/raid1/www/Hosts/bankrupt/TCR_Public/220914.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, September 14, 2022, Vol. 26, No. 256
Headlines
AEARO TECHNOLOGIES: Says Mediators Should Tackle Ch.11 Issues
AIJOBORY INVESTMENT: Seeks to Hire Ronald J. Pressley as Counsel
ASTECH ENGINEERED: Gets Court Approval to End Boeing Deal
ATLANTIC CITY, NJ: Moody's Ups Issuer Rating to Ba2, Outlook Pos.
AUDACY INC: Moody's Downgrades CFR to 'B3', Outlook Negative
AVSC HOLDING: S&P Upgrades ICR to 'CCC+' on Improved Performance
BALL CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings
BAUSCH + LOMB: Fitch Keeps Rating Watch Evolving on 'B+' IDR
BAUSCH HEALTH: Fitch Cuts IDR to 'C' on Proposed Debt Exchange
BED BATH & BEYOND: Laura Crossen Appointed as Interim CFO
BEN'S GARDEN: Voluntary Chapter 11 Case Summary
BOEING CO: Egan-Jones Retains B+ Senior Unsecured Ratings
BRAND INDUSTRIAL: S&P Downgrades ICR to 'CCC+', Outlook Negative
CARPENTER TECHNOLOGY: Egan-Jones Retains BB- Sr. Unsecured Ratings
CC HILLCREST: Has Interim OK to Access Cash Collateral
CDL UNIVERSITY: Continued Operations to Fund Plan
CELSIUS NETWORK: Misled Investors, Says Vermont Regulator
CEN BIOTECH: Begins Trading on OTCQB Venture Market
CEN BIOTECH: Inks Employment Contracts With Top Execs
CMR REAL ESTATE: Files Chapter 11 Subchapter V Case
CMS ENERGY: Egan-Jones Retains BB+ Senior Unsecured Ratings
CNX RESOURCES: Moody's Rates New $500MM Gtd. Unsecured Notes 'B1'
COLLEGE PARENT (YAHOO): Fitch Affirms 'BB-' IDR, Outlook Stable
COMMUNITY VISION: Future Operations to Fund Plan Payments
CONNECTWISE LLC: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
CORPORATE COLOCATION: Nov. 16 Plan Confirmation Hearing Set
CREEPY COMPANY: Wins Cash Collateral Access Thru Oct 17
CSG SYSTEMS: Egan-Jones Retains BB+ Senior Unsecured Ratings
DAYBREAK OIL: Stockholders Elect Four Directors
DOT DOT SMILE: Children's Clothing Seller Files Subchapter V Case
DUN & BRADSTREET: Fitch Affirms 'BB-' IDR, Outlook Positive
ECHELON CONSTRUCTION: Voluntary Chapter 11 Case Summary
ECN CAPITAL: DBRS Confirms BB(high) Long-Term Issuer Rating
EMPIRE SPORTS: Case Summary & 13 Unsecured Creditors
ENDO INTERNATIONAL: Can't Stop D.C. Circuit Appeal, Says FTC
ENJOY TECHNOLOGY: Abernathy Appointed as New Committee Member
ENVIA HOLDINGS: Amends Unsecured Claims Pay Details
FALLSWAY CONSTRUCTION: Taps Law Office of Donald L. Bell as Counsel
G.D. III: Seeks to Retain Control of Bankruptcy
GENAPSYS INC: Gets Court Approval for $42 Mil. Sale to Sequencing
GIGA-TRONICS INC: Terminates Rights Agreement with American Stock
GIRARDI & KEESE: Gets Money From Florida Plaintiffs Firm Wilkes
GPMI CO: Seeks to Extend Exclusivity Period to Oct. 14
GREEN ACRES: Seeks Approval to Hire Croker as Special Counsel
GREEN TAXI: Unsecureds' Recovery Lowered to 65% in Plan
HILLENBRAND INC: Egan-Jones Retains BB+ Senior Unsecured Ratings
IFRESH INC: Delaware Court Appoints Cynthia Romano as Receiver
IMMACULATA UNIVERSITY: Fitch Affirms BB- on 2017 Revenue Bonds
INDIAN CANYON: Files Subchapter V Case; Lawsuits Removed
ISABEL ENTERPRISES: Amends Several Secured Claims Pay Details
J MORALES: Unsecureds to Split $43K via Quarterly Payments
JOHN'S FAMILY: Voluntary Chapter 11 Case Summary
JOHNSON & JOHNSON: 3rd Circuit Tosses ERISA Fight of Ex-Workers
KEMPER CORP: Egan-Jones Hikes Senior Unsecured Ratings to BB+
MARIN ASSOCIATES: Files Chapter 11 Bankruptcy Protection
MASTEN SPACE: Gets Court Okay for $4.5M Asset Sale in Chapter 11
MATHESON FLIGHT: Committee Taps Dundon as Financial Advisor
MATHESON FLIGHT: Wants More Time for Chapter 11 Plan
MATTEL INC: Egan-Jones Hikes Senior Unsecured Ratings to BB+
MERITOR INC: Egan-Jones Retains B+ Senior Unsecured Ratings
MICROSTRATEGY INC: Faces Lawsuit Over Chairman's Unpaid Taxes
MIRACLE CENTER: Wins Cash Collateral Access Thru Dec 31
MJM VENTURES: Returns to Chapter 11 Bankruptcy
MOBY S.P.A.: Must Pay Investor's Counsel Fees in Dismissed Suit
MONSTER INVESTMENTS: Seeks to Tap Re/Max One as Real Estate Agent
MURPHY OIL: Egan-Jones Retains BB Senior Unsecured Ratings
MYLIFE.COM INC: Files for Chapter 11 Bankruptcy
NEWTON CONSTRUCTION: Files Subchapter V Case
NORTHWEST SENIOR: Landlord Opposes Extension of Exclusivity Period
NORTONLIFELOCK INC: Egan-Jones Retains BB Senior Unsecured Ratings
OWENS-IILINOIS GROUP: Egan-Jones Retains B Sr. Unsecured Ratings
PH BEAUTY III: Moody's Cuts CFR to Caa2, Outlook Negative
PITNEY POWES: Egan-Jones Retains B- Senior Unsecured Ratings
PUERTO RICO: PREPA Gets Additional Time for Debt Negotiations
RED RIVER: Sept. 28 Plan Confirmation Hearing Set
REMARK HOLDINGS: Appeals Nasdaq Delisting Determination
REPLICEL LIFE: Incurs C$1.1 Million Net Loss in Second Quarter
REPLICEL LIFE: To Sell Up to 8 Million Units
REVLON INC: 2nd Circuit Gives Citi Win in $500M Wire Transfer Fight
ROJESIE INC: Seeks Court Approval to Hire Bankruptcy Counsel
S3 SPA: Wins Interim Cash Collateral Access
SBA COMMUNICATIONS: Egan-Jones Retains B+ Senior Unsecured Ratings
SEAGATE TECHNOLOGY: Egan-Jones Retains BB+ Sr. Unsecured Ratings
SHEARER'S FOODS: Moody's Affirms B2 CFR & Alters Outlook to Neg.
SIRIUS XM: Egan-Jones Retains BB+ Senior Unsecured Ratings
SKYWEST INC: Egan-Jones Retains B Senior Unsecured Ratings
SONOCO PRODUCTS: Egan-Jones Retains BB+ Senior Unsecured Ratings
SQUIRRELS RESEARCH: Trustee Taps Inglewood as Financial Advisor
STERLING VA MARLIN: Files for Chapter 11 Bankruptcy Protection
SWF HOLDINGS I: S&P Alters Outlook to Negative, Affirms 'B-' ICR
T-MOBILE USA: Egan-Jones Retains B+ Senior Unsecured Ratings
T.G. UNITED: Creditors Oppose Extension of Exclusivity Period
TAMARACK VALLEY: S&P Affirms 'B+' Rating on Senior Unsecured Debt
TAYLOR MORRISON: S&P Affirms 'BB' ICR on Jump in Profit
TD HOLDINGS: Posts $1.4 Million Net Income in Second Quarter
TD HOLDINGS: Regains Compliance With Nasdaq's Bid Price Requirement
TERRA MANAGEMENT: Disclosure Hearing Continued to Oct. 12
TORINO CAMPUS: Nov. 8 Plan & Disclosure Hearing Set
TPC GROUP: Sullivan, et al. Advise on Port Neches Class Claimants
TRINITI DME: Wins Cash Collateral on Final Basis
UC HOLDINGS: S&P Downgrades ICR to 'CCC+', Outlook Developing
UNITED RENTALS: Egan-Jones Retains BB+ Senior Unsecured Ratings
US RENAL CARE: S&P Downgrades ICR to 'CCC+', Outlook Stable
VILLAS OF COCOA: Case Summary & 20 Largest Unsecured Creditors
VISTAGEN THERAPEUTICS: Falls Short of Nasdaq Bid Price Requirement
WAHOO FITNESS: S&P Downgrades ICR to 'CCC', Outlook Negative
WALL007 LLC: Seeks to Hire Eric A. Liepins as Legal Counsel
WESTERN AUSTRALIAN: Nov. 1 Plan Confirmation Hearing Set
WOODLAND COMMUNITY: Oct. 27 Plan & Disclosure Hearing Set
WORLD WINE: Unsecureds Will Get 25 Cents on Dollar in Plan
WYOTRANS LLC: Court OKs Deal on Cash Collateral Access Thru Oct 31
YAKIMA VALLEY HOSPITAL: Moody's Cuts Rating on Revenue Bonds to Ba3
ZENEM CORP: UST Seeks Dismissal of Pro Se Filing
[*] Commercial Chapter 11 Bankruptcy Filings Rose in August 2022
*********
AEARO TECHNOLOGIES: Says Mediators Should Tackle Ch.11 Issues
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Rick Archer of Law360 reports that 3M unit Aearo Technologies asked
an Indiana bankruptcy judge on Thursday, September 8, 2022, to let
a pair of mediators appointed to take part in talks over mass-tort
product liability claims against the company look at all aspects of
the company's Chapter 11 case.
During a virtual hearing, counsel for Aearo argued that the
mediators would have to deal with all aspects of the Chapter 11
case to reach a "global resolution" of all the claims in the case,
and U.S. Bankruptcy Judge Jeffrey Graham said he was inclined to
"make every tool available" to the mediators.
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.
AIJOBORY INVESTMENT: Seeks to Hire Ronald J. Pressley as Counsel
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Aijobory Investment, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Pennsylvania to hire Ronald J.
Pressley Associates, P.C. as its legal counsel.
The firm's services include:
a. represent the Debtor in this Chapter 11 case and advise the
Debtor as to its rights, duties and powers;
b. prepare and file all necessary statements, schedules and
other documents, and negotiate and prepare one or more plans of
reorganization for the Debtor;
c. represent the Debtor at all hearings, meetings of
creditors, conferences, trials and other proceedings in this case;
and
d. perform such other legal services as may be necessary in
connection with this case.
The firm will bill $300 per hour for time spent out of court, and
$325 per hour for time spent in court.
The retainer fee is $5,000.
As disclosed in court filings, Ronald Pressley has no interest
adverse to the Debtor or the estate in any of the matters upon
which it is engaged.
The firm can be reached through:
Ronald J. Pressley, Esq.
Ronald J. Pressley Associates, P.C.
1015 Chestnut Street, Suite 907
Philadelphia, PA 19107
Tel: (215) 629-3800
Fax: (215) 629-3804
Email: rjp@rjpressley.com
About Aijobory Investment
Aijobory Investment, LLC, a company in Lansdowne, Pa., sought
protection under Chapter 11 of the U.S Bankruptcy Code (Bankr. E.D.
Pa. Case No. 22-12008) on Aug. 1, 2022. In the petition filed by
Hatim Mukhef, as operations manager, the Debtor reported assets
between $1 million and $10 million and liabilities between $500,000
and $1 million.
Judge Magdeline D. Coleman oversees the case.
Ronald J. Pressley, Esq., at Ronald J. Pressley Associates, P.C.,
is the Debtor's counsel.
ASTECH ENGINEERED: Gets Court Approval to End Boeing Deal
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Alex Wolf of Bloomberg Law reports that Astech Engineered Products
Inc., a bankrupt manufacturer of aerospace parts, won court
approval to reject its Boeing contracts that it said were causing a
"significant loss."
Astech's decision to terminate the contracts, over the aerospace
giant's objection, is a permissible exercise of Astech's business
judgment and tools provided under Chapter 11, Judge Brendan L.
Shannon of the US Bankruptcy Court for the District of Delaware
ruled during a hearing Wednesday, September 7, 2022.
About Astech Engineered Products
Astech Engineered Products, Inc., a company in Santa Ana, Calif.,
produces welded honeycomb sandwich structures. The company offers
its products to the commercial, aerospace, marine, transportation,
and defense industries throughout the world.
Astech filed a petition for relief under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10635) on
July 15, 2022, listing $10 million to $50 million in assets and $1
million to $10 million in liabilities. David M. Klauder has been
appointed as Subchapter V trustee.
Brooks Wilkins Sharkey & Turco, PLLC and Cozen O'Connor serve as
the Debtor's bankruptcy counsels. Grobstein Teeple, LLP is the
financial advisor.
ATLANTIC CITY, NJ: Moody's Ups Issuer Rating to Ba2, Outlook Pos.
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Moody's Investors Service has upgraded the City of Atlantic City,
NJ's long-term issuer rating to Ba2 from Ba3. The outlook remains
positive.
The issuer rating is equivalent to the city's hypothetical general
obligation unlimited tax (GOULT) rating. Although the city has
$315.9 million in general obligation unlimited tax (GOULT) debt,
none of it is has an underlying rating from Moody's, though much of
it carries an A3 enhanced rating from the New Jersey Municipal
Qualified Bond Program.
RATINGS RATIONALE
The upgrade of the long-term issuer rating to Ba2 reflects the
city's improved financial performance and liquidity. The rating
also incorporates the recent recovery but reliance on the casino
industry and the ongoing efforts to diversify. The rating is also
informed by the continued, strong oversight by the State of New
Jersey (A2 stable).
Moody's view the continued oversight by the State of New Jersey as
critical to the city's continued well-being and progress. The
state's future oversight role remains to be determined and will be
of critical importance to the city's future credit quality.
Many of the city's more fundamental credit characteristics remain
weak. Resident wealth and income are low and income inequality is
starkly evident in the city's juxtaposition of high unemployment
and poverty and opulent casinos. Long-term leverage is elevated and
deferred maintenance and capital needs are only just starting to be
addressed.
RATING OUTLOOK
The positive outlook reflects Moody's expectations that, despite
the lingering effects of the pandemic, the rise of inflation, and
the risk of recession, Atlantic City will continue making strides
in improving its governance and finances. While the economic
headwinds have caused issues, the negative credit consequences are
offset by the improved management of city operations and the more
predictable PILOT payment structure for casinos. The outlook also
incorporates the continued state oversight.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
Diversification of the economic base
Material growth in tax base and resident wealth and income
Sustained improvements to governance
Material progress addressing deferred maintenance and
capital infrastructure
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
Contraction in the casino industry
Material deterioration in reserves and liquidity
Withdrawal of state oversight and inability to
independently manage operations
LEGAL SECURITY
Debt service on the city's bonds is secured by its pledge of its
full faith and credit backed by its legal obligation to levy ad
valorem tax on all taxable property for the payment of debt service
without limit as to rate or amount. Certain issuances are also
backed by the New Jersey Municipal Qualified Bond Program (A3
stable)-authorized by the Municipal Qualified Bond Act (MQBA).
PROFILE
Atlantic City is a tourism and gaming center located along the
southern portion of the Jersey shore. It provides standard
municipal services to a population of approximately 38,000.
METHODOLOGY
The principal methodology used in this rating was US Local
Government General Obligation Debt published in January 2021.
AUDACY INC: Moody's Downgrades CFR to 'B3', Outlook Negative
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Moody's Investors Service downgraded Audacy, Inc.'s Corporate
Family Rating to B3 from B2. In addition, the 1st lien credit
facility and senior secured 2nd lien notes ratings of Audacy
Capital Corp. (a subsidiary of Audacy) were downgraded to B1 from
Ba3 and Caa1 from B3, respectively. The outlook is negative.
The ratings downgrade and negative outlook reflect the impact of
high inflation and interest rates which Moody's projects will delay
Audacy's recovery from the pandemic and keep leverage at elevated
levels through 2023. Audacy's accounts receivable facility,
revolving credit facility, and term loan are all approaching
maturity in the second half of 2024 which heightens refinancing
risks.
Moody's also downgraded Audacy's Speculative Grade Liquidity (SGL)
rating to SGL-4 from SGL-3 as a result of the near term maturity of
the revolver and accounts receivable facility and the potential for
cash burn from operations for the remainder of the year, although
liquidity is likely to benefit from asset sale proceeds in the next
few quarters.
A summary of the actions are as follows:
Downgrades:
Issuer: Audacy, Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-4 from
SGL-3
Issuer: Audacy Capital Corp.
Senior Secured Regular Bond/Debenture, Downgraded to Caa1 (LGD5)
from B3 (LGD5)
Senior Secured Bank Credit Facility, Downgraded to B1 (LGD2) from
Ba3 (LGD2)
Outlook Actions:
Issuer: Audacy Capital Corp.
Outlook, Remains Negative
Issuer: Audacy, Inc.
Outlook, Remains Negative
RATINGS RATIONALE
Audacy's B3 CFR reflects the extremely high leverage level (11.3x
as of Q2 2022 excluding Moody's standard lease adjustments) and
Moody's projection that leverage will remain at elevated levels due
the impact of high inflation and slow economic growth through 2023.
While Moody's expects leverage will decline when economic
conditions improve, the approaching debt maturity of a portion of
its debt structure increases the likelihood that Audacy will have
to refinance or extend the maturities of the senior secured credit
facility while leverage levels are at very high levels. The radio
industry continues to be negatively affected by the shift of
advertising dollars to digital mobile and social media as well as
heightened competition for listeners from a number of digital music
providers. Secular pressures and the cyclical nature of radio
advertising demand have the potential to exert substantial pressure
on EBITDA performance over time.
Audacy is the second largest radio broadcaster in the US with
leading market positions in 21 of the top 25 markets. The company
benefits from a geographically diversified footprint with strong
market clusters in most of the areas it operates which enhances its
competitive position. A diversified format offering of music, news,
and sports as well as live events and digital growth initiatives
are also positives to the credit profile. Prior acquisitions to
expand its podcasting business and the roll out of the new digital
audio platform will help offset a portion of the effect of reduced
advertising spend in the radio industry in the near term. Audacy
has also taken aggressive cost cutting actions and Moody's expects
capex will decline as Audacy's new digital platform is completed.
Audacy's leading position in sports programming is projected to
continue to attract increased advertising revenue from sports
betting companies as additional markets legalize gambling.
ESG CONSIDERATIONS
Audacy's ESG Credit Impact Score is highly-negative (CIS-4) driven
by the company's exposure to governance risks (G-4) and social
risks (S4). Audacy has very high leverage levels and approaching
debt maturities, but will target lower leverage levels as economic
conditions improve. A significant percentage of the company's
revenue and profitability are generated from radio broadcasting
which faces risk from social and demographical trends as
competition for listeners from digital music services has increased
and advertising dollars have shifted to digital and social media
advertising. While Audacy is a publicly traded company listed on
the New York Stock Exchange, Joseph M. Field (Chairman) and David
J. Field (President /CEO and son of the Chairman) have a
significant minority voting interest in the company.
Audacy's SGL-4 rating reflects the maturity of the $75 million
Accounts Receivable facility in July 2024 and revolving credit
facility ($135 million drawn as of Q2 2022). Approximately $227.3
million of the revolver will mature in August 2024 with the
remaining $22.7 million due in November 2022. Audacy has $40
million of cash on the balance sheet as of Q2 2022 and Moody's
expects asset sale proceeds in the near term to help bolster
liquidity. Capex will decline to about $75 million in 2022 ($104
million LTM Q2 2022) and will decline further in 2023 as the new
digital platform is completed. Free cash flow was negative $74
million LTM Q2 2022, but Moody's projects FCF will improve in the
near term due to positive working capital and lower capex going
forward.
The revolver is subject to a consolidated net first lien leverage
ratio of 4x (up to 4.5x one year after permitted acquisitions)
compared to a calculated ratio of 3.6x as of Q2 2022. Moody's
expects the level of cushion of compliance with the covenant will
remain tight. However, add backs to the covenant calculation and
potential asset sales proceeds increase the ability to remain in
compliance with the covenant going forward.
The negative outlook reflects Moody's expectation the leverage
levels will remain at elevated levels through 2023 with approaching
debt maturities in 2024. Moody's projects leverage will remain in
the 10x range in 2023, but begin to decline in 2024 as radio
advertising spending improves. The near term completion of Audacy's
digital platform will support lower expenses and capex in the near
term and the new service offering will contribute to growth over
time when economic conditions improve. High margin political
advertising revenue as the mid-term elections approach will also
offset a portion of the impact of slow economic growth. However,
Audacy will remain very sensitive to any further declines in radio
advertising spending as a result of weak economic conditions which
will increase uncertainty in operating performance and the ability
to refinance debt maturities in a timely manner.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if Audacy is unable to refinance or
extend approaching debt maturities in a timely manner or leverage
was likely to remain at elevated levels for an extended period. A
further deterioration of liquidity or inability to obtain an
amendment from financial covenants if needed could also lead to
negative ratings pressure.
Audacy's outlook could be changed to stable if near term maturities
were addressed and Moody's expected leverage levels to decline
below 7x. An adequate liquidity position would also be required. An
upgrade could occur if Moody's expected leverage to decline below
5.5x with a good liquidity profile and a mid-single digit
percentage of free cash flow to debt ratio. Positive organic
revenue growth and expanding EBITDA margins would also be required
in addition to confidence that management would maintain
disciplined financial policies (including dividends, share
repurchases, and acquisitions) over time.
The implied outcome for the 1st lien senior secured debt was Ba3,
but a one notch override was applied resulting in a B1 rating due
to the very high leverage for the existing B3 CFR.
Audacy, Inc. (fka Entercom Communications Corp.), headquartered in
Philadelphia, PA, is the second largest US radio broadcaster based
on revenue. The company was founded in 1968 by Joseph M. Field and
is focused on radio broadcasting with radio stations in large and
mid-sized markets as well as podcasting, digital initiatives, and
live events. In November 2017, the company completed the merger of
CBS Radio. Joseph M. Field and David J. Field (President /CEO and
son of the founder) have a significant minority voting interest in
the company. Reported LTM revenue as of Q2 2022 was approximately
$1.3 billion.
The principal methodology used in these ratings was Media published
in June 2021.
AVSC HOLDING: S&P Upgrades ICR to 'CCC+' on Improved Performance
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S&P Global Ratings raised its issuer credit rating on AVSC Holding
Corp. to 'CCC+' from 'CCC'. At the same time, S&P raised its
issue-level rating on the company's revolving credit facility and
first-lien term loans to 'CCC+' from 'CCC'. S&P also raised its
issue-level rating on the company's second-lien debt to 'CCC-' from
'CC'.
S&P said, "The stable outlook reflects our view that AVSC's
operating performance will continue to recover and that the company
will maintain sufficient liquidity for operating needs over the
next 12 months. We expect leverage will remain elevated but credit
metrics will improve steadily over the latter half of 2022 and into
2023.
"The upgrade reflects our view that AVSC will generate positive
EBITDA and modest free operating cash flow (FOCF) in 2022 as
corporate events return and that it will preserve liquidity, though
we expect adjusted leverage to remain elevated. Hotel-and
convention-center-based group and corporate events have recovered
more rapidly in 2022, albeit still below 2019 levels, as
pandemic-related restrictions subside. In the quarter ended June
30, 2022, revenue increased significantly over 2021 revenue and
surpassed pro forma 2019 levels on lower volumes, driven by a
favorable shift toward larger, more expensive events. We expect
positive EBITDA and FOCF in 2022 from the continued return of
corporate events, which will enable the company to improve its
credit metrics relative to 2021. We expect more modest recovery
continuing in 2023. However, AVSC's increased reliance on external
labor to host large events will likely put pressure on EBITDA
margins in the coming months. Further, AVSC has more than $2.8
billion of reported debt, which is substantial in our view, and
will continue to increase due to the payment-in-kind interest on
its senior debt. As a result, we expect leverage to remain elevated
and adjusted EBITDA interest coverage to remain thin at below 1.5x
over the next 12-18 months. Furthermore, we view the capital
structure as unsustainable in the long term given the company's
$1.6 billion of debt maturing in 2025 and our expectation for
modest free cash flow generation. We believe AVSC must
significantly increase its EBITDA base and cash flow to comfortably
refinance its upcoming maturities at prevailing interest rates."
AVSC has made efforts to preserve liquidity by extending the
maturity of a portion of the revolver until November 2024 and
replacing $85 million in outstanding revolver borrowings with an
$85 million first-lien term loan due in 2025. In addition, the
company waived the springing first-lien net leverage covenant until
March 2024, maintaining the $40 million minimum monthly liquidity
covenant through December 2023. The amended credit facility
modestly improves its maturity profile and liquidity position,
which should support expected capital investment in equipment
upgrades and working capital needs.
Risks to a recovery in group and corporate events include a
resurgence in coronavirus variants and an economic downturn that
reduces business travel. The live events industry was significantly
impeded by the COVID-19 pandemic, with most canceled or postponed,
reducing revenue more than 90% immediately following its onset. S&P
said, "A resurgence in infections could inhibit recovery prospects,
though we expect it would be modest. AVSC's business is sensitive
to economic cyclicality and reductions in business travel. While we
do not expect a recession in the next 12 months, risks have
increased to 40%-50%. We expect the recovery in the company's
adjusted EBITDA margin could be hindered in a recessionary
environment due to reduced demand for corporate events as customers
reduce their budgets for business travel and advertising."
The stable outlook reflects S&P's view that while AVSC's operating
performance will continue to recover and the company will maintain
sufficient liquidity for operating needs, it expects leverage will
remain elevated over the next 12 months.
S&P could lower its rating on AVSC if it believes the company will
default on its debt or pursue a distressed debt exchange or in- or
out-of-court restructuring within the next 12 months. A default
could be accelerated by:
-- Slow recovery for business events, such that AVSC has
challenges refinancing its capital structure; or
-- Greater-than-expected operating and working capital costs that
deplete available liquidity.
An upgrade is unlikely over the next 12 months, given S&P's
expectations for leverage to remain high. Nevertheless, S&P could
raise its rating if:
-- Performance continues to improve and AVSC meaningfully expands
its EBITDA base such that it can comfortably refinance its roughly
$1.6 billion of 2025 debt maturities;
-- It increases and sustains EBITDA interest coverage above 1.5x
in the next 12 months; and
-- S&P believes it will manage operating costs and working capital
such that it expects sustained positive FOCF.
ESG credit indicators: E-2, S-3, G-3
S&P said, "AVSC's health and safety factors have improved, in our
view, and are now a moderately negative consideration in our credit
rating analysis. Therefore, we revised our social credit indicator
to S-3 from S-4. Social factors are reflected in the unprecedented
decline in business event attendance, which generates most of the
company's revenue, during the pandemic due to event cancellations
related to social restrictions. Revenue in 2022 could recover to
roughly 90% of pro forma 2019 levels as in-person corporate events
return, which could contribute to further leverage reduction.
Governance factors are a moderately negative consideration, as is
the case for most rated entities owned by private-equity sponsors.
We believe the company's highly leveraged financial risk profile
points to corporate decision-making that prioritizes the interests
of controlling owners. This also reflects generally finite holding
periods and a focus on maximizing shareholder returns."
Environmental Social and Governance Factors
-- Social - Health and Safety
BALL CORP: Egan-Jones Retains BB+ Senior Unsecured Ratings
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Egan-Jones Ratings Company, on August 25, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Ball Corporation.
Headquartered in Broomfield, Colorado, Ball Corporation provides
metal packaging for beverages, foods, and household products.
BAUSCH + LOMB: Fitch Keeps Rating Watch Evolving on 'B+' IDR
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Fitch Ratings maintained the Rating Watch Evolving (RWE) on Bausch
+ Lomb Corporation's (BLCO) 'B+' Issuer Default Rating (IDR) and on
its senior secured term loan at 'BB+' /'RR1' rating. The RWE
reflects the potential for BLCO's ratings to move higher should it
become an unrestricted subsidiary and Bausch Health Companies' and
Bausch Health Americas' (collectively, BHC) ownership diminished
through the distribution and/or sale of its remaining interests.
Conversely, BLCO's ratings could move lower should BHC's ratings be
downgraded. BLCO's ratings could also be downgraded should Fitch
reconsider the strength of the linkage between the entities. Fitch
views BLCO's six-notch uplift on BLCO's IDR over BHC's IDR as
temporary, as BHC is currently proposing a distressed debt exchange
(DDE).
Fitch's Parent and Subsidiary Linkage Rating Criteria allows for a
stronger subsidiary to benefit from a wider notching up from the
consolidated profile in extreme situations, which Fitch views the
DDE to be. BHC has not made any announcements that indicate a
change to their intentions for or relationship with BLCO.
KEY RATING DRIVERS
BLCO Solid Eye Care Business: BLCO is a leading global eye health
company with a portfolio of over 400 products. Fitch expects that
it will maintain an investment-grade capitalization upon its
separation from BHC and transition from a secured borrowing base to
unsecured. Fitch views BLCO as significantly smaller than Boston
Scientific Corp. (BBB/Positive), Baxter International (BBB/Stable),
Becton, Dickinson & Company (BBB/Stable) and Zimmer Biomet
Holdings, Inc. (BBB/Stable). BLCO also operates in consumer health
and prescription pharmaceuticals, providing some additional sector
diversification compared to Boston Scientific and Zimmer Biomet.
BLCO's Ratings Tied to BHC's: The primary driver of BLCO's ratings
is that of BHC's 'C' IDR until the complete separation. Fitch views
the ringfencing and access and control factors to be porous thereby
allowing BHC's credit profile to influence BLCO's. Fitch
temporarily notches BLCO's ratings six notches up from BHC's given
BHC's DDE. Until separation, any changes in the linkage could lower
BLCO's ratings.
Changes to BHC's ratings would influence BLCO's until they are
assessed on a stand-alone basis. An investment-grade rating would
likely have leverage below 3.5x and an unsecured capital structure.
Fitch will assess BLCO's Corporate Governance and its impact on
ratings and ESG Relevance Scores as it relates to the separation.
Separation Mechanics Unaffected: The mixed ruling affecting BHC
does not directly influence the timing or likelihood of a complete
separation of the entities, as management has heretofore stated is
their intention. The net leverage test needed to unrestrict BLCO
from BHC's secured debt is on a trailing basis and the timing of
potential cashflow losses are prospective.
Assessing Changes to Incentives for Separation: BHC is not legally
obligated to complete the separation and the achievability of the
proforma post-spinoff 6.7x net leverage is lower given continued
weakness in EBITDA and lower equity market valuations reducing the
potential additional proceeds from the sale of more of its
ownership in BLCO. Moreover, BLCO's stronger credit profile could
provide support for BHC's credit profile by providing covenant
headroom.
Conversely, if BHC could meet the net leverage ratio and effectuate
the separation, they may be further incentivized to do so given the
increasing uncertainty at BHC. Advancing the separation would
ensure BLCO's relatively healthy business and balance sheet are
isolated from BHC's creditors and BHC's shareholders ownership in
both entities would be unchanged were it to be a distribution in
kind.
Coronavirus Impact Moderating: BLCO's business is recovering from
the negative impact of COVID-19. Cataract and laser vision
correction surgeries faced significant challenges as these
procedures are generally considered elective or deferrable. Looking
back, the second quarter of 2020 will probably remain the trough in
revenues. Fitch believes growth will continue as population
immunity increases, more therapeutics and diagnostic tests become
available and protocols by providers mitigate the risk and patient
concern associated with having these procedures. Nevertheless, the
potential emergence of a resistant and more virulent variant could
lead to a setback in procedure volumes.
Supply Chain/Inflation: Supply chain constraints and inflationary
pressures present challenges to many firms in the healthcare
sector. BLCO is generally managing these issues through building
stocks of raw materials and API. In addition, the company is adding
redundancies in its suppliers.
Reliably Increasing Demand: Aging demographics, improved income
demographics in emerging markets, increasing digital screen times
and the ongoing increase in the incidence of diabetes will likely
drive low- to mid-single digit growth in the demand for eye health
products and services during the intermediate term. A significant
number of BLCO's products enjoy leading market positions and strong
brand recognition. Consumables and contracted services account for
roughly 78% of BLCO's revenues, and the company's product portfolio
has only limited exposure to market exclusivity losses.
Pipeline to Support Growth: Innovation is important to remain
competitive in the eye health market, Fitch views the company's R&D
efforts will help to drive intermediate- and long-term revenue
growth while also supporting margins. BLCO makes consistent and
significant investments in new product development. Its R&D efforts
span all three businesses with intensity geared more towards
surgical and ophthalmic pharmaceuticals. Fitch expects the company
will also continue to pursue innovation in its Vision Care business
with technological advancements being more incremental in nature.
Margin Expansion: Fitch assumes that margins will improve over the
forecast period. Improving sales mix and manufacturing efficiency
gains should increase gross margins. SG&A as a percent of sales are
forecasted to decline owing to strong management of other operating
costs. Increasing revenue should provide additional operating
leverage. In addition, less than 15% of BLCO's revenues are exposed
to branded pharmaceuticals pricing issues in the U.S.
Consistently Positive FCF: Advancing sales, improving margins,
solid working capital management and moderate capital expenditure
requirements should support consistently positive and increasing
FCF. Fitch does not expect that BLCO will pay dividends or engage
in share repurchases during the near term. Capital deployment will
focus on internal investment, external collaborations and targeted
acquisitions. For a leading global eye health company, Fitch
believes BLCO has relatively minimal contingent liability risk
regarding product liability, intellectual property and other
regulatory issues. As such, we forecast BLCO's leverage (total
debt/EBITDA) to decline over the forecast period to below 2.5x,
primarily through EBITDA growth. The current level of balance sheet
debt is generally viewed as a permanent component of the capital
structure.
DERIVATION SUMMARY
BLCO's 'B+'/RWE is based on it being a majority owned subsidiary of
Bausch Health until the separation. Fitch views BLCO to be a
stronger subsidiary than the weaker parent and notches BLCO's
ratings from the consolidated parent's IDR. The notching is based
on Fitch viewing the ringfencing to be porous due to the lack of
any restrictive investment or dividend covenants and access and
control to be porous due to some overlapping Board of Directors
members. Until separation, BLCO's ratings will be influenced by
BHC's whose Rating Derivation is described in the Fitch release
Release "Fitch Downgrades Bausch Health Co's IDR to 'C' on Proposed
Distressed Debt Exchange" dated Aug. 3, 2022.
BLCO is significantly smaller than Boston Scientific Corp.
(BBB/Positive), Baxter International (BBB/Stable), Becton,
Dickinson & Company (BBB/Stable) and Zimmer Biomet Holdings, Inc.
(BBB/Stable). BLCO also operates in consumer health and
prescription pharmaceuticals, providing some additional sector
diversification compared to Boston Scientific and Zimmer Biomet. It
also presents a moderate degree of regulatory risk regarding drug
pricing. BLCO is somewhat less diversified than Becton, Dickenson
and Baxter. In addition, BLCO is solely focused on eye health,
while all of its peers address a number of disease markets, with
Zimmer Biomet also being somewhat less diversified than the others.
Zimmer Biomet and Becton, Dickenson have a similar financial
profile to BLCO, and Fitch expects the company to maintain gross
debt/EBITDA between 2.5x-3.0x.
Parent-Subsidiary Linkage
The approach taken is a weak parent (BHC)/strong subsidiary (BLCO).
Using Fitch's PSL criteria, we conclude there is porous ring
fencing and porous access & control. As such, we rate the parent
and subsidiary at the consolidated level while notching the
subsidiary's rating six-notches above BHC's IDR. Fitch would
normally have a two-notch uplift, but BHC's DDE has affected BHC's
IDR, but the DDE does not affect BLCO's IDR.
ESG Commentary
Bausch + Lomb Corporation has an ESG Relevance Score of '4' for
Exposure to Social Impacts due to pressure to contain health care
spending growth; highly sensitive political environment, and social
pressure to contain costs or restrict pricing, which has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors. It is worth noting that
pharmaceuticals account for less than 15% of the firm's total
sales.
