/raid1/www/Hosts/bankrupt/TCR_Public/220929.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, September 29, 2022, Vol. 26, No. 271
Headlines
121 LANGDON STREET: $1.9M Sale of Madison Property to Dohmen Okayed
3333 ALPHARETTA: Files Emergency Bid to Use Cash Collateral
70 CLERMONT AVENUE: Seeks Chapter 11 Bankruptcy Protection
77 VARET HOLDING: Upper East Side Property Heads to Chapter 11
942 PENN RR: Wins Access to Cash Collateral
ABPCI DIRECT XI: Fitch Assigns 'BB-(EXP)' Rating on Class E Debt
ADJOY INC: ABC Services Says Bids for IP Assets Due Oct. 21
ALL FLORIDA: Seeks Cash Collateral Access
ALLTECH INC: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
ARETE REHABILITATION: Voluntary Chapter 11 Case Summary
AT HOME GROUP: S&P Downgrades ICR to 'B-', Outlook Negative
AVANTOR INC: Fitch Alters Outlook on 'BB' IDR to Positive
AVANTOR INC: Fitch Alters Outlook on 'BB' IDR to Positive
AVERY ASPHALT: Seeks Cash Collateral Access Thru Oct 7
BAYOU CYPRESS: Wins Interim Cash Collateral Access
BERGIO INTERNATIONAL: Incurs $185K Net Loss in Second Quarter
BERGIO INTERNATIONAL: Registers for Sale 5 Billion Common Shares
BONA VISTA 1606: Taps Joel M. Aresty P.A. as Legal Counsel
BORREGO COMMUNITY: U.S. Trustee Appoints Creditors' Committee
BULLSTRAP LLC: Wins Cash Collateral Access Thru Oct 12
CANADIAN GAMING: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
CAPITAL RIVER: Taps Tyler Bartl & Ramsdell as Legal Counsel
CARESTREAM HEALTH: Seeks to Hire AlixPartners as Financial Advisor
CARESTREAM HEALTH: Seeks to Hire Pachulski as Co-Counsel
CARESTREAM HEALTH: Taps Ernst & Young as Tax Services Provider
CARESTREAM HEALTH: Taps Houlihan Lokey Capital as Investment Banker
CARESTREAM HEALTH: Taps Kirkland & Ellis as Legal Counsel
CARESTREAM HEALTH: Taps Kurtzman Carson Consultants as Claims Agent
CARL MILLER: Wins Continued Cash Collateral Access
CAROLINA CAJUNS: Wins Cash Collateral Access Thru Oct 9
CENTRAL FLORIDA CIVIL: Taps William G. Haeberle as Accountant
CHERRY MAN: Wins Continued Cash Collateral Access
CINEWORLD GROUP: U.S. Trustee Appoints Creditors' Committee
CITY LIVING KC: Seeks Access to Cash Collateral
CLAREHOUSE LIVING: No Decline in Patient Care, 4th PCO Report Says
CONNECT HOLDING: Fitch Assigns 'B-' LongTerm IDR
CORSICANA BEDDING: Out of Chapter 11 After Sale to Blue Torch
DAVID A. GOLUPSKI: $425K Sale of Fort Myers Property Confirmed
DIAMOND SCAFFOLD: May Use Cash Collateral Thru Oct 4
DIOCESE OF ROCKVILLE CENTRE: Aims for Plan Deal in 60 Days
DOT DOT SMILE: Wins Cash Collateral Access Thru Dec 1
ELANCO ANIMAL: Fitch Affirms 'BB-' LongTerm IDR, Outlook Negative
EMERALD ELECTRICAL: Wins Interim Cash Collateral Access
ENDO INTERNATIONAL: ASK LLP Represents Personal Injury Victims
EPUMPS SOLUTIONS: Taps Landrau Rivera & Assoc. as Legal Counsel
ERIN INDUSTRIES: Wins Interim Cash Collateral Access
FALLSWAY CONSTRUCTION: Court OKs Deal on Cash Collateral Access
FM SOLUTIONS: Wins Interim Cash Collateral Access
FOX SUBACUTE: Wins Cash Collateral Access Thru Oct 1
FREE SPEECH: CRO, Lawyer Exit Throws Case in Disarray
GABHALTAIS TEAGHLAIGH: $450K Sale of Torrington Property Approved
GARDEN FRESH RESTAURANTS: COVID-19 Coverage Suit Tossed
GEO GROUP: Completes $84 Million Asset Sale, Pays Loans Due 2024
GISSING NORTH AMERICA: Oct. 18 Auction of Substantially All Assets
GTT COMMUNICATIONS: Bankruptcy Exit Held Up by Regulatory Approvals
HARRELL REALTY: Nevarez Buying San Francisco Property for $2.2-Mil.
HBL SNF: No Resident Complaints, 4th PCO Report Says
HERO NUTRITIONALS: Has Deal on Cash Collateral Access
HILTON GRAND: Fitch Affirms LongTerm IDR at 'BB-', Outlook Neg.
HOMELIBERTY INC: Court Denies $215.5K Sale of Montgomery Property
INNERLINE ENGINEERING: Wins Cash Collateral Access Thru Nov 15
INPIXON: KINS to Acquire Apps Business in $69M Merger Deal
J AND M SUPPLY: Wins Interim Cash Collateral Access
J.C. PENNEY: 5 Stores Bought By Meridian JV for $53 Million
JAJE ONE LLC: Gets OK to Hire Joel M. Aresty as Legal Counsel
JORGABY FREIGHT: Wins Interim Cash Collateral Access
JOURNEY PERSONAL: S&P Downgrades ICR to 'CCC+', Outlook Negative
KAPCO FOODS: Seeks Cash Collateral Access
KEVIN LLOYD CATHCART: Trustee's Sale of Happy Valley Property OK'd
KINGS RIVER: Files Emergency Bid to Use Cash Collateral
LAREDO PETROLEUM: S&P Upgrades ICR to 'B', Outlook Stable
LASHLINER INC: Gets OK to Hire Law Offices of D. Merrit as Counsel
LEVEL FOUR ORTHOTICS: Taps Verdolino & Lowey as Accountant
LIVEWELL ASSISTED: Wins Cash Collateral Access Thru Oct 31
LOTUS SKY: Wins Interim Cash Collateral Access
MACON DOOR: Interim Cash Collateral Access
MAMBA PURCHASER: S&P Alters Outlook to Stable, Affirms 'B' ICR
MEDICAL DEPOT: S&P Rates $55MM Super-Senior Term Loan 'B'
MICHAEL LOUIS ENDICOTT: $4.1MM Rancho Property Sale to Norick OK'd
MID SOUTH RECYCLING: Files Emergency Bid to Use Cash Collateral
MTPC LLC: Seeks Approval of Revised Bid Procedures for All Assets
NATIONWIDE FREIGHT: Wins Cash Collateral Access Thru Oct 31
NCR CORP: Fitch Puts 'BB-' LongTerm IDR on Rating Watch Evolving
NICK'S CREATIVE: Files Emergency Bid to Use Cash Collateral
ODONATA LTD: Gets Cash Collateral Access Thru June 2023
OFF-SPEC SOLUTIONS: Wins Cash Collateral Access Thru July 2023
OLYMPIA SPORTS: Seeks Use of Cash Collateral on Interim Basis
OMNICROBE NATURAL: Voluntary Chapter 11 Case Summary
OT MERGER: S&P Alters Outlook to Negative, Affirms 'B-' ICR
PDC ENERGY: S&P Alters Outlook to Positive, Affirms 'BB' ICR
PREHIRED LLC: Voluntary Chapter 11 Case Summary
PROFESSIONAL TECHNICAL: Paladin Buying Operating Assets for $4.6MM
PROVECTUS BIOPHARMACEUTICALS: Board OKs Proposed $5-Mil. Financing
PUERTO RICO: PREPA Bondholders Seek Bankruptcy Case Dismissal
QST INGREDIENTS: Files Emergency Bid to Use Cash Collateral
QST INGREDIENTS: Starts Subchapter V Case
RB SIGMA: Case Summary & 20 Largest Unsecured Creditors
RE-BUILD SEVILLE: Voluntary Chapter 11 Case Summary
REARDEN STEEL: Files Emergency Bid to Use Cash Collateral
REHME CUSTOM: Cash Collateral Access, $150,000 of DIP Loan OK'd
RELMADA THERAPEUTICS: Perceptive Advisors, et al. Hold 7% Stake
RIOT BLOCKCHAIN: May Issue 10M Shares Under 2019 Equity Plan
RTW CONSTRUCTION: Cash Collateral Access, DIP Loan OK'd
RUBY PIPELINE: Auction of Substantially All Assets Set for Dec. 13
SAN JORGE HOSPITAL: U.S. Trustee Appoints Edna Diaz De Jesus as PCO
SEAHORSE RESTAURANTS: Hearing Today on Continued Cash Access
SMART BAKING: Wins Cash Collateral Access Thru Nov 1
SP STAR: Has Deal on Cash Collateral Access
SPECTRUM BRANDS: S&P Alters Outlook to Negative, Affirms 'B' ICR
SUMMER AVE: Wins Cash Collateral Access Thru Jan 2023
SUMMIT FINANCIAL: Court OKs Deal on Cash Collateral
THE HACIENDA: Files Subchapter V Case
TOYS 'R' US: Has Confidential Settlement With D&Os and Carriers
TRANSPORTATION DEMAND: Court OKs Deal on Cash Collateral Access
TREES CORP: TCM Tactical Entities Report 6.4% Equity Stake
UNIVERSITY RX: Seeks Cash Collateral Access
VIRGINIA VON SCHAEFER: U.S. Trustee Appoints Tamar Terzian as PCO
VIRTU FINANCIAL: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
WATERBRIDGE MIDSTREAM: Fitch Alters Outlook on 'B-' IDR to Positive
WRIGHT EXPERIENCE: Files Subchapter V Case
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
121 LANGDON STREET: $1.9M Sale of Madison Property to Dohmen Okayed
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Judge Catherine J. Furay of the U.S. Bankruptcy Court for the
Western District of Wisconsin authorized 121 Langdon Street Group,
LLP's sale of the real property located at 121 Langdon Street, in
Madison, Wisconsin, to Brian Dohmen and/or his assigns for
$1,865,000.
The Sale is pursuant to the terms and conditions specified in the
Motion and in the Residential Offer to Purchase and Counteroffer.
The legal description for the real property to be sold is: The
Northeast Quarter (NE¼) of Lot Five (5), and all of Lot Six (6),
Block Sixty-One (61), Original Plat of the City of Madison, in the
City of Madison, Dane County, Wisconsin.
The sale will be free and clear of all liens and encumbrances, with
all liens and encumbrances to attach to the sale proceeds.
The Debtor has authority to pay all usual and customary closing
costs, including but not limited to, title insurance, transfer
fees, proration of real estate taxes and recording fees figured
through the date of closing.
The Net Proceeds will be applied to pay the secured creditors in
full, namely: DCR Mortgage 10 Sub 2, LLC, Lokre Development
Company, and the Dane County Treasurer, in the order of their
priority.
The remaining net proceeds must be used by the Debtor to pay
administrative claims, and priority and unsecured creditors in
accordance with its Modified Chapter 11 Plan Dated April 22, 2022
and Order Granting Motion to Modify Confirmed Plan entered May 17,
2022.
The 14-day automatic stay under Bankruptcy Rule 6004(h) is waived.
About 121 Langdon Street Group
121 Langdon Street Group, LLP sought protection under Chapter 11
of
the Bankruptcy Code (Bankr. W.D. Wis. Case No. 21-10886) on April
26, 2021. At the time of filing, the Debtor disclosed up to $10
billion in both assets and liabilities.
Judge Catherine J. Furay oversees the case.
Krekeler Strother, S.C. is the Debtor's legal counsel.
Lokre Development Company, as lender, is represented by Buzza,
Dreier & Johnson, LLC. Midland States Bank, as lender, is
represented by R. Carlson Law Offices.
3333 ALPHARETTA: Files Emergency Bid to Use Cash Collateral
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3333 Alpharetta Lifehope 10 Acre Land, LLC asks the U.S. Bankruptcy
Court for the Northern District of Georgia, Atlanta Division, for
authority to use cash collateral.
The Debtor requires the use of cash collateral to pay the operating
expenses of the business.
Capital One, N.A. asserts a first priority security interest in all
rental income derived from the Debtor's medical office building
located at 3333 Old Milton Parkway, Alpharetta, Georgia 30005.
The cash collateral will be used only pursuant to the terms of the
Budget during the period following entry of the Interim Order until
the earlier of: (i) 45 days following entry of the Interim Order or
(ii) conversion of the case to Chapter 7 or dismissal of the case.
As adequate protection for the cash collateral expended pursuant to
the Interim Order, Capital One will be given a replacement lien on
all tangible and intangible personal property.
A copy of the motion and the Debtor's four-week budget through the
week of October 10, is available at https://bit.ly/3SxLNcg from
PacerMonitor.com.
About 3333 Alpharetta Lifehope 10 Acre Land, LLC
3333 Alpharetta Lifehope 10 Acre Land, LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No.
22-57594) on September 23, 2022. In the petition signed by Scott C.
Honan, designated manager, the Debtor disclosed up to $100 million
in assets and up to $50 million in liabilities.
Will Geer, Esq., at Rountree, Leitman, Klein & Geer, LLC is the
Debtor's counsel.
70 CLERMONT AVENUE: Seeks Chapter 11 Bankruptcy Protection
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70 Clermont Avenue Ltd. filed for chapter 11 protection in the
Eastern District of New York.
The Debtor, a Single Asset Real Estate, owns the property at 70
Clermont Avenue, in Brooklyn, NY 11205.
70 Clermont Avenue listed liabilities of less than $10 million and
between 1 and 49 creditors. The petition states that funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 28, 2022, at 10:00 AM at Teleconference - Brooklyn.
About 70 Clermont Avenue
70 Clermont Avenue Ltd. is a Single Asset Real Estate (as defined
in 11 U.S.C. Sec. 101(51B)).
70 Clermont Avenue LTD sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42315) on
September 21, 2022. In the petition filed by Andre Soleil, the
vice-president, the Debtor reported assets and liabilities between
$1 million and $10 million.
The Debtor is represented by Nnenna Okike Onua of McKinley Onua &
Associates, PLLC.
77 VARET HOLDING: Upper East Side Property Heads to Chapter 11
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77 Varet Holding Corp. filed for chapter 11 protection in the
Eastern District of New York.
77 Varet Holding Corp. is a stock holding company whose sole asset
is its 100% membership interest in 162-164 82nd Street LLC, which
owns a residential apartment building on the Upper East Side
containing 37 units, most of which are free market. The Property
has a monthly rent roll of $81,189.
162-164 82nd Street will be filing a separate Chapter 11 petition
imminently so that the subject property itself is subject to
Bankruptcy Court jurisdiction, according to David Goldwasser, the
manager.
Mr. Goldwasser is currently the manager of both 77 Varet and
162-164 82nd Street, having been appointed by the Debtors' members
to attempt to restructure the outstanding mortgage and mezzanine
debt held by East 82nd Holdco LLC, as successor to Dime Savings
Bank. Mr. Goldwasser led the effort to negotiate a prior
forbearance with the lender and the ensuing Chapter 11 cases, which
are being field with the support of the lender.
The Upper East Side Property became subject to mortgage
delinquencies during Covid, which were exacerbated by litigation
and accounting issues involving the managing agent, Choice New York
Management. A new property manager is being engaged in connection
with the commencement of Chapter 11 cases.
In the interim, the Lender noticed a U.C.C. Article 9 foreclosure
sale of 77 Varet's membership interest in 162-164 82nd Street. The
sale has been adjourned from time to time following execution of a
forbearance agreement in January 2022. The forbearance has
expired, and the Lender is refusing to thadjourn the U.C.C.
foreclosure sale any longer. However, the Lender has consented the
commencement of bankruptcy proceedings and will afford the Debtor
one last opportunity to refinance the Property based upon a
negotiated pay-off, failing which the Proeprty will be marketed for
sale in Cahpter 11, with the Lender to retain full credit bid
rights.
For purposes of Chapter 11, the Debtors and the Lender intend to
negotiate a consensual cash collateral stipulation, and have agreed
upon a broker to market the Property.
77 Varet Holding Corp. is a stock holding company whose sole asset
is its 100% membership interest in 162-164 82nd Street LLC, which
owns a residential apartment building on the Upper East Side
containing 37 units, most of which are free market. The Property
has a monthly rent roll of $81,189.
162-164 82nd Street will be filing a separate Chapter 11 petition
imminently so that the subject property itself is subject to
Bankruptcy Court jurisdiction, according to David Goldwasser, the
manager.
Mr. Goldwasser is currently the manager of both 77 Varet and
162-164 82nd Street .
According to court filing, 77 Varet Holding estimated debt of less
than $10 million and between 1 and 49 unsecured creditors. The
petition states that funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 24, 2022, at 2:00 PM at Teleconference - Brooklyn.
About 77 Varet Holding Corp.
77 Varet Holding Corp. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42316) on Sept.
21, 2022. In the petition filed by David Goldwasser, as manager,
the Debtor reported assets between $10 million and $50 million and
liabilities between $1 million and $10 million.
The Debtor is represented by Kevin J Nash of Goldberg Weprin Finkel
Goldstein LLP.
942 PENN RR: Wins Access to Cash Collateral
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The U.S. Bankruptcy Court for the Southern District of Florida
authorized Barry E. Mukamal, the Chapter 11 Trustee of 942 Penn RR,
LLC, to use the cash collateral of 1250916 Ontario Limited and
Immokalee Real Estate Holdings, LLC, on a final basis.
The Trustee is permitted to use the cash collateral from the date
of his appointment, June 27, 2022, in the manner set forth in the
Initial Budget, with a 20% variance.
To the extent it is determined Immokalee and Ontario possess valid,
perfected, enforceable, and otherwise non-avoidable liens,
Immokalee and Ontario are granted properly perfected, valid and
enforceable security interests in post-petition collateral, which
are not subject to any claims, counterclaims, defenses, setoff,
recoupment, or deduction, and which are otherwise unavoidable and
not subject to recharacterization or subordination pursuant to any
provision of the Code, any agreement, or applicable non-bankruptcy
law, for the benefit of Immokalee and Ontario, with the same
validity and priority their prepetition liens attached to the
prepetition collateral.
The Replacement Liens will (1) be properly perfected, valid and
enforceable liens without any further action by Debtor, Trustee or
Immokalee and Ontario and without the execution, filing or
recordation of any financing statements, security agreements,
mortgages or other documents or instruments; and (2) remain in full
force and effect notwithstanding any subsequent conversion or
dismissal of the case.
Any Replacement Liens granted will be at all times subject and
junior to all unpaid fees due to the Office of the United States
Trustee pursuant to 28 U.S.C. section 1930; and all unpaid fees
required to be paid to the Clerk of the Bankruptcy Court. The
Trustee is authorized to pay fees due to the Office of the United
States Trustee pursuant to 28 U.S.C. section 1930.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3foPRNS from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$79,491 for the month ending August 26, 2022;
$60,785 for the month ending September 30, 2022;
$49,871 for the month ending October 28, 2022;
$66,669 for the month ending November 25, 2022;
$127,353 for the month ending December 30, 2022;
$65,794 for the month ending January 27, 2023;
$56,501 for the month ending February 24, 2023;
$84,261 for the month ending March 31, 2023;
$93,490 for the month ending April 28, 2023;
$55,559 for the month ending May 26, 2023;
$62,864 for the month ending June 30, 2023; and
$59,961for the month ending March 31, 2023.
About 942 Penn RR
942 Penn RR, LLC is the fee simple owner of a real property also
known as 942 Pennsylvania, Avenue, Miami Beach, Fla., valued at
$1.62 million.
942 Penn RR filed its voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-14038) on
May 23, 2022. In the petition filed by Raziel Ofer, manager, the
Debtor disclosed $1,617,630 in total assets and $27,179,541 in
total liabilities.
Judge Robert A. Mark oversees the case.
The Law Office of Mark S. Roher, PA serves as the Debtor's
counsel.
ABPCI DIRECT XI: Fitch Assigns 'BB-(EXP)' Rating on Class E Debt
----------------------------------------------------------------
Fitch Ratings has assigned expected ratings and Rating Outlooks to
ABPCI Direct Lending Fund CLO XI LP.
Debt Rating
---- ------
ABPCI Direct Lending Fund CLO XI LP
A-1 LT AAA(EXP)sf Expected Rating
A-2 LT AAA(EXP)sf Expected Rating
A-L LT AAA(EXP)sf Expected Rating
B-1 LT AA(EXP)sf Expected Rating
B-2 LT AA(EXP)sf Expected Rating
C LT A-(EXP)sf Expected Rating
D LT BBB-(EXP)sf Expected Rating
E LT BB-(EXP)sf Expected Rating
Partnership Interests LT NR(EXP)sf Expected Rating
TRANSACTION SUMMARY
ABPCI Direct Lending Fund CLO XI LP (the issuer) is a middle-market
(MM) collateralized loan obligation (CLO) that will be managed by
AB Private Credit Investors LLC. Net proceeds from the issuance of
the secured notes and partnership interests will provide financing
on a portfolio of approximately $400.0 million of primarily first
lien senior secured MM loans.
KEY RATING DRIVERS
Asset Credit Quality (Negative): The average credit quality of the
indicative portfolio is 'B-', which is in line with that of recent
MM CLOs. The weighted average rating factor (WARF) of the
indicative portfolio is 31.44 versus a maximum covenant, in
accordance with the initial expected matrix point of 34.35. Issuers
rated in the 'B' rating category denote a highly speculative credit
quality; however, the debt benefits from appropriate credit
enhancement and standard U.S. MM CLO structural features.
Asset Security (Positive): The indicative portfolio consists of
100% first lien senior secured loans. The weighted average recovery
rate (WARR) of the indicative portfolio is 64.5% versus a minimum
covenant, in accordance with the initial expected matrix point of
63.05%.
Portfolio Composition (Positive): The largest three industries may
constitute up to 47.0% of the portfolio balance in aggregate, while
the top five obligors can represent up to 15.0% of the portfolio
balance in aggregate. The level of diversity required by industry,
obligor and geographic concentrations is in line with other recent
U.S. MM CLOs'.
Portfolio Management (Neutral): The transaction has a 4.1-year
reinvestment period and reinvestment criteria similar to other U.S.
MM CLOs'. Fitch's analysis was based on a stressed portfolio
created by making adjustments to the indicative portfolio to
reflect permissible concentration limits and collateral quality
test levels.
Cash Flow Analysis (Positive): Fitch used a customized proprietary
cash flow model to replicate the principal and interest waterfalls,
and assess the effectiveness of various structural features of the
transaction. In its stress scenarios at the initial expected matrix
point, each class of debt can withstand default rates and recovery
assumptions consistent with other recent Fitch-rated CLO notes. The
performance of all classes of debt at the other permitted matrix
points will be analyzed as part of the final rating analysis.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Variability in key model assumptions, such as decreases in recovery
rates and increases in default rates, could result in a downgrade.
Fitch evaluated the notes' sensitivity to potential changes in such
metrics. The results under these sensitivity scenarios are between
'BBB+sf' and 'AAAsf' for class A, between 'BB+sf' and 'AAAsf' for
class B, between 'B+sf' and 'A+sf' for class C, between less than
'B-sf' and 'BBBsf' for class D, and between less than 'B-sf' and
'BB-sf' for class E.
Fitch also evaluated the notes' sensitivity to the potential
decrease in recovery prospects and excess spread due to optional
substitutions. Results under these sensitivity scenarios are
between 'AA+sf' and 'AAAsf' for class A, between 'AA-sf' and
'AAAsf' for class B, between 'BBB+sf' and 'A+sf' for class C,
between 'BB+sf' and 'BBB+sf' for class D and between 'BB-sf' and
'BB+sf' for class E.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Upgrade scenarios are not applicable to class A notes, as these
notes are in the highest rating category of 'AAAsf'.
At other rating levels, variability in key model assumptions, such
as increases in recovery rates and decreases in default rates,
could result in an upgrade. Fitch evaluated the notes' sensitivity
to potential changes in such metrics; results under these
sensitivity scenarios are 'AAAsf' for class B notes, between 'A+sf'
and 'AAAsf' for class C notes, between 'A-sf' and 'A+sf' for class
D notes, and between 'BBB-sf' and 'BBB+sf' for class E notes.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
DATA ADEQUACY
The majority of the underlying assets or risk-presenting entities
have ratings or credit opinions from Fitch and/or other Nationally
Recognized Statistical Rating Organizations and/or European
Securities and Markets Authority registered rating agencies. Fitch
has relied on the practices of the relevant groups within Fitch
and/or other rating agencies to assess the asset portfolio
information.
Overall, Fitch's assessment of the asset pool information relied
upon for the agency's rating analysis according to its applicable
rating methodologies indicates that it is adequately reliable.
ADJOY INC: ABC Services Says Bids for IP Assets Due Oct. 21
-----------------------------------------------------------
ABC Services Group Inc., assignee of Adjoy Inc d/b/a Dabbl
("seller"), is soliciting competing offers to sell the intellectual
property assets of Adjoy Inc. Bids must be submitted no later than
5:00 p.m. (EDT) on Oct. 21, 2022. Further information on the sale
and bid procedures, visit the web site at https://bit.ly/abc-adbble
or contact:
Charles Klaus
ABC Services Inc.
Tel: (949) 922-1211
Email: chuck@abcservices.group
Adjoy Inc. -- http://www.getdabbl.com/-- engages in an easy-to-use
mobile application that lets users earn money by completing
interactive games, quizes, surveys & videos provided by
advertisers.
ALL FLORIDA: Seeks Cash Collateral Access
-----------------------------------------
All Florida Safety Institute, LLC asks the U.S. Bankruptcy Court
for the Middle District of Florida, Jacksonville Division, for
authority to use cash collateral.
The Debtor requires the use of cash collateral to meet
post-petition contractual and tax obligations related to payroll,
inventory and equipment owned by the Debtor and ongoing business
operations.
The Debtor executed a Promissory Note, Chattel Mortgage and
Security Agreement to the United States of America c/o Small
Business Association in the original principal amount of $2,100,000
in which the rents, accounts receivables, chattel paper, contracts,
documents, cash, bank accounts, etc. were pledged as collateral.
The Debtor executed a Promissory Note, Chattel Mortgage and
Security Agreement to Westlake Flooring Company in the original
principal amount of $500,000 in which the rents, accounts
receivables, chattel paper, contracts, documents, cash, bank
accounts, etc. were pledged as collateral.
Other parties that assert an interest in the cash collateral are
NewCo c/o Corporation Service Co., Samson Horus, Cloudfund LLC,
Franklin Capital Management, LLC, CT Corporation, Pawn Funding, Ark
Capital, LCA Bank Corporation, CHTD Company, and IOU Corporation
Service Company.
The Debtor is willing to enter into an agreement with the two
primary secured creditors, SBA and Westlake, to provide a
post-petition replacement lien of a continuing nature on all
post-petition accruing cash collateral to the secured creditor.
The Debtor will also make payments of $6,164.40 per month to the
SBA and $14,938 per month to Westlake commencing November 1, 2022,
and on the first of the month thereafter or further Court order.
About All Florida Safety Institute, LLC
All Florida Safety Institute, LLC offers driving lessons, driver's
license testing and traffic school. The Debtor sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case
No. 22-01926) on September 22, 2022. In the petition signed by Mark
Allen, manager, the Debtor disclosed $2,200,185 in assets and
$5,618,570 in liabilities.
Bryan K. Mickler, Esq., at Law Offices of Mickler & Mickler, LLP,
is the Debtor's counsel.
ALLTECH INC: S&P Affirms 'B' Issuer Credit Rating, Outlook Stable
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S&P Global Ratings affirmed all its ratings on feed and specialty
ingredients manufacturer Alltech Inc., including its 'B' issuer
credit rating.
S&P said, "The stable outlook reflects our expectation for the
company's margins to rebound once price increases lap a full year
and for annual free operating cash (FOCF) to remain positive
enabling leverage to decline below 6.5x over the next 12 months.
"Leverage is slightly above our downgrade threshold but should
decline by the first half of 2023. S&P Global Ratings-adjusted
EBITDA through the first half of fiscal 2022 declined 30%
year-over-year reflecting higher raw material costs for corn, yeast
products, and various other minerals used in the company' specialty
ingredients segment. Higher delivery costs and an unfavorable mix
to lower margin premixes in its U.S. ingredients business also led
to the decline. This has resulted in an increase in S&P Global
Ratings-adjusted debt to EBITDA to 6.6x for the 12 months ended
June 30, 2022, compared with a ratio of 5.8x at fiscal year-end
2021. Still the company has aggressively increased pricing in its
ingredient business and is starting to see margins restored to
historical levels in that segment while its largest nutrition
segment is largely pass-through and unit margins in that segment
have mostly been restored to historical levels. In addition, the
company has been able to fund a record working capital build of
about $100 million over the past 12 months without increasing debt
as the company's cash balances following its recapitalization last
year have been sufficient to fund working capital.
"As the company's pricing actions take hold, working capital
unwinds, and cost savings from the relocation of less efficient
U.S. plants to more affordable and better located regions to end
customers outside the U.S., we expect cash balances to be restored
and leverage to decline closer to 6x midway through fiscal 2023 and
below 6x by fiscal year-end 2023."
