/raid1/www/Hosts/bankrupt/TCR_Public/220916.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, September 16, 2022, Vol. 26, No. 258
Headlines
2 BIG HOLDINGS: Lender Seeks to Prohibit Cash Collateral Access
96 WYTHE: Eastdil, A&G Tapped to Market Williamsburg Hotel
ADAMIS PHARMACEUTICALS: May Sell Up to $300MM Worth of Securities
ADHERA THERAPEUTICS: Appoints Zahed Subhan as CEO, Board Chairman
ADVAXIS INC: Incurs $7 Million Net Loss in Third Quarter
AIKIDO PHARMA: Unit Inks Agreement to Buy Broker-Dealer
AKOUSTIS TECHNOLOGIES: Incurs $59.2M Net Loss in FY Ended June 30
ALLENA PHARMACEUTICALS: Hires SSG Advisors as Investment Banker
ALLENA PHARMACEUTICALS: Seeks to Tap Landis Rath & Cobb as Counsel
ALLENA PHARMACEUTICALS: Seeks to Tap Sonoran Capital, Appoints CRO
ARCONIC CORP: Fitch Alters Outlook on 'BB+' IDR to Positive
ASTROTECH CORP: BML Investment Has 10.2% Stake as of Aug. 23
BITNILE HOLDINGS: Adopts Amendment to Code of Business Ethics
BITNILE HOLDINGS: Schedules Annual Meeting for Nov. 23
BITNILE HOLDINGS: Unveils Planned Spin-Offs to Create 4 Companies
BOYNE USA: Moody's Affirms 'B1' CFR, Outlook Remains Stable
CENTRAL FLORIDA CIVIL: Taps Mickler & Mickler as Legal Counsel
CHERRY MAN: Trustee Taps Radbod and Associates as Bookkeeper
CIP 1106: Seeks Approval to Hire RHM LAW as Bankruptcy Counsel
CLEAN ENERGY: Secures $125K in Funding From Pacific Pier
CLEANSPARK INC: To Buy Bitcoin Mining Facility From Mawson for $33M
CREATD INC: Former CEO to Get $475K in Separation Pay
DOCUPLEX INC: Seeks to Hire Prelle Eron & Bailey as Legal Counsel
ECOARK HOLDINGS: Closes Sale of Oil Business, Banner Midstream
EMERALD ELECTRICAL: Case Summary & 20 Largest Unsecured Creditors
ENDO INT'L: Wants to Block Govt. Opioid Suits During Bankruptcy
ENDO INTERNATIONAL: Hires Alvarez & Marsal as Financial Advisor
ENDO INTERNATIONAL: Hires PJT Partners as Investment Banker
ENDO INTERNATIONAL: Hires PricewaterhouseCoopers as Auditor
ENDO INTERNATIONAL: Seeks to Hire Kroll as Administrative Advisor
ENDO INTERNATIONAL: Seeks to Hire Skadden Arps as Legal Counsel
ENDO INTERNATIONAL: Seeks to Hire Togut Segal as Co-Counsel
ESSA PHARMA: Appoints Philip Kantoff to Board of Directors
F-12 ENTERTAINMENT: Non-Alcoholic Strip Club Files for Chapter 11
FORTRESS TRANSPORTATION: Fitch Affirms 'BB-' Long-Term IDR
FRASIER CONTRACTING: Case Summary & 20 Top Unsecured Creditors
FREE SPEECH: Bankruptcy Court to Weigh Requests for Jones Financial
FREEDOM MORTGAGE: S&P Alters Outlook to Neg., Affirms 'B' ICR
FULL CIRCLE: Files Chapter 11 Subchapter V Case
GALAXY NEXT: Issues $900K 12% Promissory Note to Investor
GL INVESTMENTS: U.S. Trustee Unable to Appoint Committee
GLOBE HOME CONNECT: Gets OK to Hire Latham Luna as Legal Counsel
GMS MEDICAL: Seeks to Hire Guy Harvey as Bankruptcy Counsel
GOBP HOLDINGS: S&P Upgrades ICR to 'BB-', Outlook Stable
GOPHER RESOURCE: S&P Lowers ICR to 'B-' on Elevated Leverage
GT REAL ESTATE: Sued Over Failed NFL New Headquarters
HDIP INC: Seeks Approval to Hire Riedel Blain as Legal Counsel
HIE HOLDINGS: Hawaiian Electric Appointed as New Committee Member
J. BOWERS CONSTRUCTION: Seeks to Hire George Roman Auctioneers
KOSSOFF PLLC: Trustee Plans to Claw Back $2.3M From Mitch's Mom
LEGACY EDUCATION: Borrows $99K From ABCImpact
MACON & HARDWARE: Files Subchapter V Bankruptcy Protection
MAGENTA BUYER: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
MHI HOLDINGS: S&P Retains 'B' Rating on First-Lien Debt
MICROSTRATEGY INC: Signs Deal to Sell $500M Worth of Common Shares
MIDAS INTERMEDIATE II: Moody's Withdraws Caa3 CFR Following Recap
MIND TECHNOLOGY: Incurs $1.9 Million Net Loss in Second Quarter
MONSTER INVESTMENTS: Court Okays Appointment of Chapter 11 Examiner
NATIONAL CINEMEDIA: Posts $700K Net Loss in Second Quarter
NATIONAL CINEMEDIA: Renana Teperberg Quits as Director
NATIONAL CINEMEDIA: Standard General, Soohyung Kim Hold 15.8% Stake
NEPHROS INC: Appoints Joe Harris to Board of Directors
NEWELL BRANDS: Fitch Assigns BB+ Rating to New $1BB Unsec. Notes
OCEAN POWER: Incurs $5.8 Million Net Loss in First Quarter
PALMS MEDICAL: Case Summary & 20 Largest Unsecured Creditors
PARAMOUNT HEALTHCARE: Wins Interim Cash Collateral Access
PEAK THEORY: D. Ray Strong Appointed as Subchapter V Trustee
PLUS THERAPEUTICS: Inks Deal to Sell $5M Worth of Common Shares
PRINCIPLE ENTERPRISES: Files Emergency Bid to Use Cash Collateral
PRINCIPLE ENTERPRISES: Files for Chapter 11 Bankruptcy
REHME CUSTOM DOORS: Files Subchapter V Case With Plan
REVLON INC: Brandco Lenders Update Holdings After Loan Approval
REWALK ROBOTICS: Names Michael Lawless as Chief Financial Officer
SAFE SITE: Amends Priority Tax Claims Pay Details
SAS AB: $700M Apollo Loan Approved With Reservations
SAS AB: Gets Court Approval of $700M Loan From Apollo
SBL HOLDINGS: Fitch Affirms BB Rating on Preferred Debt
SINTX TECHNOLOGIES: Updates Stockholders on Rights Offering Terms
SOMERSET ACADEMY: S&P Affirms 'BB' Rating on Education Rev. Bonds
SP STAR: Seeks Approval to Hire W. Derek May as General Counsel
SPARTAN POOLS: Starts Subchapter V Bankruptcy Case
SPRINGFIELD HOUSE: Bed and Breakfast in Chapter 11
STANDING OVATION: Lender Seeks to Prohibit Cash Collateral Access
STORED SOLAR: Case Summary & 20 Largest Unsecured Creditors
SUNGARD AVAILABILITY: Dual-Track Plan Headed for Creditor Vote
SYMPLR SOFTWARE: S&P Alters Outlook to Negative, Affirms 'B-'ICR
THIRD FLOOR PROPERTIES: Office Buildings Owner Enters Chapter 11
USA COMPRESSION: Fitch Affirms BB- IDR & Alters Outlook to Stable
VBI VACCINES: Linda Bain Quits as Director
W&T OFFSHORE: BlackRock Acquires 4.7% Equity Stake
W&T OFFSHORE: Posts $123.4 Million Net Income in Second Quarter
WALL016 LLC: Seeks to Hire Eric A. Liepins as Legal Counsel
[*] 2022 Midyear Update On Bankruptcy Filings By Industry
[*] Jennifer Lewellyn Joins Tiger as Retail Ops Associate Director
[*] Oil & Gas Equipment Secondary-Market Prices to Rebound
[^] BOOK REVIEW: The Story of The Bank of America
*********
2 BIG HOLDINGS: Lender Seeks to Prohibit Cash Collateral Access
---------------------------------------------------------------
AlphaFlow Transitional Mortgage Trust 2021-WLI, a secured creditor
of 2 Big Holdings LLC, asks the U.S. Bankruptcy Court for the
Northern District of Georgia, Atlanta Division, to prohibit the
Debtor from using cash collateral without provision for adequate
protection of AlphaFlow's interests in the cash collateral.
The Debtor is indebted to AlphaFlow, as successor to Flip Funding,
LLC, pursuant to several notes executed by the Debtor on June 10,
2021, in the original principal amount of $213,750, which are
secured by Security Deeds. The Note is secured by the Security
Deed, Assignment of Leases and Rents, Security Agreement and
Fixture Filing dated October 15, 2021.
On May 6, 2022, Flip assigned its interest in the Loan Documents to
AlphaFlow. Accordingly, AlphaFlow is the present holder of the Loan
Documents and is a secured creditor of the Debtor with a
first-priority security interest in the Properties and the revenues
generated thereby.
As of September 2, 2022, at least $4,535,181 is owed under the Loan
Documents. In its Petition, the Debtor listed the value of the
collateral securing the Loan Documents as $0.
On August 5, 2022, AlphaFlow provided written notice to the Debtor
of its defaults under the Loan Documents and accelerated the
indebtedness. On September 2, 2022, AlphaFlow provided written
notice to the Debtor that it was going to conduct a foreclosure
sale of the Properties on September 6.
The Debtor is in default under the Loan Documents because, among
other things, the Debtor failed to make monthly payments pursuant
to the Loan Documents beginning with payments due December 2021 and
failed to pay the entirety of the amounts owed under the Loan
Documents on or before June 10, 2022, the maturity date of each of
the Notes.
The Debtor has not filed a motion to use cash collateral nor has
the secured creditor approved the Debtor's use of its cash
collateral. Because the Debtor has not moved for permission to use
AlphaFlow's cash collateral or provided an adequate explanation for
how cash collateral is being or was spent, AlphaFlow objects to the
continued use of its cash collateral by the Debtor unless adequate
protection payments are provided sufficient to cover the diversion
of any of the secured creditor's collateral away from the secured
creditor as well as any diminution in value of the collateral.
A copy of the motion is available at https://bit.ly/3d1Zhhv from
PacerMonitor.com.
About 2 Big Holdings LLC
2 Big Holdings LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-57073) on September 6,
2022.
AlphaFlow Transitional Mortgage Trust 2021-WLI, as secured
creditor, is represented by:
Lisa Wolgast, Esq.
Talia B. Wagner, Esq.
Morris, Manning and Martin, LLP
3343 Peachtree Road, N.E., Suite 1600
Atlanta GA 30326
96 WYTHE: Eastdil, A&G Tapped to Market Williamsburg Hotel
----------------------------------------------------------
Global real estate investment bank Eastdil Secured, L.L.C., and
national advisory firm A&G Real Estate Partners have been engaged
as exclusive advisors to market The Williamsburg Hotel, a 147-room
luxury lifestyle hotel in the heart of Brooklyn's thriving
Williamsburg neighborhood.
Built in 2017, the property features modern, luxurious amenities,
floor-to-ceiling windows with sweeping views of the Manhattan
skyline, and destination dining, including The Williamsburg
Restaurant and popular Watertower Bar. The hotel boasts a rooftop
bar and pool lounge that has emerged as a Brooklyn staple, offering
an amenity package that caters to hotel guests and locals alike,
with rooftop summer events, rotating DJs, and curated year-round
music events.
The hotel also frequently serves as the destination of choice for
major gatherings and events, with multiple spaces centered around a
6,550-square-foot ballroom supported by adjacent, well-appointed
breakout space.
"Located at the epicenter of a rapidly growing retail, culinary,
and nightlife destination in New York City, the Williamsburg Hotel
is ideally positioned to capture high-end leisure clientele,
growing corporate needs, and local staycation demand," said Andy
Wimsatt, Managing Director at Eastdil Secured. "This is a
one-of-a-kind investment opportunity in a modern boutique hotel
with significant performance momentum."
"In less than five years, The Williamsburg Hotel has established
itself as an important part of the Brooklyn skyline and a
destination location for high-end, luxury-minded guests and
locals," said Emilio Amendola, Co-President of A&G Real Estate
Partners. "The property has tremendous upside potential, with
accelerating performance and several value-creation opportunities
in the near-term that will allow The Williamsburg Hotel to continue
to stand out in a growing luxury submarket."
The fully independent hotel is located at 96 Wythe Ave., Brooklyn,
NY. The property is being sold subject to the United States
Bankruptcy Court, Southern District of New York, Case Number
21-22108-shl.
For more information, visit www.wbk22.com or contact the
individuals listed below.
Investor Contacts:
Emilio Amendola
(631) 465-9507
emilio@agrep.com
Jamie Cote
(312) 203-6321
jcote@agrep.com
Andy Wimsatt
(202) 688-4107
awimsatt@eastdilsecured.com
Ian Banger
(202) 688-4078
ibanger@eastdilsecured.com
Media Contacts:
A&G Real Estate Partners
Elisa Krantz
Jaffe Communications
908.789.0700
344061@email4pr.com
Eastdil Secured
Jon Keehner / Jack Kelleher / Erik Carlson
Joele Frank, Wilkinson Brimmer Katcher
212.355.4449
344061@email4pr.com
About A&G Real Estate Partners
A&G -- http://www.agrep.com-- delivers strategies designed to
yield the highest-possible value for clients' real estate. Key
areas of expertise include real estate sales, occupancy-cost
reductions, lease terminations, real estate due diligence,
valuations, and facilitation of growth opportunities. Relying on
its marketing knowledge, reputation and advanced technology, A&G
has advised the nation's most prominent corporations in both
healthy and distressed situations. The firm has sold properties and
leases totaling more than $12 billion and achieved nearly $8
billion in rent-reduction and occupancy-cost savings on behalf of
clients in every real estate sector. Global M&A Network has named
A&G "Real Estate Restructuring Firm of the Year" for the past three
years running. Founded in 2012, A&G is headquartered in Melville,
N.Y.
About Eastdil Secured
As the most relevant and trusted advisor in the commercial real
estate capital markets, Eastdil Secured --
https://www.eastdilsecured.com -- creates value for clients through
creative, actionable ideas and flawless execution. With an
unrivaled combination of capital markets expertise and in-depth
understanding of real estate fundamentals, Eastdil Secured delivers
best-in-class advice on mergers and acquisitions, sales, joint
ventures, debt placement, structured credit and loan sales to
investors around the world. Headquartered in New York, Eastdil
Secured has a broad global footprint to support clients with
offices across the United States in Atlanta, Boston, Charlotte,
Chicago, Dallas, Los Angeles, Miami, Orange County, San Francisco,
Seattle, Silicon Valley and Washington, D.C., and internationally
in Dubai, Dublin, Frankfurt, London, Milan, Paris, Hong Kong and
Tokyo.
ADAMIS PHARMACEUTICALS: May Sell Up to $300MM Worth of Securities
-----------------------------------------------------------------
Adamis Pharmaceuticals Corporation has filed a Form S-3
registration statement with the Securities and Exchange Commission
relating to the sale of its common stock, preferred stock, debt
securities, warrants for debt or equity securities and units
consisting of the foregoing, which together shall have an aggregate
initial offering price not to exceed $300 million. In addition,
certain selling security holders to be identified in supplements to
this prospectus may offer and sell these securities from time to
time.
The Company will provide the specific terms and conditions of these
transactions and the securities the Company or a selling security
holder may sell in supplements to this prospectus prepared in
connection with each transaction. The applicable prospectus
supplement will contain information, where applicable, as to other
listings, if any, on the Nasdaq Capital Market, or the NASDAQ, or
any securities exchange of the securities covered by the prospectus
supplement. Any such prospectus supplement may also add, update or
change information in this prospectus.
The Company's common stock is traded on the NASDAQ under the symbol
"ADMP."
A full-text copy of the prospectus is available for free at:
https://www.sec.gov/Archives/edgar/data/887247/000183988222020277/admp-s3_090922.htm
About Adamis Pharmaceuticals
Adamis Pharmaceuticals Corporation --
http://www.adamispharmaceuticals.com-- is a specialty
biopharmaceutical company primarily focused on developing and
commercializing products in various therapeutic areas, including
allergy, opioid overdose, respiratory and inflammatory disease.
Adamis reported a net loss applicable to common stock of $45.83
million for the year ended Dec. 31, 2021, compared to a net loss
applicable to common stock of $49.39 million for the year ended
Dec. 31, 2020. As of June 30, 2022, the Company had $17.69 million
in total assets, $10.65 million in total liabilities, and $7.04
million in total stockholders' equity.
San Diego, California-based BDO USA, LLP, 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 has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
ADHERA THERAPEUTICS: Appoints Zahed Subhan as CEO, Board Chairman
-----------------------------------------------------------------
The Board of Directors of Adhera Therapeutics, Inc. appointed Zahed
Subhan as the Company's chief executive officer and Andrew
Kucharchuk as the Company's chief operating officer, effective
Sept. 30, 2022. Mr. Kucharchuk will continue to serve as the
Company's chief executive officer until Sept. 30, 2022.
Mr. Subhan, 64, has been serving as the Company's director since
Nov. 5, 2021. He has served as the chief executive officer and
director of Aestas Pharma Inc. since 2015. Mr. Subhan has also
been a director of Eppin Pharma Inc. since 2013, and the chief
executive officer of Eppin from 2013 to 2018.
Mr. Kucharchuk, 41, has served as the Chariman of the Company's
Board and chief executive officer since July 7, 2020. He has also
served on the Board of Directors of Theralink Technologies, Inc.
since 2020 after previously serving in such role from September
2015 to March 2017. Previously, he served as president and chief
financial officer of Theralink from February 2016 until June 2020,
as chief executive officer of Theralink from November 2019 until
June 2020, and as chief financial officer of Theralink from 2009 to
September 2015. Mr. Kucharchuk has also served as acting chief
financial officer of Theralink from June 2020 to September 2020.
In addition, on Sept. 8, 2022, the Board of the Company appointed
Mr. Subhan as the Company's Chairman of the Board.
About Adhera
Headquartered in Durham, NC, Adhera Therapeutics, Inc. (formerly
known as Marina Biotech, Inc.) -- http://www.adherathera.com-- is
a clinical stage biopharmaceutical company engaged in the
development of novel cancer products and a proprietary vaccine
technology.
Adhera reported a net loss of $6.35 million for the year ended Dec.
31, 2021, compared to a net loss of $3.77 million for the year
ended Dec. 31, 2020. As of June 30, 2022, the Company had $976,000
in total assets, $20.97 million in total liabilities, and a total
stockholders' deficit of $20 million.
Boca Raton, Florida-based Salberg & Company, P.A., the Company's
auditor since 2021, issued a "going concern" qualification in its
report dated April 15, 2022, citing that the Company has a net loss
and cash used in operations of approximately $6.4 million and
$665,000 respectively, in 2021 and a working capital deficit,
shareholders' deficit and accumulated deficit of $25.1 million,
$25.1 million and $53 million respectively, at Dec. 31, 2021.
These matters raise substantial doubt about the Company's ability
to continue as a going concern.
ADVAXIS INC: Incurs $7 Million Net Loss in Third Quarter
--------------------------------------------------------
Advaxis, Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q reporting a net loss of $6.96 million
on $0 of revenue for the three months ended July 31, 2022, compared
to a net loss of $3.33 million on $250,000 of revenue for the three
months ended July 31, 2021.
For the nine months ended July 31, 2022, the Company reported a net
loss of $9.77 million on $250,000 of revenue compared to a net loss
of $12.42 million on $3.24 million of revenue for the nine months
ended July 31, 2021.
As of July 31, 2022, the Company had $30.10 million in total
assets, $1.91 million in total liabilities, and $28.19 million in
total stockholders' equity.
As of July 31, 2022, the Company had approximately $28.2 million in
cash and cash equivalents. Although the Company expects to have
sufficient capital to fund its obligations, as they become due, in
the ordinary course of business until at least one year from the
issuance of these consolidated financial statements, the actual
amount of cash that it will need to operate is subject to many
factors.
Advaxis said, "The Company recognizes it will need to raise
additional capital in order to continue to execute its business
plan in the future. There is no assurance that additional
financing will be available when needed or that management will be
able to obtain financing on terms acceptable to the Company or
whether the Company will become profitable and generate positive
operating cash flow. If the Company is unable to raise sufficient
additional funds, it will have to further scale back its
operations."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001100397/000149315222025666/form10-q.htm
About Advaxis Inc.
Advaxis, Inc. -- http://www.advaxis.com-- is a clinical-stage
biotechnology company focused on the development and
commercialization of proprietary Lm-based antigen delivery
products. These immunotherapies are based on a platform technology
that utilizes live attenuated Listeria monocytogenes (Lm)
bioengineered to secrete antigen/adjuvant fusion proteins. These
Lm-based strains are believed to be a significant advancement in
immunotherapy as they integrate multiple functions into a single
immunotherapy and are designed to access and direct antigen
presenting cells to stimulate anti-tumor T cell immunity, activate
the immune system with the equivalent of multiple adjuvants, and
simultaneously reduce tumor protection in the tumor
microenvironment to enable T cells to eliminate tumors.
Advaxis reported a net loss of $17.86 million for the year ended
Oct. 31, 2021, a net loss of $26.47 million for the year ended Oct.
31, 2020, a net loss of $16.61 million for the year ended Oct. 31,
2019, and a net loss of $66.51 million for the year ended Oct. 31,
2018. As of April 30, 2022, the Company had $37.52 million in
total assets, $2.37 million in total liabilities, and $35.15
million of total stockholders' equity.
AIKIDO PHARMA: Unit Inks Agreement to Buy Broker-Dealer
-------------------------------------------------------
Dominari Financial, Inc., the financial services subsidiary of
AIkido Pharma Inc., has entered into an exclusive agreement for the
acquisition of a broker-dealer firm. This is Dominari's first
acquisition since launching in June.
On Sept. 9, 2022, Dominari entered into a membership interest
purchase agreement by and among (i) Dominari, as purchaser, (ii)
Fieldpoint Private Securities, LLC, a Connecticut limited liability
company and broker-dealer registered with the Financial Industry
Regulatory Authority (the "Company"), and (iii) Fieldpoint Private
Bank & Trust, a Connecticut bank, and the sole equity holder of the
Company (the Seller), pursuant to which the Purchaser will purchase
from the Seller, and the Seller will sell to the Purchaser, 100% of
the membership interests in the Company. The Purchase Agreement
provides that the Purchaser will purchase the Membership Interests
from the Seller for a total purchase price of $2,000,001, subject
to adjustment. The Transaction will be consummated, in part, to
continue AIkido's diversification of its business beyond
biotechnology and into the financial services sector.
Dominari Financial was formed with the intention of acquiring
revenue generating assets in the fintech and financial services
industry. "Our goal has always been to move swiftly to execute a
roll-up strategy of wealth management firms that cater to
ultra-high-net worth investors. This transformative purchase not
only accelerates our timetable, but also gives us the
organizational infrastructure and technology needed to scale
Dominari into a financial services powerhouse," said Carlos
Aldavero, president of Dominari.
Kyle Wool, AIkido board member, acted as matchmaker on the deal and
will continue to advise Mr. Aldavero on the purchase. "The board
fully supports the diversification strategy of which Dominari
Financial is the centerpiece," added Wool. "Once approved by
FINRA, this acquisition will catapult Dominari forward and lays the
groundwork for future acquisitions. I am looking forward to
working closely with Carlos to continue to identify synergistic
companies to bring into the portfolio," he continued.
Upon approval of the transaction by FINRA, this acquisition will
allow Dominari Financial to provide banking and lending services
through a collaborative agreement with a third-party institution,
delivering the full balance sheet to UHNW investors, corporations,
and institutional clients once the deal officially closes.
About AIkido Pharma
Headquartered in New York, NY, AIkido Pharma Inc. fka Spherix
Incorporated -- http://www.spherix.com-- was initially formed in
1967 and is currently a biotechnology company seeking to develop
small-molecule anti-cancer therapeutics. The Company's activities
generally include the acquisition and development of technology
through internal or external research and development. In
addition, the Company seeks to acquire existing rights to
intellectual property through the acquisition of already issued
patents and pending patent applications, both in the United States
and abroad. The Company may alone, or in conjunction with others,
develop products and processes associated with technology
development. Recently, the Company has invested in and helped
develop technology with Hoth Therapeutics, Inc., DatChat, Inc. and
with its recent asset acquisition with CBM BioPharma, Inc. in
December 2019.
Aikido reported a net loss of $7.17 million for the year ended Dec.
31, 2021, compared to a net loss of $12.34 million for the year
ended Dec. 31, 2020. As of March 31, 2022, the Company had $117.95
million in total assets, $895,000 in total liabilities, $11 million
in Series O redeemable convertible preferred stock, $11 million in
Series P redeemable convertible preferred stock, and $95.05 million
in total stockholders' equity.
AKOUSTIS TECHNOLOGIES: Incurs $59.2M Net Loss in FY Ended June 30
-----------------------------------------------------------------
Akoustis Technologies, Inc. filed with the Securities and Exchange
Commission its Annual Report on Form 10-K reporting a net loss of
$59.19 million on $15.35 million of revenue for the year ended June
30, 2022, compared to a net loss of $44.15 million on $6.62 million
of revenue for the year ended June 30, 2021.
Akoustis also reported a net loss of $36.14 million for the year
ended June 30, 2020, and a net loss of $29.25 million for the year
ended June 30, 2019.
As of June 30, 2022, the Company had $161.34 million in total
assets, $57.91 million in total liabilities, and $103.43 million in
total stockholders' equity.
Jeff Shealy, founder and CEO of Akoustis, stated, "Akoustis was
able to achieve another quarter of record revenue and unit growth
in June despite the persistent macro challenges presented from
COVID lockdowns, supply chain disruptions and semiconductor chip
shortages. Our growth is being driven by production ramps of our
patented XBAW RF filter solutions to multiple customers across our
diverse end markets including Wi-Fi 6, Wi-Fi 6E, 5G mobile and
network infrastructure, timing control, automotive and other
markets."
Mr. Shealy added, "As Akoustis manufactures its XBAW semiconductor
chips exclusively in Upstate New York, USA for consumer wireless
devices, we believe we are an attractive candidate to receive
funding from the recently passed CHIPS and Science Act of 2022.
Such funding could position Akoustis to expand manufacturing to
deliver billions of XBAW RF filter chips annually and position the
Company to service both tier 1 and tier 2 mobile companies for 5G
smartphones, as well as other end markets including 5G networks,
high-frequency Wi-Fi devices, and other high-volume wireless
markets."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001584754/000121390022055194/f10k2022_akoustistech.htm
About Akoustis Technologies
Headquartered in Huntersville, NC, Akoustis is focused on
developing, designing, and manufacturing innovative RF filter
products for the mobile wireless device industry, including for
products such as smartphones and tablets, cellular infrastructure
equipment, and WiFi premise equipment.
ALLENA PHARMACEUTICALS: Hires SSG Advisors as Investment Banker
---------------------------------------------------------------
Allena Pharmaceuticals, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to hire SSG Advisors,
LLC as its investment banker.
The firm will provide these services:
(a) advise the Debtor on, and assist the Debtor in the
preparation of, an information memorandum describing the Debtor and
its management and financial status for use in discussions with
prospective purchasers and assist in the due diligence process for
a potential sale transaction;
(b) assist the Debtor in developing a list of suitable
potential buyers who will be contacted on a discreet and
confidential basis after approval by the Debtor;
(c) coordinate the execution of confidentiality agreements for
potential buyers wishing to review the information memorandum;
(d) assist the Debtor in coordinating site visits for
interested buyers and work with the management team to develop
appropriate presentations for such visits;
(e) solicit competitive offers from potential buyers;
(f) advise and assist the Debtor in structuring the
transaction, negotiating the transaction agreements with potential
buyers and evaluating the proposals from potential buyers,
including, without limitation, advising and negotiating with
respect to transaction structures that include, as may be necessary
or desirable, licenses, milestone and royalty payments and/or
assignments of intellectual property;
(g) be available for meetings and appearances before the
Court, including, without limitation, providing testimony in or out
of Bankruptcy Court in furtherance and support of the transaction
process and transaction; and
(h) otherwise assist the Debtor, its attorneys and
accountants, as necessary, through closing on a best efforts basis.
The firm will be paid as follows:
Monthly Fees: Monthly fees of $30,000 per month payable
beginning Oct. 1, 2022 and on the first (1st) of each month
thereafter throughout the Engagement Term. Monthly Fees shall be
credited against the Transaction Fee.
Transaction Fee: Upon the consummation of a Sale Transaction
to any party or Restructuring Transaction, SSG shall be entitled to
a fee, payable in cash, at and as a condition of closing of such
Transaction and as a direct carveout from proceeds and cash, prior
in right to any pre- and postpetition secured debt, equal to (a)
$400,000 plus (b) 5 percent of Total Consideration in excess of
$5,000,000. Notwithstanding the foregoing, the Transaction Fee
shall not exceed the amount of proceeds from a Sale Transaction
subject to the minimum of $150,000. In the event of a liquidation
without a Sale or Restructuring, then SSG’s Transaction Fee shall
be $150,000.
J. Scott. Victor, a managing director at SSG Advisors, disclosed in
a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
J. Scott. Victor
SSG Advisors, LLC
300 Barr Harbor Drive
West Conshohocken, PA 19428
Tel: (610) 940-1094/(610) 940-5802
Fax: (610) 940-4719
Email: jsvictor@ssgca.com
About Allena Pharmaceuticals, Inc.
Allena is a pre-commercial clinical biopharmaceutical company
dedicated to discovering, developing and commercializing
first-in-class, oral biological therapeutics to treat patients with
rare and severe metabolic and kidney disorders such as gout and
kidney stones.
Allena Pharmaceuticals, Inc. filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case
No. 22-10842) on Sep. 2, 2022. The petition was signed by Matthew
Foster as chief restructuring officer. At the time of filing, the
Debtor estimated $14,368,000 in assets and $3,455,000 in
liabilities.
The Hon. Karen B. Owens presides over the case.
Matthew B. McGuire, Esq. at LANDIS RATH & COBB LLP represents the
Debtor as counsel.
ALLENA PHARMACEUTICALS: Seeks to Tap Landis Rath & Cobb as Counsel
------------------------------------------------------------------
Allena Pharmaceuticals, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Landis Rath &
Cobb, LLP to serve as its legal counsel.
The firm's services include:
(a) providing legal advice regarding Delaware local rules,
practices, precedents, and procedures and providing substantive and
strategic advice on how to accomplish the Debtor's goals in
connection with the prosecution of its case;
(b) advising the Debtor with respect to its rights, powers and
duties and taking all necessary actions to protect and preserve the
Debtor's estate, including prosecuting actions on the Debtor's
behalf, defending any actions commenced against the Debtor,
negotiating all disputes involving the Debtor, and preparing
objections to claims filed against the estate;
(c) preparing and filing legal documents and reviewing all
financial reports to be filed in the Debtor's case;
(d) handling inquiries and calls from creditors and counsel to
interested parties regarding pending matters and the general status
of the case;
(e) appearing in the bankruptcy court and any appellate
courts;
(f) attending meetings and negotiating with representatives of
creditors and other parties-in-interest;
(g) advising and assisting the Debtor in maximizing value in
its case, including, without limitation, in connection with
debtor-in-possession financing, use of cash collateral, sales of
assets, and the preparation and promulgation of a Chapter 11 plan;
and
(h) performing all other necessary legal services for the
Debtor, including, but not limited to: (i) analyzing the Debtor's
leases and contracts and the assumption, rejection or assignment
thereof, (ii) analyzing the validity of liens against the Debtor,
(iii) advising the Debtor on litigation matters, and (iv)
developing a reorganization or liquidation strategy.
The firm's hourly rates are as follows:
Partners $750 - $1,075
Associates $350 - $550
Paralegals $295
Legal assistants $145 - $180
The Debtor paid $150,000 to the firm as a retainer fee.
Matthew McGuire, Esq., a partner at Landis Rath & Cobb, disclosed
in a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
Landis Rath & Cobb can be reached at:
Matthew B. McGuire, Esq.
Adam G. Landis, Esq.
Nicholas E. Jenner, Esq.
Landis Rath & Cobb, LLP
919 Market Street, Suite 1800
Wilmington, DE 19801
Tel: 302.467.4400
Fax: 302.467.4450
Email: landis@lrclaw.com
mcguire@lrclaw.com
jenner@lrclaw.com
About Allena Pharmaceuticals, Inc.
Allena is a pre-commercial clinical biopharmaceutical company
dedicated to discovering, developing and commercializing
first-in-class, oral biological therapeutics to treat patients with
rare and severe metabolic and kidney disorders such as gout and
kidney stones.
Allena Pharmaceuticals, Inc. filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case
No. 22-10842) on Sep. 2, 2022. The petition was signed by Matthew
Foster as chief restructuring officer. At the time of filing, the
Debtor estimated $14,368,000 in assets and $3,455,000 in
liabilities.
The Hon. Karen B. Owens presides over the case.
Matthew B. McGuire, Esq. at LANDIS RATH & COBB LLP represents the
Debtor as counsel.
ALLENA PHARMACEUTICALS: Seeks to Tap Sonoran Capital, Appoints CRO
------------------------------------------------------------------
Allena Pharmaceuticals, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Sonoran
Capital Advisors, LLC and designate Matthew Foster as chief
restructuring officer.
As CRO, the Debtor require Mr. Foster to:
a) assist with reporting to and communicating with key
constituencies;
b) assist with the development of a business plan;
c) assist with liquidity management and cash flow
forecasting;
d) assist with management of the Debtor's vendors and
suppliers;
e) coordinate with the Debtor's investment bankers, and
assisting in the evaluation of any proposed transactions;
f) perform such other services as requested or directed by the
Debtor's management or its Board of Directors.
The Debtor will pay Sonoran a fixed monthly fee of $35,000 for work
performed by the CRO and that Sonoran will charge its normal hourly
rate which ranges between $195 and $495 per hour, with its hourly
fees for the first 30 days capped at $20,000 and $10,000 per month
thereafter for work performed by additional personnel.
Sonoran holds a $30,000 retainer received from the Debtor prior to
Petition Date.
Matthew Foster, managing director of Sonoran Capital Advisors,
attests that his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code and holds no
interest materially adverse to the Debtor, its creditors and
shareholders for the matters for which Sonoran is to be employed.
The firm can be reached at:
Matthew Foster
Sonoran Capital Advisors, LLC
1733 N Greenfield Rd., Suite 101
Mesa, AZ 85234
Phone: (602) 405-5380
Email: mfoster@sonorancap.com
About Allena Pharmaceuticals, Inc.
Allena is a pre-commercial clinical biopharmaceutical company
dedicated to discovering, developing and commercializing
first-in-class, oral biological therapeutics to treat patients with
rare and severe metabolic and kidney disorders such as gout and
kidney stones.
Allena Pharmaceuticals, Inc. filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case
No. 22-10842) on Sep. 2, 2022. The petition was signed by Matthew
Foster as chief restructuring officer. At the time of filing, the
Debtor estimated $14,368,000 in assets and $3,455,000 in
liabilities.
The Hon. Karen B. Owens presides over the case.
Matthew B. McGuire, Esq. at LANDIS RATH & COBB LLP represents the
Debtor as counsel.
ARCONIC CORP: Fitch Alters Outlook on 'BB+' IDR to Positive
-----------------------------------------------------------
Fitch Ratings has affirmed Arconic Corporation's (ARNC) Issuer
Default Rating (IDR) at 'BB+'. Fitch has also affirmed ARNC's
senior first lien secured ABL facility at 'BBB-'/'RR1', senior
first lien secured notes at 'BBB-'/'RR2', and senior second lien
secured notes at 'BB+'/'RR4'.
The Rating Outlook has been revised to Positive from Stable.
The Outlook revision to Positive is predominantly driven by the
company's improved financial position following the pension
annuitization in early 2021, coupled with strong growth and
tailwinds across multiple of ARNC's end-markets, including
aerospace, which is rebounding from a severe downturn during the
coronavirus pandemic.
Fitch expects to resolve the Positive Outlook over the next 18
months, particularly if ARNC provides clarity regarding the
company's future capital structure plans beyond the call date of
its 2nd Lien Notes (Feb. 15, 2023). Risks to the rating and Outlook
include the potential for supply-chain disruption and cash outflows
from working capital, particularly if coupled with multiple secular
downturns.
KEY RATING DRIVERS
Cyclical, But Diversified End Markets: ARNC's end markets are
cyclical, though some of this risk is partially mitigated by the
company's diversified mix of end markets, long-term contracts and
relationships, and innovative offerings. The company's customers
operate in the commercial aerospace, ground transportation,
packaging, diversified industrial, and building and construction
industries.
Each of these end-markets are cyclical individually, and exposure
to economic cycles and demand fluctuations within these industries
could contribute to year-over-year revenue volatility, though the
risk to the company's financial profile is generally limited as it
is able to hedge or pass through the majority of metal exposure to
customers. Significant top-line volatility, which if persistent and
coupled with operational disruptions, could lead to negative rating
momentum. However, Fitch views market diversification as a positive
factor for the company's credit profile given the likely
counter-performance during a broad economic downturn.
Downturn Resiliency: Fitch believes ARNC would remain somewhat
resilient during a potential recessionary environment due in part
to its advantaged access to commodity supply with the majority of
facilities located in the U.S. The company would also benefit from
its relatively diversified end-markets, as they have a wide array
of products across industries that are shifting toward
lighter-weight materials, which ARNC specializes in. Fitch would
expect the company has some flexibility to offset a modest amount
of disruption even during a period of lower global demand.
Strong End-Market Demand: Each of Arconic's end-markets support the
company's growth over the rating horizon, with Aerospace and
Packaging being the most substantial drivers in the near term.
Fitch expects revenue for each of these two end-markets will grow
at greater than 20% during 2022. Recent commodity price increases
had a material positive effect on revenue, though volumes are also
up substantially. The effect of commodity price increases on EBITDA
will likely be relatively neutral, as costs are mostly passed
through to customers or hedged.
Fitch expects aerospace demand will steadily increase over the next
few years despite near-term recessionary fears given airline
customers taking a long-term view on fleet planning, particularly
following lower levels of fleet replacement occurring between 2019
and 2021. Aircraft delivery and build rates will likely remain at
least flat to slightly increasing over the next 6 to 12 months
after a substantial ramp up during 2022 following pandemic lows.
There is some potential for higher rates during 2023 assuming
minimal supply chain disruptions and reduced COVID-19 restrictions
in China.
Meanwhile, packaging has several positive tailwinds that should
support substantial growth beginning in 2022, including the ramp up
of ARNC's U.S. facility following a non-compete agreement roll-off
with Alcoa, in addition to broader market pressures to shift to
more environmentally friendly products such as aluminum.
Near-term stabilization and increased output in ground
transportation and industrials are also projected to persist over
the next few years. Non-residential construction demand remains
solid in North America, while the trade cases in 2018 and 2020 have
afforded ARNC a moderately more competitive position within the
industrial products market.
Strong Financial Structure: ARNC's leverage is low and its
financial structure is strong for the ratings and a contributing
factor for the Positive Outlook. Fitch forecasts 2022 gross
debt/EBITDA to decline to and remain in the high-1x range from 2.3x
at the end of 2021. Fitch believes the previously identified need
to maintain low leverage to offset profitability concerns has
somewhat dissipated given the company's lower required pension
contributions going forward and improved product and end-market
diversification. Fitch considers the company's profitability to be
solid and in line with other 'BB' category issues and somewhat
sensitive to working capital fluctuations.
Moderate Profitability, Improving Cash Flow: Fitch expects ARNC
will generate EBITDA margins in the high-single digit or
low-double-digit range over the next few years as the company
largely passes increasing commodity and labor costs to customers.