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.
KEY ASSUMPTIONS
-- Mid- to high-single-digit organic revenue growth driven by the
uptake of new product commercialization moderately offset by
increased competitive pressure for some established products;
-- Annual FCF generation greater than $400 million during the
forecast period with moderately improving operating EBITDA
margins;
-- Dividends are not included in the forecast, but if instituted
would decrease FCF by the same amount as Fitch defines as
CFFO-capex-dividends;
-- Cash deployment prioritized for tuck-in acquisitions.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch viewing BLCO on a standalone basis;
-- An upgrade at BHC. Rating Sensitivities for BHC are detailed
in the Fitch release "Fitch Downgrades Bausch Health Co's IDR
to 'C' on Proposed Distressed Debt Exchange" dated Aug. 3,
2022.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Evidence of factors related to ring-fencing and access and
control that would lead Fitch to rate BLCO on a consolidated
basis with BHC or with 3 notch(es) rather than 3 notch(es);
-- A downgrade at BHC. Rating Sensitivities for BHC are detailed
in the Fitch release "Fitch Downgrades Bausch Health Co's IDR
to 'C' on Proposed Distressed Debt Exchange" dated Aug. 3,
2022.
LIQUIDITY AND DEBT STRUCTURE
BLCO Liquidity: Fitch expects BLCO will have sufficient liquidity
in the near term with an undrawn $500 million, five-year secured
revolving credit facility and no near-term debt maturities given a
$2.5 billion secured five-year term loan. The company has mandatory
annual amortization on its term loan of $25 million. At June 30,
2022, the company had $437 million of cash on hand.
Recovery and Notching Assumptions
The recovery analysis assumes that BLCO would be considered a going
concern in bankruptcy and that the company would be reorganized
rather than liquidated. Fitch estimates a going concern enterprise
value (EV) of $3.5 billion for Bausch Health and assumes that
administrative claims consume 10% of this value in the recovery
analysis.
The going concern EV is based upon estimates of post-reorganization
EBITDA and the assignment of an EBITDA multiple. Fitch's estimate
of Bausch Health's going concern EBITDA of $500 million is roughly
38% lower than the FYE 2021 EBITDA. The assumed going concern
EBITDA reflects a scenario where the pandemic continues to weigh on
certain business segments during the intermediate term and the
company experiences some shortfalls in commercializing the R&D
pipeline, thereby resulting in a restructuring or default.
Fitch assumes a recovery EV/EBITDA multiple of 7.0x for Bausch.
This is generally in-line with the 6.0x-7.0x Fitch typically
assigns to medical device/specialty pharmaceutical manufacturers.
Fitch applies a waterfall analysis to the going concern EV based on
the relative claims of the debt in the capital structure, and
assumes that the company would fully draw the revolvers in a
bankruptcy scenario. The senior secured credit facility, including
the term loans and revolver have outstanding recovery prospects in
a reorganization scenario and are rated 'BB'/'RR1'/Rating Watch
Evolving.
ISSUER PROFILE
Bausch + Lomb Corporation (BLCO) is currently a majority-owned
subsidiary of Bausch Health Companies Inc (BHC) and a leading
global eye health company with a portfolio of over 400 products.
The company has a global research, development, manufacturing and
commercial footprint of approximately 12,000 employees and a
presence in approximately 90 countries.
BAUSCH HEALTH: Fitch Cuts IDR to 'C' on Proposed Debt Exchange
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Fitch Ratings has downgraded Bausch Health Companies Inc.'s (BHC)
and Bausch Health Americas Inc.'s (BHA) Issuer Default Ratings
(IDRs) to 'C' from 'B-' and their unsecured debt ratings to
'C'/RR5' from 'B-'/'RR4' and removed the Rating Watch Negative
(RWN). Fitch maintains BHC's and BHA's secured first-lien debt
(rated 'BB-'/'RR1') on RWN. The RWN reflects the risk of lower
recoveries and ratings if the spinoff of Bausch + Lomb (BLCO) moves
forward and collateral value is lost.
The rating actions follow BHC's announcement that it will engage in
what Fitch views as a distressed debt exchange (DDE) with its
senior unsecured issuances. BHC has offered up to $2.5 billion of
first-lien secured notes, $500 million of second-lien secured
notes, and $1 billion of senior secured the subsidiary borrower for
the exchange unsecured notes. The net proceeds of the issuance will
be used to exchange its unsecured notes maturing in 2025 through
2031 at close to market levels.
KEY RATING DRIVERS
Distressed Debt Exchange: Fitch views BHC's offering as a DDE as
there is a material reduction in the original terms for these
unsecured issuances. When assessing distressed debt exchanges,
Fitch considers if failure of a large part of the creditor group to
accept the offer would call into doubt the issuer's ability to
fulfil the original contractual terms.
Significant deterioration of credit quality is likely if BHC is
unsuccessful at defending its XIFAXAN patents and completing the
BLCO spinoff. If the exchange offering terms are accepted, BHC
would meaningfully reduce its approximately $11.8 billion
outstanding unsecured notes and its exposure to shorter-dated
maturities. If the exchange closes, Fitch will reassess the credit
profile of the resulting capital structure.
Court Ruling Stresses Credit Profile: A district court has
invalidated U.S. patents protecting the composition and use of
XIFAXAN for treatment of IBS-D but also ruled that U.S. patents
protecting XIFAXAN for the treatment of hepatic encephalopathy (HE)
recurrence are valid. Fitch expects BHC to appeal the court's
anticipated final order, and the FDA may require an in vivo
bioequivalency study before approving a generic version of XIFAXAN.
This would delay a generic entrant for the IBS-D indication. The
court order places XIFAXAN's revenues and profitability at risk,
earlier than expected in 2028, when other generic manufacturers are
expected to launch their versions of XIFAXAN. If BHC proceeds with
the spinoff of Bausch + Lomb Corporation (BLCO), the XIFAXAN patent
risk to BHC is amplified.
Watch Reflects Potential Operating/Financial Stress: The
possibility of losing a significant portion of its profitable
product, XIFAXAN, poses significant headwinds to BHC's operating
and financial performance. Cash generation would be meaningfully
stressed, hampering its ability to fund growth initiatives and
reduce leverage. The timing of a generic entrant remains unclear,
as it depends on the outcome of future litigation and the FDA
regulatory approval process. Since 2016, the company significantly
reduced the absolute level of Fitch-calculated debt outstanding
with a combination of internally generated cash flow and proceeds
from asset divestitures. However, that initiative is at risk.
B+L Spinoff Underway: Fitch views the planned spinoff of Bausch's
eye care business as strategically sound given limited synergies
between the branded pharma business and eye care, but the loss of
BLCO's operating and financial stability creates significant risk
to BHC's credit profile. BHC already executed an 11.3% IPO of BLCO
in 1H22. Prior to the court ruling dealing with XIFAXAN, it was
clear that BHC planned to follow with another 8.7% of BLCO and to
unrestrict the entity and distribute the remaining shares through
an in-kind transaction. Proceeds from such transactions and the
potential debt reduction would likely be insufficient to reduce
leverage and offset the loss of diversification and cashflows.
Coronavirus Headwinds: The pandemic adversely affected Bausch's
operating performance during 2020, particularly in the second
quarter. The company's Ortho Dermatologics, Dentistry and Global
Surgical businesses, which account for roughly 13% of revenues have
been hit the hardest. The company adjusted its operations to
mitigate some of challenges, including manufacturing and marketing.
While Fitch believes the industry is more prepared with protocols,
vaccines and therapeutics, some uncertain related to the evolution
of the virus remain.
Reliance on New Products: The stabilization of Bausch Health's
operating profile relies on an increased focus on developing an
internal research and development pipeline, which Fitch believes is
constructive for the company's credit profile over the long term.
This strategy is not without risk since Bausch Health needs to ramp
up the utilization of recently-approved products through successful
commercialization efforts.
These products include Siliq (for the treatment of
moderate-to-severe plaque psoriasis, although with safety
restrictions), Bryhali (plaque psoriasis), Lumify (red eye) and
Vyzulta (glaucoma). The latter two will move with BLCO
post-spinoff. BHC also has a phase II pipeline candidate for the
treatment of ulcerative colitis, two candidates to treat acne and a
number of products that it will incorporate into its International
business as greenfield geographic expansion opportunities.
DERIVATION SUMMARY
Bausch Health is significantly larger and more diversified than
specialty pharmaceutical industry peers Mallinckrodt plc and Endo
International plc. While all three manufacture and market specialty
pharmaceuticals and have maturing pharmaceutical products, Bausch
Health's BLCO business meaningfully decreases business
concentration risk relative to Mallinckrodt and Endo. BLCO offers
operational diversification in terms of geographies and payers.
However, the proposed complete separation of BLCO will narrow the
company's focus.
BHC's rating also reflects gross debt leverage that is higher than
its peers, but BHC does not face contingent liabilities related to
the opioid epidemic. However, it does face significant patent
expiry risk, which is amplified by the proposed spinoff of BLCO.
Bausch accumulated a significant amount of debt through numerous
acquisitions. In addition, BHC had a number of missteps in the
integration process and other operational issues.
Parent-Subsidiary Linkage
The approach taken is a weak parent (BHC)/strong subsidiary (BHA).
Using its Parent and Subsidiary Linkage Rating Criteria, Fitch
concludes there is open ring fencing and access & control. As such,
Fitch rates the parent and subsidiary at the consolidated level
with no notching between the two.
KEY ASSUMPTIONS
- BLCO is separated from BHC through the sale of the remaining
interests up to 20% and the distribution of the remainder to
shareholders resulting in the complete loss of associated
revenues and EBITDA.
- EBITDA of $2.3 billion - $2.4 billion post BLCO spinoff and
significantly lower if XIFAXAN patent defense does not prevail;
- Annual FCF of $600 million - $700 million post BLCO spinoff and
potentially flat to negative if XIFAXAN patent defense does not
prevail.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch will reassess BHC's capital structure, liquidity and risk
profile based on the outcome of the Exchange Offer to determine its
IDR, secured and unsecured ratings.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Following the exchange offer 's outcome, Fitch anticipates
downgrading the IDR to 'RD'.
LIQUIDITY AND DEBT STRUCTURE
BHC Liquidity: Bausch Health had adequate near-term liquidity at
June 30, 2022 including restricted and unrestricted cash on hand of
$1.9 billion of which $1.2 billion of the restricted cash will be
used to fund the pending settlement with the U.S. securities
litigation. The company's amended credit facility includes a $975
million revolver and matures in 2027. At June 30, 2022, the company
had $425 borrowings on this facility. The company's most recent
refinancing activities have satisfied debt maturities through
2024.
KEY RECOVERY RATING ASSUMPTIONS
Debt Instrument Notching & Recovery Assumptions: The recovery
analysis assumes that BHC would be considered a going concern (GC)
in bankruptcy and that the company would be reorganized rather than
liquidated. The analysis is based on the on the pro forma loss of
the eye care business and debt outstanding at after the proposed
debt exchange.
Fitch estimates a standalone reorganized EV for BHC of $11.9
billion and then adds an assumed $1.5 billion to reflect BHC's
50.1% share of BLCO's equity post BLCO fully drawing down on its
revolver, resulting in $13.4 billion of EV available for claimants.
Fitch assumes that administrative claims consume 10% of this value
in the recovery analysis. The remaining 38.6% of BLCO shares that
BHC owns is held at an unrestricted subsidiary and is not assumed
to be available to BHC first-lien secured creditors.
The GC EV is based upon estimates of post-reorganization EBITDA and
the assignment of an EBITDA multiple. Fitch's estimate of BHC's GC
EBITDA, excluding BLCO, is $1.7 billion. The assumed going concern
EBITDA reflects a scenario where the XIFAXAN loses significant
market share and the company experiences some shortfalls in
commercializing the R&D pipeline, thereby resulting in a
restructuring or default. The GC EBITDA in Fitch's previous review
was higher as it then incorporated BLCO on a consolidated basis as
the review was prior to the completion of the IPO.
Fitch assumes a recovery EV/EBITDA multiple of 7.0x for Bausch.
This is at the higher end of the range of 6.0x-7.0x Fitch typically
assigns to specialty pharmaceutical manufacturers. However, BHC is
more diversified than many of its peers, and the 50.1% ownership of
BLCO business adds significant stability to the operations. The
current average forward public market trading multiple of Bausch
Health and the company's closet peers is about 9x.
Fitch applies a waterfall analysis to the going concern EV based on
the relative claims of the debt in the capital structure, and
assumes that the company would fully draw the revolvers in a
bankruptcy scenario. Proforma for the proposed exchange offer, the
senior secured first-lien credit facility, including the secured
first-lien term loans and secured first-lien term revolver, and
senior secured notes ($10.8 billion in the aggregate), have
outstanding recovery prospects in a reorganization scenario and are
rated 'BB-'/'RR1' as they are unaffected in the DDE. The unsecured
debt ($4.8 billion in the aggregate) is rated 'C'/'RR5'. Fitch
estimates total pro forma fully drawn debt for the exchange,
including secured the subsidiary borrower will total $17.2 billion
excluding BLCO debt.
ISSUER PROFILE
BHC is a multinational healthcare company headquartered in Laval,
Quebec that develops, manufactures and markets pharmaceutical and
medical products. It has significantly expanded the scope and
geographic reach of its product offering since the initial merger
of Bausch and Biovail in 2009.
ESG CONSIDERATIONS
Bausch Health Companies Inc. has an ESG Relevance Score of '4' for
Exposure to Social Impacts due to pressure to contain healthcare
spending growth, a highly sensitive political environment, and
social pressure to contain costs or restrict pricing. This has a
negative impact on the credit profile, and is relevant to the
rating in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
RATING ACTIONS
Rating Prior
------ -----
Bausch Health Americas, Inc.
LT IDR C Downgrade B-
senior unsecured LT C Downgrade RR5 B-
senior secured LT BB- Rating Watch
Maintained RR1 BB-
Bausch Health Companies Inc.
LT IDR C Downgrade B-
senior unsecured LT C Downgrade RR5 B-
senior secured LT BB- Rating Watch
Maintained RR1 BB-
BED BATH & BEYOND: Laura Crossen Appointed as Interim CFO
---------------------------------------------------------
Bed Bath & Beyond Inc. is saddened to report that Gustavo Arnal,
chief financial officer of the Company, passed away on Sept. 2,
2022.
Effective Sept. 5, 2022, Laura Crossen, the Company's senior vice
president of finance and chief accounting officer, was appointed
interim chief financial officer. As interim chief financial
officer Ms. Crossen will be the Company's principal financial
officer on an interim basis and will continue as the Company's
principal accounting officer.
The Compensation Committee adjusted Ms. Crossen's compensation in
connection with her appointment as interim chief financial officer
to (i) increase her base salary by $200,000, (ii) increase her
target annual bonus opportunity to 70% of her base salary (as
modified) and (iii) provide for severance payments and benefits,
subject to Ms. Crossen's execution and non-revocation of a general
release of claims against the Company, in the event of the
termination of Ms. Crossen's employment by the Company without
"cause" or by Ms. Crossen with "good reason", consisting of (x)
cash severance equal to, in the aggregate, one times the sum of (1)
Ms. Crossen's base salary (at the rate in effect immediately prior
to the date of her termination of employment), and (2) Ms.
Crossen's target annual bonus opportunity (at the rate in effect
with respect to the fiscal year in which the date of her
termination of employment occurs), payable in substantially equal
installments over the 12 months following the date of her
termination of employment, (y) any earned but unpaid annual bonus
for a performance year ending prior to the year in which the date
of her termination of employment occurs and (z) subsidized COBRA
benefits for the 52 weeks following the date of her termination of
employment. These adjustments will only be in effect for the
period during which Ms. Crossen serves as interim chief financial
officer.
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 operates 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.
BEN'S GARDEN: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Ben's Garden Inc.
141 Main Street
Stony Brook, NY 11790
Business Description: Ben's Garden Inc. owns and operates a home
furnishing store.
Chapter 11 Petition Date: September 12, 2022
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 22-72391
Debtor's Counsel: Richard J. McCord, Esq.
CERTILMAN BALIN ADLER & HYMAN, LLP
90 Merrick Avenue
East Meadow, NY 11554
Tel: (516) 296-7000
Fax: (516) 296-7801
Email: rmccord@certilmanbalin.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Benjamin Busko 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/GPFCMNY/Bens_Garden_Inc__nyebke-22-72391__0001.0.pdf?mcid=tGE4TAMA
BOEING CO: Egan-Jones Retains B+ Senior Unsecured Ratings
---------------------------------------------------------
Egan-Jones Ratings Company, on August 23, 2022, retained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Boeing Company.
Headquartered in Arlington, Virginia, Boeing Company operates as an
aerospace company.
BRAND INDUSTRIAL: S&P Downgrades ICR to 'CCC+', Outlook Negative
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Brand
Industrial Services Inc. to 'CCC+' from 'B-'. At the same time, S&P
lowered its issue-level rating on its revolving credit facility and
term loan B to 'CCC+' from 'B-'. S&P's '3' recovery ratings remain
unchanged, indicating its expectation for meaningful (50%-70%;
rounded estimate: 50%) recovery in the event of a default.
S&P said, "We also lowered our issue-level rating on Brand's senior
unsecured notes to 'CCC-'from 'CCC'. The '6' recovery rating
remains unchanged, indicating our expectation for negligible
(0%-10%; rounded estimate: 5%) recovery in the event of a
default."
The negative outlook reflects the risk the company will generate
sustained negative free operating cash flow (FOCF) due to
inflationary cost pressures that negatively affect its operating
performance and working capital outflows.
S&P said, "While Brand is experiencing consistent demand for its
services, we now expect its operating profit margins will increase
at a somewhat slower pace.The company is benefitting from continued
recurring demand for its services. Specifically, the increase in
Brand's revenue in 2022 was led by rising demand in its
infrastructure, energy, and commercial (IEC) segment, as well as a
full year of contributions from its 2021 acquisitions. Increased
refinery utilization this year, relative to 2021, along with
sustained demand from other end markets, such as petrochemical,
power, and oil sands, will likely support elevated demand for the
company's services. While the demand for commercial office space in
New York softens, we assume Brand will shift its focus toward
infrastructure projects in New York and benefit from continued good
demand in its other markets, such as the West Coast, Florida, and
Nashville. That said, the good demand in the company's
international operations has been somewhat offset by negative
headwinds from foreign-exchange rates. Despite its continued
revenue growth, we now assume a slower recovery in Brand's
operating margins, though we also view its downside risk as limited
due to the high proportion of variable costs in its cost structure.
We expect a gradual improvement in the company's S&P Global
Ratings-adjusted debt leverage to below 9x through 2023 as its
price initiatives help improve its EBITDA margins. However,
overall, we view Brand's financial commitments as unsustainable
over the long term.
"We assume Brand will maintain sufficient liquidity over the next
12 months, though its cash flows could come under pressure. The
company had $93 million of cash on hand as of June 30, 2022,
which--including the availability under its revolver (less
outstanding letters of credit)--should likely provide it with
sufficient liquidity to cover its amortization payments and capital
expenditure (capex) needs over the next year. Though there are no
material debt maturities over the next year, its $2,670 million
term loan and $700 million securitization facility come due in June
and December 2024. We forecast some working capital inflows in the
second half of 2022 because the company expects its collection of
receivables will generate moderate working capital benefits.
However, we now expect its inflationary cost pressures will persist
through 2023 and lead to a slower rebound in its operating
profitability. Coupled with higher expected interest costs, this
could lead Brand to generate break-even or negative FOCF.
"The negative outlook on Brand reflects the risk that it will
experience sustained negative FOCF due to the effects of
inflationary cost pressures on its operating performance and
working capital outflows. We assume the company's operating
performance will improve as it continues to pass through rising
costs to its customers and estimate its S&P Global Ratings-adjusted
debt leverage will decrease to below 10x in 2022 and below 9x in
2023.
"We could lower our ratings on Brand if we believe a default was
likely within the next 12 months, specifically if it is unable to
take steps on refinancing its term loan prior to it becoming
current in 2024. This could occur if the company underperformed our
expectations, leading to continued negative cash flows and larger
draws on its credit facility. We could also downgrade the rating if
Brand experiences a near-term liquidity crisis, violates one of its
financial covenants, leading to an increased likelihood it
undertakes a distressed exchange.
"We could revise our outlook on Brand to stable or raise our rating
if it generates positive free cash flow on a sustained basis and
refinances its term loan prior to becoming current. We believe this
could occur if the company's operating environment and EBITDA
margins improve."
ESG credit indicators: E-2, S-2, G-3
CARPENTER TECHNOLOGY: Egan-Jones Retains BB- Sr. Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on August 22, 2022, retained its 'BB-'
foreign currency and local currency senior unsecured ratings on
debt issued by Carpenter Technology Corp.
Headquartered in Philadelphia, Pennsylvania, Carpenter Technology
Corp. Carpenter Technology Corporation manufactures, fabricates,
and distributes stainless steels, titanium, and specialty metal
alloys.
CC HILLCREST: Has Interim OK to Access Cash Collateral
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division, authorized CC Hillcrest, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 15% variance.
The Debtor requires the use of cash collateral to continue the
operation of its business.
The Debtor is a party to a Loan Agreement dated as of September 17,
2020, with NEF Preservation PB Fund I LP. The Debtor also executed
a Promissory Note in the principal amount of $18,575,000 in favor
of the Secured Lender, and a Deed of Trust, Security Agreement,
Financing Statement, Fixture Filing and Assignment of Leases and
Rents in favor of the Secured Lender. The Secured Lender asserts
that, pursuant to the Loan Documents, substantially all of the
Debtor's assets are subject to the prepetition liens of the Secured
Lender including liens on rents.
As adequate protection, the Secured Lender is granted valid,
binding, enforceable, and automatically perfected liens first
priority replacement and additional liens and security interests.
The Post-Petition Liens granted to the Secured Lender in the Order
are automatically perfected without the need for filing of a UCC-1
financing statement with the Secretary of State's Office or any
other such act of perfection.
To the extent the Post-Petition Liens are not sufficient to
adequately protect the Secured Lender for the diminution in value
of its interests, the Secured Lender will have an allowed
super-priority administrative expense claim as set forth under
section 364(c)(1) of the Bankruptcy Code.
As additional adequate protection, the Debtor will pay monthly debt
service payments that would be required under the Loan Documents,
at the dates and times required under the Loan Documents.
A further hearing on the matter is scheduled for September 27 at
9:30 a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3Bq3YLm from PacerMonitor.com.
The Debtor projects $207,327 in gross income and $6,514 in total
administrative expenses on a monthly basis.
About CC Hillcrest, LLC
CC Hillcrest, LLC operates an apartment complex in Mesquite, Texas.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-31362) on July 29,
2022. In the petition signed by Jared Remington, manager, the
Debtor disclosed up to $50 million in both assets and liabilities.
Judge Scott W. Everett oversees the case.
Joyce W. Lindauer Attorney, PLLC, is the Debtor's counsel.
CDL UNIVERSITY: Continued Operations to Fund Plan
-------------------------------------------------
CDL University, LLC, filed with the U.S. Bankruptcy Court for the
Western District of Oklahoma a Plan of Reorganization dated
September 8, 2022.
CDL University, LLC is a premier trucking school located in
Oklahoma City. CDL was created in late 2017 by Darin Miller. Mr.
Miller is one of 3 members of CDL University, LLC and is the
managing member.
Debtor's assets consist of cash on hand, accounts receivables,
miscellaneous office furniture and several trucks and trailers.
Most of the value of Debtor's assets are the trucks and trailers.
The value of the unencumbered assets total $122,000. As set forth
in this Plan, Debtor will pay the unsecured creditors approximately
$252,894.90.
The Debtor will be the disbursing agent for all post-confirmation
plan payments. The Subchapter V Trustee, Steve Moriarty, will not
disburse payments on behalf of Debtor. The final Plan payment is
expected to be paid 60 months from the date of the entry of the
order confirming this plan.
This Plan of Reorganization proposes to pay Debtor's creditors from
the revenue generated by Debtor.
All secured creditors shall retain the liens securing their claims,
whether the property subject to such liens is retained by Debtor or
transferred to another entity, to the extent of the allowed amount
of such claim, pursuant to 11 U.S.C. Sec. 1129(b)(2)(A).
The Debtor will begin making payments to the unsecured creditors in
March 2023. The Debtor will pay $1,000 per month from March 2023
to December 2023, for a total of $10,000. Beginning in January
2024, the Debtor will pay all projected disposable income more than
$30,000. In other words, Debtor will maintain a minimum cash
balance of $30,000 each month to account for the cyclicality in
Debtor's monthly income and unexpected expenses.
The Debtor has 3 members – Darin Miller, Kent Blair, and Todd
Blair. All 3 members will retain their ownership interest in Debtor
in the same percentages as prior to Debtor filing bankruptcy. The
Debtor will pay Darin Miller $5,000 per month starting in January
2024.
The Debtor will fund the Plan from its operations.
A full-text copy of the Plan of Reorganization dated September 8,
2022, is available at https://bit.ly/3DCUbDl from PacerMonitor.com
at no charge.
Attorney for Debtor:
Gary D. Hammond, Esq.
HAMMOND LAW FIRM
512 N.W. 12th Street
Oklahoma City, OK 73103
Telephone: (405) 216-0007
Facsimile: (405) 232-6358
Email: gary@okatty.com
About CDL University
CDL University is a truck driving school in Oklahoma City,
Oklahoma.
CDL University, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Okla. Case No.
22-11257) on June 10, 2022. The petition was signed by Darin
Miller as managing member. At the time of filing, the Debtor
estimated $249,006 in assets and $1,168,389 in liabilities. Gary
D. Hammond, Esq. at Mitchell & Hammond, is the Debtor's counsel.
CELSIUS NETWORK: Misled Investors, Says Vermont Regulator
---------------------------------------------------------
The Vermont Department of Financial Regulation said that Celsius
Network Ltd. may have hidden its financial trouble from its
investors and "engaged in the improper manipulation of the price"
of the platform's tokens to boost the company's balance sheet and
financials.
The Vermont Department of Financial Regulation submitted the filing
on Wednesday, Sept. 7, 2022, in support of the United States
Trustee's motion to appoint an independent examiner. The U.S.
Trustee previously said that it is seeking an examiner to help get
additional information and clear up "confusion and anxiety."
"The increase in Celsius's Net Position in CEL was in addition to
the tens of millions of CEL tokens that Celsius purchased and paid
out to depositors as interest. By increasing its Net Position in
CEL by hundreds of millions of dollars, Celsius increased and
propped up the market price of CEL, thereby artificially inflating
the company's CEL holdings on its balance sheet and financial
statements. Excluding the Company's Net Position in CEL,
liabilities would have exceeded its assets since at least February
28, 2019. These practices may also have enriched Celsius insiders,
at the expense of retail investors. By increasing its Net Position
in CEL, Celsius invested depositor assets in a long position in CEL
that was inconsistent with its purported "market neutral"
investment strategy. During the 341 meeting, Celsius admitted,
through its CFO Chris Ferraro, that the decline in the price of CEL
contributed to its insolvency," Vermont said.
"An Examiner should investigate whether Celsius improperly deployed
assets to manipulate the market price of CEL, thereby artificially
inflating the value of the company's net position in CEL on its
balance sheet and financial statements. An Examiner should
investigate whether or not the company's actions and practices
improperly enriched Celsius insiders and other holders of CEL
tokens at the expense of retail investors in Earn accounts."
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
CEN BIOTECH: Begins Trading on OTCQB Venture Market
---------------------------------------------------
CEN Biotech Inc.'s common shares began trading on the OTCQB Venture
Market on Sept. 8, 2022 under the symbol "CENBF". The OTCQB
Venture Market, operated by OTC Markets Group Inc., is for
entrepreneurial and development stage U.S. and international
companies.
To be eligible to trade on the OTCQB Venture Market, companies must
meet certain standards, including being current in their reporting
obligations and undergoing an annual verification and management
certification process. Companies must also meet $0.01 bid test and
may not be in bankruptcy. Investors can find Real-Time quotes and
market information for the company on OTC MARKETS.
The Company also has begun the process of seeking to complete a
name change and planned change in direction. The Company intends
to focus on the digital media and technology space and intends to
launch technology products, beginning in Fall of 2022. Under the
requirements of the Canada Business Corporations Act, the Company
intends to hold a Special Shareholder Meeting in the future to
allow shareholders to comment and vote on the proposed changes.
"We are thrilled to have the CEN Biotech Inc. shares trade on the
OTCQB Venture Market and begin the process to change our name and
direction with the intention to become a leading digital technology
company," said Brian S. Payne, CEO of CEN Biotech Inc. "We believe
that this move from the OTC PINK Tier to the OTCQB will allow the
Company to continue its growth as a publicly traded company."
The timing of the name change and planned change of direction is
subject to many regulatory and legal requirements of regulators in
both Canada and the United States and requires shareholder approval
as well. There can be no assurance that CEN will be able to
proceed with the foregoing as planned, or at all.
About CEN Biotech Inc.
CEN Biotech, Inc. -- http://www.cenbiotechinc.com-- is focused on
the manufacturing, production and development of Light Emitting
Diode lighting technology and hemp products. The Company intends
to explore the usage of hemp, which it intends to cultivate for
usage in industrial, medical and food products. Its principal
office is located at 300-3295 Quality Way, Windsor, Ontario,
Canada.
CEN Biotech reported a net loss of $18.90 million for the year
ended Dec. 31, 2021, compared to net income of $14.25 million for
the year ended Dec. 31, 2020. As of June 30, 2022, the Company had
$8.07 million in total assets, $9.93 million in total liabilities,
and a total shareholders' deficit of $1.86 million.
New York, New York-based Mazars USA LLP, the Company's former
auditor, issued a "going concern" qualification in its report
dated April 14, 2022, citing that the Company has incurred
significant operating losses and negative cash flows from
operations since inception. The Company also had an accumulated
deficit of $45,964,183 at Dec. 31, 2021. The Company is dependent
on obtaining necessary funding from outside sources, including
obtaining additional funding from the sale of securities in order
to continue their operations. The COVID-19 pandemic has hindered
the Company's ability to raise capital. These conditions raise
substantial doubt about its ability to continue as a going concern.
CEN BIOTECH: Inks Employment Contracts With Top Execs
-----------------------------------------------------
CEN Biotech, Inc. entered into an executive employment agreement
with Lawrence Lehoux, the Company's chief technology officer,
president and a director, with an effective date of Sept. 1, 2022.
Pursuant to the Employment Agreement, during the term of the
Employment Agreement, the Company agreed to employ, and Mr. Lehoux
agreed to accept employment with the Company as its president and
chief technology officer. Pursuant to the Employment Agreement,
the Company agreed to issue Mr. Lehoux 1,750,000 shares of the
Company's common stock subject to the provisions of a Restricted
Stock Agreement under the Company's 2021 Equity Compensation Plan.
Additionally, pursuant to the Employment Agreement, the Company
agreed to pay Mr. Lehoux a base salary of $240,000. The term of
the Employment Agreement is a period of five years.
Employment Agreement with Brian S. Payne
On Aug. 26, 2022, the Company entered into an executive employment
agreement with Brian S. Payne, the Company's chief executive
officer, chief financial officer and Chairman of the Board, with an
effective date of Sept. 1, 2022.
Pursuant to the Payne Employment Agreement, during the term of the
Payne Employment Agreement, the Company agreed to employ, and Mr.
Payne agreed to accept employment with the Company as its chief
executive officer and Chairman. Pursuant to the Payne Employment
Agreement, the Company agreed to issue Mr. Payne 2,750,000 shares
of the Company's common stock subject to the provisions of a
Restricted Stock Agreement under the Plan. Additionally, pursuant
to the Payne Employment Agreement, the Company agreed to pay Mr.
Payne a base salary of $240,000. The term of the Payne Employment
Agreement is a period of five years.
About CEN Biotech Inc.
CEN Biotech, Inc. -- http://www.cenbiotechinc.com-- is focused on
the manufacturing, production and development of Light Emitting
Diode lighting technology and hemp products. The Company intends
to explore the usage of hemp, which it intends to cultivate for
usage in industrial, medical and food products. Its principal
office is located at 300-3295 Quality Way, Windsor, Ontario,
Canada.
CEN Biotech reported a net loss of $18.90 million for the year
ended Dec. 31, 2021, compared to net income of $14.25 million for
the year ended Dec. 31, 2020. As of June 30, 2022, the Company had
$8.07 million in total assets, $9.93 million in total liabilities,
and a total shareholders' deficit of $1.86 million.
New York, New York-based Mazars USA LLP, the Company's former
auditor, issued a "going concern" qualification in its report
dated April 14, 2022, citing that the Company has incurred
significant operating losses and negative cash flows from
operations since inception. The Company also had an accumulated
deficit of $45,964,183 at Dec. 31, 2021. The Company is dependent
on obtaining necessary funding from outside sources, including
obtaining additional funding from the sale of securities in order
to continue their operations. The COVID-19 pandemic has hindered
the Company's ability to raise capital. These conditions raise
substantial doubt about its ability to continue as a going concern.
CMR REAL ESTATE: Files Chapter 11 Subchapter V Case
---------------------------------------------------
CMR Real Estate Investments LLC has sought Chapter 11 bankruptcy
protection in Ohio. The Debtor filed as a small business debtor
seeking relief under Subchapter V of Chapter 11 of the Bankruptcy
Code.
CMR Real Estate Investments 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
Oct. 6, 2022, at 2:00 PM at remotely.
About CMR Real Estate Investments
CMR Real Estate Investments LLC filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ohio
Case No. 22-51057) on Sept. 7, 2022. In the petition filed by
Christopher Vanuch, as managing member, the Debtor reported assets
and liabilities between $1 million and $10 million.
M. Colette Gibbons has been appointed as Subchapter V trustee.
The Debtor is represented by Richard H. Nemeth of Nemeth &
Associates, LLC.
CMS ENERGY: Egan-Jones Retains BB+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company, on August 25, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by CMS Energy Corporation.
Headquartered in Jackson, Michigan, CMS Energy Corporation is an
energy company.
CNX RESOURCES: Moody's Rates New $500MM Gtd. Unsecured Notes 'B1'
-----------------------------------------------------------------
Moody's Investors Service assigned B1 rating to $500 million new
senior unsecured guaranteed notes offered by CNX Resources
Corporation. All of the company's other ratings, including its Ba3
corporate family rating and B1 rating on its existing senior
unsecured notes, remain unchanged. The outlook on all ratings is
stable.
Concurrently with the offer of the new $500 million new senior
unsecured notes maturing in 2031, CNX launched a tender offer to
repurchase $350 million of its outstanding $700 million senior
unsecured notes due in 2027. The company plans to use the remaining
proceeds from the placement of the new notes to repay amounts
outstanding under its $1.3 billion revolving credit facility,
extending its maturities and adding to its liquidity.
Rating Assigned:
Issuer: CNX Resources Corporation
Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD5)
RATINGS RATIONALE
The new notes are rated B1 at the same level as existing senior
unsecured notes of CNX and one notch below CNX's Ba3 CFR, given the
significant size of the $1.3 billion secured credit facility, that
has a priority claim and security over substantially all of the E&P
assets. All CNX's notes are guaranteed on a senior unsecured basis
by restricted subsidiaries (excluding CNX Midstream Partners LP,
the wholly owned midstream subsidiary supporting CNX's operations
and funded on a non-recourse basis to CNX).
CNX's Ba3 CFR reflects its durable operating profile and a track
record of successful reserve replacement supported by low-cost
production, efficient capital allocation and development of its
proved reserves. CNX does not target growth in production in the
near term and focuses on maximizing capital efficiency and cash
flow. The credit profile assessment incorporates the risks of CNX's
single basin concentration in Appalachia, subjecting its natural
gas production to volatile basis differentials, that the company
consistently hedges.
CNX maintains good liquidity supported by its operating cash flow
and significant committed bank credit facilities. CNX consistently
hedges its natural gas price risk and maintains a significant
hedging book. The company currently manages unusually high level of
financial settlements that drive high working capital requirements
as a result of high and volatile natural gas prices. CNX maintains
committed $1.3 billion secured revolving credit facility that
matures in October 2026. The facility has a borrowing base of $2.25
billion and an elected commitment of $1.3 billion. As of June 30,
2022, CNX reported about $1.1 billion availability under its
secured credit facility and full compliance under the covenants.