The company has comparatively better interest coverage for a highly
leverage capital structure because about a quarter of its adjusted
debt consists of payment-in-kind (PIK) preferred shares. In
addition to not further drawing on its revolver since its
recapitalization transaction last year to avoid incurring higher
interest expense, the company has locked in its variable interest
debt at favorable terms. This, coupled with a significant portion
of PIK preferred equity in the company capital structure (about
1.5x of our 6.6x trailing-12-month adjusted debt to EBITDA ratio is
from the preferred equity that is redeemable in the short term and
therefore debt-like) has kept the company's debt service
comparatively better than its adjusted leverage. Trailing-12-month
funds for operating (FFO) covered cash interest by 3.2x and we
don't expect cash interest coverage to materially decline in the
coming quarters given the company's prudent avoidance of
incremental debt during the unprecedented large working capital
build of the past several quarters. In addition, we expect the
company to be modestly free operating cash positive in the second
half of 2022 and to largely unwind its working capital next year
and rebuild its cash balances close to or above $100 million. S&P
continues to expect the company will use a portion of this cash to
start paying down it preferred equity balances when those shares
become redeemable in 2023.
Alltech benefits from favorable global demand for feed and
specialty ingredients, but it remains a niche player competing
against larger peers. The company operates in the animal nutrition
ingredients and feed markets, which have favorable growth
prospects. According to Mordor Intelligence (data provided by the
company), the global nutritional ingredients market totaled about
$30 billion in market revenue in 2020, and it is expected to reach
about $40 billion by 2025. These favorable growth trends are
bolstered by population growth, rising protein consumption, and
regulatory, sustainability, and technology advancements in food
consumption. Alltech's products add nutritional value naturally,
which is a favorable selling point for protein producers, and they
are supported by demand for all-natural, organic, and
antibiotic-free food. Alltech's R&D (about 1% of revenues)
capabilities develop products with high benefits for the animal
with an overall lower percent of cost to the farmer resulting in
stickier customer relationships.
Despite facing a decline in U.S. cattle herds in the current U.S.
cattle cycle, the company is geographically diverse and its product
portfolio should also allow it to leverage the favorable industry
growth outlook globally. Still, Alltech remains a niche player that
competes with peers that have much larger scale and financial
flexibility. Cargill Inc. and Land O'Lakes Inc. both have greater
scale, which could be leveraged for growth on the higher-margin
specialty ingredients side of the business through acquisitions
such as Cargill's acquisition of Diamond V in 2017. Therefore, S&P
believes Alltech may find it difficult to grow share materially in
the U.S.
S&P said, "The stable outlook reflects our expectation for a
material rebound in EBITDA to historical levels by the first half
of fiscal 2023 as the company's pricing in its specialty
ingredients segment laps a full year, input cost inflation abates,
and its cost-savings initiatives take hold. Although we expect debt
to EBITDA to remain elevated and approach 7x by fiscal year-end
Dec. 31, 2022, it should decline well below 6.5x midway through
fiscal 2023 while FFO cash interest remains above 3x and improves
to 4x for the same two respective periods."
S&P could consider lowering the ratings if FOCF remains negative
into fiscal 2023 causing debt balances to increase and FFO cash
interest coverage to fall below 2.5x. This could result from either
of the following:
-- The company experiences another significant increase in its
commodity costs, specialty ingredients margin contraction, or
unforeseen supply chain disruption. S&P estimates that if any of
these events occur, it could lead to a gross margin contraction of
more than 300 basis points.
-- Alltech raises more debt for either a large acquisition or
shareholder returns, increasing the company's cash interest
burden.
-- S&P could consider raising the ratings if Alltech sustains
leverage below 5x, restores positive FOCF, and sustainably
strengthens financial performance. A higher rating would also be
predicated on the company's commitment to manage leverage below 5x.
This could occur if Alltech uses discretionary cash flow to repay
debt and does not pursue additional debt-financed acquisitions.
ESG credit indicators: E-3, S-2, G-2
ARETE REHABILITATION: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Arete Rehabilitation, Inc.
26 Arlington St.
Amesbury, MA 01913-1704
Business Description: Arete specializes in providing Physical,
occupational & speech therapy.
Chapter 11 Petition Date: September 28, 2022
Court: United States Bankruptcy Court
District of New Hampshire
Case No.: 22-10477
Judge: Hon. Bruce A. Harwood
Debtor's Counsel: William J. Amann, Esq.
AMANN BURNETT PLLC
757 Chestnut St.
Manchester, NH 03104-3011
Tel: (603) 696-5401
Email: wamann@amburlaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Dr. Janet L. Mahoney as president, CEO,
and authorized party.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/3IM5IGI/Arete_Rehabilitation_Inc__nhbke-22-10477__0001.0.pdf?mcid=tGE4TAMA
AT HOME GROUP: S&P Downgrades ICR to 'B-', Outlook Negative
-----------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
home decor retailer At Home Group Inc. to 'B-' from 'B'.
S&P also lowered its ratings on the company's first-lien term loan
and senior secured notes to 'B-' from 'B' and its rating on its
senior unsecured notes to 'CCC' from 'CCC+'; the recovery ratings
are unchanged.
The negative outlook reflects the potential for a lower rating over
the next 12 months if anticipated cost improvements do not
materialize, delaying the rebound in earnings and cash flow that
S&P expects in fiscal 2024 and leading to a potentially
unsustainable capital structure.
At Home Group's second quarter sales and cash flow generation were
weaker than expected, reflecting freight cost pressures and lower
demand for discretionary home goods.
S&P said, "We expect conditions for home goods retailers to remain
weak and for At Home's S&P Global Ratings-adjusted leverage to
remain elevated at more than 7x through fiscal 2024 (ending January
2024).
"The downgrade reflects our expectation for elevated leverage and
softening demand this year, with slower improvements in fiscal 2024
than we previously anticipated.Freight costs heavily affected
profitability in the second quarter of fiscal 2023 (ending July 30,
2022), leading to a nearly 1,500-basis-point decline in the
company's adjusted EBITDA margin. These freight pressures come on
the back of weaker demand for home decor products, with
comparable-store sales declining in the high-single-digit
percentages in the second quarter. We expect elevated freight costs
to ease but continue to hurt profitability through at least the
first half of fiscal 2024. At the same time, we expect demand for
discretionary home merchandise to be soft amid a weaker economic
environment and a slower housing market. As a result, we now expect
At Home's leverage to remain high through next year at more than
7x.
"To mitigate these headwinds, At Home is using pricing actions and
undertaking supply chain initiatives, including contracting
directly with freight carriers to increase capacity and secure more
favorable rates, as well as geographically diversifying its
supplier base. While we expect these actions to partially mitigate
some cost pressures, we believe performance remains vulnerable to
weakening macroeconomic conditions."
At Home upsized its asset-based lending (ABL) facility in the
second quarter, which should provide sufficient liquidity to
withstand near-term cash burn. At Home has burned cash through the
first half of the year, with negative free operating cash flow (net
of proceeds from sale leasebacks) of more than $160 million for the
six months ended July 30, 2022. The company also recently upsized
its ABL by $275 million to $675 million. S&P said, "We believe the
incremental availability under the ABL will support the company's
adequate liquidity position. As of the second quarter, At Home
reported $18 million of cash on its balance sheet and more than
$280 million of availability under its revolving credit facility,
with no material upcoming maturities. Moreover, its ability to slow
its store expansion and generate good levels of cash, as it did at
the start of the COVID-19 pandemic, will likely enable it to
maintain sufficient liquidity, even under less-favorable operating
conditions. However, we expect some continued cash burn through the
end of this year as the company pursues a high in-stock inventory
strategy to increase consumer relevance. With freight costs still
high, we believe this could result in further ABL draws before the
holiday season."
At Home's position as a value retailer should support reasonable
ongoing demand, even in less favorable macroeconomic conditions.
The company's every-day-low-price (EDLP) strategy supports its
competitive position, particularly during weaker economic periods,
when consumers often look to trade-down their purchases. Moreover,
At Home is stepping up its advertising spending in fiscal 2023 to
support brand awareness in a slowing economic environment. S&P
said, "While this could support demand and drive further market
share gains, we see significant risk that high inflation will
diminish consumer confidence and reduce demand for highly
discretionary categories--such as home decor--beyond our current
expectations. Moreover, the home decor industry remains highly
competitive, and At Home's omnichannel platform lags those of
retail peers despite the company having expanded its online
offerings through the pandemic. In our view, At Home will need to
remain focused on its omnichannel capabilities to effectively
compete with e-commerce retailers (such as Wayfair and Amazon) and
larger peers with extensive omnichannel platforms, including
Walmart Inc. and Target."
S&P said, "The negative outlook reflects the potential for a
downgrade if cash burn extends beyond our expectations putting
pressure on liquidity or if profitability does not rebound
sufficiently, resulting in an unsustainable capital structure.
"We could lower the rating if At Home's operating prospects remain
weak and we do not see a path for leverage to decline
significantly, or if we expect free operating cash flow (FOCF) to
remain meaningfully negative, resulting in an unsustainable capital
structure.
"We could revise the outlook to stable if we believe At Home were
on track to reduce leverage below 7x in the next year and liquidity
remained adequate with improving cash flow prospects. Given its
growth strategy, we would also expect the company to fund store
growth largely through internally generated cash flows, reserving
the ABL for unforeseen liquidity needs."
ESG credit indicators: E-2, S-2, G-3
AVANTOR INC: Fitch Alters Outlook on 'BB' IDR to Positive
---------------------------------------------------------
Fitch Ratings has affirmed Avantor, Inc.'s and Avantor Funding,
Inc.'s Long-Term Issuer Default Ratings (IDRs) at 'BB'. The Rating
Outlook is revised to Positive from Stable.
The Positive Outlook reflects the company's continued strong
operating performance, evidenced by mid-teens top-line growth in FY
2021 and improving EBITDA margins, a strong FCF and liquidity
profile, and continued deleveraging to below 4.5x gross debt/EBITDA
(leverage). Fitch recognizes that reported sales growth is likely
to moderate in FY 2022 primarily due to COVID and FX headwinds, and
expects the company to deleverage further via EBITDA growth to
below 4.0x over the next 12-18 months. Fitch further sees
sufficient flexibility within the mid- to high-'BB' range for
Avantor to fund growth both internally and externally. The ratings
apply to roughly $6.5 billion of debt outstanding at June 30,
2022.
KEY RATING DRIVERS
Manageable Macroeconomic Pressures: Fitch views Avantor's business
profile as resilient because of good end market diversification,
non-cyclical demand for healthcare products, and its large share of
recurring revenues. Demand from biopharma end markets has remained
robust through the pandemic and a challenging macroeconomic
environment. Demand is fueled by rapid growth of R&D activities in
new therapeutic modalities including cell & gene therapy and mRNA,
spanning multiple disease areas and research spaces. Fitch does not
anticipate a reduction in demand in the short to medium term.
The Advanced Technologies & Applied Materials end markets have seen
more volatility over the past two years, but because of the
diversity of the end market applications in both industrial and
non-industrial settings, particularly in Semiconductors and
Aerospace & Defense, demand for the company's products is expected
to remain relatively stable.
Strong Competitive Position and Good Diversification: Avantor is
well diversified through end markets and product categories, with
biopharma representing about 50% of sales. Advanced Technologies &
Applied Materials end markets contribute approximately 25% of sales
and include a mix of more-cyclical end markets that benefit from
highly-recurring consumable sales.
Consistent cash generation is supported through highly-diversified
consumables- and service-focused revenues representing roughly 85%
of sales, and more limited exposure to equipment and
instrumentation (roughly 15% of sales) versus peers. Fitch expects
the company's strength and diversification in high-growth end
markets is likely to offset slower growth in cyclical end markets,
resulting in single-digit revenue growth, which is above life
sciences market growth.
Continued Margin Expansion: Avantor has consistently delivered
margin expansion since its IPO, increasing Fitch-adjusted EBITDA
margin by over 300 bps from 17.1% in FY 2018 to 20.2% in FY 2021.
This improvement in profitability has been driven by commercial
excellence, acquisitions of higher-margin assets, and a continuing
shift in mix toward proprietary products. Fitch expects the company
to continue to expand Fitch-adjusted EBITDA margin by 50-100 bps
annually over the rating horizon.
Recent Deleveraging Provides M&A Capacity: Avantor continues to
deleverage after its acquisitions of Ritter and Masterflex in 2021,
both via disciplined debt reduction and EBITDA growth. Gross debt
was 4.7x EBITDA at YE 2021, and Fitch forecasts leverage of 4.1x at
YE 2022. Fitch considers gross leverage of 4.0x-4.5x in line with
the 'BB' IDR. The Positive Outlook further reflects Fitch's
expectation that continued deleveraging below 4.0x is likely, given
management's long-term public goal to continue to reduce net
leverage to 2x-4x and the financial flexibility to achieve this
goal. The company has successfully reduced debt since its merger
with VWR and is on track in reducing debt incurred in its
acquisitions in 2021.
Fitch expects Avantor to maintain an acquisitive posture given the
fragmented nature of the industry, which may forestall when, and
how long, the company operates with lower leverage. The company is
likely to focus on targets that fill potential gaps in its product
portfolio and/or augment its market positions and footprint as
opposed to entering entirely new markets. Fitch's forecast suggests
roughly $4 billion - $5 billion in M&A capacity over the rating
horizon, considering annual FCF exceeding $850 million and the
company's target net leverage of below 4.0x. Fitch notes that the
company is willing to temporarily deviate from its target leverage
range for high-conviction acquisition opportunities.
DERIVATION SUMMARY
Avantor's strongest competitors are significantly larger, with
leading positions in the broader life sciences industry and greater
financial flexibility. Thermo Fisher (BBB+/Stable) is Avantor's
closest peer within the lab products industry. Thermo Fisher, a
direct distribution competitor, is materially larger than Avantor,
has an industry-leading manufacturing business, and is more
conservatively capitalized. Other low to mid-'BB' rated healthcare
companies operating in different industry subsectors typically have
leverage sensitivities in the 4.0x-5.0x range.
KEY ASSUMPTIONS
- Organic revenue growth in the mid-single-digits;
- Annual EBITDA margin expansion of 50-100bps from that in FY
2021;
- Annual capex of $120 million - $140 million;
- $5 billion in M&A, funded with cash on hand and debt issuance,
and no share buybacks or dividends;
- Annual FCF exceeding $850 million.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Operating with gross debt/EBITDA sustained below 4.0x;
- Continued operational strength that results in (cash flow from
operations - capex)/total debt around or above 9%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Operating with gross debt/EBITDA sustained above 4.5x;
- Margin pressure or missteps with M&A-related integration
resulting in (cash flow from operations - capex)/total debt
sustained below 7.5%.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Liquidity is supported by cash on hand of
$238 million and full availability of its $515 million first-lien
secured revolver due 2025 as of June 30, 2022. Avantor's senior
secured credit facility does not include financial maintenance
covenants aside from a springing first lien net leverage covenant
of 7.35x if 35% of the revolver is drawn. Additionally, working
capital needs are supported by a $300 million accounts receivable
securitization facility, of which $76 million was available at June
30, 2022.
Manageable Debt Maturities: The company's debt maturities and
amortization are manageable, with no debt due in the next 12 months
other than required term loan payments of roughly $30 million and
receivables facility debt of $210 million. Fitch does not
anticipate significant continuing debt reduction and expects the
company is likely to refinance most of its maturities rather than
repay them outright.
ISSUER PROFILE
Avantor, Inc. is a leading global provider of mission critical
products and services to customers in the biopharma, healthcare,
education & government, and advanced technologies & applied
materials industries. Offerings include materials & consumables,
equipment & instrumentation and services & specialty procurement.
SUMMARY OF FINANCIAL ADJUSTMENTS
Adjustments were made for stock-based compensation as well as
acquisition, integration, and restructuring related expenses.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
Avantor Funding, Inc. LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed RR4 BB
senior secured LT BB+ Affirmed RR2 BB+
Avantor, Inc. LT IDR BB Affirmed BB
AVANTOR INC: Fitch Alters Outlook on 'BB' IDR to Positive
---------------------------------------------------------
Fitch Ratings has affirmed Avantor, Inc.'s and Avantor Funding,
Inc.'s Long-Term Issuer Default Ratings (IDRs) at 'BB'. The Rating
Outlook is revised to Positive from Stable.
The Positive Outlook reflects the company's continued strong
operating performance, evidenced by mid-teens top-line growth in FY
2021 and improving EBITDA margins, a strong FCF and liquidity
profile, and continued deleveraging to below 4.5x gross debt/EBITDA
(leverage). Fitch recognizes that reported sales growth is likely
to moderate in FY 2022 primarily due to COVID and FX headwinds, and
expects the company to deleverage further via EBITDA growth to
below 4.0x over the next 12-18 months. Fitch further sees
sufficient flexibility within the mid- to high-'BB' range for
Avantor to fund growth both internally and externally. The ratings
apply to roughly $6.5 billion of debt outstanding at June 30,
2022.
KEY RATING DRIVERS
Manageable Macroeconomic Pressures: Fitch views Avantor's business
profile as resilient because of good end market diversification,
non-cyclical demand for healthcare products, and its large share of
recurring revenues. Demand from biopharma end markets has remained
robust through the pandemic and a challenging macroeconomic
environment. Demand is fueled by rapid growth of R&D activities in
new therapeutic modalities including cell & gene therapy and mRNA,
spanning multiple disease areas and research spaces. Fitch does not
anticipate a reduction in demand in the short to medium term.
The Advanced Technologies & Applied Materials end markets have seen
more volatility over the past two years, but because of the
diversity of the end market applications in both industrial and
non-industrial settings, particularly in Semiconductors and
Aerospace & Defense, demand for the company's products is expected
to remain relatively stable.
Strong Competitive Position and Good Diversification: Avantor is
well diversified through end markets and product categories, with
biopharma representing about 50% of sales. Advanced Technologies &
Applied Materials end markets contribute approximately 25% of sales
and include a mix of more-cyclical end markets that benefit from
highly-recurring consumable sales.
Consistent cash generation is supported through highly-diversified
consumables- and service-focused revenues representing roughly 85%
of sales, and more limited exposure to equipment and
instrumentation (roughly 15% of sales) versus peers. Fitch expects
the company's strength and diversification in high-growth end
markets is likely to offset slower growth in cyclical end markets,
resulting in single-digit revenue growth, which is above life
sciences market growth.
Continued Margin Expansion: Avantor has consistently delivered
margin expansion since its IPO, increasing Fitch-adjusted EBITDA
margin by over 300 bps from 17.1% in FY 2018 to 20.2% in FY 2021.
This improvement in profitability has been driven by commercial
excellence, acquisitions of higher-margin assets, and a continuing
shift in mix toward proprietary products. Fitch expects the company
to continue to expand Fitch-adjusted EBITDA margin by 50-100 bps
annually over the rating horizon.
Recent Deleveraging Provides M&A Capacity: Avantor continues to
deleverage after its acquisitions of Ritter and Masterflex in 2021,
both via disciplined debt reduction and EBITDA growth. Gross debt
was 4.7x EBITDA at YE 2021, and Fitch forecasts leverage of 4.1x at
YE 2022. Fitch considers gross leverage of 4.0x-4.5x in line with
the 'BB' IDR. The Positive Outlook further reflects Fitch's
expectation that continued deleveraging below 4.0x is likely, given
management's long-term public goal to continue to reduce net
leverage to 2x-4x and the financial flexibility to achieve this
goal. The company has successfully reduced debt since its merger
with VWR and is on track in reducing debt incurred in its
acquisitions in 2021.
Fitch expects Avantor to maintain an acquisitive posture given the
fragmented nature of the industry, which may forestall when, and
how long, the company operates with lower leverage. The company is
likely to focus on targets that fill potential gaps in its product
portfolio and/or augment its market positions and footprint as
opposed to entering entirely new markets. Fitch's forecast suggests
roughly $4 billion - $5 billion in M&A capacity over the rating
horizon, considering annual FCF exceeding $850 million and the
company's target net leverage of below 4.0x. Fitch notes that the
company is willing to temporarily deviate from its target leverage
range for high-conviction acquisition opportunities.
DERIVATION SUMMARY
Avantor's strongest competitors are significantly larger, with
leading positions in the broader life sciences industry and greater
financial flexibility. Thermo Fisher (BBB+/Stable) is Avantor's
closest peer within the lab products industry. Thermo Fisher, a
direct distribution competitor, is materially larger than Avantor,
has an industry-leading manufacturing business, and is more
conservatively capitalized. Other low to mid-'BB' rated healthcare
companies operating in different industry subsectors typically have
leverage sensitivities in the 4.0x-5.0x range.
KEY ASSUMPTIONS
- Organic revenue growth in the mid-single-digits;
- Annual EBITDA margin expansion of 50-100bps from that in FY
2021;
- Annual capex of $120 million - $140 million;
- $5 billion in M&A, funded with cash on hand and debt issuance,
and no share buybacks or dividends;
- Annual FCF exceeding $850 million.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Operating with gross debt/EBITDA sustained below 4.0x;
- Continued operational strength that results in (cash flow from
operations - capex)/total debt around or above 9%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Operating with gross debt/EBITDA sustained above 4.5x;
- Margin pressure or missteps with M&A-related integration
resulting in (cash flow from operations - capex)/total debt
sustained below 7.5%.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: Liquidity is supported by cash on hand of
$238 million and full availability of its $515 million first-lien
secured revolver due 2025 as of June 30, 2022. Avantor's senior
secured credit facility does not include financial maintenance
covenants aside from a springing first lien net leverage covenant
of 7.35x if 35% of the revolver is drawn. Additionally, working
capital needs are supported by a $300 million accounts receivable
securitization facility, of which $76 million was available at June
30, 2022.
Manageable Debt Maturities: The company's debt maturities and
amortization are manageable, with no debt due in the next 12 months
other than required term loan payments of roughly $30 million and
receivables facility debt of $210 million. Fitch does not
anticipate significant continuing debt reduction and expects the
company is likely to refinance most of its maturities rather than
repay them outright.
ISSUER PROFILE
Avantor, Inc. is a leading global provider of mission critical
products and services to customers in the biopharma, healthcare,
education & government, and advanced technologies & applied
materials industries. Offerings include materials & consumables,
equipment & instrumentation and services & specialty procurement.
SUMMARY OF FINANCIAL ADJUSTMENTS
Adjustments were made for stock-based compensation as well as
acquisition, integration, and restructuring related expenses.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
Avantor Funding, Inc. LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed RR4 BB
senior secured LT BB+ Affirmed RR2 BB+
Avantor, Inc. LT IDR BB Affirmed BB
AVERY ASPHALT: Seeks Cash Collateral Access Thru Oct 7
------------------------------------------------------
Avery Asphalt, Inc. and its affiliates ask the U.S. Bankruptcy
Court for the District of Colorado, for authority to use cash
collateral for the period of August 1 to October 7, 2022.
In order to facilitate the sale of the business as a going concern,
the Debtor will need to continue operations through the anticipated
date the sale can be closed which is estimated to be October 7,
2022. The Debtor asserts that it needs to use cash collateral to
permit, among other things, the orderly sale of its business and
assets, to make payroll, and to satisfy other working capital
needs. The Debtor further claims that the ability of the Debtor to
obtain sufficient working capital and liquidity through use of cash
collateral is vital to the preservation and maintenance of the
going concern value of the Debtor's business.
Sunflower Bank, N.A., Greenline CDF Subfund XXIII LLC, and
Nationwide Mutual Insurance Company assert that they have valid,
perfected security interests in substantially all the Debtors'
personal property, including, but not limited to the Debtors'
accounts, equipment, general intangibles, inventory, proceeds
thereof and other assets.
Nationwide asserts that in addition to its perfected security
interest created by the UCC-1 financing statement that Nationwide
filed, Nationwide also asserts rights of equitable subrogation on
all bonded contract funds, which is not a security interest
requiring perfection pursuant to a UCC-1 financing statement and
which Nationwide asserts is superior to any perfected security
interest.
Sunflower asserts that it was first to file UCC-1 financing
statements against the Debtors and claims to have a first-priority
consensual security interest in the Debtors' the Pre-Petition
Personal Property. Greenline asserts it has a valid second-priority
consensual security interest in the Debtors' Pre-Petition Personal
Property. Nationwide, which Sunflower and Greenline assert recorded
its UCC-1 financing statements after Sunflower and Greenline,
issued certain payment and performance bonds for the Debtors'
benefit and claims it has senior rights with respect certain
assets.
Sunflower Bank and Travelers Indemnity Company have objected to the
Debtor's bid to access cash collateral.
In response to the concerns raised by Travelers and Sunflower, the
Debtor has proposed a modified budget and proposed cash collateral
order and submitted to the Court an amended request. The proposed
order contains these terms:
a. Budget. The Debtor is authorized to use cash collateral for
the period from August 1 through October 7, 2022 pursuant to the
Budget, with a line-item variance of no more than 15% per month and
an overall budget variance of no more than 15% in the aggregate per
month. The estimated expenses may exceed these limits with prior
written approval from Sunflower. The Debtor will pay $150,000 to
Sunflower as adequate protection within five business days
following entry of the Cash Collateral Order.
b. Adequate Protection Liens. Each of the Secured Parties are
granted replacement liens and security interest upon the Debtor's
post-petition assets with the same priority and validity as
Sunflower's, Greenline's, and Nationwide's pre-petition liens and
security interests to the extent of the Debtor's post-petition use
of cash on hand and the proceeds of Pre-Petition Personal Property,
if any.
c. Limitation on Adequate Protection Liens. Each of the
Secured Party's Adequate Protection Liens will be limited to the
extent of value of such Secured Party's, interest, if any, in the
estate's interest in the Pre-Petition Personal Property as set
forth under Section 506(a) of the Bankruptcy Code.
d. Other Protection. To the extent that the Adequate
Protection Liens prove to be insufficient, each of the Secured
Parties, as may be applicable, will be granted superpriority
administrative expense claims under section 507(b) of the
Bankruptcy Code but only to the extent that such Secured Party has
a valid allowed secured claim under section 506(a) in the cash
collateral used. To the extent the Debtor receives any proceeds for
contracts on projects bonded by Nationwide, such funds will be
segregated, held in trust, and may only be used with the written
consent of the Secured Parties or pursuant to further Court order.
e. Insurance. The Debtors will pay $30,000 to Travelers within
five business days following entry of the Cash Collateral Order.
f. Trust Fund Taxes. The Debtors will pay all Post-Petition
federal and state payroll, withholding, sales, use, personal
property, real property, and other taxes and assessments of any
kind when due and owing under applicable law in the amounts as set
forth in the Budget, if any. Secured Parties will not be
responsible for the payment of such taxes and assessments under any
conditions.
g. Expiration of the Order. Debtor's right to use cash
collateral pursuant to the terms of the order will terminate upon
the earlier of (a) the default by Debtor under any terms of this
Order and (b) October 7, 2022.
A copy of the motion is available at https://bit.ly/3Spx9UA from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3BZUmXX from
PacerMonitor.com.
The Debtor projects $727,771 in total cash and $450,000 in total
expenses.
About Avery Asphalt, Inc.
Avery Asphalt, Inc. is the main operating company and installs,
maintains, and improves roadways, parking lots, and other outdoor
surfaces. Avery Equipment, LLC owns the equipment used in Avery
Asphalt's business. Avery Holdings, LLC owns the real estate used
in Avery Asphalt's business. LBLA Ventures, Inc. is the holding
company for a non-operating Arizona asphalt company and 1401 S.
22nd Ave., LLC owns the real estate that was formerly used by
Regional Pavement Maintenance of Arizona, Inc. in its business.
Avery Asphalt and its affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Colo. Lead Case No.
21-10799) on February 19, 2021. The bankruptcy was filed after a
receiver was appointed for all the Debtors. The receivership
hampered Avery Asphalt's ability to operate profitably.
In the petition signed by CEO Aaron Avery, the Debtors disclosed up
to $50,000 in assets and up to $10 million in liabilities.
Judge Michael E. Romero oversees the case.
David J. Warner, Esq., at Wadsworth Garber Warner Conrardy, P.C. is
the Debtor's counsel.
BAYOU CYPRESS: Wins Interim Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Tennessee,
Nashville Division, authorized Bayou Cypress Restaurants, Inc. to
use cash collateral on an interim basis.
The Debtor is permitted to use cash collateral in the ordinary
course of business provided that the use of cash collateral:
a. is for post-petition expenses only,
b. follows the amended budget included with the Debtor's
Expedited Motion to Utilize Cash Collateral, and
c. does not result in the Debtor having less money in deposits
than the Debtor had on the Petition Date.
Volunteer State Bank and the Small Business Administration will
have a perfected post-petition lien against cash collateral to the
same extent and with the same validity and priority as their
respective prepetition liens, without the need to file or execute
any documents as may otherwise be required under applicable
non-bankruptcy law.
A second interim hearing on the matter is set for October 4, 2022,
at 9:30 a.m.
A copy of the order is available at https://bit.ly/3fh2MkB from
PacerMonitor.com.
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.
Judge Randal S. Mashburn oversees the case.
The Debtor is represented by Steven L. Lefkovitz, Esq., at
Lefkovitz and Lefkovitz, PLLC.
