/raid1/www/Hosts/bankrupt/TCR_Public/220921.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, September 21, 2022, Vol. 26, No. 263
Headlines
129 N WALNUT: Taps Law Offices of Isaac Nutovic as Counsel
96 WYTHE: Gets Cash Collateral Access Thru Jan 2023
AEARO TECHNOLOGIES: Gets Court Okay to Continue Earplug Appeals
ALLENA PHARMACEUTICALS: Sets Bidding Procedures for All Assets
AMERICAN TIRE: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
ATI INC: S&P Upgrades Issuer Credit Rating to 'B+', Outlook Stable
AWKNG INC: Gets OK to Hire BDO USA as Accountant
BAYOU CYPRESS: Lost Cajun in Mt. Juliet, TN Files for Chapter 11
BRAZOS ELECTRIC: Nov. 14 Plan & Disclosure Hearing Set
CAROLINA CAJUNS: Seeks Cash Collateral Access
CELSIUS NETWORK: Court Appoints Examiner With Targeted Scope
CIMPRESS PLC: S&P Downgrades ICR to 'B+', Outlook Stable
CLASSIC REFRIGERATION: Unsecureds Owed Less Than $5K to Get 90%
COASTAL DRILLING: U.S. Trustee Appoints Creditors' Committee
COMPOUND PRIME: S&P Places 'B-' ICR on CreditWatch Negative
CONNECT HOLDING: S&P Assigns 'B-' ICR, Outlook Negative
CUREPOINT LLC: Taps Rountree Leitman Klein & Geer as Counsel
DORSEY LEON HAMMOND: Agape Buying Decatur Property for $250K Cash
E.L. SERVICES: Wins Interim Cash Collateral Access Thru Dec 16
EASCO BOILER: Leggett Sets Bidding Procedures for Bronx Property
ENERGY ENTERPRISES: Unsecureds Owed $3M to Get 1% of Claims
EPUMPS SOLUTIONS: Starts Subchapter V Case
EXCELSIOR SECURITY: Wins Cash Collateral Access Thru Sept 27
FIGUEROA MOUNTAIN: Has Deal on Cash Collateral Access
FIVE POINT: S&P Downgrades ICR to 'CCC+', Outlook Negative
FLUSHING LANDMARK: Amends Plan to Include Victoria's Insider Claim
FOX SUBACUTE: Wins Cash Collateral Access Thru Dec 17
FREE SPEECH: Jones Sanctioned Again as 2nd Sandy Hook Trial Starts
FREE SPEECH: Sandy Hook Families Told to Cut Ch.11 Debt Questions
GARDOU GROUP: SARE Hits Chapter 11 Bankruptcy
GL INVESTMENTS: Taps Abbasi Law Corporation as Bankruptcy Counsel
GML LOGISTICS: Court Confirms Second Amended Plan
GOTO GROUP: S&P Alters Outlook to Negative, Affirms 'B' ICR
GT REAL ESTATE: Amends Class 5 Claim Pay Details
GT REAL ESTATE: US Trustee Objects to Settlement Trust Plan
H-CYTE INC: Completes Acquisition of Jantibody
HIE HOLDINGS: Unit May Access Cash Collateral, Ink Factoring Deal
HJ DYNAMIC: Taps Omni Agent Solutions as Administrative Agent
HLMC TITLE: Gets Cash Collateral Access Thru Nov 17
INN S.F. ENTERPRISE: Case Summary & 14 Unsecured Creditors
INNERSCOPE HEARING: Incurs $5 Million Net Loss in 2020
INNOVATIVE DESIGNS: Posts $212K Net Income in Third Quarter
INSPIRATION ESTATES: U.S. Trustee Unable to Appoint Committee
ISCM HOLDINGS: Wins Interim Cash Access Amid Lender's Objection
J. BOWERS: Proposes Private Sale of Assets to Unified for $75.3K
JAF 27 LLC: Seeks to Hire Murray Law Firm as Bankruptcy Counsel
JOSEPH KLAYNBERG: Sets Bidding Procedures for Equity Interests
JRMC HOLBROOK: Seeks to Hire Madoff & Khoury as Legal Counsel
KS WORLD: Seeks to Hire Leslie Cohen Law as Bankruptcy Counsel
LA SALLE UNIVERSITY: Fitch Alters Outlook on 'BB+' IDR to Negative
LEGACY POOLS: Taps Latham Luna Eden & Beaudine as Legal Counsel
LEVEL FOUR ORTHOTICS: Selling All Assets to Bionic for $3.25 Mil.
LONESOME VALLEY: Wins Cash Collateral Access on Final Basis
LUMILEDS HOLDING: Unsecured Claims Unimpaired in Plan
MAGNOLIA OFFICE: Oct. 26 Hearing on Disclosures and Plan
MASTEN SPACE: Committee Taps Cozen O'Connor as Co-Counsel
MASTEN SPACE: Committee Taps Kilpatrick as Bankruptcy Counsel
MATADOR RESOURCES: S&P Upgrades ICR to 'BB-', Outlook Stable
MYLIFE.COM INC: Seeks to Hire Leslie Cohen Law as Counsel
NEWAGE INC: U.S. Trustee Appoints Creditors' Committee
NICAS GROUP: Case Summary & 15 Unsecured Creditors
OLIVER DEVELOPMENT: Popelas Buying Property in Irwin for $149K
PG&E CORP: Girardi's Sins Shouldn't Taint Bankruptcy
PROJECT RUBY: S&P Affirms 'B-' ICR on $400MM 1st-Lien Debt Add-On
QUICK LINKS: Bankruptcy Administrator Unable to Appoint Committee
SASHAY SAND: Taps Law Offices of Louis J. Esbin as Counsel
SEAHORSE RESTAURANTS: Dockside Grill Starts Subchapter V Case
SHOPS AT BROAD: Seeks Cash Collateral Access
SPECIALTY BUILDING: S&P Upgrades ICR to 'B', Outlook Stable
SPRINGFIELD HOUSE: Seeks to Hire CGA Law Firm as Counsel
STARLIN LLC: More Affiliates File Chapter 11 for Global Settlement
STORCENTRIC INC: May Use Cash Collateral Thru Sept 26
SUMMIT FINANCIAL: Has Deal on Cash Collateral Access Thru Dec 31
SWAP.COM INC: Helpsy Holdings Buying Personal Property for $250K
TBC COMPANIES: Bankruptcy Administrator Unable to Appoint Committee
TIBCO SOFTWARE: S&P Assigns 'B' Rating on Senior Secured Notes
TPC GROUP: Delaware Judge Gives Additional Time for Creditor Talks
TREETOP DEVELOPMENT: Lender Seeks Appointment of Chapter 11 Trustee
VOYAGER DIGITAL: Committee Taps Cassels as Canadian Counsel
WILLIAMS LAND: Files Emergency Bid to Use Cash Collateral
WJA ASSET: Unsecureds Owed $11K to Get Paid From Available Cash
ZABALA FARMS: Seeks to Retake Property From Landlord
ZACHAIR LTD: Court Approves Disclosure Statement
ZEROHOLDING LLC: Taps Rountree Leitman Klein & Geer as Counsel
*********
129 N WALNUT: Taps Law Offices of Isaac Nutovic as Counsel
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129 N Walnut Street, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to employ the Law
Offices of Isaac Nutovic as its bankruptcy counsel.
The firm's services include:
a. advising the Debtor regarding its powers and duties in the
continued operation of its business affairs and management of its
property;
b. representing the Debtor before the court at all hearings;
c. advising and assisting the Debtor in the preparation and
negotiation of a plan of reorganization with creditors;
d. preparing legal papers; and
e. performing all other legal services for the Debtor.
The firm will be paid at these rates:
Isaac Nutovic, Esq. $600 per hour
Colleen Dalton, Esq. $400 per hour
Associates $275 to $400 per hour
Paralegals $125 to $200 per hour
In addition, the firm will receive reimbursement for expenses
incurred.
Isaac Nutovic, Esq., disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Isaac Nutovic, Esq.
Law Offices of Isaac Nutovic
261 Madison Avenue, 26th Floor
New York, NY 10016
Tele: (212) 421-9100
Email: inutovic@nutovic.com
About 129 N Walnut Street
129 N Walnut Street, LLC is a Brooklyn, N.Y.-based company engaged
in activities related to real estate.
129 N Walnut Street sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42104) on Sept. 2,
2022, with between $1 million and $10 million in both assets and
liabilities. Samuel Rosenbaum, managing member of 129 N Walnut
Street, signed the petition.
Judge Elizabeth S. Stong oversees the case.
Isaac Nutovic, Esq., at the Law Offices of Isaac Nutovic serves as
the Debtor's counsel.
96 WYTHE: Gets Cash Collateral Access Thru Jan 2023
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The U.S. Bankruptcy Court for the Southern District of New York
authorized Stephen S. Gray, the Chapter 11 Trustee of 96 Wythe
Acquisition LLC, to use cash collateral on a further interim basis
to pay the ordinary, necessary and reasonable expenses of operating
the Williamsburg Hotel as they come due in the ordinary course of
business during the Interim Period.
The Trustee is permitted to use cash collateral through the
earliest to occur of: (i) January 31, 2023, unless extended by its
lender or a further extension of authority is granted by the Court,
(ii) the entry of a Court order terminating such authority; (iii)
the dismissal of the Chapter 11 case or conversion to a case under
Chapter 7 of the Bankruptcy Code; and (iv) the date that is five
days after the Lender provides a written notice of an Event of
Default, except to the extent the Court has entered a further
interim or final order authorizing the Debtor's continued use of
cash collateral beyond the Interim Period.
As adequate protection, Benefit Street Partners Realty Operating
Partnership, L.P., as lender, is granted additional and replacement
valid, binding, enforceable, nonavoidable, and automatically
perfected postpetition security interests in and liens on, without
the necessity of the execution by the Debtor (or recordation or
other filing) of security agreements, control agreements, pledge
agreements, financing statements, mortgages, or other similar
documents, on all property.
The Adequate Protection Liens will be junior only to: (A) the
Lender's prepetition liens, and (B) other unavoidable liens, if
any, existing as of the Petition Date that are senior in priority
to the Lender's prepetition liens. The Adequate Protection Liens
will be subject to a $10,000 carve-out for Chapter 7 administration
expenses to the extent necessary for the Debtor's payment of fees
incurred under 28 U.S.C. section 1930 and statutory fees required
to be paid to the Clerk of the Court.
The Lender is also granted an allowed administrative expense claim
ahead of and senior to any and all other administrative expense
claims in the Case, with the exception of the Carve-Out, to the
extent of any diminution.
The Trustee is directed to comply with these milestones, which
Milestones may not be modified without the prior written consent of
the Lender:
a. The Trustee will file a motion, in a form and substance
reasonably satisfactory to Lender, seeking the entry of an order
establishing and approving bidding procedures for the sale of
substantially all of the Debtor's assets, which the Bankruptcy
Court will approve in an order in a form and substance reasonably
satisfactory to Lender on or before October 31, 2022;
b. On or before November 4, 2022, the Trustee will file a
chapter 11 plan and a disclosure statement for the Plan, in each
case, in form and substance reasonably satisfactory to the Lender;
c. On or before November 18, 2022, the Bankruptcy Court will
have entered an order, in form and substance reasonably
satisfactory to the Lender, (a) conditionally approving the
Disclosure Statement on a provisional basis and (b) approving the
procedures related to confirmation of the Plan;
d. On or before December 23, 2022, the Bankruptcy Court will
have entered one or more orders (a) approving the Sale, (b)
approving the Disclosure Statement on a final basis, and (c)
confirming the Plan, in each case, in form and substance reasonably
satisfactory to the Lender; and
e. On or before December 31, 2022, the closing of the Sale,
and the effective date of the Plan, will have occurred.
These events constitute an Event of Default:
a. The Trustee's failure to comply with any of the terms of
the Eleventh Interim Order (including, without limitation,
compliance with the Budget or meeting of a Milestone);
b. The obtaining of credit or incurring of indebtedness
outside of the ordinary course of business that is either secured
by a security interest or lien that is equal or senior to any
security interest or lien of the Lender or entitled to priority
administrative status that is equal or senior to that granted to
the Lender; and
c. Entry of an order by the Court granting relief from or
modifying the automatic stay under section 362 of the Bankruptcy
Code to allow a creditor to execute upon or enforce a lien or
security interest in any collateral that would have a material
adverse effect on the business, operations, property or assets of
the Debtor.
A copy of the order is available at https://bit.ly/3xBBBYp from
PacerMonitor.com.
About 96 Wythe Acquisition LLC
96 Wythe Acquisition LLC is a privately held company whose
principal property is located at 96 Wythe Ave, Brooklyn, NY 11249.
96 Wythe Acquisition sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 1-22108) on February 23,
2021. In the petition signed by David Goldwasser, chief
restructuring officer, the Debtor disclosed $0 in assets and
$79,990,206 in liabilities.
Judge Robert D. Drain oversees the case.
Backenroth Frankel & Krinsky, LLP, led by Mark Frankel, is the
Debtor's counsel.
AEARO TECHNOLOGIES: Gets Court Okay to Continue Earplug Appeals
---------------------------------------------------------------
The Indiana bankruptcy judge overseeing 3M unit Aearo Technologies'
Chapter 11 case Wednesday, September 14, 2022, allowed appeals and
post-trial motions to go forward for Florida trials of claims that
Aearo's earplugs cause hearing loss.
The Debtors filed with the Bankruptcy Court a motion for entry of
an order lifting and amending the automatic stay solely to the
extent necessary for certain appellate proceedings pending before
the Eleventh Circuit to resume.
The Debtors and the Official Committee of Unsecured Creditors for
Tort Claimants - Related to Use of Combat Arms Version 2 Earplugs
(the "CAE Committee") met and conferred regarding the Motion. The
Debtors agreed to modify the relief they seek in order to resolve
the CAE Committee's proposed objections.
Accordingly, the Court on Sept. 15, 2022, ordered that:
Appeals
The automatic stay imposed by 11 U.S.C. Sec. 362(a) is hereby
modified, solely to the extent provided for herein, for the appeals
set forth below pending before the United States Court of Appeals
for the Eleventh Circuit (the "Circuit Court") to be fully and
finally resolved as to the Debtors. For the avoidance of doubt,
"fully and finally resolved as to the Debtors" means that: (i) the
parties may complete all briefing and any oral argument; (ii) the
Circuit Court may hear and decide the appeals and issue the mandate
therefor; (iii) any party may petition the United States Supreme
Court (the "Supreme Court") for review, in which event the parties
may brief the petition and, if the petition is granted, may brief
and argue the merits, and the Supreme Court may hear and decide the
matter; and (iv) any mandate of the Circuit Court and/or the
Supreme Court may be entered on the docket of the United States
District Court for the Northern District of Florida (the "District
Court") such that any entered judgment may become final; provided,
however, that "fully and finally resolved as to the Debtors" does
not include any trial, re-trial or other evidentiary hearing with
respect to the Debtors on any remand that may be ordered to the
District Court, including any additional discovery, briefing or
fact development in connection therewith, though all parties'
rights with respect to seeking further stay relief in respect
thereof are fully preserved.
Luke Estes v. 3M Company et al., No. 21-13135-GG (11th Cir.)
Stephen Hacker v. 3M Company et al., No. 21-13133-GG (11th Cir.)
Lewis Keefer v. 3M Company et al., No. 21-13131-GG (11th Cir.)
Lloyd Baker v. 3M Company et al., No. 21-12517-GG (11th Cir.)
Adkins v. 3M Company et al., No. 22-12812 (11th Cir.)
Wilkerson v. 3M Company et al., No. 21-12719 (11th Cir.)
Denise Kelley v. 3M Co., et al., No. 22-11607 (11th Cir.)
Post-Trial Motions
The automatic stay imposed by 11 U.S.C. Sec. 362(a) is hereby
modified, solely to the extent provided for herein, for all
post-trial motions in the cases set forth below pending before the
District Court to be fully and finally resolved as to the Debtors.
For the avoidance of doubt, "fully and finally resolved as to the
Debtors" means that: (i) the parties may complete all briefing and
any oral argument; (ii) the District Court may hear and decide the
post-trial motions and enter final judgment; (iii) any party may
appeal to the Circuit Court, in which event the parties may
complete all briefing and any oral argument and the Circuit Court
may hear and decide the appeals and issue the mandate therefor;
(iv) any party may petition the Supreme Court for review, in which
event the parties may brief the petition and, if the petition is
granted, may brief and argue the merits, and the Supreme Court may
hear and decide the matter; and (v) any mandate of the Circuit
Court and/or the Supreme Court may be entered on the docket of the
District Court such that any entered judgment may become final;
provided, however, that "fully and finally resolved as to the
Debtors" does not include any trial re-trial or other evidentiary
hearing with respect to the Debtors on any remand that may be
ordered by the District Court or on remand to the District Court,
including any additional discovery, briefing or fact development in
connection therewith, though all parties' rights with respect to
seeking further stay relief in respect thereof are fully
preserved.
Guillermo Camarillo v. 3M Co., et al., Case No. 20-00098 (N.D.
Fla.)
Theodore Finley v. 3M Co., et al., Case No. 20-00170 (N.D. Fla.)
Ronald Sloan v. 3M Co., et al., Case No. 20-00001 (N.D. Fla.)
Luke Vilsmeyer v. 3M Co., et al., Case No. 20-00113 (N.D. Fla.)
James Beal v. 3M Co., et al., Case No. 20-00006 (N.D. Fla.)
William Wayman v. 3M Co., et al., Case No. 20-00149 (N.D. Fla.)
Jonathon Vaughn v. 3M Co., et al., Case No. 20-00134 (N.D. Fla.)
For the avoidance of doubt, the automatic stay imposed by 11 U.S.C.
Sec. 362(a) remains in place as to the Debtors for all other
purposes including, but not limited to, in connection with (a) all
other portions of the MDL, all other appeals, and any other
litigation as to the Debtors not explicitly provided for herein,
and (b) any effort to collect a judgment from the Debtors or
property of the Debtors' estates. For further avoidance of doubt,
nothing in this Order is intended to, or shall, alter the Order
Denying Plaintiffs' Motion for Preliminary Injunction [Docket No.
143]. This Order may be modified for good cause shown.
About Aearo Technologies
Aearo Technologies -- https://earglobal.com/en -- is a 3M company
that designs, manufactures, and sells personal protection
equipment. The Company offers prescription and non-prescription
safety eye wear, face shields, hard hats, and respirators. Aearo
serves customers worldwide.
To address claims related to the Combat Arms Earplugs Version 2,
Aearo Technologies LLC and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case
No. 22-02890) on July 26, 2022. In the petition filed by John R.
Castellano, as authorized signatory, Aearo Technologies estimated
assets and liabilities between $1 billion and $10 billion each.
3M is not a debtor in the Chapter 11 cases. 3M has committed $1
billion to fund a trust allocated for Combat Arms claims.
Kirkland & Ellis LLP is serving as legal counsel and AlixPartners
LLP is serving as restructuring advisor to Aearo Technologies. Ice
Miller LLP, is serving as bankruptcy co-counsel to the Debtors.
Kroll is the claims agent.
PJT Partners is serving as financial advisor and White & Case LLP
is serving as legal counsel to 3M.
ALLENA PHARMACEUTICALS: Sets Bidding Procedures for All Assets
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Allena Pharmaceuticals, Inc., asks the U.S. Bankruptcy Court for
the District of Delaware to authorize its proposed bidding
procedures in connection with the solicitation and acceptance of
bids with respect to the proposed auction sale of substantially all
or a portion of its assets.
The Debtor operates through Allena Pharmaceuticals, Inc., and
wholly owns two non-debtor, non-operating subsidiaries, (a) Allena
Pharmaceuticals Security Corporation ("APSC"), a Massachusetts
tax-advantaged subsidiary established for the sole purpose of
receiving and maintaining proceeds from the Debtor's capital
raising activities and (b) Allena Pharmaceuticals Ireland Limited,
an Irish entity established to conduct business outside the United
States. As of the Petition Date, APSC held approximately 52,044,925
million in unencumbered cash. Allena Ireland holds no material cash
or other assets. The Debtor expects to wind down these entities
during or after the Chapter 11 Case.
Upon deciding that the Debtor would pursue the Chapter 11 Case, it
retained SSG Capital Advisors, LLC to initiate a marketing process
for the sale of Assets pursuant to section 363 of the Bankruptcy
Code. Subject to approval of and pursuant to the Bid Procedures,
SSG will continue to market the Debtor's assets with the assistance
and based on the knowledge and experience of the Debtor's
continuing management. The Debtor believes, in the exercise of its
business judgment, that the proposed Sale and auction structure
will foster an open and competitive process and provide the best
option to maximize value for all of its stakeholders.
The Debtor seeks to conduct an open and transparent sale process
pursuant to which the Successful Bidder will enter into an asset
purchase agreement for the assets free and clear of all
Encumbrances, with such Encumbrances attaching to the proceeds of
the Sale.
The Bid Procedures were developed consistent with the Debtor's need
to proceed with an expeditious sale process to minimize
administrative costs, maximize the value of its assets, and promote
active bidding that will result in the highest or otherwise best
offer for such assets.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Nov. 1, 2022, at 4:00 p.m. (ET)
b. Initial Bid: To be established
c. Deposit: 10% of the Purchase Price
d. Auction: If the Debtor receives two or more Qualified Bids
for substantially the same assets, the Debtor may, in its business
judgment, conduct the Auction in person or by remote audio and
video link on Nov. 4, 2022, beginning at l0:00 a.m. (ET) at the
offices of Landis Rath & Cobb LLP, 919 N. Market Street,
Wilmington, DE 19801. Only a Qualified Bidder will be eligible to
participate at the Auction, subject to such limitations as the
Debtor may impose in good faith.
e. Bid Increments: To be established
f. Sale Hearing: Nov. 7, 2022 (or other such date as the Court
may determine)
g. Sale Objection Deadline: Nov. 1, 2022 at 4:00 p.m. (ET)
h. Credit Bid: Persons or entities holding a perfected
security interest in the assets specified in the Bid may seek to
submit a credit bid, to the extent permitted by applicable law.
As set forth in the Bidding Procedures, the Debtor requests
authority to (a) designate one or more Stalking Horse Bidders for
one or more of the Debtor's assets; (b) enter into Stalking Horse
Agreements with the Stalking Horse Bidders; and (c) provide the
Stalking Horse Bidders with Stalking Horse Bid Protections, where
the Debtor determines, in the exercise of its reasonable business
judgment, that setting a floor price for the Assets is in the best
interest of the Debtor's estate.
To the extent it designates a Stalking Horse Bidder with respect to
any of the assets, the Debtor will promptly upon execution of a
Stalking Horse Agreement (and in no event more than one calendar
day following such execution) file with the Court and cause to be
published on the website maintained by the Debtor's claims and
noticing agent, located at Debtor's claims agent's website at
https://cases.stretto.com/AllenaPharmaceuticals, a notice that
contains information about the Stalking Horse Bidder, the Stalking
Horse Bid, and attaches the proposed Stalking Horse Agreement.
Given the number of executory contracts and unexpired leases to
which it is a party, the Debtor seeks to establish the Contract
Procedures. The contracts that may be assumed and assigned by the
Debtor will be listed on a schedule filed with the Court not less
than 14 days prior to the Sale Objection Deadline.
Not less than 14 days prior to the Sale Objection Deadline, the
Debtor will serve the Cure Notice on the Contract Parties that it
may assume and assign as a part of any Sale Transaction. The
Contract Objection Deadline is 4:00 p.m. (ET) on the date that is
14 days following service of the Cure Notice.
By the Motion, the Debtor seeks the entry of two orders of the
Court: (a) the Bid Procedures Order (i) approving the Bid
Procedures in connection with the solicitation and Sale of the
Assets; (ii) approving the Stalking Horse Bid Protections; (iii)
scheduling the Sale Hearing and setting objection deadlines with
respect to the Sale; (iv) approving the form and manner of notice
of the Sale and related Auction; (v) establishing procedures to
determine Cure Amounts and deadlines for objections to the
potential assumption and assignment of executory contracts and
unexpired leases; and (vi) granting related relief; and (b) the
Sale Order (i) authorizing and approving the Sale; (ii) authorizing
the Sale free and clear of Encumbrances pursuant to the Successful
Bidder; (iii) authorizing the assumption and assignment of the
Assigned Contract; and (iv) granting related relief.
The Debtor believes that the proposed Bid Procedures and Sale will
maximize the value of its assets for all stakeholders by fostering
an environment for open and robust bidding on its Assets.
To preserve the value of the Assets and limit the costs of
administering and preserving such assets, it is critical that the
Debtor closes the Sale as soon as possible after all closing
conditions have been achieved or waived. Accordingly, it requests
that the Court waives the 14-day stay periods under Bankruptcy
Rules 6004(h) and 6006(d).
A copy of the Bidding Procedures and Purchase Agreement is
available for free at https://tinyurl.com/hejc62x4 from
PacerMonitor.com free of charge.
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.
AMERICAN TIRE: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
--------------------------------------------------------------
Fitch Ratings has affirmed ATD New Holdings, Inc. and American Tire
Distributors, Inc's (collectively ATD) Long-Term Issuer Default
Ratings (IDRs) at 'B-'. Fitch has also affirmed ATD's senior
secured revolving and FILO ABL facilities at 'BB-'/'RR1' and senior
secured term loans at 'B-'/'RR4'. The Rating Outlook is Stable.
The ratings reflect Fitch's expectation that adjusted debt/EBITDAR
will remain elevated at about 5.8x in FY2022, the FCF margin will
remain low yet positive, the cyclically stable demand profile of
replacement tires, and the large scale of ATD's distribution
network. Liquidity is at a low-point in mid-2022 but remains
adequate and should improve over the remainder of the year. The
ratings also reflect the relatively weak position in the value
chain inherent to distributors, risks of volume loss from Goodyear
Tire's acquisition of Cooper Tire (a key supplier for ATD), and
counter-cyclical characteristics of working capital that stabilize
cash flows through cycles.
KEY RATING DRIVERS
Leverage Elevated Around 5.8x: Fitch expects adjusted debt/EBITDAR
of about 5.8x in FY2022 before trending lower to the mid-5.0x range
over the next two years. However, the expectation relies on the
assumptions that ATD is able to sustain low-to-mid single digit
organic growth (i.e. no meaningful volume loss from Cooper Tire),
that high working capital investment made in 1H 2022 unwinds and
supports paying down revolver borrowings, and that proceeds from
the sale of National Tire Distributors (NTD) are used to support
deleveraging. ATD's financial policies prioritize reaching
company-calculated net leverage of under 4.0x with an appetite for
M&A.
Positive FCF Profile: FCF generation is improving, and Fitch
forecasts an FCF margin sustained around 1%-2%. Meaningful
improvement in the FCF margin is largely constrained to the
low-single digits due to the low profitability of the distribution
business model. ATD's cash flows are supported by inherently stable
demand for replacement tires and counter-cyclical working capital
dynamics associated with the distribution business model.
Improving, Inventory-Linked Liquidity Position: Liquidity is
adequate but at a low point following a significant investment in
inventory that has driven a nearly 80% utilization of ATD's
revolving ABL facility as of Q2 2022. The high inventory investment
is a result of above-average seasonal purchases to mitigate supply
chain challenges and to build inventory to stock the recently
acquired TiresNow customers and Monro's retail customer base. Fitch
expects liquidity to improve in 2H 2022 as the working capital
build unwinds and the company receives proceeds from the NTD
divestiture, which was completed in early September. Fitch
continues to expect low-single digit FCF margins in 2022. There is
a risk that inventories will take longer than expected to sell off;
however, cash flows would eventually be supported due to the
low-spoilage nature of ATD's products.
ATD typically relies on its revolving ABL facility to finance
seasonal working capital needs. Fitch expects coverage EBITDAR
/(gross interest + rents) to be around the mid-to-high 1.0x range
through the forecast period, which is consistent with low 'B'
category issuers.
Replacement Demand Supports Stability: The consumable nature of
tires and the non-discretionary need to replace worn tires support
a demand and earnings profile that is stable through business
cycles. The pandemic environment is adding some variability in
demand, but Fitch believes the impact will be temporary. High
demand in 2021 from economic stimulus and pent up demand from 2020
is unwinding and driving lower volumes in the near term. Fitch
expects a return to positive volume growth.
Inherent Business Model Risks: As a distributor, ATD is in a
relatively weak position in the value chain that limits
profitability to relatively lower levels. The company has a
concentrated supplier base that exposes the business to disruptions
or aggressive actions in the product category that could pressure
cash flows. The risk is highlighted by the 2018 debt restructuring
that resulted from large vendors setting up a competing platform.
This ongoing risk is partially mitigated by ATD's large network
scale, which makes it attractive for national distribution and
solid presence with smaller regional and local customers that are
more difficult to reach. ATD has also invested in developing
logistics and digital services to offer further value to
customers.
Volume Risk from Cooper Acquisition Manageable: The acquisition of
key supplier, Cooper Tire, by Goodyear Tire and Rubber introduces
the risk that Goodyear may shift Cooper volumes away from ATD and
towards its in-house distribution platform, TireHub. While
Goodyear's distribution strategy for Cooper is still developing,
the risk is mitigated by ATD's sturdy relationship with Cooper's
brands and the use of Cooper to manufacture ATD's in-house brands,
Hercules and Ironman. Fitch believes a potential loss in volumes
would be manageable within the context of ATD's ratings considering
Cooper's products account for less than 10% of revenue.
DERIVATION SUMMARY
ATD compares favorably with other similarly rated industrial
distributors in terms of its high proportion of recurring demand
and large scale. It has concentration within its product mix, as
well as within its supplier base.
LKQ Corporation (BBB-/Stable), a distributor of automotive parts,
has a diversified product mix, leading to a strong market position
and large scale, with $13 billion of revenue and high exposure to
replacement parts that support stability.
FloWorks (B/Stable) has a highly stable operating profile supported
by its good mix of contractual relationships with customers and the
mission-critical nature of its products.
Fitch expects LKQ's adjusted debt/EBITDAR to be sustained around
the low-3.0x range while FCF margins are in the mid-single digits.
FloWorks adjusted leverage is expected to be in the high-5.0x range
in 2022 before improving to the low-5.0x range over the next few
years. ATD's leverage metrics are likely to range in the
mid-to-high 5.0x range through the forecast while FCF margins
remain similar to FloWorks in the low-single digits.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
-- Growth of about 2% in 2022 considers high pricing growth that
is largely offset by lower volumes and part of the impact
related to the NTD divestiture. Organic revenue growth is in
the low-to-mid single digits in 2023 and thereafter. The sale
of NTD drives total revenue lower by a mid-single digit rate
in 2023;
-- No meaningful loss in volumes as a result of the Goodyear's
acquisition of Cooper Tire;
-- EBITDA margins remain around 5.0% through the forecast,
though FY 2022 is modestly weaker due to higher inflation and
a lag in pricing;
-- High working capital build in early FY 2022 unwinds in 2H
2022 supporting FCF of about $75 million. FCF margin trends
to around 1.5% over the following few years;
-- Proceeds from the sale of NTD are used to support
deleveraging;
-- Tack-on M&A and debt repayment are the priorities for capital
deployment as the company progresses towards its target of
net leverage under 4.0x;
RECOVERY ANALYSIS
The recovery analysis assumes ATD would be considered a going
concern in bankruptcy and would be reorganized rather than
liquidated. Fitch has assumed a 10% administrative claim in the
recovery analysis.
A going concern (GC) EBITDA estimate of approximately $240 million
reflects Fitch's view of a sustainable post-reorganization EBITDA.
Fitch considers a bankruptcy scenario that could be caused by a
combination of one or more the following: heightened competitive
intensity leading to sustained pressures on profitability and cash
flows or a liquidity event potentially driven by working capital
challenges or large corporate actions. The GC EBITDA estimate is
about 11% below Fitch's forecast 2022 level.
An EV multiple of 5.5x is used to calculate the post-reorganization
valuation. The multiple considers a permanent erosion in ATD's
market position as well as other transaction multiples for
industrial distributors, ATD's prior reorganization at around 9.0x,
and prior automotive-related bankruptcies with a median multiple of
5.0x.
Fitch's recovery analysis assumes a 65% draw on ATD's $1.1 billion
revolving ABL facility and $100 million of ABL FILO tranche
borrowings which are already outstanding. Fitch's assumption of a
65% draw reflects the potential to liquidate some inventory in a
distressed scenario leading to a borrowing base that falls well
below the $1.2 billion of total commitments.
The analysis results in an 'RR1' for the asset-based revolving and
FILO tranche. The two share the same collateral pool, and while the
FILO loan would be "last-out", any shortfall in its borrowing base
during a time of distress would result in lower borrowing capacity
for the revolving ABL. The high quality of the inventory collateral
also benefits from consistent demand and a liquid market for tires.
The first lien term loan is rated 'RR4', which corresponds to
average recovery rates, and reflects the collateral package, which
is weaker than the assets backing the ABL facilities.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Demonstrated adherence to a financial policy that supports
adjusted debt/ EBITDAR leverage sustained below 5.5x and
EBITDAR/(Interest Paid + Rents) above 2.0x;
-- Strengthened position in the value chain that leads to FCF
margins sustained above the low-single digits;
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Disintermediation by suppliers leading to a significant loss
in volumes that heightens liquidity risk, as indicated by revolving
ABL availability of less than 25% and/or EBITDAR/(interest paid +
rents) below 1.5x, which is approaching the covenant level of
1.0x;
-- Deviation in financial policy and capital allocation
priorities leading to adjusted debt/EBITDAR sustained above 6.5x;
LIQUIDITY AND DEBT STRUCTURE
As of July 2, 2022, ATD had liquidity of $257 million, consisting
of $20 million of cash and $237 million of availability under its
various lines of credit that total $1.2 billion. The liquidity
headroom is temporarily lower than usual, even when considering
seasonal working capital trends. Fitch expects liquidity to improve
notably in 2H 2022 as high inventory investment unwinds and as ATD
receives proceeds from the sale of NTD. Debt maturities are
minimal, with term loan amortization of $10 million per year, prior
to line of credit maturities in 2026.
ISSUER PROFILE
ATD is a leading distributor of passenger vehicle and light truck
replacement tires in the U.S. The company supplies its customers
with eight of the top 10 leading passenger vehicle and light truck
tire brands. ATD also markets tires under its proprietary Hercules
brand.
ESG CONSIDERATIONS
The highest level of ESG credit relevance, if present, 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
to the way in which they are being managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
ATD New Holdings, Inc. LT IDR B- Affirmed B-
American Tire Distributors, Inc. LT IDR B- Affirmed B-
senior secured LT BB- Affirmed RR1 BB-
senior secured LT B- Affirmed RR4 B-
ATI INC: S&P Upgrades Issuer Credit Rating to 'B+', Outlook Stable
------------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on ATI Inc. to
'B+' from 'B'. S&P also raised its issue level ratings on ATI's
senior unsecured notes to 'B+' from 'B' and on its subsidiary,
Allegheny Ludlum Corp's, unsecured debt to 'BB-' from 'B+'. The '4'
and '2' recovery ratings, respectively, remain unchanged.
The stable outlook reflects S&P's view that momentum in ATI's
earnings recovery will result in debt to EBITDA of around 4x over
the next 12 months.
ATI's profitability shows signs of improvement due to streamlining
its asset portfolio recently and increasing focus on the aerospace
market, which boosts fixed cost reduction achieved during the
downturn. As aerospace demand recovers and production levels ramp
up, ATI's EBITDA margins surpass profitability levels achieved
before the pandemic, potentially reflecting an improved asset cost
profile and higher margin product mix. As of June 30, 2022, S&P
Global Ratings'-adjusted EBITDA margins were 15% compared with
13.7% in 2019. ATI shed $100 million from its cost base and
divested legacy operations that contributed zero or sometimes
negative EBITDA, much of which was written down with $1.3 billion
of asset impairments in 2020 and 2021. These actions should reduce
ATI's exposure to metals price fluctuations and further focuses its
commercial strategy towards securing a higher proportion of
long-term aerospace contracts. This shift could also drive
operational efficiencies, provide a reliable base load of
production, greater earnings visibility, and higher profit margins.
However, S&P anticipates the potential for margins to fluctuate in
the near term as the aerospace supply chain ramp up may be uneven
and lumpy.
S&P said, "ATI's credit metrics are recovering rapidly, and we now
anticipate leverage of 4x in 2022. Given ATI's early stage in the
supply chain, increasing original equipment manufacturer build
rates lead to increasing order books and volume growth, which
should translate into a return to positive free cash flow
generation over the next 12 months. Rising demand for widebody
aircraft will further boost ATI's earnings recovery, driving
additional volumes and profitability. Debt to EBITDA for the
trailing last 12 months as of June 30, 2022, was about 4.5x
compared with over 10x for the same period a year ago, highlighting
the momentum of the aerospace recovery.
"We still see risks associated with ATI's earnings recovery as it
depends on good market conditions and aerospace recovery. While we
see the beginning of a transition to more stable and potentially
stronger profitability, structural improvement in ATI's assets may
take longer to demonstrate as this is coinciding with a large
cyclical upswing in metals demand. Historically, ATI has a track
record of volatile profitability through the peak and trough of a
metals cycle. While ATI's earnings recovery is gathering momentum,
we expect uneven aerospace recovery and demand for commercial
aerospace to not return to pre-pandemic levels until 2024. In
addition, the risk of a recession could cause further disruption to
air travel. Still, orders for new aircrafts are less likely to be
immediately effected due to significant pent-up demand."
ATI's robust liquidity position supports itself during the ongoing
recovery. It has roughly $275 million of cash and $600 million
available under its asset-based loan (ABL) facility, giving the
company flexibility to manage the working capital investment
required to ramp up ongoing capital expenditures (capex).
The stable outlook reflects S&P's view that momentum in ATI's
earnings recovery will result in debt to EBITDA of around 4x over
the next 12 months.
S&P could lower its rating in the next 12 months if debt to EBITDA
is sustained above 5x. This could occur if:
-- A recessionary environment disrupts recovery in the commercial
aerospace market.
