/raid1/www/Hosts/bankrupt/TCR_Public/220824.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, August 24, 2022, Vol. 26, No. 235
Headlines
21ST CENTURY: Voluntary Chapter 11 Case Summary
ADRIAN WYATT: Files Emergency Bid to Use Cash Collateral
AEARO TECHNOLOGIES: Seeks to Hire AP Services, Appoint CRO
AEARO TECHNOLOGIES: Seeks to Hire Ice Miller as Co-Counsel
AEARO TECHNOLOGIES: Taps Bates White as Claims Valuation Consultant
AEARO TECHNOLOGIES: Taps Kirkland & Ellis as Bankruptcy Counsel
AEARO TECHNOLOGIES: Taps McDonald Hopkins as Special Counsel
AERO TECHNOLOGIES: 3M Could Lose $100B From Suits, Says Expert
ALLEGIANT TRAVEL: Egan-Jones Retains B Senior Unsecured Ratings
ANDOVER SENIOR: Wins Cash Collateral Access on Final Basis
BED BATH & BEYOND: To Hire Kirkland & Ellis to Help Debt Load
BED BATH: Egan-Jones Retains CCC+ Senior Unsecured Ratings
BOSTON SCIENTIFIC: Egan-Jones Retains BB+ Senior Unsecured Ratings
BOY SCOUTS: Plan Changes to Pave Way for Chapter 11 Exit
BRODIE HOLDINGS: Joint Modified Liquidating Plan Confirmed by Judge
BUCKINGHAM TOWER: Wins Interim Cash Collateral Access
CELSIUS NETWORK: Mashinsky Took Over Trading Prior to Bankruptcy
CELSIUS NETWORK: Taps Alvarez & Marsal as Financial Advisor
CELTIC PIG LLC: Food Truck Files for Chapter 11 Bankruptcy
CHRISTIAN HORIZONS: Fitch Cuts IDR to 'BB', Outlook Negative
CLAIRMONT PLACE: No Decline in Resident Care, 4th PCO Report Says
CLUB 77 BAR: Unsecured Creditors Will Get 5% of Claims in 60 Months
COAL NETWORK: Files for Chapter 11 Amid Dispute With KeyBank
CROWN COMMERCIAL: Court OKs Interim Cash Collateral Access
DESERT INSTITUTE: Court OKs Appointment of Susan Goodman as PCO
DMDS LLC: Taps Law Offices of Larry A. Vick as Bankruptcy Counsel
DW TRUMP INC: Files Bare-Bones Chapter 11 Petition
EDWARD ZENGEL: Wins Cash Collateral Access on Final Basis
ENDO INT'L: Reaches $450 Million Settlement With Mass. AG
ENLINK MIDSTREAM: Fitch Rates New Sr. Unsecured Notes 'BB+'
EXCELSIOR SECURITY: Wins Cash Collateral Access Thru Sept 12
FERRO CORP: Egan-Jones Withdraws BB- Senior Unsecured Ratings
FINANCIAL INVESTMENTS: Judgment Creditors Say Disclosure Inadequate
FLY LEASING: S&P Downgrades ICR to 'B-' on Increasing Liquidity
FORD MOTOR: Fitch Rates New Sr. Unsec. Green Bonds 'BB+'
GENAPSYS INC: Cash Collateral Use, $4.1MM DIP Loan Win Final OK
GLEAMIN INC: Clay Mask Seller Seeks Subchapter V Relief
GLOBAL PREMIER: Oxnard Senior Living Files for Chapter 11
GOVERNORS GUN CLUB: Atlanta Club Files for Chapter 11
GOVERNORS GUN: Case Summary & Six Unsecured Creditors
GRATA CAFE: Wins Cash Collateral Access Thru Sept 8
HALLIBURTON CO: Egan-Jones Retains BB Senior Unsecured Ratings
HELMERICH & PAYNE: Egan-Jones Retains BB- Senior Unsecured Ratings
HIE HOLDINGS: Subsidiary Wins Cash Collateral Access, Secured Debt
HIGH POWER CONCRETE: Taps Coolidge Wall as Bankruptcy Counsel
HOWARD HUGHES: Fitch Alters Outlook on 'BB' IDR to Stable
HUDSON RIVER TRADING: Fitch Affirms 'BB' Long-Term IDR
INLAND BOAT: Unsecureds Will Get 26% of Claims in Subchapter V Plan
INSULATION COATINGS: Wins Interim Cash Collateral Access
INTERIOR COMMERCIAL: Seeks Cash Collateral Access
INTERTAPE POLYMER: Egan-Jones Withdraws BB Sr. Unsecured Ratings
ISTAR INC: Egan-Jones Retains BB- Senior Unsecured Ratings
JA SEEKINS: Hearing Thursday on Continued Cash Collateral Access
JEFFERSON LA BREA: SARE Files for Chapter 11 Bankruptcy
JGR GROUP: Wins Cash Collateral Access Thru Aug 31
JOSEPH KLAYNBERG: Creditor Seeks Chapter 11 Trustee Appointment
JOYCARE THERAPY: Files Subchapter V Case
JOYCARE THERAPY: Gets Cash Collateral Access Thru Sept 13
KHOFFNER USA: Seeks to Hire Gamberg & Abrams as Bankruptcy Counsel
LASHLINER INC: Seeks Interim Cash Collateral Access
LCN PARTNERS: Crown Castle Opposes Disclosure Statement
LTL MANAGEMENT: Tells 3rd Circuit Chapter 11 Filing Is Valid
MATHESON FLIGHT: Court OKs Deal on Cash Collateral Access
MATHIS & MATHIS: Seeks to Hire Vivona Pandurangi as Legal Counsel
MELO AIR: Wins Continued Cash Collateral Access
PAVERS INC: Seeks Approval to Hire SMG Unlimited as Bookkeeper
PAVERS INC: Seeks to Hire Pickel & Bruckner as Accountant
POLYMER INSTRUMENTATION: Seeks Approval to Hire Investment Banker
POMMEL MEADOWS: Gets OK to Hire Hilco as Real Estate Broker
PREMIER PAVING: Wins Cash Collateral Access on Final Basis
PUERTO RICO: HTA Debt-Cutting Deal Under Judge's Review
RANCHO CIELO: Amends Unsecured Claims Pay Details
RANGE RESOURCES: Egan-Jones Hikes Senior Unsecured Ratings to B+
RECYCLING REVOLUTION: Joint Reorganizing Plan Confirmed by Judge
REID'S EDUCATIONAL: Wins Final OK to Access Cash Collateral
REVLON INC: Gets Approval to Hire Deloitte Tax as Tax Advisor
REVLON INC: Gets Approval to Hire KPMG as Auditor
REVLON INC: Gets Approval to Hire Kroll LLC as Valuation Advisor
REVLON INC: Gets Court OK to Hire Deloitte Canada as Tax Advisor
REVLON INC: Gets OK to Hire PwC as Accounting Advisor
REVLON INC: Gets OK to Tap Freshfields Bruckhaus as Special Counsel
RICCI TRANSPORT: United States Trustee Says Plan Not Feasible
RITE AID: Egan-Jones Retains CCC Senior Unsecured Ratings
ROBERT E. SPRINGER: Gets Approval to Hire Keck Legal as Counsel
SHO-ME NUTRICEUTICALS: Taps Bleakley Bavol Denman as Legal Counsel
SKY INN OPERATION: Taps Michael McConnell of Kelly Hart as Mediator
SOUTH SIDE CONVENIENT: No Change in Patient Care, PCO Report Says
SOUTHGATE TOWN: Unsecureds Will Get 100% of Claims in Plan
STORCENTRIC INC: Taps Trodella & Lapping as Conflicts Counsel
SUMMER AVE: Wins Cash Collateral Access Thru Sept 7
SWISSBAKERS INC: Wins Cash Collateral Access Thru Sept 13
T-SHACK INC: Taps Jeff Chain of Milestone Realty as Broker
TEAM SERVICES: S&P Rates New $100MM Senior Secured Term Loan 'B-'
TOWNE & TERRACE: Seeks to Hire Steven Brown as Corporate Counsel
TRINITI DME: Wins Cash Collateral Access Thru Sept 1
VANGUARD ROOFING: Wins Cash Collateral Access Thru Sept 21
W L HOUSTONS: Gets Court Approval to Hire Realtor
WEB IV LLC: Files Bare-Bones Chapter 11 Petition
WEB IV: Case Summary & Three Unsecured Creditors
WESTBANK HOLDINGS: Wins Interim Cash Collateral Access
WESTERN GLOBAL: S&P Alters Outlook to Negative, Affirms 'B' ICR
WEYERBACHER BREWING: Court OKs Cash Collateral Access Thru Sept 16
WHETSTONE PARTNERS: Taps Rob Lamb of Long Realty Co. as Broker
ZIER PROPERTIES: U.S. Trustee Says Disclosure Statement Inadequate
*********
21ST CENTURY: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: 21st Century Communities, Inc.
276 Seven Dwarfs Rd.
Mt. Charleston, NV 89124
Business Description: The Debtor is engaged in activities
related to real estate.
Chapter 11 Petition Date: August 22, 2022
Court: United States Bankruptcy Court
District of Nevada
Case No.: 22-13005
Judge: Hon. Natalie M. Cox
Debtor's Counsel: Michael J. Harker, Esq.
LAW OFFICES OF MICHAEL J. HARKER
2901 El Camino Ave
Suite 200
Las Vegas, NV 89102
Tel: 702-248-3000
Email: notices@harkerlawfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Barry Cohen as president.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/AR3YLBA/21ST_CENTURY_COMMUNICATIONS_INC__nvbke-22-13005__0001.0.pdf?mcid=tGE4TAMA
ADRIAN WYATT: Files Emergency Bid to Use Cash Collateral
--------------------------------------------------------
Adrian Wyatt Adams Drug, Inc. asks the U.S. Bankruptcy Court for
the Eastern District of North Carolina, Raleigh Division, for
authority to use cash collateral.
To maintain existing operations, the Debtor expects to incur
certain operating expenses, including but not limited to,
insurance, utilities, and payroll as more fully set forth in its
30-Day Projected Budget.
Live Oak Banking Company and North Carolina Mutual Wholesale Drug
Company, Inc. may assert a security interest in certain property of
the Debtor pursuant to the UCC financing statement filed with the
North Carolina Secretary of State.
As adequate protection for the Debtor's use of its creditors' cash
collateral, the Debtor proposes to provide the Creditors with
post-petition replacement liens on cash collateral with the same
priorities as pre-petition, in lien amounts equal to the amount of
the cash collateral on hand as of the Petition Date.
A hearing on the matter is set for August 24, 2022 at 10:30 a.m.
A copy of the motion and the Debtor's 30-day budget is available at
https://bit.ly/3c826wY from PacerMonitor.com.
The Debtor projects $234,160 in total receipts and $225,010 in
total expenses.
About Adrian Wyatt Adams Drug, Inc.
Adrian Wyatt Adams Drug, Inc. operates two independently-owned drug
stores in Wake County, North Carolina. The Debtor sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case
No. 22-01834) on August 18, 2022. In the petition signed by Adrian
Wyatt Adams, president, the Debtor disclosed $392,125 in total
assets and $1,919,109 in total liabilities.
Judge David M. Warren oversees the case.
George Mason Oliver, Esq., at the Law Offices of Oliver and Cheek,
PLLC is the Debtor's counsel.
AEARO TECHNOLOGIES: Seeks to Hire AP Services, Appoint CRO
----------------------------------------------------------
Aearo Technologies LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Indiana to hire
AP Services, LLC and designate John Castellano as chief
restructuring officer.
The firm's services include:
a. assisting in the development of a rolling 13-week cash
receipts and disbursements forecasting tool designed to provide
on-time information related to the Debtors' liquidity and assisting
in developing the funding requirements of the impacted business
units;
b. assisting in broadening and shoring up the Debtors'
business units' internal services and shared services
arrangements;
c. assisting in creating, and in supporting once created, a
treasury function or any other accounting or finance-related
function, to the extent necessary;
d. assisting in the development of a business plan and such
other related forecasts as may be required in related negotiations
or other corporate purposes;
e. assisting the Debtors' counsel, Kirkland & Ellis, in
advising the Debtors in the design and implementation of a
restructuring strategy;
f. assisting in negotiation and implementation of
restructuring initiatives and evaluation of strategic
alternatives;
g. assisting with communications or negotiations with outside
parties including the Debtors' stakeholders;
h. assisting the Debtors' management and counsel in the
preparation of first day orders and estimation of any first day
relief required under such orders;
i. assisting the management in preparing and testing
accounting systems;
j. assisting in coordinating and providing administrative
support in connection with the Debtors' bankruptcy cases and
developing the Debtors' plan of reorganization or other appropriate
bankruptcy case resolution, if necessary;
k. assisting in the preparation of the Debtors' statement of
financial affairs, schedules of assets and liabilities and other
regular reports, and providing assistance with testimony before the
bankruptcy court on matters that are within AP Services' areas of
expertise;
l. assisting in obtaining and responding to due diligence
requests of the Debtors' professionals and other parties;
m. providing assistance as requested by the management in
connection with the Debtors' development of any forecasts as may be
required, including by creditor constituencies in these bankruptcy
cases or by the Debtors for other corporate purposes;
n. assisting as requested in managing and providing any
litigation support that may be brought against the Debtors in the
bankruptcy court;
o. assisting as requested in managing any claims resolution
process and analyzing preferences and other avoidance actions; and
p. assisting with such other matters as may be requested that
fall within AP Services' expertise and are mutually agreeable.
AP Services' standard hourly rates for 2022 are as follows:
John R. Castellano $1,335
Managing Director $1,060 - $1,335
Director $840 - $990
Senior Vice President $700 - $795
Vice President $510 - $685
Consultant $190 - $505
Paraprofessional $320 - $340
In addition, the firm will seek reimbursement for work-related
expenses.
AP Services and affiliates received a retainer in the amount of $1
million.
Mr. Castellano, managing director at AlixPartners LLP, an affiliate
of AP Services, disclosed in a court filing that AP Services is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
Mr. Castellano can be reached at:
John R. Castellano
AlixPartners LLP
909 Third Avenue, Floor 30
New York, NY 10022
Office: +1 312 551 3287
Mobile: +1 312 560 5276
Email: jcastellano@alixpartners.com
About Aearo Technologies
Aearo Technologies, LLC -- https://earglobal.com/en -- is a 3M
company that designs, manufactures, and sells personal protection
equipment. The Indianapolis-based company serves customers
worldwide.
To address claims related to the Combat Arms Earplugs Version 2,
Aearo Technologies and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case
No. 22-02890) on July 26, 2022. In the petition filed by John R.
Castellano, as authorized signatory, Aearo Technologies listed $1
billion to $10 billion in both assets and liabilities.
The Debtors tapped Kirkland & Ellis and Ice Miller, LLP as
bankruptcy counsels; McDonald Hopkins, LLC as special counsel;
Bates White, LLC as claims valuation consultant; and AP Services,
LLC as restructuring advisor. John R. Castellano, managing director
at AlixPartners LLP, an affiliate of AP Services, serves as the
Debtors' chief restructuring officer. Kroll, LLC is the claims
agent and noticing agent.
AEARO TECHNOLOGIES: Seeks to Hire Ice Miller as Co-Counsel
----------------------------------------------------------
Aearo Technologies, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Indiana to hire
Ice Miller, LLP as co-counsel with Kirkland & Ellis.
The firm's services include:
a) providing legal advice and services regarding local rules,
practices, and procedures and providing substantive and strategic
advice on how to accomplish the Debtors' goals in connection with
the prosecution of their Chapter 11 cases;
b) reviewing, revising or preparing drafts of documents to be
filed with the court;
c) appearing in court and at any meeting with the U.S. trustee
and creditors;
d) performing various services in connection with the
administration of the cases, including, without limitation, (i)
preparing agendas, certificates of no objection, notices of fee
applications and other court documents, (ii) monitoring the docket
for filings, (iii) preparing and maintaining critical dates
memoranda to monitor pending applications, motions, hearing dates,
and other matters and the deadlines associated therewith, and (iv)
handling inquiries from creditors and other matters;
e) interacting and communicating with the court's chambers and
Clerk's Office;
f) assisting the Debtors and Kirkland & Ellis in preparing,
reviewing, revising, filing and prosecuting pleadings related to
contested matters, executory contracts and unexpired leases, asset
sales, plan and disclosure statement issues and claims
administration, and resolving objections and other matters relating
thereto;
g) providing logistical services in the form of access and use
of conference and office space, equipment and personnel; and
h) performing all other services assigned by the Debtors and
in consultation with Kirkland & Ellis.
The firm will be paid at these hourly rates:
Partners $445 - $975
Of Counsel $500 - $690
Associates $370 - $610
Paralegals $240 - $430
Ice Miller received a retainer of $100,000 from the Debtors.
As disclosed in court filings, Ice Miller is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Jeffrey A. Hokanson, Esq.
Ice Miller, LLP
One American Square, Suite 2900
Indianapolis, IN 46282-0200
Tel: (317) 236-2236
Fax: (317) 592-4809
Email: Jeff.Hokanson@icemiller.com
About Aearo Technologies
Aearo Technologies, LLC -- https://earglobal.com/en -- is a 3M
company that designs, manufactures, and sells personal protection
equipment. The Indianapolis-based company serves customers
worldwide.
To address claims related to the Combat Arms Earplugs Version 2,
Aearo Technologies and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case
No. 22-02890) on July 26, 2022. In the petition filed by John R.
Castellano, as authorized signatory, Aearo Technologies listed $1
billion to $10 billion in both assets and liabilities.
The Debtors tapped Kirkland & Ellis and Ice Miller, LLP as
bankruptcy counsels; McDonald Hopkins, LLC as special counsel;
Bates White, LLC as claims valuation consultant; and AP Services,
LLC as restructuring advisor. John R. Castellano, managing director
at AlixPartners LLP, an affiliate of AP Services, serves as the
Debtors' chief restructuring officer. Kroll, LLC is the claims
agent and noticing agent.
AEARO TECHNOLOGIES: Taps Bates White as Claims Valuation Consultant
-------------------------------------------------------------------
Aearo Technologies, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Indiana to hire
Bates White, LLC as their claims valuation consultant.
The firm's services include:
(a) performing due diligence and analysis regarding the
Debtors' current, potential, and overall liability (both defense
costs and indemnity), including with respect to historical and
projected trends, econometric evaluations, market analysis, and
evaluations using other established methodologies;
(b) estimating the number and value of, and producing analysis
with respect to, present and future personal injury claims against
the Debtors;
(c) assisting the Debtors in negotiations with various parties
regarding the Debtors' liability, including by evaluating proposals
or potential proposals and providing analysis, information, and
support in connection therewith;
(d) advising the Debtors regarding the funding of any trust
that may be created pursuant to the Bankruptcy Code;
(e) advising the Debtors regarding financial issues that may
impact the valuation of certain claims;
(f) providing expert testimony and related reports, and
assisting the Debtors in preparing and evaluating reports and
testimony by other experts and consultants; and
(g) providing such other consulting services as may be
requested by the Debtors.
The firm will be paid as follows:
Partner (Dr. Charles Mullin) $1,150 per hour
Partner $700 - $1,600 per hour
Principal $575 - $750 per hour
Managing Economist $545 - $650 per hour
Managing Consultant $500 - $625 per hour
Senior Economist $475 - $550 per hour
Senior Consultant $450 - $500 per hour
Economist $460 per hour
Consultant II $390 - $425 per hour
Consultant $365 per hour
Research Analyst $365 - $460 per hour
Project Coordinator $250 - $275 per hour
Research Assistant $210 per hour
The Debtors provided the firm with a retainer totaling $450,000 for
services rendered or to be rendered, and for reimbursement of
expenses.
As disclosed in court filings, Bates White is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Charles Mullin
Bates White, LLC
2001 K Street NW
North Building, Suite 500
Washington, DC 20006
Phone: 202-408-6110
Email: charlie.mullin@bateswhite.com
About Aearo Technologies
Aearo Technologies, LLC -- https://earglobal.com/en -- is a 3M
company that designs, manufactures, and sells personal protection
equipment. The Indianapolis-based company serves customers
worldwide.
To address claims related to the Combat Arms Earplugs Version 2,
Aearo Technologies and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case
No. 22-02890) on July 26, 2022. In the petition filed by John R.
Castellano, as authorized signatory, Aearo Technologies listed $1
billion to $10 billion in both assets and liabilities.
The Debtors tapped Kirkland & Ellis and Ice Miller, LLP as
bankruptcy counsels; McDonald Hopkins, LLC as special counsel;
Bates White, LLC as claims valuation consultant; and AP Services,
LLC as restructuring advisor. John R. Castellano, managing director
at AlixPartners LLP, an affiliate of AP Services, serves as the
Debtors' chief restructuring officer. Kroll, LLC is the claims
agent and noticing agent.
AEARO TECHNOLOGIES: Taps Kirkland & Ellis as Bankruptcy Counsel
---------------------------------------------------------------
Aearo Technologies, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Indiana to hire
Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP to
serve as legal counsels in their Chapter 11 cases.
The firms' services include:
(a) advising the Debtors with respect to their powers and
duties in the continued management and operation of their business
and property;
(b) advising and consulting on the conduct of the cases,
including all of the legal and administrative requirements of
operating in Chapter 11;
(c) attending meetings and negotiating with representatives of
creditors and other parties in interest;
(d) taking all necessary actions to protect and preserve the
Debtors' estate, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which they are involved, including objections to claims filed
against the estate;
(e) preparing legal papers;
(f) representing the Debtors in connection with obtaining
authority to continue using their bank accounts;
(g) appearing before the bankruptcy court and any appellate
courts;
(h) advising the Debtors regarding tax matters;
(i) taking any necessary action to negotiate, prepare and
obtain approval of a disclosure statement and confirmation of a
Chapter 11 plan and all documents related thereto; and
(j) performing all other necessary legal services in
connection with the prosecution of the cases, including analyzing
the validity of liens against the Debtors' assets, and advising the
Debtors on corporate and litigation matters.
The firms' hourly rates are as follows:
Partners $1,135 - $1,995
Of Counsel $805 - $1,845
Associates $650 - $1,245
Paraprofessionals $265 - $495
The Debtor paid $500,000 to the firms, which constituted as an
advance payment retainer.
Chad Husnick, president of Chad J. Husnick, P.C., a partner of the
Kirkland & Ellis firms, disclosed in a court filing that the firms
are "disinterested" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firms can be reached at:
Chad J. Husnick, Esq.
Chad J. Husnick, P.C.
Kirkland & Ellis LLP
Kirkland & Ellis International LLP
601 Lexington Avenue
New York, NY 10022
Tel: +1 212 446 4734
Email: christopher.greco@kirkland.com
About Aearo Technologies
Aearo Technologies, LLC -- https://earglobal.com/en -- is a 3M
company that designs, manufactures, and sells personal protection
equipment. The Indianapolis-based company serves customers
worldwide.
To address claims related to the Combat Arms Earplugs Version 2,
Aearo Technologies and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case
No. 22-02890) on July 26, 2022. In the petition filed by John R.
Castellano, as authorized signatory, Aearo Technologies listed $1
billion to $10 billion in both assets and liabilities.
The Debtors tapped Kirkland & Ellis and Ice Miller, LLP as
bankruptcy counsels; McDonald Hopkins, LLC as special counsel;
Bates White, LLC as claims valuation consultant; and AP Services,
LLC as restructuring advisor. John R. Castellano, managing director
at AlixPartners LLP, an affiliate of AP Services, serves as the
Debtors' chief restructuring officer. Kroll, LLC is the claims
agent and noticing agent.
AEARO TECHNOLOGIES: Taps McDonald Hopkins as Special Counsel
------------------------------------------------------------
Aearo Technologies, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Southern District of Indiana to hire
McDonald Hopkins, LLC as their special counsel.
The firm will provide independent legal services to the Debtors to
assist Roger Meltzer and Jeffrey Stein, independent members of the
Debtors' Boards of Directors, in fulfilling their duties under the
June 14 resolutions issued by the Boards.
Pursuant to the resolutions, the Boards delegated to both directors
the tasks of reviewing, negotiating, evaluating, and approving a
strategic transaction; and certain rights, authority, and powers in
connection with matters pertaining to a transaction in which a
conflict of interests exists or is likely to exist between the
Debtors and any related party.
McDonald Hopkins will be paid at hourly rates for its services:
Members $375 - $960
Of Counsel $345 - $910
Associates $250 - $495
Paralegals $185 - $345
The Debtors funded a retainer for McDonald Hopkins in the amount of
$200,000.
As disclosed in court filings, McDonald Hopkins is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
David A. Agay, Esq.
McDonald Hopkins, LLC
300 N. LaSalle Street, Suite 1400
Chicago, IL 60654
Phone: 312-280-0111
About Aearo Technologies
Aearo Technologies, LLC -- https://earglobal.com/en -- is a 3M
company that designs, manufactures, and sells personal protection
equipment. The Indianapolis-based company serves customers
worldwide.
To address claims related to the Combat Arms Earplugs Version 2,
Aearo Technologies and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case
No. 22-02890) on July 26, 2022. In the petition filed by John R.
Castellano, as authorized signatory, Aearo Technologies listed $1
billion to $10 billion in both assets and liabilities.
The Debtors tapped Kirkland & Ellis and Ice Miller, LLP as
bankruptcy counsels; McDonald Hopkins, LLC as special counsel;
Bates White, LLC as claims valuation consultant; and AP Services,
LLC as restructuring advisor. John R. Castellano, managing director
at AlixPartners LLP, an affiliate of AP Services, serves as the
Debtors' chief restructuring officer. Kroll, LLC is the claims
agent and noticing agent.
AERO TECHNOLOGIES: 3M Could Lose $100B From Suits, Says Expert
--------------------------------------------------------------
Steven Church of Bloomberg News reports that 3M Co. faces more than
$100 billion in losses and bankruptcy because of lawsuits brought
by veterans who blame their hearing problems on faulty earplugs,
according to a litigation consultant hired by lawyers suing the
industrial conglomerate.
Initial results from a handful of test cases shows 3M would be
swamped by losses should the more than 230,000 lawsuits related to
the company's military earplugs business go forward, the
plaintiff's adviser J.B. Heaton testified in bankruptcy court
Tuesday.
"It is more and more likely within the next several years we'll see
a 3M bankruptcy, yes," Heaton told U.S. Bankruptcy Judge Jeffrey
Graham.
A full-text copy of the article is available at
https://news.bloomberglaw.com/bankruptcy-law/3m-faces-100-billion-in-losses-from-veteran-suits-expert-says?context=search&index=12
About Aearo Technologies
Aearo Technologies -- https://earglobal.com/en -- is a 3M company
that designs, manufactures, and sells personal protection
equipment. The Company offers prescription and non-prescription
safety eye wear, face shields, hard hats, and respirators. Aearo
serves customers worldwide.
To address claims related to the Combat Arms Earplugs Version 2,
Aearo Technologies LLC and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case
No. 22-02890) on July 26, 2022. In the petition filed by John R.
Castellano, as authorized signatory, Aearo Technologies estimated
assets and liabilities between $1 billion and $10 billion each.
3M is not a debtor in the Chapter 11 cases. 3M has committed $1
billion to fund a trust allocated for Combat Arms claims.
Kirkland & Ellis LLP is serving as legal counsel and AlixPartners
LLP is serving as restructuring advisor to Aearo Technologies. Ice
Miller LLP, is serving as bankruptcy co-counsel to the Debtors.
Kroll is the claims agent.
PJT Partners is serving as financial advisor and White & Case LLP
is serving as legal counsel to 3M.
ALLEGIANT TRAVEL: Egan-Jones Retains B Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company, on August 12, 2022, retained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Allegiant Travel Company.
Headquartered in Las Vegas, Nevada, Allegiant Travel Company
operates as a leisure travel company.
ANDOVER SENIOR: Wins Cash Collateral Access on Final Basis
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Kansas extended a
prior order authorizing Andover Senior Care, LLC to continue using
cash collateral for its operating expenses on a final basis.
The Debtor sought entry of a final order on its Motion to: (1)
Extend Prior Interim Order Authorizing Use of Cash Collateral (Dkt.
85); (2) Authorize Payment from Cash Collateral of Additional
Accounting Expense for June 2022; and (3) Authorize Debtor to
Disburse Employee Retention Bonuses.
On July 5, 2022, the Court entered its Third Interim Order on the
Motion of the Debtor to: (1) Extend Prior Interim Order Authorizing
Use of Cash Collateral; (2) Authorize Payment from Cash Collateral
of Additional Accounting Expense for June 2022; and (3) Authorize
Debtor to Disburse Employee Retention Bonuses.
On July 7, 2022, the Third Interim Order was served upon the United
States Trustee, all of the Debtor's creditors, the Debtor, and all
other parties who had filed a request for notice in the matter.
No objections were filed to the Third Interim Order becoming a
Final Order.
A copy of the order is available at https://bit.ly/3TbOXn6 from
PacerMonitor.com.
About Andover Senior Care, LLC
Andover Senior Care, LLC owns and operates an assisted living
facility in Andover, Kansas. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No.
22-10139 ) on March 11, 2022. In the petition signed by Dennis L.
Bush, managing member, the Debtor disclosed up to $10 million in
assets and up to $50 million in liabilities.
Judge Mitchell H. Herren oversees the case.
Mark Lazzo, Esq., at Mark J. Lazzo, Attorney At Law is the Debtor's
counsel.
BED BATH & BEYOND: To Hire Kirkland & Ellis to Help Debt Load
-------------------------------------------------------------
Bed Bath & Beyond Inc., the Union, NJ-based home goods chain, hired
law firm Kirkland & Ellis to help it address a debt load that's
become unmanageable, and is late on its payments to vendors,
leading some to restrict shipments or halt them altogether,
according to a Bloomberg report.
Kirkland, typically known for its dominance in restructuring and
bankruptcy situations, was tapped to advise the retailer on options
for raising new money, refinancing existing debt, or both,
according to the person, who asked not to be named discussing
private company plans, Bloomberg said..
Much of Bed Bath & Beyond's bonds and loans are trading at
distressed levels.
"If the company does not secure adequate financing to appease its
vendor base, it might have not appropriate inventory for the key
holiday period, leading to a fast downward spiral and creating
bankruptcy risk," according to a note by Wedbush analyst Seth
Basham, The New York Post said.
The Post notes that a cascade of bad news for the retailer was
ignited last week when billionaire investor Ryan Cohen pulled his
stake out of Bed Bath & Beyond, bagging a $68.1 million profit.
Bed Bath & Beyond shares tumbled 41% on Friday after news of the
stake sale by Cohen, an influential investor among the Reddit crowd
who founded Chewy.com and who also is chairman of video game
retailer GameStop.
It's unclear what prompted Cohen to sell his position in the
company, which forced out its CEO in June due to the company's
subpar performance. Cohen had successfully pushed for the company
to add three new board directors and has also urged the retailer to
sell itself. Cohen purchased more than 7 million shares of Bed
Bath & Beyond earlier this year.
There is concern that the company may not have enough cash and that
vendors will demand payment upfront before shipping the struggling
retailer goods.
About Bed Bath & Beyond
Bed Bath & Beyond Inc., together with its subsidiaries, is an
omnichannel retailer selling a wide assortment of merchandise in
the Home, Baby, Beauty & Wellness markets and operate under the
names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face
Values. The Company also operates Decorist, an online interior
design platform that provides personalized home design services.
The Company reported a net loss of $559.62 million for the fiscal
year ended Feb. 26, 2022, a net loss of $150.77 million for the
year ended Feb. 27, 2021, a net loss of $613.82 million for the
year ended Feb. 29, 2020, and a net loss of $137.22 million for the
year ended March 2, 2019. As of May 28, 2022, the Company had
$4.94 billion in total assets, $5.16 billion in total liabilities,
and a total stockholders' deficit of $220.30 million.
BED BATH: Egan-Jones Retains CCC+ Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on August 12, 2022, retained its 'CCC+'
foreign currency and local currency senior unsecured ratings on
debt issued by Bed Bath & Beyond Inc. EJR also downgraded the
rating on commercial paper issued by the Company to C from B.
Headquartered in Union, New Jersey, Bed Bath & Beyond Inc. operates
a nationwide chain of retail stores.
BOSTON SCIENTIFIC: Egan-Jones Retains BB+ Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on August 10, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Boston Scientific Corporation.
Headquartered in Marlborough, Massachusetts, Boston Scientific
Corporation develops, manufactures, and markets minimally invasive
medical devices.
BOY SCOUTS: Plan Changes to Pave Way for Chapter 11 Exit
--------------------------------------------------------
Daniel Gill of Bloomberg Law reports that the Boy Scouts of
America's reorganization plan creating a sex abuse victims fund of
more than $2 billion is back on track for likely court approval
following revisions to a controversial piece of the deal involving
the Mormon church.
The youth organization modified the plan on Aug. 12, 2022, to
change how the Church of Jesus Christ of Latter-Day Saints, which
sponsored scouting activities and was named as a defendant in some
abuse lawsuits, will be treated. In doing so, the Boy Scouts won't
get the church's previously proposed contribution of $250 million
to the settlement fund.
The plan amendment came after Judge Laurie S. Silverstein of the US
Bankruptcy Court for the District of Delaware in July approved most
of the plan but ruled that the legal protections to be given the
Mormon church in exchange for a $250 million contribution went too
far. Under the amended plan, which aims to resolve decades worth
of scouting-related sex abuse claims, the church will receive more
limited protections.
Though some questions about the plan still remain, the change to
the Mormon church provision appears to be an effort to mollify the
judge.
The court expected "the debtors and plan proponents and others to
come back with a [plan] confirmation order which excludes
problems," said Ted Gavin, managing director of Gavin/Solmonese
LLC, a turnaround and restructuring firm.
Controversial Releases
The Mormon church has a long history with the Boy Scouts, in 1913
becoming the first official charter of the organization, according
to the church's Web site.
"The Mormon church was Boy Scouts' dominant sponsoring
organization, until it began allowing gay members," Gavin said.
The bankruptcy plan provides liability releases to a number of
non-bankrupt entities also facing exposure for alleged sexual
abuse, including local scouting councils and sponsoring
organizations, such as schools or churches. The extent of those
liabilities shifts depending on whether the "chartered
organization" contributes to the victims fund under a settlement
with the Boy Scouts and a committee of tort claimants representing
the abuse victims.
The plan initially provided that the Mormon church would receive
releases for all sexual abuse claims -- not just those that arose
in the context of Boy Scouts activities. Under the revised plan,
the church will only be released from scouting-related abuse claims
that accrued after 1976, in exchange for giving the Boy Scouts any
rights to insurance payments and waiving any indirect claims
against the organization.
The plan offers differing results for victims, depending on the
extent of their damages and their ability to prove them.
"For some victims it’s a great result," Gavin said. “For
others, maybe they could do better if they litigated their claims
separately, but this is what bankruptcy does—it channels the
claims into the same funnel, good and bad, varying degrees of
injury, different kinds of proof.”