BERGIO INTERNATIONAL: Incurs $185K Net Loss in Second Quarter
-------------------------------------------------------------
Bergio International, Inc. filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $185,380 on $2.46 million of total net revenues for the three
months ended June 30, 2022, compared to a net loss of $1.92 million
on $2.14 million of total net revenues for the three months ended
June 30, 2021.
For the six months ended June 30, 2022, the Company reported a net
loss of $2.26 million on $4.55 million of total net revenues
compared to a net loss of $2.40 million on $3.28 million of total
net revenues for the same period during the prior year.
As of June 30, 2022, the Company had $9.92 million in total assets,
$4.41 million in total liabilities, and $5.51 million in total
stockholders' equity.
Bergio stated, "The Company has suffered recurring losses and has
an accumulated deficit of $17,587,581 as of June 30, 2022. As of
June 30, 2022, the Company has principal amounts of convertible
notes of $80,000, notes payable (current and long-term portion) of
$1,050,238 and loans payable of $923,465. These factors raise
substantial doubt about the Company's ability to continue as a
going concern. The recoverability of a major portion of the
recorded asset amounts shown in the accompanying unaudited
condensed consolidated balance sheet is dependent upon continued
operations of the Company, which in turn, is dependent upon the
Company's ability to raise capital and/or generate positive cash
flows from operations."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1431074/000121390022045870/f10q0622_bergiointer.htm
About Bergio International
Based in Fairfield, New Jersey, Bergio International, Inc. --
www.bergio.com -- designs, manufactures, and retails, jewelry
products.
Bergio reported a net loss of $3.56 million in 2021, a net loss of
$148,050 in 2020, and a net loss of $3.03 million in 2019. As of
March 31, 2022, the Company had $10.10 million in total assets,
$5.33 million in total liabilities, and $4.77 million in
total stockholders' equity.
Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
March 29, 2022, citing that the Company's significant operating
losses raise substantial doubt about its ability to continue as a
going concern.
BERGIO INTERNATIONAL: Registers for Sale 5 Billion Common Shares
----------------------------------------------------------------
Bergio International, Inc. filed a Form S-1 registration statement
with the Securities and Exchange Commission relating to an initial
public offering of 5,000,000,000 shares of its common stock, par
value $0.00001 per share.
This offering will terminate on the date which is 180 days from the
effective date of this prospectus, although the Company may close
the offering on any date prior if the offering is fully subscribed
or upon the vote of its board of directors.
The Company currently expects the initial public offering price of
the shares it is offering to be $0.0002 per share of its common
stock.
The Company is quoted on the OTC Pink market and there is a limited
established market for its stock. The Company noted that the
offering price of the shares has been determined arbitrarily by the
Company. The price does not bear any relationship to its assets,
book value, earnings, or other established criteria for valuing a
privately held company. In determining the number of shares to be
offered and the offering price, the Company took into consideration
its capital structure and the amount of money the Company would
need to implement its business plans. Accordingly, the offering
price should not be considered an indication of the actual value of
its securities.
The offering is being conducted on a self-underwritten, best
efforts basis, which means its management will attempt to sell the
shares being offered hereby on behalf of the Company. There is no
underwriter for this offering.
Completion of this offering is not subject to the Company raising a
minimum offering amount. The Company does not have an arrangement
to place the proceeds from this offering in an escrow, trust or
similar account. Any funds raised from the offering will be
immediately available to the Company for its immediate use.
A full-text copy of the prospectus is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1431074/000121390022058909/ea166094-s1_bergioint.htm
About Bergio International
Based in Fairfield, New Jersey, Bergio International, Inc. --
www.bergio.com -- designs, manufactures, and retails, jewelry
products.
Bergio reported a net loss of $3.56 million in 2021, a net loss of
$148,050 in 2020, and a net loss of $3.03 million in 2019. As of
March 31, 2022, the Company had $10.10 million in total assets,
$5.33 million in total liabilities, and $4.77 million in
total stockholders' equity.
Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
March 29, 2022, citing that the Company's significant operating
losses raise substantial doubt about its ability to continue as a
going concern.
BONA VISTA 1606: Taps Joel M. Aresty P.A. as Legal Counsel
----------------------------------------------------------
Bona Vista 1606, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of Florida to employ Joel M. Aresty, P.A.
as its legal counsel.
The firm's services include:
(a) advising the Debtor regarding its powers and duties and the
continued management of its business operations;
(b) advising the Debtor regarding its responsibilities in
complying with the U.S. trustee's operating guidelines and
reporting requirements and with the rules of the court;
(c) preparing legal documents;
(d) protecting the interest of the Debtor in all matters pending
before the court; and
(e) representing the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan.
The Debtor agreed to pay the sum of $11,000 as compensation for the
firm's services.
Joel Aresty, 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 firm can be reached at:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde FL 33715
Tel: (305) 904-1903
Fax: (800) 899-1870
Email: Aresty@Mac.com
About Bona Vista 1606
Bona Vista 1606, LLC filed a Chapter 11 bankruptcy petition (Bankr.
S.D. Fla. Case No. 22-16461) on Aug. 22, 2022, with up to $1
million in both assets and liabilities. Judge Robert A. Mark
oversees the case.
The Debtor is represented by Joel M. Aresty, P.A.
BORREGO COMMUNITY: U.S. Trustee Appoints Creditors' Committee
-------------------------------------------------------------
Tiffany Carroll, Acting U.S. Trustee for Region 15, on Sept. 26
appointed an official committee to represent unsecured creditors in
the Chapter 11 case of Borrego Community Health Foundation.
The committee members are:
1. McKesson Corporation
Attn: Pamela M. Craik,
Regional Credit Director
3775 Seaport Blvd.
West Sacramento, CA 95691
Representative:
Pamela M. Craik
Phone: 916-373-5222
Email: Pamela.craik@McKesson.com
2. Greenway Health, LLC
Attn: Stephen Janes
4301 W. Boy Scout Blvd., Suite 800
Tampa, FL 33607
Representative:
Stephen Janes
Phone: 813-557-6241
Email: Stephen.janes@greenwayhealth.com
3. We Klean Inc.
1444 Main Street, #581
Ramona, CA 92065
Representative:
Aracelis Gutierrez
Phone: 619-375-1822
Email: agutierrez@weklean.org
nleal@weklean.org
4. Mustafa Bilal, DDS, Inc.
1210 S. Brookhurst St.
Anaheim, CA 92804
Representative:
Mustafa Bilala, DDS
Phone: 714-606-8395
Email: VillageDentalGrouponline@yahoo.com
5. Vista Village Family Dentistry
Attn: Mehrnaz Irani, DDS
950 Civic Center Dr., Suite B
Vista, CA 92083
Representative:
Mehrnaz Irani, DDS
Phone: 760-208-4030
Email: info@vistavillagefamilydentistry.com
6. Vitamin D Public Relations, LLC
Attn: Denise Gitsham
2534 Mankas Corner Rd.
Fairfield, CA 94534
Representative:
Denise Gitsham
Phone: 202-369-1619
Email: dgitsham@gmail.com
7. Pourshirazi & Youssefi Dental Corporation
31569 Canyon Estates Dr. Suite 120
Lake Elsinore, CA 92532
Representative:
Homayoun Pourshirazi
Phone: 951-775-5536
Email: Drhpemail@gmail.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 Borrego Community
Borrego Community Health Foundation offers, among other services,
comprehensive primary care, pediatric care, urgent care, behavioral
health services, dental services, specialty care, transgender
health, women's health, prenatal care, veteran's health, and
chiropractic services. Borrego Community is a non-profit public
charity, tax-exempt under section 501(c)(3) of the Internal Revenue
Code. The Foundation, as of Sept. 12, 2022, had 24 brick-and-mortar
sites including administrative sites, two pharmacies and six mobile
units covering a service area consisting of a 250-mile corridor on
the eastern side of San Diego and Riverside Counties, Calif.
Borrego Community Health Foundation sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Calif. Case No.
22-02384) on Sept. 12, 2022, with between $50 million and $100
million in assets and liabilities. Isaac Lee, chief restructuring
officer, signed the petition.
Tania M. Moyron, Esq., at Dentons US, LLP is the Debtor's legal
counsel. Kurtzman Carson Consultants, LLC is the Debtor's claims
and noticing agent.
BULLSTRAP LLC: Wins Cash Collateral Access Thru Oct 12
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
West Palm Beach Division, authorized Bullstrap, LLC to use cash
collateral on an interim basis in accordance with the budget
through the date of the final hearing set for October 12, 2022, at
1:30 p.m.
The Debtor requires the use of cash collateral to maintain its
assets and pay payroll, payroll taxes, inventory suppliers and
other vendors, overhead, costs to administer the Debtor's estate,
and other expenses necessary to maximize the value of the Debtor's
assets.
As previously reported by the Troubled Company Reporter, the
Debtor's primary indebtedness is an Economic Injury Disaster Loan
from the Small Business Administration. As of August 26, 2022, the
outstanding principal balance due under the Loan was $1,199,400.
The Loan is evidenced by an original note dated May 21, 2020, and
security agreement, a 1st modification of the note dated July 16,
2021, and a 2nd Modified of Note and Amended Security Agreement
encumbering substantially all of the assets of the Debtor. The Note
matured on May 21, 2022.
Although the extent, validity and priority of the SBA's secured
position is not adjudicated by way of the Interim Order, in
addition to the existing rights and interests of the SBA and for
the purpose of providing adequate protection for the use of cash
collateral, the SBA is granted valid, automatically perfected and
enforceable security interests and liens equivalent to liens
granted under Sections 361 and 363 of the Bankruptcy Code and
Bankruptcy Code section 364(c) in and upon (i) the Collateral; (ii)
all property acquired by the Debtor after the Petition Date that is
of the same nature, kind, type, or character as the Collateral in
which the Lenders had an interest prior to the commencement of the
Case (but excluding claims or causes of action of the Debtor or the
estate available through the exercise of the powers granted
pursuant to Sections 542, 544, 547, 548, 549, 550, 551 and 553 of
the Code); and (iii) all cash and receivables that are proceeds,
products, offspring, or profits of such collateral.
The Replacement Liens granted: (i) will be in addition to all
security interests, liens and rights of set-off existing in favor
of the SBA; (ii) will be valid, perfected, enforceable and
effective as of the date of the entry of the Interim Order without
any further action by the Debtor or the SBA, and without the
necessity of the execution, filing or recordation of any financing
statements, security agreements, mortgages or other documents; and
(iii) will secure the payment of the indebtedness to the SBA, as
the case may be, in an amount equal to any diminution in the value
of the cash collateral or any other Collateral occurring from and
after the Petition Date.
In addition, the Debtor will pay the SBA $1,500 each month which
will be unallocated until such time as the extent, validity and
amount of the SBA's secured claim is conclusively established in
the case by agreement or by Court order. The first payment will be
due within 30 days of the Petition Date and each following payment
will be paid within 30 days after the deadline of the prior month's
payment.
The Debtor will maintain, with financially sound and reputable
insurance companies, insurance of the kind covering the Collateral,
and in accordance with and in compliance with the U.S. Trustee
Guidelines and naming the SBA loss payee as it may request and as
its interest may appear.
A copy of the order is available at https://bit.ly/3RWFpeN from
PacerMonitor.com.
About Bullstrap, LLC
Bullstrap, LLC is a retailer of leather goods, including backpacks,
cellular telephone cases, smart watch wristbands, and other
lifestyle products. Bullstrap has a substantial online presence.
Bullstrap sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D. Fla. Case No. 22-16627) on August 26, 2022. In
the petition signed by Claudio Conte, managing member, the Debtor
disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Erik P. Kimball oversees the case.
Chad P. Pugatch, Esq., at Loriun Law is the Debtor's counsel.
CANADIAN GAMING: Fitch Affirms 'B+' LongTerm IDR, Outlook Stable
----------------------------------------------------------------
Fitch Ratings has affirmed Great Canadian Gaming Corp.'s (GCGC)
Long-Term Issuer Default Rating of 'B+'. Fitch has also affirmed
the 'BB+'/'RR1' rating for GCGC's senior secured debt and
'B-'/'RR6' rating for its unsecured debt. The Rating Outlook is
Stable.
The ratings consider GCGC's modest rent-adjusted leverage -- with
pro rata share of joint venture (JV) debt -- healthy discretionary
FCF generation, and the recovery of Canada's regional gaming
markets. However, the long-term leverage profile remains unclear
given the lack of constraints (e.g. financial policy, maintenance
covenants) and the potential for future recapitalizations of the
Greater Toronto Area (GTA) JV bundle and GCGC restricted group.
KEY RATING DRIVERS
Unclear Long-Term Leverage: Fitch calculates GCGC's adjusted
leverage at 5.3x as of June 30, 2022 and expects this to remain in
the high-4x to low-5x range in the medium term, which considers
current macroeconomic headwinds. Fitch proportionally includes
GCGC's 50% share of GTA JV's debt, capitalized rent and EBITDAR in
leverage. Fitch has not assumed FCF will be directed toward debt
repayment given the lack of financial policy and incentive to do
so.
There is risk that leverage could increase in the medium term from
debt-funded shareholder returns at both the restricted group and JV
level. The 'B+' IDR considers GCGC operates with adjusted leverage
within the 5.0x-6.0x range (2022 forecast: 4.7x) and the likelihood
additional debt can be raised at both entities. The restricted
group achieved its cash flow-based "trigger condition" in July 2022
given the strong EBITDA growth, which allows for an increased level
of permitted restricted payments (Fitch estimates CAD190 million of
starting capacity). In addition, the JV already increased its
credit facility by CAD500 million in late 2021 to fund a
distribution to Apollo and Brookfield.
Strong FCF Generation: The restricted group is generating solid
FCF, given the remaining growth capex is at the GTA JV level and
operating margin expansion has exceeded Fitch's initial
expectations. The GTA JV should also generate strong FCF margins
(in excess of 20% beginning in 2023) as capex declines and EBITDA
grows from the expansions. Fitch assumes the FCF generation is not
used to paydown debt and primarily goes toward some form of
shareholder returns.
Favorable Regulatory Environment: GCGC enjoys solid competitive
positions and/or economic exclusivity under long-dated operating
agreements. It is the only operator in the GTA, has nearly 50%
share in the Vancouver market and operates three of four casinos in
New Brunswick/Nova Scotia. The average operating agreement
expiration in the more lucrative Ontario and British Columbia
provinces is 2038.
Exclusivity comes at a high cost, with provincial crowns retaining
roughly 60% of gross gaming revenue. This is partially countered by
governmental support for certain capex, including slots in British
Columbia, which is roughly one-quarter of GCGC's total slot count.
These high barriers to entry and minimal new competitive supply are
viewed positively and set GCGC's operating environment apart from
its U.S. regional peers.
Canadian Regional Gaming Recovery: Canada's casino industry
recovered from the pandemic at a slower pace than the U.S. given
more conservative public health policies, including operating
restrictions. Gaming demand has returned to more normalized levels
after the lifting of restrictions in spring 2022 and ongoing
rollout of non-gaming amenities.
Fitch expects Canada to avoid a recession in 2023, compared with a
mild one in the U.S., according to its Global Economic Outlook
published September 2022. Canada's less intense macroeconomic
headwinds and more modest recovery in gaming revenues relative to
the U.S. should allow it to outperform in 2023. Fitch expects U.S.
regional gaming revenue to decline in the mid-single digits in 2023
and Canadian regional gaming revenue to remain flat yoy.
Positively, GCGC benefits from its reliance on local, drive-in
customers and limited international tourism exposure.
Some Geographic Diversification: GCGC operates 26 properties across
four provinces in Canada. GCGC's diversification improved following
the acquisition of certain gaming bundles in Ontario from 2016 to
2018. Despite being the largest commercial operator in Canada, the
company is concentrated in Ontario and British Columbia, making up
about 60% and 40% of its earnings attributable to the restricted
group, respectively (2Q22 annualized). GCGC has favorable
competitive positions in these two provinces, which are solid
markets, which helps offset its more limited diversification
compared with its U.S. regional gaming peers.
Proportional Consolidation of GTA: Fitch proportionally
consolidates the GTA JV in GCGC's credit metrics by removing 50% of
GTA's debt, capitalized rent and EBITDAR attributable to Brookfield
Business Partners. GCGC manages GTA JV's four casinos in Toronto
and fully consolidates the subsidiary's financials into its own
statements. The JV is considered strategically important to both
owners given its casino exclusivity in Toronto and ongoing gaming
and nongaming development. The JV is an unrestricted subsidiary
relative to the GCGC restricted group and has a CAD1.6 billion
credit facility due 2024.
DERIVATION SUMMARY
GCGC's 'B+' IDR reflects it modest leverage, strong discretionary
FCF generation and favorable regulatory environments, in which it
enjoys varying degrees of exclusivity. This is offset by
uncertainty surrounding its financial policy toward long-term
leverage. GCGC's exclusivity in the GTA compares similarly with
Seminole Tribe of Florida (BBB/Stable; exclusivity in deep Florida
market), Crown Resorts Limited and Star Entertainment, which enjoy
exclusivity in certain Australian markets.
Similarly, Las Vegas Sands Corp (BB+/Rating Watch Negative) has
exposure to Singapore and Macau, two deep international
jurisdictions with only two and six operators, respectively. Fitch
has less tolerance for leverage at GCGC relative to Las Vegas
Sands, as the latter has international diversification and a
well-articulated conservative financial policy.
GCGC's operating environment is more favorable than most of its
U.S. regional gaming peers, most of which have credit profiles
consistent with the mid-to-high 'B' category.
KEY ASSUMPTIONS
- Gaming revenues in 2H22 are slightly above pre-pandemic levels
and remain flat in 2023 due to growing macroeconomic headwinds.
Same-store revenues grow by the low to mid-single digits
thereafter;
- EBITDAR margins remain exceptionally strong in 2022 around 60%,
but begin to normalize in the mid-to-high 40% range thereafter
as non-gaming amenities normalize. These margins are still
higher than pre-pandemic and pre-Apollo levels given success of
cost-saving initiatives and operational adjustments;
- Fitch assumes roughly 15% returns on GTA JV's expansion
projects, with a two- to three-year ramp-up period upon
completion. CAD600 million of growth capex is spent during
2022-2023 at the JV level. Maintenance capex is estimated at
roughly CAD30 million at both the restricted group and GTA JV
levels;
- FCF is allocated primarily toward gaming and nongaming
investments and some form of shareholder returns. Fitch assumes
no debt paydown at either the restricted group or GTA JV given
lack of financial policy;
- Fitch assumed no cash distributions out of or into the JV from
the restricted group, and assumed this debt cannot be a
catalyst for any event of default or similar in the restricted
group.
RECOVERY ASSUMPTIONS
The recovery analysis assumes the GCGC restricted group would be
reorganized as a going-concern in bankruptcy rather than
liquidated. Fitch estimates an enterprise value (EV) on a going
concern basis of CAD1.6 billion for GCGC's restricted group. The EV
assumption is based on post-reorganization EBITDA approximately
CAD240 million, a 7.0x multiple and a deduction of 10% for
administrative claims.
Fitch projects a post-restructuring sustainable cash flow, which
assumes both depletion of the current position to reflect the
distress that provoked a default, and a level of corrective action
Fitch assumes either would have occurred during restructuring, or
would be priced into a purchase price by potential bidders. The GC
EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which it bases the EV.
GCGC's restricted group's going concern EBITDA of about CAD240
million considers recessionary pressures, such as property
closures, competitive openings and/or weaker consumer spending.
This is nearly 40% below normalized EBITDA, but reflects a forward
view of operating pressures that would drive negative FCF and
ultimately a default or restructuring.
The 7.0x EV multiple assumption is higher than that assumed for
most U.S. regional peers given GCGC's strong competitive position
and the high barriers to entry due to long-standing exclusivity
agreements. GCGC's restricted group also has low rent expense,
which increases its financial flexibility relative to some U.S.
regional peers.
Fitch uses a range of 5.0x-7.0x recovery multiples for most U.S.
regional peers, dependent on market position, diversification and
materiality of rent expense. In applying the distributable
proceeds, Fitch assumes roughly CAD1.6 billion of senior secured
debt, including a fully drawn revolving credit facility and CAD400
million of senior unsecured notes.
The restricted group could benefit from GCGC's 50% ownership in the
GTA JV. However, Fitch does not include any residual equity in its
recovery analysis given uncertainty surrounding the subsidiary's
long-term capital structure post refinancing of its construction
credit facility. The current JV capital structure of CAD1.6 billion
(if fully drawn) relative to CAD500 million of estimated run-rate
EBITDA (full ramp-up of its expansion) provides a substantial
amount of residual equity.
As Fitch receives greater clarity about the JV's long-term capital
structure, it could begin ascribing residual equity to GCGC's
restricted group's recovery analysis, which could increase the
recovery rating for and notching of the unsecured notes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Gross adjusted leverage sustaining below 5.0x, including a more
explicit commitment from the company to maintain a leverage
level more supportive of a higher rating;
- Leverage-neutral refinancing of GTA JV's credit facility
relative to GCGC's proportionally consolidated leverage
metrics.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Gross adjusted leverage increasing above 6.0x;
- FCF primarily funding shareholder returns, as opposed to gaming
and nongaming reinvestment;
- Prolonged operating weakness in GCGC's primary markets,
including pandemic-related trends (i.e. property closures,
operating restrictions).
LIQUIDITY AND DEBT STRUCTURE
GCGC's liquidity at June 30, 2022 consisted of CAD-equivalent 199
million of revolver availability and CAD243 million of cash at the
restricted group. Discretionary FCF generation at the restricted
group is estimated at over 10% during 1H22 and should remain solid
given there are only modest maintenance capex requirements.
The GTA JV has moderate liquidity relative to its remaining
discretionary growth capex. The JV had CAD105 million of
unrestricted cash and CAD191 million of credit facility
availability as of Jun. 30, 2022, with the portion of capex
expected to be funded by operating cash flow under Fitch's base
case assumptions. GCGC estimates remaining capex in 2022 to be
CAD369 million, primarily associated with GTA developments. Fitch
expects GTA's FCF to turn meaningfully positive in 2023 and
increase further in 2024 as the Pickering and Woodbine developments
ramp up. GTA's credit facility matures in March 2024.
ESG Considerations
GCGC has an ESG Relevance Score of '4' for Governance Structure due
to the board composition being primarily composed of
non-independent directors and lack of financial policy surrounding
leverage, which are not atypical in sponsor-owned companies. When
coupled with the sponsor's history in the gaming sector, this could
have a negative impact on the credit profile and is relevant to the
ratings in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
ISSUER PROFILE
GCGC is a large Canadian gaming company, with casinos in Ontario,
British Columbia, Nova Scotia and New Brunswick.
Debt Rating Recovery Prior
---- ------ -------- -----
Great Canadian
Gaming Corporation
LT IDR B+ Affirmed B+
senior secured LT BB+ Affirmed RR1 BB+
senior unsecured LT B- Affirmed RR6 B-
CAPITAL RIVER: Taps Tyler Bartl & Ramsdell as Legal Counsel
-----------------------------------------------------------
Capital River Enterprises, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to employ
Tyler Bartl & Ramsdell, P.L.C. as its legal counsel.
The firm's services include:
a. assisting with required bankruptcy schedules and related
forms;
b. representing the Debtor at creditors' meetings;
c. advising the Debtor of its duties and responsibilities under
the Bankruptcy Code;
d. assisting in preparing monthly financial forms and in
analyzing cash flow and financial matters;
e. advising the Debtor in connection with executory contracts;
f. drafting documents to reflect agreements with creditors;
g. resolving motions for relief from stay and adequate
protection;
h. negotiating for obtaining financing and use of cash
collateral, as necessary, and determining whether reorganization,
dismissal or conversion is in the best interests of the Debtor and
its creditors;
i. working with creditors' committee and other counsel, if any;
j. working on any disclosure statement and plan of
reorganization; and
k. handling other matters that arise in the normal course of
administration of the Debtor's bankruptcy estate.
The firm will be paid at the rate of $450 per hour for its services
and will be reimbursed for its out-of-pocket expenses. The retainer
fee is $21,738.
Steven Ramsdell, Esq., a partner at Tyler, 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:
Steven B. Ramsdell, Esq.
Tyler, Bartl & Ramsdell, P.L.C.
300 N. Washington St., Suite 310
Alexandria, VA 22314
Tel: (703) 549-5003
Email: SRamsdell@TBRCLaw.com
About Capital River Enterprises
Capital River Enterprises, LLC, a company in Falls Church, Va.,
filed its voluntary petition for Chapter 11 protection (Bankr. E.D.
Va. Case No. 22-11169) on Sept. 6, 2022, with between $1 million
and $10 million in both assets and liabilities. Yu-Dee Chang,
managing agent, signed the petition.
Steven B. Ramsdell, Esq., at Tyler, Bartl & Ramsdell, P.L.C. serves
as the Debtor's legal counsel.
CARESTREAM HEALTH: Seeks to Hire AlixPartners as Financial Advisor
------------------------------------------------------------------
Carestream Health, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
AlixPartners, LLP as their financial advisor.
The firm's services include:
a. developing the Debtors' rolling 13-week cash receipts and
disbursements forecasting tool designed to provide on-time
information related to the Debtors' liquidity;
b. assisting the Debtors in developing and implementing cash
management strategies, tactics and processes;
c. assisting the Debtors in developing their revised business
plan and such other related forecasts as may be required by the
bank lenders or the Debtors for other corporate purposes;
d. assisting the Debtors in the design and implementation of a
restructuring strategy to maximize enterprise value, taking into
account the unique interests of all constituencies;
e. supporting discussions, as necessary, with the unsecured
creditors' committee, if any, and other external stakeholders, in
connection with the Chapter 11 cases, to provide general process
updates and to provide such information as may be requested by the
Debtors;
f. assisting in the preparations of (i) a disclosure statement
and plan of reorganization, (ii) liquidation analysis, (iii)
statements of financial affairs and schedules of assets and
liabilities, (iv) potential preferences analysis, (v) claims
analyses, (vi) monthly operating reports and (vii) motions and
pleadings associated with the proceeding and other regular
reporting required by the court;
g. assisting the Debtors in implementing vendor management
programs to maintain vendor support;
h. assisting the Debtors and other professionals in developing
potential debtor-in-possession financing scenarios; and
i. assisting the Debtors with such other matters as may be
requested that fall within the firm's expertise and that are
mutually agreeable.
AlixPartner will be paid at these rates:
Managing Director $1,060 - $1,335 per hour
Director $840 - $990 per hour
Senior Vice President $700 - $795 per hour
Vice President $510 - $685 per hour
Consultant $190 - $505 per hour
Paraprofessional $320 - $340 per hour
The firm will also be reimbursed for its out-of-pocket expenses.
AlixPartner received a retainer of $500,000 from the Debtors.
John Dischner, managing director at AlixPartners, 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:
John Dischner,
AlixPartners, LLP
909 Third Avenue, 30th Floor
New York, NY 10022
Tel: (212) 490-2500
Fax: (212) 490-1344
Email: jdischner@alixpartners.com
About Carestream Health
Carestream Health, Inc., and its affiliates are providers of
medical imaging and non-destructive testing products with over 100
years of industry experience. The companies' products are used by
prominent health systems, hospitals, imaging centers, specialty
practices and industrial companies worldwide.
Carestream Health and eight related entities sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 22-10778) on Aug. 23,
2022, to seek confirmation of a prepackaged plan. In the petition
signed by Scott Rosa, chief financial officer, Carestream Health
disclosed $1 billion to $10 billion in both assets and
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Kirkland & Ellis and Pachulski Stang Ziehl &
Jones, LLP as bankruptcy counsels; AlixPartners, LLC as financial
advisor; Ernst & Young, LLP as tax services provider; and Houlihan
Lokey, Inc. as investment banker. Kurtzman Carson Consultants, LLC
is the claims and noticing agent.
Akin Gump Strauss Hauer & Feld, LLP and GLC Advisors & Co., LCC
serve as legal counsel and financial advisor, respectively, to a
group of first lien and second lien lenders.
CARESTREAM HEALTH: Seeks to Hire Pachulski as Co-Counsel
--------------------------------------------------------
Carestream Health, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Pachulski Stang Ziehl & Jones LLP as co-counsel with Kirkland &
Ellis.
The firm's services include:
a. providing legal advice regarding local rules, practices and
procedures;
b. reviewing and commenting on drafts of documents to ensure
compliance with local rules, practices, and procedures;
c. filing documents as requested by co-counsel and coordinating
with the Debtors' claims agent for service of documents;
d. preparing agenda letters, certificates of no objection,
certifications of counsel, and notices of fee applications and
hearings;
e. preparing hearing binders of documents and pleadings,
printing of documents and pleadings for hearings;
f. appearing in court and at any meeting of creditors on behalf
of the Debtors in its capacity as co-counsel;
g. monitoring the docket for filings and coordinating with
Kirkland & Ellis on pending matters that need responses;
h. preparing and maintaining critical dates memorandum to
monitor pending applications, motions, hearing dates and other
matters and the deadlines associated with same, distributing
critical dates memorandum with Kirkland & Ellis for review, and any
necessary coordination for pending matters;
i. handling inquiries and calls from creditors and counsel to
interested parties regarding pending matters and the general status
of the Debtors' cases, and, to the extent required, coordinating
with Kirkland & Ellis on any necessary responses; and
j. providing additional administrative support to Kirkland &
Ellis as requested.