-- Weaker market conditions drive lower revenue, costs for
materials are persistently elevated, or ATI can no longer
pass-through high costs, resulting in a return to historically
observed earnings volatility; or
-- Cash flows weaken and ATI's liquidity cushion tightens because
of persistently high working capital, more capex, and discretionary
spending.
S&P could upgrade the rating on ATI if debt to EBITDA is sustained
below 4x for a couple of years, potentially demonstrating a
structural improvement in competitive position and profitability.
This could result in free cash flow that enables continued
reinvestment in this capital-intensive and innovation-sensitive
industry, some debt reduction, and further contributions to pension
obligations.
ESG credit indicators: E-2, S-2, G-2
ESG factors have an overall neutral influence on S&P's credit
rating analysis of ATI. It produces specialty alloy-based materials
and processes solutions for critical applications in sectors like
the aerospace and defense sectors. ATI uses a high share of
secondary scrap metals during production and its products address
long-term trends, such as fuel efficiency and the transition to
cleaner fuels.
AWKNG INC: Gets OK to Hire BDO USA as Accountant
------------------------------------------------
AWKNG, Inc. received approval from the U.S. Bankruptcy Court for
the Middle District of Florida to employ BDO USA, LLP as its
accountant.
The Debtor requires an accountant to complete and file its Form
990, Form 990-T, and Form DR-405 returns.
BDO USA will be paid at these rates:
Staff $133.25 to $162.50 per hour
Sr. Staff $214.50 to $243.75 per hour
Managers $432.25 to $487.50 per hour
Managing Directors $552.50 per hour
Partners $633.75 per hour
The firm will also be reimbursed for out-of-pocket expenses
incurred.
William Morrow, a partner at BDO USA, disclosed in a court filing
that his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
William R. Morrow
BDO USA, LLP
1301 Riverplace Blvd., Ste. 900
Jacksonville, FL 32207
Tel: (904) 396-4015
Fax: (904) 399-4012
About AWKNG Inc.
AWKNG, Inc. is a non-profit corporation, which operates an online
school of theology and mission ministry. It is based in
Jacksonville, Fla.
AWKNG filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01434) on July 19,
2022, with up to $100,000 in assets and up to $500,000 in
liabilities. Jerrett M. McConnell serves as Subchapter V trustee.
Judge Jason A. Burgess oversees the case.
The Debtor tapped William B. McDaniel, Esq., at Lansing Roy, P.A.
as legal counsel, and BDO USA, LLP as accountant.
BAYOU CYPRESS: Lost Cajun in Mt. Juliet, TN Files for Chapter 11
----------------------------------------------------------------
Bayou Cypress Restaurants Inc., d/b/a THE LOST CAJUN, filed for
chapter 11 protection in the Middle District of Tennessee. The
Debtor elected on its voluntary petition to proceed under
Subchapter V of chapter 11 of the Bankruptcy Code.
The Debtor owns The Lost Cajun restaurant in Mt. Juliet,
Tennessee.
The Debtor disclosed $721,000 in assets against $894,000 in
liabilities in its schedules. The Debtor has no real property --
it's a party to a commercial lease in Mt. Juliet, TN, which costs
$7,741 per month and has 7.5 years remaining.
The Debtor had gross business revenue of $2.165 million in 2021 and
$1.819 million in 2020. For 2022 year to date, revenue was $1.176
million.
According to court documents, Bayou Cypress Restaurants Inc.
estimates between 1 and 49 creditors. The petition states funds
will be available to unsecured creditors.
About Bayou Cypress Restaurants
Bayou Cypress Restaurants Inc., doing business as The Lost Cajun,
filed a petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 22-02945) on Sept. 14,
2022. In the petition filed by Susan Estrada, as owner and
secretary, the Debtor reported assets and liabilities between
$500,000 and $1 million.
GLEN COY WATSON has been appointed as Subchapter V trustee.
The Debtor is represented by Steven L Lefjivutz of LEFKOVITZ AND
LEFKOVITZ, PLLC.
BRAZOS ELECTRIC: Nov. 14 Plan & Disclosure Hearing Set
------------------------------------------------------
Brazos Electric Power Cooperative, Inc., filed with the U.S.
Bankruptcy Court for the Southern District of Texas a motion of an
order conditionally approving the adequacy of the Disclosure
Statement.
On September 13, 2022, Judge David R. Jones conditionally approved
the Disclosure Statement and ordered that:
* Oct. 28, 2022 is fixed as the last day to file objections to
the final approval of the Disclosure Statement or confirmation of
the Plan.
* Oct. 28, 2022 is the Voting Deadline.
* Nov. 14, 2022 at 9:30 a.m. is the hearing to consider final
approval of the Disclosure Statement and confirmation of the Plan.
* All Tort Claims in Class 7 of the Plan shall be temporarily
allowed in the amount of $1.00 in the aggregate per claimant solely
for purposes of voting to accept or reject the Plan and not for any
other purpose.
* All Tort Claims filed on account of litigation against the
Debtor which have not been fixed pursuant to a judgment or
settlement entered prior to the Voting Record Date shall be
classified as contingent and unliquidated Claims in accordance with
the Solicitation Procedures and shall have a single vote in the
amount, for voting purposes only, of $1.00 in the aggregate per
claimant.
A copy of the order dated September 13, 2022, is available at
https://bit.ly/3UlKXB3 Stretto, claims agent.
About Brazos Electric Power Cooperative
Brazos Electric Power Cooperative Inc. is a 3,994-megawatt
transmission and generation cooperative which members' service
territory covers 68 counties from the Texas Panhandle to Houston.
It was organized in 1941 and the first cooperative formed in the
Lone Star state with the primary intent of generating and supplying
electrical power. At present, Brazos Electric is the largest
generation and transmission cooperative in the state and is the
wholesale power supplier for its 16 member-owner distribution
cooperatives and one municipal system.
Brazos Electric filed a voluntary petition for relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 21-30725)
on March 1, 2021. At the time of the filing, the Debtor disclosed
assets of between $1 billion and $10 billion and liabilities of the
same range.
Judge David R. Jones oversees the case.
The Debtor tapped Norton Rose Fulbright US, LLP as bankruptcy
counsel, Foley & Lardner LLP and Eversheds Sutherland US LLP as
special counsel, Collet & Associates LLC as investment banker, and
Berkeley Research Group, LLC as financial advisor. Ted B. Lyon &
Associates, The Gallagher Law Firm, West & Associates LLP, Butch
Boyd Law Firm and Boyd Smith Law Firm, PLLC serve as special
litigation counsel. Stretto is the claims and noticing agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtor's case on March 15, 2021. The
committee is represented by the law firms of Porter Hedges, LLP and
Kramer, Levin, Naftalis & Frankel, LLP. FTI Consulting, Inc. And
Lazard Freres & Co. LLC serve as the committee's financial advisor
and investment banker, respectively.
CAROLINA CAJUNS: Seeks Cash Collateral Access
---------------------------------------------
The Carolina Cajuns, LLC asks the U.S. Bankruptcy Court for the
District of Connecticut, Hartford Division, for authority to use
cash collateral in accordance with the budget.
The budget includes the Debtor's request to use cash collateral on
a preliminary basis for the period from the Filing Date through
October 9, 2022, and on a final basis for the period from October
10, 2022 through December 18, 2022.
The Debtor's use of the cash collateral will be for the purposes of
meeting the Debtor's payroll and maintaining, operating,
preserving, and protecting the value and integrity of the Debtor's
business, which will inure to the benefit of the estate.
The Debtor needs to use cash collateral to meet payroll and other
obligations, and maintain and preserve its business in order to
preserve its value for the benefit of the Chapter 11 estate and its
creditors.
The Debtor, a North Carolina limited liability company, became a
franchisee of The Lost Cajun Enterprises, LLC in May 2018 and
opened two, full-service, family-focused restaurants in August and
October 2019. One restaurant is located at 9709 Sam Furr Road,
Huntersville, North Carolina 28078 and one restaurant is located at
108 Huffman Mill Road, Burlington, North Carolina 27215.
Prior to the Filing Date, the Debtor borrowed monies from Aquesta
Bank, 464 Williamson Road, Mooresville, NC 28117, to operate the
restaurants. Aquesta subsequently sold its assets to United
Community Bank. The Debtor's loans with United are guaranteed by
the U.S. Small Business Administration.
According to a UCC search performed in North Carolina, Aquesta --
now United -- and the SBA claim a security interest in the Debtor's
assets, including its cash and receivables. As a result of the
Secured Creditors' claims, the Debtor has insufficient unencumbered
cash with which to operate its business, compensate its employees,
and meet its creditor obligations.
As adequate protection, the Debtor proposes to grant to the Secured
Creditors a replacement lien upon and a security interest in the
Debtor's assets, excluding all bankruptcy causes of action,
pursuant to Bankruptcy Code section 361(2) but only to the extent
that the Court determines that the Secured Creditors possess valid,
duly perfected, non-avoidable and enforceable pre-petition liens.
In addition, to the extent the adequate protection therein to the
Secured Creditors proves to be inadequate and the inadequacy gives
rise to a claim allowable under Bankruptcy Code section 507, that
claim will constitute an allowed administrative claim against the
Debtor with priority over all administrative claims in the
bankruptcy case, including all claims of the kind specified in
Bankruptcy Code sections 503(b) and 507(b).
A copy of the motion is available at https://bit.ly/3xuszfF from
PacerMonitor.com.
About The Carolina Cajuns, LLC
The Carolina Cajuns, LLC is part of the restaurant industry. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Conn. Case No. 22-20640) on September 16, 2022. In
the petition signed by Steven A. Galloway, president, the Debtor
disclosed up to $50,000 in assets and up to $10 million of
liabilities.
Judge James J. Tancredi oversees the case.
John P. Newton, Esq., at Reid and Riege, P.C., is the Debtor's
counsel.
CELSIUS NETWORK: Court Appoints Examiner With Targeted Scope
------------------------------------------------------------
Vince Sullivan of Law360 reports that a New York bankruptcy judge
agreed Wednesday, September 14, 2022, to appoint a Chapter 11
examiner in the case of cryptocurrency investment platform Celsius
Network LLC to investigate the prepetition conduct of the company's
leadership.
As reported in the TCR, Celsius Network LLC and its Official
Committee of Unsecured Creditors have consented to the U.S.
Trustee's request for an appointment of an examiner in the crypto
platform's bankruptcy cases after the U.S. Trustee agreed to limit
the scope of the examiner's investigation.
Celsius had earlier said any investigation by an examiner with a
broad scope would be duplicative of the Creditors' Committee's
ongoing investigation and would result in undue delay in these
chapter 11 cases and additional costs to the Debtors' estates --
all to the detriment of the Debtors' stakeholders.
After negotiations, the parties agreed that the scope of the
examiner's investigation will consist of:
i. An examination of the Debtors' cryptocurrency holdings,
including a determination as to where the Debtors' cryptocurrency
holdings were stored prepetition and are stored postpetition and
whether different types of accounts are commingled.
ii. An examination as to why there was a change in account
offerings beginning in April 2022 from the Earn Program to the
Custody Service for some customers while others were placed in a
"Withhold Account."
iii. An examination of the Debtors' procedures for paying sales
taxes, use taxes, and value added taxes and the extent of the
Debtors' compliance with any non-bankruptcy laws with respect
thereto.
iv. An examination of the current status of the utility
obligations of the Debtors' mining business.
v. Subject to the terms of this Order, otherwise perform the
duties of an examiner set forth in Sec. 1106(a)(3) and 1106(a)(4)
of the Bankruptcy Code.
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case
No.22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtor estimated assets and liabilities between $1
billion and $10 billion.
Kirkland & Ellis LLP is serving as legal counsel, Centerview
Partners is serving as financial advisor, and Alvarez & Marsal is
serving as restructuring advisor to Celsius. Stretto, the claims
agent, maintains the page https://cases.stretto.com/celsius
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. On July 29, 2022, the committee voted to
retain White & Case as its counsel. The committee tapped Elementus
as blockchain forensics advisor, M3 as its financial advisor, and
Perella Weinberg Partners LP as its investment banker.
CIMPRESS PLC: S&P Downgrades ICR to 'B+', Outlook Stable
--------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating to 'B+' from
'BB-' on Cimpress PLC.
S&P said, "We also lowered our issue-level ratings on the senior
secured debt to 'BB-' from 'BB' and on the senior unsecured debt to
'B-' from 'B'. The '2' and '6' recovery ratings respectively remain
unchanged.
"The stable outlook reflects our expectations that Cimpress'
adjusted leverage will decline to less than 5.5x over the next 12
months, primarily driven by improved EBITDA margins as the company
incurs lower one-time costs and increase prices to offset
inflation."
Cimpress' investments within its Vista business segment and
inflationary cost pressures lowered EBITDA margin, despite strong
top-line revenue growth over the last 12 months. Cimpress' revenue
grew about 11.4% in fiscal-year 2022, ended June 30, 2022, which is
more than double the 4.5% revenue growth in fiscal 2021. The
company grew across all its business segments, with the Upload &
Print segment growing at the fastest rate at over 20%, followed by
the National Pen segment growing just under 10%. Its largest
business segment, Vista (about 52% of fiscal 2022 revenues), grew
about 5%. While top-line growth was marginally stronger than
originally forecast, two key factors pressured EBITDA margins:
Cimpress' significant investments in its Vista business segment and
cost inflation over the last 6–9 months.
Cimpress' investments in Vista focus on leveraging its new
technology platform through headcount growth across data, customer
experience, design and marketing, including more brand focused
external marketing spend. This includes focusing on building out
Vista's brand awareness as well as expanding its service offerings
including graphic design services through Vista's acquisition of
99Design in 2020. In S&P's view, this strategy is important given
the secular pressures in the print industry and the need to provide
a differentiated service offering.
However, the high costs of these investments have significantly
affected Vista's EBITDA margin and in turn, the overall margin of
Cimpress. The effect of inflation on Cimpress' overall EBITDA
margin is also driving up adjusted leverage metrics. Cimpress has
increased prices to offset inflation in all businesses except
Vista, which started to adjust prices in June 2022, which should
allow it to offset the higher costs over the next 12 months.
However, in S&P's view, a slowing global economic growth rate and
an environment with higher interest rates have risks to demand if
Cimpress increases prices too aggressively. Partially offsetting
some of these risks are tendencies for new business formation rates
to grow during economic slowdowns as was seen in prior recessions.
This tends to elevate demand for print services which could provide
some volume benefit to Cimpress in a slower economic cycle.
S&P said, "We expect adjusted leverage metrics will remain elevated
through fiscal 2023 as revenue growth is more than offset by
continued EBITDA margin pressure. We forecast adjusted leverage
metrics of 5.0x–5.5x by the end of fiscal 2023, down from 6.8x in
fiscal 2022. We expect the improvement to largely come from EBITDA
margin recovery within the Vista segment compared with the prior
year, although we don't expect the segment's margin profile to
recover to pre-COVID-19 levels within the next 24 months. We also
expect total revenue grows 6%-8% in fiscal 2023 to contribute to
overall deleveraging. We also forecast adjusted free operating cash
flow (FOCF)-to-debt of 8%-10% in fiscal 2023."
Cimpress' mass customization platform is a key driver in its
operating efficiency, differentiating itself from competitors. The
company's highly efficient mass customization platform allows it to
profitably make on-demand products at lower quantities, servicing a
wider range of clients. This allows Cimpress to operate at higher
margins and better navigate the secular pressures affecting the
print industry despite recent investments pressuring EBITDA margins
in the last year. Competition in the fragmented print industry
remains high, and as more companies adopt a digital-first platform
strategy, Cimpress' competitive advantage in the digital space
could wane, although its established brand there could somewhat
mitigate competition. Its investments to move up the marketing
funnel is also key to strengthening its brand and market
positions.
Cimpress benefits from its geographic diversity, mainly in Europe,
with its Upload and Print business. The business segment
demonstrated significant volatility during the pandemic-related
recession, and its exposure to live events. Over the past 12–24
months, Cimpress invested in significant cost efficiencies for the
Upload and Print segment, resulting in substantial margin
improvements for this segment over the last 12 months. The company
also introduced new product and service innovation that created a
differentiated offering while improving pricing power. This led to
material EBITDA growth and placed the business segment on a more
solid footing.
The stable outlook reflects S&P's expectations that Cimpress'
adjusted leverage will decline to less than 5.5x over the next 12
months, primarily driven by improved EBITDA margins as the company
incurs lower one-time costs and increases prices to partially
offset inflation.
S&P could lower its ratings if it expects Cimpress' adjusted
leverage to remain above 5.5x while its FOCF-to-debt declines
towards 5% on a sustained basis. This could occur if:
-- It cannot effectively mitigate some of the high inflationary
costs with price increases, resulting in sustained EBITDA margin
compression;
-- A slowdown in economic activity results in a sustained decline
in demand for products and services; or
-- Cimpress pursues a more aggressive financial policy using its
cash balances or additional debt to fund significant shareholder
distributions or acquisitions.
An upgrade is unlikely over the next 12 months. Nonetheless, S&P
could raise its ratings on Cimpress if:
-- Adjusted leverage declines below 4.5x while FOCF-to-debt
remains above 10% on a sustained basis; and
-- Revenue continues to grow by at least high-single-digit
percents while Cimpress' operating efficiency improves, leading to
EBITDA margins growing.
ESG credit indicators: E-2, S-2, G-2
CLASSIC REFRIGERATION: Unsecureds Owed Less Than $5K to Get 90%
---------------------------------------------------------------
Classic Refrigeration SoCal, Inc., filed with the U.S. Bankruptcy
Court for the Central District of California a Subchapter V Plan of
Reorganization dated September 13, 2022.
The Debtor is in the business of designing, constructing,
equipping, servicing and maintaining large cold storage units
throughout Southern California, from Bakersfield to Mexico and from
Palm Springs to the Pacific Ocean.
On July 18, 2022, after a jury trial in the District Court Action,
a judgment was entered in favor of Hill Phoenix, Inc. and against
(a) the Debtor and one of its officers on a claim under the
California Uniform Trade Secrets Act, and (b) two of its officers
on claims for breach of contract and fiduciary duty. The jury
awarded Hill Phoenix zero damages on the breach of contract and
fiduciary duty claims, and $2.875 million against the Debtor.
The Debtor appealed the judgment to the Ninth Circuit. This
Bankruptcy Case was necessary in order to preserve the value of the
Debtor's business pending appeal and protect the interests of all
stakeholders.
The Plan provides for quarterly payments to Creditors from the
projected net cash flow generated from the Debtor's business
operations and other sources. The Plan Payments are expected to
begin on the fifth day on the first month after the Confirmation
Order is entered on the docket. The Plan Payments will continue
until the earlier of i) the Termination Date, which is the 36th
month after the Confirmation Order is entered on the docket; or ii)
when all Disposable Income has been funded.
Class 3 consists of Convenience Claims. Any Unsecured Claim in the
amount of $5,000 or less, and any Unsecured Claim that has been
reduced to $5,000 by the election of the Holder thereof. Holders of
Allowed Convenience Claims shall receive Cash equal to 90% of such
Holder's Allowed Claim, on the Effective Date. (iii) The Debtor
estimates that total of Class 3 Convenience Claims will approximate
$70,000.
Class 4 consists of General Unsecured Claims. Any Claim, including
the Litigation Claim, that is not an Administrative Expense Claim,
a Priority Tax Claim, a Priority Claim, a Secured Claim, a
Convenience Claim, a Litigation Claim, an Insider Unsecured Claim
or an Indemnification Claim. This class also includes any Claim
that may arise as a result of rejection of any Executory Contract
or Unexpired Lease. After payment to certain Critical Vendors, it
is projected that the total of Allowed Unsecured Claims will
approximate $3,500,000.
On or before the 15th day following each calendar quarter through
the Termination Date, the Debtor will pay to each holder of a
General Unsecured Claim its pro rata share of the Disposable Income
during the prior 3 months. As to the Litigation Claim, which is the
subject of a pending appeal before the Ninth Circuit Court of
Appeals, until such Claim is determined by a Final Order, that
claim is Disputed. If any Judicial Lien associated with the
Litigation Claim has not been released during the pendency of the
Bankruptcy Case, such Judicial Lien shall be released upon entry of
the Confirmation Order.
No Plan Payment allocated to the Litigation Claim shall be provided
to the Holder of the Litigation Claim until the Litigation Claim is
Allowed, and only to the extent the Litigation Claim is Allowed.
Once the Litigation Claim is Allowed, the Holder of the Litigation
Claim shall be paid from the funds in the Reserve for Disputed
Claims allocable to the Litigation Claim and from any future pro
rata quarterly distributions on the Required Payment Date.
Class 6 consists of Insider Unsecured Claims. The claims of i)
Profit Partners, LLC; ii) 401 (K), LLC, and iii) David Rogers, each
based on their pre-petition loans to the Debtor. As of the Petition
Date, the Class 6 Claims total $2,248,593.56. On the Effective
Date, the Insider Unsecured Claims will be converted into preferred
shares of the Debtor, with a priority right to receive cumulative
dividends at an annual rate of 8%, commencing on the Effective
Date, provided, however, no dividends may be paid to the holders of
preferred shares and no preferred shares may be redeemed until all
required plan payments have been funded. The respective rights and
restrictions on preferred shares shall be set forth in appropriate
corporate documents, which will be filed with the Court as a Plan
Supplement prior to the Plan Confirmation Hearing.
Class 8 consists of Equity Security Interests. Holders of Allowed
Equity Securities comprised of the 9 individual shareholders.
Except as expressly provided in the Plan and the Plan Supplement
documents, the rights of the Holders of Equity Security Interests
shall not be impaired. Until all plan payments have been funded, no
dividends or distributions may be made to the holders of Equity
Security Interests.
The Debtor shall make the Plan Payments and all other payments
contemplated under the Plan. It is estimated that under the Plan,
the Debtor will be required to pay approximately [$600,000] on the
Effective Date. Based on the Projections, the Debtor expects that
it will have Cash sufficient to make the Plan Payments required to
be made on the Effective Date.
A full-text copy of the Subchapter V Plan dated September 13, 2022,
is available at https://bit.ly/3qTkaOY from PacerMonitor.com at no
charge.
Proposed Attorneys for the Debtor:
Jeffrey K. Garfinkle, Esq.
Caroline R. Djang, Esq.
Buchalter, A Professional Corporation
Attorneys at Law
401 Main Street, Suite 1130
Peoria, IL 61602
Telephone: (949) 760-1121
Facsimile: (949) 720-0182
Email: jgarfinkle@buchalter.com
cdjang@buchalter.com
About Classic Refrigeration
SoCal
Classic Refrigeration SoCal Inc. is in the business of designing,
instructing, equipping, servicing and maintaining large cold
storage units throughout Southern California.
Classic Refrigeration SoCal sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-11239) on
July 25, 2022. In the petition signed by David Rogers, chief
financial officer, the Debtor disclosed $6 million in total assets
and $7 million in total liabilities.
Judge Theodor Albert oversees the case.
Jeffrey K. Garfinkle, Esq., and Carolyn Djang, Esq., at Buchalter,
a Professional Corporation, are the Debtor's attorneys.
COASTAL DRILLING: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------------
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Coastal
Drilling Land Company, LLC and its affiliates.
The committee members are:
1. Yellowjacket Oilfield Services, LLC
5151 Katy Fwy., Suite 206
Houston, TX 77007
Attention: Joe Alanis
Phone: 832-669-9125
Email: jalanis@yjosllc.com
2. Baker Hughes
Assignee of Vendor Note from Dynamic Drilling Fluids
2001 Rankin Road
Houston, TX 77073
Attention: Christopher J. Ryan
Phone: 713-416-0149
Email: christopher.ryan@bakerhughes.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Coastal Drilling Land Company
Coastal Drilling Land Company, L.L.C. offers drilling rigs and
services to the South Texas and Gulf Coast regions.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-20204) on August 28,
2022. In the petition signed by CEO Chris McClanahan, the Debtor
disclosed up to $50 million in both assets and liabilities.
Judge David R. Jones oversees the case.
Matthew Okin, Esq., at Okin Adams Bartlett Curry LLP is the
Debtor's counsel.
COMPOUND PRIME: S&P Places 'B-' ICR on CreditWatch Negative
-----------------------------------------------------------
S&P Global Ratings placed its 'B-' issuer credit and senior
unsecured issue ratings on California-based Compound Prime LLC on
CreditWatch with negative implications.
The CreditWatch placement follows Compound Prime's announcement of
a new lending product to be offered to accredited borrowers in the
form of digital U.S. dollar coins (USDC) or U.S. dollar traditional
bilateral loans, collateralized by non-stable digital
cryptocurrencies, outside of the decentralized finance Compound
Protocol.Although the new lending product may improve profitability
for Compound Prime, it could meaningfully add credit risk, in our
view, and potentially weaken the creditworthiness of the entity
overall.
S&P said, "Compound Prime has remained loss-making since we
initiated our ratings, depleting its capital base gradually and
increasing its dependence on its principal shareholder's capital
injections.Recent developments, including a prolonged "crypto
winter" characterized by significant price corrections of crypto
assets and investor withdrawals from the digital asset space,
continue to weigh on Compound Prime's earnings. Total assets
supplied to the Compound Prime Protocol declined to $3 billion as
of Sept. 14, from over $8 billion when we assigned our rating in
May 2022." Likewise, borrowing demand for USDC on the Compound
platform has shrunk significantly, as the value of eligible crypto
collateral that borrowers can pledge has fallen substantively,
owing to plunging prices for digital assets. As a result, the
interest rate paid to USDC suppliers on the Compound platform has
remained consistently lower than the 4% return promised to debt
investors, raising serious profitability challenges for Compound
Prime.
At the same time, interest expenses have been curtailed by the
substantive reduction in debt securities outstanding (with just
over $30 million of debt outstanding as of June 30, 2022),
meaningfully lower than the $500 million mid-term target of the
issuer. Nevertheless, Compound Prime remains loss-making and
received a capital injection from its principal shareholder, which
helped it replenish the capital base to its initial level of $5
million.
S&P said, "In our view, the new direct lending product may
partially ease profitability challenges, but is likely to also
increase credit risk given the altered liquidation procedure.It is
offered to accredited borrowers at a fixed interest rate of at
least 6% (higher than the committed 4% to debt investors) and makes
it possible to supply the collateral posted by them onto the
Compound protocol platform in the name of Compound Prime--to
improve the overall returns. However, we think this off-protocol
lending product development will add credit risk to Compound Prime
debt investors since the key mechanism of automated collateral
liquidations in the Compound protocol--that is central to the
protection of investors under the current framework--will no longer
apply.
"While the initial overcollateralization will be higher than
currently applied on the protocol, we understand that Compound
Prime's new product introduces margin call in lieu of automatic
liquidations at preset loan-to-value (LTV) threshold. Specifically,
the margin call notification process permits longer time window to
comply (up to a 8-hour grace period) at a lower LTV threshold. This
increases risks of a potential credit loss, in our view, given the
extreme price volatility of crypto assets and that the more lenient
underwriting features may attract weaker counterparties."
Furthermore, given the differential in LTV thresholds for
liquidation between the Compound platform and the new lending
product, credit risk for Compound Prime could be exacerbated in the
event the new loans are partly funded directly through the Compound
protocol and not in full by Compound Prime debt investors. Minimal
losses on the Compound protocol--despite over $1.1 billion of
liquidations since the platform's inception four years ago--is a
key supportive factor in S&P's current rating. That said, it
understands the company aspires to predominantly rely on debt
investor funding for the new lending product, and only use direct
protocol funding as a backstop.
S&P said, "In our view, the new lending product poses limited
incremental liquidity risks at this stage.The new bilateral loans
are expected to have an open term and will be redeemable in full by
Compound Prime with three-day notice, mirroring the contractual
redemption period for the Compound Prime debt investors. Debt
investors who provide U.S. dollar or USDC to new borrowers already
have a three-day window, unlike the one-day notice under the
initial product when we assigned our ratings. The matched timeframe
limits liquidity risk overall, in our view. Nevertheless, we think
the new product raises the bar for Compound Prime's liquidity risk
management, and some uncertainties remain at this stage, including
the size of its liquidity buffers, whether it will have access to
secure committed lines of credit, or how the entity may execute
sizable investor redemptions in practice.
"We expect to resolve the CreditWatch negative over the next 90
days once we have more clarity on takeup, monitoring, performance,
and funding and liquidity management of the new lending product.
"We could lower the ratings over the next 90 days if Compound
Prime's credit profile worsens following the launch of the new
lending product, without corresponding material improvement in
profitability. We could also lower the ratings if, contrary to our
expectations, we see some mismatch between the redemption terms of
the debt securities and those of the loans.
"We could remove the ratings from CreditWatch in the next 90 days
if the company manages its new product rollout such that we believe
it is likely to sustainably improve its profitability without
meaningfully worsening its credit risk profile."
CONNECT HOLDING: S&P Assigns 'B-' ICR, Outlook Negative
-------------------------------------------------------
S&P Global Ratings assigned a 'B-' issuer credit rating to Connect
Holding II LLC (doing business as Brightspeed) with a negative
outlook.
S&P said, "We also assigned a 'B-' issue-level rating and '3'
recovery rating to the company's proposed first-lien senior secured
debt, which comprises a $600 million revolving credit facility due
in 2027, $1 billion term loan A due in 2029, $2 billion term loan B
due in 2029, and $1.9 billion of senior notes due in 2029. The '3'
recovery rating indicates our expectation of meaningful (50%-70%;
rounded estimate: 65%) recovery in the event of a payment default.
"We expect Apollo Global Management Inc.'s acquisition of Lumen
Technologies Inc.'s incumbent local exchange carrier assets and
associated operations across 20 states in a transaction valued at
$7.5 billion to close in October 2022, with $4.9 billion of
proposed first-lien secured debt raised at the new carve-out
entity, Connect Holding II LLC (doing business as Brightspeed).
"The ratings on Brightspeed reflect our expectation for high
leverage and negative FOCF due to substantial network investments
over the next couple of years. We expect the transaction will
result in elevated pro forma adjusted debt to EBITDA of about 7x in
2022, rising to the mid-8x area in 2023 due to substantial capital
spending requirements, lower earnings because of secular industry
declines for legacy voice and data, and negative FOCF.
Brightspeed's capacity to reduce debt over time is predicated on
its ability to profitably expand its fiber broadband customer base
sufficiently to offset declines in legacy products and services. If
Brightspeed executes on its fiber deployment strategy, achieves
penetration above 35%, and manages its operating expenses, we
believe it could improve revenue trends and ultimately increase
earnings by 2024–2025, enabling it to reduce leverage. However,
even under this scenario, Brightspeed could adopt a more aggressive
financial policy under private equity ownership, including
debt-financed dividends to Apollo."
The acquired network will require significant investment to achieve
top-line stability. The Lumen assets are about 97% copper
wire-based infrastructure. Upon close of the transaction,
Brightspeed will have about $1.5 billion cash and full availability
under its $600 million revolving credit facility to fund its
network upgrade. It plans to make fiber available to more than 50%
of its addressable market by 2026, passing 3.5 million new premises
with fiber. S&P expects capital expenditures (capex) to be
substantial, about $1 billion annually over the next couple of
years. That will require solid execution during the network build,
yielding penetration of at least 35% and maintaining low churn for
top-line stability and earnings growth.
Brightspeed faces secular declines from its legacy products and
services as well as aggressive competition from cable. Secular
industry pressures from Brightspeed's legacy products, including
digital subscriber line (DSL) internet and wireline voice services,
will constrain top-line growth over the next couple of years, in
our view. They account for approximately 97% of its mass markets
revenue. S&P said, "We believe Brightspeed can convert a
significant portion of its copper wire customers to fiber at a
relatively low cost. However, to achieve penetration rates of 35%,
the company will need to take market share (it has about 20%
penetration) and faces aggressive competition from incumbent cable
operators in 76% of its markets (38% from Comcast and 15% from
Charter). These operators can offer similar download speeds
compared with fiber and competitively priced bundled services,
which now include wireless services. Increasing competition from
new fixed wireless players such as Verizon and T-Mobile, which are
leveraging their 5G wireless networks to offer in-home broadband
service, could also be a factor. We believe they could provide an
alternative for customers who are more price-sensitive and less
data-intensive users, making it more difficult to convert copper
wire customers to fiber."
S&P said, "We believe there is execution risk as Brightspeed
deploys fiber-to-the-home (FTTH) across its footprint. Inflation
and recession risks could pose challenges to Brightspeed's
strategy. Both global supply chain and labor shortfalls are
prevalent among fiber network providers, which could constrain
Brightspeed's ability to meet its target of more than 50% fiber
homes passed by 2026. That said, its network architecture will
predominantly consist of aerial fiber (75% of its total fiber
build), which should keep its cost per home passed lower than
peers', at about $580. However, this architecture leaves it more
exposed to adverse weather conditions. Further, Brightspeed's fiber
technology uses a simpler design that will reduce the contractors
it requires for installation.
"While we view FTTH as the best conduit from transmitting data to
customers, material penetration gains could be challenging. Data
speeds offered are still comparable with the packages cable
providers provide. Therefore, Brightspeed's ability to increase its
subscriber base may depend on aggressive promotions or discounts
relative to cable operators, especially given the economic
environment in which consumers are cost-conscious.
"S&P Global Ratings will treat the $1.9 billion holding company
loan as debt, increasing Brightspeed's consolidated leverage,
although we expect Apollo will service the debt. Connect Midco
LLC's (an intermediate holding company of Connect Holding II LLC)
borrowing will be backed by an equity commitment letter from Apollo
to support the transaction and capex plan of Brightspeed. Given the
size of the holdco loan, proximity to Connect Holding II LLC, and
the debt-like nature of the instrument, we include this loan as
debt in our consolidated adjusted leverage calculation. Given the
lack of cash flow at Connect Holding II LLC, we expect Apollo will
need to provide support in servicing this debt via the equity
commitment letter. However, limited restrictions prevent
Brightspeed from servicing the Connect Midco debt or paying Apollo
a dividend. Excluding the holdco loan from S&P Global
Ratings-adjusted debt, leverage is about 1x lower at the outset.
"The negative outlook reflects our expectation that secular
industry declines in Brightspeed's copper wire business and
elevated capital spend should contribute to lower earnings and
negative FOCF, raising consolidated leverage to the mid-8x area
over the next two years from the low-7x area in 2022. This
increases the risk that the capital structure could become
unsustainable if operating targets are not met. At the same time,
given its aggressive buildout plans and liquidity profile, we
believe Brightspeed may require additional funding in two years."
S&P could lower the rating on Brightspeed if:
-- Competition increases, such that Brightspeed cannot capture
significant broadband share;
-- FOCF deficits are worse than S&P's expectations; or
-- S&P determines the capital structure is no longer sustainable
or there are liquidity pressures, likely a result of missteps in
executing on its growth strategy.
S&P could revise the outlook to stable if Brightspeed:
-- Profitably increases its fiber broadband penetration;
-- Manages churn and customer acquisition costs over the next 12
months; and
-- Stabilizes margins such that there is a path to leverage
reduction.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance is a moderately negative consideration in our
credit rating analysis of Brightspeed. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of
controlling owners, in line with our view of most rated entities
owned by private-equity sponsors. Our assessment also reflects
their generally finite holding periods and a focus on maximizing
shareholder returns."
CUREPOINT LLC: Taps Rountree Leitman Klein & Geer as Counsel
------------------------------------------------------------
Curepoint, LLC received approval from the U.S. Bankruptcy Court for
the Northern District of Georgia to employ Rountree Leitman Klein &
Geer, LLC as its legal counsel.
The firm's services include:
(a) advising the Debtor with respect to its powers and duties in
the management of its property;
(b) preparing legal papers;
(c) assisting in the examination of claims of creditors;
(d) assisting in the formulation and preparation of a disclosure
statement and plan of reorganization and in the consummation
thereof; and
(e) performing all other necessary legal services for the
Debtor.
The hourly rates of the firm's attorneys and staff are as follows:
William A. Rountree, Attorney $495
Will B. Geer, Attorney $495
Michael Bargar, Attorney $495
Hal Leitman, Attorney $425
David S. Klein, Attorney $425
Alexandra Dishun, Attorney $425
Benjamin R. Keck, Attorney $425
Barret Broussard, Attorney $395
Ceci Christy, Attorney $350
Elizabeth A. Childers, Attorney $350
Caitlyn Powers, Attorney $275
Zach Beck, Law clerk $195
Sharon M. Wenger, Paralegal $195
Megan Winokur, Paralegal $150
Catherine Smith, Paralegal $150
Yasmin Alamin, Paralegal $150
The firm received a pre-bankruptcy retainer of $20,000 from the
Debtor.
Will Geer, Esq., a partner at Rountree Leitman Klein & Geer,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Will B. Geer, Esq.
Rountree Leitman Klein & Geer, LLC
Century Plaza I
2987 Clairmont Road, Suite 350
Atlanta, GA 30329
Telephone: (404) 584-1238
Facsimile: (404) 704-0246
Email: wgeer@rlkglaw.com
About Curepoint LLC
Curepoint, LLC -- https://www.curepointcancer.com/ -- provides
radiation treatment for cancer patients at its facility in Dublin,
Ga.
Curepoint filed a petition for relief under Subchapter V of Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-56501) on
Aug. 19, 2022, with between $1 million and $10 million in both
assets and liabilities. Todd E. Hennings has been appointed as
Subchapter V trustee.
Judge Jeffery W. Cavender oversees the case.
Will B. Geer, Esq., at Rountree, Leitman, Klein & Geer, LLC is the
Debtor's counsel.
DORSEY LEON HAMMOND: Agape Buying Decatur Property for $250K Cash
-----------------------------------------------------------------
Dorsey Leon Hammond asks the U.S. Bankruptcy Court for the Northern
District of Georgia to authorize the sale of the real property
located at 2251 Verna Drive, in Decatur, Georgia 30034-2635, to
Agape Acquisitions, LLC, for $250,000, cash.
The Debtor is a 76-year-old retired veteran who lives on his
military pension and social security income. He owns the Property.
His non-filing spouse, Hariette Johnson Hammond, co-owns the
Property with him. They have lived in the Property since 1995.