Fitch also projects FCF margins will turn positive in 2022 and will
remain in the low-single-digit range over the rating forecast,
aided by lower pension contributions, end-market recovery and
growth, and less severe working capital swings compared with
historical levels. Fitch expects the company would have some
flexibility to continue to incorporate incremental price increases
in the case of prolonged cost pressure, though potentially to a
modestly lesser degree.
DERIVATION SUMMARY
In general, Arconic Corp. has weaker profitability than similarly
rated peers such as Kaiser Aluminum Corp. (BB/Stable), but a
stronger capital structure, which is more in line with
investment-grade issuers. Fitch considers ARNC's end markets to be
relatively diversified and expects the company's cash flow to
gradually improve following several cost-cutting measures, reduced
environmental costs and lower pension contributions expected
following the announced annuitization.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
-- Revenue growth in 2022 driven by commodity price increases
coupled with volume growth; aerospace and packaging end
markets grow at greater than 20%, with remaining end markets
also seeing at least mid-to-high single digit increases;
-- After a volatile 2022 Fitch assumes relatively stable
aluminum prices through 2024 with an average price between
$2,500 and $2,600 per tonne before declining to around $2,250
per tonne in 2025;
-- Sales volume continue to increase in the mid-single digit
range throughout the forecasted period, led by aerospace and
packaging;
-- EBITDA margins decline in 2022 due to the effect of pass
through costs from commodity price increases which results in
higher revenue but relatively unaffected profit; margins
should remain steady and trend toward the low-double digit
range over the next few years;
-- Capex between 2% and 3% of revenue per year;
-- Annual dividend instituted after normalization of operations;
Fitch assumes up to $100 million per year;
-- Pension contributions plus other post-employment benefit
(OPEB) payments decline to around $50 million per year over
the forecast;
-- The company is unable to divest its Russia operations, but
also does not receive benefit from the operations over the
forecast;
-- No voluntary debt repayment or M&A.
RATING SENSITIVITIES
Factors that May, Individually or Collectively, Lead to Positive
Rating Action
-- Demonstrated commitment to a financial policy leading to mid-
cycle gross leverage (total debt/EBITDA) sustained below
2.0x;
-- FCF margin sustained around or above 2.0% while maintaining
advantaged operational and cost profile relative to other
global manufacturers;
-- Improved financial flexibility evidenced by a less encumbered
capital structure;
-- Clearly defined capital allocation plan, inclusive of Phase 3
and Phase 4 operational investments.
Factors that May, Individually or Collectively, Lead to Negative
Rating Action
-- Mid-cycle gross leverage (total debt/EBITDA) sustained around
or above 2.5x;
-- Contingent legal liabilities, pension contributions, or
environmental liabilities result in significant impact to
FCF.
Fitch could return the Rating Outlook to Stable over the next 18
months if the company does not perform in line with the agency's
forecasts, maintains leverage between 2.0x and 2.5x, generates
modest cash flow below 2.0% due to less resilient performance
during a recessionary environment, and is unable to maintain strong
commodity access to support the global supply chain.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity Position: Fitch considers ARNC's liquidity
position to be strong. Total liquidity was comprised of $252
million of cash and equivalents and near-full availability under
its $1.2 billion ABL facility at the end of June 2022. Fitch
anticipates ARNC will maintain liquidity of between $1.2 billion
and $2.0 billion on average over the next several years between
cash and its ABL facility, which could be drawn upon during the
year to cover short-term working capital fluctuations but would
likely be subsequently paid down.
Fitch views the company's liquidity as adequate to maintain
operations, particularly as the agency expects the company to
generate positive FCF over the next few years to bolster its
financial flexibility. ARNC's capital structure consists of an ABL
credit facility, senior first lien secured notes and senior second
lien secured notes. The first lien notes are the earliest maturity
and are due in 2025.
ISSUER PROFILE
Arconic Corporation (ARNC) is a provider of rolled aluminum
products, extrusions, and building products within the building and
construction, industrial, packaging, ground transportation, and
aerospace & defense end-markets.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
Arconic Corporation LT IDR BB+ Affirmed BB+
senior secured LT BBB- Affirmed RR1 BBB-
Senior Secured
2nd Lien LT BB+ Affirmed RR4 BB+
senior secured LT BBB- Affirmed RR2 BBB-
ASTROTECH CORP: BML Investment Has 10.2% Stake as of Aug. 23
------------------------------------------------------------
BML Investment Partners, L.P. disclosed in a Schedule 13G filed
with the Securities and Exchange Commission that as of Aug. 23,
2022, it beneficially owns 5,129,322 shares of common stock of
Astrotech Corporation, representing 10.2 percent of the shares
outstanding.
BML Investment Partners, L.P. is a Delaware limited partnership
whose sole general partner is BML Capital Management, LLC. The
managing member of BML Capital Management, LLC is Braden M.
Leonard. Mr. Leonard reported beneficial ownership of 5,479,322
Common Shares of Astrotech.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1001907/000156761922016653/doc1.htm
About Astrotech
Astrotech Corporation (NASDAQ: ASTC) --
http://www.astrotechcorp.com-- is a mass spectrometry company that
launches, manages, and commercializes scalable companies based on
its innovative core technology through its wholly-owned
subsidiaries. 1st Detect develops, manufactures, and sells trace
detectors for use in the security and detection market. AgLAB is
developing chemical analyzers for use in the agriculture market.
BreathTech is developing a breath analysis tool to provide early
detection of lung diseases. Astrotech is headquartered in Austin,
Texas.
Astrotech reported a net loss of $7.60 million for the year ended
June 30, 2021, a net loss of $8.31 million for the year ended June
30, 2020, and a net loss of $7.53 million for the year ended June
30, 2019. For the six months ended Dec. 31, 2021, the Company
reported a net loss of $4.21 million. As of March 31, 2022, the
Company had $58.26 million in total assets, $2.96 million in total
liabilities, and $55.30 million in total stockholders' equity.
BITNILE HOLDINGS: Adopts Amendment to Code of Business Ethics
-------------------------------------------------------------
Effective as of Sept. 9, 2022, the Board of Directors of BitNile
Holdings, Inc., approved and adopted an amendment to the Company's
Amended and Restated Code of Business Conduct and Ethics for
Employees, Executive Officers and Directors. A portion of section
14 of the A&R Code of Ethics was amended to state as follows:
The Company will not contribute directly or indirectly to
political parties, candidates for office and/or political
action committees unless approved by the Board of Directors
or the Audit Committee, and by the CEO and the General Counsel,
and only in accordance with applicable laws, provided, however,
that the Executive Committee may authorize the Company to make
contributions not in excess of $20,000 annually to a particular
political party, candidate for office and/or political action
committee, but not to exceed an aggregate of $200,000 annually.
About BitNile Holdings
BitNile Holdings, Inc. (formerly known as Ault Global Holdings,
Inc.) -- www.BitNile.com -- is a diversified holding company
pursuing growth by acquiring undervalued businesses and disruptive
technologies with a global impact. Through its wholly and
majority-owned subsidiaries and strategic investments, the Company
owns and operates a data center at which it mines Bitcoin and
provides mission-critical products that support a diverse range of
industries, including defense/aerospace, industrial, automotive,
telecommunications, medical/biopharma, and textiles. In addition,
the Company extends credit to select entrepreneurial businesses
through a licensed lending subsidiary. BitNile's headquarters are
located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas,
NV.
BitNile reported a net loss of $23.97 million for the year ended
Dec. 31, 2021, a net loss of $32.73 million for the year ended Dec.
31, 2020, a net loss of $32.94 million for the year ended Dec. 31,
2019, and a net loss of $32.98 million for the year ended Dec. 31,
2018. As of June 30, 2022, the Company had $596.27 million in
total assets, $133.98 million in total liabilities, $116.89 million
in redeemable noncontrolling interests in equity of subsidiaries,
and $345.40 million in total stockholders' equity.
BITNILE HOLDINGS: Schedules Annual Meeting for Nov. 23
------------------------------------------------------
The Board of Directors of BitNile Holdings, Inc. has scheduled its
2022 annual meeting of stockholders for 9:00 a.m. Pacific Time on
Nov. 23, 2022.
Because the date of the 2022 Annual Meeting differs by more than 30
days from the anniversary date of the 2021 annual meeting of
stockholders, which was initially held on July 6, 2021 and
adjourned to July 23, 2021 and further adjourned to Aug. 13, 2021,
the deadlines for any stockholder proposals pursuant to Rule 14a-8
under the Securities Exchange Act of 1934, as amended, and for any
stockholder nomination or proposal outside of Rule 14a-8, as listed
in the Company's Proxy Statement on Schedule 14A, as filed with the
Securities and Exchange Commission on June 7, 2021, are no longer
applicable.
The Company has set a deadline of Sept. 19, 2022 for the receipt of
any stockholder proposals for inclusion in the proxy materials to
be distributed in connection with the 2022 Annual Meeting pursuant
to Rule 14a-8 under the Exchange Act, which the Company believes to
be a reasonable time before it expects to begin to print and
distribute its proxy materials for the 2022 Annual Meeting. Any
Exchange Act Rule 14a-8 proposal received after this date will be
considered untimely. Stockholders should send any such proposal to
the Company's Secretary at BitNile Holdings, Inc., 11411 Southern
Highlands Parkway, Suite 240, Las Vegas, NV 89141, Attention:
Corporate Secretary and such proposal must comply with all
applicable requirements set forth in the rules and regulations of
the SEC, including Exchange Act Rule 14a-8, Delaware law and the
Bylaws in order to be eligible for inclusion in the Company's proxy
materials for the 2022 Annual Meeting.
Pursuant to the Bylaws, any stockholder seeking to raise a proposal
outside the processes of Exchange Act Rule 14a-8 or make a
nomination for consideration at the 2022 Annual Meeting, but not
included in the proxy materials for the 2022 Annual Meeting, must
comply with the requirements of the Bylaws, including by delivering
notice of such stockholder's proposal or nomination to the
Company’s Secretary at BitNile Holdings, Inc., 11411 Southern
Highlands Parkway, Suite 240, Las Vegas, NV 89141, Attention:
Corporate Secretary no later than 5:00 p.m., Pacific time, on Sept.
19, 2022. Any proposal or nomination received after such date will
be considered untimely and will not be considered at the 2022
Annual Meeting.
An adjournment, rescheduling or postponement of the 2022 Annual
Meeting date, or any announcement of such action, will not commence
a new time period (or extend any time period) for giving such
notice under the Bylaws or submitting a proposal pursuant to
Exchange Act Rule 14a-8.
About BitNile Holdings
BitNile Holdings, Inc. (formerly known as Ault Global Holdings,
Inc.) -- www.BitNile.com -- is a diversified holding company
pursuing growth by acquiring undervalued businesses and disruptive
technologies with a global impact. Through its wholly and
majority-owned subsidiaries and strategic investments, the Company
owns and operates a data center at which it mines Bitcoin and
provides mission-critical products that support a diverse range of
industries, including defense/aerospace, industrial, automotive,
telecommunications, medical/biopharma, and textiles. In addition,
the Company extends credit to select entrepreneurial businesses
through a licensed lending subsidiary. BitNile's headquarters are
located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas,
NV.
BitNile reported a net loss of $23.97 million for the year ended
Dec. 31, 2021, a net loss of $32.73 million for the year ended Dec.
31, 2020, a net loss of $32.94 million for the year ended Dec. 31,
2019, and a net loss of $32.98 million for the year ended Dec. 31,
2018. As of June 30, 2022, the Company had $596.27 million in
total assets, $133.98 million in total liabilities, $116.89 million
in redeemable noncontrolling interests in equity of subsidiaries,
and $345.40 million in total stockholders' equity.
BITNILE HOLDINGS: Unveils Planned Spin-Offs to Create 4 Companies
-----------------------------------------------------------------
BitNile Holdings, Inc. unveils plans that will upon completion
result in its having separated into four public companies. The
Company will host a conference call at 2:00 p.m. Pacific Time on
Monday, Oct. 17, 2022 to provide additional information on the
planned spin-offs of the Company's subsidiaries, summarized below:
* TurnOnGreen, Inc., an electric vehicle charging and power
solutions company, became a publicly traded company on Sept. 6,
2022 pursuant to its acquisition by Imperalis Holding Corp. (OTC
Pink: IMHC), a publicly traded subsidiary of BitNile that intends
to change its name to TurnOnGreen, Inc. as soon as practicable;
* Gresham Worldwide, Inc., a global provider of proprietary,
purpose-built electronic solutions to militaries and leading
defense companies, among other products, became a publicly traded
company on Sept. 8, 2022 pursuant to closing of a share exchange
agreement with Giga-tronics Incorporated;
* Ault Alliance, Inc., a diversified holding company focused on
Bitcoin mining, data center operations, commercial lending,
activist investing, oil exploration, hotel operations and other
commercial real estate holdings, is intended to become a public
reporting company in the first half of 2023; and
* BitNile will after the planned spin-offs retain sufficient
capital to continue development of a new Bitcoin marketplace
platform to be discussed on the Oct. 17, 2022 conference call.
The spin-offs, whether completed or planned, will upon completion
result in the distribution of substantially all of the Company's
nearly $600 million assets to its shareholders, who will become
owners of four public companies.
BitNile believes that these companies, as separate public entities,
will be better positioned to deliver long-term growth and maximize
stockholder value. Each business is expected to benefit from
increased operational focus, independent capital allocation based
on the needs of the businesses, dedicated and focused boards of
directors as well as management teams and compelling investment
profiles that will appeal to investors with distinct interests.
Regarding TurnOnGreen, as previously announced, the Company
anticipates setting a record date whereby stockholders of BitNile
will receive a dividend of securities of TurnOnGreen. BitNile
expects to distribute to its stockholders approximately 140 million
shares of TurnOnGreen common stock and warrants to purchase an
additional 140 million shares of TurnOnGreen common stock, subject
to regulatory approval and compliance with U.S. federal securities
laws. The Company plans to cause TurnOnGreen to apply to have the
warrants publicly traded.
The Company plans to have Ault Alliance become a public reporting
company in the first half of 2023. The capital structure,
leadership team and board of directors will be determined and
announced at a later time. The proposed spin-off to stockholders
is subject to the satisfaction of customary conditions, including
approval by the Company's board of directors, private letter
rulings from the Internal Revenue Service and/or tax opinions from
counsel, and the filing and effectiveness of a Form 10 registration
statement with the U.S. Securities and Exchange Commission.
The Company's Founder and Executive Chairman, Milton "Todd" Ault,
III said, "I could not be more excited about the Company's
portfolio of businesses. This is a seminal moment for our Company.
We believe that our strategic plan will be transformational,
allowing each company to grow while focusing on its respective core
strengths, providing stockholders the ability to realize the full
potential of each separate company. Our goal is to distribute to
our stockholders our holdings in TurnOnGreen, GWW/GIGA and Ault
Alliance, such that one day each stockholder will own common stock
in four public companies rather than merely BitNile."
About BitNile Holdings
BitNile Holdings, Inc. (formerly known as Ault Global Holdings,
Inc.) -- www.BitNile.com -- is a diversified holding company
pursuing growth by acquiring undervalued businesses and disruptive
technologies with a global impact. Through its wholly and
majority-owned subsidiaries and strategic investments, the Company
owns and operates a data center at which it mines Bitcoin and
provides mission-critical products that support a diverse range of
industries, including defense/aerospace, industrial, automotive,
telecommunications, medical/biopharma, and textiles. In addition,
the Company extends credit to select entrepreneurial businesses
through a licensed lending subsidiary. BitNile's headquarters are
located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas,
NV.
BitNile reported a net loss of $23.97 million for the year ended
Dec. 31, 2021, a net loss of $32.73 million for the year ended Dec.
31, 2020, a net loss of $32.94 million for the year ended Dec. 31,
2019, and a net loss of $32.98 million for the year ended Dec. 31,
2018. As of June 30, 2022, the Company had $596.27 million in
total assets, $133.98 million in total liabilities, $116.89 million
in redeemable noncontrolling interests in equity of subsidiaries,
and $345.40 million in total stockholders' equity.
BOYNE USA: Moody's Affirms 'B1' CFR, Outlook Remains Stable
-----------------------------------------------------------
Moody's Investors Service affirmed Boyne USA, Inc.'s ratings,
including the company's B1 Corporate Family Rating, B1-PD
Probability of Default Rating, and the B1 rating on the existing
$690 million senior unsecured notes due 2029 following the closing
of a new 5 year $100 million delayed draw first lien senior secured
term loan (DDLT). The outlook is stable.
The purpose of this DDTL facility is to fund future growth capital
spending for planned capital upgrades at various resorts and
facilities in 2024 and 2025. The DDTL is unfunded at closing. The
terms of the DDTL requires at least 50% be drawn within 18 months
of the closing date, with the remaining balance drawn within 24
months of closing though any draw downs are at the company's
discretion.
The affirmation of the B1 CFR reflects Boyne's strong operating
performance over the past year due to a very strong 2021/2022 ski
season as well as Moody's expectation for continued good operating
performance over the next year. Total revenue and earnings for the
last 12 month (LTM) period ended June 30, 2022 both surpassed
FY2019 (pre-coronavirus) levels as the result of strong ski demand,
good yield management through dynamic pricing, cost discipline,
continued investment in transformational upgrades as well as strong
performance from non-ski related activities that are 20% to 25% of
total revenue and consist primarily of golf and other summer
activities. Moody's adjusted debt-to-EBITDA has declined to about
4.8x for the LTM period ended June 30, 2022 from the low 6x in FY
2021 (pro forma for the $150 million add-on to senior unsecured
notes in early 2022) due to strong earnings growth over the past
ski season. Looking into FY23, and barring a deep economic
recession, Moody's expects continued good growth in both revenue
and earnings due to strong demand for ski and outdoor leisure
activities. This will maintain leverage below 5x and retained cash
flow-to-net debt above 14%, despite the potential increase in debt
from the DDTL draw. The affirmation of the B1 CFR also reflects
Moody's expectation that Boyne will maintain very good liquidity
over the next year, reflecting its ample cash balance of about $237
million at June 30, 2022, access to an undrawn $90 million revolver
facility due 2026 (unrated) as well as the $100 million DDTL due
2027 (unrated). Due to the significant increase in spending on
capital upgrade projects over the next couple of years, Moody's
anticipates negative free cash flow in the range of $50 million for
FY22 and slightly negative in FY23 assuming capital spending of
about $180 million for FY22 and $150 million for FY23, which will
be funded with cash on balance sheet. The lack of near term
refinancing needs as well as having majority of debt being fixed
rate are supporting factors for the very good liquidity.
The affirmation of the B1 rating for the unsecured notes reflects
that the DDTL is undrawn, utilization is at the company's
discretion, and the $690 million senior unsecured notes still
represent the bulk of the debt structure. Boyne owns all of is
resort assets, as well as the underlying land for six of the
resorts while the other six are operated under long term land use
arrangements. The absence of secured debt provides very good
residual asset coverage for the $690 million of the senior
unsecured notes. Meaningful utilization of the DDTL that results in
more secured debt in the capital structure would weaken the
recovery for the unsecured notes in the event of a default and
could lead to a downgrade of the notes.
Moody's took the following rating actions:
Ratings Affirmed:
Issuer: Boyne USA, Inc.
Corporate Family Rating, affirmed B1
Probability of Default Rating, affirmed B1-PD
Existing senior unsecured notes, affirmed B1 (LGD4)
Outlook Actions:
Issuer: Boyne USA, Inc.
Outlook, remains Stable
RATINGS RATIONALE
Boyne's B1 CFR reflects its elevated financial leverage with
Moody's debt-to-EBITDA of about 4.8x for the LTM period ended June
30, 2022. Moody's expects strong volume, good yield management
through dynamic pricing, cost discipline, good reinvestment as well
as continued good performance from its non-ski related activities
to support continued solid earnings growth in FY23, and expects
debt-to-EBITDA leverage will remain at or below 5x over the next 12
to 18 months, despite the potential increase in debt due to draw on
DDTL. Projected leverage is high for the rating and provides
limited cushion for shortfalls in operating performance including
if lower visitation or cost increases prevent the company from
growing earnings. Boyne's operating results are highly seasonal,
exposed to varying weather conditions and discretionary consumer
spending. However, the rating reflects Boyne's strong position as
one of the largest operators in the North American ski industry,
operating ten mountain resorts across North America. The company
has a well-diversified geographic footprint, and roughly 20%-25% of
its revenue relates to non-snowsports activities, which helps to
somewhat mitigate its exposure to weather and operating
seasonality. The North American ski industry has high barriers to
entry and has exhibited resiliency even during weak economic
periods, including the 2007- 2009 recession. The rating also
benefits from very good liquidity including a largely fixed rate
debt structure and sizable cash balance that provides flexibility
reinvest and execute the company's operating strategies.
Boyne's environmental risk exposure results from physical climate,
water management, and natural capital risks. Physical climate risk
is due to exposure to changing weather that could result from
climate shifts and the reliance on cold weather activities. The
geographic diversity of the company's properties is good but does
not fully mitigate the physical climate risks. Water management
risk reflects the need to access large quantities of water, which
may require additional investment to ensure sufficient additional
water availability and access rights going forward. Water
availability may be challenging following periods of severe
drought. Natural capital risk reflects that the company is
responsible to properly operate and protect the vast amount of
forest land and mountains. Energy needs are also meaningful.
Boyne's social risk profile reflects exposure to customer relations
and human capital risk. Most of Boyne's workers at its mountains
and resorts are hourly wage workers that tend to have high
turnover. Additionally, staffing at expensive resort towns is also
challenging due to lack of sufficient affordable housing for
workers. Investments in dormitories and wages to attract and retain
staff consume cash and can weaken margins. However, Boyne's
geographic diversity and pricing power helps to partially mitigate
this risk. Boyne experienced challenges keeping its facilities and
resorts fully staffed in the past ski season, which negatively
impacted its customer relations. Additionally, customer relations
risk is due to the need to invest in facilities and maintain strong
service offerings to sustain consumer demand. Boyne also has
exposure to data security and customer privacy risk as the company
has access to sensitive customer information such as credit card
numbers and personal information.
Boyne's governance risk profile is linked primarily to risk related
to financial policy and its controlled family ownership.
Boyne has a reinvestment orientation to build long-term value.
Large capital upgrades are usually funded with debt, which can add
to leverage. However, Moody's expects leverage to fall when
earnings from the investments are realized. Key man risk exists
because the company is owned by the Kircher family. Board
structure and policies creates credit risk as the composition of
the nine member board of directors include four representatives
from the controlling shareholders and management. 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 stable outlook reflects Moody's view that Boyne's
debt-to-EBITDA leverage will remain below 5x over the next 12 to
18 months with earnings growth, despite the potential increase in
debt from the DDTL draw. The stable outlook also reflects Moody's
expectation that Boyne will maintain very good liquidity over the
next year including a sizable cash balance that provides good
flexibility to meet debt service and execute the operating
strategies.
The ratings could be upgraded if the company continues to grow
organically while sustaining a stable to higher EBITDA margin,
debt-to-EBITDA below 4.0x, retained cash flow (RCF) -to-net debt
exceeds 17.5%, and the company maintains very good liquidity.
The ratings could be downgraded if debt-to-EBITDA is sustained
above 5.0x, or RCF-to-net debt falls below 7.5%. Weak reinvestment,
visitation declines, or margin deterioration could also lead to a
downgrade. In addition, if there is a material weakening of
liquidity for any reason, or the company's financial policies
become more aggressive, including undertaking a large debt-funded
acquisition or the payment of dividends, the ratings could be
downgraded. Additionally, the rating on the notes could be
downgraded below the CFR if the level of secured debt increases
including if there is material utilization of the DDTL.
The principal methodology used in these ratings was Business and
Consumer Service Industry published in November 2021.
Boyne USA, Inc, headquartered in Petoskey, Michigan, operates ten
mountain resorts (four with golf courses) and two non-ski
properties consisting of one attraction (Gatlinburg Sky Lift) and
one hotel/convention center with a 45 hole golf course (the Inn at
Bay Harbor). The company is private and does not publicly disclose
its financials. Boyne is also family owned by the Kircher family,
direct descendants of the founder. The company generated
approximately $591 million revenue for the trailing twelve months
ended on June 30, 2022.
CENTRAL FLORIDA CIVIL: Taps Mickler & Mickler as Legal Counsel
--------------------------------------------------------------
Central Florida Civil, LLC seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Bryan Keith
Mickler, Esq. of the Law Offices of Mickler & Mickler as its
counsel in the bankruptcy proceedings.
The firm will charge $250 to $350 per hour for its services.
Mickler & Mickler is a "disinterested person" within the meaning of
11 U.S.C. 101(14), according to court filings.
The firm can be reached through:
Bryan Keith Mickler, Esq.
Law Offices of Mickler & Mickler
5452 Arlington Expy
Jacksonville, FL 32211-6860
Office: 904-725-0822
Cell: 904-725-0822
Fax: 904-725-0855
Email: bkmickler@planlaw.com
About Central Florida Civil, LLC
Central Florida Civil, LLC provides a full range of services
relating to site preparation for commercial projects.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. M.D. Fla. Case No. 22-01736) on August 31,
2022. In the petition signed by Chad M. Converse, manager, the
Debtor disclosed $2,469,641 in assets and $4,873,621 in
liabilities.
Bryan K. Mickler, Esq., at Law Offices of Mickler & Mickler, LLP is
the Debtor's counsel.
CHERRY MAN: Trustee Taps Radbod and Associates as Bookkeeper
------------------------------------------------------------
Hamid Rafatjoo, the Chapter 11 trustee for Cherry Man Industries,
Inc., received approval from the U.S. Bankruptcy Court for the
Central District of California to employ Radbod and Associates
Inc., as his bookkeeper.
The firm will render these services:
a. provide monthly bookkeeping services; and
b. provide professional services regarding possible employee
retention tax credits for the payroll period beginning March 13,
2020 through and including June 30, 2021.
The Trustee has agreed to provide a retainer in the amount of
$20,000.
Radbod will charge an hourly rate of $285 in connection with
bookkeeping services, capped at $15,000 for each monthly closing
process.
Radbod has requested a flat fee of $8,500 for each quarterly
period for which Radbod conducts an employee retention tax
creditors study.
Any additional services, the firm will be charged at the hourly
rate of $285.
As disclosed in the court filings, Radbod and all persons
associated with Radbod are disinterested persons, do not hold or
represent an interest adverse to the estate, and do not have any
connections with the Debtor, the creditors of the estate, any other
party in interest.
The firm can be reached through:
Rayan Radbod, EA
Radbod and Associates Inc.
9730 Ventura Blvd.
Woodland Hills, CA91364
Phone: (818) 668-7695
Email: rayanradbod@gmail.com
About Cherry Man Industries
Cherry Man Industries, Inc. was started in 2002 by Frank Lin. It is
one of the largest nationwide importers and distributors of office
furniture case goods. It is headquartered in El Segundo, Calif.,
with five distribution centers across the U.S.
Cherry Man Industries sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-11471) on March 17,
2022, listing $100 million to $500 million in assets and $10
million to $50 million in liabilities. Frank Lin, president of
Cherry Man Industries, signed the petition.
Judge Neil W. Bason oversees the case.
The Law Offices of Michael Jay Berger serves as the Debtor's legal
counsel.
The U.S. Trustee for Region 15 appointed an official committee of
unsecured creditors on March 31, 2022. Kelley Drye & Warren, LLP
and Province, LLC serve as the committee's legal counsel and
financial advisor, respectively.
Hamid R. Rafatjoo, the Chapter 11 trustee appointed in the Debtor's
case, tapped Levene Neale Bender Yoo & Golubchik, LLP as his legal
counsel and Province, LLC as his financial advisor and sales
process advisor.
CIP 1106: Seeks Approval to Hire RHM LAW as Bankruptcy Counsel
--------------------------------------------------------------
CIP 1106 11th St, LLC seeks approval from the U.S. Bankruptcy Court
for the Central District of California to hire RHM LAW LLP as its
general bankruptcy counsel.
The fir m will render these services:
a. advice and assistance regarding compliance with the
requirements of the United States Trustee;
b. advice regarding matters of bankruptcy law, including the
rights and remedies of the Debtor in regard to its assets and with
respect to the claims of creditors;
c. advice regarding cash collateral matters;
d. conduct examinations of witnesses, claimants or adverse
parties and to prepare and assist in the preparation of reports,
accounts and pleadings;
e. advice concerning the requirements of the Bankruptcy Code
and applicable rules;
f. assist with the negotiation, formulation, confirmation and
implementation of a Chapter 11 plan of reorganization; and
g. make any appearances in the Bankruptcy Court on behalf of
the Debtor; and to take such other action and to perform such other
services as the Debtor may require.
The firm will be paid at these hourly rates:
Matthew D. Resnik, Partner $600
Roksana D. Moradi-Brovia, Partner $550
Russell J. Stong Ill, Associate $350
David M. Kritzer, Associate $350
W. Sloan Youkstetter, Associate $350
Pardis Akhavan, Associate $250
Rosario Zubia, Paralegal $135
Priscilla Bueno, Paralegal $135
Rebeca Benitez, Paralegal $135
Max Bonilla Paralegal $135
Susie Segura, Paralegal $135
The firm received an initial retainer fee of $26,738 for its
representation of the Debtor in this case.
Roksana D. Moradi-Brovia, a partner at RHM LAW, assured the court
that no person in the Firm holds any interest in, nor is any person
materially adverse to the Debtor, and thus the Firm constitutes a
disinterested person as contemplated by 11 U.S.C. Sec. 327 and
defined in Sec. 101(14) of the Bankruptcy Code.
The firm can be reached through:
Roksana D. Moradi-Brovia, Esq.
Matthew D. Resnik, Esq.
RHM LAW LLP
17609 Ventura Blvd, Suite 314
Encino, CA 91316
Phone: (818) 285-0100
Fax: (818) 855-7013
Email: roksana@RHMFirm.com
matt@RHMFirm.com
About CIP 1106 11th St, LLC
CIP 1106 11th St, LLC is a Single Asset Real Estate (as defined in
11 U.S.C. Section 101(51B)).
CIP 1106 11th St, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
22-14521) on August 19, 2022. The petition was signed by Robert W.
Clippinger, managing member of CIP Capital Cathedral LLC, which is
the sole managing member of CIP 1106 11th St, LLC. At the time of
filing, the Debtor estimated $10 million to $50 million in assets
and $1 million to $10 million in liabilities.
Judge Vincent P. Zurzolo presides over the case.
Mathew D. Resnick, Esq. at RHM LAW, LLP represent the Debtor as
counsel.
CLEAN ENERGY: Secures $125K in Funding From Pacific Pier
--------------------------------------------------------
Clean Energy Technologies, Inc., has consummated a funding pursuant
to a Securities Purchase Agreement with Pacific Pier Capital, LLC
whereby the Company issued to Pacific a $138,888.88 Convertible
Promissory Note, due Sept. 1, 2023 for a purchase price of
$125,000.00 plus an original issue discount in the amount of
$13,888.88, and an interest rate of 15% per annum.
The principal and interest of the Note may be converted in whole or
in part at any time on or following the earlier of (i) upon an
event of default or (ii) the date that the Company consummates an
IPO and up listing to a national exchange (the "Up List Offering"),
into common stock of the Company, par value $.001 share, subject to
anti-dilution adjustments and for certain other corporate actions
subject to a beneficial ownership limitation of 4.99% of Pacific
and its affiliates. The per share conversion price into which
principal amount and accrued interest may be converted into shares
of Common Stock equals $0.025. However, if the Company consummates
the Up List Offering on or before March 1, 2023, then the
conversion price will equal 75% of the offering price per share of
Common Stock (or units) as set in the Up List Offering. Upon an
event of default, the Note will become immediately payable and the
Company shall be required to pay a default rate of interest of 15%
per annum. If the Company issues an equity security or security
convertible into Common Stock following the issue date of the Note,
the conversion price of the Note will be lowered to such price.
Certain existing convertible debt is excluded from these
antidilution provisions. At any time prior to an event of default,
the Note may be prepaid by the Company at a 115% premium. The note
contains customary representations, warranties and covenants of the
Company.
The Securities Purchase Agreement provides customary
representations, warranties and covenants of the Company and
Pacific as well as providing Pacific with registration rights.
The Company issued Pacific a five-year warrant to purchase
1,736,111 shares of Common Stock in connections with the
transactions. The Warrant may be exercised, in whole or in part,
on the earlier of (i) on or after March 1, 2023, or (ii) the date
that the Company consummates an Up List Offering. The exercise
price of the Warrant is $0.04 per share, however, that if the
Company consummates an Up List Offering on or before March 1, 2023,
then the exercise price equals 120% of the offering price per share
of Common Stock (or unit) as set in the Up List Offering. If (i)
the date of an exercise notice is on or after March 1, 2023 and
(ii) the per share price of Common Stock is greater than the
exercise price, then, unless there is an effective non-stale
registration statement the Warrant may be exercised on a cashless
exercise basis.
About Clean Energy
Headquartered in Costa Mesa, California, Clean Energy Technologies,
Inc. -- http://www.cetyinc.com-- designs, produces and markets
clean energy products and integrated solutions focused on energy
efficiency and renewables.
Spokane, Washington-based Fruci & Associates II, PLLC, the
Company's auditor since 2015, issued a "going concern"
qualification in its report dated April 15, 2022, citing that the
Company has an accumulated deficit, net losses, and working capital
deficit from operations. These factors raise substantial doubt
about the Company's ability to continue as a going concern.
CLEANSPARK INC: To Buy Bitcoin Mining Facility From Mawson for $33M
-------------------------------------------------------------------
CleanSpark, Inc. has entered into definitive agreements with Mawson
Infrastructure Group Inc., to acquire Mawson's turnkey bitcoin
mining facility in Sandersville, Georgia, for up to $33 million.
The transaction is expected to add 1.4 exahashes per second (EH/s)
to CleanSpark's hashrate before year-end, 2.4 EH/s in early 2023
and 7.0 EH/s by the end of 2023. This capacity supports
CleanSpark's target of over 22 EH/s by the end of 2023.
CleanSpark has also agreed to purchase from Mawson 6,468 of the
latest generation mining ASICs for approximately $9.5 million in
cash, at a cost of $17 per terahash. These machines, already
operating at the acquired site, will add over 558 petahashes per
second (PH/s) of computing power immediately upon closing.
Under the terms of the agreements for the facility and miners,
Mawson will receive approximately $26.5 million of cash
consideration (including the $9.5 million for the miners) at
closing; up to $11 million in CleanSpark stock (based upon the
current trading price), $6.5 which is issuable at closing and the
remaining $4.5 million of which is subject to reaching certain
earn-out commitments; $3 million in seller financing in the form of
promissory notes; and, an additional $2 million in a
seller-financed earn-out payable at least 60 days post-closing upon
certain conditions being met. The maximum total purchase price for
the facility and miners is $42.5 million.
"We are pleased to welcome Mawson's Sandersville site and its
operating teams into the CleanSpark family," said Zachary Bradford,
CleanSpark's chief executive officer. "The site is nothing but
impressive--well-run by over 20 dedicated professionals who have
taken significant pride in the design, development, and maintenance
of the site. We are enthusiastic about Georgia and believe that
our expansion there will continue to build value for our
shareholders and the communities we operate in throughout
Georgia."
The turn-key infrastructure is currently capable of supporting
24,108 latest-generation miners. There is an ongoing effort to
expand the facility by an additional 150 MW by late 2023. Upon
completion of the planned expansion, the site would be capable of
supporting 70,000 latest generation miners capable of producing
over 7.0 EH/s
As part of the agreement, CleanSpark will provide up to 30 MW of
temporary hosting capacity, for up to 180 days, while Mawson
transfers miners to their Pennsylvania operations. This process is
slated to begin in early 2023. Immediately upon completion,
CleanSpark will use the space for self-mining.
"We have thoroughly enjoyed working with the CleanSpark team on
this transaction and look forward to working closely with them
going forward," said James Manning, CEO and Founder of Mawson. "We
now intend to focus our attention on the continued development of
our Pennsylvania and Texas facilities where we see the opportunity
for compelling returns on capital. We would like to sincerely
thank the City of Sandersville for welcoming us into their
community and being high-quality partners over the last several
years."
The agreement has been approved by the organizations' respective
boards of directors and is subject to customary closing conditions.
CleanSpark and Mawson expect to close the transaction in early
October.
"Georgia has one of the most favorable operating environments in
the country," said Matthew Schultz, CleanSpark's executive
chairman. "We have strategically grown our operations in Georgia
because of the state's strong business ethic, competitive power
rates, and an abundance of carbon-free energy, specifically
nuclear. Georgia is a terrific place to do business and call home.
We are committed to being socially and environmentally responsible
partners in this great state."
CleanSpark has a strong tradition of supporting the communities it
operates in. It has invested over $275 million in Georgia
communities, which includes property and energy infrastructure
upgrades, equipment and hardware investments, over 75 highly
skilled and skilled jobs, scholarships, and various community
sponsorships.
H.C. Wainwright & Co., LLC, served as financial advisor to
CleanSpark. Baker Donelson and Katten Muchin Rosenman LLP served
as legal counsel for CleanSpark in connection with the
transaction.
About CleanSpark
Headquartered in Bountiful, Utah, CleanSpark, Inc. --
www.cleanspark.com -- is a sustainable bitcoin mining and energy
technology company that is solving modern energy challenges.
CleanSpark reported a net loss of $21.81 million for the year ended
Sept. 30, 2021, a net loss of $23.35 million for the year ended
Sept. 30, 2020, and a net loss of $26.12 million for the year ended
Sept. 30, 2019. As of June 30, 2022, the Company had $411.06
million in total assets, $34.19 million in total liabilities, and
$376.87 million in total stockholders' equity.
CREATD INC: Former CEO to Get $475K in Separation Pay
-----------------------------------------------------
Creatd, Inc., has entered into an executive separation agreement
with Laurie Weisberg, the Company's chief executive officer and
member of the Board of Directors, setting forth the terms and
conditions related to the Executive's resignation for good reason
as chief executive officer, director and any other positions held
with the Company or any subsidiary.
Pursuant to the Agreement, the Executive has agreed to return all
Company files, property and access information to the Company and
the Company will pay a severance in the aggregate amount of
$475,000, payable as follows: (i) 1/24 of the Severance Amount will
be paid to the Executive on each of Sept. 15, 2022, Oct. 1, 2022
and Nov. 1, 2022, respectively; (ii) 1/8 of the Severance Amount
will be paid to the Executive on each of Dec. 1, 2022, Jan. 1, 2023
and Feb. 1, 2023, respectively; (iii) 1/4 of the Severance Amount
will be paid to the Executive on April 1, 2023; and (iv) the
balance of the Severance Amount will be paid to the Executive on
May 1, 2023. The Company has executed and delivered a Confession
of Judgment concerning the Severance Amount, which is being held in
escrow pending satisfaction of payment of the Severance Amount.
Under the Agreement, all unvested and/or outstanding stock options
held by the Executive as of the Effective Date that are not subject
to metric based vesting will automatically and fully vest as of the
Effective Date. The Executive shall continue to hold all unvested
and/or outstanding stock options held by Executive as of the
Effective Date that are subject to metric based vesting and such
Metric Based Vesting Options shall vest in accordance with their
respective original terms.
Additionally, the Agreement contains mutual releases from the
Executive and the Company.
Appointment of Chief Executive Officer
The Board determined to appoint Jeremy Frommer, executive chairman,
as chief executive officer upon the effectiveness of Ms. Weisberg's
resignation. Accordingly, on Sept. 2, 2022, Jeremy Frommer was
appointed chief executive officer.
Jeremy Frommer, age 54, was appointed executive chairman in
February 2022 and has been a member of the Company's board of
directors since February 2016. Previously, he served as the
Company's chief executive officer from February 2016 to August
2021, and co-chief executive officer from August 2021 to February
2022. Mr. Frommer has over 20 years of experience in the financial
technology industry. Additionally, Mr. Frommer previously held key
leadership roles in the investment banking and trading divisions of
large financial institutions.