The facility includes two financial covenants (a maximum net
leverage ratio of 3.5x and a minimum current ratio of 1x) and
Moody's expects CNX to maintain headroom for future compliance with
covenants though 2023. CNX also benefits from an extended maturity
profile, with the next bond maturity being $330 million convertible
notes due in 2026 (unrated).
The stable outlook reflects Moody's expectation that CNX will
maintain a balanced approach in allocating its cash flow between
debt reduction and shareholder distributions and will maintain good
liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
CNX's ratings may be upgraded if it demonstrates replacement of
reserves amid modest growth in production and a continued recovery
in the natural gas sector. The ratings could be upgraded if CNX
continues to reduce its debt, with debt/production declining
towards $6,000/boe and RCF/debt at above 30%, with sustained good
liquidity and solid capital returns, with LFCR maintained above
1.5x.
Deteriorating cash margins, capital returns and operating cash flow
or a substantial increase in leverage with RCF/debt declining below
20% could result in a downgrade of the ratings.
The principal methodology used in this rating was Independent
Exploration and Production published in August 2021.
CNX Resources Corporation is a sizable publicly traded independent
exploration and production company operating in the Appalachian
Basin. It controls substantial resources in Marcellus and Utica
Shale.
COLLEGE PARENT (YAHOO): Fitch Affirms 'BB-' IDR, Outlook Stable
---------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of 'BB-' for College Parent LP (d/b/a Yahoo) and AP Core
Holdings II, LLC. (AP Core) and AP Core's 'BB+'/'RR1' senior
secured issue ratings. The Rating Outlook is Stable.
Fitch continues to view Yahoo's carve-out positively despite the
heightened underlying challenges facing its businesses. The rating
is supported by the opportunity to improve the company's expense
base and the resultant decline in Fitch-calculated leverage to
below 2.0x over the rating horizon, due to expected margin
improvement and debt repayment.
KEY RATING DRIVERS
Secularly Challenged Businesses: Yahoo is a leading global website
with significant positions in the finance, news and information,
lifestyle and sports verticals long with E-mail services. However,
better capitalized competitors, audience fragmentation and
continued erosion in certain segments are expected to continue
providing a drag on Yahoo's operating performance.
Advertising Market: Advertising spending in 2021 experienced
significant growth as the market snapped back from the pandemic's
effects faster and stronger than Fitch's expectations. Despite a
strong start to 2022, certain market segments have begun to show
signs of weakening in line with the overall economy.
Fitch is modelling a general advertising recession starting in 2022
and continuing into 2023, leading to low to mid-single-digit
revenue declines, followed by a recovery into 2024 in line with
historical trends. Digital advertising is already showing weakness,
with most digital platforms reporting soft or declining ad
revenues. However, the relatively short-term nature of most digital
contracts should help drive an earlier recovery than more
traditional advertisers. In addition, given the current political
landscape, Fitch expects record political advertising in 2022 and
2024, with 2024 also benefitting from the presidential election,
which should minimize the aggregate decline.
Complex Organizational Structure: Yahoo's search and consumer
businesses, including Yahoo! Mail and Yahoo's home page, news,
sports, finance, and entertainment content verticals are held by AP
Core. AP Core will continue to generate the majority of Yahoo's
revenues, EBITDA and FCF while supporting first lien secured
facilities totaling $1.8 billion as of March 31, 2022. Management
has committed to using AP Core's FCF to prepay its Term Loan B-1.
Yahoo's digital advertising platform (Ad Tech) and legacy AOL
subscription assets are held outside AP Core in RemainCo and do not
guarantee or secure AP Core's credit facilities. RemainCo's
investment requirements will use a mix of cash on hand and a $570
million accounts receivable facility. Fitch notes Yahoo's cash
position was bolstered by a $300 million add on to AP Core's term
loans in January 2022.
Fitch notes that, in line with market conditions at the time, AP
Core's Restricted Payments baskets allow for significant cash
leakage that step up when net leverage has declined to no greater
than 1x below closing leverage or following an IPO. The baskets can
also be used for investments and redemption of subordinated debt.
Leverage: AP Core's leverage is expected to rapidly improve over
the rating horizon due to debt prepayment and EBITDA improvement.
Yahoo's total leverage, which includes AP Core debt, is expected to
improve more slowly as borrowings under the DDTL offset a portion
of AP Core's prepayments. Fitch-calculated leverage improved
slightly to 2.9x at March 31, 2022, from 3.1x at closing, as debt
capital raises somewhat offset greater than expected EBITDA
improvement.
Fitch believes leverage is appropriate given the model's ongoing
secular challenges. However, Apollo Group will own 90% of Yahoo and
exert full control over the company's operational and financing
decisions. Fitch believes this increases the likelihood of future
debt funded shareholder friendly actions, which could negatively
affect the credit profile. In March 2022, Yahoo redeemed preferred
units totaling $350 million while also completing a $350 million
addon to its existing $500 million unsecured notes issued by
another HoldCo outside AP Core.
Cost Efficiencies: Yahoo identified cost synergies, which it
expects to be realized by 2024, driven by operating efficiency
improvements and technology and facility benefits, with matching
upfront costs. Fitch's rating case estimates both Yahoo and AP Core
will achieve 90% of expected efficiencies along with full upfront
cost allocation. Fitch and Yahoo did not include revenue synergies
in their estimates. Fitch estimates Yahoo has significant margin
expansion potential of more than 500 basis points over the rating
horizon driven by these efficiency opportunities.
Fitch's rating case assumes a blend of expense realization success
based on varying expectations for synergy and upfront cost
realizations. These are driven by the category and scope of
expected efficiencies and upfront costs, typical industry
realizations and the probability of realizing each category.
Fitch's realization expectations range from 75% to 100% of
management's expectations and full upfront cost expectations.
Parent/Subsidiary Linkage: Fitch links the IDRs of College Parent
and AP Core Holdings based on a strong subsidiary/weak parent
approach incorporating legal ring-fencing and access and control in
accordance with Fitch's criteria, thereby equalizing the IDRs
DERIVATION SUMMARY
Yahoo's primary competitors are larger and better capitalized and
have dominant market positions. Facebook (unrated) and Google
(unrated) have meaningfully larger and faster growing revenue
bases, significantly higher margins and are much better
capitalized. In addition, Google has a dominant market position in
both email and search. While DIRECTV Entertainment Holdings, LLC
(BB+/Stable) has a similar growth trajectory in its base business,
it has lower leverage and a receives one notch uplift from AT&T's
70% retained economic ownership position.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
-- Revenues decline low single digits in 2022 due to the
advertising recession, returning to low single digit growth in
2023 as the digital ad market recovers ahead of the linear
market. Thereafter, AP Core sees high single digit growth
driven by continued strength in the finance, sports and
entertainment verticals while RemainCo sees mid-single digit
growth due to positive momentum in Ad Tech;
-- Realized Fitch-calculated expense synergies drive more than
500 bp of EBITDA margin improvement by 2025;
-- Aggregate capital intensity remains in the high single digits
driven in large part by the ongoing Ad Tech investment;
-- Ad Tech's capital investment is funded with an accounts
receivable facility and cash on hand held outside AP Core;
-- Full costs to achieve the expense synergies are incurred
through 2024;
-- No dividends or M&A activity over the rating horizon;
-- AP Core uses annual FCF to pay down Term Loan B-1 by 2024;
-- Total debt with equity credit/operating EBITDA plus annualized
realized expense savings declines to 2.0x by 2024.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch does not anticipate an upgrade in the near term;
-- Yahoo makes substantial progress toward realizing its total
cost savings;
-- Total debt with equity credit/operating EBITDA including
annualized realized cost savings declines below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Yahoo experiences delays in realizing its total cost savings;
-- Inconsistent or insufficient revenue gains from anticipated
investments in Ad Tech business;
-- Total debt with equity credit/operating EBITDA including
annualized realized cost savings remains above 3.0x through
2023;
-- Debt funded recapitalization or acquisition that increases
leverage beyond 4.0x without a creditable. plan to reduce
leverage below 3.0x within 18 to 24 months.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Yahoo's liquidity at March 31, 2022 included
$956 million in cash and full availability under its $150 million
revolver which matures on Sept. 1, 2026. Yahoo has no significant
maturities until 2026 when its delayed draw term loan matures ($353
million outstanding at March 31, 2022). Until then, its maturity
schedule is comprised of modest annual term loan amortization of
$39 million.
ISSUER PROFILE
Yahoo offers Internet search, mail, news, finance, sports,
entertainment, content, subscription and e-commerce to consumers
and business users and digital advertising to businesses. AP Core
is comprised of Yahoo's consumer and search businesses.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
RATING ACTIONS
Entity/Debt Rating Prior
----------- ------ -----
AP Core Holdings II, LLC LT IDR BB- Affirmed BB-
senior secured LT BB+ Affirmed RR1 BB+
College Parent LP LT IDR BB- Affirmed BB-
COMMUNITY VISION: Future Operations to Fund Plan Payments
---------------------------------------------------------
Community Vision Development Programs, LLC, filed with the U.S.
Bankruptcy Court for the District of Minnesota a Disclosure
Statement for Chapter 11 Plan dated September 8, 2022.
The Debtor operates as a Personal Care Assistant (PCA)- Personal
Care Provider Organization (PCPO), providing services to individual
participants living in their own homes.
The Debtor filed a Chapter 11 case in 2016. The Bankruptcy Case
Number was 16-42109. The Debtor's Plan was Confirmed by the Court.
In 2021, the Debtor defaulted on payments to the taxing
authorities. This led to collection action and levies by the taxing
authorities which caused the Debtor to file the instant Chapter 11
case.
The Debtor is pursuing a plan to continue operations subsequent to
approval of its Plan of Reorganization. The Debtor does not intend
to sell any assets or enter into any bank financing. The Debtor
intends to make payments to its creditors from cash flow derived
from future operations.
Class 1 consists of the claim of the Internal Revenue Service who
holds secured claim in the approximate amount of $299,134.14. The
Internal Revenue Service also holds an Unsecured Priority Claim in
the approximate amount of $162,134.14. The Debtor has been paying
$2,000.00 per month to the IRS on the Secured Claim and will
continue to do so.
If the Debtor fails to make any payment to the Internal Revenue
Service within 7 days of the due date of such deposit or payment,
or if the Debtor or a successor in interest fails to file any
required Federal tax return by the due date of such return, then
the Internal Revenue Service may declare that the Debtor is in
default of this Plan. Failure to declare a default does not
constitute a waiver by the United States of the right to declare
that the successor in interest or Debtor is in default.
Class 2 consists of the Equity Security Holders of the Debtor. The
Equity Security Holders in the Debtor will retain their shareholder
interests in the Debtor subsequent to Court approval of the Plan.
The Debtor is pursuing a Plan to continue its business operations
subsequent to approval of this Plan of Reorganization.
The Debtor anticipates no adverse tax consequences as a result of
the Court confirming the Plan of Reorganization. The Debtor will
not have quarterly US Trustee fees following confirmation of the
Plan and being able to not pay US Trustee fees will produce an
additional source of revenue to the Debtor that will permit it to
make payments to Priority Tax Creditors. The Debtor has no
Executory Contracts which require acceptance or rejection.
A full-text copy of the Disclosure Statement dated September 8,
2022, is available at https://bit.ly/3U4Ou6C from PacerMonitor.com
at no charge.
Counsel to the Debtor:
Steven B. Nosek, Esq.
STEVEN B. NOSEK, P.A.
2812 Anthony Lane South, Suite 200
St. Anthony, MN 55418
Tel: (612)335-9171
E-mail: snosek@noseklawfirm.com
About Community Vision Development
Community Vision Development Programs, LLC, sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Minn. Case No.
21-42019) on Nov. 12, 2021. In the petition signed by Marbue
Watkins, manager, the Debtor disclosed up to $50,000 in both assets
and liabilities.
Judge Katherine A. Constantine oversees the case.
Steven B. Nosek, Esq., at Steven B. Nosek, P.A., is the Debtor's
counsel.
CONNECTWISE LLC: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of ConnectWise Holdings, LLC and ConnectWise, LLC (dba
ConnectWise) at 'B+'. The Rating Outlook is Stable.
Fitch has also affirmed ConnectWise's $70 million secured revolving
credit facility (RCF) and $1.05 billion first-lien secured term
loan at 'BB+'/'RR1'. ConnectWise, LLC is the issuer of debt.
The ratings are supported by ConnectWise's industry-leading
software solutions for Managed Service Providers (MSPs) and
Technology Success Providers (TSPs). The company's growth strategy
and private equity ownership could limit deleveraging despite the
FCF generation projected for the company. Fitch expects the company
to prioritize tuck-in acquisitions as part of its growth strategy
over accelerated deleveraging, and expects gross leverage to remain
over 4.0x over the 2022-2025 forecast period.
KEY RATING DRIVERS
Industry Tailwind Supports Growth: ConnectWise's end-markets are
small- and medium-sized businesses (SMBs) that lack IT resources
and look to MSPs and TSPs to provide technology solutions. The
managed services market is estimated to grow in the high single
digits to low-teens supported by increasing dependence of
businesses on technology for all aspects of operations.
In addition, the migration to cloud services and hybrid IT services
further increases complexity in management of IT resources that
creates further incremental demand. Fitch believes these factors
serve as underlying demand growth drivers for managed services
resulting in greater demand for ConnectWise's products.
High Levels of Recurring Revenues and Revenue Retention: Recurring
revenue represents over 95% of total revenue, while net retention
rate has sustained over 100%. These attributes provide significant
visibility into future revenue streams and profitability.
Diversified Customer Base with SMB Exposure: ConnectWise serves
over 35,000 customers globally. No single customer represented over
1% of ARR. While ConnectWise's customers are concentrated in MSPs
and TSPs, the end-markets represent a diverse cross-section of
industries. In Fitch's view, the diverse set of customers and
industry verticals in the end-markets should minimize idiosyncratic
risks that may arise from customers or industry concentration.
Through the MSPs and TSPs, ConnectWise is indirectly exposed to the
SMB market segment as SMBs lack sophisticated IT resources to
manage the increasingly complex IT environment and leverage
services provided by MSPs and TSPs.
Cross-Selling Opportunities: ConnectWise's software ARR growth has
outpaced customer growth, demonstrating growth in revenue per
customer. This is attributed to its broad product portfolio and its
ability to increase product penetration into existing customer
base. In addition to supporting revenue growth, Fitch believes
ConnectWise also benefits through greater customer retention as the
products become more integrated with the customers' operations.
M&A Central to Product Strategy: The company is active in M&As as a
strategy to expand product offerings. Since 2015, ConnectWise has
acquired Screen Connect, HTG, ITBoost, BrightGauge, Continuum,
Service Leadership, Perch Security, Stratozen and SmileBack. These
acquisitions expanded ConnectWise's offerings in the three products
areas of Business Management, Security Management and Unified
Management. Despite the acquisitive nature of the company, its net
leverage has historically reverted back to 4x-5.5x within twelve
months after temporary increases.
Narrow Niche Market Focus: ConnectWise's software solutions cater
primarily to the MSP and TSP market. The company provides broad
solutions that facilitate their customers' operations in support of
the SMB end-market. In Fitch's view, the narrow market focus is
effectively mitigated given the broader end-market. However, the
narrow focus in serving the MSP and TSP market does expose
ConnectWise to systemic risks associated with the specific market.
Moderate Financial Leverage: Fitch estimates gross leverage to be
4.5x in 2022 with capacity to delever over the rating horizon
supported by strong FCF generation. However, given the private
equity ownership that is likely to prioritize ROE, Fitch believes
accelerated debt repayment is unlikely. Fitch expects excess
capital to be used for acquisitions to accelerate growth or for
dividends to equity owners with financial leverage remaining at
moderate levels.
DERIVATION SUMMARY
ConnectWise is a leader in the fragmented niche market of
mission-critical software solutions that supports the MSPs and
TSPs. The products facilitate their customers ongoing operations in
areas of Business Management, Security Management, and Unified
Management in serving the SMB end-markets. ConnectWise's recurring
revenue represents over 95% of total revenue and net retention
rates have sustained over 100% in recent years. It serves over
35,000 customers with no single customer representing more than 1%
of revenue.
The MSP and TSP markets are projected to grow in the low-teens
supported by the increasing complexity in IT infrastructure and
applications. ConnectWise's revenue visibility, profitability,
financial structure and liquidity compare well against vertical
industry software peers in the 'B' category. Consistent with other
private equity-owned software peers, the ownership structure could
optimize ROE limiting the prospect for accelerated deleveraging.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Revenue growth in the high-single-digits;
-- EBITDA margins remaining stable in the low-40's;
-- Capex intensity 4.0% of revenue;
-- Debt repayment limited to mandatory amortization;
-- Aggregate acquisitions of $400 million through 2025;
-- $300 million in dividends assumed in 2024 financed with debt.
KEY RECOVERY RATING ASSUMPTIONS
-- The recovery analysis assumes that ConnectWise would be
reorganized as a going-concern in bankruptcy rather than
liquidated;
-- Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
-- In the event of distress, Fitch assumed that the company would
suffer greater customer churn resulting in a combination of
revenue decline and EBITDA margin compression resulting in
going concern EBITDA that is approximately 15% below Proforma
LTM March 2022 EBITDA;
-- Fitch assumes an adjusted distressed enterprise valuation of
$1.16 billion using approximately $185.3 million in going-
concern EBITDA;
-- Fitch assumes that ConnectWise will receive a going-concern
recovery multiple of 7.0x. The estimate considers several
factors, including the highly recurring nature of the revenue,
the high customer retention, the secular growth drivers for
the sector, the company's strong FCF generation and the
competitive dynamics. The EV multiple is supported by:
-- The historical bankruptcy case study exit multiples for
technology peer companies ranged from 2.6x to 10.8x;
-- Of these companies, only three were in the Software sector:
Allen Systems Group, Inc., Avaya, Inc. and Aspect Software
Parent, Inc., which received recovery multiples of 8.4x, 8.1x
and 5.5x, respectively;
-- The highly recurring nature of ConnectWise's revenue and
mission critical nature of the product support the high-end of
the range.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch's expectation of gross leverage (total debt with equity
credit/operating EBITDA) sustaining below 4.0x;
-- (Cash from operations - capex)/total debt with equity credit
ratio sustaining near 10%;
-- Organic revenue growth sustaining above the high single
digits;
-- Diversification of product focus.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch's expectation of gross leverage sustaining above 5.5x;
-- (Cash from operations - capex)/total debt with equity credit
ratio sustaining below 7.5%;
-- Organic revenue growth sustaining near 0%.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: The company's liquidity is projected to be
adequate, supported by its FCF generation and an undrawn $70
million RCF, and readily available cash and cash equivalents. Fitch
forecasts ConnectWise's FCF margins to remain in high teens through
2025 supported by EBITDA margin in the 40% range.
Debt Structure: ConnectWise has $1.05 billion of secured first lien
debt due 2028. Given the recurring nature of the business and
adequate liquidity, Fitch believes ConnectWise will be able to make
its required debt payments.
ISSUER PROFILE
ConnectWise is a provider of software solutions for IT Managed
Service Providers (MSPs) and Technology Success Providers (TSPs)
encompassing the full scope of business activities including
Business Management, Security Management and Unified Management.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
RATING ACTIONS
Rating Prior
------ -----
ConnectWise, LLC LT IDR B+ Affirmed B+
senior secured LT BB+ Affirmed RR1 BB+
ConnectWise Holdings, LLC LT IDR B+ Affirmed B+
CORPORATE COLOCATION: Nov. 16 Plan Confirmation Hearing Set
-----------------------------------------------------------
Corporate Colocation Inc. filed with the U.S. Bankruptcy Court for
the Central District of California a Plan of Reorganization and a
Disclosure Statement.
On September 8, 2022, Judge Ernest M. Robles ordered that:
* The Court finds that the Disclosure Statement contains
information adequate to enable creditors to make an informed
decision on the Plan.
* Nov. 16, 2022, at 10:00 a.m. is the hearing on the
confirmation of the Plan.
* Oct. 12, 2022, is fixed as the last day for creditors and
equity security holders to return to Debtor's counsel ballots
containing written acceptances or rejections of the Plan.
* Oct. 26, 2022 is fixed as the last day on which the Debtor
must file and serve a motion for an order confirming the Plan.
* Nov. 2, 2022, is fixed as the last day for filing and
serving written objections to confirmation of the Plan.
* Nov. 9, 2022, is fixed as the last day on which the Debtor
may file and serve its reply to any opposition to the Confirmation
Motion.
A copy of the order dated September 8, 2022, is available at
https://bit.ly/3RIgTxX from PacerMonitor.com at no charge.
General Counsel for Debtor:
Robert M. Yaspan, Esq.
Joseph G. McCarty, Esq.
Debra R. Brand, Esq.
Law Offices of Robert M. Yaspan
21700 Oxnard Street, Suite 1750
Woodland Hills, CA 91367
Telephone: (818) 774-9929
Facsimile: (818) 774-9989
Email: ryaspan@yaspanlaw.com
About Corporate Colocation
Inc.
Corporate Colocation Inc. -- https://www.corporatecolo.com/ --
operates a large server farm that provides website services to
about 25 subtenants that is located at 530 West Sixth Street, Suite
502 et seq., Los Angeles, California 90014. Corporate Colocation
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. C.D. Calif. Case No. 21-12812) on April 7, 2021. In the
petition signed by Jonathan Goodman, president, the Debtor
disclosed $2,284,042 in assets and $5,041,445 in liabilities.
Judge Ernest Robles oversees the case.
Robert M. Yaspan, Esq., at Law Offices of Robert M. Yaspan is the
Debtor's counsel.
530 6th Street, LLC, as landlord, is represented by Jeffrey Lee
Costell, Esq. at Costell & Adelson Law Corporation.
CREEPY COMPANY: Wins Cash Collateral Access Thru Oct 17
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized Creepy Company, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance through October 17, 2022.
In return for the Debtor's continued interim cash collateral use,
these parties are granted adequate protection for their purported
secured interests in cash collateral equivalents:
Bizfund, LLC
CFT Clear Finance Technology Corp.
Cloud fund
Goldman Sachs Bank USA, Sail Lake
Ouiby Inc. d/b/a Kickfurther
PayPal Working Capital
Shopify Capital Inc.
SBA/EIDL
U.S. Bank - SBA Paycheck Protection Loan
U.S. Bank/SBA
Union Funding Source, Inc.
The Debtor is directed to permit the Secured Parties and the
Subchapter V Trustee to inspect, upon reasonable notice and within
reasonable business hours. The Debtor must maintain and pay
premiums for insurance to cover the collateral from fire, theft,
and water damage.
The Secured Parties are granted replacement liens, attaching to the
Collateral, but only to the extent of their pre-petition liens,
with any valid liens attaching to the Collateral and its proceeds
until further Court order.
A further interim hearing on the matter is scheduled for October 13
at 10 a.m.
A copy of the order is available at https://bit.ly/3cYnW6q from
PacerMonitor.com.
About Creepy Company LLC
Creepy Company LLC sells horror-themed blankets, rugs, lapel pins,
apparel and other products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-08660) on August 1,
2022. In the petition signed by Susanne C. Goethals, owner and
manager, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Carol A. Doyle oversees the case.
Scott R. Clar, Esq., at Crane, Simon, Clar & Goodman, is the
Debtor's counsel.
CSG SYSTEMS: Egan-Jones Retains BB+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on August 22, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by CSG Systems International, Inc.
Headquartered in Englewood, Colorado, CSG Systems International,
Inc. provides customer care and billing solutions for cable
television providers, direct broadcast satellite providers, on-line
services markets, and telephony providers.
DAYBREAK OIL: Stockholders Elect Four Directors
-----------------------------------------------
Daybreak Oil and Gas, Inc. held an Annual Meeting of Shareholders
at which the shareholders:
(1) elected James F. Westmoreland, Timothy R. Lindsey, James F.
Meara, and Darren Williams as directors to serve until the
Company's next Annual Meeting of Shareholders, or until their
earlier, death, resignation, or removal; and
(2) ratified the Company's appointment of MaloneBailey, LLP as
its independent registered public accountant for the fiscal year
ending Feb. 28, 2023.
About Daybreak Oil and Gas
Daybreak Oil and Gas, Inc. is an independent crude oil and natural
gas company currently engaged in the exploration, development and
production of onshore crude oil and natural gas in the United
States. The Company is headquartered in Spokane Valley, Washington
with an operations office in Friendswood, Texas. Daybreak owns a
3-D seismic survey that encompasses 20,000 acres over 32 square
miles with approximately 6,500 acres under lease in the San Joaquin
Valley of California. The Company operates production from 20 oil
wells in our East Slopes project area in Kern County, California.
Daybreak Oil reported a net loss of $398,450 for the 12 months
ended Feb. 28, 2022, compared to a net loss of $512,265 for the 12
months ended Feb. 28, 2021. As of May 31, 2022, the Company had
$8.79 million in total assets, $3.81 million in total liabilities,
and $4.98 million in total stockholders' equity.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2006, issued a "going concern" qualification in its report dated
June 15, 2022, citing that the Company has suffered recurring
losses from operations and has a net capital deficiency that raises
substantial doubt about its ability to continue as a going concern.
DOT DOT SMILE: Children's Clothing Seller Files Subchapter V Case
-----------------------------------------------------------------
Dot Dot Smile LLC filed for chapter 11 protection in the Central
District of California. The Debtor filed as a small business
debtor seeking relief under Subchapter V of Chapter 11 of the
Bankruptcy Code.
Dot Dot Smile, LLC, was created in 2013 by Nicole and Jeff Thompson
to provide superior quality and custom design children's clothing.
Its designs and fabrics were very well received by consumers as
reflected in the company's success and rapid growth, resulting in
nearly $15,000,000 in revenues in 2020.
In 2017, DDS adopted a Multi-Level Marketing sales model and in
2019 the company moved to its current location, a 72,000 square
foot warehouse in Riverside, California. DDS's popularity and
growth continued, resulting in significant increases in
year-over-year revenues. Unfortunately, inventory shortages caused
by the COVID 19 pandemic impacted DDS's ability to recruit and
build new teams under the MLM model and, after unsuccessful
attempts and obtaining financing, the Debtor borrowed from Merchant
Cash Advance lenders and increased its orders for product. By the
time the new inventory arrived, demand under the MLM model had
waned, a result of the difficulties
associated with the MLM business model during the pandemic.
Despite these challenges, DDS continued to have a loyal following
and a viable brand and therefore pivoted to warehouse sales and the
opening of its Carlsbad Premium Outlet location. However, as a
result of these challenges in the retail clothing environment,
DDS's cash flow was impacted resulting in lawsuits and collection
efforts by the Merchant Cash Lenders and an eviction lawsuit filed
by the owner of the Debtor's Riverside location. DDS has filed
the
instant chapter 11 case to rebuild its company and pay creditors.
DDS currently has significant assets to rebuild its business,
including:
a. DDS has approximately $2,000,000 of inventory on-hand which
includes desirable products and generate significant revenues from
retail and online sales.
b. Pre-Petition, the Debtor negotiated a proposed sublet
agreement of its 72,700 square foot commercial space in Riverside,
California, which included a sale of its racking system located at
the premises to the proposed sub-tenant. While indicating an
interest in the sub-lease agreement, the landlord filed an unlawful
detainer action, which has been stayed by the bankruptcy filing.
The Debtor expects to seek
approval of the sub-let agreement or assumption and assignment of
the lease as in its current state it does not require 72,700 square
feet
of space.
c. The Debtor has applied for Employee Retention Credits in
the amount of $117,424 in 2020 and $363,306 in 2021, which should
result in $480,730 to the estate to fund operations and pay
creditors through a subchapter V plan.
The Debtor says the MCA Lenders assert $1.325 million in claims.
"Over the last decade, there has been an increase in high interest
lending schemes targeting small businesses like the Debtor. These
loans have exorbitantly high interest rates, running into the
hundreds of percent on an annual percentage basis, the
documentation and funding are provided with no real opportunity for
review or negotiation -- i.e., are contracts of adhesion and use
DocuSign, which provides the ability to electronically sign
documents but causes the document to jump directly to the signature
lines to dissuade borrowers from reading the documents. The
lenders purport to "purchase" future receivables of the Debtor, yet
in contradiction to the agreements, also file UCC1 financing
statements. The loans are the subject of multiple defenses and
counter-claims as being fraudulent, usurious, illegal, deceptive,
predatory and not enforceable. However, the lenders rely on the
financial weakness and naivety of the borrowers and the use of
highly questionable legal tactics, including, without limitation,
individual guaranties to assert their highly questionable legal
fiction of ownership of receivables."
According to court documents, Dot Dot Smile LLC estimates between
50 and 99 unsecured creditors. The petition states funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 12, 2022, at 1:30 PM at UST-RS1, TELEPHONIC MEETING.
CONFERENCE LINE: 1-866-822-7121, PARTICIPANT CODE:6203551. Proofs
of claim are due by Nov. 14, 2022.
Pursuant to 11 U.S.C. Sec. 1183(a), the United States Trustee
appointed the following qualified individual as Subchapter V
trustee in the case:
Caroline Djang
18400 Von Karman Ave, Suite 800
Irvine, California 92612
Tel: (949) 224-6252
E-mail: cdjang@buchalter.com
About Dot Dot Smile LLC
Dot Dot Smile LLC -- https://dotdotsmile.com/ -- is a retail store
that offers kids trendy clothes.
Dot Dot Smile LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-13361) on Sept. 3,
2022. In the petition filed by Jeffrey Eugene Thompson, as CEO,
the Debtor reported assets and liabilities between $1 million and
$10 million each.
The Debtor is represented by Jeffrey S. Shinbrot of The Shinbrot
Firm.
DUN & BRADSTREET: Fitch Affirms 'BB-' IDR, Outlook Positive
-----------------------------------------------------------
Fitch Ratings has affirmed Dun & Bradstreet Holdings, Inc.'s and
Dun & Bradstreet Corporation's Long-Term Issuer Default Rating at
'BB-', its secured debt at 'at 'BB+'/RR1', and its unsecured debt
at 'BB-/RR4'. The Outlook is updated to Positive from Stable.
KEY RATING DRIVERS
Sustained Margin Profile: Although 2021 EBITDA margin was down
approximately 2% compared with 2020, Dun & Bradstreet has had
strong revenue growth in the first half of 2022 and should be able
to finish the full year with EBITDA margin in the range of 39% to
40%. This target is somewhat at risk, since the company is working
to integrate its acquisitions of Netwise and Eyeota in the Sales &
Marketing sector, while maintaining its margins.
Fitch views the revenue diversification of this sector as a
potential benefit to the rating, but the acquisitions were
announced less than a year ago. These two online marketing
businesses face stiff competition and will require continued,
material investments to maintain success. Whether or not the
company can integrate these business and cross-sell their services,
while maintaining its overall margin targets, remains an open
question.
Organic Growth: Management has guided to 3% to 5% organic constant
currency growth in 2022. The company has been successful at winning
new logos, maintaining high retention levels, as well as increasing
cross-selling and growing client wallet share, which is supported
in part by growing the proportion of multi-year contracts.
Additionally, the company's prior efforts and investments in its
product development has led to key wins with strategic clients for
analytics, sales and marketing, as well as successful build out of
its offerings to the SMB market. The company has noted particularly
strong engagement related to e-commerce customers accessing
self-service options. Fitch forecasts Dun & Bradstreet revenue
growth in the mid-single-digit range.
Financial Structure: Within Fitch's still conservative growth and
margin expectations, Dun & Bradstreet's leverage remains in the low
to mid-4.0x region for the next two years, but the company should
have significant FCF if they want to reduce debt. Fitch sees Dun &
Bradstreet's gross leverage declining a further to 3.8x by the end
of 2023, by paying down its revolver balance. Dun & Bradstreet has
the potential to generate in excess of $1 billion in free cash flow
over the next three to four years, providing significant
flexibility for further debt reduction, organic investment,
capability acquisition and potentially shareholder return.
Financial Policy: Dun & Bradstreet recently announced a quarterly,
per-share dividend of five cents (approximately $85 million
annually), which should still allow the company to achieve FCF of
more than $300 million. They have not committed to using FCF for
debt reduction, and there is a possibility the company begins a
share repurchase program to increase its shareholder returns. The
company has stated its plans to address its capital structure, and
aligning it with its operational improvement since the take-private
transaction and subsequent IPO.
DERIVATION SUMMARY
Dun & Bradstreet's business profile as a data analytics provider is
supported by its market position with a meaningful market share of
core commercial credit in North America, approximately 90%
recurring revenue base with subscriptions representing more than
three-quarters of revenue, and a long-standing customer base with
an approximate 96% revenue retention rate. In 2021, no customer
accounted for more than 5% of the company's revenue, and top 50
customers accounted for approximately 25% of revenue.
The company is broadly diversified across sectors, although it is
weighted more toward North America (approximately 69% of revenue).
These metrics are broadly comparable with Dun & Bradstreet's data
analytics peers, the majority of which are solid investment grade.
However, several factors have contributed to Dun & Bradstreet's
lower rating in the past, such as its organic growth profile, which
has been lower than its peers, the LBO and associated governance
structure, an EBITDA margin range 10 to 20 points below its peers,
gross leverage above 4.5x, which is a remnant of the LBO. There has
been improvement on essentially all fronts, leading Fitch to assign
a Positive Outlook.
Fitch establishes a parent-subsidiary relationship between Dun &
Bradstreet Holdings, Inc. as parent, assessing it to have a weaker
stand-alone credit profile than its operating subsidiary and issuer
of Dun & Bradstreet Corporation debt. Fitch assigns the same IDRs
given the entities' strong operational and legal ties.
No Country Ceiling constraints or operating environment influence
were in effect for these ratings.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
-- Management projections for 2022, including foreign exchange
headwinds;
-- 2023 and following revenue growth in the mid-single digits,
assuming the Sales & Marking sector revenue growth is strong
as the acquisitions of Netwise and Eyeota are fully
integrated;
-- Operating EBITDA margin showing incremental gains over the
rating horizon, reflecting operating leverage;
-- Capital expense of $180 million in 2022 line with guidance and
a comparable amount annually thereafter;
-- Allocation of portion of FCF the newly announced dividend with
share repurchases beginning in 2023;
-- No acquisitions are modelled, although the company should have
the flexibility for tuck-in acquisitions using cash from the
balance sheet.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Total debt with equity credit to operating EBITDA expected to
be sustained below 4.0x;
-- FCF to total debt with equity credit expected to be sustained
above 5%;
-- Expectation for sustained organic constant currency growth in
excess of low single digit;
-- Material voluntary debt reduction.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Total debt with equity credit to operating EBITDA expected to
be sustained above 5.0x;
-- FCF to total debt with equity credit expected to be sustained
below 4%;
-- Expectation for flat to negative organic constant currency
growth;
-- Shift to more aggressive financial policy.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Dun & Bradstreet's solid liquidity position is
supported by $210 million in cash & cash equivalents and $755
million of revolver availability at June 30, 2022. Fitch expects
Dun & Bradstreet to generate approximately $400 million of FCF in
2022, increasing each year driven by modest organic top-line growth
at higher margins. Uses of liquidity are modest at approximately
$33 million annually fund scheduled debt principal maturities.
Manageable Debt Maturity Schedule: Debt maturities are modest until
the 2026 term loan facility matures in February 2026. This term
loan represents 77% of Dun & Bradstreet's total outstanding debt.
Fitch expects that DNB will proactively address its term loan and
revolver maturity in the normal course of business.
ISSUER PROFILE
Dun & Bradstreet is a leading data and analytics provider of
business information that informs credit and trade decisions among
firms and lenders and also supports sales & marketing efforts.
The company had records on 460 million businesses at Dec. 31, 2021.
It relies on 28,000 proprietary and public data sources as well as
alliance partners across 256 countries and territories.
Approximately 90% of revenue earned in 2021 was recurring up from
80% in 2020. Client retention rate was 96%, and the company is
emphasizing a shift to multi-year subscription contracts.
Approximately 69% of revenue is earned in North America, which is
down from 83% in 2020 due primarily to the acquisition of Bisnode
in Europe. Dun & Bradstreet is most well-known for its unique
business identifier called the D-U-N-S Number, which is often a
requirement for a business to obtain a loan or do business with
established firms and the government. Revenue in 2021 was
approximately $2.2 billion, and its operating EBITDA margin was
approximately 39%. The company's enterprise value is approximately
$10.6 billion.
