re Tamara Perez Cruz
Bankr. D.P.R. Case No. 22-02300
Chapter 11 Petition filed August 5, 2022
represented by: Jesus Batista Sanchez, Esq.
THE BATISTA LAW GROUP
Email: jeb@batistasanchez.com
In re 1713 208th Street E, LLC
Bankr. W.D. Wash. Case No. 22-40968
Chapter 11 Petition filed August 5, 2022
See
https://www.pacermonitor.com/view/WG222RQ/1713_208th_Street_E_LLC__wawbke-22-40968__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Robert Durant Thornton Hall
Bankr. D.S.C. Case No. 22-02097
Chapter 11 Petition filed August 6, 2022
represented by: Robert H. Cooper, Esq.
THE COOPER LAW FIRM
In re Hope Trucker Logistics LLC
Bankr. E.D. Va. Case No. 22-11038
Chapter 11 Petition filed August 6, 2022
See
https://www.pacermonitor.com/view/6ULTCHI/Hope_Trucker_Logistics_LLC__vaebke-22-11038__0001.0.pdf?mcid=tGE4TAMA
represented by: Ashvin Pandurangi, Esq.
VIVONA PANDURANGI, PLC
E-mail: ashvinp@vpbklaw.com
In re B Garza Services, LLC
Bankr. D. Md. Case No. 22-14321
Chapter 11 Petition filed August 8, 2022
See
https://www.pacermonitor.com/view/WQWEZ4I/B_Garza_Services_LLC__mdbke-22-14321__0001.0.pdf?mcid=tGE4TAMA
represented by: Alisha Gordon, Esq.
LAW OFFICES OF A GORDON PC
E-mail: alisha@agordonatlaw.com
In re TBC Companies, LLC
Bankr. E.D.N.C. Case No. 22-01737
Chapter 11 Petition filed August 8, 2022
See
https://www.pacermonitor.com/view/3O6I3YA/TBC_Companies_LLC__ncebke-22-01737__0001.0.pdf?mcid=tGE4TAMA
represented by: Danny Bradford, Esq.
PAUL D. BRADFORD, PLLC
E-mail: dbradford@bradford-law.com
In re USAmerican Spark, LLC
Bankr. N.D. Tex. Case No. 22-31425
Chapter 11 Petition filed August 8, 2022
See
https://www.pacermonitor.com/view/HEMIS3Y/USAmerican_Spark_LLC__txnbke-22-31425__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric A. Liepins, Esq.
ERIC A. LIEPINS
E-mail: eric@ealpc.com
In re Richard Kevin Russell
Bankr. N.D. Tex. Case No. 22-41793
Chapter 11 Petition filed August 8, 2022
represented by: Stephanie Curtis, Esq.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2022. All rights reserved. ISSN: 1520-9474.
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*** End of Transmission ***