No Plan 'Blow Up'
When Silverstein declined to approve the plan in its entirety, "the
case didn't blow up; there's still going to be a plan," said
Clifford White III, who recently retired after serving 17 years as
the director of the Executive Office of the US Trustee, the Justice
Department's bankruptcy watchdog branch.
'It rarely happens that a plan will just become undone when a judge
says 'no,'" White said. "The parties will find a way to make it
work."
A similar situation arose in the Purdue Pharma L.P. bankruptcy,
Gavin noted. When a New York bankruptcy court wouldn't initially
approve releases for members of the Sackler family who owned and
controlled the opioid manufacturer, the Sacklers subsequently found
a couple billion dollars more to contribute for the existing
settlement -- enough for creditors and the bankruptcy judge to
approve the deal.
Additionally, in the Purdue case, the judge "scaled back the
releases that the Sacklers were to get, which made it clear that
events that weren’t tied to the debtor’s business weren't going
to be released," said attorney Catherine Steege of Jenner & Block
LLP. Steege represented USA Gymnastics, which went through Chapter
11 to create the means to handle hundreds of sexual abuse claims.
But Silverstein is breaking from Purdue by emphasizing in her
opinion that "this is not a case in which the perpetrators are
released," White said.
What's Next
In some bankruptcy cases, a judge will require the debtor to
distribute new disclosures and conduct a whole new vote of
creditors following plan modifications. It remains to be seen
whether any party -- or the judge -- will seek to take that step.
It's a question of whether the modification is "material," Steege
said. She thinks it's unlikely that the court will require new
disclosures and voting.
"The judge wrote the opinion so that they could say it's not a
material modification," Steege said of the change to the Mormon
church's treatment.
It's also unclear whether anyone will appeal should the court
approve the modified plan. Although the plan was previously
approved by a majority of claim-holders, some voted against the
plan and objected to confirmation.
A number of insurance companies that didn't settle with the Boy
Scouts and the tort committee may appeal. Those insurers opposed
the authority the plan gave the victims trust to determine the
value of individual tort claims.
"I think insurers will appeal, at least for leverage," Steege
said.
In the USA Gymnastics case, some dissenting insurance companies
appealed the plan approval, she said. The settling insurers then
refused to make required plan payments for fear of facing exposure
to demands for contributions from non-settling insurance
companies.
Ultimately, USA Gymnastics got a stipulation that allowed the
settling insurers to make the payments called for in the plan, she
said.
The Boy Scouts’ non-settling insurers might still be looking for
a better deal, Steege said.
The case is In re Boy Scouts of America, Bankr. D. Del., No.
20-10343, 8/16/22.
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.
BRODIE HOLDINGS: Joint Modified Liquidating Plan Confirmed by Judge
-------------------------------------------------------------------
Judge Thomas J. Catliota has entered findings of fact, conclusions
of law and order consensually confirming the Joint Modified Chapter
11 Plan of Liquidation of Brodie Holdings, LLC and its Debtor
Affiliates filed by the Chapter 7 Trustee for Harry Kaiser and the
Curator for the Probate Estate of Beatrice Brodie, Paul M. Cowan,
the Guardian Barbara Reiser and Liz Messianu, Court Appointed
Counsel for the Ward Mindell Brodie, (the "Plan Proponents" or
"Proponents").
The Disclosure Statement complies with the requirements of
Bankruptcy Rule 3016(c) by sufficiently describing in specific and
conspicuous bold language the provisions of the Plan that provide
for releases and injunctions against conduct not otherwise enjoined
under the Bankruptcy Code and sufficiently identifies the persons
and entities that are subject to the releases and injunctions.
The Plan Proponents have complied with all applicable provisions of
the Code, as required by § 1129(a)(2), including §1125 and Rules
3017, 3017.1, and 3018. The procedures by which the ballots for
acceptance or rejection of the Plan were solicited and tabulated
were fair, properly conducted and in accordance with §1126, Rules
3017, 3017.1, and 3018 and the Hearing Notice Order.
The Plan Proponents have proposed the Plan in good faith and not by
any means forbidden by law, thereby satisfying § 1129(a)(3). In
determining that the Plan has been proposed in good faith, the
Court has examined the totality of the circumstances surrounding
formulation of the Plan. The Plan is the product of arm's-length
negotiation between the Plan Proponents, the Debtors and the
Debtors' creditors.
The Proponents have established, with credible evidence, that the
Plan is feasible and thus satisfies the requirements of §
1129(a)(11).
A copy of the Plan Confirmation Order dated August 18, 2022, is
available at https://bit.ly/3PIR9zy from PacerMonitor.com at no
charge.
Chapter 7 Trustee for Harry Kaiser:
Morgan W. Fisher, #28711
Law Offices of Morgan Fisher, LLC
18 West St
Annapolis, MD 21401
410-626-6111
mwf@morganfisherlaw.com
About Brodie Holdings
Chestertown, Md.-based Brodie Holdings, LLC filed a petition for
Chapter 11 protection (Bankr. D. Md. Case No. 21-16309) on Oct. 5,
2021, listing as much as $10 million in both assets and
liabilities. Harry Kaiser, managing member, signed the petition.
Judge Thomas J. Catliota oversees the case.
The Debtor tapped Tate M. Russack, Esq., at RLC, PA Lawyers &
Consultants as legal counsel and Larry Strauss, Esq., CPA and
Associates, Inc. as accountant.
On Feb. 22, 2022, the court approved the appointment of Zvi Guttman
as Chapter 11 trustee. The trustee tapped Shapiro Sher Guinot &
Sandler as bankruptcy counsel; Gunster Yoakley & Stewart, PA as
litigation counsel; and A & G Realty Partners, LLC as real estate
advisor.
BUCKINGHAM TOWER: Wins Interim Cash Collateral Access
-----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Buckingham Tower Condominium, Inc. f/k/a Buckingham
Owners, Inc., to use cash collateral on an interim basis in
accordance with the budget.
The Debtor requires the use of cash collateral for continued
preservation and maximization of its estate.
Titan Capital ID, LLC has asserted a fully perfected first priority
security interest pursuant to 11 U.S.C. Sections 363(c)(2) and 361
and Federal Rules of Bankruptcy Procedure 4001.
The Debtor will make adequate protection payments to Titan for July
2022 and August 2022 in the amount of $12,000 per month or $24,000
in the aggregate on or before August 31, 2022. The Debtor will make
continued Adequate Protection Payments to Titan on or before the
15th of each successive month thereafter (ie September 15, 2022,
October 15, 2022). Titan's acceptance of the Adequate Protection
Payments will not be deemed a waiver or modification of any of its
rights under the Loan Documents.
No later than 10 days following entry of the Order, the Debtor will
make payment to the City of Yonkers representing payment in full of
all real property taxes, late fees and interest that have accrued
post-petition. Proof of such payment will be provided to Titan's
counsel within three business days of such payment.
In addition to the existing rights and interests of Titan in the
Collateral and for the purpose of adequately protecting it from any
diminution of value therein, Titan is granted, as of the Petition
Date: (a) valid, enforceable, unavoidable, and fully perfected
replacement liens upon all existing and after-acquired tangible and
intangible personal and real property and assets of the Debtor of
any kind or nature, whether existing prior to or acquired after the
Petition Date and wherever located, and all products and proceeds
of all of the foregoing, only to the extent that said prepetition
liens are deemed valid, perfected and enforceable as of the
Petition Date, and (b) a super-priority administrative expense
claim under sections 503(b) and 507(b) of the Bankruptcy Code,
subject only to: (i) the fees of the Subchapter V Trustee, counsel
for the Debtor, the Debtor's accountant and any other professionals
authorized to act on behalf of the Debtor in an amount not to
exceed $25,000, as approved by the Bankruptcy Court; and (ii) the
fees and commissions of a Chapter 7 trustee, in the event that this
chapter 11 case is converted to one under chapter 7 not to exceed
$10,000.
The security interests and liens granted and regranted: (i) are in
addition to all security interests, liens and rights of set-off
existing in favor of Titan on the Petition Date; (ii) will secure
the payment of indebtedness to Titan in an amount equal to the
aggregate cash collateral used or consumed by the Debtor and any
diminution in the value of the Collateral; and (iii) will be deemed
to be automatically perfected without the necessity of any further
action by Titan or the Debtor.
These events constitute an "Event of Default:"
a. use of cash collateral outside the Budget;
b. failure to pay, timely and in full, the Adequate Protection
Payments, real property taxes or any insurance premiums; and
c. failure to comply with any of the dates and deadlines
contained in the Order.
A further interim hearing on the matter is set for September 7,
2022 at 11 a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3QKYsrY from PacerMonitor.com.
The Debtor projects $30,894 in total receipts and $30,894 in total
expenses.
About Buckingham Tower Condominium
Buckingham Tower Condominium Inc., a condominium association, is in
the business of owning and managing the common areas of the
premises at 615 Warburton Avenue, Yonkers, NY and also owning and
managing 25 sponsored apartment buildings . Each apartment is worth
approximately $165,000.
Buckingham Tower Condominium Inc. filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y.
Case No. 22-22403) on June 30, 2022. In the petition filed by Jose
Guerrero, as president, the Debtor estimated assets and liabilities
between $1 million and $10 million.
Judge Sean H. Lane oversees the case.
Anne J. Penachio, Esq., at Penachio Malara LLP, is the Debtor's
counsel.
CELSIUS NETWORK: Mashinsky Took Over Trading Prior to Bankruptcy
----------------------------------------------------------------
Alex Mashinsky intervened on Celsius Network's trading decisions in
the months leading up to the firm's collapse, a Tuesday Financial
Times report has claimed.
According to the report, the Celsius CEO took reign over the firm's
trading strategy in January ahead of a Federal Reserve meeting.
According to unnamed sources familiar with the matter, Mashinsky
feared that crypto prices would suffer if the Fed hiked interest
rates and decided to overrule senior traders with decades of
experience. In one instance, the sources claimed, he ordered the
crypto lender's trading team to sell hundreds of millions of
dollars worth of Bitcoin, and the firm bought back the funds the
following day at a loss. The report alleges that Celsius lost $50
million through trading in January alone.
The sources also said that Mashinsky had multiple clashes with the
firm's former chief investment officer Frank van Etten over trading
decisions and his intervention in the firm's trading strategy. Van
Etten left Celsius in February.
The Financial Times report comes after months of turbulence at
Celsius. In June, it emerged that the crypto lender was facing an
insolvency crisis when it halted customer withdrawals. The firm
filed for Chapter 11 bankruptcy a month later, revealing a $1.2
billion hole in its balance sheet stemming from lost bets on Terra,
Lido's staked-Ethereum token, Grayscale's GBTC fund, and loans to
the now-defunct hedge fund Three Arrows Capital.
In the fallout from Celsius' implosion, the firm has faced a number
of controversies with Mashinsky at the center of the drama. One
former executive alleged that the firm manipulated the price of its
CEL token prior to its collapse, and the firm was criticized when
its recovery plan revealed that it was hoping for a bull market to
honor its debts. According to Celsius' terms of use, clients gave
the firm the right “to use, sell, pledge, and rehypothecate"
their assets when they deposited their funds. This means that those
customers may never see their funds again.
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.
Kirkland & Ellis LLP is serving as legal counsel, Centerview
Partners is serving as financial advisor, and Alvarez & Marsal is
serving as restructuring advisor to Celsius.
Stretto, the claims agent, maintain the page
https://cases.stretto.com/celsius
CELSIUS NETWORK: Taps Alvarez & Marsal as Financial Advisor
-----------------------------------------------------------
Celsius Network, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Alvarez & Marsal North America, LLC as their financial advisor.
The firm will provide these services:
(a) assist in the development and management of a 13-week cash
flow forecast;
(b) assist in evaluation of the Debtors' current business plan
and in preparation of a revised operating plan if necessary;
(c) assist with the Debtors' communications with lenders, and
other creditors with respect to the Debtors' strategic, financial
and operational matters;
(d) assist the Debtors and counsel in the preparation of
motions, pleadings and other activities and materials necessary to
implement a chapter 11 filing, if required;
(e) assist with the preparation of financial related
disclosures required by the Court, including the Schedules of
Assets and Liabilities, the Statement of Financial Affairs and
Monthly Operating Reports;
(f) assist with information and analyses required for the
Debtors' potential Debtor-In-Possession financing including, but
not limited to, preparation of budgets and forecasts, sizing of a
potential DIP Financing facility, and preparation for hearings
regarding the use of cash collateral and/or DIP Financing;
(g) assist with identification of executory contracts and
leases and performance of cost/benefit evaluations with respect to
the assumption or rejection/disclaimer of each;
(h) assist in the preparation of financial information for
distribution to creditors and others, including, but not limited
to, cash flow projections and budgets, cash receipts and
disbursements analysis, analysis of various asset and liability
accounts, and analysis of proposed transactions for which Court
approval is sought;
(i) attend meetings and assist in discussions with potential
investors, banks and other lenders, the Committee, the U.S.
Trustee, other parties in interest and professionals hired by the
same, as requested;
(j) analyze creditor claims by type, entity and individual
claim, including assistance with development of a database to track
such claims if needed;
(k) assist with evaluation and analysis of avoidance actions,
including fraudulent conveyance and preferential transfers;
(l) provide testimony before the Court with respect to
financial and restructuring matters within the purview of A&M;
(m) assist the Debtors and counsel in preparing plans,
disclosure statements and other court materials and pleadings;
(n) assistance with regulatory, compliance, and BSA/AML,
sanctions, and terrorist financing matters, including
communications with regulators, and assistance with due diligence,
as appropriate;
(o) attend meetings and assist in discussions with Debtors'
representatives, counsel, regulators, creditors, debtors, and other
parties in interest and professionals with respect to the impact of
regulatory and compliance matters and potential claims; and
(p) other activities as are approved by the Debtors, its
officers, and agreed to by A&M.
The firm will be paid at these rates:
Managing Directors $975 - $1,295 per hour
Directors $750 - $950 per hour
Analysts/Associates $425 - $750 per hour
In the 90 days prior to the Debtors' bankruptcy filing, Alvarez &
Marsal received retainers and payments totaling $200,000.
Robert Campagna, managing director at Alvarez & Marsal, disclosed
in a court filing that his firm is a "disinterested person" as
defined by Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Robert Campagna
Alvarez & Marsal North America, LLC
600 Madison Avenue, 8th Floor
New York, NY 10022
Tel: +1 212 759 4433
Fax: +1 212 759 5532
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.
The Debtors tapped Joshua A. Sussberg, Esq., at Kirkland & Ellis,
LLP as legal counsel and Alvarez & Marsal North America, LLC as
financial advisor. Stretto, the claims agent, maintains the page
https://cases.stretto.com/celsius
CELTIC PIG LLC: Food Truck Files for Chapter 11 Bankruptcy
----------------------------------------------------------
Michael L. Jones of Louisville Business First reports that the
owners of a popular Louisville food truck, Celtic Pig LLC, filed
for bankruptcy.
The Celtic Pig LLC, which operates a food truck by the same name,
filed for Chapter 11 bankruptcy protection with the U.S. District
Court of Western District of Kentucky on Aug. 11, 2022.
Sam Bracken III, co-owner of the Celtic Big BBQ food truck,
declined to comment for this story. Bracken said he wanted to
handle the situation in private. However, his partner Melissa
Ingram set up a GoFundMe campaign seeking $100,000 to aid the
business. It's raised over $5,000 so far.
The company's former landlord has repossessed Celtic Pig's food
truck, according to an Aug. 1 post on its Facebook page, which
linked to the crowdfunding campaign.
"The Celtic Pig food truck is in trouble. Melissa and I are in
trouble," Bracken wrote in the post. "Our former landlord from our
restaurant that Covid killed has gotten a court order and has taken
our food truck. He is also coming after our house.
"We are trying to meet our obligations for events by operating out
of a tent or something, but the truck was in the shop for a week
before it was seized, so we haven't been able to generate funds to
buy product for our big gig this weekend, and now we have lawyer
fees on top of everything."
Derek Steinbrecher, corporate managing director of Ice House Lofts,
said his company got a judgment against the Celtic Pig in November
2021(regarding the food truck), but he couldn't provide further
details because of ongoing litigation.
Bracken and Ingram founded The Celtic Pig BBQ food truck in 2015.
Prior to launching the business, they were an amateur BBQ team
winning competitions using what they called a "steampunk" smoker
made out of odds and ends from backyard barbecues.
About Celtic Pig LLC
Celtic Pig LLC is a limited liability company that owns the Celtic
Big BBQ food truck in Louisville, Kentucky.
Celtic Pig LLC filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Ky. Case No.) on
August 11, 2022. Chapter 11 protection enables a business to
restructure its creditor obligations to keep the business alive and
pay back its debts over time. In the petition filed by Samuel J.
Bracken, III, as sole member, the Debtor reports estimated
liabilities between $100,000 and $500,000.
Charity S. Bird has been appointed as Subchapter V trustee.
Michael W. McClain, of Goldberg Simpson LLC, is the Debtor's
counsel.
CHRISTIAN HORIZONS: Fitch Cuts IDR to 'BB', Outlook Negative
------------------------------------------------------------
Fitch Ratings has downgraded the Issuer Default Rating two notches
to 'BB' from 'BBB-' for Christian Horizons, formerly known as
Christian Homes (CH). In addition, Fitch has downgraded
approximately $24 million series 2021A and 2021B bonds and $66.690
million series 2016 and 2018 outstanding bonds previously issued
through various authorities on behalf of CH to 'BB' from 'BBB-".
The Rating Outlook is Negative.
SECURITY
The bonds are secured by a pledge of gross revenues, first lien
mortgage and security interest in the facilities, and a debt
service reserve fund.
ANALYTICAL CONCLUSION
The two-notch downgrade to 'BB' reflects CH's significantly
deteriorated liquidity position that has left CH with a very thin
financial cushion to weather additional operational headwinds.
Cash-to-adjusted debt fell to 44% at the end of 2022 (FYE June 30)
from 84% in 2021. Operating losses and unrealized investment losses
drove the $30 million decrease in unrestricted liquidity in 2022,
which represented close to 50% of their unrestricted cash position
at FYE 2021. Fitch does not expect liquidity to recover over the
Outlook period.
The Negative Outlook reflects Fitch's expectation that labor and
inflation-related operating pressures will continue over the
Outlook period, likely pushing debt service coverage ratio (DSCR)
and days cash on hand (DCOH) below the covenant required minimums
of 1.2x and 100 days, respectively. Per management's calculations,
CH satisfied its liquidity and rate covenants in 2022, but this was
largely due to a series of one-time items including forgiveness of
a Paycheck Protection Program (PPP) loan and proceeds from a
lawsuit settlement.
Historically consistent operating performance softened during the
coronavirus pandemic and is not expected to recover to pre-pandemic
levels. Skilled nursing facility (SNF) beds comprise most of CH's
unit mix (979 SNF beds/1,604 total units). The pandemic disrupted
this business line across the sector; initially when elective
surgeries and patient intakes were suspended, then later with a
scarcity of clinical staff. Increased nursing costs have led CH to
limit SNF admissions despite increased demand. Though more cost
management initiatives are required to stop operating losses.
Management is looking for opportunities to grow its independent
living (IL) and assisted living (AL) business lines, to ultimately
reduce its reliance on SNF. However, it may take several years to
materially alter CH's unit mix.
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
Sizable Multi-Campus Senior Living Provider
The midrange revenue defensibility assessment reflects both the
scale and modest geographic diversity of CH, as the obligated group
includes four LPCs in Illinois, two in Indiana, one in Missouri and
one in Iowa. Within the OG CH has 355 IL units, 270 AL units, and
979 skilled nursing beds. This strength is balanced against the
relative weakness of each of these markets with predominantly
shrinking populations and median household incomes below state and
national averages, and generally soft demand across the obligated
group.
Historically, demand has been somewhat soft at CH, with IL
occupancy averaging 87% over the last five years. Due to the
pandemic, AL and skilled nursing occupancies fell in June of 2021
to 69% and 72% from levels in the mid-80% range respectively. In
2022, AL and SNF occupancy further softened to 68% and 66% on
average. Decreased SNF occupancy in 2022 reflects increased labor
pressure as staffing shortages prompted CH to limit SNF admissions.
Fitch expects SNF occupancy to remain well below historical
averages over the outlook period.
Overall, CH has a demonstrated history of regular fee and rate
increases, and according to Zillow data, CH's typical entrance fee
is affordable relative to prevailing housing prices in CH's
separate market areas.
Operating Risk: 'bbb'
Persistent Operating Pressures
CH's operating performance depends largely on SNF operations given
CH's unit mix is predominantly SNF beds. The midrange operating
risk assessment is based on Fitch's expectation that management
will improve cost containment measures by reducing its reliance on
agency nursing and Medicaid.
Before the coronavirus pandemic, CH exhibited good cost management
metrics with operating ratios around 92% and net operating margins
(NOM) above 10%. Core operating performance softened during the
pandemic, though recognition of approximately $13 million CARES Act
and State funding in 2020 and 2021 bolstered profitability margins
softened by lower skilled nursing and personal care occupancies.
Without including the approximately $9 million in forgiven PPP
loans in 2022, CH's operating ratio was 111%, NOM was negative 8.9%
and NOM-adjusted was negative 7.1%. Additional CARES Act support is
unlikely in 2023 and a continuation of the operating trends from
2020 through 2022 will negatively pressure the rating.
Given operating stress, CH has suspended its expansion plans for
the Crown Point campus and capital expenditures are expected to
remain near historical averages of about 80% of depreciation.
Average age of plant is somewhat soft for the midrange assessment
at 15 years.
CH's capital-related metrics are midrange, with revenue-only
proforma maximum annual debt service (MADS) coverage averaging 1.3x
over the last five years and MADS representing 6.6% of 2022
revenues. Debt-to-net available has been good historically,
generally about 5.5x, and was weaker in 2021 and 2022.
Financial Profile: 'bb'
Operating Losses Weaken Liquidity
Given CH's midrange revenue defensibility and midrange operating
risk assessments and Fitch's forward-looking scenario analysis,
Fitch expects key leverage metrics to remain consistent with the
weak financial profile, throughout the current economic and
business cycle. As of YE 2022, CH had unrestricted cash and
investments of approximately $28 million (compared to an average of
$54 million from 2017 through 2021), resulting in cash-to-adjusted
debt of 44% (compared to an average of 68% from 2017 through
2021).
Fitch's baseline scenario, which is a reasonable forward look of
financial performance over the next several years given current
economic expectations, shows CH maintaining operating and financial
metrics that are largely consistent with the below investment-grade
rating and with operating ratios in the high 90% range and NOM near
5%. Capital spending is expected to remain consistent with
historical levels, near $5 million annually. Fitch's forward look
assumes an economic stress (to reflect both operating and equity
volatility). The equity stress is specific to CH's asset
allocation.
CH's cash-to-adjusted debt deteriorates significantly in Fitch's
stress case scenario, which reflects both operating and financial
market volatility (specific to CH's asset allocation). This
indicates that the severe liquidity deterioration CH experienced in
FY 2022 has left it vulnerable to further credit deterioration in
the face of additional operational headwinds, underscoring the
multi-notch downgrade and Negative Outlook.
Asymmetric Additional Risk Considerations
CH's Medicaid revenues consistently exceed 25% (generally near 50%)
of health care revenues, and therefore constitute an asymmetric
risk consideration. CH's 'operating risk' is constrained to some
degree by its high exposure to Medicaid, which has constituted more
than 50% of CH's health care revenues from 2020 through 2022.
Health care revenue consistently makes up most of CH's revenue
(about 80% for 2020 through 2022). CH remains focused on growing
the unit mix of the system with more IL units (ILUs) and AL units
(ALUs) and decreasing its SNF.
As an additional asymmetric risk consideration, Fitch-calculated
DCOH was 98 days at the end of 2022 (CH calculated 100 DCOH), which
constrains CH's financial profile. Fitch does not expect CH to
reach 200 DCOH (the threshold for an asymmetric risk consideration)
over the Outlook period.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Positive rating action is unlikely over the Outlook period.
However, the Outlook may be revised to stable if operating
ratios stabilize below 100% and cash-to-adjusted debt
stabilizes above 45% and CH meets all of its covenants.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Further deterioration in liquidity such that cash-to-adjusted
debt is sustained below 40%;
-- Operating ratios sustained above 100% and NOM below 3%;
-- Failure to meet covenant minima (DSCR of 1.2x, DCOH >100).
CREDIT PROFILE
CH is a large senior living system that operates 10 facilities in
Illinois, Indiana, Iowa and Missouri. CH's parent company changed
the organization's brand name to Christian Horizons in January
2017. Fitch's analysis is based upon CH's obligated group, which
includes eight facilities with 355 ILUs, 270 ALUs and 979 SNF beds.
Total obligated group operating revenue equaled approximately $97
million in fiscal 2022.
Rating Prior
------ -----
Christian Homes, Inc. (IL) LT IDR BB Downgrade BBB-
Christian Homes, Inc. (IL)
/General Revenues/1LT LT BB Downgrade BBB-
CLAIRMONT PLACE: No Decline in Resident Care, 4th PCO Report Says
-----------------------------------------------------------------
Melanie S. McNeil, Esq., the duly appointed Patient Care Ombudsman
for Clairmont Place Condominium Association, Inc., filed with the
U.S. Bankruptcy Court for the Northern District of Georgia a Fourth
Report on the Debtor's health care facility.
The Montclair was visited on July 22, 2022, and the Ombudsman
Representative did not receive any complaints. The residents and
family members with whom the Ombudsman Representative visited
expressed satisfaction with the facility, staff, and care.
The Ombudsman Representative observed that the facility appeared
clean with no noticeable odors or maintenance issues. Food and
supplies appeared adequate. No decline in resident care was noted
since the last visit.
No new survey information has been added since the most recent
survey report available for The Montclair dated more than two years
ago on April 7, 2020, for an infection control survey in which no
deficiencies were found. The last routine health survey, dated
October 22, 2019, was noted in the prior reports.
The Patient Care Ombudsman is not aware of any significant change
in facility conditions or decline in resident care for this
personal care home since the appointment of the Patient Care
Ombudsman.
A copy of the Fourth Ombudsman Report is available for free at
https://bit.ly/3QSOCUI from PacerMonitor.com.
The Ombudsman may be reached at:
Melanie S. McNeil, Esq.
Office of the State Long-Term Care Ombudsman
2 Peachtree Street NW, 33rd Floor
Atlanta, GA 30303
Telephone: (404) 657-5327
(404) 416-0211
Facsimile: (404) 463-8384
E-mail: Melanie.McNeil@osltco.ga.gov
About Clairmont Place Condominium Association Inc.
Clairmont Place Condominium Association, Inc. sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
21-58123) on Oct. 29, 2021, listing up to $1 million in assets and
up to $10 million in liabilities. Judge Lisa Ritchey Craig oversees
the case.
Shayna Steinfeld, Esq., at Steinfeld & Steinfeld, PC is the
Debtor's legal counsel.
Melanie S. McNeil, Esq., from the Office of the State Long-Term
Care Ombudsman, has been appointed as patient care ombudsman.
CLUB 77 BAR: Unsecured Creditors Will Get 5% of Claims in 60 Months
-------------------------------------------------------------------
Club 77 Bar & Grill, Inc. filed with the U.S. Bankruptcy Court for
the Western District of New York a Chapter 11 Disclosure Statement
and Plan of Reorganization dated August 18, 2022.
Club 77 Bar operates a bar and grill at 1614 Broadway in the city
of Buffalo since 2010.
The Chapter 11 petition was filed in October 2021 was filed to stay
the enforcement of collection activities against the debtor by the
New York State Department of Taxation and Finance. The debtor has
one shareholder and proprietor, Charles Hargrove, who also owns and
resides in the building at 1614 Broadway and is a current Ch.13
debtor (19-11266) which currently is paying off the delinquent real
property taxes accrued against the 1614 address.
The proposed Plan will enable the Debtor to continue operating as a
corporation, operating the bar at 1614 Broadway, Buffalo, NY, while
satisfying the claims of its creditors over a 5 year period. Debtor
plans to pay all secured and priority claims 100% and allowed non
priority and unsecured claims at a rate of 5% over the life of the
Plan.
Debtor's plan of reorganization will include making substantial
monthly payments on the pre-petition debt over 5 years and using
the bar proceeds to fund the Plan. Current financials show Debtor's
revenues are recovering from the pandemic shutdown and from further
business interruptions in early 2022 from a personal bout with
Covid, family emergencies and serious roofing issues to the
building causing temporary shutdown of the bar. Debtor believes
that putting these issues behind him, that current and future
revenues are capable of funding a plan.
Since the Petition Date, Debtor has concentrated its efforts into
operating and managing the bar profitably to generate sufficient
income to fund the attached Plan of Reorganization. The Debtor
believes the business will have annual revenues of $110,000 with
overhead and yearly overhead and taxes of about $80,000.
Class 1 consists of Priority Taxes. The Debtor owes priority debt
of $250 in quarterly US Trustee Fees that are current. The
outstanding US Trustee Fees, if any, shall be paid on the Effective
date of the Plan, 20 days from confirmation. This class is
unimpaired.
Class 2 consists of Secured Claims. This class is impaired. Under
Section 507 of the U.S. Bankruptcy Code, Debtor owes an aggregate
amount of $8500 in secured tax debt to the Internal Revenue
Service. This debt will be paid over 60 months at 3% annual
interest but should be satisfied well before the maximum time
proposed. ($155 monthly).
Class 3 consists of Priority Tax Claims. This Class is impaired. NY
sales Tax and penalties ($83,000). Internal Revenue Service
($2099). This debt will be paid over 60 months at 3% annual
interest but should be satisfied well before the maximum time
proposed. ($1545 monthly).
Class 4 consists of Unsecured Tax Claims of NY Corporate Tax
($8000), NY Sales tax interest ($93,000), NY State Labor Department
($2545), Internal Revenue Service ($42000). This debt ($145500
total) will be paid over 60 months at a rate of 5% but should be
satisfied well before the maximum time proposed. Total Plan
payments $7250 ($121. monthly).
Class 5 consists of Equity Holders. Debtor has one shareholder and
he will retain sole ownership of the debtor corporation.
The plan contemplates that the debtor shall make Plan payments out
of the profitable operation of Debtor's business. As noted below
the total monthly payment shall be $1,821 until completion.
The cooperation of the various creditors affected by this plan is
necessary to its success. The secured and priority debt will be
paid over 60 months at 3% annual interest. Unsecured claims shall
be paid 5% over the life of the Plan. Monthly Plan payments will
total $1821 until completion. This plan deals fairly and equitably
with all of the creditors involved, and it is hoped that this
effort will be rewarded by receiving a vote of approval from each
of the various creditors.
A full-text copy of the Disclosure Statement dated August 18, 2022,
is available at https://bit.ly/3dU0RlG from PacerMonitor.com at no
charge.
Attorney for the Debtor:
James M. Joyce, Esq.
3330 Grand Ridge Drive NE
Grand Rapids, MI 49525
Tel: (616) 447-1887
Email: JmJoyce@lawyer.com
About Club 77 Bar & Grill Inc.
Club 77 Bar & Grill, Inc. filed a petition for Chapter 11
protection (Bankr. W.D.N.Y. Case No. 21-11067) on Oct. 21, 2021,
disclosing under $1 million in both assets and
liabilities. Judge Carl L. Bucki oversees the case.
The Debtor tapped James Joyce, Esq., an attorney practicing in
Grand Rapids, Mich., to handle its Chapter 11 case.
COAL NETWORK: Files for Chapter 11 Amid Dispute With KeyBank
------------------------------------------------------------
Coal Network LLC has sought relief under Subchapter V of Chapter 11
of the Bankruptcy Code to stop KeyBank National Association's
receiver from taking control of the business and assets.
Founded by Ramesh Malhotra, the Debtor's business operations focus
has been on the purchase, trade and sale of coal.
The Debtor's primary assets are its contracts. Based on these
contracts, Coal Network procures coal and arranges for shipping and
logistics. Additionally, the Debtor's primary physical assets are
its coal and inventory. The coal inventory is located in two major
stock piles in Kentucky, River Way terminal located in Cattlesburg,
Kentucky, and Yellow Banks terminal, located in Owensboro,
Kentucky.
Until last year, the Debtor was always able to pay its creditors as
its debts became due. However, in 2021, several of Coal Network's
suppliers -- Pristine ENergy, LLC, and Virgie Clean Mining, LLC, --
failed to fulfill their supply contracts after being wired $2.8
million. As a result of that default, Coal Network filed a lawsuit
in Warren County, Ohio and ultimately prevailing with a $2.038
million judgment entered on Nov. 30, 2021. Nonetheless, at this
time, Coal Network has been unable to execute on its judgment.
Default on KeyBank Loan
The Debtor's primary lender is KeyBank National Association, which
provided a term loan of $1.8 million and a revolving line of credit
of $10 million.
The Debtor defaulted on the KeyBank Loan on Feb. 2, 2022. At that
time, KeyBank requested that a chief restructuring officer be put
in place.
On or about Feb. 8, 2022, Debtor entered into an Engagement
Agreement for Chief Restructuring Officer thereby engaging Hillyer
Group with Mr. John Hillyer acting as CRO with the authority and
duties as set out therein.
Since the CRO has taken control of the accounts payables, over $3
million has been made to the outstanding balance on the term loan.
At the time of the Chapter 11 filing, the was currently $4.4
million outstanding to KeyBank.
According to Mr. Malhotra, in early August, Mr. Hillyer stopped
paying all vendors and accounts payable of the Debtor. As a result
of Mr. Hillyer's decision to refrain from making such payments,
suppliers and vendors stopped providing goods and services to Coal
Network. Significantly, one of the Debtor's favorable contracts was
canceled on August 16, 2022.
Mr. Malhotra said that on Aug. 17, 2022, the Debtor duly authorized
(a) the termination of the CRO and (b) the filing of its bankruptcy
petition, which was necessitated, in part, by Mr. Hillyer's
decision to refrain from paying creditors. The Debtor also had
directed past-due vendors to be paid prior to filing the Petition.
On or about Aug. 17, 2022, KeyBank filed a complaint against Debtor
in the Court of Common Pleas of Warren County, Ohio (Case No.
22CV95374) and then filed an Emergency Motion for Appointment of a
Receiver to be heard that same day. The Ohio State Court
immediately entered an order appointing Hillyer as receiver for the
Debtor.
The Debtor filed its bankruptcy petition at approximately 2:48
P.M.
EDT on August 17, 2022.
At the time of filing, Debtor had $3,133,000 in cash in its deposit
account at KeyBank (account number ending in 1121). By 3:33 P.M.
EDT, after KeyBank's counsel was expressly notified of Debtor's
bankruptcy filing, KeyBank swept approximately $3,000,000 from the
Debtor Account.
Competing Motions in Bankruptcy Court
The Debtor says it has established that the $3,000,000 seized by
KeyBank is property of the Debtor's estate, that KeyBank willfully
and knowingly seized these funds after having been notified of the
Debtor's bankruptcy filing, and that Debtor has an immediate right
to and need for the funds. Accordingly, it filed a motion asking
the Bankruptcy Court to enter an order directing KeyBank to release
the funds and explain why it shouldn't be held in violation of the
automatic stay.