ESG CONSIDERATIONS
The Dun & Bradstreet Corporation has an ESG Relevance Score of '4'
for Governance Structure due to due to board independence risk as a
result of its complex ownership structure, which has a negative
impact on the credit profile, and is relevant to the rating[s] in
conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
RATING ACTIONS
ENTITY/DEBT RATING RECOVERY PRIOR
----------- ------ -------- -----
The Dun & Bradstreet
Corporation LT IDR BB- Affirmed BB-
senior secured LT BB+ Affirmed RR1 BB+
senior unsecured LT BB- Affirmed RR4 BB-
Dun & Bradstreet
Holdings, Inc. LT IDR BB- Affirmed BB-
ECHELON CONSTRUCTION: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Echelon Construction and Maintenance LLC
2309 Springlake Rd #600
Dallas, TX 75234
Business Description: The Debtor provides pre-construction,
construction management, design-build,
interiors, ground up, and program rollout
services.
Chapter 11 Petition Date: September 12, 2022
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 22-31669
Judge: Hon. Michelle V. Larson
Debtor's Counsel: Robert C. Lane, Esq.
THE LANE LAW FIRM
6200 Savoy Dr Ste 1150
Houston, TX 77036-3369
Tel: (713) 595-8200
Email: notifications@lanelaw.com
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Aaron Kyle Wyatt as managing director.
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/4UW6R2A/Echelon_Construction_and_Maintenance__txnbke-22-31669__0001.0.pdf?mcid=tGE4TAMA
ECN CAPITAL: DBRS Confirms BB(high) Long-Term Issuer Rating
-----------------------------------------------------------
DBRS, Inc. confirmed the ratings of ECN Capital Corp., including
the Company's Long-Term Issuer Rating of BB (high) and Preferred
Shares Rating of Pfd-4 (high). The trend for the ratings is Stable.
The rating actions follow the Company's announcement that it has
entered into a definitive agreement to sell its Kessler Financial
Services LLC (KG) business to funds managed by Stone Point Capital
LLC. The Intrinsic Assessment (IA) for ECN is BB (high) and the
Support Assessment is SA3, resulting in the Company's Long-Term
Issuer Rating being equalized with the IA. The transaction is
subject to customary regulatory approvals and closing conditions
and is anticipated to close late in the third quarter or early
fourth quarter of 2022.
KEY RATING CONSIDERATIONS
ECN's ratings consider the impact of the sale of KG, a manager,
adviser and structuring partner to credit card issuers, banks,
credit unions, and payment networks, on ECN's credit fundamentals.
With the sale of KG, the Company and its management team will be
exclusively focused on a more streamlined asset-light business
model, focused singularly on secured consumer financing. These
businesses include Triad Financial Services, Inc. (Triad), ECN's
manufactured housing finance business, as well as Source One
Financial Services, LLC (Source One) and Intercoastal Financial
Group, LLC (IFG), both of which provide consumer lending programs
to the marine and recreational vehicle (RV) industries. The ratings
action considers the loss of earnings contribution from KG, that is
expected to be offset by the higher growth nature of the
earnings-generating capacity of ECN's remaining businesses.
We see the Company's risk profile as sound, especially given the
limited credit risk on the balance sheet, reflecting the
asset-light business model as well as the historically low loss
nature of floorplan lending. Although operating risk is well
managed, integration risk is somewhat elevated, given the execution
risk associated with the Company's recent tuck-in acquisitions of
IFG on July 1, 2022 and Source One on December 21, 2021. ECN's
ratings also reflect a sound funding profile, as originations for
Triad, Source One, and IFG are funded on a flow basis with their
Funding Partners (Partners), which consist of numerous banks and
credit unions. Finally, capital is acceptable for ECN's rating
level.
The Stable trend, reflects our view that ECN's credit fundamentals
will remain acceptable, despite the uncertain economic outlook and
rising interest rate environment. We expect continuing moderation
in housing demand in 2022. However, we anticipate that Triad's
operating performance will continue to benefit from solid demand
for manufactured housing underpinned by the notable affordability
issues in the U.S. housing market. Additionally, the Company's
Source One and IFG's marine and RV business performance should
benefit from solid but contracting demand, and tight supply.
RATING DRIVERS
Sustained improvements in adjusted profitability and statutory
earnings, while maintaining disciplined capital management and risk
aversion, would result in an upgrade of the ratings. Should credit
risk on the balance sheet become more pronounced, cash flow
leverage track upwards for a sustained period, or if there were
Partner funding disruptions, the ratings would be downgraded.
RATING RATIONALE
Upon the close of the KG sale, ECN's focus will be entirely on
secured consumer financings. Triad is a leader in the manufactured
home financing business while Source One and IFG, combined, provide
marine and RV financing on a nationwide basis. All three businesses
are asset-light businesses that focus on customers with super prime
and prime credit profiles. We note that over the near term, the
Company anticipates acquiring several more moderately sized tuck-in
acquisitions to further strengthen its marine and RV business
segment. ECN's ratings also consider the Company's solid management
team, which has considerable experience and industry knowledge.
Despite the loss of KG's earnings contributions, offsetting is the
higher growth nature of ECN's secured consumer segment businesses.
Overall, we expect the Company's future earnings to remain
acceptable with solid growth potential. During 1H22, ECN generated
earnings totaling $14.7 million, down from $25.7 million in 1H21,
reflecting the non-recurrence of $22.9 million of net income from
discontinued operations, specifically related to the sale of its
Service Finance Company, LLC's (SFC) business on December 6, 2021.
On a continuing operations basis, net income totaled $14.7 million,
up from $2.8 million, year-on-year (YoY). Improved earnings
reflected solid performance from the secured consumer businesses,
including higher levels of loan origination revenues (up 89.5% YoY
to $62 million), servicing revenues (up 60.4% to $9.9 million), and
interest income and other revenue (up 56.5% to $13.5 million).
Meanwhile, revenues related to KG totaled $52.9 million in 1H22,
compared to $41.3 million, YoY.
Overall, ECN's risk profile is well managed. Credit risk is limited
to the Company's moderately sized but growing manufactured housing
floorplan portfolio ($280 million at June 30, 2022) and its loans
held for trading portfolio ($100 million). Providing comfort,
floorplan loans are secured by first priority, fully perfected
liens in the underlying manufactured housing units that are
financed by Triad. Meanwhile, the held for trading portfolio
represents commitments, as well as regular flow business of
manufactured housing loans to large institutional buyers that
prefer larger transaction sizes. Loans purchased by ECN's Partners
are non-recourse purchase arrangements. Specifically there is no
recourse beyond fees to Partners for charge-offs or prepayments
typically within the first 12 months. Finally, we see operational
risk as a key risk for the Company, given that its consumer
businesses have considerable compliance and regulatory oversight,
and many of its Partners are FDIC-insured institutions. We view
integration risk to be somewhat elevated given its recent
acquisitions, but see it as being well managed.
The Company's ratings reflect its solid funding profile. Indeed,
its secured consumer segment is funded on a flow basis by its
Partners, including banks, and credit unions. Liquidity is
satisfactory, as the Company recently upsized its revolving credit
facility, but has increased the utilization of the line for
acquisitions and its growing floorplan loan portfolio.
Capital is acceptable. Going forward, we would expect the Company
to maintain appropriate levels of capital to match its risk
position. Given ECN's moderate credit risk, we view cash flow
leverage to be a more appropriate measure for leverage. We note
that the Company's cash flow leverage is elevated and would view
sustained lower levels favorably.
Notes: All figures are in U.S. dollars unless otherwise noted.
EMPIRE SPORTS: Case Summary & 13 Unsecured Creditors
----------------------------------------------------
Debtor: Empire Sports & Entertainment, Inc.
f/k/a AI's Ticket Empire, Inc.
5900 Sawmill Rd.
Dublin, OH 43017
Business Description: Empire Sports is a full-service event
management and production company
specializing in corporate events, sporting
events, meetings & conferences, hospitality
services, and non-profit events.
Chapter 11 Petition Date: September 12, 2022
Court: United States Bankruptcy Court
Southern District of Ohio
Case No.: 22-52666
Judge: Hon. Mina Nami Khorrami
Debtor's Counsel: John W. Kennedy, Esq.
STRIP HOPPERS LEITHART MCGRATH &
TERLECKY CO., LPA
575 S. Third St.
Columbus, OH 43215
Tel: 614-228-6345
Fax: 614-228-6369
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Alexander M. Schaffe as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 13 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/EGULUWQ/Empire_Sports__Entertainment__ohsbke-22-52666__0001.0.pdf?mcid=tGE4TAMA
ENDO INTERNATIONAL: Can't Stop D.C. Circuit Appeal, Says FTC
------------------------------------------------------------
Katie Buehler of Law 360 reports that the Federal Trade Commission
has asked the D. C. Circuit to lift a bankruptcy-related stay in
its bid to revive antitrust claims accusing Endo Pharmaceuticals
Inc. of entering a "pay-for-delay" agreement with Impax
Laboratories LLC to stave off competition to Endo's Opana ER
painkiller. In mid-August, the federal appellate court suspended
briefing in the FTC's appeal of a lower court's order dismissing
the case, after Endo and related entities filed for Chapter 11
bankruptcy protection in the Southern District of New York. But
the FTC said its case falls within an exception to the Bankruptcy
Code and should be allowed to continue.
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. Its
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.
ENJOY TECHNOLOGY: Abernathy Appointed as New Committee Member
-------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed The Abernathy
MacGregor Group, Inc. as new member of the official committee of
unsecured creditors in the Chapter 11 cases of Enjoy Technologies,
Inc. and its affiliates.
Meanwhile, Xoriant Corporation resigned from the committee
effective Sept. 8.
As of Sept. 8, the members of the committee are:
1. Donnelly Financial, LLC
Attn: Brian Heberlein
35 W. Wacker Street
Chicago, IL 60693
Phone: 866-319-706
Email: brian.t.heberlein@dfinsolutions.com
2. Vetty, Inc.
Attn: Subrat Nayak
110 Wall Street, 2nd Floor
New York, NY 10005
Phone: 610-563-7292
Email: subrat@vetty.com
3. The Abernathy MacGregor Group, Inc.
Attn: Tom Johnson
277 Park Ave., 39th Floor
New York, NY 10172
Tel: 212-371-5999
Email: tbj@abmac.com
About Enjoy Technology
Enjoy Technology, Inc. provides a commerce-at-home experience for
consumers through their network of mobile retail stores. It is
based in Palo Alto, Calif.
Enjoy Technology and affiliates, Enjoy Technology Operating Corp.
and Enjoy Technology, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10580) on June
30, 2022. In the petition signed by Tiffany N. Meriweather, chief
legal officer and corporate secretary, Enjoy Technology, Inc.
disclosed $111,661,000 in total assets and $69,956,000 in
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Cooley, LLP and Richards, Layton, and Finger
P.A. as legal counsels; Centerview Partners, LLC as investment
banker; PricewaterhouseCoopers, LLP as auditor; and Todd Zoha of AP
Services, LLC as chief financial officer. Stretto, Inc. is the
claims, noticing agent and administrative advisor.
Asurion, LLC, a Delaware Limited Liability Company, as DIP lender,
is represented by Gibson, Dunn & Crutcher LLP, Bass, Berry & Sims
PLC, and Pachulski Stang Ziehl & Jones, LLP.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases on July 11, 2022. Fox Rothschild, LLP and FTI Consulting,
Inc. serve as the committee's legal counsel and financial advisor,
respectively.
ENVIA HOLDINGS: Amends Unsecured Claims Pay Details
---------------------------------------------------
Envia Holdings LLC submitted an Amended Disclosure Statement for
Small Business Chapter 11 Plan.
General Unsecured creditors are classified in Class 3 and will
receive a 100% dividend of their allowed claims together with
post-confirmation interest to be paid on the latter of the
effective date or within 5 days of the sale of the Improved
Property, Unimproved Property or Properties if Debtor's Properties
sell with sufficient net proceeds to pay these claims in full.
If the net proceeds of sale after paying secured claims are
insufficient to pay general unsecured creditors in full,
nonetheless general unsecured creditors will be paid in full, in
part from the remaining proceeds of sale after payment of secured
and administrative priority claims with the balance paid over 5
years, but without interest.
Before the filing of the petition, Nathaniel Villareal's parents
were residing in the Improved Property without paying any rent. It
provides for rents to accrue until there are sufficient funds in
Debtor's WFB Debtor in Possession account to cover projected
expenses. An order authorizing use of cash collateral was entered
on August 22, 2022.
Debtor has employed PHP Group, Inc. as its real estate broker to
market and sell the Properties. Debtor's agent opines that the
Property can be sold for $3,000,000 but because it is unique it may
take some time. Debtor contends the Properties are worth more.
Debtor's agent, at his own marketing expense, hired an appraiser.
The appraiser opined that the value of the Properties is
$2,727,000. Debtor has received one offer for $2,400,000 which was
rejected.
Class 3 consists of General Unsecured Claims. This Class shall be
paid in full together with interest at 3.12% per annum, the latter
of the effective date, or five days after the sale of the
Unimproved Property or Improved Property or Properties, provided
there are sufficient proceeds of sale, after payment of
administrative priority claims, to pay these claims in full; or, if
the proceeds of sale of the Properties are insufficient to pay
these claims in full or if the Properties do not sell within 6
months of the effective date, paid in full without interest from
the net proceeds of sale after payment of administrative priority
claims, with the unpaid balance paid in payments of $3,558.33/month
commencing 6th month after the effective date. This Class will
receive a distribution of 100% of their allowed claims.
This Plan of Reorganization proposes to pay creditors of the Debtor
from the sale of estate Improved Property at 325 Denio Ave. #B
Gilroy, CA and Unimproved Property at 0 Denio Ave. Gilroy, CA
(collectively "Properties") or if the proceeds of sale are
insufficient to pay creditors in full, from payments over time
emanating from Mr. Villareal, Debtor's sole member.
The hearing at which the Court will determine whether to approve
the Disclosure Statement will take place on October 13, 2022 at
10:00 AM in Courtroom 11, at the United States Bankruptcy Court,
Northern District of California, San Jose Division at 280 So. First
St., San Jose, CA 95113.
A full-text copy of the Amended Disclosure Statement dated
September 8, 2022, is available at https://bit.ly/3xjp0c3 from
PacerMonitor.com at no charge.
Debtor's counsel:
Lars T. Fuller, Esq.
Sam Taherian, Esq.
Joyce K. Lau, Esq.
The Fuller Law Firm, PC
60 No. Keeble Ave.
San Jose, CA 95126
Tel: (408) 295-5595
Fax: (408) 295-9852
Email: admin@fullerlawfirm.net
About Envia Holdings
Envia Holdings, LLC is a single asset real estate (as defined in 11
U.S.C. Sec. 101(51B)). The company is based in San Jose, Calif.
Envia Holdings sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. N.D. Calif. Case No. 22-50489) on June 2, 2022,
listing between $1 million and $10 million in both assets and
liabilities. Nathaniel Villareal, sole member, signed the
petition.
The case is assigned to Judge M. Elaine Hammond.
Lars T. Fuller, Esq., at The Fuller Law Firm, is the Debtor's
counsel.
FALLSWAY CONSTRUCTION: Taps Law Office of Donald L. Bell as Counsel
-------------------------------------------------------------------
Fallsway Construction Company, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Maryland to hire The Law
Office of Donald L. Bell, LLC to handle its Chapter 11 case.
The firm will provide extensive legal services such as preparing
bankruptcy schedules, statement of financial affairs, monthly
operating reports and other documents.
The firm will charge $450 per hour for attorney work and $100 per
hour for paralegal services.
The retainer fee is $8,500.
As disclosed in court filings, the Law Office of Donald L. Bell has
no interest adverse to the Debtor or its estate.
The firm can be reached through:
Donald L Bell, Esq.
The Law Office Of Donald L. Bell, LLC
MD/DC Capital Office Park
6305 Ivy Ln Suite 315
Greenbelt, MD 20770
Phone: 301-614-0536
Email: donbellaw@gmail.com
About Fallsway Construction
Fallsway Construction Company, LLC, a road construction company in
Baltimore, Md., filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 22-14340)
on Aug. 9, 2022. At the time of the filing, the Debtor listed $1
million to $10 million in both assets and liabilities.
Judge Michelle M. Harner oversees the case.
Donald L. Bell, Esq., at The Law Office of Donald L. Bell, LLC is
the Debtor's counsel.
G.D. III: Seeks to Retain Control of Bankruptcy
-----------------------------------------------
G.D. III, Inc. is seeking more time to control its bankruptcy while
it waits for the results of the investigation being conducted by
the examiner appointed in its Chapter 11 case.
In its motion, the company asked the U.S. Bankruptcy Court for the
District of Maryland to extend its exclusive right to file a
Chapter 11 plan and solicit votes in favor of the plan to Oct. 19
and Dec. 19, respectively.
"This extension would permit the examiner to report his findings as
well as give time for [G.D. III] to adjust a plan based on that
report," said the company's attorney, Timothy Mummert, Esq., at
Mummert Law Firm.
Scott Miller, the examiner appointed to investigate the company, is
set to report his findings at a status hearing scheduled for Oct.
3.
About G.D. III
G.D. III, Inc. is a Baltimore-based company engaged in renting and
leasing real estate properties.
G.D. III filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Md. Case No. 22-12393) on May 3,
2022, listing $6,500,000 in assets and $7,549,273 in liabilities.
George Divel, III, president of G.D. III, signed the petition.
Judge Michelle M. Harner oversees the case.
Timothy Mummert, Esq., at Mummert Law Firm and Richard Fleischer,
CPA serve as the Debtor's legal counsel and accountant,
respectively.
GENAPSYS INC: Gets Court Approval for $42 Mil. Sale to Sequencing
-----------------------------------------------------------------
Leslie A. Pappas of Law360 reports that gene-sequencing company
GenapSys Inc. won a bankruptcy court's approval Thursday, Sept. 8,
2022, to sell its assets to an investor group for $42 million
despite a last-minute plea from Bolt Financial Inc.'s CEO Ryan
Breslow to postpone the sale so his new pharma startup could put in
a competing bid.
At a virtual hearing Thursday, U.S. Bankruptcy Judge Brendan L.
Shannon rejected the call for delay and approved the company's sale
to Sequencing Health Inc. , calling GenapSys' decision to choose "a
bird in the hand" over an offer that may not materialize "the
debtor's best business judgment.
About GenapSys Inc.
GenapSys Inc. -- https://genapsys.com/ -- is a biotechnology
company that transforms the human condition by building a scalable,
affordable genomic sequencing ecosystem that will support research
and diagnostics. It is based in Redwood City, Calif.
GenapSys 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 filed by Britton Russell, chief financial officer and
treasurer, the Debtor listed assets between $10 million and $50
million and liabilities between $50 million and $100 million.
Judge Brendan Linehan Shannon oversees the case.
The Debtor tapped Richards, Layton & Finger, PA as bankruptcy
counsel; Willkie Farr & Gallagher LLP as special litigation and
corporate counsel; and Lazard Freres & Co. LLC as investment
banker. Kroll Restructuring Administration LLC is the Debtor's
claims and noticing agent and administrative advisor.
GIGA-TRONICS INC: Terminates Rights Agreement with American Stock
-----------------------------------------------------------------
Giga-tronics Incorporated had entered into an amendment to its
Rights Agreement dated Oct. 12, 2020 with American Stock Transfer &
Trust Company.
The Amendment accelerated the expiration of the rights from Oct.
22, 2025 to Sept. 7, 2022. At the time of the termination of the
Rights Agreement on Sept. 7, 2022 at 5:00 p.m. Pacific Time, all
rights distributed to holders of the Company's common stock
pursuant to the Rights Agreement expired.
About Giga-tronics Inc.
Headquartered in Dublin, California, Giga-Tronics Inc. is a
publicly held company, traded on the OTCQB Capital Market under the
symbol "GIGA". Giga-tronics -- http://www.gigatronics.com--
produces RADAR filters and Microwave Integrated Components for use
in military defense applications as well as sophisticated RADAR and
Electronic Warfare (RADAR/EW) test products primarily used in
electronic warfare test & emulation applications.
Giga-Tronics reported a net loss of $2.72 million for the year
ended March 26, 2022, compared to a net loss of $393,000 for the
year ended March 27, 2021. As of March 26, 2022, the Company had
$8.06 million in total assets, $4.33 million in total liabilities,
and $3.73 million in total shareholders' equity.
San Ramon, California-based Armanino LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated June 24, 2022, citing that the Company's significant
recurring losses and accumulated deficit raise substantial doubt
about its ability to continue as a going concern.
GIRARDI & KEESE: Gets Money From Florida Plaintiffs Firm Wilkes
---------------------------------------------------------------
Brandon Lowrey of Law360 reports that a well-known Florida
plaintiffs attorney has given at least $750,000 to reality
television star Erika Girardi as her husband's law firm, Girardi
Keese, went bankrupt amid allegations that it stiffed lenders and
stole from its clients, according to court records reviewed by
Law360.
James Wilkes II's firm, Wilkes & Associates, began wiring
six-figure payments to Erika Girardi just two months before her
husband, Thomas V. Girardi, admitted to stealing millions of
dollars from his clients in December 2020, according to the
document. Erika Girardi has since been fighting with bankruptcy
trustees over money and valuables.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese.
It served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
Telephone: (310) 640-1200
GPMI CO: Seeks to Extend Exclusivity Period to Oct. 14
------------------------------------------------------
GPMI Co. asked the U.S. Bankruptcy Court for the District of
Arizona to extend its exclusivity period to file a Chapter 11 plan
to Oct. 14 and solicit votes in favor of the plan to Dec. 14.
The company will use the extension to finalize the terms of its
reorganization plan and address any issues with its lender and
other key constituents, according to its attorney, Patrick Clisham,
Esq., at Engelman Berger, PC.
"Rushing this process to meet the initial exclusivity periods could
jeopardize a successful reorganization," Mr. Clisham said in court
papers.
The exclusivity motion is on the court's calendar for Sept. 8.
About GPMI Co.
GPMI Company is engaged in developing new concepts, innovating
products, program development, and marketing. GPMI is an Arizona
based company established in 1989, with production facilities
across the United States.
GPMI filed its voluntary petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. D. Ariz. Case No. 22-00150) on Jan. 10,
2022, listing as much as $50 million in both assets and
liabilities. Yarron Bendor, president, signed the petition.
Judge Eddward P. Ballinger Jr. oversees the case.
The Debtor tapped Engelman Berger, PC, led by Steven N. Berger,
Esq., as legal counsel; Dickinson Wright PLLC and Titus Brueckner &
Levine, PLC as special counsel; and MCA Financial Group, Ltd. as
financial consultant.
GREEN ACRES: Seeks Approval to Hire Croker as Special Counsel
-------------------------------------------------------------
Green Acres MHP, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Nebraska to hire Croker, Huck, Kasher, DeWitt,
Anderson & Gonderinger, LLC as its special counsel.
The firm will represent the Debtor in issues regarding contracts to
which it is a party as well as in state court litigation issues.
The firm will be paid at these rates:
Scott D. Jochim, Member $325 per hour
David J. Skalka, Member $325 per hour
As disclosed in court filings, Crocker has no connection with any
of the creditors of the Debtor or any other party in interest.
The firm can be reached through:
Scott D. Jochim, Esq.
David J. Skalka, Esq.
Croker, Huck, Kasher, DeWitt, Anderson & Gonderinger, LLC
2120 S 72nd St #1200
Omaha, NE 68124
Phone: +1 402-391-9221/844-856-0720
Fax: 402-390-9221
About Green Acres MHP LLC
Green Acres MHP, LLC filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No.
22-80635) on Aug. 25, 2022, listing $500,000 to $1 million in both
assets and liabilities. James A. Overcash has been appointed as
Subchapter V trustee.
Judge Thomas L. Saladino oversees the case.
Patrick Patino, Esq., at Patino King, LLC is the Debtor's
bankruptcy counsel while Croker, Huck, Kasher, DeWitt, Anderson &
Gonderinger, LLC serves as special counsel.
GREEN TAXI: Unsecureds' Recovery Lowered to 65% in Plan
-------------------------------------------------------
Green Taxi Cooperative submitted a Second Amended Plan of
Reorganization for Small Business under Subchapter V.
Class 2 consists of those unsecured creditors of the Debtor who
hold Allowed Claims that were either scheduled by the Debtor as
undisputed, or subject to timely filed proofs of claim to which the
Debtor does not successfully object.
The total Class 2 claims are approximately $95,000. Class 2 shall
receive a pro-rata distribution of a variable percentage of $28,800
generated at the rate of $800 per month over a three-year period
into a segregated account commencing on the fifteenth day of the
first full month following the Effective Date of the Plan
("Repayment Term"). Plan distributions shall be made to Class 2 on
an annual basis within 30 days after every 12 monthly payments.
No interest will be paid on account of Class 2 claims. For the
avoidance of doubt, no creditor shall receive more than 100% of
their allowed claim from payments on account of their Class 2
Claim.
Based on the estimated distributions, and withdrawal of the
Technology Insurance Corporation proofs of claim, Class 2 Claimants
are anticipated to receive approximately 65% of their allowed
claims. Upon request by any party in interest, the Debtor shall
provide an annual financial statement, including amounts disbursed
to creditors in accordance with the Plan.
Class 3 includes Interests in the Debtor held by the members of the
Debtor. Class 3 is unimpaired by this Plan. On the Effective Date
of the Plan, Class 3 shall retain its Interests in the Debtor.
Pursuant to the Debtor's operating agreement, only those members
that are current on their dues to the Debtor shall be allowed to
retain their membership in the Debtor.
On the Effective Date of the Plan, the Debtor's current President
shall be appointed pursuant to 11 U.S.C.§1142(b) for the purpose
of carrying out the terms of the Plan, and taking all actions
deemed necessary or convenient to consummating the terms of the
Plan.
The Debtor's Plan is feasible based upon the Debtor's prepared
projections, which reflect a conservative prediction of the
Debtor's operations during the term of the Plan.
The Debtor has used its best efforts to prepare accurate
projections. The Debtor has based payments to Class 2 Unsecured
Creditors on available funds to support the feasibility of the
Plan. While the Debtor's projections show excess funds at the end
of the Plan term, the additional funds are necessary to ensure that
the Debtor can pay for any unanticipated expenses.
A full-text copy of the Second Amended Plan dated September 8,
2022, is available at https://bit.ly/3L8XuUl from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Jenny M.F. Fujii, Esq.
Kutner Brinen Dickey Riley, P.C.
1660 Lincoln Street, Suite 1720
Denver, CO 80264
Telephone: (303) 832-2400
Email: jmf@kutnerlaw.com
About Green Taxi Cooperative
Green Taxi Cooperative sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. D. Colo. Case No. 22-11290) on
April 15, 2022, listing $50,000 in assets and $100,001 to $500,000
in liabilities.
Judge Elizabeth E Brown presides over the case.
Jenny M.F. Fujii, at Kutner Brinen Dickey Riley, P.C., serves as
the Debtor's counsel.
HILLENBRAND INC: Egan-Jones Retains BB+ Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on August 24, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Hillenbrand, Inc.
Headquartered in Batesville, Indiana, Hillenbrand, Inc.
manufactures and sells premium business-to-business products and
services.
IFRESH INC: Delaware Court Appoints Cynthia Romano as Receiver
--------------------------------------------------------------
On Aug. 31, 2022, in the matter KEYBANK NATIONAL ASSOCIATION vs.
NYM HOLDING, INC., IFRESH, INC., NEW YORK MART 8 AVE., INC., NEW
YORK MART EAST BROADWAY INC., NEW YORK SUPERMARKET EAST BROADWAY
INC., NEW YORK MART GROUP INC., MING'S SUPERMARKET, INC., NEW YORK
MART MOTT ST., INC., NEW YORK MART ROOSEVELT, INC., NEW YORK MART
SUNRISE, INC., ZEN MKT QUINCY, INC., STRONG AMERICA LIMITED, IFRESH
E. COLONIAL INC., IFRESH GLEN COVE INC., IFRESH BELLAIRE, INC., NEW
YORK MART AVE U 2ND INC., NEW YORK MART CT, INC., NEW YORK MART N.
MIAMI INC., and NYM MILFORD, LLC (C.A. No. 22-1134 (UNA)), the
United States District Court of District of Delaware issued an
Order Appointing Receiver, upon a motion made by Keybank National
Association which was consented to by all the above-captioned
defendants, for the appointment and creation of a receiver to take
exclusive custody, control and management of certain collateral
made by the Defendants in favor of KeyBank pursuant to a certain
pledge agreement and security agreement in connection with a loan
arrangement with Keybank.
Pursuant to the Order, effective as of Sept. 6, 2022, the Court
appointed Cynthia Romano, acting on behalf of CohnReznick LLP, as
receiver to take exclusive custody, control, and management of the
Receivership Assets, which include: (i) all the Collateral as
defined in the Pledge Agreement, dated Feb. 27, 2017, made by
iFresh Inc. in favor of KeyBank; (ii) all the Collateral as defined
in the Pledge Agreement, dated Dec. 23, 2016, made by NYM HOLDING,
INC. in favor of KeyBank; (iii) all the Collateral as defined in
the Security Agreement, dated Dec. 23, 2016, made by the Defendants
(other than the Company and NYM Milford LLC in favor of KeyBank;
and (iv) all the Premises as defined in the Open-End Mortgage Deed
and Security Agreement, dated May 20, 2019, made by NYM Milford in
favor of KeyBank. As of the Effective Date, the Receiver shall
have exclusive operational control of the businesses of the
Receivership Defendants, which are all the Defendants excluding the
Company, relating to the Receivership Assets in accordance with the
terms of the Order and until such time as provided by the Order.
The Receivership Assets are placed in custodia legis and are
subject to the exclusive jurisdiction of the Court.
The Order also specifies that the Receivership Assets shall not
include (i) 100% of the stock of (x) E Compass, a shell company
with no subsidiaries, or (y) I Fresh (BVI) Co, Ltd., a holding
company with three direct or indirect subsidiaries, Xiamen DL
Medical Technology Co, Ltd., Hubei Rongentang Wine Co, Ltd., and
Jiuxiang Blue Sky Technology (Beijing) Co, Ltd. (collectively and
including such subsidiaries, the "Sister Companies"), in each case,
owned by the Company; (ii) the Sister Companies' assets; (iii) any
assets of the Company that are not Receivership Assets; or (iv) any
causes of action held by the Company; and the Receivership shall
not include any businesses of the Company or the Sister Companies.
The Receiver was granted all the rights, duties, and
responsibilities of a court-appointed receiver, including without
limitation, custody, control, management, and sale of any part of
or all the Receivership Assets and the Receivership Businesses,
provided that no Receivership Asset subject to a lien or security
interest in favor of Keybank shall be sold without the prior
written consent of Keybank.
Pursuant to the Order, the Defendants and each of their respective
current and former owners, directors, officers, members, managers,
employees, affiliates, successors, assigns, attorneys, accountants,
agents, independent contractors, creditors, and other
representatives, or any other persons or entities acting in concert
or participating with any Defendant, and all those who are under
the Defendants' direction or control, are directed to fully and
immediately cooperate with the Receiver to ensure an orderly
transfer of the custody, control, and management of the
Receivership Assets, and the operational control of the
Receivership Businesses, to the Receiver, including, without
limitation, turning over any Receivership Assets in their
possession or control to the Receiver and providing the Receiver
with any information and documents in their possession or control
relevant to the Receivership Assets and/or the Receivership
Businesses. Any entity or person that willfully interferes with
the authority of the Receiver as set forth in the Order or any
subsequent order of the Court shall be subject to all appropriate
penalties provided for under the laws of the State of Delaware and
the United States, and any such conduct may be punishable as a
contempt of Court.
Pursuant to the Order, all Defendant Parties, creditors, claimants,
bodies politic, parties in interest, and their respective
attorneys, agents, employees, and all other persons, firms, and
corporations are jointly and severally enjoined and stayed from
commencing or continuing any action at law or suit or proceeding in
equity to foreclose any lien or enforce any claim against the
Receivership Assets, the books, records, revenues, profits, and
related assets of the Receivership Businesses, or against the
Receiver in any court; provided, however, that (a) the Company may
commence actions at law, suits, and proceedings related to causes
of action held by the Company; (b) certain Defendant Parties are
presently party to existing actions at law, suits, and proceedings
against other Defendant Parties, and all such Defendant Parties may
continue such existing actions at law, suits, and proceedings; and
(c) certain Defendant Parties may commence additional actions
against other Defendant Parties, and all such Defendant Parties may
continue such additional actions, provided that, in each case, such
actions at law, suits, and proceedings do not seek relief contrary
to the terms of the Order.
The Receiver's rights and duties with respect to the Receivership
Assets and the Receivership and as Receiver shall cease and
terminate only upon further order of the Court, which may be
entered into with the consent of the Receiver, Plaintiff, and all
of the Defendants or at requested by the Receiver, Keybank or the
Defendants. At termination, to the extent not transferred as part
of a sale of the Receivership Assets, the Receiver shall, among
other things, transfer all other property to the respective
Receivership Defendant owning such property.
Nothing in the Order modifies, amends, or limits in any way
whatsoever the rights of KeyBank under the Loan to approve sales,
to credit bid, to receive payment of all proceeds arising from the
sale of any or all the Receivership Assets prior to all other
creditors, and to refuse to release its interest in the
Receivership Assets.
About iFresh Inc.
Headquartered in Long Island City, New York, iFresh Inc. --
http://www.ifreshmarket.com-- is an Asian American grocery
supermarket chain and online grocer on the east coast of U.S. With
eight retail supermarkets along the US eastern seaboard (with
additional stores in Connecticut opening soon), and one in-house
wholesale business strategically located in cities with a highly
concentrated Asian population, iFresh aims to satisfy the
increasing demands of Asian Americans (whose purchasing power has
been growing rapidly) for fresh and culturally unique produce,
seafood and other groceries that are not found in mainstream
supermarkets. With an in-house proprietary delivery network,
online sales channel and strong relations with farms that produce
Chinese specialty vegetables and fruits, iFresh is able to offer
fresh, high-quality specialty produce at competitive prices to a
growing base of customers.
iFresh Inc. reported a net loss of $8.29 million for the year ended
March 31, 2020, compared to a net loss of $12 million for the year
ended March 31, 2019. As of Dec. 31, 2020, the Company had $131.62
million in total assets, $110.33 million in total liabilities, and
$21.29 million in total shareholders' equity.
Friedman LLP, in New York, the Company's auditor since 2016, issued
a "going concern" qualification in its report dated Aug. 13, 2020,
citing that the Company has incurred significant operating losses,
has negative working capital of $28.6 million and is not in
compliance with its credit agreement. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern.
IMMACULATA UNIVERSITY: Fitch Affirms BB- on 2017 Revenue Bonds
--------------------------------------------------------------
Fitch Ratings has affirmed the rating on the following Chester
County Health and Educational Facilities Authority (PA) revenue
bonds, issued on behalf of Immaculata University at 'BB-':
-- $38.4 million series 2017.
In addition, Fitch has affirmed Immaculata's Issuer Default Rating
(IDR) at 'BB-'.
The Rating Outlook is Stable.
SECURITY
The series 2017 bonds are secured by a lien and security interest
in the pledged revenues of Immaculata. Financial covenants include
the maintenance 1.2x coverage and a liquidity covenant to maintain
at least $5 million in unrestricted assets. The university has met
all covenants through fiscal 2022.
ANALYTICAL CONCLUSION
Immaculata's 'BB-' ratings reflect weak but stable leverage, with
fiscal 2021 available funds (AF) of $25 million equaling 60% of
adjusted debt, which Fitch expects will remain above 30% through
Fitch's stress case scenario.
Immaculata's revenue defensibility remains weak, reflecting the
university's high acceptance rates and persistently weak
matriculation. Enrollment dipped by nearly 10% between fiscal years
2017 and 2019, driven mostly by volatility in not-traditional
enrollment, but has stabilized near 1,800 full-time equivalent
(FTE) enrollment in fiscal 2022. Immaculata's operating risk
assessment of 'bbb' reflects moderate and improving cash flow
margins around 10%, which is necessary to maintain economic debt
service coverage over 1x, and significant near-term capital
projects that are critical to program expansion.