Appointment of Director
The Board determined to appoint Justin Maury, president and chief
operating officer, to the Board effective Sept. 2, 2022.
About Creatd Inc.
Headquartered in Fort Lee, NJ, Creatd, Inc. -- https://creatd.com
-- is a company whose mission is to provide economic opportunities
to creators by multiplying the impact of platforms, people, and
technology. The Company operates four main business segments:
Creatd Labs, Creatd Partners, Creatd Ventures, and Creatd Studios.
Creatd reported a net loss of $37.38 million for the year ended
Dec. 31, 2021, a net loss of $24.21 million for the year ended Dec.
31, 2020, and a net loss of $8.04 million for the year ended Dec.
31, 2019. As of June 30, 2022, the Company had $10.13 million in
total assets, $11.63 million in total liabilities, and a total
stockholders' deficit of $1.50 million.
DOCUPLEX INC: Seeks to Hire Prelle Eron & Bailey as Legal Counsel
-----------------------------------------------------------------
Docuplex, Inc. seeks approval from the U.S. Bankruptcy Court for
the District of Kansas to hire Prelle Eron & Bailey, P.A., as its
Chapter 11 counsel.
The firm's services include:
a) advising the Debtor of its rights, powers and duties as
Debtor-in-Possession, including those with respect to the operation
and management of its business;
b) advising the Debtor concerning and assisting in the
negotiation and documentation of financing agreements, cash
collateral orders and related transactions;
c) investigating into the nature and validity of liens
asserted against the Debtor, and advising Debtor concerning the
enforceability of said liens;
d) investigating and advising Debtor concerning and taking
such action as may be necessary to collect income and assets in
accordance with applicable law, and recover property for the
benefit of the estate;
e) preparing on behalf of the Debtor such applications,
motions, pleadings, orders, notices, schedules and other documents
as may be necessary and appropriate, and reviewing the financial
and other reports to be filed;
f) advising the Debtor concerning and preparing responses to
applications, motions, pleadings, notices and other documents which
may be filed and served;
g) counseling Debtor in connection with the formulation,
negotiation and promulgation of a Chapter 11 plan or plans and
related documents; and
h) performing such other legal services for and on behalf of
Debtors as may be necessary or appropriate in the administration of
the case.
The firm will be paid at these hourly rates:
David Prelle Eron, Esq. $330
January M. Bailey, Esq. $275
Laura Prelle $100
Paralegal $85
Prelle Eron & Bailey was originally retaining funds in its trust
account for the purpose of a fee and cost retainer in the amount of
$20,000, which Debtor will increase by another 20,000 pursuant to
the retainer agreement.
Prelle Eron & Bailey is a "disinterested person" within the meaning
of 11 USC 101(14), according to court filings.
The firm can be reached through:
David Prelle Eron, Esq.
PRELLE ERON & BAILEY, P.A.
301 N. Main St., Suite 2000
Wichita, KS 67202
Tel: 316-262-5500
Fax: 316-262-5559
Email: david@eronlaw.net
About Docuplex, Inc.
Docuplex, Inc. owns and operates a print and mailing company,
providing all varieties of commercial printing, finishing, and
direct mailing services. It is one of the largest providers of
these services in Wichita, Kansas. Docuplex does not own any real
property, but owns a significant amount of furniture, fixtures,
machinery, equipment, rolling stock, and inventory used in the
operation.
Docuplex sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Kan. Case No. 22-10734) on September 2, 2022. In
the petition signed by Gina Cherry, controller, the Debtor
disclosed up to $10 million in both assets and liabilities.
David Prelle Eron, Esq., at Prelle Eron & Bailey, P.A. is the
Debtor's counsel.
ECOARK HOLDINGS: Closes Sale of Oil Business, Banner Midstream
--------------------------------------------------------------
Ecoark Holdings, Inc. announced the closing of its Share Exchange
Agreement, effective Aug. 23, 2022 to divest its wholly-owned
subsidiary, Banner Midstream Corp, via a reverse merger into the
company, Enviro Technologies U.S., Inc. Immediately following the
closing, Ecoark now owns approximately 70% of the issued and
outstanding shares of Enviro common stock.
In the coming weeks, Enviro plans to file a request with FINRA to
effect a 4:1 forward stock split of Enviro's outstanding common
stock which will permit Ecoark to effect an approximately 1-to-1
stock dividend of Enviro common stock to Ecoark's shareholders and
equity holders as of a future to be determined record date.
As a post-closing regulatory requirement, Ecoark also plans to file
a Form 14F-1 with the SEC in the coming days. As such time as
Enviro complies with Section 14(f) of the Securities Exchange Act
of 1934 and Rule 14f-1 thereunder, the two Enviro directors prior
to the share exchange shall resign.
"We are excited for both our shareholders within Ecoark and the
legacy shareholders within Enviro that this transaction has been
successfully closed," stated Randy May, CEO of Ecoark. "We look
forward to kicking off a period of accretive growth with a goal of
building a diversified oilfield services company. We are also
excited to pursue operational diversification beyond our current
transportation focus by adding additional service lines within
higher margin areas of the energy services sector."
"I am looking forward to working with Randy May, Jay Puchir (Ecoark
CFO / Banner CEO), Jim Galla (Banner CFO), and JD Reedy (Banner
COO) after the closing of this transaction to further define my
role within the new defined company," stated John DiBella, former
CEO and CFO of Enviro and current executive officer of Florida
Precision Aerospace, Inc., a wholly owned subsidiary of Enviro. "I
am extremely excited about the future prospects of our combined
business and believe that this transaction was the best opportunity
to create long-term value for Enviro's shareholders. I am proud of
and grateful for the dedication and hard work of our employees
throughout the years."
About Ecoark Holdings
Rogers, Arkansas-based Ecoark Holdings, Inc., founded in 2011, is a
diversified holding company. Through its wholly-owned
subsidiaries, the Company has operations in three areas: (i) oil
and gas, including exploration, production and drilling operations
and transportation services, (ii) post-harvest shelf-life and
freshness food management technology, and (iii) financial services
including consulting, fund administration and asset management.
Ecoark reported a net loss of $10.55 million for the year ended
March 31, 2022, a net loss of $20.89 million for the year ended
March 31, 2021, a net loss of $12.14 million for the year ended
March 31, 2020, and a net loss of $13.65 million for the year ended
March 31, 2019. As of June 30, 2022, the Company had $43.65
million in total assets, $14.89 million in total liabilities,
$11.81 million in mezzanine equity, and $16.96 million in total
stockholders' equity.
EMERALD ELECTRICAL: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Emerald Electrical Consultants LLC
1400 Market Place Blvd.
Suite 162
Cumming, GA 30041
Business Description: Emerald Electrical specializes in substation
construction, related technical services,
and consulting across the United States,
with a focused presence in the southeastern
and central regions of the country.
Chapter 11 Petition Date: September 15, 2022
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 22-20913
Debtor's Counsel: Benjamin Keck, Esq.
KECK LEGAL, LLC
2566 Shallowford Rd. Suite 104-252
Atlanta, GA 30345
Tel: 678-641-1720
Email: bkeck@kecklegal.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Lindy Truitt as president and CEO.
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/RPTRNMQ/Emerald_Electrical_Consultants__ganbke-22-20913__0001.0.pdf?mcid=tGE4TAMA
ENDO INT'L: Wants to Block Govt. Opioid Suits During Bankruptcy
---------------------------------------------------------------
Dietrich Knauth of Reuters reports that Endo International plc sued
hundreds of state and local governments on Friday, September 9,
2022, seeking a ruling that their lawsuits accusing the company of
helping fuel the U.S. opioid epidemic must be paused during the
pharmaceutical company's bankruptcy.
In a filing in U.S. bankruptcy court in Manhattan, Endo said if
those lawsuits are allowed to continue, the company will not be
able to focus on successfully completing its restructuring,
including a comprehensive resolution of the opioid claims.
Endo filed for Chapter 11 protection on Aug. 17, 2022, seeking to
address its high debt load and resolve more than 3,100 lawsuits
accusing the company of deceptively marketing prescription opioids
like Opana by downplaying the risk of addiction.
Before filing for bankruptcy, Endo reached a $450 million
settlement with more than 30 states to resolve the lawsuits, but it
still faces litigation risk from state and local governments that
have not agreed to participate in the settlement. Other state and
local governments, including Florida and West Virginia, had
previously settled their opioid claims against Endo.
A Chapter 11 filing usually automatically protects bankrupt
companies from litigation by pausing new and ongoing lawsuits, but
some state and local governments have argued that the bankruptcy
court's "automatic stay" does not apply to government enforcement
actions, Endo said in its complaint.
At least 36 states, as well as attorneys representing local
governments in nationwide opioid multi-district litigation
proceedings, have agreed to voluntarily pause their lawsuits during
Endo's bankruptcy, without conceding that the "automatic stay"
applies to them, Endo said.
But others, like Oregon, have told the company that they intend to
proceed with litigation against Endo, and many local governments
have not made their position clear, according to the complaint.
Kristina Edmunson, a spokesperson for the Oregon Department of
Justice, confirmed that Oregon is proceeding with litigation
against Endo despite the company's bankruptcy.
"Our position is that the automatic stay does not apply to state
police power actions to protect consumers," Edmunson said.
Before filing for bankruptcy, Endo often found itself litigating
dozens of opioid lawsuits at a time, and the effort has "impacted
nearly every aspect" of its business, the company said. Endo spent
$136 million on opioid litigation in 2021, and $32.7 million in the
first quarter of 2022, according to its complaint.
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.
ENDO INTERNATIONAL: Hires Alvarez & Marsal as Financial Advisor
---------------------------------------------------------------
Endo International plc and affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Alvarez & Marsal North America, LLC, to serve as their financial
advisor.
The firm's services include:
(a) assisting the Debtors in the preparation of
financial-related disclosures required by this Court, including the
Debtors' schedules of assets and liabilities, statements of
financial affairs and monthly operating reports;
(b) assisting the Debtors with information and analyses
required pursuant to the Debtors' use of cash collateral;
(c) assisting with the identification and implementation of
short-term cash management procedures;
(d) assisting with the identification of executory contracts
and leases and performing cost/benefit evaluations with respect to
the assumption or rejection of each;
(e) assisting the Debtors' management team and counsel focused
on the coordination of resources related to the ongoing
reorganization effort, including without limitation a review of the
Debtor's business plan;
(f) assisting in the preparation of financial information for
distribution to creditors and others, including, but not limited
to, cash flow projections and budgets, cash receipts and
disbursement analyses, analyses of various asset and liability
accounts, and analyses of proposed transactions for which Court
approval is sought;
(g) attending meetings and assisting in discussions with
potential investors, banks, and other secured lenders, any official
committee(s) appointed in the Chapter 11 Cases, the United States
Trustee, other parties-in-interest and professionals hired by same,
as requested;
(h) analyzing creditor claims by type, entity, and individual
claim, including assisting with developing databases, as necessary,
to track such claims;
(i) assisting in the preparation of information and analyses
necessary for the confirmation of a plan of reorganization in the
Chapter 11 Cases, including information contained in the disclosure
statement;
(j) assisting in the evaluation and analysis of avoidance
actions, including fraudulent conveyances and preferential
transfers;
(k) assisting in the analysis and preparation of information
related to certain tax matters, including without limitation, such
information necessary to assess the tax attributes related to the
confirmation of a plan of reorganization in the Chapter 11 Cases,
including the development of the related tax consequences contained
in the disclosure statement;
(l) providing litigation advisory services with respect to
accounting and tax matters, along with expert witness testimony on
case related issues as required by the Debtors;
(m) advisory assistance in connection with the development and
implementation of key employee compensation and other critical
employee benefit programs; and
(n) rendering such other general business consulting or such
other assistance as Debtors' management or counsel may deem
necessary, consistent with the role of a financial advisor, to the
extent that it would not be duplicative of services provided by
other professionals in the Chapter 11 Cases.
The firm will be paid at these rates:
Managing Directors $975-1,295 per hour
Directors $750-950 per hour
Analysts/Associates $425-750 per hour
The firm received $750,000 as a retainer in connection with
preparing for and conducting the filing of the Chapter 11 Cases.
As disclosed in court filings, Alvarez & Marsal is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Ray Dombrowski
Alvarez & Marsal North America, LLC
600 Madison Avenue, 8th Floor
New York, NY 10022
Telephone: (212) 759-4433
Facsimile: (212) 759-5532
Email: rdombrowski@alvarezandmarsal.com
About Endo International
Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical
company committed to helping everyone they serve live their best
life through the delivery of quality, life-enhancing therapies. 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.
ENDO INTERNATIONAL: Hires PJT Partners as Investment Banker
-----------------------------------------------------------
Endo International plc and affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire PJT
Partners LP as its investment banker.
(a) assisting in the evaluation of the Debtors' businesses and
prospects;
(b) assisting in the development of the Debtors' long-term
business plan and related financial projections;
(c) assisting in the development of financial data and
presentations to the Board of Directors, various creditors and
other third parties;
(d) analyzing the Debtors' financial liquidity and evaluating
alternatives to improve such liquidity;
(e) analyzing various restructuring scenarios and the
potential impact of these scenarios on the recoveries of those
stakeholders impacted by the Restructuring4 or the Transaction;
(f) providing strategic advice with regard to restructuring
or refinancing the Debtors' Obligations;
(g) evaluating the Debtors' debt capacities and alternative
capital structures;
(h) participating in negotiations among the Debtors and their
creditors, suppliers, lessors and other interested parties;
(i) assisting the Debtors and their counsel in negotiating a
settlement with litigating plaintiffs;
(j) valuing securities offered by the Debtors in connection
with a Restructuring or Transaction;
(k) advising the Debtors and their counsel and negotiating
with lenders with respect to potential waivers or amendments of
various credit facilities and indentures;
(l) assisting in arranging financing for the Debtors, as
requested;
(m) providing expert witness testimony concerning any of the
subjects encompassed by the other investment banking services;
(n) assisting the Debtors and their counsel in preparing
marketing materials in conjunction with a possible Transaction;
(o) assisting the Debtors in identifying potential buyers or
parties in interest to a Transaction and assisting in the due
diligence process;
(p) assisting and advising the Debtors and their counsel
concerning the terms, conditions and impact of any proposed
Transaction;
(q) assisting the Debtors and their counsel in raising new
debt or equity capital, including, but not limited to,
debtor-in-possession financing and/or exit financing in connection
with any bankruptcy case, including developing marketing materials,
creating and maintaining a data room and contact log, initiating
contact with potential capital providers and running the process
for any proposed new capital raise; and
(r) providing such other advisory services as are customarily
provided in connection with the analysis and negotiation of a
transaction similar to a potential Restructuring, Exchange/Tender,
Settlement or Transaction, as may be requested and mutually
agreed.
The firm will be paid as follows:
(a) Monthly Fee. The Debtors shall pay PJT a monthly advisory
fee of $250,000 per month. Fifty percent of all Monthly Fees paid
to PJT under the Engagement Agreement shall be credited only once
and without duplication against any Restructuring Fee or
Transaction Fee.
(b) Capital Raising Fee. The Debtors shall pay PJT a capital
raising fee for any financing arranged by PJT, earned and payable
upon receipt of a binding commitment letter. If access to financing
is limited by orders of this Court, a proportionate fee shall be
payable with respect to each available commitment (irrespective of
availability blocks, borrowing base, or other similar
restrictions). The Capital Raising Fee will be calculated as:
-- Senior Debt. 1 percent of the total issuance size
for senior debt financing
-- Junior Debt. 2. percent of the total issuance size
for junior debt financing; and
-- Equity Financing. 3.0% of the issuance amount for
equity financing.
(c) Settlement Fee. The Debtors shall pay PJT a settlement fee
equal to $20 million for any out-of-court Settlement, or any
nonbankruptcy, judicially-approved Settlement. If a Settlement is
consummated contemporaneously with and as part of the consummation
of a Restructuring, PJT shall only be entitled to be paid the
Restructuring Fee and not also the Settlement Fee in respect of
such Settlement.
(d) Exchange/Tender Fee. If PJT has, at the request of the
Debtors or their counsel, provided investment banking services in
connection with an Exchange/Tender, then the Debtors shall pay PJT
an exchange/tender fee equal to 0.75 percent of the aggregate
amount of the Obligations subject to such Exchange/Tender. If an
Exchange/Tender is consummated concurrently with and as a part of
the consummation of a Restructuring, PJT shall be entitled to be
paid only the Restructuring Fee and not also the Exchange/Tender
Fee in respect of such Exchange/Tender.
(e) Restructuring Fee. The Debtors shall pay PJT a
restructuring fee equal to $29 million upon the consummation of a
chapter 11 plan or other Restructuring.
(f) Transaction Fee. The Debtors shall pay PJT a Transaction
fee upon the consummation of a Transaction. If the Transaction
involves all or substantially all of the Debtors or their assets,
such Transaction Fee shall equal $22 million plus 0.1 percent of
the Transaction Value.
If the Transaction involves less than all or substantially all of
the Debtors or their assets, the Debtors and PJT shall negotiate in
good faith a reasonable, market-based Transaction Fee. Upon the
consummation of a Restructuring in which all or substantially all
of the Debtors or their assets are sold, PJT, in its sole
discretion, shall be entitled to either a Transaction Fee in
respect of such Restructuring or the Restructuring Fee, but not
both.
Notwithstanding anything in the Engagement Agreement to the
contrary, the aggregate amount of any Transaction Fee earned
pursuant to clause (vi)(a) therein, the Restructuring Fee, the
Settlement Fee, the Exchange/Tender Fees, and the Capital Raising
Fees payable to PJT under the Engagement Agreement shall not exceed
$30 million (after application of any crediting of any other fees
thereunder). For the avoidance of doubt, Monthly Fees and
Transaction Fees earned pursuant to clause (vi)(b) of the
Engagement Agreement shall not be included in the aforementioned
fee cap.
(g) Expense Reimbursements. In addition to the fees described
above, the Debtors agree to reimburse PJT for all reasonable and
documented out-of-pocket expenses incurred during its engagement
including, but not limited to, travel and lodging, direct
identifiable data processing, document production, publishing
services and communication charges, courier services, working
meals, reasonable fees and expenses of PJT's counsel (without the
requirement that the retention of such counsel be approved by this
Court) and other necessary expenditures, payable upon rendition of
invoices setting forth in reasonable detail the nature and amount
of such expenses.
(h) Further, in connection with the reimbursement,
contribution and indemnification provisions set forth in the
Engagement Agreement and Attachment A to the Engagement Agreement,
which is incorporated therein by reference, the Debtors agree to
reimburse each Indemnified Party for its reasonable and documented
legal and other out of pocket expenses (including the cost of any
investigation and preparation) as such expenses are incurred in
connection with any claim, suit, action, proceeding, investigation,
or inquiry arising out of or in connection with PJT's engagement,
excluding any losses resulting primarily from the gross negligence,
bad faith or willful misconduct of an Indemnified Party.
Mark Buschmann, a partner at PJT Partners LP, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Steve M. Zelin
PJT Partners LP
280 Park Avenue
New York, NY 10017
Tel: (212) 364-7800
Email: buschmann@pjtpartners.com
About Endo International
Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical
company committed to helping everyone they serve live their best
life through the delivery of quality, life-enhancing therapies. 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.
ENDO INTERNATIONAL: Hires PricewaterhouseCoopers as Auditor
-----------------------------------------------------------
Endo International plc and affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
PricewaterhouseCoopers LLP as their audit and tax services
provider.
The firm will render these services:
a. 2022 Audit Engagement Letter:
i. PwC will perform an integrated audit of the consolidated
financial statements of Endo at December 31, 2022 and for the year
then ending and of the effectiveness of Endo's internal control
over financial reporting as of Dec. 31, 2022. PwC will provide
Endo, upon completion of its work, with a report on the audit work
referred to above. The integrated audit will be conducted in
accordance with the standards of the Public Company Accounting
Oversight Board.
ii. In conjunction with the annual financial statement
audit, PwC will perform reviews of Endo's unaudited consolidated
quarterly financial information for each of the first three
quarters in the year ending December 31, 2022, before the Form 10-Q
is filed. These reviews will be conducted in accordance with the
PCAOB.
iii. As is customary, as part of its engagement, PwC may
provide various types of insights whether oral, written, or
visual.
iv. PwC's fiscal 2022 services also include discussions,
review and testing of certain information related to the adoption
of new accounting standards which will be adopted by Endo in fiscal
years subsequent to 2022 and/or accounting advice related to
potential transactions and/or other matters that may arise during
the fiscal year.
b. Tax SOW #1 -PA/BRF Petition: PwC will assist in connection
with filing a petition for review to the Pennsylvania Board of
Finance and Revenue ("BF&R") on behalf of debtor Generics
International US 2 Inc. ("Taxpayer") for the Pennsylvania Corporate
Net Income Tax ("CNIT") period ended December 31, 2020 (the "2020
tax year") The following illustrates the nature of the services
intended to be covered by the Tax SOW #1:
i. Review documentation related to Taxpayer's petition to
the Pennsylvania Board of Appeals for 2020 tax year Pennsylvania
CNIT and the Pennsylvania Department of Revenue ("DOR") Notice of
Assessment ("Assessment") which Taxpayer appealed;
ii. Draft, for Endo Pharmaceuticals Inc.'s ("Endo
Pharmaceuticals") approval, the BF&R petition for review, and file
said petition with the BF&R;
iii. Draft, for Endo Pharmaceuticals' approval, an addendum
to the BF&R petition for review, explaining in further depth the
basis for the petition;
iv. Participate in discussions with Endo Pharmaceuticals
concerning the BF&R petition for review, and, if desired, assist in
developing a compromise offer for the Pennsylvania DOR's
consideration; and
v. Upon Endo Pharmaceuticals' request, participate in all
BF&R hearings and/or compromise meetings in connection with its
BF&R petition for review.
c. Tax SOW #2 – TP Consulting3: PwC will provide transfer
pricing-related income tax consulting services to Endo
Pharmaceuticals as requested, such as the following:
i. BEPS Action 13 assistance – PwC will assist Endo
Pharmaceuticals in assessing its transfer pricing compliance
requirements, and making recommendations for its consideration, as
necessary, with respect to jurisdictions' adoption of various
elements of the Organizations for Economic Cooperation and
Development's Base Erosion and Profit Shifting ("BEPS") Action 13
project, as needed;
ii. Dispute resolution – PwC will provide Endo
Pharmaceuticals with tax controversy and dispute resolution
support, as needed, with respect to transfer pricing and related
tax issues;
iii. Integration assistance – PwC will assist Endo
Pharmaceuticals in assessing changes in Endo Pharmaceuticals'
entities and businesses, and making recommendations for its
consideration, as necessary, with respect to Endo Pharmaceuticals'
compliance with relevant transfer pricing principles.
d. Tax SOW #3- General Tax Consulting: PwC will provide
general tax consulting services to Endo Pharmaceuticals during
2022. The following illustrates the nature of the services intended
to be covered:
i. PwC will provide advice, answers to questions on U.S.
federal, state, and local, and international tax matters, including
research, discussions, preparation of memorandum, and attendance at
meetings relating to such matters, as mutually determined to be
necessary.
ii. PwC will provide advice and/or assistance with respect
to matters involving the Internal Revenue Service ("IRS") or other
tax authorities on an as-needed or as-requested basis.
iii. PwC will provide general tax advice and analysis,
including U.S. and nonU.S. tax considerations in connection with
various European tax reform concepts.
e. Tax SOW #4 – Intercompany Transactions: PwC will assist
Endo Pharmaceuticals in drafting intercompany transaction step
plans and identifying application non-U.S., U.S. federal and state
and local tax considerations in connection with certain Endo
Pharmaceuticals' intercompany transactions during the calendar year
2022.
f. Tax SOW #5 – DAC6: PwC will perform work in connection
with certain European Union mandatory DAC6 disclosure requirements
for the 2022 taxable year which covers the following services in
relation to various step plans provided:
i. Provide advice and recommendations regarding the
reportable character of transactions involved in the step plan(s)
(the "Transaction") pursuant to DAC6 reporting rules.
ii. If applicable, with respect to the Transaction, PwC will
also provide advice and recommendations as to the appropriate party
responsible for the DAC6 filing, the information that must be
submitted to the authorities, and the format of such submission.
iii. PwC will prepare and file the identified reporting
obligations with the relevant tax authority on Endo
Pharmaceuticals' behalf with the respect to the Transactions noted
above.
g. Tax SOW #6 – Texas Refund: PwC will assist Endo
Pharmaceuticals with reviewing previously filed Texas franchise tax
returns to determine whether state tax savings can be achieved
through the filing of refund claims. Services to be provided by
PwC:
i. PwC will review Endo Pharmaceuticals' previously filed
Texas franchise tax returns in order to assist Endo Pharmaceuticals
in its determination of whether state tax savings can be achieved
through the filing of refund claims. The period covered under this
review will be the periods open under the Texas statute of
limitations for which returns have been filed (Report Years 2017,
2018, 2019, and 2020).
ii. PwC will research and develop the filing positions and
prepare amended returns (net of any changes), Statements of
Grounds, and refund claim letters for review, approval, and signing
by Endo Pharmaceuticals and upon Endo Pharmaceuticals' request
filing by PwC on behalf of Endo Pharmaceuticals. Upon Endo
Pharmaceuticals request, PwC will assist in correcting any errors
other than those reflected in the refund claims.
iii. To assist Endo Pharmaceuticals with developing its
filing positions, PwC will analyze the property, payroll, and sales
of the entities included in Endo Pharmaceuticals Hyperion Financial
Management ("HFM") trial balance to assess if an entity may qualify
under 80/20 rule to be excluded from the Texas combined group. PwC
will also review and analyze the amount of cost of goods sold and
research and development expense reported on the federal return and
HFM trial balance to assess the proper cost of goods sold deduction
in the Texas return; as part of this analysis, PwC will review the
applicable cost of goods sold and amortization from non-U.S.
affiliates on a post-elimination basis.
iv. PwC will also review for potential sales factor
duplication in other states due to the purchase and sale of goods
to Endo Pharmaceuticals' Irish affiliates to determine if tax
savings can be achieved through the filing of refund claims.
v. If requested by Endo Pharmaceuticals, PwC will assist
Endo Pharmaceuticals' audit defense of the refund claims filed. The
assistance may include an analysis of the Texas auditor's proposed
adjustments as well as oral and written communication with the
Texas auditor to gain an understanding of the proposed adjustments.
PwC will consult with Endo Pharmaceuticals regarding the evaluation
of offers or proposals to resolve any disputes.
vi. PwC will consult with Endo Pharmaceuticals as necessary
to determine the appropriate scope of PwC's fact finding,
preparation of refund claims, preparation for hearings or
conferences, and assistance in the evaluation of offers or
proposals to resolve any disputes.
The firm will be paid as follows:
a. 2022 Audit Engagement Letter: The 2022 Audit Engagement
Letter is a fixed fee arrangement whereby PwC agreed to be paid
$4,499,000, exclusive of expenses, to provide the agreed-upon
services payable in 10 installments. Pre-petition, Debtor paid the
first 4 installments and an additional $79,000 totaling $2,124,000,
of which $571,604 remains to be applied against approved
post-petition fees for such services.
b. Tax SOW #1 - PA/BRF Petition: The Tax SOW #1 is a fixed fee
arrangement whereby PwC agreed to be paid $35,000, exclusive of
expenses, to provide the agreed-upon services. Pre-Petition, PwC
was paid $13,000 of such fixed fee amount for pre-petition
services.
c. Tax SOW #2 – TP Consulting: The Tax SOW #2 is an hourly
fee arrangement. The hourly rates are set forth below, and PwC has
agreed that the fees shall not exceed $90,000, exclusive of
expenses, without prior written agreement of the parties.
Pre-petition, PwC was paid $11,651 of such capped amount for
pre-petition services.
d. Tax SOW #3 – General Tax Consulting: The Tax SOW # 3 is
an hourly fee arrangement. The hourly rates are set forth below,
and PwC has agreed that the fees shall not exceed $300,000,
exclusive of expenses, without prior written approval of Endo
Pharmaceuticals. Prepetition, PwC was paid $30,755 of such capped
amount for pre-petition services.
e. Tax SOW #4 – Intercompany Transactions: The Tax SOW #4 is
an hourly fee arrangement. The hourly rates are set forth below,
and PwC agreed that the fees shall not exceed $300,000, exclusive
of expenses, without the prior written agreement of Endo
Pharmaceuticals. Prepetition, PwC was paid $65,207 of such capped
amount for pre-petition services.
f. Tax SOW #5 – DAC6: The Tax SOW # 5 is a fixed fee
arrangement whereby PwC agreed to be paid $145,000, exclusive of
expenses, to provide the agreed-upon services. Pre-petition, PwC
was paid $41,938 of such fixed fee amount for pre-petition
services.
g. Tax SOW #6 – Texas Refund Claim: The Tax SOW # 6 is a
fixed fee arrangement whereby PwC has agreed that the fees shall
not exceed $150,000, exclusive of expenses, without prior written
approval of the Endo Pharmaceuticals. Pre-petition, PwC was paid
$76,000 of such fixed fee amount for pre-petition services.
The firm's hourly rates are as follows:
For Tax SOW #2 For Tax SOW #3
and Tax SOW # 3 (M&A/ITS) and
Tax SOW #4
Partner $770 $864
Senior Managing Director $663 $790
Director $632 $776
Senior Manager $500 $632
Manager $448 $575
Senior Associate $372 $464
Associate $288 $356
PricewaterhouseCoopers will also be reimbursed for reasonable
out-of-pocket expenses incurred.
J. Gray Lambe, partner of PricewaterhouseCoopers LLP, assured the
Court that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code and does not
represent any interest adverse to the Debtors and their estates.
PricewaterhouseCoopers can be reached at:
J. Gray Lambe
PRICEWATERHOUSECOOPERS LLP
Two Commerce Square
2001 Market Street Suite 1700
Philadelphia, PA 19103-7042
Phone: (267) 330 - 3000
About Endo International
Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical
company committed to helping everyone they serve live their best
life through the delivery of quality, life-enhancing therapies. 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.
ENDO INTERNATIONAL: Seeks to Hire Kroll as Administrative Advisor
-----------------------------------------------------------------
Endo International plc and affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Kroll Restructuring Administration LLC as its administrative
advisor.
The firm will render these services:
(a) assist with, among other things, solicitation, balloting
and tabulation of votes, and prepare any related reports, as
required in support of confirmation of a chapter 11 plan, and in
connection with such services, process requests for documents from
parties-in-interest, including, if applicable, brokerage firms,
bank back-offices and institutional holders;
(b) prepare an official ballot certification and, if
necessary, testify in support of the ballot tabulation results;
(c) assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
(d) provide a confidential data room, if requested;
(e) manage and coordinate any distributions pursuant to a
chapter 11 plan; and
(f) provide such other processing, solicitation, balloting and
other administrative services described in the Engagement
Agreement, but not included in the Section 156(c) Application, as
may be requested from time to time by the Debtors, this Court or
the Office of the Clerk of the Bankruptcy Court.
The Debtors provided Kroll an advance in the amount of $100,000.
Benjamin Steele, a managing director at Kroll, disclosed in a court
filing that his firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Benjamin J. Steele
Kroll Restructuring Administration LLC
55 East 52nd Street, 17th Floor
New York, NY 10055
Telephone: (212) 593-1000
Email: benjamin.steele@kroll.com
About Endo International
Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical
company committed to helping everyone they serve live their best
life through the delivery of quality, life-enhancing therapies. 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.
ENDO INTERNATIONAL: Seeks to Hire Skadden Arps as Legal Counsel
---------------------------------------------------------------
Endo International plc and affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Skadden, Arps, Slate, Meagher & Flom LLP as their counsel.
The firm will render the following services:
(a) advise the Debtors with respect to their powers and duties
as debtors in possession in the continued management and operation
of their businesses and properties;
(b) attend meetings and negotiate with representatives of
creditors and other parties in interest and advise and consult on
the conduct of the cases, including all of the legal and
administrative requirements of operating in chapter 11;
(c) take all necessary actions to protect and preserve the
Debtors' estates, including the prosecution of actions on the
Debtors' behalf, the defense of actions commenced against the
Debtors' estates, negotiations concerning litigation in which the
Debtors may be involved, and objections to claims filed against the
Debtors' estates;
(d) prepare on behalf of the Debtors all motions,
applications, answers, orders, reports, and papers necessary to the
administration of the estates;
(e) negotiate and prepare on the Debtors' behalf: plan(s) of
reorganization or a sale of all or substantially all assets
pursuant to section 363 of the Bankruptcy Code and all related
agreements and/or documents, and take any necessary action on
behalf of the Debtors in connection with the Chapter 11 Cases;
(f) explore various strategic alternatives to address the
Debtors' financial circumstances;
(g) appear before this Court, any appellate courts, and the
U.S. Trustee, and protect the interests of the Debtors' estates
before such courts and the U.S. Trustee;
(h) continue to act as coordinating counsel in opioid product
litigation to the extent such litigation continues in other courts;
and
(i) perform all other necessary legal services and provide all
other necessary legal advice to the Debtors in connection with the
Chapter 11 Cases.
The firm will be paid at these hourly rates:
Partners $1,465 to $1,980
Counsel $1,300 to $1,495
Associates $550 to $1,275
Skadden has historically applied a 10 percent discount to hourly
time charges for all services provided to the Company across all
matters. This historical discount applies to the services within
the scope of the Restructuring Engagement Agreement.
In opioid product litigation, Skadden agreed to apply a 20 percent
discount to hourly charges for services provided in connection with
the Coordinating Counsel Engagement Agreement, which increased to a
25 percent discount upon the billed time charges reaching an
aggregate of $7.5 million.
Skadden is a "disinterested person," as that term is defined in
section 101(14) of the Bankruptcy Code, and does not hold or
represent any interest adverse to the estates, according to court
filings.
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, Skadden
disclosed that:
-- As one of Skadden's longest tenured and largest clients,
Skadden has historically applied a 10% discount to hourly time
charges for services provided to the Company across all matters for
which Skadden was engaged, both related and unrelated to the
prepetition matters surrounding the Chapter 11 Cases. The Debtors
and Skadden have agreed that the hourly fee structure provided in
the Restructuring Engagement Agreement will continue to apply in
the Chapter 11 Cases. In addition, pursuant to an earlier version
of the Coordinating Counsel Engagement Agreement, executed on Sep.
21, 2021, Skadden agreed to apply a 20 percent discount, which
increased to a 25 percent discount once fees incurred reached an
aggregate of $7.5 million, on matters covered by the Coordinating
Counsel Engagement Letter;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- Skadden represented the client in the 12 months
prepetition. During that representation, on Jan. 1, 2022, Skadden
raised its billing rates, as it does customarily from time to time;
and
-- the Debtors attached an approved 13-week cash flow budget,
which included a line item for "Professional Fees," including
Skadden's fees.
The firm can be reached through:
Paul D. Leake, Esq.
Skadden, Arps, Slate,
Meagher & Flom LLP
One Manhattan West
New York, NY 10001
Tel: (212) 735-3000
Fax: (212) 735-2000
Email: Paul.Leake@skadden.com
About Endo International
Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical
company committed to helping everyone they serve live their best
life through the delivery of quality, life-enhancing therapies. 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.
ENDO INTERNATIONAL: Seeks to Hire Togut Segal as Co-Counsel
-----------------------------------------------------------
Endo International plc and affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Togut, Segal & Segal LLP as its co-counsel.
The Togut Firm shall serve as secondary restructuring counsel to
the Debtors.
The firm's services include:
a. assisting the Debtors with obtaining Bankruptcy Court
approval for the retention of select estate professionals and
ordinary course professionals as may be needed in these Chapter 11
Cases;
b. assisting the Debtors' professionals with preparing and
filing monthly fee statements and interim fee applications;
c. assisting the Debtors with preparing their monthly
operating reports;
d. assisting the Debtors with preparing their schedules of
assets and liabilities and statements of financial affairs;
e. reviewing, objecting to, and settling claims and handling
related matters, including contested matters seeking the setoff,
allowance, and/or settlement of (a) priority or secured claims and
(b) general unsecured claims;
f. counseling the Debtors in connection with reclamation
demands and issues;
g. effectuating the assumption and rejection of executory
contracts and unexpired leases;
h. assisting the Debtors in connection with utility matters,
including, but not limited to, demands by utility providers
pursuant to section 366 of the Bankruptcy Code;
i. analyzing transfers made by the Debtors in the 90-day
period prior to the commencement of the Chapter 11 Cases for an
assessment of potential avoidance claims under chapter 5 of the
Bankruptcy Code;
j. assisting the Debtors in connection with de minimis asset
sales;
k. assisting the Debtors with certain vendor issues;
l. advising the Debtors regarding their powers and duties as
debtors in possession for the tasks assigned;
m. preparing and filing on the Debtors' behalf motions,
applications, answers, proposed orders, reports, and papers
necessary for the assigned matters;
n. attending meetings and negotiating with representatives of
creditors and other parties in interest;
o. appearing before this Court and any appellate courts to
protect the interests of the Debtors' estates in connection with
the assigned matters;
p. responding to inquiries and calls from creditors and
counsel to interested parties regarding pending assigned matters;
and
q. performing other necessary legal services for assigned
matters, or any other discrete matters assigned to the Togut Firm,
and providing other necessary legal advice to the Debtors in
connection with these Chapter 11 Cases.
The firm will be paid at these hourly rates:
Partners $915 to $1,300
Counsel $810 to $990
Associates $320 to $830
In accordance with Appendix B-Guidelines for Reviewing Applications
for Compensation and Reimbursement of Expenses Filed under 11
U.S.C. Sec. 330 for Attorneys in Larger Chapter 11 Cases, the Togut
Firm disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm represented the client in the 12 months
prepetition in matters unrelated to the Chapter 11 Cases. During
that representation, on Jan. 1, 2022, the Togut Firm raised its
billing rates, as it does customarily from time to time; and
-- as these Chapter 11 Cases continue to develop, the Togut
Firm will formulate a budget and staffing plan for this proposed
engagement, which it will review with the Debtors.
The firm can be reached through:
Albert Togut, Esq.
Frank A. Oswald, Esq.
Kyle J. Ortiz, Esq.
Bryan M. Kotliar, Esq.
TOGUT, SEGAL & SEGAL LLP
One Penn Plaza, Suite 3335
New York, NY 10119
Phone: (212) 594-5000
Email: altogut@TeamTogut.com
About Endo International
Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical
company committed to helping everyone they serve live their best
life through the delivery of quality, life-enhancing therapies. 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.
ESSA PHARMA: Appoints Philip Kantoff to Board of Directors
----------------------------------------------------------
ESSA Pharma Inc. has appointed Philip Kantoff, M.D., to its Board
of Directors. Dr. Kantoff is a renowned medical oncologist and
leader in the clinical development of new prostate cancer
treatments.
"Phil's breadth and quality of accomplishments are unmatched, and
we are honored to welcome him to ESSA's Board of Directors," stated
Richard M. Glickman, L.L.D. (Hon), Chairman of ESSA's Board of
Directors. "We are eager to leverage Phil's admirable expertise in
prostate cancer clinical research, as we work to further ESSA's
pipeline of first-in-class anitens targeting the N-terminal domain
of the androgen receptor."
"ESSA's development program is focused on uniquely interfering with
androgen-driven prostate cancer through targeting of the N-terminal
domain of the androgen receptor. I look forward to advising and
working with ESSA's Board of Directors and management team during
this pivotal time," said Philip Kantoff, M.D.