There are no mortgage liens on the Property. The Debtor listed two
secured creditors on Schedule D that assert that they are secured
by virtue of having writs of fieri facias recorded against the
Property ("Secured Creditors"): DLP Lending Fund, LLC and
Groundfloor Holdings GA, LLC. The Debtor is not aware of any other
creditors asserting liens on the Property.
The Secured Creditors both received default judgments against the
Debtor in lawsuits that alleged a "fraudulent scheme" involving the
Debtor, Flourish Home Investors, LLC, of which the Debtor was the
principal, and 230 Goshen Investment Group, LLC. The Debtor,
however, was not a knowing or willing participant in the alleged
"fraudulent scheme."
The Debtor has secured the Purchaser for the Property that will
lease it back to him in order to allow him and his wife to live out
the remainder of their lives in the Property. Agape was formed on
April 23, 2019, and is owned by two individuals, James Peek and
Adrienne Chiles, each of whom have a 50% ownership share. Neither
Agape, nor the owners of Agape, is insider of the Debtor. In order
to ensure that the Property is being sold for fair market value,
the Debtor obtained an appraisal of the Property, which values the
Property at $250,000.
The Debtor requests entry of an order, authorizing him to sell the
Property on the terms set forth in the Purchase Agreement free and
clear of liens, claims, and encumbrances, with all liens or
security interests of the Secured Creditors attaching to the
proceeds of the sale, and allowing the Debtor to enter into the
Lease.
As shown in the Real Estate Purchase Agreement, the Debtor proposes
to sell the Property "as-is" for $250,000. This is an all-cash
offer. The Debtor submits that the proposed purchase price amounts
to fair market value for the Property. The closing is to be
scheduled by Sept. 15, 2022.
As shown in the Residential Lease Agreement Agape has leased the
Property to the Debtor for a 10-year term commencing on Sept. 15,
2022, for a monthly rent payment of $1,500.
The Debtor has determined that selling the Property pursuant to the
Purchase Agreement and leasing it back pursuant to the Lease is in
the best interests of the estate and its creditors.
Finally, the Debtor requests that the order granting the Motion be
effective immediately by providing that the 14-day stay applicable
under Rule 6004(h) of the Bankruptcy Rules be waived.
A copy of the Purchase Agreement is available for free at
https://tinyurl.com/3x5w69p7 from PacerMonitor.com free of charge.
Dorsey Leon Hammond sought Chapter 11 protection (Bankr. N.D. Ga.
Case No. 22-54243) on June 3, 2022. The Debtor tapped William
Rountree, Esq., as counsel.
E.L. SERVICES: Wins Interim Cash Collateral Access Thru Dec 16
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California
authorized E.L. Services, Inc. to use cash collateral on an interim
basis in accordance with the budget attached to the Declaration of
Steve Baca Re Budget through December 16, 2022.
A further hearing on the matter is scheduled for December 14 at
10:30 a.m.
The status conference is continued to December 14 also at 10:30
a.m.
A copy of the order is available at https://bit.ly/3Bs0zu7 from
PacerMonitor.com.
About E.L. Services, Inc.
E.L. Services, Inc., a landscape and maintenance company located in
Dublin, California, filed a Chapter 11 petition (Bankr. N.D. Cal.
Case No. 21-41087) on August 25, 2021. On the Petition Date, the
Debtor estimated $50,000 to $100,000 in assets and $1 million to
$10 million in liabilities. The petition was signed by Steven P.
Baca, general manager.
Judge William J. Lafferty oversees the case.
The Debtor tapped Kornfield, Nyberg, Bendes, Kuhner & Little P.C.
to serve as its counsel.
EASCO BOILER: Leggett Sets Bidding Procedures for Bronx Property
----------------------------------------------------------------
Leggett Real Estate Holdings, LLC, an affiliate of Easco Boiler
Corp., asks the U.S. Bankruptcy Court for the Southern District of
New York to approve their proposed bidding procedures in connection
with the sale of the real property located at 1173-1175 Leggett
Avenue, in Bronx, New York, to TBE RE Acquisitions Co. II LLC for
$15.25 million, subject to higher and better offers.
Easco is the sole member and 100% owner of Leggett. Leggett's only
business is the management of the Property and Easco is its only
tenant.
On Aug. 22, 2021, Leggett (as one of five joint and several
borrowers) and Easco (as guarantor) entered into a loan arrangement
with EF Edgewood SBC 2016-1 LLC (the "Original Lender") evidenced
by certain notes, instruments, and agreements (collectively,
the "Loan Documents"), including that certain Consolidated, Amended
and Restated Commercial Term Promissory Note in the original
principal amount of $15 million, dated as of Aug. 22, 2019.
The amounts due under the Note are secured by that certain Mortgage
Consolidation, Spreader and Modification Agreement and that certain
Consolidated, Amended and Restated Mortgage dated as of Aug. 22,
2019 encumbering the Property and certain other real properties
owned by the other four makers. As of Oct. 21, 2019, the Note,
Mortgage, and all other Loan Documents were assigned by the
Original Lender and delivered to Elizon DB Transfer Agent LLC. In
an effort to address these challenges, the amount of the principal
amount of the Loan was increased to $16 million pursuant to that
certain Consolidated, Amended and Restated Commercial Term
Promissory Note dated as of April 30, 2021.
Easco's business and the related cash flows continued to suffer and
it found itself unable to pay its obligations, as tenant, which
then impaired Leggett's ability to make the required payments to
the Lender.
Prior to the Petition Date, an event of default occurred under the
Loan Documents when Leggett failed to make the required payment due
and owing to Lender on Jan. 1, 2022. As a result of the event of
default, the Lender declared the current outstanding principal
balance of $16 million and all other outstanding debt due under the
Loan Documents to be immediately due and payable. At that point,
the Lender was entitled to commence an action to foreclose the
mortgage against the Property and other properties securing its
debt.
To effectuate the proposed sale of the Property, Leggett seeks
entry of two separate orders. The first order, the Sale Procedures
Order, to be presented at the initial hearing on this Motion
scheduled for Sept. 27, 2022 at 2:00 p.m. The Sale Procedures
Order is (a) for the authorization and approval of (i) the Bid
Procedures to be employed in connection with the proposed sale of
the Property, and (ii) a break-up fee equal to 3% of the Purchase
Price and expense reimbursement not to exceed $150,000, such
amounts payable in the event that the Court fails to approve a sale
to the Proposed Buyer and instead approves a sale of the Property
to an entity that has submitted a higher or better counteroffer and
such sale is consummated; (b) for scheduling a hearing to approve
the proposed sale of the Property; and (c) for approval of the form
and manner of notice of the Motion and the Sale Hearing.
Leggett further requests that, at the Sale Hearing, the Court
enters a second order, the Sale Order, (a) approving a sale to the
Proposed Buyer pursuant to the APA or to another bidder submitting
a higher or better offer; (b) approving the APA or a substantially
similar asset purchase agreement with the applicable purchaser; and
(c) authorizing Leggett to sell the Property, free and clear of all
Encumbrances. The Seller reserves the right to request that the
Sale Hearing be in conjunction with the Chapter 11 plan
confirmation hearing.
The sale of the Property will be "as is, where is, how is" to the
Proposed Buyer or the ultimate successful bidder, without recourse.
Leggett actively marketed the Property pre-petition and
post-petition. Leggett and the Proposed Buyer engaged in
discussions regarding the potential sale of the Property. After
arm's-length negotiations, the Proposed Buyer offered to buy the
Property for the sum of $15.25 million. The Parties entered into
the APA, subject to higher and better offers and the approval of
the Court.
The salient terms of the APA are:
a. Property: 1173-1175 Leggett Avenue, Bronx, New York Bronx
Section 2736 Lots 82, 84 and 86 and Grinell Place lot/parking area
including all building(s), improvements, and permanent fixtures
b. Purchase Price: $15.25 million
c. Deposit: $1,525,000 (10% of the Purchase Price)
d. Break-up Fee: 3% of the Purchase Price
e. Expense Reimbursement: Up to $150,000
f. Court Approval: The sale is conditioned upon entry of an
order of the Court authorizing the sale of the Property free and
clear of all liens, claims and Encumbrances (including, without
limitation, successor liability), including a determination that
the Proposed Buyer is a good faith purchaser pursuant to section
363(m) of the Bankruptcy Code.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 19, 2022 at 5:00 p.m. (ET)
b. Initial Bid: $1.625 million
c. Deposit: 5% of the counteroffer to be held in escrow by the
Seller's attorney
d. Auction: The Auction will take place on Oct. 21 2022 at
10:00 p.m. (ET) by the law firm of RIEMER & BRAUNSTEIN LLP and must
be attended remotely by Zoom or another similar online platform by
each prospective Qualified Bidder (and/or their legal designee).
The Auction may be transcribed by a court reporter. The Seller's
counsel will notify all Qualified Bidders and other interested
parties of the log in information and passcode.
e. Bid Increments: $100,000
f. Sale Hearing: Oct. 25, 2022 at 10:00 a.m. (ET)
g. Closing: Two Days after the Outside Date of Nov. 28, 2022,
subject to the terms of the APA
Leggett reserves the right to modify the relief requested in the
Motion prior to or at the applicable hearings, including modifying
the proposed Bid Procedures, if it determines that such action will
maximize value of its estate.
To ensure that adequate notice of the sale of the Property is
provided, Leggett seeks approval of a form of Notice of Auction and
Sale Hearing. Upon entry of the Sale Procedures Order and approved
form of Sale Notice and Bid Procedures, Leggett will cause such
documents to be served upon the Notice Parties.
Finally, to implement the foregoing successfully, Leggett seeks a
waiver of the 14-day stay of an order authorizing the use, sale, or
lease of property under Bankruptcy Rules 6004(h).
A copy of the Bidding Procedures and the Purchase Agreement is
available for free at https://tinyurl.com/rntuj5u7 from
PacerMonitor.com free of charge.
The Purchaser:
TBE RE ACQUISITIONS CO II LLC
4 Bryant Park, Suite 200
New York, NY 10018
About Easco Boiler
Founded in 1926, Easco Boiler Corp. is the oldest minority owned
and operated steel boiler and tank manufacturer in the country.
Easco Boiler and affiliate, Leggett Real Estate Holdings, LLC,
filed petitions under Chapter 11 of the Bankruptcy Code (Bankr.
S.D.N.Y. Lead Case No. 22-10881) on June 27, 2022. In their
petitions, Easco Boiler listed up to $10 million in assets and up
to $50 million in liabilities while Leggett Real Estate Holdings
listed as much as $50 million in both assets and liabilities.
Tyren
Eastmond, president, signed the petitions.
Judge James L. Garrity, Jr. oversees the cases.
The Debtors tapped Riemer & Braunstein, LLP as legal counsel and
ASI Advisors, LLC as financial advisor.
ENERGY ENTERPRISES: Unsecureds Owed $3M to Get 1% of Claims
-----------------------------------------------------------
Energy Enterprises USA Inc., d/b/a Canopy Energy, submitted a Plan
and a Disclosure Statement.
This is a reorganizing Plan that provides for payment to holders of
allowed claims over time. The timing of Plan payments to
particular creditor groups will depend upon their classification
under the Plan. The Effective Date of the Plan shall be the first
business day that is 14 calendar days after the entry of the order
confirming the Plan, with payment beginning by the first day of the
following month.
Under the Plan, Class 2 General Unsecured Claims total $3,202,366.
General unsecured claims, except for nominal unsecured claims which
are classified in Class 2A, and except for the paycheck protection
program loan (PPP Loan) which is classified in Class 2C, are
classified in Class 2B and will receive a total of approximately 1%
of their claims in monthly payments over five-year period of the
Plan. The Debtor has no nominal unsecured claims listed in Class
2A.
Class 2B General Unsecured Claims will receive their pro-rata share
of $533.73 per month for a total of $32,023.65 over the five-year
period of the Plan. The payments will start on the first day of
the first month following the month within which the Effective Date
occurs. Based on the proposed payments, the unsecured class will
receive approximately 1% of their claims. Class 2B is impaired.
Class 2C First International Bank for PPP Loan. Debtor submitted
the forgiveness application for the PPP Loan to First International
Bank several months ago but has not yet received a confirmation
that the PPP loan has been forgiven. Debtor anticipates the PPP
Loan to be forgiven in its entirety. Class 2C is impaired.
The Debtor will fund the Plan from the continued operation of its
business.
The hearing on adequacy of Disclosure Statement will be on Oct. 31,
2022 at 11:00 a.m. in Courtroom 302, 21041 Burbank Blvd., Woodland
Hills, CA 91367.
Attorneys for Energy Enterprises USA Inc.:
Michael Jay Berger, Esq.
Sofya Davtyan, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Blvd. 6th Floor
Beverly Hills, CA 90212-2929
Telephone: (310) 271-6223
Facsimile: (310) 271-9805
E-mail: Michael.Bergerbankruptcypower.com
Sofya.Davtyan@bankruptcypower.corn
A copy of the Disclosure Statement dated September 14, 2022, is
available at https://bit.ly/3LhikRy from PacerMonitor.com.
About Energy Enterprises USA Inc.
Energy Enterprises USA Inc. d/b/a Canopy Energy --
https://www.canopyenergy.com/ -- is a residential solar energy
developer in California. The company filed a Chapter 11 petition
(Bankr. C.D. Cal. Case No. 21-11374) on August 12, 2021. On the
Petition Date, the Debtor estimated $100,000 to $500,000 in assets
and $1,000,000 to $10,000,000 in liabilities. The petition was
signed by Lior Agam, president.
Judge Maureen Tighe presides over the case.
The Law Offices of Michael Jay Berger serves as the Debtor's
counsel.
EPUMPS SOLUTIONS: Starts Subchapter V Case
------------------------------------------
Epumps Solutions LLC filed for chapter 11 protection in the
District of Puerto Rico. The Debtor elected on its voluntary
petition to proceed under Subchapter V of chapter 11 of the
Bankruptcy Code.
Epumps Solutions LLC estimates between 1 and 49 creditors. The
petition states funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 28, 2022, at 10:30 AM via Telephonic Conference Information
for AUST/Trial Attys.
Proofs of claim are due by Nov. 23, 2022.
About Epumps Solutions LLC
Epumps Solutions LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.P.R. Case No. 22-02731) on Sept. 14,
2022. In the petition filed by Alexis O. Hernandez Arnaldy, as
president,the Debtor reported assets and liabilities between
$500,000 and $1 million.
Roberto Santos Ramos has been appointed as Subchapter V trustee.
The Debtor is represented by Noemi Landrau Rivera of Landrau Rivera
& Associates.
EXCELSIOR SECURITY: Wins Cash Collateral Access Thru Sept 27
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Jacksonville Division, authorized Excelsior Security Agency of
North Florida, Inc. to use the cash collateral pledged to Paychex
Advance, LLC d/b/a Advance Partners and Fora Financial Advance,
LLC.
The Debtor is permitted to use cash collateral in accordance with
the budget through the earlier of (i) September 27, 2022, at 10
a.m. E.T., (ii) the entry of an order modifying the order, (iii)
the Debtor being removed as debtor-in-possession, (iv) the
conversion of the Debtor's Chapter 11 case to a case under Chapter
7 of the Bankruptcy Code, or (v) a default in the performance or
observance of any material provision of the order.
Advance Partners and the Debtor dispute the character of the the
parties' Factoring Agreement as a purchase and sale of the Debtor's
accounts. Advance Partners asserts the proceeds of factored
accounts are the property of Advance Partners; the Debtor asserts
those proceeds are Advance Partners' collateral. In addition,
Advance Partners asserts the Debtor failed to comply with the
provisions of the Court's First Interim Order.
As adequate protection for the use of cash collateral, Advance
Partners and Fora Financial are granted a replacement lien on the
Debtor's post-petition inventory, accounts (excluding sales taxes),
receivables, and unrestricted cash in the same priority and to the
same extent as their pre-petition liens, but only to the extent
their prepetition collateral is utilized. The post-petition liens
granted do not extend to any avoidance claims held by the estate.
With respect to Advance Partners, the "Replacement Lien" granted
will mean a post-petition lien on any accounts of the Debtor with
verifiable face value at all times at least equal to 110% of the
outstanding balance of cash collateral used by the Debtor. The
Debtor will present Advance Partners with the Post-Petition
Collateral for verification before the Debtor uses cash collateral
as authorized by the interim Order. After verification, Advance
Partners will transfer funds in the Lock Box to the Debtor only as
needed to cover the expenses outlined in the Budget. Additionally,
Advance Partners will receive a super-priority administrative claim
pursuant to 11 U.S.C. section 364(c)(1) in an amount equal to the
proceeds of accounts used by Debtor during the Second Interim
Period. The Debtor will not grant to any party any interest in the
Post-Petition Collateral prior to or equal with the Replacement
Lien being accorded to Advance Partners.
Advance Partners is granted an allowed administrative priority
claim pursuant to 11 U.S.C. section 503 to the extent of any
diminution in value of the Post-Petition Collateral.
The liens granted to Advance Partners and Fora Financial will be
valid and perfected without the need for the execution of filing of
any further document or instrument otherwise required to be filed
under applicable non-bankruptcy law.
A continued preliminary hearing on the matter is set for September
27 at 10 a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3RXE4V7 from PacerMonitor.com.
The budget provides for total estimated operating expenses, on a
weekly basis, as follows:
$64,737 for the week ending September 18, 2022;
$69,879 for the week ending September 25, 2022; and
$60,605 for the week ending October 2, 2022.
About Excelsior Security Agency of North Florida, Inc.
Excelsior Security Agency of North Florida, Inc. is a security
services provider. The Debtor sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-01609) on
August 19, 2022. In the petition signed by Bobby J. Lingold, vice
president, secretary, and chief executive officer, the Debtor
disclosed up to $1 million in assets and up to $10 million in
liabilities.
Judge Jason A. Burgess oversees the case.
Bradley R. Markey, Esq., at Thames Markey is the Debtor's counsel.
FIGUEROA MOUNTAIN: Has Deal on Cash Collateral Access
-----------------------------------------------------
Figueroa Mountain Brewing, LLC, White Winston Select Asset Funds,
LLC, and SCS Acquisition LLC, successor-in-interest to Montecito
Bank & Trust, advised the U.S. Bankruptcy Court for the Central
District of California that they have reached an agreement
regarding Figueroa Mountain's use of cash collateral and now desire
to memorialize the terms of this agreement into an agreed order.
The parties agree the Debtor is authorized to use cash collateral
on a final basis through the earlier of (a) October 14, 2022, or
(b) the date on which the Debtor's cash on hand falls below falls
below the Cash Floor of $698,865.
If the Debtor's cash on hand falls below $698,865, then the Debtor
will: (a) immediately notify counsel for the Secured Creditors in
writing; (b) if unable to reach further agreement with the Secured
Creditors for the continued use of cash collateral, within two
Court days of sending the Required Notification file an emergency
motion for continued authority to use cash collateral and request
that the Court hear such motion at its earliest opportunity; (c) be
authorized to continue using cash collateral in accordance with the
Stipulation and the Budget until the hearing on such emergency
motion; and (d) the $698,865 will not be transferred to a third
party, including the Secured Parties or Creekstone, other than
payments of approved Budget expenses including in accordance with
clause (c) above so long as they are not payments to the Secured
Parties or Creekstone, without prior Court order entered after a
hearing set on regular notice.
During the Authorization Period, the Debtor may use cash collateral
solely to pay the expenses set forth in the budget or such further
budget that may be approved by the Parties or the Court, with a 25%
variance.
White Winston and SCS will continue to receive, as adequate
protection, replacement liens in post-petition collateral for any
diminution in their collateral as of the Petition Date arising from
the Debtor's use of such collateral but only to the same extent,
applicability and validity as the prepetition liens held by White
Winston and SCS.
A copy of the stipulation and the Debtor's budget through the week
of December 12, 2022, is available for free at
https://bit.ly/3RZkcAO from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$254,276 for the week beginning September 19, 2022;
$196,953 for the week beginning September 26, 2022;
$250,649 for the week beginning October 3, 2022;
$163,448 for the week beginning October 10, 2022;
$244,555 for the week beginning October 17, 2022;
$167,950 for the week beginning October 24, 2022;
$281,863 for the week beginning October 31, 2022;
$164,364 for the week beginning November 7, 2022;
$242,205 for the week beginning November 14, 2022;
$164,150 for the week beginning November 21, 2022;
$279,155 for the week beginning November 28, 2022;
$163,458 for the week beginning December 5, 2022; and
$239,206 for the week beginning December 12, 2022.
About Figueroa Mountain Brewing LLC
Buellton, Calif.-based Figueroa Mountain Brewing, LLC --
https://www.figmtnbrew.com/ -- is a beer manufacturer founded in
2020. It sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. C.D. Cal. Case No. 20-11208) on Oct. 5, 2020. Jaime
Dietenhofer, the company's manager, signed the petition.
At the time of filing, the Debtor had estimated assets of between
$1 million and $10 million and liabilities of the same range.
Judge Martin R. Barash oversees the case.
Lesnick Prince & Pappas LLP is the Debtor's legal counsel.
FIVE POINT: S&P Downgrades ICR to 'CCC+', Outlook Negative
----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Irvine,
Calif.-based residential developer Five Point Holdings LLC (FPH) to
'CCC+', from 'B-'. At the same time, S&P also lowered its
issue-level rating on its senior unsecured notes to 'B-' from 'B'.
The recovery rating remains '2'.
The negative outlook reflects S&P's view that it may see continued
weakening of its core operations over the next 12 months that may
result in further deterioration in overall liquidity.
Liquidity is diminishing via unprofitable core operations.
S&P said, "We expect only negligible revenue and profit
contribution from Valencia over the next year. Demand for finished
lots in this large master planned community outside of Los Angeles,
Five Point Holding LLC's (FPH) sole wholly owned asset (with about
$2 billion in inventories), appears fully satisfied for now
(through the third quarter of 2023).
"Thus, we expect the land developer's only material cash inflows
over the coming 12 months to come from distributions from its
37.5%-owned joint venture at Great Park. In fact, we estimate
roughly $80 million in (net) receipts from Great Park by this
October. Most of these land-based revenues we expect to arise from
lot sales to land-banking entities – many of which are related to
either FPH or controlling shareholder Lennar Corp. – and thus we
think the visibility into this 2022 payment is relatively good.
"Nevertheless, even though we assume a similarly sized distribution
from Great Park in late 2023, our estimates still suggest overall
cash balances will decline by close to $50 million over that span,
from about $125 million as of June 30, 2022. Finally, we now
believe FPH should face some challenges refinancing its unsecured
revolving credit facility, due April 2024 (the company has a
one-year extension option which could push the maturity to 2025).
As a result, we now view FPH's liquidity as less than adequate.
"FPH's capital structure appears unsustainable. We think EBITDA
will remain at or below break-even levels for the foreseeable
future. That's mainly caused by continued disappointing results
expected from Valencia, Five Point's largest, most important
asset."
Meanwhile, the land developer's modest but revamped commercial
operations (i.e., joint ventures) have yet to generate material
revenues, let alone profits. Finally, the San Francisco Venture,
its third key asset (along with Valencia and Great Park), appears
for now a non-starter, due in part to litigation, with no visible
revenues.
Note that since S&P's last review, total debt has increased by
almost $175 million, and reflects deferred tax savings that it now
deem unlikely to be realized.
Ultimately, further weakening in results, especially at Valencia,
makes repayment of the $625 million principal on its senior notes
by late-2025 maturity increasingly uncertain.
Uncertainty about leadership and control. Virtually the entire
executive team at Five Point has been replaced amid broad
restructurings undertaken over these past couple of years.
Moreover, its director and other key board roles have recently
changed, with controlling shareholder Lennar Corp. gaining
strength. FPH's strategy and financial policy remain in flux, even
as demand for its residential lots and commercial space is slowing
with broader housing and economic trends.
S&P said, "The negative outlook reflects our view for continued
weakening in FPH's core operations (i.e., residential land sales)
to drive more than an estimated $50 million in outflows for fund
from operations (FFO) and result in further erosion in the
developer's liquidity over the next 12 months. We now view the
company as vulnerable and dependent upon favorable business,
financial, and economic conditions to meet its financial
commitments. The issuer's financial commitments appear to be
unsustainable over the long term, although it may not face a credit
or payment crisis in the next 12 months.
"We could lower the rating to 'CCC' if liquidity declines even
further than we expect, should quarterly cash balances fall below
the $75 million to $100 million we forecast. We could also lower
the rating if the company is unable to refinance or extend the
maturity of its revolver once it becomes current.
"An outlook revision to stable, while unlikely over the next year,
could occur if profits from residential lot sales significantly
outperform our expectations. For that to happen, we think finished
lot sales from Valencia, Five Point's main asset, would have to
recover to at least 1,000 home-sites annually. In addition, we
would expect to see FPH refinance its revolver due April 2024."
ESG credit indicators: E-3, S-2, G-2
SG Credit Factors: Waste and Pollution. Environmental factors are a
moderately negative consideration in our credit rating analysis of
Five Point Holdings. The land developer is subject to a variety of
local, state, and federal statutes, ordinances, rules, and
regulations concerning health and environmental protection. S&P
views Five Point's ESG exposure as broadly in line with that of
industry peers.
FLUSHING LANDMARK: Amends Plan to Include Victoria's Insider Claim
------------------------------------------------------------------
Flushing Landmark Realty LLC submitted a Fourth Amended Disclosure
Statement for the Fourth Amended Chapter 11 Plan dated September
13, 2022.
On or about April 6, 2022, the Court entered an Order approving the
Debtor's Third Amended Disclosure Statement and scheduled a hearing
to consider confirmation of the Debtor’s Third Amended Plan. The
Debtor's Third Amended Plan was predicated on a financing
transaction that failed to materialize. As a result, the Third
Amended Plan was no longer confirmable.
In addition, Wu, a debtor before the Court as well, failed to
confirm his proposed chapter 11 plan. By Order dated July 6, 2022,
the Court converted Wu's individual chapter 11 case to one under
chapter 7 of the Bankruptcy Code. This conversion significantly
impacted the Debtor's ability to reorganize.
Recoveries projected in the Plan shall be from the Debtor's re
financing of the Real Property or, in the event that the Debtor
fails to close on proposed re-financing and pay to 41-60 the
amounts agreed upon, by not later than 8 months after the date of
entry of an Order confirming the Debtor's Plan, the sale of the
Real Property.
The amount generated by proposed re-financing of the Real Property
shall be used to satisfy the claim of 41-60; the payment of any
outstanding statutory fees due and owing the United States Trustee;
the payment of allowed costs of administration of the case (the
"Administrative Claims") and a distribution to the holder of
Allowed General Unsecured Claims. In the event that the Debtor is
unable to meet the deadlines imposed, the Debtor shall conduct an
auction sale (the "Auction") of the Real Property and the proceeds
realized by the Auction shall be used to satisfy the claim of 41
60; the payment of any outstanding statutory fees due and owing the
United States Trustee; the payment of allowed costs of
administration of the case; and a distribution to the holders of
Allowed General Unsecured Claims.
Class 1 consists of the Secured Claim of 41-60 Main Street LLC
under its first mortgage on the Real Property. According to the
claim filed in this chapter 11 case, 41-60 is owed the amount of
$143,988,021.20 as of the date of the filing of its proof of claim
(Claim No. 3) filed on December 15, 2020. According to the claim,
interest in the amount of 24% percent continues to accrue. 41-60
states in its proof of claim that interest shall continue to accrue
on the unpaid principal balance from October 31, 2020, at the per
diem rate of $62,666.67 plus other fees and costs, including,
without limitation, attorneys' fees in accordance with the loan
documents.
41-60 had previously agreed to accept a reduced payment in the sum
of $112,987,675.37 plus interest at the per diem amount of
$25,000.00 commencing on May 3, 2022, and continuing until June 24,
2022, provided however, that amount was to be paid by not later
than June 24, 2022. As of July 1, 2022, 41-60 has agreed to accept,
and the Debtor have agreed to pay the sum of $114,445,486.46 (the
"Agreed Amount") along with an exit fee in the amount of
$940,000.00 (the "Exit Fee"), in full and complete satisfaction of
the amounts due and owing 41-60. Effective on July 1, 2022, the
Agreed Amount, but not the Exit Fee, shall be subject to interest
in the amount of 12.5% per annum until such time as the Agreed
Amount and Exit Fee have been satisfied in full. 41-60 has agreed
to vote to accept the proposed Plan in exchange for this proposed
treatment.
Class 3 consists of the Allowed General Unsecured Claims of the
Debtor. Accordingly, the Debtor estimates that the allowed general
unsecured creditors total $202,648.38. Provided that the closing on
the Debtor's proposed refinancing has occurred, and the Agreed
Amount and Exit Fee was paid to 41-60 the Allowed General Unsecured
Claims of Con Edison and the SBA shall be paid in full in Cash
within 10 business days from the Effective Date.
In the event that the Debtor is unable to refinance, to the extent
that the Agreed Amount and Exit Fee are paid to 41-60 pursuant to a
proposed sale of the Real Property, funds available in amount not
less than 10 percent of the Allowed Unsecured Claims, from a
carveout from 41-60, for pro rata distributions to Holders of
Allowed Unsecured Claims including, but not limited to, the Allowed
General Unsecured Claims of Con Edison and the SBA, will be made
available from the remaining available funds realized from the sale
of the Real Property. Distributions to such Holders of Allowed
Unsecured Claims including, but not limited to, the Allowed General
Unsecured Claims of Con Edison and the SBA shall be made in Cash
within 10 business days from the Effective Date.
Class 4 consists of the Other General Unsecured Claims of the
Debtor. Landmark Portfolio Mezz LLC ("Landmark Portfolio") on
December 23, 2020, timely filed Claim No. 3 in the amount of
$23,948,785.05. The Debtor has not included this claim in the
Allowed General Unsecured Claims as the Debtor asserts that
Landmark Portfolio has no claim directly against the estate. The
Debtor shall file an objection to the Landmark Portfolio claim.
Landmark Portfolio does hold a validly perfected security interest
in the membership interests in the Debtor. Accordingly, in the
event that the sale of the Debtor's Property generates sufficient
proceeds to satisfy the Agreed Amount due to 41-60 and a
distribution would therefore be available to the equity interests
in the Debtor, Landmark Portfolio would be entitled to said
distribution, up to an amount necessary to satisfy its lien, only
after the satisfaction of all allowed general unsecured creditors'
claims.
Class 5 consists of the claim of Victoria Realty Group LLC ("VRG")
an insider of the Debtor as that term is defined under the
Bankruptcy Code. VRG shall not receive a distribution under the
Plan and shall be subordinated to all other Allowed General
Unsecured Claims.
Class 6 consists of the Ownership Interest of Flushing Landmark
Realty Mezz in the Debtor. To the extent Allowed Claims are paid in
full in accordance with the Plan, the Ownership Interest in the
Debtor shall remain. In the event that the Debtor fails to
refinance, and the Debtor's Real Property is sold, the Debtor shall
have liquidated all or substantially all of its assets and the
Debtor will no longer exist. In that instance, the Debtor's
Ownership Interest would be cancelled.
In the event that the Debtor is unable to refinance, by not later
than May 1, 2023, and satisfy the Agreed Amount and Exit Fee to
41-60, the Debtor shall immediately proceed with the Auction of the
Real Property.
In the event of an Auction the Real Property shall be sold. The
Real Property shall be transferred free and clear of all liens,
claims and encumbrances, with the liens, claims and encumbrances to
attach to the proceeds of the sale, to the same extent, validity
and priority that said liens, claims and encumbrances existed as of
the Filing Date, provided that the mortgage of 41-60 shall survive
for the purpose of assigning it to any lender for the successful
purchaser.
A full-text copy of the Fourth Amended Disclosure Statement dated
September 13, 2022, is available at https://bit.ly/3RVPU24 from
PacerMonitor.com at no charge.
Attorneys for the Flushing Landmark Realty, LLC:
Fred S. Kantrow, Esq.
THE KANTROW LAW GROUP, PLLC
6901 Jericho Turnpike, Suite 230
Syosset, New York 11791
Tel: (516) 703-3672
E-mail: fkantrow@thekantrowlawgroup.com
About Flushing Landmark Realty
Flushing Landmark Realty LLC is primarily engaged in renting and
leasing real estate properties. The Company is the owner of a
fee simple title to a commercial building located at 41-60 Main
Street, Flushing, New York.
Flushing Landmark Realty LLC filed a voluntary petition for relief
under chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
20-73302) on Oct. 30, 2020. In the petition signed by Myint J.
Kyaw, principal, the Debtor estimated $353,831 in total assets and
$97,476,811 in total liabilities. Fred S. Kantrow, Esq., at
ROSEN & KANTROW, PLLC, represents the Debtor.
FOX SUBACUTE: Wins Cash Collateral Access Thru Dec 17
-----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Pennsylvania
authorized Fox Subacute at Mechanicsburg, LLC and its affiliated
debtors, Fox Nursing Home Corp. d/b/a Fox Subacute at Warrington,
Fox Subacute at Clara Burke, Inc., and Fox Subacute at South
Philadelphia, LLC, to use cash collateral of PeoplesBank, A Codorus
Valley Company, and Sabra Health Care Pennsylvania, LLC, on an
interim basis through and including the earlier of December 17,
2022, or the occurrence of an event of default.
Sabra objected to the request.
According to the Court, the Debtors may use the cash collateral
only:
i. For the purposes specified in the budget;
ii. To pay the United States Trustee's fees;
iii. To pay contingent fees to Weltman, Weinberg & Reis Co, LPA
in accordance with the Order Approving Employment of Weltman,
Weinberg & Reis Co., LPA as Special Counsel to the Debtor entered
on January 27, 2021; and
iv. To pay professional fees and reimbursement for expenses
allowed by the Court that the Bank and Sabra consent to being paid
from cash collateral or for which the Bank's and/or Sabra's
collateral is surcharged pursuant to 11 U.S.C. section 506(c).
On or before the fifth day of each month during the 19th interim
period, the Debtors will remit to PeoplesBank the amount of all
accrued and unpaid interest under the Note, and $50,000, which
amount will be applied to the principal balance outstanding under
the Note. In addition, Mechanicsburg will remit to the Bank for
application to the principal balance outstanding under the Note
upon entry of the Order, a payment in the amount of $500,000.
On or before the fifth day of October, 2022, and continuing on the
fifth day of each month thereafter until the earlier to occur of:
(a) rejection of the Sabra Lease and surrender of the facilities
leased from Sabra; or (b) expiration of the Nineteenth Interim
Period, Clara Burke will pay $168,394 to Sabra as payment of a
portion of the contractual base rent due from Warrington and Clara
Burke jointly and severally pursuant to the terms of the Master
Lease dated effective as of March 30, 2012, the First Amendment to
Master Lease dated effective as of March 30, 2012, Second Amendment
to Master Lease dated as of October 6, 2016, and Third Amendment to
Master Lease dated effective as of April 20, 2018.
On or before the fifth day of each month during the Facility Use
Period, Clara Burke will also deposit 1/12 of the estimated annual
School and Real Estate Taxes for the facility it occupies into one
or more escrow accounts maintained by Sabra. Sabra's agreement to
accept rent from Clara Burke in the specified amount and to allow
only Clara Burke to deposit funds for School and Real Estate Taxes
does not constitute a waiver by Sabra of any claims it may have
against Warrington and/or Clara Burke under the terms of the Sabra
Lease or other applicable law. Warrington and Clara Burke do not
concede that the contractual base rent amounts represent fair
market rents for the respective facilities or that Warrington is
required to pay School and Real Estate Taxes on the facility that
it leases under the Sabra Lease for any period after it vacated
such facility and reserve all rights as to whether such base rent
amounts constitute market rents or whether Warrington is obligated
to pay such School and Real Estate Taxes.
On or before the fifth day of each month during the 19th Interim
Period, the Debtors will remit to the Bank a $500 fee to compensate
the Bank for the personnel time required to monitor the Debtors'
compliance with the Order. The Administrative Fee will not reduce
the Debtors' obligations to the Bank under the Note or the Loan
Agreement but will be payable in addition to any amounts payable
thereunder.
As adequate protection, the Bank is granted a replacement lien on
the Debtors' post-petition assets, and Sabra will have a
replacement lien on the post-petition assets of Clara Burke and
Warrington with the same respective priorities as their
pre-petition lien to the same extent that the Bank and Sabra would
have had perfected liens on such assets absent the filing of the
petition.
Moreover, the Bank and Sabra are each granted a claim against the
Debtors, which claim have: (a) the same priority as United States
Trustee's fees and professional fees and reimbursement for expenses
allowed by the Court that are authorized to be paid from cash
collateral; and (b) priority over any other administrative expenses
of any kind including, the administrative expenses described in
Sections 503(b) and 507(b) of the Bankruptcy Code.
These events constitute an "Event of Default:
1. The failure of the Debtors to maintain the Required
Balance;
2. Use by any Debtor of cash collateral for purposes other
than those specified in the Approved Budget or to pay the Weltman
Fees, without the Bank's and Sabra's written consent;
3. Use by any Debtor of cash collateral for any purpose (other
than payment of the Weltman Fees) in an amount in excess of the
amount specified in the Approved Budget subject to the Acceptable
Variance, without the Bank's and Sabra's written consent;
4. The failure of the Debtors to make the payments and/or
escrow deposits to the Bank and/or Sabra provided for in the order
when and as due;
5. The failure of any Debtor to pay any obligation arising on
or after the Petition Date under any unexpired lease of
nonresidential property, including without limitation, the Sabra
lease, by the later of: (a) the date payment of such obligation is
due under the applicable lease; or (b) such date, if any, as may be
set by the Court pursuant to 11 U.S.C. section 365(d)(3); or
6. The violation by any Debtor of any other term or condition
of the Order.
The final hearing on the cash collateral request is continued to
December 13, 2022, at 9:30 a.m.
A copy of the order and the Debtors' budgets for October and
November 2022 is available at https://bit.ly/3r9xlvD from
PacerMonitor.com free of charge.
Warrington's budget provided for $139,623 in total cash out for
October 2022.