There is the potential for improvement in the rating over the next
few years, should enrollment growth and prudent expense controls
sustain cash flow margins consistently above 10%. Immaculata's
liquidity profile has stabilized, given recent improvements in debt
service coverage and Fitch's expectation that the university
retains capacity to maintain adequate coverage levels in Fitch's
stress case scenario. As such, Fitch no longer deems Immaculata's
liquidity to be an asymmetric consideration in the rating outcome.
KEY RATING DRIVERS
Revenue Defensibility: 'bb'
Stabilizing Demand; Limited Other Revenues
Immaculata's revenue defensibility assessment is characteristic of
the university's moderate to weak demand indicators, historically
volatile admissions and enrollment, and limited market position.
Acceptance rates remain above 80% and matriculation is consistently
below 20% through fall 2021. Fitch views these weaker metrics in
the context of Immaculata's efforts to grow non-traditional
programs, which exhibit a higher degree of self-selection than
traditional undergraduate programs.
Total enrollment has improved modestly since fall 2019 as the
university added new academic programs to meet market needs, but
revenue growth prospects remain uncertain as student affordability
and the highly competitive Philadelphia market may limit revenue
and pricing flexibility. As a result, net tuition and fee revenues
have been stable at below $30 million between fiscal years 2019 and
2022 (unaudited) from a historical peak of $35 million in fiscal
2016. Fitch expects moderate enrollment growth to result in
incremental revenue increases in the intermediate term while
remaining below the historical peak.
Operating Risk: 'bbb'
Improving Cash Flow; High Near-Term Capex
The 'bbb' operating risk assessment reflects Fitch's expectations
for improving operating cost flexibility hampered by high near-term
capex plans. Margins have improved in recent years due to
extraordinary federal relief funds and a combination of improving
student-generated revenues and prudent cost containment. Fitch
expects cash flow margins generally closer to 10% going forward as
the university works to grow enrollment while containing expenses
in the near to intermediate term.
Cash flow margins of above 7% are necessary to meet economic debt
service coverage. Immaculata's capex needs remain very high in the
near term as the university completes its largest capital project,
the Parsons Science Pavilion, opening fall 2022. The project is
fully funded by donor gifts, indicating a moderate level of
capacity for donor funding. Beyond this project, Fitch expects
deferred maintenance across the campus to remain high.
Financial Profile: 'bb'
Thin Balance Sheet Cushion
The financial profile assessment of 'bb' reflects high leverage
through a moderate investment stress relative to the university's
limited business profile strength. Balance sheet metrics improved,
with AF jumping to $25 million in fiscal 2021 (from $12 million in
fiscal 2019), due to strong market performance, fundraising for
capex, and various federal relief programs.
About $6.5 million of total AF will be used to fund the Parsons
Science Pavilion. Fitch's base case assumes stabilizing demand and
cost controls will maintain AF to adjusted debt at levels
consistently above 50%, inclusive of capital outlay plans. In
Fitch's stress scenario analysis, AF to adjusted debt remains
consistent with the rating level at around 30%.
Immaculata's liquidity profile is assessed at 'neutral' following
improved debt service coverage (calculated by Fitch at 2.3x in
fiscal 2021), and in line with expectations that cash flows will
generate sufficient coverage in Fitch's stress case.
Asymmetric Additional Risk Considerations
No asymmetric additional risk considerations were applied to the
rating.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Consistent trend of positive enrollment and related growth in
student-fee revenue;
-- Successful completion of near-term capital projects within
budget, followed by stabilization of capital spending plans to
levels nearer depreciation expense;
-- Sustained improvement in cash flow with margins consistently
exceeding 10%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Further declines in enrollment and net tuition and student fee
revenues;
-- Failure to sustain cash flow margins at levels sufficient to
generate economic debt service coverage;
-- Deterioration of available funds (AF) to debt below 20%.
CREDIT PROFILE
Immaculata University is a Catholic comprehensive, coeducational
institution of higher learning founded in 1920 on a 375-acre
suburban campus in Malvern, PA, about 20 miles west of
Philadelphia. With the exception of a facility jointly owned by the
university and Camilla Hall, as well as the library, Lettiere
Center, West Campus Apartments, and IHM Student Center,
Immaculata's campus is owned by the Sisters, Servants of the
Immaculate Heart of Mary, which is the sole corporate member of the
University.
It was the first Catholic women's college established in the
Philadelphia area and has since expanded coeducational programs at
all levels. Currently FTE enrollment is approximately 1,800
students in 53 undergraduate majors, seven master's degree
programs, three doctoral degree programs, and over 40 additional
professional endorsement, certificate and certification programs.
Immaculata served about 985 undergraduates and 537 graduates and
261 non-traditional students (by FTE) in fall 2021.
The university's accreditation with Middle States Commission on
Higher Education was last affirmed in 2014, with its next
self-study evaluation due in 2023-2024 and next mid-point peer
review in 2028.
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
RATING ACTIONS
Rating Prior
------ -----
Immaculata University (PA) LT IDR BB- Affirmed BB-
Immaculata University (PA)
/General Revenues/1 LT LT BB- Affirmed BB-
INDIAN CANYON: Files Subchapter V Case; Lawsuits Removed
--------------------------------------------------------
Indian Canyon & 18th Property Owners Association filed for chapter
11 protection. The Debtor filed as a small business debtor seeking
relief under Subchapter V of Chapter 11 of the Bankruptcy Code.
Indian Canyon & 18th Property Owner Association estimates between 1
and 49 creditors. The petition states that funds will be available
to unsecured creditors.
Pursuant to 11 U.S.C. Sec. 1183(a), the United States Trustee
appointed this qualified individual as Subchapter V trustee in the
case:
Arturo Cisneros
3403 Tenth Street, Suite 714
Riverside, California 92501
Tel: (951) 328-3124
Facsimile: (951) 682-9707
E-mail: amctrustee@mclaw.org
The Debtor, a defendant in the action -- DHS Verde LLC, Plaintiff
vs. Coachillin Holdings LLC; Coachillin Energy Company, LLC; Eco
Master Corporation; Indian Canyon & 18th Property Owners
Association; Kenneth Dickerson; William Moreland; Katherine
Beneteau; Michael Dickerson; Kirsten Dickerson; Ricky McCormies,
Defendants, which is pending in the U.S. District Court, Central
District of California, Eastern Division - Riverside, as Case No.
5:22-cv-00943-JWH-SHK -- is removing the action in its entirety
from the USDC to the U.S. Bankruptcy Court for the Central District
of California, Riverside Division. In the action, DHS asserts that
the Debtor improperly imposed assessments on DHS, among other
claims.
In addition, the Debtor, a defendant in the action -- Alpenglow
Management Group LLC; Brightside Estate Holdings; En Primeur, LLC,
Plaintiffs vs. Coachillin Holding,s LLC; Coachillin Energy Company,
LLC; Eco Master Corporation; Indian Canyon & 18th Property Owners
Association; Kenneth Dickerson; Defendants, which is pending in the
Superior Court of the State of California, for the County of
Riverside, as Case No. PSC2002599 -- is removing the action in its
entirety from the RSC to the U.S. Bankruptcy Court for the Central
District of California, Riverside Division. In the action,
Alpenglow & Brightside assert that the Debtor improperly imposed
assessments, among other claims.
About Indian Canyon & 18th Property Owners Association
Indian Canyon & 18th Property Owners Association filed a petition
for relief under Subchapter V of Chapter 11 of the Bankruptcy Code
(C.D. Cal. Case No. 22-13378) on Sept. 6, 2022. In the petition
filed by Kenneth Dickerson, as director of the board, the Debtor
reported assets between $1 million and $10 million and estimated
liabilities between $500,000 and $1 million.
The Debtor is represented by Douglas A Plazak of Reid & Hellyer.
ISABEL ENTERPRISES: Amends Several Secured Claims Pay Details
-------------------------------------------------------------
Isabel LLC and Isabel Enterprises, Inc., submitted a Second Amended
Disclosure Statement for the Second Amended Joint Chapter 11 Plan
of Reorganization dated September 8, 2022.
The Joint Plan seeks to restructure the prepetition Claims held by
the LLC Creditors of the LLC Debtor ("Reorganized Isabel LLC") and
the prepetition Claims held by the Enterprises Creditors of the
Enterprises Debtor ("Reorganized Isabel Enterprises"), and together
with Reorganized Isabel LLC, the "Reorganized Debtors") in order to
attract sufficient new capital in the form of post Effective Date
loans and extensions of credit from vendors such that Reorganized
Isabel Enterprises will be able to resume operations pursuant to
its new business plan and generate sufficient revenues to cover its
operating costs, including lease payments to Reorganized Isabel LLC
pursuant to a New Lease.
The New Lease will be substantially in form and content the
prepetition lease, and principally will require Reorganized Isabel
Enterprises to make monthly payments in an amount that enables
Reorganized Isabel LLC to satisfy the Allowed Claims held by the
LLC Creditors. Any available net income remaining in Reorganized
Isabel Enterprises after the lease payments are made that are
otherwise not necessary to fund the continued operations of
Reorganized Isabel Enterprises will be distributed by Reorganized
Isabel Enterprises to the Enterprises Creditors holding Allowed
Unsecured Claims against Reorganized Isabel Enterprises.
The Debtors' reorganization plan preserves the capital structure of
the prepetition Debtors and does not seek or intend to effectuate
any form of substantive consolidation of the assets and liabilities
of each of the Debtors, nor seeks to effectuate any structural
subordination or disallowance of Allowed Claims held by the LLC
Creditors and the Enterprises Creditors. Each of the Debtors will
emerge from bankruptcy protection on the Effective Date as separate
and distinct legal entities with a New Lease that mirrors the legal
structure of the Debtors prior to the Petition Dates.
Following entry of the Confirmation Order and prior to the
Effective Date, the Enterprises Debtor will receive a capital
contribution from William Tosheff or his assignee in the amount no
less than $50,000.00, which funds shall be used to resume
operations under the new business plan. In order to secure
extensions of credit from critical vendors necessary to implement
Reorganized Isabel Enterprises’ business plan, the Joint Plan
proposes a ninety-day standstill of payments ("Standstill Period")
by the Reorganized Debtors on account of all Allowed Claims,
subject to the following caveat: proceeds of the loan from Adamson
Holdings shall be used to satisfy the Allowed Secured Claim of OR
Real Estate LLC, the Condominium Owners' Association, and the
governmental taxing authorities on terms consensually agreed to in
connection with confirmation of the Joint Plan.
Consummation and successful implementation of, and performance
under, the Joint Plan is predicated on the following assumptions
and projections:
* Cash Flow Projections. Reorganized Isabel Enterprises will
be able to meet its cash flow projections to pay its operating
costs including lease payments to Reorganized Isabel LLC in the
ordinary course and make distributions from disposable income to
the Enterprises Creditors holding Allowed Priority and Unsecured
Claims;
* Monthly Lease Payments. The monthly lease payments by
Reorganized Isabel Enterprises to Reorganized Isabel LLC will not
exceed the amount set forth in the Debtors' cash flow projections;
* Downtown Portland. The current environment in downtown
Portland does not continue to deteriorate or materially affect the
implementation of and performance under the Joint Plan, and any
downturn in the commercial real estate market is modest and
temporary and the Real Property holds its value during the three
year term of the Joint Plan;
* "Best Efforts" by William Tosheff. Mr. Tosheff is able to
exercise, in good faith, his best efforts to cause the Reorganized
Debtors to perform in accordance with the Joint Plan.
Class 1 consists of Oregon Department of Revenue Secured Claim.
Monthly payments of $1,018.87 at 5% interest rate over five year
period, or on terms consensually agreed by the Class.
Class 2 consists of Multnomah County DART Secured Claim. Monthly
payments of $500 over five years with a balloon payment due at end
of five year period with 5% interest rate, unless alternative
treatment is agreed on.
Class 3 consists of OR Real Estate Secured Claim. Paid on the
Effective Date, or on terms consensually agreed by the Class. OR
Real Estate's claim against the Enterprises Debtor is an unsecured
claim.
Class 4 consists of Condominium Owners' Association Secured Claim
against LLC Debtor. Quarterly payments of $10,412.26 commencing
January 1, 2023, or on terms consensually agreed by the Class.
Class 5 consists of SBA's Allowed Secured Claim against LLC Debtor.
Monthly payments of $2,500.00 with 3% interest commencing March 1,
2023, balloon payment at maturity. SBA's claim against the
Enterprises Debtor is unsecured.
Class 6 consists of Mitsubishi HC Capital America Inc. (f/k/a
Hitachi Capital America Corp.) Allowed Secured Claim against
Enterprises Debtor. Stipulated amount and payment schedule to be
agreed to prior to September 20, 2022.
Class 7 consists of MercedesBenz Financial Serv USA LLC Allowed
Secured Claim against Enterprises Debtor. Stipulated amount and
payment schedule to be agreed to prior to September 20, 2022.
Class 8(b) consists of General Unsecured Creditors of the
Enterprises Debtor in the amount of $120,000. Quarterly payments
from the available cash (i.e., disposable income) in Reorganized
Isabel Enterprises.
A full-text copy of the Second Amended Disclosure Statement dated
September 8, 2022, is available at https://bit.ly/3d7TA1m from
PacerMonitor.com at no charge.
Attorneys for Debtors:
Oren B. Haker
STOEL RIVES LLP
760 SW Ninth Avenue, Suite 3000
Portland, OR 97205
Telephone: 503.224.3380
Facsimile: 503.220.2480
oren.haker@stoel.com
About Isabel Enterprises
Isabel LLC owns two tax lots consisting of a commercial unit
located at 330 NW 10th Avenue, #116, Portland, Oregon 97209 and a
related parking unit. Historically, Isabel LLC leased the
property to affiliate Isabel Enterprises, which operated a
restaurant on the premises commonly known as the Isabel
Pearl. Amid deteriorating conditions in the neighborhood and the
pandemic, the restaurant shut operations in July 2019.
Amid an impending sale of the property as a result of a foreclosure
action initially instituted by the Condominium Owners' Association,
Isabel Enterprises, Inc., and Isabel LLC sought Chapter 11
protection (Bankr. D. Ore. Lead Case No. 22-30801) on May 18, 2022.
In its petition, Isabel Enterprises was estimated to have $50,000
to $100,000 in assets and $1 million to $10 million in
liabilities.
The Hon. Peter C. Mckittrick oversees the cases.
Oren B. Haker, Esq., of Stoel Rives LLP is the Debtors' counsel.
J MORALES: Unsecureds to Split $43K via Quarterly Payments
----------------------------------------------------------
J Morales, Inc., filed with the U.S. Bankruptcy Court for the
District of Nevada a Chapter 11 Plan of Reorganization dated
September 8, 2022.
The Debtor is a Nevada corporation that was formed on November 1,
2006. Jose Morales is the Debtor's sole officer, director and
shareholder.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $42,330 over the next 3
years. The final Plan payment is expected to be paid by October
2025, assuming the Plan is confirmed and goes effective in November
2022.
Non-priority general unsecured creditors holding Allowed claims
will receive distributions, which the proponent of this Plan has
valued at approximately $0.0286 on the dollar. This Plan also
provides for the payment in full of Allowed administrative and
priority claims.
Class 5 consists of Non-Priority General Unsecured Creditors. Each
holder of an Allowed general unsecured, non-priority and
non-penalty claim shall receive its pro rata share of the sum of
Debtor's disposable income in the total amount of $43,000 over the
term of this Plan, which sum shall be paid in equal payments of
$3,583 per calendar quarter, which payments shall commence by
January 15, 2023, and continue each and every calendar quarter
until that entire sum of disposable income is distributed, which
shall be in full satisfaction of all Allowed general unsecured
(non-penalty) claims. Class 5 is impaired.
Class 6 consists of Penalty General Unsecured Claims. Each holder
of an Allowed penalty claim shall only receive a distribution if
all Allowed claims in Class 5 are paid in full first.If all Allowed
Claims in Class 5 are paid in full during the Plan's term, then the
holders of Allowed Claims in Class 6 shall receive their pro rata
share of any remaining disposable income generated by the Debtor
during the Plan's term that may remain after the Allowed Claims in
Class 5 are paid in full.
The Holders of Class 7 Equity Interests shall retain their Equity
Interests, subject to the terms and conditions of this Plan.
This Plan will be funded through cash flow generated from future
operations of the Business, and as may be necessary, from infusions
of additional money from Mr. Morales.
A full-text copy of the Plan of Reorganization dated September 8,
2022, is available at https://bit.ly/3BAlqN8 from PacerMonitor.com
at no charge.
Attorneys for Debtor:
Matthew C. Zirzow, Esq.
Zachariah Larson, Esq.
Larson & Zirzow, LLC
850 E. Bonneville Ave.
Las Vegas, NE 89101
Telephone: (702) 382-1170
Facsimile: (702) 382-1169
Email: mzirzow@lzlawnv.com
zlarson@lzlawnv.com
About J Morales Inc.
J Morales Inc. owns and operates two businesses. Since 2006, it has
owned and operated an El Nopal Mexican Grill #2 restaurant, which
operates out of leased space located at 4200 W. Russell Rd., Suite
115, Las Vegas, Nevada, 89118. Since 2017, it has owned real
property located at 3977 Vegas Valley Drive, Las Vegas, Nevada
89121, which includes an approximately 10,000 square foot building,
and in which it has most recently operated the Le Caprice Banquet
Hall, which host events such as wedding receptions and
quinceaneras.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 22-13083) on Aug. 29,
2022. In the petition signed by Jose Morales, owner and director,
the Debtor disclosed up to $1 million in assets and up to $10
million in liabilities.
Judge Natalie M. Cox oversees the case.
Matthew C. Zirzow, Esq., at Larson & Zirzow, LLC, serves as the
Debtor's counsel.
JOHN'S FAMILY: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: John's Family Inc.
48 Bi-State Plaza, #233
Old Tappan, NJ 07675
Case No.: 22-17234
Business Description: The Debtor is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: September 13, 2022
Court: United States Bankruptcy Court
District of New Jersey
Judge: Hon. Stacey L. Meisel
Debtor's Counsel: Anthony Sodono, III, Esq.
MCMANIMON, SCOTLAND & BAUMANN, LLC
75 Livingston Avenue
Second Floor
Roseland, NJ 07068
Tel: 973-622-1800
Fax: 973-622-7333
E-mail: asodono@msbnj.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kun Kwak as shareholder.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/COX6J2Q/Johns_Family_Inc__njbke-22-17234__0001.0.pdf?mcid=tGE4TAMA
JOHNSON & JOHNSON: 3rd Circuit Tosses ERISA Fight of Ex-Workers
---------------------------------------------------------------
Kellie Mejdrich of Law360 reports that the 3rd Circuit on
Wednesday, September 7, 2022, backed dismissal of a proposed class
action filed by former Johnson & Johnson employees who claim the
company hurt their retirement savings by concealing the presence of
asbestos in its baby powder, saying workers hadn't met the
demanding pleading standard for their claims.
A three-judge panel in a published opinion said a New Jersey
federal judge correctly ruled in March 2021 that workers failed to
offer viable alternative actions that J&J, who they alleged had
inside information about cancer-causing asbestos in its talc
products, could have taken in managing the employee stock ownership
plan.
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.
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.
KEMPER CORP: Egan-Jones Hikes Senior Unsecured Ratings to BB+
-------------------------------------------------------------
Egan-Jones Ratings Company, on August 25, 2022, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Kemper Corporation to BB+ from BBB-.
Headquartered in Chicago, Illinois, Kemper Corporation is a
financial services provider.
MARIN ASSOCIATES: Files Chapter 11 Bankruptcy Protection
--------------------------------------------------------
Marin Associates filed for chapter 11 protection in the Southern
District of Florida. The Debtor filed as a small business debtor
seeking relief under Subchapter V of Chapter 11 of the Bankruptcy
Code.
The Debtor, a Single Asset Real Estate, owns the property at 7339
Bounty Drive, Sarasota, FL 34231.
Marin Associates estimates between 1 and 49 creditors. The
petition states that funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 13, 2022, at 2:30 PM by TELEPHONE. Proofs of claim are due by
Nov. 15, 2022. (Covington, Katrinka)
About Marin Associates
Marin Associates is a Single Asset Real Estate (as defined in 11
U.S.C. Sec. 101(51B)).
The Debtor filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
22-16936) on Sept. 6, 2022. In the petition filed by George Florez
and Guillermo Marin, the Debtor reported assets and liabilities
between $500,000 and $1 million.
The Debtor is represented by David Winker of David Winker PA.
MASTEN SPACE: Gets Court Okay for $4.5M Asset Sale in Chapter 11
----------------------------------------------------------------
Vince Sullivan of Law360 reports that bankrupt NASA contractor
Masten Space Systems received approval Thursday, September 8, 2022,
in Delaware for a $4.5 million sale of its assets including
valuable launch credits issued by private space venture SpaceX.
During a virtual hearing, debtor attorney Jeffrey Waxman of Morris
James LLP said after an auction earlier this week stalking horse
bidder Astrobotic Technology Inc. had emerged as the top offer
among three proposals. The $4.5 million in cash will be
supplemented by the payment of contract cure costs and the waiver
of Astrobotic's claims against the bankruptcy estate, Waxman said.
About Masten Space Systems
Masten Space Systems Inc. -- https://www.masten.aero -- is a space
infrastructure company enabling sustainable access and utilization
of the Moon, Mars, and beyond.
On July 29, 2022, Masten Space Systems Inc. filed for chapter 11
protection (Bankr. D. Del. Case No. 22-10657). In the petition
filed by David Masten, as president and chief technology officer,
the Debtor reported assets and liabilities between $10 million and
$50 million each.
Morris James LLP, is the Debtor's counsel. Alston & Bird LLP is
the Debtor's corporate counsel. Gavin/Solmonese LLC is the
financial advisor.
MATHESON FLIGHT: Committee Taps Dundon as Financial Advisor
-----------------------------------------------------------
The official committee representing unsecured creditors of Matheson
Trucking, Inc., an affiliate of Matheson Flight Extenders, Inc.,
seeks approval from the U.S. Bankruptcy Court for the Eastern
District of California to employ Dundon Advisers, LLC as its
financial advisor.
The firm will render these services:
a. advise the committee with respect to matters and
proceedings in the Debtors' Chapter 11 cases that may impact on the
treatment of and recovery by general unsecured creditors;
b. provide the committee with the benefit of its experience in
numerous transportation and logistics bankruptcies wherein it
advised creditors;
c. support counsel to the committee with regard to motions and
other practice in the Debtors' cases;
d. advise the committee with respect to recovery of
preferential payments and fraudulent transfers;
e. advise the committee with respect to potential actions or
claims against third parties for the benefit of the estate;
f. advise the committee concerning any proposed sale of assets
of the Debtors and any raising of debt or equity capital by or for
the Debtors or any of their successors;
g. advise the committee concerning restructuring of the
Debtors' material contracts, notably those with the U.S. Postal
Service;
h. advise and represent the committee with regard to
development and confirmation of a Chapter 11 plan;
i. provide reports and testimony to the extent required by the
committee or its counsel; and
j. assist the committee with respect to other insolvency
related matters connected with the Debtors' Chapter 11 cases.
The hourly rates charged by the firm's professionals are as
follows:
Rate through Rate after
June 30, 2022 June 30, 2022
Alex Mazier, Managing, Director $730 $760
April Kimm, Director $550 $625
Eric Reubel, Managing Director $730 $760
Lee Rooney, Associate Director $500 $550
Matthew Dundon, Principal $790 $850
Michael Garbe, Director $550 $625
Michael Whelan, Associate $350 $370
Tabish Rizvi, Senior Director $650 $725
Thomas Short, Senior Associate $450 $475
Yi Zhu, Director $550 $625
In addition, the firm will seek reimbursement for expenses
incurred.
Eric Reubel, managing director at Dundon Advisers, disclosed in a
court filing that his firm is a "disinterested person" as defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Eric Reubel
Dundon Advisers LLC
Ten Bank Street, Suite 1100
White Plains, NY 10606
Telephone: (917) 838-1930
Email: ER@dundon.com
About Matheson
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
provide short and long-haul transportation, logistics and ground
handling services. The companies are based in Sacramento, Calif.
Matheson Flight Extenders and Matheson Postal Services sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.
Calif. Case Nos. 22-21148 and 22- 21149 ) on May 5, 2022. On July
14, 2022, Matheson Trucking, Inc., an affiliate, filed for Chapter
11 protection (Bankr. E.D. Calif. Case No. 22-21758). The cases are
jointly administered under Case No. 21148.
In the petitions 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 cases.
Nuti Hart, LLP and Development Specialists, Inc. serve as the
Debtors' bankruptcy counsel and financial advisor, respectively.
Donlin, Recano & Company, Inc. is the Debtors' claims, noticing and
solicitation agent, and administrative advisor.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors in the Debtors' cases. The committee is
represented by Felderstein Fitzgerald Willoughby Pascuzzi & Rios,
LLP.
MATHESON FLIGHT: Wants More Time for Chapter 11 Plan
----------------------------------------------------
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
filed a motion seeking court approval to remain in control of their
bankruptcy until early next year.
In their motion, the companies asked the U.S. Bankruptcy Court for
the Eastern District of California to extend their exclusive right
to file a Chapter 11 plan to Feb. 28 and solicit votes from
creditors to April 30.
Kevin Coleman, Esq., at Nuti Hart, LLP, said any plan of
reorganization proposed by the companies will depend on which of
their contracts with the U.S. Postal Service will continue on a
long-term basis.
"The decisions about which contracts will continue after Jan. 31,
2023, and on what terms will be determined by whether the
[companies] or their competitor can offer services to USPS at a
more favorable price," the companies' attorney said.
The companies have requested information from the USPS regarding
how and when it intends to go about soliciting competitive bids.
The USPS, however, has not yet committed to a particular process
that it will follow.
Matheson Flight and Matheson Postal Services sort and transport
large volumes of mail across the U.S. under certain contracts with
the USPS, the companies' largest customer. In May, the companies
filed for bankruptcy protection primarily to address significant
operating losses under those contracts.
About Matheson
Matheson Flight Extenders, Inc. and Matheson Postal Services, Inc.
provide short and long-haul transportation, logistics and ground
handling services. The companies are based in Sacramento, Calif.
Matheson Flight Extenders and Matheson Postal Services sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. E.D.
Calif. Case Nos. 22-21148 and 22-21149) on May 5, 2022. On July 14,
2022, Matheson Trucking, Inc., an affiliate, filed for Chapter 11
protection (Bankr. E.D. Calif. Case No. 22-21758). The cases are
jointly administered under Case No. 22-21148.
In the petitions 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 cases.
Nuti Hart, LLP and Development Specialists, Inc. serve as the
Debtors' bankruptcy counsel and financial advisor, respectively.
Donlin, Recano & Company, Inc. is the Debtors' claims, noticing and
solicitation agent, and administrative advisor.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors in the Debtors' cases. The committee is
represented by Felderstein Fitzgerald Willoughby Pascuzzi & Rios,
LLP.
MATTEL INC: Egan-Jones Hikes Senior Unsecured Ratings to BB+
------------------------------------------------------------
Egan-Jones Ratings Company, on August 25, 2022, upgraded the
foreign currency and local currency senior unsecured ratings on
debt issued by Mattel, Inc. to BB+ from BB.
Headquartered in El Segundo, California, Mattel, Inc. designs,
manufactures, and markets a broad variety of children's toy
products on a worldwide basis.
MERITOR INC: Egan-Jones Retains B+ Senior Unsecured Ratings
-----------------------------------------------------------
Egan-Jones Ratings Company, on August 24, 2022, retained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by Meritor, Inc.
Headquartered in Troy, Michigan, Meritor, Inc. manufactures
automobile components for military suppliers, trucks, trailers, and
specialty vehicles.
MICROSTRATEGY INC: Faces Lawsuit Over Chairman's Unpaid Taxes
-------------------------------------------------------------
The District of Columbia, through its Office of the Attorney
General, filed a civil complaint in the Superior Court of the
District of Columbia naming as defendants (i) Michael J. Saylor,
the Chairman of the Board of Directors of MicroStrategy
Incorporated and the Company's executive chairman, in his personal
capacity, and (ii) MicroStrategy Incorporated (The District of
Columbia, et al. v. Michael J. Saylor, et al.)
The District is seeking, among other relief, monetary damages under
the District of Columbia's False Claims Act for the alleged failure
of Mr. Saylor to pay personal income taxes to the District over a
number of years together with penalties, interest and treble
damages. The complaint alleges that the amount of personal income
taxes purportedly involved is more than $25 million. The complaint
also alleges that the Company has violated the District's False
Claims Act by conspiring to assist Mr. Saylor's alleged failure to
pay personal income taxes. The Company believes that the
District's claims against it has no merit and intends to defend
itself aggressively against these allegations.
About MicroStrategy
Microstrategy Incorporated is an enterprise analytics software and
services company. Since its founding in 1989, MicroStrategy has
been focused on empowering organizations to leverage the immense
value of their data. MicroStrategy pursues two corporate
strategies in the operation of its business. One strategy is to
acquire and hold bitcoin and the other strategy is to grow its
enterprise analytics software business.
MicroStrategy reported a net loss of $535.48 million for the year
ended Dec. 31, 2021, and a net loss of $7.52 million for the year
ended Dec. 31, 2020. For the nine months ended Sept. 30, 2021, the
Company reported a net loss of $445.50 million. As of June 30,
2022, the Company had $2.57 billion in total assets, $2.76 billion
in total liabilities, and a total stockholders' deficit of $187.07
million.
* * *
As reported by the TCR on June 15, 2021, S&P Global Ratings
assigned its 'CCC+' issuer credit rating to Tysons Corner,
Va.-based MicroStrategy Inc. S&P said, "The stable outlook
reflects our expectation that MicroStrategy's operating results
will remain consistent over the next 12 given its good recurring
revenue base and the low interest expense on its convertible debt,
which will allow it to maintain good EBITDA interest coverage and
generate positive free operating cash flow. We expect these
factors to enable the company to sustain its capital structure over
the subsequent 12 months."
MIRACLE CENTER: Wins Cash Collateral Access Thru Dec 31
-------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Northern Division, authorized Miracle Center Church of Ventura
County, Inc. to use cash collateral on an interim basis in
accordance with the budget through December 31, 2022.
The Debtor may use cash collateral only for the following expenses
through September 14, 2022:
a. School Supplies expenses not exceeding $370.07;
b. Children's Ministry expenses not exceeding $249.38;
c. Utilities not exceeding $2,795.52;
d. Telephone Communications expenses not exceeding
$610.70;
e. Property Insurance expenses not exceeding $196.59;
f. Taxes and Licenses expenses not exceeding $39.37;
g. Worship Ministry expenses not exceeding $315.21; and
h. Prepetition wages as authorized in separate wage
order filed with the Court.
As previously reported by the Troubled Company Reporter, the First
Christian Church of Ventura County is the Debtor's only secured
creditor claiming a security interest in the amount of
approximately $3,208,233 against the Debtor's real property located
at County of Ventura Assessors Parcel Number 082-0-120-445. First
Christian is the sole lienholder against the Property and Debtor
disputes the amount of the claim by First Christian.
First Christian's interest in the Property is protected by an
adequate equity cushion whereby their secured claim amount
(disputed) is $3,208,233 and the estimated fair market value of the
Property is $3,390,299 based on the County of Ventura assessed
valuation as of July 5.
A continued hearing on the matter is set for September 14 at 3
p.m.
A copy of the order is available at https://bit.ly/3QwcIUg from
PacerMonitor.com.
About Miracle Center Church of Ventura County, Inc.
Miracle Center Church of Ventura County, Inc. is a tax-exempt
religious organization. The Debtor sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-10664)
on August 29, 2022. In the petition signed by Alonzo McCowan,
CEO/president, the Debtor disclosed $3,472,792 in assets and
$3,387,733 in liabilities.
Judge Ronald A. Clifford III oversees the case.
John K. Rounds, Esq., at Rounds & Sutter LLP is the Debtor's
counsel.
MJM VENTURES: Returns to Chapter 11 Bankruptcy
----------------------------------------------
MJM Ventures Inc. has returned to Chapter 11 bankruptcy after nine
years without stating a reason.
In the previous Chapter 11 filing in 2013, the Debtor sought
bankruptcy protection to stop a tax sale in San Bernardino County
of the property known as SanTimeteo Canyon Property which was
recovered through a trust deed sale from Mr. Danny Simon of Pacific
First Redlands. The Debtor then disclosed that the several tracts
of vacant land that it owns in San Bernardino County, California,
are worth over $8 million.
In the new filing, MJM Ventures estimates between 1 and 49
unsecured creditors. The petition states that funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 3, 2022, at 9:00 AM at UST-LA2, TELEPHONIC MEETING. CONFERENCE
LINE:1-866-816-0394, PARTICIPANT CODE:5282999. Proofs of claim are
due by Jan. 1, 2023.
About MJM Ventures Inc.
MJM Ventures Inc. sought Chapter 11 protection (Bankr. C.D. Cal.
Case No. 13-bk-19602) on May 20, 2013.
MJM Ventures Inc. again sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-14866) on Sept.
6, 2022. In its petition, the Debtor reported assets and
liabilities between $1 million and $10 million each.
The Debtor is represented by Stephen R Wade of The Law Offices of
Stephen R Wade.
MOBY S.P.A.: Must Pay Investor's Counsel Fees in Dismissed Suit
---------------------------------------------------------------
New York Supreme Court Justice Jennifer Schecter has ordered Moby
S.p.A. to pay $150,000 to counsel for defendant Antonello Di Meo in
the recently dismissed matter Moby S.p.A v. Morgan Stanley, Morgan
Stanley & Co. LLC, Antonello Di Meo, Massimo Piazzi, Dov Hillel
Drazin.
Last month, Judge Schecter granted motions to dismiss filed by
Morgan Stanley and distressed investor Di Meo, dismissing with
prejudice all four tortious interference claims brought by Moby
S.p.A.
In ordering that attorneys' fees be paid to Di Meo, the court
agreed with the argument that New York law applied in this matter,
and that applying the statute in New York, although the underlying
conduct occurred in Italy, is not "impermissibly extraterritorial"
since the matter was brought to this court. The court also
confirmed that Moby had filed a baseless SLAPP suit, affirming the
importance of the Anti-SLAPP statute.
This dispute confirmed a significant issue of apparent
first-impression: whether suing a creditor for his conduct in a
foreign bankruptcy proceeding falls within the ambit of New York's
recently amended Anti-SLAPP statute, according to Di Meo's counsel,
Jed I. Bergman, Esq., at Glenn Agre Bergman & Fuentes.
Furthermore, this matter could set precedent for future disputes in
which parties improperly attempt to weaponize New York courts
against protected foreign communication, Bergman added.
Ancillary to its restructuring proceeding, Moby brought suit in the
New York Supreme Court against two minority bondholders, Morgan
Stanley and Di Meo, as well as other Morgan Stanley entities and
employees, alleging tortious interference with Moby’s contracts
and prospective business relations.
In the August 5 ruling, Justice Schecter agreed with Glenn Agre
partner Bergman's argument on behalf of Di Meo that Moby's claims
against Di Meo for tortiously interfering with a sale of two
vessels to Danish company DFDS -- counts one and two of Moby's
complaint -- are barred by res judicata under the "two-dismissal
rule" because those claims were included in two prior complaints
that were both voluntarily dismissed by Moby. The judge rejected
Moby's contention that the two-dismissal rule does not apply
because the purpose of the two suits allegedly was not to "harass"
Di Meo.
In her August ruling, Justice Schecter suggested she believes Di
Meo may be entitled to attorneys' fees under the statute for counts
one and two of Moby's complaint to the extent they were based on Di
Meo's filing of an involuntary bankruptcy against Moby in Italy and
a related request for a temporary restraining order from the
Italian court, both of which may qualify as protected public
communications in a public forum.
Moby is represented by:
Juan Morillo, Esq.
Alain Jaquet, Esq.
QUINN EMANUEL URQUHART & SULLIVAN LLP
1300 I St. NW #900
Washington DC, 20005
E-mail: juanmorillo@quinnemanuel.com
alainjaquet@quinnemanuel.com
Defendants Morgan Stanley, Piazzi and Drazin are represented by:
Michael Paskin, Esq.