Pachulski will be paid at these rates:
Partners $945 to $1,775 per hour
Of Counsels $725 to $1,425 per hour
Associates $675 to $825 per hour
Paraprofessionals $460 to $495 per hour
The firm will also be reimbursed for its out-of-pocket expenses.
Pachulski received payments in the amount of $112,904 from the
Debtors during the year prior to the Debtors' Chapter 11 filing.
Laura Davis Jones, Esq., a partner at Pachulski, 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.
Ms. Jones 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:
Question: Did you agree to any variations from, or
alternatives to, your standard or customary billing arrangements
for this engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and reasons for the difference.
Response: Pachulski represented the Debtors during the
12-month period prior to their Chapter 11 filing. The material
financial terms for the pre-bankruptcy engagement remained the same
as the engagement was hourly-based subject to economic adjustment.
The billing rates and material financial terms for the
post-petition period remain the same as the pre-bankruptcy period
subject to an annual economic adjustment. The standard hourly rates
of Pachulski are subject to periodic adjustment in accordance with
the firm's practice.
Question: Has your client approved your respective budget and
staffing plan, and, if so, for what budget period?
Response: The Debtors and Pachulski expect to develop a
prospective budget and staffing plan to comply with the U.S.
trustee's requests for information and additional disclosures,
recognizing that in the course of these large Chapter 11 cases,
there may be unforeseeable fees and expenses that will need to be
addressed by the Debtors and the firm.
Pachulski can be reached at:
Laura Davis Jones, Esq.
Timothy P. Cairns, Esq.
Pachulski Stang Ziehl & Jones LLP
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899-8705
Tel: (302) 652-4100
Fax: (302) 652-4400
Email: ljones@pszjlaw.com
tcairns@pszjlaw.com
About Carestream Health
Carestream Health, Inc., and its affiliates are providers of
medical imaging and non-destructive testing products with over 100
years of industry experience. The companies' products are used by
prominent health systems, hospitals, imaging centers, specialty
practices and industrial companies worldwide.
Carestream Health and eight related entities sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 22-10778) on Aug. 23,
2022, to seek confirmation of a prepackaged plan. In the petition
signed by Scott Rosa, chief financial officer, Carestream Health
disclosed $1 billion to $10 billion in both assets and
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Kirkland & Ellis and Pachulski Stang Ziehl &
Jones, LLP as bankruptcy counsels; AlixPartners, LLC as financial
advisor; Ernst & Young, LLP as tax services provider; and Houlihan
Lokey, Inc. as investment banker. Kurtzman Carson Consultants, LLC
is the claims and noticing agent.
Akin Gump Strauss Hauer & Feld, LLP and GLC Advisors & Co., LCC
serve as legal counsel and financial advisor, respectively, to a
group of first lien and second lien lenders.
CARESTREAM HEALTH: Taps Ernst & Young as Tax Services Provider
--------------------------------------------------------------
Carestream Health, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ Ernst
& Young, LLP as tax services provider.
The firm's services include:
a. advising the Debtors' personnel regarding tax issues and
options related to the Chapter 11 filing, taking into account the
Debtors' specific facts and circumstances, for U.S. federal, state,
local and foreign tax purposes;
b. preparing the sales and use tax returns for the Debtors'
review and approval;
c. advising on the federal, state and local, and foreign income
tax consequences of proposed plans of reorganization, including, if
necessary, assisting in the preparation of IRS ruling requests
regarding the tax consequences of alternative reorganization
structures and tax opinions;
d. advising on the tax implication of reorganization and
restructuring alternatives, which the Debtors are evaluating with
existing creditors that may result in a change in the equity,
capitalization and ownership of the shares of Debtors and their
assets;
e. advising on the tax implication of reorganization and
restructuring alternatives, which the Debtors are evaluating with
existing creditors related to intercompany accounts and evaluation
of the base erosion and anti-abuse tax;
f. preparing calculations and applying the appropriate federal,
state and local tax law to determine the amount of tax attribute
reduction related to debt cancellation income and modeling of tax
consequences of such reduction;
g. gathering information, preparing calculations related to
asset and stock basis;
h. analyzing U.S. federal and state and local tax treatment of
the costs and fees incurred by the Debtors in connection with the
bankruptcy proceedings, including tax return disclosure and
presentation;
i. analyzing the U.S. federal, state and local, and foreign tax
treatment, as applicable, of any debt instruments issued by the
Debtors in connection with a plan of emergence;
j. analyzing U.S. federal and state and local tax treatment of
interest and financing costs related to debt subject to automatic
stay, and new debt incurred as the Debtors emerge from bankruptcy,
including tax return disclosure and presentation;
k. providing the Debtors with an overview of material tax
considerations that are part of the bankruptcy process;
l. analyzing U.S. federal, state and local, and foreign tax
consequences, as applicable, of contemplated restructuring during
bankruptcy, including tax return disclosure and presentation; and
m. assisting with various tax, compliance and audit issues
arising in the Debtors' ordinary course of business while in
bankruptcy.
Ernst & Young will be paid at these rates:
Partner/Principal $750 to $1,150 per hour
Managing Director $710 to $950 per hour
Senior Manager $610 to $850 per hour
Manager $490 to $750 per hour
Senior $420 to $550 per hour
Staff $290 to $400 per hour
Client Serving Specialist $200 to $250 per hour
The firm will also be reimbursed for its out-of-pocket expenses.
During the 90 days before the petition date, the firm received the
sum of $192,325 from the Debtors.
Andrea Varga, a partner at Ernst & Young, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Andrea Varga
Ernst & Young LLP
1540 Broadway, 25th floor
New York, NY 10003
Tel: (212) 773-3000
About Carestream Health
Carestream Health, Inc., and its affiliates are providers of
medical imaging and non-destructive testing products with over 100
years of industry experience. The companies' products are used by
prominent health systems, hospitals, imaging centers, specialty
practices and industrial companies worldwide.
Carestream Health and eight related entities sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 22-10778) on Aug. 23,
2022, to seek confirmation of a prepackaged plan. In the petition
signed by Scott Rosa, chief financial officer, Carestream Health
disclosed $1 billion to $10 billion in both assets and
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Kirkland & Ellis and Pachulski Stang Ziehl &
Jones, LLP as bankruptcy counsels; AlixPartners, LLC as financial
advisor; Ernst & Young, LLP as tax services provider; and Houlihan
Lokey, Inc. as investment banker. Kurtzman Carson Consultants, LLC
is the claims and noticing agent.
Akin Gump Strauss Hauer & Feld, LLP and GLC Advisors & Co., LCC
serve as legal counsel and financial advisor, respectively, to a
group of first lien and second lien lenders.
CARESTREAM HEALTH: Taps Houlihan Lokey Capital as Investment Banker
-------------------------------------------------------------------
Carestream Health, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Houlihan Lokey Capital, Inc. as investment banker.
The firm's services include:
(a) providing the Debtors with expert financial advice in
connection with a potential transaction, including performing
financial analyses, searching for a purchaser acceptable to the
Debtors, coordinating visits of potential purchasers and assisting
the Debtors in negotiating the financial aspects of a transaction;
(b) assisting the Debtors in reviewing their capital structure,
including the terms, priorities and conditions of debt, pension and
other obligations, and claims;
(c) assisting the Debtors in reviewing their legal entity
structure in relation to the aforementioned claims analysis;
(d) assisting the Debtors in the development and distribution of
select information and presentation materials to creditors and
other stakeholders, and in the coordination of due diligence with
such parties;
(e) assisting and providing input to the Debtors regarding
potential strategic alternatives available for the resolution of
the Debtors' liabilities;
(f) assisting the Debtors in discussions with creditor
constituents regarding progress toward the consummation of a
transaction;
(g) assisting the Debtors and their other advisors in evaluating
the ability to achieve applicable thresholds necessary to
consummate a transaction;
(h) assisting the Debtors' management in presenting to and
advising their leadership and Board of Directors regarding a
transaction; and
(i) providing such other financial advisory and investment
banking services as may be mutually agreed upon by the firm and the
Debtors.
Houlihan will be paid as follows:
(a) Transaction Fee. Upon the consummation of a transaction, the
firm will receive a cash fee equal to $5,915,000.
(b) Supplemental Transaction Fee. In addition to the transaction
fee, the firm will receive a cash fee equal to $1,750,000 upon the
consummation of a "discount transaction."
(c) Monthly Fees. The firm will be paid a nonrefundable cash fee
of $100,000 for the first three months and $150,000 per month
thereafter. Fifty percent (50%) of all monthly fees after the third
monthly fee previously paid to the firm will be credited against
the supplemental transaction fee.
Andrew Turnbull, managing director at Houlihan, disclosed in court
filings that his firm is a "disinterested person" within the
meaning of Bankruptcy Code Section 101(14).
The firm can be reached through:
Andrew Turnbull
Houlihan Lokey Capital, Inc.
245 Park Avenue, 20th Floor
New York, NY 10167
Tel: (212)-497-4100
Fax: (212)-661-3070
About Carestream Health
Carestream Health, Inc., and its affiliates are providers of
medical imaging and non-destructive testing products with over 100
years of industry experience. The companies' products are used by
prominent health systems, hospitals, imaging centers, specialty
practices and industrial companies worldwide.
Carestream Health and eight related entities sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 22-10778) on Aug. 23,
2022, to seek confirmation of a prepackaged plan. In the petition
signed by Scott Rosa, chief financial officer, Carestream Health
disclosed $1 billion to $10 billion in both assets and
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Kirkland & Ellis and Pachulski Stang Ziehl &
Jones, LLP as bankruptcy counsels; AlixPartners, LLC as financial
advisor; Ernst & Young, LLP as tax services provider; and Houlihan
Lokey, Inc. as investment banker. Kurtzman Carson Consultants, LLC
is the claims and noticing agent.
Akin Gump Strauss Hauer & Feld, LLP and GLC Advisors & Co., LCC
serve as legal counsel and financial advisor, respectively, to a
group of first lien and second lien lenders.
CARESTREAM HEALTH: Taps Kirkland & Ellis as Legal Counsel
---------------------------------------------------------
Carestream Health, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Kirkland & Ellis, LLP and Kirkland & Ellis International, LLP as
their legal counsel.
The firms' services include:
a. advising the Debtors with respect to their powers and duties
in the continued management and operation of their businesses and
properties;
b. advising and consulting on the conduct of the Debtors' cases,
including all of the legal and administrative requirements of
operating in Chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties;
d. taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which they are involved, including objections to claims filed
against the estates;
e. preparing pleadings;
f. representing the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
g. advising the Debtors in connection with any potential sale of
assets;
h. appearing before the bankruptcy court and any appellate
courts;
i. advising the Debtors regarding tax matters;
j. taking necessary actions to negotiate, prepare and obtain
approval of a disclosure statement and confirmation of a Chapter 11
plan and all documents related thereto; and
k. performing all other necessary legal services for the Debtors
in connection with the prosecution of their cases, including: (i)
analyzing the Debtors' leases and contracts and the assumption and
assignment or rejection thereof; (ii) analyzing the validity of
liens against the Debtors' assets; and (iii) advising the Debtors
on corporate and litigation matters.
The firms will be paid at these rates:
Partners $1,135 to $1,995 per hour
Of Counsels $805 to $1,845 per hour
Associates $650 to $1,245 per hour
Paraprofessionals $265 to $495 per hour
In addition, the firms will receive reimbursement for their
out-of-pocket expenses.
The Debtors paid an advance retainer of $300,000.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases,
Kirkland & Ellis disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed post-petition, explain the
difference and the reasons for the difference.
Response: The firms' current hourly rates for services rendered
on behalf of the Debtors range as follows: partners, $1,135 to
$1,995; of counsel, $805 to $1,845; associates, $650 to $1,245; and
paraprofessionals, $265 to $495.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: Yes, for the period from Aug. 23 to Oct. 22, 2022.
As disclosed in court filings, the Kirkland & Ellis firms are
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firms can be reached at:
Patrick J. Nash, Jr., Esq.
Patrick J. Nash, Jr., P.C.
Kirkland & Ellis, LLP
Kirkland & Ellis International, LLP
300 North LaSalle Street
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: patrick.nash@kirkland.com
About Carestream Health
Carestream Health, Inc., and its affiliates are providers of
medical imaging and non-destructive testing products with over 100
years of industry experience. The companies' products are used by
prominent health systems, hospitals, imaging centers, specialty
practices and industrial companies worldwide.
Carestream Health and eight related entities sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 22-10778) on Aug. 23,
2022, to seek confirmation of a prepackaged plan. In the petition
signed by Scott Rosa, chief financial officer, Carestream Health
disclosed $1 billion to $10 billion in both assets and
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Kirkland & Ellis and Pachulski Stang Ziehl &
Jones, LLP as bankruptcy counsels; AlixPartners, LLC as financial
advisor; Ernst & Young, LLP as tax services provider; and Houlihan
Lokey, Inc. as investment banker. Kurtzman Carson Consultants, LLC
is the claims and noticing agent.
Akin Gump Strauss Hauer & Feld, LLP and GLC Advisors & Co., LCC
serve as legal counsel and financial advisor, respectively, to a
group of first lien and second lien lenders.
CARESTREAM HEALTH: Taps Kurtzman Carson Consultants as Claims Agent
-------------------------------------------------------------------
Carestream Health, Inc. and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Delaware to employ
Kurtzman Carson Consultants, LLC as their claims and noticing
agent.
The firm will oversee the distribution of notices and will assist
in the maintenance, processing and docketing of proofs of claim
filed in the Debtors' Chapter 11 cases.
Prior to the petition date, the Debtor provided the firm a retainer
in the amount of $25,000.
The firm will bill the Debtor monthly and the Debtors agreed to pay
out-of-pocket expenses incurred by the firm.
Robert Jordan, senior managing director of Kurtzman's Corporate
Restructuring Services, 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:
Robert Jordan
Kurtzman Carson Consultants, LLC
222 N. Pacific Coast Highway, 3rd Floor
El Segundo, CA 90245
Telephone: (310) 823-9000
Facsimile: (310) 823-9133
Email: rjordan@kccllc.com
About Carestream Health
Carestream Health, Inc., and its affiliates are providers of
medical imaging and non-destructive testing products with over 100
years of industry experience. The companies' products are used by
prominent health systems, hospitals, imaging centers, specialty
practices and industrial companies worldwide.
Carestream Health and eight related entities sought Chapter 11
protection (Bankr. D. Del. Lead Case No. 22-10778) on Aug. 23,
2022, to seek confirmation of a prepackaged plan. In the petition
signed by Scott Rosa, chief financial officer, Carestream Health
disclosed $1 billion to $10 billion in both assets and
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Kirkland & Ellis and Pachulski Stang Ziehl &
Jones, LLP as bankruptcy counsels; AlixPartners, LLC as financial
advisor; Ernst & Young, LLP as tax services provider; and Houlihan
Lokey, Inc. as investment banker. Kurtzman Carson Consultants, LLC
is the claims and noticing agent.
Akin Gump Strauss Hauer & Feld, LLP and GLC Advisors & Co., LCC
serve as legal counsel and financial advisor, respectively, to a
group of first lien and second lien lenders.
CARL MILLER: Wins Continued Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey authorized
Carl Miller Funeral Home, Inc. to continue using cash collateral on
an interim basis through October 13, 2022.
The Court said the Debtor's authority to use cash collateral on an
interim basis going forward will be extended to October 13 and
incorporating all of the terms and conditions previously set forth
in the Cash Collateral Orders dated February 8, 2022, May 23, 2022,
and July 28, 2022.
The Debtor will pay to FMM Bushnell, LLC, the secured creditor, an
adequate protection payment on or before September 15, 2022, in the
amount of $4,000.
As previously reported by the Troubled Company Reporter, FMM is the
holder of a secured commercial loan made May 22, 2008, by
Alternative Business Credit, LLC to the Debtor in the original
principal amount of $495,000.
The Loan is secured by, among other things, a duly and timely
perfected first priority lien and senior security interest in all
of the Debtor's assets and property, as well certain assets not
owned by the Debtor.
A copy of the order is available at https://bit.ly/3R1XaIu from
PacerMonitor.com.
About Carl Miller Funeral Home, Inc.
Carl Miller Funeral Home, Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D.N.J. Case No. 22-10479) on
January 20, 2022. In the petition signed by Pamela M. Dabney,
shareholder and president, the Debtor disclosed up to $100,000 in
assets and up to $10 million in liabilities.
Judge Andrew B. Altenburg, Jr. oversees the case.
Jenny R. Kasen, Esq., at Kasen & Kasen, P.C. represents the Debtor
as counsel.
FMM Bushnell, LLC, as lender, is represented by Alana Bartley, Esq.
at Drake Loeb PLLC.
CAROLINA CAJUNS: Wins Cash Collateral Access Thru Oct 9
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut, Hartford
Division, authorized The Carolina Cajuns, LLC to use cash
collateral, which may be subject to the liens and/or security
interests of United Community Bank and the United States Small
Business Administration, on an interim basis in accordance with the
budget, with a 10% variance, through October 9, 2022.
As adequate protection, each of the Secured Creditors granted a
post-petition lien upon and security interest in the Debtor's
assets, with the same validity, extent and priority as the
prepetition lien and security interest, if any, of each of the
Secured Creditors.
To the extent the adequate protection herein to the Secured
Creditors proves to be inadequate and such inadequacy gives rise to
a claim allowable under Bankruptcy Code section 507, such claim
will constitute an administrative claim against the Debtor with
priority over all administrative claims in the bankruptcy case.
A final hearing on the matter is set for October 6 at 3 p.m.
The budget provides for total fixed costs, on a weekly basis, as
follows:
$8,205 for the week starting September 19, 2022;
$8,205 for the week starting September 26, 2022;
$8,205 for the week starting October 3, 2022;
$8,205 for the week starting October 10, 2022;
$8,205 for the week starting October 17, 2022;
$8,205 for the week starting October 24, 2022;
$8,205 for the week starting October 31, 2022;
$8,205 for the week starting November 7, 2022;
$8,205 for the week starting November 14, 2022;
$8,205 for the week starting November 21, 2022;
$8,205 for the week starting November 28, 2022;
$8,205 for the week starting December 5, 2022; and
$8,205 for the week starting December 12, 2022.
About The Carolina Cajuns, LLC
The Carolina Cajuns, LLC is part of the restaurant industry.
Carolina Cajuns 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.
CENTRAL FLORIDA CIVIL: Taps William G. Haeberle as Accountant
-------------------------------------------------------------
Central Florida Civil, LLC received approval from the U.S.
Bankruptcy Court for the Middle District of Florida to employ
William G. Haeberle, P.A. as its accountant.
The Debtor requires an accountant to prepare its monthly operating
reports and provide other accounting services.
The firm will be paid at the rate of $200 per hour and will be
reimbursed for its out-of-pocket expenses. The retainer is $1,500.
William Haeberle 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 G. Haeberle
William G. Haeberle, P.A.
4446-1 A Hendricks Ave St. 245
Jacksonville, FL 32207
About Central Florida Civil
Central Florida Civil, LLC provides a full range of services
relating to site preparation for commercial projects. The company
is based in Ocala, Fla.
Central Florida Civil sought protection under Chapter 11 of the
U.S. Bankruptcy Court (Bankr. M.D. Fla. Case No. 22-01736) on Aug.
31, 2022, with $2,469,641 in assets and $4,873,621 in liabilities.
Chad M. Converse, manager, signed the petition.
Judge Jason A. Burgess oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP serves as the Debtor's legal counsel while William G. Haeberle,
P.A. is the Debtor's accountant.
CHERRY MAN: Wins Continued Cash Collateral Access
-------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized Hamid R. Rafatjoo, the Chapter 11
Trustee of Cherry Man Industries, Inc., to use cash collateral on a
final basis, subject to the terms, including but not limited to the
provisions of adequate protection, as set forth in the Cash
Collateral Stipulation as modified by a Fourth Supplement.
On September 20, 2022, the Court held a hearing on the Debtor's
Emergency Motion for Order Authorizing Interim Use of Cash
Collateral; Granting Adequate Protection as affected by the
Stipulation Authorizing Use Of Cash Collateral; Granting Adequate
Protection, as modified by the Third Supplement to Stipulation
Authorizing Use Of Cash Collateral; Granting Adequate Protection,
which Cash Collateral Stipulation the Court approved on September
6, 2022.
Since then, Rafatjoo and Cathay Bank have entered into a Fourth
Supplement to the Cash Collateral Stipulation to which the U.S.
Small Business Administration does not object.
A continued hearing on the matter is set for October 25, 2022, at 2
p.m.
A copy of the order is available at https://bit.ly/3C3TilS from
PacerMonitor.com.
About Cherry Man Industries
Cherry Man Industries, Inc., sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-11471) on March
17, 2022, listing $100 million to $500 million in assets and $10
million to $50 million in liabilities. Frank Lin, president of
Cherry Man Industries, signed the petition.
El Segundo, Calif.-based Cherry Man was started in 2002 by Frank
Lin. It is one of the largest nationwide importers and distributors
of office furniture case goods. It has five distribution centers
across the United States.
Judge Neil W. Bason oversees the case.
The Law Offices of Michael Jay Berger serves as the Debtor's legal
counsel.
An official committee of unsecured creditors has been appointed in
the case. The Committee has retained Kelley Drye & Warren LLP as
counsel.
CINEWORLD GROUP: 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 Cineworld
Group plc and its affiliates.
The committee members are:
1. Cineplex Inc.
1303 Yonge Street
Toronto, Ontario, M4T 2Y9
Canada
Attention: Gord Nelson, CFO
Telephone: (416) 323-6602
Fax: (416) 323-6603
Email: Gord.nelson@cineplex.com
Counsel for Member:
John Higgins, Esq.
Porter Hedges, LLP
1000 Main Street, 36th Floor
Houston, TX 77002
Telephone: (713) 226-6648
Fax: (713) 226-6248
Email: jhiggins@porterhedges.com
- and -
Robert Chadwick, Esq.
Goodmans LLP
Email: rchdwick@goodmans.ca
- and -
Alan Kornberg, Esq.
Paul Weiss Rifking Wharton
Email: akornberg@paulweiss.com
2. The Bank of New York Mellon
240 Greenwich Street
New York, NY 10286
Attention: Alex T. Chang, VP
Telephone: (212) 815-2816
Email: Alex.Chang@BNYMellon.com
Counsel for Member:
Kurt Gwynne, Esq.
Jason Angelo, Esq.
Paul Moak, Esq.
Reed Smith LLP
811 Main Street, Suite 1700
Houston, TX 77002
Telephone: (302) 345-7996/(713) 469-3800
Email: KGwynne@ReedSmith.com
JAngelo@ReedSmith.com
PMoak@ReedSmith.com
3. Paramount Pictures Corporation
5555 Melrose Avenue
Los Angeles, CA 90038
Attention: Micol Green VP-Legal Affairs
Telephone: (323) 956-3819
Email: Micol_Green@Paramount.com
Counsel for Member:
Michael L. Tuchin, Esq.
KTBS Law, LLP
1801 Century Park East, 26th Floor
Los Angeles, CA 90064
Telephone: (310) 407-4040
Fax: (310) 407-9090
Email: mtuchin@ktbslaw.com
4. Simon Property Group, Inc.
225 West Washington Street
Indianapolis, IN 46204
Attention: Ronald M. Tucker
Telephone: (317) 263-2346
Fax: (317) 263-7901
Email: rtucker@simon.com
Counsel for Member:
Ronald M. Tucker, Esq.
c/o Simon Property Group, Inc.
Telephone: (317) 263-2346
Fax: (317) 263-7901
Email: rtucker@simon.com
5. PepsiCo Sales, Inc.
1100 Reynolds Boulevard
Winston-Salem, NC 27105
Attention: Conrad Ragan
Telephone: (336) 972-8910
Email: Conrad.Ragan@pepsico.com
Counsel for Member:
Joseph Frank, Esq.
Frank Gecker LLP
1327 W. Washington Blvd. Ste 5G-H
Chicago, IL 60607
Telephone: (312) 276-1400
Fax: (312) 276-0035
Email: jfrank@fgllp.com
6. CJ 4Dplex Americas, LLC
CJ 4Dplex Co. Ltd.
7083 Hollywood Blvd. #600
Hollywood, CA 90028
Attention: Vince Kim, Head of Operations
Telephone: (562) 322-7959
Email: Vince.kim@cj.net
Counsel for Member:
Deborah Perry, Esq.
Munsch Hardt Kopf & Harr P.C.
500 N. Akard Street, Suite 3800
Dallas, TX 75201
Telephone: (214) 855-7565
Email: dperry@munsch.com
7. Land Securities Properties Limited
100 Victoria Street
London, SW1E 5JL
United Kingdom
Attention: Gareth Williams
Telephone: +44 20 7024 5221
Email: Gareth.williams@landsec.com
Tim.cooper@landsec.com
8. EPR Properties (& affiliates)
909 Walnut Street, Suite 200
Kansas City, MO 64106
Attention: Craig L. Evans
Telephone: (816) 472-1700
Email: craige@eprkc.com
Counsel for Member:
Ted Dillman, Esq.
Latham & Watkins LLP
355 South Grand Avenue, Ste 100
Los Angeles, CA 90071-1560
Email: ted.dillman@lw.com
9. Realty Income Corporation
11995 El Camino Real
San Diego, CA 9130
Attention: Demetri Lahanas
Telephone: (858) 284-5327
Fax: (858) 481-4862
Email: dlhanas@realtyincome.com
Counsel for Member:
Robert L. LeHane, Esq.
Kelley Drye & Warren LLP
3 World Trade Center
175 Greenwich Street
New York, NY 10007
Telephone: (212) 808-7573
Cell: (646) 263-9563
Email: RLeHane@kelleydrye.com
10. Intertrust Technologies Corporation
400 N. McCarthy Blvd, Ste 220
Milpitas, CA 95035
Attention: Sidford Brown
Telephone: (650) 616-1600 main
Telephone: (408) 616-1616 GC
Email: sidfordbrown@intertrust.com
Counsel for Member:
Rajiv Dharnidhaka, Esq.
DLA Piper
2000 University Ave
East Palo Alto, CA 94303-2214
Telephone: (650) 833-2322
Fax: (650) 687-9322
Email: Rajiv.dhamidharka@us.dlapiper.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 Cineworld Group PLC
London-based Cineworld Group PLC was founded in 1995 and is the
world's second-largest cinema chain. Cineworld operates 751 sites
with 9,000 screens in 10 countries, including the Cineworld and
Picturehouse screens in the UK and Ireland, Yes Planet in Israel,
and Regal Cinemas in the US.
According to The Guardian, the Griedinger family, including Mooky's
brother and deputy chief executive, Israel, have struggled to
maintain control of the ailing business but have been forced to
reduce their stake from 28% in recent years. Cineworld's top five
investors include the Chinese Jangho Group at 13.8%, Polaris
Capital Management (7.82%), Aberdeen Standard Investments (4.98%)
and Aviva Investors (4.88%).
The London-listed Cineworld, which has run up debt of more than
$4.8 billion after losses soared during the pandemic, is pinning
its hopes on a meatier slate of movies in 2022 to bounce back from
a two-year lull.
Cineworld Group plc and 104 affiliates sought Chapter 11 protection
(Bankr. S.D. Texas Lead Case No. 22-90168) on Sept. 7, 2022,
estimating more than $1 billion in assets and debt.
PJT Partners LP is providing financial advice, Kirkland & Ellis LLP
and Slaughter and May are acting as legal counsel and AlixPartners
LLP is serving as restructuring advisor to Cineworld. Jackson
Walker LLP is the co-bankruptcy counsel. Kroll is the claims
agent.
CITY LIVING KC: Seeks Access to Cash Collateral
-----------------------------------------------
City Living KC, LLC asks the U.S. Bankruptcy Court for the Western
District of Missouri for authority to use cash collateral for
payment of the normal and necessary expenses of its business.
The Debtor also seeks a further Court order authorizing the
Debtor's continued use of cash collateral through March 31, 2023,
or until the Plan of Reorganization is confirmed, whichever is
later, and reserving to the Debtor the right to seek a further
extension of such Order.
The Debtor requires the use of cash collateral for continued
business operations and the reorganization of the Debtor.
Asset Bridge Capital, LLC and PS Funding, Inc. have alleged
perfected security interest in cash, cash equivalents, and accounts
generated by Debtor's business.
The Debtor's only creditors are:
a. Secured Debt
i. Asset Bridge Capital, LLC
ii. PS Funding, Inc.
b. Priority Debt
i. N/A
c. Unsecured Non-Priority Debt
i. Kelly Andrews
ii. Lavetta J. Cullars
iii. Lucille Clark-Autry
iv. Rick Ciantar
The owner of the Debtor is the only individual working for the
Debtor and she is not seeking payment for any pre-petition wages
but will be making post-petition wages.
The Debtor proposes paying Asset Bridge Capital, LLC the monthly
sum of $500 beginning October 28, 2022, and continuing the 28th day
of the month thereafter for its adequate protection payment.
The Debtor proposes paying PS Funding, Inc. the monthly sum of
$4,448 beginning October 28, 2022, and continuing the 28th day of
the month thereafter for its adequate protection payment. The
payment will be allocated between the properties as follows:
a. 1840 East 77th Street, Kansas City, MO 64132 and 2219 East
69th Terrace, Kansas City, MO 64132. Monthly payment of $1,671,
which includes escrow payments for real state taxes and insurance
of $630.
b. 7320 Manchester Avenue, Kansas City, MO 64133. Monthly
payment of $1,723, which includes escrow payments for real state
taxes and insurance of $480.
c. 7861 James A Reed Road, Kansas City, MO 64138. Monthly
payment of $1,055, which includes escrow payments for real state
taxes and insurance of $370.