Dr. Kantoff currently serves as the chief executive officer and
co-founder of Convergent Therapeutics, where he spearheads the
development of precision radiopharmaceuticals for prostate cancer
treatment. Previously, Dr. Kantoff served as Chairman of the
Department of Medicine at Memorial Sloan Kettering Cancer Center
(MSK), managing more than 450 physicians and physician-scientists,
while caring for patients, running a funded laboratory and
developing improved cancer therapies. Prior to MSK, he was
Professor of Medicine at Harvard Medical School and the Jerome and
Nancy Kohlberg Chair at Harvard Medical School, Director of the
Lank Center for Genitourinary Oncology at the Dana-Farber Cancer
Institute and Division Head of Solid Tumor Oncology, serving as
principal investigator in significant trials developing new
therapeutic targets for patients with advanced prostate cancer.
During this time, Dr. Kantoff conducted laboratory research focused
on the genetic epidemiology of prostate cancer, mechanisms of
resistance, the role of noncoding RNAs in prostate cancer, and the
discovery of biomarkers as potential prognostic tools and/or
therapeutic targets. Dr. Kantoff earned both his undergraduate and
medical degrees from Brown University and is board certified in
internal medicine and medical oncology. He has written more than
500 articles and books and is the recipient of numerous awards
celebrating his research and clinical skills.
Mr. Kantoff will participate in the Company's standard compensation
plan for non-executive members of the Board, including an initial
stock option grant, which was granted to Mr. Kantoff on Sept. 13,
2022. In addition, Mr. Kantoff will enter into an indemnity
agreement with the Company consistent with the form of the existing
indemnity agreement entered into between the Company and its
directors and officers.
The Board has not yet determined the committee of the Board, if
any, to which Mr. Kantoff will be named.
About Essa
Vancouver-based Essa Pharma, Inc. -- www.essapharma.com -- is a
clinical stage pharmaceutical company, focused on developing novel
and proprietary therapies for the treatment of prostate cancer in
patients whose disease is progressing despite treatment with
current standard of care therapies, including second-generation
anti-androgen drugs such as abiraterone, enzalutamide,
apalutamide,
and darolutamide.
ESSA Pharma reported a loss and comprehensive loss of $36.81
million for the year ended Sept. 30, 2021, a loss and comprehensive
loss of $23.45 million for the year ended Sept. 30, 2020, and a net
loss and comprehensive loss of $12.75 million for the year ended
Sept. 30, 2019. As of June 30, 2022, the Company had $175.66
million in total assets, $4.14 million in total liabilities, and
$171.52 million in total shareholders' equity.
F-12 ENTERTAINMENT: Non-Alcoholic Strip Club Files for Chapter 11
-----------------------------------------------------------------
F-12 Entertainment Group Inc. filed for chapter 11 protection in
the District of Nevada. The Debtor elected on its voluntary
petition to proceed
under Subchapter V of chapter 11, and thus is authorized to
continue operating its business as a debtor in possession.
The Debtor is a Nevada corporation that operates the Cheetahs
Gentlemen's Club, a non-alcohol strip club operating out of leased
space located at 8105 Clairemont Mesa Boulevard, San Diego,
California 92111. The Debtor was formed on May 14, 2015, and Rich
Bounantony is its sole officer and director, and also serves as its
general manager.
The Debtor's sole shareholder is Michael Galardi, who previously
owned and operated several gentlemen's clubs in Las Vegas as well,
and who is also a consultant to the Club. The Debtor is filing for
bankruptcy reorganization principally to achieve a more economical
and expedient resolution to various
litigations in California state court, which have proven very
expensive and time-consuming to litigate and resolve, and to allow
it to continue in business and preserve and protect value for the
benefit of all creditors and parties in interest.
The Debtor has filed motions to pay employee wages, pay utilities,
and continue its cash management system.
According to court filings, F-12 Entertainment Group Inc. estimates
between 1 and 49 creditors. The petition states funds will be
available to unsecured creditors.
About F-12 Entertainment Group
F-12 Entertainment Group Inc., operates the Cheetahs Gentlemen's
Club, a non-alcohol strip club operating out of leased space
located at 8105 Clairemont Mesa Boulevard, San Diego, California
92111.
F-12 Entertainment Group Inc., doing business as Cheetahs
Gentlemen's Club, sought protection under Chapter 11 Subchapter V
of the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 22-13215) on
Sept. 8, 2022. In the petition filed by Richard Buonantony, as
president, the Debtor reported assets between $50,000 and $100,000
and estimated liabilities between $1 million and $10 million.
Larson & Zirzow, LLC, led by Matthw C. Zirzow, is the Debtor's
general bankruptcy counsel. Steve Hoffman is the special counsel,
and William Ceravolo, EA, is the accountant.
The Subchapter V trustee:
Jeanette McPherson
1980 Festival Plaza Drive, Suite 700
Las Vegas, NV 89135
Phone: (702) 699-5923
E-mail: JMcPherson@foxrothschild.com
FORTRESS TRANSPORTATION: Fitch Affirms 'BB-' Long-Term IDR
----------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of Fortress Transportation and Infrastructure Investors LLC
(FTAI) at 'BB-' and maintained the Negative Rating Outlook. Fitch
has also affirmed the unsecured debt rating at 'BB-' and preference
share rating at 'B'.
KEY RATING DRIVERS
IDR, SENIOR DEBT and PREFFERED SHARES
The affirmation of the Long-Term IDR reflects FTAI's progress in
executing on the spin-off of its infrastructure business, with the
bulk of the targeted proceeds of $800 million already received.
With these proceeds used for debt reduction, including repayment of
its senior secured bridge loan, its revolving credit facility and a
portion of the senior unsecured notes due in 2025, meaningful
deleveraging over the short- to medium term is plausible.
At FYE 2021, FTAI's gross debt to tangible equity ratio (adjusted
for 50% equity credit for its preference shares) was elevated, at
5.5x (YE20: 2.4x). Proforma for the spin off, balance sheet
leverage is expected to be 14.2x in 1H22, as compared to a 20.4x
estimate in 1Q22.
The Negative Outlook continues to reflect uncertainties around the
pace of deleveraging and FTAI's ability to sustain leverage below
Fitch's downgrade trigger of 6x. Deleveraging is heavily reliant on
the sale of aviation assets (in addition to the $80 million gain on
sale already recorded in 1H22), as well as the execution on core
leasing activities.
While insurance proceeds relating to assets held in Russia and
Ukraine could also support debt reduction efforts, Fitch deems the
timing and quantum of these flows as uncertain, and therefore does
not afford these proceeds any credit in core financial ratios.
Failure to reduce and sustain leverage below 6.0x over the next
12-18 months could result in a ratings downgrade.
FTAI's ratings continue to benefit from its market position as a
niche aviation lessor (focusing mainly on aged aircraft and
engines), good portfolio diversification, limited exposure to
residual value risk and a predominantly unsecured funding profile.
This is balanced against a relatively short operating track record,
relatively weak consolidated profitability, and elevated re-lease
risk due to its focus on shorter term leases as well as a high
dividend payout ratio, which limits capital accumulation.
As at June 30, 2022, FTAI's fleet portfolio was comprised of 107
aircraft and 244 engines with a combined portfolio value of over $2
billion. Utilization rates are generally robust across the
portfolio but are lower for engines (59% at 2Q22) as compared to
aircraft (83% at 2Q22). Average remaining lease terms are shorter
for engines (14 months versus 41 months for aircraft), which
implies inherent release risk, but this has been managed reasonably
well in the context of the homogenous nature and exchangeability of
the assets.
While the impairment ratio has historically been maintained at low
levels (typically below 1%), a sharp increase was reported for 1H22
(15%) as the company recognized a $124 million impairment in
relation to its fleet held in Russia and Ukraine. Going forward,
Fitch expects the impairment ratio to revert to historic levels on
the back of an improving aviation backdrop.
FTAI reported $80 million in gains on the sale of assets in 1H22;
up from $5 million a year ago. FTAI has reported annual gains on
aviation asset disposals over the past five years, indicating
prudent residual value management and risk controls.
FTAI reported an operating loss in 1H22, driven by the
Russia/Ukraine-related portfolio impairment, Russia related bad
debt impairments ($47 million) as well as one-off costs associated
with the infrastructure spin.
FTAI's funding profile is largely unsecured (representing 75% of
total debt at 2Q22) and no debt maturities are falling due over the
next 12 months. Furthermore, liquidity on the balance sheet is
adequate, with $120 million in unrestricted cash at 2Q22,
particularly in the absence of any significant capital commitments
as the company does not maintain a conventional order book.
The unsecured debt rating is equalized with FTAI's Long-Term IDR
reflecting the unsecured funding mix and Fitch's expectation for
average recovery prospects in a stressed scenario.
FTAI's preferred share rating is two notches below the company's
Long-Term IDR reflecting the subordination and heightened risk of
non-performance of the instrument relative to other obligations.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
A sustained elevated leverage above 6x could give rise to a
downgrade, in particular if it results from weak operational
performance or a material decline in asset sale proceeds.
Additionally, the recognition of sizable aircraft and/or engine
impairments, higher repossession activity, difficulty re-leasing
aircraft at economical rates, and/or a reduction in available
liquidity could adversely impact ratings.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
A sustained reduction in balance sheet leverage below 6.0x could
result in the Outlook being revised to Stable. Beyond that, a
further reduction in leverage, coupled with a sustained improvement
in profitability, maintenance of a predominantly unsecured funding
profile, and the maintenance of operating cash flow in excess of
dividend distributions could yield positive rating momentum. Strong
risk management and credit performance through a full credit cycle
would also be viewed favorably in the longer-term.
The unsecured debt rating is primarily sensitive to changes in
FTAI's Long-Term IDR and secondarily to the level of unencumbered
balance sheet assets relative to outstanding debt. A decline in the
level of unencumbered asset coverage and/or a material increase in
the use of secured debt, could result in the notching of the
unsecured debt rating down from the Long-Term IDR.
The preferred share rating is primarily sensitive to changes in
FTAI's Long-Term IDR and is expected to move in tandem. However,
the preferred share rating could be downgraded by an additional
notch to reflect further structural subordination should the firm
consider other hybrid issuances.
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.
FRASIER CONTRACTING: Case Summary & 20 Top Unsecured Creditors
--------------------------------------------------------------
Debtor: Frasier Contracting, Inc.
4100 Recker Hwy
Winter Haven, FL 33880
Business Description: The Debtor is a general contracting company.
Its projects have ranged from convenience
store remodels to the complete design-build
of large industrial plants.
Chapter 11 Petition Date: September 15, 2022
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 22-03776
Debtor's Counsel: Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel: (813) 877-4669
Fax: (813) 877-5543
Email: All@tampaesq.com
Total Assets: $1,253,075
Total Liabilities: $1,025,407
The petition was signed by Matthew LaForest as president.
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/AFQSNYQ/Frasier_Contracting_Inc__flmbke-22-03776__0001.0.pdf?mcid=tGE4TAMA
FREE SPEECH: Bankruptcy Court to Weigh Requests for Jones Financial
-------------------------------------------------------------------
Daniel Gill of Bloomberg Law reports that parents of children
killed in the 2012 Sandy Hook Elementary School massacre are
pressing a company with connections to Infowars host Alex Jones to
disclose more information about its finances.
The Sandy Hook parents, including two with a nearly $50 million
judgment against Jones, Sept. 9, 2022, filed an emergency motion
asking U.S. Bankruptcy Court for the Southern District of Texas to
force PQPR Holdings Limited LLC to respond to their discovery
requests.
The plaintiffs believe PQPR, owned by right-wing conspiracy
theorist Jones and his parents, received millions of dollars from
Infowars' bankrupt parent, Free Speech Systems LLC, after courts in
Texas and Connecticut found Free Speech and Jones liable for
defamation for calling the mass murder a hoax. They say Free Speech
transferred its assets to keep them away from the reach of
creditors, including the Sandy Hook families.
The state courts entered default judgments for some Sandy Hook
families. In August 2022, a Texas jury ordered Jones to pay almost
$50 million in damages to Neil Heslin and Scarlett Lewis, whose
six-year-old son, Jesse, was among those murdered. The Connecticut
court damages trial is set to begin Tuesday.
The plaintiffs have served PQPR with discovery requests for
financial records to look for grounds to recover payments from Free
Speech to PQPR and invalidate Free Speech’s alleged $54 million
debt to PQPR.
Before the Texas court entered its liability judgments, "FSS had no
memory of this $54 million debt," the plaintiffs said in their
emergency motion. "But after these default judgments were entered
in favor of the Texas Plaintiffs, FSS conveniently recalled these
ostensible debts and began paying PQPR about $11,000 a day."
Judge Christopher M. Lopez agreed to hear the families’ discovery
motion Tuesday, September 13, 2022.
The families' request comes as PQPR's own motion to restrict the
financial inquiry to a bankruptcy trustee, automatically appointed
in cases filed under Subchapter V of Chapter 11 designed for small
businesses, remains pending. PQPR Sept. 8, 2022 filed a request to
expedite a hearing on the motion.
Sandy Hook families call the motion an attempt by PQPR to avoid its
obligations to respond to legitimate discovery requests.
It's also a tactic to avoid an earlier motion by the families to
appoint a tort claims committee and divest Free Speech from the
ability to make operational or bankruptcy decisions during the
case, they said.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is the Debtor's counsel.
FREEDOM MORTGAGE: S&P Alters Outlook to Neg., Affirms 'B' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook on Freedom Mortgage Corp. to
negative from stable. At the same time, S&P affirmed its 'B' issuer
credit rating on Freedom and 'B' issue rating on the company's
senior unsecured notes. S&P's recovery rating of '4' indicates its
expectation for average recovery (45%) in a simulated default
scenario.
The outlook revision reflects Freedom's rise in leverage, resulting
from weak operations for the first half of 2022 and debt increase
to fund acquisitions of mortgage servicing rights (MSRs). As of
June 30, 2022, the company's debt to EBITDA for the last 12 months
was 8.5x and debt to tangible equity was 1.76x, above S&P's
previous base-case expectations of 5.0x and 1.5x, respectively.
Freedom stated that it plans to use cash flow from operations to
pay off debt starting in the second half of the year, aiming to
lower debt to tangible equity back below 1.5x over the next 12-24
months.
Rising interest rates led to plummeting mortgage origination
volumes and gain-on-sale (GOS) margins. The rise in mortgage
interest rates will continue to create headwinds for the mortgage
industry as origination volume is expected to decline primarily
owing to refinancing burnout. Freedom originated $23.7 billion of
mortgages in the first half of 2022, down 72% from $84.1 billion in
the first half of 2021. GOS margins for second-quarter 2022 were
also negative, indicating pressures on profitability from
heightened market competition. As a result, EBITDA for the first
half of 2022 was slightly negative at -$2.7 million, compared with
$701 million in the first half of 2021. For full-year 2022, S&P
thinks Freedom's EBITDA could continue to be negative, despite
cost-cutting efforts. The drop in profit is a combination of lower
volume and declining GOS margins, which are normalizing from
historical highs.
S&P said, "We expect the current challenging operating environment
will continue to strain Freedom's performance. From a macroeconomic
standpoint, our economists now expect U.S. GDP growth of 1.8%
(versus 2.4% in June 2022) for 2022, assess the risk of recession
in the next 12 months as 45% (within a 40%-50% range), and predict
risks increasing as we head into 2023. Our economists also believe
the Fed could raise rates to 3.50%-3.75% before mid-2023, which
would mean continued challenges for the residential mortgage
companies such as Freedom over the next 12 months." The Mortgage
Banking Assn. forecasts 2022 origination volume to decline by 47%
on a yearly basis to $2.3 trillion, of which, purchase volume is
expected to decrease by 12% to $1.6 trillion and refinancing volume
is expected to decline by 72% to $0.7 trillion.
To offset weakening origination volumes, Freedom purchased $1.5
billion of MSRs in the first half of 2022. The company funded the
acquisitions with $1.3 billion of new secured debt. As of June 30,
2022, the unpaid principal balance (UPB) of loans in the
servicing-owned portfolio increased 23% to $441.2 billion from $360
billion, and the company is party to letters of intent to acquire
MSRs with UPB of approximately $43 billion by the end of 2022. S&P
expects MSR acquisitions to slow significantly in the second half
of the year and Freedom to judiciously add debt for future MSR
purchase opportunities, if any.
S&P said, "We believe Freedom's liquidity remains sufficient to
meet operational needs.As of June 30, 2022, the company had $690
million of cash on balance sheet and over $400 million of capacity
under its KeyBank line and Ginnie Mae Variable Funding Note
facility. Positively, forbearance levels and 60-plus-day
delinquencies continue to decline.
"The negative outlook indicates our expectation that over the next
12 months, the challenging operating environment will continue to
pressure Freedom's performance, which could result in debt to
tangible equity remaining above 1.5x despite the company's efforts
to lower debt with cash flow from operations. We also expect debt
to EBITDA to remain well over 5.0x before stabilizing next year and
Freedom to maintain sufficient liquidity to meet operational
needs.
"We could lower the ratings over the next six to 12 months if we
expect operating performance to further weaken, especially if it
were to lead to cash burn or EBITDA interest coverage sustained
below 2.0x. We could also lower the ratings if we expect debt to
tangible equity to remain above 1.5x, if Freedom encounters
additional regulatory actions or scrutiny, or if the company buys
back debt at distressed levels--which we could view as a de facto
restructuring tantamount to default.
"We could revise the outlook to stable if the macroeconomic
headwinds fade, debt to tangible equity remains below 1.5x, debt to
EBITDA declines toward 5.0x, and EBITDA interest coverage remains
above 2.0x.
"Our hypothetical default scenario contemplates a default occurring
in 2025, resulting from reduced origination volumes and rapid
prepayment of mortgages. Financial pressure could also arise from
regulatory changes or operational issues.
"As the company approaches default, we assume its assets will
shrink as it sells MSRs to garner additional liquidity to fund
operations.
Ultimately, S&P assumes the company will breach the advance rates
on its secured funding facilities, leading to covenant violations.
This would also activate the cross-acceleration provision under the
senior unsecured notes, allowing unsecured creditors to submit a
claim for excess collateral following the sale of MSR assets
pledged as collateral for priority claims.
S&P believes that in a default scenario, creditors would seek to
liquidate the company's assets to receive the value of what they
are owed. The challenge of selling assets when the company is
distressed incurs an additional realization factor, or discount.
-- High delinquency rates leading to depressed MSR valuations
-- Sustained period of rapid amortization of MSRs with limited
ability to refinance the repayments
-- Limited new originations, an increase in borrower
delinquencies, and an increase in the discount rate to value MSRs.
-- Net enterprise value (after 5% administrative costs): $4.44
billion
-- Collateral value available to secured debt: $4.42 billion
-- Total first-lien debt at default: $3.43 billion
-- Collateral value available to senior unsecured note claims:
$989 million
-- Total unsecured debt at default: $2.16 billion
-- Recovery expectations: 45% ('4')
Note: All debt amounts include six months of prepetition interest.
FULL CIRCLE: Files Chapter 11 Subchapter V Case
-----------------------------------------------
Full Circle Technologies LLC filed for chapter 11 protection in the
Northern District of Texas. The Debtor elected on its voluntary
petition to proceed
under Subchapter V of chapter 11 of the Bankruptcy Code.
According to court filings, Full Circle Technologies estimates
between 1 and 49 unsecured creditors. The petition states funds
will be available to unsecured creditors.
The Debtor's Chapter 11 Plan Small Business Subchapter V is due by
Dec. 8, 2022.
About Full Circle Technologies
Full Circle Technologies LLC filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex.
Case No. 22-31660) on Sept. 9, 2022. In the petition filed by
Abheeshek Sharma, as managing member, the Debtor reported assets
and liabilities between $1 million and $10 million each.
Areya Holder Aurzada has been appointed as Subchapter V trustee.
The Debtor is represented by Eric A. Liepins of Eric A. Liepins,
P.C.
GALAXY NEXT: Issues $900K 12% Promissory Note to Investor
---------------------------------------------------------
Galaxy Next Generation, Inc. entered into a Securities Purchase
Agreement with an investor pursuant to which the Company issued a
12% promissory note in the principal amount of $900,000 for gross
proceeds of $765,000, together with a warrant to purchase 1,000,000
shares of the Company's common stock and an agreement to issue
3,000,000 shares of the Company's common stock to the investor as
commitment fee shares in respect of a $450,000 commitment fee. The
Company applied $400,000 of the proceeds from the sale of the Note
and the Warrant to repay principal and interest obligations accrued
under a 12% Promissory Note, dated June 21, 2022, issued by the
Company in the principal amount of $600,000 to the investor.
The Note bears interest at 12% per annum and is due and payable on
Aug. 31, 2023. Any amount of principal or interest on the Note
which is not paid when due will bear default interest at the rate
of the lesser of (i) 18% per annum and (ii) the maximum amount
permitted under law. In the event the Company receives gross
proceeds of at least $5,000,000 in connection with any debt or
equity financing, the Company has agreed to apply a portion of the
proceeds from such financing to repay the Note in full.
The Note is convertible in the event of a default into common stock
at a conversion price equal to the lowest trading price (i) during
the previous 20 trading day period ending on the date of issuance
of the Note, or (ii) during the previous 20 trading day period
ending on the conversion date. If in the case that the Company's
common stock is not deliverable by DWAC, an additional 10% discount
will apply for all future conversions until DWAC delivery becomes
available. If in the case that the Company's common stock is
"chilled" for deposit into the DTC system and only eligible for
clearing deposit, an additional 15% discount will apply for all
future conversions under all Note until such chill is lifted.
Additionally, if the Company ceases to be a 1934 Act reporting
company or if the Note cannot be converted into free trading shares
after 181 days from the issue date (other than as a result of the
holder's status as an affiliate of the Company), an additional 15%
discount will be attributed to the conversion price. If the
Company fails to maintain its status as "DTC Eligible" for any
reason, the principal amount of the Note will increase by $5,000
and the conversion price will be redefined to mean 70% multiplied
by the market price of the common stock.
So long as the Note is outstanding, upon any issuance by the
Company or any of its subsidiaries of any security with any term
more favorable to the holder of such security or with a term in
favor of the holder of such security that was not similarly
provided to the holder of the Note, then the Company shall notify
the holder of such additional or more favorable term and such term,
at holder's option, will become a part of the transaction documents
with the holder. If while the Note is outstanding a third party
has the right to convert monies owed into common stock at a
discount to market greater than the Conversion Price in effect at
that time (before all other applicable adjustments in the Note),
then the holder, in holder's sole discretion, may utilize such
greater discount percentage. In no event will the holder be
entitled to convert any portion of the Note in excess of that
portion which would result in beneficial ownership by the holder
and its affiliates of more than 9.99% of the outstanding shares of
common stock.
So long as the Company shall have any obligation under the Note,
the Company may not, without the holder's written consent, create,
incur, assume guarantee, or otherwise become liable upon the
obligation of any person or entity, except by the endorsement of
negotiable instruments for deposit or collection, or suffer to
exist any liability for borrowed money, except (a) borrowings in
existence or committed on the date the Note was issued and of which
the Company has informed holder, (b) indebtedness to trade
creditors financial institutions or other lenders incurred in the
ordinary course of business, (c) borrowings, the proceeds of which
shall be used to repay the Note, or (d) borrowings which are
expressly subordinated to the Note.
Upon the occurrence of certain events of default specified in the
Note, such as a failure to honor a conversion request, failure to
maintain the Company's listing or the Company's failure to comply
with its obligations under Securities Exchange Act of 1934, as
amended, 200% of all amounts owed to holder under the Note,
including default interest if any, shall then become due and
payable. Upon the occurrence of other events of default specified
in the Note, such as a breach of the Company's representations or
covenants or the failure register the Commitment Fee Shares as
required by the Securities Purchase Agreement or the Warrant Shares
as required by the Warrant, all amounts owed to holder under the
Note, including default interest if any, shall then become due and
payable. Further, if the Company shall fail to maintain its
listing, fail to comply with its obligations under Securities
Exchange Act of 1934, as amended, or lose the "bid" price for its
common stock for a period of five days after written notice thereof
to the Company, after the nine-month anniversary of the Note, then
the principal amount of the Note will increase by $15,000 and the
holder shall be entitled to use the lowest trading price during the
delinquency period as a base price for the conversion and the
conversion price shall be redefined to mean 40% multiplied by the
market price of the common stock.
The Warrant is exercisable, commencing on the earlier of (i) the
date that is 181 calendar days after its Issuance Date or (ii) the
date that the Company consummates an Uplist Offering (as defined in
this Warrant), for a period of five years at an initial exercise
price of $.01, subject to adjustment for stock splits, stock
dividends or similar event, provided, however, that if the Company
consummates an Uplist Offering on or before the date that is 180
calendar days after the Issuance Date, then the exercise price will
equal the lower of (i) offering price per share of common stock (or
unit, if units are offered in the Uplist Offering) at which the
Uplist Offering is made or (ii) the exercise price of any
warrant(s) issued by the Company in connection with the Uplist
Offering. If while the Warrant is outstanding, the Company issues
or sells, or is deemed to have issued or sold, any warrant or
option to purchase common stock and/or common stock equivalents
other than in connection with an exempt issuance (as defined), with
a purchase price per share less than the exercise price in effect
immediately prior to such issuance or sale or deemed issuance or
sale, then immediately after such issuance or sale or deemed
issuance or sale, the exercise price then in effect will be reduced
to an amount equal to the new issuance price. In the event the
Company fails to timely file a registration statement for the
shares issuable upon exercise of the Warrant the Warrant may be
exercised on a cashless basis. In no event will the holder be
entitled to exercise any portion of the Warrant in excess of that
portion which would result in beneficial ownership by the holder
and its affiliates of more than 9.99% of the outstanding shares of
common stock.
The Company has agreed to include the shares exercisable upon
exercise of the Warrant and the Commitment Fee Shares in a
registration statement filed by the Company no later than the date
that is 30 days following the later of (i) the consummation of the
Uplist Offering, or (ii) the Maturity Date, and to cause the
registration statement to be declared effective within 90 days of
its filing.
The Securities Purchase Agreement provides that if the Company
issues any shares of common stock at a price per share of less than
$0.15 during the period beginning on the date which is the six
month anniversary of the closing date, the Company will issue to
investor additional Commitment Fee Shares such that the price per
share of the aggregate amount of Commitment Fee Shares (including
such additional Commitment Fee Shares) equals such lower price per
share. The Securities Purchase Agreement further provides that the
investor may elect during the Adjustment Period to provide the
Company with a reconciliation statement showing the net proceeds
actually received from the sale of the Commitment Fee Shares. If,
as of the date of the delivery by investor of the Sale
Reconciliation, the investor has not realized net proceeds from the
sale of such Commitment Fee Shares equal to at least the Commitment
Fee, then the Company is obligated to pay, within five business
days, the applicable shortfall amount in cash or immediately take
all required action necessary to cause the issuance of additional
shares of common stock to the investor in an amount sufficient such
that, when sold and the net proceeds thereof are added to the net
proceeds from the sale of any of the previously issued and sold
Commitment Fee Shares, the investor will have received total net
funds equal to the Commitment Fee. The Securities Purchase
Agreement provides that the Commitment Fee Shares shall be issued
to the investor upon the earlier of: (i) the consummation of the
Uplist Offering, (ii) Aug. 31, 2023, or (iii) the repayment in full
of the Company's obligations under the Note.
The Securities Purchase Agreement provides the investor with a
right of first refusal with respect to future equity financings by
the Company for a period of twelve months following the closing
date.
The Securities Purchase Agreement contains customary
representations, warranties, conditions and indemnification
obligations of the parties. The representations, warranties and
covenants contained in such agreements were made only for purposes
of such agreements and as of specific dates, were solely for the
benefit of the parties to such agreements and may be subject to
limitations agreed upon by the contracting parties.
The shares of the Company's common stock issued, and the shares to
be issued, under the Securities Purchase Agreement, the Note and
the Warrant were, and will be, sold pursuant to an exemption from
the registration requirements under Section 4(a)(2) of the
Securities Act of 1933, as amended, and Rule 506 of Regulation D
promulgated thereunder. The investor is an accredited investor who
has purchased the securities as an investment in a private
placement that did not involve a general solicitation. The shares
of common stock not been registered under the Securities Act and
may not be offered or sold in the United States in the absence of
an effective registration statement or exemption from the
registration requirements.
About Galaxy Next Generation
Headquartered in Toccoa, Georgia, Galaxy Next Generation, Inc. --
http://www.galaxynext.us-- is a manufacturer and distributor of
interactive learning technologies and enhanced audio solutions. It
develops both hardware and software that allows the presenter and
participant to engage in a fully collaborative instructional
environment.
Galaxy Next reported a net loss of $24.43 million for the year
ended June 30, 2021, compared to a net loss of $14.03 million for
the year ended June 30, 2020. As of March 31, 2022, the Company
had $4.92 million in total assets, $5.30 million in total
liabilities, and a total stockholders' deficit of $378,250.
Indianapolis, Indiana-based Somerset CPAs PC, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated Sept. 16, 2021, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raises substantial doubt about its ability to continue as a
going concern.
GL INVESTMENTS: U.S. Trustee Unable to Appoint Committee
--------------------------------------------------------
The U.S. Trustee for Region 16 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of GL Investments Group LLC.
About GL Investments Group
GL Investments Group, LLC, a company in Reseda, Calif., sought
protection under Chapter 11 of the Bankruptcy Code (Bankr. C.D.
Calif Case No. 22-10960) on Aug. 17, 2022, with up to $50,000 in
assets and $1 million to $10 million in liabilities.
Judge Victoria S. Kaufman oversees the case.
Matthew Abbasi, Esq., at Abbasi Law Corporation is the Debtor's
counsel.
GLOBE HOME CONNECT: Gets OK to Hire Latham Luna as Legal Counsel
----------------------------------------------------------------
Globe Home Connect, LLC received approval from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Latham, Luna, Eden
& Beaudine, LLP as its counsel.
The firm's services include:
(a) advising as to the Debtor's rights and duties in its
Chapter 11 case;
(b) preparing pleadings related to this case, including a plan
of reorganization; and
(c) taking any and all other necessary action incident to the
proper preservation and administration of this estate.
The firm will charge $475 per hour for attorney's services and $105
per hour for paraprofessional services.
The Debtor paid an advance fee of $13,262 for pre-petition services
and expenses.
In addition, the firm will seek reimbursement for its out-of-pocket
expenses.
Justin Luna, Esq., a partner at Latham, disclosed in a court filing
that his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Justin M. Luna, Esq.
Latham Luna Eden & Beaudine, LLP
201 S. Orange Ave., Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: jluna@lathamluna.com
About K&A Property Solutions LLC
K&A Property Solutions LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
22-02592) on July 21, 2022, listing $50,001 to $100,000 in both
assets and liabilities. Daniel A Velasquez, Esq. at Latham, Luna,
Eden & Beaudine, LLP represents the Debtor as counsel.
GMS MEDICAL: Seeks to Hire Guy Harvey as Bankruptcy Counsel
-----------------------------------------------------------
GMS Medical Company, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to hire Guy H. Holman,
Esq. and Guy Harvey Holman, PLLC as its bankruptcy counsel.
Mr. Holman, owner of Guy Harvey Holman, PLLC, has associated with
Kerry Alleyne-Simmons, of Alleyne Law Firm, PLLC a non-member of
his firm, and has agreed to share compensation with her for her
services in this case.
The compensation to be paid to Mr. Holman shall be $275 per hour.
The hourly rate for Ms. Alleyne shall be $275. Paralegals and legal
assistants are billed at $65 to $125 per hour
The firm has been paid a retainer of $9,288 in connection with this
proceeding which includes the $1,738 filing fee.
Mr. Holman attest that the firms, nor any members of their
respective firms, do not presently hold or represent any interest
adverse to the interests of the Debtor or its estate and are
disinterested within the meaning of 11 U.S.C. Sec. 101(14).
The firms can be reached through:
Guy Harvey, Esq.
Guy Harvey Holman, PLLC
8330 Lyndon B Johnson Fwy, Suite B646
Dallas, TX 75243
Tel: 972-325-2900
Email: gholman@debtreset.net
Kerry Alleyne-Simmons, Esq.
Alleyne Law Firm, PLLC
12002 Warfield St Ste 203
San Antonio, TX 78216-3219
Tel: 210-910-6328
Email: kerry@kerryalleyne.com
About GMS Medical Company
GMS Medical Company, LLC sought protection for relied under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-31412) on
August 3, 2022, listing $50,000 in assets and between $100,001 to
$500,000 in liabilities. Guy H. Holman, Esq. at Guy Harvey Holman,
PLLC represents the Debtor as counsel.
GOBP HOLDINGS: S&P Upgrades ICR to 'BB-', Outlook Stable
--------------------------------------------------------
S&P Global Ratings raised its issuer-credit rating on
California-based discount grocer GOBP Holdings Inc. (Grocery
Outlet) to 'BB-' from B+'.
S&P said, "We also raised our issue-level rating on the term loan
facility to 'BB+' from 'BB-' because of the increase in the
issuer-rating and improved recovery expectations from lower debt
outstanding.
"The stable ratings outlook reflects our expectation the company
will sustain good operating performance trends along with S&P
Global Ratings-adjusted leverage tracking in the 3x to 4x range
over the next year.
"The company's lower leverage due to better-than-expected
performance and debt reduction supports our upgrade. Grocery
Outlet's performance trends have accelerated in the first two
quarters of the year. Sales increased at a double-digit rate for
the first half of year compared to the prior-year period, helping
lead to trailing-12-month sales growth of nearly 6%. In addition,
S&P Global Ratings-adjusted EBITDA gained more than 11% in the
first half of the year and expanded by about 6% for the trailing
months. We had previously expected a high single-digit sales
increase and relatively flat to modestly positive adjusted EBITDA.
Moreover, GOBP's management took advantage of cash flow generation
and cash on hand to retire $75 million in term loan debt. These
events led to annualized S&P Global Ratings-adjusted leverage of
3.8x in the June quarter or 4.3x for the trailing-12 months, both
better than our projections. Better performance along with our
expectation for continued growth leads us to believe that adjusted
leverage will be lower than 4.0x by the end of the year and then
sustained below that level. This continues a secular deleveraging
trend since the company went public in 2019. We have accordingly
revised our financial risk profile to significant from aggressive.
"Grocery Outlet's Business model will support further performance
improvement and cash flow generation. Our base-case projections
contemplate a continuation of recent performance trends. This
includes our estimate for nearly 14% sales growth this year
followed by about 11% growth next year. We also believe adjusted
EBITDA will increase meaningfully through 2023. Our estimates
consider adjusted margins around 10% or more in both years because
of sales leveraging and store efficiency.
"GOBP's operating model, in our opinion, will remain supportive of
long-term growth. This includes an expected expansion of the store
base by about 10% annually. We also think the company's deep
discount pricing model will continue to attract consumers to its
stores in both uncertain and normalized economics times. For
example, we believe customer traffic increased significantly in
2022 as consumers looked for value in the high inflationary
environment, a trend we expect to continue. In addition, we expect
an economic slowdown in conjunction with inflation to lead to
consumers seeking value, driving traffic to stores.
"We also believe Grocery Outlet's operating initiatives will help
maintain growth. In addition to new store growth in its core
markets and the mid-Atlantic, we think the company maintains strong
relationships with suppliers and a good distribution network. This
will, in our opinion, help maintain its deep-discount pricing on
many products. Moreover, nearly all stores are run by independent
operators, and profits are shared at a gross margin level. This
results in relatively steady margin generation.
"We think the company's performance and financial policy will
remain supportive of adjusted leverage in the 3x range. We expect
S&P Global Ratings-adjusted leverage to improve to the high-3x area
over the next 12 to 18 months, better than our previous forecast
for leverage around the low- to mid-4x area. The upward trajectory
in performance, including our estimate for free operating cash flow
more than $60 million over the next 12 months, helps support credit
metrics. In our opinion, cash flows will provide internal funding
sources for capital investment and maintain its good balance sheet
cash position. We also think that cash flow generation could
provide management the ability to fund additional debt retirement
following the recent $75 million pay down of the term loan. While
not explicitly projecting any additional debt reduction, we believe
the recent term loan retirement reflects management's willingness
to reduce debt over time. Still, we believe the strategic priority
for cash will remain focused on business reinvestment along with
risk mitigation through maintaining meaningful balance sheet cash.
"Grocery Outlet will remain a small competitor in the grocery
industry for the foreseeable future. GOBP will maintain its
position as a small, largely regional player with a significant
geographic concentration with more than 50% of its stores in
California. In addition, we continue to view Grocery Outlet as a
niche, deep-discount competitor in the U.S. grocery industry. The
limited operating scale and cash flow generation relative to
higher-rated peers leads us to maintain our negative comparable
rating analysis modifier. That said, we continue to expect GOBP's
expansion plans will gradually reduce its geographical
concentration over the long term. We also think the company
maintains good relationships with consumer-packaged goods
companies, a unique independent operator business model, and
consistent growth through economic cycles.
"The stable outlook reflects our view that GOBP will achieve and
sustain adjusted leverage in the 3x to 4x range as it retains
positive performance dynamics over the next 12 to 18 months
including positive comparable sales and profitable new store
growth.
"We could lower our rating if we expected Grocery Outlet's S&P
Global Ratings-adjusted leverage to sustain at 4x or more."
This scenario could occur if:
-- Significantly negative comparable sales and unprofitable store
expansion leads to a 100 basis point or more decline in margins;
or
-- The company increases balance sheet debt by about $100 million
to, for example, return capital to shareholders.
S&P said, "We could raise our rating if GOBP significantly expands
its scale through profitable store growth while generating positive
comparable sales. Under this scenario, we would expect the company
to expand into multiple regions in the U.S. while at least
maintaining, in not expanding, its relationship with independent
operators and suppliers. We could also raise our rating if the
company demonstrates a commitment to maintain lower leverage
including leverage less than 3x."
ESG factors have no material influence on S&P's credit rating
analysis of GOBP Holdings Inc.
E-2, S-2, G-2
GOPHER RESOURCE: S&P Lowers ICR to 'B-' on Elevated Leverage
------------------------------------------------------------
S&P Global Ratings lowered its rating on Gopher Resource LLC to
'B-' from 'B'. At the same time, S&P lowered its issue level rating
on Gopher's senior secured term loan to 'B-'; the '3' recovery
rating on the term loan is unchanged.
The stable outlook reflects that S&P anticipates Gopher to maintain
debt to EBITDA below 7x over the next 12 months.
S&P said, "We expect Gopher's credit measures to remain weak after
several years of a challenging operating environment that has
sustained leverage above 7x. With supportive end-market demand, we
believe leverage improvement will depend on the company's ability
to resolve the operational issues and consistently improve its
run-rate production. Sustaining annual production of more than
300,000 refined tons will be a key driver to improving
profitability and free cash flow generation, and thus leverage.
Gopher should continue to see strong demand, full order books, and
price increases due to the lack of battery recycling capacity in
North America. As a low-cost lead battery recycler in North America
with a 15% market share, Gopher is well-positioned to benefit from
the tight, refined lead market. If production and leverage does not
improve over the next 12-18 months, we believe there is potential
refinance risk as its 2025 term loan maturity approaches.
Additionally, Gopher faces headwinds from input cost inflation and
labor shortages that could pressure earnings and production."
Production challenges continue to affect Gopher, resulting in a 5%
year-over-year decrease in refined tons for the last 12 months.
Gopher's high fixed costs mean it's highly sensitive to volume
changes, causing modest production disruptions to materially affect
earnings. Gopher has seen production challenges at both of its
facilities due to labor availability, disruptions from extremely
cold weather earlier this year, and delays in repairing and
installing new equipment. Gopher has not sustained production over
300,000 refined tons due to disruptions over the last couple of
years and has not reached 310,000 refined tons as anticipated.
While the Tampa facility has had most production challenges in
recent years, Gopher's more efficient and lower cost production
facility Eagan experienced production setbacks this year, which had
a larger effect on earnings.
S&P said, "We believe there is a lower risk of a material
operational and financial disruption to Gopher following the
completion of the Occupational Safety and Health Administration's
(OSHA's) and the local Environmental Protection Commission (EPC's)
investigations. However, uncertainties remain as the outcome of
pending civil litigation is presently unknown and could take
several years to resolve. While the two investigations found
violations, they did not result in any production stoppages. In our
view, this demonstrates how Gopher risks closure by operating in
the heavily regulated lead-acid battery recycling industry. This is
due to strict safety and environmental requirements and the
public's perception of risks associated with lead. Gopher's highly
concentrated operating footprint--with just two facilities--further
exacerbates this risk.