KeyBank on the other hand has filed a motion to dismiss the
Debtor's hastily filed Chapter 11 case.
It notes that the bankruptcy is the result of a two-party dispute
between Debtor and KeyBank that KeyBank has essentially won. The
bank warns that the bankruptcy filing, if not appropriately
dismissed, would allow Malhotra to evade the State Court's holding
divesting him of authority to operate the business.
"No legitimate objective is accomplished with this bankruptcy; the
aim is to improperly divest the court-appointed fiduciary -- tasked
with protecting the legitimate interests of creditors -- of his
authority for the purpose of promoting Malhotra's personal
interests. Consequently, dismissal of the Debtor's bankruptcy case
for bad faith is warranted," KeyBank tells the Court.
It noted that prepetition, Mr. Malhotra thwarted and obstructed the
sale process by inserting himself in negotiations for the purpose
of advancing his own pecuniary interest, all in violation of his
fiduciary duties,
requiring, for example, a lucrative "consulting" agreement or other
payout to obtain his cooperation and consent to a sale.
About Coal Network LLC
Coal Network LLC -- http://www.coalnetwork.com-- is a turnkey
solution provider focused specifically on coal and blended coal
products.
Coal Network LLC filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ky. Case No.
22-10098) on August 17, 2022. In the petition filed by Ramesh
Malhotra, as president, the Debtor reported assets and liabilities
between $1 million and $10 million.
Michael E. Wheatley has been appointed as Subchapter V trustee.
April A Wimberg, of Dentons Bingham Greenebaum LLP, is the Debtor's
counsel.
CROWN COMMERCIAL: Court OKs Interim Cash Collateral Access
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Crown Commercial Real Estate and
Development, LLC to use cash collateral on an interim basis in
accordance with the budget.
The Debtor requires the use of cash collateral to continue
operating its business enterprise and successfully reorganize its
operations.
The Debtor and Rialto Capital Advisors, LLC, have agreed to the
terms of a fourth interim order on cash collateral access. Rialto
is the Special Servicer and Attorney-in-Fact for secured creditor
U.S. Bank National Association, as Trustee for the benefit of the
holders of Morgan Stanley Capital I Inc., Commercial Mortgage
Pass-Through Certificates, Series 2012-05.
Bank of America, N.A. made a loan to the Debtor in the original
principal amount of $27,450,000, pursuant to a loan agreement dated
June 26, 2012. The Loan is evidenced by a promissory note dated
June 26, 2012, in the original principal amount of $27,450,000 made
by the Debtor and payable to the order of the Original Lender.
To secure repayment of the Loan, the Debtor executed and delivered
to the Original Lender a Mortgage, Assignment of Leases and Rents,
and Security Agreement dated as of June 26, 2012, encumbering the
Debtor's real property, a real property improved by a shopping
center commonly known as Chatham Village Square Shopping Center,
located at 87th Street and Cottage Grove Avenue, Chicago, IL 60619,
recorded with the Cook County Recorder of Deeds on July 20, 2012,
as document number 1220213054.
As further security for the Loan, the Debtor granted the Original
Lender a lien on all of its personal assets. On June 29, 2012, the
Original Lender perfected its security interest in the Debtor's
assets by filing a UCC Financing Statement with the Illinois
Secretary of State identifying Crown Commercial as the debtor and
the Original Lender as the secured party.
On July 2, 2012, the Original Lender negotiated the Note to the
order of Rialto pursuant to an allonge and delivered the Note with
the Allonge to Rialto.
On August 8, 2012, the Original Lender assigned the Mortgage to
Morgan Stanley Capital I Inc., Commercial Mortgage Pass-Through
Certificates, Series 2012-05, by executing and delivering to the
Lender an Assignment of Mortgage, Assignment of Leases and Rents,
and Security Agreement, which was recorded with the Cook County
Recorder of Deeds on September 10, 2012, as document number
1225408405.
On August 30, 2012, Rialto perfected its security interest in the
Debtor's assets by filing a UCC Financing Statement Amendment with
the Illinois Secretary of State identifying the Debtor as the
debtor and the Lender as the secured party, as subsequently
continued by filing of those UCC Financing Statement Amendments on
September 6, 2012, January 11, 2017, and January 18, 2022.
As of the Petition Date, the Debtor owed Rialto $22,874,831.
The Debtor is directed to use cash collateral only to pay actual,
ordinary, and necessary operating expenses for the purpose of
operating its business as debtor-in-possession. The use of the
Lender's cash collateral to pay any extraordinary expense in excess
of actual, ordinary, and necessary operating expenses will require
the prior written approval of the Lender, or further Court order,
upon three days' notice.
The Debtor will ensure the payment of all personal property taxes,
real property taxes, sales taxes, payroll taxes, insurance,
maintenance expenses, and payroll/wages in connection with
preserving the Property coming due during the Interim Period.
As further adequate protection for the use of cash collateral, the
Debtor will pay the Lender, on or before August 19, the amount of
$20,000 to reduce the amount of real estate taxes advanced by the
Lender.
The Lender is also granted, retroactively to the Petition Date, and
without the necessity of any additional documentation or filings,
valid, enforceable, non-avoidable, and fully perfected replacement
liens on and in all property of the Debtor acquired or generated
after the Petition Date, to the same extent, validity, and priority
as the Lender's preexisting liens and security interests.
These events constitute an "Event of Default:"
a. The Debtor's failure to maintain appropriate insurance for
the Collateral;
b. Except for disclosed payments made following the Petition
Date through the date of the Order, if the Debtor pays obligations
not showing on the Budget without the Lender's prior written
consent or further Court order or exceeds the Budget amounts by
more than 15%;
c. The Debtor fails to provide, when due, any reports or
accounting information reasonably required by the Agreed Interim
Order;
d. Any termination by the Court of the Debtor's use of cash
collateral; or
e. Failure to make the Adequate Protection Payment when due.
A further interim hearing on the matter is scheduled for August 24
at 10 a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3wgW7wv from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$26,000 for the week ending August 25, 2022;
$31,206 for the week ending September 12022;
$36,275 for the week ending September 8, 2022; and
$115,525 for the week ending September 15, 2022.
About Crown Commercial
Real Estate and Development, LLC
Crown Commercial Real Estate and Development, LLC operates
shopping center, located at 87th Street and Cottage Grove Avenue,
Chicago, IL 60619. The Property consists of a shopping center owned
and operated for 25 years by the Debtor.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-05113) on May 3,
2022. In the petition signed by Musa P. Tadro, manager, the Debtor
disclosed up to $50,000 in assets and up to $50 million in
liabilities.
The Law Offices of Konstantine Sparagis is the Debtor's counsel.
Judge Janet S. Baer oversees the case.
DESERT INSTITUTE: Court OKs Appointment of Susan Goodman as PCO
---------------------------------------------------------------
Judge Madeleine C. Wanslee of the U.S. Bankruptcy Court for the
District of Arizona approves the appointment of Susan N. Goodman as
Patient Care Ombudsman for Desert Institute for Spine Disorders,
PC.
The appointment was made pursuant to the the United States Trustee
for the District of Arizona's, Region 14 Ex Parte Motion to Approve
the Stipulated Appointment of Patient Care Ombudsman, seeking the
Court's order directing appointment of a patient care ombudsman.
To the best of her knowledge, Ms. Goodman has no connections with
the Debtor, creditors, any other parties in interest, their
respective attorneys and accountants, the U.S. Trustee, and persons
employed in the Office of the U.S. Trustee, except as set forth in
her verified statement.
A copy of the order is available for free at https://bit.ly/3QzaHHX
from PacerMonitor.com.
The Ombudsman may be reached at:
Susan N. Goodman, RN, JD
Pivot Health Law, LLC
P.O. Box 69734
Oro Valley, AZ 85737
Telephone: 520-744-7061
Email: sgoodman@pivothealthaz.com
About Desert Institute
Desert Institute for Spine Disorders PC is a privately owned and
operated medical group practice, specializing in spine disorders
and neck and lower back pain located in Fountain Hills, Arizona.
Duane D.H. Pitt is the sole shareholder director and sole physician
of/at DISD.
DISD filed a voluntary petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code on (Bankr. D. Ariz. Case No.
22-05043) on Aug. 1, 2022. In the petition filed by Duane D.H.
Pitt, as president, the Debtor reported assets up to $50,000 and
liabilities between $1 million and $10 million.
Duane D.H. Pitt also filed a Chapter 11 petition (Bankr. D. Ariz.
Case No. 22-05046) on Aug. 1, 2022. The case is jointly
administered with DISD's case.
James E. Cross has been appointed as Subchapter V trustee of DISD.
Randy Nussbaum, Esq., at Sacks Tierney P.A., is the Debtors'
counsel.
DMDS LLC: Taps Law Offices of Larry A. Vick as Bankruptcy Counsel
-----------------------------------------------------------------
DMDS, LLC seeks approval from the U.S. Bankruptcy Court for the
Southern District of Texas to employ the Law Offices of Larry A.
Vick to serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. analyzing the financial situation and rendering legal
assistance to the Debtor;
b. advising the Debtor with respect to its rights, duties, and
powers in this case;
c. representing the Debtor at all hearings and other
proceedings;
d. preparing schedules of assets and liabilities, statements
of affairs, motions and other legal papers;
e. representing the Debtor at any meeting of creditors;
f. representing the Debtor in all proceedings before the court
and in any other judicial or administrative proceeding where the
rights of the Debtor may be litigated or otherwise affected;
g. preparing and filing a disclosure statement and Chapter 11
plan of reorganization;
h. assisting the Debtor in analyzing the claims of creditors
and in negotiating with such creditors; and
i. assisting the Debtor in any matters related to the case.
The firm will be paid at hourly rates as follows:
Attorneys $385
Paralegals $85
The Law Offices of Larry A. Vick will also be reimbursed for its
out-of-pocket expenses.
Larry Vick, Esq., a partner at the Law Offices of Larry A. Vick,
disclosed in a court filing that his firm is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Larry A. Vick, Esq.
Law Offices of Larry A. Vick
13501 Katy Freeway, Suite 1460
Houston, TX 77079
Tel: (832) 413-3331
Fax: (832) 202-2821
Email: lv@larryvick.com
About DMDS LLC
DMDS, LLC is a limited liability company that owns and leases
commercial properties in South Houston, Texas.
On Aug. 1, 2022, DMDS sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Texas Case No. 22-32201), listing as
much as $10 million in both assets and liabilities. DMDS President
David M. Soliman signed the petition.
Judge Jeffrey P. Norman oversees the case.
The Law Offices of Larry A. Vick serves as the Debtor's bankruptcy
counsel.
DW TRUMP INC: Files Bare-Bones Chapter 11 Petition
--------------------------------------------------
An entity called DW Trump Inc. filed for chapter 11 protection in
the Southern District of New York without stating a reason.
According to court filings, DW Trump Inc. estimates between 1 and
49 unsecured creditors. The petition states funds will be
available to unsecured creditors.
About DW Trump Inc.
DW Trump Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-22628) on August 18,
2022. In the petition filed by Ephriam Weismandl, as treasurer, the
Debtor reported assets and liabilities between $1 million and $10
million.
The Debtor is represented by Barry D. Haberman, of the Law Office
of Barry D. Haberman, Esq.
EDWARD ZENGEL: Wins Cash Collateral Access on Final Basis
---------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Fort
Myers Division, authorized Edward Zengel & Son Express, Inc. to use
cash collateral on a final basis in accordance with the budget.
The Debtor is permitted to use cash collateral to pay: (a) all
amounts expressly authorized by the Court; (b) the current and
necessary expenses set forth in the budget, plus (i) an amount not
to exceed 10% for each line item, or (ii) an amount in excess of
10% of any line item so long as the total of all amounts in excess
of all line items for the Budget do not exceed 10% in the aggregate
of the total budget; and, (c) such additional amounts as may be
expressly approved in writing by Synovus Bank, the Debtor's
pre-petition senior secured lender.
As adequate protection for the extent of the Debtor's use of cash
collateral, Synovus will have a perfected post-petition lien
against the Prepetition Collateral to the same extent and with the
same validity and priority as the alleged prepetition lien, without
the need to file or execute any document as may otherwise be
required under applicable non-bankruptcy law. Additionally, the
Debtor will remit to Synovus $12,254 and provide an actual budget
on a biweekly basis to Synovus.
A copy of the order and the Debtor's budget for the period from
January 15 to September 10, 2022 is available at
https://bit.ly/3QCz1Zy from PacerMonitor.com.
About Edward Zengel & Son Express
Edward Zengel & Son Express, Inc., a company in Fort Myers, Fla.,
filed its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00001) on Jan. 1,
2022, listing up to $500,000 in assets and up to $10 million in
liabilities. Edward Zengel, Jr., president, signed the petition.
Judge Caryl E. Delano oversees the case.
The Debtor tapped Mike Dal Lago, Esq., at Dal Lago Law as legal
counsel; AG Employment Law, PLLC as special labor counsel; and The
Spires Group, PA as accountant.
ENDO INT'L: Reaches $450 Million Settlement With Mass. AG
---------------------------------------------------------
Massachusetts Attorney General Maura Healey has reached an
agreement in principle with opioid maker Endo International plc and
its lenders that would provide up to $450 million to participating
states and local governments, ban promotion of Endo's opioids, and
require Endo to turn over millions of documents related to its role
in the opioid crisis for publication in a public online archive.
The agreement in principle with Endo, which filed for Chapter 11
bankruptcy protection Tuesday, August 16, 2022, night in the
Southern District of New York, resolves allegations that Endo
boosted opioid sales using deceptive marketing that downplayed the
risk of addiction and overstated the benefits. Endo, an
Ireland-based drugmaker with its U.S. headquarters in Malvern,
Pennsylvania, makes generic and branded opioids including Percocet
and Endocet, and also made Opana ER, which was withdrawn from the
market in 2017. The states allege that Endo falsely promoted the
benefits of Opana ER's so-called abuse-deterrent formulation, which
did nothing to deter oral abuse and led to deadly outbreaks of
Hepatitis and HIV due to its widespread abuse via injection.
"Endo's deceptive marketing fueled the opioid crisis and caused a
massive human toll," said AG Healey. "The money recovered from this
settlement will help to fund treatment, harm reduction and
prevention throughout the country, and the ban on promotion and
document disclosure requirements will ensure this never happens
again."
The resolution, which is contingent on final documentation and
Bankruptcy Court approval, involves the following:
* Requires payment of $450 million in cash over 10 years to
participating states and subdivisions.
* Requires Endo to turn over its opioid-related documents for
publication online in a public document archive and pay $2.75
million for archival expenses.
* Bans the marketing of Endo’s opioids forever.
The negotiations are being led by the following states: Maine,
Massachusetts, New Hampshire, Pennsylvania, Tennessee, Vermont, and
Virginia. The settlement is also joined by the attorneys general of
Arizona, Colorado, Connecticut, Delaware, the District of Columbia,
Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan,
Minnesota, Missouri, Montana, Nebraska, Nevada, New Jersey, North
Carolina, North Dakota, Rhode Island, South Carolina, South Dakota,
Utah, Washington, Wisconsin, Wyoming, and the U.S. Virgin Islands.
About Endo International
Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical
company committed to helping everyone we serve live their best life
through the delivery of quality, life-enhancing therapies. Our
decades of proven success come from passionate team members around
the globe collaborating to bring the best treatments forward.
Together, we boldly transform insights into treatments benefiting
those who need them, when they need them. On the Web:
http://www.endo.com/
On August 16, 2022, Endo International plc and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549). The Company's cases are
pending before the Honorable James L. Garrity, Jr.
The Company has put up a Web site dedicated to its restructuring:
http://www.endotomorrow.com/
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal
counsel, PJT Partners LP is serving as investment banker, and
Alvarez & Marsal is serving as financial advisor to Endo. Kroll is
the claims agent.
ENLINK MIDSTREAM: Fitch Rates New Sr. Unsecured Notes 'BB+'
-----------------------------------------------------------
Fitch Ratings has assigned a 'BB+'/'RR4' rating to EnLink
Midstream, LLC's (ENLC) proposed offering of senior unsecured
notes. Proceeds will be used to tender for outstanding senior
unsecured debt due over the next few years. The Rating Outlook is
Positive.
The Positive Outlook reflects ENLC's leverage, which is expected to
decline below Fitch's positive 4.5x leverage sensitivity by around
Dec. 31, 2022. ENLC raised EBITDA guidance on the 2Q22 call, and
leverage is falling faster than Fitch expected at its March 2022
affirmation. Sustained leverage below the positive sensitivity
threshold over a couple of quarters would be the main trigger for
an upgrade.
KEY RATING DRIVERS
Deleveraging Underpinned by Financial Policy: ENLC posted FY21
leverage of 4.8x (total debt with equity credit to operating
EBITDA). Leverage has fallen from that level thus far in 2022. The
strong leverage metric profile reflects in part strong commitment
to credit quality.
During 2020 and 2021, ENLC was able to execute on credit
enhancement items, such as distribution cuts, capex reduction, and
cost savings, and posted strong 2021 result. ENLC raised its
distributions in the 4Q21 by 20%. Given ENLC's current distribution
policy and capex program, Fitch forecasts that ENLC's leverage will
trend below positive sensitivity threshold of 4.5x by around Dec.
31, 2022.
Fitch expects ENLC's growth in the Permian and Louisiana should
keep leverage below positive sensitivity threshold beyond 2022
under the current Fitch's price deck. Fitch believes, following the
successful deleveraging in the past two years, ENLC is well
positioned to manage its leverage below 4.5x, while at the same
time support moderate dividend growth, a modest share buyback
program and current capital expenditure levels.
Fee-Based Cash Flow: ENLC has exhibited a strong focus on fee-based
contracts to mitigate commodity price volatility. Fitch expects
ENLC will continue to generate about 90% of its gross margin from
fee-based services in 2022 and 2023. Gathering and processing (G&P)
operations in the Permian and Oklahoma are further underpinned by
long-term contracts. In addition, ENLC hedges its commodity
exposure for the current year, further limiting any commodity price
volatility impact on earnings.
Permian and Louisiana Growth: The Permian and Louisiana segments
remain the two steadily growing segments for ENLC, both looking at
recent annual results, and in Fitch's forecast. Fitch projects
ENLC's Permian segment to continue its recent steep growth in 2022,
underpinned by strong natural gas volume production.
ENLC completed relocation of an 80mcfpd natural gas processing
plant from Oklahoma to the Permian under project Warhorse. New
plant relocation -- project Phantom, which will add 200MMcf/d of
processing capacity in the Midland Basin-- is currently under way
and is expected to be completed during the 4Q22. Additionally, ENLC
also has long-term contracts with high quality producer customers
that have a focus in allocating capital in the Permian in the near
term. Within Louisiana, ENLC has built an integrated gas and
natural gas liquid (NGL) pipeline network that has
interconnectivity to key export markets near the Gulf Coast.
Oklahoma and North Texas Stabilizing: The Oklahoma segment profit
posted a period of a relatively level trough during a part of 2021,
and is now modestly growing, driven by strong natural gas prices.
The wider Anadarko region that contains and surrounds the Oklahoma
segment is showing modest yoy natural gas volume growth in most
months of 2022. Better times are expected by Fitch based on rig
activity by several ENLC customers.
ENLC also has exposure in the Barnett, where production volume and
segment profit have been in a decline in the past years, but the
decline has moderated in 2021. Fitch expects cashflow and volume to
stabilize in the near term, driven by expected rig activity by
Banpu Kalnin Ventures Corporation, which is the largest source of
volumes to the segment.
DERIVATION SUMMARY
Western Midstream Partners, LP (WES; BB+/Stable) is a G&P
comparable for ENLC. Both companies have similar degree of
geographic diversification (moderate diversification), but WES has
much higher customer concentration. Fitch views that WES is
moderately better positioned financially relative to ENLC given
WES's larger EBITDA and lower leverage of 3.8x at YE 2021 (versus
ENLC's at 4.8x in the same period).
WES's overall counterparty risk is greater than ENLC's, as WES is
largely exposed to non-investment grade E&P producer customers.
WES's largest counterparty, Occidental Petroleum Corp.
(BB+/Stable), contributed approximately 60% of WES's revenue in
2021. ENLC has a customer concentration (greater than 10% of
revenue) from higher quality customers, including Devon Energy
(BBB+/Stable) and about 80% of its customers are investment grade
rated.
KEY ASSUMPTIONS
-- Natural gas production and commodity prices sales consistent
with Fitch's price deck, e.g., for Henry Hub including
$4.00/mcf in 2023, $3.25/mcf in 2024 and $2.75/mcf in 2025;
-- Flat operating results in Oklahoma and Barnett with growth in
the Permian and Louisiana in 2022 and beyond; 3% annual growth
in the Louisiana segment profit beyond 2022; Moderation of
growth in Permian over the forecast period;
-- Moderate growth in EBITDA in 2023 and assuming flat EBITDA
beyond 2023;
-- Approximately level capex beyond 2022;
-- Approximately $100 million common unit repurchase annually
over the forecast period;
-- Distribution increase in 2022 (as was announced in the 4Q21),
and further modest increases in forecast years.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Leverage and distribution coverage sustained below 4.5x and
above 1.1x underpinned by stable segment performances.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A significant change in cash flow stability, including a move
away from the current profile of fee-based profits that could
lead to a negative rating action;
-- Leverage above 5.5x on a sustained basis and/or distribution
coverage consistently below 1.1x.
LIQUIDITY AND DEBT STRUCTURE
Ample Liquidity: As of June 30, 2022, there were no outstanding
borrowings under the revolving credit facility and $44.6 million
outstanding letters of credit (it is Fitch's understanding that
this facility was a source of some of the funds for the Crestwood
asset acquisition that closed July 1, 2022). Its $1.4 billion
revolving credit facility matures in June 2027. This facility
contains a leverage covenant maximum of 5.0x for consolidated net
indebtedness to consolidated EBITDA (each term as defined, and
where EBITDA includes EBITDA from certain capital expansion
projects) and consolidated indebtedness excludes the existing
preferred securities.
The maximum leverage level may rise from 5.0x to 5.5x for four
quarters following an acquisition (with the rise subject to
limitations). Following the term loan repayment in December 2021,
ENLC has no debt maturities until 2024. A portion of the proceeds
from the new issuance will be used to tender for part of the notes
due 2024.
ENLC was in compliance with its covenant as of June 30, 2022 and is
expected to remain in compliance under Fitch's forecast period.
Fitch expects ENLC will continue to fund its capex program with its
internally generated cash flow in the near term.
ISSUER PROFILE
EnLink Midstream, LLC is predominately a midstream G&P company that
operates in three G&P regions: Oklahoma (STACK play), Permian, and
the Barnett. ENLC also operates gas and NGL gathering and
transmission pipelines, gas processing facilities, gas and NGL
storage, and NGL fractionation business in Louisiana.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch applied 50% debt credit and 50% equity credit to ENLK's
preferred equity securities outstanding.
EXCELSIOR SECURITY: Wins Cash Collateral Access Thru Sept 12
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized Excelsior Security Agency of
North Florida, Inc. to use the cash collateral pledged to Paychex
Advance, LLC d/b/a Advance Partners and Fora Financial Advance,
LLC.
The Debtor is permitted to use cash collateral in accordance with
the budget through September 12, 2022.
As adequate protection for the use of cash collateral, Advance
Partners and Fora Financial are granted a replacement lien on
Debtor's post-petition inventory, accounts (excluding sales taxes),
receivables, and unrestricted cash in the same priority and to the
same extent as their pre-petition liens, but only to the extent
their prepetition collateral is utilized. The post-petition liens
granted do not extend to any avoidance claims held by the estate.
With respect to Advance Partners, the "Replacement Lien" granted
will mean a post-petition lien on any accounts of the Debtor with
verifiable face value at all times at least equal to 110% of the
outstanding balance of cash collateral used by the Debtor. The
Debtor will present Advance Partners with the Post-Petition
Collateral for verification before the Debtor uses cash collateral
as authorized by the interim Order. After verification, Advance
Partners will transfer funds in the Lock Box to the Debtor only as
needed to cover the expenses outlined in the Budget. The Debtor
will not grant to any party any interest in the Post-Petition
Collateral prior to or equal with the Replacement Lien being
accorded to Advance Partners.
Advance Partners is granted an allowed administrative priority
claim pursuant to 11 U.S.C. section 503 to the extent of any
diminution in value of the Post-Petition Collateral.
The liens granted to Advance Partners and Fora Financial will be
valid and perfected without the need for the execution of filing of
any further document or instrument otherwise required to be Filed
under applicable non-bankruptcy law.
The Debtor's authority to use cash collateral will terminate upon
the earlier of (i) September 12, 2022, (ii) the entry of an order
modifying the order, (iii) the Debtor being removed from
possession, (iv) the conversion of Debtor's Chapter 11 case to a
case under Chapter 7 of the Bankruptcy Code, or (v) a default in
the performance or observance of any material provision of the
order.
A continued preliminary hearing on the matter is set for September
12 at 9 a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3c8MdGy from PacerMonitor.com.
The budget provides for total estimated operating expenses, on a
weekly basis, as follows:
$56,513 for the week ending August 19, 2022;
$60,174 for the week ending August 26, 2022;
$53,185 for the week ending September 2, 2022; and
$61,440 for the week ending September 9, 2022.
About Excelsior Security Agency of North Florida, Inc.
Excelsior Security Agency of North Florida, Inc. is a security
services provider. The Debtor sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01609) on
August 19, 2022. In the petition signed by Bobby J. Lingold, vice
president, secretary, and chief executive officer, the Debtor
disclosed up to $1 million in assets and up to $10 million in
liabilities.
Judge Jason A. Burgess oversees the case.
Bradley R. Markey, Esq., at Thames Markey is the Debtor's counsel.
FERRO CORP: Egan-Jones Withdraws BB- Senior Unsecured Ratings
-------------------------------------------------------------
Egan-Jones Ratings Company, on August 8, 2022, withdrew its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Ferro Corporation.
Headquartered in Mayfield Heights, Ohio, Ferro Corporation produces
performance materials for industry by utilizing organic and
inorganic chemistry.
FINANCIAL INVESTMENTS: Judgment Creditors Say Disclosure Inadequate
-------------------------------------------------------------------
Monique Moise, Shadonna Charleston, and Rasheeda Lawler
(collectively "the Judgment Creditors"), object to the adequacy of
the Disclosure Statement for Plan of Reorganization being proposed
by Financial Investments and Real Estate, LLC.
The Judgment Creditors hold secured claims against the Debtor by
way of judgment liens on 1203 S. Melville Street, Philadelphia, PA
("the Property"), which they obtained by default judgment in the
Philadelphia Court of Common Pleas (Nov. Term 2019, ID No.
191101031), on February 19, 2020.
Judgment Creditors assert that the Disclosure Statement fails to
set forth information of a kind, and in sufficient detail, to
enable creditors to make an informed decision regarding acceptance
or rejection of the Plan, as required pursuant to 11 U.S.C. §
1125, for the following reasons:
* Article IV, Section B of the Disclosure Statement indicates
that the Debtor "has a loan due from Cyndescope in the approximate
amount of $300,000" and that "Cyndescope has agreed to pay $2,500
to $6,000 per month as reflected on the budget projections, toward
the loan until it is satisfied." The Disclosure Statement does not
adequately explain how the Debtor determined the final amount due
from Cyndescope.
* The Disclosure Statement does not explain why Cyndescope is
not being required to pay the overdue debt in full immediately in
order to provide a more certain and prompt payment of the claims of
the Judgment Creditors.
* The Disclosure Statement does not explain how the monthly
payments to be made by Cyndescope were negotiated and why the first
year's payments are so low, which result in very low and uncertain
proposed payments to the Judgment Creditors during the first year
of the plan.
* The Disclosure Statement does not adequately explain why
Dennis Dicker, who as part owner of the Debtor and is a co-debtor,
is permitted to draw a salary of between $400 and $700 per month
the first year, which increases to $1,000 in subsequent years,
rather than allocating that amount to the Judgment Creditors.
* The Disclosure Statement indicates that the Debtor has
assets sufficient to pay all debts in full and yet the Plan
proposes to allow equity holders to receive payment even though the
Judgment Debtors would be paid less than their claims in full with
interest.
* Article V, Section C of the Disclosure Statement indicates
that, under the Plan, the Judgment Creditors would be paid a total
of $192,000 to fully satisfy their claims. The Disclosure Statement
does not adequately explain how the Debtor determined this amount.
* The Disclosure Statement describes a Plan that is
speculatively based on (i) uncertain and undocumented payment by
Cyndescope of a debt that has been significantly overdue and (ii)
the use of the Debtor's real estate for a new and unproven purpose.
* The Disclosure Statement does not specify the allocation to
each of the Judgment Creditors.
A full-text copy of Judgment Creditors' objection dated August 18,
2022, is available at https://bit.ly/3Cmhd0x from PacerMonitor.com
at no charge.
Attorneys for Judgment Creditors:
CURTIN & HEEFNER LLP
Robert A. Badman, Esquire
Attorney ID #49903
1040 Stony Hill Road, Suite 150
Yardley, PA 19067
Telephone: (215) 736-2521
Facsimile: (215) 736-3647
About Financial Investments and Real Estate
Financial Investments and Real Estate, LLC is a Pennsylvania-based
real estate and financial investments company.
Financial Investments and Real Estate sought Chapter 11 bankruptcy
protection (Bankr. E.D. Pa. Case No. 22-11150) on May 3, 2022,
listing as much as $500,000 in both assets and liabilities. Kathryn
Anderson, managing member, signed the petition.
The case is assigned to Judge Magdeline D. Coleman.
Michael A. Cataldo, Esq., at Gellert, Scali, Busenkell & Brown, LLC
is the Debtor's counsel.
FLY LEASING: S&P Downgrades ICR to 'B-' on Increasing Liquidity
---------------------------------------------------------------
S&P Global Ratings lowered its issue-level ratings on Fly Funding
II S.a.r.l's and Fly Willow Funding Ltd.'s term loans to 'B+' from
'BB-', in line with the lower issuer rating (recovery rating
unchanged at '1'). S&P also lowered the rating on the company's
$390.5 million senior unsecured notes due in 2024 to 'CCC+' from
'B-', in line with the lower rating (recovery rating unchanged at
'5').
Fly has sizeable debt obligations coming up in 2023. Fly has more
than $400 million in secured debt repayments coming due in 2023,
including the Fly Aladdin Acquisition facility that the company is
now current on (matures June 2023; $200 million outstanding as of
March 31, 2022).
Carlyle Aviation, Fly's parent, has historically accessed the
aircraft ABS market to meet its financing needs. However, S&P
believes Fly's ability to refinance its debt obligations through a
new issuance in the capital markets is currently limited given the
current volatility in the capital markets, and a weaker
macroeconomic environment.
S&P continues to assess Fly's liquidity as less than adequate,
based on the company's reported financials as of March 31, 2022.
S&P said, "Fly's $390.5 million senior unsecured notes have
recently been trading at a significant discount since late June,
which we believe increases the likelihood that the company may
engage in a transaction that we view as a distressed exchange. We
also believe these trading levels indicate Fly's relatively weak
standing in the unsecured debt markets, limiting the company's
ability to refinance its debt through a corporate debt issuance.
"We view Fly as somewhat more vulnerable to weaker global
macroeconomic conditions than most other rated aircraft lessors.
Fly's customer portfolio is somewhat less diversified than most
other rated aircraft lessors. In addition, the company has sizeable
exposure to various emerging economies such as southeast Asia.
Fly's collections during the COVID-19 pandemic were significantly
weaker than most of its rated peers due to lease deferral
agreements, non-accrual of rents, lease extensions, and
restructurings at lower lease rates.
"We expect the weaker economy and higher fuel prices will affect
airlines' operating performances globally through 2023. S&P Global
Ratings expects global GDP growth to moderate to 3.5% in 2023 from
5.1% in 2022 and 4.3% in 2021. S&P Global Ratings' economists
expect U.S. real GDP growth will moderate to 1.8% in 2022 and 1.6%
in 2023, compared with 5.7% in 2021. We also believe there is a
40%-50% risk of a recession over the next year.
"The outlook is negative. We expect Fly's liquidity position to
remain constrained over the next 12 months due to large upcoming
maturities, and currently limited access to refinancing
opportunities through the capital markets. We also view Fly as
somewhat more vulnerable to weaker macroeconomic conditions than
most other rated aircraft lessors, given its relatively large
exposure to emerging market countries. We expect EBIT interest
coverage of about 1x in 2022 (compared with 0.5x in 2021),
improving to the low-1x area in 2023. We forecast FFO to debt in
the mid-single-digit percent area through 2023 (compared with the
low-single-digit percent area in 2021), while debt to capital
weakens to the 80%-90% area through 2023, from the high-70% area in
2021."
S&P could lower its ratings on Fly if it views the company's
capital structure as unsustainable or revise its liquidity
assessment to weak. This could happen if:
-- The company is unable to refinance or extend its upcoming
maturities, including the Fly Aladdin facility that matures in June
2023;
-- Carlyle's financial policies are more aggressive than we
expect; or
-- S&P believes the company could undertake a transaction that it
views as a distressed exchange.
S&P could revise the outlook to stable if:
-- S&P expects Fly to refinance its upcoming maturities such that
its liquidity remains adequate;
-- The likelihood that the company will pursue a bond repurchase
transaction that we could view as a distressed exchange remains
low;
-- The company's operating performance improves and/or the company
pays down debt such that S&P expects EBIT interest coverage to
remain above 1x and FFO to debt to remain in the 6% area on a
sustained basis; and
-- S&P believes the sponsor is committed to maintaining these
ratios.
ESG credit indicators: E-2; S-3; G-3
FORD MOTOR: Fitch Rates New Sr. Unsec. Green Bonds 'BB+'
--------------------------------------------------------
Fitch Ratings has assigned a 'BB+'/'RR4' rating to Ford Motor
Company's proposed issuance of senior unsecured green bonds.
Ford's Long-Term Issuer Default Rating (IDR) is 'BB+'. The Rating
Outlook is Positive.
Ford's ratings and Outlook reflect expected improvements in the
company's profitability and core FCF, which will likely lead to
margins and credit protection metrics that are in line with Fitch's
positive rating sensitivities for the company over the intermediate
term. Although supply chain and inflationary pressures are likely
to continue for much of 2022, Fitch expects Ford's profitability to
improve as it benefits from ongoing redesign activities, as well as
execution on its Ford+ plan.
KEY RATING DRIVERS
Proposed Green Bonds: Ford intends to allocate an amount equal to
the net proceeds from the bond offering to finance or refinance
clean transportation projects as outlined in the bonds' prospectus
supplement. Clean transportation projects include activities
related to designing, developing and manufacturing battery electric
vehicles. Ford expects to fully allocate the net proceeds from the
green bonds by the end of 2023, and the company will publish annual
Sustainable Financing Reports detailing progress on the projects
funded by the bonds.
Ford has also retained an outside consultant that will confirm the
bonds are aligned with the International Capital Market Association
(ICMA) Green Bond Principles, the ICMA Social Bond Principles, the
ICMA Sustainability Bond Guidelines and the Loan Market Association
Green Loan Principles.