Asset Bridge Capital and PS Funding will be granted replacement
liens as their interest appears on all of the proceeds and
replacements of cash collateral.
A copy of the motion is available at https://bit.ly/3S55urY from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3dyVgRG from
PacerMonitor.com.
The Debtor projects $6,700 in total income and $4,947 in total
mortgage payments.
About City Living KC, LLC
City Living KC, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Mo. Case No. 22-41170-btf11) on
September 20, 2022. In the petition signed by Quashena Wallace,
owner, the Debtor disclosed up to $10 million in assets and up to
$1 million in liabilities.
Colin Gotham, Esq., at Evans & Mullinix, P.A., is the Debtor's
counsel.
CLAREHOUSE LIVING: No Decline in Patient Care, 4th PCO Report Says
------------------------------------------------------------------
Melanie McNeil, Esq., the court-appointed patient care ombudsman,
filed with the U.S. Bankruptcy Court for the Northern District of
Georgia a fourth report regarding the quality of patient care
provided at Clarehouse Living, Inc.'s personal care homes in Powder
Springs, Ga.
The PCO on Sept. 19 visited the two facilities operated by
Clarehouse Living and reported as follows:
* The PCO visited Clare House 1 with 10 residents and direct
care staff. No complaints were made. Residents seemed happy with
the level of care they were receiving. The PCO noted that staffing
appears to be stable. The home was well stocked especially with
canned goods. The PCO also observed that some effort has been made
to reduce clutter at the facility. No decline in care was noted.
* The PCO visited Clare House II with three residents, the
person in charge, and direct care staff. No complaints were made.
Residents seemed happy with their care. The PCO did not observe any
safety concerns. It was reported that the staff are stable. This
building was not as cluttered as the other. This building seemed to
have more than adequate staffing. The facility was well supplied.
No decline in care was noted.
The PCO is not aware of any significant change in facility
conditions or decline in resident care for these personal care
homes since her appointment.
A copy of the fourth ombudsman report is available for free at
https://bit.ly/3UFGxVO from PacerMonitor.com.
The ombudsman may be reached at:
Melanie S. McNeil, Esq.
2 Peachtree Street NW, 33rd Floor (Mail)
Atlanta, GA 30303
Telephone: 404-416-0211 (Cell)
Facsimile: 404-463-8384
Email: Melanie.McNeil@osltco.ga.gov
About Clarehouse Living
Clarehouse Living, Inc. is an operator of a licensed personal care
home for elderly or disabled residents in Georgia,
Clarehouse Living sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-50035) on Jan. 3,
2022, with up to $1 million in both assets and liabilities. Judge
Lisa Ritchey Craig oversees the case.
Ian M. Falcone, Esq., at Falcone Law Firm, PC is the Debtor's
counsel.
Melanie S. McNeil, Esq., is the patient care ombudsman appointed in
the Debtor's case.
CONNECT HOLDING: Fitch Assigns 'B-' LongTerm IDR
------------------------------------------------
Fitch Ratings has assigned 'B-' Long-Term Issuer Default Ratings
(IDR) to Connect Holding LLC and Connect Holding II LLC (d/b/a
Brightspeed). In addition, Fitch has assigned the senior secured
term loans, notes and revolver of Connect Holding II instrument
ratings of 'B+'/'RR2'. Connect Holding LLC is the parent of Connect
Holding II LLC and guarantees the latter's debt.
The senior secured financing as proposed consists of a $600 million
five-year senior secured revolver, a $1 billion 6.5-year senior
secured term loan A, a $2 billion seven-year senior secured term
loan B and $1.865 billion of seven-year senior secured notes.
The 'BB' IDR and senior unsecured note ratings of Embarq Corp.,
currently a subsidiary of Lumen Technologies, Inc, are on Rating
Watch Negative pending the close of the transaction with
Brightspeed. Following the close of the transaction, Fitch
anticipates a multi-notch downgrade of Embarq's IDR and senior
unsecured notes. The senior secured term loans, notes and revolver
of Connect Holding II will be structurally senior to Embarq's
senior unsecured notes.
KEY RATING DRIVERS
First-Time Rating: The ratings incorporate Brightspeed's initial
high leverage as well as the execution risk associated with its
fiber build plan and transitioning to its own operating systems
following the carve-out from Lumen. The ratings benefit from the
strengthening competitive position as the company plans to invest
aggressively in a fiber broadband network, which is expected to be
funded at the close of the transaction, mitigating the near-term
impact of the pressure on cash flows from the high levels of
investment.
Capital Allocation, Fiber Investment: Brightspeed and its sponsor,
Apollo Managed Funds, are committed to a fiber build plan that is
expected to pass up to three million homes and businesses over the
next five years, at a cost of more than $2 billion. The company's
network currently passes more than 6 million homes and businesses
in 20 states in the Midwest and Southeastern U.S. as well as parts
of Pennsylvania and New Jersey. The top 8 states account for
approximately 85% of the locations passed.
The assets to be acquired by Brightspeed will consist of Lumen's
residential, small business, wholesale and enterprise businesses in
those states; Lumen's national enterprise customers will not be
included. The network in the footprint includes approximately
75,000 route miles of fiber, with fiber passing just over 250,000
homes and small businesses. Current broadband penetration is
relatively low at less than 20%. Fitch believes successful
execution of its fiber deployment plan could lead to improved
penetration rates, based on trends demonstrated by other providers
transitioning to fiber from legacy copper networks.
Leverage Metrics: Brightspeed's initial gross leverage (total
debt/operating EBITDA) is expected to be high at approximately 6.6x
at yearend 2022 but then increase to approximately 8x in 2023. In
connection with Brightspeed's capex program, Apollo managed funds
will provide an equity commitment letter (ECL) to the Holdco, and
Apollo will pay the principal and interest of the Holdco Loan as
contemplated by the ECL.
Fitch's rating case assumptions reflect the repayment of the Holdco
Loan (which is above the restricted group) under the ECL.
Notwithstanding this mechanism, Fitch has included the Holdco Loan
(approximately $1.9 billion) as debt of the rated entity following
an assessment of the loan against Fitch's criteria. Gross leverage
excluding the Holdco Loan is projected to be 5.1x at the end of
2022, increasing to approximately 6.3x in 2023.
Net leverage metrics are considerably lower at the outset, given
starting cash of approximately $1.5 billion. The transaction
financing includes the full funding of the fiber build-out plan, as
contemplated, until the company generates positive FCF. Fitch
believes there is execution risk with respect to the company's
funding plan as higher than expected capex per passing and/or
success-based capex could lead to some funding requirements earlier
than anticipated, as could slower penetration gains than
anticipated. As it progresses along its build plan, the company has
flexibility to preserve cash by slowing capacity expansion and
driving take-up rates in markets already passed.
FCF Deficits: As the company's capex accelerates following the
close of the transaction, FCF deficits will ramp up. Capex
associated with the fiber build out has two major components, capex
associated with the expansion of the network to pass homes and
small and medium businesses, and the cost to connect those customer
locations to the fiber network. The latter capex is success-based
and will vary depending on the rate of penetration. Given the
upfront costs to pass customers, the deficits are higher in the
early years of the plan.
Challenging Operating Environment: The rating incorporates a
challenging operating environment for wireline operators.
Regulatory changes also play a role, as the negative revenue trend
in 2022 was significantly affected by the expiration of $279
million of annual Connect America Fund II (CAF II) funding at the
end of 2021. Competition from cable operators in the high-speed
broadband market remains intense, but the company's fiber build out
is expected to materially improve the company's competitive
position over time.
Ongoing Relationship with Lumen: Initially, Lumen will support
Brightspeed under transition services agreements intended to ensure
there are no disruptions to customers as it sets up its own
operations. Fitch believes execution risk is high with regard to
the company setting up its own operations, and successful execution
will lead to EBITDA improvements as these costs go away.
Brightspeed will continue to provide certain services to Lumen
under a ten-year network services agreement (NSA), which
incorporates minimum revenue commitments. Services will be provided
to Lumen on a wholesale basis for customers that Lumen needs to
reach in Brightspeed's territory under national contracts.
Similarly, Brightspeed will pay Lumen under master services
agreements (MSA) to reach customers in Lumen's territory.
Brightspeed is a net beneficiary under these arrangements.
Parent-Subsidiary Relationship: Fitch expects to equalize the IDR
of Connect Holding II LLC and Embarq Corp. at the close of the
transaction, using a stronger subsidiary/weaker parent approach,
based on open legal ring-fencing and open access and control. The
IDRs of Connect Holding LLC and Connect Holding II LLC are the same
as the parent's stand-alone credit profile starts with the
consolidated group profile, including its subsidiary.
DERIVATION SUMMARY
Brightspeed's exposure to the consumer market is more similar to
that of Frontier Communications Parent Inc. (BB-/Stable) than other
peers, including its former parent company Lumen (BB/Stable) and
Windstream Services, LLC (B/Stable). The latter two have a greater
proportion of revenues coming from enterprise lines of business.
The consumer market continues to face secular challenges, primarily
with respect to legacy voice and broadband services. Competition
with cable operators for high-speed broadband services has been
intense, given the cable platform's advantage over copper-based
networks. Fitch views Brightspeed's aggressive investments in fiber
positively, with the potential to improve its competitive position
significantly over the first two years, and more over time.
Successful execution on these plans will be critical to support the
long-term competitive profile.
Brightspeed also needs to improve its position in the enterprise
and wholesale markets, although the company's enterprise business
does have some differences versus the larger wireline operators
that have much larger, national enterprise accounts while
Brightspeed's enterprise customers are mainly state and local
governments, and the education market. In the enterprise market,
Brightspeed is smaller than AT&T Inc. (BBB+/Stable), Verizon
Communications Inc. (A-/Stable) and Lumen. Brightspeed's wholesale
business is larger than its enterprise business, and both wireline
and wireless operators are major customers.
Compared with Brightspeed, AT&T and Verizon have wireless offerings
that provide more service diversification. Fitch expects
Brightspeed's fiber build plans to cause its gross leverage to be
higher over time than other high-yield peers Lumen and Frontier.
KEY ASSUMPTIONS
Fitch expects revenues of just over $2.2 billion in 2023,
Brightspeed's first full year of operation. Revenues in 2023 are
not directly comparable to 2021 and 2022 given the expiration of
CAF II revenues industrywide in 2022, and the changes brought about
by the increase in revenues post-close from the Network Service
Agreement and the cessation of affiliate revenues recorded
pre-close. In 2024 and 2025, Brightspeed could approach mid-single
digit growth as the company adds mass market fiber broadband
customers.
EBITDA margins are expected to be in the mid-40% range in 2023, and
gradually increase toward the upper 40% range as the company's
expenses under the transition services agreement TSA wind down.
Fitch expects capex to be in the range of $3.0 billion to $3.2
billion over 2023-2025 as the company passes three million or more
homes with a combination of aerial and buried fiber.
Fitch assumes the company does not pay a dividend in the 2022-2025
rating horizon.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes that Brightspeed would be reorganized
as a going-concern in bankruptcy rather than liquidated.
Fitch has assumed a 10% administrative claim.
The revolving facility is assumed to be fully drawn.
Brightspeed's going concern EBITDA is based on forecast 2023
EBITDA, excluding estimated TSA costs, which assumes Brightspeed
has set up its own systems. The GC EBITDA is assumed roughly 20%
lower than the PF EBITDA in a bankruptcy scenario due to a slower
than anticipated take up of its fiber services, while having
incurred significant capex, as well as from competitive pressures
on legacy services. These factors pressure EBITDA.
The GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level, upon which Fitch bases the
enterprise valuation.
An EV multiple of 5.5x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value. The choice of
this multiple considered the following factors:
The historical bankruptcy case study exit multiples for most
telecom companies ranged from 3x-7x, with a median of 5.4x.
Fitch estimates Brightspeed's sale transaction multiple was in the
high 6x range using estimated 2023 EBITDA, which takes into account
the known loss of CAF II revenue in 2022, continued secular
declines and the effects of post-transaction agreements with Lumen.
This is higher than the 5.5x multiple disclosed when the
transaction was announced, which was based on estimated 2020 EBITDA
without considering these factors. Moreover, at the close of the
transaction, Brightspeed will have very little fiber to the home.
Fitch believes the 5.5x multiple will remain appropriate given the
long-term benefits of the technology. A significant portion of the
fiber build will likely have been completed before the company
approaches stress, given the approximately $1.5 billion in
prefunding.
Frontier Communications emerged in early 2021 at near 5x.
FairPoint's reorganization multiple was 4.6x following its
emergence from bankruptcy in 2011. Windstream emerged from
bankruptcy in 2020 with a reorganization multiple of roughly 3.5x.
The recovery analysis produces Recovery Ratings of 'RR2' for the
all secured debt, reflecting 81% recovery.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Gross leverage (including holdco debt), defined as total debt
with equity credit/operating EBITDA, expected to be sustained
at or below 5.5x;
- Consistent gains in revenues from anticipated investments in
fiber and broadband product areas;
- Demonstrated stable EBITDA and FCF growth.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A weakening of operating results, including deteriorating
margins and an inability to stabilize revenue erosion in key
product areas or offset EBITDA pressure through cost
reductions;
- Weakening of the company's financial flexibility by
distributions to the holdco while the company is in the fiber
expansion phase;
- Operating EBITDA/interest paid sustained below 1.5x.
LIQUIDITY AND DEBT STRUCTURE
Strong Initial Liquidity: At the close of the transaction,
Brightspeed is anticipated to have approximately $1.5 billion in
cash as a result of the transaction funding, and a $600 million
senior secured, undrawn revolver maturing in 2027.
In addition to the revolver, new senior secured debt of
approximately $4.865 billion is expected, with initial indications
this debt will be composed of a $1 billion 6.5-year senior secured
term loan A, a $2 billion seven-year senior secured term loan B and
$1.865 billion of seven-year senior secured notes. Debt also
includes $1.437 billion of Embarq senior unsecured notes due 2037
that will be rolled into the company. A new sponsor equity
contribution of just over $3 billion is expected. The equity
includes the net proceeds of borrowings under a holdco loan of
approximately $1.9 billion. Fitch has treated the holdco loan as
debt of the rated entity.
ISSUER PROFILE
Connect Holdings is the fifth largest wireline provider in the
U.S., and provides service primarily to consumers and small and
mid-sized businesses. The company also has a presence in the
enterprise and wholesale markets. The company operates in 20
states, primarily in the Midwest and Southeastern U.S.
SUMMARY OF FINANCIAL ADJUSTMENTS
Fitch has included the Holdco Loan (approximately $1.9 billion) as
debt of the rated entity following an assessment of the loan
against Fitch's criteria.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery
---- ------ --------
Connect Holding II LLC LT IDR B- New Rating
senior secured LT B+ New Rating RR2
Connect Holding LLC LT IDR B- New Rating
CORSICANA BEDDING: Out of Chapter 11 After Sale to Blue Torch
-------------------------------------------------------------
Vicky Jarrett of Furniture Today reports that Corsicana Mattress
has been acquired by Blue Torch Finance through a court-supervised
auction under Section 363 of the U.S. Bankruptcy Code.
The court, in the Northern District of Texas in Fort Worth,
approved the sale on Sept. 16, 2022 making Blue Torch the company's
sole owner. Prior to the sale, it was a majority owner in
partnership with Long Point Capital and KKR.
"The sale is complete, and the new ownership enables Corsicana to
emerge from Chapter 11 as a stronger company with the ability to
build on its long-standing foundation as the nation's largest
private retail mattress manufacturer," said Corsicana CEO Eric
Rhea.
"We've restructured our company and strategically defined our
footprint within key distribution channels to serve our customers
better, so we can deliver high-quality sleep products
coast-to-coast, handcrafted in the U.S. for the best possible
price, enabling the Corsicana business to continue for another 50
years as the premier value-priced mattress partner."
Rhea said the company appreciates the loyalty of its customers and
suppliers, and it remains focused on providing its customers with
"exception service and products."
About Corsicana Bedding
Corsicana Bedding, LLC, is a U.S.-based manufacturer of mattresses
and foundations. The Company is headquartered in Texas and operates
manufacturing facilities located in Texas, Arizona, Connecticut,
Florida, North Carolina, Tennessee, Washington, and Wisconsin.
Corsicana Bedding and its affiliates sought Chapter 11 bankruptcy
protection (Bankr. N.D. Tex. Lead Case No. 22-90016) on June 25,
2022.
Corsicana Bedding disclosed total assets of $151 million against
total liabilities of $260 million as of May 30, 2022.
The Hon. Edward L. Morris is the case judge.
The Debtors tapped Haynes and Boone, LLP as bankruptcy counsel; and
Houlihan Lokey, Inc. and CR3 Partners, LLC, as financial advisors.
Donlin Recano & Company, Inc., is the claims agent.
DAVID A. GOLUPSKI: $425K Sale of Fort Myers Property Confirmed
--------------------------------------------------------------
Judge Gregory L. Taddonio of the U.S. Bankruptcy Court for the
Western District of Pennsylvania confirmed David A. Golupski and
Maureen Y. Golupski's sale by Special Warranty deed of the real
property described as 8205 Woodbridge Pointe Drive, in Fort Myers,
Florida 33912, to Thomas J. Lewis and Georgett A. Lewis for
$425,000.
The Sale is free and divested of liens and claims. The liens and
claims are transferred to the proceeds of sale.
The Movants are authorized to make, execute and deliver to the
Purchasers the necessary deed and/or other documents required to
transfer title to the property purchased upon compliance with the
terms of sale.
The Sale being conducted in conjunction with the Debtor's Chapter
11 subchapter V Plan and it is entitled to an exemption from any
state or local transfer taxes pursuant to 11 U.S.C Section 1141.
The following expenses/costs will immediately be paid at the time
of closing. Failure of the Closing Agent to timely make and
forward the disbursements required by the Order will subject the
closing agent to monetary sanctions, including among other things,
a fine or imposition of damages, after notice and hearing, for
failure to comply with the terms of the Order.
(1) The following lien(s)/claim(s) from the gross proceeds:
(2) Delinquent real estate taxes; if any; This charge will be
assessed against the sale proceeds:
a. The allowed payoff of the first mortgage in favor of
PNC Bank, in the original amount of $148,000 and was recorded in
the Office of the Clerk of Circuit Court of Lee County, Florida on
May 3, 2010, at Mortgage Book as Instrument No. 2010000111110.
This is a valid first lien on the 8205 Woodbridge Property. The
balance is subject to verification and the Debtor reserves its
right to challenge the claimed amount due.
b. The payoff of the second mortgage in favor of Newtek
Small Business Finance, LLC in the original amount of $4,027,000
and was recorded in the Office of the Clerk of Circuit Court of Lee
County, Florida on August 8, 2017, at Mortgage Book as Instrument
No. 2017000169129. Pursuant to the mortgage, Newtek asserts that
the maximum amount that the mortgage is intended and is limited to
secure is $285,000. The balance is subject to the pending dispute
raised in the adversary and the Debtor reserves its right to
challenge the claimed amount due.
(3) On July 28, 2022, the Debtors' filed their Motion to
Retain James R. Higgins and SWFL Real Estate Brokers as a realtor
for the transaction at the behest of Newtek. The Debtors withdrew
the Motion. To the extent he is entitled to any commission,
Higgins must file a Motion within 30 days of the Order.
(4) Current real estate taxes, pro-rated to the date of
closing; This charge will be assessed against the sale proceeds.
(5) Current homeowner's association fees, pro-rated to the
date of closing; This charge will be assessed against the sale
proceeds.
(6) The costs of The News-Press, the local newspaper
advertising in Lee County, Florida, in the amount of $25.12;
reimbursed to Calaiaro Valencik for their Court approved legal fees
and for by the Court for all costs and advertising expenses related
to this sale. This charge will be assessed against the sale
proceeds.
(7) The costs advertising on The Florida Bar’s website in
the amount of $95; reimbursed to Calaiaro Valencik for their
approved by the Court for legal fees and for all costs and
advertising expenses related to this sale. This charge will be
assessed against the gross sale proceeds.
(8) The "net proceeds" from the closing as identified on the
HUD-1 to Calaiaro Valencik to be held in escrow pending further
Order of Court.
(9) Notwithstanding anything in the sale agreement to the
contrary, any dispute arising between the parties will be resolved
by the Court.
(10) If there is a dispute at time of closing, the settlement
officer may pay the undisputed claims at closing to in the order of
their priority, and then escrow the balance with Calaiaro Valencik
and that amount will be deposited into their IOLTA account until
further order of the Court.
(11) The Court reserves the jurisdiction over the sale and
the proceeds until they are distributed.
The Closing will occur within 30 days of th3 Order and within five
days following closing, the Movants will file a report of sale.
Within five days of the date of the Order, the Movants will serve a
copy of the Order on each Respondent (i.e., each party against whom
relief is sought) and its attorney of record, if any, upon any
attorney or party who answered the motion or appeared at the
hearing, the attorney for the debtor, the Purchaser, and the
attorney for the Purchase, if any, and file a certificate of
service.
The Debtor will file a report of sale within 15 days of the
closing. If the original bidder does not close the sale within the
time allowed by the Sale Order, the Debtor will file a notice and
status court with the Court.
A hearing on the Motion was held on Sept. 9, 2022, at 9:30 a.m.
The Objection Deadline was Aug. 29, 2022.
The Purchasers:
Thomas J. Lewis and Georgett A. Lewis
19277 Birchdale Point Road
Brainerd, MN 56401
David A. Golupski and Maureen Y. Golupski sought Chapter 11
protection (Bankr. W.D. Pa. Case No. 22-20324) on Feb. 24, 2022.
The Debtors tapped Donald Calaiaro, Esq., as counsel.
DIAMOND SCAFFOLD: May Use Cash Collateral Thru Oct 4
----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Alabama
authorized Diamond Scaffold Services, LLC to use cash collateral on
an interim basis in accordance with the budget through October 4,
2022.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to pay its payroll, payroll
taxes, post-petition trade creditors and vendors, fuel and
transportation costs, professionals fees, and other operating
expenses necessary for the continued operation of the Debtor's
business and the management and preservation of the Debtor's assets
and properties.
Prior to June 2021, the Debtor owned scaffolding and leased it to
its customers. It now leases scaffolding from Sertant Capital, SMA
II LP I, LLC, Mazuma Capital, and First Guaranty Bank and subleases
that scaffolding to its customers.
Sertant, SMA, Mazuma, and First Guaranty Bank claim security
interests in the scaffolding and in the proceeds thereof.
Honest Funding, LLC; Cheetah Capital; Dynasty Capital 26, LLC;
Reserve Capital Management; Byrd Capital, LLC; Granite State
Services, LLC; Strategic Investments, LLC; LCF Group, Inc.; and
Imperial Funding -- which the Debtor calls "Cash Advance
Facilitators" -- may also claim to own or to have a security
interest in certain of Debtor's receivables.
Byrd Capital, LLC, Granite State Services, LLC, and Strategic
Investments, LLC are members of 3 Cajuns, LLC and consolidated
their claims against the Debtor into one promissory note in the
principal amount of $875,000 prior to the petition date.
The IRS, Alabama Department of Revenue, and the State of Texas
recorded tax liens against the Debtor prior to the Petition Date,
which may attach to the Debtor's pre-petition accounts
receivables.
The IRS, Alabama Department of Revenue, and the State of Texas
recorded tax liens against the Debtor prior to the Petition Date,
which may attach to the Debtor's pre-petition accounts receivables.
The Louisiana Department of Revenue claims a statutory lien against
the Debtor's pre-petition receivables.
The IRS, the Alabama Department of Revenue, the Louisiana
Department of Revenue, the State of Texas, and the Funders are the
"Cash Collateral Claimants."
On the petition date, the Debtor had $1,831,275 in accounts
receivable.
The Court said the Debtor will not be required to make lease-cure
payments to Sertant or First Guaranty Bank, as successor in
interest to Mazuma Capital, in September 2022.
All other terms and conditions of the Second Interim Order will
continue in full force and effect until October 4.
The hearing on the matter is set for October 4 at 10:30 a.m.
Objections were due September 28.
A copy of the order is available at https://bit.ly/3xHHZ0f from
PacerMonitor.com.
About Diamond Scaffold Services
Diamond Scaffold Services LLC -- https://www.diamondscaffold.com/
-- is an authorized distributor of Ring-lock, Cup-lock, Shoring,
and Frame Scaffold. Diamond Scaffold Services, LLC, sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Ala. Case No. 22-11208) on June 21, 2022. In the petition
filed by Jewell Wayne Sumrall, as president, the Debtor estimated
assets between $1 million and $10 million and liabilities between
$10 million and $50 million.
Judge Jerry Oldshue oversees the case.
Alexandra K. Garrett, Esq., at Silver, Voit & Garrett, is the
Debtor's counsel. Jason R. Watkins is serving as special counsel,
representing the Debtor in various litigation.
DIOCESE OF ROCKVILLE CENTRE: Aims for Plan Deal in 60 Days
----------------------------------------------------------
Rick Archer of Law360 reports that the Roman Catholic Diocese of
Rockville Centre on Wednesday, September 21, 2022, told a New York
bankruptcy judge that it hopes to negotiate a consensual Chapter 11
plan with its creditors before the end of November 2022.
About The Roman Catholic Diocese
of Rockville Centre, New York
The Roman Catholic Diocese of Rockville Centre, New York, is the
seat of the Roman Catholic Church on Long Island. The Diocese has
been under the leadership of Bishop John O. Barres since February
2017. The State of New York established the Diocese as a religious
corporation in 1958. The Diocese is one of eight Catholic dioceses
in New York, including the Archdiocese of New York. The Diocese's
total Catholic population is approximately 1.4 million, roughly
half of Long Island's total population of 3.0 million. The Diocese
is the eighth largest diocese in the United States when measured by
the number of baptized Catholics.
The Roman Catholic Diocese of Rockville Centre, New York, filed a
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-12345) on Sept.
30, 2020, listing as much as $500 million in both assets and
liabilities.
The Diocese tapped Jones Day as legal counsel, Alvarez & Marsal
North America, LLC, as restructuring advisor, and Sitrick and
Company, Inc., as communications consultant. Epiq Corporate
Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors in the Diocese's Chapter 11 case. The
committee tapped Pachulski Stang Ziehl & Jones, LLP and Ruskin
Moscou Faltischek, PC as its bankruptcy counsel and special real
estate counsel, respectively
Robert E. Gerber, the legal representative for future claimants of
the Diocese, is represented by the law firm of Joseph Hage
Aaronson, LLC. Michael A. Hogan, a retired judge, serves as the
Diocese's financial advisor.
New Case Judge
According to a notice, the Debtor's case has been reassigned from
Judge Shelley C. Chapman to Judge Martin Glenn effective June 28,
2022.
DOT DOT SMILE: Wins Cash Collateral Access Thru Dec 1
-----------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Riverside Division, authorized Dot Dot Smile, LLC to use cash
collateral on an interim basis, to pay ordinary and necessary
operating expenses in accordance with the budget through December
1, 2022.
The Debtor is permitted to exceed any line item in the budget by up
to 15% in any one month, as long as the overage for all items in
the aggregate does not exceed 15% of the total budget amount for
that month, with the budget savings in one month to be carried over
into subsequent months.
As and for adequate protection in consideration of the Debtor's use
of cash collateral:
a. If EBF Holdings, LLC is later determined to be a secured
creditor with a properly perfected security interest, EBF will have
a perfected post-petition lien against cash collateral to the same
extent and with the same validity and priority as the prepetition
lien, without the need to file or execute any document as may
otherwise be required under applicable non-bankruptcy law.
b. The Debtor will make an adequate protection payment in the
amount of $4,500 to EBF on or before October 15 and another payment
in the amount of $4,500 on or before November 15.
If EBF is determined to be a lender, all funds paid by the Debtor
will reduce the amount of EBF's claim.
A copy of the order is available at https://bit.ly/3SxplQK from
PacerMonitor.com.
About Dot Dot Smile, LLC
Dot Dot Smile, LLC is a wholesaler of children's clothing. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Cal. Case No. 22-13361) on September 3, 2022. In
the petition filed by CEO Jeffrey Eugene Thompson, the Debtor
disclosed $4,478,922 in assets and $5,638,742 in liabilities.
Judge Wayne E. Johnson oversees the case.
Jeffrey S. Shinbrot, APLC, is the Debtor's counsel.
ELANCO ANIMAL: Fitch Affirms 'BB-' LongTerm IDR, Outlook Negative
-----------------------------------------------------------------
Fitch Ratings has affirmed Elanco Animal Health Incorporated's
(ELAN) and Elanco US Inc.'s Issuer Default Ratings (IDRs) at 'BB'
and senior secured debt ratings at 'BBB-'/'RR1'. Fitch has also
affirmed ELAN's senior unsecured notes at 'BB'/'RR4'. Additionally,
Fitch has assigned a 'BBB-'/'RR1' rating to the 2029 incremental
term loans co-issued by Elanco Animal Health Incorporated and
Elanco US Inc. and a 'BBB-'/'RR1' rating to the 2025 and 2028
incremental term loans at Elanco US Inc., a coborrower of the debt.