"The stable outlook reflects that we anticipate Gopher to maintain
debt to EBITDA below 7x over the next 12 months. While the
financial effects from the OSHA and EPC investigations have been
modest, the outcome of pending civil litigation is unknown at this
point and could take several years to resolve."
S&P could lower the rating if leverage remains above 8x a year from
now as Gopher's 2025 term loan maturity approaches.
S&P could raise its rating over the next 12 months if Gopher:
-- Trends toward leverage of 5x, placing the company in a more
favorable position to access capital markets and refinance its 2025
maturity; and
-- Maintains prudent financial policies, such as prioritizing free
cash flow for absolute debt reduction.
ESG credit indicators: E-4, S-3, G-3
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis of Gopher. Gopher participates in the
lead-acid battery recycling industry, which is heavily regulated
due to its effects on the environment. A key constraining factor in
our current rating is potential disruption in operational and
financial performance due to the stringent environmental regulation
and the concentration in Gopher's operating footprint. We also note
these risks are a characteristic of the industry and other
operators have had facilities shuttered due to environmental
considerations in the past."
Social factors are a moderately negative consideration as employees
are potentially exposed to hazardous materials. The concentration
in Gopher's footprint and the risk that environmental and safety
factors could influence Gopher's earnings and creditworthiness is
highlighted by the recent investigations due to reports alleging
inadequate safety measures at one of its sites earlier this year.
Governance factors are a moderately negative consideration. S&P
said, "Our assessment of Gopher'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 most
rated entities owned by private-equity sponsors."
GT REAL ESTATE: Sued Over Failed NFL New Headquarters
-----------------------------------------------------
Alex Wolf of Bloomberg Law reports that Carolina Panthers owner
David Tepper's bankrupt real estate development firm is facing a
lawsuit from a South Carolina city that alleges contract breaches
over a deal to build the NFL team's new headquarters.
The city of Rock Hill is seeking $20 million in actual damages,
plus compensation and punitive damages, for a deal gone bad earlier
this year that ultimately led Tepper's GT Real Estate Holdings LLC
into bankruptcy.
GT Real Estate came up short on a multi-faceted agreement that
would have enabled Rock Hill to raise $135 million in bond
financing for the roughly $800 million project.
About GT Real Estate Holdings
GT Real Estate Holdings is a real estate company owned by David
Tepper. It was created to own and develop a mixed-use,
pedestrian-friendly community, sports, and entertainment venue,
that would also include a new headquarters and practice facility
for the Carolina Panthers, a National Football League team,
situated on a 234-acre site located in Rock Hill, South Carolina.
The company suspended further development of the Project in March
2022.
GT Real Estate Holdings sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10505) on June 2,
2022. In the petition filed by Jonathan Hickman, as chief
restructuring officer, the Debtor reports estimated assets and
liabilities between $100 million and $500 million each.
The Hon. Karen B. Owens is the case judge.
The Debtor tapped White & Case LLP as restructuring counsel; Farnan
LLP, as Delaware counsel; and Alvarez & Marsal as financial
advisor. Kroll Restructuring Administration LLC is the claims
agent.
HDIP INC: Seeks Approval to Hire Riedel Blain as Legal Counsel
--------------------------------------------------------------
HDIP, Inc. seeks approval from the U.S. Bankruptcy Court for the
Middle District of Florida to hire Stichter Riedel Blain & Postler,
P.A. as legal counsel.
The firm will render these services:
(a) advise the Debtor regarding its powers and duties in the
continued operation of its business and management of its
property;
(b) prepare legal papers;
(c) appear before this court and the U.S. Trustee to represent
and protect the interests of the Debtor;
(d) assist with and participate in negotiations with creditors
and other parties-in-interest in formulating a plan of
reorganization, drafting such a plan, and taking necessary legal
steps to confirm such a plan;
(e) represent the Debtor in all adversary proceedings,
contested matters, and matters involving administration of this
case;
(f) represent the Debtor in negotiations with potential
financing sources, and preparing contracts, security instruments,
and other documents necessary to obtain financing; and
(g) perform all other legal services that may be necessary for
the proper preservation and administration of this Chapter 11
case.
The firm received a retainer of $25,000.
Amy Denton Mayer, Esq., an attorney at Stichter Riedel Blain &
Postler, 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:
Amy Denton Mayer, Esq.
Stichter Riedel Blain & Postler, P.A.
110 East Madison Street, Suite 200
Tampa, FL 33602
Phone: (813) 229-0144 – Phone
Email: amayer@srbp.com
About HDIP, Inc.
HDIP, Inc. sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03610) on Sep. 2,
2022, listing under $1 million in both assets and liabilities. Amy
Denton Mayer, Esq. at Stichter Riedel Blain & Postler, P.A.
represents the Debtor as counsel.
HIE HOLDINGS: Hawaiian Electric Appointed as New Committee Member
-----------------------------------------------------------------
Tiffany Carroll, Acting U.S. Trustee for Region 15, appointed
Hawaiian Electric Company, Inc. as new member of the official
committee of unsecured creditors in the Chapter 11 cases of HIE
Holdings, Inc. and its affiliates.
Meanwhile, Melekahiwa Watamull LLC has been removed from the
committee.
As of Sept. 12, the members of the committee are:
1. Hawaiian Electric Company, Inc.
Representative: Jessica Benito
Email: Jessica.benito@hawaiianelectric.com
2. Koksan Pet Packaging Ltd.
Representative: Michael Basel
Email: Michael.basel@koksan usa.com
3. CH Robinson Worldwide, Inc.
Representative: Bill Glad
Email: bill.glad@chrobinson.com
About HIE Holdings Inc.
HIE Holdings Inc. is the parent entity of Royal Hawaiian Water Co.,
Ltd., and Hawaiian Isles Kona Coffee Company, Ltd. HIE Holdings
is, in turn, owned by Michael Boulware, Julie Boulware and the
Glenn Boulware Trust.
Royal Hawaiian, doing business as Hawaiian Isles Water Company,
operates a water bottling facility in Halawa, Oahu, while Hawaiian
Isles Kona Coffee, doing business as Hawaii Coffee Roasters,
roasts, packages and distributes coffee.
Royal Hawaiian sought for Chapter 11 bankruptcy protection (Bankr.
D. Hawaii Case No. 22-00524) on July 30, 2022; HIE Holdings (Bankr.
D. Hawaii Case No. 22-00534) on Aug. 3, 2022; and Hawaiian Isles
Kona Coffee (Case No. 22-00546) on Aug. 5, 2022. The cases are
jointly administered under Case No. 22-00534.
At the time of the filing, each of the Debtors reported assets
between $1 million and $10 million and liabilities between $1
million and $10 million.
Judge Robert J. Faris oversees the cases.
Chuck C. Choi, Esq., at Choi & Ito is the Debtors' legal counsel.
J. BOWERS CONSTRUCTION: Seeks to Hire George Roman Auctioneers
--------------------------------------------------------------
J. Bowers Construction, Inc. and its affiliate, Restoration
Services of Akron, Inc., seek approval from the U.S. Bankruptcy
Court for the Northern District of Ohio to hire George Roman
Auctioneers, Ltd. as their auctioneer.
The Debtors represent that they have office furniture, fixtures and
business machinery and equipment that should be sold for the
benefit of the creditors of these estates.
Due to the nature of said property, the auctioneer proposes to sell
same at an online sale.
The firm is entitled to a commission equal to 10 percent of the
gross auction proceeds in addition to a 10 percent buyer premium
being added to all final bids.
Ronald Roman of George Roman Auctioneers assured the court that his
firm is a "disinterested person" as defined in 11 U.S.C. 101(14).
The firm can be reached through:
Ronald L. Roman
George Roman
George Roman Auctioneers Ltd.
22 W Main St.
Canfield, OH 44406
Phone: +1 330-533-4071
Email: info@georgeromanauctioneers.com
About J Bowers Construction
J. Bowers Construction Inc. is a fire restoration company in Akron,
Ohio, which provides detailed, itemized estimates and appraisals
required when dealing with all manners of insurance losses,
including storm and water losses, vehicle damage repairs, and all
types of fire and smoke damage, as well as water mitigation and
restorative drying services.
J. Bowers Construction and its affiliate, Restoration Services of
Akron, Inc., filed their Chapter 11 voluntary petitions (Bankr.
N.D. Ohio Lead Case No. 22-50878) on July 29, 2022. Kyle Bowers,
authorized representative, signed the petitions.
At the time of the filing, J. Bowers Construction listed $1,059,836
in total assets and $2,464,220 in total liabilities while
Restoration Services listed $71,397 in total assets and $678,532 in
total liabilities.
Peter G. Tsarnas, Esq., at Gertz & Rosen, Ltd. represents the
Debtors as legal counsel.
KOSSOFF PLLC: Trustee Plans to Claw Back $2.3M From Mitch's Mom
---------------------------------------------------------------
Grace Dixon of Law360 reports that the trustee of the now-defunct
real estate law firm Kossoff PLLC is seeking to recoup $2.3 million
that former attorney Mitchell Kossoff -- now incarcerated after
stealing millions from clients' escrow accounts -- siphoned from
firm bank accounts to repay his mother.
Chapter 7 Trustee Albert Togut on Tuesday, September 6, 2022, hit
Phyllis Kossoff with an adversary action amid bankruptcy
proceedings, alleging her son paid down a more than $1.46 million
loan with funds pulled directly and indirectly from the firm's
escrow account, though the firm itself never benefited from the
loan.
About Kossoff PLLC
Kossoff PLLC is a real estate law firm based in New York City. It
operated as a law firm with offices located at 217 Broadway in New
York City. The firm held itself out as a law firm that provided
full-service real estate legal services specializing in litigation
and transactional matters, including leasing, sale and acquisition
of real property, commercial landlord tenant matters, real estate
litigation, and city, state and federal agency regulatory matters.
Mitchell H. Kossoff, the firm's founder and only known managing
member, is alleged to have failed to and/or refused to return
millions of dollars of client funds when requested by clients.
Since on or about April 1, 2021, Kossoff's whereabouts have been
unknown, and Kossoffhas ceased all communications with the Debtor's
clients and with the attorneys and staff who were employed by the
Debtor.
Kossoff PLLC is subject to an involuntary petition for Chapter 7
bankruptcy (Bankr. S.D.N.Y. Case No. 21-10699) by creditors on
April 13, 2021. The case is handled by Honorable Judge David S.
Jones.
Gran Sabana Corp NV, Louis & Jeanmarie Giordano, and other former
clients of the Debtor signed the involuntary petition. Carter
Ledyard & Milburn LLP, led by Aaron R. Cahn, represents the
petitioners.
Veteran restructuring lawyer Albert Togut of Togut, Segal & Segal
LLP, was named as Chapter 7 Trustee. He tapped his own firm as
counsel in the case.
LEGACY EDUCATION: Borrows $99K From ABCImpact
---------------------------------------------
Between Sept. 2, 2022 and Sept. 7, 2022, Legacy Education Alliance,
Inc. borrowed an aggregate of $99,000 from ABCImpact I, LLC, a
Delaware limited liability company, evidenced by one or more 10%
Convertible Debentures. Pursuant to the Debentures, the Lender has
the option to loan up to an additional $4,450,000 to the Company.
The Lender is a recently-formed entity in which an affiliate of
Barry Kostiner, the Company's chief executive officer and sole
director, has a non-controlling passive interest. The Lender
previously loaned an aggregate of $451,000 to the Company pursuant
to convertible debentures substantially similar to the Debentures.
The maturity date of each Debenture is the earlier of 12 months
from the issue date and the date of a Liquidity Event (as defined
in the Debentures) and is the date upon which the principal and
interest shall be due and payable. The Debentures bear interest at
a fixed rate of 10% per annum. Any overdue accrued and unpaid
interest shall entail a late fee at an interest rate equal to the
lesser of 18% per annum or the maximum rate permitted by applicable
law, which shall accrue daily from the date such interest is due
through and including the date of actual payment in full.
The Company intends to use the net proceeds from the Loan for
general corporate purposes and working capital.
The then outstanding and unpaid principal and interest under each
Debenture shall be converted into shares of Company common stock
and an equal number of common stock purchase warrants at the option
of the Lender, at a conversion price per share of $0.05, subject to
adjustment (including pursuant to certain dilutive issuances)
pursuant to the terms of the Debenture. The Debentures are subject
to a beneficial ownership limitation of 4.99% (or 9.99% in the
Lender's discretion).
The Company may not prepay the Debentures without the prior written
consent of the Lender.
The Debentures contain customary events of default for transactions
such as the Loan. If any event of default occurs, the outstanding
principal amount under the Debentures, plus accrued but unpaid
interest, liquidated damages and other amounts owing through the
date of acceleration, shall become, at the Lender's election,
immediately due and payable in cash at the Mandatory Default
Amount. "Mandatory Default Amount" means the sum of (a) the greater
of (i) the outstanding principal amount of the Debenture, plus all
accrued and unpaid interest, divided by the conversion price on the
date the Mandatory Default Amount is either (A) demanded or
otherwise due or (B) paid in full, whichever has a lower conversion
price, multiplied by the VWAP (as defined in the Debenture) on the
date the Mandatory Default Amount is either (x) demanded or
otherwise due or (y) paid in full, whichever has a higher VWAP, or
(ii) 130% of the outstanding principal amount of the Debenture,
plus 100% of accrued and unpaid interest hereon, and (b) all other
amounts, costs, expenses and liquidated damages due in respect of
the Debenture.
The Warrant has an exercise price per share of $0.05, subject to
adjustment (including pursuant to certain dilutive issuances)
pursuant to the terms of the Warrant. The exercise period of the
Warrant is for five years from the issue date.
The exercise of the Warrant is subject to a beneficial ownership
limitation of 4.99% (or 9.99%) of the number of shares of common
stock outstanding immediately after giving effect to such
exercise.
The shares underlying the Debenture and the Warrants have
"piggy-back" registration rights afforded to them.
About Legacy Education
Cape Coral, Fla.-based, Legacy Education Alliance, Inc. --
http://www.legacyeducationalliance.com-- is a provider of
practical and value-based educational training on the topics of
personal finance, entrepreneurship, real estate investing
strategies and techniques.
Legacy Education reported a net loss of $566,000 for the year ended
Dec. 31, 2021. As of March 31, 2022, the Company had $1.01 million
in total assets, $23.87 million in total liabilities, and a total
stockholders' deficit of $22.87 million.
Hamilton, New Jersey-based Ram Associates, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated March 31, 2022, citing that the Company has a net capital
deficiency and an accumulated deficit that raise substantial doubt
about its ability to continue as a going concern.
MACON & HARDWARE: Files Subchapter V Bankruptcy Protection
----------------------------------------------------------
Macon Door & Hardware Inc. filed for chapter 11 protection in the
Middle District of Georgia. The Debtor elected on its voluntary
petition to proceed under Subchapter V of chapter 11 of the
Bankruptcy Code.
MDH is a distributor of commercial doors and hardware in Central
Georgia and beyond. Headquartered in Macon, Georgia, the Debtor is
a stocking distributor for such brands as Steelcraft Hollow Metal
Doors & Frames, Marshfield Wood Doors, Von Duprin & Monarch Exit
Devices, LCN Closers, Schlage & Falcon Locks, Ives, Rockwood and
National Guard Products. Additionally, MDH offers design
consultation, specification writing, estimating, scheduling and
detailing, and installation services.
The Debtor filed motions to use cash collateral, pay employee wages
and grant adequate assurance to utilities. The Debtor also filed a
motion to enlarge its time to file its schedules and statements.
Macon Door & Hardware 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 10:00 AM at U.S. Trustee Teleconference. Proofs
of claim are due by Nov. 18, 2022.
About Macon Door & Hardware
Macon Door & Hardware Inc. -- https://www.macondoor.com/ -- is a
leading distributor of division 8 & 10 materials in the Middle
Georgia area.
Macon Door & Hardware filed a petition for relief under Subchapter
V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No.
22-51044) on Sept. 9, 2022. In the petition filed by Daniel L.
Pike, as president, the Debtor reported assets and liabilities
between $1 million and $10 million.
Robert M. Matson has been appointed as Subchapter V trustee.
The Debtor is represented by Ward Stone, Jr. of Stone & Baxter,
LLP.
MAGENTA BUYER: Fitch Affirms 'B' LongTerm IDR, Outlook Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Magenta Buyer LLC's (dba Trellix and
Skyhigh and fka McAfee Enterprise) Long-Term Issuer Default Rating
(IDR) at 'B'. The secured revolving credit facility and secured
term loan has been affirmed at 'BB-'/'RR2' and the second-lien term
loan has been affirmed at 'CCC+'/'RR6'. The Rating Outlook remains
Stable.
Magenta Buyer LLC's Long-Term IDR of 'B' is supported by its strong
product offerings, resilient recurring sales and strong cash
generative qualities. The IDR also reflects the fragmented state of
the cybersecurity market with several competing brands and
products. In addition, as a private equity owned entity, financial
leverage is likely to remain elevated as shareholders prioritize
ROE maximization, limiting debt reduction.
KEY RATING DRIVERS
Ongoing Restructuring: Over the last few quarters, there have been
many changes at the company. McAfee Enterprises was carved out of
McAfee Corp. and it became a standalone entity focused on providing
cyber-security products to enterprises. A consortium led by
Symphony Technology Group (STG) acquired McAfee Enterprise from
McAfee Corp. for $4 billion dollars in July 2021. Then in October
of 2021, STG combined McAfee Enterprises with FireEye Products,
which was purchased for $1.2 billion.
In January of 2022, the sponsors restructured the entity and the
XDR segment was branded Trellix and the Data-Aware Cloud Security
was branded Skyhigh Security. These are now two sister companies,
each with its own top management. There is an agreement in place to
share technologies for three years. Fitch expects significant
restructuring during 2022.
Recurring Revenue and Strong Profitability: Both McAfee Enterprise
and FireEye Products had the majority of revenues from recurring
products, providing visibility into future revenue streams for
Magenta Buyer. Recurring revenues consisted of subscription sales
as well as support revenues for customers with perpetual software
licenses. Historically, both entities had about three-quarters of
revenues from recurring revenues. Both entities are expected to
have increased EBITDA margins and the ability to generate strong
FCF.
Leverage High/Coverage Low: Following the business combinations in
2021, Fitch estimates Magenta's leverage may be in the range of
5.5x to 6.0x by the end of 2022. Fitch expects limited deleveraging
as Magenta's private equity ownership would likely prioritize ROE
maximization over debt prepayment. As the company optimizes
efficiencies, EBITDA and margin have the potential to improve over
time. Magenta Buyer's ability to execute its cost optimization plan
will drive how much margins can improve. Furthermore, with rising
interest rates, Magenta Buyer's interest coverage may be around
2.0x.
Secular Cybersecurity Tailwinds: There are notable industry
tailwinds over the intermediate term within the core segments for
Magenta Buyer's solutions. The Endpoint Security market demand is
expected to grow through increased sophistication, frequency, and
overall cost of attacks as well as the proliferation of WFH
policies that fuel growth in the number of endpoints. The Unified
Cloud Edge (UCE) market demand tailwinds include application
consumption shifting from on-premise to SaaS-based (Software as a
Service) applications and workloads increasingly operating outside
of traditional corporate network perimeters.
Execution Risk in Operational Improvements: A substantial portion
of projected profitability growth for Magenta Buyer depends on
successful execution of planned operating efficiency improvements,
as it has a low growth sales profile. While Fitch deems such plans
as realistic, execution risk does exist. Delay or failure in
executing such a plan would adversely affect the company's
projected profitability and credit protection metrics.
IT Security Threats Increasingly Complex: IT security threats have
evolved from PC-centric to mobile devices, networks and user
identities. The evolving threats enable a continuous stream of
niche solutions to develop, addressing threats beyond the
traditional PC-centric security to protect users, data and networks
at various levels of the internet. While some of these solutions
were developed by legacy cybersecurity providers, many were created
by suppliers with narrow expertise. Magenta Buyer is a
cybersecurity provider with a wide variety of offerings to address
today's threat vectors.
DERIVATION SUMMARY
Magenta Buyer's 'B' Long-term IDR reflects its ability to generate
significant FCF, the recurring nature of approximately 75% of its
revenues, high net retention rates and long tenures among core
enterprise customers. The IDR also reflects Magenta Buyer's strong
market position as a vendor in the fragmented IT security industry
and the benefits of the FireEye Products platform to the combined
entity.
On a pro forma basis, Magenta Buyer's EBITDA margins are lower
compared with pureplay consumer cybersecurity companies such as
higher-rated NortonLifeLock, Inc. (NLOK; BB+/Negative). NLOK had
EBITDA margins in the high 40's to low 50's in recent history. NLOK
is also rated four notches above Magenta Buyer since NLOK is much
larger and operates with lower leverage.
Limitations to the rating include its elevated leverage. Fitch
expects the company to maintain some level of financial leverage as
a private equity owned company as equity owners optimize the
capital structure to maximize ROE.
KEY ASSUMPTIONS
-- In the forecast years, revenues increase annually in the low
mid-single digits;
-- EBITDA margins are in the mid-high 30s;
-- Low capex just over 2.0% of revenues;
-- Fitch assumes that excess FCF is directed to dividends to the
sponsors and that alternative uses could be for acquisitions.
KEY RECOVERY RATING ASSUMPTIONS:
The Recovery analysis assumes that Magenta Buyer would be
reorganized as a going concern in bankruptcy rather than
liquidated. A 10% administrative claim is assumed.
Going-Concern (GC) Approach
Magenta Buyer's GC EBITDA is assumed to be pressured by license and
support revenue churn without successful conversions to
subscription products. The assumption is that actioned optimization
plans and integration strategies have challenges and some customers
do not renew contracts. Following emergence from bankruptcy, GC
EBITDA is estimated to down approximately 31% from recent run-rate
EBITDA.
An enterprise value (EV) multiple of 6.5x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization enterprise value. The
choice of this multiple considered the following factors:
The historical bankruptcy case study exit multiples for technology
peer companies ranged from 2.6x-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.
Magenta Buyer's resilient recurring sales profile with long
customer relationships, mission critical nature of the product,
brand recognition, leadership position in enterprise cybersecurity,
and cash generative qualities supports the 6.5x recovery multiple.
Offsets to the multiple include a relatively weaker organic growth
profile compared with other software companies rated by Fitch.
Fitch arrives at an EV of $3.25 billion on a going-concern basis.
After applying the 10% administrative claim, adjusted EV of
approximately $2.9 billion is available for claims by creditors.
Fitch assumes a full draw on McAfee Enterprise's $125 million
revolver.
Fitch estimates strong recovery prospects for the first lien term
loan and revolver and rates them 'BB-'/'RR2', or two notches above
McAfee Enterprise's 'B' IDR. The second lien term loan is rated
'CCC+'/'RR6'.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Fitch's expectation of total debt with equity credit/operating
EBITDA at or below 5.5x on a sustained basis;
-- (Cash from operations-capex)/total debt with equity credit at
or above 7.0% on a sustained basis.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Fitch's expectation of total debt with equity credit/operating
EBITDA at or above 7.0x on a sustained basis;
-- Operating EBITDA/interest paid below 2.0x on a sustained
basis;
-- (Cash from operations-capex)/total debt with equity credit at
or below 2.0%;
-- Inability to successfully integrate McAfee Enterprise and
FireEye Products and action a significant cost savings plan;
-- Deterioration in operating metrics, including sustained sales
declines and/or customer churn.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Magenta Buyer's liquidity is supported by
cash on hand of $563 million. Liquidity is further supported by the
$125 million secured revolving credit facility and strong
pre-dividend FCF generation.
Debt Structure: The company currently has $3.167 billion in first
lien loans outstanding, with annual amortization of 1% until
maturity in 2028. Fitch expects Magenta Buyer to generate
sufficient FCF to make required amortization payments. The company
also has $750 million in second lien term loans that mature in
2029.
ISSUER PROFILE
Magenta Buyer LLC is a provider of cybersecurity software that
derives revenue from the sale of security products, subscriptions,
SaaS, support and maintenance, and professional services. The
company is to be comprised of two carve-outs, McAfee Enterprise as
well as FireEye Products.
Debt Rating Recovery Prior
---- ------ -------- -----
Magenta Buyer LLC
LT IDR B Affirmed B
Senior Secured
2nd Lien LT CCC+ Affirmed RR6 CCC+
senior secured LT BB- Affirmed RR2 BB-
MHI HOLDINGS: S&P Retains 'B' Rating on First-Lien Debt
-------------------------------------------------------
S&P Global Ratings revised its recovery rating on MHI Holdings
LLC's first-lien debt to '3' from '4', indicating S&P's expectation
for meaningful (50%-70%; rounded estimate: 50%) recovery in the
event of a default. This reflects the company's March 2022
agreement to sell its shipyard properties in a sale-leaseback
transaction, through which it repaid $100 million of its first-lien
term loan B. Therefore, given its lower level of total debt, S&P
now expects improved recovery prospects for its first-lien
debtholders. S&P's 'B' issue-level rating on MHI's first-lien debt
is unchanged.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- The company's capital structure comprises a $100 million
first-lien revolving credit facility due 2024 and a $715 million
($599 million outstanding) first-lien term loan B due 2026.
-- S&P revised its recovery rating on MHI's first-lien debt to
'3(50%)' from '4(40%)' after the company repaid debt as part of its
recent sale-leaseback transaction.
-- S&P has valued the company on a going-concern basis using a 5x
multiple of its projected emergence EBITDA, which is in line with
the multiples it uses for its peers.
-- Other key assumptions at default include LIBOR of 2.5% and the
revolver is 85% drawn.
Simulated default assumptions
-- Default year: 2025
-- EBITDA at emergence: $76 million
-- Multiple: 5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $359
million
-- Valuation split (obligors/nonobligors): 100%/0%
-- Collateral value available to first-lien creditors: $359
million
-- Total first-lien debt: $671 million
--Recovery expectations: 50%-70% (rounded estimated: 50%)
MICROSTRATEGY INC: Signs Deal to Sell $500M Worth of Common Shares
------------------------------------------------------------------
MicroStrategy Incorporated entered into a sales agreement with
Cowen and Company, LLC and BTIG, LLC, as sales agents, pursuant to
which the Company may issue and sell shares of its class A common
stock, $0.001 par value per share, having an aggregate offering
price of up to $500,000,000, from time to time through the Agents.
Also, on Sept. 9, 2022, the Company filed a prospectus supplement
with the Securities and Exchange Commission in connection with the
Offering under its existing automatic shelf registration statement,
which became effective on June 14, 2021 (File No. 333-257087), and
the base prospectus contained therein.
Upon delivery of a placement notice, and subject to the terms and
conditions of the Sales Agreement, the Agents may sell the Shares
by methods deemed to be an "at the market offering" as defined in
Rule 415(a)(4) promulgated under the Securities Act of 1933, as
amended. The Company may sell the Shares in amounts and at times to
be determined by the Company from time to time subject to the terms
and conditions of the Sales Agreement, but it has no obligation to
sell any of the Shares in the Offering. The Company will only sell
Shares through one Agent on any single day.
The Company or the Agents may suspend or terminate the Offering
upon notice to the other parties and subject to other conditions.
Each Agent will act as sales agent on a commercially reasonable
efforts basis consistent with its normal trading and sales
practices and applicable state and federal law, rules and
regulations and the rules of The Nasdaq Global Select Market.
The Company has agreed to pay the Agents' commissions for their
respective services in acting as agents in the sale of the Shares
in the amount of up to 2.0% of gross proceeds from the sale of the
Shares pursuant to the Sales Agreement. The Company has also
agreed to provide the Agents with customary indemnification and
contribution rights.
Wilmer Cutler Pickering Hale and Dorr LLP, counsel to the Company,
has issued a legal opinion relating to the Shares.
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."
MIDAS INTERMEDIATE II: Moody's Withdraws Caa3 CFR Following Recap
-----------------------------------------------------------------
Moody's Investors Service has withdrawn all outstanding ratings and
the outlook for Midas Intermediate Holdco II, LLC (dba "Service
King"), including the company's Caa3 Corporate Family Rating and
Caa3-PD Probability of Default Rating. Moody's has also withdrawn
the Caa1 rating on the company's Senior Secured Bank Credit
Facility.
Withdrawals:
Issuer: Midas Intermediate Holdco II, LLC
Corporate Family Rating, Withdrawn , previously rated Caa3
Probability of Default Rating, Withdrawn , previously rated
Caa3-PD
Senior Secured Bank Credit Facility, Withdrawn , previously rated
Caa1 (LGD2)
Outlook Actions:
Issuer: Midas Intermediate Holdco II, LLC
Outlook, Changed To Rating Withdrawn From Negative
RATINGS RATIONALE
Moody's has withdrawn all ratings for Midas Intermediate Holdco II,
LLC following the completion of the company's recapitalization
transaction. The company is now majority-owned and controlled by
affiliates of Clearlake Capital Group, L.P., a private equity
firm.
Headquartered in Richardson, Texas, Midas Intermediate Holdco II,
LLC was a leading provider of vehicle body repair services with
annual revenue of over $1 billion. The company operated under the
Service King brand name.
MIND TECHNOLOGY: Incurs $1.9 Million Net Loss in Second Quarter
---------------------------------------------------------------
Mind Technology, Inc. issued a press release announcing its
financial results for the fiscal quarter ended July 31, 2022.
The Company reported a net loss of $1.92 million on $8.71 million
of total revenues for the three months ended July 31, 2022,
compared to a net loss of $2.66 million on $6.81 million of total
revenues for the three months ended July 31, 2021.
For the six months ended July 31, 2022, the Company reported a net
loss of $4.34 million on $17.80 million of total revenues compared
to a net loss of $6.64 million on $11 million of total revenues for
the six months ended July 31, 2021.
As of July 31, 2022, the Company had $35.57 million in total
assets, $9.91 million in total liabilities, and $25.66 million in
total stockholders' equity.
Rob Capps, MIND's president and chief executive officer, stated,
"We were pleased with our second quarter results, with revenues
coming in 28% higher than the second quarter of last year. These
revenues were in line with our expectations and were comparable to
our first quarter revenues of approximately $9.1 million. We feel
that the higher level of revenue that we've generated in the first
half of this year is an indication of our revenue potential on an
ongoing basis. As we have discussed previously, we see robust
interest, improved customer optimism, increased order flow and
backlog. Based on these factors, we expect revenue in the second
half of fiscal 2023 to exceed that of the first half.
"Despite slightly lower revenue in the second quarter as compared
to the first, our operating loss improved to approximately $1.6
million as compared to approximately $2.5 million in the previous
quarter. We saw improved gross margins, lower selling, general and
administrative expenses and lower research and development
expense.
"We remain encouraged by the underlying market conditions that
surround our business. The sustained global energy prices we are
seeing continue to drive increased activity among our marine
seismic and exploration customers, as evidenced by recent and
pending order activity. In addition to the firm backlog of orders,
we are experiencing significant inquiries from our exploration and
survey customers, particularly for source controller and
high-resolution seismic streamer systems. Due to lead times for
certain components, we are encouraging customers to place orders
for fiscal 2024 deliveries as early as possible to ensure an
appropriate place in our production queue. We believe some of our
recent orders for sonar systems are directly associated with the
current geopolitical climate, namely the security concerns in
Europe. Although we're pleased with these orders and the inquiry
levels that we've seen to date, we remain focused on continuing to
leverage our growing product offerings to take advantage of
opportunities in this improved market.
"As we look ahead to the second half of the year, we expect
improved results when compared to the first half. While the timing
of orders remains variable, which may result in a sequential drop
in the third quarter, we expect to more than make up for it in the
fourth quarter. Given the current state of our backlog and
anticipated deliveries before year end, we expect to generate
meaningfully higher revenue and positive income from continuing
operations in the fourth quarter," concluded Capps.
A full-text copy of the press release is available for free at:
https://www.sec.gov/Archives/edgar/data/926423/000143774922022239/ex_387022.htm
About Mind Technology
Mind Technology, Inc. -- http://mind-technology.com-- provides
technology and solutions for exploration, survey and defense
applications in oceanographic, hydrographic, defense, seismic and
security industries. Headquartered in The Woodlands, Texas, MIND
Technology has a global presence with key operating locations in
the United States, Singapore, Malaysia and the United Kingdom. Its
Klein and Seamap units design, manufacture and sell specialized,
high performance sonar and seismic equipment.
Mind Technology reported a net loss of $15.08 million for the year
ended Jan. 31, 2022, a net loss of $20.31 million for the year
ended Jan. 31, 2021, compared to a net loss of $11.29 million for
the year ended Jan. 31, 2020. As of April 30, 2022, the Company had
$37.78 million in total assets, $10.65 million in total
liabilities, and $27.13 million in total stockholders' equity.
Houston, Texas-based Moss Adams LLP, the Company's auditor since
2017, issued a "going concern" qualification in its report dated
April 29, 2022, citing that the Company has suffered recurring
losses from operations and has continued to rely on sale of
preferred stock and leasepool equipment to sustain operations. The
Company's inability to generate positive cash flows from
operations combined with the limited amount of leasepool equipment
remaining to be sold raise substantial doubt about its ability to
continue as a going concern.
MONSTER INVESTMENTS: Court Okays Appointment of Chapter 11 Examiner
-------------------------------------------------------------------
Judge Lori Simpson of the U.S. Bankruptcy Court for the District of
Maryland approved the appointment by John Fitzgerald, III, Acting
U.S. Trustee for Region 4, of Stanley W. Mastil to serve as Chapter
11 examiner for Monster Investments, Inc.
The scope of the appointment is to investigate Monster Investments'
real estate transactions that were closed by Avance Title, LLC
during the period from 2018 through the filing of its bankruptcy
petition, and questions related to those transactions regarding:
* whether Avance properly carried out the terms of those
transactions,
* whether Avance properly recorded documents related to those
transactions,
* whether Avance properly disbursed funds from those
transactions,
* what parties, including, but not limited to, insiders of
Monster Investments, received, properly or improperly, proceed from
those transactions, and
* whether Avance, or parties related to Avance, improperly
retained or received funds from those transactions.
A copy of the order is available for free at https://bit.ly/3xgWKXy
from PacerMonitor.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.
NATIONAL CINEMEDIA: Posts $700K Net Loss in Second Quarter
----------------------------------------------------------
National Cinemedia, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
attributable to the company of $700,000 on $67.1 million of revenue
for the three months ended June 30, 2022, compared to a
consolidated net loss of $22.7 million on $14 million of revenue
for the three months ended July 1, 2021.
For the six months ended June 30, 2022, the Company reported a net
loss attributable to the company of $25.9 million on $103 million
of revenue compared to a net loss attributable to the company of
$42.1 million on $19.4 million of revenue for the six months ended
July 1, 2021.
As of June 30, 2022, the Company had $789.9 million in total
assets, $1.22 billion in total liabilities, and a total deficit of
$431.3 million.
Commenting on the Company's second quarter 2022 operating results
and future outlook, NCM CEO Tom Lesinski said, "The second quarter
of 2022 was our fifth straight quarter of year over year revenue
growth, continuing our trajectory of positive momentum. For the
first time since the pandemic, monthly box office reached nearly $1
billion in June, resulting in NCM achieving pre-pandemic level
AOIBDA margins. The second quarter demonstrated, that with a
strong film slate, large audiences will return to the theaters.
Looking ahead, we expect continued growth in the cinema advertising
business, especially as we move into the fourth quarter with
several blockbuster releases planned."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1377630/000137763022000119/ncminc-20220630.htm
About National CineMedia Inc.
National CineMedia Inc. (NCM) is a cinema advertising network in
the U.S. NCM's Noovie pre-show is presented exclusively in 50
leading national and regional theater circuits including AMC
Entertainment Inc. (NYSE:AMC), Cinemark Holdings, Inc. (NYSE:CNK)
and Regal Entertainment Group (a subsidiary of Cineworld Group PLC,
LON: CINE). NCM's cinema advertising network offers broad reach
and audience engagement with over 20,600 screens in over 1,600
theaters in 195 Designated Market Areas (all of the top 50). NCM
Digital and Digital-Out-Of-Home (DOOH) go beyond the big screen,
extending in-theater campaigns into online, mobile, and place-based
marketing programs to reach entertainment audiences. National
CineMedia, Inc. (NASDAQ:NCMI) owns a 47.4% interest in, and is the
managing member of, National CineMedia, LLC.
National Cinemedia reported a net loss attributable to the company
of $48.7 million compared to a net loss attributable to the company
of $65.4 million for the year ended Dec. 31, 2020. As of March 31,
2022, the Company had $821.6 million in total assets, $1.24 billion
in total liabilities, and a total deficit of $421.4 million.
NATIONAL CINEMEDIA: Renana Teperberg Quits as Director
------------------------------------------------------
Renana Teperberg notified National CineMedia, Inc. of her
resignation from the Company's Board of Directors, effective
immediately. Ms. Teperberg's resignation did not result from any
disagreement with NCM, Inc., according to the Company's Form 8-K
filed with the Securities and Exchange Commission.
Ms. Teperberg was designated to the Board of Directors by Regal
CineMedia Holdings, LLC pursuant to the Director Designation
Agreement, dated as of Feb. 13, 2007, between NCM, Inc. and its
founding members, American Multi-Cinema, Inc., Cinemark Media,
Inc., and Regal.
About National CineMedia Inc.
National CineMedia Inc. (NCM) is a cinema advertising network in
the U.S. NCM's Noovie pre-show is presented exclusively in 50
leading national and regional theater circuits including AMC
Entertainment Inc. (NYSE:AMC), Cinemark Holdings, Inc. (NYSE:CNK)
and Regal Entertainment Group (a subsidiary of Cineworld Group PLC,
LON: CINE). NCM's cinema advertising network offers broad reach
and audience engagement with over 20,600 screens in over 1,600
theaters in 195 Designated Market Areas (all of the top 50). NCM
Digital and Digital-Out-Of-Home (DOOH) go beyond the big screen,
extending in-theater campaigns into online, mobile, and place-based
marketing programs to reach entertainment audiences. National
CineMedia, Inc. (NASDAQ:NCMI) owns a 47.4% interest in, and is the
managing member of, National CineMedia, LLC.
National Cinemedia reported a net loss attributable to the company
of $48.7 million compared to a net loss attributable to the company
of $65.4 million for the year ended Dec. 31, 2020. As of March 31,
2022, the Company had $821.6 million in total assets, $1.24 billion
in total liabilities, and a total deficit of $421.4 million.
NATIONAL CINEMEDIA: Standard General, Soohyung Kim Hold 15.8% Stake
-------------------------------------------------------------------
Standard General L.P. and Soohyung Kim disclosed in a Schedule
13D/A filed with the Securities and Exchange Commission that as of
Sept. 7, 2022, they beneficially own 12,932,382 shares of common
stock of National CineMedia, Inc., representing 15.8 percent of the
shares outstanding. The percentage is based upon the statement in
the Issuer's Quarterly Report on Form 10-Q for the quarterly period
ended June 30, 2022, as filed with the SEC on Aug. 8, 2022, that
there were 81,888,911 outstanding shares of Common Stock of the
Issuer as of August 4, 2022.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1377630/000110465922098888/tm2225487d1_sc13da.htm
About National CineMedia Inc.
National CineMedia Inc. (NCM) is a cinema advertising network in
the U.S. NCM's Noovie pre-show is presented exclusively in 50
leading national and regional theater circuits including AMC
Entertainment Inc. (NYSE:AMC), Cinemark Holdings, Inc. (NYSE:CNK)
and Regal Entertainment Group (a subsidiary of Cineworld Group PLC,
LON: CINE). NCM's cinema advertising network offers broad reach
and audience engagement with over 20,600 screens in over 1,600
theaters in 195 Designated Market Areas (all of the top 50). NCM
Digital and Digital-Out-Of-Home (DOOH) go beyond the big screen,
extending in-theater campaigns into online, mobile, and place-based
marketing programs to reach entertainment audiences. National
CineMedia, Inc. (NASDAQ:NCMI) owns a 47.4% interest in, and is the
managing member of, National CineMedia, LLC.