Clara Burke's budget provided for $1,389,665 in total cash out for
October 2022.
Mechanicsburg's budget provided for $1,276,839 in total cash out
for October 2022.
South Philadelphia's budget provided for $1,197,296 in total cash
out for October 2022.
About Fox Subacute at Mechanicsburg, LLC
Fox Subacute at Mechanicsburg, LLC is a skilled nursing facility in
Pennsylvania that specializes in pulmonary, neurological, and
rehabilitative care for patients with degenerative neurological and
neuromuscular disease; and pulmonary care and ventilator
requirements with an emphasis on vent weaning. Its facilities are
located in Plymouth Meeting, Warrington, Mechanicsburg and
Philadelphia, Pa., and are licensed by the PA Department of
Health.
On Nov. 1, 2019, Fox Subacute at Mechanicsburg and its affiliates
sought Chapter 11 protection (Bankr. M.D. Pa. Lead Case No.
19-04714). Fox Subacute at Mechanicsburg was estimated to have $1
million to $10 million in assets and liabilities as of the
bankruptcy filing.
Judge Henry W. Van Eck oversees the cases.
The Debtors tapped Cunningham, Chernicoff & Warshawsky, P.C. as
their legal counsel, Kennedy P.C. as special counsel, Isdaner &
Company, LLC as accountant, and Three Twenty-One Capital Partners,
LLC as investment banker.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Dec. 11, 2019. The committee is represented
by Flaster/Greenberg P.C.
FREE SPEECH: Jones Sanctioned Again as 2nd Sandy Hook Trial Starts
------------------------------------------------------------------
Rachel Scharf of Law360 reports that the second Sandy Hook
defamation trial against right-wing conspiracy theorist Alex Jones
got off to a heated start Tuesday, September 13, 2022, with a
Connecticut state judge issuing sanctions for Jones' continued
discovery violations and repeatedly berating defense counsel.
A Waterbury jury heard opening arguments in the damages trial
against Jones and his Infowars website, which were held liable for
peddling lies that the 2012 mass shooting at Sandy Hook Elementary
School in Newtown was a government hoax and the victims' families
and first responders were actors. Opening arguments began Tuesday,
September 13, 2022, in the damages trial for right-wing conspiracy
theorist Alex Jones.
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.
FREE SPEECH: Sandy Hook Families Told to Cut Ch.11 Debt Questions
-----------------------------------------------------------------
Rick Archer of Law360 reports that a Texas bankruptcy judge
Tuesday, September 13, 2022, told counsel for families of victims
of the 2012 Sandy Hook school shooting that their requests for
information on an alleged $54 million debt owed by Alex Jones'
podcast business will need to be scaled back.
At a hybrid hearing, U.S. Bankruptcy Judge Christopher M. Lopez
told the families and representatives of the Free Speech Systems
creditor to meet to try to narrow down the questions, and expressed
confidence that the parties could come to an agreement before a
scheduled deposition on the validity of the creditor's $54 million
claim at the beginning of October 2022.
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.
GARDOU GROUP: SARE Hits Chapter 11 Bankruptcy
---------------------------------------------
Gardou Group, LLC, filed for chapter 11 protection in the Northern
District of California.
The Debtor disclosed $517,000 in assets against $349,056 in total
liabilities. The Debtor owns the property at 988 91st Avenue,
Oakland, Ca 94603, valued at $517,000.
Garden Group LLC estimates between 1 and 49 creditors. The
petition states funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 17, 2022, at 11:30 AM via Tele/Videoconference -
www.canb.uscourts.gov/calendars.
Proofs of claim are due by Jan. 16, 2023.
About Gardou Group LLC
Gardou Group LLC is a Single Asset Real Estate (as defined in 11
U.S.C. Sec. 101(51B)).
Gardou Group, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-40889) on Sept. 12,
2022. In the petition filed by Joe Jamar James Douglass, as
managing member, the Debtor reported assets between $500,000 and $1
million and liabilities between $100,000 and $500,000.
The Debtor is represented by Marc Voisenat of Law Offices of Marc
Voisenat.
GL INVESTMENTS: Taps Abbasi Law Corporation as Bankruptcy Counsel
-----------------------------------------------------------------
GL Investments Group, LLC seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Abbasi Law
Corporation to serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. representing the Debtor at the initial interview;
b. representing the Debtor in meetings of creditors or any
continuance thereof;
c. representing the Debtor at all hearings before the bankruptcy
court;
d. preparing legal papers;
e. advising the Debtor, regarding matters of bankruptcy law,
including its rights and remedies with respect to its assets and
claims of its creditors;
f. representing the Debtor in all contested matters;
g. assisting the Debtor in the preparation of a disclosure
statement and the negotiation, preparation, and implementation of a
plan of reorganization;
h. analyzing claims that have been filed in the Debtor's
bankruptcy case;
i. negotiating with creditors regarding the amount and payment
of their claims;
j. objecting to claims if appropriate;
k. advising the Debtor with respect to its powers and duties in
the continued operation of its business;
l. providing counseling with respect to the general corporate,
securities, real estate, litigation, environmental, state
regulatory, and other legal matters which may arise during the
pendency of the case; and
m. performing all other legal services for the Debtor as may be
necessary except in adversary proceedings, which would require a
further written agreement.
The firm will be paid at these rates:
Attorneys $450 per hour
Paralegals $60 per hour
Law Clerks $25 per hour
In addition, the firm will seek reimbursement for out-of-pocket
expenses.
Prior to the petition date, the firm was paid a retainer of
$12,500.
Matthew Abbasi, Esq., a partner at Abbasi Law Corporation,
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:
Matthew Abbasi, Esq.
Abbasi Law Corporation
6320 Canoga Ave., Suite 220
Woodland Hills, CA 91367
Tel: (310) 358-9341
Fax: (888) 709-5448
Email: matthew@malawgroup.com
About GL Investments Group
GL Investments Group, LLC, a company in Reseda, Calif., filed its
voluntary petition for Chapter 11 protection (Bankr. C.D. Calif.
Case No. 22-10960) on Aug. 17, 2022, with up to $50,000 in assets
and up to $10 million in liabilities. Hen Levi, manager of GL
Investments Group, signed the petition.
Judge Hon. Victoria S. Kaufman oversees the case.
Matthew Abbasi, Esq., at Abbasi Law Corporation serves as the
Debtor's legal counsel.
GML LOGISTICS: Court Confirms Second Amended Plan
-------------------------------------------------
On August 23, 2022, a hearing was held to consider confirmation of
GML Logistics, LLC's Amended Small Business Debtor's Chapter 11
Plan of Reorganization Dated as of July 15, 2022. Creditor The LCF
Group, Inc. filed an objection to the Amended Plan on August 1,
2022 (Doc. No. 103).
On the morning of the Hearing, Debtor filed a second Amended Small
Business Debtor's Chapter 11 Plan of Reorganization Dated as of
August 23, 2022 representing to the Court that the only change
therein was the revision of Section 2.6 in order to resolve The LCF
Group, Inc.'s objection to the Amended Plan.
Judge Carlota M. Bohm accordingly entered an order that GML
Logistics's request for a cramdown of the Second Amended Plan
pursuant to 11 U.S.C. Sec. 1191(b) is granted and the Second
Amended Plan is confirmed.
Any party-in-interest object to the entry of the Confirmation
order, such objections must be filed on or before Sept. 28, 2022.
If an objection is filed on or before Sept. 28, 2022, a hearing
will be set. If no objections are filed, the order will become
final effective on Sept. 29, 2022.
Debtor, GML Logistics, LLC c/o Jamaal Lester, shall make any and
all distributions pursuant to the Second Amended Plan. The
distributions shall be monthly and shall be for a period of 5
years. Subsequent to the commencement of the monthly distributions,
the Debtor shall file a report each quarter detailing the actual
distributions made pursuant to the Second Amended Plan by the 20th
day of the month thereafter.
About GML Logistics
GML Logistics, LLC, a transportation and or hauling company, filed
a Chapter 11 petition (Bankr. W.D. Pa. Case No. 22 20037) on Jan.
7, 2022. The Debtor is represented by Rodney D. Shepherd, Esq. of
LAW OFFICES OF RODNEY SHEPHERD.
GOTO GROUP: S&P Alters Outlook to Negative, Affirms 'B' ICR
-----------------------------------------------------------
S&P Global Ratings revised the outlook on GoTo Group Inc. to
negative from stable, and affirmed all ratings on the company,
including its 'B' issuer credit rating.
S&P said, "Our negative outlook on GoTo reflects our expectation
that the company's declining revenue base and high one-time costs
to reorganize and modernize its product portfolio will lead to
negative free operating cash flow (FOCF) of around $35 million in
2022 while also increasing leverage to the mid- to high-7X area.
"The company faces higher operational risk amid a difficult
environment. We expect weaker demand for the company's heritage
online collaboration offerings (accounting for about 21% of
revenues) following strong demand spurred by hybrid work
environments during the peak of the pandemic will offset growth in
other areas. While we view GoTo's UCaaS segment, (30% of revenues)
serving the relatively underpenetrated SMB market bodes well for
its growth prospects (7% CAGR 2021-2026 according to IDC. Corp.),
we view strong competition from players like Microsoft Corp., Cisco
Systems Inc., and Zoom and market saturation for its meeting
solutions, will challenge GoTo's ability to restore overall growth
over the coming year. We expect the evolving competitive landscape
to continue to intensify as consolidation yields players with
expanded capabilities, especially for the UCaaS market. This has
been evidenced by deals over the past few years such as 8x8's
acquisition of Fuze, Dialpad's acquisition of Highgfive, and
RingCentral's partnership with Mitel. The company is also early in
optimizing its sales force after experiencing sales execution
challenges and employee attrition that contributed to lower revenue
that we expect to persist through the remainder of 2022. We expect
revenue declines of around 5% in 2022 before the company reaches an
inflection point, at which we expect it to grow around 1% in 2023.
We expect the secular decline of on-premise private networks (known
as pbx systems) and increasing adoption of cloud telephony
solutions will provide GoTo with some protection from its declining
heritage collaboration segment."
GoTo's recent emphasis on expanding its solution set to focus more
on "CCaaS" (contact-center services) and external communication
tools that support outward rather than internal collaboration,
should provide it with new growth opportunities. Given that GoTo
Connect's new functionality is integrated with the company's
modernized remote support tools, it should provide more
cross-selling prospects in a fragmented market.
While S&P believes the company has implemented strategies to
restore growth, it views improvements will take time considering
these recent challenges.
Revenue declines and profitability headwinds lead to negative FOCF
in 2022 and elevated leverage profile. GoTo's lower revenues
coupled with elevated one-time costs to related to the separation
of LastPass, company rebranding, and repositioning of its product
portfolio so far in 2022 will lead to sharp declines in
profitability, with S&P Global Ratings-estimated EBITDA margins
declining to 32% in 2022 from about 37.5% in 2021. S&P said, "These
negative trends have put pressure on GoTo's credit metrics, and we
expect debt to EBITDA will increase to about 7.7x as of the end of
2022 from 6.8x as of June 2022. Furthermore, we expect over $130
million of nonrecurring costs related to the separation of
LastPass, RSU payments, company rebranding, and modernization of
the GoTo Connect platform will contribute to negative FOCF of $30
million-$40 million in 2022 before improving to $100 million in
2023. We expect the company may have reduced operational
flexibility if recent investments to improve the growth trajectory
of the business is unsuccessful. Still, with $292 million of
balance sheet cash as of June 30, 2022, we expect the company
should be able to absorb cash flow headwinds over the next 12
months."
Significant investments over the past several quarters position
products in faster growth areas. The company transitioned from
having several siloed brands under LogMeIn to having more
unification of its products under one GoTo brand, which should
create more efficiencies when selling to SMB clients, which tend to
prefer solutions that are both all-encompassing and simple to use.
Although the company's reorganization of its portfolio could lead
to long-term client wins--because areas that have been underfunded
are better positioned to grow--it adds business uncertainty and
heightened execution risk, which could lead to more volatile
operating performance in the interim, especially after implementing
a refreshed sales motion that emphasizes channel partner sales.
S&P said, "We will likely reassess GoTo's business risk upon
significant changes to its operations. GoTo also made significant
investments to separate LastPass into a separate silo under the
parent guarantor. This should provide it with its own dedicated
C-suite and sales organization to focus on the value creation in
its password management solutions, which does not have much overlap
with the company's other core segments. While our base case is that
LastPass will continue to provide credit support for the loans and
bonds as if it were a subsidiary of the borrower, a sale of this
entity would likely cause us to reassess our view of the company's
overall competitive advantage, especially given the stability that
LastPass provides to the entire group. In a potential sale
scenario, it is highly probable that some form of debt repayment
would be required.
"Our negative outlook on GoTo reflects our expectation that the
company's declining revenue base and high one-time costs to
reorganize and modernize its product portfolio will lead to
negative FOCF of around $35 million in 2022 while also increasing
leverage to the mid-7X area. While we expect an improvement in the
company's EBITDA and cash generation ability to contribute to a
stabilization of credit metrics in 2023, macroeconomic uncertainty
is increasing and the company has high SMB exposure."
Over the next 12 months, S&P's could lower the rating if:
-- It sustains leverage above 7.5x; or
-- FOCF to debt remains in the low-single-digit percent area.
This would likely result the company is unable to stem declines in
the heritage collaboration business, continued sales execution
missteps that could lead to material revenue and EBITDA margin
shortfalls, or a more aggressive financial policy regarding
shareholder returns or acquisitions.
S&P could revise the outlook to stable if:
-- GoTo grows organic revenue consistently, while managing its
cost base such that adjusted leverage declines and remains below
7.5x; and
-- FOCF to debt rises to the mid-single-digit percent area.
ESG Credit Indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of the company, as is
the case for most rated entities owned by private-equity sponsors.
We believe GoTo Group Inc.'s highly leveraged financial risk
profile points to corporate decision-making that prioritizes the
interests of the controlling owners. This also reflects the
generally finite holding periods and a focus on maximizing
shareholder returns."
GT REAL ESTATE: Amends Class 5 Claim Pay Details
------------------------------------------------
GT Real Estate Holdings, LLC, submitted a Modified Disclosure
Statement and a Modified Plan dated September 13, 2022.
The version of the Plan filed by the Debtor on August 11 has been
modified with respect to the treatment of the City, the County, and
the Affiliate Unsecured Claims. These modifications are based on
further discussions with the Debtor's stakeholders and events in
the Chapter 11 Case.
The Debtor hoped, and in fact expected, that the treatment included
in the August 11 Plan, which provided clear paths to recoveries for
the City and the County (totaling over $40 million in cash and
future property proceeds) despite each holding Disputed Claims,
would be met with receptiveness or at least a willingness to
negotiate further regarding a fair and reasonable resolution to the
failed Project. The Plan Sponsor was putting forth significant
value and making significant concessions that would benefit the
County and the City. But this attempt by the Debtor and the Plan
Sponsor to lead all parties to a near-term, consensual outcome was
instead followed by exorbitant counter demands and unreasonable
conduct from both the County and the City:
* From the County, this included (a) seeking over $80 million
in its proof of claim (including amounts for $3 million of
interest, $43 million claim for damages related to Mt. Gallant Road
that were duplicative of the $21 million payment that it is also
seeking to recover, and $38 million of forecasted lost tax revenue)
and (b) continuing and aggressive violations of the automatic stay
through further pursuit of civil litigation in South Carolina and
other actions; and
* From the City, this included (a) continued pursuit of a 2004
motion for examination of the Debtor, (b) a separate filing of a
venue transfer motion, and (c) the filing of the City Adversary
Proceeding, which is seeking $20 million of actual damages plus
compensatory, punitive, or exemplary damages and accused the Debtor
of dishonesty and fraud.
The aggressive responses, unreasonable expectations regarding claim
amounts, and apparent dislike of the form of potential treatment
provided by the August 11 Plan (cash for the County and property
value and related upside for the City) forced the Debtor to
re-evaluate its approach. The Plan now provides that the
distribution to holders of unsecured claims that were not otherwise
entitled to recover from the Settlement Trust provided by the Plan
Sponsor (i.e., the County, the City, and the Holders of Affiliate
Unsecured Claims) will recover their pro rata share of
distributions from the Class 5 Trust, which will hold and
distribute the residual value of the Project Site (after payment of
the Plan Sponsor Senior Obligations) and the proceeds of the Class
5 Trust Causes of Action, in each case based on the amount of their
respective Allowed Claims and after satisfaction of the expenses of
the Class 5 Trust.
As a result of this modified structure, (1) Holders of such Claims
will receive the same form of treatment and (2) disputes regarding
whether these Claims should be Allowed and in what amount, as well
as the appropriateness of any subordination of such Claims, will be
addressed by the Bankruptcy Court but do not need to otherwise hold
up confirmation of the Plan and distributions under the Plan to
Holders of Allowed Claims, including MBM, its subcontractors, and
the other parties that provided actual goods and services to the
Project.
The City entered into a series of agreements with the Debtor to
support the development of the Project. Each of these agreements
unambiguously provided that the Debtor had no obligation to proceed
with the construction of the Project unless the City issued an
agreed minimum amount of bonds. The Debtor proceeded with the
construction of the Project to further the public interest in a
timely completion of the Project in good faith reliance that the
City would eventually issue the required bonds.
As a result, the Debtor invested over $240 million toward the
development of the Project. But the City failed to issue any amount
of bonds in accordance with the deadline in the applicable Project
Documents. Indeed, more than a year later, the City still had not
issued a single dollar of bonds, despite the Debtor's enormous
investment in the Project. The idea that the City is seeking
damages against the Debtor in the City Adversary Proceeding for its
own failures is preposterous. The Debtor filed a statement and
reservation immediately after the City's complaint was filed
stating as much.
Following negotiations and to facilitate their original objectives,
on August 11, 2022, the Debtor entered into a plan support and
sponsorship agreement (the "Plan Sponsor Agreement") with DT Sports
Holding, LLC (the "Parent" and "Plan Sponsor") that provides value
and other considerations to the Debtor, a near-term conclusion to
the Chapter 11 Case, and distributions to the Debtor's creditors.
As a result of these commitments and contributions, the Debtor is
able to provide the following distributions to Holders of Claims
and Interests pursuant to the Plan:
* Holders of Non-Insider Administrative Claims (excluding DIP
Claims and Secured Contractor Claims) will be paid in full in
cash;
* Holders of DIP Claims will receive the Debtor's remaining
cash immediately prior to the Effective Date, the membership
interests in the Reorganized Debtor, and the Plan Sponsor Senior
Obligations;
* Holders of Other Priority Claims will receive payment in
full in cash;
* Holders of Priority Contractor Claims will receive their pro
rata share of the $60 million Settlement Amount through the
Settlement Trust after all Allowed Secured Contractor Claims and
Allowed Administrative Contractor Claims have been paid in full in
cash, subject to the Reserve;
* Holders of Other Secured Claims will either (a) receive
payment in full in cash, the Debtor's interest in their respective
collateral, or other treatment that renders such Claims unimpaired
or (b) have their Claims reinstated;
* The Holder of Prepetition Secured Note Claims will receive
100% of the membership interests in non-debtors Waterford Golf
Club, LLC and Waterford Golf Club 1, LLC; (together, "Waterford"),
provided that, at the election of the Plan Sponsor (which is the
Holder of the Allowed Prepetition Secured Note Claims), the Holder
of the Allowed Prepetition Secured Note Claims may instead receive
membership interests in the Reorganized Debtor instead of the
membership interests in Waterford in order to maintain the existing
organizational structure of the Debtor and Waterford;
* Holders of Secured Contractor Claims will receive their pro
rata share of the $60 million Settlement Amount through the
Settlement Trust until paid in full in cash, subject to the
Reserve;
* Holders of Class 5 Claims (i.e., the City Claims, the County
Claims, and the Affiliate Unsecured Claims) will receive
distributions from the Class 5 Trust on account of the Class 5
Trust Interests, in accordance with the following priority: first,
pro rata to Holders of Allowed Claims in Class 5 to the extent such
Allowed Claims have not been subordinated by order of the
Bankruptcy Court and second, pro rata to Holders of Allowed Claims
in Class 5 to the extent such Allowed Claims have been subordinated
by order of the Bankruptcy Court;
* Holders of General Unsecured Claims (including Unsecured
Contractor Claims) will receive their pro rata share of (a) the GUC
Allocation and (b) the remaining Settlement Amount from the
Settlement Trust after Allowed Secured Contractor Claims, Allowed
Administrative Contractor Claims, and Allowed Priority Contractor
Claims are paid in full, in each case subject to the Reserve; and
* Holders of Interests in the Debtor will not receive any
distribution and will have such interests be cancelled.
Counsel to Debtor:
WHITE & CASE LLP
Thomas E Lauria
Varoon Sachdev
200 South Biscayne Boulevard, Suite 4900
Miami, Florida 33131
Telephone: (305) 371-2700
- and -
WHITE & CASE LLP
J. Christopher Shore
Stephen Moeller-Sally
Mark Franke
Brandon Batzel
1221 Avenue of the Americas
New York, New York 10020
Telephone: (212) 446-4800
WHITE & CASE LLP
William A. Guerrieri
111 South Wacker Drive
Chicago, Illinois 60606
Telephone: (312) 881-5400
- and -
FARNAN, LLP
Joseph J. Farnan, Jr.
Brian E. Farnan, Jr.
Michael J. Farnan
919 North Market Street, 12th Floor
Wilmington, Delaware 19801
Telephone: (302) 777-0300
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.
GT REAL ESTATE: US Trustee Objects to Settlement Trust Plan
-----------------------------------------------------------
Vince Sullivan of Law360 reports that the U. S. Trustee's Office
objected Monday, September 12, 2022, to the Chapter 11 disclosure
statements of an entity tied to the construction of the Carolina
Panthers practice facility, telling a Delaware bankruptcy court the
plan would channel the claims of building contractors to a trust in
a move usually reserved for mass tort cases.
In the objection, the trustee argued the proposed plan of GT Real
Estate Holdings LLC includes provisions to send the secured claims
of contractors to a Chapter 11 settlement trust while granting the
debtor and related parties broad releases from liability, using a
plan format commonly used in product liability.
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.
H-CYTE INC: Completes Acquisition of Jantibody
----------------------------------------------
H-Cyte, Inc. has completed the acquisition of 100% of the issued
and outstanding membership interests of Jantibody, LLC in exchange
for an aggregate of 52,023 shares of the Company's common stock,
$0.001 par value per share.
"Closing the Jantibody transaction marks a pivotal milestone for
the Company as we continue to expand and diversify our portfolio,"
said Michael Yurkowsky, H-CYTE's chief executive officer. "We are
excited to take over the rights to this proprietary technology for
the treatment of ovarian cancer, the fifth leading cause of
cancer-related deaths in women. We expect to submit the Pre-IND
submission for Jantibody before the end of 2022. The close of the
Jantibody transaction validates H-CYTE's ongoing transformation
into a hybrid-biopharmaceutical company, and we will continue to
provide updates as we further expand our portfolio."
Jantibody is a novel cancer immunotherapeutic agent that has
demonstrated robust efficacy in controlling ovarian cancer and
mesothelioma in preclinical models of these diseases. The
Jantibody molecule was developed and refined at the Vaccine and
Immunotherapy Center at MGH and Harvard Medical School by Dr.
Jeffrey Gelfand and Dr. Mark Poznansky. This molecule is a fusion
protein between a broadly immune activating protein called MTBhsp70
and an immune targeting molecule called a single chain antibody
which causes the molecule to specifically attach to tumor cells and
stimulate a robust immune response specifically around these
malignant cells resulting in their death.
Catheter Precision Update
Today, H-CYTE also announced the termination of the previously
announced letter of intent, whereby H-CYTE would acquire Catheter
Precision. The Company has decided that it would rather focus its
current and future capital on other leading biologics and bringing
new technologies to market. H-CYTE wishes David Jenkins and his
team much future success.
About H-CYTE Inc.
Headquartered in Tampa, Florida, H-CYTE Inc. --
http://www.HCYTE.com-- is a hybrid-biopharmaceutical company
dedicated to developing and delivering new treatments for patients
with chronic respiratory and pulmonary disorders.
H-Cyte reported a net loss of $4.80 million for the year ended Dec.
31, 2021, compared to a net loss of $6.46 million on $2.15 million
of revenues for the year ended Dec. 31, 2020. As of June 30, 2022,
the Company had $305,691 in total assets, $6.88 million in total
liabilities, and a total stockholders' deficit of $6.58 million.
Tampa, Florida-based Frazier & Deeter, LLC, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated Feb. 25, 2022, citing that he Company has negative working
capital, has an accumulated deficit, has a history of significant
operating losses and has a history of negative operating cash flow.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.
HIE HOLDINGS: Unit May Access Cash Collateral, Ink Factoring Deal
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Hawaii authorized
Royal Hawaiian Water Co., Ltd., dba Hawaiian Isles Water Company, a
subsidiary of HIE Holdings, Inc. to use cash collateral on an
interim basis and to factor certain of its accounts to Alliance
One, LLC under a post-petition factoring agreement.
The Court held that the Debtor is permitted to incur post-petition
secured indebtedness from Alliance One pursuant to the Order and
the Agreement in such amounts as needed in the ordinary course of
its business and not for any purpose prohibited by law.
The Debtor is permitted to use the cash collateral of Alliance One
in accordance with the budget, with a 15% variance, during the
period commencing from the Petition Date and terminating on the
earlier of: (i) October 31, 2022, or such other date as agreed to
by Alliance One in writing, or (ii) the date of the occurrence of a
Default.
The Debtor and Alliance One are parties to a Purchase and Sale
Agreement, dated October 23, 2019. The Agreement provides for
advances by the Secured Party to the Debtor, at the sole discretion
of Alliance One, so long as the advances do not cause the ratio of
the Debtor's obligations to Alliance One to the value of the
Debtor's eligible accounts to exceed that set forth in the
Agreement.
Alliance One asserts that, as of the Petition Date, the Debtor was
indebted to the Secured Party in the amount of $166,587 secured by
the collateral described in the Agreement.
As adequate protection, Alliance is granted replacement liens in
the estate's post-petition assets, and the proceeds thereof, to the
same extent and priority as any lien held by Alliance in the
Pre-Petition Collateral as of the Petition Date, limited to the
amount of Pre-Petition Collateral as of the Petition Date. The
Replacement Liens granted will be subject to and subordinate to the
fees and expenses of a Chapter 7 Trustee, if one is appointed, but
not including the expenses of such Chapter 7 Trustee's
professionals.
In order for the Replacement Lien granted to adequately protect
Alliance, the Collateral must at all times equal at least 100% of
the amount of Cash Collateral used by the Debtor. No account that
is factored by Alliance pursuant to Section B of the Order will be
included in the Replacement Lien Collateral. Alliance is also
granted an allowed administrative priority claim pursuant to 11
U.S.C. section 503 to the extent of any diminution in value of the
Post-Petition Collateral, whether from the Debtor's use of cash
collateral or otherwise.
These events constitute an "Event of Default:"
i. The Debtor's failure to perform or comply with any of the
terms, conditions, or covenants of the Order;
ii. The Debtor's failure to perform or comply with any of the
terms, conditions, or covenants of the Agreement;
iii. A deterioration in the Formula from what it was on the
Petition Date;
iv. The termination of this Order by its own terms, operation
of law or court order;
v. The dismissal of this Bankruptcy Case;
vi. The appointment of a Chapter 11 trustee;
vii. The conversion of the Bankruptcy Case to a case under
another chapter of the Bankruptcy Code.
A final hearing on the matter is set for October 31, 2022 at 2
p.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3QWenTw from PacerMonitor.com.
The budget provides for total selling, general, and administrative
expenses, on a monthly basis, as follows:
$346,457 for August 2022;
$315,240 for September 2022; and
$302,886 for October 2022.
About HIE Holdings Inc.
HIE Holdings Inc. is the parent entity of Royal Hawaiian Water Co.,
Ltd., and Hawaiian Isles Kona Coffee Company, Ltd. Holdings is, in
turn, owned by Michael Boulware, Julie Boulware and the Glenn
Boulware Trust.
Royal Hawaiian operates a water bottling facility in Halawa, Oahu,
while Kona Coffee Company roasts, packages and distributes coffee.
Royal Hawaiian Water Co., Ltd., d/b/a Hawaiian Isles Water Company,
filed a Chapter 11 petition (Bankr. D. Hawaii Case No. 22-00524) on
July 30, 2022. HIE Holdings Inc. filed a Chapter 11 petition
(Bankr. D. Hawaii Case No. 22-00534) on August 3, 2022.
Hawaiian Isles Kona Coffee Company, Ltd., doing business as Hawaii
Coffee Roasters, filed a Chapter 11 petition (Case No. 22-00546) on
Aug. 5, 2022. The Debtors have sought joint administration of
their cases under Case No. 22-00524.
In the petitions filed by Michael H. Boulware, as president, each
of the Debtors reported assets between $1 million and $10 million
and liabilities between $1 million and $10 million.
Judge Robert J. Faris oversees the case.
Chuck C. Choi, Esq., at Choi & Ito, is the Debtors' counsel.
HJ DYNAMIC: Taps Omni Agent Solutions as Administrative Agent
-------------------------------------------------------------
HJ Dynamic Holdings, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Omni
Agent Solutions as administrative agent.
The firm's services include:
a. assisting with, among other things, solicitation, balloting
and tabulation of votes, preparing any related reports in support
of confirmation of a Chapter 11 plan, and processing requests for
documents;
b. preparing an official ballot certification and, if necessary,
testifying in support of the ballot tabulation results;
c. assisting with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs, and
gathering data in conjunction therewith;
d. providing a confidential data room, if requested; and
e. managing and coordinating any distributions pursuant to a
Chapter 11 plan.
The firm will be paid at these rates:
Data Entry/Information Updates $65 per hour
Programming/Customization $85 to $135 per hour
Updating of Schedules and SoFAs $65 to $200 per hour
The retainer fee is $12,500.
Paul Deutch, executive vice president of Omni Agent Solutions,
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:
Paul H. Deutch
Omni Agent Solutions
5955 De Soto Avenue Suite 100
Woodland Hills, CA 91367
Tel: (818) 906-8300
Fax: 818-783-2737
Email: lacontact@omniagnt.com
About HJ Dynamic Holdings
HJ Dynamic Holdings, LLC and three affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead
Case No. 22-10837) on Sept. 2, 2022. In the petition signed by
Thomas A. Sacco, president and chief executive officer, HJ Dynamic
Holdings disclosed up to $1 million in assets and up to $10 million
in liabilities.
Judge J. Kate Stickles oversees the cases.
Mark Minuti, Esq., at Saul Ewing Arnstein & Lehr, LLP serves as
legal counsel for the Debtors. Omni Agent Solutions is the
Debtors' claims, noticing and administrative agent.
AAVIN Mezzanine Fund, LP and AAVIN Equity Partners II, LLP, the
debtor-in-possession (DIP) lenders, are represented by Reinhart
Boerner Van Deuren s.c and Ashby & Geddes, P.A.
HLMC TITLE: Gets Cash Collateral Access Thru Nov 17
---------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized HMLC Title Services, Inc. to use the
cash collateral of Sapient Providence, LLC to make payments as
contemplated in the budget.
The Debtor was directed to make adequate protection payments to
Sapient on September 22 and October 22, 2022.
The authorization to use cash collateral expires on November 17.
A further hearing on the matter is scheduled for November 10 at
9:30 a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3DBcRTK from PacerMonitor.com.
The budget provides for total disbursements, on a weekly basis as
follows:
$695 for the week ending September 9, 2022;
$4,478 for the week ending September 16, 2022;
$4,650 for the week ending September 23, 2022;
$0 for the week ending September 30, 2022;
$1,195 for the week ending October 7, 2022;
$0 for the week ending October 14, 2022;
$9,128 for the week ending October 21, 2022;
$0 for the week ending October 28, 2022;
$500 for the week ending November 4, 2022;
$695 for the week ending November 11, 2022;
$4,478 for the week ending November 18, 2022;
$0 for the week ending November 25, 2022; and
$0 for the week ending December 2, 2022.
About HMLC Title Services, Inc.
HMLC Title Services, Inc. was organized as an Illinois corporation
in 2012. HMLC operates from 1147 W. 175th Homewood, Illinois 60430.
It owns a real property located at 17532-42 Dixie Highway,
Homewood, Illinois 60430, where it operates a strip mall.
HMLC sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. N.D. Ill. Case No. 22-02518) on March 4, 2022. In the
petition signed by Rajei J. Haddad, president, the Debtor disclosed
up to $50,000 in assets and up to $1 million in liabilities.
Judge Deborah L. Thorne oversees the case.
Laxmi P. Sarathy, Esq., at Whitestone, P.C., is the Debtor's
counsel.
INN S.F. ENTERPRISE: Case Summary & 14 Unsecured Creditors
----------------------------------------------------------
Debtor: Inn S.F. Enterprise, Inc.
943 South Van Ness Avenue
San Francisco, CA 94110
Business Description: The Debtor is part of the traveler
accommodation industry.
Chapter 11 Petition Date: September 14, 2022
Court: United States Bankruptcy Court
Northern District of California
Case No.: 22-30477
Judge: Hon. Dennis Montali
Debtor's Counsel: Sarah M. Stuppl, Esq.
LAW OFFICES OF STUPPL & STUPPL
1630 N. Main Street, #332
Walnut Creek, CA 94596
Tel: 415-786-4365
Fax: 925-287-8113
Email: sarah@stuppllaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Martin A. Neely as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 14 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/55YJDDQ/Inn_SF_Enterprise_Inc__canbke-22-30477__0001.0.pdf?mcid=tGE4TAMA
INNERSCOPE HEARING: Incurs $5 Million Net Loss in 2020
------------------------------------------------------
Innerscope Hearing Technologies, Inc. filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $4.95 million on $166,111 of total revenues for the year
ended Dec. 31, 2020, compared to a net loss of $7.92 million on
$847,109 of total revenues for the year ended Dec. 31, 2019.
As of Dec. 31, 2020, the Company had $1.68 million in total assets,
$12.04 million in total liabilities, and a total stockholders'
deficit of $10.35 million.
New York-based Paris Kreit & Chiu CPA LLP, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated Sept. 12, 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.
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1609139/000155479522000341/innd0901form10k.htm
About InnerScope
Headquartered in Roseville, Calif., Innerscope Hearing
Technologies, Inc. -- http://www.innd.com/-- is a manufacturer and
a distributor/retailer of Direct-to-Consumer ("DTC") FDA (Food and
Drug Administration) registered hearing aids, personal sound
amplifier products (PSAPs), hearing-related treatment therapies,
and doctor-formulated dietary hearing supplements.
INNOVATIVE DESIGNS: Posts $212K Net Income in Third Quarter
-----------------------------------------------------------
Innovative Designs, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting net income
of $212,357 on $135,048 of net revenues for the three months ended
July 31, 2022, compared to net income of $13,153 on $110,475 of net
revenues for the three months ended July 31, 2021.
For the nine months ended July 31, 2022, the Company reported a net
loss of $195,500 on $235,164 of net revenues compared to a net loss
of $146,297 on $176,388 of net revenues for the nine months ended
July 31, 2021.
As of July 31, 2022, the Company had $1.63 million in total assets,
$626,524 in total liabilities, and $1.01 million in total
stockholders' equity.
Management's plans include cash receipts through sales, sales of
Company stock, and borrowings from private parties. These factors,
the Company said, raise substantial doubt regarding its ability to
continue as a going concern for a period of one year from the
issuance of these financial statements.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1190370/000173112222001574/e4049_10-q.htm
About Innovative Designs
Headquartered in Pittsburgh, Pennsylvania, Innovative Designs, Inc.
operates in two separate business segments: cold weather clothing
and a house wrap for the building construction industry. Both of
its segment lines use products made from INSULTEX, which is a
low-density foamed polyethylene with buoyancy, scent block, and
thermal resistant properties. The Company has a license agreement
directly with the owner of the INSULTEX Technology.
Innovative Designs reported a net loss of $322,732 for the year
ended Oct. 31, 2021, compared to a net loss of $280,743 for the
year ended Oct. 31, 2020. As of Oct. 31, 2021, the Company had
$1.68 million in total assets, $750,116 in total liabilities, and
$932,361 in total stockholders' equity.
Kennett Square, PA-based RW Group, LLC, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
Feb. 14, 2022, citing that the Company had net losses and negative
cash flows from operations for the year ended Oct. 31, 2021 and an
accumulated deficit at Oct. 31, 2021. These factors raise
substantial doubt about the Company's ability to continue as a
going concern for one year from the issuance date of these
financial statements.
INSPIRATION ESTATES: U.S. Trustee Unable to Appoint Committee
-------------------------------------------------------------
The U.S. Trustee for Region 2 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Inspiration Estates, LLC.
About Inspiration Estates
Inspiration Estates, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D.N.Y. Case No. 22-20382) on Aug. 16,
2022, with between $100,001 and $500,000 in both assets and
liabilities. Judge Warren oversees the case.
David H. Ealy, Esq., at Cristo Law Group, LLC is the Debtor's
counsel.
ISCM HOLDINGS: Wins Interim Cash Access Amid Lender's Objection
---------------------------------------------------------------
ISCM HOLDINGS: Wins Interim Cash Access Amid Lender's Objection
The Bankruptcy Court for the Middle District of Florida granted the
emergency request of ISCM Holdings, LLC, and Inpatient Care
Management Co., LLC to use cash collateral, on a second interim
basis, following a hearing on Sept. 16. The Court scheduled
another hearing for Sept. 30 to consider the Debtors' continued
cash collateral access.
As discussed in open court, the Debtors are directed to file a list
of all expenses paid on the Debtors' behalf for the time period of
Sept. 1 to 23, on or before Sept. 26.
Zions Bancorporation, N.A. dba Zions First National Bank asked the
Court to prohibit ISCM and Inpatient Care from using cash
collateral. The Debtors are obligated to Zions, pursuant to
indebtedness secured by perfected security interests in all assets
of the collective Debtors and more than a dozen other entities,
including Debtor and non-Debtor accounts that generate cash.