The Rating Outlooks remains Negative.
The rating actions reflect the operating headwinds facing the
company, though Fitch expects the company to still generate
positive FCF and deleverage through a combination EBITDA growth and
debt reduction.
KEY RATING DRIVERS
Operating Environment Headwinds: Supply chain disruptions,
coronavirus-related shutdowns in China, competitive pressure on
Elanco's veterinarian-prescribed parasiticides and pressure in its
retail market present operating challenges for Elanco. As a result,
the company has extended its margin expansion timeline. In
addition, one-time costs are now expected to be $550 million - $575
million in order to realize the roughly $400 million of synergies
from Bayer transaction. These costs exceed what was originally
expected owing to more headcount reduction and higher costs
required for the integration of Bayer. The company has publicly
restated its commitment to achieving 60% gross margin and 31%
adjusted EBITDA margin.
Margin Improvement/Debt Reduction Required: Fitch expects both
EBITDA growth and debt reduction to reduce leverage after the Bayer
AG's animal health business acquisition in 2020. Advancing sales
and margin expansion from the Bayer acquisition cost-related
synergies and other efficiency gains should drive EBITDA growth. A
forecasted return to growth in 2023, improving margins, manageable
capex requirements and no cash dividend should support positive
annual FCF during the forecast period. Fitch looks for ELAN to
prioritize cash generation for debt reduction. Current operating
headwinds and the Kindred Biosciences acquisition in 2021
highlights the need for solid execution in order for timely
deleveraging to be achieved.
Advancing Pipeline: Elanco's legacy research and development
efforts, the Bayer and the Kindred acquisitions have helped to
strengthen the company's pipeline. The company recently launched
Zorbium, a long-acting transdermal pain product for cats. It has
garnered six regulatory approvals so far this year, including
Credelio (China), Credelio Plus (Canada), and Advantage X
(felines/U.S.). Elanco also looks to submit a broad-spectrum
parasiticide and at least one dermatological treatment in the near
term, and it entered into agreement for a diabetes therapy
(felines) that has been submitted to the FDA.
Competitive Position in Animal Health: ELAN is the fourth largest
company in the animal health industry with a global footprint and
portfolio that spans the feed animal and pet health segments. Fitch
expects the animal health category will benefit from long-term
demand growth and the feed animal segment will be supported by
population growth and increasing global protein consumption. Also,
the pet health segment is expected to benefit from growing consumer
expenditures. Further, Fitch expects revenues to be fairly durable
relative to broader corporate industrial companies given that
ELAN's products benefit from some level of differentiation and
patent exclusivity.
ELAN is also expected to benefit from durable revenues relative to
pharmaceutical companies given its more fragmented and notably
private-pay customer base as opposed to public and commercial
third-party payers. Fitch views ELAN's scale and portfolio reach as
a competitive advantage allowing it to serve a global customer base
with its intellectual property and to buffer against the
consolidation of its end customers.
Acquisitions Improved Business Profile: The acquisitions of Bayer
AG animal health business and Kindred Biosciences have strengthened
the company's competitive profile with greater product
diversification, reduced reliance on antibiotics and scale benefits
such as an improved competitive position relative to Zoetis Inc.,
stronger relative bargaining power with suppliers and customers
(e.g. group purchasing organizations) and more products to sell
through its sales and marketing infrastructure. Also, the
transactions reduce ELAN's reliance on the farm animal segment,
which has been pressured by a variety of headwinds in recent years
(e.g. headwinds to antibiotic volumes).
DERIVATION SUMMARY
ELAN has a competitive position within the global animal health
segment with a large, global footprint and scale that affords it
competitive advantages relating to procurement, manufacturing, R&D,
distribution and to buffer against the effects of customer
consolidation. Compared to pharmaceutical peers that focus on
humans, ELAN's portfolio benefits from no reimbursement risk.
However, its antibiotic segment continues to face material
headwinds from regulatory interventions and end-consumer
preferences. ELAN's closest peer is Zoetis, Inc., which has a
broader portfolio and has already achieved its debt reduction and
margin expansion goals. ELAN's 'BB' IDR is multiple notches lower
than the 'BBB' category and 'A' category ratings of its
pharmaceutical peers due to significantly higher leverage, limited
scale and weaker cash flow generation.
Parent-Subsidiary Linkage
The approach taken is a weak parent (Elanco Animal Health
Incorporated)/strong subsidiary (Elanco US Inc.). Using its Parent
and Subsidiary Linkage Rating Criteria, Fitch concludes there is
open ring fencing and access & control. As such, Fitch rates the
parent and subsidiary at the consolidated level with no notching
between the two.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Revenues decline 5% to 8% in 2022 owing to supply-chain
disruptions and pandemic-related headwinds, followed by mid-
single-digit growth.
- Operating EBITDA margins gradually improve during the forecast
period assuming ELAN will realize $200 million of synergies in
2022 and focuses on other operating efficiency improvements.
- Leverage declines well below 4.5x by YE 2023 through EBITDA
expansion and debt reduction.
- The issuer does not initiate a dividend nor engage in material
M&A until it achieves its deleveraging target.
- FCF generation of at least $600 million.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Successful execution of growth and productivity initiatives
manifesting in revenues and margins consistent with
management's forecast;
- Fitch's expectation of gross leverage (gross debt to operating
EBITDA) sustaining below 3.5x;
- Fitch's expectation of FCF to gross debt sustaining above 10%;
- Continued improvements in ELAN's scale and relative competitive
position.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch's expectation of gross leverage sustaining above 4.5x
due, in part, to weaker or slower recovery in EBITDA or synergy
realization without additional debt repayment;
- Continued erosion in antibiotic demand without sufficient
offsets.
LIQUIDITY AND DEBT STRUCTURE
Principally Secured Capital Structure: ELAN is principally a
secured debt borrower with a $750 million secured revolving credit
facility and $4.9 billion secured term loans. The $1.1 billion of
senior unsecured debt issued in 2018 remains outstanding.
Adequate Liquidity: Fitch expects ELAN will have adequate liquidity
to manage through the current operating headwinds and upcoming debt
maturities. At June 30, 2022, Elanco had $507 million in cash and
cash equivalents and had $75 million drawn on its $600 million
senior secured revolving credit facility. Fitch forecasts FCF will
remain positive throughout the forecast period. The company has $40
million of debt maturing in 2022, $401 million in 2023, $50 million
in 2024 and $300 million in 2025.
Debt Notching: Fitch does not employ a waterfall recovery analysis
for issuers rated in the 'BB' category. The further up the
speculative-grade continuum a rating moves, the more compressed the
notching between the specific classes of issuances becomes. As
such, Fitch rates the senior secured credit facility 'BBB-'/'RR1',
two notches above the IDR. This rating illustrates Fitch's
expectation for superior recovery prospects in the event of default
given there is no structurally senior debt (e.g. an ABL) and
leverage is not considered to be excessive.
The notching of ELAN's senior unsecured debt is rated 'BB'/'RR4'.
The +0 notching from the IDR reflected the potential for being
subordinated to secured debt and, thus, the secured debt issuances
did not further subordinate the unsecured notes but instead was a
realization of the assumption implicit in the original notching.
Adequate Liquidity: Fitch expects ELAN will have adequate liquidity
to manage through the current operating headwinds and upcoming debt
maturities.
ISSUER PROFILE
Elanco is the fourth largest animal health company, and it has one
of the broadest portfolios of pet parasiticides in the companion
animal sector. Elanco controls a diverse portfolio of more than 200
brands that make it a partner to veterinarians and food animal
producers in more than 90 countries.
ESG CONSIDERATIONS
Elanco Animal Health Incorporated has an ESG Relevance Score of '4'
for Customer Welfare - Fair Messaging, Privacy & Data Security due
to regulatory interventions and end-consumer preferences away from
the use of antibiotics in feed for animals. This has a negative
impact on the credit profile, and is relevant to the ratings in
conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
Elanco Animal
Health Incorporated IDR BB Affirmed BB
senior secured LT BBB- New Rating RR1
senior secured LT BBB- Affirmed RR1 BBB-
senior unsecured LT BB Affirmed RR4 BB
Elanco US Inc. LT IDR BB Affirmed BB
senior secured LT BBB- New Rating RR1
senior secured LT BBB- Affirmed RR1 BBB-
EMERALD ELECTRICAL: Wins Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Gainesville Division, authorized Emerald Electrical Consultants LLC
to use cash collateral on an interim basis in accordance with the
budget.
The Debtor requires the use of cash collateral to fund critical
operations of its business.
Emerald Electrical and its affiliates are borrowers on certain
loans with First US Bank, which asserts security interests in
certain of the Debtor's personal property. The revenue from the
Debtor's business may constitute cash collateral.
As adequate protection, the Lender and any other secured creditor,
to the extent they hold valid liens, security interests, or rights
of setoff as of the Petition Date, are granted valid and
properly-perfected liens on all property acquired by the Debtor
after the Petition Date. The Adequate Protection Liens will be
deemed automatically valid and perfected upon entry of the Order.
A final hearing on the matter is set for October 20, 2022 at 10:30
a.m.
A copy of the order is available at https://bit.ly/3xOuN9L from
PacerMonitor.com.
About Emerald Electrical Consultants LLC
Emerald Electrical Consultants LLC specializes in substation
construction, related technical services, and consulting across the
United States, with a focused presence in the southeastern and
central regions of the country. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No.
22-20913) on September 15, 2022. In the petition signed by Lindy
Truitt, president and CEO, the Debtor disclosed up to $10 million
in both assets and liabilities.
Judge James R. Sacca oversees the case.
Benjamin Keck, Esq., at Keck Legal, LLC, is the Debtor's counsel.
ENDO INTERNATIONAL: ASK LLP Represents Personal Injury Victims
--------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of ASK LLP submitted a verified statement to disclose
that it is representing the Ad Hoc Group of Personal Injury Victims
in the Chapter 11 cases of Endo International PLC, et al.
On September 7, 2022, the Ad Hoc Group was formed. The Ad Hoc Group
is represented by ASK LLP in connection with the Debtors' chapter
11 cases.
The Ad Hoc Group members are as follows:
* Kathleen Scarpone. Kay's son, Sgt. Joseph Scarpone, served
in the United States Marine Corps from 2007 to 2011 and had
a one-year tour in Afghanistan during that time. A
combination of PTSD and opioid use led to his death in
2015. Joseph was one-month shy of his 26th birthday. Kay
currently serves on the Board of Directors of Team Sharing,
Inc., a national nonprofit organization dedicated to
parents who have lost a child to SUD. Team Sharing provides
grief services, advocacy, community activism and a
benevolence program for those in need of burial services.
Team Sharing was instrumental in obtaining the proclamation
of August 31 as National Overdose Awareness Day. Ms.
Scarpone has traveled to Washington DC to meet with the
Interim Director of the Drug Enforcement Administration to
share her concerns with respect to furthering education
regarding substance abuse for our youth.
* Julie Strickler. Julie lost her 24-year old son, Nicholas,
a Corporal in the U.S.M.C., to an overdose in 2017. Nick
was an amazing young man with a bright future and he had
his eyes set on being a “career Marine." Those dreams and
desires all changed when Nick suffered an injury in the
Corps and he had a series of surgeries, each one followed
by opioid prescriptions. Nick was well respected in the
Marine Corps and was recognized as a leader shortly after
he arrived at Parris Island. He earned the title of Squad
Leader for his entire platoon at the age of 18. He climbed
the ranks from a Private, Private First Class, Lance
Corporal and then became a Corporal before the age of 21.
He was awarded numerous honors and medals and obtained the
Marine Corps' green belt in martial arts. Since Nick's
death from overdose, Ms. Strickler has dedicated her life
to assuring that other mothers do not suffer as she did.
Ms. Strickler has been a committee member on a project to
create a public education program on opioids, the Berks
Opioid Task Force, and on the international task force, "Do
the Portugal Flip," to flip addiction out of the criminal
justice system and into the primary care system. Ms.
Strickler is a Certified Family Recovery Specialist and
works with families who have loved ones in active addiction
or recovery and families who have lost a loved one to the
disease. Ms. Strickler discussed addiction on a panel with
the U.S. Surgeon General, Dr. Jerome Adams, where she
shared her family's story. She also spoke before the U.S.
Senate, provided local TV interviews to raise awareness of
opioid addiction and authors articles on the opioid
epidemic.
* Lindsey Arrington. Lindsey was first introduced to opioids
as a minor and she became addicted. After enrolling in
numerous treatment facilities, having her son taken away
from her by child protective services, and almost losing
her life, she was able to recover and she has been in
recovery for over ten years. Lindsey founded Hope Soldiers,
a non-profit organization based in Everett, Washington,
whose mission is to help individuals and families affected
by the opioid epidemic. Hope Soldiers' efforts have been
featured in the national media and on MTV and were formally
recognized by the White House.
* Diana Yoder. Dede was a single mom who raised her only
child, Chris, in suburban New York. Chris loved extreme
sports such as snowboarding, skateboarding, downhill
mountain biking and more. As a result of such sports, Chris
had several knee injuries which led to surgeries when he
was 14 years old, followed by an emergency appendectomy
when he was 15. His doctors prescribed opioid painkillers
after each operation and Chris became addicted. Eventually,
Chris attempted rehab, enrolling in 8 different programs
over 4 years. In 2017, however, after a year of being in
recovery, Chris relapsed and died. He was 21 years old.
Dede is currently an Ambassador for Shatterproof, a
national nonprofit organization dedicated to ending the
devastation that opioid addiction causes families.
Shatterproof works on policy change, new federal
legislation, programs that educate and empower families,
workplaces, and the general public, evidence-based
standards of care for addiction, and initiatives to drive
payment reform and accountability.
* Jill Cichowicz. Jill lost her twin brother, Scott, to an
accidental overdose in February 2017. Scott was prescribed
opioids in connection with a back injury he sustained and
he became addicted immediately. Scott entered treatment,
but he relapsed after he was released. Jill founded The
Scott Zebrowski Scholarship Fund at the McShin Foundation
to help those suffering from SUD to receive services that
they could not afford otherwise. The Fund won the Richmond
Times Dispatch Best Charity of 2019. The Fund hosts monthly
events to give back to the community, such as serving
dinner to individuals in recovery at The Healing Place,
volunteering at the Chesterfield Food Bank, mentoring the
women in the HARP Program at the Chesterfield County Jail,
and collecting items for those in recovery. Jill also
educates others through the website www.anightforscott.com.
Each of the members of the Ad Hoc Group holds one or more
unsecured, unliquidated, opioid-related personal injury claims
against one or more of the Debtors.
As of Sept. 26, 2022, members of the Ad Hoc Group and their
disclosable economic interests are:
Kathleen Scarpone
c/o ASK LLP
60 East 42nd Street, 46th Floor
New York, NY 10165
* Unliquidated, unsecured claim of at least $5 million on the
basis of wrongful death
Julie Strickler
c/o ASK LLP
60 East 42nd Street, 46th Floor
New York, NY 10165
* Unliquidated, unsecured claim of at least $5 million on the
basis of wrongful death
Lindsey Arrington
c/o ASK LLP
60 East 42nd Street, 46th Floor
New York, NY 10165
* Unliquidated, unsecured claim of at least $2.5 million on the
basis of personal injury
Diana Yoder
c/o ASK LLP
60 East 42nd Street, 46th Floor
New York, NY 10165
* Unliquidated, unsecured claim of at least $5 million on the
basis of wrongful death
Jill Cichowicz
c/o ASK LLP
60 East 42nd Street, 46th Floor
New York, NY 10165
* Unliquidated, unsecured claim of at least $5 million on the
basis of wrongful death
The members of the Ad Hoc Group make no representation with respect
to the amount, allowance, validity, or priority of their claims and
reserve all rights with respect thereto. Nothing contained in this
Statement should be construed as a limitation upon, or waiver, of
any Ad Hoc Group member's right to assert, file, and/or amend its
claim(s) in accordance with applicable law and any orders entered
in these cases establishing procedures for filing proofs of claim.
The Ad Hoc Group reserves the right to amend and/or supplement this
Statement in accordance with Bankruptcy Rule 2019.
Counsel to the Ad Hoc Group of Personal Injury Victims can be
reached at:
ASK LLP
Edward E. Neiger, Esq.
Jennifer A. Christian, Esq.
Marianna Udem, Esq.
60 East 42nd Street, 46th Floor
New York, NY 10165
Tel: (212) 267-7342
Fax: (212) 918-3427
E-mail: eneiger@askllp.com
jchristian@askllp.com
mudem@askllp.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3UKINex and https://bit.ly/3LTbQIN
About Endo International
Endo International plc (NASDAQ: ENDP) is a specialty pharmaceutical
company committed to helping everyone we serve live their best life
through the delivery of quality, life-enhancing therapies. Its
decades of proven success come from passionate team members around
the globe collaborating to bring the best treatments forward.
Together, we boldly transform insights into treatments benefiting
those who need them, when they need them. On the Web:
http://www.endo.com/
On August 16, 2022, Endo International plc and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549). The Company's cases are
pending before the Honorable James L. Garrity, Jr. The Company has
put up a Web site dedicated to its restructuring:
http://www.endotomorrow.com/
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as
legal counsel; PJT Partners LP as investment banker; and Alvarez &
Marsal as financial advisor. Kroll is the claims agent.
Roger Frankel, the legal representative for future claimants in the
Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway
Stargatt & Taylor, LLP as counsel and Ducera Partners LLC as
investment banker.
EPUMPS SOLUTIONS: Taps Landrau Rivera & Assoc. as Legal Counsel
---------------------------------------------------------------
Epumps Solutions, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Puerto Rico to employ Landrau Rivera & Assoc.
as its legal counsel.
The firm's services include:
(a) advising the Debtor regarding its duties and powers in its
Chapter 11 case under the laws of the United States and Puerto Rico
where it conducts its business or where it is involved in
litigation;
(b) advising the Debtor whether a reorganization is feasible
and, if not, assisting the Debtor in the orderly liquidation of its
assets;
(c) assisting the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan;
(d) preparing legal documents;
(e) appearing before the bankruptcy court, or any court in which
the Debtor asserts a claim interest or defense directly or
indirectly related to its bankruptcy case;
(f) employing other professionals to complete the Debtor's
financial reorganization; and
(g) performing other legal services.
The firm will be paid at these rates:
Noemi Landrau Rivera, Esq. $200 per hour
Legal and Financial Assistants $75 per hour
In addition, the firm will seek reimbursement for fees and
expenses.
The retainer is $10,000.
Noemi Landrau Rivera, Esq., a partner at Landrau Rivera & Assoc.,
disclosed in court filings that the firm and its members are
"disinterested persons" within the meaning of Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Noemi Landrau Rivera, Esq.
Landrau Rivera & Assoc.
P.O. Box 270219
San Juan, PR 00927-0219
Telephone: (787) 774-0224
Facsimile: (787) 793-1004
Email: nlandrau@landraulaw.com
About Epumps Solutions
Epumps Solutions, LLC filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. D.P.R. Case No. 22-02731) on Sept.
14, 2022, with up to $1 million in both assets and liabilities.
Roberto Santos Ramos has been appointed as Subchapter V trustee.
Judge Enrique S. Lamoutte oversees the case.
The Debtor is represented by Noemi Landrau Rivera, Esq., at Landrau
Rivera & Assoc.
ERIN INDUSTRIES: Wins Interim Cash Collateral Access
----------------------------------------------------
Erin Industries, Inc. sought and obtained authority from the U.S.
Bankruptcy Court for the Eastern District of Michigan, Southern
Division, to use cash collateral and provide adequate protection to
Flagstar Bank, its primary pre-petition secured creditor.
The Debtor's use of cash collateral is critical to its
reorganization and any delay in use of cash collateral would
seriously threaten reorganization.
The Debtor needs to use $470,000 of cash collateral in the first
three weeks of its case to meet payroll and avoid immediate and
irreparable harm. These expenditures are critically necessary to
avoid a cessation of operations, which would be devastating to the
estate and the Debtor's customers.
The Debtor's financial problems stem largely from difficulties with
a particular customer project, for Nova Steel USA Inc. The Debtor
has accrued a significant account receivable from Nova Steel and
has signed a Security Agreement due to amounts owed to Nova.
Nova Steel, a Delaware Corporation, asserts a secured claim against
the Debtor. On or about March 9, 2022, the Debtor executed a
Security Agreement with Nova USA. However, the results of a UCC
search shows that Nova USA never perfected its security interest.
Increased material costs, as well as increased labor costs and
shortages, have rendered production for Nova unprofitable.
Further, Nova has refused to accept significant systems built for
it, and the escalating costs associated with parts manufactured for
Nova, and the Debtor has been forced to carry increased financial
burdens that it cannot maintain.
Flagstar Bank FSB is the Debtor's primary prepetition lender.
Pursuant to a Loan and Security Agreement dated December 21, 2018,
as amended by an Amendment No. 1 to Revolving Credit Note dated
March 5, 2020, and an Amendment No. 2 to Revolving Credit Note
dated November 10, 2020, as well as all collateral documents
between Flagstar and the Debtor related to the Loan and Security
Agreement, and a UCC Financing Statement filed on September 10,
2019, Debtor believes Flagstar has a first-priority security
interest in substantially all assets, subject only to certain true
leases or purchase-money security interests in machinery and
equipment. The Debtor believes that Flagstar is owed approximately
$593,000 as of the Petition Date.
Deborah Atwell, the former wife of Steven Atwell, asserts a second
priority security interest against the Debtor's assets pursuant to
a Judgment of Divorce. Deborah Atwell's UCC Financing Statement was
filed on July 30, 2021.
Samson Horus, a merchant cash lender, asserts a third priority
security interest against the Debtor's accounts receivable and
inventory pursuant to a Revenue Purchase Agreement dated January
24, 2022, and a UCC Financing Statement filed on January 24, 2022.
The Debtor does not believe that the Revenue Purchase Agreement was
a true sale of accounts receivable.
The following parties assert security interests or true leases in
specific items of the Debtor's equipment:
A. Leaf Capital Funding, LLC;
B. Toyota Industries Commercial Finance, Inc.;
C. CNC Associates, Inc.
D. Complete Capital Services, Inc.
E. Financial Pacific Leasing, Inc.
As adequate protection, the Debtor proposes that Flagstar be
granted valid, binding, enforceable and perfected replacement liens
in substantially all of the Debtor's assets subject only to
existing liens and encumbrances that are valid, binding and
enforceable and perfected liens existing in the Prepetition
Collateral on the Petition Date.
Further, in the event of any diminution suffered by Flagstar, the
Debtor offers the superpriority administrative claim rights.
The Debtor will also make weekly adequate protection payments in
the amount of $10,000 commencing week of October 1, 2022.
To the extent that Deborah Atwell and Samson have a valid,
perfected second-priority secured claim, the Debtor will provide
them with a replacement lien in all collateral that secures their
claim as their interest may appear as of the Petition Date.
The Debtor does not believe that any adequate protection of the
Nova USA interest, as such interest is unperfected and may be
avoided under 11 U.S.C. section 544(a).
The interests of Deborah Atwell and Samson are further protected as
the payments to Flagstar shall reduce the amount of its claim,
making more collateral available for junior-priority creditors.
* * *
The Court granted the Debtor's request to use cash collateral on an
interim basis, in accordance with the budget following a hearing on
September 22.
The Prepetition Secured Creditor is granted adequate protection in
the form of (1) weekly payments of $10,000 commencing September 30,
plus any fees, expenses, costs and indemnities allowed under the
Prepetition Credit Documents and (2) payments required under this
order towards the Prepetition Obligations from the proceeds of
Prepetition Collateral.
The Prepetition Lender is granted valid and perfected replacement
liens to the same extent and validity as those liens existed
prepetition, including proceeds, products, offspring, or profits of
such property in the event of a diminution of the Prepetition
Collateral and the foregoing.
The Adequate Protection Liens are valid, binding enforceable and
fully perfected as of the date hereof with the same priority as the
Prepetition Lender's existing liens.
The final hearing on the matter is set for on October 19 at 11 a.m.
A copy of the motion is available at https://bit.ly/3UrlI0k from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3f7TOX2 from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/3UF2zbp from
PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$232,340 for the week ending August 27, 2022;
$152,921 for the week ending September 3, 2022;
$183,973 for the week ending September 10, 2022;
$135,060 for the week ending September 17, 2022;
$157,156 for the week ending September 24, 2022;
$146,996 for the week ending October 1, 2022;
$183,367 for the week ending October 8, 2022;
$131,524 for the week ending October 15, 2022;
$97,838 for the week ending October 22, 2022;
$0 for the week ending October 29, 2022;
$1,219 for the week ending November 5, 2022;
$0 for the week ending November 12, 2022; and
$5,771 for the week ending November 19, 2022.
About Erin Industries, Inc.
Erin Industries, Inc. is a family-owned business engaged in the
prototyping, production and assembly of tube bending, bracket
fabrication and tube assemblies. Erin serves customers in the
automotive industry, aerospace, defense, amusement industry and
building trades. In the automotive industry, while the Debtor has,
at times, supplied directly to original equipment manufacturers, it
has more commonly acted as a Tier 2 supplier.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mich. Case No. 22-47354-tjt) on
September 20, 2022. In the petition signed by Steven Atwell,
president, the Debtor disclosed up to $50,000 in assets and up to
$10 million in liabilities.
Max J. Newman, Esq., at Butzel Long, a professional corporation, is
the Debtor's counsel.
FALLSWAY CONSTRUCTION: Court OKs Deal on Cash Collateral Access
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland, Baltimore
Division, authorized Fallsway Construction Co., LLC to use cash
collateral on an interim basis in accordance with its agreement
with Manufacturers and Traders Trust Co.
The Debtor requires the use of cash collateral to operate its
business.
Prior to the Petition Date, the Lender extended to the Debtor: (i)
a $500,000 business access line of credit loan (BALOC Loan), as
evidenced by, among other things, an Amended and Restated Business
Access Line of Credit Note, dated June 5, 2014, executed and
delivered by the Debtor to the order of Lender, and (ii) a $500,000
commercial term loan, as evidenced by, among other things, a
various term notes executed by the Debtor the order of the Lender.
Prior to the Petition Date, the Debtor also guaranteed a $292,000
commercial term loan from the Lender to Parkview Realty, LLC
pursuant to an Unlimited Guaranty executed by the Debtor and
delivered to the Lender.
The indebtedness and obligations owed by the Debtor under the
Loans, the Note and the Guaranty are secured by first-priority duly
perfected liens and security interests in, to and against all
business assets of the Debtor pursuant to and as more particularly
described in a Security Agreement, dated September 20, 2014,
executed by the Debtor and delivered to the Lender and a UCC
financing statement properly recorded among the records of State
Department of Assessment and Taxation.
As of the Petition Date, the total balance due and owing by the
Debtor under the Loan Documents was $854,382.
The authorization granted to the Debtor will terminate upon the
earlier of: (a) November 30, 2022, at 4 p.m. (prevailing Eastern
Time); (b) the entry by the Court of an order denying the Debtor's
authorization to use cash collateral; or (c) at the option of the
Lender, upon the occurrence of an Event of Default after notice and
the expiration of the cure period as set forth therein.
As adequate protection, the Lender is granted valid, choate,
perfected, enforceable and non-avoidable first-priority security
interests and liens in, to and against all post-petition property
and assets of the Debtor that constitute proceeds and products of
Lender's Prepetition Collateral and cash collateral.
In addition to the liens and security interests granted to the
Lender, but only to the extent that the adequate protections
granted are insufficient to provide adequate protection for the
Lender's interests in the cash collateral after the Petition Date,
the Lender is entitled to seek, pursuant to the provisions of
Section 507(b) of the Bankruptcy Code, over all administrative and
priority expenses incurred in the Chapter 11 case.
As further adequate protection, the Debtor will make monthly
payments each in the amount of $8,454.
These events constitute an "Event of Default:"
a. Upon a default under the terms of the Order, or if the
Debtor fails to comply with any term or condition set forth
therein;
b. The Debtor fails to timely deliver the Adequate Protection
Payments as specified therein;
c. If the Debtor's uses cash collateral for a purpose not
expressly authorized by the Order;
d. If a tax creditor or any other creditor seeks relief from
the automatic stay with respect to all or part of the Lender
Collateral;
e. If the Order is modified, stayed, or amended without the
consent of the Lender;
f. If a claim or action is instituted, the purpose of which is
to seek or obtain any relief invalidating, setting aside, avoiding
or subordinating, the Indebtedness, the Loan Documents or the
Lender's liens, security interests, mortgages, rights of setoff, or
claims in the Lender Collateral;
g. If the Debtor discontinues its business or is ordered to
discontinue its business;
h. If the Debtor's Chapter 11 case is converted or dismissed;
i. If the Debtor files a motion seeking to convert or dismiss
the Debtor's Chapter 11 case; or
j. If the Debtor institutes an action seeking the granting or
imposition, under Section 364 of the Bankruptcy Code or otherwise,
liens, security interests, or mortgages on any of the Lender
Collateral equal or superior to the Lender's interest in that
property.
A copy of the order is available at https://bit.ly/3DQP7eG from
PacerMonitor.com.
About Fallsway Construction
Fallsway Construction Company, LLC, a road construction company in
Baltimore, Md., filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 22-14340)
on Aug. 9, 2022. At the time of the filing, the Debtor listed $1
million to $10 million in both assets and liabilities.