National Cinemedia reported a net loss attributable to the company
of $48.7 million compared to a net loss attributable to the company
of $65.4 million for the year ended Dec. 31, 2020. As of March 31,
2022, the Company had $821.6 million in total assets, $1.24 billion
in total liabilities, and a total deficit of $421.4 million.
NEPHROS INC: Appoints Joe Harris to Board of Directors
------------------------------------------------------
Nephros, Inc. has appointed Joe Harris to its Board of Directors.
"We are excited that Joe is joining our board," said Andy Astor,
president and chief executive officer of Nephros. "He brings years
of financial, sales, and marketing acumen to the board, with
experience in both large and small healthcare ventures."
"I am thrilled to join the Nephros board," said Joe Harris. "I
believe Nephros is at an exciting point as they continue to focus
on sales momentum and continued growth. With over 20 years of
sales management experience in healthcare with large organizations
and start-ups, I look forward to helping the company build on its
foundation and achieve greater success."
Joe Harris is currently the Midwest, Sales Director at Murj.
Previous positions have included East, Areas Sales Director at
HeartFlow, Inc., Midwest Regional Sales Director at BIOTRONIK, and
Regional Sales Manager at Boston Scientific. Joe is also a U.S.
Army veteran. He received his B.S. in Systems Engineering
Economics from the United States Military Academy at West Point,
and his MBA in Marketing Finance from the University of Michigan.
The Company will provide Mr. Harris with the standard compensation
and indemnification approved for non-employee directors, which
consists of a $20,000 annual retainer and $1,500 per meeting for
each quarterly Board meeting attended and reimbursement for
expenses incurred in connection with serving on the Board, as well
as an annual grant of options to purchase a number of shares equal
to the product of 0.0006 multiplied by the total number of
outstanding shares of common stock of the Company on a
fully-diluted basis. In accordance with the Company's standard
compensation for non-employee directors, the Company also granted
to Mr. Harris a stock option pursuant to its 2015 Equity Incentive
Plan to purchase 13,115 shares of common stock, which is equal to
the product of 0.0011 multiplied by the total number of outstanding
shares of common stock of the Company on a fully-diluted basis.
The per share exercise price applicable to such option is $1.25,
which represents the fair market value price per share of Company
common stock on Sept. 6, 2022, and this option will vest and be
exercisable in three equal installments on each of the date of
grant and the first and second anniversaries thereof.
About Nephros
South Orange, New Jersey-based Nephros, Inc. -- www.nephros.com --
is a commercial-stage company that develops and sells water
solutions to the medical and commercial markets.
Nephros reported a net loss of $3.87 million for the year ended
Dec. 31, 2021, a net loss of $4.53 million for the year ended Dec.
31, 2020, a net loss of $3.18 million for the year ended Dec. 31,
2019, and a net loss of $3.32 million for the year ended Dec. 31,
2018. As of June 30, 2022, the Company had $14.95 million in total
assets, $2.47 million in total liabilities, and $12.48 million in
total stockholders' equity.
NEWELL BRANDS: Fitch Assigns BB+ Rating to New $1BB Unsec. Notes
----------------------------------------------------------------
Fitch Ratings has assigned 'BB+'/'RR4' ratings to Newell Brands
Inc.'s proposed $1 billion unsecured issuance, split between
five-year and seven-year tranches. Proceeds along with cash on hand
will be used to pay down $1.1 billion of debt due April 2023.
Newell's 'BB+'/Stable ratings reflect its position as a large
diversified consumer products company. Fitch expects Newell to
sustain flat to modestly positive top line and EBITDA in the $1.3
billion to $1.4 billion range (similar to pre-pandemic levels
adjusting for divestitures) over the medium term, with gross
debt/EBITDA trending in the mid-3x.
However, top line and EBITDA are likely to be under material
pressure in the second half of 2022 and potentially the first half
of 2023, given a significant pullback in retail orders and an
overall slowdown in consumer spending, and Fitch projects gross
debt/EBITDA will increase to over 4x in 2022 before declining to
under 4x in 2023.
KEY RATING DRIVERS
Near-Term Challenges: Newell's near-term operations will be
challenged by changing consumer behavior with a shift towards
services after strong pandemic-induced demand, a heightened risk
for overall slowdown in consumer spending given inflationary
pressures, and declining customer orders as retailers reduce
inventory levels across general merchandise categories.
The company saw a strong recovery in 2021 with top line growth of
12.8% and EBITDA of $1.45 billion, almost 10% higher than 2019
results, as categories adversely impacted during the pandemic such
as writing, home fragrance, outdoor & recreation, and connected
home and security recovered.
While topline and EBITDA was relatively flat to 2021 levels for the
first half 2022, Newell has materially lowered guidance for the
back of 2022 given a higher than expected pullback in customer
orders for food, home appliance and fragrance (collectively 39% of
2021 revenue) and outdoor and recreation (14% of revenue), leading
to both top line and gross margin pressure given high inventory
levels. The company has also seen significant headwinds from
inflation, an increase in advertising and promotion expense as a
percentage of sales and an unfavorable impact from foreign
exchange, partially offset by pricing, productivity savings and
lower overhead costs.
EBITDA Volatility Expected: Fitch expects Newell's current
challenges to negatively impact 2022 operating results, and some
could continue into 2023, resulting in EBITDA trending towards the
low $1 billion in 2022 before recovering towards $1.3 billion in
2023/2024. EBITDA margins could recover in 2023 with the easing of
inflationary pressures and realignment of inventory despite
projected modest revenue declines due to pullback in consumer
demand.
Medium-Term Low-Single Digit Topline Growth Target: Newell expects
to sustain low single digit organic sales growth over the medium
term by strengthening brands through increased innovation, focusing
on omnichannel initiatives (with ecommerce at 22% of sales), and
accelerating international growth (one-third of sales).
In 2021, the company realigned its eight business units into three
categories to direct investments and business focus and maximize
portfolio value. The "growth and value accelerators" category
comprised of food, writing and home fragrance (together 41% of 2021
net sales) has strong growth potential and a gross margin of over
40%. Newell views the "solid value generators" category comprised
of commercial, baby and parenting (28% of net sales) as steady
businesses with some growth potential and good gross margins.
The "continuous improvement" group includes home appliances and
outdoor and recreation in the midst of a turnaround, with the main
challenge being a gross margin significantly below the company
average of 32%-33% (at 2020/2021 levels). Fitch expects its top
line to be essentially flat to modestly positive over the medium
term.
Medium-Term Margins: Newell has discussed a several-hundred basis
point improvement opportunity in operating margin based on industry
benchmarking, with a long-term target of driving operating margin
improvement of 50bp annually. Actions include reduction in overhead
costs and working capital management; for example, Newell improved
its cash conversion to 68 days in 2021 from 115 days in 2018 due to
actions such as extended payable terms and SKU reduction of 65%.
In September 2021, Newell discussed a new multi-year supply chain
initiative (Project OVID) to transform its go-to market strategy,
particularly in the U.S., moving from 23 business specific supply
chains to a single integrated supply chain. This should generate
savings from fuller trucks, closer proximity to retailers and
distribution center optimization.
Given Newell's ongoing gross margin challenges in a number of
categories, investments required to support its brands and
potential disruption and costs related to its supply chain
initiatives, Fitch projects the EBITDA margin to remain relatively
flat to 2019-2021 levels of 13.5%-14% over the medium term, with
near-term margins in the 12% range given current topline
headwinds.
Elevated Near-Term Leverage: Fitch expects gross debt/EBITDA to
increase to over 4x in 2022 versus 3.4x in 2021 given projected
material weakness in top line and EBITDA in 2H22. Gross leverage is
projected to decline to under 4x beginning in 2023 on EBITDA margin
recovery, with net leverage trending in the mid-3x. This compares
to Newell's long-term net leverage (net debt/EBITDA) target of
2.5x.
Newell's total outstanding debt was $4.9 billion at the end of
2021. Newell has $1.1 billion of debt due in April 2023, which it
will largely refinance with the proposed $1 billion debt offering.
The next debt maturity post this refinancing is $200 million of
debt due in 2024 which the company could choose to refinance or pay
down with cash on hand. While Fitch expects FCF to be an outflow of
nearly $300 million in 2022, Newell's liquidity remains reasonable
with almost full availability anticipated at YE 2022 on its upsized
$1.5 billion revolver.
DERIVATION SUMMARY
Newell's ratings reflect its position as a large diversified
consumer products company. Fitch expects Newell to sustain flat to
modestly positive top line and EBITDA in the $1.3 billion to $1.4
billion range (similar to pre-pandemic levels adjusting for
divestitures) over the medium term, with gross debt/EBITDA trending
in the mid 3x. However, top line and EBITDA are expected to be
under material pressure in the second half 2022 and potentially
first half 2023, given a significant pull back in retail orders and
overall slowdown in consumer spending, and Fitch projects gross
debt/EBITDA will increase to over 4x in 2022 before declining to
under 4x in 2023.
ACCO Brands Corporation's 'BB'/Stable rating reflects the company's
historically consistent FCF and reasonable gross leverage, which
trended around 3.0x prior to operating challenges in 2020 related
to the coronavirus pandemic. The ratings are constrained by secular
challenges in the office products industry and channel shifts
within the company's customer mix, as well as the risk of further
debt-financed acquisitions into faster-growing geographies and
product categories.
Mattel, Inc.'s 'BB+'/Positive rating reflect the company's
meaningfully improved credit metrics achieved through better than
expected execution on both the top and bottom line, as well as
discretionary debt paydown. While Fitch expects the company to
surrender some of the revenue and margin gains achieved in 2021 as
the tailwinds from the pandemic dissipate, the Positive Rating
Outlook reflects Fitch's view that improved competitive
positioning, cost cuts and debt reduction could result in
post-pandemic credit metrics and an operational profile supportive
of an investment grade rating over time.
Hasbro, Inc's. 'BBB-'/Stable ratings reflect its position as one of
the world's largest toy companies, its good liquidity and cash flow
profile, and expectations of leverage (gross debt to EBITDA)
maintaining below 3.5x. Hasbro's leverage increased to 5.0x in 2020
from 2.2x in 2018 due to a combination of elevated debt levels from
the acquisition of eOne and suppressed EBITDA due to challenges
stemming from the coronavirus pandemic.
Strong results at the company's Wizards of the Coast segment, a
rebound in the Consumer Products segment and the paydown of over $1
billion in debt drove leverage back below 3.5x in 2021. The recent
Outlook revision to Stable from Negative reflects increased
confidence in leverage remaining below 3.5x given EBITDA trends and
expected debt reduction.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
-- Revenue declines over 10% to $9.5 billion in 2022 from $10.6
billion in 2021, reflecting core sales declines of 3%-4% driven by
expectations of core sales turning materially negative at down 10%
in the second half versus a positive first half. Top line is also
expected to be impacted by a 4% decline due to divested businesses
(the company divested its Connected Home & Security on April 1,
2022 which had net sales of $395 million in 2021) and forex
headwinds of 3%. Revenue is expected to modestly decline in 2023
assuming top line declines continue through first half 2023, before
recovering in the low single digits thereafter;
-- Operating EBITDA is expected to be in the low $1 billion range
in 2022 before recovering towards the 1.3 billion to $1.4 billion
range over 2023/2024. EBITDA margin is expected to decline to the
low 12% in 2022 (versus 13.7% in 2021) before recovering to 13%
beginning 2023;
-- Capex around $300 million and dividends at around $400 million
annually;
-- FCF (after dividends) is expected to be an outflow of around
$300 million (reflecting cash outflow from working capital as well
as a one-time cash payment on the sale of the CH&S) and be
approximately $200 million of inflow thereafter, assuming fairly
neutral working capital swings;
-- Gross debt/EBITDA increases to over 4x in 2022 versus 3.4x in
2021 given projected material weakness in top line and EBITDA in
2H22. Leverage is projected to decline to under 4x beginning in
2023 on EBITDA margin recovery. The leverage projections in 2022
reflect short-term borrowings of about $200 million at YE (before
paydown in 2023).
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A positive rating action could result from increased
confidence in the company's ability to grow core sales in the low
single digits, sustaining EBITDA growth of at least low single
digits leading to EBITDA of over $1.5 billion, with EBITDA margins
in the mid-teens and gross debt/EBITDA sustained under 3.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- A negative rating action could result from worse than expected
operating performance leading to reduced confidence in Newell's
ability to stabilize its business and/or lower than expected debt
reduction such that gross debt/EBITDA is sustained above 4.0x.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: As of June 30, 2022, Newell maintained $323
million cash on hand and nearly $1.1 billion availability under its
$1.25 billion unsecured revolving credit facility that was due to
expire in December 2023, after netting out $22 million outstanding
letters of credit and $112 million of commercial paper borrowings
at June 30, 2022. In addition, Newell has a $375 million accounts
receivable securitization facility that matures in October 2023; as
of June 30, 2022, there was $260 million of outstanding under this
facility.
Borrowings under the CP program and the A/R facility relate to
seasonal working capital needs, primarily reflecting an inventory
increase to support sales and the first wave of Project OVID
(Newell's multiyear supply chain initiative) implementation. Fitch
expects the company to maintain some borrowings on its CP program
and A/R facility at YE given higher than expected inventory balance
given reduced customer orders and material reduction to operating
cash flow in 2022 although Fitch expects the company to pay down
the short-term borrowings in 2023.
Newell recently upsized its revolver from $1.25 billion to $1.5
billion, and extended the maturity to August 31, 2027. Newell's
total outstanding debt was $4.9 billion at the end of 2021. Newell
has $1.1 billion of debt due in April 2023, which it will largely
refinance with the proposed $1 billion debt offering. Post this
redemption the company's next debt maturity is $200 million in 2024
which the company could choose to refinance or pay down with cash
on hand.
RECOVERY CONSIDERATIONS
Fitch does not employ a waterfall recovery analysis for issuers
assigned ratings in the 'BB' category. The further up the
speculative grade continuum a rating moves, the more compressed the
notching between the specific classes of issuances becomes.
Newell's capital structure is unsecured, including its revolver and
notes. Fitch has affirmed Newell's ratings across its capital
structure to 'BB+'/'RR4', indicating average recovery prospects.
ISSUER PROFILE
Newell is a global marketer of consumer and commercial products,
marketed under Paper Mate, Sharpie, Dymo, EXPO, Parker, Elmer's,
Coleman, Marmot, Oster, Sunbeam, FoodSaver, Mr. Coffee, Rubbermaid
Commercial Products, Graco, Baby Jogger, NUK, Calphalon,
Rubbermaid, Contigo, First Alert, Mapa, Spontex, Quickie and Yankee
Candle.
SUMMARY OF FINANCIAL ADJUSTMENTS
--Historical EBITDA has been adjusted for stock-based
compensation, restructuring and restructuring related costs,
acquisition amortization & impairment, transaction and related
costs, other items.
ESG CONSIDERATIONS
Newell has an Environmental, Social and Governance (ESG) Relevance
Score of '4' for Financial Transparency. This reflects material
weaknesses in internal control over financial reporting related to
the company's tax accounting in 2019 and 2020, an SEC subpoena in
January 2020 related to the impairment of goodwill and other
intangibles in 2018, and a subpoena in June 2021 related to
disclosures of the potential impact of revised U.S Treasury
regulations.
Operating comparability over the last few years has also been
challenging given a number of reclassifications of continuing
versus discontinued operations as well as business segments over
2018-2021. This has a negative impact on the credit profile and is
relevant to the ratings in conjunction with the other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery
---- ------ --------
Newell Brands Inc.
senior unsecured LT BB+ New Rating RR4
OCEAN POWER: Incurs $5.8 Million Net Loss in First Quarter
----------------------------------------------------------
Ocean Power Technologies, Inc. filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q reporting a
net loss of $5.85 million on $714,000 of revenues for the three
months ended July 31, 2022, compared to a net loss of $3.08 million
on $272,000 of revenues for the three months ended July 31, 2021.
As of July 31, 2022, the Company had $68 million in total assets,
$4.68 million in total liabilities, and $63.31 million in total
stockholders' equity.
Philipp Stratmann, OPT's president and chief executive officer,
commented, "I was pleased with our results this quarter,
particularly with the progress within business development, and I
remain encouraged with our ability to achieve our $9.0 million
bookings target for fiscal 2023. An example of our success was
winning the DOE award for Phase II development of next generation
technologies, which further advances our leading ocean energy
generation capabilities and supports U.S. Government-led Energy
Transition efforts. Additionally, we have seen increased demand
for our WAM-V based solutions, from new and recurring customers, as
well as continued traction within Strategic Consulting Services.
We look forward to sharing our continued progress in the coming
quarters."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1378140/000149315222025628/form10-q.htm
About Ocean Power Technologies
Headquartered in Monroe Township, New Jersey, Ocean Power
Technologies, Inc. -- http://www.oceanpowertechnologies.com--
provides intelligent maritime solutions and services that enable
safer, cleaner, and more productive ocean operations for the
defense and security, oil and gas, science and research, and
offshore wind markets. Its PowerBuoy platforms provide clean and
reliable electric power and real-time data communications for
remote maritime and subsea applications. The Company also provides
WAM-V autonomous surface vessels (ASV) and marine robotics services
through our wholly owned subsidiary Marine Advanced Robotics and
strategic consulting services including simulation engineering,
software engineering, concept design and motion analysis through
our wholly owned subsidiary 3Dent.
Ocean Power reported a net loss of $18.87 million for the 12 months
ended April 30, 2022, a net loss of $14.76 million for the 12
months ended April 30, 2021, a net loss of $10.35 million for the
12 months ended April 30, 2020, and a net loss of $12.25 million
for the 12 months ended April 30, 2019.
PALMS MEDICAL: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Palms Medical Transport, LLC
102 Church Street
Byron, GA 31008
Chapter 11 Petition Date: September 15, 2022
Court: United States Bankruptcy Court
Middle District of Georgia
Case No.: 22-51074
Judge: Hon. James P. Smith
Debtor's Counsel: Wesley J. Boyer, Esq.
BOYER TERRY LLC
348 Cotton Avenue, Suite 200
Macon, GA 31201
Tel: (478) 742-6481
Fax: (770) 200-9230
Email: Wes@BoyerTerry.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Maurice Grayson as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/HPNARWQ/Palms_Medical_Transport_LLC__gambke-22-51074__0001.0.pdf?mcid=tGE4TAMA
PARAMOUNT HEALTHCARE: Wins Interim Cash Collateral Access
---------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Paramount Health Services, LLC to use
cash collateral on an interim basis in accordance with the budget.
The Court said, to the extent the value of the United States Small
Business Administration's security interest in the Debtor's assets
is diminished by the Debtor's use of cash collateral, the SBA will
receive valid, automatically perfected, and enforceable replacement
liens on the same type and with the same priority as its
pre-petition liens.
The Debtor will make cash payments to the SBA in accordance with
the terms of the parties' loan agreement. The requirements of 11
U.S.C. section 363(c)(4) are waived and the Debtor will not be
required to segregate any cash collateral.
A final hearing on the matter is set for October 19, 2022 at 9
a.m.
A copy of the order is available at https://bit.ly/3de0bY2 from
PacerMonitor.com.
About Paramount Healthcare Group Inc.
Paramount Healthcare Group Inc. is a licensed outpatient physical
therapy practice formed in 1999, operating in Houston, Texas, and
offering a full range of physical therapy services. Not only does
Paramount assist patients in rehabilitating and recovering from
injuries and surgeries, but it also offers physical therapy
treatments for stroke recovery, chronic pain, and balance issues
including vertigo.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-32623) on September
5, 2022. In the petition signed by Alireza Hashemi,
president/manager, the Debtor disclosed up to $1 million in assets
and up to $10 million in liabilities.
Judge Eduardo V. Rodriguez oversees the case.
Broocks M. Wilson, Esq., at Kean Miller LLP is the Debtor's
counsel.
PEAK THEORY: D. Ray Strong Appointed as Subchapter V Trustee
------------------------------------------------------------
Patrick Layng, the U.S. Trustee for Region 19, appointed D. Ray
Strong as Subchapter V trustee for Peak Theory Inc.
Mr. Strong disclosed in a court filing that he is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The Subchapter V trustee can be reached at:
D. Ray Strong
Berkeley Research Group
201 South Main Street, Suite 450
Salt Lake City, UT 84111
Tel: (801) 364-6233
E-mail: rstrong@thinkbrg.com
About Peak Theory
Peak Theory Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Utah Case No. 22-23480) on Sept. 5,
2022, with between $100,000 and $500,000 in assets and between $1
million and $10 million in liabilities. Zac Park, president of Peak
Theory, signed the petition.
Judge Joel T. Marker oversees the case.
Darren Neilson, Esq., at Parsons Behle and Latimer is the Debtor's
counsel.
PLUS THERAPEUTICS: Inks Deal to Sell $5M Worth of Common Shares
---------------------------------------------------------------
Plus Therapeutics, Inc. entered into an Equity Distribution
Agreement with Canaccord Genuity LLC, pursuant to which the Company
may issue and sell, from time to time, shares of its common stock
having an aggregate offering price of up to $5,000,000, depending
on market demand, with the Agent acting as an agent for sales.
Sales of the Shares may be made by any method permitted by law
deemed to be an "at the market offering" as defined in Rule
415(a)(4) of the Securities Act of 1933, as amended, including,
without limitation, sales made directly on or through the NASDAQ
Capital Market. The Agent will use its commercially reasonable
efforts to sell the Shares requested by the Company to be sold on
its behalf, consistent with the Agent's normal trading and sales
practices, under the terms and subject to the conditions set forth
in the Distribution Agreement. The Company has no obligation to
sell any of the Shares. The Company may instruct the Agent not to
sell the Shares if the sales cannot be effected at or above the
price designated by the Company from time to time and the Company
may at any time suspend sales pursuant to the Distribution
Agreement.
The Company will pay the Agent a commission of up to 3.0% of the
gross proceeds from the sale of Shares by the Agent under the
Distribution Agreement. The Company has also agreed to reimburse
the Agent for its reasonable documented out-of-pocket expenses,
including fees and disbursements of its counsel, in the amount of
$50,000. In addition, the Company has agreed to provide customary
indemnification rights to the Agent.
The Offering will terminate upon the earlier of (1) the issuance
and sale of all shares of the Company's common stock subject to the
Distribution Agreement, or (2) the termination of the Distribution
Agreement as permitted therein, including by either party at any
time without liability of any party.
Any sales of Shares under the Distribution Agreement will be made
pursuant to the Company's Registration Statement on Form S-3 (File
No. 333-249410), including the related prospectus, filed with the
Securities and Exchange Commission on Oct. 9, 2020 and declared
effective on Oct. 19, 2020, as supplemented by the prospectus
supplement dated Sept. 9, 2022, and any applicable additional
prospectus supplements related to the Offering that form a part of
the Registration Statement. The aggregate market value of Shares
eligible for sale in the Offering and under the Distribution
Agreement will be subject to the limitations of General Instruction
I.B.6 of Form S-3, to the extent required under such instruction.
The Company intends to use the net proceeds from this offering for
general corporate purposes and for working capital.
About Plus Therapeutics
Headquartered in Austin, Texas, Plus Therapeutics, Inc. --
http://www.plustherapeutics.com-- is a clinical-stage
pharmaceutical company focused on the discovery, development, and
manufacturing scale up of complex and innovative treatments for
patients battling cancer and other life-threatening diseases.
Plus Therapeutics reported a net loss of $13.40 million for the
year ended Dec. 31, 2021, a net loss of $8.24 million on $303,000
for the year ended Dec. 31, 2020, a net loss of $10.89 million for
the year ended Dec. 31, 2019, a net loss of $12.63 million for the
year ended Dec. 31, 2018, and a net loss of $22.68 million for the
year ended Dec. 31, 2017. As of June 30, 2022, the Company had
$21.27 million in total assets, $11.59 million in total
liabilities, and $9.68 million in total stockholders' equity.
PRINCIPLE ENTERPRISES: Files Emergency Bid to Use Cash Collateral
-----------------------------------------------------------------
Principle Enterprises, LLC asks the U.S. Bankruptcy Court for the
Western District of Pennsylvania for authority to use cash
collateral and provide adequate protection.
The Debtor maintains four separate bank accounts in connection with
the operation of its business: (i) a general operating account
(ending in 8246) with KeyBank National Association, which KeyBank
sweeps daily and applies to the outstanding balance of a Revolving
Loan; (ii) a petty cash checking account (ending in 8410) with
KeyBank, which the Debtor uses for intermittent vendor
disbursements; (iii) a prefunding ACH account (ending in 5084) with
KeyBank, which the Debtor uses for prefunding and processing vendor
ACH payments; and (iv) a general checking account with First
Citizens Community Bank.
As of the Petition Date, the balance in each of the foregoing Bank
Accounts was $502,537, $0.00, $0.00, and $100, respectively. As of
the Petition Date, the Debtor's books and records reflect accounts
receivables in the estimated amount of $5,227,944.
The Debtor is obligated to Key Bank on account of (i) the Revolving
Loan in the original principal amount of $5,500,000; (ii) the Term
A Loan in the original principal amount of $8,300,000; and (iii)
the Term B Loan in the original principal amount of $7,616,892. The
KeyBank Loans are secured by a first-priority security interest in
all or substantially all of the Debtor's assets, including cash
collateral, subject only to certain liens other secured creditors
have in specific pieces of equipment.
As of the Petition Date the outstanding principal balance of the
KeyBank Loans, in the aggregate, is $15,761,180. As of the Petition
Date, the KeyBank Loans have matured and are due in full.
The Debtor also obtained a loan in the original principal amount of
$100,000 from the Pennsylvania Industrial Development Authority.
The PIDA loan is secured by a security interest all or
substantially all of the Debtor's assets, including Cash
Collateral, subject only to the liens securing the KeyBank Loans
and certain liens other secured creditors have in specific pieces
of equipment.
The Debtor intends to use cash collateral for: (i) working capital
and other operational expenses; (ii) permitted payment of costs of
administering the Chapter 11 Case; (iii) payment of such other
prepetition obligations as approved by the Court; (iv) payment of
monthly interest on the Revolving Loan; and (v) other general
business purposes of the Debtor permitted by the Budget.
After an extensive dialogue, the Debtor and KeyBank reached an
agreement on the final terms of the consensual use of cash
collateral, which include:
a. The Debtor will be permitted to use KeyBank's cash
collateral;
b. KeyBank has agreed to a Carve-Out of KeyBank's cash
collateral for payment of the Debtor's reasonable and necessary
professionals' fees and expenses in the amount of $500,000;
c. The Debtor stipulates to the amount, validity, perfection,
and enforceability of the KeyBank obligations; and
d. The Debtor is waiving surcharge rights available under
Sections 506(c) and 552(b) of the Bankruptcy Code;
e. As adequate protection for any diminution in the value of
the KeyBank Liens in favor of KeyBank caused by the Debtor's use of
the assets secured by the KeyBank Liens, the imposition of the
automatic stay in the bankruptcy case, and the subordination of the
KeyBank Liens to the Carveout or otherwise as a result of the
Proposed Orders, and to the extent that the Debtor uses KeyBank's
cash collateral and such use diminishes the value of the KeyBank
Liens, KeyBank will be provided the customary adequate protection
as set forth in the Proposed Orders;
f. KeyBank is receiving customary adequate protection
superpriority administrative expense claims as protection for any
diminution in value of the assets secured by KeyBank's valid
liens;
g. KeyBank and its advisors will receive customary 13-week
budgets and financial reports, including cash forecasts, for the
Chapter 11 Case, which rights will include KeyBank's ability to
suggest revisions to the budget; and
h. KeyBank will receive monthly interest payments on the
Revolving Loan to be applied, in its discretion, to accrued
interest and/or KeyBank's professionals' fees.
KeyBank has agreed to a carve-out not to exceed $500,000 for
professionals of the Debtor and professionals hired by any official
committee of unsecured creditors. The Carve-Out allocation will be
negotiated in good faith by and between the Debtor and a statutory
committee, if one is appointed in the case. The Debtor submits that
the treatment of the Debtors' and Committee's professionals under
the Carve-Out is substantially similar based on their respective
roles in the Chapter 11 Case.
A copy of the motion is available at https://bit.ly/3QDDJFz from
PacerMonitor.com.
About Principle Enterprises, LLC
Principle Enterprises, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21779) on
September 9, 2022. In the petition filed by Angelo Mark Papalia,
president of AMP Holdings, sole member, the Debtor disclosed up to
$50 million in both assets and liabilities.
Daniel R. Schimizzi, Esq., at Whiteford, Taylor & Preston, LLP is
the Debtor's counsel.
PRINCIPLE ENTERPRISES: Files for Chapter 11 Bankruptcy
------------------------------------------------------
Principle Enterprises LLC has sought Chapter 11 protection.
In April of 2008, the Debtor commenced its operations as a trucking
services
company focused on water hauling. In 2012, the Debtor split its
operations into 2 divisions -- trucking services and water
transfer.
The Debtor has two primary locations: (i) 6000 Towne Center
Boulevard, Suite 220, Canonsburg, Pennsylvania, 15317 (the
"Canonsburg Location"), where the Debtor maintains its executive
offices and manages the water transfer and trucking services; and
(ii) 2897 Route 414, Canton, Pennsylvania, 17724 (the "Canton
Location"), where the majority of the Debtor's employees report and
provide water transfer and trucking services to the Debtor's
customers.
As of the Petition Date, the Debtor employs 191 full and part-time
employees, of which approximately 117 report to the Canton Location
and 74 report to the Canonsburg Location.
For the 12 months ending Dec. 31, 2021, the Debtor recorded total
revenues of approximately $22,450,746, a decrease of approximately
$2,843,785 from the year ending December 31, 2020. The Debtor's
operating expenses for the twelve months ending December 31, 2021,
were $25,881,160, a decrease of approximately $7,000,000 from the
year ending December 31, 2020.
For the 12 months ended December 31, 2021, the Debtor reported a
net loss of
approximately $3,264,183.
The 12 months ending December 31, 2020, were far and away the worst
the Debtor has experienced since its inception. The COVID-19
pandemic had a material and adverse impact on the Debtor's
operations, causing its revenue to drop by approximately $8,000,000
in comparison to the prior year. Similarly, the Debtor reported a
loss in excess of $8,000,000 for 2020.
Business began to improve in 2021, but the chapter 11 bankruptcy of
Tilden Marcellus, LLC, one of the Debtor's main customers, resulted
in a write-off of over $700,000 in otherwise collectible
receivables. When coupled with the challenges faced in 2020, the
write-off from the Tilden Marcellus bankruptcy impaired the ability
of the Debtor to satisfy the claims of its vendors and, despite
valiant efforts, forced the Debtor out of compliance with the
covenants set forth in the KeyBank Loan Documents.
KeyBank Default
As of Aug. 3, 2022, and subject to all of the Debtor's available
claims, rights, and defenses, the outstanding principal balance of
the loans from
KeyBank National Association, in the aggregate, was $14,503,664.
As of the Petition Date, the KeyBank Loans have matured and are due
in full.
In February of 2021, KeyBank declared the Debtor to be in default
of the KeyBank Loan Documents for violating (i) the Fixed Charge
Covenant Ration (as defined in the KeyBank Loan Documents); and
(ii) the minimum quarterly EBITDA (as defined in the KeyBank Loan
Documents). In lieu of exercising its rights under the KeyBank Loan
Documents, the Debtor and KeyBank entered into the Forbearance
Agreements.
Following the 4th amendment to the original Forbearance Agreement,
on or about March 15, 2022, KeyBank and the Debtor entered into the
Agreement to Reinstate Forbearance and Loan Modification Agreement
for purposes of liquidating all or substantially all of the
Debtor's assets.
One of the primary goals of the Debtor was (and remains to this
day) preserving the employment for its almost 200 employees, the
Debtor conducted the initial process with the hopes the Debtor
would secure a purchaser that would continue to operate the
Debtor's business as a going concern. In furtherance of those
efforts, the Debtor retained Murphy McCormack Capital Advisors
("MCMA") as its investment bank to handle, inter alia, the
marketing of the Debtor’s business and negotiations with
prospective purchasers.
MCMA reviewed thousands of potential purchasers (including industry
purchasers and private equity firms), distributed solicitation
materials, and received interest from approximately 140 potential
purchasers. Of the 140 potential purchasers that expressed
interest, 14 signed confidentiality and non-disclosure agreements
and 4 submitted offers.
Ultimately the Debtor chose to pursue an asset sale with one party.
Following extensive negotiations on a letter of intent and binding
asset purchase agreement, the potential purchaser decided to pursue
other opportunities. As a result, KeyBank, as senior secured
lender, elected to pursue an asset sale in accordance with Article
9 of the PA UCC.
As the Article 9 sale process advanced, the Debtor had concerns
regarding whether the Article 9 sale would provide the maximum
value to its customers, vendors, employees, and stakeholders. As a
result, the Debtor determined that commencing a Chapter 11 case
would not only maximize the value of its business for the benefit
of all stake holders, but also enable the Debtor to preserve
optionality, enhance its existing business relationships, and
preserve the employment of its nearly 200 employees.
The Debtor filed a Chapter 11 case to preserve and potentially
avail itself of opportunities that will not only serve the best
interests of all stakeholders, but also preserve the employment of
its nearly 200 full and part-time employees.
According to court filing, Principle Enterprises estimates between
50 and 99 creditors. The petition states funds will be available
to unsecured creditors.
About Principle Enterprises
Principle Enterprises LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Pa. Case No. 22-21779) on Sept.
9, 2022. In the petition filed by Angelo Mark Papalia, as sole
member and president of AMP Holdings, Inc., the Debtor reported
assets and liabilities between $10 million and $50 million each.
The Debtor is represented by Daniel R. Schimizzi of Whiteford,
Taylor & Preston LLP.
REHME CUSTOM DOORS: Files Subchapter V Case With Plan
-----------------------------------------------------
Rehme Custom Doors & Lighting Inc. filed for chapter 11 protection
in the Southern District of Texas. The Debtor elected on its
voluntary petition to proceed under Subchapter V of chapter 11 of
the Bankruptcy Code.
With 44 employees, the Debtor designs and manufactures custom,
high-end stainless-steel windows and doors primarily for
residential applications.
Founded ten years ago, the Company has earned a reputation for
excellence and quality. The products are 100% American-made, are
fully recyclable and are themselves made from 95% recycled
materials.
The Company’s sales have historically varied between $2 million
to $3 million annually. Despite a downturn during the pandemic that
resulted in losses in 2020 and 2021, demand for the Company's
products rebounded quickly and has remained strong. The Company
returned to profitability in 2022.
About two years ago, the Company began receiving complaints about
rust appearing in certain legacy products fabricated from 1018 cold
rolled steel. The Company immediately worked to address the issue,
providing repairs and remediation. Despite these efforts, some
former customers remained unsatisfied and filed lawsuits against
the Company and others, including the unrelated companies that sold
and installed those products.
While the Company is confident it would prevail in this litigation,
and denies any liability, these lawsuits have created an
extraordinary drain on Company profits and management's time and
attention. The financial strain has become unsustainable, and, to
preserve its otherwise healthy business, the Company has elected to
reorganize through the bankruptcy process.
$500,000 Financing
On the Petition Date, the Company had aggregate noncontingent
liquidated debt of $2,463,210. As of the filing, the Company has
no secured debt but already owes Peter J. Rehme $2,163,679.36 on
account of four prepetition unsecured notes.
The Company's 100% owner and manager, Peter J. Rehme, has agreed to
extend
$500,000 in post-petition credit. The proposed facility would roll
up over $2 million in unsecured notes already owed to Rehme into a
new, secured obligation. Rehme would be entitled to interest only
payments at a rate of 3% per annum during a three-year subchapter V
plan period.
Subchapter V Plan
Granting postpetition secured status to the pre-petition unsecured
notes is reasonable in this unique situation. The Company's
proposed Plan sets aside the next three-years' Disposable Income
(as defined in the statute) for the benefit of unsecured creditors.
The roll-up improves the recovery of other unsecured creditors by
reducing the unsecured claims pool by over $2 million. (The Debtor
estimates the remaining claims pool to be in the range of $100,000
to $2.5 million, with the wildcard being the value of unresolved
litigation.) The rolled-up loan does not mature until after the
Plan Period, so the other unsecured creditors are only adversely
affected by the interest-only payments due during the Plan Period.
At the same time, all creditors are better off because the
post-petition financing, which is necessary to a successful
reorganization, makes the Plan feasible, and unsecured creditors
are better off under the Plan than in a liquidation scenario.
According to court documents, the Debtor 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. 5, 2022, at 1:00 PM. Proofs of claim are due by Jan. 3, 203.
About Rehme Custom Doors & Lighting
Rehme Custom Doors & Lighting Inc. builds quality steel frame
windows and doors.
Rehme Custom Doors & Lighting filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-50059) on Sept. 9, 2022.
Catherine Stone Curtis has been appointed as Subchapter V trustee.
The Debtor is represented by Jacqueline Chiba of Jones Murray LLP.
REVLON INC: Brandco Lenders Update Holdings After Loan Approval
---------------------------------------------------------------
In the Chapter 11 cases of Revlon, Inc., et al., the law firms of
Davis Polk & Wardwell LLP and Kobre & Kim LLP submitted a first
supplemental verified statement under Rule 2019 of the Federal
Rules of Bankruptcy Procedure, to provide an updated list of
holdings by the BrandCo Lenders.
In October 2020, a group formed by lenders under the BrandCo Credit
Agreement, dated as of May 7, 2020, by and among Revlon Consumer
Products Corporation, as borrower, Revlon, Inc. and Jefferies
Finance LLC, as administrative and collateral agent engaged Davis
Polk to represent it in connection with potential transactions with
or any restructuring of the Debtors. In April 2021, Kobre & Kim
entered into an engagement letter to represent the Ad Hoc Group of
BrandCo Lenders as conflicts counsel.
Counsel represents only the Ad Hoc Group of BrandCo Lenders,
members of which group are also lenders under the Debtors' Term DIP
Credit Agreement. Each member of the Ad Hoc Group of BrandCo
Lenders is aware of, and has consented to, Counsel's "group
representation" of the Ad Hoc Group of BrandCo Lenders. Counsel
does not represent or purport to represent any entities other than
the Ad Hoc Group of BrandCo Lenders in connection with the Chapter
11 Cases.
On June 16, 2022, Counsel submitted its first verified statement
pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure.
Counsel submitted this First Supplemental Statement to disclose
the BrandCo Lenders' reshuffled loan participations following
approval of the DIP Facility and Angelo Gordon's $160,000 interest
in a vendor put protection pact.
The Members of the Ad Hoc Group of BrandCo Lenders, collectively,
beneficially own, or are the investment advisors or managers for
funds that beneficially own (i) $831,164,668.03 in aggregate
principal amount of the Term B-1 Loans under the BrandCo Credit
Agreement, (ii) $805,159,545.78 in aggregate principal amount of
the Term B-2 Loans under the BrandCo Credit Agreement, (iii)
$14,556,202.87 in aggregate principal amount of the Excess Roll- up
Amount under the BrandCo Credit Agreement, (iv) $9,294,360.77 in
aggregate principal amount of the claim under that certain Term
Credit Agreement, dated as of September 7, 2016, by and among
Revlon Consumer Products Corporation, as borrower, Revlon, Inc. and
Citibank, N.A., as administrative agent and collateral agent, (v)
$9,515,000.00 in aggregate principal amount of 6.25% Senior Notes
due 2024 under that certain Indenture, dated as of August 4, 2016,
by and among Revlon Consumer Products Corporation, as issuer, and
U.S. Bank National Association, as trustee, (vi) $3,829,632.78 in
aggregate principal amount of the Tranche B Term Loans under that
certain Asset-Based Revolving Credit Agreement, dated as of
September 7, 2016, by and among Revlon Consumer Products
Corporation and the local borrowing subsidiaries, as borrowers,
Revlon, Inc., the lenders and issuing lenders party thereto, MidCap
Funding IV Trust, as administrative agent and collateral agent, and
Alter Domus (US) LLC, as tranche B administrative agent, (vii)
$451,141,368.66 in aggregate principal amount of the term loans
under that certain Superpriority Senior Secured
Debtor-in-Possession Credit Agreement, dated as of June 17, 2022,
by and among Revlon Consumer Products Corporation, as borrower,
Revlon, Inc., the lenders party thereto, and Jefferies Finance LLC,
as administrative agent and collateral agent, and (viii)
$160,000.00 of vendor put protection.