Zions has a perfected security interest in the medical receivables
of the non-Debtor practice groups before such cash collateral is
delivered by the non-Debtor obligors to the Debtors. Conversely,
all cash held by the Debtors constitutes non-Debtor cash collateral
before later becoming cash collateral in the possession Zions, as
governed by UCC Article 9. Zions preserves all rights it has to the
practice group collateral and their proceeds in accordance with 11
U.S.C. section 546(b)(2), including in the Debtors' possession.
The debts owed to Zions include a $8,000,000 term loan, on which
the last payment occurred on April 30, 2022, and a $3,000,000
revolving line of credit, on which the last payment occurred July
31, 2022. Two large draws on that line of credit, totaling
$1,524,624, occurred in May 2022.
As previously indicated to the Court, Zions said it does not
consent to the use of cash collateral, nor does Zions consent to
the use of its UCC Article 9 collateral, arising from its security
interest in the misappropriated medical receivables of the
non-Debtor practice groups managed by the Debtors.
The Court previously permitted the Debtors to use cash collateral
of not more than $159,031, limiting that sum by payments of
pre-petition wages to Casey Thomas in excess of $15,150.
According to Zions, in the first 10 days of the bankruptcy cases,
the Debtors violated the prior interim cash collateral order by
using cash collateral in the amount of $311,507. Zions argued that
violation of the Court's order reflects a lack of the Debtors'
understanding of the Court's orders, an unwillingness to comply
with the Court's orders, incompetent management, or worse. Zions
also noted the Debtors have not provided an accounting of cash
collateral used since the petition date, and have not provided an
accounting of new accounts created as replacement accounts for cash
collateral expended; the promised adequate protection replacement
lien.
The Debtors proposed to pay approximately $234,000 per month in
payroll expenses and officer compensation alone, yet stated that
their year-to-date gross revenue is only $959,000, or approximately
$137,000 per month, Zions pointed out.
Zions also objected to all payments to Mit Desai, David Terry, and
Casey Thomas, as none of them perform necessary services to the
Debtors and the secondary income to those three individuals is
greater than the Debtors' total revenues.
Based on the information received, Zions said it was unable to
receive sufficient adequate protections through new accounts
because the Debtors have not demonstrated the projected value of
the replacement lien.
* * *
The Court previously authorized the Debtors to use cash collateral
on an interim basis pending a further hearing set for Sept. 16.
That order allowed the Debtors, from September 6 through 16, to use
cash collateral including, without limitation, cash, deposit
accounts, accounts receivable, and proceeds from business
operations substantially in accordance with the budget, except that
the Debtors in possession are not authorized to pay the following
expenses: (i) pre-petition wages payable to Dr. Casey Thomas in
excess of $15,150; and (ii) pre-petition or post-petition
compensation to Dr. Mit Desai.
Adequate protection, Zions is granted a post-petition replacement
lien in and upon all of the categories and types of collateral in
which Lender has a security interest as of the Petition Date to the
same extent, validity and priority.
The Debtors will maintain insurance for the Lender's collateral in
accordance with the obligations under the Lender's loan and
security documents.
A copy of the previous interim order is available at
https://bit.ly/3BosX0a from PacerMonitor.com.
A copy of Zions' motion is available at https://bit.ly/3BuJwHU from
PacerMonitor.com.
The Debtor projects total operating disbursements, on a weekly
basis, as follows:
$20,955 for the week ending September 2, 2022;
$138,075 for the week ending September 9, 2022; and
$0 for the week ending September 16, 2022.
About ISCM Holdings, LLC
InPatient Care Management Company, LLC, a wholly owned subsidiary
of ISCM Holdings, LLC, is a physician management company that
provides management and administrative services including billing
and collection services, financial management services, contracting
services, and day-to-day business operating services for surgical
practices in the medical staffing industry. Management provides
these services to a number of physician practices in the medical
staffing industry, including The Surgicalist Group, PLLC and
others, in exchange for a management fee.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Lead Case No 8:22-bk-03601) on
September 1, 2022. In the petition signed by Mit Desai, MD, chief
executive officer, the Debtor disclosed up to $10 million in both
assets and liabilities.
Judge Roberta A. Colton oversees the case.
Daniel R. Fogarty, Esq., at Stichter, Riedel, Blain & Postler, P.A
is the Debtor's counsel
J. BOWERS: Proposes Private Sale of Assets to Unified for $75.3K
----------------------------------------------------------------
J. Bowers Construction, Inc., and its affiliate, Restoration
Services of Akron, Inc., doing business as RestorX, ask the U.S.
Bankruptcy Court for the Northern District of Ohio to authorize
their private sale of a portion of the office furniture, fixtures
and business machinery and equipment they owned identified on the
list of assets to be purchased to Unified Restoration Systems, LLC,
for $75,295.
J. Bowers Construction ("JBC") issued 900 shares of Class A stock.
Sean Bowers owns 683 shares and the Rick Bowers Trust owns the
remaining 217 shares of JBC. RestorX issued 75 shares of stock.
Sean Bowers owns 57 shares, the Rick Bowers Trust owns 9.5 shares
and Christie Bowers-Petit owns 8.5 shares of RestorX. Jim Bowers
formed JBC in 1959 and formally incorporated the business under the
laws of the State of Ohio in 1979. His son Rick Bowers took over
control in 1988.
JBC is one of the largest fire restoration companies in Northeast
Ohio boasting the timely capabilities of providing 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. Lead by
Rick Bowers, JBC's ability to provide immediate response and prompt
attention to insurance claims quickly established JBC as a leader
in the industry.
As a family-owned business, Sean Bowers took over control of JBC
following Rick's passing in 2005. Sean's sister, Christie
Bowers-Petit and his son, Kyle Bowers, also are employed by JBC.
With the unexpected global pandemic in the spring of 2020, JBC and
RestorX ("Companies") began experiencing cash flow issues. While
the Paycheck Protection Program helped the Companies struggle
through this period, gross sales suffered as a result of
contraction in virtually all industries worldwide.
In early 2022, the Companies discovered that Sean Bowers
misdirected corporate funds for his own personal use resulting in
the Companies' inability to meet its debt obligations. Since that
discovery, the Companies have shifted its focus to the marketing of
tassets and collection of accounts receivables and liquidation of
assets to maximize the value of the businesses for the benefit of
creditors.
Financing for the business operations of the Debtors was provided
by Peoples Bank through a certain promissory note dated June 11,
2015 in the original principal amount of $500,000. The note was
jointly and severally executed by JBC and RestorX. As security for
the Peoples Note, JBC and RestorX jointly and severally executed
and delivered to Peoples Bank a Commercial Security Agreement dated
June 11, 2015 conveying a security interest to Peoples Bank on all
of the Debtors' real and personal property (Claim No. 1) including
a security interest on the Purchased Assets.
The security interest that JBC and RestorX conveyed to Peoples Bank
was perfected by the filing of a UCC Financing Statement with the
Office of the Ohio Secretary of State on June 26, 2015 bearing
Instrument No. OH00186949073 with a continuation statement being
filed on April 27, 2020.
As further security for the Peoples Note, JBC executed and
delivered a certain Open-End Mortgage, dated Nov. 2, 2018 thereby
conveying a security interest and lien on the real property,
recorded in with the Office of the Summit County Fiscal office on
Nov. 8, 2018 under Instrument No. 56425363.
On Oct. 7, 2020, JBC obtained an EIDL loan from the U.S. Small
Business Administration in the amount of $500,000. As security for
the JBC EIDL Loan, JBC conveyed a security interest to the SBA on
all of the Debtor's personal property, including a security
interest on the Purchased Assets. The security interest that JBC
conveyed to the SBA was perfected by the filing of a UCC Financing
Statement with the Office of the Ohio Secretary of State on Oct. 7,
2020 bearing Instrument No. OH00247024542.
On Oct. 7, 2020, RestorX obtained an EIDL loan from the U.S. Small
Business Administration in the amount of $145,600. As security for
the RestorX EIDL Loan, RestorX conveyed a security interest to the
SBA on all of RestorX's Cash Collateral. The security interest
that RestorX conveyed to the SBA was perfected by the filing of a
UCC Financing Statement with the Office of the Ohio Secretary of
State on Oct. 11, 2020 bearing Instrument No. OH00247120516.
On Aug. 31, 2021, JBC obtained financing from Global Merchant Cash,
Inc. ("GMC") and presently owes GMC approximately $201,200. As
security for the August 2021 GMC Financing, JBC conveyed a security
interest to GMC on assets including, but not limited to, JBC’s
accounts, equipment, furniture, fixtures, general intangibles,
intellectual property, and proceeds, including a security interest
on the Purchased Assets. The security interest that JBC conveyed
to GMC was perfected by the filing of a UCC Financing Statement
with the Office of the Ohio Secretary of State on Sept. 8, 2021
bearing Instrument No. OH00256156502.
On Jan. 8, 2022, JBC obtained financing from GMC and presently owes
GMC approximately $164,000. As security for the January 2022 GMC
Financing, JBC conveyed a security interest to GMC on assets
including, but not limited to, JBC's accounts, equipment,
furniture, fixtures, general intangibles, intellectual property,
and proceeds, including a security interest on the Purchased
Assets.
The assets to be liquidated in these Chapter 11 cases include, but
is not limited to, the Debtors' office furniture, fixtures and
business machinery and equipment. Peoples Bank holds the first and
best lien on the JBC's assets with an approximate balance due of
$136,519.33, followed by the SBA with an approximate balance due in
the amount of $500,000 and finally GMC with an approximate balance
due of $374,659.46. Peoples Bank holds the first and best lien on
the RestorX assets with an approximate balance due of $136,519.33
followed by the SBA with an approximate balance due in the amount
of $145,600.
Following negotiations, Unified Restoration Systems, LLC has
offered to purchase a portion of the Debtors' office furniture,
fixtures and business machinery and equipment as set forth on
Exhibit A for the sum of $75,295. From that Purchase Price,
$16,070 is attributable to assets owned by RestorX while the
balance of $59,225 is attributable to assets owned by JBC.
Prior to the Petition Date, the Debtors retained Ronald Roman to
conduct an appraisal of their office furniture, fixtures and
business machinery and equipment with one of the intended purposes
of the appraisal being to assist them in their review of the
pending offer received from Unified. Mr. Roman appraised the
Purchased Assets as having a value of $43,605.
Accordingly, the Debtors believe that the proposed private sale to
Unified for $75,295 represents the highest and best offer for these
assets and is in the best interests of the creditors of the
Bankruptcy Estates. JBC also believes that the proposed private
sale is in the best interests of the creditors of the Bankruptcy
Estates given the costs and fees, including professional fees that
would otherwise be associated with an auction sale or other type of
liquidation of the same assets.
The sale of assets to Unified will be "as is, where is" without any
representations or warranties of any kind. It will be free and
clear of all liens, claims, encumbrances held by Peoples Bank, the
SBA and GMC with the sale proceeds derived therefrom in the amount
of $75,295 being distributed to the first lienholder of the
collateral, Peoples Bank.
Following the proposed sale of the Purchased Assets to Unified, the
Debtors submit that the remaining office furniture, fixtures and
business machinery and equipment with a projected value of $74,710
will likely be sold via public auction pursuant to a separate sale
motion.
As set forth, the Debtors' assets to be liquidated in the Chapter
11 case includes, but is not limited to, office furniture, fixtures
and business machinery and equipment, accounts receivables, and
real property. By approving the terms of the Purchase Agreement to
Unified, the Debtors will be divested of assets that do not
generate cash flow while a significant claim and liability against
the bankruptcy estate will be substantially reduced.
A copy of the Purchase Agreement is available for free at
https://tinyurl.com/462wcpkh from PacerMonitor.com free of charge.
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.
JAF 27 LLC: Seeks to Hire Murray Law Firm as Bankruptcy Counsel
---------------------------------------------------------------
JAF 27, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Massachusetts to employ Murray Law Firm, P.C. as its
legal counsel.
The firm's services include:
a. analysis of the financial situation of the Debtor;
b. preparation and filing of bankruptcy schedules, statement of
affairs and legal papers;
c. representation of the Debtor in the bankruptcy court and at
all meetings of creditors;
d. formulation of the Debtor's disclosure statement and any
amendments, if warranted;
e. preparation of the Debtor's plan of reorganization and any
amendments, if warranted;
f. completion of all legal tasks required for confirmation; and
g. representation of the Debtor in any subsequent proceedings
under the Bankruptcy Code.
The firm will be paid based upon its normal and usual hourly
billing rates and will be reimbursed for out-of-pocket expenses
incurred.
The Debtor received from the Debtor a retainer of $4,000, plus
filing fee of $1,738.
Christopher Murray, Esq., a partner at Murray Law Firm, 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:
Christopher Murray, Esq.
Murray Law Firm, P.C.
39 Union Avenue, 2nd Floor
Sudbury, MA 01776
Tel: (978) 579-9800
Email: Chris@DanielMurrayLaw.com
About JAF 27 LLC
JAF 27, LLC is a Tewksbury, Mass.-based company engaged in renting
and leasing real estate properties.
JAF 27 filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Mass. Case No. 22-40648) on Sept. 7,
2022, with between $1 million and $10 million in both assets and
liabilities. Steven Weiss serves as Subchapter V trustee.
Christopher Murray, Esq., at Murray Law Firm, P.C. is the Debtor's
legal counsel.
JOSEPH KLAYNBERG: Sets Bidding Procedures for Equity Interests
--------------------------------------------------------------
Joseph Klaynberg asks the U.S. Bankruptcy Court for the Southern
District of New York to authorize the bidding procedures related to
the sale and proposed auction of the Equity Interests in the
following 16 active entities:
1. Mark Paragon LP (2.53%) - Entity owns a strip mall in
upstate NY
2. Durdom, Inc. (70%) - Entity owns a 45% interest in 2
partnerships which own 2 commercial condominiums in New Rochelle
3. SCP, LLC (28.03%) - Entity owns property at 5 Constitution
Plaza, Hartford, CT
4. JEDR Group, LLC I (50%) - Owns interests in 5CP, HSK
Mulberry (which owns interest in Spectra Top, which owns property
at 100 Trumbull St, Hartford, CT), 114 MS Member (which owns
property at 114 Mulberry St., NY, NY)
5. KS Equities (50%) - Owns interests in 5CP, Spectra 111
(which owns property at 111 Pearl St, Hartford, CT), Spectra 101
(which owns property at 101 Peral St, Hartford, CT), 114 MS Member
6. JKIG LLC (.5%) - Owns interest in Spectra TOP, Spectra 111,
Spectra 101
7. W Spectra Corp. (50%) - Owns interest in Spectra TOP
8. Klaynberg Family Group (10%) - Owns interest in Spectra
111, Spectra 101
9. 318 Investors A (9.52%) - Entity owns 50% of entity which
owns property at 318 E. 3rd St., NY, NY
10. WW1834 Members, LLC (1.92%) - Entity owns a project under
construction in Harlem, NY
11. 114 MS Member, LLC (3.61%) - Entity owns property located
at 114 Mulberry Street, NY, NY
12. AM Club, LLC (50%) - Entity owns interest in 114 MS Member
13. WWIG III LLC (5.56%) - Entity owns interest in Greenpoint
Partners (which owns a building under construction in Brooklyn,
NY)
14. WW Eastern LLC (3.56%) - Owns apartment unit at 302 East
96th St, NY, NY
15. Wonder Works (42%) - Construction company
16. Construction Corp. International Design (100%) - Importer
of goods used in construction Direct, Ltd. projects
A hearing on the Motion is set for Oct. 3, 2022, at 10:00 a.m.
(EST). The Objection Deadline is Sept. 26, 2022, at 4:00 p.m.
(EST).
Prior to emigrating to the United States, the Debtor earned a
degree in Civil Engineering. He came to this country in 1979 from
Belarus (never having gone back) and was able to find work as a
carpenter in the New York City. The Debtor continued to work in
this trade for approximately 7 years. During this period he
advanced from a laborer to a supervisor and was able to save enough
money to start a small general contracting company, Wonder Works
Construction Corp. in 1987. Wonder Works grew from a small
carpentry contractor to a successful design and development builder
that has completed 388 projects, developed 25 building and
constructed thousands of residential units in New York City and the
surrounding areas. It has since reduced its workforce to
approximately 5 employees and has less than $1 million of work in
the pipeline with no development projects on the horizon.
During the period of Wonder Works' growth, the Debtor started to
look for larger development opportunities. As part of this
strategy, he would finance individual development projects by
finding investors to take equity interests in a project.
Additional funds needed to complete a project would be borrowed
from conventional lenders, both as secured debt and mezzanine
financing. As part of these transactions, the Debtor would often
manage the project, earning fees for asset management and as
managing member of the special purpose entity formed for the
project. Thus, the Debtor owned interests in these various
entities, predominantly real estate based.
Because it has been determined that the Debtor is unable to
restructure his obligations, a Second Amended Chapter 11 Plan dated
Aug. 8, 2022 has been filed by the Debtor, which relies for the
distributions thereunder on the liquidation of the Debtor's assets,
including the Equity Interests. The Motion is filed pursuant to
the Plan and in furtherance of that liquidation.
The Debtor owns the Equity Interests. The Equity Interests
represent the Debtor's interest as a member of the entities. In
some cases, the Debtor is also a managing member. To the extent
permissible, the managing interest will also be sold. The Debtor
proposes to sell the foregoing Equity Interests through the Motion,
either in whole or in one or more individual lots, in accordance
with the terms set forth.
Contemporaneously with the filling of the instant Motion, the
Debtor is filing an application seeking to retain A&G Realty
Partners to market and sell the Equity Interests. The Successful
Bidder(s) for the Equity Interests will be party to the proposed
Purchase Agreement with the Debtor, as modified to incorporate the
terms of the Successful Bid(s). If the Debtor enters into a
Purchase Agreements with a proposed Stalking Horse Purchaser, at
least 10 days prior to the Bid Deadline, the Debtor will file a
notice with the Bankruptcy Court, the Notice Parties, and all
Potential Bidders, and will include the Stalking Horse Agreement
with such notice. The Stalking Horse Bidder will obtain any
Consents needed with respect to its Bid prior to the Debtor
accepting any Stalking Horse Bid. A&G will act as liaison between
any Stalking Horse Bidders and the entities from whom Consents are
needed.
The principal terms of the Purchase Agreement are:
a. Parties: Seller: Joseph Klaynberg
Purchaser: TBD
b. Asset: Itemize Interests
c. Purchase Price: TBD
d. Conditions to Closing: Entry of Sale Order and other
criteria set forth in Section 7 of the Purchase Agreement,
including all Consents needed for transfer of Equity Interest
e. Closing Date: 30 days following the entry of Sale Order
f. Termination Fee: 2% of the Purchase Price in the event a
non-insider Stalking Horse Purchaser is selected and is not the
Successful Bidder for the Equity Interests or the Expense
Reimbursement in the event of an Insider Purchaser
To ensure that the Debtor receives the maximum value for the sale
of the Equity Interests, either in whole or in one or more
individual purchases, A&G will actively market the Equity Interests
and solicit bids, and intends to conduct an Auction. In connection
with the Sale of the Equity Interests, the Debtor seeks the
approval of the Bidding Procedures and certain bid protections, for
any Stalking Horse Purchaser which the Debtor believes are
necessary to induce a Stalking Horse Purchaser to enter into a
Stalking Horse Agreement.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: 45 days after entry of Bidding Procedures
Order at 5:00 p.m. (EST).
b. Initial Bid: An amount not less than $25,000 in excess of
the Auction Baseline Bid plus the amount of any Bid Protections
c. Deposit: 5% of the purchase price contained in the Purchase
Agreement
d. Auction: If multiple Qualified Bids (including any Stalking
Horse Agreement) with respect to any or all Equity Interests are
submitted by the Bid Deadline, the Seller will conduct the Auction
to determine the highest and otherwise best Qualified Bid with
respect to such Equity Interests.
e. Bid Increments: $10,000, in cash or in cash equivalents
f. Sale Hearing: As soon as practicable after the conclusion
of the Auction, a hearing will be conducted in the Court to confirm
the terms of the Auction and authorize the Sale(s) of the Equity
Interests.
g. Closing: 30 days following entry of the Sale Order
To provide an incentive and to compensate a Stalking Horse
Purchaser for negotiating a Stalking Horse Agreement, the Debtor
has agreed to a breakup fee in an amount equal to 2% of the
purchase price set forth in any Stalking Horse Agreement executed
by a non-insider Stalking Horse Purchaser.
By the Motion, the Debtor requests the entry of orders: (a)
approving the Bidding Procedures related to the Sale and proposed
Auction of the Equity Interests; (b) approving the Purchase
Agreement as a form to be followed by Potential Bidders; (c)
approving proposed bid protections in favor of any Stalking Horse
Purchaser, if one is identified; (d) scheduling an Auction, if
necessary, and the Sale Hearing to approve the Sale of the Equity
Interests; and (e) approving the form and manner of Auction
Notice.
The Debtor further requests that at the Sale Hearing, subject to
the results of the Auction and the Bidding Procedures set forth
herein, this Court enter the Sale Order approving and authorizing
the Sale, free and clear of any pledges, liens, security interests,
encumbrances, claims, charges, options and interests thereon,
pursuant to the Purchase Agreement, as modified to incorporate the
terms of any Successful Bid.
The Debtor requests that the Court finds that there will be no
transfer or similar taxes owed on any transaction in connection
with the Sale of the Equity Interests, as such is in contemplation
and furtherance of the Debtor's Plan, pursuant to Section 1146 of
the Bankruptcy Code.
Pursuant to Bankruptcy Rules 2002(c) and 6004, the Debtor is
required to give 21 days' notice of any proposed sale of property
not in the ordinary course of business. Not later than three days
after the entry of the Bidding Procedures Order, the Debtor will
cause the Bidding Procedures Order, the Bidding Procedures and the
Auction Notice to the Notice Parties.
A copy of the Bidding Procedures and the Purchase Agreement is
available for free at https://tinyurl.com/uu2me7s7 from
PacerMonitor.com free of charge.
About Joseph Klaynberg
Joseph Klaynberg sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10165) on February
11,
2022. The Debtor is represented by Matthew Roseman, Esq., at
Cullen
and Dykman LLP.
JRMC HOLBROOK: Seeks to Hire Madoff & Khoury as Legal Counsel
-------------------------------------------------------------
JRMC Holbrook, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Massachusetts to employ Madoff & Khoury, LLP to
serve as legal counsel in its Chapter 11 case.
The firm will be paid based upon its normal and usual hourly
billing rates and will be reimbursed for out-of-pocket expenses
incurred.
Nina Parker, Esq., the firm's attorney who will be providing the
services, disclosed in a court filing that she is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Nina M. Parker, Esq.
Madoff & Khoury, LLP
124 Washington Street
Foxboro, MA 02035
Tel.: (508) 543-0040
Email: parker@mandkllp.com
About JRMC Holbrook
JRMC Holbrook, LLC filed a Chapter 11 bankruptcy petition (Bankr.
D. Mass. Case No. 22-11173) on Aug. 16, 2022, with as much as $1
million in both assets and liabilities. Judge Janet E. Bostwick
oversees the case.
Nina M. Parker, Esq., at Madoff & Khoury, LLP is the Debtor's legal
counsel.
KS WORLD: Seeks to Hire Leslie Cohen Law as Bankruptcy Counsel
--------------------------------------------------------------
KS World, Inc. seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ Leslie Cohen Law, PC
to serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. advising the Debtor regarding its rights and responsibilities
under the U.S. Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure and the Local Bankruptcy Rules, and how the application
of such provisions relates to the administration of the Debtor's
estate;
b. assisting the Debtor in the preparation of certain documents
to be filed with the bankruptcy court or the Office of the United
States Trustee;
c. representing the Debtor, with respect to bankruptcy issues,
in the context of its pending Chapter 11 case and representing the
Debtor in contested matters;
d. assisting the Debtor in the negotiation, formulation and
confirmation of a plan of reorganization; and
e. rendering services for the purpose of pursuing, litigating or
settling litigation.
The firm's hourly rates are as follows:
Leslie Cohen, Esq. $575 per hour
J'aime Williams, Esq. $430 per hour
Senior Contract Attorneys $350 per hour
Paraprofessionals $175 per hour
Leslie Cohen Law received from the Debtor a retainer of $67,500.
Leslie Cohen, Esq., president and sole shareholder of the firm,
disclosed in a court filing that her firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Leslie A. Cohen, Esq.
J'aime K. Williams Esq.
Leslie Cohen Law, PC
506 Santa Monica Blvd., Suite 200
Santa Monica, CA 90401
Tel.: (310) 394-5900
Fax: (310) 394-9280
Email: leslie@lesliecohenlaw.com
jaime@lesliecohenlaw.com
About KS World
KS World Inc. filed a Chapter 11 bankruptcy petition (Bankr. C.D.
Calif. Case No. 22-14751) on Aug. 30, 2022, with up to $1 million
in both assets and liabilities. Judge Julia W. Brand oversees the
case.
The Debtor is represented by Leslie Cohen Law, PC.
LA SALLE UNIVERSITY: Fitch Alters Outlook on 'BB+' IDR to Negative
------------------------------------------------------------------
Fitch Ratings has affirmed La Salle University (PA)'s Issuer
Default Rating (IDR) at 'BB+' and has affirmed the ratings on the
following bonds issued on behalf of La Salle:
-- $40,050,000 Philadelphia Industrial Development Authority, La
Salle University revenue bonds series 2017 at 'BB+';
-- $82,105,000 million Pennsylvania Higher Educational
Facilities Authority, La Salle University revenue bonds
series 2012 at 'BB+'.
The Rating Outlook has been revised to Negative from Stable.
SECURITY
The series 2012 and 2017 revenue bonds are secured as general
obligations of the university. Through intercreditor agreements,
the bonds are also secured, on a parity basis, by a lien on
unrestricted gross revenues of the university.
ANALYTICAL CONCLUSION
The Outlook revision to Negative is a result of significant
declines in net student-generated revenues, both in unaudited
results for fiscal year 2022 and projections for fiscal year 2023,
reflecting consistent, multi-year downward enrollment trends at La
Salle (4,430 full time equivalents [FTEs] in Fall 2018 to 3,295
FTEs in Fall 2021), as well as administrative mishaps under a prior
enrollment management team that negatively impacted Fall 2021
enrollment and fiscal 2022 results. While Fitch acknowledges signs
of improved enrollment in Fall 2022 and the recognition by La
Salle's new leadership team to right-size operations to match the
university's recurring revenue base, Fitch's Negative Outlook
further considers La Salle's repeated reliance on unsustainable
levels of endowment support to balance operations, which will
persist into 2023.
The 'BB+' rating is anchored in part by the current financial
flexibility afforded by La Salle's endowment and $84 million in
available funds (AF) as of fiscal year end 2022 (unaudited),
equating to just under 80% of operating expenses and 69% of debt.
However, Fitch maintains concerns that this level of AF and
associated financial ratios will be compromised, given that
extraordinary, unsustainable distributions from La Salle's
investment portfolio (above the university's policy distribution of
5% of rolling 12-quarter market value) have provided necessary
cushion for deficits over several years and are expected to be
repeated in fiscal 2023 in even greater magnitude. Further, AF were
buttressed by extraordinary financial market performance in fiscal
2021, and by one-time income from federal stimulus grants and
non-core asset sales in fiscal years 2021 and 2022. As these asset-
and income-boosting events are not recurring in nature,
management's creation and execution of serious and expeditious
plans to stabilize or grow enrollment and right-size its operating
base (including expenses and physical assets) will be necessary to
avoid further rating action by Fitch.
The challenges are substantial, given the competitive environment
for students in which La Salle operates, the university's regional
draw in a demographically unfavorable region and the compounding
pressure of smaller class cohorts progressing through the
institution replacing larger graduating classes. Fitch acknowledges
the additional challenges resulting from multiple changes in senior
leadership over the past six years. Although Fitch's understanding
is that the current Vice President of Enrollment is appointed on an
interim basis, Fitch is expecting the energy and commitment of a
new executive team guided by a stable and engaged 28-member board
of trustees to develop consistent execution towards strategic and
operational goals.
Fitch's 'BB+' rating is also supported by relatively solid cash
flows (inclusive of the endowment draw) of 9.5%-12.5% in recent
years. While strong, these cash flow margins are necessary to
generate sufficient debt service coverage on a sizeable debt burden
and significant level of debt totaling over $120 million. La Salle
has communicated to Fitch that they have no plans for additional
debt.
KEY RATING DRIVERS
Revenue Defensibility: 'bb'
Competitive Pressures on Enrollment, Elevated Endowment Support
La Salle's 'bb' revenue defensibility reflects continued enrollment
pressure over several years, coupled with some erosion in key
demand characteristics including retention and selectivity. Net
tuition revenue has fallen 18% from fiscal year 2018 to fiscal year
2022 (unaudited), and auxiliary revenues remain well below
pre-pandemic levels. With its student-dependent revenue base, La
Salle has needed supplemental endowment draws to offset student
revenue declines at levels which Fitch does not consider to be
sustainable.
FTE enrollment fell over 15% in fall 2021, well below expectations,
including an incoming freshman base well below budgeted levels at
450 (and down from a recent high of 957 in fall 2018, following a
tuition reset in 2017). Selectivity worsened to 83% in fall 2021
from 76% in the prior fall, and retention remains relatively weak
at 69%. Fitch understands that Fall 2022 pre-census freshmen
matriculation is expected to rebound to over 500 students,
consistent with budget expectations. Management believes that the
recent relocation of freshmen students to newer housing on the
university's South campus will have a meaningful impact on the
freshmen experience, enrollment, and retention. With new leadership
in key student-centric roles, successful execution in strategy will
be critical in the coming years to continue to improve La Salle's
enrollment trajectory. These challenges are further pronounced by
the demographic and competitive pressures across the broader
Philadelphia and Pennsylvania market.
Operating Risk: 'bbb'
Somewhat Variable - Though Sufficient - Cash Flow Supports High
Debt Burden Only When Incorporating Extraordinary Income
Inclusive of its supplemental endowment draw, La Salle has
generated operating cash flow margins between 9.5% and 12.5%, which
could be considered consistent with a higher operating risk
assessment. However, Fitch's operating risk assessment is tempered
by La Salle's relatively high debt burden (maximum annual debt
service [MADS] equal to over 10% of fiscal 2022 unaudited
revenues), elevated average age of plant, and a pattern of
extraordinary endowment support.
Based on unaudited fiscal 2022 revenue, absent non-recurring
revenue items (including extraordinary endowment support above the
5% policy and the sale of two non-core assets) totaling over $6
million, La Salle would not have generated economic debt service
coverage per Fitch's calculation. While expense controls have been
significant, between 2018 and 2022 they have not been sufficient to
fully keep up with reductions in revenue.
Financial Profile: 'bb'
Sufficient AF - For Now -- Provide Flexibility to Cushion Budgetary
Shortfalls
The 'bb' financial profile assessment reflects the strain on La
Salle's leverage profile. While currently adequate for the rating
level, La Salle's leverage profile is particularly vulnerable
through a Fitch-modeled stress scenario which includes Fitch's
expectations of financial market performance, continued operating
and revenue stress and some excess endowment distributions above
policy. Absent improvements in recurring operating performance, La
Salle remains susceptible to further deterioration in available
funds over the intermediate term.
La Salle has approximately $84 million in AF as of FYE 2022
(unaudited), down from a high $96 million at FYE 2021. In turn, the
FYE 2021 high of $96 million was above the preceding five-year
average AF value of about $80 million due to fiscal 2021's strong
financial market gains and federal stimulus support for operations,
both which minimized necessary endowment draws in that year. The
current $84 million in AF continues to provide meaningful financial
flexibility and support through this recent period of continued
enrollment and revenue pressures.
La Salle has approximately $122 million in debt (100% fixed rate)
and another $2 million in Fitch-calculated debt equivalents (mostly
operating leases). Debt service is level, with MADS of $10.8
million. Per Fitch's calculation including one-time revenue
sources, La Salle generated about 1.5x debt service coverage in
fiscal 2021 and about 1.2x coverage in fiscal 2022 (unaudited). An
undrawn $7.5 million line of credit provides supplemental
liquidity.
Asymmetric Additional Risk Considerations
Fitch's assessment includes no asymmetric additional risk
considerations.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
-- Continued enrollment pressure beyond fall 2022, particularly
which pressures net tuition and student fee revenue;
-- Erosion in operating performance which persists beyond fiscal
2023, particularly at levels requiring ongoing extraordinary
and unsustainable endowment support;
-- Unfavorable shift in leverage (as measured by AF/adjusted
debt) either from additional debt or erosion in liquidity, to
levels persisting below 45%-50%.
-- Further instability in management and enrollment staff, or
lack of evidence that new management team has support for
strategic plan or execution.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
-- Signs of stabilization or recovery in enrollment and
retention levels in 2023, correlating with the same for
student fee revenues, could support a revision to stable.
-- While unlikely, any upward rating pressure would require a
return to a normalized level of endowment support that
persists over several years, as supported by sustainable
operating performance on a recurring basis.
CREDIT PROFILE
La Salle University, founded in 1863 by the Institute of the
Brothers of the Christian Schools (Brothers), is a private,
co-educational university located on a 133-acre campus in the
Germantown area of Philadelphia, 10 miles from Center City. La
Salle is one of six Lasellian colleges and universities in the
U.S., and was granted university status in 1984. The Brothers'
residence is co-located on the campus of the university.
Total headcount enrollment in fall 2021 was 4,043, and was 3,395 on
an FTE basis. La Salle offers undergraduate and graduate degrees at
its three schools: Arts and Sciences, Business, and Nursing and
Health Sciences. Approximately 70% of students are undergraduates.
Approximately 80% are Pennsylvania residents. With several NCAA
Division I men's and women's athletics programs and approximately
330 student-athletes, athletics is an important component of La
Salle's operations.
A new President of the university was inaugurated in April 2022,
coinciding with a new Vice President for Finance and
Administration. A new Chief of Staff, (Interim) Vice President of
Enrollment Management, and new Provost have also joined the
university over the past year. The university is governed by a
28-member Board of Trustees, six of whom are brothers.
La Salle is accredited by the Middle States Commission on Higher
Education, last affirmed in 2016 for a 10-year period.
REVENUE DEFENSIBILITY
La Salle's 'bb' revenue defensibility reflects continued enrollment
pressure, over the several prior years, coupled with some erosion
in key demand characteristics including retention and selectivity.
The assessment is further informed by the need for elevated
endowment support in recent years. With its relatively tuition
dependent revenue base, La Salle has relied upon a supplemental
endowment draw to offset student revenue pressures at levels which
are not sustainable. Net tuition revenue has fallen 18% since 2018,
and auxiliary revenues remain well below pre-pandemic levels.
FTE enrollment fell over 15% in fall 2021, well below expectations,
including an incoming freshman base well below budgeted levels at
450 (and down from a more recent high of 957 in fall 2018 following
a tuition reset in 2017). Selectivity worsened to 83% from 76%
prior fall, and retention remained relatively weak at 69%. With new
leadership in the finance, enrollment, and provost roles,
successful execution in strategy will be critical in the coming
years to stabilize La Salle's enrollment trajectory.
Fitch calculates La Salle's effective full endowment spend as
averaging over 8% in each of the past three years, above its 5%
allowable payout policy and including a board-approved supplemental
component elevating it above what is generally accepted as a
sustainable level. Leadership has budgeted for a $12 million (over
10%) draw for fiscal 2023. Despite this, Fitch notes that the
endowment (and AF) total has thus far remained largely resilient
over the past five years, against a shrinking revenue and expense
base.
The endowment draw was about 8.7% in fiscal 2020, but stimulus
support allowed for just a 1.2% draw in fiscal 2021. The effective
draw for fiscal 2022 was again closer to 8%.
OPERATING RISK
Inclusive of its supplemental endowment draw, La Salle has
generated operating cash flow margins between 9.5% and 12.5%, which
could be considered consistent with a higher operating risk
assessment. However, the assessment is tempered by La Salle's
relatively high debt burden (MADS equal to over 10% of fiscal 2022
unaudited revenues), elevated average age of plant, and an
expectation of a return to standard endowment support, are better
reflected in the 'bbb' assessment. Based on unaudited fiscal 2022
revenue, absent non-recurring revenue items (including
extraordinary endowment support above the 5% policy and the sale of
two non-core assets) totaling over $6 million, La Salle would not
have generated economic debt service coverage per Fitch's
calculation methodology. While expense controls have been
significant, between 2018 and 2022 they have not been sufficient to
fully keep up with reductions in revenue.
With an elevated average age of plant above 22 years, one of the
highest in the portfolio, La Salle would appear to be reaching the
limits on its capital spending flexibility. However, with several
non-core asset sales planned, La Salle has a relatively reasonable
$6 million in capital spending approved for fiscal 2023. Management
notes that recent student housing and other student-oriented
investments actually position it sufficiently well to allow for
more moderate outlays over the near term that could feasibly flex
downward as necessary. Some external support is expected, including
state grant and donor funds that La Salle has solid track record of
garnering.
La Salle has a solid history of consistent (if limited)
fundraising; gift revenue has been very steady over the prior four
years, equal to about 3% of adjusted operating revenue.
La Salle's debt profile is fixed rate, with $122 million in fixed
rate revenue bonds and another $2 million in Fitch-calculated debt
equivalents, in the form of operating leases. Debt service
requirements on the fixed rate bonds are level near $9 million,
with MADS of $10.8 million. La Salle has consistently reduced its
debt burden over time, paying of various notes and loans and has no
plans for additional debt. Annual debt service coverage was
sufficient at 1.2x as Fitch calculated in fiscal 2022, and should
remain steady or better given reduced annual requirements going
forward.
La Salle has a $7.5 million line of credit with Citizens Bank,
which remained undrawn in fiscal 2022.
In addition to the sources of information identified in Fitch's
applicable criteria specified below, this action was informed by
information from Lumesis.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Prior
---- ------ -----
La Salle University (PA) LT IDR BB+ Affirmed BB+
La Salle University (PA)
/General Revenues/1 LT LT BB+ Affirmed BB+
LEGACY POOLS: Taps Latham Luna Eden & Beaudine as Legal Counsel
---------------------------------------------------------------
Legacy Pools, LLC seeks approval from the U.S. Bankruptcy Court for
the Middle District of Florida to employ Latham Luna Eden &
Beaudine, LLP as its legal 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 all other necessary actions incident to the proper
preservation and administration of the Debtor's estate.