Rating Considerations: Near-term rating considerations include
ongoing production difficulties stemming from supply-chain related
challenges and the coronavirus pandemic, elevated commodity and
logistics costs, rising interest rates, and the impacts of
inflation and a slowing macroeconomic environment on consumer
confidence. Other considerations include tightening emissions
regulations in various global regions, as well as substantial
investments that the company is making in both electrification and
vehicle autonomy. All of these factors will weigh on profitability
and FCF generation over the next several years.
Despite these headwinds, vehicle demand remains strong, and it has
outpaced supply in the major global regions for the past two years.
Fitch expects Ford will continue to experience a strong pricing
environment, which will help to mitigate some of the inflationary
pressure on the company's margins. That said, Fitch expects the
combination of inflation and technology-related investment spending
to result in some margin dilution over the next several years,
although overall profitability is likely to improve relative to the
period leading up to the pandemic.
Improving FCF: Fitch expects Ford's automotive FCF (based on
Fitch's methodology) to remain under pressure over the next couple
of years as the company continues to work through its global
redesign, with a relatively modest cash outflow expected in 2022 as
the company spends $1.0 billion-$1.5 billion on redesign work.
However, excluding the redesign initiatives, Fitch expects the
company's FCF to be solidly positive over the next several years
with a more benign market backdrop, although the pandemic and
ongoing supply-chain challenges remain near-term concerns.
Increasing EV investments will also weigh on FCF over the next
several years.
Fitch expects Ford's automotive FCF margins, according to Fitch's
calculations and excluding the redesign initiatives, to run near
2.0% over the intermediate term. Actual automotive FCF (based on
Fitch's methodology) in 2021 was $3.1 billion when excluding $1.9
billion in cash costs associated with the redesign, equivalent to a
2.5% FCF margin. However, automotive FCF in 2021 was supported by
$7.5 billion in Ford Credit distributions, which was more than
double the typical level of recent years. Fitch expects those
distributions to run at more normalized levels over the next few
years.
Low Automotive Leverage: Fitch expects Ford's automotive EBITDA
gross leverage (according to Fitch's calculations) to remain low
and generally in line with pre-pandemic levels over the next
several years. Leverage declined significantly in 2021 due to a
combination of debt reduction and higher EBITDA. In 2021, Ford
reduced automotive debt by $3.9 billion, leaving it with about $20
billion of automotive debt outstanding at YE 2021. The EBITDA
increase was partially due to the increased distributions from Ford
Credit (Fitch adds affiliate dividends to EBITDA in its calculation
of leverage).
Looking ahead, Fitch expects EBITDA gross leverage to rise
slightly, toward the upper-1x range by YE 2022, largely due to
lower Ford Credit dividends, as Fitch expects debt to decline a bit
and EBITDA excluding Ford Credit dividends to rise on higher
production levels. Over the longer term. Fitch expects leverage to
decline back toward the low-1x range, largely due to higher levels
of EBITDA.
DERIVATION SUMMARY
Ford's business profile is similar to other large global volume
auto manufacturers. From an automotive revenue perspective, it is
larger than General Motors Company (GM) (BBB-/Positive) but smaller
than Stellantis N.V. (Stellantis; BBB/Stable). Compared with GM,
Ford's operations are more globally diversified, with significant
operations in most major auto markets. However, from a brand
perspective, Ford is less diversified than Volkswagen AG (VW)
(A-/Stable), Stellantis or GM, focusing primarily on its global
Ford brand and, to a much lesser extent, its Lincoln luxury brand,
which is only available in North America and China.
However, the company sells a wide range of vehicles under the Ford
brand globally, ranging from small economy passenger cars to heavy
trucks in certain markets. Ford has a particularly strong market
share in the highly profitable North American pickup and European
light commercial vehicle segments.
For the past several years, Ford's credit profile has been weaker
than that of many of its global mass-market peers in the 'BBB'
category, such as GM, Stellantis and VW. Ford's EBIT and FCF
margins have been lower and gross leverage has been a little higher
than these other global auto manufacturers. Partially offsetting
the credit profile effect of lower FCF and higher leverage, Ford
has one of the global auto industry's strongest liquidity
positions, providing it with significant financial flexibility.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within The Rating Case for the Issuer:
-- Global industry light vehicle production rises by 3% in 2022,
including an 11% increase in North America, with continued
effects from the global supply chain challenges. Beyond 2022,
U.S. and global industry production increases but does not
rise back to the 2019 level until 2024;
-- Capex runs near 4%-5% of revenue over the next several years,
with capex in 2022 running at the higher end of the range;
-- Working capital is a source of cash in 2022 on increased
wholesale volumes and a more normalized production environment
in the latter half of the year. Working capital remains a
source of cash in later years on higher production levels;
-- The post-dividend FCF margin excluding redesign cash expenses
runs at about 1% in 2022, then increases toward 2% in later
years;
-- The company maintains automotive cash above $20 billion over
the forecast horizon, with total liquidity, including credit
facility capacity, above $30 billion;
-- Ford Credit continues to distribute dividends to Ford,
although at a lower level than in 2021, which is included in
Fitch's FCF calculations.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to a
positive rating action/upgrade:
-- Fitch does not expect to upgrade Ford's ratings until the
global auto production environment has stabilized;
-- Sustained North American automotive EBIT margin of 6.0%;
-- Sustained global automotive EBIT margin near 3.0%;
-- Sustained FCF margin near 1.5%, excluding restructuring costs;
-- Sustained EBITDA leverage (total debt/operating EBITDA) below
2.0x.
Factors that could, individually or collectively, lead to a
negative rating action/downgrade:
-- An extended decline in automotive cash below $15 billion;
-- Sustained breakeven global automotive EBIT margin;
-- Sustained negative FCF, excluding restructuring costs;
-- Sustained EBITDA leverage above 3.0x.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity Position: Ford had about $28 billion in automotive
cash and marketable securities as of June 30, 2022 (excluding
Fitch's adjustments for not readily available cash). Marketable
securities included $2.0 billion of stock in Rivian Automotive,
Inc. In addition to its cash and marketable securities, as of June
30, 2022, Ford had nearly full availability on its $13.5 billion
primary revolver (after accounting for $25 million in LOCs), $1.0
billion in availability on its new 364-day $1.75 billion revolver
and full availability on its $2.0 billion supplemental revolver.
Ford also had a total of about $400 million available on various
local credit facilities around the world. About $3.4 billion of the
primary revolver commitments mature in 2025 and $10.1 billion
matures in 2027. The supplemental revolver has about $100 million
in commitments that mature in 2024, with the remainder maturing in
2025.
As part of its captive finance adjustment, Fitch's Non-Bank
Financial Institutions team has calculated an allowable
debt-to-equity ratio of 4.0x for Ford Credit. This is lower than
the actual 9.5x ratio, as calculated by Fitch at YE 2021. As a
result of its analysis, Fitch has assumed that Ford makes a
theoretical $13.6 billion equity injection into Ford Credit, funded
with balance sheet cash, to bring Ford Credit's debt-to-equity
ratio down to 4.0x.
Fitch has included the adjustment in its calculation of Ford's not
readily available cash. The resulting adjustment reduces Fitch's
calculation of Ford's readily available automotive cash, but the
company's metrics remain supportive of its 'BB+' IDR and Positive
Outlook.
In addition to the captive-finance adjustment, according to its
criteria, Fitch has treated an additional $3.2 billion of Ford's
automotive cash as "not readily available" for purposes of
calculating net metrics. This is based on Fitch's estimate of the
amount of cash needed to cover typical seasonality in Ford's
automotive business. However, even after excluding the amounts
noted above from its liquidity calculations, Fitch views Ford's
automotive liquidity position as strong.
Debt Structure: As of June 30, 2022, Ford's automotive debt
structure consisted primarily of about $16 billion of senior
unsecured notes, $750 million of borrowings on the 364-day revolver
and about $1.7 million of borrowings outstanding under a U.K.
export finance program, along with about $1.4 billion of various
other long- and short-term borrowings.
ISSUER PROFILE
Ford is a global automotive manufacturer that builds and sells
light vehicles primarily under the Ford and Lincoln brands, as well
as Ford-brand commercial vehicles. Ford also offers financial
services to dealers and customers through Ford Motor Credit Company
LLC.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Rating
------
Ford Motor Company
senior unsecured LT BB+ New Rating RR4
GENAPSYS INC: Cash Collateral Use, $4.1MM DIP Loan Win Final OK
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
GenapSys, Inc. to use cash collateral in accordance with the budget
and obtain postpetiton financing, on a final basis.
The Debtor is permitted to obtain secured postpetition financing
pursuant to the terms and conditions of a Secured
Debtor-in-Possession Term Loan and Security Agreement, by and among
the Debtor, Oxford Finance LLC, as Administrative Agent and
Collateral Agent, and Oxford and any other entity that becomes a
lender under the DIP Facility in an aggregate principal amount not
to exceed $4,100,000, consisting of a multiple-draw term loan
facility.
The Debtor requires the use of cash collateral and the DIP Loans to
finance its operations and fund its sale process.
On December 20, 2019, the Debtor entered into the Prepetition Loan
Agreement, as amended from time to time thereafter, with the
Prepetition Secured Parties. The Prepetition Loan Agreement
provides for term loans in the aggregate principal amount of $30
million.
As of the Petition Date, the Debtor is liable for payment of all
outstanding Prepetition Loan Obligations, and the outstanding
Prepetition Loan Obligations will be an allowed secured claim in an
amount not less than $31,946,423, plus all accruing interest, fees,
expenses, and other amounts owed to the Prepetition Secured Parties
under the Prepetition Loan Documents.
As adequate protection against any diminution in value of the
Prepetition Agent's interest in the Prepetition Collateral, the
Prepetition Agent is granted a valid and perfected security
interest in, and lien on all of the right, title and interest of
the Debtor in, to, and under all present and after-acquired
property and assets of the Debtor.
Subject to the Carve-Out, the Adequate Protection Liens will be (i)
first priority perfected liens on all of the Postpetition
Collateral that is not otherwise encumbered by validly perfected,
non-avoidable security interests or liens as of the Petition Date,
(ii) first priority perfected replacement liens on all of the
Postpetition Collateral as to which the Prepetition Agent had a
first priority lien as of the Petition Date, and (iii) junior
perfected liens on all Postpetition Collateral that is subject to a
Prior Lien. The Adequate Protection Liens on the Postpetition
Collateral will be senior to the DIP Liens on such Postpetition
Collateral.
The Adequate Protection Liens will be enforceable against the
Debtor, its estate, and any successors thereto, including without
limitation, any trustee or other estate representative appointed in
the Chapter 11 Case, or any case under chapter 7 of the Bankruptcy
Code upon the conversion of the Chapter 11 Case, or in any other
proceedings superseding or related to any of the foregoing.
As further adequate protection against any diminution in value of
the interests of the Prepetition Agent in the Prepetition
Collateral, the Prepetition Agent is granted allowed superpriority
administrative expenses claims in the Chapter 11 Case or any
Successor Case in the amount of the Adequate Protection
Obligations, which will be payable from and have recourse to all
Postpetition Collateral and all proceeds of Postpetition
Collateral.
The Adequate Protection Superpriority Claims will be junior only to
the Carve-Out. Except for the Carve-Out, the Adequate Protection
Superpriority Claims will have priority over all administrative
expense claims and unsecured claims against the Debtor or its
estate, including the DIP Superpriority Claim, now existing or
hereafter arising, of any kind or nature whatsoever.
A copy of the order is available at https://bit.ly/3wfm5AF from
Kroll Restructuring Administration LLC, the claims agent
About GenapSys, Inc.
GenapSys, Inc. is focused on the advancement of universal access to
genomic information by delivering an affordable, scalable, and
accurate genomic sequencing ecosystem that empowers both academic
and clinical research applications. Its system leverages a
proprietary electrical microfluidic sequencing chip with a scalable
number of detectors, allowing for a wide range of applications.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 22-10621) on July 11,
2022. In the petition signed by Britton Russell, chief financial
officer and treasurer, the Debtor disclosed up to $50 million in
both assets and liabilities.
Judge Brendan Linehan Shannon oversees the case.
Daniel J. DeFranceshi, Esq., at Richards, Layton and Finger, P.A.
is the Debtor's counsel. The Debtor tapped Wilikie Farr and
Gallagher LLP as special litigation counsel and transactional
counsel, Lazard Freres and Co. LLC as investment banker, and Kroll
Restructuring Administration LLC as claims, noticing and
administrative agent.
GLEAMIN INC: Clay Mask Seller Seeks Subchapter V Relief
-------------------------------------------------------
Gleamin Inc. has sought creditor protection under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code.
Gleamin is a direct-to-consumer ("DTC") owner and wholesaler of
skincare products, including face masks, serums, and moisturizers.
Its products are built with sustainable, ethically sourced
superfoods that are safe for all skin types. Gleamin's most
popular product is the the Vitamin C Clay Mask, a 100% natural
Australian clay mask infused with a super-dose of vitamin C,
turmeric, aloe vera, desert and caviar limes, kakadu plum, castor
oil, and almond oil.
Since founded by Jordan Smyth in March 2019, Gleamin has averaged
$6,300,000 in gross sales annually. Gross sales as of July 31,
2022 for calendar year 2022 remain strong at $3,100,000.
As of the Petition Date, the Debtor has secured debt totaling
$475,000, consisting mostly of private loans. The Debtor also has
unsecured trade debt totaling approximately $1.7 million.
The Debtor subleases an office in Los Angeles, but is current on
rent. All of the Debtor's product is stored and shipped by two
third-party logistics companies ("3PL"), one in Ohio and the other
in the United Kingdom. The Debtor is current with respect to both
of its 3PLs.
The Debtor experienced incredible success early in its existence,
including selling over 500,000 units of the Vitamin C Clay Mask and
achieving top-seller product status on Amazon.com. This success led
to rapid growth in 2019 and 2020, leading to an eight-figure run
rate for the company.
Because the Debtor previously manufactured all of its product in
Australia, the Debtor's normal supply chain can take around 14 more
weeks per product than a product made in the United States.
Therefore, it is imperative that the Debtor hold sufficient
inventory to meet demand.
Of course, like countless other DTC companies in the retail
industry, the Debtor did not anticipate the unprecedented supply
chain disruption caused by the spread of the novel coronavirus
disease 2019 ("COVID-19"). Once COVID-19 hit, the timeline for
product increased dramatically and crippled sales.
In addition, the Debtor also experienced market efficiency drop-off
due to the iOS 14 release. This change limited ad functions on
popular social media sites like Facebook.com and its tracking for
application and web conversion events. As a result,
personalizations and performance reporting was hindered with
respect to customers on those platforms leading to an unanticipated
material loss of marketing efficiency and a decrease in margins.
Such inefficiency got increasingly worse throughout calendar year
2021.
The Debtor also made numerous mishires which led to failures in
its
marketing campaign and team efficiency.
Considering the financial troubles of calendar year 2021, the
Debtor was relying on a strong holiday season in December 2021 to
right the ship. However, holiday 2021 sales failed to hit the
mark, falling 35% year-over-yea
Accordingly, in Q1 2022, the Debtor began phase 1 of its
restructuring efforts which included implementing payroll
reductions and layoffs and moving manufacturing to the United
States. In connection with the initiatives, as of June 2022, Mr.
Smyth remained the only employee of the Debtor
Notwithstanding the above actions, the Debtor remained unable to
pay its secured and unsecured vendors in full in accordance with
the terms of their respective agreements.
When negotiations with its largest secured creditor failed to
produce a reasonable payment plan, the Debtor chose to file a
voluntary petition under Subchapter V to implement the automatic
stay and provide the Debtor with the necessary breathing room to
successfully complete its restructuring.
The Debtor filed the Chapter 11 case with the goal of right-sizing
its balance sheet and confirming a plan of reorganization that will
pay their secured creditors in full over time and provide value to
its unsecured creditors. The Debtor is in a strong position upon
entering chapter 11, and it looks forward to working with its
creditors, vendors and other parties in interest as it charts the
path to continue providing its customers with healthy, vibrant and
glowing skin for many years to come.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Sept. 12, 2022, at 4:00 p.m. (ET) via telephone. Please call
1-866-621-1355 and use access code 7178157 to join the meeting.
About Gleamin Inc.
Gleamin Inc. is an innovative skin beautifying and cleansing
company created by Jordan Smyth.
Gleamin Inc. filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No.
22-10768) on Aug. 18, 2022. In the petition filed by Joran Smyth,
as founder and CEO, the Debtor reported assets and liabilities
between $1 million and $10 million each.
David M. Klauder has been appointed as Subchapter V trustee.
Pashman Stein Walder Hayden, P.C., led by Joseph Charles Barsalona
II, is the Debtor's counsel.
GLOBAL PREMIER: Oxnard Senior Living Files for Chapter 11
---------------------------------------------------------
Global Premier Regency Palms Oxnard LP filed for chapter 11
protection.
According to its Web site http://www.regencypalmsoxnard.com/,
Global Premier operates Regency Palms Oxnard, a luxurious and
newly-renovated senior living community in Oxnard, California.
According to court filings, Global Premier Regency Palms Oxnard LP
estimates between 1 and 49 unsecured creditors. The petition
states funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Sept. 15, 2022, at 11:00 AM at UST-SVND2, TELEPHONIC MEETING.
CONFERENCE LINE:1-866-820-9498, PARTICIPANT CODE:6468388.
About Global Premier Regency Palms
Global Premier Regency Palms Oxnard LP owns Regency Palms Oxnard,
an assisted living facility in Oxnard, California.
Global Premier Regency Palms Oxnard sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-10626)
on Aug. 16, 2022. In the petition filed by Christine Hanna, as
managing member of the General Partner, the Debtor reported assets
and liabilities between $10 million and $50 million each.
Garrick A Hollander, of Winthrop Golubow Hollander, LLP, is the
Debtor's counsel.
GOVERNORS GUN CLUB: Atlanta Club Files for Chapter 11
-----------------------------------------------------
Governors Gun Club Kennesaw LLC has sought chapter 11 protection in
the Northern District of Georgia.
The Debtor on the Petition Date filed motions to use cash
collateral, maintain its bank accounts and pay prepetition employee
wages.
The Debtor is a gun club with two north metro Atlanta locations in
Kennesaw and Powder Springs. The Debtor is owned by 13 separate
entities/individuals, with HIAAM, LLC owning a majority of the
membership interests in the company.
Like so many other small businesses, the Debtor suffered a series
of setbacks at the hands of the pandemic. The Debtor is a
membership based business that offers its members a luxury
experience for indoor shooting facilities, including an indoor
shooting range, professional firearms
training, concerts, and a situational training simulator. The
Debtor also offers packages for corporate and social events at its
club.
South State Bank, N.A., asserts a first priority interest in all
Debtor's assets, including cash collateral. National Bank of
Commerce, a predecessor in interest to South State, has filed a
UCC-1 Financing Statement on November 28, 2017 that includes all
fixtures, accounts, and intangibles related to real property
located at 1005 Cobb Place Boulevard NW, Kennesaw, Georgia, 30144,
which is owned by co-debtor Web IV, LLC. South State asserts the
principal balance of the loan is $8,619,776.
According to court filings, Governors Gun Club Kennesaw 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. 16, 2022, at 10:00 AM.
About Governors Gun Club Kennesaw LLC
Governors Gun Club Kennesaw LLC --
https://www.governorsgunclub.com/ -- is a gun club in Kennesaw,
Georgia.
Governors Gun Club Kennesaw LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. W.D. Ga. Case No. 22-20787) on
August 17, 2022. In the petition filed by William E Brown, as
president, the Debtor reported assets and liabilities between $1
million and $10 million each.
Will B. Geer, of Rountree, Leitman, Klein & Geer, LLC, is the
Debtor's counsel.
GOVERNORS GUN: Case Summary & Six Unsecured Creditors
-----------------------------------------------------
Debtor: Governors Gun Club Kennesaw, LLC
657 Crunkleton Lane
Tiger, GA 30576
Business Description: The Debtor is a membership based business
that offers its members a luxury experience
for indoor shooting facilities, including an
indoor shooting range, professional firearms
training, concerts, and a situational
training simulator. The Debtor also offers
packages for corporate and social events at
its club.
Chapter 11 Petition Date: August 17, 2022
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 22-20787
Debtor's Counsel: William Rountree, Esq.
ROUNTREE, LEITMAN, KLEIN & GEER, LLC
287 Clairmont Road Suite 350
Atlanta, GA 30329
Tel: 678-587-8740
Email: wrountree@rlkglaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by William E. Brown as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/HQFRBSQ/Governors_Gun_Club_Kennesaw_LLC__ganbke-22-20787__0001.0.pdf?mcid=tGE4TAMA
GRATA CAFE: Wins Cash Collateral Access Thru Sept 8
---------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of North
Carolina, Durham Division, authorized Grata Cafe, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance and provide adequate protection.
The Debtor is permitted to use cash collateral through the earliest
of (i) the entry of a final order authorizing the use of cash
collateral, or (ii) the entry of a further interim order
authorizing the use of cash collateral, or (iii) September 8, 2022
or (iv) the entry of an order denying or modifying the use of cash
collateral, or (v) the occurrence of a Termination Event.
The Debtor entity was formed in 2021 and entered into a lease
agreement for the cafe space in April 2021. Extensive delays in
opening the cafe and construction costs, followed by a depressed
restaurant environment due to the COVID-19 pandemic, forced the
Debtor to incur significant debt, both from institutional lenders
and from the owner's wife, Rachel Radford's business, Ceremony
Salon. Since the filing of the case, business has improved.
On June 24, 2021, the Debtor and CFG Merchant Solutions entered
into a loan and security agreement. The loan was secured by a
blanket lien on all the Debtor's assets "now or hereafter acquired"
and perfected by UCC Financing Statement 20210084467h filed with
the North Carolina Secretary of State. The Debtor believes the
balance of the CFG loan is approximately $12,000.
On September 13, 2021, the Debtor and Green Grass Capital entered
into a loan and security agreement. The loan was secured by a
blanket lien on all the Debtor's "present and future accounts" and
perfected by UCC Financing Statement 202I0123874A filed with the
North Carolina Secretary of State. The Debtor believes the balance
of the Green Grass loan is approximately $3,000.
As adequate protection for any diminution in value as a result of
the Debtor's use of cash collateral, the Secured Parties are
granted a post-petition replacement lien in the Debtor's
post-petition property of the same type which secured the
indebtedness of a Secured Party pre-petition, with such liens
having the same validity, priority, and enforceability as the
Secured Party had against the same type of such collateral as of
the Petition Date. A Secured Party's lien is deemed perfected to
the extent the pre-petition liens and security interests were
valid, perfected, enforceable, and non-avoidable as of the Petition
Date; provided however, that nothing in the Order will be deemed to
grant the Secured Party a post-petition lien on assets, if any, in
which it did not possess a valid, perfected, enforceable, and
otherwise unavoidable pre-petition lien.
As additional adequate protection, Grata Cafe will keep all of the
Debtor's personal property insured for no less than the amounts of
the pre-petition insurance and maintain appropriate workers
compensation and general liability insurance. The Debtor will
timely pay all insurance premiums related to any and all of the
collateral securing the claims of the Secured Parties.
These events consist a "Termination Event":
a. The effective date of any confirmed Chapter 11 plan in the
proceeding;
b. Conversion of the case to another Chapter of the Bankruptcy
Code or removal of the Debtor from possession;
c. The entry of further orders of the Court regarding the
subject matter hereof;
d. Dismissal of the proceeding; or
e. Occurrence of an event of default that is not timely
cured.
A further hearing on the matter is scheduled for September 8 at
9:30 a.m.
A copy of the order and the Debtor's budget for the period from
August 9 to September 7, 2022, is available at
https://bit.ly/3pwbBcd from PacerMonitor.com.
The Debtor projects $69,800 in revenue and $68,721 in total
expenses for the period.
About Grata Cafe, LLC
Grata Cafe, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-00494) on March 8,
2022. The case was transferred to the Middle District of North
Carolina (Bankr. M.D.N.C. Case No. 22-80071) on March 21, 2022.
In the petition filed by Jerome Radford, member-manager, the Debtor
disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Lena Mansori James oversees the case.
Travis Sasser, Esq., at Sasser Law Firm is the Debtor's counsel.
HALLIBURTON CO: Egan-Jones Retains BB Senior Unsecured Ratings
--------------------------------------------------------------
Egan-Jones Ratings Company, on August 9, 2022, retained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Halliburton Company.
Headquartered in Houston, Texas, Halliburton Company provides
energy and engineering and construction services, as well as
manufactures products for the energy industry.
HELMERICH & PAYNE: Egan-Jones Retains BB- Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on August 8, 2022, retained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Helmerich & Payne, Inc.
Headquartered in Tulsa, Oklahoma, Helmerich & Payne, Inc. provides
contract drilling of oil and gas wells in the Gulf of Mexico and
South America.
HIE HOLDINGS: Subsidiary Wins Cash Collateral Access, Secured Debt
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Hawaii authorized
Royal Hawaiian Water Co., Ltd., dba Hawaiian Isles Water Company, a
subsidiary of HIE Holdings, Inc. to use cash collateral on an
interim basis and incur secured debt.
The Debtor is permitted to use the cash collateral of Alliance One,
LLC until completion of the final hearing on the Motion.
The authorization to use cash collateral is without prejudice to
(i) any party's position regarding the validity, perfection,
priority, enforceability, and/or extent of the security interests
and other rights of Alliance, or (ii) Alliance's right to seek an
order terminating the use of the pre-petition cash collateral or to
establish the validity and perfection of its security interest or
to otherwise seek relief from the Court.
As adequate protection, Alliance is granted replacement liens in
the estate's post-petition assets, and the proceeds thereof, to the
same extent and priority as any lien held by Alliance in the
Pre-Petition Collateral as of the Petition Date, limited to the
amount of Pre-Petition Collateral as of the Petition Date. The
Replacement Liens would thus be granted with the same validity and
priority and to the same extent and as Alliances's prepetition
liens, and would be subject to the same rights and challenges by or
on behalf of the Debtor. The amount secured by the Replacements
Liens will be equal to any actual net diminution of Alliance's cash
collateral due to the Debtor's use thereof. The Replacement Liens
granted will have the same validity and priority and to the same
extent as Alliance held in the Debtor's prepetition liens and will
be valid, perfected and enforceable against the Replacement
Collateral without further filing or recording of any document or
instrument or the taking of any further action.
The Debtor is authorized to continue to obtain secured, first
priority (with respect to the Debtor's personal property, including
inventory and accounts receivable) "financing" from Alliance,
pursuant to the terms of the Factoring Agreement.
A final hearing on the matter is set for September 6, 2022 at 2
p.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3QCudTN from PacerMonitor.com.
The Debtor projects $1,560,000 in gross profit and $948,184 in
total selling, general and admin expenses for August to October
2022.
About HIE Holdings Inc.
HIE Holdings Inc. is the parent entity of Royal Hawaiian Water Co.,
Ltd., and Hawaiian Isles Kona Coffee Company, Ltd. Holdings is, in
turn, owned by Michael Boulware, Julie Boulware and the Glenn
Boulware Trust.
Royal Hawaiian operates a water bottling facility in Halawa, Oahu,
while Kona Coffee Company roasts, packages and distributes coffee.
Royal Hawaiian Water Co., Ltd., d/b/a Hawaiian Isles Water Company,
filed a Chapter 11 petition (Bankr. D. Hawaii Case No. 22-00524) on
July 30, 2022.
HIE Holdings Inc. filed a Chapter 11 petition (Bankr. D. Hawaii
Case No. 22-00534) on August 3, 2022.
Hawaiian Isles Kona Coffee Company, Ltd., doing business as Hawaii
Coffee Roasters, filed a Chapter 11 petition (Case No. 22-00546) on
Aug. 5, 2022. The Debtors have sought joint administration of
their cases under Case No. 22-00524.
In the petitions filed by Michael H. Boulware, as president, each
of the Debtors reported assets between $1 million and $10 million
and liabilities between $1 million and $10 million.
Judge Robert J. Faris oversees the case.
Chuck C. Choi, Esq., at Choi & Ito, is the Debtors' counsel.
HIGH POWER CONCRETE: Taps Coolidge Wall as Bankruptcy Counsel
-------------------------------------------------------------
High Power Concrete, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Ohio to hire Coolidge Wall, Co,
L.P.A. to serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. advising the Debtor of its powers and duties in the
continued management and operation of its business;
b. attending meeting and negotiating with representatives of
creditors and other parties of interest;
c. taking all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on the
Debtor's behalf, the defense of any action commenced against the
Debtor, negotiations concerning all litigation in which the Debtor
is involved, and objections to claims filed against the estate;
d. preparing legal papers;
e. preparing a plan of reorganization and all related
documents and taking any necessary action to obtain confirmation of
the plan;
f. advising the Debtor in connection with any potential sale
of its assets;
g. appearing before the bankruptcy court, any appellate courts
and the Office of the U.S. Trustee;
h. consulting with the Debtor regarding tax matters; and
i. performing all other necessary legal services.
The firm holds a retainer in the amount of $9,046.25.
As disclosed in court filings, Coolidge Wall is a disinterested
person within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Patricia J. Friesinger, Esq.
Coolidge Wall Co., L.P.A.
33 W. First Street, Ste. 200
Dayton, OH 45402
Tel: (937) 449-5776
Fax: (937) 223-6705
Email: friesinger@coollaw.com
About High Power Concrete
High Power Concrete, LLC is a company in Dayton, Ohio, which is
primarily engaged in concrete work, including portland cement and
asphalt.
High Power Concrete, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ohio Case No.
22-31102) on Aug. 8, 2022, listing $40,235 in assets and $1,080,643
in liabilities. Marcelo S. De Oliveira, sole member, signed the
petition.
Judge Beth A. Buchanan presides over the case.
Patricia J. Friesinger, Esq., at Coolidge Wall CO., L.P.A.
represents the Debtor as counsel.
HOWARD HUGHES: Fitch Alters Outlook on 'BB' IDR to Stable
---------------------------------------------------------
Fitch Ratings has revised Howard Hughes Corporation's (HHC) Rating
Outlook to Stable from Negative, and has affirmed the company's
Long-Term Issuer Default Rating (IDR) at 'BB' and its unsecured
bonds at 'BB'/'RR4. Fitch also affirmed the 'BBB-'/'RR1' rating of
the company's senior secured debt.
The Outook revision to Stable reflects Fitch's expectation that
HHC's leverage will decrease to around the low-8x level in 2022,
driven by operating asset NOI stabilization, increased condo sales
and execution of dispositions. Nothwithstanding unevenness in the
condo and MPC land sales segments, Fitch expects leverage to return
to levels consistent with the 'BB' rating.
The rating reflects HHC's strong portfolio asset quality within its
core markets in and around strategic master planned communities
(MPC), in select Sunbelt markets and other mid-Atlantic and Hawaii
assets. The ratings also consider the company's strategic land
portfolio, development capability and track record, with the
expectation HHC will add to recurring NOI from contractual rents
through its operating assets portfolio.
KEY RATING DRIVERS
Key Assets in Attractive Markets: HHC owns strategic asset
positions in select Sunbelt and mid-Atlantic markets, which benefit
from migration and job growth but also face lower physical and
zoning barriers to entry. Through its operating asset, MPCs, and
strategic development segments, the company is able to plan and
grow its communities over multi-year periods while increasing its
base of recurring income.
The company's MPCs total approximately 118,000 gross acres of land
with 25,000 residential acres of land remaining to be developed and
13,000 acres designated for commercial development or non-compete
users. Despite a rising mortgage rate and inflationary environment,
HHC's markets continue to experience elevated housing demand,
leading to homebuilders' ongoing purchase of additional lots in the
company's MPCs at appreciating prices.
Land and Condo Development Volatility: Fitch views HHC's rental
income risk profile as below average relative to its equity REIT
peers, generally consistent with high speculative grade category.
The company generated approximately 31% of 2021 revenues
contractual rents from its operating portfolio properties, which
include predominantly office, multifamily, retail properties
located in and adjacent to its master planned communities. This
figure was down from 53% of revenues in 2020 as the company's other
segments, notably MPCs and Strategic Developments performed
relatively stronger in 2021.
The company's development-for-sale segments provide incremental
cash flow but possess increased volatility. Fitch anticipates an
increase in earnings for these segments in 2022, with a drop in
2023 and subsequent rebound later into the forecast period. This
volatility is due to the timing of the future Ward Village condo
development deliveries.
High Income-Based Leverage: HHC's net debt to recurring operating
EBITDA leverage is high relative to low-investment-grade-rated
equity REIT peers, partly due to the company's development focus
and related non-income producing assets. Moreover, the company
generates a high percentage of income from non-recurring asset
sales within its MPC and strategic developments segments, which
Fitch views as more volatile than contractual rental income.
The Operating Asset segment NOI recovered in 2021 and surpassed
pre-pandemic levels. Fitch foresees a modest decline in this
segment in 2022, partially due to the sale of the company's hotel
assets in 2021 in addition to higher expected deliveries of condo
projects. As revenues stabilize and development assets are
completed, Fitch anticipates leverage declining to the low to mid
7x level over the forecast period.
Fitch also considers HHC's net debt/capital, a supplemental metric
commonly used to analyze homebuilders, which was 55.5% for the
quarter ended June 30, 2022, and 50.7% for the full year ended Dec.
31, 2021. Fitch expects this metric to sustain around the mid 50%
range during the forecast period through 2024.
Prefunded Development Mitigates Risk: HHC prefunds all development
with non-recourse secured debt. The company does not begin
construction until all necessary cash is on the balance sheet.
Fitch views this strategy as mitigating unfunded development
pipeline risk. As of June 30, 2022, projects under construction had
an estimated total cost of $3.5 billion, with $980 million
remaining to be spent, including $638 million of committed debt to
be drawn.
As of June 30, 2022, unfunded development cost to complete
represented 2.2% of undepreciated assets. Fitch generally views
development cost to complete as a percentage of undepreciated
assets over 10% as a concern. The company only develops core MPCs,
which Fitch views positively.
In May 2021, HHC received approval from NYC Landmarks Preservation
Commission for the proposal of redeveloping the 250 Water Street
(Seaport District) parking lot to condos, affordable housings, and
community/office space. After receiving final approvals in December
2021, the company plans to break ground on the development in 3Q22.
Fitch believes this will contribute positively to the Seaport
District in the forecast years.
Speculative Grade Capital Access: HHC has demonstrated capital
access to the unsecured bond market as the company issued $750
million and $1.3 billion senior unsecured notes in 2020 and 2021,
respectively. Nonetheless, the company maintains secured debt at
over 50% of total debt as it continues to refinance mortgages,
which is more consistent with the capital structure of
below-investment-grade real estate companies.
Strategic Management Shift Completed: Upon management's 2019 shift,
HHC implemented a transformation plan, which aimed to substantially
reduce G&A expenses, dispose of $2 billion gross ($600 million net)
in non-core assets, and refine development focus to only core MPCs.