CRAVATH SWAIN AND MOORE LLP
825 Eighth Avenue
New York, NY 10019
E-mail: mpaskin@cravath.com
Defendant Di Meo is represented by:
Jed Bergman, Esq.
GLENN AGRE BERGMAN & FUENTES LLP
1185 Avenue of the Americas, 22nd Floor
New York, NY 10036
E-mail: jbergman@glennagre.com
Moby S.p.A. is an Italian company that transports passengers and
freight between Italy, France and various islands in the
Mediterranean Sea. It has been embroiled in a years-long
restructuring before the Civil Bankruptcy Section of the Court of
Milan, Italy.
MONSTER INVESTMENTS: Seeks to Tap Re/Max One as Real Estate Agent
-----------------------------------------------------------------
Monster Investments, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Maryland to employ Re/Max One to market
and sell its property located at 36029 Center Ave., Chaptico, Md.
The firm will get a commission of 6 percent of the gross sales
price and an additional $495 for administrative costs if the
property is sold at a private transaction.
Re/Max One proposes compensation to the buyer's broker or other
subagent in the form of a commission of 3 percent of the gross
purchase price, shared from and not additional to its commission.
Joshua Wilson, an associate at Re/Max One, disclosed in a court
filing that he does not represent any interest adverse to the
Debtor or its bankruptcy estate.
The firm can be reached through:
Joshua Wilson
Re/Max One
132 Main St.
Prince Frederick, MD 20678
Phone: (443) 771-7146
Email: Joshuawilsonrealestate@gmail.com
About Monster Investments
Monster Investments, Inc. is a Hughesville, Md.-based company
primarily engaged in renting and leasing real estate properties. It
is the fee simple owner of 28 real properties in Maryland and
Florida having an aggregate value of $9.95 million.
Monster Investments filed its voluntary petition for Chapter 11
protection (Bankr. D. Md. Case No. 21-16592) on Oct. 19, 2021,
listing $10,018,848 in assets and $16,529,878 in liabilities.
Donald Bernard, president, signed the petition.
Judge Lori S. Simpson oversees the case.
Wolff & Orenstein, LLC is the Debtor's legal counsel.
MURPHY OIL: Egan-Jones Retains BB Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on August 26, 2022, retained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by Murphy Oil Corporation.
Headquartered in El Dorado, Arkansas, Murphy Oil Corporation is an
independent exploration and production company that conducts its
business through various operating subsidiaries.
MYLIFE.COM INC: Files for Chapter 11 Bankruptcy
-----------------------------------------------
Mylife.com Inc. has sought Chapter 11 bankruptcy protection in
California.
The Debtor is an information brokerage firm which gathers
information through public records and other sources to
automatically generate a "MyLife Public Page" for each person. The
Debtor has a minimal amount of secured debt, as well as priority
wage claims, and substantial unsecured debt arising from vendors as
well as litigation with the FTC.
The Debtor commenced the instant case in good faith, with the
intention to establish a plan of reorganization to timely pay its
creditors in a manner to be overseen by the Court.
The Debtor filed with the Bankruptcy Court a motion to extend by 30
days its deadline to file schedules of assets and liabilities, its
statement of financial affairs, and other schedules.
The Debtor and its proposed professionals have been greatly
impacted by the COVID-19 pandemic; varied and fluid state and
national orders and restrictions, and the attendant uncertainty and
interruptions, have greatly limiting the ability to compile and
review the necessary information with counsel in the limited time
allotted.
MyLife.com estimates between 50 and 99 creditors. The petition
states that funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 6, 2022, at 9:30 AM at UST-LA2, TELEPHONIC MEETING.
CONFERENCE LINE: 1-866-816-0394, PARTICIPANT CODE:5282999.
Proofs of claims are due by Jan. 4, 2023.
About Mylife.com Inc.
Mylife.com Inc. is an American information brokerage firm founded
by Jeffrey Tinsley in 2002 as Reunion.com.
On Sept. 2, 2022, Mylife.com Inc., d/b/a Reunion.com Inc., filed
for chapter 11 protection (C.D. Cal. Case No. 22-14858). In the
petition filed by Jeffrey Tinsley, as CEO, the Debtor reported
assets between $500,000 and $1 million and liabilities between $10
million and $50 million.
The Debtor is represented by Leslie A Cohen of Leslie Cohen Law PC.
NEWTON CONSTRUCTION: Files Subchapter V Case
--------------------------------------------
Newton Construction LLC filed for chapter 11 protection in the
District of Nevada. The Debtor filed as a small business debtor
seeking relief under Subchapter V of Chapter 11 of the Bankruptcy
Code.
The Debtor disclosed $198,700 in assets against $695,600 in
liabilities in its schedules.
Newton Construction estimates between 1 and 49 creditors. The
petition states funds will be available to unsecured creditors.
Pursuant to 11 U.S.C. Sec. 1183(a), the United States Trustee has
appointed the following qualified individual as Subchapter V
trustee in the above-captioned case:
Jeanette McPherson
1980 Festival Plaza Drive, Suite 700
Las Vegas, NV 89135
Tel: (702) 699-5923
E-mail: JMcPherson@foxrothschild.com
About Newton Construction
Newton Construction LLC is a general contractor in North Las Vegas,
Nevada.
Newton Construction filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No.
22-13186) on Sept. 3, 2022. In the petition filed by John Newton,
the Debtor reported assets between $100,000 and $500,000 and
liabilities between $500,000 and $1 million.
Corey B. Beck of LAW OFFICE OF COREY B. BECK P.C. is the Debtor's
counsel.
NORTHWEST SENIOR: Landlord Opposes Extension of Exclusivity Period
------------------------------------------------------------------
Intercity Investment Properties, Inc., the landlord of a Dallas
retirement community, urged the U.S. Bankruptcy Court for the
Northern District of Texas to deny the operator's bid to remain in
control of its bankruptcy until early next year.
Northwest Senior Housing Corp., the operator of the Edgemere
retirement facility, asked the court last month to extend until
Feb. 8 its exclusive right to file a Chapter 11 plan, saying it
will use the extension to resolve its lawsuit against the landlord.
In court papers, Michael Held, Esq., the landlord's attorney, said
the requested extension is "inappropriate" given that a hearing on
confirmation of the operator's proposed plan is unlikely to be
scheduled prior to the expiration of the exclusivity period.
According to the attorney, the prerequisites for such a hearing,
including the resolution of the lawsuit cannot be satisfied by Feb.
8. He also argued that the disclosure statement detailing the plan
contains deficiencies.
Northwest Senior Housing filed its disclosure statement and Chapter
11 plan of reorganization in August 3. The transactions proposed
under the plan are contingent upon the operator achieving several
outcomes with respect to the lawsuit, including subordination of
Intercity's claims under the lease such that the landlord is
entitled to distributions of up to $20 million for the remaining
term of the lease.
Intercity can be reached at:
Michael S. Held, Esq.
Jennifer F. Wertz, Esq.
J. Machir Stull, Esq.
Jackson Walker, LLP
2323 Ross Ave., Suite 600
Dallas, TX 75201
Telephone: (214) 953-6000
Facsimile: (214) 953-5822
Email: mheld@jw.com
jwertz@jw.com
mstull@jw.com
About Northwest Senior Housing Corp.
Northwest Senior Housing Corporation, doing business as Edgemere,
is a Texas non-profit corporation and is exempt from federal income
taxation as a charitable organization described under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
Northwest Senior Housing Corporation was formed for the purpose of
developing, owning and operating a senior living community now
known as Edgemere.
Northwest Senior Housing Corporation and its affiliates sought
Chapter 11 bankruptcy protection (Bankr. N.D. Texas Lead Case No.
22-30659) on April 14, 2022. The petitions were signed by Nick
Harshfield, treasurer. At the time of the filing, Northwest Senior
Housing listed $100 million to $500 million in both assets and
liabilities.
Judge Michelle V. Larson oversees the cases.
Polsinelli, PC and FTI Consulting Inc. serve as the Debtors' legal
counsel and business advisor, respectively. Kurtzman Carson
Consultants, LLC is the Debtors' notice, claims and balloting agent
and administrative advisor.
The official committee of unsecured creditors tapped Foley &
Lardner, LLP as legal counsel, and Ankura Consulting Group, LLC as
financial advisor.
The Debtors filed their proposed Chapter 11 plan of reorganization
and disclosure statement on August 3, 2022.
NORTONLIFELOCK INC: Egan-Jones Retains BB Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on August 25, 2022, retained its 'BB'
foreign currency and local currency senior unsecured ratings on
debt issued by NortonLifeLock Inc.
Headquartered in Tempe, Arizona, NortonLifeLock Inc. provides
consumer cyber security solutions.
OWENS-IILINOIS GROUP: Egan-Jones Retains B Sr. Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on August 22, 2022, retained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by Owens-Illinois Group, Inc.
Headquartered in Perrysburg, Ohio, Owens-Illinois Group, Inc.
manufactures and sells glass containers.
PH BEAUTY III: Moody's Cuts CFR to Caa2, Outlook Negative
---------------------------------------------------------
Moody's Investors Service downgraded pH Beauty Holdings III, Inc.'s
Corporate Family Rating to Caa2 from Caa1, and its Probability of
Default Rating to Caa2-PD from Caa1-PD. Moody's also downgraded the
company's senior secured first lien credit facility to Caa1 from
B3, and its senior secured second lien term loan to Ca from Caa3.
The rating outlook is negative.
The downgrades reflect Moody's view that pH Beauty's high financial
leverage, weak liquidity and negative free cash flow are increasing
the risk of default including a distressed exchange as the company
seeks to address upcoming maturities starting with the September
2023 revolver expiration. pH Beauty's earnings have sharply
declined as a result of supply chain disruptions and elevated
freight costs, which are expected to remain high in 2023. The
company's liquidity has significantly deteriorated as earnings
decline and heavy spending on building inventory to improve
customer fill rates lead to negative free cash flow. The company's
liquidity is further pressured by increasing cash interest costs
from rising interest rates, as all of its debt are floating, and
limited cushion under the maximum total net leverage covenant that
steps down in December 2022. Although consumer demand is reasonably
stable, Moody's believes the company's products are largely in
discretionary categories such as cosmetic accessories, sunless
tanning treatments, and bath accessories that could experience some
consumer pullback in the current inflationary environment. This
along with challenges raising prices in competitive categories will
make it difficult to meaningfully increase EBITDA if freight costs
do not fall materially. Moody's is concerned that the nearing
September 2023 revolver expiration with a $18 million outstanding
balance as of June 2022 may not afford the company enough time to
stabilize earnings and strengthen credit metrics enough to permit a
successful refinancing of the debt. Moody's thus views default risk
as growing including the potential for a distressed exchange
transaction such as a discounted debt repurchase.
The following ratings/assessments are affected by the action:
Ratings Downgraded:
Issuer: pH Beauty Holdings III, Inc.
Corporate Family Rating, Downgraded to Caa2 from Caa1
Probability of Default Rating, Downgraded to Caa2-PD
from Caa1-PD
Senior Secured 1st Lien Bank Credit Facility (Revolver
and Term Loan), Downgraded to Caa1 (LGD3) from B3 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility, Downgraded
to Ca (LGD5) from Caa3 (LGD5)
Outlook Actions:
Issuer: pH Beauty Holdings III, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
The Caa2 CFR reflects pH Beauty's small scale and weak credit
metrics including a very high debt-to-EBITDA leverage at above 15x
and over $30 million negative free cash flow for the twelve-month
ending June 30, 2022. Earnings erosion in the last 18 months is
contributing to the high leverage with supply chain disruptions and
heightened freight costs, with free cash flow additionally weakened
by building inventory. pH Beauty does not have its own
manufacturing facilities and imports the majority of its products
from China. Although Moody's expects demand for beauty products to
remain solid as consumers increase outdoor activities, Moody's
views pH Beauty's products as more discretionary than other beauty
categories such as skincare and color cosmetics. Consumers are more
likely to cut spending on beauty tools/accessories such as makeup
brushes, as well as spending on sunless tanning products and bath
accessories in an economic downturn. Moreover, the cosmetic
accessories and facial skin care industries are highly competitive
with many branded product companies that are significantly larger,
more diverse, financially stronger, and which have much greater
investment capacity. Moody's believes pH Beauty's default risk has
increased as a result of continued heightened costs and weak
liquidity, including a very thin cushion under its net leverage
maintenance covenant and the nearing September 2023 revolver
expiration with a $18 million outstanding balance as of June 2022.
pH Beauty's rating is supported by the company's strong brand name
recognition in niche markets, recovering demand in beauty and
cosmetics, and the company's recent category expansion to
skincare.
pH Beauty's exposure to environmental risks is moderately negative
(E-3). Waste and pollution risks are moderately negative reflecting
the waste created from packaging material that often cannot be
recycled. The company has neutral-to-low exposure to physical
climate risks, carbon transition, water management, and use of
natural capital risks.
pH Beauty's exposure to social risks is moderately negative (S-3).
The company's exposure to customer relations is moderately negative
given the company is consumer facing with investment in product
innovation, quality and marketing necessary to sustain the market
position. Responsible production risk is moderately negative
because the company must cost-effectively manage its supply chain,
responsibly source inputs, and continue to invest to limit exposure
to risks related to product labeling, marketing, recalls, and
contamination. The company has neutral-to-low risk exposure to
demographic and societal trends, human capital, and health and
safety.
pH Beauty has highly negative governance risk (G-4) primarily due
to aggressive financial policies under the company's private equity
ownership and its high leverage that is in part due to debt
financed acquisitions. The company has been owned by Yellow Wood
Partners since 2017. Concentrated decision making creates potential
for event risk and decisions that favor shareholders over
creditors.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects Moody's view that pH Beauty's capital
structure is increasingly unsustainable with very high leverage and
negative cash flow generation. The depressed earnings as a result
of significant freight costs coupled with weak liquidity elevate
the company's refinancing and default risks.
The ratings could be downgraded if the company is unable to improve
EBITDA due to cost pressures such as elevated freight costs and
product procurement, or demand for the company's products weakens.
Ratings could also be downgrade if pH Beauty's liquidity weakens,
the company is unable to proactively address its 2023 maturity, the
risk of a debt restructuring or event of default increases for any
reason, or if recovery prospects weaken.
The ratings could be upgraded if leverage materially declines
driven by improved operating results, the company can sustainably
generated positive free cash flow and liquidity improves including
successfully addressing the September 2023 expiration of its
revolving credit facility.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
pH Beauty is a designer of cosmetic accessories, bath accessories,
sunless tanning and facial skin care products. Key brands include
Real Techniques, EcoTools, Freeman, Tan-luxe, Isle of Paradise,
Tanologist, and BYOMA. Yellow Wood Partners acquired the company in
2017. pH Beauty generates roughly $300 million in annual revenues.
PITNEY POWES: Egan-Jones Retains B- Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on August 26, 2022, retained its 'B-'
foreign currency and local currency senior unsecured ratings on
debt issued by Pitney Bowes Inc. EJR also retained its 'B' rating
on commercial paper issued by the Company.
Headquartered in Stamford, Connecticut, Pitney Bowes Inc. sells,
finances, rents, and services integrated mail and document
management systems.
PUERTO RICO: PREPA Gets Additional Time for Debt Negotiations
-------------------------------------------------------------
Michelle Kaske of Bloomberg News reports that Puerto Rico's
Electric Power Authority and its creditors have through Sept. 30 to
negotiate a deal to reduce about $9 billion of debt as the judge
overseeing the bankruptcy case continues to give the parties more
time to reach a restructuring plan.
Prepa, as the utility's known, and bondholders are set to meet on
Sept. 13, 2022 for an in-person mediation session, according to
court filings. US District Court Judge Laura Taylor Swain gave the
parties until Sept. 16 -- a one-week extension -- to strike a
debt-cutting deal and agreed to push out that deadline to Sept. 30,
2022.
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.
RED RIVER: Sept. 28 Plan Confirmation Hearing Set
-------------------------------------------------
Red River Waste Solutions, LP, filed with the U.S. Bankruptcy Court
for the Northern District of Texas a motion for entry of an order
approving Disclosure Statement.
On Sept. 8, 2022, Judge Edward L. Morris granted the motion and
ordered that:
* The Disclosure Statement for the Second Amended Chapter 11
Plan is approved as having adequate information.
* Sept. 28, 2022, at 10:00 a.m. is the Confirmation Hearing.
* Sept. 26, 2022, at 5:00 p.m. is the Voting Deadline.
* Sept. 26, 2022, at 5:00 p.m. is the deadline to object to
the Plan.
* Sept. 27, 2022, at 5:00 p.m. is the deadline for the Debtor
to file its: (i) reply to any and all Objections, including a
consolidated reply in its sole discretion; and (ii) a brief in
support of the Plan.
A copy of the order dated September 8, 2022, is available at
https://bit.ly/3d6UKKN from Stretto, the claims agent.
Counsel for the Debtor:
Marcus A. Helt, Esq.
Jane A. Gerber, Esq.
McDERMOTT WILL & EMERY LLP
2501 North Harwood Street, Suite 1900
Dallas, Texas 75201
Tel: (214) 210-2821
Fax: (972) 528-5765
E-mail: mhelt@mwe.com
jagerber@mwe.com
About Red River Waste
Solutions
Red River Waste Solutions LP is a company in Dripping Springs,
Texas, that provides waste management services. It also offers
solid waste and garbage pickup, recycling, industrial waste
collection, disposal, and landfill management services.
Red River Waste Solutions sought Chapter 11 protection (Bankr. N.D.
Tex. Case No. 21-42423) on Oct. 14, 2021, listing up to $50 million
in assets and up to $100 million in liabilities. James Calandra,
chief restructuring officer of Red River Waste Solutions, signed
the petition.
Judge Morris oversees the case.
Marcus Alan Helt, Esq., at McDermott Will & Emery LLP, is the
Debtor's legal counsel. Stretto, Inc., is the claims and noticing
agent.
The Debtor's official committee of unsecured creditors tapped
Womble Bond Dickinson (US) LLP as legal counsel and Rock Creek
Advisors, LLC as financial advisor.
REMARK HOLDINGS: Appeals Nasdaq Delisting Determination
-------------------------------------------------------
Remark Holdings, Inc. received a staff determination letter on Aug.
30, 2022, from the Listing Qualifications Department of The Nasdaq
Stock Market LLC indicating that the Company did not regain
compliance with the Bid Price Rule and the Company is not eligible
for a second 180-day grace period because the Company did not
comply with the minimum $5,000,000 Stockholders' Equity initial
listing requirement for the Nasdaq Capital Market. Accordingly,
unless the Company requests an appeal of Nasdaq's determination,
the Company's common stock is subject to delisting.
The Company has appealed Nasdaq's delisting determination to a
Hearings Panel and a hearing is scheduled to be held on Oct. 6,
2022. The Company's common stock will continue to be listed and
traded on the Nasdaq Capital Market pending a decision by the
Panel.
About Remark Holdings
Remark Holdings, Inc. (NASDAQ: MARK) --
http://www.remarkholdings.com-- its subsidiaries, and the
variable-interest entities that the company consolidates,
constitute a diversified global technology business with leading
artificial intelligence and data-analytics, as well as a portfolio
of digital media properties. The company's easy-to-install AI
products are being rolled out in a wide range of applications
within the retail, urban life cycle and workplace and food safety
arenas. The company also owns and operates digital media
properties that deliver relevant, dynamic content and ecommerce
solutions. The company's corporate headquarters and U.S.
operations are based in Las Vegas, Nevada, and it also maintain
operations in London, England and Shanghai, China. The operations
of the variable interest entities the company consolidates are
headquartered in Chengdu, China with additional operations in
Hangzhou.
As of June 30, 2022, the Company had $33.36 million in total
assets, $39.68 million in total liabilities, and a total
stockholders' deficit of $6.32 million.
Los Angeles, California-based Weinberg & Company, the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated March 31, 2022, citing that the Company has suffered
recurring losses from operations and negative cash flows from
operating activities and has a negative working capital and a
stockholders' deficit that raise substantial doubt about its
ability to continue as a going concern.
REPLICEL LIFE: Incurs C$1.1 Million Net Loss in Second Quarter
--------------------------------------------------------------
Replicel Life Sciences Inc. reported a net loss and comprehensive
loss of C$1.11 million on C$88,434 of revenue for the three months
ended June 30, 2022, compared to a net loss and comprehensive loss
of C$1.05 million on C$88,434 of revenue for the three months ended
June 30, 2021.
For the six months ended June 30, 2022, the Company reported a net
loss and comprehensive loss of C$1.90 million on C$176,868 of
revenue compared to a net loss and comprehensive loss of C$2.40
million on C$176,868 of revenue for the same period in 2021.
As of June 30, 2022, the Company had C$574,893 in total assets,
C$8.29 million in total liabilities, and a total shareholders'
deficiency of C$7.72 million.
Replicel said, "The Company's ability to continue as a going
concern is dependent upon its ability to generate future profitable
operations and/or to obtain the necessary financing to meet its
obligations and repay its liabilities arising from normal business
operations when they come due. Management has a plan in place to
address this concern and intends to obtain additional funds by
equity financing to the extent there is a shortfall from
operations. While the Company is continuing its best efforts to
achieve the above plans, there is no assurance that any such
activity will generate funds for operations."
A full-text copy of the Form 6-K is available for free at:
https://www.sec.gov/Archives/edgar/data/1205059/000108503722000065/ex99_1.htm
About Replicel
RepliCel Life Sciences Inc. is a regenerative medicine company
focused on developing cell therapies for aesthetic and orthopedic
conditions affecting what the Company believes is approximately one
in three people in industrialized nations, including
aging/sun-damaged skin, pattern baldness, and chronic tendon
degeneration. These conditions, often associated with aging, are
caused by a deficit of healthy cells required for normal tissue
healing and function. These cell therapy product candidates are
based on RepliCel's innovative technology, utilizing cell
populations isolated from a patient's healthy hair follicles.
Replicel Life reported a net loss and comprehensive loss of C$4.07
million for the year ended Dec. 31, 2021, compared to a net loss
and comprehensive loss of C$1.58 million for the year ended Dec.
31, 2020. As at Dec. 31, 2021, the Company had C$591,794 in total
assets, C$7.43 million in total liabilities, and a total
shareholders' deficiency of C$6.84 million.
Vancouver, British Columbia-based BDO Canada LLP, the Company's
auditor since 2010, issued a "going concern" qualification in its
report dated June 28, 2022, citing that the Company has accumulated
losses of $42,231,642 since its inception and incurred a loss of
$4,073,315 during the year ended Dec. 31, 2021. These events or
conditions, along with other matters, indicate that a material
uncertainty exists that may cast substantial doubt about its
ability to continue as a going concern.
REPLICEL LIFE: To Sell Up to 8 Million Units
--------------------------------------------
RepliCel Life Sciences Inc. announced a non-brokered private
placement financing of up to 8,000,000 units at a price of $0.10
per Unit for gross proceeds of up to $800,000. Each Unit consists
of one common share of the Company and one-half of one share
purchase warrant. Each whole Warrant entitles the holder thereof
to purchase one additional Share of the Company at a price of $0.20
per Share for a period of three years from closing of the Offering.
The Offering is subject to the approval of the TSX Venture
Exchange. Insiders may participate in the Offering.
Finders' fees may be payable in connection with the Offering in
accordance with the policies of the Exchange.
All securities issued in connection with the Offering will be
subject to a statutory hold period expiring four months and one day
after closing of the Offering. Completion of the Offering is
subject to the approval of the Exchange. Any participation by
insiders in the Offering will constitute a related party
transaction under Multilateral Instrument 61-101 - Protection of
Minority Security Holders in Special Transactions but is expected
to be exempt from the formal valuation and minority shareholder
approval requirements of MI 61-101.
The aggregate gross proceeds from the sale of the Offering will be
used for general working capital.
About Replicel
RepliCel Life Sciences Inc. is a regenerative medicine company
focused on developing cell therapies for aesthetic and orthopedic
conditions affecting what the Company believes is approximately one
in three people in industrialized nations, including
aging/sun-damaged skin, pattern baldness, and chronic tendon
degeneration. These conditions, often associated with aging, are
caused by a deficit of healthy cells required for normal tissue
healing and function. These cell therapy product candidates are
based on RepliCel's innovative technology, utilizing cell
populations isolated from a patient's healthy hair follicles.
Replicel Life reported a net loss and comprehensive loss of C$4.07
million for the year ended Dec. 31, 2021, compared to a net loss
and comprehensive loss of C$1.58 million for the year ended Dec.
31, 2020. As at Dec. 31, 2021, the Company had C$591,794 in total
assets, C$7.43 million in total liabilities, and a total
shareholders' deficiency of C$6.84 million.
Vancouver, British Columbia-based BDO Canada LLP, the Company's
auditor since 2010, issued a "going concern" qualification in its
report dated June 28, 2022, citing that the Company has accumulated
losses of $42,231,642 since its inception and incurred a loss of
$4,073,315 during the year ended Dec. 31, 2021. These events or
conditions, along with other matters, indicate that a material
uncertainty exists that may cast substantial doubt about its
ability to continue as a going concern.
REVLON INC: 2nd Circuit Gives Citi Win in $500M Wire Transfer Fight
-------------------------------------------------------------------
A Second Circuit panel handed Citibank a win Thursday in its battle
to recover $500 million the bank accidentally wired to a group of
Revlon Inc. lenders, overturning a New York federal court's
decision that said the lenders didn't have to return the money.
The three-judge panel vacated a February 2021 decision that relied
on a New York legal doctrine known as discharge-for-value and held
that the lenders could keep the mistakenly sent funds as a valid,
if unintentional, satisfaction of Revlon's debt to them.
According to Law 360, a Citibank spokesman on Thursday, September
8, 2022, lauded a Second Circuit decision that it could recover
$500 million accidental money transfer.
"Plaintiff Citibank, N.A, the Administrative Agent for the lenders
on a $1.8 billion seven-year syndicated loan to Revlon Inc.,
appeals from the judgment of the United States District Court for
the Southern District of New York (Jesse M. Furman, J.) in favor of
Defendants, the Loan Managers for certain lenders, who received and
refused to retur Citibank's accidental, unintended early repayment
of the loan. The district court, after a bench trial, relying on
Banque Worms v. BankAmerica International, 570 N.E.2d 189 (N.Y.
1991), ruled that the rule of discharge-for-value provided a
defense against Citibank's suit for restitution. Held, because the
Defendants had notice of the mistake and because the lenders were
not entitled to repayment at the time, the rule of Banque Worms
does not protect the Defendants. The judgment is VACATED and the
case is REMANDED to the district court," according to the
decision.
"The Court of Appeals's specified requirement of entitlement to the
money, combined with the cases it cited as precedents for the rule,
and its continued espousal of New York's general rule that mistaken
payments should be returned, lead us to conclude that, in New York,
a creditor may not invoke the discharge-for-value rule unless the
debt at issue is presently payable. Here, the debt on which
Citibank mistakenly made a payment was not due for another three
years. As a result, Defendants may not invoke the
discharge-for-value rule as a shield against Citibank's claims for
restitution."
About Revlon Inc.
Revlon Inc. manufactures, markets and sells an extensive array of
beauty and personal care products worldwide, including color
cosmetics; fragrances; skin care; hair color, hair care and hair
treatments; beauty tools; men's grooming products; anti-perspirant
deodorants; and other beauty care products. Today, Revlon's
diversified portfolio of brands is sold in approximately 150
countries around the world in most retail distribution channels,
including prestige, salon, mass, and online.
Since its breakthrough launch of the first opaque nail enamel in
1932, Revlon has provided consumers with high-quality product
innovation, performance and sophisticated glamour. In 2016, Revlon
acquired the iconic Elizabeth Arden company and its portfolio of
brands, including its leading designer, heritage and celebrity
fragrances.
Revlon is among the leading global beauty companies, with some of
the world's most iconic and desired brands and product offerings in
color cosmetics, skin care, hair color, hair care and fragrances
under brands such as Revlon, Revlon Professional, Elizabeth Arden,
Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy
Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos,
Christina Aguilera and AllSaints.
Revlon, Inc., sought Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 22-10760) on June 15, 2022. Fifty affiliates, including Almay,
Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also
sought bankruptcy protection on June 15 and June 16, 2022.
Revlon disclosed total assets of $2,328,093,000 against total
liabilities of $3,689,240,395 as of April 30, 2022.
The Hon. David S. Jones is the case judge.
PJT Partners is acting as financial advisor to Revlon and Alvarez &
Marsal is acting as restructuring advisor. Paul, Weiss, Rifkind,
Wharton & Garrison LLP is acting as legal advisor to the Company.
Mololamken, LLC, is the conflicts counsel. Kroll, LLC, is the
claims agent.
ROJESIE INC: Seeks Court Approval to Hire Bankruptcy Counsel
------------------------------------------------------------
Rojesie Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Puerto Rico to employ the Law Office of Gloria
Justiniano Irizarry as its legal counsel.
The Debtor requires legal counsel to:
a. examine documents and other necessary information to
prepare schedules of assets and liabilities and statements of
financial affairs;
b. prepare the Debtor's disclosure statement and plan of
reorganization;
c. identify and prosecute claims and causes of action on
behalf of the Debtor;
d. examine proofs of claim filed and to be filed in the
Debtor's bankruptcy case;
e. advise the Debtor and prepare documents in connection with
the ongoing operation of its business; and
f. advise the Debtor and prepare documents in connection with
the liquidation of assets of the bankruptcy estate, including
analysis and collection of outstanding receivables.
The firm will be paid at these hourly rates:
Attorneys $275
Paralegal $50
Justiniano Irizarry was paid a retainer in the amount of $5,000 and
will receive reimbursement for work-related expenses.
The firm is a "disinterested person" as defined in Section 101(14)
of the Bankruptcy Code and does not represent any interest adverse
to the Debtor and its estate, according to court filings.
Justiniano Irizarry can be reached at:
Gloria Justiniano Irizarry, Esq.
Law Office of Gloria Justiniano Irizarry
Calle A. Ramirez Silva, Suite 8
Mayaguez, PR 00680-4714
Tel: (787) 831-3577
Email: justiniano@gmail.com
About Rojesie Inc.
Rojesie Inc., doing business as Parador Villas Sotomayor, sought
protection under Subchapter V of Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D.P.R. Case No. 22-02529) on Aug. 29, 2022, listing $1
million to $10 million in both assets and liabilities. Jesus
Rogelio Ramos Fuente, president of Rojesie, signed the petition.
Carlos G. Garcia Miranda has been appointed as Subchapter V
trustee.
Judge Maria De Los Angeles Gonzalez presides over the case.
Gloria Justiniano Irizarry, Esq., at the Law Office of Gloria
Justiniano Irizarry is the Debtor's counsel.
S3 SPA: Wins Interim Cash Collateral Access
-------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona authorized S3
SPA, LLC to use cash collateral on an interim basis in accordance
with the limited needs budget.
The Debtor is permitted to use cash collateral to pay post-petition
operating expenses in the ordinary course of its businesses but
only as set forth in, and subject to, the limited needs budget.
As adequate protection, any creditor holding a valid and
enforceable prepetition security interest in any pre-petition cash
collateral, will have a post-petition replacement lien on the same
type of post-petition assets acquired by the Debtor after the
Petition Date, if any, and in the same validity, priority, and
extent as such creditor possessed a lien on the cash collateral on
the Petition Date, and will have all the rights and remedies of a
secured creditor in connection with the replacement liens granted
by this Order, except to the extent that the Bankruptcy Code may
affect such rights and remedies. The liens will be effective
without perfection and as against any successors of the Debtor,
including any trustee.
The $600 per month adequate protection payment to whichever
creditor is in first position on the cash collateral will be
segregated by the Debtor for payment in the future, until the first
position lender on the Debtor's assets is established.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3xaLZpv from PacerMonitor.com.
The budget provides for total expenses, on a monthly basis, as
follows:
$64,591 for September 2022;
$65,341 for October 2022;
$66,641 for November 2022; and
$68,966 for December 2022.
About S3 SPA, LLC
S3 SPA, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 22-05439) on August 17,
2022. In the petition filed by Kiera L. Stroup, owner, the Debtor
disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Paul Sala oversees the case.
D. Lamar Hawkins, Esq., at Guidant Law, PLC is the Debtor's
counsel.
SBA COMMUNICATIONS: Egan-Jones Retains B+ Senior Unsecured Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on August 26, 2022, retained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by SBA Communications Corporation.
Headquartered in Boca Raton, Florida, SBA Communications
Corporation owns and operates wireless communications
infrastructure in the United States.
SEAGATE TECHNOLOGY: Egan-Jones Retains BB+ Sr. Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on August 23, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Seagate Technology, LLC.
Headquartered in Cupertino, California, Seagate Technology, LLC
manufactures and distributes hard drives and storage solutions.
SHEARER'S FOODS: Moody's Affirms B2 CFR & Alters Outlook to Neg.
----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Shearer's Foods,
LLC, including the B2 Corporate Family Rating, the B2-PD
Probability of Default Rating, the B2 rating on the company's first
lien term loan, and the Caa1 rating on the company's second lien
term loan. Moody's changed the outlook to negative from stable.
The outlook revision to negative from stable reflects that
Shearer's faces challenges to reducing leverage and improving free
cash flow to levels in line with Moody's expectation for the
rating. Moody's anticipates that Shearer's operating performance in
the next 12 to 18 months will be weaker than previously expected as
a result of labor shortages and related production downtime. A
combination of other operating challenges, including raw material
and freight availability, inflationary pressures, and private label
category headwinds, have led to elevated debt/EBITDA leverage of
7.8x for the LTM period ended June 25, 2022 (on a Moody's adjusted
basis, and pro forma for the June 27, 2022, SuperPufft acquisition
and the February 16, 2022, sale-leaseback transaction), which is
high for the B2 CFR given the company's operating profile. In
addition, free cash flow is likely to be negative over the next 12
to 18 months due to higher interest rates, and elevated capital
expenditures as the company is investing in additional capacity and
automation.
Moody's nonetheless affirmed the ratings because the company's good
liquidity provides some flexibility for Shearer's to execute its
operating plans and reduce leverage. The company should be able to
reduce its debt/EBITDA leverage below 6.5x within 18 months as
fill rates and capacity utilization rates improve. Shearer's has
put in place various initiatives to address the labor staffing
challenges, including wage increases, increased employee
engagement, and automation investments. The company has seen some
improvement in hiring and turnover after the latest round of wage
increases in June 2022 in certain markets. Wage increases across
other markets are likely to be implemented during the remainder of
calendar 2022, which should improve labor staffing levels across
the organization. However, Moody's remains cautious on this front
as the labor market remains tight. Improvements in staffing levels
are critical to improving fill rates and capacity utilization. In
addition, the company should benefit from easing supply chain
pressures and improving private label demand as consumers seek
value in a challenging economic environment. Further, the company
has successfully implemented pricing to offset the inflationary
impacts of higher ingredient costs and packaging, and more recent
pricing actions have also covered labor and natural gas.
Moody's projects volumes to decline in fiscal 2022 due to labor
shortages and associated production downtime, with volumes
projected to improve gradually through fiscal 2023 as staffing
levels and fill rates improve. Pricing will drive revenue growth in
fiscal 2022, and will also be the main contributor to fiscal 2023
revenue growth. Moody's expects pricing and higher volumes to drive
EBITDA higher, and debt/EBITDA leverage lower to approximately 6.6x
by the end of fiscal 2023. While EBITDA is projected to grow in
fiscal 2023, Moody's expects free cash flow to be negative due to
the rise in interest rates. Higher interest rates impact the
company's cash flow meaningfully given the floating rate nature of
its approximately $1.3 billion term loan debt. Moody's projects
free cash flow to turn positive in 2024 driven by a continued
EBITDA recovery as fill rates should be near historical rates at
the start of the year.
Shearer's good liquidity is supported by an undrawn $125 million
ABL revolving credit facility that expires in September 2024. As of
June 25, 2022, availability on the ABL was $104 million (net of
letters of credit and reserves), and the company had $237 million
of cash, of which approximately $201 million was from the February
2022 sale-leaseback transaction. A large portion of the cash
balance will be used for the SuperPufft acquisition in fiscal 3Q22,
although Moody's still expects the company to have a healthy cash
balance of at least $60 million. Moody's projects the company's
free cash flow will be negative $15-$20 million in both fiscal 2022
and fiscal 2023 due to operating headwinds in fiscal 2022, and more
so higher interest rates in fiscal 2023. The company also has $11
million in required annual term loan amortization. Moody's expects
the negative free cash flow and term loan amortization to be funded
with cash on hand, the remaining sale-leaseback proceeds (roughly
$12 million) and remaining Hermiston insurance proceeds (roughly
$60 million) that will be received over the next 12-18 months.