The firm will charge $475 per hour for attorney's services and $105
per hour for paraprofessional services. In addition, the firm will
seek reimbursement for its out-of-pocket expenses.
Daniel Velasquez, Esq., a partner at Latham Luna Eden & Beaudine,
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:
Daniel A. Velasquez, Esq.
Latham Luna Eden & Beaudine, LLP
201 S. Orange Ave., Suite 1400
Orlando, FL 32801
Tel: (407) 481-5800
Fax: (407) 481-5801
Email: dvelasquez@lathamluna.com
About Legacy Pools
Legacy Pools LLC -- https://www.legacypools.com -- is a top custom
pool builder serving Melbourne, Fla., and surrounding cities.
Legacy Pools filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
22-03123) on Aug. 30, 2022, with between $500,000 and $1 million in
assets and between $1 million and $10 million in liabilities.
Robert Altman has been appointed as Subchapter V trustee.
The Debtor is represented by Daniel A. Velasquez, Esq., at Latham
Luna Eden & Beaudine, LLP.
LEVEL FOUR ORTHOTICS: Selling All Assets to Bionic for $3.25 Mil.
-----------------------------------------------------------------
Level Four Orthotics & Prosthetitics, Inc., doing business as
Restore POC, and affiliates, ask the U.S. Bankruptcy Court for the
District of Delaware to authorize their bidding procedures in
connection with the sale of substantially all assets free and clear
of all liens, claims, encumbrances to Bionic Prosthetics and
Orthotics Group LLC for $3.25 million cash at closing, plus an
amount equal to the dollar for dollar value of any deposits and
prepaid expenses related to assumed contracts (estimated to be
approximately $92,000), plus a payment for work in progress
delivered within 30 days, and collected within 60 days, following
the closing (estimated to be worth $360,000), plus the assumption
of certain liabilities and cure costs, subject to overbid.
A hearing on the Motion is set for Sept. 27, 2022, at 11:00 a.m.
The Objection Deadline is Sept. 23, 2022, at 4:00 p.m.
The Debtors have prepetition loan obligations totaling $20,235,011
as of the Petition Date secured by some or all of the assets of
each the Debtors. In 2012, then-lender BB&T extended the L4 BB&T
Secured Line of Credit, a $500,000 line of credit, together with
the L4 BB&T Secured Term Loans, two term notes in the original
principal amounts of $605,000 and $295,000 respectively. The L4
BB&T Secured Loans were subsequently acquired by Penta Mezzanine
SBIC Fund I, L.P. ("Prepetition Secured Party") after the L4 BB&T
Secured Loans eventually fell into default.
On Feb. 28, 2014, L4 entered into the Prepetition Credit Agreement
in the original principal amount of $5 million. Through a series
of amendments to the Prepetition Credit Agreement and L4/OPI Penta
Secured Notes, the Prepetition Secured Party ultimately extended a
total of $13,753,171.50 in principal to Restore POC under the
Prepetition Credit Agreement.
Cocco Enterprises, Inc., American Ortho-Tech Laboratories, Inc.,
W.R. Rosen Inc., and Orthopartners, Inc. all executed guarantees
and security agreements guaranteeing and securing the L4/OPI Penta
Secured Notes. The UCC-1s filed against AOT, Cocco, and WRR,
however, were allowed to lapse, and those guarantees are now
unsecured. WCOP is not an obligor of the L4/OPI Penta Secured
Notes. The L4/OPI Penta Secured Notes are secured by substantially
all of L4's and OPI's assets, junior to the L4 BB&T Secured Loans.
More recently, prior to the Petition Date, the Debtors, jointly and
severally, entered into a series of bullet loans with the
Prepetition Secured Party, including the L4/OPI Secured Bullet
Notes in the original principal amounts of $100,000 and $20,000
respectively, and the Restore POC Secured Bullet Notes in the
original principal amounts of $20,000, $100,000, and $100,000,
respectively. The L4/OPI Secured Bullet Notes are secured by a
lien on all assets of L4 and OPI, and the Restore POC Secured
Bullet Notes are secured by a lien on all assets of all of the
Debtors.
On Aug. 31, 2022, the Court entered an interim order approving the
Debtors' DIP Facility, which order authorized initial borrowings of
up to $300,000. The proposed maximum amount of the DIP Facility,
subject to entry of a final order approving it, is $1 million. The
hearing to consider approval of the DIP Facility on a final basis
is currently scheduled for Sept. 27, 2022 at 11:00 a.m. (EDT). The
Prepetition Secured Party is the DIP Lender under the DIP Facility.
In the wake of a series of unsuccessful management teams, followed
by the effects of COVID and the "Great Resignation," it was readily
apparent that the Debtors were unable operate profitably, and
enterprise value was quickly diminishing. As a result, they
pursued strategic alternatives, eventually determining to file
these chapter 11 cases to pursue a sale of substantially all of
their assets. The Motion seeks to establish a process for the sale
of their Assets to maximize their value for these estates.
As a result of pre-petition efforts, the Debtors were able to reach
agreement on a stalking horse asset purchase agreement for the
Assets with the Stalking Horse Bidder. Pursuant to the Stalking
Horse Agreement, and subject to higher or better offers through the
bidding and auction process, the Stalking Horse Bidder has agreed
to purchase the Assets for aggregate consideration consisting of
$3.25 million cash at closing, plus an amount equal to the dollar
for dollar value of any deposits and prepaid expenses related to
assumed contracts (estimated to be approximately $92,000), plus a
payment (based on the completed percentage) for work in progress
delivered within 30 days, and collected within 60 days, following
the closing (estimated to be worth $360,000), plus the assumption
of certain liabilities and cure costs.
By this Motion, the Debtors seek approval of the Bidding Procedures
pursuant to which they will market, solicit, and select the highest
or otherwise best offer for the sale of the Assets. In connection
with this process, they also request that the Court schedules an
auction, if necessary, and hearing to consider approval of the
Sale. As part of the Sale, the Debtors propose to assume and
assign certain executory contracts and unexpired leases to the
Stalking Horse Bidder or other successful bidder; therefore, the
Debtors also request approval of assumption and assignment
procedures related thereto. They likewise seek approval of the
form and manner of notice that the Debtors will provide of the
Sale, the Auction, the Sale Hearing, and the proposed assumptions
and assignments. Finally, they request that, at the Sale Hearing,
the Court enters an order approving the Sale to the successful
bidder as determined in accordance with the Bidding Procedures. If
the Debtors do not receive competing bids that are higher or better
than the Stalking Horse Agreement, they intend to seek entry of a
Sale Order approving the Sale to the Stalking Horse Bidder at the
Sale Hearing.
The salient terms of the APA are:
a. Purchaser: Bionic Prosthetics and Orthotics Group LLC
b. Sellers: Restore POC, Cocco, OPI, AOT, WRR, and Western
Carolina O&P
c. Purchase Price: $3.25 million cash (including the $162,500
Escrow Deposit), plus an amount equal to the dollar-for-dollar
value of any Deposit and Prepaids, plus an amount equal to Cure
Amounts ("Cash Purchase Price"), plus the WIP Payments, plus the
Assumed Liabilities
d. Purchased Assets: All of the Debtors' right, title and
interest in, to and under the following Assets related to them
e. Assumed Liabilities: Those liabilities identified in
Section 2.3 of the Agreement
f. Indemnity Escrow Agreement: An Indemnity Escrow Amount of
$162,500, will be available to Buyer to satisfy any amounts Buyer
is obligated to pay Medicare/Medicaid clawbacks
g. Agreements with Management or Key Employees: The Stalking
Horse Bidder has indicated that it intends to offer employment to
all of the employees who are employed immediately prior to the
Closing. It requires, as a precondition to closing, that Rebecca
R. Irish enters into a one-year term Employment Agreement providing
for gross annual compensation of $200,000, in form and substance
reasonably acceptable to her and the Stalking Horse Bidder. Other
than those potential offers, there are no discussions or agreements
between the Stalking Horse Bidder and any of the Debtors’
management or key employees.
h. Private Sale/No Competitive Bidding: The Sale to the
Stalking Horse Bidder is subject to higher or better offers in
accordance with the Bidding Procedures.
i. Closing and Other Deadlines: The Closing will occur
electronically via email at 9:00 a.m. (ET), on the first day on
which the conditions to Closing have been satisfied or waived or at
such other time or on such other date or at such other please as
the Stalking Horse Bidder and the Debtors may mutually agree upon
in writing.
j. Good Faith Deposit: The Stalking Horse Bidder has deposited
$162,500 with the Escrow Deposit Holder, Ruberto, Israel & Weiner,
P.C., subject to the terms of the Stalking Horse Agreement.
k. Use of Proceeds : Following the Closing and receipt of the
Purchase Price, and payment of any Cure Costs that are the Debtors'
responsibility under the Stalking Horse Agreement, without further
order of the Court, the cash proceeds of the sale will be
distributed as follows: (i) to the DIP Lender, in an amount
necessary to satisfy the DIP Facility; and (ii) all remaining sale
proceeds to the Debtors' estates with liens, if any, attaching to
such proceeds.
l. Sale Free and Clear: of Unexpired Leases: None
m. Expense Reimbursement: $75,000
n. Break-up Fee: $162,500
The salient terms of the Bidding Procedures are:
a. Bid Deadline: Oct. 17, 2022 at 4:00 p.m. (ET)
b. Initial Bid: An amount greater than the sum of (a) the
Purchase Price offered by the Stalking Horse Bidder under the terms
of the Stalking Horse Agreement, plus (b) $300,000, which is the
Initial Overbid with respect to the Stalking Horse Agreement
c. Deposit: 5% of the aggregate consideration provided by the
Competing Purchase Agreement
d. Auction: Oct. 20, 2022 at 10:00 a.m. (ET), if necessary
e. Bid Increments: $100,000
f. Sale Hearing: Oct. 27, 2022
g. Sale Objection Deadline: Oct. 25, 2022 at 4:00 p.m. (ET)
Credit Bid: Parties holding claims against the Debtors secured
by the Assets will not be allowed to credit bid for the Assets.
The Stalking Horse Bidder holds no secured claims against the
Debtors or their estates.
Within two business days after the date of entry of the Bidding
Procedures Order, or as soon as reasonably practicable thereafter,
the Debtors will serve the Sale Notice on the Sale Notice Parties.
In connection with any Sale, the Debtors may seek to assume and
assign to a Successful Bidder one or more Contracts. Within two
business days after the entry of the Bidding Procedures Order, they
will file with the Court and serve on each Counterparty to a
Contract that may be assumed in connection with the Sale an
Assumption and Assignment Notice. The Cure Objection Deadline is
Oct. 17, 2022, at 4:00 p.m. (ET).
The Bidding Procedures and the Debtors' entry into the Stalking
Horse Agreement should be approved because, under the
circumstances, they are reasonable, appropriate, and in the best
interests of the Debtors, their estates, and all parties in
interest. In the interest of attracting the best offers, the
Assets should be sold free and clear of any and all liens, claims,
interests and other encumbrances, with any such liens, claims,
interests and encumbrances attaching to the proceeds of the
applicable sale.
Finally, to implement the foregoing successfully, the Debtors
request that the Court finds that notice of the Motion is adequate
under Bankruptcy Rule 6004(a) under the circumstances, and waives
the 14-day stay of an order authorizing the use, sale, or lease of
property under Bankruptcy Rule 6004(h).
A copy of the Bidding Procedures is available for free at
https://tinyurl.com/yvsc7yzh from PacerMonitor.com free of charge.
About Level Four Orthotics
Level Four Orthotics & Prosthetics, Inc., doing business as
Restore
POC, is a provider of custom prosthetics, orthotics, and infant
cranial remolding products with a mission to provide affordable,
quality products and limb loss solutions to patients in need.
Level Four Orthotics & Prosthetics and five affiliates, including
Cocco Enterprises, Inc., sought Chapter 11 protection (Bankr. D.
Del. Lead Case No. 22-10807) on August 29, 2022.
Level 4 reported assets and debt of $10 million to $50 million as
of the bankruptcy filing. The Debtors have prepetition loan
obligations totaling $20,235,011 as of the Petition Date secured
by
some or all of the assets of each the Debtors.
The Hon. J. Kate Stickles is the case judge.
The Debtors tapped RUBERTO, ISRAEL & WEINER, P.C., as general
bankruptcy counsel, and CROSS & SIMON, LLC, as local bankruptcy
counsel. VERDOLINO & LOWEY, P.C., is the Debtors' accountant.
KROLL RESTRUCTURING ADMINISTRATION LLC is the claims agent.
LONESOME VALLEY: Wins Cash Collateral Access on Final Basis
-----------------------------------------------------------
Lonesome Valley Brewing, Inc. sought and obtained entry of an order
from the U.S. Bankruptcy Court for the District of Arizona
authorized Lonesome Valley Brewing, Inc. to use cash collateral in
accordance with the budget, with a 10% variance, on a final basis
through September 30, 2022.
The Debtor requires the use of cash collateral to meet continuing
obligations to, among others, its landlords, employees, utility
providers, and vendors.
The Debtor had an estimated $5,556 in deposit accounts. As of the
Petition Date, the Debtor estimates it had $11,964 in pending
proceeds from unprocessed credit card transactions at the time of
filing.
The Debtor is unaware of any creditor having a perfected interest
or control over the Debtor's Accounts as of the Petition Date.
The Debtor believes the U.S. Small Business Administration holds a
first-priority interest in the Debtor's pre-petition assets,
including the receivables. The SBA asserts a $736,496 claim.
The Debtor believes the SBA Claim may be lower than asserted but
does not believe that its assets exceed the value of the SBA
Claim.
The Debtor is aware of the following additional parties who have
asserted or may assert a security interest in the Debtor's accounts
or receivables:
a. Arizona Department of Revenue
b. Greenbox Capital/Merchant Capital Group, LLC
c. Holloway Funding Group/ Adam Wines Consulting, LLC
d. IOU Central Inc.
e. DMKA, LLC
The Debtor is also aware that the following agencies have filed
financing statements on behalf of unnamed creditors that assert an
interest in the Debtor's accounts or receivables.
a. Corporation Service Company
b. First Corporate Solutions
Apart from the SBA, the Debtor does not believe these Applicable
Creditors have any interest in the Debtor's assets under 11 U.S.C.
section 506(a)(1).
As adequate protection, the applicable creditors will receive
replacement liens in the Debtor's post-petition assets, including
cash, to the same extent, validity, and priority as their interest
in cash collateral as of the Petition Date up to the value of any
depreciation in the unavoidable portion of such interest during the
pendency of the Case.
A copy of the motion and the Debtor's budget for the period from
October to December 2022 is available at https://bit.ly/3f3326Z
from PacerMonitor.com.
The budget provides total expenses, on weekly basis, as follows:
$18,035 for the week ending October 7, 2022;
$4,923 for the week ending October 14, 2022;
$19,000 for the week ending October 21, 2022; and
$5,005 for the week ending October 28, 2022.
A copy of the order is available at https://bit.ly/3UmiATd from
PacerMonitor.com.
About Lonesome Valley Brewing, Inc.
Lonesome Valley Brewing, Inc. operates two bar and restaurant
locations in northern Arizona: a craft brewery in Prescott Valley
and a pub in Prescott.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 22-05747) on August 29,
2022. In the petition signed by Joanne Cole, chief financial
officer, the Debtor disclosed up to $500,000 in assets and up to
$10 million in liabilities.
Judge Brenda K. Martin oversees the case.
Thomas H. Allen, Esq., at Allen Barnes & Jones, PLC is the Debtor's
counsel.
LUMILEDS HOLDING: Unsecured Claims Unimpaired in Plan
-----------------------------------------------------
Lumileds Holding B.V., et al., submitted a First Amended Joint
Prepackaged Plan of Reorganization.
Under the Plan, holders of Class 4 General Unsecured Claims will
receive payment in full in cash on the date due in the ordinary
course of business in accordance with the terms and conditions of
the particular transaction giving rise to such Allowed General
Unsecured Claim. Class 4 is unimpaired.
As reported in the TCR, the Plan contemplates the following
transactions:
* conversion of approximately $1.711 billion of First Lien Loan
Claims to 100% of the New Common Equity, subject to dilution, and
their Pro Rata share of $125 million of Exit First Lien Takeback
Term Loans;
* postpetition financing—in the form of a $275 million DIP
Facility—to enable the Debtors to continue to operate in the
ordinary course of business during the Chapter 11 Cases;
* access to new capital up to $175 million of an Exit
evolving/Factoring Debt Facility (with the size and terms of such
facility subject to the approval of the Required Consenting First
Lien Lenders) which may take the form of (a) the existing
Receivables Factoring Facility (if such facility is reinstated on
the Plan Effective Date), (b) a new receivables factoring facility,
and/or (c) a new revolving credit facility or asset-based lending
facility;
* each Holder of an Allowed DIP Facility Claim will receive its
Pro Rata share of the Exit First Lien Converted Term Loans or Cash
(depending on the amount drawn under the DIP Facility);
* each Holder of an Allowed General Unsecured Claim will
receive payment in full in Cash on the date due in the ordinary
course of business in accordance with the terms and conditions of
the particular transaction
giving rise to such Allowed General Unsecured Claim;
* each Holder of an Allowed Intercompany Claim or Intercompany
Interest will, at the option of the Debtors, either have its Claim:
(a) Reinstated; or (b) set off, settled, distributed, contributed,
merged, canceled, or
released;
* each Holder of an Existing Interest in Luminescence
Coöperatief U.A., a Co-Investment Interest in Aegletes B.V., or a
Subordinated Claim will have its Claim or Interest be cancelled and
extinguished, be of no further
force or effect, and receive no distribution under the Plan (except
that, to the extent required under Dutch Law, a nominal amount will
be paid to the Existing Co-Investment Interests in Aegletes B.V. in
connection
with such cancellation); and
* the legal, equitable, and contractual rights of each Holder of
an Allowed Other Secured Claim and an Allowed Other Priority Claim
will be unaltered by the Plan.
Proposed Counsel to the Debtors:
George A. Davis, Esq.
George Klidonas, Esq.
Anupama Yerramalli, Esq.
Liza L. Burton, Esq.
Misha E. Ross, Esq.
LATHAM & WATKINS LLP
1271 Avenue of the Americas
New York, NY 10020
Telephone: (212) 906-1200
Facsimile: (212) 751-4864
A copy of the First Amended Joint Prepackaged Plan of
Reorganization dated September 14, 2022, is available at
https://bit.ly/3S838s1 from PacerMonitor.com.
About Lumileds Holding B.V.
Lumileds Holding B.V. is a global manufacturer of innovative
lighting solutions. In the 1960s, the Company expanded its
offerings to also include state-of-the-art LED devices alongside
the automotive lighting technologies that it had continued to
innovate. Today, the Company continues to develop and manufacture
high-tech lighting products for the automotive, mobile device,
consumer, general lighting, and industrial markets.
Lumileds Holding and several affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 22-11155) on August 29, 2022. In the petition signed by
Johannes Paulus Teuwen, chief financial officer, Lumileds Holding
disclosed up to $100 million in assets and up to $500 million in
liabilities.
Judge Lisa G. Beckerman oversees the case.
The Debtor tapped Latham & Watkins LLP as legal counsel, Paul,
Weiss, Rifkind, Wharton & Garrison LLP as special financing and
employee compensation counsel, AlixPartners, LLP as financial
advisor, and Evercore Inc. as investment banker, and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
Davis Polk & Wardwell LLP serves as counsel to the DIP Lenders.
The Secured Lender Group retained Gibson Dunn & Crutcher LLP,
Loyens & Loeff N.V., Roland Berger LP, and PJT Partners LP, as
counsel or financial advisor.
MAGNOLIA OFFICE: Oct. 26 Hearing on Disclosures and Plan
--------------------------------------------------------
Judge Erik P. Kimball has entered an order conditionally approving
the Disclosure Statement of Magnolia Office Investments, LLC.
The hearing on final approval of the Disclosure Statement and
confirmation of the Plan will be held on October 26, 2022, at 2:00
p.m. in United States Bankruptcy Court, Courtroom B, 8th Floor,
1515 North Flagler Drive, West Palm Beach, Florida 33401.
The last day for filing and serving objections to final approval of
the Disclosure Statement is on October 21, 2022.
The last day for filing and serving objections to confirmation of
the Plan is on October 21, 2022.
The last day for filing elections under 11 U.S.C. section 1111(b)
is on October 21, 2022.
The last day for filing written acceptances or rejections of the
Plan is on October 19, 2022.
The last day for filing and serving objections to claims is on
October 12, 2022.
The last day for filing and serving fee applications is on October
12, 2022.
About Magnolia Office Investments
Magnolia Office Investments LLC is a Single Asset Real Estate (as
defined in 11 U.S.C. Sec. 101(51B)). It owns the commercial office
building located at 1211 Governors Square Boulevard, Tallahassee,
Florida 3230, valued at $5.5 million.
Magnolia Office Investments sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-14044) on
May 24, 2022. In the petition signed by Anand Patel, as managing
member, Magnolia Office Investments, LLC listed estimated assets
and liabilities between $1 million and $10 million each.
The case is assigned to Honorable Bankruptcy Judge Erik P.
Kimball.
David L. Merrill, Esq., at The Associates, is the Debtor's counsel.
MASTEN SPACE: Committee Taps Cozen O'Connor as Co-Counsel
---------------------------------------------------------
The official committee of unsecured creditors of Masten Space
Systems, Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Delaware to employ Cozen O'Connor as co-counsel with
Kilpatrick Townsend & Stockton, LLP.
Cozen O'Connor will be paid at these rates:
Partners $735 to $880 per hour
Associates $530 per hour
Paralegals $325 per hour
The firm will also be reimbursed for out-of-pocket expenses
incurred.
Thomas Francella, Jr., Esq., at Cozen O'Connor, disclosed in a
court filing that his firm is a "disinterested person" as defined
in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Thomas J. Francella, Jr., Esq.
Cozen O'Connor
1201 North Market Street, Suite 1001
Wilmington, DE 19801
Phone: +1 (302) 295-2000 / (302) 295-2023
Fax: (302) 295-2013 / (302) 250-4495
Email: tfrancella@cozen.com
About Masten Space Systems
Masten Space Systems, Inc. -- https://www.masten.aero -- is a space
infrastructure company in Mojave, Calif.
Masten Space Systems filed for Chapter 11 protection (Bankr. D.
Del. Case No. 22-10657) on July 29, 2022, with between $10 million
and $50 million in both assets and liabilities. David Masten,
president and chief technology officer of Masten Space Systems,
signed the petition.
Morris James, LLP is the Debtor's bankruptcy counsel while Alston &
Bird, LLP serves as special counsel. Gavin/Solmonese LLC is the
financial advisor and restructuring advisor.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtor's Chapter 11 case on Aug. 16,
2022. The committee is represented by Kilpatrick Townsend &
Stockton, LLP and Cozen O'Connor.
MASTEN SPACE: Committee Taps Kilpatrick as Bankruptcy Counsel
-------------------------------------------------------------
The official committee of unsecured creditors of Masten Space
Systems, Inc. seeks approval from the U.S. Bankruptcy Court for the
District of Delaware to employ Kilpatrick Townsend & Stockton, LLP
as its legal counsel.
The firm's services include:
a. rendering legal advice regarding the committee's
organization, duties and powers in the Debtor's Chapter 11 case;
b. evaluating and participating in the Debtor's sale process to
ensure such process proceeds in the most efficient manner to
maximize recoveries to unsecured creditors;
c. assisting the committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtor, and participating in and reviewing any proposed asset sales
or dispositions, and any other matters relevant to the case;
d. attending meetings of the committee and meetings with the
Debtor, and its attorneys and other professionals, and
participating in negotiations with the Debtor and other parties, as
requested by the committee;
e. taking all necessary action to protect and preserve the
interests of the committee, including possible prosecution of
actions on its behalf and investigations concerning litigation in
which the Debtor is involved;
f. assisting the committee in the review, analysis, and
negotiation of any financing or proposed use of cash collateral;
g. assisting the committee with respect to communications with
the general unsecured creditor body about significant matters in
the case;
h. reviewing and analyzing claims filed against the Debtor's
estate;
i. representing the committee in hearings before the bankruptcy
court, appellate courts, and other courts in which matters may be
heard, and representing the interests of the committee before those
courts and before the U.S. Trustee;
j. assisting the committee in preparing legal papers;
k. assisting the committee in the review, formulation, analysis,
and negotiation of any proposed plan of reorganization and
disclosure statement; and
l. providing such other legal assistance as the committee may
deem necessary and appropriate.
The firm will be paid at hourly rates ranging from $545 to $995 and
will be reimbursed for out-of-pocket expenses incurred.
David Posner, Esq., a partner at Kilpatrick, disclosed in court
filings that his firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
David M. Posner, Esq.
Kilpatrick Townsend & Stockton LLP
The Grace Building
1114 Avenue of the Americas
New York, NY 10036
Telephone: (212) 775-8700
Facsimile: (212) 775-8800
Email: dposner@kilpatricktownsend.com
About Masten Space Systems
Masten Space Systems, Inc. -- https://www.masten.aero -- is a space
infrastructure company in Mojave, Calif.
Masten Space Systems filed for Chapter 11 protection (Bankr. D.
Del. Case No. 22-10657) on July 29, 2022, with between $10 million
and $50 million in both assets and liabilities. David Masten,
president and chief technology officer of Masten Space Systems,
signed the petition.
Morris James, LLP is the Debtor's bankruptcy counsel while Alston &
Bird, LLP serves as special counsel. Gavin/Solmonese LLC is the
financial advisor and restructuring advisor.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtor's Chapter 11 case on Aug. 16,
2022. The committee is represented by Kilpatrick Townsend &
Stockton, LLP and Cozen O'Connor.
MATADOR RESOURCES: S&P Upgrades ICR to 'BB-', Outlook Stable
------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Dallas-based
crude oil and natural gas exploration and production (E&P) company,
Matador Resources Co., to 'BB-' from 'B+'.
S&P said, "At the same time, we affirmed the 'BB-' issue-level
rating on the company's 5.875% senior unsecured notes due in 2026.
We revised our recovery rating to '3' from '2', which reflects our
expectation for meaningful (50%-70%; rounded estimate capped at
65%) recovery of principal to creditors in the event of a payment
default.
"The stable outlook reflects our view that Matador's leverage
metrics will remain very strong over the next 12-24 months,
including funds from operations (FFO) to debt of well over 100%,
and that the company will continue to generate positive
discretionary cash flow (DCF) and maintain a conservative financial
policy."
The upgrade to 'BB-' reflects Matador's very strong credit
measures, which are supported by its debt repayment and
conservative financial policy.
Matador has repaid about $288 million of debt year to date, fully
repaying the $100 million balance on its reserve-based lending
(RBL) facility, and repurchasing $188 million of its senior
unsecured notes due in 2026. The company now has about $862 million
of its initial $1.05 billion of senior unsecured notes outstanding.
S&P said, "Matador has prioritized debt reduction following the
2020 downturn and reduced its total debt by about $663 million
since the end of 2020 using internally generated cash flows and
without engaging in distressed exchanges or restructurings, which
also supports our rating. Our upgrade also reflects our expectation
that Matador will maintain a conservative financial policy going
forward, prioritizing further debt reduction and maintaining a
modest dividend. Under our current commodity price assumptions, we
anticipate Matador will generate about $500 million of DCF in 2023,
which supports credit measures and debt reduction. We anticipate
FFO to debt to average well over 100% in 2022 and 2023, and debt to
EBITDA will average less than 0.75x over the same period."
Matador's scale has improved somewhat but will remain a near-term
constraint on the rating.
S&P said, "We anticipate full-year production of 102,300 barrels of
oil equivalent (boe) per day in 2022--an approximate 20% increase
from 2021--after it surpassed the 100,000 boe per day mark for the
first time in the second quarter. This production level, coupled
with our supportive commodity price outlook, will support strong
cash flow generation, but it remains volumetrically low compared
with similarly rated peers. In addition, the company's proved
reserves, which totaled 323 million boe (60% proved developed) as
of year-end 2021 remain small for the rating. Further positive
rating actions would likely depend on a significant increase in the
company's scale of production and proved developed reserves.
"Our stable outlook reflects our view that Matador's leverage
metrics will remain strong over the next 12-24 months, including
FFO to debt of well over 100%, supported by our expectation that
the company will continue generating significant DCF and maintain a
disciplined capital spending and shareholder returns framework.
"We could lower the rating if we expect the company's FFO to debt
to fall to below 60% on a sustained basis, which would most likely
follow a decline in commodity prices below our expectations with no
offsetting reduction to Matador's capital spending plans, or if the
company pursues a more aggressive financial policy that limits
DCF.
"Although unlikely over the next 12-24 months, we could raise our
rating on Matador if it increases its production and proved
developed reserves to be more in line with higher-rated peers,
while maintaining FFO to debt comfortably above 60% and a moderate
financial policy."
ESG credit indicators: E-4, S-2, G-2
S&P said, "Environmental factors are a negative consideration in
our rating analysis on Matador as the E&P industry contends with an
accelerating energy transition and adoption of renewable energy
sources. We believe falling demand for fossil fuels will reduce
profitability and returns for the industry as it fights to retain
and regain investors that seek higher return investments."
MYLIFE.COM INC: Seeks to Hire Leslie Cohen Law as Counsel
---------------------------------------------------------
Mylife.com, Inc. seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ Leslie Cohen Law, PC
to serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. advising the Debtor regarding its rights and responsibilities
under the U.S. Bankruptcy Code, the Federal Rules of Bankruptcy
Procedure and the Local Bankruptcy Rules, and how the application
of such provisions relates to the administration of the Debtor's
estate;
b. assisting the Debtor in the preparation of certain documents
to be filed with the bankruptcy court or the Office of the United
States Trustee;
c. representing the Debtor, with respect to bankruptcy issues,
in the context of its pending Chapter 11 case and representing the
Debtor in contested matters;
d. assisting the Debtor in the negotiation, formulation and
confirmation of a plan of reorganization; and
e. rendering services for the purpose of pursuing, litigating or
settling litigation.
The firm's hourly rates are as follows:
Leslie Cohen, Esq. $575 per hour
J'aime Williams, Esq. $430 per hour
Senior Contract Attorneys $350 per hour
Paralegals $175 per hour
Paraprofessionals $110 per hour
Leslie Cohen Law received from the Debtor a retainer of $100,000.
Leslie Cohen, Esq., president and sole shareholder of the firm,
disclosed in a court filing that her firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Leslie A. Cohen, Esq.
J'aime K. Williams Esq.
Leslie Cohen Law, PC
506 Santa Monica Blvd., Suite 200
Santa Monica, CA 90401
Tel.: (310) 394-5900
Fax: (310) 394-9280
Email: leslie@lesliecohenlaw.com
jaime@lesliecohenlaw.com
About Mylife.com Inc.
Mylife.com Inc. is an American information brokerage firm founded
by Jeffrey Tinsley in 2002 as Reunion.com.
On Sept. 2, 2022, Mylife.com Inc., doing business as Reunion.com
Inc., filed for Chapter 11 protection (C.D. Calif. Case No.
22-14858), with between $500,000 and $1 million in assets and
between $10 million and $50 million in liabilities. Jeffrey
Tinsley, chief executive officer of Mylife.com, signed the
petition.
Judge Ernest M. Robles oversees the case.
The Debtor is represented by Leslie Cohen Law PC.
NEWAGE INC: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of NewAge
Inc. and its affiliates.
The committee members are:
1. 2420 17th Street LLC
Attention: Don Stage
4400 Macarthur Blvd., Suite 700
Newport Beach, CA 92660
Phone: (303) 839-5300
Fax: (303) 839-5302
Email: don.stage@cbre.com
2. Allen Flavors Inc.
Attention: Ira Steinberg
230 St. Nicholas Ave.
South Plainfield, NJ 07080
Phone: (908) 561-5995
Fax: (908) 548-0955
Email: ira@allenflavors.com
3. Cargo Link International
Attention: Scott Ogden
881 So. 3760 West
Salt Lake City, UT 84104
Phone: (801) 808-6154
Fax: (801) 975-9406;
Email: sogden@cargolink.com
4. Stevens Global Logistics
Attention: Gary Hooper
3700 Redondo Beach Ave.
Redondo Beach, CA 90278
Phone: (800) 229-7284
Fax: (310) 727-9948
Email: garyh@stevensglobal.com
5. Vision 68th, LLC
Attention: Marc Lippitt
400 S. Broadway
Denver, CO 80209
Phone: (303) 905-5888
Fax: (303) 321-5889
Email: mlippitt@uniqueprop.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About NewAge Inc.
NewAge Inc. (Nasdaq: NBEV) is a purpose-driven firm dedicated to
inspiring the planet to Live Healthy. The Utah-based Company
commercializes a portfolio of organic and healthy products
worldwide primarily through a direct-to-consumer (D2C) route to
market distribution system across more than 50 countries. The
company competes in three major category platforms including health
and wellness, inner and outer beauty, and nutritional performance
and weight management -- through a network of exclusive independent
Brand Partners, empowered with the leading social selling tools and
technology available worldwide. On the Web:
http://www.NewAgeGroup.com/
NewAge Inc. and certain of its subsidiaries, Ariix LLC, Morinda
Holdings, Inc., and Morinda, Inc., sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No.
22-10819) on August 30, 2022.
NewAge reported total assets of $310,902,000 against total
liabilities of $149,447,000 as of the bankruptcy filing.
The Debtors tapped Greenberg Traurig, LLP as bankruptcy counsel and
SierraConstellation Partners, LLC as financial advisor. Houlihan
Lokey Capital, Inc. conducted the pre-bankruptcy marketing process
for the Debtors. Stretto is the claims agent.
NICAS GROUP: Case Summary & 15 Unsecured Creditors
--------------------------------------------------
Debtor: Nicas Group Capital LLC
148 Old Will Hunter Road
Athens, GA 30606
Business Description: The Debtor is a vertically integrated
multifamily ownership group that performs
all management and construction services.
Chapter 11 Petition Date: September 19, 2022
Court: United States Bankruptcy Court
Middle District of Georgia
Case No.: 22-30499
Debtor's Counsel: Will Geer, Esq.
ROUNTREE, LEITMAN, KLEIN & GEER, LLC
2987 Clairmont Road Suite 350
Atlanta, GA 30329
Tel: 678-587-8740
Email: wgeer@rlkglaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nicholas Leap as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 15 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/V25O33Y/Nicas_Group_Capital_LLC__gambke-22-30499__0001.0.pdf?mcid=tGE4TAMA
OLIVER DEVELOPMENT: Popelas Buying Property in Irwin for $149K
--------------------------------------------------------------
Oliver Development Corp. asks the U.S. Bankruptcy Court for the
Western District of Pennsylvania to authorize the sale of a parcel
of real property situated at 11660 Parkway Drive, in Irwin,
Westmoreland County, Pennsylvania, Parcel ID 54-07-09-0-055, which
was recorded in the Westmoreland County Recorder of Deeds at
Instrument No. 201501080000698, to Kristofer Popelas for $149,000.
Since the filing of the case, the Debtor and the Buyer have signed
a Sales Agreement regarding the Property. The purchase price for
the Property is $149,000. The liens, claims and encumbrances, if
any, will attach to the proceeds of the sale, if and to the extent
that they may be determined to be valid liens against the Real
Property sold in accordance with their validity or priority.
The Respondents which may hold liens, claims and encumbrances
against the Property are North Huntingdon Township, Westmoreland
County, and Norwin School District.
The Debtor believes, and therefore avers, that the proposed sale is
fair and reasonable and acceptance and approval of the same is in
the best interest of the Estate.
A copy of the Sales Agreement is available for free at
https://tinyurl.com/bdhmy8tt from PacerMonitor.com free of charge.
About Oliver Development
Corporation
Oliver Development Corporation filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Penn.
Case No. 22-20803) on April 27, 2022. At the time of filing, the
Debtor estimated $500,001 to $1 million in assets and $100,001 to
$500,000 in liabilities. Sy Oscar Lampl, Esq. at Robert O Lampl
Law
Office represents the Debtor as counsel.
PG&E CORP: Girardi's Sins Shouldn't Taint Bankruptcy
----------------------------------------------------
Dorothy Atkins of Law360 reports that a California bankruptcy judge
on Tuesday, September 13, 2022, ordered PG&E fire victims' trustee
to respond to a pro se plaintiff's discovery bid into JAMS
mediators' neutrality, but he doubted the plaintiff's "very broad
brush" allegations that disgraced lawyer Tom Girardi influenced the
proceedings and warned the "sins of Girardi" shouldn't taint the
case.
U.S. Bankruptcy Judge Dennis Montali's comments came during a
hearing held via Zoom on a request for discovery made by pro se
plaintiff William B. Abrams of Santa Rosa. Abrams' home was
destroyed by the devastating 2017 Tubbs Fire, which was sparked by
an electrical wire.
About PG&E Corporation
PG&E Corporation (NYSE: PCG) -- http://www.pgecorp.com/-- is a
Fortune 200 energy-based holding company, headquartered in San
Francisco. It is the parent company of Pacific Gas and Electric
Company, an energy company that serves 16 million Californians
across a 70,000-square-mile service area in Northern and Central
California.
PG&E Corporation and its regulated utility subsidiary, Pacific Gas
and Electric Company, faced extraordinary challenges relating to a
series of catastrophic wildfires that occurred in Northern
California in 2017 and 2018. The utility faced an estimated $30
billion in potential liability damages from California's deadliest
wildfires of 2017 and 2018.
On Jan. 29, 2019, PG&E Corp. and its primary operating subsidiary,
Pacific Gas and Electric Company, filed voluntary Chapter 11
petitions (Bankr. N.D. Cal. Lead Case No. 19-30088). As of Sept.
30, 2018, the Debtors, on a consolidated basis, had reported $71.4
billion in assets on a book value basis and $51.7 billion in
liabilities on a book value basis.