Fitch believes the company has substantially completed this plan,
given its G&A reduction, $578 million of net asset sales and exit
from non-core assets, such as the hospitality segment, 110 North
Wacker in Chicago and Riverwalk outlets in New Orleans.
DERIVATION SUMMARY
Although HHC has not elected REIT status, Fitch views select U.S.
equity REITs and, to a lesser extent, U.S. homebuilders as
comparable peers, notwithstanding the company's differentiated
business model that includes ownership of multiple commercial
property types in and around select MPCs, as well as its high
exposure to sales income from developed lots and merchant
developments. In 2021, The company generated approximately
one-third of its revenue from contractual rents from its operating
portfolio properties, including office, multifamily, retail and, to
a lesser extent, hotels located in and adjacent to its MPCs.
HHC's portfolio is more diversified by property type than
higher-rated, Sunbelt-focused multifamily REIT peers Camden
Property Trust (A-/Stable) and Mid-America Apartment Communities
(A-/Stable); however, the company operates at considerably higher
net debt/recurring operating EBITDA leverage with reliance on
non-contractual residential land sales. HHC's portfolio is somewhat
similar to American Assets Trust (AAT; BBB/Stable) in that it has a
diversified portfolio of office, retail and multifamily assets with
a U.S. West Coast focus and some additional Hawaii exposure;
however, AAT's revenues are 100% derived from owned real estate and
Fitch expects the company to operate at around 6x leverage through
the forecast horizon.
Fitch considers debt to capitalization as a secondary leverage
measure given HHC's high level of non-income-producing land and
homebuilding industry exposure. Fitch expects the company will
operate with a debt capitalization ratio of approximately 55% over
the forecast period, which is considerably above the 35% to 40%
range for homebuilding peer Toll Brothers, Inc. (BBB-/Positive).
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Operating Asset segment decline of 2% in 2022, followed by
SSNOI growth of low-single through the remainder of forecast
period;
-- $300 billion of dispositions in 2022;
-- Strategic Development Revenues of $675 million in 2022,
$0 in 2023 and returning to $600 million in 2024;
-- Development deliveries of approximately $600 million at
around 8% yields through the forecast period.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- REIT leverage (net debt to recurring operating EBITDA)
sustaining below 7x, assuming a similar or modestly greater
percentage of NOI from contractual rents;
-- REIT fixed-charge coverage sustaining above 2.5x;
-- Growth in HHC's operating assets resulting in NOI from
recurring contractual rental income comprising 70% of net
operating income;
-- Growth in unencumbered assets and/or UA/UD coverage improving
to 1.75x, or greater.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch expectations of net leverage (net debt to recurring
operating EBITDA) sustaining above 9x and/or a net debt to
capital ratio sustaining above 55%;
-- Expectations of REIT fixed charge coverage sustaining below
1.5x;
-- Expectations of deteriorating access to capital markets.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch estimates HHC's base case liquidity
coverage at 1.1x through YE 2023 and improves to 1.4x, assuming 80%
secured refinancing. The company's sources include approximately
$350 million in estimated retained cash flow, $85 million
availability on its secured credit facility and approximately $573
million of cash on hand. As of June 30, 2022, projects under
construction had an estimated total cost of $3.5 billion, with $980
million remaining to be spent, including $638 million of committed
debt to be drawn on existing development projects.
Fitch defines liquidity coverage as sources of liquidity divided by
uses of liquidity. Sources include unrestricted cash, availability
under unsecured revolving credit facilities and retained cash flows
from operating activities after dividends. Uses include pro rata
debt maturities, expected recurring capex and forecast
(re)development costs.
ISSUER PROFILE
The Howard Hughes Corporation (NYSE: HHC) owns, manages and
develops commercial, residential and mixed-use real estate
throughout the U.S. Key holdings include its portfolio of master
planned communities, as well as operating properties and
development opportunities.
HUDSON RIVER TRADING: Fitch Affirms 'BB' Long-Term IDR
------------------------------------------------------
Fitch Ratings has affirmed Hudson River Trading LLC's (HRT)
Long-Term Issuer Default Rating (IDR) and secured debt ratings at
'BB'. The Rating Outlook is Stable.
KEY RATING DRIVERS
The ratings reflect HRT's established market position as a
technology-driven market maker in the U.S. equities market across
various venues and its growing presence in other asset classes. The
ratings also reflect HRT's improving scale, strong operating
performance, scalable business model, and good track record of
managing market and operational risks.
Rating constraints include elevated operational risks inherent in
technology-driven trading; limited business diversification;
reliance on volatile transactional revenue streams; a fully secured
funding profile; and heightened regulatory scrutiny of designated
market making, high-frequency trading and dark pools.
HRT's EBITDA to gross revenue ratio has been very strong
historically, consistently above Fitch's 'bb' category quantitative
benchmark range of 10%-20% for securities firms with low balance
sheet usage. Fitch expects HRT's margins to remain at, or above,
historical averages over the medium-term, supported by new strategy
roll-outs and product expansion, which should support HRT's revenue
despite the likelihood of less volatile market conditions than were
present over the last two years. Nevertheless, HRT's revenues are
highly transactional and could be sensitive to market conditions,
which constrains the firm's business profile in Fitch's opinion.
Fitch views HRT's focus on organic growth favorably. However, HRT's
expansion into new asset classes and geographies could result in
higher market, balance sheet and funding risks. Fitch expects HRT
to maintain a prudent deployment process for new trading
strategies, including extensive testing of program code and trading
output. Outsized trading or operational losses would be viewed
negatively.
Fitch views HRT's cash flow leverage as conservative, with the firm
operating below Fitch's 'bb' category capitalization and leverage
benchmark range of 2.5x-3.5x for securities firms with low balance
sheet usage. Although not expected, a material increase in balance
sheet leverage from the most recent reported levels would be viewed
negatively by Fitch, particularly if associated with more
substantial market risks and/or the use of confidence-sensitive
secured borrowings.
HRT's funding profile is viewed as limited, given its fully-secured
corporate debt profile and reliance on confidence-sensitive secured
broker-dealer facilities. Corporate debt is represented by a single
$2.1 billion senior secured term loan, due in March 2028.
Fitch views HRT's liquidity as generally adequate, as the risks of
its confidence-sensitive and predominantly secured funding profile
are partially offset by the largely liquid securities inventory,
which consist almost exclusively of Level 1 financial instruments.
HRT has increased its committed settlement facilities, but
contingency funding would be subject to the availability of
unencumbered collateral. Positively, in the first half of 2022, the
firm obtained a committed revolving credit facility which could
cover short-term funding needs if needed.
Fitch viewed interest coverage (EBITDA/Interest expense) as strong
in the most recent available trailing 12 month (TTM) reporting
period. Coverage may decline during lower volatility environments,
but Fitch expects it to remain substantially above the 'bb'
category quantitative benchmark range of 4x to 6x, absent material
market dislocations or increases in debt.
The Stable Rating Outlook reflects Fitch's expectations that HRT
will maintain good operating performance, modest cash flow and
balance sheet leverage and sufficient liquidity in a lower
volatility environment.
The secured term loan rating is equalized with the IDR and reflects
the fully secured funding profile and average recovery prospects in
a stressed scenario.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- An inability to maintain leverage at or below 3.0x on a gross
debt/adjusted EBITDA basis;
-- A substantial increase in balance sheet leverage above 15x on
a tangible assets to tangible equity basis, particularly if
associated with higher market or funding risks;
-- A material deterioration in interest coverage, approaching 6x;
-- Adverse legal or regulatory actions against HRT, which results
in a material fine, reputational damage, or alteration in the
business profile;
-- Material operational or risk management failures;
-- An idiosyncratic liquidity event;
-- An inability to maintain its market position in the face of
evolving market structures and technologies, and/or a material
shift into trading less liquid products.
Positive rating action is likely limited to the 'BB' rating
category given the significant operational risk inherent in
technology-driven trading. However, factors that could,
individually or collectively, lead to positive rating
action/upgrade:
-- Consistent operating performance and minimal operational
losses over a longer time period;
-- Increased funding flexibility, including demonstrated access
to third party funding through market cycles and the
introduction of an unsecured funding component;
-- Maintaining cash flow leverage consistently at or below 1.5x
on a gross debt/adjusted EBITDA basis;
-- Diversification of trading platforms outside of equities and
equity-related products, while maintaining a limited and well
managed market risk profile;
The secured term loan rating is primarily sensitive to changes in
HRT's IDR, and secondarily, to material changes in HRT's capital
structure and/or changes in Fitch's assessment of the recovery
prospects for the debt instrument.
INLAND BOAT: Unsecureds Will Get 26% of Claims in Subchapter V Plan
-------------------------------------------------------------------
Inland Boat Club, LLC filed with the U.S. Bankruptcy Court for the
District of Utah a Plan of Reorganization under Subchapter V dated
August 18, 2022.
Inland Boat Club was founded as a Utah limited liability company on
March 4, 2019, by Blomquist. The Debtor operates a boat sharing
service, where parties to club contracts may use premium boats
owned by the Debtor on lakes and reservoirs in Utah.
A critical action taken by the Debtor was to obtain Bankruptcy
Court approval for it to continue to honor the Club Member
Contracts and to continue to schedule use of the Boats by Club
Members. Because most of the fees paid by Club Members was before
Inland Boat Club filed its chapter 11 case, the obligations
constituted pre-bankruptcy obligations of the Debtor. Because it is
critical that the Debtor continue operating and providing use of
Boats to Club Members, the Debtor successfully moved the Bankruptcy
Court to permit it to continue scheduling and providing use of the
Boats to Club Members in the ordinary course of business.
The projections anticipate that the Debtor will be able to fund its
projected Disposable Income through its ongoing business operations
and make distributions to holders of Allowed Claims in full under
the Plan, the Debtor submits that the Plan is not likely to be
followed by the liquidation or need for future reorganization of
the Debtor.
Potential recovery by creditors under the Plan is more likely to be
higher than it would be in a liquidation under chapter 7. The
Debtor projects a 26% distribution on account of general unsecured
claims under the Plan and no distribution to holders of general
unsecured claims in chapter 7.
Class 2 consists of General Unsecured Claims. After satisfaction in
full or adequate provision for satisfaction in full of all Allowed
Administrative Expense Claims and Allowed Priority Claims, each
holder of an Allowed Class 2 Claim will receive from the
Distribution Fund payment up to in full of its Allowed Class 2
Claim, without interest. Following satisfaction in full or adequate
provision for satisfaction in full of all Allowed Administrative
Expense Claims and Allowed Priority Claims, each holder of an
Allowed Class 2 General Unsecured Claim will receive its pro rata
share (subject to reserves for Unsecured Claims that have been
objected to and/or are unliquidated) will receive its pro rata
share of amounts available from the Distribution Fund on a
quarterly basis.
Following the last contribution by the Reorganized Debtor to the
Distribution Fund and upon resolution of all Disputed Class 2
Claims, final distributions shall be made from the Distribution
Fund. Class 2 is impaired by the Plan.
Class 3A Interests – Class A Units. Holders of Class 3A Interests
will receive ownership in the Reorganized Debtor in the same number
of Class A Units and percentage ownership of the Debtor as they now
hold in the Debtor. Class 3A is impaired by the Plan.
Class 3B Interests – Class B Units. Holders of Class 3B Interests
will receive ownership in the Reorganized Debtor in the same number
of Class 3B Units and percentage ownership in the Reorganized
Debtor as they how hold in the Debtor. No distributions to holders
of Class B Units until the final distribution is made to holders of
Class 2 Unsecured Claims from the Distribution Fund. Class 3B is
impaired by the Plan.
Beginning no later than the Initial Distribution Date, the Debtor
shall deliver to the Distribution Agent and deposit into the
Distribution Fund its projected Disposable Income to fund the
Distribution Fund. The aggregate amount of funds deposited in or
credited to the Distribution Fund shall be no less than the amount
of Total Distributions.
Beginning no later than the Initial Distribution Date, the Debtor
shall deliver to the Distribution Agent and deposit into the
Distribution Fund its projected Disposable Income, as calculated
hereunder, to fund the Distribution Fund. The aggregate amount of
funds deposited in or credited to the Distribution Fund shall be no
less than the amount of Total Distributions.
A full-text copy of the Plan of Reorganization dated August 18,
2022, is available at https://bit.ly/3QLNF0s from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Kenneth L. Cannon II, Esq.
Penrod W. Keith, Esq.
Dentons Durham Jones Pinegar, P.C.
111 South Main Street, Suite 2400
P.O. Box 4050
Salt Lake City, UT 84110-4050
Telephone: (801) 415-3000
Facsimile: (801) 415-3500
Email: Kenneth.Cannon@dentons.com
Penrod.Keith@dentons.com
About Inland Boat Club
Inland Boat Club, LLC -- https://www.inlandboatclub.com/ -- is a
boat club for avid boaters and water sport enthusiasts. It is based
in Lindon, Utah.
Inland Boat Club sought bankruptcy protection under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Utah Case No.
22-21879) on May 20, 2022, listing as much as $10 million in both
assets and liabilities. D. Ray Strong of Berkeley Research Group
serves as Subchapter V trustee.
Judge R. Kimball Mosier oversees the case.
Kenneth L. Cannon, II, Esq., and Penrod W. Keith, Esq., at Dentons
Durham Jones Pinegar P.C. are the Debtor's bankruptcy attorneys.
INSULATION COATINGS: Wins Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Pennsylvania
authorized Insulation Coatings & Consultants, LLC to use cash
collateral on an interim basis in accordance with its agreement
with the United States of America, on behalf of the Internal
Revenue Service.
The Debtor requires the use of cash collateral to pay current
operating expenses in order to continue in business.
The parties agreed that prior to August 9, 2022, the IRS levied on
property of the Debtor and filed a Notice of Federal Tax Lien
against the Debtor. The lien memorialized in the Notice of Federal
Tax Lien encumbered all property or rights to property belonging to
the Debtor. As of the petition date, the balance due on the periods
with federal tax liens is $583,127
As adequate protection, the IRS is granted a replacement lien on
postpetition accounts receivable, including proceeds and products
thereof. This postpetition lien will be shared by the IRS with
other secured creditors as those secured creditors are identified.
The priority of each secured creditor's interest in this
postpetition lien will be based on the priority each secured
creditor held in property of the Debtor as of the petition date. No
additional notices of federal tax lien need be filed to perfect
such postpetition liens but may be filed if the IRS so chooses.
This postpetition lien will be limited to accounts receivable that
will be or have been acquired from the petition date through the
term of this agreement. This lien will be in addition to the liens
that the IRS had in the assets and property of the Debtor as of the
petition date, which extend to and encumber the proceeds and
products of the property of the Debtor in existence at the time the
bankruptcy petition was filed.
The Debtor will make monthly adequate protection payments in the
amount of $55,000 on the secured prepetition tax debt. Payments
will commence on September 15, 2022. The subsequent monthly
payments will be made on the 15lh day of each month thereafter
until a plan is confirmed, the case is dismissed or converted, or
the agreement is terminated.
A copy of the order is available at https://bit.ly/3T7attf from
PacerMonitor.com.
About Insulation Coatings & Consultants, LLC
Insulation Coatings & Consultants, LLC provides acoustical and
thermal insulations that have been used in commercial, industrial
and institutional projects nationwide. The Debtor serves the New
York, Pennsylvania, and Ohio areas. The Debtor sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case
No. 22-10340) on August 9, 2022. In the petition signed by Charles
C. Sorce, member manager, the Debtor disclosed up to $100 million
in both assets and liabilities.
Judge Thomas P. Agresti oversees the case.
Guy C. Fustine, Esq., at Knox McLaughlin Gornall & Sennett, PC is
the Debtor's counsel.
INTERIOR COMMERCIAL: Seeks Cash Collateral Access
-------------------------------------------------
Interior Commercial Installation, Inc. asks the U.S. Bankruptcy
Court for the Northern District of California, Oakland Division,
for authority to use cash collateral to make payroll, pay rent,
pay for new inventory and generally, for operations.
At the time of the filing of the petition, the Debtor's assets
consisted of cash in its Bank of Stockton checking accounts,
accounts receivable, ERC Tax credit receivable, inventory, office
furniture, and a fleet of vehicles.
The Debtor filed a prior case on Dec. 7, 2018 as Case No. 18-42874.
The Prior Case was confirmed by order entered on March 4, 2020, and
a discharge was entered.
Various lenders have filed blanket UCC-1's. Yet to continue
operations, the Debtor needs to use the cash, inventory,
receivables and money generated from machinery to make payroll, pay
rent, pay for new inventory and generally, for operations. The
Debtor's assets, once receivables are collected, exceed
collateralized debt by over $1.7 million.
The entities with an interest in the cash collateral are DLUI
Assets Bravo, LLC, Everest Business Funding, Forward Financing,
LLC, Kalamata Capital Group, Nextwave Enterprises, Vendor Financial
Services, and Yellowstone Capital West LLC.
After confirmation of the prior bankruptcy, the Debtor incurred a
new loan in favor of LCF Group in the original amount of $440,000
with an estimated balance as of the Petition Date of $337,100.
The Debtor proposes to be allowed to use all cash collateral to pay
for the normal operating expenses of the business including payment
of a salary to Jens Jensen, its sole shareholder not to exceed
$13,333/month.
As adequate protection, the Debtor proposes to provide all secured
creditors holding a blanket UCC-1 a replacement lien for the use of
all pre-petition cash collateral that is used by granting these
secured creditors a lien in post-petition receivables and cash.
Creditors will have the same priority in such replacement lien as
these creditors had pre-petition. Further, the Debtor proposes to
pay secured creditors, as adequate protection, commencing 30 days
after entry of order authorizing use of cash collateral as
follows:
Monthly Payments
Lender in Prior Bankruptcy
------ -------------------
DLUI Assets $1,399
Everest Business $1,350
Forward Financing $1,461
Kalamata Capital $1,891
Nextwave Enterprises $1,750
Vendor Financial $1,874
Yellowstone Capital $2,436
LCF Group $6,405
The Debtor proposes that these payments, absent further Court
order, continue until the sooner of confirmation, dismissal,
conversion or the failure to cure a default after 10 days' written
notice to the Debtor and its counsel.
A copy of the motion is available at https://bit.ly/3wmasI0 from
PacerMonitor.com.
About Interior Commercial Installation, Inc.
Interior Commercial Installation, Inc. is a building finishing
contractor. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-40745) on August
2, 2022. In the petition signed by Jens Christian Jensen,
president, the Debtor disclosed up to $10 million in assets and up
to $1 million in liabilities.
Judge Roger L. Efremsky oversees the case.
Lars Fuller, Esq., at The Fuller Law Firm, PC is the Debtor's
counsel.
INTERTAPE POLYMER: Egan-Jones Withdraws BB Sr. Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on August 11, 2022, withdrew its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Intertape Polymer Group.
Headquartered in Montreal, Canada, Intertape Polymer Group
manufactures polyolefin, plastic and paper-based packaging
products.
ISTAR INC: Egan-Jones Retains BB- Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on August 10, 2022, retained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by iStar Inc.
Headquartered in New York, New York, iStar Inc. operates as a real
estate investment company.
JA SEEKINS: Hearing Thursday on Continued Cash Collateral Access
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Washington,
authorized JA Seekins Painting Inc. to use cash collateral to pay
prepetition wages to Hayden Alexander, Nakoma Glossip, and Andrew
Emmerich for hours worked from August 8, 2022, through the date the
bankruptcy case was filed.
The Court said the hearing on the Debtor's requests (i) to pay
prepetition wages to David Seekins for hours worked from August 8,
2022, through the date the case was filed and (ii) for authority to
use cash collateral on an interim basis, is continued to August 25,
at 11 a.m. in Judge Alston's Courtroom, 700 Stewart Street, Suite
7206, Seattle, Washington.
As directed by the Court, the Debtor filed on Monday a supplemental
declaration of David Seekins and a declaration by Thomas Neeleman,
its counsel, to provide additional information required to support
its bid to access cash collateral, and filed an amended Cash
Collateral Motion on Tuesday.
A copy of the order is available at https://bit.ly/3T7aNrX from
PacerMonitor.com.
About JA Seekins Painting, Inc.
JA Seekins Painting, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-11316-CMA) on
August 14, 2022. In the petition signed by David Seekins,
president, the Debtor disclosed up to $50,000 in assets and up to
$500,000 in liabilities.
Judge Christopher M. Alston oversees the case.
Thomas D. Neeleman, Esq., at Neeleman Law Group, P.C. is the
Debtor's counsel.
JEFFERSON LA BREA: SARE Files for Chapter 11 Bankruptcy
-------------------------------------------------------
Jefferson La Brea D&J Properties LLC filed for chapter 11
protection.
The Debtor, a Single Asset Real Estate, says its principal asset is
located at 5112-2118 W. Jefferson Blvd., Los Angeles, California.
According to court filings, Jefferson La Brea D&J Properties
estimates between 1 and 49 unsecured creditors. The petition
states funds will be available to unsecured creditors.
About Jefferson La Brea D&J Properties LLC
Jefferson La Brea D&J Properties LLC is a Single Asset Real Estate
(as defined in 11 U.S.C. Sec. 101(51B)).
Jefferson La Brea D&J Properties LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No.
22-14481) on August 17, 2022. In the petition filed by Jason E.
Upchurch, as manater, the Debtor reports estimated assets between
$10 million and $50 million and estimated liabilities between $1
million and $10 million.
The debtor is represented by David B Shemano, of ShemanoLaw.
JGR GROUP: Wins Cash Collateral Access Thru Aug 31
--------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
entered an order amending the Interim Order authorizing JGR Group,
Inc. to use cash collateral on an interim basis through August 31,
2022.
The Court said the Debtor may only make payments as set forth in
the Second Amended Budget and is not authorized to make any
additional payments without prior Court approval.
The Interim Order as modified will otherwise remain in full force
and effect.
On August 13, 2022, the Debtor filed a Statement in Support of
Pending Cash Collateral Motion containing an updated 13 Week Budget
for August 8 to November 6. The updated budget provides for
separate payments to the Debtor's Vice President and the Debtor's
President in lieu of the $30,000 of RGS Payments provided for in
the Amended Budget.
On August 15, 2022, the Court entered a Third Amended Emergency
Order (I) Authorizing Debtors Use Of Cash Collateral, (II)
Providing Adequate Protection Thereof And (III) Scheduling a Final
Hearing [ECF No. 81] amending the Interim Order with respect to the
Consulting Expenses Paragraph to allow for the payment of the RGS
Expenses for the period spanning August 16 to August 21 in
accordance with the Second Amended Budget.
The final hearing on the matter is adjourned to August 30 at 10
a.m. via Zoom.
A copy of the order is available at https://bit.ly/3Pz7xTo from
PacerMonitor.com.
About JGR Group, Inc.
JGR Group, Inc. is a general contractor focused on residential
renovation. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10710) on June 3,
2022. In the petition signed by Gennadiy Sadykov, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Lisa G. Beckerman oversees the case.
Leo Jacobs, Esq., at Jacobs PC is the Debtor's counsel.
JOSEPH KLAYNBERG: Creditor Seeks Chapter 11 Trustee Appointment
---------------------------------------------------------------
Series 2020A of Nahla Capital LLC ("Nahla") asks the U.S.
Bankruptcy Court for the Southern District of New York to appoint a
Chapter 11 Trustee for Joseph Klaynberg.
Prior to the Petition Date, the Debtor was engaged in the
residential construction business. In January 2019, the Debtor and
his business partner, Eric Brody obtained just under $68 million in
financing from Deutsche Bank AG, New York Branch to finance
construction of a luxury condominium known as "The Vitre" located
at 302-304 East 96th Street, New York, New York 10128.
The loan was originated in two parts: (i) a $43 million mortgage
loan under a Senior Loan Agreement between DB and WWML96 DE, LLC as
Mortgage Borrower, an entity ultimately owned by the Debtor and
Brody; and (ii) a mezzanine loan for approximately $24.9 million
under a Mezzanine Loan Agreement between DB and WWML96 DE Mezz,
LLC.
As security for the Mezz Loan, the Mezz Borrower pledged its 100%
equity interests in WWML96 DE Pledge, LLC and related collateral.
WWML96 DE Pledge, LLC owned 100% of the equity interests in the
Mortgage Borrower. The Mortgage Borrower owned the Vitre Property.
On May 30, 2019, DB assigned a Mezz Loan to Meadowbrooke Limited,
an entity for which Nahla Capital Management, LLC is the investment
manager. Meadowbrooke subsequently assigned the Mezz Loan to Series
2020A of Nahla Capital LLC, another entity managed by Nahla
Capital, on September 29, 2020.
Beginning around the time the Mezz Borrower defaulted on the Mezz
Loan, the Debtor began implementing a scheme to defraud Nahla by
hindering or delaying Nahla's ability to collect on its guaranty
claims against the Debtor. The cornerstone of this asset protection
scheme involved a sham separation and divorce with his then wife,
Emily Klaynberg.
The separation agreement provided for the transfer of a majority of
the Debtor's assets, including without limitation substantially all
of the Debtor's identified liquid assets, to Emily in an attempt to
shield them from the reach of Nahla. The Debtor also transferred
substantial cash and real estate-related investments to, and/or for
the benefit of, his and Emily's three sons (Daniel, Edward, and
Robert) and others.
Nahla points out that the Debtor has engaged in a blatant pre- and
post-petition scheme to move assets out of his name and into the
hands of insiders, including into the hands of his former spouse
and three adult children, in an effort to hinder Nahla's ability to
collect on its judgment against the Debtor for over $13 million.
The Debtor transferred the majority of his assets, including
substantially all of his liquid assets, to his former spouse in a
sham divorce conveniently entered only after the Debtor became
exposed on Nahla's guaranty claims. In all, the Debtor has
transferred $15-20 million in value to his former spouse, sons, and
other insiders through that sham divorce, direct cash transfers,
and transfers made by entities that the Debtor controls.
Moreover, the Debtor's recently filed plan of liquidation makes
clear he has no interest in fulfilling his fiduciary duties as a
debtor-in-possession, but rather seeks to maintain control of the
liquidation and claims reconciliation processes for purposes of
ensuring the maximum benefit to insiders, and minimal recovery to
creditors.
A copy of the motion is available for free at
https://bit.ly/3PEMZJd from PacerMonitor.com.
Attorneys for Series 2020A of Nahla:
Patrick L. Robson, Esq.
Robert A. Rich, Esq.
Silvia N. Ostrower, Esq.
HUNTON ANDREWS KURTH LLP
200 Park Avenue
New York, NY 10166
Telephone: (212) 309-1000
Email: probson@huntonak.com
rrich2@huntonak.com
sostrower@huntonak.com
About Joseph Klaynberg
Joseph Klaynberg sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10165) on February 11,
2022. The Debtor is represented by Matthew Roseman, Esq., at Cullen
and Dykman LLP.
JOYCARE THERAPY: Files Subchapter V Case
----------------------------------------
Joycare Therapy LLC has sought bankruptcy protection. The Debtor
filed as a small business debtor seeking relief under Subchapter V
of Chapter 11 of the Bankruptcy Code.
The Debtor operates an Advanced Day Program for medically fragile
or complex kids from 6 weeks to 20 years of age, that includes
nursing care, as well as, art, music, and language related
services.
The Debtor filed motions to use cash collateral, use its bank
accounts and pay payroll owed to 15 employees.
According to court filings, Joycare Therapy estimates between 1 and
49 creditors. The petition states funds will be available to
unsecured creditors.
About Joycare Therapy
Joycare Therapy LLC, doing business as Joycare Pediatric Day Health
Center, in Houston Texas, is a provider excellent skilled nursing
care services throughout the day along with speech, physical, and
occupational therapy.
Joycare Therapy filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No.
22-32351) on Aug. 17, 2022. In the petition filed by Huan Le, as
manager, the Debtor reported assets between $100,000 and $500,000
and estimated liabilities between $1 million and $10 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Reese W Baker, of Baker & Associates, is the Debtor's counsel.
JOYCARE THERAPY: Gets Cash Collateral Access Thru Sept 13
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Joycare Therapy, LLC dba Pediatric Day
Health Center to use cash collateral on an interim basis for
necessary business expenses incurred in the ordinary course of
business in the categories and amounts on the budget, with a 10%
variance, through the date of the final cash collateral hearing.
The hearing is set for September 13, 2022 at 3 p.m.
The Court said that lenders JP Morgan Chase Bank NA, U.S. Bank
Equipment Finance, U.S. Small Business Administration, and Huan Le
will continue to have the same liens, encumbrances and security
interests in the cash collateral generated or created post filing,
plus all proceeds, products, accounts, or profits thereof, as
existed prior to the filing date.
The Debtor is also directed to provide to the Lenders copies of all
insurance policies currently in force, and further continue to keep
all collateral of the Lenders fully insured against all loss, peril
and hazard with substantially similar coverage as in the past.
A copy of the order is available at https://bit.ly/3CrQi3u from
PacerMonitor.com.
About Joycare Therapy, LLC
Joycare Therapy, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-32351) on August 17,
2022. In the petition filed by Huan Le, manager, the Debtor
disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Reese W. Baker, Esq., at Baker and Associates is the Debtor's
counsel.
KHOFFNER USA: Seeks to Hire Gamberg & Abrams as Bankruptcy Counsel
------------------------------------------------------------------
Khoffner USA, Inc. seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to hire Gamberg & Abrams to
serve as legal counsel in its Chapter 11 case.
The firm's services include:
(a) advising the Debtor with respect to its powers and duties
in the continued management and operation of its business and
properties;
(b) attending meetings and negotiating with representatives of
creditors and other parties, and advising the Debtor on the conduct
of its case, including all of the legal and administrative
requirements of operating in Chapter 11;
(c) advising the Debtor on matters relating to the evaluation
of the assumption, rejection or assignment of unexpired leases and
executory contracts;
(f) advising the Debtor regarding legal issues arising in or
relating to its ordinary course of business;
(g) taking all necessary action to protect and preserve the
Debtor's estate, including the prosecution of actions on its
behalf, the defense of any actions commenced against the estate,
negotiations concerning all litigation in which the Debtor may be
involved and objections to claims filed against the estate;
(h) preparing legal papers;
(i) negotiating and preparing a plan of reorganization,
disclosure statement and all related documents, and taking any
necessary action to obtain confirmation of such plan;
(g) attending meetings with third parties and participating in
negotiations;
(k) appearing before the bankruptcy court, any appellate
courts, and the Office of the U.S. Trustee; and
(l) performing all other necessary legal services for the
Debtor.
The firm will be paid at these rates:
Thomas L. Abrams $500 per hour
Jared L. Gamberg $450 per hour
As disclosed in court filings, Gamberg & Abrams is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Thomas L. Abrams, Esq.
Gamberg & Abrams
633 S. Andrews Avenue, #500
Fort Lauderdale, FL 33301
Tel: (954) 523-0900
Fax: (954) 915-9016
Email:tabrams@tabramslaw.com
About Khoffner USA Inc.
Khoffner USA Inc., a craft brewery in Fort Lauderdale, Fla., filed
a petition under Chapter 11, Subchapter V of the Bankruptcy Code
(Bankr. S.D. Fla. Case No. 22-15966) on Aug. 1, 2022, listing as
much as $1 million in both assets and liabilities. Linda Marie
Leali has been appointed as Subchapter V trustee.
Judge Scott M. Grossman oversees the case.
Thomas L. Abrams, Esq., at Gamberg & Abrams is the Debtor's legal
counsel.
LASHLINER INC: Seeks Interim Cash Collateral Access
---------------------------------------------------
Lashliner, Inc. asks the U.S. Bankruptcy Court for the Western
District of Washington for authority to use cash collateral on an
interim basis in accordance with its agreement with Bank of
America.
The parties agree that the Debtor may use cash collateral in
accordance with the six-month budget projection for the period from
August 8, 2022, until further Court Order on the Debtor's request.
Unless the Court enters an order on a stipulation between the
Debtor and BofA on further use of cash collateral, the hearing on
the further interim cash collateral access will be scheduled by the
Debtor for the date on or before September 23, 2022.
The Debtor will make monthly "adequate protection payments" to the
Creditor in the amounts equal to $2,200 a month, which approximates
a non-default contractual rate of interest on the outstanding
amount due, prorated to the monthly amounts, for the three month
period, payable on the first day of the month, starting with
September 1 payment.
BofA is granted a replacement lien in the Debtor's post-petition
cash, accounts receivables, inventory, and proceeds therefrom, to
the same extent, validity, and priority as any lien held by such
secured creditor as of the petition date, to the extent of
reduction in the amount of cash collateral actually used by the
Debtor.
The Debtor requires immediate use of cash collateral to continue
its business operations uninterrupted. The Debtor requires
immediate court authorization to use cash collateral to pay all
operating, ordinary and necessary obligations.
The main events that precipitated Chapter 11 filing were (1) the
maturity of several obligations, including BofA's loan in the face
amount of $500,000 that required a balloon payment of the principal
amount with an interest; (2) unfavorable contracts with several
service and product vendors; (3) several litigations whereby the
Debtor is a plaintiff as well as the defendant. With BofA's
purported fully matured secured claim alone of over $500,000,
extremely high interest, default rates and aggressive payment
schedules on this and other claims, the Debtor's survival was put
in jeopardy in meeting ongoing obligations. The bankruptcy filing
has provided a temporary status quo from the most aggressive
collections and a mechanism to reorganize the Debtor's affairs for
the benefit of all involved interested parties.
The parties are working on a stipulation that should be submitted
for Court approval. Nevertheless, the Debtor has to file the
emergency request in order to pay its ongoing obligations and
payroll. At the same time, the Debtor has substantial assets that
can be easily pledged to protect BofA's interest. The Debtor also
offers adequate protection payments equal to contractual rate of
interest.
A copy of the motion is available at https://bit.ly/3AzeKOI from
PacerMonitor.com.
About LashLiner Inc.
LashLiner Inc., doing business as Lashliner LLC, is an innovative
cosmetics brand. Our initial product is a patent-pending magnetic
eyeliner and eyelash system. LashLiner Inc. filed a petition for
relief under Subchapter V of Chapter 11 of the Bankruptcy Code
(Bankr. W.D. Wash. Case No. 22-11273) on August 8, 2022. In the
petition filed by Robert Kitzberger, as president, the Debtor
reported assets and liabilities between $1 million and $10
million.
Kathryn E Perkins has been appointed as Subchapter V trustee.
Dmitry Merrit, Esq., at Law Offices of D. Merrit & Associates, is
the Debtor's counsel.
LCN PARTNERS: Crown Castle Opposes Disclosure Statement
-------------------------------------------------------
Crown Castle Fiber LLC objects to the Disclosure Statement and Plan
of Reorganization proposed by LCN Partners, Inc.
Debtor, its president and owner, Joseph Robbins ("Robbins"); Crown
Castle; and the Mayor and City Council of the City of Baltimore
(the "City") each are defendants in a state court action styled
Nelson Precast Products, LLC vs. Mayor and City Council of the City
of Baltimore, et. al., Case No. 24-C-22-000330 (the "State Court
Action") filed by creditor Nelson Precast Products, LLC ("Nelson").
Crown Castle has denied Nelson's allegations in the State Court
Action. On or about April 27, 2022, the State Court Action was
stayed on consideration of the Suggestion of Bankruptcy filed by
the Debtor in the State Court.