Judge Michelle M. Harner oversees the case.
Donald L. Bell, Esq., at The Law Office of Donald L. Bell, LLC is
the Debtor's counsel.
FM SOLUTIONS: Wins Interim Cash Collateral Access
-------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona authorized FM
Solutions Management, LLC to use cash collateral on an interim
basis in accordance with the budget.
The Court finds that it is critical for the Debtor to continue
operating and maintaining its business in order to preserve its
value.
The Debtor is permitted to use cash collateral to pay post-petition
operating expenses in the ordinary course of its businesses.
As adequate protection, any creditor holding a valid and
enforceable prepetition security interest in any pre-petition cash
collateral, will have a post-petition replacement lien on the same
type of post-petition assets acquired by the Debtor after the
Petition Date, if any, and in the same validity, priority, and
extent as such creditor possessed a lien on the cash collateral on
the Petition Date, and will have all the rights and remedies of a
secured creditor in connection with the replacement liens granted
by the Order, except to the extent that the Bankruptcy Code may
affect such rights and remedies. The liens will be effective
without perfection and as against any successors of the Debtor,
including any trustee.
A final hearing on the matter is set for October 12, 2022, at 10
a.m.
Arizona Bank and Trust claims a first position lien in the cash
collateral and desires to be paid the adequate protection payment
set forth in the Debtor's monthly budget. The Court will determine
at the continued hearing if there is any further dispute concerning
potential lien priorities and whether the Debtor can pay these
adequate protection payments on a monthly basis.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3dFuVS8 from PacerMonitor.com.
The Debtor projects $57,681 in total expenses.
About FM Solutions Management, LLC
FM Solutions Management, LLC is a small business that provides
Architectural, Design, and Project Management services to multiple
municipalities and utilities in Arizona. FM Solutions provides
services that take an "owner's view" of facility needs. This
includes everything from mission critical facilities to space
planning and design of employee workspaces.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 22-06152) on September
14, 2022. In the petition signed by Curtis Slife, manager, the
debtor disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Judge Eddward P. Ballinger Jr. oversees the case.
D. Lamar Hawkins, Esq., at Guidant Law, PLC, is the Debtor's
counsel.
FOX SUBACUTE: Wins Cash Collateral Access Thru Oct 1
----------------------------------------------------
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 October 1, 2022.
The Court said the Debtors, PeoplesBank, and Sabra Health Care have
not reached an agreement regarding the use of cash collateral on a
long term basis after the expiration of the Eighteenth Interim
Period.
The Bank will not apply any funds on deposit in Warrington's
operating account and concentration account on September 25, 2022
in excess of $250,000 to the principal balance outstanding on the
Bank's loan to the Debtors.
All terms and conditions of the Existing Cash Collateral Order
continue in full force and effect.
All rights and remedies of the Debtors, the Bank, Sabra, and the
Committee following expiration of the Eighteenth Interim Period are
reserved.
The final hearing on the matter is set for September 27 at 9:30
a.m.
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: CRO, Lawyer Exit Throws Case in Disarray
-----------------------------------------------------
Dietrich Knauth of Reuters reports that a U.S. bankruptcy judge on
Tuesday blocked a restructuring executive and an attorney from
working for Infowars' bankrupt parent company over a conflict of
interest, potentially throwing the bankruptcy case and the
company's daily operations into disarray.
U.S. Bankruptcy Judge Christopher Lopez in Houston found that Marc
Schwartz, chief restructuring officer of Infowars parent Free
Speech Systems LLC, and attorney Kyung Lee failed to disclose that
they sought work from Free Speech Systems before the conclusion of
earlier Infowars bankruptcies.
The judge raised the conflicts issue because he presided over the
earlier Infowars bankruptcies and was concerned about the apparent
overlap of work. The judge said the two men showed a "lack of
candor" regarding the overlap and other matters. The judge also
said the problem was compounded by Schwartz's tendency to defer to
Alex Jones and his other companies instead of advocating on behalf
of FSS alone.
Lopez said that an independent trustee, instead of Schwartz, should
investigate potential claims against Alex Jones and his companies.
Lopez acknowledged that his decision would cause disruption, but he
said he could not trust Schwartz or Lee to impartially represent
FSS if a conflict arose with Alex Jones or one of his other
companies.
Lee did not immediately respond to a message seeking comment.
Schwartz could not immediately be reached for comment. Both had
told the judge they could fairly work on FSS' behalf.
FSS is seeking bankruptcy protection to resolve its liability for
Alex Jones' false and defamatory claims that the 2012 Sandy Hook
elementary school massacre was a hoax. A Texas jury awarded nearly
$50 million in compensatory and punitive damages to the parents of
slain 6-year-old Jesse Lewis, and a Connecticut trial is underway
on the amount that must be paid to other Sandy Hook parents.
Lopez's decision leaves FSS's bankruptcy representation in question
because its other attorney, Ray Battaglia, agreed only to serve as
co-counsel.
"I can't do this on my own," Battaglia said in court.
The case is Free Speech Systems LLC, U.S. Bankruptcy Court for the
Southern District of Texas, No. 22-60043.
For FSS: Ray Battaglia of the Law Offices of Ray Battaglia and R.J.
Shannon of Shannon & Lee
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.
GABHALTAIS TEAGHLAIGH: $450K Sale of Torrington Property Approved
-----------------------------------------------------------------
Judge Christopher J. Panos of the U.S. Bankruptcy Court for the
District of Massachusetts authorized Gabhaltais Teaghlaigh, LLC's
private sale of the property located 85 Pulaski Street, in
Torrington, Connecticut, formerly a Roman Catholic Church, with all
appurtenances and improvements, to Braham Berg of BBB3RG or its
nominee for $450,000, subject to entry of separate order.
The Sale is free and clear of all liens and other interests.
The Debtor will submit a revised proposed form of order in word
format to cjp@mab.uscourts.gov that contains the updated payoff
amount for Sachem Capital Corp and provides that any additional
proceeds of the sale will be held in escrow pending a further order
of the Court on motion of the Debtor to make additional
distributions.
About Gabhaltais Teaghlaigh
Gabhaltais Teaghlaigh, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 22-10839) on
June 15, 2022. In the petition filed by Virginia Hung, as member,
Gabaltais Teaghlaigh LLC listed under $50,000 in both assets and
liabilities.
The case is assigned to Judge Christopher J. Panos.
David G. Baker, Esq., at Baker Law Offices is the Debtor's
counsel.
GARDEN FRESH RESTAURANTS: COVID-19 Coverage Suit Tossed
-------------------------------------------------------
Rick Archer of Law360 reports that a California federal judge has
rejected bankrupt restaurant chain Garden Fresh's claims that its
insurance covers losses caused by government-ordered COVID-19
shutdowns, saying it is making arguments that have been tried and
rejected in numerous prior cases.
A full-text copy of the article is available at:
https://www.law360.com/articles/1532613/bankrupt-restaurant-s-covid-19-coverage-suit-tossed
About Garden Fresh Restaurants
Founded in 1978 and headquartered in San Diego, CA, Garden Fresh
owns of 123 Souplantation and Sweet Tomatoes restaurants across 15
states. Garden Fresh has 5,500 employees, approximately 5,000 of
whom are employed on an hourly basis.
Garden Fresh Restaurant Intermediate Holding, LLC, and its
affiliates filed Chapter 11 petitions (Bankr. D. Del. Case Nos.
16-12174 to 16-12178) on Oct. 3, 2016. In the bankruptcy case, the
Debtors hired Morgan, Lewis & Bockius LLP as general counsel;
Young, Conaway, Stargatt & Taylor, LLP as local counsel; Piper
Jaffray Companies as financial advisor; and Epiq Bankruptcy
Solutions, LLC as claims and noticing agent.
Garden Fresh Restaurants LLC filed a petition for Chapter 7
liquidation (Bankr. S..D. Cal. Case No. 20-02477) on May 14, 2020.
The company reported assets between $50 million and $100 million
and liabilities of similar range. The Hon. Louise Decarl Adler is
the presiding judge.
The Debtor's counsel in the Chapter 7 case:
Gary B. Rudolph
Sullivan Hill Rez & Engel, Aplc
Tel: 619-233-4100
E-mail: rudolph@sullivanhill.com
GEO GROUP: Completes $84 Million Asset Sale, Pays Loans Due 2024
----------------------------------------------------------------
Lin Cheng of Bloomberg Law reports that GEO Group says it completed
the sale of equity investment interest in the government-owned
Ravenhall Correctional Centre in Australia for about $84.4 million
in gross proceeds, pre-tax.
To use the proceeds along with available cash on hand to repay all
of the remaining $146.9m outstanding principal of term loans due
2024.
"We have now been able to reduce our outstanding debt maturing
prior to 2026 to approximately $23 million, from $2 billion,"
executive chairman George C. Zoley said.
About The GEO Group
The GEO Group, Inc. (NYSE: GEO) is a leading diversified government
service provider, specializing in design, financing, development,
and support services for secure facilities, processing centers, and
community reentry centers in the United States, Australia, South
Africa, and the United Kingdom. GEO's diversified services include
enhanced in-custody rehabilitation and post-release support through
the award-winning GEO Continuum of Care, secure transportation,
electronic monitoring, community-based programs, and correctional
health and mental health care. GEO's worldwide operations include
the ownership and/or delivery of support services for 103
facilities totaling approximately 83,000 beds, including idle
facilities and projects under development, with a workforce of up
to approximately 18,000 employees.
* * *
In July 2022, Moody's Investors Service downgraded GEO Group,
Inc.'s ratings, including its corporate family rating and senior
unsecured debt ratings to Caa2 from Caa1 and its senior secured
credit facility to Caa1 from B3. The speculative grade liquidity
rating was changed to SGL-3 from SGL-4. Concurrently, the
company's rating outlook was revised to stable from negative.
"The rating actions reflect the issuer's execution of a distressed
debt restructuring transaction with its credit facility lenders and
bondholders in order to avoid a likely eventual default per Moody's
definition, and is expected to close in August 2022. The outlook
revision to stable reflects the issuer's repositioned capital
structure, balance sheet and liquidity profile, driven by a
reduction in net recourse debt and an extension of near-term
maturities," Moody's said.
In July 2022, S&P Global Ratings lowered its issuer credit rating
on criminal detention and residential reentry facilities provider
The GEO Group Inc. to 'CC' from 'CCC'. At the same time, S&P
lowered its issue-level rating on the company's secured debt to
'CC' from 'B-' and its issue-level rating on its unsecured debt to
'C' from 'CCC'.
S&P said, "The negative outlook reflects the likelihood that we
will lower our issuer credit rating on GEO to 'SD' (selective
default) and our issue-level ratings on its debt to 'D' upon the
completion of the transaction. Subsequently, we will review the
company's new capital structure and financial plan.
"The downgrade reflects our view that GEO's proposed restructuring
agreement is distressed and tantamount to a default. The company
has reached a restructuring agreement with its debtholders that we
expect will close in mid-August 2022. The proposed transaction, if
completed, will extend the maturities of GEO's secured debt and
2023, 2024, and 2026 senior unsecured notes beyond their original
terms. In addition, any secured lenders that choose not to
participate in the exchange will rank junior to the enhanced
collateral provided to the secured lenders under the new
facilities. Furthermore, the participating unsecured noteholders
will have a second-lien on the collateral whereas the
non-participating noteholders will have none," S&P said.
GISSING NORTH AMERICA: Oct. 18 Auction of Substantially All Assets
------------------------------------------------------------------
Judge Lisa S. Gretchko of the U.S. Bankruptcy Court for the Eastern
District of Michigan authorized the bidding procedures proposed by
Gissing North America, LLC, and its affiliates relating to the
auction sale of substantially all assets used in their businesses.
The following changes to the Bidding Procedures as set forth in the
Sale Motion are made and approved, and will be incorporated in the
Bidding Procedures: The Bid Deadline will be Oct. 14, 2022; the
Auction Date will be Oct. 18, 2022; the Sale Hearing will be Oct.
24, 2022; and the deadline for entry of the Sale Order will be Oct.
26, 2022; and for purposes of clarity, the Closing Date is not
changed, and remains Oct. 31, 2022.
Notwithstanding anything to the contrary in any prior order or in
the Sale Motion, the Debtor may select one or more Stalking Horse
Bidders. A Stalking Horse Bidder's submission must include a
Deposit, a designation of the executory contracts and unexpired
leases that the Stalking Horse Bidder desires to be assumed and
assigned by Debtors to the Stalking Horse Bidder, and a redline of
the Stalking Horse Bid comparing against the original Form APA.
If a Stalking Horse Bidder or Bidders is or are selected by Debtors
by the Stalking Horse Selection Date, Debtors may provide the
Stalking Horse Bidder(s) with a break-up fee in the aggregate
amount in connection with all Stalking Horse Bids of up to 3% of
the cash purchase prices set forth in the Stalking Horse Bids,
excluding any applicable Cure Costs ("Stalking Horse Bidder's
Premium"). Any Stalking Horse Bidder that submits a credit bid
will not be entitled to a Stalking Horse Bidder's Premium. Once a
Stalking Horse Bidder or Bidders is or are selected, the Debtors
will file with the Court clean and redlined copies of the
respective asset purchase agreement(s) comparing them to the Form
APA.
The Stalking Horse Bidder's Premium is approved based upon an
exercise of the Debtors' business judgment and the substantial
value that a Stalking Horse Bid will create for the bankruptcy
estates. The Sale Objection Deadline is Oct. 20, 2022 at 5:00 p.m.
(ET). Any reply brief will be filed by no later than Oct. 21,
2022, at 5:00 p.m. (ET).
In connection with the marketing and Sale of Debtors' Assets, the
Debtors are authorized to utilize the Form APA, as modified and
revised to be consistent therewith and filed with the Court.
The Notice of Auction and Sale and the Assumption and Assignment
Notice, as modified and revised, are approved.
By no later than one week following the date of entry of the
Bidding Procedures Order, the Debtors will file a Cure Schedule.
Following the Auction, the Winning Bidder(s) and the Back-Up
Bidder(s) must file on the Court's evidence demonstrating the
ability of the Winning Bidder and the Back-Up Bidder to provide
adequate assurance of future performance under any Assumed and
Assigned Agreement by no later than Oct. 19, 2022 at 5:00 p.m.
(ET). The Cure/Assignment Objection Deadline is Oct. 20, 2022 at
5:00 p.m. (ET) and the Adequate Assurance Objection Deadline is
Oct. 21, 2022 at 12:00 p.m. (ET).
A Qualified Bidder may bid on some of the Assets without having to
bid on all of the Assets.
All the objections raised by Gissing Automotive Systems, LLC in its
Limited Objection and Reservation of Rights to the Sale Motion with
respect to the assumption and assignment of that certain Patent
License Agreement between the Debtors, Gissing North America, LLC
and Gissing Automotive Systems, LLC are expressly preserved.
The DIP Lenders and Prepetition Lenders agree that, in the event
that the aggregate sale price for the Debtors' assets is at least
$24 million, then 50% of the net sale cash proceeds (after payment
of all costs of sale) above $24 million, up to a cap of $2 million,
will be segregated at closing from the net sale cash proceeds of
such sale to pay allowed claims. The Cap will be reduced
dollar-for-dollar for any 503(b)(9) claim that is cured by any
purchaser(s) of the Debtors' assets or otherwise paid.
The 503(b)(9) Escrow will remain segregated until the earliest of
(a) the effective date of a confirmed chapter 11 plan for the
Debtors, (b) 60 days after conversion of the Debtors' cases to
chapter 7, and (c) the entry of an Order by the Court requiring the
Debtors to pay 503(b)(9) claims.
If, as of the applicable 503(b)(9) Test Date, there are
insufficient cash assets to pay 503(b)(9) claims in full, then the
amounts in the 503(b)(9) Escrow will be used to pay such claims.
If there are sufficient cash assets as of the 503(b)(9) Test Date
to pay all or a portion of allowed 503(b)(9) claims as of that
date, then the remainder of the amounts in the 503(b)(9) Escrow
(after payment of all allowed 503(b)(9) claims) will be distributed
to the DIP Lenders or Prepetition Lenders, as the case may be,
under the terms of the DIP Loan Documents.
About Gissing North America
Gissing North America LLC, formerly known as Conform Gissing
International, LLC, and its affiliates are innovative and
technology-driven suppliers of acoustic systems and weight
reduction solutions for the automotive industry. They provide
customers products that minimize noise, vibration, and harshness
throughout a vehicle and reduce vehicle weight by using
proprietary
technology.
On Aug. 8, 2022, Gissing North America and its affiliates sought
Chapter 11 protection (Bankr. E.D. Mich. Lead Case No. 22-46160).
In the petition signed by Steven R. Wybo, chief restructuring
officer, Gissing North America reported up to $100 million in both
assets and liabilities.
Judge Lisa S. Gretchko oversees the case.
The Debtors tapped Wolfson Bolton, PLLC as bankruptcy counsel;
Steven R. Wybo of Riveron Management Services as chief
restructuring officer; and Livingstone Partners, LLC as investment
banker. Epiq Corporate Restructuring, LLC is the Debtors' claims,
noticing and balloting agent and administrative advisor.
On August 15, 2022, the U.S. Trustee for Region 9 appointed an
official committee of unsecured creditors. The committee is
represented by Foley & Lardner, LLP.
GTT COMMUNICATIONS: Bankruptcy Exit Held Up by Regulatory Approvals
-------------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that GTT Communications Inc.
asked for more time to implement its Chapter 11 bankruptcy plan
approved late last year, saying it's still waiting for the
regulatory approvals required to consummate the $2.8 billion debt
reduction deal.
Nine months after getting its bankruptcy plan confirmed, the
telecommunications company's applications for regulatory approval,
while uncontested, have been held up by "unforeseen delays," GTT
told the US Bankruptcy Court for the Southern District of New York
in a filing Tuesday, September 20, 2022.
The delay has caused "certain ripple effects on the Debtors'
liquidity profile," forcing GTT to update agreements with lenders
regarding its use .
About GTT Communications
Headquartered in McLean, Va., GTT Communications, Inc. --
http://www.gtt.net/-- owns and operates a global Tier 1 Internet
network and provides a comprehensive suite of cloud networking
services.
GTT and its affiliates sought Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 21-11880) on Oct. 31, 2021, to implement a
prepackaged Chapter 11 plan.
GTT had total assets of $2.8 billion and total debt of $4.1
billion
as of June 30, 2021. As of the petition date, the Debtors had
pre-bankruptcy funded indebtedness totaling $2.015 billion.
Judge Michael E. Wiles oversees the cases.
The Debtors tapped Akin Gump Strauss Hauer & Feld, LLP as legal
counsel; TRS Advisors as financial advisor and investment banker;
The Siegfried Group, LLP as accounting and financial resource
services provider; Ernst & Young LLP as tax, valuation and
accounting and advisory services provider; and Alvarez & Marsal,
LLC as restructuring advisor. Brian Fox, Alvarez & Marsal's
managing director, serves as the Debtors' chief restructuring
officer. Prime Clerk, LLC is the claims agent and administrative
advisor.
HARRELL REALTY: Nevarez Buying San Francisco Property for $2.2-Mil.
-------------------------------------------------------------------
Harrell Realty Corp. asks the U.S. Bankruptcy Court for the
Northern District of California to authorize the private sale of
its sole asset, residentially-zoned real property located at 940
Haight Street, in San Francisco, California 94117, APN
09-1237-013-01, (Lot: 013 Block 2137) to Jose Nevarez (owner of
creditor/tenant Care & Care, Inc.) for $2.2 million, in accordance
with the terms of the Purchase and Sale Agreement.
The following are Secured Creditors of the Property:
a. City and County of San Francisco County Property Tax
(Property Tax Lien) - $1,804.80
b. Val-Chris Investments, Inc. (First Deed of Trust) -
$1,357,400.15
c. Surinder Singh and Sukhjeet K. Singh, Trustees of the
Surinder and Sukhjeet K. Singh Revocable Living Trust as to an
Undivided 75,000/150,000 Interest and Maninder Arora and Pritinder
S. Arora, Trustees of the Arora Living Trust as to an Undivided
75000/150,000 Interest as Tenants in Common (Second Deed of Trust)
- $279,345.55
d. Franchise Tax Board Priority (disputed) - $13,288.10
e. Internal Revenue Service Priority (disputed) - $1,500
As of Aug. 19, 2022, the Property was appraised by the buyer's
lender at an as-is market value of $2.54 million ($2.36 million for
the building and $180,000 for the business). Liens against the
property, including unpaid property taxes, are currently in the
amount of $1,638,550.50.
On Sept. 1, 2022, the Court issued an order authorizing the
employment of Coldwell Banker Realty as real estate broker.
The Debtor seeks approval to sell the Property to the Buyer for
$2.2 million free and clear of liens, not subject to overbid. The
sale will result in sufficient proceeds to pay in full all admin,
secured and unsecured claims.
The sale proceeds are expected to pay in full the secured and
unsecured creditors (estimates only) ($1,948,201.87 in total):
a. City and County of San Francisco County Property Tax
(Priority/Secured) - $1,804.80
b. Franchise Tax Board (Priority) - $13,288.10
c. Internal Revenue Service (Priority) - $1,500
d. Val-Chris Investments, Inc. (Secured) - $1,357,400.15
e. Superior Loan Servicing (Secured) - $279,345.55
f. United States Trustee's Fees (Statutory Expense) - $22,000
g. Commission, Coldwell Banker Realty (Closing) - $132,000
h. Title & Escrow Fees (Closing) - TBD
i. Care & Care, Inc. (Lease Deposit) (Unsecured) - $15,000
j. P. Harrell Wines (Loans) (Unsecured) - $43,979.04
k. Paula J. Harrell (Loans) (Unsecured) - $18,721.25
l. TRETTIN Family II LP (Loan) (Unsecured) - $33,162.98
m. Macdonald Fernandez LLP Admin. (Claim) - $30,000
The Debtor emphasizes that these are estimates, and figures may
change. Administrative claims are subject to Court approval.
The secured claim of the San Francisco County Tax Collector is
$1,804.80.
The Debtor requests a waiver of the provisions Federal Rule of
Civil Procedure 62(a) and Federal Rule of Bankruptcy Procedure
6004(h) that would otherwise stay the order approving the sale be
waived under the circumstances.
The Debtor prays for an order: (i) granting the Motion and
approving the sale to Jose Nevarez, the principal of the Debtor's
tenant, for the sum of $2.2 million; (ii) authorizing the Debtor
to consummate the sale; (iii) authorizing the Debtor to take all
actions reasonably necessary to close the sale; (iv) approving the
disbursement of the proceeds from escrow to the holders of secured
claims in order of their priority; (v) approving and authorizing
payment of a 6%, (or $123,000) broker's commission to Coldwell
Banker pursuant to the terms of its listing agreement, payment of
U.S. Trustee Fees; (vi) authorizing the Debtor to pay its share of
the real property taxes; water, sewer, and utility charges; closing
fees charged by the title company; and any escrow fees; (vii)
authorizing the Debtor to pay all transfer taxes and recording fees
for the releases of any mortgage or other encumbrance; (viii)
approving the sale of the Property free and clear of the liens,
claims, encumbrances, and interests of all secured creditors; (ix)
finding that the sale of the Property is made in good faith under
Bankruptcy Code Section 363(m); (x) reserving jurisdiction to
interpret and enforce the Order; (xi) waiving the stays imposed by
Rule 62(a) of the Federal Rule of Civil Procedure 62(a) and Federal
Rule of Bankruptcy Procedure 6004(h); and (xii) for such other and
further relief as is necessary and proper in the premises.
A video conference on the Motion is set for Sept. 30, 2022, at
10:30 a.m.
About Harrell Realty Corporation
Harrell Realty Corporation, a real estate investment firm, sought
Chapter 11 bankruptcy protection (Bankr. N.D. Cal. Case No.
22-30362) on July 20, 2022. In the petition filed by Paula J.
Harrel, president, the Debtor listed $1 million to $10 million in
assets and $100,000 to $500,000 in liabilities.
Judge Dennis Montali oversees the case.
Iain A. Macdonald, Esq., at Macdonald Fernandez LLP serves as the
Debtor's counsel.
HBL SNF: No Resident Complaints, 4th PCO Report Says
----------------------------------------------------
Joseph Tomaino, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Southern District of New
York a fourth report regarding the quality of patient care provided
at HBL SNF, LLC's nursing facility in White Plains, N.Y.
The report, which covers the period from June 17 to Sept. 20,
contains the PCO's findings from his visit to the White Plains
facility on Sept. 2, during which he toured the facility and
interviewed several patients, staff, and administration.
According to the report, the PCO observed the following during his
visit: (i) good sanitation at the short-term resident care units;
(ii) well-maintained equipment; and (ii) staff being actively
engaged with residents. No resident, family or staff complaints
were received by the PCO during this period, the report further
said.
Meanwhile, the facility administrator reported no issues meeting
payroll or operating-related financial obligations. He said that
HBL SNF's bankruptcy continues to have no effect at all on the
facility and is related to a landlord or financing dispute. The
facility continues to have some vacant beds, like other facilities
in the area, according to the administrator.
A copy of the fourth ombudsman report is available for free at
https://bit.ly/3DSVLRB from Omni Agent Solutions, claims agent.
The ombudsman may be reached at:
Joseph J. Tomaino
Grassi Healthcare Advisors LLC
488 Madison Avenue
New York, NY 10022
Telephone: (212) 223-5020
About HBL SNF
HBL SNF, LLC, doing business as Epic Rehabilitation and Nursing at
White Plains, operates a 160-bedroom skilled nursing and
rehabilitation facility located at 120 Church St., White Plains,
N.Y. The facility, which opened in late 2019, provides an array of
healthcare services, including neurological, respiratory,
orthopedic, occupational, psychiatric, and many other medical and
rehabilitative services.
HBL SNF filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 21-22623) on Nov. 1,
2021, listing $9,131,311 in total assets and $20,128,876 in total
liabilities. Heidi J Sorvino, Esq., at White and Williams, LLP
serves as Subchapter V trustee.
Judge Sean H. Lane oversees the case.
The Debtor tapped Klestadt Winters Jureller Southard & Stevens, LLP
as bankruptcy counsel; Michelman & Robinson, LLP as special
litigation counsel; and HMM CPAs, LLP as accountant.
Joseph J. Tomaino, the patient care ombudsman appointed in the
case, is represented by SilvermanAcampora, LLP.
HERO NUTRITIONALS: Has Deal on Cash Collateral Access
-----------------------------------------------------
Hero Nutritionals, LLC asks the U.S. Bankruptcy Court for the
Central District of California, Santa Ana Division, for entry of an
order authorizing the use of cash collateral in accordance with its
agreement with McCormick 107, LLC.
The Debtor requires the use of cash collateral to pay independent
contractors to operate the Debtor's equipment for prospective
buyers and to pay property insurance premiums.
The following are the material provisions of the Stipulation:
1. The Debtor is authorized to use the approximately $5,000
cash collateral of McCormick pursuant to 11 U.S.C. section
363(c)(2), from September 1, 2022, through and including November
1, 2022, or when McCormick's lien is paid in full, whichever occurs
first, for the specific purpose of paying independent contractors
to operate the Debtor's equipment for prospective buyers and to pay
property insurance premiums.
2. The Debtor will not use McCormick's cash collateral, as
agreed to therein, for payment to insiders.
3. The use of cash collateral may be renewed upon subsequent
stipulation with McCormick or an order of the Court authorizing use
of McCormick's cash collateral.
4. As adequate protection, McCormick will receive a
replacement lien against all assets of the estate, subject to
existing liens, to have the same extent, validity, scope, and
priority as the prepetition liens held by the secured parties. This
lien will be in addition to any other liens of McCormick against
the assets and property of the Debtor as of the Petition Date.
5. The replacement lien is valid, perfected, and enforceable
without the need of any further recording. McCormick is authorized
to file a certified copy of the cash collateral order and any other
necessary and related documents.
6. Nothing in the Stipulation will be a waiver of the Parties'
rights to seek or assert other relief in future matters.
7. The Debtor and McCormick will request entry of an order
approving the Stipulation; however, this Stipulation will be in
effect pending Court approval.
Like too many businesses, Hero was hit particularly hard by the
Covid-19 pandemic. Hero recently restarted its operations, but
filed a chapter 11 bankruptcy case in July 2022, which case was
ultimately dismissed. Thereafter, an eviction was scheduled for
August 18, 2022 following an unlawful detainer judgment entered in
favor of Hero's landlord.
The Debtor is not operating. The Debtor has retained an accountant
and two brokers, and is seeking offers to sell its physical assets
and, if necessary, its intellectual property. The Debtor believes a
sale of its physical assets will yield sufficient funds and should
pay all claims in full. Should there be any remaining funds for
equity, those funds will be paid to Mark Sharf, the Chapter 7
Trustee of CEO Jennifer Hodges' Chapter 7 case.
The Debtor anticipates filing its plan of reorganization within the
exclusivity period -- no later than December 15, 2022. The Debtor
plans to use cash collateral on a limited basis, with the consent
of the first priority lienholder, to bring its insurance premium
current and to show prospective buyers the equipment in operation
at the Debtor’s premises.
McCormick contends that as of the Petition Date, the Debtor owed it
$2,312,667, together with all accrued interest, late fees, costs
and attorneys' fees. By virtue of a first priority UCC-1, McCormick
asserts a first priority lien on the Debtor's personal property
along with the rents, issues and profits generated by same.