Moody's expects little to no usage of the revolver through fiscal
2023. Further, free cash flow is projected to turn positive in
fiscal 2024, driven by operating performance improvement, at which
point excess free cash flow can be used for voluntary debt
reduction.
The following ratings/assessments are affected by the action:
Ratings Affirmed:
Issuer: Shearer's Foods, LLC
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured 1st Lien Bank Credit Facility,
Affirmed B2 (LGD3)
Senior Secured 2nd Lien Bank Credit Facility,
Affirmed Caa1 (LGD5) from Caa1 (LGD6)
Outlook Actions:
Issuer: Shearer's Foods, LLC
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Shearer's B2 Corporate Family Rating reflects the company's
aggressive financial policy and high financial leverage following a
September 2020 refinancing and leveraging dividend transaction and
a one-time transaction related equity incentive paid to management
in fiscal 3Q21. Additionally, the company has faced various
operating challenges over the last year including labor shortages,
raw material and freight availability, inflationary pressures, and
private label category headwinds. These credit challenges are
balanced by improving private label demand, easing supply chain
pressures, and the company's good liquidity. Customer concentration
also remains a risk. However, the company has solid relationships
with its largest customers and benefits from its leading position
as a producer of private label snacks, with a broad manufacturing
footprint that allows it to service customers nationally.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating downgrade could occur if operating performance fails to
improve, including better supply chain performance and higher
margins, liquidity deteriorates, or the financial policy becomes
more aggressive. Quantitatively, a downgrade could occur if
debt/EBITDA is not sustained below 6.5x, EBITDA less capital
spending-to-interest is less than 1.25x, or free cash flow is not
restored to a comfortably positive level.
A rating upgrade could occur if Shearer's is able to improve
operating performance including sustained positive organic revenue
growth with higher margins, and consistent and solid free cash flow
generation. Shearer's would also need to sustain debt/EBITDA below
5x and adopt a more conservative financial policy.
ESG CONSIDERATIONS
ESG considerations have a highly negative credit impact (CIS-4) on
Shearer's rating. The CIS score reflects the weight placed on
Shearer's governance, including its private equity ownership and
Moody's expectation for an aggressive financial policy. The company
is also moderately negatively exposed to environmental and social
risks.
Shearer's credit exposure to environmental risks is moderately
negative (E-3). Moderately negative exposure to natural capital
risks reflects the company's reliance on many agricultural inputs
(including potatoes, corn, oils, sugar, and others) that require
use of land and fertilizers that could harm the environment, and
which could additionally be affected by climate change. The company
also has moderately negative exposure to waste and pollution risks
as it creates waste in food manufacturing, packaging, and disposal.
Regulations and consumer preferences are likely to evolve to reduce
packaging or improve recyclability or biodegradability of
packaging, which could increase the cost of compliance in the
future.
Shearer's credit exposure to social risks is moderately negative
(S-3). Moderately negative exposure to customer relations and
responsible production risks reflects the need to invest in product
development and marketing to maintain relevance with consumers and
minimize exposure to potential litigation related to product
labeling, marketing, recalls, and contamination. A majority of
Shearer's business is private label and co-manufacturing, where
brand perception is less of a risk, but since product quality is a
key attribute that customers look for when choosing a supplier,
reputational risk important. Moderately negative health & safety
risks reflect Shearer's exposure as a food manufacturer to protect
employees from workplace injuries and from health concerns that
could arise from contact with raw materials and chemicals. A fire
at the company's Hermiston, Oregon plant in February 2022 was
reportedly caused by a natural gas boiler explosion that resulted
in non-fatal injuries to some employees. Shearer's is receiving
insurance proceeds but is incurring meaningful costs to close the
facility, relocate production, and cover lost earnings. The
company has neutral-to-low exposure to demographic and societal
trends as it regularly invests in innovation, such as new flavors,
as well as the introduction of "better-for-you" products in
response to evolving consumer preferences. The company benefits
from the healthy growth of the salty snack category.
Shearer's credit exposure to governance risks is highly negative
(G-4). This reflects Shearer's private equity ownership and Moody's
expectation for an aggressive financial policy, including high
leverage along with the potential for debt funded acquisitions and
dividends. Concentrated decision making creates potential for event
risk and decisions that favor shareholders over creditors.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
Shearer's Foods, LLC, headquartered in Massillon, Ohio,
manufactures snack food products such as traditional potato chips,
tortilla chips, kettle potato chips, extruded cheese snacks,
cookies, and crackers for other companies. Revenue was $1.3 billion
for the last twelve months ended June 25, 2022. Shearer's is
majority owned by Ontario Teachers' Pension Plan and does not
publicly disclose financial information.
SIRIUS XM: Egan-Jones Retains BB+ Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on August 22, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Sirius XM Holdings Inc.
Headquartered in New York, New York, Sirius XM Holdings Inc.
broadcasts various channels of audio from its satellites.
SKYWEST INC: Egan-Jones Retains B Senior Unsecured Ratings
----------------------------------------------------------
Egan-Jones Ratings Company, on August 26, 2022, retained its 'B'
foreign currency and local currency senior unsecured ratings on
debt issued by SkyWest, Inc.
Headquartered in St. George, Utah, SkyWest, Inc. operates regional
airlines that offer scheduled passenger service to destinations in
the United States, Canada, Mexico, and the Caribbean.
SONOCO PRODUCTS: Egan-Jones Retains BB+ Senior Unsecured Ratings
----------------------------------------------------------------
Egan-Jones Ratings Company, on August 24, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by Sonoco Products Company.
Headquartered in Hartsville, South Carolina, Sonoco Products
Company manufactures industrial and consumer packaging solutions
for customers around the world.
SQUIRRELS RESEARCH: Trustee Taps Inglewood as Financial Advisor
---------------------------------------------------------------
Frederic P. Schwieg, Subchapter V Trustee of Squirrels Research
Labs LLC and the Midwest Data Company LLC, seeks approval from the
U.S. Bankruptcy Court for the Northern District of Ohio to employ
Inglewood Associates, LLC as his financial advisor.
Inglewood will render these services:
a. perform detailed review of the Debtors' books and records
prior to the filing for bankruptcy protection;
b. investigate the possible existence of transfers to insiders
and assist in pursuing such transfers found;
c. testify in hearings and other litigation related
proceedings such as depositions; and
d. otherwise assist the trustee as his financial advisor
during the administration of the proceedings.
Inglewood's hourly rates are as follows:
John K. Lane Managing Directors $295
Thomas P. Furnas Managing Directors $295
Scott D. McGurk Principal $250
Staff $225 to $295
Data Management $120
As disclosed in court filings, Inglewood is a "disinterested
person" as it does not have any interest materially adverse to the
interest of the Debtors' estate and creditors.
The firm can be reached through:
John K. Lane, Esq.
Inglewood Associates LLC
9242 Headlands Road
Mentor, OH 44060
Telephone: (216) 533-5860
Email: jlane@ingw.com
About Squirrels Research Labs
Squirrels Research Labs, LLC is a manufacturer of semiconductor and
other electronic components based in North Canton, Ohio.
Squirrels Research Labs and its affiliate, The Midwest Data
Company, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Ohio Lead Case No. 21-61491) on Nov.
23, 2021. Frederic P. Schwieg has been appointed as Subchapter V
trustee.
At the time of the filing, Squirrels Research Labs listed as much
as $10 million in both assets and liabilities while Midwest Data
Company listed up to $100,000 in assets and up to $50,000 in
liabilities.
Judge Russ Kendig oversees the cases.
Marc B. Merklin, Esq., at Brouse McDowell, LPA and
CliftonLarsonAllen, LLP serve as the Debtors legal counsel and
accountant, respectively.
STERLING VA MARLIN: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------------
Sterling VA Marlin LLC filed for chapter 11 protection in the
Southern District of Texas.
The Debtor says it's a Single Asset Real Estate and its principal
asset is located at 1016 Ward Street, Marlin, TX 76661. The
property is valued at $1.756 million, according to the schedules.
Secured creditor Solstice Capital LLC is owed $1.2 million. The
Debtor's liabilities total $1.791 million.
Sterling VA Marlin LLC estimates between 1 and 49 creditors. The
petition states that funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Sept. 29, 2022, at 10:00 AM at US Trustee Houston Teleconference.
Proofs of claim are due by Dec. 28, 2022.
About Sterling VA Marlin
On Sept. 2, 2022, Sterling VA Marlin LLC filed for chapter 11
protection (Bankr. S.D. Tex. Case No. 22-32596). In the petition
filed by Ralphaell V. Wilkins, as president, the Debtor reported
assets and liabilities between $1 million and $10 million.
The Debtor is represented by Samuel L Milledge.
SWF HOLDINGS I: S&P Alters Outlook to Negative, Affirms 'B-' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Wisconsin-based SWF
Holdings I Corp. (Springs), the holding company of window coverings
manufacturer Springs Window Fashions LLC, to negative from stable
and affirmed all its ratings on the company, including our 'B-'
issuer credit rating.
The negative outlook reflects the possibility for a lower rating if
S&P believes Springs' capital structure becomes unsustainable with
leverage exceeding double digits or EBITDA to interest coverage
ratio weakening to below 1.5x.
S&P said, "The negative outlook reflects our expectation for credit
metrics to deteriorate over the next 12 months due to the
challenging macroeconomic environment. We believe Springs' sales
and profitability will deteriorate over the next 12 months as
weakening economic activity and sustained high inflation translates
into eroding consumer confidence and lower demand for the company's
products. We previously expected leverage to be sustained in the 8x
area in 2022, but now believe its leverage could approach 10x. We
also expect EBITDA interest coverage to weaken to the mid-1x area
in 2022. This correlates to an approximately 15% EBITDA decline
from 2021 levels.
"Following the debt-funded acquisition of Springs by Clearlake
Capital Group L.P. in late 2021, pro forma leverage increased to
7.3x from 3.7x. We previously expected leverage to increase to the
mid-8x area by the end of 2021 as demand in the second half of the
year would be weaker than the pent-up demand in the second half of
2020. While Springs performed in line with our expectations for
2021, the significant increase in debt following the LBO leaves
little ratings cushion to absorb potential shocks of a recession.
Given the expected reduction in consumer spending and increased
risk of recession, we believe demand for Springs' products will
decline for the remainder of 2022 because of its discretionary home
improvement nature. In addition, the company saw weakness from its
retail partners in the first quarter of 2022, while its dealer
channel still performed as expected and offset some retail
weakness. We believe persistent inflation and economic uncertainty
could affect its dealer channel customers in the upcoming quarters.
If demand remains depressed for a prolonged period and Springs
cannot cut enough costs to preserve its margins, we believe its
capital structure could become unsustainable.1'
High inflation and low discretionary spending amid a potential
recession continue to pressure operating margins. S&P Global
Ratings-adjusted EBITDA margins contracted 380 basis points (bps)
during the 12-month period ended April 2, 2022, to 19.9% from 23.7%
due to persistently high inflation. While S&P expects Spring's
price increases and favorable channel mix to offset some eroding
profitability, a substantial near-term improvement will be
difficult amid a weakening macroeconomic environment.
S&P said, "Our economists estimate a 40%-50% chance of a recession
within the next 12 months. We also expect consumer discretionary
spending to remain challenged through the first half of 2023,
particularly for big ticket discretionary items such as window
coverings. Additionally, we expect housing starts to decline to
1.48 million units in 2023 from 1.62 million units in 2022. A
housing market slowdown coupled with rising interest rates will
likely put additional downward pressure on demand for window
coverings. Moreover, because of high inflation, we expect consumers
to prioritize spending on non-discretionary goods such as food and
energy. As a result, we forecast residential investment to decline
4.6% in 2022, further declining 2.1% in 2023. Therefore, we expect
Springs' sales to decline in mid-single-digit percentage in 2022
before increasing to low-single-digit percentage in 2023 due to
moderate recovery starting in the second half of 2023.
"The negative outlook reflects the possibility that we could lower
the rating if we believe Springs' capital structure becomes
unsustainable."
S&P could lower the rating if leverage is sustained above 10x or
EBITDA to interest coverage falls below 1.5x. This could occur if:
-- Revenue declines either from a contraction in consumer demand
from a housing market shock or from a loss of one of its key retail
customers.
-- Springs cannot effectively manage input cost increases by
passing the cost along via price increase or cost-efficiency
initiatives.
-- The company's financial policy becomes even more aggressive,
and it continues to undertake debt-funded acquisitions or
shareholder returns.
S&P would revise its outlook to stable if Springs' operations
stabilize and leverage is sustained in the 8x area, or EBITDA
interest coverage is at or above 2x. This could occur if:
-- Revenue stabilizes and Springs manages input cost pressures,
enabling adjusted EBITDA margin to rebound closer to historical
levels; or
-- Springs manages its variable costs and working capital to
generate FOCF and repay debt, thereby reducing its interest
burden.
ESG credit indicators: E-2, S-2, G-2
T-MOBILE USA: Egan-Jones Retains B+ Senior Unsecured Ratings
------------------------------------------------------------
Egan-Jones Ratings Company, on August 25, 2022, retained its 'B+'
foreign currency and local currency senior unsecured ratings on
debt issued by T-Mobile USA, Inc.
Headquartered in Bellevue, Washington, T-Mobile USA, Inc. provides
telecommunications services.
T.G. UNITED: Creditors Oppose Extension of Exclusivity Period
-------------------------------------------------------------
T.G. United, Inc.'s major creditors David Ambrose and AADD
Properties, LLC urged the U.S. Bankruptcy Court for the Middle
District of Florida to deny the motion filed by the company to
extend the period during which it alone can file a Chapter 11
plan.
Jason Rigoli, Esq., the attorney representing both creditors, said
the requested extension "serves no purpose other than to delay"
T.G. United's bankruptcy.
"There is no need for delay to allow negotiations to continue as
negotiations are bordering on impasse," Mr. Rigoli said, adding
that no agreement has been reached so far to settle the lawsuits
involving T.G. United and the creditors.
"Without agreement from Mr. Ambrose and AADD, any plan [T.G.
United] puts forth is unconfirmable," the attorney further said.
T.G. United asked the court last month to extend until Nov. 1 its
exclusive right to pursue a plan, saying it needs additional time
to negotiate and resolve the lawsuits pending in the Circuit Court
of the Fifth Judicial Circuit in Hernando County, Fla.
The lawsuits are styled as David Ambrose v. Wittman Enterprises
LLC, Mental Toughness Training Center LLC, and TG United, Inc.
(Case Number 2021-CA-000637); and AADD Properties, LLC v. TG
United, Inc. and Mental Toughness Training Center, LLC (Case Number
2021-CA-000669).
Mr. Rigoli can be reached at:
Jason S. Rigoli, Esq.
Furr Cohen
2255 Glades Road, Suite 419A
Boca Raton, FL 33431
Phone: (561) 395-0500
Fax: (561) 338-7532
Email: jrigoli@furrcohen.com
About T.G. United Inc.
T.G. United Inc. -- http://www.tgunited.com/-- manufactures a wide
range of solid dose products including tablets and capsules in
compliance with the OTC monograph.
T.G. United sought Chapter 11 protection (Bankr. M. Fla. Case No.
22-01831) on May 6, 2022, listing $1 million to $10 million in both
assets and liabilities. Andrew Wittman II, chief executive officer,
signed the petition.
Judge Catherine Peek Mcewen oversees the case.
Steven E. Wallace, Esq., at Ward Damon, PL is the Debtor's legal
counsel.
TAMARACK VALLEY: S&P Affirms 'B+' Rating on Senior Unsecured Debt
-----------------------------------------------------------------
S&P Global Ratings has updated its recovery analysis for Calgary,
Alta.-based oil and gas exploration and production company Tamarack
Valley Energy Ltd. following the company's announced C$1.425
billion acquisition of Deltastream Energy Corp. Based on the
updated estimated enterprise value for Tamarack Valley, which now
reflects the net proven reserves acquired since year-end 2021 and
is pro forma for the Deltastream proven reserves, S&P Global
Ratings projects the recovery prospects for Tamarack Valley's rated
senior unsecured debt remain consistent with the '2' recovery
rating and the 'B+' issue-level rating. In aggregate, the company's
acquisitions completed since July 2020 have added daily average
production of about 26,000 barrels of oil equivalent (boe) per day.
At June 30, 2022, Tamarack Valley produced 43,777 boe per day (74%
liquids). The acquisition of Deltastream Energy, announced on Sept.
12, 2022, will add a further 22,000-23,000 barrels per day of heavy
oil to Tamarack Valley's production, increasing the company's pro
forma total production to about 68,000-72,000 boe per day.
Tamarack Valley intends to increase the availability under its
committed revolving credit facility by C$50 million, and add a
total of C$650 million of debt to its capital structure to fund the
Deltastream acquisition, including a proposed C$75 million add-on
to its existing C$200 million 7.25% senior unsecured notes maturing
in 2027. S&P said, "Despite the immediate material increase to debt
in its capital structure, our estimated debt outstanding at the
time of our 2025 simulated default scenario includes only the
assumed 100% draw on the credit facility and senior unsecured
notes, as we estimate both the new term loan and deferred asset
note to be fully repaid by the end of 2024, based on the mandatory
repayment terms for these new debt tranches. Furthermore, the
incremental value we ascribe to the reserves acquired since
year-end 2021 increases our estimated enterprise value for the
company, adding incremental residual value available to repay the
senior unsecured debt at the time of our simulated 2025 default. As
a result, we affirmed our 'B+' issue-level rating on the company's
senior unsecured debt, with the '2' recovery rating remaining
unchanged."
S&P said, "Although the incremental debt assumed to fund the
Deltastream acquisition weakens our projected fully adjusted funds
from operations (FFO)-to-debt ratio for 2022 and 2023 from our
previous estimates, we project Tamarack Valley's fully adjusted
two-year (2022-2023) average FFO-to-debt ratio will remain in the
60%-65% range and continue to support our existing financial risk
profile assessment for Tamarack Valley. While the Deltastream
acquisition will increase the company's pro forma net proven
reserves and daily average production by about 30% and 50%,
respectively, our assessment of its business risk profile remains
aligned with the 'B' issuer credit rating. As a result, our 'B'
issuer credit rating and stable outlook are unchanged."
ISSUE RATINGS-RECOVERY ANALYSIS
Key analytical factors
-- S&P said, "We have updated our estimated enterprise value for
Tamarack Valley, pro forma all announced and completed acquisitions
and dispositions since year-end 2021. We value the company on a
going-concern basis using a reserve multiple approach that applies
a range of distressed fixed prices to the company's proved reserves
and caps the value of proven undeveloped reserves at 25% of the
total estimated enterprise value."
-- S&P has included proved reserves from the Deltastream,
Crestwynd, and Rolling Hills acquisitions. It has excluded reserves
volumes associated with the noncore asset sale completed subsequent
to June 30, 2022.
-- S&P's default scenario contemplates a significant drop in oil
and gas prices that limits the company's ability to fund fixed
charges and exhausts available liquidity.
-- S&P's recovery analysis assumes that, in a hypothetical
bankruptcy scenario, Tamarack Valley's secured creditors are fully
covered, with the remaining value available to unsecured
noteholders.
-- The '2' recovery rating indicates substantial (70%-90%; rounded
estimate: 85%) recovery in the event of a default. The issue-level
rating is 'B+', one notch higher than the issuer credit rating in
line with S&P's notching guidelines.
Simulated default assumptions
-- Simulated year of default: 2025
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): US$970
million
-- Valuation split in % (obligors/non-obligors): 100/0
-- Secured first-lien debt: US$590 million
-- Recovery expectations: Not applicable
-- Senior unsecured debt: US$230 million
-- Recovery expectations: 70%-90% (85% capped rounded
estimate)
All debt amounts include six months of prepetition interest.
TAYLOR MORRISON: S&P Affirms 'BB' ICR on Jump in Profit
-------------------------------------------------------
S&P Global Ratings affirmed all its ratings on Scottsdale,
Ariz.-based Taylor Morrison Home Corp. (TMHC), including the 'BB'
issuer credit rating.
The stable outlook reflects S&P's forecasts for net debt to EBITDA
to remain below 2x in the next year despite slowing housing demand,
supported by a further decline in net borrowings driven by funds
from operations (FFO).
A changing macroeconomic environment has slowed housing demand,
which could pressure profitability and credit metrics. During the
second quarter of 2022, a rapid increase in mortgage interest rates
resulted from the U.S. Federal Reserve's actions to stem continued
price inflation and reduced housing demand. Meanwhile, significant
supply chain disruptions continued, extending construction and
development cycles and delaying home closings and openings of new
communities. While profitability remains strong in 2022, S&P
expects margin pressure to build into 2023 as higher incentives and
supply chain issues hurt profitability.
S&P said, "We think Taylor Morrison's profits will jump more than
50% in 2022 alone. We now expect that average home price growth and
EBITDA margins will both achieve cycle-peaks in the current year,
at about 21% each, before edging lower in 2023. As such, we
anticipate 2022 EBITDA, of $1.72 billion, will have easily doubled
since its 2020 acquisition of William Lyon Homes."
Net borrowings should fall to $2 billion in 2023. With most of its
more than $1.2 billion in forecast FFO remaining after TMHC meets
inventory-related spending needs (outlined above), net debt should
finish about $100 million lower than last year's about $2.4
billion. This includes completion of TMHC's ($290 million) tender
offer for its senior notes due in 2027 and expected repayment of
its $150 million revolving credit balance on June 30. S&P thinks
TMHC's year-end cash balance will approach $700 million. Thus, with
net debt to EBITDA expected to fall to or below 1.5x and net debt
to capital trending below 35%, the company should have relatively
attractive options as it considers repaying or refinancing its
roughly $350 million in 2023 senior notes due next April.
S&P said, "More modest demand for U.S. housing should limit land
outlays. For 2022 and 2023, our economists now expect further
softening in key drivers of housing demand--namely employment
growth--even as rising mortgage rates and weak consumer confidence
continue to weigh on demand. Spending at TMHC through year-end
(2022) will shift toward completing construction, so it can close
and deliver an estimated 75% of its $6.1 billion in June 30
backlog. Even allowing for net land and development spending
staying 5%-10% above replacement levels through 2023, or about $500
million-$600 million a year, TMHC should generate $600 million-$700
million a year in free operating cash flow (FOCF), based on our
estimates."
But keep in mind that because these outlays should skew more toward
(fast pay-back) vertical construction from (slow pay-back)
horizontal development, returns on spending should accelerate, but
at the risk of TMHC being unable to deliver these more abundant,
fully costed homes.
The stable outlook reflects S&P's forecasts for net debt to EBITDA
to remain below 2x, with the further decline in net borrowings
driven by our expected about $1.2 billion in FFO a year.
S&P could lower the rating on Taylor Morrison over the next 12
months if net debt to EBITDA rises above 4x, potentially through:
-- About a 65% decline in profits from our EBITDA forecasts ($1.72
billion for 2022, $1.65 billion for 2023); or
-- Net debt issuances of more than $5 billion from recent levels
($2.45 billion in the second quarter of 2022).
S&P could raise the rating if TMHC maintains net debt to EBITDA
below 2x.
ESG credit indicators: E-3; S-2; G-2
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of Taylor Morrison
Home. The company is subject to a variety of local, state, and
federal statutes, ordinances, rules, and regulations concerning
health and environment protection. We view TMHC's ESG exposure as
broadly in line with that of industry peers."
TD HOLDINGS: Posts $1.4 Million Net Income in Second Quarter
------------------------------------------------------------
TD Holdings, Inc. filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q reporting net income of $1.42
million on $53.68 million of total revenue for the three months
ended June 30, 2022, compared to net income of $357,856 on $59.84
million of total revenue for the three months ended June 30, 2021.
For the six months ended June 30, 2022, the Company reported net
income of $3.02 million on $101.84 million of total revenue
compared to a net loss of $1.18 million on $89.42 million of total
revenue for the six months ended June 30, 2021.
As of June 30, 2022, the Company had $274.62 million in total
assets, $28.26 million in total liabilities, and $246.36 million in
total equity.
TD Holdings said, "Since the beginning of 2022, another wave of
COVID-19 variants broke out in China, which caused surging numbers
of COVID-19 cases in certain cities, such as Shenzhen, Shanghai and
Beijing, where relevant local governments have taken certain
lock-down and other restrictive measures to prevent the further
spread of COVID-19. As a result, our operations in Shanghai at the
beginning of 2022 were temporarily affected for about two weeks
primarily attributable to the closure of our warehouse as local
authorities in Shanghai imposed strict lock-down measures since
March 2022. As of June 30, 2022, since the lock-down restrictions
in Shanghai have been gradually lifted, our business operations
have not experienced any material or adverse interruption due to
the recent COVID-19 outbreak. To the best knowledge of our
management, our business and financial conditions had not been
materially adversely impacted by the resurgence of COVID-19 for the
six months ended June 30, 2022.
"The economic effect of a prolonged pandemic is difficult to
predict and could result in a material financial impact on the
Company's future reporting periods. The actual impact caused by
the COVID-19 outbreak will depend on its subsequent development.
We will continue to assess the impacts of COVID-19 on the business
and financial performance of our Group and will closely monitor the
risks and uncertainties arising thereof, and may take further
actions that alter our operations, or that we determine are in the
best interests of our employees and third parties with which we do
business."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1556266/000121390022045597/f10q0622_tdhold.htm
About TD Holdings
TD Holdings, Inc. is a service provider currently engaging in
commodity trading business and supply chain service business in
China. Its commodities trading business primarily involves
purchasing non-ferrous metal product from upstream metal and
mineral suppliers and then selling to downstream customers. Its
supply chain service business primarily has served as a one-stop
commodity supply chain service and digital intelligence supply
chain platform integrating upstream and downstream enterprises,
warehouses, logistics, information, and futures trading. For more
information, please visit http://ir.tdglg.com.
TD Holdings reported a net loss of $940,357 for the year ended Dec.
31, 2021, a net loss of $5.95 million for the year ended Dec. 31,
2020, and a net loss of $6.94 million for the year ended Dec. 31,
2019.
TD HOLDINGS: Regains Compliance With Nasdaq's Bid Price Requirement
-------------------------------------------------------------------
TD Holdings, Inc. has received a notification letter from the
Listing Qualifications Department of the Nasdaq Stock Market Inc.
dated Aug. 31, 2022, informing the Company that it has regained
compliance with the Nasdaq Listing Rule 5550(a)(2).
As previously announced, the Company received a notification letter
from the Nasdaq dated Sept. 1, 2021 indicating that the closing bid
price for the Company's common stock was below the minimum bid
price of $1.00 required for continued listing under the Nasdaq
Listing Rule 5550(a)(2) for 30 consecutive business days.
According to the Deficiency Notice, if at any time during the
180-day compliance period, the closing bid price of the Company's
common stock is at least $1.00 for a minimum of ten consecutive
business days, the Nasdaq will provide the Company written
confirmation of compliance and the matter will be closed.
According to the Compliance Notice, the closing bid price of the
Company's common stock has been at $1.00 per common stock or
greater for 10 consecutive business days from Aug. 17, 2022, and
the Company has regained compliance with the Minimum Bid Price
Requirement and the matter is closed.
About TD Holdings
TD Holdings, Inc. is a service provider currently engaging in
commodity trading business and supply chain service business in
China. Its commodities trading business primarily involves
purchasing non-ferrous metal product from upstream metal and
mineral suppliers and then selling to downstream customers. Its
supply chain service business primarily has served as a one-stop
commodity supply chain service and digital intelligence supply
chain platform integrating upstream and downstream enterprises,
warehouses, logistics, information, and futures trading. For more
information, please visit http://ir.tdglg.com.
TD Holdings reported a net loss of $940,357 for the year ended Dec.
31, 2021, a net loss of $5.95 million for the year ended Dec.
31,2020, and a net loss of $6.94 million for the year ended Dec.
31, 2019. As of June 30, 2022, the Company had $274.62 million in
total assets, $28.26 million in total liabilities, and $246.36
million in total equity.
TERRA MANAGEMENT: Disclosure Hearing Continued to Oct. 12
---------------------------------------------------------
Terra Management Group, LLC, and Littleton Main Street LLC filwed
with the U.S. Bankruptcy Court for the District of Colorado a
motion to Continue Disclosure Statement Hearing and Reset Objection
Deadline.
On Sept. 12, 2022, Judge Kimberley H. Tyson granted the motion and
ordered that:
* The telephonic hearing for consideration of the adequacy of
and to approve the Disclosure Statement originally scheduled to
begin on September 16, 2022, is continued to Oct. 12, 2022 starting
at 10:00 a.m.
* Oct. 5, 2022, is fixed as the last day to file objections to
the Disclosure Statement.
A copy of the order dated September 12, 2022, is available at
https://bit.ly/3Dt3KEN from PacerMonitor.com at no charge.
Attorneys for the Debtors:
Michael J. Pankow, Esq.
Amalia Sax-Bolder, Esq.
BROWNSTEIN HYATT FARBER SCHRECK, LLP
410 17th Street, Suite 2200
Denver, CO 80202
Tel: (303) 223-1100
Fax: (303) 223-1111
Email: mpankow@bhfs.com
asax-bolder@bhfs.com
About Terra Management Group and Littleton Main Street
Terra Management Group, LLC, is an Englewood, Colo.-based company
engaged in activities related to real estate.
Terra Management Group and Littleton Main Street, LLC filed their
voluntary petitions for Chapter 11 protection (Bankr. D. Col. Lead
Case No. 21-15245) on Oct. 15, 2021. J. Marc Hendricks, president
and manager of Terra Management Group, signed the petitions. At
the time of the filing, Terra Management Group listed up to
$100,000 in assets and up to $50 million in liabilities while
Littleton listed as much as $50 million in both assets and
liabilities.
The Hon. Kimberley H. Tyson is the case judge.
The Debtors tapped Michael J. Pankow, Esq., at Brownstein Hyatt
Farber Schreck, LLP as legal counsel, and Haynie & Company as tax
accountant.
TORINO CAMPUS: Nov. 8 Plan & Disclosure Hearing Set
---------------------------------------------------
On August 25, 2022, Torino Campus, LLC, filed with the U.S.
Bankruptcy Court for the Southern District of Florida an Amended
Disclosure Statement with respect to Chapter 11 Plan.
On Sept. 8, 2022, Judge Mindy A. Mora conditionally approved the
Disclosure Statement and ordered that:
* Nov. 8, 2022 at 2:30 p.m. at the United States Bankruptcy
Court located at 1515 N. Flagler Dr., Courtroom A, Room 801, West
Palm Beach, FL 33401 is the hearing on final approval of Disclosure
Statement and Confirmation Hearing.
* Nov. 1, 2022 is fixed as the last day for filing written
acceptances or rejections of the plan.
* Nov. 3, 2022 is fixed as the last day for filing and serving
written objections to the disclosure statement and confirmation of
the plan.
* Oct. 25, 2022 is the deadline for Fee Applications.
A copy of the order dated September 8, 2022, is available at
https://bit.ly/3eQ2kda from PacerMonitor.com at no charge.
Debtor's Counsel:
Brian K. McMahon, Esq.
Brian K. McMahon, PA
1401 Forum Way, 6th Floor
West Palm Beach, FL 33401
Telephone: (561) 478-2500
Facsimile: (561) 478-3111
Email: brian@bkmbankruptcy.com
About Torino Campus
Torino Campus, LLC, a Florida Limited Liability Company, exists
solely to own real estate located at 5481 NW E Torino Parkway, Port
St. Lucie, FL.
To delay a foreclosure sale, Torino Campus, LLC, sought bankruptcy
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Fla. Case No. 22-15442) on July 15, 2022. In the petition
filed by Jose Toledo, managing member, the Debtor listed as much as
$10 million in both assets and liabilities.
Judge Mindy A. Mora oversees the case.
Brian K. McMahon, Esq., at Brian K. McMahon PA, is the Debtor's
counsel.
TPC GROUP: Sullivan, et al. Advise on Port Neches Class Claimants
-----------------------------------------------------------------
In the Chapter 11 cases of TPC Group Inc., et al., the law firms of
Sullivan Hazeltine Allinson LLC, Mitchell A. Toups, Ltd., The
Coffman Law Firm, Provost Umphrey Law Firm, L.L.P., The Ferguson
Law Firm, LLP, Farrar & Ball LLP, and Brent Coon & Associates,
submitted a verified statement under Rule 2019 of the Federal Rules
of Bankruptcy Procedure, to disclose that they are representing the
Port Neches Plant Explosion Proposed Class Representatives.
The names and contact information of the Port Neches Plant
Explosion Proposed Class Representatives represented are:
a. Weber Real Estate, LLC, Faith Shoemaker, and Scott Morvant,
as proposed class representatives.
c/o Mitchell A. Toups, Esq., and Richard L. Coffman, Esq.
P.O. Box 350
Beaumont, TX 77704
The names and addresses of the Port Neches Plant Explosion Proposed
Class Representatives represented by SHA and PUL are:
a. David and Teri Wilson, as proposed class representatives.
c/o Darren L. Brown, Esq.
Provost Umphrey Law Firm, L.L.P.
350 Pine Street, Suite 1100
Beaumont, TX 77701
The name and address of the Port Neches Plant Explosion Proposed
Class Representatives represented by SHA and FLF are:
a. Roger Wallace, as proposed class representative.
c/o Mark Sparks, Esq.
The Ferguson Law Firm, LLP
350Pine Street, Suite 1440
Beaumont, Texas 77701
The name and address of the Port Neches Plant Explosion Proposed
Class Representatives represented by SHA and F&B are:
a. Brian Lange and Chris and Pamela Johnson, as proposed class
representatives.
c/o Troy O'Brien, Esq.
Farrar & Ball LLP 1117 Herkimer St.
Houston, TX 77008
The name and address of the Port Neches Plant Explosion Proposed
Class Representatives represented by SHA and BCA are:
a. Oscar and Keeli Galvan, as proposed class representatives.
c/o Brent Coon, Esq.
BRENT COON & ASSOCIATES
215 Orleans St.
Beaumont, TX 77701
None of the claims asserted by the Port Neches Plant Explosion
Proposed Class Representatives rise to the level of a "disclosable
economic interest" as defined in Rule 2019, as a result of the
Debtors' Port Neches plant explosion.
The Firms were retained in the ordinary course of business to
represent the Port Neches Plant Explosion Proposed Class
Representatives on and after November 27, 2019, for purposes of
acting in concert to advance their respective clients' common
interests and to benefit from economies of scale in their legal
representation in this case. The specific terms and conditions of
employment of the Firms are confidential and are also protected by
the attorney-client privilege and attorney work product doctrine.
The Firms do not presently own, nor have they previously owned, any
disclosable economic interest in or against the Debtors or their
estates.
Counsel to the Port Neches Plant Explosion Proposed Class
Representatives can be reached at:
SULLIVAN · HAZELTINE · ALLINSON LLC
William D. Sullivan, Esq.
Elihu E. Allinson, Esq.
919 North Market Street, Suite 420
Wilmington, DE 19801
Tel: (302) 428-8191
Fax: (302) 428-8195
E-mail: bsullivan@sha-llc.com
zallinson@sha-llc.com
Counsel to Weber Real Estate, LLC, Faith Shoemaker, and Scott
Morvant, as proposed class representatives can be reached at:
Mitchell A. Toups, Esq.
MITCHELL A. TOUPS, LTD.
2615 Calder Ave., Suite 400
Beaumont, TX 77702
Telephone: (409) 832-1800
Facsimile: (409) 832-8577
E-mail: matoups@wgttlaw.com
Richard L. Coffman, Esq.
THE COFFMAN LAW FIRM
3355 West Alabama, Suite 240
Houston, TX 77098
Telephone: (713) 528-6700
Facsimile: (866) 835-8250
E-mail: rcoffman@coffmanlawfirm.com
Counsel to David and Teri Wilson, as proposed class representatives
can be reached at:
Darren L. Brown, Esq.
Provost Umphrey Law Firm, L.L.P.
350 Pine Street, Suite 1100
Beaumont, TX 77701
Tel: (409) 835-6000
Fax: (409) 813-8630
E-mail: dbrown@provostumphrey.com
Counsel to Roger Wallace, as proposed class representative:
Mark Sparks, Esq.