As of Sept. 13, 2022, members of the Ad Hoc Group of BrandCo
Lenders and their disclosable economic interests are:
Angelo, Gordon & Co., L.P.
245 Park Ave #26
New York, NY 10167
* $160,704,090.43 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $145,423,718.10 in aggregate principal amount of the Term B-2
Loans under the BrandCo Credit Agreement
* $54,974,475.78 in aggregate principal amount of the DIP Term
Loans
* $160,000 of vendor put protection
ASOF Holdings II, L.P.
c/o ASOF Investment Management
2000 Avenue of the Stars, 12th Floor
Los Angeles, CA 90067
* $66,946,161.00 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $21,968,150.00 in aggregate principal amount of the DIP Term
Loans
Cyrus Capital Partners, L.P.
65 E 55th St
New York, NY 10022
* $47,240,222.00 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $47,614,387.00 in aggregate principal amount of the Term B-2
Loans under the BrandCo Credit Agreement
* $30,384,208.00 in aggregate principal amount of the DIP Term
Loans
Deutsche Bank AG Cayman Islands Branch
c/o Deutsche Bank Securities Inc.
One Columbus Circle, 7th Floor
New York, New York 10019
* $19,425,010.00 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $170,267.00 in aggregate principal amount of the Term B-2 Loans
under the BrandCo Credit Agreement
* $275,552.00 in aggregate principal amount of the 2016 Term Loan
* $6,757,362.00 in aggregate principal amount of the DIP Term
Loans
Diameter Capital Partners LP
55 Hudson Yards Suite 29B
New York, NY 10001
* $81,021,458.49 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $45,957,134.26 in aggregate principal amount of the DIP Term
Loans
Glendon Capital Management L.P.
2425 Olympic Blvd, Suite 500E
Santa Monica, CA 90404
* $82,561,046.16 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $189,683,520.99 in aggregate principal amount of the Term B-2
Loans under the BrandCo Credit Agreement
* $11,024,713.51 in aggregate principal amount of the Excess Roll-
up Amount under the BrandCo Credit Agreement
* $9,515,000.00 in aggregate principal amount of the 2024 Senior
Notes
* $3,829,632.78 in aggregate principal amount of the Tranche B
Term Loans under the Asset-Based Revolving Credit Agreement
* $90,108,538.94 in aggregate principal amount of the DIP Term
Loans
King Street Capital Management, L.P.
299 Park Ave #40
New York, NY 10171
* $88,823,684.96 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $192,725,452.64 in aggregate principal amount of the Term B-2
Loans under the BrandCo Credit Agreement
* $90,444,296.88 in aggregate principal amount of the DIP Term
Loans
Nut Tree Capital Management, LP
55 Hudson Yards, 22nd Floor
New York, NY 10001
* $41,550,106.00 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $116,126,934.00 in aggregate principal amount of the Term B-2
Loans under the BrandCo Credit Agreement
Oak Hill Advisors, L.P.
1 Vanderbilt Ave 16th Floor
New York, NY 10017
* $215,411,019.66 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $84,150,580.05 in aggregate principal amount of the Term B-2
Loans under the BrandCo Credit Agreement
* $3,531,489.36 in aggregate principal amount of the Excess Roll-
up Amount under the BrandCo Credit Agreement
* $9,018,808.77 in aggregate principal amount of the 2016 Term
Loan
* $95,957,547.80 in aggregate principal amount of the DIP Term
Loans
140 Summer Partners Master Fund LP
1450 Broadway
New York, NY 10018
* $27,481,869.00 in aggregate principal amount of the Term B-1
Loans under the BrandCo Credit Agreement
* $29,264,686.00 in aggregate principal amount of the Term B-2
Loans under the BrandCo Credit Agreement
* $14,589,655.00 in aggregate principal amount of the DIP Term
Loans
Counsel to the Ad Hoc Group of BrandCo Lenders can be reached at:
DAVIS POLK & WARDWELL LLP
Eli J. Vonnegut, Esq.
Angela M. Libby, Esq.
Stephanie Massman, Esq.
450 Lexington Avenue
New York, NY 10017
Telephone: 212-450-4331
Facsimile: 212-701-5331
E-mail: eli.vonnegut@davispolk.com
angela.libby@davispolk.com
stephanie.massman@davispolk.com
- and -
KOBRE & KIM LLP
Danielle L. Rose, Esq.
Adam M. Lavine, Esq.
800 Third Avenue
New York, NY 10022
Telephone: 212-488-1209
Facsimile: 212-488-1220
E-mail: danielle.rose@kobrekim.com
adam.lavine@kobrekim.com:
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3QIliPW
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.
REWALK ROBOTICS: Names Michael Lawless as Chief Financial Officer
-----------------------------------------------------------------
The Board of Directors of ReWalk Robotics Ltd. appointed Michael A.
Lawless to serve as the Company's chief financial officer and
principal financial officer effective as of Sept. 19, 2022. Almog
Adar, the Company's Director of Finance, will continue to serve as
the Company's principal accounting officer.
On Sept. 2, 2022, the Company entered into an employment agreement,
effective as of the Effective Date, pursuant to which Mr. Lawless
will receive (i) an annual base salary of $300,000, subject to
increases as may be determined from time to time by the
compensation committee of the Board and (ii) an annual performance
bonus up to 35% of annual base salary, subject to the achievement
of objectives as determined by the compensation committee of the
Board, which will be pro-rated for the remainder of 2022. Mr.
Lawless will also receive as of the Effective Date, an inducement
grant of restricted share units for 225,000 ordinary shares in
accordance with Nasdaq Listing Rule 5635(c)(4), which vest in four
equal annual installments commencing as of the grant date. The
terms of the RSUs will be materially consistent with the Company's
form of RSU award agreements for employees and executive officers
as previously filed with the SEC.
The Employment Agreement is for an initial term of 12 months,
through Sept. 18, 2023. At the expiration of the Initial Term and
at the end of each subsequent Renewal Term (as defined therein),
the Employment Agreement shall be automatically renewed for an
additional twelve-month term; provided, however, that either party
may terminate the Employment Agreement, effective as of the last
date of the Initial Term or any subsequent Renewal Term, by
providing at least 90 days prior written notice. The Employment
Agreement also provides that the Company may terminate the
Employment Agreement immediately without providing prior notice in
the event of death or disability, or for cause. In the event that
Mr. Lawless' employment is terminated by the Company without cause
or if Mr. Lawless resigns for Good Reason, Mr. Lawless will be
entitled to a severance payment equal to (i) six months of his
then-current base salary, (ii) 50% of his annual discretionary
bonus, representing a pro-rated six month payment of the annual
discretionary bonus and (iii) the replacement cost of his benefits
for six months.
The Employment Agreement provides that if a change of control
occurs, and within 90 days prior or one year following such change
of control Mr. Lawless is terminated without cause or he resigns
for Good Reason, Mr. Lawless will be entitled to severance of 12
months' salary, an annual bonus (assuming achievement of 100% of
milestones and targets set by the board of directors), and the
replacement cost of his benefits for twelve months. In addition,
in the case of a Change of Control Event, the inducement RSUs
granted to Mr. Lawless will vest and become immediately exercisable
upon the effective date of termination of employment. The
Employment Agreement is governed by the laws of the Commonwealth of
Massachusetts and contains non-solicitation and non-competition
covenants (each of which remains in effect during the term of
employment and for a period of 12 months following termination of
employment) and trade secrets and inventions clauses.
Mr. Lawless, age 55, joins the Company from Danforth Advisors, LLC,
where he served as a CFO Consultant since April 2021. Previously,
Mr. Lawless served as a Division CFO of Azenta, Inc. (formerly
known as Brooks Automation, Inc.), a leading provider of life
sciences solutions worldwide, from October 2017 to December 2020,
and as Senior Director of Financial Planning and Analysis at Azenta
from February 2015 to October 2017. In addition, Mr. Lawless has
held senior level finance and investor relations positions for
numerous public life sciences companies throughout his career,
including PerkinElmer, Inc., where he served as both Vice President
of Financial Planning and Analysis and Vice President of Investor
Relations, as well as Aegerion Pharmaceuticals Inc. , Momenta
Pharmaceuticals, Inc., and CTI Molecular Imaging, Inc. Mr. Lawless
started his career as an investment banker at Lehman Brothers and
later as a securities analyst with MFS Investment Management, Inc.
Mr. Lawless' broad financial background in the life sciences
industry has given him significant experience in evaluating and
improving business performance, providing public company oversight,
leading investor relations, raising capital, and evaluating
acquisitions and other strategic transactions. Mr. Lawless has a
Bachelor of Arts degree in Economics from Swarthmore College, a
Master of Business Administration degree from the Tuck School of
Business at Dartmouth College and is a Certified Public
Accountant.
The Company said there are no arrangements or understandings
between Mr. Lawless and any other persons pursuant to which he was
appointed the Company's chief financial officer and principal
financial officer. There is no family relationship between Mr.
Lawless and any director, executive officer, or person nominated or
chosen by the Company to become a director or executive officer of
the Company. The Company has not entered into any transactions
with Mr. Lawless that would require disclosure pursuant to Item
404(a) of Regulation S−K under the Exchange Act.
About ReWalk Robotics
ReWalk Robotics Ltd. -- http://www.rewalk.com-- develops,
manufactures, and markets wearable robotic exoskeletons for
individuals with lower limb disabilities as a result of spinal cord
injury or stroke. ReWalk's mission is to fundamentally change the
quality of life for individuals with lower limb disability through
the creation and development of market leading robotic
technologies. Founded in 2001, ReWalk has headquarters in the
U.S., Israel and Germany.
ReWalk Robotics reported a net loss of $12.74 million for the year
ended Dec. 31, 2021, a net loss of $12.98 million for the year
ended Dec. 31, 2020, a net loss of $15.55 million for the year
ended Dec. 31, 2019, a net loss of $21.67 million for the year
ended Dec. 31, 2018, and a net loss of $24.72 million for the year
ended Dec. 31, 2017. As of March 31, 2022, the Company had $90
million in total assets, $4.81 million in total liabilities, and
$85.19 million in total shareholders' equity.
SAFE SITE: Amends Priority Tax Claims Pay Details
-------------------------------------------------
Safe Site Youth Development, Inc., d/b/a Save Site Child
Development submitted a Second Amended Disclosure Statement
describing Plan of Reorganization dated September 12, 2022.
Safe Site was founded as an in-home daycare in 2000. Safe Site
received its accreditation with Children Youth & Families
Department ("CYFD"), now known as Early Childhood Education and
Care Department ("ECECD") and was the first child care facility to
receive the five-tar accreditation in Valencia County.
It is the opinion of Pillar CPA's, the Debtor's counsel, and the
Debtor that the factors leading to the drop in available cash are
short-term in duration, and can be easily addressed to ensure that
long-term cash flow is not a problem. In addition, the Debtor has
successfully reduced its overall operational expenses, and
consistently shows a healthy monthly net income over expenses,
which should allow for payment of 100% of the claims filed by
creditors.
The principals of the Debtor, Felix and Sarah Candelaria, have a
pending lawsuit filed against them by Ilene Marchant, a personal
creditor with a claim against them and their prior business entity.
The lawsuit is pending in the Second Judicial District Court
against Felix and Sarah in their individual capacity for this
claim. This lawsuit has had no activity for over a year and is
subject to dismissal for lack of prosecution.
Should Ms. Marchant eventually obtain a judgment against Felix and
Sarah in their individual capacity, it is their opinion that it
will have no negative impact on their ability to run Safe Site
successfully. Any judgment against Felix and Sarah would be paid
from their individual salaries and not from any other income or
earnings of Safe Site.
The Debtor employs four insiders: Felix Candelaria, Sarah
Candelaria, Marissa Candelaria, and Miranda Gonzalez. The insiders
typically receive annual bonuses when there are excess funds
available after fulfilling certain programs for ECECD. The bonuses
are paid instead of reverting the funds to ECECD which could lower
the budget for the following year for certain programs. The Debtor
anticipates annual cost of living increases for the four insiders
during the pendency of the Chapter 11 case.
Upon the effective date of this Plan, Four Seas Los Lunas, LLC,
their successors, assigns and agents, including the agents of their
successors and assigns, if any, shall be enjoined from taking any
action to collect or liquidate the amount of the debt owed to them
by Felix and Sarah Candelaria as co-Debtors or guarantors of the
Debtors on the rejected Lease with Four Seas Los Lunas, LLC, as
long as the Debtor continues to make monthly payments to Four Seas
Los Lunas, LLC under the confirmed Plan.
In order to ensure the success of the reorganization and allow the
officers and directors to focus on business operations, the
Internal Revenue Service shall be enjoined from collecting the
trust fund portion of any taxes owed against any liable individual
so long as payments are being timely made under the Plan. Any
relevant statute of limitations affecting the collection of trust
fund tax liability shall be tolled while payments are being made
under the Plan.
Class 1 is the allowed priority claim of the Internal Revenue
Service and the New Mexico Taxation and Revenue Department, for
unsecured, priority taxes owed by the Debtor. The priority amounts
are small, the IRS amount is approximately $1,500.00, and the
Taxation and Revenue Department is approximate $170.00 on its
priority claim. This class shall not vote on the Plan.
Like in the prior iteration of the Plan, Class 3 general unsecured
claims will be paid 100% of their allowed claims.
The Debtor will fund the Plan payments through their operating
revenues.
A full-text copy of the Second Amended Disclosure Statement dated
September 12, 2022, is available at https://bit.ly/3BimzaX from
PacerMonitor.com at no charge.
Attorney for Debtor:
Dennis A. Banning
320 Gold Avenue NW, Suite 1401
Albuquerque, NM 87102
Phone: 505-503-1637
E-mail: dabgnmfinanciallaw.com
About Safe Site
Safe Site Youth Development, Inc., a company based in Los Lunas,
New Mexico, filed a petition for Chapter 11 protection (Bankr.
D.N.M. Case No. 21-11399) on Dec. 30, 2021, listing $1,277,033 in
assets and $1,741,417 in liabilities.  Felix and Sarah
Candelaria, site directors, signed the petition. Â
Judge Robert H. Jacobvitz oversees the case.
The Debtor tapped Dennis A. Banning, Esq., at New Mexico Financial
& Family Law, P.C. as legal counsel and Ronak Bhatt CPA, LLC as
financial advisor and accountant.
SAS AB: $700M Apollo Loan Approved With Reservations
----------------------------------------------------
Jeremy Hill of Bloomberg News reports that Apollo Global cleared to
lend $700 million to bankrupt airline SAS AB in 'unusual' deal.
US Bankruptcy Judge Michael Wiles on Friday, September 9, 2022,
approved a $700 million financing package for SAS AB from Apollo
Global Management, though he said features of the deal concern him.
The financing, divided into two $350 million draws, will allow
Apollo to convert the debt into stock in the bankrupt airline or
participate in an equity raise tied to SAS’s eventual exit from
Chapter 11 protection under certain circumstances. Wiles called the
financing "unusual" and questioned whether it was legally viable.
"I will approve the arrangement, although not without some
significant reservations," Wiles said in a hearing held by
telephone Friday. "To be honest, I still have some misgivings about
the whole idea."
Judge Wiles said the structure is akin to SAS selling options on
stock that does not yet exist, a concept he found legally murky.
While questioning SAS advisers in court, he asked whether the deal
might dissuade potential suitors for the airline from making
proposals that would ultimately be better for the company's
creditors.
Lawyers and bankers for SAS emphasized that the airline has the
ability to terminate Apollo's options by paying fees to the asset
manager. They also argued that the deal is a substantially cheaper
way to finance its operations than a standard loan arrangement and
is allowed under bankruptcy rules.
"I'm not going to, in the abstract and on abstract principles,
refuse to approve this," Judge Wiles said. "I note that I have no
objections before me."
SAS filed for bankruptcy in July 2022, succumbing to a heavy debt
load and dwindling cash in the wake of the pandemic.
About Scandinavian Airlines (SAS AB)
SAS SAB, Scandinavia's leading airline, with main hubs in
Copenhagen, Oslo and Stockholm, is flying to destinations in
Europe, USA and Asia. Spurred by a Scandinavian heritage and
sustainable values, SAS aims to be the global leader in sustainable
aviation. The airline will reduce total carbon emissions by 25
percent by 2025, by using more sustainable aviation fuel and our
modern fleet with fuel-efficient aircraft. In addition to flight
operations, SAS offers ground handling services, technical
maintenance and air cargo services. SAS is a founder member of the
Star Alliance, and together with its partner airlines offers a wide
network worldwide. On the Web: https://www.sasgroup.net
SAS AB and its affiliates, including Scandinavian Airlines Systems
Denmark-Norway-Sweden and Scandinavian Airlines of North America
Inc., sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 22-10925) on July 5, 2022. In the
petition filed by Erno Hildén, as authorized representative, the
Debtor SAS AB estimated assets between $10 billion and $50 billion
and liabilities between $1 billion and $10 billion.
Weil, Gotshal & Manges LLP is serving as global legal counsel and
Mannheimer Swartling Advokatbyra AB is serving as Swedish legal
counsel to SAS. Seabury Securities LLC and Skandinaviska Enskilda
Banken AB are serving as investment bankers, Seabury is also
serving as restructuring advisor. FTI Consulting is serving as
financial advisor. Kroll Restructuring Advisors is the claims
agent.
SAS AB: Gets Court Approval of $700M Loan From Apollo
-----------------------------------------------------
SAS AB announced Sept. 9, 2022, that the U.S. Bankruptcy Court for
the Southern District of New York has approved SAS'
debtor-in-possession ("DIP") financing credit agreement for USD 700
million with funds managed by Apollo Global Management.
On Aug. 14, 2022, SAS announced that it entered into a DIP
financing credit agreement for USD 700 million with Apollo, subject
to Court approval. The terms of the DIP financing credit agreement
approved by the Court Sept. 9, 2022, are substantially similar to
the terms previously announced by SAS.
Bloomberg News notes that the DIP loan is divided into two $350
million draws, and would allow Apollo to convert the debt into
stock in SAS and participate in an equity raise tied to the
airline's eventual exit from Chapter 11 bankruptcy. No SAS
creditors have objected to the financing and the airline could
reject the so-called equity-linked options in exchange for paying a
fee to Apollo, a lawyer for SAS said in a hearing held by telephone
Wednesday, September 7, 2022, said.
The DIP financing, along with cash generated from the Company's
ongoing operations, enables SAS to continue meeting its obligations
throughout the chapter 11 process.
Key Terms for DIP financing
The DIP financing will be provided by Apollo under a term loan
agreement by way of non-amortizing senior secured super-priority
debtor-in-possession delayed-draw term loan facility (the "DIP
Facility") in an aggregate principal amount of US$700 million (the
"Total Aggregate Commitment"), of which US$350 million will be
available following the Court's approval of the DIP Term Loan
Agreement, which is expected to take place in mid-September, and
satisfaction of certain conditions precedent under the DIP Term
Loan Agreement (the "Closing Date"). The remaining US$350 million
will be available upon the satisfaction of certain other conditions
precedent under the DIP Term Loan Agreement.
Loans under the DIP Facility will bear interest at a rate per annum
equal to adjusted term SOFR (Secured Overnight Financing Rate) plus
9.0 percent, payable in cash or in kind at the borrower's election,
which may be increased by 2.0 percent per annum during the
continuance of any event of default under the DIP Term Loan
Agreement.
The DIP Term Loan Agreement requires the payment of certain fees to
Apollo on the Closing Date; an upfront fee of 1.0 percent of the
Total Aggregate Commitment, an advisor fee of 1.0 percent of the
Total Aggregate Commitment, an unused commitment fee of 2.0 percent
of the unused amount of the Total Aggregate Commitment per annum
and an initial work fee of US$1 million. Moreover, certain fees are
payable upon the occurrence of specific events, including a
break-up fee of 1.0 percent of the Total Aggregate Commitment, and
an exit fee of 4.0 percent of the Total Aggregate Commitment.
Moreover, under the terms of the DIP Term Loan Agreement, in the
event Apollo elects, but is not provided the opportunity, to
subscribe for equity interests of the Company on the effective date
of the chapter 11 plan of reorganization (the "Effective Date"),
with the amount of such equity interests calculated assuming a
total enterprise value of the Company of US$3.2 billion, SAS shall
pay Apollo a fee equal to (a) if such fee event occurs within 12
months of the Closing Date, US$19.5 million; or (b) if such fee
event occurs after the 12-month anniversary of the Closing Date, an
amount such that Apollo receives an all-in internal rate of return
of 23.2 percent on the DIP financing.
In addition, the DIP Term Loan Agreement requires the payment of a
4.0 percent fee of the Total Aggregate Commitment in the event
Apollo elects, but is not provided the opportunity, to provide up
to 30.0 percent of any new money equity or equity-like financing
for the Company that is provided by any third party on the
Effective Date, on the same terms and conditions made available to
any such third parties.
The DIP Facility matures nine months after the Closing Date, but
may be extended for an additional three-month period, at the
election of the Company, up to three times, subject to the Company
paying an escalating extension fee equal to 0.75 percent (first
extension), 1.25 percent (second extension) and 1.50 percent (third
extension), respectively, of the Total Aggregate Commitment,
together with any accrued and unpaid interest or expenses.
The obligations of Scandinavian Airlines System
Denmark-Norway-Sweden (the "Consortium") as borrower under the DIP
Term Loan Agreement will be entitled to super priority
administrative expense claim status in the chapter 11 process and
will be guaranteed by the Company and all wholly-owned subsidiaries
of the Company that are or become debtors in the chapter 11 process
(the "Guarantors"). All amounts owing by the Consortium and the
Guarantors under the DIP Term Loan Agreement will be secured by
substantially all property of the Consortium and the Guarantors,
whether real or personal, tangible or intangible, now existing or
hereafter acquired (subject to certain customary exclusions),
including certain take-off and landing slots at Heathrow Airport;
all shares in certain entities of the SAS group, including the
Consortium and EuroBonus AB (which owns all rights to the EuroBonus
loyalty program); all material registered intellectual property;
certain unencumbered aircraft and engines; intercompany
receivables; and the products and proceeds of the foregoing.
The DIP Term Loan Agreement contains customary covenants, events of
default and representations and warranties. The Company has also
undertaken to comply with certain milestones customary for chapter
11 proceedings.
Anko van der Werff, President and Chief Executive Officer of SAS,
comments, "With the Court's approval of our DIP financing, we are
making important progress in our chapter 11 process. The DIP
financing agreement with Apollo followed an extensive and
competitive process that we conducted to achieve the best financing
outcome for SAS, and we are pleased that the Court has approved it.
I'd like to thank our employees for their hard work and
dedication, as well as our business partners for their support as
we continue moving through this process. We continue to make
progress with the SAS FORWARD plan, and our work to build a
competitive and even better airline for our customers."
About Apollo Global Management
Apollo Global Management is a leading alternative asset manager,
headquartered in the U.S. and operating globally. Apollo is listed
on the New York Stock Exchange (NYSE: APO). Apollo has more than
three decades of experience investing in and working with leading
management teams to build and transform their businesses. Apollo
provides companies with innovative capital solutions and support to
fund their growth and position businesses for long-term success.
About Scandinavian Airlines
SAS SAB, Scandinavia's leading airline, with main hubs in
Copenhagen, Oslo and Stockholm, is flying to destinations in
Europe, USA and Asia. Spurred by a Scandinavian heritage and
sustainable values, SAS aims to be the global leader in sustainable
aviation. The airline will reduce total carbon emissions by 25
percent by 2025, by using more sustainable aviation fuel and our
modern fleet with fuel-efficient aircraft. In addition to flight
operations, SAS offers ground handling services, technical
maintenance and air cargo services. SAS is a founder member of the
Star Alliance, and together with its partner airlines offers a wide
network worldwide. On the Web: https://www.sasgroup.net
SAS AB and its affiliates, including Scandinavian Airlines Systems
Denmark-Norway-Sweden and Scandinavian Airlines of North America
Inc., sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 22-10925) on July 5, 2022. In the
petition filed by Erno Hildén, as authorized representative, the
Debtor SAS AB estimated assets between $10 billion and $50 billion
and liabilities between $1 billion and $10 billion.
Weil, Gotshal & Manges LLP is serving as global legal counsel and
Mannheimer Swartling Advokatbyra AB is serving as Swedish legal
counsel to SAS. Seabury Securities LLC and Skandinaviska Enskilda
Banken AB are serving as investment bankers, Seabury is also
serving as restructuring advisor. FTI Consulting is serving as
financial advisor. Kroll Restructuring Advisors is the claims
agent.
PJT Partners LP is acting as financial advisor to Apollo, the DIP
lender. Akin Gump Strauss Hauer & Feld LLP is acting as legal
counsel to Apollo. Watson Farley & Williams LLP is acting as
special aviation counsel to Apollo.
SBL HOLDINGS: Fitch Affirms BB Rating on Preferred Debt
-------------------------------------------------------
Fitch Ratings has affirmed the 'A-' Insurer Financial Strength
(IFS) ratings of SBL Holdings, Inc.'s (SBL) primary life insurance
subsidiaries. Fitch has also affirmed SBL's Issuer Default Rating
(IDR) at 'BBB'. The Rating Outlook for SBL and its primary life
insurance subsidiaries are Stable.
KEY RATING DRIVERS
The Stable Outlook reflects near-term improvements in interest
rates. Despite this, long-term exposure to persistently low
interest rates could have a meaningful impact on results if current
rates are maintained.
SBL's ratings reflect its moderate business profile, strong
capitalization and leverage, strong operating results and
above-average exposure to interest rate and asset risk.
Fitch views SBL as having a "moderate" business profile on par with
the North American insurance sector and in line with the company's
rating category. This assesement is driven by SBL's moderate
operating scale and business concentration in the sale of
spread-based annuity products, primarily consisting of
fixed-indexed annuities (FIAs).
SBL's capitalization is strong. At year-end 2021, its RBC ratio was
402%, which falls in the 'aa+' category of Fitch's sector credit
factors. Based on year-end 2021 data, the company scored in the
'Very Strong' category of Fitch's Prism capital model, in line with
the prior year and Fitch's expectations for its rating category.
Going forward, Fitch expects that SBL will remain strongly
capitalized and that Prism will remain comfortably in the 'Very
Strong' category.
Financial leverage as measured by Fitch is likely to remain at or
below 25% and was 18% as of year-end 2021. Financial leverage is
driven primarily by senior unsecured notes and a revolver at SBL
used to fund growth and support the capital position of the
operating companies.
SBL's business strategy relies on the company's ability to capture
an adequate risk-adjusted spread above the company's cost of funds.
It accomplishes this through above-average exposure to structured
securities, and non-traditional short-term assets that Fitch views
as carrying an elevated level of risk. The company's ratio of risky
assets to total adjusted capital (TAC) of 183% at year-end 2021 was
materially above the industry average but more closely aligned with
annuity peers.
SBL continues to report strong and consistent operating earnings
despite the continued economic pressure through the successful
management of the company's cost of funds. Additionally, the
company's investment strategy has continued to provide adequate
investment spreads on new business, although Fitch expects that
investment income may be pressured long term.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- A material decline in Fitch's view of asset risk (including
the decline in short-term loans as a percentage of invested
assets) while maintaining PRISM score well into the "Strong"
category;
-- Financial leverage below 20%;
-- GAAP interest coverage greater than 10x;
-- GAAP Operating ROE of 15% or greater.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Deterioration in the quality of the asset portfolio;
-- Sustained deterioration in capital resulting in a Prism score
below the "Strong" category;
-- Deterioration in SBL operating performance such that GAAP
Operating ROE falls below 10% ;
-- GAAP interest coverage of less than 7x;
-- Financial leverage above 25%
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Prior
---- ------ -----
Security Benefit
Life Insurance
Company Ins Fin Str A- Affirmed A-
Security Benefit
Global Funding
senior secured LT A- Affirmed A-
First Security
Benefit Life
Insurance and
Annuity Company
of New York Ins Fin Str A- Affirmed A-
SBL Holdings Inc LT IDR BBB Affirmed BBB
senior unsecured LT BBB- Affirmed BBB-
preferred LT BB Affirmed BB
SINTX TECHNOLOGIES: Updates Stockholders on Rights Offering Terms
-----------------------------------------------------------------
SINTX Technologies, Inc. provided an informational update to its
security holders regarding its proposed rights offering and the
expected key dates and terms relative to the offering.
Security holders are advised that open market purchases of SINTX's
common stock be completed by Wednesday, Sept. 21, 2022 to be
considered a stockholder of record on Friday, Sept. 23, 2022.
Holders of the Company's Series B Preferred Shares, Series C
Preferred Shares, and warrants issued March 6, 2018, May 8, 2018,
May 14, 2018, and Feb. 6, 2020 are also entitled to participate in
the rights offering on the same terms as the common stockholders.
Security Holders or other interested parties are advised to direct
all questions and informational requests to the contacts listed
below.
Under the proposed rights offering, SINTX will distribute to the
Security Holders, at no charge, one non-transferable subscription
right for each share of common stock, share of Series B Preferred
Stock, share of Series C Preferred Stock, and each participating
warrant (on an as-if-converted-to-common-stock basis) held on the
record date. Each right will entitle the holder to purchase one
unit, at a subscription price of $1,000 per unit, consisting of one
share of Series D Convertible Preferred Stock with a face value of
$1,000 (and immediately convertible into shares of SINTX's common
stock at a conversion price equal to 90% of the lowest closing
price for a share of SINTX's common stock as quoted on the Nasdaq
Capital Market, during the five trading days prior to and including
Oct. 10, 2022), and warrants to purchase, at an exercise price
equal to the Conversion Price, a number of shares of SINTX's common
stock equal to $1,000 divided by the Conversion Price. The
warrants will be exercisable for five years after the date of
issuance and shall be redeemable as described in the preliminary
and final prospectus, when available.
The subscription rights are non-transferable and may only be
exercised during the anticipated subscription period of Sept. 26,
2022 through 5:00 p.m. ET on Monday, Oct. 10, 2022, unless extended
in the sole discretion of the Company.
The expected calendar for the rights offering is as follows:
* Wednesday, Sept. 21, 2022: Ownership Day -- in order to be
considered a stockholder of record on Friday, Sept. 23, 2022,
shares should be acquired by this date.
* Friday, Sept. 23, 2022: Record Date
* Monday, Sept. 26, 2022: Distribution Date; Subscription Period
Begins
* Monday, Oct. 10, 2022: Subscription Period Ends 5:00 p.m. ET
(unless extended at SINTX's sole discretion). Shareholders should
check with their respective brokerage firms to determine the cutoff
date for subscriptions as some brokerage firms require shareholders
to subscribe up to a few days in advance of the expiration of the
subscription period.
Holders who exercise their subscription rights in full will be
entitled, if available, to subscribe for additional units that are
not purchased by other stockholders, on a pro rata basis and
subject to ownership limitations.
SINTX has engaged Maxim Group LLC as dealer-manager in the rights
offering. Questions about the rights offering or requests for
copies of the preliminary and final prospectuses, when available,
may be directed to Maxim Group LLC at 300 Park Avenue, New York, NY
10022, Attention Syndicate Department, or via email at
syndicate@maximgrp.com or telephone at (212) 895-3745.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement
becomes effective. The rights offering, which is expected to
commence following the effectiveness of the registration statement,
is being made only by means of a written prospectus. A preliminary
prospectus relating to and describing the proposed terms of the
rights offering has been filed with the SEC as a part of the
registration statement and is available on the SEC's website at
www.sec.gov. Copies of the preliminary and final prospectuses for
the rights offering may be obtained, when available, from Maxim
Group LLC, 300 Park Avenue, New York, NY 10022, Attention Syndicate
Department, email: syndicate@maximgrp.com or telephone (212)
895-3745.
About SINTX Technologies
Headquartered in Salt Lake City, Utah, SINTX Technologies, Inc. --
https://ir.sintx.com -- is an OEM ceramics company that develops
and commercializes silicon nitride for medical and non-medical
applications. The core strength of SINTX Technologies is the
manufacturing, research, and development of silicon nitride
ceramics for external partners. The Company presently manufactures
advanced ceramics powders and components in its FDA registered, ISO
13485:2016 certified, and ASD9100D certified manufacturing
facility.
SINTX reported a net loss of $8.78 million for the year ended Dec.
31, 2021, a net loss of $7.03 million for the year ended Dec. 31,
2020, and a net loss of $4.79 million for the year ended Dec. 31,
2019. As of June 30, 2022, the Company had $17.49 million in total
assets, $5.45 million in total liabilities, and $12.05 million in
total stockholders' equity.
SOMERSET ACADEMY: S&P Affirms 'BB' Rating on Education Rev. Bonds
-----------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from positive and
affirmed its 'BB' rating on the Arizona Industrial Development
Authority's series 2021 education revenue bonds issued for Somerset
Academy of Las Vegas- Aliante and Skye Canyon Campus, Nev. S&P
Global Ratings also revised its outlook to stable from positive and
affirmed its 'BB' rating on the Arizona Industrial Development
Authority's series 2019A and 2019B education revenue bonds, issued
for Somerset Academy of Las Vegas--Lone Mountain Campus, Nev., and
on the Nevada State Department of Business & Industry's series
2015A, and 2018A charter school lease revenue bonds issued for
Somerset Academy of Las Vegas (Somerset).
"The outlook revision reflects feedback received from the
authorizer suggesting it would likely not act within the 2021-2022
school year to resolve the weak academic performance designation at
four campuses, which were issued as one notice of breach and three
notices of concern," said S&P Global Ratings credit analyst Robert
Tu.
Somerset had $136 million in long-term debt outstanding as of June
30, 2021, consisting of the series 2015, 2018, 2019 and 2021 bonds.
Somerset also has maintained an operating lease on the North Las
Vegas II campus, although management indicated it will not be
extending the lease at that location. Somerset was able to offer
all middle school students seats at existing campuses.
Somerset Academy is in Clark County, which covers more than 8,000
square miles in southern Nevada and encompasses Las Vegas, where
the charter school operates.
SP STAR: Seeks Approval to Hire W. Derek May as General Counsel
---------------------------------------------------------------
SP Star Enterprise Inc. seeks approval from the U.S. Bankruptcy
Court for the Central District of California to hire the Law Office
of W. Derek May as its general counsel.
The firm will render these services:
a. advise the Debtor concerning the requirements of the
Bankruptcy Court, the Federal Rules of Bankruptcy Procedure, the
Local Rules of the Central District of California; and with respect
to compliance with the requirement of the Office of the United
State Trustee;
b. advise the Debtor regarding matters of bankruptcy law,
including the rights and remedies of the Debtor in regard to its
assets and the claims of its creditors;
c. conduct examinations of witnesses, claimants, or adverse
parties with respect to any necessary or pending litigation arising
in Bankruptcy;
d. prepare and assist in the preparation of reports, accounts,
applications, motions, complaint, orders and or any other pleadings
of any kind required in the case;
e. represent the Debtor in any proceedings or hearings in this
Court and any proceedings in any other court where the Debtor's
rights under the Bankruptcy Code may be litigated or affected;
f. file any motion, applications or other pleadings
appropriate to effectuate the reorganization of the Debtor;
g. review claims filed in the Debtor's case, and, if
appropriate, to prepare and file objections to disputed claims;
h. assist the Debtor in negotiation, formulation, confirmation
and implementation of a Chapter 11 plan of reorganization;
i. assist the Debtor in negotiation with the Estate's secured
creditors or executory contracts;
j. serve as the Debtor's general insolvency counsel in
cooperation with any special counsel or other professional(s)
retained by the Debtor in the case;
k. represent the Debtor in any adversary proceedings filed in
the case; and
l. take such other action and perform such other services as
the Debtor may require of the firm in connection with its Chapter
11 case.
Derek May, Esq., the firm's attorney who will be providing the
services, will be paid at an hourly rate of $375.
The Debtor paid $15,000 to the law firm as a retainer fee.
Mr. May disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
Mr. May can be reached at:
Derek May, Esq.
Law Office of W. Derek May
400 N. Mountain Ave., Suite 215B
Upland, CA 91786
Tel: (909) 920-0443
Email: wdmlaw17@gmail.com
About SP Star Enterprise
Located in Los Angeles, California, Platinum Showgirls LA provides
an after-hours hangout with sexy dancers entertaining all night.
SP Star Enterprise Inc., doing business as Platinum Showgirls LA,
filed a petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. C.D. Cal. (Case No. 22-14502) on August 18, 2022. In the
petition filed by Mohan S. Makkar, as president, Debtor disclosed
at least $1 million in liabilities against assets of less than
$100,000.
Gregory Kent Jones has been appointed as Subchapter V trustee.
The Debtor is represented by W. Derek May, of the Law Office of W.
Derek May.
SPARTAN POOLS: Starts Subchapter V Bankruptcy Case
--------------------------------------------------
Spartan Pools LLC filed for chapter 11 protection in the District
of Nevada. The Debtor elected on its voluntary petition to proceed
under Subchapter V of chapter 11 of the Bankruptcy Code.
Spartan Pools 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 case:
Brian Shapiro
510 S. 8th Street
Las Vegas, NV 89101
Phone: (702) 386-8600
Email: brian@trusteeshapiro.com
About Spartan Pools
Spartan Pools LLC is a swimming pool contractor in Las Vegas,
Nevada.
Spartan Pools LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 22-13244) on Sept. 9,
2022. In the petition filed by Carlos Tapia, as manager, the
Debtor reported assets and liabilities between $500,000 and $1
million.
The Debtor is represented by Zachariah Larson of LARSON & ZIRZOW,
LLC.
SPRINGFIELD HOUSE: Bed and Breakfast in Chapter 11
--------------------------------------------------
Springfield House Bed and Breakfast LLC has sought bankruptcy
protection. The Debtor elected to proceed as a small business
debtor seeking relief under Subchapter V of Chapter 11 of the
Bankruptcy Code.
The Debtor is a small bed and breakfast operating in rural
Pennsylvania. It says it sought bankruptcy protection to stop a
scheduled sheriff's sale of its property.
According to court documents, Springfield House Bed and Breakfast
estimates between 1 and 49 creditors. The petition states that
funds will be available to unsecured creditors.
About Springfield House Bed and Breakfast
Springfield House Bed and Breakfast LLC filed a petition for relief
under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr.
M.D. Pa. Case No. 22-01675) on Sept. 7, 2022. In the petition
filed by John J. Johnson II, as chief executive manager, the Debtor
reported assets between $500,000 and $1 million and estimated
liabilities between $500,000 and$1 million.
Lisa Ann Rynard has been appointed as Subchapter V trustee.
The Debtor is represented by Brent Diefenderfer of CGA Law Firm.
STANDING OVATION: Lender Seeks to Prohibit Cash Collateral Access
-----------------------------------------------------------------
NYMT Commercial Acquisitions, LLC, a secured creditor of Standing
Ovation Renovations LLC, asks the U.S. Bankruptcy Court for the
Northern District of Georgia, Atlanta Division, to prohibit the
Debtor from using cash collateral without provision for adequate
protection of NYMT's interests in the cash collateral.
The Debtor is indebted to NYMT, as successor to Flip Funding, LLC,
pursuant to several notes executed by the Debtor on July 23, 2021,
in the original principal amount of $136,500. The Note is secured
by the Security Deed, Assignment of Leases and Rents, Security
Agreement and Fixture Filing dated October 15, 2021.