Crown Castle claims that the Disclosure Statement fails to
recognize and/or even acknowledge the substantial impact that a
judgment rendered against either Debtor or Robbins may have on the
Debtor's ability to consummate the proposed Plan.
Further, the Plan does not mention anything regarding the post
confirmation Debtor taking any actions to preserve any documents
that may be relevant to the State Court Action. The Bankruptcy Code
requires debtors to maintain and preserve their assets, including
books, records, documents, files, and electronically stored
information, unless authorized by order of the Court to abandon or
sell them after notice and an opportunity to be heard.
Crown Castle points out that the Disclosure Statement provides no
information regarding the steps Debtor will take to preserve such
evidence. In the absence of such disclosure, Crown Castle cannot
ascertain whether Debtor intends for the Plan to improperly absolve
the reorganized Debtor and Robbins of evidence preservation
obligation in connection with the State Court Action. Without such
disclosure, the Disclosure Statement cannot be approved.
Finally, Debtor's Plan and Disclosure Statement do not contain any
discussion regarding existing insurance policies, which would
potentially provide coverage for claims in the State Court Action.
Crown Castle needs to understand what types of policies exist and
whether they are left intact by the Plan.
Additionally, the Plan and Disclosure Statement should contain some
discussion regarding whether there is any coverage for current or
former directors, managers, officers of Debtor and the cost to
maintain coverage for these individuals and Debtor.
Crown Castle asserts that the Disclosure Statement should explain
the process by which creditors (namely Nelson) can access those
insurance policies to satisfy any judgment or settlement of the
State Court Action.
A full-text copy of Crown Castle's objection dated August 18, 2022,
is available at https://bit.ly/3TlnAau from PacerMonitor.com at no
charge.
Counsel for Crown Castle Fiber:
BERNSTEIN-BURKLEY, P.C.
Kirk B. Burkley, Esq.
PA Bar I.D.: 89511
601 Grant Street, 9th Floor
Pittsburgh, PA 15219
T: 412-456-8100
F: 412-456-8135
Email: kburkley@bernsteinlaw.com
About LCN Partners
LCN Partners, Inc., is a certified service-disabled veteran owned
small business specializing in the electrical and technology
industries.
LCN Partners sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Pa. Case No. 22-10665) on March 17,
2022. In the petition signed by Joseph E. Robbins, president, the
Debtor disclosed up to $1 million in both assets and liabilities.
Judge Ashely M. Chan oversees the case.
Albert A. Ciardi III, Esq., at Ciardi Ciardi and Astin is the
Debtor's counsel.
LTL MANAGEMENT: Tells 3rd Circuit Chapter 11 Filing Is Valid
------------------------------------------------------------
P. J. D'Annunzio of Law360 reports that Johnson & Johnson's talcum
powder liability spinoff has asked the Third Circuit to reject
ovarian cancer and mesothelioma patients' calls to dismiss its
Chapter 11 filing, claiming it was a good-faith effort to fairly
deal with its talc liability.
In a brief filed to the Third Circuit on Monday, August 15, 2022,
LTL Management LLC argued that the plaintiffs were wrong to claim
that handling the liability through bankruptcy was a bad faith
move, claiming that since juries have delivered wildly varying
results in talc cases, bankruptcy distribution was the fairest way
to compensate claims.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the time
of the filing, the Debtor was estimated to have $1 billion to $10
billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S. Trustee
for Regions 3 and 9 reconstituted the talc claimants' committee and
appointed two separate committees: (i) the official committee of
talc claimants I, which represents ovarian cancer claimants, and
(ii) the official committee of talc claimants II, which represents
mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
About Johnson & Johnson
Johnson & Johnson is an American multinational corporation founded
in 1886 that develops medical devices, pharmaceuticals, and
consumer packaged goods. It is the world's largest and most broadly
based healthcare company.
Johnson & Johnson is headquartered in New Brunswick, New Jersey,
the consumer division being located in Skillman, New Jersey. The
corporation includes some 250 subsidiary companies with operations
in 60 countries and products sold in over 175 countries.
The corporation had worldwide sales of $82.6 billion in 2020.
MATHESON FLIGHT: Court OKs Deal on Cash Collateral Access
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of California,
Sacramento Division, authorized Matheson Flight Extenders, Inc. and
Matheson Postal Services, Inc. to use cash collateral on a final
basis through the Termination Date consistent with the terms and
conditions and subject to the limitations set forth in a
stipulation.
The Court said the Fourth Stipulation for Use of Cash Collateral
filed June 28, 2022, is approved.
The Debtors will only use the cash collateral to make adequate
protection payments to Bank of America described in the Cash
Collateral Stipulation, and otherwise for working capital purposes,
the payment of certain obligations in accordance with the relief
authorized by the Court, and to conduct its Chapter 11 case
described in the budgets.
The Budget may be revised, updated, and modified through the
Termination Date, by: (i) consensual agreement between the Debtors,
BofA, the Official Committee of Unsecured Creditors, or (ii) by
further Court order.
As adequate protection for, and to the extent of, any diminution in
the value of BofA's secured claim existing as of May 5, 2022,
resulting from the Debtors' use of cash collateral pursuant to the
order and any prior agreement with BofA, the bank is granted valid
and perfected, replacement security interests in and liens on all
postpetition assets. The Replacement Liens will attach to all
properties of the Debtors of any kind or nature.
To the extent the Replacement Liens together with any other lien
granted by Debtors for the benefit of BofA is insufficient to
adequately protect the BofA Secured Claim against any diminution in
value as it existed on May 5, 2022, resulting from use of cash
collateral, then BofA will also be allowed an administrative
priority claim in accordance with the provisions of Bankruptcy Code
section 507(b) for any deficiency.
Any replacement or additional liens or administrative claim granted
to BofA in this order, the Cash Collateral Stipulation or any other
stipulations for use of cash collateral between the Debtors and
BofA will be of the same extent, validity and priority as the
prepetition lien of BofA, if any.
The Replacement Liens and any Bankruptcy Code section 507(b) claim
that may arise in favor of BofA will be subordinate in payment to
any fees payable by the Debtors under 28 U.S.C. section 1930(a)(6),
and to the payment of compensation and expense reimbursement to any
trustee hereafter appointed in this action.
The Debtors' authorization to use cash collateral under the Cash
Collateral Stipulation may be terminated after the occurrence and
continuance of any of the following events (unless waived by BofA
"Events of Default") beyond any applicable grace period as
follows:
a. A violation by the Debtors of the terms of the Cash
Collateral Stipulation;
b. Failure of the Debtors to comply with the Budget (within
the Permitted Variance, unless agreed to by BofA or permitted by
order of the Court);
c. Failure of the Debtors to comply with the Reporting
Requirements if such failure will continue unremedied for more than
five business days; or
d. The conversion of the Debtors' cases to proceedings under
Chapter 7 of of the Bankruptcy Code.
A copy of the order and the Debtor's 13-week budget is available at
https://bit.ly/3c9ee0D from PacerMonitor.com.
The budget provides for total cash outflows, on a weekly basis, as
follows:
$2,380,500 for the week ending August 12, 2022;
$2,590,500 for the week ending August 19, 2022;
$3,509,443 for the week ending August 26, 2022;
$4,344,519 for the week ending September 2, 2022;
$2,594,836 for the week ending September 9, 2022;
$2,578,500 for the week ending September 16, 2022;
$2,737,976 for the week ending September 23, 2022;
$4,636,299 for the week ending September 30, 2022;
$2,427,476 for the week ending October 7, 2022;
$2,285,000 for the week ending October 14, 2022;
$2,890,200 for the week ending October 21, 2022;
$2,278,000 for the week ending October 28, 2022; and
$4,886,299 for the week ending November 4, 2022
About Matheson Flight Extenders, Inc.
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
provide short and long-haul transportation, logistics and ground
handling services. The Debtors sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D. Cal. Case No. 22-21148) on
May 5, 2022. In the petition signed by Charles J. Mellor, chief
restructuring officer, the Debtors disclosed up to $50 million in
both assets and liabilities.
Judge Christopher M. Klein oversees the case.
Gregory C. Nuti, Esq., at Nuti Hart LLP is the Debtors' counsel.
MATHIS & MATHIS: Seeks to Hire Vivona Pandurangi as Legal Counsel
-----------------------------------------------------------------
Mathis & Mathis, Inc. seeks approval from the U.S. Bankruptcy Court
for the Eastern District of Virginia to hire Vivona Pandurangi, PLC
as its legal counsel.
The firm's services include:
a. serving as general bankruptcy counsel;
b. preparing schedules and related forms;
c. representing the Debtor at the initial debtor interview,
creditors' meeting and hearings before the Bankruptcy Court;
d. advising the Debtor of its duties and responsibilities
under the Bankruptcy Code;
e. assisting in preparation of monthly operating reports;
f. analyzing Debtor's financial matters;
g. advising Debtor in connection with executory contracts;
drafting documents to reflect agreements with creditors;
h. resolving motions for relief from stay and adequate
protection;
i. negotiating for obtaining financing and use of cash
collateral, as necessary;
j. determining whether reorganization, dismissal, or
conversion is in the best interests of the Debtor and his
creditors;
k. working with the creditors' committee and other counsel, if
any;
l. drafting any disclosure statement and plan of
reorganization; and
m. handling other matters that arise in the normal course of
administration of this bankruptcy estate.
Debtor has agreed to pay a retainer of $10,000 to Vivona.
The firm will charge an hourly rate of $350 and seek reimbursement
of all out-of-pocket expenses incurred.
As disclosed in court filings, Vivona is a disinterested person
within the meaning of 11 U.S.C. Sec. 327.
The firm can be reached through:
Jonathan B. Vivona, Esq.
Vivona Pandurangi, PLC
601 King Street, Suite 400
Alexandria, Va 22314
Tel: (703) 739-1353
Fax: (703) 337-0490
Email: jvivona@vpbklaw.com
About Mathis & Mathis
Mathis & Mathis, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 22-11022) on August
3, 2022. The Debtor disclosed under $50,000 in assets and $100,001
to $500,000 in liabilities. The Debtor is represented by Jonathan
Baird Vivona, Esq., at Vivona Pandurangi, PLC.
MELO AIR: Wins Continued Cash Collateral Access
-----------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized Melo Air, Inc. to use cash collateral of
Monroe Capital Management Advisors, LLC, on an interim basis
retroactive to April 7, 2022, to pay:
(a) amounts expressly authorized by the Court;
(b) one quarter of the current and necessary expenses set
forth in the budget, plus an amount not to exceed 10% for each line
item; and
(c) additional amounts as may be expressly approved in writing
by the Secured Creditor.
As adequate protection, the Secured Creditor will have a perfected
post-petition lien against cash collateral to the same extent and
with the same validity and priority as its prepetition lien,
without the need to file or execute any document as may otherwise
be required under applicable non-bankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with the Secured Creditor.
A continued hearing on the matter is scheduled for September 19,
2022 at 10 a.m.
A copy of the order is available at https://bit.ly/3wox22W from
PacerMonitor.com.
About Melo Air, Inc.
Melo Air, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01394) on April 7,
2022. In the petition signed by Gustavo M. Melo, president, the
Debtor disclosed $100,000 in assets and $500,000 in liabilities.
Judge Michael G. Williamson oversee the case.
Buddy D. Ford, Esq., at Buddy D. Ford, P.A. is the Debtor's
counsel.
PAVERS INC: Seeks Approval to Hire SMG Unlimited as Bookkeeper
--------------------------------------------------------------
Pavers Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Kansas to hire SMG Unlimited LLC to render general
bookkeeping services.
SMG will receive $65 hourly fees for general bookkeeping services
for Cherise Hughes, bookkeeper and the office manager.
SMG Unlimited and its employees represent no interest adverse to
the Trustee or the above estate, according to court filings.
The firm can be reached through:
Cherise Hughes
SMG Unlimited LLC
711 Roach Street
Salina, KS 67401
Phone: +1 785-714-0205
Email: Support@SMGUnlimited.com
About Pavers Inc.
Pavers Inc. provides design and installation of pavers, retaining
walls, water features and outdoor living areas.
Pavers Inc. filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Kan. Case No.
22-40463) on August 8, 2022. In the petition filed by Jeffrey B.
Wilson, as president, the Debtor reports estimated assets between
$1 million and $10 million and estimated liabilities between $1
million and $10 million.
Kent L Adams has been appointed as Subchapter V trustee.
David T Prelle Eron, of Prelle Eron & Bailey, PA, is the Debtor's
counsel. SMG Unlimited (Cherise Hughes) is the Debtor's bookkeeper
and Pickel & Bruckner, LLC (Thomas E. Pickel) is the accountant.
PAVERS INC: Seeks to Hire Pickel & Bruckner as Accountant
---------------------------------------------------------
Pavers Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Kansas to hire Pickel & Bruckner, LLC as its
accountant.
The firm will prepare and file the Debtor's federal and state
income tax returns.
The firm will charge $275 per hour for its services.
Pickel & Bruckner and its staff represent no interest adverse to
the Trustee or the above estate, according to court filings.
The firm can be reached through:
Thomas E. Pickel
Pickel & Bruckner, LLC
2525 S Ohio St # 1
Salina, KS 67401
Phone: +1 785-823-1908
About Pavers Inc.
Pavers Inc. provides design and installation of pavers, retaining
walls, water features and outdoor living areas.
Pavers filed a petition for relief under Subchapter V of Chapter 11
of the Bankruptcy Code (Bankr. D. Kan. Case No. 22-40463) on August
8, 2022. In the petition filed by Jeffrey B. Wilson, as president,
the Debtor listed $1 million to $10 million in both assets and
liabilities.
Kent L. Adams has been appointed as Subchapter V trustee.
David T Prelle Eron, of Prelle Eron & Bailey, PA, is the Debtor's
counsel. SMG Unlimited (Cherise Hughes) is the Debtor's bookkeeper
and Pickel & Bruckner, LLC (Thomas E. Pickel) is the accountant.
POLYMER INSTRUMENTATION: Seeks Approval to Hire Investment Banker
-----------------------------------------------------------------
Polymer Instrumentation & Consulting Services, Ltd. seeks approval
from the U.S. Bankruptcy Court for the Middle District of
Pennsylvania to employ Three Twenty-One Capital Partners, LLC as
its investment banker.
The Debtor requires an investment banker to advertise and market
its assets, and search the market for buyers or for funding.
Upon successful closure of a transaction, the Debtor will pay the
firm a closing fee of 7 percent of the transaction value for the
first $2 million; 6 percent of the transaction value between $2
million and $4 million; and 5 percent of the transaction value over
$4 million.
The retainer fee is $45,000.
Ervin Terwilliger, managing partner at Three Twenty-One, 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:
Ervin M. Terwilliger
Three Twenty-One Capital Partners
5950 Symphony Woods Rd, Suite 200
Columbia, MD 21044
Tel: 443-325-5290 ext. 201
Fax: 443-703-2330
Email: erv@3-21capital.com
About Polymer Instrumentation
& Consulting Services Ltd.
Polymer Instrumentation & Consulting Services, Ltd., a State
College, Pa.-based firm that conducts business under the name
Polymics, filed a Chapter 11 petition (Bankr. M.D. Pa. Case No.
21-01056) on May 10, 2021, listing as much as $10 million in both
assets and liabilities. Tim T. Hsu, president of Polymer, signed
the petition.
Judge Mark J. Conway oversees the case.
The Debtor tapped Robert E. Chernicoff, Esq., at Cunningham
Chernicoff & Warshawsky, P.C. as bankruptcy counsel; Beard Law
Company and Morgan, Lewis & Bockius, LLP as special counsel; Chen &
Fan Accountancy Corp. as accountant; Strategic Resource as
management and financial advisor; and Three Twenty-One Capital
Partners, LLC as investment banker.
POMMEL MEADOWS: Gets OK to Hire Hilco as Real Estate Broker
-----------------------------------------------------------
Pommel Meadows Hospitality, LLC received approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire Hilco
Real Estate, LLC as its real estate broker.
The firm's services include:
a. developing a sales strategy with the Debtor;
b. soliciting interested parties for the sale and marketing of
the Debtor's real property through a managed qualifying bid
process; and
c. conducting negotiations, at the Debtor's direction, for the
sale of the property.
A buyer's premium of 5 percent of the winning bid amount will be
charged to the winning bidder.
Hilco will receive reimbursement of up to $15,000 for work-related
expenses.
Sarah Baker, vice president of Hilco, disclosed in a court filing
that her firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Sarah Baker
Hilco Real Estate, LLC
5 Revere Drive, Suite 206
Northbrook, IL 60062
Tel: (847) 504-2462
Fax: (847) 897-0874
Email: sbaker@hilcoglobal.com
About Pommel Meadows Hospitality
Pommel Meadows Hospitality, LLC operates the Best Western Plus
Seabrook Suites located at 5755 Bayport Blvd., Seabrook, Texas. The
hotel, which Pommel Meadows Hospitality acquired in 2018, features
85 rooms with a restaurant on-site, complimentary breakfast, a
cocktail lounge, an outdoor pool, and an exercise facility.
Pommel Meadows Hospitality sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-31579) on June
6, 2022, listing as much as $10 million in both assets and
liabilities. Danish Khan, managing member, signed the petition.
Judge Jeffrey P. Norman oversees the case.
Stephen W. Sather, Esq., at Barron and Newburger, PC serves as the
Debtor's legal counsel.
The Debtor's lender, DCR Mortgage 10 Sub 3, LLC, is represented by
Daniel J. Ferretti, Esq., at Baker, Donelson, Bearman, Caldwell and
Berkowitz.
PREMIER PAVING: Wins Cash Collateral Access on Final Basis
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized Premier Paving, Ltd. to use cash
collateral on a final basis in accordance with the budget, with a
10% variance.
The Debtor requires the use of cash collateral to make payroll and
pay other direct operating expenses needed to carry on its business
during this sensitive period in a manner that will avoid
irreparable harm to the Debtor's estate.
As adequate protection for any secured creditor that holds a valid
unavoidable security interest in prepetition cash or cash
equivalents for the Debtor's use of cash collateral, to the extent
that the Debtor's use of cash collateral results in a diminution in
value of the Lender's interest in the cash collateral as of the
Petition Date, each such Lender is granted a replacement lien in
the Debtor's assets that serve as collateral under each Lenders'
applicable agreements, in the same order of priority that existed
as of the Petition Date.
As additional partial adequate protection for the Debtor's use of
cash collateral, to the extent of any diminution in value and a
failure of the other adequate protection provided by the Order, the
Lenders will have an allowed superpriority administrative expense
claim in the case and any successor case as provided in and to the
fullest extent allowed by Sections 503(b) and 507(b) of the
Bankruptcy Code over and senior to all other claims and expenses.
The Replacement Liens are subject and subordinate to a carve-out of
funds for all fees required to be paid to the Clerk of the
Bankruptcy Court and to the Office of the United States Trustee
pursuant to 11 U.S.C. Section 1930(a).
The Replacement Liens are valid, perfected, enforceable and
effective as of the Petition Date without the need for any further
action by the Debtor or the Lenders, or the necessity of execution
or filing of any instruments or agreements.
The Debtor's right to use cash collateral will terminate: (a)
without further notice or court proceeding upon entry of an order
(i) dismissing the chapter 11 case or (ii) converting the chapter
11 case to a case under chapter 7 of the Bankruptcy Code; (b) upon
the expiration of the Budget without any further extension pursuant
to the Order; or (c) upon the effective date of a confirmed chapter
11 plan of reorganization.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3CgaQf2 from PacerMonitor.com.
The budget provides for, total expenses, on a weekly basis, as
follows:
$110,062 for the week ending August 5, 2022;
$72,407 for the week ending August 12, 2022;
$95,082 for the week ending August 19, 2022;
$108,720 for the week ending August 19, 2022; and
$80,064 for the week ending August 19, 2022.
About Premier Paving, Ltd.
Premier Paving, Ltd. provides asphalt paving and asphalt milling
subcontractor services to general contractors within a 100-mile
radius of Fort Worth, Texas. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No.
22-41560-11) on July 13, 2022. In the petition signed by Herbert D.
Severin, III, the Debtor disclosed up to $50 million in both assets
and liabilities.
Dylan T.F. Ross, Esq., at Forshey Prostok is the Debtor's counsel.
PUERTO RICO: HTA Debt-Cutting Deal Under Judge's Review
-------------------------------------------------------
Michelle Kaske of Bloomberg News reports that a judge overseeing
Puerto Rico's bankruptcy is reviewing a plan to slash $4 billion of
its Highways and Transportation Authority bonds down to $1.2
billion, inching the commonwealth closer to resolving its
obligations.
U.S. District Court Judge Laura Taylor Swain will consider HTA's
restructuring plan following a confirmation hearing on Wednesday
where lawyers for Puerto Rico, its creditors and insurance
companies weighed in on the debt-cutting deal.
The plan gives bondholders a combined $264 million cash payment
and
$1.2 billion of new Highways Authority bonds. Investors will also
receive a so-called contingent value instrument.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70 billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of the
last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets Inc.
is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
* * *
The two Title III plans of adjustment have been confirmed to date,
for the Commonwealth and COFINA debtors.
RANCHO CIELO: Amends Unsecured Claims Pay Details
-------------------------------------------------
Rancho Cielo Estates, LTD submitted a Second Amended Disclosure
Statement describing Second Amended Chapter 11 Plan dated August
18, 2022.
This is a liquidating plan. In other words, the Proponent seeks to
accomplish payments under the Plan by completing a sale
transaction. The Effective Date of the proposed Plan is 14 days
after the close of the sale of substantially all of the Debtor's
assets to Avanti Acquisition Company, LLC or its affiliated
assignee.
After substantial marketing efforts by its Court-approved real
estate professionals and many months of arm's length negotiations,
the Debtor entered into the Second Amended and Restated Escrow
Instructions and Purchase and Sale Agreement (the "APSA") for the
sale of substantially all of its real property parcels with Avanti
Acquisition Company, LLC.
The APSA currently provides for a 12-month period for escrow to
close commencing the day on which Sale Order became final. During
its continued due diligence in accordance with the APSA, Avanti
learned (and has provided evidence to the Debtor) that engineering
issues related to the completion of Via Ambiente and other issues
will be significantly more time consuming and costly than
anticipated. As a result, the Debtor has agreed to, and the
Bankruptcy Court has approved a 24 month escrow period, in order to
maximize the chances of a sale closing.
Class 5 consists of General unsecured claims. Class 5 creditors
will be paid from the proceeds of the sale to Avanti on a pro-rata
basis after payment of the secured claims and closing costs which
is estimated to result in $1,888,171.14, due to the Debtor and of
which $1,800,000 is paid to SurTec. Since $50,000 will have been
released to the Debtor prior to the close of sale, there shall be
$38,171.14 of unencumbered funds as result of the closing of the
sale.
In addition on closing of the sale to Avanti, SureTec's bond
obligations (hence its claim) will be reduced to $2,400,000,
resulting in an additional $580,000 available to fund the Plan.
Additionally, as stated herein $550 per day will be added to the
sale price of the Debtor's assets until the close of the sale.
Therefore, if the closing of sale does not occur for the full 24
months escrow period, there will be proceeds available to the
estate of an approximately an additional $401,500 available to fund
the Plan and pay claims.
The Debtor's unsecured claims total approximately $612,420.33.
Payment shall be made to this class 90 days after the Effective
Date with no interest. Based on the foregoing the Debtor estimates
that allowed claims will be paid close to, or totally, in full,
depending on the closing date and approved administrative claims.
Interest holders will retain pre-Petition interests until wind down
of the Debtor following closing of the sale to Avanti.
The primary source of cash the Debtor will have on hand by the
Effective Date is from the proceeds from the sale to Avanti. The
sale is estimated to result in $1,888,171.14, due to the Debtor and
of which $1,800,000 is paid to SurTec. $50,000 has been released to
the Debtor, there shall be approximately $85,000 of unencumbered
funds as a result of the Sale Order and SurTec's carve-outs. In
addition on closing of the sale to Avanti, SureTec's bond
obligations (hence its claim) will be reduced to $2,400,000,
resulting in an additional $580,000 available to fund the Plan,
plus up to an additional $401,500, depending on the closing date of
the sale to Avanti. Therefore, approximately up to $1,019,671 of
unencumbered cash will be available to fund the Plan.
The remaining funding of the Plan will be paid upon close of the
sale to Avanti. The Debtor is informed and believes that Avanti has
the requisite experience to complete the sale process. As set forth
in the declaration of Marvin M Shapiro, the president of Avanti
Management Corporation (the "Shapiro Declaration"), over the past
year Avanti has incurred and paid costs and expenses totaling in
excess of $250,000 in connection with investigative and due
diligence activities, and legal matters, related to the proposed
acquisition of the Property.
A full-text copy of the Second Amended Disclosure Statement dated
August 18, 2022, is available at https://bit.ly/3PDvgBD from
PacerMonitor.com at no charge.
Attorneys for the Debtor and Debtor-in-Possession:
Jeffrey S. Shinbrot, Esq.
JEFFREY S. SHINBROT, APLC
15260 Ventura Blvd., Suite 1200
Sherman Oaks, CA 91403
Tel: (310) 659-5444
Fax: (310) 878-8304
E-mail: jeffrey@shinbrotfirm.com
About Rancho Cielo Estates
Rancho Cielo Estates, LTD, based in Gardena, CA, filed a Chapter 11
petition (Bankr. C.D. Cal. Case No. 20-12306) on Feb. 29, 2020. In
the petition signed by Peter Fagrell, president, the Debtor
disclosed $3,207,977 in assets and $142,576,987 in liabilities. The
Hon. Sheri Bluebond oversees the case. Jeffrey S. Shinbrot,
Esq., at Jeffrey S. Shinbrot, APLC, serves as bankruptcy counsel to
the Debtor.
RANGE RESOURCES: Egan-Jones Hikes Senior Unsecured Ratings to B+
----------------------------------------------------------------
Egan-Jones Ratings Company, on August 12, 2022, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Range Resources Corporation to B+ from B.
Headquartered in Fort Worth, Texas, Range Resources Corporation is
an independent oil and gas company that explores, develops, and
acquires oil and gas properties.
RECYCLING REVOLUTION: Joint Reorganizing Plan Confirmed by Judge
----------------------------------------------------------------
Judge Mindy A. Mora has entered findings of fact, conclusions of
law and order confirming the Second Amended Joint Plan of
Reorganization of RR3 Resources, LLC, and Recycling Revolution,
LLC.
The Plan has been proposed in good faith and not by any means
forbidden by law. Any payment made or to be made by the estate for
services or for costs and expenses in or in connection with this
case, or in connection with the Plan and incident to this case, has
been approved by, or is subject to the approval of, the Court as
reasonable.
As stated on the record, page 18 of the Second Amended Disclosure
Statement should have included the additional $1,000 payments to
Newtek, which are referenced correctly elsewhere in the Disclosure
Statement and Plan.
As stated on the record, Class 4 will not receive a distribution
under the Plan but will retain equity in exchange for a gift from
the principals to the Debtors in the amount of $25,000.00 and a
personal guaranty from Robin Seskin as to the amounts paid to
Classes 2.2 and 3.
As stated on the record, substantive consolidation will be on the
effective date and will file a Notice of Substantive Consolidation
with the Court.
As of the Effective Date, and except as otherwise provided in the
Plan and in the settlement agreements entered into between the
Reorganized Debtors and Gabrielle/MHT Limited Dividend Housing
Partnership and Benjamin Manor MHT Dividend Housing Associates, LLC
(collectively, "MHT"), the Reorganized Debtors' rights, title and
interest in property of the estate shall vest in the Reorganized.
The property shall vest in the Reorganized free and clear of all
Claims, liens, and encumbrances, except as otherwise provided under
the Plan and in the settlement agreements entered into between the
Reorganized and MHT.
A copy of the Plan Confirmation Order dated August 18, 2022, is
available at https://bit.ly/3PDbK8s from PacerMonitor.com at no
charge.
Attorney for the Debtors:
Joe M. Grant, Esq.
LORIUM PLLC
197 S. Federal Highway, Suite 200
Boca Raton, Florida 33432
Telephone: (561) 361-1000
Facsimile: (561) 672-7581
About Recycling Revolution
Recycling Revolution, LLC
-- http://www.RecyclingRevolution.net/ --is a recycling company
specializing in low end, contaminated and hard-to-handle materials.
It purchases all types of plastic, metal and electronic waste.
Recycling Revolution and its affiliate RR3 Resources, LLC, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. S.D.
Fla. Lead Case No. 19-25063) on Nov. 7, 2019. Recycling
Revolution disclosed $365,896 in assets and $9,318,956 in debt,
while RR3 Resources disclosed under $1 million in both assets and
liabilities.
Judge Mindy A. Mora oversees the cases.
The Debtors tapped Marshall Grant, PLLC, as their legal counsel and
Daszkal Bolton, LLP as their accountant.
REID'S EDUCATIONAL: Wins Final OK to Access Cash Collateral
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized Reid's Educational Child Care
Centre, LLC to use the cash collateral of James P. Flanders and the
U.S. Small Business Administration, on a final basis in accordance
with the budget.
The Debtor contends that without the use of this cash collateral,
it would not be able to pay its monthly obligations, which would
frustrate any effort to successfully reorganize under Chapter 11 of
the Bankruptcy Code.
As of the Petition Date, the Debtor owed Flanders $85,000. The
Debtor's obligation is evidenced by a Promissory Note and Wrap
Around Mortgage and Security Agreement and Assignment of Leases and
Rents executed on June 18, 2013. The Debtor was secondarily
obligated to the SBA in the amount of $125,000 secured by a UCC-1
filed with the Florida Secretary of State.
The Debtor's cash and accounts receivable generated by the
operation of its business, prepetition and post-petition,
constitute cash collateral pursuant to 11 U.S.C. section 363(a).
The Debtor is directed to pay only expenses necessary for the
operation of the business and not any pre-petition expenses,
salaries, professional fees, or insiders without further Court
order. If an order is entered, the necessary pre-petition expenses,
salaries, professional fees, or insider payments will not be paid
unless the Debtor is current on its ordinary course of business
expenses.
As a further limitation on the use of cash collateral, the Debtor
will be limited to expenses of not more than $4,000 per month in
excess of any salary ordered by the Court for Officers, Subchapter
V Trustee fees or cash collateral payments.
As additional adequate protection of the lender's interest and the
estate's interest in cash collateral, the lender is granted a
replacement lien to the same nature, priority, and extent that the
lender may have had immediately prior to the date that the case was
commenced nunc pro tunc to the Petition Date. Further, the lender
is granted a replacement lien and security interest on property of
the bankruptcy estate to the same extent and priority as that which
existed pre-petition on all of the cash accounts, accounts
receivable and other assets and property acquired by the Debtor's
estate or by the Debtor on or after the Petition. The replacement
lien in the Post-Petition Collateral will be deemed effective,
valid and perfected as of t he Petition Date, without the necessity
of filing with any entity of any documents or instruments otherwise
required to be filed under applicable non-bankruptcy law.
The Debtor is ordered to pay adequate protection payments of
$943.67 per month to Flanders and $100 per month to the SBA
commencing July 1 and on the first day of the month thereafter or
further Court order.
As additional adequate protection of the lender's interest in the
cash collateral, the Debtor will (a) maintain all necessary
insurance coverage on the lender's collateral and under no
circumstances will the Debtor allow its insurance coverage to
lapse, (b) continue to pay such monthly insurance payment in a
timely manner, and (c) within two days of the request of the
lender, the Debtor will provide to lender's counsel a written
statement supported by evidence of Debtor's compliance with the
foregoing.
The Debtor's authority to use the cash collateral will terminate
immediately and upon the earlier of (a) order of the Court; (b) the
conversion of the case to a Chapter 7 case or the appointment of a
Chapter 11 trustee without the consent of the lender; (c) the entry
of an Order that alters the validity or priority of the replacement
liens granted therein to the Bank; (d) the Debtor ceasing to
operate all or substantially all of its business; (e) the entry of
an order granting relief from the automatic stay that allows any
entity to proceed against any material assets of the Debtor that
constitute cash collateral; (f) the entry of an Order authorizing a
security interest under section 364(c) or 364(d) of the Bankruptcy
Code in the collateral to secure any credit obtained or debt
incurred that would be senior to or equal to the replacement lien;
or (g) the dismissal of the Chapter 11 case. Occurrence of any of
the foregoing will constitute the "Expiration Date."
A copy of the order is available at https://bit.ly/3QwNGp0 from
PacerMonitor.com.
About Reid's Educational Child Care Centre, LLC
Reid's Educational Child Care Centre, LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
3:22-bk-01037) on May 23, 2022. In the petition signed by Nickesha
V. Reid, manager, the Debtor disclosed up to $500,000 in both
assets and liabilities.
Judge Jacob A. Brown oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP is the Debtor's counsel.
REVLON INC: Gets Approval to Hire Deloitte Tax as Tax Advisor
-------------------------------------------------------------
Revlon, Inc. and its affiliates received approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Deloitte Tax, LLP as their tax advisory services provider.
The firm's services include:
1) Tax Compliance SOW. Pursuant to the terms and conditions of
the Tax Compliance SOW, Deloitte Tax will assist the Debtors with
preparing the 2021 federal, state and local income tax returns
identified in Exhibit A attached to the Tax Compliance SOW. In
addition, Deloitte Tax will assist in calculating the amount of
extension payments and preparing the extension requests for such
tax returns, as well as assisting in calculating 2022 quarterly
estimated tax payments as needed.
2) Business Personal Property Tax Rendition SOW. Pursuant to
the terms and conditions of the Business Personal Property Tax
Rendition SOW, Deloitte Tax will assist the Debtors with preparing
the business personal property tax renditions, as identified in
Exhibit A attached to the Business Personal Property Tax Rendition
SOW, for the years 2022 and 2023.