Weil, Gotshal & Manges LLP and Cravath, Swaine & Moore LLP served
as PG&E's legal counsel, Lazard as its investment banker and
AlixPartners, LLP as the restructuring advisor to PG&E. Prime Clerk
LLC is the claims and noticing agent.
PG&E has appointed James A. Mesterharm, a managing director at
AlixPartners, LLP, and an authorized representative of AP Services,
LLC, to serve as Chief Restructuring Officer. In addition, PG&E
appointed John Boken also a Managing Director at AlixPartners and
an authorized representative of APS, to serve as Deputy Chief
Restructuring Officer.
Morrison & Foerster LLP served as the Debtors' special regulatory
counsel. Munger Tolles & Olson LLP also served as special counsel.
The Office of the U.S. Trustee appointed an official committee of
creditors on Feb. 12, 2019. The Committee retained Milbank LLP as
counsel; FTI Consulting, Inc., as financial advisor; Centerview
Partners LLC as investment banker; and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
On Feb. 15, 2019, the U.S. trustee appointed an official committee
of tort claimants. The tort claimants' committee is represented by
Baker & Hostetler LLP.
* * *
PG&E Corporation and Pacific Gas and Electric Company announced
July 1, 2020, that PG&E has emerged from Chapter 11, successfully
completing its restructuring process and implementing PG&E's Plan
of Reorganization ("Plan") that was confirmed by the United States
Bankruptcy Court on June 20, 2020.
For the benefit of fire victims, the Plan provided for a Fire
Victim Trust, which was funded with an oft-stated value of $13.5
billion, to be half in cash and half in new company PG&E common
stock. The $6.75 billion in cash was paid. With respect to the
stock consideration, 478 million shares of PG&E stock were
delivered to the Fire Victim Trust in accordance with an agreed-to
formula under the Plan.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese.
It served clients in California in a variety of legal areas. It
was known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
Telephone: (310) 640-1200
PROJECT RUBY: S&P Affirms 'B-' ICR on $400MM 1st-Lien Debt Add-On
-----------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on
Overland Park, Kan.-based Project Ruby Parent Corp. (which does
business as Wellsky) and its 'B' rating on the first-lien debt; the
recovery rating remains '2' (70%), indicating its expectation for
substantial recovery in the event of default.
The stable outlook reflects Wellsky's good position in the
post-acute and non-acute health care IT market and its longer-term
operating prospects, enjoying favorable secular demand trends and
investing heavily in analytics. S&P assumes that over the next 12
months, Wellsky should be able to leverage its good position in
these markets and its highly recurring revenue business model to
grow revenue by high-single-digit percent rates and maintain its
adjusted EBITDA margins in the mid-30% range in fiscal-year 2023.
This should enable it to generate free operating cash flow (FOCF)
of at least $30 million (post-transaction costs) despite its high
leverage.
Wellsky announced the acquisition of a software-as-a-service (SaaS)
company focused on care coordination, funded with the proceeds of a
$400 million non-fungible incremental first-lien term loan and $200
million of equity.
S&P said, "The acquisition of an additional software company
focused on care transitions modestly increases Wellsky's scale and
diversity, and combined with its recent acquisition of CarePort
Health and its evolution over the past several years, our view of
the company's business has fundamentally improved. The acquisition
further expands Wellsky's end-market exposure in the acute care
segment, allowing the company to manage about 50%-60% of care
transitions in the U.S. More broadly, we view the company's
acquisition history as consistent with its strategy of expanding
its focus on value-based care in the broad post-acute care segment.
The company is well-positioned to capitalize on secular tailwinds
in the post-acute /non-acute care industry, including the shift of
volumes from hospitals to home and community settings. Wellsky's
investment in analytics also address the increasing importance that
acute care providers attribute to care coordination as post-acute
and non-acute care become a particular focus within the value-based
reimbursement model. We also expect Wellsky's strengthening network
presence in different sites of care and capabilities in analytics
and social determinants of health will allow the company to
increase its presence in the payor business, adding an additional
end market. Finally, we continue to view Wellsky as having a
distinct competitive advantage over its peers with its development
of the U.S. Food and Drug Administration-approved HCLL Transfusion
software and its strong relationship with Epic, which integrates
this application into its own software.
"We expect WellSky's leverage will remain high as it pursues
debt-financed tuck-in acquisitions to enhance its scale and
solutions and diversify its verticals.We expect the company's
elevated S&P Global Ratings-adjusted leverage of about 8.7x in
fiscal 2023 to improve to about 8.2x in 2024 through EBITDA
expansion as it benefits from the contributions from the
higher-margin acquisition and CarePort businesses and realizes
synergies. Nevertheless, WellSky has a history of maintaining
high-single-digit percent leverage due to its debt-funded
acquisitions, and we expect it to maintain this financial policy.
WellSky's highly recurring revenue stream (about 85%), high revenue
visibility (which is increasing as its focuses on SaaS
subscriptions over perpetual licenses), and strong client retention
(high 90% area) somewhat mitigate this risk. Furthermore, the
company's low capital intensity enables good cash flow, even at
very high leverage. However, WellSky is sponsor-owned, and so we
expect it to prioritize acquisitions and dividends over debt
reduction.
"The stable outlook on WellSky reflects the company's good position
in the post-acute and non-acute health care IT markets and its
longer-term operating prospects, enjoying favorable secular demand
trends and investing heavily in analytics. We assume that over the
next 12 months, Wellsky should be able to leverage its good
position in these markets and its highly recurring revenue business
model to grow revenue by high-single-digit percent rates and
maintain its adjusted EBITDA margins in the mid-30% range in
fiscal-year 2023. This should enable it to generate free operating
cash flow (FOCF) of at least $30 million (post-transaction costs)
despite its high leverage.
"We could lower the rating if increased competition from other
health care IT providers contribute to pricing pressure and
increased customer attrition, leading to sustained negative free
operating cash flow and weakening liquidity (including revolver
availability), at which point we could consider the capital
structure unsustainable.
"Although unlikely over the next 12 months, we could raise the
rating over the longer term if the company sustains leverage below
7x and maintains FOCF to debt of at least 3%. Given the company's
track record of debt-financed tuck-in acquisitions, we would expect
a commitment from the company to sustain the lower leverage and
stronger FOCF to debt."
E2, S2, G3
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 its
corporate decision-making that prioritizes the interests of its
controlling owners, which is in line with our view of the majority
of rated entities owned by private-equity sponsors. Our assessment
also reflects private-equity owners' generally finite holding
periods and focus on maximizing shareholder returns."
QUICK LINKS: Bankruptcy Administrator Unable to Appoint Committee
-----------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Eastern District of North
Carolina disclosed in a filing that no official committee of
unsecured creditors has been appointed in the Chapter 11 case of
Quick Links, Inc.
About Quick Links Inc.
Quick Links, Inc. sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-01847) on Aug. 18,
2022, with up to $100,000 in assets and up to $50,000 in
liabilities. Judge Pamela W. Mcafee oversees the case.
J.M. Cook, Esq., at J.M. Cook, P.A is the Debtor's legal counsel.
SASHAY SAND: Taps Law Offices of Louis J. Esbin as Counsel
----------------------------------------------------------
Sashay Sand, LLC seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ the Law Offices of
Louis J. Esbin as its legal counsel.
The firm's services include:
a. advising the Debtor regarding its powers and duties in the
administration of its estate and property of the estate and with
respect to the Debtor's rights, claims or interests versus those of
parties in interest in the estate;
b. appearing on behalf of the Debtor at all meetings required
under the guidelines of the Office of the United States Trustee;
c. negotiating on behalf of the Debtor when it may be necessary
to enable the Debtor to administer the estate and property of the
estate;
d. advising the Debtor regarding its rights and duties in
connection with the assumption or rejection of executory contracts
and leases;
e. preparing or reviewing legal papers;
f. negotiating with holders of secured and unsecured claims and
equity security interest holders; and
g. initiating or defending, and assisting the Debtor in any
proceedings which may arise in its Chapter 11 case, and taking such
other necessary action in other matters for which legal counsel is
required, and which may affect the administration of the estate.
The hourly rates charged by the firm are as follows:
Louis J. Esbin $750
Associate, if any $250
Paralegals and Legal Assistants $150
The firm received a retainer of $5,000 for pre-bankruptcy services
rendered and $2,000 for payment of the filing fee in the amount of
$1,738, among other costs.
Louis Esbin, Esq., 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 Law Offices of Louis J. Esbin can be reached through:
Louis J. Esbin, Esq.
Law Offices of Louis J. Esbin
27451 Tourney Road, Suite 120
Valencia, CA 91355
Tel: 661-254-5050
Fax: 661-254-5252
Email: Louis@Esbinlaw.com
About Sashay Sand
Sashay Sand, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-14332) on Aug. 10,
2022, with between $1 million and $10 million in both assets and
liabilities. Kasher Mehrdad, managing member and owner of Sashay
Sand, signed the petition.
Judge Julia W. Brand oversees the case.
Louis J. Esbin, Esq., at the Law Offices of Louis J. Esbin is the
Debtor's counsel.
SEAHORSE RESTAURANTS: Dockside Grill Starts Subchapter V Case
-------------------------------------------------------------
Seahorse Restaurants LLC has sought bankruptcy protection in
Florida. The Debtor elected on its voluntary petition to proceed
under Subchapter V of chapter 11 of the Bankruptcy Code.
The Debtor owns and operates a restaurant d/b/a Dockside Grill &
Bar in St. Pete Beach, Florida. Vikas Bansal owns 100% of the
membership interests in the Debtor.
The Debtor’s business operations are located at 4945 Gulf Blvd.,
St. Pete Beach, Florida 33706. The Debtor leases this location from
EE Boulevard Properties, LLC (the "Landlord"), a third-party who is
not an insider.
The Debtor was formed as a Florida limited liability company on
April 14, 2021. From Oct. 1, 2014 to on or about July 12, 2021,
4945 Gulf Boulevard, LLC (the "Original Seller") operated the
Restaurant and leased the premises from the Landlord. On or about
July 12, 2021 (the "Original Sale Date"), the Original Seller sold
the Restaurant to the Debtor and executed (I) a Promissory Note for
$212,500, and (ii) an Assignment and Assumption of Lease with the
Debtor. The Landlord separately executed (i) a Second Amendment to
Triple Net Restaurant Lease Agreement (the "Lease") and (ii)
Consent to Assignment with the Debtor, permitting the Debtor to
assume the Lease.
The Restaurant has not performed to the expectations of the Debtor.
On May 6, 2022, the Landlord initiated civil proceedings against
the Debtor for eviction. On Sept. 9, 2022, the Landlord filed a
Motion for Default Final Judgment and for Possession – Commercial
Eviction in which the Landlord sought immediate eviction of the
Debtor.
On June 13, 2022, the Original Seller initiated civil proceedings
against the Debtor for breach of contract. The Debtor may have
counter-claims against the Original Seller. The Debtor has
obtained a potential buyer for the assets of the Restaurant. The
Debtor anticipates filing a motion to approve sale of the assets
pursuant to Section 363 of the Bankruptcy Code.
After evaluating alternatives, the Debtor determined that a
Subchapter V Chapter 11 filing would provide a venue in which to
effectively address its current debts and best serve the interests
of its creditors, customers, and employees. The Debtor will
utilize the Chapter 11 process to reorganize its business, sell
assets of the estate, and make distributions to creditors
efficiently and effectively.
According to court filings, Seahorse Restaurants 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. 12, 2022, at 12:00 PM. U.S. Trustee (T/FM) will hold the
meeting telephonically. Call in Number: 866-910-0293. Passcode:
7560574.
Proofs of claim are due by Nov. 21, 2022.
About Seahorse Restaurants
Seahorse Restaurants LLC owns and operates a restaurant d/b/a
Dockside Grill & Bar in St. Pete Beach, Florida.
Seahorse Restaurants filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No.
22-03707) on Sept. 12, 2022. In the petition filed by Vikas Bansal,
as authorized member, the Debtor reported assets between $500,000
and $1 million and liabilities between $500,000 and $1 million.
Ruediger Mueller has been appointed as Subchapter V trustee.
The Debtor is represented by Edward J. Peterson, III of Stichter,
Riedel, Blain & Postler, P.A.
SHOPS AT BROAD: Seeks Cash Collateral Access
--------------------------------------------
Shops at Broad, LLC asks the U.S. Bankruptcy Court for the Northern
District of Texas, Fort Worth Division, for authority to use cash
collateral.
The Debtor requires the use of cash to pay its reasonable and
necessary operating expenses, including, but not limited to,
property management fees, waste management fees, taxes, insurance,
necessary repairs, professional fees and to minimally preserve and
optimally increase the value of the business for the benefit of all
creditors.
The Debtor owns and operates multiple parcels of real estate
including a large shopping center located in Mansfield, Texas. SAB
consists of over 80 acres and is comprised of both developed and
undeveloped land projects. The undeveloped projects include
multifamily housing and a hotel.
Several parcels of land were sold prior to the bankruptcy. The
Debtor has obligations to some or all of these purchasers for
maintaining the parking lots and/or common areas as well as
reciprocal easements. The businesses occupying these spaces include
At Home, Academy Sports & Outdoors, Fieldhouse USA and the Dallas
Stars Center. The shopping center owned by SAB has approximately
22 tenants including anchor tenants Belk and TJ Maxx. A movie
theater space occupies approximately 40,000 square feet. The
exterior construction is complete, but the interior finish out has
not yet been completed.
The movie theater was scheduled for completion in March 2020 but
did not open due to the COVID-19 pandemic. In addition, and to
compound matters, the rent payments from Belk are tied to the
opening of the movie theater, which has resulted in Belk not paying
rent to the Debtor for over two years.
The Debtor is in negotiations with several cinema companies to take
over the movie theater space and finish out the improvements. Once
the movie theater opens, this will trigger the rent provisions
under the Belk lease and mitigate the default provisions.
The Debtor has a source for DIP financing that, if approved, will
allow it to operate and adequately protect the lender.
Trez Shops at Broad LP, Advantage Platform Service, Inc., CT
Corporation System and Corporation Service Company assert secured
claims against the Debtor and have filed UCC financing statements
with the Texas Secretary of State. Trez, APS, CTC and CSC may hold
liens that may attach to personal property including cash
collateral of the Debtor.
As of September 5, 2022, and without admission as to the validity,
priority, amount or extent of liens asserted, Trez asserts secured
claims and liens against the Debtor in the amount of $60,055,872
and $692,660. The collateral asserted includes real and personal
property of the Debtor.
As adequate protection, the Debtor proposes to grant replacement
lien(s) and security interest(s) to Trez, APS, CTC and CSC in the
Debtor's cash and receipts.
A copy of the motion is available at https://bit.ly/3dpZCKY from
PacerMonitor.com.
About Shops at Broad LLC
Shops at Broad LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-42059) on Sept. 2,
2022. In its petition, the Debtor reported assets and liabilities
between $50 million and $100 million. The Debtor is represented by
Areya Holder, Esq., at Holder Law, as counsel.
SPECIALTY BUILDING: S&P Upgrades ICR to 'B', Outlook Stable
-----------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
building materials distributor Specialty Building Products Holdings
LLC and its ratings on the company's senior secured term loan and
notes to 'B' from 'B-'.
The stable outlook reflects S&P's view that the company's credit
measures contain a sufficient cushion, even if less-favorable
business conditions lead to some earnings compression.
Solid earnings growth over the last few quarters has helped build a
credit cushion against less-favorable operating conditions. S&P
said, "We believe the very favorable demand conditions and higher
price realizations for the last few quarters could result in
adjusted leverage under 6x for year-end 2022. Nonetheless, we
expect deteriorating business conditions--including a potential
recession in the U.S. and softening demand--to lower earnings and
push adjusted leverage toward 6x-7x over the next 12-18 months.
Despite the expected deterioration, we believe the company's credit
measures contain at least a 1x EBITDA cushion and expect them to
remain supportive of our 'B' rating. As such, we forecast revenue
of about $3.5 billion-$4 billion and adjusted EBITDA of about $400
million in 2022, moderating to about $320 million-$350 million over
2023. While we expect some earnings growth from incremental
earnings from acquisitions closed in 2021, we believe lower price
realizations from stabilizing and moderating commodity prices could
offset that."
While the company has improved it scale and profitability, its
earnings are still prone to volatility due to its exposure to
cyclical residential construction markets. The company's revenue
base has grown 3x-4x over the last few years from a combination of
organic growth and several acquisitions. For instance, the
company's revenue is now closer to $3.6 billion compared to about
$1 billion five years ago. S&P said, "We believe that in a highly
fragmented and intensely competitive industry such as building
materials distribution, size and scale could drive competitive
advantages and improve profitability. Therefore, we expect the
company to sustain some of the recent margin improvements, with
adjusted margins of 9%-10% over the next 12-24 months compared to
the historical average of 5%-8%. Despite this growth, the company
remains exposed to cyclical residential new construction demand
(approximately 50% of revenues), which could lead to some earnings
volatility, particularly during periods of economic stress.
However, we believe the more predictable and stable repair and
remodel end markets, which drive about 40% of the company's
revenue, could offset that somewhat."
S&P said, "We expect the company will generate $50 million-$100
million of free cash flow over the next 12 months, even in weaker
business conditions, but continued aggressive financial policy
actions amidst a downturn could pose downside risks.We expect cash
from collection cycles through the second half of 2022, moderating
prices, and possibly slower demand could result in improved free
cash generation from reduced working-capital investments. Even if
business conditions weaken, we expect liquidation of working
capital will drive cash generation.
"Specialty has a history of pursuing mid-sized to large debt-funded
acquisitions, which demonstrates its aggressive financial policies.
While the company has a track record of successfully integrating
target companies and realizing operational synergies, we believe a
potential large debt-financed deal--coinciding with a sharp
reduction in earnings from increased macroeconomic headwinds--could
deplete buffers and pose downside pressure to credit quality.
Nonetheless, we expect the company to remain prudent in maintaining
adjusted leverage within our 6x-7x tolerance as it continues to
pursue inorganic growth opportunities, including those funded by
short-term borrowings, free cash, or both.
"The stable outlook reflects our expectation that the company will
maintain adjusted leverage of 6x-7x and EBITDA interest coverage of
at least 2x over the next 12 months. We expect the company to
maintain these credit measures even amid a tougher macroeconomic
and operating environment."
S&P could lower its ratings on Specialty Building Products by one
notch over the next 12 months if:
-- Adjusted earnings deteriorate more than 25% from S&P's
base-case scenario, causing adjusted debt to EBITDA to rise above
7x or EBITDA interest coverage to fall below 2x, and it expects
those levels to be sustained. This could occur if there is a severe
downturn that drastically reduces demand for the company's products
or compresses adjusted EBITDA margins by more than 150 basis
points; or
-- Management maintains its aggressive financial policy, including
pursuing large debt-financed acquisitions and dividends that weaken
credit measures.
S&P views another upgrade as highly unlikely over the next 12
months given the company's ownership by a private equity firm.
However, S&P could raise the rating if:
-- Adjusted leverage improves to well below 5x due to
higher-than-expected earnings growth, and S&P views these levels as
sustainable in most market conditions; and
-- S&P believes the financial sponsors are committed to
maintaining credit measures at this level.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance is a moderately negative consideration in our
credit rating analysis of Specialty. 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 most rated entities
owned by private-equity sponsors. Our assessment also reflects
these sponsors' generally finite holding periods and focus on
maximizing shareholder returns. Furthermore, we view environmental
factors to be an overall neutral influence on our credit rating
analysis because the company engages in the distribution of
building products, and its operations are less energy intensive
than those of heavy materials producers."
SPRINGFIELD HOUSE: Seeks to Hire CGA Law Firm as Counsel
--------------------------------------------------------
Springfield House Bed and Breakfast, LLC seeks approval from the
U.S. Bankruptcy Court for the Middle District of Pennsylvania to
employ CGA Law Firm to handle its Chapter 11 case.
CGA Law Firm will charge between $240 and $295 per hour for the
services of its attorneys and $130 per hour for paralegal services.
In addition, the firm will seek reimbursement for its out-of-pocket
expenses.
The retainer is $5,000.
Brent Diefenderfer, Esq., a partner at CGA Law Firm, 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:
Brent C. Diefenderfer, Esq.
CGA Law Firm
135 North George Street
York, PA 17401
Tel: (717) 848-4900
Email: bdiefenderfer@cgalaw.com
About Springfield House Bed & Breakfast
Springfield House Bed and Breakfast, LLC filed a Chapter 11
bankruptcy petition (Bankr. M.D. Pa. Case No. 22-01675) on Sept. 7,
2022, with up to $1 million in both assets and liabilities. Brent
C. Diefenderfer, Esq., at CGA Law Firm is the Debtor's legal
counsel.
STARLIN LLC: More Affiliates File Chapter 11 for Global Settlement
------------------------------------------------------------------
175 Spring Street LLC et al., have joined affiliates Starlin LLC,
et al., in Chapter 11 bankruptcy to seek approval of a global
settlement with Clinton PB Holdings I LLC, Clinton PB Holdings II
LLC, and Clinton PB Holdings III LLC (collectively, the "CPBH
Entities").
To recall, on June 28, 2022, Starlin LLC, 610 West 46th Street
Enterprises, Ltd., RM Holdings Company Inc., BRC Owners, L.P., RG
Mezz LLC, RG Mezz III LLC, RG Mezz V LLC, RG Mezz VI LLC
(collectively, "Mezz Borrower Debtors") filed voluntary petitions
under chapter 11 of the Bankruptcy Code. The Mezz Borrower Debtors
are entities that own the equity interests in the limited liability
companies, limited partnerships or corporations that are the owners
of real property and improvements located mainly in the Midtown
West area of New York City.
On Sept. 14, 2022, 175 Spring Street LLC, 610 West 46th Street LLC,
623 11th Avenue LLC, 617 11th Avenue LLC, 616 11th Avenue LLC, 108
Merrick Boulevard LLC, 613 11th Avenue LLC, 609 11th Avenue LLC,
616-620 West 46th Street LLC (collectively, "PropCo Debtors") filed
voluntary petitions under chapter 11 of the Bankruptcy Code. The
PropCo Debtors are the owners of the Properties and the equity
interests in the PropCo entities are owned by the Mezz Borrower
Debtors.
The real property and improvements owned by the PropCo Debtors are
located at these addresses:
Debtor Property
------ --------
175 Spring Street LLC 175 Spring Street, NY, NY
610 West 46th Street LLC 610 West 46th Street, NY, NY
616-620 West 46th Street LLC 616-620 West 46th Street, NY, NY
616 11th Avenue LLC 616-624 11th Avenue, NY, NY
609 11th Avenue LLC 603 West 45th Street, NY, NY
613 11th Avenue LLC 613-615 11th Avenue, NY, NY
617 11th Avenue LLC 617 11th Avenue, NY, NY
623 11th Avenue LLC 623 11th Avenue, NY, NY
108 Merrick Boulevard LLC 108-02, 108-16 Merrick Blvd, Queens,
NY
Six of the Properties are contiguous and make up roughly half of a
square city block on the west side of 11th Avenue between 45th and
46th Street. Certain of these properties are or were leased to
Metropolitan Lumber, Hardware & Building Supplies, Inc., an entity
that conducts a building supply business from the premises. The
six properties, referred to here as the "Assemblage" or the "West
Side Parcels", consist of (i) 610 West 46th Street, (ii) 616-620
West 46th Street, (iii) 603 West 45th Street (a/k/a 609-611 11 th
Avenue), (iv) 613-615 11th Avenue, (v) 617 11th Avenue, and (vi)
623 11th Avenue. The West Side Parcels have an aggregate land
measurement of approximately 58,000 square feet, plus as of right
development rights to build vertically.
Argo 45 LLC is an entity where Gans is the sole member and that has
rights to acquire a parcel comprising part of the Assemblage. Argo
45 has not yet filed a voluntary petition under chapter 11 of the
Bankruptcy Code but intends to do so on or about September 20,
2022.
On September 14, 2022, 533 West 27 Street Common Member LLC ("Gans
Member" or "Common Member") filed a voluntary petition under
chapter 11 of the Bankruptcy Code. Common Member does not
currently own any property but was the entity through which Gans
invested in a property located at 533-535 West 27th Street New
York, New York ("27th Street Property"). Specifically, the 27th
Street Property was owned by Westside Realty of New York, Inc.
("Westside"), which was, in turn, owned by 533 West 27 Street JV
LLC ("JV"). Common Member owned 100% of the common interests in JV,
while 534 West 28th Pref LLC ("Initial Pref Member") owned 100% of
the preferred interests in JV, which preferred interests were
granted to Initial Pref Member in exchange for a $5,000,000
investment in the JV ("Pref Loan"). In connection with the
acquisition of its preferred position, the Initial Pref Member also
received a pledge of the equity ownership interests in Westside,
and a pledge of Gans Member's membership interests in the JV. On
August 11, 2021, there was a UCC sale ("West 27 UCC Sale") of the
membership interests of Gans Member in the JV.
Prepetition Lawsuits
On October 14, 2021, the Initial Mortgage Lender filed a Summons
and Complaint for Foreclosure in Supreme Court for the State of New
York, New York County, in an action captioned (as amended) CMTG
Lender 23 LLC v. Westside Realty of New York, Inc., et al., Index
No. 850241/2021 (Sup. Ct., N.Y. Cnty.) ("Foreclosure Action"),
pursuant to which Initial Mortgage Lender sought, among other
relief, a judgment of foreclosure under the mortgage securing the
Senior Loan. Certain of the defendants therein asserted
counterclaims and various defenses disputing the Initial Mortgage
Lender's claims in the Foreclosure Action. On August 22, 2022, the
Court entered an order substituting Clinton PB Holdings I LLC as
the named plaintiff in the Foreclosure Action and amending the
caption in the Foreclosure Action to Clinton PB Holdings I LLC v.
Westside Realty of New York, et al.
On May 2, 2022, Clinton PB Holdings I LLC filed a Complaint, which
was subsequently amended by an Amended Complaint dated July 27,
2022, in an action captioned Clinton PB Holdings I LLC v. 175
Spring Street LLC, et al., Index No. 652059/2022 (Sup. Ct. N.Y.
Cnty.) ("Argo 45 Action"), pursuant to which Clinton PB Holdings I
LLC sought an order directing Mortgage Borrowers and Gans to
perform alleged obligations under the Senior Loan Agreement and the
Mortgage Loan Recourse Guaranty to cause Argo 45 to exercise and
consummate a purchase option set forth in Argo 45's lease for
premises known as 605 West 45th Street, New York, New York (Block
1093, Lot 28) and to grant Clinton PB Holdings I LLC liens on such
property as additional collateral for the Senior Loan.
On June 23, 2022, Clinton PB Holdings II LLC provided notice of its
intent to conduct a UCC foreclosure of equity interests in the
Mortgage Borrowers' equity interests that were pledged as
collateral for the Mezz Loan.
In 2021, Gans transferred the family's vacation home to his
daughter. Gans has stated that he made such transfer for estate
planning purposes. The CPBH Entities dispute the validity of this
transfer. On June 24, 2022, Clinton PB Holdings I LLC and Clinton
PB Holdings II LLC filed a complaint in an action captioned Clinton
PB Holdings I LLC, et al. v. Robert Gans, et al., Index No.
656967/2022 ("Conveyance Action"), pursuant to which Clinton PB
Holdings I LLC and Clinton PB Holdings II LLC sought: (i) a
judgment against Gans and Caren Gans setting aside Gans' transfer
of the properties to his daughter, Caren Gans under New York's
version of the Uniform Fraudulent Transactions Act; (ii) an
injunction against Gans barring the transfer of any other assets;
and (iii) in the alternative, damages for Gans' alleged breach of
the applicable guaranties.
The Debtors and the CPBH Entities and Gans have been engaged in
negotiations on and off for more than one year before reaching the
agreement encompassed in the Settlement Agreement.
Settlement Agreement
The Settlement Agreement, once it is approved by the Court and its
terms are implemented through timely performance by each of the
Debtors and each of the CPBH Entities, will result in a consensual,
global resolution of over $240 million dollars of claims by and
between over 25 entities and individuals in what has been a
contentious dispute that has been ongoing since at least 2020.
As a result, the Debtors' properties will be developed in the near
future through either (I) a refinancing or sale under a Chapter 11
plan in satisfaction of the CPBH Entities' claims at a significant
discount of more than $45 million (which voluntary discount grows
by the continued accrual of default interest that would not be
charged as part of the Settlement Amount); or (ii) surrendered to
the CPBH Entities if the Debtors are unable to consummate a
transaction allowing for the timely payment of the reduced
Settlement Amount, in either case in full and complete satisfaction
of any and all of the CPBH Entities and affiliates secured and
unsecured claims against the Debtors Gans and his family members.
This global settlement also saves each side untold millions of
dollars in legal and related expert and other associated expenses
as well as the uncertainty of multiple litigations that could take
an extended period to resolve. Importantly, the settlement amicably
resolves disputes between the parties and provides for a
substantial voluntary reduction -- in excess of $45 million
(including the waiver of default rate for interest) -- of claims
asserted against the Debtors' estates and resolves multiple pending
litigations while affording the Debtors, and Mr. Gans, the
opportunity to repay a materially reduced claim.
The salient terms of the Agreement are:
* Allowed Claim. The CPBH Entities will receive an allowed
claim, which is as of September 6, 2022, in the amount of
$237,230,043, subject to continued accrual of interest at the
default contract interest rate, incurrence of costs and expenses,
and payment of CPBH Entities' professional fees and expenses (such
claim, "Allowed Claim"). The Allowed Claim will be further
increased by the Argo 45 Option Purchase Price (as provided for
below) to the extent funded by or on behalf of one or more of the
CPBH Entities. The Allowed Claim is secured by all of the assets
of the Gans Entities11 other than Gans.
* Settlement Amount. Subject to the terms of the Agreement, the
CPBH Entities agree to accept a material voluntary reduction of
their Allowed Claim as payment of the Settlement Amount. To obtain
this benefit, the Debtors must pay the CPBH Entities an amount
equal to the sum of (i) $200 million, plus (ii) the Argo 45 Option
Purchase Price to the extent funded by or on behalf of one or more
the CPBH Entities, plus (iii) interest on $200 million (compounding
monthly) at the non-default contract interest rate from and after
August 19, 2022, plus (iv) payment of CPBH Entities' professional
fees and expenses and from and after July 5, 2022 (such claim, the
"Settlement Amount"). The applicable CPBH Entities shall retain
their interests in the 533-535 West 27th Street property. The
Settlement Amount must be paid in cash and in full on or before
December 22, 2022 or such later date to which the CPBH Entities may
agree in their sole discretion ("Payment Date").
* The Argo 45 Transaction. Within no more than one day following
the Execution Date (which was September 8, 2022), Argo 45 shall
accelerate the closing date of the purchase option ("Purchase
Option") provided in Section 30 of the lease (as amended, the
"Option Lease") dated January 2013 between Argo 45 and SA
Waterfront Realty, Inc., with respect the property located at 605
West 45th Street, New York, New York (Block 1093, Lot 28) ("Option
Property"), and immediately provide evidence of such acceleration
to the CPBH Entities -- which Argo 45 has done on September 9, 2022
-- and within no more than 10 days following the Execution Date,
actually close on the acquisition of the Option Property ("Argo 45
Option Closing Date"). Clinton PB Holdings I, LLC will provide a
secured loan to Argo 45 to fund (i) the acquisition of the Option
Property at the purchase price for the Option Property set forth in
the Option Lease and (ii) the reasonable and necessary closing
costs (including reasonable legal fees, title insurance charges,
prorations and recording fees and mortgage recording tax in an
amount not to exceed 4% of the purchase price for the Option
Property (the foregoing, with interest, except as waived as
provided for herein with respect to the Settlement Amount, the
"Argo 45 Option Purchase Price"). The amount of such secured loan
shall either be added to the original mortgage or new individual
mortgage, at Clinton PB Holdings I, LLC's option and in its sole
discretion, and be subject to the same terms as the Senior Loan. On
the Argo 45 Option Closing Date, Argo 45 will, concurrently with
the closing, (i) cause the Option Property to be added to Clinton
PB Holdings I, LLC's collateral in accordance with the terms of the
Senior Loan documents, and (ii) provide Clinton PB Holdings I LLC a
pledge of the membership interests in Argo 45. Immediately
thereafter, Gans will cause a voluntary chapter 11 petition to be
filed for Argo 45.
* Consummation of Agreement under a Chapter 11 Plan. The
Settlement Agreement will be implemented through the consensual
bankruptcy cases of all the Gans Entities (other than Mr. Gans),
including the Mezz Borrower Debtors, the PropCo Debtors and Argo
45. The Settlement Amount will be paid under a sale and/or
refinancing transaction under a Chapter 11 plan ("Plan") in form
and substance acceptable to the CPBH Entities and for which CPBH
will be a co-plan proponent. The Plan will provide the CPBH
Entities with the following treatment: (a) payment of the
Settlement Amount on or before the Payment Date, or (b) if the
Debtors fail to make such timely payment, then, one (1) Business
Day after the Payment date (or such later dates as determined by
the CPBH Entities in their sole and absolute discretion), the sale
or sales of the assets of the Gans Entities to the CPBH Entities
(or their designees) through a credit bid for an amount not to
exceed the full amount of the Allowed Claim in full and complete
satisfaction of any and all claims of any of the CPBH Entities has
or may have against any of the Gans Entities ("Sale Treatment"). In
furtherance of the Agreement and the Plan, the Parties agreed to
the following milestones: (i) the hearing on the motion to approve
the Agreement shall occur on the earliest available date available
from the Bankruptcy Court upon the filing of such motion; (ii) the
filing of the Plan and disclosure statement shall occur on or
before November 7, 2022; (iii) a hearing to confirm the Plan shall
occur on or before December 8, 2022; and (iv) the Plan's effective
date shall occur on or before December 22, 2022. The Plan,
disclosure statement and all pleadings in furtherance thereof shall
be in form and substance acceptable to the CPBH Entities. The
Debtors shall not be permitted to withdraw the Plan (absent the
consent of the CPBH Entities and, then, only to proceed with the
Sale Treatment under the Sale Motion).
* Sale Treatment. If the CPBH Entities are provided the Sale
Treatment because the Settlement Amount is not paid on or before
the Payment Date, then the CPBH Entities may elect (in their sole
discretion) to either: (a) pay all allowed priority and allowed
administrative expense claims so that the Sale Treatment occurs
under the Plan and the Plan can go effective or (b) consummate the
Sale Treatment through one or more sales under section 365 and 363
of the Bankruptcy Code outside of a plan (in which case, the Plan
shall not go effective). Promptly upon the Bankruptcy Court's
approval of the Agreement, the Debtors will file a sale motion
("Sale Motion") for a private sale to the CPBH Entities, as credit
bidder, as a backstop if the Plan fails to be confirmed or does not
go effective with the Settlement Payment being made by the Payment
Date or the CPBH Entities elect not to proceed with the Sale
Treatment under a Plan. The Sale Motion shall be in form and
substance acceptable to the CPBH Entities. The Debtors shall not
be permitted to withdraw the Sale Motion. If there is a transfer
of assets to CPBH Entities (or their designees) through one or more
sales and the Sale Treatment is consummated under either the Plan
or the Sale Motion, such assets will be transferred free and clear
of any pledges, liens, security interests, encumbrances, claims,
charges, service contracts, options and interests thereon,
tenancies, and shall be delivered vacant to the CPBH Entities (or
their designees).
* Stay of Pending Actions. Within five days of the Execution
Date (i.e., September 8, 2022), and provided that the closing of
the Purchase Option has been accelerated in accordance with the
Agreement, the Parties agree to seek a temporary stay ("Stay") of
all proceedings in deadlines in the Foreclosure Action, the Argo 45
Action and the Conveyance Action by the filing of executed
stipulations. If the Gans Entities default under any covenants or
obligations in the Agreement, then (i) any Stay with respect to
actions against non-Debtors shall immediately terminate, and the
CPBH Entities shall have the unilateral right to inform the court
of the same, and (ii) the CPBH Entities shall be entitled to
request that the automatic stay with respect to the Debtors be
lifted on an expedited basis, and Debtors consent to the same.
* Releases. The Settlement Agreement provides for releases in
accordance with thee agreed terms and conditions.
About Starlin, LLC, et al.
Starlin, LLC and affiliates (collectively," Mezz Borrower Debtors")
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D.N.Y. Lead Case No. 22-10888) on June 28, 2022. The
Mezz Borrower Debtors are entities that own the equity interests in
the limited liability companies, limited partnerships or
corporations that are the owners of real property and improvements
located mainly in the Midtown West area of New York City.
The owner of the properties, 175 Spring Street LLC, 610 West 46th
Street LLC, 623 11th Avenue LLC, 617 11th Avenue LLC, 616 11th
Avenue LLC, 108 Merrick Boulevard LLC, 613 11th Avenue LLC, 609
11th Avenue LLC, 616-620 West 46th Street LLC (Bankr. S.D.N.Y. Case
Nos. 22-11228 to 22-11238) (collectively, "PropCo Debtors") and 533
West 27 Street Common Member LLC (Case No. 22-11239) have sought
Chapter 11 bankruptcy protection.
The Debtors have sought joint administration under Case No.
22-10888.
Judge Martin Glenn oversees the cases.
Fred B. Ringel, Esq., at Leech Tishman Robinson Brog, PLLC and
Getzler Henrich & Associates, LLC are the Debtors' legal counsel
and financial advisor, respectively.
STORCENTRIC INC: May Use Cash Collateral Thru Sept 26
-----------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California,
San Jose Division, entered an order authorizing StorCentric, Inc.
and its debtor-affiliates to continue using cash collateral through
September 26, 2022, in accordance with its agreement with Serene
Investment Management, LLC.
The Court said Serene will refrain from issuing a default notice
unless the conditions of their agreement are not met.