The Ferguson Law Firm, LLP
350 Pine Street, Suite 1440
Beaumont, TX 77701
Tel: 409+832-9700
Counsel to Brian Lange and Chris and Pamela Johnson, as proposed
class representatives can be reached at:
Troy O’Brien, Esq.
Farrar & Ball LLP
1117 Herkimer St.
Houston, TX 77008
Tel: 713-221-8300
Fax: 713-221-8301
E-mail: troy@fbtrial.com
Counsel to Oscar and Keeli Galvan, as proposed class
representatives can be reached at:
Brent Coon, Esq.
Lori K. Slocum, Esq.
BRENT COON & ASSOCIATES 215 Orleans St.
Beaumont, TX 77701
Telephone: 409-835-2666
Facsimile: 409-835-1912
E-mail: brent@bcoonlaw.com
Lori.Slocum@bcoonlaw.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3Bzd48A
About TPC Group
TPC Group, headquartered in Houston, is a producer of value-added
products derived from petrochemical raw materials such as C4
hydrocarbons, and provider of critical infrastructure and logistics
services along the Gulf Coast. The Company sells its products into
a wide range of performance, specialty and intermediate markets,
including synthetic rubber, fuels, lubricant additives, plastics
and surfactants. With an operating history of more than 75 years,
TPC Group has a manufacturing facility in the industrial corridor
adjacent to the Houston Ship Channel and operates product
terminals
in Port Neches, Texas and Lake Charles, Louisiana.
TPC Group Inc. and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group
estimated assets and debt of $1 billion to $10 billion to $10
billion.
The Hon. Craig T. Goldblatt is the case judge.
Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arshtn
& Tunnell LLP is the co-counsel; Moelis & Company LLC is the
investment banker; and FTI Consulting is the financial advisor.
Simpson Thacher & Bartlett LLP is the special finance counsel.
Kroll Restructuring Administration is the claims agent.
Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd.
Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as
counsel to the Ad Hoc Noteholder Group that supports the Debtors'
restructuring. Evercore Group L.L.C., is the Group's financial
advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to
the Ad Hoc Noteholder Group. The Supporting Noteholders are funds
controlled by FIG LLC and Fortress Capital Finance III(A) LLC,
Monarch Alternative Capital LP., PGIM Inc., Redwood Capital
Management LLC, and Strategic Value Partners LLC.
Pachulski Stang Ziehl & Jones LLP, Proskauer Rose LLP, and Selendy
Gay Elsberg PLLC are serving as counsel to an Ad Hoc Group of
Non-Consenting Noteholders, led by Bayside Capital, Inc., and
Cerberus Capital Management, L.P.  Milbank LLP previously
served as the group's counsel but was later replaced by Pachulski
and SGE.
TRINITI DME: Wins Cash Collateral on Final Basis
------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas,
Sherman Division, authorized Triniti DME Solutions, LLC to use cash
collateral on a final basis, in accordance with the provisions in
the 14-day budget, for any budgeted item that is due and payable.
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.
The Court said the funds set forth $5,000 for attorney's fees and
$1,000 for Subchapter V Trustee fees on the budget have not been
authorized by the Court at this time. Those funds will remain
budgeted but shall not be paid unless ordered by the Court in a
separate Order.
As adequate protection for the use of cash collateral, the parties
included on the UCC filing list presented to the Court 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.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3ezavdC from PacerMonitor.com.
The Debtor projects $60,000 in cash receipts and $50,448 in cash
disbursements.
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.
UC HOLDINGS: S&P Downgrades ICR to 'CCC+', Outlook Developing
-------------------------------------------------------------
S&P Global Ratings lowered the issuer credit rating on UC Holdings
Inc. (d/b/a Aludyne) to 'CCC+' from 'B-'. At the same time, S&P
lowered its issue-level rating on the company's senior secured
first-lien term loan to 'B-' from 'B'.
The developing outlook for Aludyne reflects S&P's view that we
could raise or lower its issuer credit rating depending upon the
company's ability to sufficiently address its upcoming debt
maturity and sustainably generate positive FOCF, such that it
improves its liquidity position and alleviates pressures on its
capital structure.
The downgrade reflects Aludyne's weakening liquidity due to
negative free cash flow and increased refinancing risk for its
first-lien term loan as credit market conditions have weakened. The
company has generated over $75 million of negative FOCF in the
first half of 2022 due to outsized working capital investments and
increased capital spending required to support Aludyne's recent
ramp in sales growth associated with several new original equipment
manufacturer (OEM) program launches and general pickup in North
American vehicle production. The company's liquidity totaled $70.6
million including $41.3 million of balance sheet cash and net
asset-based lending (ABL) revolver availability of $29.3 million as
of June 30, 2022, which has fallen from more than $100 million at
the end of 2021. Of note, the majority of Aludyne's cash holdings
are held in foreign jurisdictions, predominantly China, and the
company faces constraints in efficiently repatriating this cash.
While S&P expects the negative drag from working capital to reverse
to some degree in the second half of the year, the volatility in
production with automotive OEMs, and inflationary costs could
result in elevated working capital and further reduce liquidity.
The recent negative cash flows along with uncertainty on the
recovery of auto production and increasingly tough credit market
conditions means the company could encounter heightened difficulty
in refinancing its first-lien term loan, which will become current
on Nov. 15, 2022. For this reason, S&P continues to view Aludyne's
liquidity as less than adequate.
S&P said, "These risks are partially offset by ongoing sales growth
and EBITDA margin expansion that we expect will lead to leverage
below 4x in 2022. Sales growth in 2022 has contributed to modest
EBITDA margin expansion from sub-5% the prior year to the 7%-8%
range in the first half, which we expect will continue to improve
as production volumes with core OEM customers recovers from the
impact of the COVID-19 pandemic and subsequent supply chain
disruptions associated with semiconductor chip shortages. For this
reason, we expect leverage to fall from over 9x in 2021 to below 4x
in 2022. Given the relatively low leverage, we will focus on how
the company manages to convert its margin expansion to improving
cash flows. Improving cash flows and liquidity, including
addressing its upcoming first-lien term loan maturity, would likely
lead to an increase in the company's rating.
"The developing outlook for Aludyne reflects our view that we could
raise or lower our issuer credit rating depending upon the
company's ability to sufficiently address its upcoming debt
maturity and sustainably generate positive FOCF, such that it
improves its liquidity position and alleviates pressures on its
capital structure."
S&P could downgrade Aludyne if:
-- The company is unable to sufficiently address its upcoming
first-lien term loan maturity due November 2023; or
-- Its liquidity position deteriorated further over the next 12
months; or
-- S&P believed there was an increased likelihood the company
would pursue a distressed exchange that it would consider
tantamount to a default.
S&P could upgrade Aludyne to the extent that:
-- The company appropriately addressed its upcoming debt maturity
in a manner that results in creditors receiving nothing less than
the value promised when the debt was issued.
-- Its EBITDA margin recovery remains stable and the company is
able to manage its working capital over the forecast period to
sustainably generate modest FOCF and improve its liquidity.
ESG credit indicators: E-2, S-2, G-4
S&P said, "Environmental factors have an overall neutral influence
on our credit rating analysis of UC Holdings Inc. As a supplier of
knuckles and control arms and subframe components, the company's
products will not face a material drop in demand from the
electrification of the vehicle powertrain. We may consider some
upside if the company is able to grow above the industry average
through light-weighting, which is essential for achieving
compliance. The company's focus on aluminum structural components,
critical for reducing vehicle weight, should benefit from the
industry trends.
"Governance is a negative consideration. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of the
controlling owners, in line with our view of the majority of rated
entities owned by private-equity sponsors. Our assessment also
reflects their generally finite holding periods and a focus on
maximizing shareholder returns. Under previous owners, the company
had a poor operating track record, which led to large financial
losses during product launches and, eventually, a bankruptcy. If
the company extends its recent operating track record, especially
around cost-reductions, we could revise the governance indicator to
G-3."
UNITED RENTALS: Egan-Jones Retains BB+ Senior Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company, on August 23, 2022, retained its 'BB+'
foreign currency and local currency senior unsecured ratings on
debt issued by United Rentals, Inc.
Headquartered in Stamford, Connecticut, United Rentals, Inc.,
through its subsidiary, is an equipment rental company operating a
network of locations in the United States and Canada.
US RENAL CARE: S&P Downgrades ICR to 'CCC+', Outlook Stable
-----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S. Renal
Care Inc. (USRC) to 'CCC+' from 'B-'. S&P also lowered its
issue-level rating on the secured debt to 'CCC+' from 'B-' and its
rating on the unsecured debt to 'CCC-' from 'CCC'. The recovery
ratings of '3' on the secured debt and '6' on the unsecured debt
are unchanged.
The outlook is stable and reflects S&P's expectation for liquidity
to remain adequate over the next couple of years, despite weaker
profitability and projected cash flow deficits.
S&P said, "The downgrade reflects our expectation for higher
operating expenses and labor inflation to reduce adjusted EBITDA
margins to 15% for fiscal 2022 from 20% for fiscal 2021. We also
expect interest expense to increase, resulting in persistent free
cash flow deficits and elevated leverage over the next several
years. Despite recent improvements in revenue and volume growth,
ongoing inflationary pressures and higher growth spending have
contributed to a significant adjusted EBITDA margin decline. In
addition, margins have been negatively impacted by the COVID-19
pandemic, which has resulted in excess patient mortality and
increased patient care costs, as many clinics were forced to
operate COVID only patient shifts.
"Margins have also been affected by investments to support
value-based care initiatives. We do not expect these initiatives to
be accretive to profitability until 2024. Much of the company's
debt is hedged, but we still expect interest expense to increase
because of rising rates. The combination of margin erosion and
higher interest rates leads us to now expect that cash flow from
operations will not be sufficient to cover maintenance capex,
distributions to minority interests, and mandatory amortization. In
addition, we expect adjusted debt to EBITDA to increase to about
13x in 2022.
"We believe USRC will maintain sufficient liquidity over the next
12 months.We estimate liquidity of about $395 million as of June
30, 2022, based on approximately $262 million cash on the balance
sheet and approximately $133 million of availability under its $150
million revolving credit facility (matures 2024). We view its
liquidity as sufficient to support fixed charges of about $290
million over the next 12 months, which includes $24 million in
mandatory amortization; $40 million in maintenance capex; about $55
million in distributions to noncontrolling interests; and
approximately $170 million in interest expense. However, we expect
that to significantly deteriorate over the next few years because
of continued cash flow deficits.
"We believe there is an increased likelihood of a below-par debt
purchase. The company's 10.625% senior notes payable (due in 2027)
are trading at less than 50 cents on the dollar and have traded low
in the secondary market for several months. With USRC's high debt
burden, we believe the potential for a below-par repurchase has
increased. We could view such a transaction as a default if lenders
do not receive the full amount originally promised.
"The stable outlook reflects our expectation for liquidity to
remain adequate over the next couple of years, despite weaker
profitability and projected cash flow deficits."
S&P could lower the rating on USRC if:
-- S&P believes there is increased risk of a distressed debt
exchange; or
-- Liquidity deteriorates and becomes insufficient to cover cash
needs over the next 12 months.
Although unlikely over the next 12 months, S&P could raise its
ratings on U.S. Renal Care if it increases revenue and improves
margins such that reported cash flow from operations is sufficient
to cover distributions to minority interests, maintenance capex,
and mandatory amortization on a sustained basis.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of
controlling owners, in line with our view of most rated entities
owned by private-equity sponsors. Our assessment also reflects the
generally finite holding periods and a focus on maximizing
shareholder returns."
VILLAS OF COCOA: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: The Villas of Cocoa Village LLC
210 Annie Street
Orlando, FL 32806
Business Description: The Debtor is part of the residential
building construction industry.
Chapter 11 Petition Date: September 12, 2022
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 22-03286
Debtor's Counsel: C. Andrew Roy, Esq.
WINDERWEEDLE HAINES WARD & WOODMAN PA
PO Box 880
Winter Park, FL 32790-0880
Tel: 407-423-4246
E-mail: aroy@whww.com
Total Assets: $842,938
Total Liabilities: $3,802,963
The petition was signed by Robert D. Harvey as authorized officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/DDXOGJA/The_Villas_of_Cocoa_Village_LLC__flmbke-22-03286__0001.0.pdf?mcid=tGE4TAMA
VISTAGEN THERAPEUTICS: Falls Short of Nasdaq Bid Price Requirement
------------------------------------------------------------------
Vistagen Therapeutics, Inc. received a letter from the Listing
Qualifications Staff of The Nasdaq Stock Market, LLC on Sept. 6,
2022, indicating that, based upon the closing bid price of the
Company's common stock, par value $0.001 per share, for the last 30
consecutive business days, the Company is not currently in
compliance with the requirement to maintain a minimum bid
price of $1.00 per share for continued listing on the Nasdaq
Capital Market, as set forth in Nasdaq Listing Rule 5550(a)(2).
The Letter has no immediate effect on the listing of the Company's
Common Stock on The Nasdaq Capital Market.
The Company intends to monitor the closing bid price of its
Common Stock. To regain compliance, the closing bid price of
the Company's Common Stock must be at least $1.00 per share for 10
consecutive business days during the 180-day period from Sept. 6,
2022 to March 6, 2023. If the Company does not regain compliance
with the minimum bid price requirement by March 6, 2023, Nasdaq
may grant the Company a second 180-day period to regain compliance.
To qualify for this additional 180-day compliance period, the
Company would be required to meet the continued listing requirement
for market value of publicly held shares and all other initial
listing standards for the Nasdaq Capital Market, other than the
minimum bid price requirement. In addition, the Company would
also be required to notify Nasdaq of its intent to cure the
minimum bid price deficiency by effecting a reverse stock
split, if necessary. If the Company does not regain compliance
within the allotted compliance periods, including any extensions
that may be granted by Nasdaq, Nasdaq will provide notice that the
Company's Common Stock will be subject to delisting. The Company
would then be entitled to appeal that determination to a Nasdaq
hearings panel.
There can be no assurance that the Company will regain compliance
with the minimum bid price requirement during the 180-day
compliance period, secure a second 180-day period to regain
compliance or maintain compliance with the other Nasdaq listing
requirements.
About VistaGen
Headquartered in San Francisco, California, VistaGen Therapeutics,
Inc. -- http://www.vistagen.com-- is a biopharmaceutical company
committed to developing and commercializing innovative medicines
with the potential to go beyond the current standard of care for
anxiety, depression, and other CNS disorders.
VistaGen reported a net loss and comprehensive loss of $47.76
million for the fiscal year ended March 31, 2022, compared to a
net
loss and comprehensive loss of $17.93 million for the fiscal year
ended March 31, 2021. As of June 30, 2022, the Company had $58.73
million in total assets, $12.67 million in total liabilities, and
$46.05 million in total stockholders' equity.
San Francisco, California-based WithumSmith+Brown, PC, the
Company's auditor since 2006, issued a "going concern"
qualification in its report dated June 23, 2022, citing that the
Company has suffered negative cash flows from operations and
recurring losses from operations since inception, resulting in an
accumulated deficit of $267.6 million as of March 31, 2022, that
raise substantial doubt about its ability to continue as going
concern.
WAHOO FITNESS: S&P Downgrades ICR to 'CCC', Outlook Negative
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
fitness technology company Wahoo Fitness Acquisition LLC to 'CCC'
from 'B-' because it believes a default due to a liquidity
shortfall or balance sheet restructuring (potentially triggered by
a covenant breach) is likely without unforeseen positive
developments within the next 12 months.
Concurrently, S&P lowered its issue-level rating on its senior
secured credit facilities to 'CCC+' from 'B'. The recovery rating
remains '2', indicating its expectations for substantial (70%-90%;
rounded estimate: 70%) recovery in the event of a payment default.
The negative outlook reflects the potential for a lower rating if a
default, including a restructuring triggered by a covenant breach,
within six months appears inevitable.
S&P said, "Wahoo's revenue and profits will be significantly weaker
than our previous forecasts. The company's second quarter of 2022
results came in substantially below our expectations, impaired by
fewer replenishment orders from retailers and higher costs related
to freight and warehousing. We previously forecast a recovery in
the second half as Wahoo returns to normal seasonality--about 65%
of total revenue concentrated in the back half of the year, which
coincides with colder months in the Northern Hemisphere and the
holiday season. However, we now assume performance will be
considerably lower as retailers continue to report elevated
inventory. Our revised forecast is for weakening macroeconomic
conditions that lead to consumers focusing on necessities and
consumables, cutting back on discretionary spending. This is
further amplified in Europe--which accounts for about 40% of
revenue--where elevated inflationary pressures are exacerbated by
an acute energy shortfall and high energy prices.
"We note Wahoo plans to release multiple new products later this
month. While we acknowledge that this will drive some recovery from
recent lows and that Wahoo serves a niche, loyal customer base, we
continue to believe that a large segment of customers would defer
purchases of product upgrades in a recessionary and/or inflationary
environment.
"Therefore, we now project revenue will drop about 35% and S&P
Global Ratings-adjusted EBITDA about 75% in 2022, resulting in
elevated leverage of about 17x, which we deem unsustainable.
"Liquidity might become a near-term concern. We expect Wahoo to
generate negative FOCF in 2022 due to weak earnings and elevated
working capital outflows. Additionally, our revised base-case
forecast indicates Wahoo will not meet its 7x net leverage covenant
applicable at the end of the year. Although we expect the company
to maintain access to the revolver over the next few months, a
covenant default would cause Wahoo to lose access absent a waiver
or amendment, which may be difficult to negotiate. We recognize
Wahoo is addressing short-term liquidity concerns by cutting back
on discretionary spending and improving working capital management
by focusing on inventory reduction and negotiating extended terms
with suppliers. However, this is unlikely to prevent the company
from violating the leverage covenant when it comes into effect.
"We forecast Wahoo's margins will remain pressured through 2022 due
to cost inflation. It continues to be affected by high costs
related to commodities, freight, and warehousing, which it cannot
offset with higher prices given aggressive promotional activity
from larger competitors. As a result, we now expect margins will be
substantially weaker.
"The negative outlook on Wahoo reflects the possibility that we
will lower our ratings if the risk of a near-term default increases
such that we envision a specific default scenario in the subsequent
six months.
"We would likely lower our rating if profit and cash flow deficits
point to specific default scenarios that are inevitable within the
subsequent six months." This could include a financial covenant
default that leads to a balance sheet restructuring. Potential
triggers include:
-- An inability to unwind its elevated working capital position,
leading to sustained cash burn and materially weaker liquidity;
-- A recession resulting in reduced consumer discretionary
spending;
-- Competitive incursions by financially stronger industry players
or sustained intense price competition from rivals; or
-- New product launches fail to drive revenue growth.
S&P could revise the outlook to stable or raise the ratings if:
-- Wahoo maintains compliance with its covenants and a minimum 15%
EBITDA headroom;
-- It manages working capital effectively and maintains sufficient
liquidity; and
-- Consumption trends for the company's products improve,
providing a clearer pathway to sustained profitability that would
reduce the likelihood of default.
ESG credit indicators: E-2; S-2; G-3
WALL007 LLC: Seeks to Hire Eric A. Liepins as Legal Counsel
-----------------------------------------------------------
WALL007, LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Texas to hire the law firm of Eric A. Liepins,
P.C. as its counsel.
The Debtor requires legal assistance for the purpose of orderly
liquidating the assets, reorganizing the claims of the estate, and
determining the validity of claims asserted in the estate.
The hourly rates of the firm's counsel and staff are as follows:
Eric A. Liepins $275
Paralegals and Legal Assistants $30 - $50
In addition, the firm will seek reimbursement for expenses
incurred.
The firm received a retainer of $2,500.
Mr. Liepins, the sole shareholder of the firm, disclosed in a court
filing that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Eric A. Liepins, Esq.
Eric A. Liepins, PC
12770 Coit Road, Suite 850
Dallas, TX 75251
Telephone: (972) 991-5591
Facsimile: (972) 991-5788
Email: eric@ealpc.com
About WALL007 LLC
WALL007 LLC, a company in Carrollton, Texas, filed for Chapter 11
protection (Bankr. E.D. Texas Case No. 22-41049) on Aug. 19, 2022,
listing $1 million to $10 million in both assets and liabilities.
Tim Barton, president of the Debtor's managing member, signed the
petition.
Judge Brenda T. Rhoades oversees the case.
Eric A. Liepins, P.C. is the Debtor's legal counsel.
WESTERN AUSTRALIAN: Nov. 1 Plan Confirmation Hearing Set
--------------------------------------------------------
On July 25, 2022, debtor Western Australian Holdings, LLC filed
with the U.S. Bankruptcy Court for the Western District of North
Carolina a Disclosure Statement referring to a Plan.
On Sept. 12, 2022, Judge George R. Hodges approved the Disclosure
Statement and ordered that:
* Oct. 25, 2022, is fixed as the last day for filing written
acceptances or rejections of the plan.
* Nov. 1, 2022, at 10:00 AM is fixed for the hearing on
confirmation of the plan at U.S. Courthouse, Main Courtroom, First
Floor, 100 Otis Street, Asheville, NC 28801−2611.
* Oct. 25, 2022, is fixed as the last day for filing and
serving written objections to confirmation of the plan.
A copy of the order dated September 12, 2022, is available at
https://bit.ly/3eGTCxz from PacerMonitor.com at no charge.
Counsel for the Debtor:
Jason L. Hendren, Esq.
Rebecca F. Redwine, Esq.
Benjamin E.F.B. Waller, Esq.
Hendren Redwine & Malone, PLLC
4600 Marriott Drive, Suite 150
Raleigh, NC 27612
Tel: (919) 573-1422
Fax: (919) 420-0475
Email: jhendren@hendrenmalone.com
rredwine@hendrenmalone.com
bwaller@hendrenmalone.com
About Western Australian
Holdings
Western Australian Holdings, LLC -- https://www.majorsestate.com/
-- operates a 200-acre mountain ranch. Based in Clyde, N.C., the
company conducts business under the name Majors Estate.
Western Australian Holdings sought Chapter 11 bankruptcy protection
(Bankr. W.D.N.C. Case No. 22-10058) on April 27, 2022. In the
petition filed by Timothy F. Majors, manager, the Debtor listed up
to $10 million in assets and up to $50 million in liabilities.
Judge George R. Hodges oversees the case.
Hendren Redwine & Malone, PLLC and David M. Cole, CPA, LLC serve as
the Debtor's legal counsel and accountant, respectively.
WOODLAND COMMUNITY: Oct. 27 Plan & Disclosure Hearing Set
---------------------------------------------------------
Gina B. Krol, the chapter 11 trustee (the "Trustee") of Woodlawn
Community Development Corp., filed with the U.S. Bankruptcy Court
for the Northern District of Illinois a motion for entry of an
order conditionally approving the disclosure statement.
On September 8, 2022, Judge Carol A. Doyle granted the motion and
ordered that:
* The disclosure statement is approved on a conditional
basis.
* Oct. 27, 2022, at 10:30 a.m. is the Combined Hearing.
* Oct. 21, 2022 is fixed as the last day to file any
objections to the Disclosure Statement or Plan.
* October 21, 2022 is fixed as the last day to submit ballots
accepting or rejecting the Plan.
A copy of the order dated September 8, 2022, is available at
https://bit.ly/3U0YtKe from PacerMonitor.com at no charge.
Counsel to the Chapter 11 Trustee:
Harold D. Israel, Esq.
LEVENFELD PEARLSTEIN, LLC
2 N. LaSalle St., Suite 1300
Chicago, IL 60602
Tel: (312) 346-8380
Fax: (312) 346-8434
E-mail: hisrael@lplegal.com
About Woodlawn Community Development
Founded in 1972, Woodlawn Community Development Corp. manages and
develops affordable housing for families in the Greater Metro
Chicago area. Visit https://www.wcdcchicago.com for more
information.
Woodlawn Community Development filed a Chapter 11 petition (Bankr.
N.D. Ill. Case No. 18-29862) on Oct. 24, 2018. In the petition
signed by Leon Finney, Jr., president and chief executive officer,
the Debtor was estimated to have $50 million to $100 million in
both assets and liabilities. Judge Carol A. Doyle oversees the
case. The Debtor has tapped Herzog & Schwartz, P.C. as its
bankruptcy counsel.
Gina B. Krol is the Debtor's Chapter 11 trustee. The trustee tapped
Cohen & Krol as bankruptcy counsel, and Freeborn & Peters, LLP and
Duane Morris, LLP as special counsel.
WORLD WINE: Unsecureds Will Get 25 Cents on Dollar in Plan
----------------------------------------------------------
World Wine Group Inc., filed with the U.S. Bankruptcy Court for the
Southern District of New York a Plan of Reorganization for Small
Business dated September 8, 2022.
The Debtor is a retail wine store that has operated in New York
since 2013. It was previously located at 49 Chrystie Street, New
York, NY 10002.
The Landlord of the previous location sued for the remaining rental
on the lease, and obtained a judgement in New York State Supreme
Court on April 15, 2022. The events drove the Debtor to seek relief
in this Court. The Debtor signed a lease to 90 Bowery Street, New
York, NY10013 on March 3, 2021, and has been operating in the new
location since then.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $50,000.00 to fully
perform the terms of the plan no longer than 36 months after
confirmation. The final Plan payment is expected to be paid on the
3rd anniversary following the effective date.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 25 cents on the dollar. This Plan also provides
for the payment of administrative and priority claims.
Class 1 consists of Priority claims. This Class shall be paid in
full in equal installments over 36 months.
Class 3 consists of Non-priority unsecured creditors. This Class
shall be paid pro-rata out of projected disposable income over a 36
month period in equal installments.
The funds required for confirmation and the payment of claims
required to be paid on the effective date, shall be provided by the
Debtor and the Reorganized Debtor from the Debtor's operating cash
flow commencing on the effective date of the Plan.
A full-text copy of the Plan of Reorganization dated September 8,
2022, is available at https://bit.ly/3REpx0v from PacerMonitor.com
at no charge.
Attorney for the Plan Proponent:
Warren R. Graham, Esq.
Hooper, Yang & Associates Law Office P.C.
450 Seventh Avenue, Suite 305
New York, NY 10123
Phone: (917) 885-2370
Fax: 212-268-8668
Email: r.hineslaw@gmail.com
showarg@gmail.com
About World Wine Group
World Wine Group Inc. is a licensed liquor authority in the county
of New York, licensed by New York State State Liquor Authority
(NYSSLA) that specializes in beer and ale.
World Wine Group filed a petition for relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-10738) on June 10, 2022, listing up to $50,000 in assets and up
to $500,000 in liabilities. Sam Dawidowicz has been appointed as
Subchapter V trustee.
Judge Lisa G. Beckerman oversees the case.
Warren R. Graham, Esq., at Hooper, Yang & Associates Law Office
P.C., is the Debtor's counsel.
WYOTRANS LLC: Court OKs Deal on Cash Collateral Access Thru Oct 31
------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona authorized
Wyotrans, LLC to use cash collateral on an interim basis in
accordance with the budget, through October 31, 2022.
As previously reported by the Troubled Company Reporter, the Debtor
entered into a Factoring Agreement with England Carrier Services,
LLC whereby it sold the rights to collect various receivables
subject to the terms and conditions of the Agreement. England
Carrier perfected its interest in the Debtor's future receivables
on May 12, 2021, by recording a first position UCC-1 statement with
the Arizona Secretary of State.
Prior to the Petition Date, the Debtor entered into a Merchant Cash
Advance Agreement with Rival. In turn, Rival perfected its
interest in the Debtor's future receivables under the MCA on April
18, 2022, by recording a second position UCC-1 statement with the
Wyoming Secretary of State.
Prior to the Petition Date, the Debtor entered into an Agreement
for the Purchase and Sale of Future Receipts with Fincoast Capital,
LLC. Fincoast asserts that the transaction between it and the
Debtor amounts to an outright sale of certain assets and, as a
result, those assets are not property of the bankruptcy estate.
However, Fincoast has filed a "secured" Proof of Claim.
On June 29, 2022 the Debtor, Rival and Fincoast entered into a
Stipulation for the use of cash collateral. An Order approving that
Stipulation was entered on July 19. Pursuant to the Order, the cash
collateral agreement was subject to extension either by agreement
of the parties or further Order of the Court.
Between the time of the entry of the Order authorizing the use of
cash collateral and the filing of this Motion, the Parties worked
together and, by agreement, extended the authority for the use of
cash collateral through and including August 31.
Through an oversight, the Debtor's Counsel did not reach out to
Rival and Fincoast until August 30, 2022 to seek an agreement to
extend the use of cash collateral through the Confirmation
process.
Rival Funding will be paid as staled in the Chapter 11 Plan under
Class 2, specifically with payments beginning in September 2022. As
a result, Rival Funding will have a secured claim in the amount of
$50,100 to be paid with interest at 6% per annum. The secured claim
will be paid at the rate of $969 per month for a total of 59 months
and $969 for month 60.
A copy of the order is available at https://bit.ly/3x9GOWW from
PacerMonitor.com.
About WYOTRANS LLC
WYOTRANS LLC, doing business as National Freight Carriers, is a
U.S. Department of Transportation-registered motor carrier.
WYOTRANS, LLC, sought protection under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Ariz. Case No. 22-03353) on
May 25, 2022. In the petition filed by Michelle Allen, as managing
member, WOTRANS LLC listed estimated assets between $100,000 and
$500,000 and estimated liabilities between $500,000 and $1
million.
The case is assigned to the Honorable Bankruptcy Judge Daniel P.
Collins.
Allan D. Newdelman PC, is the Debtor's counsel.
Jennifer A. Giaimo has been appointed as Subchapter V trustee.
YAKIMA VALLEY HOSPITAL: Moody's Cuts Rating on Revenue Bonds to Ba3
-------------------------------------------------------------------
Moody's Investors Service has downgraded Yakima Valley Memorial
Hospital Association's (WA) revenue bond rating to Ba3 from Ba1.
The outlook has been revised to negative from stable at the lower
rating. The organization has approximately $40 million of debt
outstanding
RATINGS RATIONALE
The downgrade to Ba3 reflects Yakima Valley Memorial Hospital
Association's (YVM) material and recent decline in operating
performance, resulting in negative operating cash flow, and a
significant drop in unrestricted cash through the first two
quarters of 2022. This has resulted in the material reduction in
headroom to YVM's covenants, including their days cash on hand
covenant and their debt service coverage covenant. At June 30,
2022, YVM had about $61 million in unrestricted cash and
investments, excluding Medicare advances, resulting in only a $1.5
million cushion to the 40 days cash on hand requirement. Failure to
meet the days cash on hand covenant could lead to immediate
acceleration of debt, a governance consideration under Moody's ESG
framework. Operating performance has significantly deteriorated due
to elevated expense pressures resulting from the labor shortage and
inflation. While these challenges are consistent with the sector,
the severity of YVM's operating losses and decline in unrestricted
cash is higher than usual. Furthermore, ongoing labor pressures and
COVID disruptions, as well as revenue cycle issues will make it
difficult to achieve financial improvements quickly. Despite these
challenges, YVM will continue to benefit from minimal direct
competition, its sole community provider status, and relatively low
financial debt.
YVM is currently in negotiations to join MultiCare Health System.
The potential merger would allow YVM to accelerate investments in
new programs, implement an integrated electronic health record, and
expand local access to healthcare. The potential merger has not
been incorporated into Moody's rating.
RATING OUTLOOK
The negative outlook reflects the severity of cashflow and
liquidity losses through the first two quarters of 2022 and
uncertainty about the pace of improvement, given ongoing and
significant labor challenges. There is increased risk of a days'
cash on hand and/or debt service coverage covenant breach at fiscal
yearend 2022. Continued cash burn at current levels could result in
additional negative rating pressure.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
- Material and sustained improvement in operating
performance which drives sufficient headroom to
financial covenants
- Meaningful and sustained liquidity growth
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
- Failure to adhere to financial covenants
- Inability to improve financial performance and/or
a further decline in liquidity
- Further weakening of debt metrics
LEGAL SECURITY
Bonds are secured by a receivables pledge and a lien on the primary
hospital campus. The bonds also have a debt service reserve fund.
The most restrictive financial covenants include maintenance of a
minimum 40 days cash on hand and a minimum 1.25 times annual debt
service coverage (both measured annually at fiscal yearend
(December 31). YVM remained in compliance for both covenants during
the last measurement date (December 31, 2021).
PROFILE
Yakima Valley Memorial Health operates a general acute care
community hospital with 226 licensed beds located about two hours
southeast of Seattle in Yakima, the county seat of Yakima County,
WA. The hospital operates the sole Level III Neonatal Intensive
Care Unit in its primary service area. In January 2021, YVM exited
its affiliation with Virginia Mason Medical Center, and has
returned to being an independent, locally managed, community
hospital.
METHODOLOGY
The principal methodology used in these ratings was Not-For-Profit
Healthcare published in December 2018.
ZENEM CORP: UST Seeks Dismissal of Pro Se Filing
------------------------------------------------
Zenem Corp. filed for chapter 11 protection in the District of
Arizona.
The U.S. Trustee notes that the Debtor filed its petition pro se.
It is well established that only licensed attorneys may represent a
corporation in federal court. See Rowland v. Cal. Men's Colony,
Unit II, Men's Advisory Council, 506 U.S. 194, 201-02 (1993) ("It
has been the law for the better part of two centuries ... that a
corporation may appear in
federal court only through licensed counsel.")
In light of the fact that the Debtor lacks counsel in this case,
the U.S. Trustee seeks dismissal of the case.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 11, 2022.
About Zenem Corp.
Zenem Corp. is an Electronics Manufacturing/electro-mechanical
Service provider in Tempe, Arizona.
Zenem Corp. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 22-05954) on Sept. 6,
2022. In the petition filed by Frank Trask, the Debtor reported
assets between $100,000 and $500,000 and estimated liabilities
between $1 million and $10 million.
[*] Commercial Chapter 11 Bankruptcy Filings Rose in August 2022
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ABL Advisor reports that bankruptcy filings in August 2022 across
all chapters totaled 35,355, a 10 percent increase from the August
2021 total of 32,276, according to new research released from
Epiq's Bankruptcy Analytics platform.
Overall commercial filings increased 6 percent in August 2022, as
the 1,861 filings were up over the 1,753 commercial filings
registered in August 2021. Individual filings increased 10 percent
totaling 33,494 in August 2022 compared to the 30,523 filed in
August of 2021.
Total filings, both commercial and individual, show a 15 percent
increase month-over-month compared to the July 2021 total of 30,854
filings. August's commercial filings represent a 16 percent
increase compared to July's commercial filing total of 1,607, while
August's individual filings represent a 15 percent increase
compared to July’s individual filing total of 29,247.
Notably, for the first time in months, all chapters registered a
month-over-month increase. Chapter 11 filings increased 81 percent,
totaling 466 filings in August 2022 compared to 257 registered in
July. Chapter 13 filings increased 15 percent, totaling 14,981
filings compared to 12,992 registered in July. Chapter 7 filings
increased 13 percent, totaling 19,884 compared to the 17,593
registered last month.
"New bankruptcy filings in August clearly show momentum in the
market," said Chris Kruse, senior vice president at Epiq
Bankruptcy. "Chapter 13 new filings continue the recent trend of
month-over-month growth, and for the first time since March, we
also see increases in new Chapter 7 filings in August. We expect
this trend to continue as the U.S. exits the summer and marches
toward the fourth quarter."
From a commercial Chapter 11 perspective, filings continue to trend
up. August's Chapter 11 filings totaling 466 increased 81 percent
from the 257 registered in July 2022. Small business filings,
captured as subchapter V elections within Chapter 11, increased 41
percent to 140 in August 2022 from 99 in August 2021. Similarly,
August’s commercial Chapter 11 filings were up 91 percent over
the 212 filings in July 2022. The commercial filing total
represented a 16 percent increase from the July 2022 commercial
filing total of 1,607. Subchapter V elections within Chapter 11
increased 42 percent from the 85 filed in July 2022.
"Financially distressed households and companies are experiencing
expanding debt loads amid rising interest rates, inflation, and
supply chain concerns," said ABI Executive Director Amy
Quackenboss. "Though still at historically low numbers, the
increase in bankruptcy filings in August points to more families
and businesses looking for a path to alleviate mounting financial
challenges."
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Monday's edition of the TCR delivers a list of indicative prices
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then-ending.
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