3) ASC 740 SOW. Pursuant to the terms and conditions of the
ASC 740 SOW, Deloitte Tax will provide tax advisory services in
connection with the calculation of the Debtors' income tax
provision under the provisions of ASC 740 for the years ending Dec
31, 2019, Dec 31, 2020, Dec 31, 2021 and the interim periods ending
March 31, 2020, June 30, 2020, Sep 30, 2020, March 31, 2021, June
30, 2021, Sep 30, 2021, March 31, 2022, June 30, 2022 and Sep 30,
2022, as follows:
a) Assist the Debtors with the computation of the entries
required to adjust the income tax account balances such that they
are consistent with the tax return filed for the years ended Dec
31, 2018, Dec 31, 2019, and Dec 31, 2020;
b) Assist the Debtors with the computation of their
federal, state and foreign current income tax receivable/payable
balances as of Dec 31, 2018, Dec 31, 2019, and Dec 31, 2020;
c) Assist the Debtors in computing their federal, state and
foreign current and deferred income tax expense or benefit for the
years ended Dec 31, 2018, Dec 31, 2019, and Dec 31, 2020;
d) Assist the Debtors with its efforts to identify tax
provision items to be recorded to equity (either additional paid in
capital or other comprehensive income) for the years ended Dec 31,
2018, Dec 31, 2019, and Dec 31, 2020;
e) Assist the Debtors with the computation of their
federal, state and foreign deferred income tax asset/liability
balances as of Dec 31, 2018, Dec 31, 2019, and Dec 31, 2020;
f) Provide observations, and assist the Debtors with their
documentation, regarding the Debtors' assessment of positive and
negative evidence identified in connection with whether a valuation
allowance is needed with respect to deferred tax assets;
g) Assist the Debtors with their efforts to summarize,
record and disclose (not analyze) existing and prior period
federal, state and foreign unrecognized tax benefits (tax, interest
and penalties) years ended Dec 31, 2018, Dec 31, 2019, and Dec 31,
2020;
h) Assist the Debtors with their preparation of the income
tax footnote and related disclosures for the years ended Dec 31,
2018, Dec 31, 2019, and Dec 31, 2020;
i) Assist the Debtors with their computation of amounts to
be included in the Debtors' interim financial statements for March
31, 2020, June 30, 2020, Sep 30, 2020, March 31, 2021, June 30,
2021, and Sep 30, 2021, March 31, 2022, June 30, 2022 and Sep 30,
2022;
j) Assist the Debtors in preparing materials, documents,
presentations, etc. that will be used to communicate the results of
the tax provision to management, the Debtors' Audit Committee/Board
of Directors and external auditors; and
k) Assist the Debtors with defining the data elements
needed for the preparation of the tax income provision.
4) State Tax Support SOW. Pursuant to the terms and conditions
of the State Tax Support SOW, Deloitte Tax will provide tax
advisory services for the Debtors on an as requested basis with
respect to assistance with facilitation of voluntary disclosure
agreements, tax technical support related to indirect tax engine
implementation, tax determinations and exemption certificate
processes related to business to consumer operational changes and
state income tax planning related to apportionment, transfer
pricing and taxable loss to taxable income planning.
5) Annual Report Compliance SOW. Pursuant to the terms and
conditions of the Annual Report Compliance SOW, Deloitte Tax will
provide tax services as follows:
a) Assist the Debtors in compiling the information
requirements to complete an annual report and compliance filings
for the entities, as well as preparing such Filings;
b) Assist the Debtors with their preparation of an annual
filing calendar that includes all Filings; and
c) Assist the Debtors with current and past Secretary of
State notice(s) review, research and resolution as needed.
6) Direct State Tax Support SOW. Pursuant to the terms and
conditions of the Direct State Tax Support SOW, Deloitte Tax will
assist the Debtors with enhancing their processes related to
handling U.S. state income tax matters by providing assistance
related to (a) audits and notice resolution, (b) internally
utilized communication presentation decks; (c) audit trackers,
notice trackers and an income tax filing calendar, (d) manual
non-purchase order (PO) payment submission requests processes, (e)
nexus combined election calculations, and (f) state compliance
workpapers, as well as providing additional assistance related to
the foregoing as requested by the Debtors and agreed to by Deloitte
Tax.
7) Indirect State Tax Support SOW. Pursuant to the terms and
conditions of the Indirect State Tax Support SOW, Deloitte Tax will
assist the Debtors with enhancing their processes related to
handling U.S. sales and use tax functions by providing assistance
related to (a) audits and notice resolution, (b) sales and use tax
compliance, (c) the facilitation of state and local tax Voluntary
Disclosure Agreements, (d) internally utilized communication
presentation decks, (e) audit and notice tracker logs and a sales
tax calendar; (f) quarterly sales tax reserve review, (g) use tax
processes, (h) new and revised sales tax registration accounts, (i)
exemption certificates, (j) the potential imposition of sales and
use taxes on vendor purchases and/or sales of product, and (k)
manual non-PO payment submission requests processes, as well as
providing additional assistance related to the Debtors as requested
by the Debtors and agreed to by Deloitte Tax.
8) Vertex Implementation SOW. Pursuant to the terms and
conditions of the Vertex Implementation SOW, Deloitte Tax will
provide implementation services as described under the Vertex
Implementation SOW with respect to phases 3 through 5 noted therein
to assist the Debtors with their implementation of the Vertex O
Series indirect tax engine, which includes the Vertex O Series
engine, Vertex Certificate Wizard, and SAP/Vertex Accelerator 3.1
(collectively, the "Tax Engine"). The Tax Engine is an indirect tax
calculation engine that integrates with enterprise resource
planning (ERP) systems, billing systems and e-commerce platforms to
deliver tax determination on sales and purchase transactions.
The firm will be compensated as follows:
a. Tax Compliance SOW:
Partner / Managing Director $648 - $718 per hour
Senior Manager $580 - $610 per hour
Manager $490 - $523 per hour
Senior $408 per hour
Staff $330 per hour
b. Pursuant to Business Personal Property Tax Rendition SOW,
Deloitte Tax will bill the Debtors an annual fee of $18,000. For
other business personal property tax advisory services, the firm
will be paid as follows:
Partner / Managing Director $407 per hour
Senior Manager $345 per hour
Manager $300 per hour
Senior $230 per hour
Staff $186 per hour
c. Pursuant to the terms and conditions of the ASC 740 SOW,
Deloitte Tax will bill the Debtors base fees in the amounts listed
below:
2019 2020 2021 2022
Year End $475,000 $475,000 $475,00 N/A
$58,000 per
quarter (except
that fees will be
Interim N/A $58,000 per $90,604 per
quarter quarter starting
$90,604
the quarter ended
September 30,
2021)
For out-of-scope services, the hourly fees charged by the firm
are follows:
Partner / Managing Director $842 - $933 per hour
Senior Manager $754 - $793 per hour
Manager $637 - $679 per hour
Senior $530 per hour
Staff $429 per hour
d. The hourly fees for State Tax Support SOW services are as
follows:
Partner / Managing Director $407 per hour
Senior Manager $345 per hour
Manager $300 per hour
Senior $230 per hour
Staff $186 per hour
e. The hourly fees for Vertex Implementation SOW services are as
follows:
Partner / Principal / Managing Director $647 per hour
Senior Manager $580 per hour
Senior Consultant $407 per hour
Consultant (Offshore) $280 per hour
James Piazza, a tax partner at Deloitte Tax, 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:
James Piazza
Deloitte Tax LLP
100 Kimball Drive
Parsippany, NJ 07054
Phone 973-602-6784
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: Gets Approval to Hire KPMG as Auditor
-------------------------------------------------
Revlon, Inc. and its affiliates received approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
KPMG, LLP as auditor.
The firm's audit services include:
(a) Statutory audit of Elizabeth Arden (UK) Ltd. under the UK
Companies Act 2006 as of and for the year ended December 31, 2021;
and
(b) Going concern audit procedures.
KPMG UK and Elizabeth Arden (UK) have agreed to a fixed fee for
each year of audit services, subject to changes in circumstances.
For the year ended Dec. 31, 2021, the auditor and Elizabeth Arden
(UK) have agreed to a fixed fee of GBP73,000 or approximately
US$88,824, with an additional amount of not more than GBP10,000 or
approximately US$12,167 for changes in circumstances.
For so-called out-of-scope services that are not covered by the
audit services fixed fee, the firm will be paid at hourly rates as
follows:
GBP (US)
Partners/Principals GBP680 $827 per hour
Senior Managers/Directors GBP480 $584 per hour
Managers GBP330 $401 per hour
Senior Associates GBP245 $298 per hour
Associates GBP150 $182 per hour
In addition, KPMG UK will receive reimbursement for costs and
expenses incurred.
As disclosed in court filings, KPMG UK is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
David Burridge
KPMG LLP
58 Clarendon Road
Watford WD17 1DE
United Kingdom
Tel +44 (0) 1923 830000
Fax +44 (0) 1923 214500
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: Gets Approval to Hire Kroll LLC as Valuation Advisor
----------------------------------------------------------------
Revlon, Inc. and its affiliates received approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Kroll, LLC as their valuation advisor.
The firm's services include:
1) Goodwill Impairment Testing -- ASC 350. Pursuant to the
terms and conditions of the Engagement Letter, Kroll will estimate
the fair value of certain reporting units, on a value basis
consistent with the carrying amounts of such reporting units
determined by the Debtors as of June 30, 2022. The services
provided by Kroll will be used for financial reporting purposes to
assist the Debtors with their goodwill impairment test and the
application of the quantitative Step 1 of Accounting Standards
Codification Topic 350, intangibles, Goodwill, and Other, which
requires, in part, the determination of the fair value of reporting
units. Kroll will estimate the fair value of the following
reporting units as of June 30, 2022:
-- Fragrances,
-- Professional Portfolio,
-- Elizabeth Arden Skin,
-- Elizabeth Arden Fragrances, and
-- Revlon
The impairment test will also be performed for certain of the
Debtors' indefinite lived assets, which include the following five
trade names:
-- Fragrances,
-- Professional Portfolio,
-- Elizabeth Arden Skin,
-- Elizabeth Arden Fragrances, and
-- Revlon
2) Recoverability Test for Long-Lived Assets -- ASC 360. Kroll
will also provide services to assist the Debtors with their
impairment testing of certain long-lived assets under Accounting
Standards Codification Section 360-10-35, Impairment and Disposal
of Long-lived Assets, which requires, in part, first performing a
recoverability test for the long-lived asset (or asset group) when
certain impairment indicators are present, and then performing a
fair value test for those long-lived assets (or asset groups) that
failed the recoverability test, by estimating their fair values.
Kroll will perform impairment testing for long-lived assets within
the following asset groups:
-- Fragrances and customer relationships,
-- Professional Portfolio and trade names,
-- Elizabeth Arden Skin and trade names,
-- Elizabeth Arden Fragrances and trade names, and
-- Revlon and trade names
Kroll will be compensated a fixed fee of $85,000, excluding direct
engagement and administrative expenses plus 5 percent of its fees
for unallocated expenses and legal fees relating to Kroll's
retention and compensation.
As disclosed in court filings, Kroll is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
John Walsh
Kroll, LLC
55 East 52nd Street
New York, NY 10055
Tel: +1 305-793-6279
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: Gets Court OK to Hire Deloitte Canada as Tax Advisor
----------------------------------------------------------------
Revlon, Inc. and its affiliates received approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Deloitte LLP (Deloitte Canada) to provide Canadian indirect tax
compliance, and indirect tax consulting and advisory services.
The firm's services include:
Indirect Tax Compliance Services
-- Maintain a calendar to monitor and track critical
deadlines related to indirect tax filings.
-- Conduct reasonability testing on the tax collectible
amounts, comparing the tax collectible to the total sales for the
period to determine if the tax collectible is reasonable.
-- Conduct reasonability testing on input tax credits (ITCs)
reported, comparing the ITCs reported to total taxable expense
incurred in the period to determine if the ITCs are reasonable.
-- With respect to the QST returns, reasonability tests
assess that the amounts of QST collected and the amount of Input
Tax Refunds (ITR) claimed are reasonable with respect to the
revenues and expenses of the period reported.
-- With respect to the PST returns, reasonability tests
assess that the amount of PST collected are reasonable with respect
to the revenues and expenses of the period reported.
-- Report to Canadian Debtors' management any amounts that do
not appear to be reasonable and work with Canadian Debtors to
understand and address (where applicable) such findings.
-- Calculation of the net tax due.
-- Prepare returns and forward all required returns and
related filings to Canadian Debtors for final review and sign-off.
-- Provide details for payment.
-- Keep copies of all working papers and returns to ensure in
case of an audit.
-- Provide electronic copies of all returns filed to Canadian
Debtors.
Indirect Tax Advisory and Consulting Services and Work Order #3
-- Review relevant records of the Canadian Debtors for the
purpose of identifying and recovering any refunds and/or
overpayments, interest and/or reducing liabilities.
-- The services will consider from January 2018 to October
2021 for transactions covering all applicable indirect taxes and
customs.
-- Where Savings are determined, Deloitte Canada will be
allowed to complete all work necessary to recover such Savings.
The firm will be compensated as follows:
a. Indirect Tax Compliance Services
Deloitte Canada is compensated on a "per filing" basis, as
follows:
Returns Frequency Fee
Per
Returns
(CAD)
Goods and Services/Harmonized Sales Tax Monthly $1,000
(GST/HST)
Quebec Sales Tax Return (QST) Monthly $1,000
British Columbia Provincial Sales Tax
Return (BC PST) Monthly $1,000
b. Indirect Tax Advisory and Consulting Services
Partner $931 per hour
Senior manager $679 per hour
Manager $455 per hour
Senior analyst $371 per hour
Analyst $259 per hour
As disclosed in court filings, Deloitte Canada is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Elizabeth Peon Valle
Deloitte LLP
410 West Georgia Street, Suite 2000
Vancouver, British Columbia
V6B 0S7
Canada
Tel: 604-669-4466
Fax: 778-374-0510
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: Gets OK to Hire PwC as Accounting Advisor
-----------------------------------------------------
Revlon, Inc. and its affiliates received approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
PricewaterhouseCoopers, LLP to provide accounting advisory
services.
The firm's services include:
a. Accounting Advisory Agreement. PwC understands that Revlon,
Inc. is evaluating the potential accounting and financial reporting
impacts of a Chapter 11 Bankruptcy Filing and Subsequent emergence
from Bankruptcy. Revlon has requested the following Services in
connection with its evaluation of certain accounting and financial
reporting matters that may apply to the Bankruptcy and its
preparation of financial statements and other financial information
for the: two annual periods ended Dec. 31, 2022 and Dec. 31, 2023,
the three interim periods ending June 30, 2022, Sep 30, 2022, and
March 31, 2023.
(i) Training and Examples. Advise Revlon on the scope of
accounting and financial reporting changes introduced by its
Bankruptcy pursuant to ASC 852 -- Reorganizations ("ASC 852"). If
requested, advise Revlon in its preparation and facilitation of
technical training for certain Revlon personnel (selected by
Revlon) to enhance Revlon's understanding of the scope of changes
introduced by the Bankruptcy, including:
-- The accounting and reporting framework requirements
of the standard that span the evolution of the Bankruptcy
proceedings;
-- The difference between ASC 852 and existing
accounting standards, based on authoritative guidance;
-- Examples of redacted public registrant filings which
include the application of ASC 852 and other bankruptcy related
financial statement presentation and disclosure items within; and
-- Examples of publicly available bankruptcy accounting
guides which outline the application of the relevant US GAAP that
applies to entities in bankruptcy and upon emergence.
(ii) Accounting Advice. Analyze and advise Revlon on certain
accounting and reporting issues related to its Bankruptcy, based on
information and facts provided by Revlon, including, if requested,
technical accounting analyses and advice on possible alternative
accounting and reporting treatments that may be available for
Revlon's consideration. These Services will be mutually agreed upon
and may include:
-- Accounting and financial reporting pursuant to ASC
852 -- Reorganizations;
-- Debt financing arrangements pursuant to ASC 470 --
Debt, including the potential debt financing structures being
considered, classification, financing costs, and covenant
compliance;
-- Presentation of financial statements pursuant ASC 205
Presentation of Financial Statements, including potential
differences between Company and Revlon's historical accounting
policies;
-- Purchase accounting matters pursuant to ASC 805 --
Business Combination, including advice on the potential accounting
and reporting impacts of purchase accounting, acquisition
structure, financing arrangements, identification of the accounting
acquirer, determination of consideration paid, and other potential
purchase accounting impacts;
-- Consolidation accounting pursuant to ASC 810 --
Consolidation;
-- Goodwill and other intangibles pursuant to ASC 350 --
Intangibles -- Goodwill and other;
-- Derivatives and hedging pursuant to ASC 815 --
Derivatives and Hedging, including embedded derivatives;
-- Preferred stock classification pursuant to ASC 480 --
Distinguishing Liabilities from Equity;
-- Treasury matter pursuant to ASC 320 -- Investments --
Debt and Equity Securities;
-- Stock-based compensation pursuant to ASC 718 --
Stock-based compensation;
-- Financial Instrumentals pursuant to ASC 825 --
Financial Instruments;
-- Determination of functional currency pursuant to ASC
839 -- Foreign Currency Matters; and
-- Taxes pursuant to ASC 740 -- Income Taxes.
(iii) Financial Reporting and Disclosure. Advise Revlon on
certain potential financial reporting and SEC filing matters that
Revlon may consider related to its Bankruptcy. These services will
be mutually agreed upon and may include:
-- Provide generic advice, and examples from the
applicable accounting literature (e.g., ASC 852, Reorganizations),
public company disclosures, SEC comment letters, or other publicly
available information, as requested by Revlon;
-- Provide advice to Revlon on an analysis of its
general ledger accounts to address the following accounting and
financial reporting matters pursuant to ASC 852, Reorganization
related to the bankruptcy transaction:
-- Cut-off assessments: Identification of potential
accounts impacted by the timing and proceedings of the bankruptcy
transaction (e.g., petition date, emergence date);
-- Liabilities Subject to Compromise: Identification of
accounts to be considered for classification to liabilities subject
to compromise; and
-- Reorganization items, net: Identification of
transactions to be recognized within the Statement of Operations as
Reorganization items, net including Revlon's revenues, expenses,
realized gains and losses, and provisions for losses as a result
of, or attributed to, the reorganization proceedings.
-- Advising Revlon on the potential impact of the
Bankruptcy on Revlon's existing financial reporting and data
gathering processes, including the potential impact on Revlon's
systems;
-- Reading and commenting on Revlon prepared document
drafts e.g., draft financial statement disclosures and
presentation, drafts of potential SEC comment letter responses
(consistent with the Services performed);
-- Reading and commenting on Revlon prepared SEC filing
documents, including management discussion and analysis ("MD&A");
and
-- Advising on pro-forma financial information non-GAAP
measures and key performance indicators ("KPI") related to Revlon
accounting and financial reporting matters. Revlon is responsible
for the determination, identification, and definition of any pro
forma financial information, non-GAAP measures, or KPIs.
(iv) Bankruptcy Business Processes: Advise Revlon on the
potential impact of the Bankruptcy on certain of Revlon's current
accounting and financial reporting policies, procedures, systems,
and processes, based on authoritative guidance. These Services will
be mutually agreed upon and may include:
-- Providing observations based upon Revlon's design and
operation of bankruptcy related business processes; and
-- Reading and commenting on Revlon prepared bankruptcy
related business process documentation, including narratives, white
papers and matrices developed by Revlon to memorialize their
business process activities.
(v) Court Dockets. Read the listing of court dockets and
advise Revlon on certain potential accounting matters that Revlon
may consider related to the Bankruptcy including, if requested,
technical accounting advice and advice on specific matters,
including:
-- First day motions and orders;
-- Debt and debt-like items; and
-- Executory contracts and leases.
(vi) Enterprise Value Reconciliation. Advise Revlon with its
analysis of its enterprise value reconciliation, including:
-- Reading and commenting on the enterprise valuation
performed by a third party in connection with the court
proceedings;
-- Reading and commenting on Revlon's GAAP
reconciliation of enterprise value to reorganization value, which
is contemplated as a component of fresh-start reporting; and
-- Analyzing and advising Revlon on the accounting and
disclosure implications of the court-approved enterprise value.
(vii) Transaction Agreements. Read Revlon's transaction
agreements and comment on certain accounting considerations,
including, if applicable:
-- Debt and debt-like items;
-- Equity and Rights offering;
-- Backstop commitments;
-- Warrants;
-- Stock Compensation;
-- Restructuring transactions;
-- Covenants;
-- Application of troubled debt restructuring, debt
modification, and/or debt extinguishment; and
-- Balance sheet classification of the instruments.
If requested and mutually agreed upon, in connection with the
Bankruptcy, PwC will advise and assist Revlon in connection with
its preparation of its financial statements or accumulation of its
other financial statement data and disclosures, account analyses
and reconciliations that Revlon may evaluate for inclusion in its
disclosure documents.
-- Assisting Revlon with its evaluation of the potential
impact of the Bankruptcy on its existing accounting policies, its
identification of the accounts that may be impacted, accounting and
disclosure requirements that may be impacted, and potential changes
Revlon may require to its systems and processes;
-- Aggregating general ledger information into financial
statement line items, or providing schedules, summaries or other
account reconciliations;
-- Preparing draft adjustments to specific accounting
transactions or accounts and any related journal entries. Revlon is
responsible for reviewing, approving and posting such journal
entries to Revlon's financial systems;
-- Constructing and presenting Revlon's financial
statements for each year or period presented to reflect the
potential impact of the Bankruptcy;
-- Drafting financial statement footnotes or other
financial statement disclosures, or components thereof, that
reflect the potential impact of the Bankruptcy;
-- Drafting internal accounting policies, manuals or
other accounting or financial reporting documentation and guidance,
including Revlon's accounting conclusions in technical accounting
memos (as directed by Revlon), that reflect Revlon's views,
processes and conclusions on the potential impact of the
Bankruptcy;
-- Assisting with Revlon's preparation of financial and
other information in SEC filing documents, including financial and
other information in management discussion and analysis ("MD&A")
and required disclosures that reflect the potential impact of the
Bankruptcy; and
-- Aggregating general ledger information into pro-forma
financial information non-GAAP measures, KPIs, and other financial
information that Revlon has identified and may evaluate for
inclusion in its disclosure documents, or preparing schedules,
summaries or other reconciliations of Revlon determined financial
or other information.
Revlon is responsible for the determination, identification, and
definition of any pro forma financial information non-GAAP
measures, or KPIs.
(viii) Claims - Advise and assist Revlon with its accounting
for claims received, including:
-- Advising Revlon on its determination of the selection
of claims subject to review procedures;
-- Advising Revlon on its determination of the process
it may use to reconcile claims to its general ledger; and
-- Assisting Revlon with its preparation of its
documentation of its results and conclusions relating to the
accounting for claims process.
(ix) Rejected Executory Contracts and Leases-Advise and
assist Revlon with its assessment of its accounting treatment for
rejected executory contracts and leases, including:
-- Advising Revlon with its analysis of the nature of
each contract and the estimated damages;
-- Advising Revlon with its determination of the P&L
classification of damages related to each rejected contract and/or
lease; and
-- Assisting Revlon with its preparation of its
documentation of its results and conclusions relating to the
rejected contracts and leases process reached by management.
(x) Fresh-Start Reporting - Advise and assist Revlon on its
application of fresh-start reporting pursuant to ASC 852 --
Reorganizations, including:
-- Advising and assisting Revlon with its determination
of its qualification for fresh-start reporting using (i) Solvency
Test and (ii) Change in Control test;
-- Advising Revlon with its assessment of the use of an
alternative date (convenience date) to apply fresh-start reporting;
and
-- Advising Revlon with its selection of new accounting
policies as a result of the application of fresh-start reporting.
(xi) Accounting for Emergence (4-Column Balance Sheet)-Advise
and assist Revlon with its analysis of certain transactions related
to its emergence from bankruptcy, including transactions included
in its 4-column balance sheet, including:
-- Analyzing Revlon's general ledger accounts to
identify accounts that may be impacted by the bankruptcy
transaction and/or subject to adjustment by the application of
fresh-start reporting;
-- Analyzing Revlon's general ledger to identify
accounts that may be considered to be subject to valuation
procedures;
-- Analyzing Revlon's plan of reorganization to identify
potential accounting implications; and
-- Assisting Revlon with its drafting of accounting
entries and supporting documentation.
The hourly rates charged by the firm for its services are as
follows:
Partner $1,105
Managing Director $1,045
Director $945
Senior Manager $835
Manager $735
Senior Associate $625
Associate $525
Rajeeb Das, a partner at PwC, disclosed in court filings that his
firm is "disinterested" as defined in Section 101(14) of the
Bankruptcy Code.
PwC can be reached through:
Rajeeb Das
PricewaterhouseCoopers LLP
300 Madison Ave
New York, NY 10017
Phone: (646) 471-4000
Fax: (646) 471-3188
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: Gets OK to Tap Freshfields Bruckhaus as Special Counsel
-------------------------------------------------------------------
Revlon, Inc. and its affiliates received approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Freshfields Bruckhaus Deringer US, LLP and Freshfields Bruckhaus
Deringer, LLP as their special counsel.
The firm's services include:
(a) advising and providing legal advice with respect to the
Debtors on matters arising under the laws of the United Kingdom,
France, Spain, Italy, and The Netherlands, together with other
non-U.S. jurisdictions where Freshfields maintains offices in
respect of the Chapter 11 cases, including Elizabeth Arden (UK)
Ltd.;
(b) advising on the terms of the debtor-in-possession
financing arrangements obtained by the Debtors regarding
guaranties, security, and other matters of such DIP financing
provided by non-U.S., non-debtor members of the Revlon group in
respect of non-U.S. law matters;
(c) advising the Debtors on matters pertaining to Elizabeth
Arden UK's pension obligations and the administration thereof;
(d) providing the Debtors with general corporate advice on
non-U.S. law matters as may be requested;
(e) advising on matters that affect non-U.S. members of the
Debtors and affiliates of the Debtors in respect of the Chapter 11
cases, including in respect of claims adjudication, inter-company
matters, the Chapter 11 plan process or other adjudication of the
Chapter 11 cases and the impact of any litigation involving the
Debtors and their affiliates, which may affect any non-U.S. Debtor,
and liaising with Debtors' counsel and advisors in regard to the
foregoing; and
(f) liaising with other non-U.S. counsel that non-U.S. Debtors
and their affiliates have retained.
The following Freshfields attorneys will have primary
responsibility for representing the Debtors:
Ken Baird England and Wales $1,568 (USD)
Lindsay Hingston England and Wales $1,568 (USD)
Alex Thomson England and Wales $888 (USD)
Nicholas Cooper England and Wales $651 (USD)
David Bor England and Wales $527 (USD)
Laurent Mabilat France $970 (USD)
Ana Lopez Spain $970 (USD)
Michael Broeders The Netherlands $970 (USD)
Mark Liscio United States $1,675 (USD)
Scott Talmadge United States $1,550 (USD)
Alexander Rich United States $1,050 (USD)
Freshfields initially received a retainer from the Debtors in the
amount of $400,000 on June 9, 2022.
Mark Liscio, Esq., a partner at Freshfields, disclosed in a court
filing that the firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Mr.
Liscio disclosed the following:
-- The firm has not agreed to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement.
-- None of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case.
-- The firm typically adjusts its billing rates on an annual
basis and implemented a rate increase effective Jan 1, 2022.
Accordingly, Freshfields' rates for timekeepers for its prepetition
engagement on this matter were, for the period of Jan 1, 2021
through Dec 31, 2021, $1,450 to $1,845 for partners; $1,195 to
$1,345 for counsel; $470 to $1,230 for associates and trainees, and
$350 to $470 for paraprofessionals.
-- The Debtors have approved the budget and staffing plan from
the petition date through Sep 30, 2022.
The firms can be reached through:
Mark Liscio, Esq.
Freshfields Bruckhaus Deringer US, LLP
601 Lexington Avenue, 31st Floor
New York, NY 10022
Tel: +1 212 277 4029
Fax: +1 212 277 4001
Email: mark.liscio@freshfields.com
-- and --
Freshfields Bruckhaus Deringer, LLP
100 Bishopsgate
London, EC2P 2SR
United Kingdom
Tel: +44 20 7936 4000
Fax: +44 20 7832 7001
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.
RICCI TRANSPORT: United States Trustee Says Plan Not Feasible
-------------------------------------------------------------
Andrew R. Vara, the United States Trustee for Region 3, objects to
confirmation of the Plan of Reorganization filed by Ricci Transport
& Recovery Inc.
On August 17, 2022, the U.S. Trustee filed the Motion of the United
States Trustee to Dismiss Debtor's Case or Convert to Chapter 7 for
Failure to File Operating Reports (the "Motion"). Pursuant to the
Motion, the U.S. Trustee seeks dismissal or conversion of this
bankruptcy case due to the Debtor's failure to file required
monthly operating reports (each an "MOR" and collectively, the
"MORs").
The U.S. Trustee objects to confirmation of the Plan because the
Debtor cannot carry its burden of demonstrating that the Plan
complies with the applicable provisions for confirmation of a
Subchapter V bankruptcy plan.
The U.S. Trustee points out that an examination of the Debtor's
historical financial performance is necessary to anticipate, and
thereby project, the Debtor's future financial performance under
the proposed Plan.
Moreover, the Plan's proposed payments must be feasible, such that
the Debtor is not likely to default and require liquidation or
further financial reorganization. Because the MORs have not been
filed, the Debtor's financial performance cannot be projected to
determine whether the Plan is feasible.
The U.S. trustee asserts that MORs provide vital information about
the case to the Court, the U.S. Trustee, and all parties-in
interest. The MORs are essential to understanding the Debtor's
financials and prospects for successful reorganization.
The U.S. Trustee further asserts that the Debtor simply cannot
satisfy its burden of demonstrating that the Plan satisfies all the
confirmation requirements of the Bankruptcy Code, including those
set forth in section 1190, due to its failure to file the MORs.
The U.S. Trustee claims that the Plan does not provide specific
appropriate remedies. In sum, the Plan provides that if the Debtor
fails to comply with its post-petition payment and reporting
obligations, the Subchapter V Trustee can file a notice of dispute
with the court and all parties in interest can then seek
appropriate relief from the Bankruptcy Court.
The U.S. Trustee states that rather than provide the requisite
specific appropriate remedies, the Plan merely leaves unsecured
creditors to enforce their rights to the Debtor's asset through
judicial process, a process with uncertain results and length and
expense that may not justify the effort.
A full-text copy of the United States Trustee's objection dated
August 18, 2022, is available at https://bit.ly/3QHvxEV from
PacerMonitor.com at no charge.
About Ricci Transport & Recovery
Ricci Transport & Recovery, Inc., sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No.
22-10969) on April 14, 2022, listing up to $500,000 in both assets
and liabilities.
Judge Eric L. Frank oversees the case.
Michael A. Cibik, Esq., at Cibik Law, PC and Rey's Tax & Accounting
Services serve as the Debtor's counsel and accountant,
respectively.
RITE AID: Egan-Jones Retains CCC Senior Unsecured Ratings
---------------------------------------------------------
Egan-Jones Ratings Company, on August 11, 2022, retained its 'CCC'
foreign currency and local currency senior unsecured ratings on
debt issued by Rite Aid Corporation. EJR also retained its 'C'
rating on commercial paper issued by the Company.
Headquartered in Camp Hill, Pennsylvania, Rite Aid Corporation
operates a retail drugstore chain in various states and the
District of Columbia.
ROBERT E. SPRINGER: Gets Approval to Hire Keck Legal as Counsel
---------------------------------------------------------------
Robert E. Springer, III, M.D., P. C. received approval from the
U.S. Bankruptcy Court for the Northern District of Georgia to hire
Keck Legal, LLC to serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. giving the Debtor legal advice with respect to its powers
and duties in the management of its property;
b. preparing legal papers;
c. assisting in the examination of claims of creditors;
d. assisting with the preparation of the disclosure statement
and plan of reorganization, and with the confirmation and
consummation thereof; and
e. performing all other necessary legal services for the
Debtor.
Keck Legal will charge $425 per hour for the services of Benjamin
Keck, Esq., the firm's sole member and primary attorney.
The firm received into trust a retainer of $25,000.
As disclosed in court filings, Keck Legal has no connection with
creditors or any other party except that Mr. Keck formerly worked
as a partner with the law firm of Rountree Leitman & Klein, LLC,
which has represented the Debtor in its case to date, and that he
continues to work with Rountree on a limited contract basis on
certain matters under an "Of Counsel" arrangement.
The firm can be reached through:
Benjamin R. Keck, Esq.
Keck Legal, LLC
2566 Shallowford Road, Suite 104-252
Atlanta, GA 30345
Phone: (678) 641-1720
Email: bkeck@kecklegal.com
About Robert E. Springer
Atlanta-based Robert E. Springer, III, M.D., P.C. filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Ga. Case No. 22-51065) on Feb. 8, 2022, listing
as much as $10 million in both assets and liabilities. Robert E.
Springer III, chief executive officer, signed the petition.
Judge Barbara Ellis-Monro oversees the case.
Rountree Leitman & Klein, LLC and Keck Legal, LLC serve as the
Debtor's legal counsels.
SHO-ME NUTRICEUTICALS: Taps Bleakley Bavol Denman as Legal Counsel
------------------------------------------------------------------
Sho-Me Nutriceuticals Acquisition Company seeks approval from the
U.S. Bankruptcy Court for the Middle District of Florida to hire
Bleakley Bavol Denman & Grace as its bankruptcy counsel.
The firm's services include:
a. analyzing the financial situation and rendering advice and
assistance to the Debtor in determining legal options under Title
11, United States Code;
b. advising the Debtor with regards to its powers and duties
in the continued operation of its business and management of the
property of the estate;
c. preparing and filing of schedules of assets and
liabilities, statement of affairs and legal documents;
d. representing the Debtor at the Section 341 meeting of
creditors;
e. protecting the interest of the Debtor in all matters
pending before the court;
f. representing the Debtor in negotiation with its creditors
in the preparation of a Chapter 11 plan; and
g. performing all other legal services.
The firm will charge $425 per hour for services rendered by
Samantha Dammer, Esq., principal attorney.
The Debtor provided a retainer in the amount of $12,000.
As disclosed in court filings, Bleakley does not represent
interests adverse to the Debtor or the estate in the matters upon
which it is to be engaged.
The firm can be reached through:
Samantha L. Dammer, Esq.
Bleakley Bavol Denman & Grace
15316 N. Florida Avenue
Tampa, FL 33613
Phone: (813) 221-3759
Fax: (813) 221-3198
Email: sdarnmerbbdglaw. corn
About Sho-Me Nutriceuticals
Sho-Me Nutriceuticals Acquisition Co., a company in Brooksville,
Fla., filed its voluntary petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03215) on Aug. 9,
2022, listing up to $50,000 in assets and up to $10 million in
liabilities. Christopher Reckner, the authorized representative,
signed the petition.
Samantha L. Dammer, Esq., at Bleakley Bavol Denman & Grace is the
Debtor's legal counsel.
SKY INN OPERATION: Taps Michael McConnell of Kelly Hart as Mediator
-------------------------------------------------------------------
Sky Inn Operation, Inc. and Austin Airport Suites, LLC received
approval from the U.S. Bankruptcy Court for the Western District of
Texas to employ Michael McConnell of Kelly Hart to mediate the
claims and issues between the companies and RSS COMM2015 - DC1–TX
SIO, LLC.
Mr. McConnell's fee is $5,000 for a full day of mediation.
In court papers, Mr. McConnell, a partner at Kelly Hart, disclosed
that his firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
Mr. McConnell can be reached at:
Michael McConnell
Kelly Hart
201 Main Street, Suite 2500
Fort Worth, TX 76102
Phone: (817) 878-3569
Fax: (817) 878-9280
Email: michael.mcconnell@kellyhart.com
About Sky Inn Operation and Austin Airport
Sky Inn Operation, Inc. owns real property locally known as the
Staybridge Hotel located at 1611 Airport Commerce Drive, Austin,
Texas. Austin Airport Suites, LLC, an affiliate, is renting the
hotel pursuant to a lease agreement dated June 23, 2008.