The Court said the parties' Stipulation will be binding on the
Debtors, and any successor thereto -- including, without
limitation, any chapter 7 or chapter 11 trustee for any of the
Debtors or any other estate representative appointed in the Cases
or any successor cases -- in all circumstances and for all
purposes. The Stipulation also will be binding on all creditors and
other parties in interest and all of their respective successors
and assigns, including, without limitation, any other person or
entity acting or seeking to act on behalf of the Debtors' estates
in all circumstances and for all purposes.
A copy of the order is available at https://bit.ly/3LrnWIN from
PacerMonitor.com.
About StorCentric, Inc.
StorCentric, Inc. develops software and security systems to
mitigate cybersecurity threats to ensure data is not compromised.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-50515) on June 20,
2022. In the petition filed by John Coughlan, CFO, the Debtor
disclosed up to $50 million in both assets and liabilities.
Judge Elaine Hammond oversees the case.
John W. Mills, III, Esq., at Jones Walker LLP is the Debtor's
counsel. Force Ten Partners, LLC is the Financial Advisor. Donlin,
Recano & Company, Inc. is the Claims, Noticing, and Solicitation
Agent.
An Official Committee of Unsecured Creditors has been appointed in
the case. The Committee has retained Sheppard, Mullin, Richter &
Hampton LLP as Bankruptcy Counsel; Trodella & Lapping LLP as
Conflicts Counsel; and Oxford Restructuring Advisors LLC as
Financial Advisors.
SUMMIT FINANCIAL: Has Deal on Cash Collateral Access Thru Dec 31
----------------------------------------------------------------
Summit Financial, Inc. and CalPrivate Bank advised the U.S.
Bankruptcy Court for the District of California, Santa Ana
Division, they have reached an agreement regarding the Debtor's use
of cash collateral and now desire to memorialize the terms of this
agreement into an agreed order.
The Debtor borrowed funds from CalPrivate and entered into a loan
and security agreement that, among other things, contained a
provision that purported to grant CalPrivate a security interest in
all personal property of the Debtor. On October 9, 2018, CalPrivate
filed a UCC-1 Financing Statement with the California Secretary of
State. CalPrivate filed a proof of claim in the bankruptcy case,
asserting a $650,033 secured claim.
On May 17, 2020, the Debtor borrowed funds from the Small Business
Administration and entered into a loan and security agreement that,
among other things, contained a provision that purported to grant
the SBA a security interest in all tangible and intangible personal
property of the Debtor. On May 25, 2020, the SBA filed a UCC-1
Financing Statement with the California Secretary of State. On
September 27, 2021, the SBA also filed a proof of claim in the
bankruptcy case, asserting a $157,505 secured claim.
As a result, CalPrivate holds a first priority lien against the
Debtor's cash collateral, and the SBA holds a second priority lien
against the Debtor's cash collateral.
The parties agree the Debtor may use cash collateral from October 1
through and including December 31, 2022, pursuant to a Revised
Budget and on the same terms and conditions that were approved by
the Court in its Fourth Cash Collateral Order.
As adequate protection, CalPrivate and the SBA will receive
replacement liens in assets of the same kind, type, and nature as
the collateral in which the secured creditors held a lien that are
acquired after the Petition Date, and the proceeds thereof, to the
same extent, validity, and priority as any lien held by the secured
creditor in such Assets as of the Petition Date, though all rights
of the Debtor to challenge the extent, validity, and priority of
any asserted lien or liens are reserved.
The Debtor will pay CalPrivate Bank its contractual monthly
payment, which is approximately $9,363 per month.
The Debtor will pay the SBA its contractual monthly payment, which
is approximately $731 per month.
A copy of the order and the Debtor's budget for the period from
October to December 2022 is available at https://bit.ly/3Bjnx6M
from PacerMonitor.com.
The budget provides for total expenses, on a monthly basis, as
follows:
$50,089 for October 2022;
$50,089 for November 2022; and
$50,089 for December 2022.
About Summit Financial, Inc.
Summit Financial, Inc., which operates six high-end luxury nail
salons in Southern California, sought Chapter 11 protection (Bankr.
C.D. Cal. Case No. 21-12276) on September 18, 2021. On the
Petition Date, the Debtor estimated $100,000 to $500,000 in assets
and $1,000,000 to $10,000,000 in liabilities. The petition was
signed by Hao Tang as chief executive officer.
The Honorable Scott C. Clarkson presides over the case.
SWAP.COM INC: Helpsy Holdings Buying Personal Property for $250K
----------------------------------------------------------------
Swap.com, Inc., asks the U.S. Bankruptcy Court for the Eastern
District of North Carolina to authorize the private sale of
personal property to Helpsy Holdings PBC for $250,000, free and
clear of liens, claims, encumbrances, and interests, subject to
overbid.
The Debtor is a Delaware corporation that operates an online thrift
and consignment store, offering pre-owned baby, kid's, maternity,
men's and women's apparel and accessories. In addition, it owns
certain office equipment and intangibles as detailed in Schedule
A/B of its bankruptcy schedules. The Debtor does not own any real
property. It has no secured creditors.
The Debtor's assets are very specialized and, therefore, there are
very few potential purchasers for the assets. Prior to the
bankruptcy case, it marketed its company to the parties in the
industry that might have an interest in its unique assets.
Although the Debtor received expressions of interest, no party was
willing to move forward following completion of due diligence.
On a post-petition basis, the relatively few players in the niche
industry were made aware that the Debtor's assets are for sale. To
date, three potential buyers have expressed interest in the
Property; and two of those potential buyers presented offers to
purchase some or all of the Property. Two of the interested buyers
obtained access to the Debtor's data room and subsequently made
offers. The first offer was to purchase only the Debtor's website
for $2,000. The terms of the second offer, which the Debtor has
determined was the highest and best offer received, was a
non-contingent offer to purchase the Property, submitted by the
Stalking Horse Bidder in the amount of $250,000.
Following negotiations, the Debtor and Stalking Horse Bidder
entered into an Asset Purchase Agreement for the Property, which is
expressly subject to Bankruptcy Court approval in all respects.
The salient terms of the APA are:
a. Purchase Price: $250,000
b. Earnest Money Deposit: $25,000
c. Closing: Seven days following the later of (a) entry of the
Sale Order, provided that the Sale Order is not subject to a stay,
or (b) satisfaction of all of the conditions to closing as set
forth in the Asset Purchase Agreement or the Overbid
Purchase Agreement, as applicable.
d. Financing Contingency: N/A
e. Break-Up Fee: 4% of the approved sales price of the highest
bidder
Any Schedules required to be provided by the Purchaser under the
Purchase Agreement, including without limitation Schedule 2.1(c),
will be provided in their final form to the Debtor on or before the
expiration of the Overbid Period. Each party is responsible for
its own attorneys' fees incurred in connection with the Purchase
Agreement, the Bankruptcy Case and the transactions or other
matters contemplated thereby.
The Debtor now wishes to establish a procedure for the orderly sale
of the Property to further maximize the recovery for the estate.
Pursuant to the Motion, it wishes to allow for the sale of the
Property on the terms set forth in therein, and according to the
Bidding Procedures. The Debtor believes the Bidding Procedures
allow maximum flexibility when evaluating potential competing
offers or bids for the Property, thereby providing the greatest
potential to further maximize value to the estate.
The Debtor respectfully requests that the Court approves the
Purchase Agreement and the designation of Stalking Horse Bidder as
the stalking horse bidder, for the proposed sale of the Property on
the terms set forth. It further requests approval of overbid
protection for Stalking Horse Bidder in the amount of 10%,
resulting in a minimum overbid from other potential bidders in an
amount of at least $275,000.
The salient terms of the Bidding Procedures are:
a. Bid Deadline: 14 days following the Court's entry of an
Order approving Stalking Horse Bidder as the stalking horse
b. Initial Bid: $275,000
c. Deposit: 10% of the bid amount
d. Sale Hearing: Seven days after the conclusion of the
Overbid Period
A copy of the APA is available for free at
https://tinyurl.com/53n2d9yy from PacerMonitor.com free of charge.
About Swap.com, Inc.
Swap.com, Inc. -- https://www.swap.com/-- is a consignment company
that helps consumers find affordable, quality secondhand apparel
for the whole family..
Swap.com, Inc., filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.C. Case No.
22-01314) on June 16, 2022. In the petition filed by Gray King, as
president and chief executive officer, the Debtor reports
estimated
assets and liabilities between $1 million and $10 million each.
Jason L. Hendren, of Hendren Redwine & Malone, PLLC, is the
Debtor's counsel.
TBC COMPANIES: Bankruptcy Administrator Unable to Appoint Committee
-------------------------------------------------------------------
The U.S. Bankruptcy Administrator for the Eastern District of North
Carolina disclosed in a filing that no official committee of
unsecured creditors has been appointed in the Chapter 11 case of
TBC Companies, LLC.
About TBC Companies
TBC Companies, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-01737) on Aug. 8,
2022, with up to $500,000 in assets and up to $1 million in
liabilities. Judge Pamela W. McAfee oversees the case.
Danny Bradford, Esq., at Bradford Law Offices serves as the
Debtor's counsel.
The Debtor filed its proposed Chapter 11 plan and disclosure
statement on Aug. 9, 2022.
TIBCO SOFTWARE: S&P Assigns 'B' Rating on Senior Secured Notes
--------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to up to $4 billion of senior secured notes due in
2029 that it expect will be issued by TIBCO Software Inc.
The notes are being proposed under a $15 billion debt financing
package to partially fund the pending acquisition of Citrix Systems
Inc. and subsequent merger. Newly created Picard Midco Inc. is
serving as an escrow issuer since this offering will occur before
the Citrix/TIBCO transactions are consummated. Upon completion,
which S&P expects before the end of September, TIBCO will become
the ultimate issuer.
S&P said, "The notes are larger than the $3.5 billion we expected
to be issued in our Sept. 8, 2022, rating actions on Picard Midco,
Balboa Intermediate Holdings LLC, and TIBCO. Nevertheless, we
understand the difference will be offset by lower term loan A
principal, which we assume to be first-lien senior secured issues
that will rank pari passu. We also expect the company to have $15
billion in funded debt at close. As such, our 'B' issuer credit
ratings and stable outlooks on Picard Midco, Balboa, and TIBCO
Software are unchanged, as are our 'B' issue-level and '3' recovery
ratings on the term loan A due in 2028, U.S. dollar tranche term
loan B due in 2029, euro tranche term loan B due in 2029, and $1
billion revolving credit facility due in 2027."
ISSUE RATINGS - RECOVERY ANALYSIS:
Key analytical factors
-- S&P now assumes a capital structure that includes a $2.5
billion term loan A due in 2028, $4.05 billion term loan B due in
2029, $500 million euro term loan B due in 2029, $1 billion undrawn
revolving credit facility due in 2027, $4 billion senior secured
first-lien notes, and $3.95 billion second-lien term loan.
-- S&P's simulated default scenario assumes a payment default in
2025 because of weaker macroeconomic conditions, increased
competition, integration-related business disruptions, inefficient
research and development, and sales activities arising from cost
actions, resulting in a loss in competitive advantage.
-- S&P values Balboa/Picard as a going concern because it believes
that following a payment default, the company's technologies,
long-standing incumbent positions with customers, and subscription
revenue base would likely have considerable value supporting
reorganization rather than liquidation.
-- S&P applies a 7x multiple to an estimated distressed emergence
EBITDA of $1.13 billion to estimate a gross enterprise value at
emergence of about $8 billion. The 7x multiple is consistent with
what we use for other technology software companies with similar
scale and market positions.
Simulated default assumptions
-- Simulated year of default: 2025
-- EBITDA at emergence: $1.13 billion
-- EBITDA multiple: 7x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $7.5
billion
-- Valuation split (obligors/nonobligors): 39%/61%
-- Collateral value available to first-lien creditors: $5.9
billion
-- Value available to unsecured claims: $1.6 billion
-- Secured first-lien debt: $12.1 billion
--Recovery expectations: 50%-70% (rounded estimate: 55%)
-- Collateral value available to second-lien creditors: $0
million
-- Secured second-lien debt: $4.1 billion
--Recovery expectations: 10%-30% (rounded estimate: 15%)
TPC GROUP: Delaware Judge Gives Additional Time for Creditor Talks
------------------------------------------------------------------
Rick Archer of Law360 reports that a Delaware bankruptcy judge on
Tuesday, September 13, 2022, delayed the hearing for TPC Group's
Chapter 11 plan disclosure for another week, after being told that
the petrochemical maker had reached a settlement with its secured
noteholders but not its unsecured creditors.
U.S. Bankruptcy Judge Craig T. Goldblatt scheduled the new hearing
for Sept. 22, after counsel for TPC said at a virtual hearing that
his previous week's delay had given TPC time to close a deal with
noteholders but that talks were continuing to resolve disputes with
the unsecured creditors committee over the plan disclosure
statement.
About TPC Group
TPC Group, headquartered in Houston, is a producer of value-added
products derived from petrochemical raw materials such as C4
hydrocarbons, and provider of critical infrastructure and logistics
services along the Gulf Coast. The Company sells its products into
a wide range of performance, specialty and intermediate markets,
including synthetic rubber, fuels, lubricant additives, plastics
and surfactants. With an operating history of more than 75 years,
TPC Group has a manufacturing facility in the industrial corridor
adjacent to the Houston Ship Channel and operates product terminals
in Port Neches, Texas and Lake Charles, Louisiana.
TPC Group Inc. and its subsidiaries sought Chapter 11 protection
(Bankr. D. Del. Lead Case No. 22-10493) on June 1, 2022. TPC Group
estimated assets and debt of $1 billion to $10 billion to $10
billion.
The Hon. Craig T. Goldblatt is the case judge.
Baker Botts L.L.P. is the Debtors' counsel; Morris, Nichols, Arshtn
& Tunnell LLP is the co-counsel; Moelis & Company LLC is the
investment banker; and FTI Consulting is the financial advisor.
Simpson Thacher & Bartlett LLP is the special finance counsel.
Kroll Restructuring Administration is the claims agent.
Eclipse Business Capital LLC is advised by Goldberg Kohn Ltd.
Paul Hastings LLP, and Stroock & Stroock & Lavan LLP are serving as
counsel to the Ad Hoc Noteholder Group that supports the Debtors'
restructuring. Evercore Group L.L.C., is the Group's financial
advisor. Young Conaway Stargatt & Taylor, LLP is local counsel to
the Ad Hoc Noteholder Group. The Supporting Noteholders are funds
controlled by FIG LLC and Fortress Capital Finance III(A) LLC,
Monarch Alternative Capital LP., PGIM Inc., Redwood Capital
Management LLC, and Strategic Value Partners LLC.
Pachulski Stang Ziehl & Jones LLP, Proskauer Rose LLP, and Selendy
Gay Elsberg PLLC are serving as counsel to an Ad Hoc Group of
Non-Consenting Noteholders, led by Bayside Capital, Inc., and
Cerberus Capital Management, L.P. Milbank LLP previously served as
the group's counsel but was later replaced by Pachulski and SGE.
TREETOP DEVELOPMENT: Lender Seeks Appointment of Chapter 11 Trustee
-------------------------------------------------------------------
Skylark Capital Management, LLC is seeking the appointment of a
Chapter 11 trustee for Treetop Development, LLC to replace Mohamed
Hadid, manager of the company, and take control of the company's
bankruptcy case.
In a motion filed with the U.S. Bankruptcy Court for the Central
District of California, William Brody, Esq., one of the attorneys
representing Skylark, said allowing Mr. Hadid to remain in control
of the company despite his "lack of trustworthiness" and "lack of
concern of his fiduciary duties" would make any reorganization
involving the sale, financing or construction of the company's
Beverly Hills luxury residences impossible.
"Having on multiple occasions determined that Hadid is undeniably
unfit to serve as a debtor-in-possession, the court should not
permit Mr. Hadid to remain in control of Treetop in this case and
appoint a Chapter 11 trustee," Mr. Brody said in court papers.
The attorney cited two other bankruptcy cases filed by 901 Strada
Vecchia, LLC and Coldwater Development, LLC -- companies run by Mr.
Hadid -- where the court reached a conclusion of Mr. Hadid's lack
of trustworthiness and his unwillingness to act as a fiduciary for
the estate. Both cases resulted in either the dismissal or the
appointment of a trustee.
Treetop filed for Chapter 11 protection after it defaulted under
the terms of its loan agreement with Skylark by failing to complete
the construction of two luxury residences on a 27-acre estate in
Beverly Hills, and by failing to pay the lender and the contractors
for the project.
As of Aug. 2, 2022, Treetop was indebted to Skylark in an amount of
not less than $63.05 million.
Attorneys for Skylark Capital are:
William S. Brody, Esq.
Paul S. Arrow, Esq.
Brian T. Harvey, Esq.
Buchalter, A Professional Corporation
100 Wilshire Boulevard, Suite 1500
Los Angeles, CA 90017-1730
Telephone: (213) 891 0700
Fax: (213) 896 0400
Email: wbrody@buchalter.com
About Treetop Development
Mohamed Anwar Hadid is a Jordanian-American real estate developer.
He is known for building luxury hotels and mansions, mainly in the
Bel Air neighbourhood of Los Angeles and the city of Beverly Hills,
Calif.
Hadid's 901 Strada, LLC, based in Los Angeles, CA, filed a Chapter
11 petition (Bankr. C.D. Cal. Case No. 19-23962) on Nov. 27, 2019.
Strada was entity formed for the purpose of developing and
ultimately selling the real property perched on a hillside, and
with views to the ocean, located at 901 Strada Vecchia Road, Bel
Air, California. 901 Strada sought bankruptcy after the City of
Los Angeles revoked the building permits and a court ordered the
partially finished structures to be torn down.
Hadid's Coldwater Development, LLC, and Lydda Lud, LLC, filed for
Chapter 11 bankruptcy in January 2021 (Bankr. C.D. Cal. Lead Case
No. 21-10335). Coldwater and Lydda Lud owned six highly prized,
vacant, residential estate lots, totaling 65.63 acres located in
the Santa Monica Mountains above Beverly Hills, California. The
debtors said the property was worth $130 million but was embroiled
in a dispute with the activist group "Friends of the Hastain
Trail", which has pushed for a recreational trail easement through
the property. The cases have since been converted to Chapter 7
liquidation and the property sold by the bankruptcy trustee for
just $1.7 million in April 2022.
Hadid's Treetop Development LLC, owner of a 9650 Cedarbrook Drive
in Beverly Hills, California, which is a planned 78,000-square foot
home that's currently on the market for $250 million, sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
C.D. Cal. Case No. 22-14165) on August 2, 2022. In the petition
filed by Mohamed A. Hadid, as manager, the Debtor reported assets
between $100 million and $500 million and liabilities between $10
million and $50 million.
Lewis R Landau, of LeWis R. Landau Attorney at law, is the Debtor's
counsel.
VOYAGER DIGITAL: Committee Taps Cassels as Canadian Counsel
-----------------------------------------------------------
The official committee of unsecured creditors of Voyager Digital
Holdings, Inc. and its affiliates seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Cassels Brock & Blackwell, LLP as its Canadian counsel.
The committee requires a Canadian counsel in light of the
proceedings commenced by Voyager Digital Ltd., an affiliate of
Voyager Digital Holdings, under the Companies' Creditors
Arrangement Act before the Ontario Superior Court of Justice
(Commercial List) in Toronto.
Cassels Brock & Blackwell will be paid at these rates:
Partners $630 to $1,100 per hour
Associates $400 to $680 per hour
Paraprofessionals $205 to $485 per hour
Law Students $145 to $195 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Ryan Jacobs, Esq. a partner at Cassels Brock & Blackwell, 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.
Mr. Jacobs also made the following disclosures in response to the
request for additional information set forth in Paragraph D.1 of
the Revised U.S. Trustee Guidelines:
a. Cassels Brock & Blackwell did not agree to any variations
from, or alternatives to, its standard or customary billing
arrangements for this engagement, except that the firm agreed to
convert its monthly accounts to U.S. dollars at the prevailing Bank
of Canada exchange rate, and the firm agreed to provide a 10
percent discount on its standard hourly rates, which discount will
be reflected in each of its monthly accounts.
b. No rate for any of the professionals included in this
engagement varies based on the geographic location of the
bankruptcy cases.
c. The firm did not represent any member of the committee in
connection with the Debtors' Chapter 11 cases or the Canadian
proceedings prior to its retention by the committee.
d. The firm expects to develop a prospective budget and staffing
plan to comply reasonably with the U.S. Trustee's request for
information and additional disclosures, as to which the firm
reserves all rights.
e. The committee has approved the firm's proposed hourly billing
rates.
Cassels Brock & Blackwell can be reached at:
Ryan C. Jacobs, Esq.
Cassels Brock & Blackwell, LLP
40 King Street West
Toronto, Ontario Canada M5H 3C2
Tel: (416) 869-5300
Email: rjacobs@cassels.com
About Voyager Digital Holdings
Based in Toronto, Canada, Voyager Digital Holdings Inc. --
https://www.investvoyager.com/ -- runs a cryptocurrency platform.
Voyager claims to offer a secure way to trade over 100 different
crypto assets using its easy-to-use mobile application. Through its
subsidiary Coinify ApS, Voyager provides crypto payment solutions
for both consumers and merchants around the globe.
Voyager Digital Holdings and two affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 22-10943) on July 5, 2022. In the petition filed by Stephen
Ehrlich, as chief executive officer, Voyager Digital Holdings
listed $1 billion to $10 billion in both assets and liabilities.
The Debtors tapped Kirkland & Ellis as general bankruptcy counsel;
Berkeley Research Group, LLC as financial advisor; Moelis & Company
as investment banker; and Consuelo Group as strategic financial
advisor. Stretto, Inc. is the claims agent.
The U.S. Trustee for Region 2 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases on
July 19, 2022. The committee tapped McDermott Will & Emery, LLP as
bankruptcy counsel; Cassels Brock & Blackwell, LLP as Canadian
counsel; and FTI Consulting, Inc. as financial advisor.
WILLIAMS LAND: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------
Williams Land Clearing, Grading, and Timber Logger LLC asks the
U.S. Bankruptcy Court for the District of Nevada for authority to
use cash collateral.
The Debtor needs to use cash collateral to make payment of ordinary
operating expenses.
A review of the North Carolina Secretary of State's UCC filings
reveals these financing statements which might perfect a lien on
the cash collateral:
a. File # 20200065229K recorded May 29, 2020, in favor of U.S.
Small Business Administration, 2 North Street, Suite 320,
Birmingham, AL 35203
b. File # 20210063027E recorded May 12, 2021, in favor of
Commercial Credit Group Inc. on behalf of itself and all affiliates
of CCI, 525 N. Tryon Street, Suite 1000, Charlotte, NC 28202.
c. File # 20210083455A recorded June 22, 2021, in favor of
Commercial Funding Inc. on behalf of itself and on behalf of all
affiliates of CCI, 170 South Main Street, Suite 700, Salt Lake
City, UT 84101.
d. File # 20210086077E recorded June 28, 2021, in favor of
Commercial Credit Group Inc. on behalf of itself and all affiliates
of CCI, 525 N. Tryon Street, Suite 1000, Charlotte, NC 28202.
e. File # 20210099242B recorded July 23, 2021, in favor of
Commercial Credit Group Inc. on behalf of itself and all affiliates
of CCI, 525 N. Tryon Street, Suite 1000, Charlotte, NC 28202.
f. File # 20210112347E recorded on August 18, 2021, in favor
of Corporation Service Company as representative, P.O. Box 2576.
Springfield, IL 62708.
g. File # 20210122913E recorded on September 9, 2021, in favor
of Corporation Service Company as representative, P.O. Box 2576.
Springfield, IL 62708.
h. File # 20210138107G recorded October 13, 2021, in favor of
Commercial Credit Group Inc. on behalf of itself and all affiliates
of CCI, 525 N. Tryon Street, Suite 1000, Charlotte, NC 28202.
i. File # 20220030809H recorded on March 8, 2022, in favor of
CT Corporation System as representative, 330 N Brand Blvd, Suite
700, ATTN: SPRS, Glendale, CA 91203.
j. File # 20220063407H recorded on May 5, 2022, in favor of
Corporation Service Company as representative, P.O. Box 2576.
Springfield, IL 62708.
k. File # 20220064143F recorded on May 6, 2022, in favor of
ACE Funding Source, LLC, 360 North Broadway, Jericho, NY 11753.
l. File # 20220064293A recorded on May 6, 2022, in favor of
TBF, 460 Faraday Avenue, Jackson, NJ 08527.
m. File # 20220103256E recorded on July 27, 2022, in favor of
Corporation Service Company as representative, P.O. Box 2576.
Springfield, IL 62708.
n. File # 20220113421K recorded on August 16, 2022, in favor
of Corporation Service Company as representative, P.O. Box 2576.
Springfield, IL 62708.
o. File # 20220123548M recorded on September 7, 2022, in favor
of Masada Funding, LLC, 20 Jay Street, Brooklyn, NY 11201.
p. File # 20220126470H recorded on September 14, 2022, in
favor of Franklin Capital Group, LLC, 32300 Northwestern Hwy.,
Farmington Hills, MI 48334.
q. File # 20220126471J recorded on September 14, 2022, in
favor of Franklin Capital Group, LLC, 32300 Northwestern Hwy.,
Farmington Hills, MI 48334.
The Debtor also believes Couch Oil Company, 2907 Hillsborough Rd.,
Durham, NC 27705, may have a lien on funds pursuant to Chapter 44A
of the North Carolina General Statutes.
The Debtor proposes to give a replacement lien to secured creditors
for the cash collateral used if the motion is approved.
A copy of the motion is available at https://bit.ly/3S9Et6k from
PacerMonitor.com.
About Williams Land Clearing, Grading, and Timber Logger, LLC
Williams Land Clearing, Grading, and Timber Logger, LLC is a land
development company that logs timber in addition to offering lot
and site clearing, land leveling, drainage solutions, and related
services. Prior to forming the Debtor in 2016, Lamont Williams,
the sole member of the Debtor, had been in the logging business
since 2001, and added clearing and grading to his business in about
2006.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-02094) on September
16, 2022. In the petition signed by Lamonte Williams, manager, the
Debtor disclosed up to $50 million in assets and up to $10 million
in liabilities.
Judge Pamela W. McAfee oversees the case.
William P. Janvier, Esq., at Stevens Martin Vaughn and Tadych, PLLC
is the Debtor's counsel.
WJA ASSET: Unsecureds Owed $11K to Get Paid From Available Cash
---------------------------------------------------------------
Secure California Income Fund, LLC, submitted a Chapter 11 Plan of
Liquidation and a Disclosure Statement.
The Debtor is part of a network of entities or "Funds" formed by
William Jordan to offer investment opportunities to individuals.
William Jordan Investments, Inc. ("WJI"), was the registered
investment advisor. WJA Asset Manager, LLC ("WJAAM") is the
managing member of the Debtors, with the exception of itself and
WJI. William Jordan is the sole owner of WJI and is the sole
member of WJAAM.
The Plan is a liquidation plan which contemplates that the Debtor
will liquidate its assets and distribute the proceeds and funds on
hand to its Creditors and Interest Holders in accordance with the
priorities set forth in the Bankruptcy Code.
Collectively, the Debtors held the following types of assets: (1)
cash; (2) real estate; (3) deeds of trust; (4) promissory notes;
and (5) stock or membership units in third-party companies, which,
in turn, either operate a business or own a real estate development
project.
Under the Plan, Class 1 Allowed Priority Unsecured Claims totaling
$0 will be paid in full on the Effective Date. Class 1 is
unimpaired.
Class 2 General Unsecured Claims total $11,669, depending on the
outcome of the review of the General Unsecured Claims and
resolution of any objection(s) to General Unsecured Claims. General
Unsecured Claims incurred in the operation of the business of
Debtor, including prepetition management fees to WJAAM and
outstanding obligations to any related Fund, regardless of whether
a Proof of Claim is filed. Within one hundred and 120 days of the
Effective Date, the Debtor will make an initial Pro Rata
Distribution of the Available Cash, if any, to the holders of
Allowed Class 2 Claims. To the extent Allowed Class 2 Claims are
not Paid in Full by the initial Pro Rata Distribution and provided
that there is Available Cash, the Debtor will make additional
interim and/or final Pro Rata Distributions of Available Cash. The
timing of such additional Distributions will be in the discretion
of the Debtor. If there is sufficient Available Cash for all
Allowed Class 2 Claims to be fully satisfied, then payments on
Allowed Class 2 Claims will include simple interest at the federal
judgment rate in effect on the Effective Date from the Petition
Date through the date that each Allowed Class 2 Claim is Paid in
Full.
If a Class 2 Claim is disputed when a Distribution is made, then
pending resolution of the dispute by a Final Order, the Debtor will
reserve sufficient funds to pay the higher Distribution amount.
Once the dispute is resolved by a Final Order, the Debtor will make
a Distribution on account of the Allowed Class 2 Claim in
accordance with the treatment described in the foregoing
paragraph.
The Debtor will continue to liquidate its Estate assets and
distribute the proceeds and funds on hand to its Creditors and
Interest Holders as set forth in the Plan.
The Debtor estimates that it will have approximately $69,357
available on the Effective Date to make distributions required to
be made on or near the Effective Date.
Attorneys for the Debtors:
Philip E. Strok, Esq.
Kyra E. Andrassy, Esq.
Robert S. Marticello, Esq.
Michael L. Simon, Esq.
SMILEY WANG-EKVALL, LLP
3200 Park Center Drive, Suite 250
Costa Mesa, CA 92626
Telephone: (714) 445-1000
Facsimile: (714) 445-1002
E-mail: pstrok@swelawfirm.com
kandrassy@swelawfirm.com
rmarticello@swelawfirm.com
msimon@swelawfirm.com
A copy of the Disclosure Statement dated September 9, 2022, is
available at https://bit.ly/3TZDA1Y from PacerMonitor.com.
About WJA Asset Management
Luxury Asset Purchasing International, LLC, et al., are part of a
network of entities or "Funds" formed to offer a range of
investment opportunities to individuals. Many of the existing funds
are performing and some Funds had substantial gains. However,
certain Funds, i.e., those invested in private trust deeds secured
by real estate, suffered losses.
William Jordan Investments, Inc. ("Advisor"), is a registered
investment advisor. Laguna Hills, California-based WJA Asset
Management, LLC ("Manager"), is the managing member of Luxury, et
al. William Jordan was the president and sole owner of Advisor and
was the sole member and manager of Manager.
On May 18, 2017, Luxury and its affiliates filed voluntary
petitions under Chapter 11 of the United States Bankruptcy Code. On
May 25, 2017, four other affiliated filed voluntary Chapter 11
petitions. On June 6, 2017, CA Real Estate Opportunity Fund III
filed its Chapter 11 petition. The Debtors' cases are jointly
administered under Bankr. C.D. Cal. Lead Case No. 17-11996, and the
Debtors continue to operate their businesses and manage their
affairs as DIP.
Pursuant to court orders, Howard Grobstein is now serving as the
chief restructuring officer of the Debtors and Mr. Jordan no longer
has any ongoing role in the Debtors' operations.
At the time of the filing, WJA estimated assets of less than
$500,000 and liabilities of $1 million to $10 million.
Judge Scott C. Clarkson presides over the cases.
Lei Lei Wang Ekvall, Esq., Philip E. Strok, Esq., Robert S.
Marticello, Esq., and Michael L. Simon, Esq., at Smiley
Wang-Ekvall, LLP, serve as counsel to the Debtors. Ann Moore of
Norton Moore Adams has been tapped as special counsel. Elite
Properties Realty is the broker.
ZABALA FARMS: Seeks to Retake Property From Landlord
----------------------------------------------------
Zabala Farms of Salinas LLC filed for chapter 11 protection in the
Northern District of California.
The Debtor runs the Zabala Farms, an agricultural property at 50
Zabala Road Salinas, CA 93908. The business is led by Jason
Turchin, managing member.
Due to severe financial hardship and business declining revenues,
the organization fell behind on both the monthly lease payments and
monthly utility expenses.
The Debtor filed the bankruptcy petition to stop the landlord,
Grupo Leasing II, LLC, and the Monterey County sheriff's dept. to
stay the eviction process.
Notwithstanding the bankruptcy filing, the Debtor tells the Court
that Grupo Leasing locked out the Debtor and proceeded with the
repossession of the real property in a "malicious and wilfully
attempt to disregard the statutory mandates of the court."
The Debtor accordingly asked the Court to impose sanctions against
Grupo Leasing and to void the eviction process.
The Debtor on Sept. 13, 2022 filed the Chapter 11 petition without
the assistance of counsel. The Debtor has been ordered to appear
before the Court on Oct. 4, 2022, to show cause why this case
should not be dismissed for failure to have counsel
representation.
According to court filing, Zabala Farms of Salinas LLC estimates
between 1 and 49 creditors. The petition states funds will be
available to unsecured creditors.
About Zabala Farms of Salinas
Zabala Farms of Salinas LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-50828) on
Sept. 14, 2022. In the petition filed by Winston Turchin, as
managing member, the Debtor reported assets between $500,000 and $1
million and estimated liabilities between $500,00 and $1 million.
ZACHAIR LTD: Court Approves Disclosure Statement
------------------------------------------------
Judge Thomas J. Catliota has entered an order approving the
Disclosure Statement of Zachair, Ltd.
The Plan confirmation hearing will be held on Oct. 19, 2022, at
10:30 a.m. (prevailing Eastern Time), at the United States
Bankruptcy Court, Federal Courthouse, 6500 Cherrywood Lane,
Courtroom 3-E, Greenbelt, Maryland 20770.
The deadline to file objections to the confirmation of the Plan
will be October 12, 2022, at 5:00 p.m. (prevailing Eastern Time).
The deadline to submit a ballot to accept or reject the Plan will
be October 12, 2022, at 5:00 p.m. (prevailing Eastern Time).
Except as set forth below, the record date (the "Voting Record
Date") for determining which Holders of Claims are entitled to vote
to accept or reject the Plan shall be the date the Bankruptcy Court
enters this Order. In the event that the Class 1 or Class 2 Claim
presently owned by Sandy Spring Bank is assigned to a third party,
the record date for Class 1 and Class 2 shall be September 16,
2022, or such later date as the Debtor may agree in writing.
For purposes of voting to accept or reject the Plan, and not for
purposes of allowance or distribution on account of a Claim, and
without prejudice to the rights of the Debtor in any other context,
the amount of a Claim used to tabulate acceptance or rejection of
the Plan shall be one of the following alternatives:
(a) if no proof of Claim was timely filed, the Claim amount
listed in the Schedules filed with the Bankruptcy Court by the
Debtor, provided that such Claim is not scheduled as contingent,
disputed, or unliquidated;
(b) the liquidated amount specified in a proof of Claim timely
filed with the Court (or otherwise deemed timely filed by the
Bankruptcy Court under applicable law), to the extent that the
proof of Claim is not the subject of an objection; or
(c) the amount temporarily allowed by the Bankruptcy Court for
voting purposes, pursuant to Bankruptcy Rule 3018(a), after notice
and a hearing at or before the Confirmation Hearing.
About Zachair Ltd.
Clinton, Md.-based Zachair, Ltd. was formed by Dr. Nabil Asterbadi
to acquire Hyde Field, an airport for commercial and general
aviation. Hyde Field is located near Andrews Air Force Base,
National Harbor, Downtown Washington DC, and nearby Northern
Virginia. It offers a 3000' lighted runway with a day and night
instrument approach. For more information, visit
http://www.hydefield.com/
Zachair filed a Chapter 11 petition (Bankr. D. Md. Case No.
20-10691) on Jan. 17, 2020. In the petition signed by Zachair
President Nabil J. Asterbadi, the Debtor was estimated to have $10
million to $50 million in assets and $1 million to $10 million in
liabilities.
Judge Thomas J. Catliota oversees the case.
Whiteford Taylor & Preston, LLP, is the Debtor's legal counsel. CC
Services Corporation and Mendelson & Mendelson, CPAs, P.C., are the
Debtor's tax accountants.
ZEROHOLDING LLC: Taps Rountree Leitman Klein & Geer as Counsel
--------------------------------------------------------------
Zeroholding, LLC received approval from the U.S. Bankruptcy Court
for the Northern District of Georgia to employ Rountree Leitman
Klein & Geer, LLC as its legal counsel.
The firm's services include:
(a) advising the Debtor with respect to its powers and duties in
the management of its property;
(b) preparing legal papers;
(c) assisting in the examination of claims of creditors;
(d) assisting in the formulation and preparation of a disclosure
statement and plan of reorganization and in the consummation
thereof; and
(e) performing all other necessary legal services for the
Debtor.
The hourly rates of the firm's attorneys and staff are as follows:
William A. Rountree, Attorney $495
Will B. Geer, Attorney $495
Michael Bargar, Attorney $495
Hal Leitman, Attorney $425
David S. Klein, Attorney $425
Alexandra Dishun, Attorney $425
Benjamin R. Keck, Attorney $425
Barret Broussard, Attorney $395
Ceci Christy, Attorney $350
Elizabeth A. Childers, Attorney $350
Caitlyn Powers, Attorney $275
Zach Beck, Law clerk $195
Sharon M. Wenger, Paralegal $195
Megan Winokur, Paralegal $150
Catherine Smith, Paralegal $150
Yasmin Alamin, Paralegal $150
The firm received a pre-bankruptcy retainer of $20,000 from the
Debtor.
Will Geer, Esq., a partner at Rountree Leitman Klein & Geer,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Will B. Geer, Esq.
Rountree Leitman Klein & Geer, LLC
Century Plaza I
2987 Clairmont Road, Suite 350
Atlanta, GA 30329
Telephone: (404) 584-1238
Facsimile: (404) 704-0246
Email: wgeer@rlkglaw.com
About Zeroholding LLC
Zeroholding, LLC -- https://www.zeroreznashville.com/ -- is a
carpet cleaning company in Alpharetta, Ga.
Zeroholding filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
22-56502) on Aug. 14, 2022, with between $500,000 and $1 million in
assets and between $1 million and $10 million in liabilities. John
T. Whaley has been appointed as Subchapter V trustee.
Judge Jeffery W. Cavender oversees the case.
Will B. Geer, Esq., at Rountree, Leitman, Klein & Geer, LLC is the
Debtor's legal counsel.
*********
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