On May 6, 2022, Flip assigned its interest in the Loan Documents to
NYMT. Accordingly, NYMT is the present holder of the Loan Documents
and is a secured creditor of the Debtor with a first-priority
security interest in the Properties and the revenues generated
thereby.
As of September 2, 2022, at least $3,347,806 is owed under the Loan
Documents. In its Petition, Debtor listed the value of the
collateral securing the Loan Documents as $0.
On August 5, 2022, NYMT provided written notice to the Debtor of
its defaults under the Loan Documents and accelerated the
indebtedness. On September 2, 2022, NYMT provided written notice to
the Debtor that it was going to conduct a foreclosure sale of the
Properties on October 4, 2022.
The Debtor is in default under the Loan Documents because, among
other things, the Debtor failed to make monthly payments pursuant
to the Loan Documents beginning with payments due January 2022 and
failed to pay the entirety of the amounts owed under the Loan
Documents on or before August 1, 2022, the maturity date of each of
the Notes.
The Debtor has not filed a motion to use cash collateral nor has
the secured creditor approved the Debtor's use of its cash
collateral. Because the Debtor has not moved for permission to use
the NYMT cash collateral or provided an adequate explanation for
how cash collateral is being or was spent, NYMT objects to the
continued use of its cash collateral by the Debtor unless adequate
protection payments are provided sufficient to cover the diversion
of any of the secured creditor's collateral away from the secured
creditor as well as any diminution in value of the collateral.
A copy of the motion is available at https://bit.ly/3TW8wjT from
PacerMonitor.com.
About Standing Ovation Renovations LLC
Standing Ovation Renovations LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. Case
22-57071) on September 6, 2022.
NYMT Commercial Acquisitions, LLC, as secured creditor, is
represented by:
Lisa Wolgast, Esq.
Talia B. Wagner, Esq.
Morris, Manning and Martin, LLP
3343 Peachtree Road, N.E., Suite 1600
Atlanta GA 30326
STORED SOLAR: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Stored Solar Enterprises, Series LLC
1231 Main Rd
Enfield, ME 04493-4407
Business Description: The Debtor owns and operates seven biomass-
fueled, renewable energy generating
facilities located in Maine, Massachusetts
and New Hampshire. The Plants produce
electric energy which is transmitted into,
and earns payments from, the ISO New England
power grid.
Chapter 11 Petition Date: September 14, 2022
Court: United States Bankruptcy Court
District of Maine
Case No.: 22-10191
Debtor's Counsel: George J. Marcus, Esq.
MARCUS CLEGG
16 Middle St Ste 501
Portland, ME 04101-5166
Email: bankruptcy@marcusclegg.com
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by William Harrington as manager.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/FYZB2PI/Stored_Solar_Enterprises_Series__mebke-22-10191__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Anderson Timber $76,345
Harvest Inc.
12 Woods Rd
Westminster, MA
01473-1127
2. Chris Pirner Logging $96,682
152 Williamsville Rd
Hubbardston, MA
01452-1318
3. Chuck Rose Inc. $74,766
100 Chase Farm Rd
Hopkinton, NH
03229-2900
4. D H Hardwick & Sons $65,000
PO Box 430
Antrim, NH
03440-0430
5. Emera Maine $101,041
PO Box 11008
Lewiston, ME
04243-9459
6. Eversource $223,274
PO Box 56003
Boston, MA
02205-6003
7. GTL Forest Products $98,643
PO Box 10
Westminster, MA
01473-0010
8. H.C. Haynes, Inc. $674,303
PO Box 96
Winn, ME
04495-0096
9. JB Sawmill & $141,074
Landclearing Inc.
51 Fisher St
Westborough, MA
01581-1823
10. John Brown & Sons $144,804
14 B and B Ln
Weare, NH
03281-5902
11. Keiths Tree Service $91,238
465 Water St
Wakefield, MA
01880-3516
12. Ken Mitchell $56,577
Trucking Inc.
1622 Randolph Rd
Morrisville, VT
05661-8154
13. New England Tree Masters $75,220
871 Massachusetts Ave
Boxborough, MA
01719-1410
14. Round II Timber LLC $74,623
431 NH Route 119 E
Fitzwilliam, NH
03447-3153
15. Soini Corporation $145,613
37 Fort Hill Rd
Oxford, MA
01540-231
16. TJ Epson & Son LLC $77,063
40 Howe Rd
Spencer, MA
01562-2712
17. Timber CO $98,479
32 Harbor St
Pepperell, MA
01463-1224
18. Town of Westminster $161,119
11 South St
Westminster, MA
01473-1534
19. U.S. Small Business $150,000
Administration
2 North St Ste 320
Birmingham, Al 35201
20. Worster Holdings $888,070
125 Pit Rd
Columbia Falls, ME
04623-5116
SUNGARD AVAILABILITY: Dual-Track Plan Headed for Creditor Vote
--------------------------------------------------------------
Rick Archer of Law360 reports that a Texas bankruptcy judge on
Wednesday sent the Chapter 11 plan of information technology
company Sungard Availability Services out for a creditor vote, with
the final result of the plan still depending on whether Sungard can
find a buyer for the last of its assets.
At a hearing, U.S. Bankruptcy Judge David R. Jones approved a plan
disclosure statement outlining a process that will either end in
the sale of all of Sungard's assets or a debt-for-equity swap by a
smaller, reorganized company. Pennsylvania-based Sungard, which
provides corporate IT services, filed for Chapter 11 in April
2022.
About Sungard AS New Holdings LLC
Sungard Availability Services is Wayne, Pennsylvania-based
information-technology services provider owned by Angelo Gordon,
Blackstone Credit, FS/KKR Advisor LLC and Carlyle Group Inc.
Sungard Availability Services sought Chapter 11 bankruptcy
protection (Bankr. S.D. Tex. Case No. 22-90018) on April 11, 2022.
In the petition filed by Sungard Availability Services LP, as Chief
Executive Officer and President of Sungard AS New Holdings, LLC,
listed estimated assets and liabilities up to $1 billion each.
The case is assigned to Honorable Judge Judge David Jones.
The Debtor's counsels are Philip Dublin, Meredith Lahaie, Marty
Brimmage, Lacy Lawrence and Zach Lanier of Akin Gump Strauss Hauer
& Feld; and Matthew Cavenaugh, Jennifer Wertz and Rebecca Blake
Chaikin of Jackson Walker.
SYMPLR SOFTWARE: S&P Alters Outlook to Negative, Affirms 'B-'ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Houston-based Symplr
Software Intermediate Holdings Inc. to negative from stable and
affirmed its 'B-' issuer credit rating.
S&P said, "The negative outlook reflects our view that if Symplr's
EBITDA remains suppressed in the second half of 2022 with limited
prospects for improvement in 2023, financial metrics may no longer
be commensurate with a 'B-' rating. It also reflects our view that
ongoing investments to support its organic revenue growth, combined
with the higher interest rate environment, could lead the company
to sustain free operating cash flow (FOCF) deficits. We believe
there is significant execution risk to drive profitability and any
operational misstep or unforeseen industry downturn could result in
constrained liquidity.
"Our outlook reflects our belief that Symplr's ability to generate
continuous positive cash flow may be more precarious than we
previously expected, especially against the backdrop of interest
rate increases and multiyear efforts to integrate its acquisitions.
In the first half of 2022, the company's bookings mix has shifted
toward recurring services and access management products, which
while favorable for revenue stability, have a longer billings
recognition and cash-collection period compared with a typical
software as a service (SaaS) booking and no associated
implementation and hardware needs. While we expect the booking
profile to be more heavily weighted toward SAAS and workforce
management in the second half of the year, and despite a decrease
in operating expenses this year, we believe absent material
improvement, Symplr will only modestly cover its fixed costs and
has little room for error. Nevertheless, with no debt maturities
until 2025, a somewhat flexible cost structure, and an expectation
the company will halt acquisitions and delay certain projects if
necessary in response to unfavorable business, financial or
economic conditions, or internal setbacks, we believe the company
still has time to grow into its capital structure via EBITDA
growth."
Minimal historical cash flows and very high leverage reflect the
company's willingness to operate aggressively. While Symplr has
acquired higher-growth products such as GreenLight Medical, Phynd
and Spinfusion, it also looks for value in acquiring products that
require investment and have longer paths to growth, such as
HealthSource and Tractmanager. S&P said, "The company's numerous
acquisitions and associated investments in research and development
(R&D) and sales and marketing to increase organic growth prospects,
as well as significant acquisition-related costs, which we view as
recurring based on the company's track record, are impairing
short-term EBITDA and cash flow. Most recently, the company
acquired GreenLight Medical (March 2022) and Midas (February 2022)
even as it continues to integrate and invest in Halo (October
2021), HealthcareSource (June 2021), Phynd (Feb 2021), and
TractManager (Dec 2020) and spending on software development
internally. As such, even if the company paused acquisitions, it
would continue to require investment in previously acquired
products and have ongoing costs associated with supporting multiple
back-ends. S&P also expect over the coming few years the company
will need to invest more to shift to the cloud and integrate all
products onto one platform, which could temporarily burden EBITDA
for two to three years.
The company may require external sources of capital due to ongoing
cash flow deficits; a significant increase in revenue and cost
management will be required to raise EBITDA to sustainable levels.
S&P said, "Burdened by acquisition and integration costs, we expect
the company to report its third consecutive year of free operating
cash flow deficits in 2022. The company's expected below-1x EBITDA
interest coverage in 2022 and diminished liquidity, and breakeven
EBITDA interest coverage in 2023, leads us to believe it may not
independently sustain its capital structure over the next several
years, especially with the required level of internal investments.
Absent significant improvement in EBITDA in the second half of 2022
stemming from previous acquisitions and new bookings, combined with
lesser acquisition and integration costs, labor reductions and
other cost-cutting measures, we no longer believe Symplr can
comfortably meet its financial commitments on its own without
external capital infusions, even if it halts acquisitions. Finally,
while we believe the company can continue to grow even if it cuts
back on or delays some internal spending, we consider that material
cuts in operating expenditures may be detrimental to future
growth."
S&P said, "The negative outlook reflects our view that if Symplr's
EBITDA remains suppressed in the second half of 2022 with limited
prospects for improvement in 2023, financial metrics may no longer
be commensurate with a 'B-' rating. It also reflects our view that
ongoing investments to support its organic revenue growth, combined
with the higher interest rate environment, could lead the company
to sustain FOCF deficits. We believe there is significant execution
risk to drive profitability and any operational misstep or
unforeseen industry downturn could result in constrained
liquidity.
"We could lower the rating on Symplr any time within the next 12
months if significant improvement in revenue and EBITDA do not
materialize or unforeseen challenges arise, causing the company to
sustain negligible cash flow and leading us to believe Symplr can
no longer comfortably meet its financial commitments without
assistance from its sponsor, even if it halts acquisitions. We
could also lower the rating if there is a near-term liquidity
shortfall, likely from internal disruptions or an overly aggressive
pace of investments and acquisitions.
"We could revise the outlook to stable if the company materially
improved free operating cash flow (after capital expenditures),
leading us to believe its cash flow generation will approach at
least breakeven and EBITDA margins, burdened by integration and
capitalized software costs, will be sustained above 30%."
ESG credit indicators: E2 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 the
controlling owners, in line with our view of the majority of rated
entities owned by private-equity sponsors. Our assessment also
reflects the generally finite holding periods and a focus on
maximizing shareholder returns."
THIRD FLOOR PROPERTIES: Office Buildings Owner Enters Chapter 11
----------------------------------------------------------------
Third Floor Properties LLC filed for chapter 11 protection in the
Western District of Louisiana.
The Debtor has operated as the owner of certain office buildings
and other
properties since 2018.
In order to facilitate preparation of a Plan of Reorganization, the
Debtor says a date should be set as the last day for filing proofs
of claim pursuant to the provisions of Federal Rules of Bankruptcy
Procedure 3003(c)(3). The Debtor suggests that December 31, 2022,
is an appropriate for setting of the last date for filing claims
According to court documents, Third Floor Properties LLC estimates
between 1 and 49 unsecured creditors. The petition states funds
will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 3, 2022 at 1:00 p.m., Telephonically: call 866-762-6425,
Passcode: 8530051#.
About Third Floor Properties
Third Floor Properties LLC filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. W.D. La.
Case No. 22-20303) on September 9, 2022. In the petition filed by
Jason A. Thomas, as managing member, the Debtor reported assets and
liabilities between $1 million and $10 million each.
Lucy G. Sikes has been appointed as Subchapter V trustee.
The Debtor is represented by Thomas R. Willson.
USA COMPRESSION: Fitch Affirms BB- IDR & Alters Outlook to Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Rating
(IDR) of USA Compression Partners, LP (USAC or partnership) at
'BB-' and the senior unsecured ratings of USAC and co-issuer USA
Compression Finance Corp.'s senior unsecured notes at 'BB-'/'RR4'.
Fitch has also affirmed USAC's senior secured rating on USAC's
secured asset-based revolving credit facility at 'BB+'/'RR1.' The
Rating Outlook has been revised to Stable from Negative.
The Stable Outlook reflects run-rate leverage of approximately
5.5x, as supported by the move up in utilization from a lengthy
plateau. In the second quarter of 2022, utilization rates increased
from trough levels, ending the period at 88%. The upward trend
supports Fitch's belief that leverage will remain at or below the
downgrade sensitivity throughout the forecast period.
USAC's ratings are reflective of its size/scale and geographic
diversity. Credit concerns include USAC's large distribution to
common unitholders and its high expected leverage relative to other
'BB' companies in the midstream sector. The ratings also consider
that USAC's cash flow is supported by fixed-fee based contracts
with a diverse set of counterparties.
USAC's contract tenor is relatively short, with approximately 30%
of revenue tied to compression services provided on a
month-to-month basis to customers. Fitch notes that USAC has a
strong history of retaining customers and has long-term
relationships with its largest counterparties.
KEY RATING DRIVERS
Utilization Improving: In the first half of 2022, USAC's
utilization rates have increased from the 2021 lows. In early 2020,
due to disruptions from the pandemic, utilization dropped from the
long-term average of 92% to 82% in 2021. As of 2Q22, the rate has
bounced back to 88.4%. Consequently, as demand for compression
services increased, USAC has ramped up growth capital expenditures,
refurbishing old units for new contracts and adding new machines to
the fleet.
Fitch expects USAC to reach pre-pandemic utilization rates in the
next couple years and gradually increase total fleet horsepower
though capital expenditures. Fitch will closely monitor the
partnership's ability to increase utilization.
Stable Leverage: Leverage, defined as total debt with equity
credit-to-EBITDA, in 2021 was 5.6x, higher than Fitch's expectation
of 5.4x. Lower utilization levels persisted throughout the year,
resulting in lower than anticipated EBITDA. Fitch forecasts that
leverage will stabilize at or slightly below Fitch's downgrade
sensitivity of 5.5x. Above this level, Fitch may consider taking a
negative rating action. EBITDA is anticipated to increase steadily
as utilization returns to its long-term average and new compression
is added to the fleet via growth capital expenditures.
The partnership's debt is expected to increase in lockstep with
EBITDA, keeping leverage in the 5.4x-5.5x range. Fitch believes the
partnership will continue to increase borrowings on its revolving
credit facility to maintain its distribution to common shareholders
and support capital expenditures.
Stable Cash Flows: USAC's contracts are 100% fixed-fee, take-or-pay
contracts with no volumetric or commodity price-based revenues.
USAC has a strong track record of average fleet horsepower
utilization going back to 2007 of approximately 92%. In 2021,
approximately 33% of compression services were provided on a
month-to-month basis. As a result, average contract length is
relatively short, but USAC has historically had a strong track
record with renewals.
USAC's focus on larger horsepower, midstream focused compression
applications (like regional gathering, gas processing plant
compression and central gathering with unit specific contracts)
provides it some competitive advantages and creates high barriers
to exit for some customers, making USAC's services costly to
replace.
Counterparty and Geographic Diversification: In the 1H22, the
partnership's largest customer only accounted for 9% of revenues.
The next biggest customer was 6% of revenues, and the top 10
provides less than 40% of revenues. The company is also
geographically diversified with operations in five different
basins. Measured by horsepower, the Permian and Appalachia are
USAC's top basins, accounting for roughly 37% and 27% of the
partnership's assets, respectively. Fitch Oil & Gas is particularly
constructive on these regions.
Parent Subsidiary Rating Linkage: There is a parent subsidiary
relationship between USAC and its parent Energy Transfer LP (ET;
BBB-/Stable). Fitch determines ET's standalone credit profile (SCP)
based on consolidated metrics. Fitch believes ET has a stronger SCP
than USAC. As such, Fitch has followed the stronger parent path.
Legal incentive to support is low given the lack of guarantees in
place. Strategic incentive is also low as USAC does not contribute
substantially to ET's financial profile and does not offer
significant competitive advantages. However, it does offer
long-term growth potential. Operational incentive is low as USAC
has a separate management team.
Due to the aforementioned linkage considerations, Fitch rates USAC
on a standalone basis. Despite the lack of explicit rating
linkages, Fitch views the ownership dynamic as supportive of the
company's credit quality.
DERIVATION SUMMARY
As a lessor of compression equipment, USAC is uniquely positioned
in Fitch's midstream coverage. Based on other business features,
EBITDA size and presence in the Appalachia basin, DT Midstream,
Inc. (DTM; BB+/Stable) is USAC's closest peer. Over 80% of DTM's
revenue comes from take-or-pay contracts. With an average contract
length of nearly nine years, DTM has significantly longer
agreements than USAC does.
Offsetting this, USAC has a more diversified customer base and less
customer concentration, i.e. no customer exceeds 10% of contracted
capacity. DTM's largest customer is a high yield issuer that
accounts for nearly 50% of revenue. Overall Fitch regards USAC's
business risk as higher than that of DTM. Fitch expects DTM to post
2022 leverage of approximately 4.1x. Due to lower leverage and
lower business risk, DTM is rated two notches above USAC.
KEY ASSUMPTIONS
-- Fitch base case price deck, e.g., Henry Hub natural gas price
in 2022 and 2023 of $6.25/mcf and $4.00/mcf, respectively;
-- Base interest rate applicable to the revolving credit facility
reflects the Fitch Global Economic Outlook, e.g., 3.5% for
2023 and 2024;
-- EBITDA rises from the combined impact of utilization rates
returning to their long-term trend, new horsepower from growth
capital expenditures (company guidance for 2022 and $50MM from
2023-2025) and steady contract rates ($17.2 Rev/HP/Month, the
average 2Q22 rate);
-- Current rate of distribution/unit maintained.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Leverage (total debt with equity credit/Operating EBITDA) at
or below 5.0x on a sustained basis could lead to an upgrade;
-- An increase in size and contract term while maintaining
leverage below 5.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Leverage, previously defined, above 5.5x on a sustained basis,
inclusive of preferred equity receiving 50% debt treatment;
-- Distribution coverage below 1.0x on a sustained basis.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Acceptable: Fitch considers USAC's liquidity to be
acceptable and remain so over the near to intermediate term. USAC
currently has a $1.6 billion revolving credit facility that matures
in December 2026. USAC has the option to increase the amount of
total commitments under the revolving credit facility by $200
million, subject to receipt of lender commitments and satisfaction
of other conditions.
As of June 30, 2022, USAC had outstanding borrowings of $558.7
million with borrowing base availability (based on USAC's borrowing
base) of $1.0 billion and available borrowing capacity of $360.9
million under its covenants. Fitch expects the company to increase
revolver borrowings in the upcoming years, reducing availability.
Availability will be reduced further if the borrowing base is
decreased.
Financial covenants permit a maximum funded debt to EBITDA ratio of
5.5x, reduced to 5.25x after 3Q23. Other covenants include, a
minimum EBITDA to interest coverage ratio of 2.5x and secured debt
to EBITDA of no greater than 3.0x. USAC was in compliance with its
covenants as of June 30, 2022. USAC's Maturities are limited with
the nearest term maturity being the 2026 senior notes.
ISSUER PROFILE
USAC provides compression services in the United States of
America.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has applied 50% equity credit to USAC's preferred equity
units. The securities are subordinate to all senior debt, and Fitch
expects that management will keep the preferred equity as a
permanent portion of its capital structure, the instrument permits
the deferral of coupon payments (on a cumulative basis), and
effective maturity is greater than five years.
There is a holder option for a cash redemption in the event of a
change of control. Fitch views this option as non-material as Fitch
believes that management's intent with the preferred was to create
a junior security that qualifies for 100% equity treatment under
its revolving credit facility.
ESG CONSIDERATIONS
USA Compression Partners, LP has an ESG Relevance Score of '4' for
Group Structure due to related party transactions and ownership
concentration. ET operates a large gas gathering and processing
business, and ET leases compression from USAC, amounting to an
immaterial amount of USAC revenues.
These matters have a negative impact on the credit profile, and is
relevant to the ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
RATING ACTIONS
Rating Prior
------ -----
USA Compression Partners, LP LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR1 BB+
USA Compression Finance Corp.
senior unsecured LT BB- Affirmed RR4 BB-
VBI VACCINES: Linda Bain Quits as Director
------------------------------------------
Linda C. Bain tendered her resignation from the Board of Directors
of VBI Vaccines Inc. and all committees thereto, effective
immediately.
Ms. Bain's resignation was to enable her to focus on operational
responsibilities and was not in connection with any dispute or
disagreements with the Company on any matter relating to the
Company's operations, policies, or practices, as disclosed in a
Form 8-K filed with the Securities and Exchange Commission.
About VBI Vaccines
VBI Vaccines Inc. -- www.vbivaccines.com -- is a biopharmaceutical
company driven by immunology in the pursuit of powerful prevention
and treatment of disease. Through its innovative approach to
virus-like particles ("VLPs"), including a proprietary enveloped
VLP ("eVLP") platform technology, VBI develops vaccine candidates
that mimic the natural presentation of viruses, designed to elicit
the innate power of the human immune system. VBI is committed to
targeting and overcoming significant infectious diseases, including
hepatitis B, coronaviruses, and cytomegalovirus (CMV), as well as
aggressive cancers including glioblastoma (GBM). VBI is
headquartered in Cambridge, Massachusetts, with research operations
in Ottawa, Canada, and a research and manufacturing site in
Rehovot, Israel.
VBI Vaccines reported a net loss of $69.75 million for the year
ended Dec. 31, 2021, compared to a net loss of $46.23 million for
the year ended Dec. 31, 2020. As of June 30, 2022, the Company had
$172.16 million in total assets, $40.53 million in total current
liabilities, $26.07 million in total non-current liabilities, and
$105.56 million in total stockholders' equity.
Iselin, New Jersey-based EisnerAmper LLP, the Company's auditor
since 2016, issued a "going concern" qualification in its report
dated March 7, 2022, citing that the Company has an accumulated
deficit as of Dec. 31, 2021, and cash outflows from operating
activities for the year-ended Dec. 31, 2021 and, as such, will
require significant additional funds to conduct clinical and
non-clinical trials, achieve regulatory approvals, and subject to
such approvals, commercially launch its products. These factors
raise substantial doubt about its ability to continue as a going
concern.
W&T OFFSHORE: BlackRock Acquires 4.7% Equity Stake
--------------------------------------------------
BlackRock, Inc. disclosed in a Schedule 13G filed with the
Securities and Exchange Commission that as of Aug. 31, 2022, it
beneficially owns 6,692,976 shares of common stock of W&T Offshore,
Inc., representing 4.7 percent of the shares outstanding. A
full-text copy of the regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1288403/000083423722010637/us92922p1066_090722.txt
About W&T Offshore
W&T Offshore, Inc. -- http://www.wtoffshore.com-- is an
independent oil and natural gas producer with operations offshore
in the Gulf of Mexico and has grown through acquisitions,
exploration and development. As of March 31, 2022, the Company had
working interests in 47 fields in federal and state waters and has
under lease approximately 655,000 gross acres, including
approximately 474,000 gross acres on the Gulf of Mexico Shelf and
approximately 181,000 gross acres in the Gulf of Mexico deepwater.
A majority of the Company's daily production is derived from wells
it operates.
W&T Offshore reported a net loss of $41.48 million for the year
ended Dec. 31, 2021, compared to net income of $37.79 million for
the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$1.19 billion in total assets, $324.38 million in total current
liabilities, $687.94 million in long-term debt, $368.08 million in
asset retirement obligations (less current portion), $55.39 million
in other liabilities, $113,000 in deferred income taxes, $4.50
million in commitments and contingencies, and a total shareholders'
deficit of $247.18 million.
* * *
In May 2021, S&P Global Ratings affirmed the 'CCC+' issuer credit
rating on Houston-based W&T Offshore Inc.
As reported by the TCR on April 19, 2021, Moody's Investors Service
upgraded W&T Offshore, Inc.'s Corporate Family Rating to Caa1 from
Caa2, Probability of Default Rating to Caa1-PD from Caa2-PD and
senior secured second lien notes rating to Caa2 from Caa3. The
outlook was changed to stable from negative. "The upgrade of W&T
Offshore's ratings reflects higher commodity prices that support
continued positive free cash flow in 2021," said Jonathan Teitel, a
Moody's analyst.
W&T OFFSHORE: Posts $123.4 Million Net Income in Second Quarter
---------------------------------------------------------------
W&T Offshore, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting net income
of $123.44 million on $273.81 million of total revenues for the
three months ended June 30, 2022, compared to a net loss of $51.67
million on $132.83 million of total revenues for the three months
ended June 30, 2021.
For the six months ended June 30, 2022, the Company reported net
income of $120.98 million on $464.81 million of total revenues
compared to a net loss of $52.42 million on $258.47 million of
total revenues for the six months ended June 30, 2021.
As of June 30, 2022, the Company had $1.43 billion in total assets,
$383.53 million in total current liabilities, $671.97 million in
long-term debt, $409.26 million in asset retirement obligations
(less current portion), $94.26 million in other liabilities,
$113,000 in deferred income taxes, $5.04 million in commitments and
contingencies, and a total shareholders' deficit of $124.37
million.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1288403/000155837022012510/wti-20220630x10q.htm
About W&T Offshore
W&T Offshore, Inc. -- http://www.wtoffshore.com-- is an
independent oil and natural gas producer with operations offshore
in the Gulf of Mexico and has grown through acquisitions,
exploration and development. As of March 31, 2022, the Company had
working interests in 47 fields in federal and state waters and has
under lease approximately 655,000 gross acres, including
approximately 474,000 gross acres on the Gulf of Mexico Shelf and
approximately 181,000 gross acres in the Gulf of Mexico deepwater.
A majority of the Company's daily production is derived from wells
it operates.
W&T Offshore reported a net loss of $41.48 million for the year
ended Dec. 31, 2021, compared to net income of $37.79 million for
the year ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had
$1.19 billion in total assets, $324.38 million in total current
liabilities, $687.94 million in long-term debt, $368.08 million in
asset retirement obligations (less current portion), $55.39 million
in other liabilities, $113,000 in deferred income taxes, $4.50
million in commitments and contingencies, and a total shareholders'
deficit of $247.18 million.
* * *
In May 2021, S&P Global Ratings affirmed the 'CCC+' issuer credit
rating on Houston-based W&T Offshore Inc.
As reported by the TCR on April 19, 2021, Moody's Investors Service
upgraded W&T Offshore, Inc.'s Corporate Family Rating to Caa1 from
Caa2, Probability of Default Rating to Caa1-PD from Caa2-PD and
senior secured second lien notes rating to Caa2 from Caa3. The
outlook was changed to stable from negative. "The upgrade of W&T
Offshore's ratings reflects higher commodity prices that support
continued positive free cash flow in 2021," said Jonathan Teitel, a
Moody's analyst.
WALL016 LLC: Seeks to Hire Eric A. Liepins as Legal Counsel
-----------------------------------------------------------
WALL016 LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Texas to hire Eric A. Liepins, PC as its
bankruptcy counsel.
The Debtor requires the assistance of a counsel for the purpose of
orderly liquidating the assets, reorganizing the claims of the
estate, and determining the validity of claims asserted against 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 has been paid 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 WALL016 LLC
On Sep. 1, 2022, WALL016 LLC filed for chapter 11 protection
(Bankr. E.D. Tex. Case No. 22-41136). In the petition filed by Tim
Barton, as president of managing member, the Debtor reported assets
and liabilities between $1 million and $10 million.
Eric A Liepins, of Eric A. Liepins, P.C., is the Debtor's counsel.
[*] 2022 Midyear Update On Bankruptcy Filings By Industry
---------------------------------------------------------
The National Law Review reports bankruptcy filings decreased across
most industries in 2021, including those industries with the most
filings following the pandemic: Mining, Oil, and Gas; Retail Trade;
Manufacturing; and Services.
In 1H 2022, bankruptcy filings across most industries continued to
decline from mid-2020 pandemic highs.
Forecasts of a continued trend of increased bankruptcies in 2021
were disrupted by government stimulus programs, low borrowing
rates, and high debt forbearance. Oil prices also rose by 55.8% in
2021, and surged another 43.1% in 1H 2022. Consumers spent $163
trillion in 2021, 7.9% and 3.8% higher than in 2020 and 2019,
respectively.
30%: Percentage of bankruptcies filed in 1H 2022 by Finance,
Insurance, and Real Estate companies.
Consistent with oil price and consumer spending increases, Mining,
Oil, and Gas and Retail Trade bankruptcies, which together
accounted for 48% of bankruptcies in 2020, declined to 21% in 2021
and 15% in 1H 2022.
While Retail Trade bankruptcies have declined, supply chain
disruptions, rising inflation, labor shortages, and high debt
burdens and interest rates have increased expectations for future
Retail Trade bankruptcies among some commentators. Although
classified as Manufacturing, cosmetics company Revlon Inc. filed
for bankruptcy in June 2022, citing supply chain issues, combined
with labor shortages and rising inflation.
A notable exception to the trend of substantially declining
bankruptcies was Finance, Insurance, and Real Estate, which
increased from 10 bankruptcies in 2020 to 15 in 2021, and remained
elevated with six in 1H 2022—the most by any industry in 1H
2022.
Real estate investment remains challenged by struggles of
traditional shopping centers and hotels, as well as changes in
consumer and worker behavior, in the wake of the pandemic. In
addition, signs of a potential global recession and high inflation
have increased concerns for cryptocurrency and financial firms.
[*] Jennifer Lewellyn Joins Tiger as Retail Ops Associate Director
------------------------------------------------------------------
Jennifer A. Lewellyn, a 22-year retail veteran with experience in
both managing healthy stores and liquidating underperforming
locations, has joined Tiger Group as Associate Director of Retail
Operations.
Based in Pittsburgh, Ms. Lewellyn will provide operational input
and data to Tiger's retail dealmaker team during the due-diligence
phase. She will work on special projects, write appraisal reports
and provide on-site leadership and executive representation.
In the asset-based lending sector, Ms. Lewellyn's retail consulting
experience has included multiple collaborations with Tiger Group.
Ms. Lewellyn was part of the Tiger team that closed 95 Francesca's
stores beginning in 2020, and she co-led the closures of more than
600 GNC stores across North America. In addition, Lewellyn served
as regional lead consultant on the closure of 95 Stein Mart stores,
a process that exceeded recovery expectations.
"Managing teams and projects all over the United States and Canada,
Jennifer has a strong track record of successfully implementing
efficient strategies for retail store closures and liquidations,"
said Tiger Group COO Michael McGrail. "She understands every aspect
of the process -- from staffing up and running the sales to
executing the final store closing. In addition, our appraisal
clients will benefit from Jennifer's years of experience in the
retail industry. We're excited to welcome her to the Tiger team."
With respect to retail management, Lewellyn's most-recent position,
from 2017 to 2020, included overseeing a 53-store region for
Variety Wholesalers' Roses Stores, where she supervised five
multi-unit managers, five corporate trainers and a total of 1,300
associates. The division posted an annual retail volume of
approximately $150 million. Her achievements in this role included
growing both sales and profits on a year-over-year basis, reducing
inventory shortages and developing and implementing merchandising
documentation for a total of 400 stores.
The Warren, Ohio native started her retail career in Pittsburgh as
a district manager for Value City Department Stores, Inc. Over the
next eight years, she rose to become regional manager, overseeing
daily operations of 16 department stores with more than 700
employees and sales of $179 million. Lewellyn ran internal
performance audits, set operational and merchandise standards,
managed inventory and worked closely with merchants as well as
associates at the regional and store level.
From 2009 to 2014, Ms. Lewellyn served as district operations
manager for a 10-store division of Sears Holdings Corp./Kmart. She
oversaw more than 400 employees and reduced expenses year-over-year
for five years. Her locations consistently ranked in the top ten
for comp-store sales.
"Collaborative and results-driven, Jennifer excels at meeting or
exceeding sales targets and has a talent for building, growing and
motivating large teams," said Tiger Group Managing Director Arnold
L. Jacobs. "She knows how to solve problems under the tightest of
deadlines and is comfortable working with people at all levels of
an organization. We're eager and excited to see what Jennifer will
accomplish in her new role."
Contact:
Jennifer Lewellyn
Associate Director, Retail Operations
TIGER CAPITAL GROUP
JLewellyn@TigerGroup.com
[*] Oil & Gas Equipment Secondary-Market Prices to Rebound
----------------------------------------------------------
Secondary-market prices for oil-and-gas equipment could strengthen
in the months ahead—good news for both asset-based lenders and
their borrowers in the energy business, advises Chad Farrell,
Managing Director of Tiger Commercial & Industrial, in an opinion
piece for ABL Advisor.
"The energy crunch is easing a bit, but global drilling incentives
are strong and will likely increase with the onset of the European
winter," Mr. Farrell writes, noting exploration and production
(E&P) spending could grow by about 30 percent this year.
In the September 8 piece ("Oilfield Equipment Prices Poised for
Comeback"), Mr. Farrell also notes that the industry has yet to
fully recover from its nadir in 2020.
"The oil-and-gas business took a huge hit during the COVID-19
lockdowns, with the price of West Texas Intermediate crude oil
dropping into negative territory for the first time in history,"
the executive writes, noting that the total count of active rigs in
the United States is a good bellwether for E&P.
"According to data from energy services firm Baker Hughes Co., back
in August 2020 just 250 rigs were active in the country," Mr.
Farrell writes. "While more recent rig-count totals -- around 760
as of mid-August -- are closer to normal, they still fall short of
the pre-pandemic total of 804 rigs at the end of 2019."
Equipment prices have also not fully recovered. In the piece,
Farrell offers an analysis as to why.
That's because lenders are more reluctant to lend into the space,
due in part to long-term performance concerns about companies in
the fracking industry, dogged by excessive regulations and legal
battles. "Simply put, it is a tougher business these days."
The labor shortage, too, has taken a toll. "By some estimates,
during 2020 the oilfield business lost nearly a quarter of its
skilled workers," Mr. Farrell writes. "There are now major
questions about the availability of these workers because many
'roughnecks' appear to have grown weary of the boom-and-bust
dynamics, as well as demands of the job that can include spending
long stretches of time away from their families."
Finally, oilfield services companies of all sizes, including those
worth billions of dollars, filed for Chapter 11 bankruptcy
protection in 2020 and 2021, with total debt exceeding $55 billion.
As a result, the secondary market was flooded with oilfield
equipment.
Yet it's a temporary situation, Mr. Farrell predicts.
"Tiger and other companies continue to liquidate drilling
equipment, trucks, mud pumps, rigs and other inventory related to
those bankruptcies," he writes. "While this creates downward
pressure on prices, these sales will not continue forever. Pricing,
as always, will stabilize with time."
In further explaining his optimism about the sector, Mr. Farrell
points to a seemingly unlikely contributing factor -- the federal
climate bill, which stands to lock in years of additional onshore
and offshore leasing to oil and gas companies because of
concessions to pro-energy-industry lawmakers.
If the world keeps clamoring for non-Russian sources of oil and
gas, he continues, borrowers will require plenty of investment
capital as they seek to meet the rising global demand. This could
spur more small- and mid-sized energy companies to jump back into
the arena.
These companies will need specialized equipment to launch or
restart operations. Brand-new inventory may not be an option
because it is too costly or unavailable from the supply chain.
"Many manufacturers of pipe and OCTG (oil country tubular goods),
for example, are still waiting to crank up their mills," Mr.
Farrell writes. "The dearth of available pipe is a key reason Tiger
has sold nearly 400,000 feet of line pipe and OCTG in just over the
past few months. Lenders should continue to monitor the oil-and-gas
sector for emerging opportunities. The potential is there."
[^] BOOK REVIEW: The Story of The Bank of America
-------------------------------------------------
Author: Marquis James and Bessie R. James
Publisher: Beard Books
Softcover: 592 pages
List Price: $31.80
Order your personal copy today at
http://www.amazon.com/exec/obidos/ASIN/1587981459/internetbankrupt
The Bank of America began as the Bank of Italy in 1904. A. P.
Giannini was motivated to found the Bank out of his indignation
over the neglect by other banks of the Italian community in San
Francisco's North Beach area. Local residents were quickly drawn to
Giannini's new type of bank suited for their social circumstances,
financial needs, and plans and aspirations. Before Giannini's Bank
of Italy, the field was dominated by large, well-connected, and
politically influential banks typified by the magnate J. P.
Morgan's House of Morgan catering to corporations and the wealthy
industrialists and their families of the Gilded Age.
Giannini's Bank proved to be a timely enterprise with great
potential far beyond its founder's original aims. The early 1900s
following the Gilded Age was a time of spreading democratization in
American society with large numbers of immigrants being
assimilated. It was also a time of considerable industrial growth
after the heyday of the tycoons such as Morgan, Rockefeller, and
Carnegie in the latter 1800s. Giannini's idea was also helped by
the growth of California in its early stages of becoming one of the
most prosperous and most populous states. As California grew, so
did the Bank of America.
A. P. Giannini was the perfect type of individual to oversee the
growth of a bank that stood in sharp contrast to the House of
Morgan and which reflected broad changes in American society and
business. Giannini followed the quick success of his North Beach
bank with Bank of Italy branches elsewhere in San Francisco. With
the success of these followed branches throughout California's
agricultural valleys and Los Angeles as Giannini reached out to
populations of other average persons generally ignored by the
traditional banks. Throughout the rapid growth of his bank,
Giannini never lost touch with his original motive for creating a
bank suited for the average individual. When he died at 80 years of
age in 1949, he lived in the same house as he did when he opened
the original Bank of Italy; and his estate was less than half a
million dollars.
Throughout all the stages of the Bank of America's growth, business
recessions and depressions, and changes in American society,
including increased government regulation, the Bank continued to
reflect its founder's purposes for it. In the 1920s, the Bank of
Italy became a part of the corporation Transamerica. In 1930, the
Bank was merged with the Bank of America of California. The newly
formed bank was given the name the Bank of America National Trust
and Savings Association, with Giannini appointed as chairman of the
committee to work out the details of the merger. In 1930, he
selected Elisha Walker to head Transamerica so he could be free to
pursue his interest of establishing a national bank with the same
goals and nature as his original Bank of Italy. But becoming
alarmed over Walker's proposed measures for dealing with the
pressures of the Depression, Giannini waged a battle involving
board members, stockholders, and allies he had worked with in the
past to regain control of Transamerica. In 1936, A. P. Giannini's
son, Lawrence Mario, succeeded his father as president of Bank of
America, with A. P. remaining as chairman of the board.
The story of Bank of America is largely the story of A. P.
Giannini: his ideas, his values, his ambitions, his goals, his
personality. The co-authors follow the stages of the Bank's growth
by focusing on the genteel, yet driven and innovative, A. P.
Giannini. There's a balance of basic business material such as
stock prices, rationale of momentous business decisions, and
balance-sheet data, with portrayals of outsized characters of the
time. Among these, besides Giannini, are the federal government
official Henry Morgenthau and Charles Stern, California's
superintendent of banks in the early 1900s. With this balance, The
Story of the Bank of America is an engaging and informative work
for readers of more technical business books and human-interest
business stories alike.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2022. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***