Sky Inn Operation and Austin Airport Suites sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Texas Lead Case No.
22-10134) on Feb. 28, 2022.
In their petitions, Sky Inn Operation disclosed up to $50 million
in assets and up to $10 million in liabilities while Austin Airport
disclosed up to $500,000 in assets and up to $10 million in
liabilities. Armando Batarse Cardenas, president of Sky Inn Hotels
& Suites and sole shareholder, signed the petitions.
Judge Tony M. Davis oversees the cases.
C. Daniel Roberts, PC and Kell C. Mercer PC serve as the Debtors'
legal counsels.
SOUTH SIDE CONVENIENT: No Change in Patient Care, PCO Report Says
-----------------------------------------------------------------
Abigail Mohs, the duly appointed Patient Care Ombudsman for South
Side Convenient Care, Inc., filed with the U.S. Bankruptcy Court
for the District of Nebraska an Initial Report, dated June 17, 2022
through August 18, 2022, on the Debtor's health care facility.
According to the report, the Debtor experienced no staffing changes
in both July and August. Furthermore, the Debtor was able to make
payroll during these periods.
Additionally, there were not changes to clinic hours. However, the
Debtor reported increased average patient volumes in both periods.
Furthermore, the Debtor reported the clinic's positive online
reviews increased. The only change the Debtor reports is the loss
of the truSculptID equipment, as it was returned to the
manufacturer.
The PCO noted that there have been no notable changes in the
patient care provided by the Debtor. Continued monitoring of the
Debtor's patient care will focus on ensuring payroll and staffing
continues unaffected and to recommend updates to any continued
inaccurate available information related to the clinic.
A copy of the Ombudsman Report is available for free at
https://bit.ly/3pCkEs8 from PacerMonitor.com.
The Ombudsman may be reached at:
Abigail T. Mohs
1700 Farnam Street, Suite 1500
Omaha, NE 68102-2068
Telephone: (402) 344-0500
Email: amohs@bairdholm.com
About South Side Convenient Care
South Side Convenient Care, Inc. sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No.
22-80201) on March 21, 2022, listing $100,001 to $500,000 in both
assets and liabilities. John A. Lentz, Esq. at Lentz Law, PC, LLLC
serves as the Debtor's counsel.
SOUTHGATE TOWN: Unsecureds Will Get 100% of Claims in Plan
----------------------------------------------------------
Southgate Town and Terrace Homes, Inc. filed with the U.S.
Bankruptcy Court for the Eastern District of California a
Disclosure Statement to Plan of Reorganization dated August 18,
2022.
Debtor is a limited equity housing cooperative and was originally
organized in November, 1964.
Debtor has in recent years failed to maintain compliance with the
terms of the Regulatory Agreement to the satisfaction of the
California Department of Housing and Community Development. The
California Department of Housing and Community Development
scheduled a Trustee's Sale of Debtor's Property based on only
technical defaults under the terms of Debtor's Regulatory Agreement
with the Department. The present case was filed to stop the
Trustee's sale and provide an opportunity to restructure the Debtor
and Debtor's obligations.
General unsecured creditors are classified in Class 3 and will
receive an estimated dividend of 100% of their claims, to be
distributed on the effective date of the Plan.
Class 1 secured claim of the United States Department of Housing
and Urban Development will continue to be paid current until the
Debtor's Property is sold or refinanced. The lien holder shall
retain its lien.
Class 2 secured claim of the California Department of Housing and
Community Development will continue to be paid current until the
Debtor's Property is sold or refinanced. The lien holder shall
retain its lien.
Class 3 consists of General Unsecured Claims. The claims of General
Unsecured Creditors will be paid in full without interest on the
effective date of the Plan. This Class is unimpaired.
Debtor shall retain the property of the estate and continue to
operate the residential property foe the benefit of the
member/residents. Debtor shall refinance or otherwise pay the two
secured creditors within twenty-four months of the effective date
of this Plan. The Court shall retain jurisdiction to allow for
other satisfaction or other consensual resolution to the claims of
the two secured creditors.
A full-text copy of the Disclosure Statement dated August 18, 2022,
is available at https://bit.ly/3c9vz9T from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Stephen M. Reynolds
Reynolds Law Corporation
424 Second Street, Ste. A
Davis, CA 95616
Telephone: 530 297 5030
Facsimile: 530 297 5077
Email: sreynolds@lr-law.net
About Southgate Town and Terrace Homes
Southgate Town and Terrace Homes Inc. is a limited equity housing
cooperative per CA Civil Code Section 817. It is a resident-owned
affordable housing community in South Sac, California.
Southgate Town and Terrace Homes sought Chapter 11 bankruptcy
protection (Bankr. E.D. Cal. Case No. 22-20632) on March 16, 2022.
In the petition filed by Mirza Baig, as president, Southgate Town
and Terrace Homes estimated assets between $1 million and $10
million and liabilities of the same range.
The case is handled by Honorable Judge Fredrick E. Clement.
Stephen Reynolds, Esq., at Reynolds Law Corporation, is the
Debtor's counsel.
STORCENTRIC INC: Taps Trodella & Lapping as Conflicts Counsel
-------------------------------------------------------------
The official committee of unsecured creditors of StorCentric, Inc.
seeks approval from the U.S. Bankruptcy Court for the Northern
District of California to employ Trodella & Lapping LLP as its
conflicts counsel.
The firm will handle matters in the Bankruptcy Cases for the
Debtors that involve credit insurance backstopped by the Argo
Group, and any other party with which Sheppard may have a conflict
of interest in connection with its representation of the Committee
and to perform such other discrete and non-duplicative duties that
may be identified by the Committee and/or Sheppard from time to
time during the Bankruptcy Cases.
The firm's fees are billed at its standard hourly rate, which is
$600 for Richard Lapping, Esq.
Richard Lapping, Esq., a partner at Trodella, disclosed in court
filings that his firm does not have any interests adverse to the
Debtor's estate, creditors and equity interest holders.
The firm can be reached through:
Richard Lapping, Esq.
Trodella & Lapping LLP
540 Pacific Ave
San Francisco, CA 94133
Phone: +1 415-399-1015
Email: rich@trodellalapping.com
About StorCentric Inc.
StorCentric, Inc. develops software and security systems to
mitigate cybersecurity threats to ensure data is not compromised.
StorCentric and its affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Calif. Case No. 22-50515)
on June 20, 2022. In the petitions filed by John Coughlan, chief
financial officer, StorCentric disclosed up to $50 million in both
assets and liabilities.
Judge M. Elaine Hammond oversees the cases.
The Debtors tapped John W. Mills, III, Esq., at Jones Walker LLP as
counsel and Force Ten Partners, LLC as financial advisor.
SUMMER AVE: Wins Cash Collateral Access Thru Sept 7
---------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Western Division, authorized Summer Ave LLC to use cash collateral
under the same terms and conditions as the previous order through
September 7, 2022.
As previously reported by the Troubled Company Reporter, the
creditors that claim security interests in the Debtors' properties
are Community Loan Servicing, LLC and Belvidere Capital, LLC.
As adequate protection for any diminution in value as a result of
the Debtor's use of cash collateral, all secured creditors were
granted replacement liens and security interest to the same extent,
validity, and enforceability of their perfected security interests
as of the petition date not subject to avoidance.
The Court said that on or before September 6, 2022, at 12:00 p.m.
the Debtor must file an amended projected budget for September,
October, November, and December 2022 and a reconciled budget
showing actual to projected income and expenses for August 2022.
The hearing on the matter is set for September 7 at 2 p.m. via Zoom
video conference.
About Summer Ave, LLC
Summer Ave, LLC is a limited liability company that owns commercial
property, consisting of three buildings and two parking lots, each
on a separate parcel, with building addresses of (i) 431-435 White
Street, (ii) 429 White Street and 752 Sumner Avenue, and (iii) 760
Sumner Avenue, Springfield, Massachusetts.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 22-30140) on April 28,
2022. In the petition signed by Louis Masaschi, manager, the Debtor
disclosed $778,100 in assets and $4,058,600 in liabilities.
Judge Elizabeth D. Katz oversees the case.
The Law Offices of Louis S. Robin represents the Debtor as counsel.
SWISSBAKERS INC: Wins Cash Collateral Access Thru Sept 13
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts
authorized Swissbaker Inc. to use cash collateral on an interim
basis through September 13, 2022, on the same terms and conditions
as set forth in the Order Granting Interim Use of Cash Collateral
dated March 23, 2022, except as modified by this order.
The Court said the Debtor may use funds in accordance with the
Revised Budget attached to the Status Report filed on August 15,
2022. The funds will be used subject to (i) an upward variance in
cost of goods sold proportionate to an increase in sales over
budget, and (ii) an aggregate variance of up to 10% on all other
budgeted amounts for each four week period.
A further hearing on the matter is scheduled for September 13,
2022, at 9:30 a.m.
A copy of the order is available at https://bit.ly/3dJvE4w from
PacerMonitor.com.
About Swissbakers, Inc.
Swissbakers, Inc. is a family-owned European bakery. Swissbakers
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Mass. Case No. 22-10357) on March 18, 2022. In the
petition signed by Nicolas Stohr, chief executive officer, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Janet E. Bostwick oversees the case.
Joseph S.U. Bodoff, Esq., at Rubin and Rudman LLP is the Debtor's
counsel.
T-SHACK INC: Taps Jeff Chain of Milestone Realty as Broker
----------------------------------------------------------
T-Shack Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Nevada to employ Jeff Chain of Milestone Realty to
market for sale its property located at 5155 W. Tropicana Ave., Las
Vegas.
The broker will get a commission of 3 percent of the gross selling
price of the Tropicana property.
Mr. Chain, owner of Milestone Realty, 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:
Jeff Chain
Milestone Realty, Inc.
519 American Legion Hwy
Westport, MA 02790
Phone: +1 774-309-3101
About T-Shack Inc.
T-Shack Inc., a wholesale and retail company in Mantador, N.D.,
filed for Chapter 11 protection (Bankr. D. Nev. Case No. 22-11197)
on April 5, 2022. In the petition filed by Raymond Zajac, as
registered agent, T-Shack Inc. listed $1 million to $10 million in
both assets and liabilities.
Judge Mike K. Nakagawa oversees the case.
Michael J. Harker, Esq., at The Law Offices of Michael J. Harker is
the Debtor's counsel.
TEAM SERVICES: S&P Rates New $100MM Senior Secured Term Loan 'B-'
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating and '3'
recovery rating to TEAM Services Group LLC's proposed $100 million
senior secured term loan. TEAM Services Group is a core subsidiary
of RMS Holding Co. LLC. The '3' recovery rating indicates its
expectation for meaningful (50%-70%; rounded estimate: 60%)
recovery in the event of a payment default. S&P expects TEAM
Services will use the proceeds from the new term loan for
acquisitions, as well as to pay related fees and expenses.
S&P said, "Our 'B-' issuer credit rating on TEAM reflects its small
scale in two niche businesses: providing services to fiduciaries of
primarily special needs trusts and providing outsourced employment
administration home care services for senior and individuals with
long-term disabilities. It also reflects our expectation that the
company's leverage will remain above 7x for the next two years due
to acquisitions and our forecast for only modest annual free
operating cash flow (FOCF) generation of $5 million-$15 million
after fees and expenses (which equates to 1.5%-2% of debt). Given
the minimal FOCF, we believe that any delays in Medicaid rate
increase, coupled with wage inflation and higher interest expense,
could lead to cash flow deficits and put pressure on the existing
rating.
TEAM benefits from several favorable industry trends and
characteristics, such as the aging population, the consumer
preference for receiving personal care at home, and the industry's
increased focus on serving disabled individuals in their
communities, which reflects both family preferences and payors push
for lower-cost models. Even as the COVID-19 pandemic continues, S&P
expects that the company will continue to expand (albeit at a
moderated pace) because receiving at-home care is perceived to be a
safer alternative to receiving care at institutional settings.
S&P's base-case scenario assumes:
-- US GDP growth of 3.2% in 2022 and 2.1% in 2023;
-- Net revenue increases by about 40% in 2022 and 30% in 2023 on
incremental revenue from recent acquisitions supported by
high-single-digit organic growth as the pandemic eases;
-- S&P Global Ratings-adjusted EBITDA margins increase to the
11%-12% range in 2022 on Medicaid rate hikes, pricing increases,
and operational efficiencies, which are offset by higher wages;
-- Capital expenditure of about $20 million-$30 million per year
(including capitalized software development cost and estimated
asset purchases from micro-M&A); and
-- Debt-financed acquisition spending of about $150 million in
2022 and $200 million in 2023.
S&P said, "Based on these assumptions, we forecast S&P Global
Ratings-adjusted leverage of more than 7x in 2022 and 2023. We also
believe material deleveraging is unlikely over the next two years
given our expectation the company will issue incremental debt to
fund its acquisitions. We also expect TEAM to generate about $5
million-$15 million of discretionary cash flow in 2023.
"We assess the company's liquidity as adequate. We estimate TEAM's
sources of cash will be at least 1.2x its uses over the next 12
months and believe its net sources will remain positive even if
forecasted EBITDA declines by 15%. However, we believe the
company's liquidity is constrained by its likely inability to
absorb high-impact, low-probability events without refinancing,
given its high leverage and minimal cash flow generation."
Principal liquidity sources:
-- Full availability of $35 million under the revolver at close;
-- Cash balance of about $42 million as of June 30, 2022; and
-- About $40 million of funds from operations over the 12 months
starting July 2022.
Principal liquidity uses:
-- Capital expenditure of $20 million-$30 million for the next 12
months (including capitalized software development cost and
estimated asset purchases from micro-M&A);
-- Annual term loan amortization of about $5 million for the next
12 months; and
-- About $5 million-$10 million of working capital outflows for
the next 12 months.
The company is subject to a springing first lien covenant on the
revolver, which is tested when its draws on more than 35% of its
commitment. S&P expects TEAM will maintain headroom of at least 35%
under this covenant over the next 12 months.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- At close, the company's proposed capital structure will
comprise a $35 million revolving credit facility (undrawn), a $390
million first-lien term loan, a $100 million incremental first lien
term loan, and a $125 million second-lien term loan.
-- S&P values the company as a going concern using a 5.5x multiple
of our projected emergence EBITDA.
-- S&P estimates that in a default scenario TEAMS' EBITDA would
decline significantly due to increasing competition, significant
reimbursement rate cuts, and integration challenges.
Simulated default assumptions
-- Simulated year of default: 2024
-- EBITDA at emergence: $62 million
-- EBITDA multiple: 5.5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $322
million
-- Valuation split (obligor/nonobligors): 100%/0%
-- Total first-lien claims: $531 million
-- Value available to first-priority claims (revolver and
first-lien debt): $322 million
--Recovery expectations: 50%-70% (rounded estimate: 60%)
-- Total second-lien claims: $132 million
-- Value available to second-priority claims (second-lien debt):
$0
--Recovery expectations: 0%-10% (rounded estimate: 0%)
Note: All debt amounts include six months of prepetition interest.
TOWNE & TERRACE: Seeks to Hire Steven Brown as Corporate Counsel
----------------------------------------------------------------
Towne & Terrace Corp. seeks approval from the U.S. Bankruptcy Court
for the Southern District of Indiana to hire Steven Brown, Esq., as
its corporate and collection counsel.
Mr. Brown will charge $200 per hour for services as corporate
counsel, which will include assisting and advising the Debtor's
Board of Directors, preparing for and attending board and annual
meetings, preparing corporate documents and required entity
reports, and other duties as directed by the Board.
With respect to his duties as collection counsel, Mr. Brown will
seek compensation on a hybrid fee basis at an hourly rate of $100
per hour and a contingency fee of 33 percent.
As disclosed in court filings, Mr. Brown neither holds nor
represents any interest adverse to the Debtor with respect to the
matters on which he is to be employed.
About Towne & Terrace Corp.
Indianapolis-based Towne & Terrace Corp. sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ind. Case No.
21-02161) on May 12, 2021, disclosing assets of $1,599,365 and
liabilities of $59,594. Towne & Terrace President Josh McDermott
signed the petition.
Judge James M. Carr oversees the case.
The Debtor tapped Jacobson Hile Kight, LLC as its bankruptcy
counsel; Frederic Sipe, Esq., a practicing attorney in
Indianapolis, is the Debtor's special counsel while Steven Brown,
Esq., serves as corporate and collection counsel.
TRINITI DME: Wins Cash Collateral Access Thru Sept 1
----------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas,
Sherman Division, authorized Triniti DME Solutions, LLC to use cash
collateral through September 1, 2022, in accordance with the
provisions in the 14-day budget, for any budgeted item that is due
and payable before the final hearing.
As previously reported by the Troubled Company Reporter, a search
in the Texas Secretary of State shows that allegedly secured
positions are held by National Funding, Inc. (filing number
21-0029265411, filing number 22-0013700500, and 22- 0015914266), an
unidentified party (filing number 22-0022349529), Cloud Fund
(filing number 22- 0029108791), and an additional unidentified
party (filing number 22-0031913293).
While these UCC filings appear to be secured as blanket liens, the
Debtor believes the Merchant Cash Advance lenders are not properly
secured in any of the Debtor's property nor accounts.
As adequate protection for the use of cash collateral, the lenders
are granted replacement liens on all post-petition cash collateral
and post-petition acquired property to the same extent and priority
they possessed as of the Petition Date.
The final hearing on the matter is set for September 1 at 10 a.m.
A copy of the order is available at https://bit.ly/3PImvq9 from
PacerMonitor.com.
About Triniti DME Solutions, LLC
Triniti DME Solutions, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D. Tex. Case No. 22-40975) on
August 2, 2022. In the petition signed by Martin Fuller, owner, the
Debtor disclosed $50,000 in assets and up to $500,000 in
liabilities.
Judge Brenda T. Rhoades oversees the case.
Robert C Lane, Esq., at The Lane Law Firm is the Debtor's counsel.
VANGUARD ROOFING: Wins Cash Collateral Access Thru Sept 21
----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Virginia,
Lynchburg Division, authorized Vanguard Roofing, LLC to use cash
collateral on an interim basis in accordance with the budget and
provide adequate protection to the Small Business Administration
and Kalamata Capital Group.
Specifically, the Debtor is permitted to use cash collateral for
the purposes of advertising, rent, insurance, wages, salaries and
commissions, payroll taxes, electricity, accounting software,
advertising management software, telephones, materials, roof
measuring software, subcontractors, secured creditors, and fuel as
set forth in the budget through the date of the final hearing set
for September 21, 2022 at 11 a.m.
As adequate protection, the SBA and Kalamata will have replacement
liens on all of the Debtor's collateral of the same type and nature
that exists as of the Petition Date with the same validity (or
invalidity) and priority as exists as of the Petition Date.
The Replacement Liens will be perfected, enforceable, choate, and
effective without the necessity of the filing of any additional
security documents.
As further adequate protection, the Debtor will make $500 per month
adequate protection payments to the SBA as set forth in the
Budget.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3KfRjxf from PacerMonitor.com.
The Debtor projects $137,226 in total expenses for the period from
August 17 to September 21, 2022.
About Vanguard Roofing, LLC
Vanguard Roofing, LLC operates a roofing contracting business. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. W.D. Va. Case No. 22-60697) on July 18, 2022. In the
petition signed by Gary Greenwood, chief executive officer, the
Debtor disclosed up to $500,000 in both assets and liabilities.
Judge Rebecca B. Connelly oversees the case.
Martin C. Conway, Esq., at Conway Law Group, PC is the Debtor's
counsel.
W L HOUSTONS: Gets Court Approval to Hire Realtor
-------------------------------------------------
W L Houstons Business Investments, LLC received approval from the
U.S. Bankruptcy Court for the Southern District of Texas to employ
a realtor.
The Debtor requires the services of a realtor in connection with
the sale of its real property located at 3402 Crosby Landing
Missouri City, Texas.
The Debtor has already sought the advice of a realtor but has not
attempted to retain a realtor without the court's approval.
Any compensation sought by the realtor will be subject to the
scrutiny and authority of the court.
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 sought protection under
Subchapter V of Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.
Texas Case No. 22-31575) on June 6, 2022, listing as much as
$50,000 in both assets and liabilities. Warren Houston, managing
member of W L Houstons, signed the petition.
Judge Jeffrey P. Norman oversees the case.
Samuel L. Milledge, Sr., Esq., at The Milledge Law Firm, PLLC is
the Debtor's legal counsel.
WEB IV LLC: Files Bare-Bones Chapter 11 Petition
------------------------------------------------
WEB IV LLC filed for chapter 11 protection, without stating a
reason.
According to court filing, WEB IV 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. 16, 2022, at 10:00 AM.
The Debtor's Chapter 11 Plan and Disclosure Statement are due by
Dec. 15, 2022.
About WEB IV LLC
WEB IV LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-20790) on August 17,
2022. In the petition filed by William E. Brown, as president, the
Debtor reported assets between $10 million and $50 million and
liabilities between $1 million and $10 million.
William A. Rountree, of Rountree Leitman Klein & Geer, LLC, is the
Debtor's counsel.
WEB IV: Case Summary & Three Unsecured Creditors
------------------------------------------------
Debtor: WEB IV, LLC
657 Crunkleton Lane
Tiger GA 30576
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: August 17, 2022
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 22-20790
Judge: Hon. James R. Sacca
Debtor's Counsel: William Rountree, Esq.
ROUNTREE, LEITMAN, KLEIN & GEER, LLC
2987 Clairmont Road Suite 350
Atlanta, GA 30329
Tel: 678-587-8740
Email: wrountree@rlkglaw.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by William E. Brown as president.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/CBNR5FQ/WEB_IV_LLC__ganbke-22-20790__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's Three Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Georgia Department of Revenue Taxes & Other $0
1800 Century Boulevard Government Units
Suite 9100
Atlanta, GA, 30345-0000
2. Georgia Department of Labor Taxes & Other $0
148 Andrew Young Inter. Blvd Government Units
Room 738
Atlanta, GA, 30303-0000
3. Internal Revenue Taxes & Other $0
Service CIO Government Units
P.O. Box 7346
Philadelphia, PA, 19101-7346
WESTBANK HOLDINGS: Wins Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Louisiana
authorized Westbank Holdings, LLC and its debtor-affiliates to use
cash collateral on an interim basis.
Dwayne Murray, the Chapter 11 Trustee, is authorized to pay the
expenses set forth in the budget and to pay the expenses for Tree
Trimming, James Conway labor, Carpentry Labor (Marco Hernandez),
and Supervision (Hernandez Consulting) to the extent such expenses
have been approved by Fannie Mae or upon subsequent Order of this
Court after notice and hearing.
The Trustee is authorized to substitute any of the vendors set
forth in the budget with the consent of Fannie Mae or upon
subsequent Order of the Court after notice and hearing.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3Ce0cp1 from PacerMonitor.com.
The Debtor projects $256,439 in total future expenses.
About Westbank Holdings, LLC
Westbank Holdings, LLC, et al., are limited liability companies
that operate five low-income apartment complexes in New Orleans.
The complexes are owned and operated by Joshua Bruno.
Westbank Holdings, LLC, Cypress Park Apartments II, LLC, Liberty
Park Apartments, LLC, and Forest Park Apartments, LLC, sought
Chapter 11 protection (Bankr. E.D. La. Case Nos. 22-10082 to
22-10086) on Jan. 27, 2022. In the petition signed by Joshua Bruno
as manager, Liberty Park Apartments estimated assets between
$500,000 and $1 million and estimated liabilities between $1
million and $10 million.
The cases are handled by Honorable Judge Meredith S. Grabill.
Frederick L. Bunol, Esq., of The Derbes Law Firm, LLC, is the
Debtors' counsel.
WESTERN GLOBAL: S&P Alters Outlook to Negative, Affirms 'B' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook to negative and affirmed its
'B' issuer credit rating on Western Global Airlines Inc. (WGA). S&P
also affirmed its 'B-' issue-level rating on the company's $400
million senior unsecured notes.
S&P said, "We expect WGA's 2022 operating performance will be
affected by staffing shortages and other operating disruptions
before improving gradually into 2023.There is currently an
industry-wide pilot shortage, with global passenger airlines
attempting to increase their staffing levels to meet the high
demand for air travel as pandemic-related restrictions have eased
or been eliminated. As one of the smaller airline operators in the
U.S., WGA has experienced higher levels of attrition as some of its
employees have shifted to other, larger airlines. While we expect
WGA to initiate various actions to address the situation, given
tight labor market conditions, we expect staffing to remain
somewhat constrained through 2022 and possibly into 2023.
"WGA's operating performance was also affected by pandemic-related
lockdowns in China in the first few months of 2022. The company has
increasingly focused on long-haul, intercontinental flights since
2019, which has resulted in somewhat higher dependence on Asia in
general, and China in particular. Even as the country's lockdowns
and quarantine periods have eased in the past few months as
COVID-19 cases have declined, we believe WGA's performance remains
susceptible to such disruptions in the near term, given China's
continued commitment to its zero-COVID policy."
Additionally, fuel expenses are typically largely pass-throughs for
air cargo operators such as WGA (costs that the company incurs for
operations and passes along to its customers). However, the recent
rapid increase in fuel prices has resulted in higher fuel expenses
on WGA's ferry flights (non-revenue generating flights to
reposition aircraft in different locations), costs of which it
hasn't been able to fully pass on to customers.
As a result of these factors, S&P expects WGA's 2022 operating
performance (particularly in the first half) to remain relatively
weak, before improving gradually through 2023, as the company
addresses these issues.
Market dynamics for air cargo operators will likely be less
favorable in 2023 amid weaker global macroeconomic conditions and
increased air cargo capacity. WGA's operations over the past two
years have benefited from the shift away from retail stores during
the COVID-19 pandemic, which accelerated growth in e-commerce.
Additionally, passenger airlines reduced flying (particularly on
long-haul, international routes) in response to the pandemic, which
resulted in much lower availability of belly capacity (which
typically accounts for about 50% of capacity in the air cargo
market). Beginning in late 2020, ocean freight capacity also became
constrained, driving stronger demand for air cargo.
S&P said, "However, we expect these factors to moderate into 2023
and beyond as a gradual increase in international air travel
results in the return of more passenger widebody belly capacity.
The industry will also likely see a higher capacity contribution
from new entrants and freighter conversions completed over the past
two years, a trend that is continuing.
"We expect air cargo demand conditions to cool somewhat from
recently very strong levels, due to weaker global macroeconomic
conditions. We believe that the rate of growth in e-commerce
related freight volumes will likely moderate somewhat amid weaker
consumer spending and higher inventory levels. S&P Global Ratings
economists expect U.S. real GDP growth will slip to 1.8% in 2022
and 1.6% in 2023, compared with 5.7% in 2021; global GDP growth
will moderate to 3.5% in 2023 from 5.1% in 2022.
"We forecast WGA's funds from operations (FFO) to debt to decline
to the mid-teens percent area in 2022 due to the various operating
disruptions, before improving to the low-20% area in 2023. This
forecast incorporates our assumption that market conditions will
soften somewhat in 2023 but remain stronger than 2019 levels.
However, we generally view the air cargo industry as very
competitive and believe WGA's relatively small scale of operations
makes it vulnerable to pricing pressures and volume declines during
periods of sustained market weakness. Therefore, the negative
outlook reflects the risk that WGA's credit metrics could weaken
beyond our forecast if market conditions soften beyond our
base-case assumptions.
"We expect high capital spending requirements associated with
aircraft deliveries in 2024 will affect WGA's credit metrics. In
January 2022, WGA placed a firm order for two new Boeing 777
freighters with Boeing, with delivery scheduled for August and
September 2024. The company's arrangement with Boeing includes the
option to purchase three additional Boeing 777 freighters. This
order represents a shift in WGA's fleet plan; the company has
historically focused on owning and operating older MD-11 and Boeing
747-400 aircraft. The required capital spending for these aircraft
will greatly exceed what WGA has spent historically on its aircraft
fleet. Given WGA's relatively small size and limited available
liquidity, we expect the company will finance these aircraft
largely through additional debt or lease arrangements.
"We don't include any of these assets or debt in our 2023 forecast
credit metrics. However, as WGA finalizes its capital spending and
financing plans, we expect the company's credit metrics will be
pressured somewhat by sizable additional debt associated with these
aircraft acquisitions.
"We expect WGA's 2022 operating performance will be hurt by
staffing shortages and other pandemic-related disruptions
(including shutdowns in China), before improving gradually through
2023 as the company addresses its operating issues. We also expect
market dynamics will be less favorable in 2023, due to weaker
macroeconomic conditions and the higher capacity contribution from
belly capacity in passenger aircraft (driven by an increase in
international passenger air travel). The negative outlook reflects
the risk that WGA's credit metrics could weaken if market
conditions soften beyond our assumptions in the base-case scenario.
WGA has significant upcoming capital spending associated with the
upcoming deliveries of two Boeing 777 freighters in 2024, which
will also result in higher debt levels, regardless of whether the
aircraft are purchased or leased.
"We could lower our rating on WGA over the next 12 months if
aircraft utilization and pricing deteriorates significantly, or if
the company has difficulty retaining or growing its business,
causing FFO to debt to decline to the mid-teens percent area on a
sustained basis.
"We could revise our outlook on WGA to stable over the next 12
months if we expect FFO to debt to remain well above the mid-teens
percent area on a sustained basis."
ESG credit indicators: E-3, S-2, G-3
WEYERBACHER BREWING: Court OKs Cash Collateral Access Thru Sept 16
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Pennsylvania
authorized Weyerbacher Brewing Company, Inc. to use cash
collateral, on an interim basis, in accordance with the budget
through September 16, 2022.
The Debtor requires the use of cash collateral to continue business
operations without interruption toward the objective of formulating
an effective plan of reorganization.
As adequate protection, the secured lenders are granted a
replacement perfected security interest under 11 U.S.C. Section
361(2) to the extent the Lenders' cash collateral is used by the
Debtor, to the extent and validity and with the same priority in
the Debtor's post-petition collateral, and proceeds thereof, that
the Lenders held in the Debtor's pre-petition collateral, subject
to payments due under 28 U.S.C. section 1930(a)(6). To the extent
any other creditor holds or asserts a lien position in cash
collateral, that creditor will receive a replacement lien to the
same extent, priority and validity as it existed pre-petition.
To the extent the adequate protection provided for proves
insufficient to protect the Lenders' interests in and to the cash
collateral, they will have a super-priority administrative expense
claim, pursuant to 11 U.S.C. Section 507(b), senior to any and all
claims against the Debtor under Section 507(a), whether in this
proceeding or in any superseding proceeding, subject to payments
due under 28 U.S.C. section 1930(a)(6).
The replacement liens and security interests granted are
automatically deemed perfected upon entry of the Order without the
necessity of the Lenders taking possession, filing financing
statements, mortgages or other documents.
A further interim hearing on the matter is scheduled for September
13 at 3 p.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3AxtVIg from PacerMonitor.com.
The budget provides for total cost of goods cash outflow, on a
weekly basis, as follows:
$55,500 for the week ending August 19, 2022;
$30,500 for the week ending August 26, 2022;
$0 for the week ending September 2, 2022; and
$14,000 for the week ending September 9, 2022.
.
About Weyerbacher Brewing Co.
Weyerbacher Brewing Company, Inc., sought protection under Chapter
11 of the Bankruptcy Code (Bankr. E.D. Pa. Case No. 22-11665) on
June 27, 2022. In the petition signed by Daniel Weirback,
president, the Debtor disclosed up to $10 million in both assets
and liabilities.
Judge Patricia M. Mayer oversees the case.
Albert A. Ciardi III, Esq., at Ciardi Ciardi & Astin, P.C., is the
Debtor's counsel.
WHETSTONE PARTNERS: Taps Rob Lamb of Long Realty Co. as Broker
--------------------------------------------------------------
Whetstone Partners, LLP received approval from the U.S. Bankruptcy
Court for the District of Arizona to hire Rob Lamb, a real estate
broker at Long Realty Company.
The Debtor requires a real estate broker to market for sale its
real property, consisting of 30 improved lots and 85 unimproved
lots located near Benson, Ariz., in the Cottonwood Highlands
subdivision.
Mr. Lamb will receive compensation of $595, plus 6 percent of the
selling price.
In court papers, Mr. Lamb disclosed that he is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
Mr. Lamb can be reached at:
Rob Lamb
Long Realty Company
6330 N Campbell Ave, Suite 210
Tucson, AZ 85718
Phone: +1 520-444-4411
Email: RobLamb@RobLamb.com
About Whetstone Partners
Whetstone Partners, LLP filed a voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Ariz. Case No.
22-04271) on June 30, 2022, listing up to $10 million in assets and
up to $1 million in liabilities. Judge Brenda Moody Whinery
oversees the case.
Charles R. Hyde, Esq., at the Law Offices Of C.R. Hyde, PLC serves
as the Debtor's counsel.
ZIER PROPERTIES: U.S. Trustee Says Disclosure Statement Inadequate
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The Acting United States Trustee for Region 18, Gregory M. Garvin,
objects to the Disclosure Statement for Plan of Reorganization
under Chapter 11 filed by Zier Properties Reverse LLC.
The United States Trustee claims that the Disclosure Statement
fails to satisfy the adequate information standard because the
Debtor provides no discussion of historical income and a very
limited discussion of projected income. Merely attaching pro forma
income calculations to the Disclosure Statement is insufficient.
The United States Trustee states that where the Debtor discloses in
its Plan that the funds necessary to make payments come from rents
received, (Plan, p. 9), there should be a discussion about
historical rents and projected income for rents. As of the Petition
Date, Mr. Zier, the son of the Debtor's managing member, was paying
$2,500 in rent.
The United States Trustee points out that the Disclosure Statement
contains no information as to how the Debtor will suddenly be able
to receive $9,350 per month of income. Mr. Zier filed for
bankruptcy in 2021 and stated in his bankruptcy that he is no
longer paying rent. The source of the monthly proposed income of
$9,350 is not disclosed in the Disclosure Statement.
The United States Trustee asserts that the Plan contemplates an
initial payment of $25,000. There is no discussion in the
Disclosure Statement where that cash will come from or if the
Debtor has that type of cash on hand to make administrative claims
as of the Effective Date. As of the last MOR filed for June 2022,
the ending cash on hand was $50.
The United States Trustee further asserts that the proposed
settlement agreement with second mortgage creditor, Sunwest Bank,
which has not yet been approved by the Court, should be discussed
as part of the Disclosure Statement, including who is paying
Sunwest Bank in the proposed settlement. It is unclear under the
current Disclosure Statement if Sunwest Bank will be paid before
Plan confirmation or as part of the Plan. If the latter, then
Sunwest Bank should be identified as a class and as part of the
budget as well.
A full-text copy of the United States Trustee's objection dated
August 18, 2022, is available at https://bit.ly/3dLvZDI from
PacerMonitor.com at no charge.
About Zier Properties Reverse
Olympia, Wash.-based Zier Properties Reverse, LLC, sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Wash. Case No. 20-42868) on Dec. 31, 2020, listing $1,000,300 in
assets and $2,862,193 in liabilities. Judge Mary Jo Heston
oversees the case. The Debtor is represented by the Law Offices
of David Smith, PLLC.
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