A hearing on the matter is set for October 12, 2022 at 1:30 p.m.
A copy of the motion is available at https://bit.ly/3f12UEP from
PacerMonitor.com.
About Hero Nutritionals, LLC
Hero Nutritionals, LLC is the first company to introduce a
nutrient-rich, all-natural gummy bear for children called Yummi
Bears. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-11383) on August 17,
2022. In the petition signed by Jennifer Leigh Hodges, chief
executive officer, the Debtor disclosed up to $50 million in assets
and up to $10 million in liabilities.
Judge Scott C. Clarkson oversees the case.
David M. Goodrich, Esq., at Golden Goodrich LLP, is the Debtor's
counsel.
HILTON GRAND: Fitch Affirms LongTerm IDR at 'BB-', Outlook Neg.
---------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDR) for Hilton Grand Vacations, Inc. (HGV) and Hilton Grand
Vacations Borrower LLC at 'BB-'. The ratings reflect HGV's strong
competitive position as one of the largest timeshare operators and
its strong profitability and cash flow profile.
Fitch expects HGV will restore leverage back below Fitch's negative
leverage sensitivity during FY 2024 through continued EBITDA
growth. However, the Rating Outlook remains Negative given the
increasing macroeconomic headwinds and cyclical nature of the
timeshare industry. Fitch could stabilize the Outlook should the
strong recovery in HGV's cash flows continue (or Fitch has a higher
degree of confidence it will continue) and drive faster
de-levering.
KEY RATING DRIVERS
Timely Post-M&A De-levering: Should timeshare sales continue to
show strength through 2023, Fitch expects HGV to reduce its
leverage (total adjusted debt/operating EBITDAR) to 5.0x by FY
2024. Fitch's leverage calculation excludes HGV's net interest
margin from timeshare financing and the related non-recourse debt
but includes an adjustment to ensure proper capitalization of the
company's captive finance operations. The forecasted deleveraging
results from a combination of EBITDA growth and Fitch's belief that
there will be excess readily available cash to allow for Fitch's
captive finance adjustment to be partially reflected as a reduction
to readily available cash rather than an increase in gross debt.
HGV has a public leverage target of 2.0x-3.0x net debt to adjusted
EBITDA (company-defined), which includes financing income and nets
the gross debt with cash, securitized debt, and gross receivables
eligible for securitization. HGV's closing pro forma leverage
post-Diamond Resorts acquisition in 3Q21 was 6.5x and HGV
originally intended to reduce leverage to sub-3x within 24 months.
Due to faster-than-expected EBITDA growth and some cost synergies,
HGV is well within its own leverage sensitivities and has reduced
its defined leverage to 2.1x at 2Q22.
Cash Flows Rebounding Quickly: Fitch expects HGV's total revenues
to grow through fiscal 2023 due to a combination of vacation
ownership interest (VOI) sales growth, higher tours flow, improving
volume per guest (VPG), and increasing occupancy rates. HGV
generates a substantial portion of its revenues from recurring
sources (46% in fiscal 2021) including consumer financing, club
management, and rental and property management fees. Fitch expects
HGV to generate substantial FCF in the medium term due to limited
development spend under its 'just-in-time' model and modest
inventory spend.
Recovery Meeting Expectations: HGV's domestic resorts ended 2Q22
with occupancies in line with or better than 2019 levels, while
international resorts occupancies continue slowly rebounding given
travel challenges and, to a lesser extent, customer risk aversion.
Additionally, HGV's provisions for loan losses and default rates in
fiscal 2021 were in line with fiscal 2019 levels, reflecting its
focus on targeting higher-FICO score customers and improved
performance of its notes receivable portfolio.
Increasing Focus on New Buyers: Fitch positively views HGV's
increasing focus on new owner sales, and expects new owner sales as
a percentage of total sales to grow to more than 35% through 2025.
New buyers, who contributed 30% of HGV's 2Q22 revenues, are
particularly important in the timeshare industry as companies rely
heavily on existing owner purchases for revenue. New buyers bring
lower VPG but are still profitable because of the relatively low
tour cost, commission structure, and the fact that new owners tend
to come back and purchase more points in the future.
Inflationary Risks Manageable: Fitch's assumptions for the
timeshare industry include a heightened level of inflation and an
increasing prevalence of recessionary risks. However, Fitch expects
inflation risks to be manageable for the timeshare industry, and
for HGV, specifically. Rising inflation can improve the value
proposition for timeshare properties relative to the increased cost
of alternative products such as hotels and vacation rentals.
Moreover, wages and other expenses at the property level are borne
by the homeowners' associations and HGV's marketing and sales
positions are commission based. Finally, Fitch expects inflation to
have a limited impact on HGV's development spending as the issuer
has no material construction projects underway and has ample excess
inventory on its balance sheet with the ability to reacquire low
cost inventory.
Well Positioned in a Competitive Industry: HGV is the second
largest timeshare operator based on owner families, which provides
some economies of scale and facilitates third-party marketing
relationships. HGV is well positioned within the high-end spectrum
of the timeshare industry and has a diversified portfolio of
vacation ownership brands. Furthermore, the integration of Diamond
Resorts further broadens HGV's addressable market through an
expanded regional network in the U.S. as well as a wider range of
products and price points. Finally, HGV has exclusive rights to the
Hilton name for the timeshare business on a 100-year license and
has access to 118 million members in the Hilton Honors program,
which is one of the strongest loyalty programs in the industry.
Loyalty programs are crucial for chains like Hilton, as these
programs drive repeat business which translates into repeat selling
opportunities in the timeshare industry.
Cyclicality of Timeshare Industry: The domestic timeshare market is
mature, with above average economic cyclical sensitivity owing to
the consumer discretionary nature of the product. During the Great
Financial Crisis, industry-wide VOI sales declined over 40%, which
exceeded most other Gaming, Lodging & Leisure sub-sectors' degrees
of cyclicality. The industry has limited barriers to entry as well
as a variety of competitive alternatives, including the rapid
growth and adoption of alternative lodging accommodation
businesses, such as Airbnb, Inc., Vrbo and FlipKey.
DERIVATION SUMMARY
HGV's ratings reflect its strong position in the timeshare
industry, its strong brand affiliation and network and its strong
liquidity due to limited near-term debt maturities. The
discretionary and cyclical nature of timeshare sales balance the
ratings.
HGV is the second largest timeshare operator with approximately
720,000 owner families in its system. Travel + Leisure Co. (TNL;
BB-/Negative) is HGV's closest peer with 900,000 owner families,
followed by Marriott Vacations Worldwide (VAC) with 700,000,
Holiday Inn Club Vacations with 345,000 and Bluegreen Vacations
Holding Corp. with 220,000.
HGV's revenues are less diversified than TNL's and VAC, which own
the Resorts Condominium International and Interval International
timeshare exchange networks respectively. Fitch notes that HGV has
historically operated with lower leverage than TNL and VAC, but
expects HGV will operate with leverage more in line with peers post
the Diamond acquisition. HGV's net leverage targets pre-acquisition
and post-acquisition are 1.5x-2.0x and 2.0x-3.0x, respectively.
Fitch rates the IDRs of the parent and subsidiary on a consolidated
basis using the weak parent/strong subsidiary approach and open
access and control factors - based on the entities operating as a
single enterprise with strong legal and operational ties.
Under Fitch's Corporate Rating Criteria treatment for corporate
issuers with captive finance subsidiaries, Fitch calculates an
appropriate target debt-to-equity ratio for the finance subsidiary
based on its asset quality, funding, and liquidity. If the finance
subsidiary's target debt-to-equity ratio, based on Fitch's
calculations, is lower than the actual ratio, Fitch assumes that
the parent injects additional equity into the finance subsidiary to
bring the debt-to-equity ratio down to the appropriate target
level. Fitch's Corporate Rating Criteria assumes that the corporate
entity (HGV) funds the capital injection either by an increase in
gross debt, a reduction in cash, or a combination of the two. On an
as-reported basis, Fitch considers the effect of this equity
injection in its analysis of HGV's credit profile vis-a-vis an
increase in gross debt.
For HGV's captive finance subsidiary, Fitch calculates an
appropriate target debt-to-equity ratio of 1.0x, which is below the
actual ratio as of FYE 2021. As a result, Fitch makes an adjustment
by adding $649 million of non-recourse timeshare receivable debt to
its adjusted leverage calculation for HGV. This represents the
capital injection needed to bring its captive finance subsidiary's
debt-to equity ratio down to 1.0x.
Given the strong FCF profile of HGV, Fitch expects cash will
accumulate through the forecast years above an assumed $300 million
minimum amount required for operations through the cycle. HGV has
averaged cash and cash equivalents of around $300 million at each
reporting period post-pandemic and post-Diamond acquisition. On a
forward basis, Fitch assumes HGV will build readily available cash
with retained FCF after assumed share buybacks, net working capital
requirements and net acquisitions.
Fitch allocates a portion of the captive financing debt adjustment
as a reduction to cash ($132 million), which considers Fitch's view
of HGV requiring $300 million of estimated minimum operating cash.
The remaining $517 million is allocated as an increase in debt and
held constant through the forecast horizon. Given HGV's strong
underlying free cash flow profile and limited near-term traditional
debt maturities, Fitch assumes the majority of FCF will be
allocated towards shareholder returns.
KEY ASSUMPTIONS
- Revenues and net VOI sales reach approximately 175% and
approximately 250% of fiscal 2019 levels by 2025, respectively,
due to a combination of the Diamond Resort integration and a
recovery in timeshare industry fundamentals;
- EBITDA margins maintained in the 23% to 24% range through 2025;
- Inventory spend of $200 million annually through 2025;
- Share buybacks of $250 million annually through 2025;
- No material acquisitions or dispositions occur through 2025.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Adjusted Debt to Operating EBITDAR sustaining below 4.0x;
- Greater cash flow diversification by brand and/or business
line;
- Evidence of through-the-cycle sustainability in the company's
capital-light inventory sources such that it does not
materially affect HGV's financial flexibility and operational
strategy.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Adjusted Debt to Operating EBITDAR and FCF/Debt above 5.0x
and/or lower than 5.5%, respectively;
- Severe disruption in the ABS markets such that HGV needs to
provide material support to its captive finance subsidiary;
- Material decline in profitability, leading to EBITDAR margins
sustaining around 15%;
- Consistently negative FCF.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity Profile, Limited Near-Term Debt Maturities: At
2Q22, HGV has $374 million in cash and cash equivalents on hand,
and $824 million of available capacity, net of letters of credits,
under its $1.0 billion revolving credit facility. The strength of
HGV's liquidity profile is further driven by a lack of meaningful
near-term debt maturities.
Since HGV is reliant on the asset-backed securities (ABS) market to
help fund its timeshare customer lending activities, Fitch notes
that a significant economic downturn resulting in tightened credit
markets could pressure HGV's securitization market access and
potentially require the company to provide support to its finance
subsidiary. This risk is mitigated by the company's annual
extension of its two-year $750 million receivable securitization
warehouse facility, which HGV upsized from $450 million, in May
2022. HGV also has a conduit facility with a borrowing capacity of
$125 million that matures in 2023.
At 2Q22, HGV has $874 million of available liquidity across its
warehouse and conduit facilities, which should provide sufficient
liquidity to finance the sale of VOIs through 2023. HGV has already
completed two separate securitization transactions through August
2022. HGV completed a $246 million securitization of vacation
ownership loans in April 2022 at a weighted average interest rate
of 4.30% and an advance rate of 95%. HGV also completed a $269
million securitization transaction in August 2022 at a weighted
average interest rate of 4.83% and an advance rate of 96%.
ISSUER PROFILE
Hilton Grand Vacations, Inc. (NYSE: HGV) is a global timeshare
company that develops, sells and manages timeshare resorts under
the Hilton Grand Vacations brand. HGV's operations consist of
selling vacation ownership interests (VOIs), financing and
servicing loans provided to consumers
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
Hilton Grand Vacations
Borrower LLC
LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR1 BB+
Hilton Grand Vacations
Inc.
LT IDR BB- Affirmed BB-
HOMELIBERTY INC: Court Denies $215.5K Sale of Montgomery Property
-----------------------------------------------------------------
Judge Kesha L. Tanabe of the U.S. Bankruptcy Court for the District
of Minnesota denied without prejudice HomeLiberty, Inc.'s proposed
sale of the property located in the County of Rice, State of
Minnesota, with an address of: 11481 130th Street W., Montgomery,
MN 56069, to George A. Gnerer and Tracy A. Gnerer for $215,523.09
cash plus closing costs.
The Debtor proposed to sell the property free and clear of liens,
claims, and encumbrances.
About HomeLiberty Inc.
HomeLiberty Inc. -- https://www.home-liberty.com/aboutus.html --
is
a company that provides financial products to qualified
homeowners
with severe negative equity.
HomeLiberty, Inc. sought Chapter 11 protection (Bankr. D. Min.
Case
No. 22-30548) on April 12, 2022. In the petition filed by Patricia
Hanratty, as chief executive officer (CEO), HomeLiberty Inc.
listed
estimated assets between $1 million and $10 mllion and estimated
liabilities between $1 million and $10 million.
The case is assigned to Honorable Judge Kesha L Tanabe.
Steven B Nosek, Esq., at Steven Nosek PA, is the Debtor's counsel.
INNERLINE ENGINEERING: Wins Cash Collateral Access Thru Nov 15
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Riverside Division, authorized Innerline Engineering, Inc. to use
cash collateral on a final basis through November 15, 2022.
The Debtor is permitted to use cash collateral in accordance with
the budget, with a 15% variance.
The Debtor is directed to provide the adequate protection by making
monthly payment through November 15, 2022, as follows:
a. HOP Capital: $3,000
b. Danny Song: $1,000
c. U.S. Small Business Administration: $731
d. Internal Revenue Service: $5,207.17
Secured creditors holding valid, pre-petition liens secured by the
cash collateral used by the Debtor post-petition were granted a
replacement lien on all post-petition revenues of the Debtor to the
same extent, priority and validity (if any) that their liens
attached to the cash collateral. The scope of the replacement lien
is limited to the amount (if any) that cash collateral diminishes
post-petition as a result of the post-petition use of cash
collateral by the Debtor.
A copy of the order is available at https://bit.ly/3DIfNOy from
PacerMonitor.com.
About Innerline Engineering
Corona, Cal.-based Innerline Engineering, Inc. -
http://www.innerlineengineering.com/-- offers a variety of
services to municipalities, utility owners, industrial facilities
and commercial property owners for the maintenance of their
underground utilities.
Innerline Engineering filed a petition for Chapter 11 protection
(Bankr. C.D. Cal. Case No. 21-14305) on Aug. 9, 2021, listing as
much as $10 million in both assets and liabilities. Thomas J.C.
Yeh, chief financial officer, signed the petition.
Judge Wayne E. Johnson oversees the case.
Resnik Hayes Moradi LLP serves as the Debtor's bankruptcy counsel.
INPIXON: KINS to Acquire Apps Business in $69M Merger Deal
----------------------------------------------------------
Inpixon has signed a definitive merger agreement with KINS
Technology Group, Inc., a publicly traded special purpose
acquisition company, for KINS to acquire Inpixon's enterprise apps
business (including its workplace experience technologies, indoor
mapping, events platform, augmented reality and related business
solutions).
The transaction will be structured as a business combination with
Inpixon's newly formed subsidiary, CXApp Holding Corp., that is
anticipated to result in Inpixon stockholders receiving shares in
KINS valued at approximately $69 million. The transaction is
expected to provide Inpixon's enterprise apps business with greater
capital and operational resources, a new executive management team
and board expertise to accelerate growth.
Following the closing of the transaction, CXApp will be a wholly
owned subsidiary of KINS, and the combined business will be listed
on the Nasdaq Capital Market. The transaction has been unanimously
approved by the Boards of Directors of both Inpixon and KINS and is
subject to approval by the Security and Exchange Commission, KINS
stockholders and the satisfaction of customary closing conditions.
The proposed Business Combination is expected to be completed in
the fourth quarter of 2022. Inpixon shareholders as of a record
date to be determined will be eligible to receive the KINS shares.
Mr. Khurram Sheikh, founder, chairman and CEO of KINS, said "We are
pleased to announce this transformative acquisition. The workplace
experience market is experiencing explosive growth as organizations
seek new ways to leverage technology to maximize efficiency,
increase productivity and drive growth. This shift has accelerated
due to the pandemic, as organizations adapt to the new hybrid work
environment. Customers for Inpixon's enterprise apps business line
include the who's who of Fortune 500 companies, and the business
has an established track record, consistently ranked among the top
providers of workplace experience solutions. Inpixon's enterprise
app is already well positioned in the market as a comprehensive
end-to-end solution that offers a seamless employee experience.
Moreover, we believe that with resources and capital exclusively
allocated to this business, we can enhance its organic growth
opportunities and maximize value for both Inpixon and KINS
stockholders."
Mr. Nadir Ali, CEO of Inpixon, commented, "We have been working on
multiple strategic transactions for some time and believe this
transaction will unlock significant value for stockholders. I
could not be more excited about the outlook for this line of
business. With this transaction, capital and operational resources
will be singularly focused on the growth and profitability of this
business. In addition, Inpixon shareholders will be able to benefit
in the potential upside as stockholders of two public companies,
each with distinct customers and product lines."
Following the transaction, Inpixon will retain the remainder of its
products including the Industrial Internet of Things (IIoT)
business line, and will be focused on pursuing the most
advantageous opportunities for this business and Inpixon
shareholders. In this regard, Inpixon has entered into a
non-binding letter of intent and is in due diligence stages with
another third party in connection with a potential transaction
involving the remainder of its business. Inpixon believes that
pursuing these opportunities, coupled with Inpixon's recent cost
cutting initiatives, will offer the greatest chance for maximizing
the value of their investment with dedicated and focused resources
allocated to these core business lines.
Advisors
Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal
advisor to KINS, and Mitchell Silberberg & Knupp LLP is serving as
legal advisor to Inpixon.
About Inpixon
Headquartered in Palo Alto, Calif., Inpixon (Nasdaq: INPX) is an
indoor data company and specializes in indoor intelligence. The
Company's indoor location data platform and patented technologies
ingest and integrate data with indoor maps enabling users to
harness the power of indoor data to create actionable
intelligence.
Inpixon reported a net loss of $70.13 million for the year ended
Dec. 31, 2021, a net loss of $29.21 million for the year ended Dec.
31, 2020, a net loss of $33.98 million for the year ended Dec. 31,
2019, and a net loss of $24.56 million for the year ended Dec. 31,
2018. As of June 30, 2022, the Company had $117.85 million in
total assets, $15.70 million in total liabilities, $48.16 million
in mezzanine equity, and $53.98 million in total stockholders'
equity.
J AND M SUPPLY: Wins Interim Cash Collateral Access
---------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina authorized J and M Supply of the Carolinas, LLC to use
cash collateral on an interim basis for its post-petition,
necessary and reasonable operating expenses.
The Debtor requires the use of cash collateral to maintain existing
operations and reorganize its obligations in the Chapter 11 case.
The entities that assert an interest in the Debtor's cash
collateral are Pearl Delta Funding, LLC, Cloudfund, LLC, ROC
Funding Group, LLC, and ROC Funding Group, LLC.
The Court ruled that the Secured Creditors will not retain a
continuing and replacement post-petition lien and security interest
in all property, receivables and assets of the Debtor and the
proceeds thereof, whether acquired pre-petition or post-petition.
Unless additional agreement for the interim or final use of cash
collateral is reached by the relevant parties, further hearing on
the matter will be held at 11 a.m. on September 28, 2022, at the
United States Bankruptcy Court in Wilmington, North Carolina.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3dwHC1L from PacerMonitor.com.
The Debtor projects $25,500 in gross profit and $19,415 in total
expenses for a 30-day period.
About J and M Supply
J and M Supply of the Carolinas, LLC operates a sporting goods
retail store in Leland, N.C. It is a licensed Federal Firearms
dealer and specializes in the sale of firearms, ammunition and
related equipment. The company also provides firearm and first aid
training classes and is a North Carolina certified firearms
instructor.
J and M filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-00536) on March 11,
2022, listing as much as $500,000 in both assets and liabilities.
Jennifer Bennington serves as the Subchapter V trustee.
Judge David M. Warren oversees the case.
Richard P. Cook, Esq., at Richard P. Cook, PLLC is the Debtor's
legal counsel.
J.C. PENNEY: 5 Stores Bought By Meridian JV for $53 Million
-----------------------------------------------------------
Jack Rogers of Globe St. reports that a partnership between the
Meridian Group and Martin-Diamond Associates has acquired five
Mid-Atlantic JC Penney stores for $53 million.
Copper Property CTL Pass Through Trust, the Jersey City-based
entity created last year to sell off the department store chain's
real estate assets, sold the portfolio. Acore Capital financed the
deal, and Newmark represented the seller.
The five stores, encompassing 900K SDF, all are in regional
shopping malls in Virginia, Maryland and Delaware.
The stores are located at Fair Oaks Mall in Fairfax, VA;
Springfield Town Center in Springfield, VA; The Mall in Columbia in
Columbia, MD; Westfield Annapolis Mall in Annapolis, MD; and
Christiana Mall in Newark, DE.
In a separate transaction involving an undisclosed buyer, Copper
Property also sold JC Penney stores at Pheasant Lane Mall in
Nashua, NH and Dulles Town Center in Sterling, VA.
"We believe these sales reflect current market conditions and the
market's recognition of the solid performance of J.C. Penney
post-reorganization," said Neil Aaronson, principal executive
officer of Cooper Property.
JC Penney, which emerged from bankruptcy protection last 2021, will
continue to operate the seven stores.
JC Penney filed for Chapter 11 in May 2020, citing hardships from
the pandemic lockdowns. Later that year, Simon Property Group and
Brookfield Asset Management acquired JC Penney for $800M in an
auction.
In 2021, JC Penney's retail and operating assets exited Chapter 11
bankruptcy protection through the creation of Cooper Trust, which
was created to sell 160 retail assets and six distribution centers
to third-party investors.
To date, Cooper has sold 23 store properties and six distribution
centers, generating $868 million in sale proceeds. The distribution
centers portfolio, encompassing more than 10M SF, was sold in
December in a $557M deal with National Industrial Portfolio
Property Owner LLC.
J.C. Penney holds long-term triple net leases on all of the assets
being sold by Cooper.
The partnership between Simon, the leading mall REIT, and
Brookfield Asset Management also teamed up to buy two other
retailers that went into bankruptcy: fast-fashion retailer Forever
21 in 2020 -- a deal that Brookfield divested in 2021 -- and teen
retailer Aeropostale, which went under in 2016.
According to a report in the NY Post, Simon and Brookfield jointly
bid $68 per share in April in an unsuccessful effort to acquire the
retail chain Kohl's in an $8.6B transaction.
Earlier this month, Oak Street Real Estate Capital offered to
acquire a portion of Kohl's portfolio in a $2B sale-leaseback deal,
GlobeSt. reported.
About J.C. Penney Co. Inc.
J.C. Penney Company, Inc. -- http://www.jcpenney.com/-- is an
apparel and home retailer, offering merchandise from an extensive
portfolio of private, exclusive, and national brands at over 850
stores and online. It sells clothing for women, men, juniors, kids,
and babies.
On May 15, 2020, J.C. Penney entered into a restructuring support
agreement with lenders holding 70% of its first lien debt. The RSA
contemplates agreed-upon terms for a pre-arranged financial
restructuring plan that is expected to reduce several billion
dollars of indebtedness.
To implement the plan, J.C. Penney and its affiliates on May 15,
2020, filed voluntary petitions for reorganization under Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
20-20182). At the time of the filing, J.C. Penney disclosed assets
of between $1 billion and $10 billion and liabilities of the same
range.
Judge David R. Jones oversaw the cases.
The Debtors tapped Kirkland & Ellis and Jackson Walker, LLP as
legal counsel; Katten Muchin Rosenman, LLP as special counsel;
Lazard Freres & Co. LLC as investment banker; AlixPartners, LLP as
restructuring advisor; and KPMG, LLP as tax consultant. Prime Clerk
is the claims agent, maintaining the page
http://cases.primeclerk.com/JCPenney
The committee of unsecured creditors retained Cole Schotz, P.C.,
and Cooley, LLP.
* * *
J.C. Penney in November 2020 won approval to sell substantially all
of its retail and operating assets ("OpCo") to a group formed by
landlords Brookfield Asset Management, Inc. and Simon Property
Group and senior lenders through a combination of cash and new term
loan debt.
Paul, Weiss, Rifkind, Wharton & Garrison LLP was the legal counsel,
and BRG Capital Advisors, LLC, served as financial adviser to Simon
and Brookfield.
JAJE ONE LLC: Gets OK to Hire Joel M. Aresty as Legal Counsel
-------------------------------------------------------------
Jaje One, LLC received approval from the U.S. Bankruptcy Court for
the Southern District of Florida to employ Joel M. Aresty, P.A. as
its legal counsel.
The firm's services include:
(a) advising the Debtor regarding its powers and duties and the
continued management of its business operations;
(b) advising the Debtor regarding its responsibilities in
complying with the U.S. trustee's Operating Guidelines and
Reporting Requirements and with the rules of the court;
(c) preparing legal documents;
(d) protecting the interest of the Debtor in all matters pending
before the court; and
(e) representing the Debtor in negotiation with its creditors in
the preparation of a Chapter 11 plan.
The Debtor agreed to pay the sum of $11,000 as compensation for the
firm's services.
Joel Aresty, 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 firm can be reached at:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde FL 33715
Tel: (305) 904-1903
Fax: (800) 899-1870
Email: Aresty@Mac.com
About Jaje One
JAJE One, LLC, a company in Miami Beach, Fla., sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case
No. 22-16629) on Aug. 28, 2022, with up to $10 million in assets
and up to $1 million in liabilities. Judge Robert A. Mark oversees
the case.
The Debtor is represented by Joel M. Aresty, Esq., at Joel M.
Aresty, P.A.
JORGABY FREIGHT: Wins Interim Cash Collateral Access
----------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Jorgaby Freight Services, LLC and its
debtor-affiliates to use cash collateral on an interim basis for 14
days, in accordance with the 14-Day Budget, pending final hearing.
The Debtor requires the use of cash collateral or
debtor-in-possession financing, as applicable, to fund business
operations, provide for maintenance, repair and road worthiness of
rolling stock and to pay post-petition tax and toll obligations.
In the ordinary course of its business, the Debtor generates
invoices from its customers, which it sells to TBS Factoring
Service, LLC for a discount. TBS is commercial factoring company,
based in Oklahoma City. The Debtor uses the money it receives from
TBS to operate is business. TBS services and collects the Debtor's
invoices and earns a profit on the difference between the face
amount of the invoices and the amount it pays the Debtor buy them.
This arrangement is evidenced and governed by an Accounts
Receivable Purchase Agreement, dated June 25, 2012.
TBS asserts that the Debtor is indebted to it under the Factoring
Agreement, including related assignments, security agreements and
other loan instruments entered into prior to the Petition Date and
that the TBS Indebtedness is secured by properly perfected liens on
all or substantially all of the Debtor's assets, except for real
estate.
Truist Bank asserts the Debtors are obligated to it on account of
prepetition secured financings which have now been reduced to
judgment. Truist claims a lien on, inter alia, the Debtors'
accounts, vehicles, equipment, inventory and certain real property.
Truist asserts that its liens arise from various pledge agreements
and are perfected by various UCC-1 financing statements, a deed of
trust and annotations on title certificates. Truist asserts that
the balance owed by the Debtors on account of the judgment exceeds
$1.2 million.
According to the Court, the automatic stay of 11 U.S.C. section
362(a) is modified as needed to allow TBS to perform its
obligations under the Factoring Agreement during the Interim Period
and to allow the Debtor to perform its obligations under the
Factoring Agreement, except for the factoring of post-petition
invoices, which will be governed by a separate order, pursuant to
the Motion, authorizing DIP financing.
All revenues received from its factoring service, TBS, on a
post-petition basis by the Debtor will be collected, received and
maintained by the Debtor in its DIP account to be established
forthwith at Axos Bank and will not be used except in accordance
with the terms of the Interim Order and any Cash Management Order
entered thereafter.
As adequate protection, TBS will be granted a post-petition
security interest in, and replacement lien upon, subject only to
prior non-avoidable liens, the Debtor's assets and property. TBS
will not receive a security interest in, or a replacement lien on,
the Debtor's avoidance actions under chapter 5 of the Bankruptcy
Code. The TBS Replacement Liens will serve as adequate protection
for the use of the Collateral to the extent of any diminution of
the value of the Collateral.
As adequate protection, Truist Bank will be granted a post-petition
security interest in, and replacement liens upon, subject only to
prior non-avoidable liens, the Debtor's assets and property.
All liens and security interests granted are deemed effective,
valid, and perfected as of the Petition Date, without the necessity
of filing or recording by or with any entity of any documents or
instruments otherwise required to be filed or recorded under
applicable non-bankruptcy law.
To the extent necessary, TBS will have an super-priority
administrative expense pursuant to 11 U.S.C. section 507(b) in the
Debtor's Chapter 11 Case and against the Debtor's bankruptcy estate
for the Debtor's use of cash collateral to the extent of any
diminution in the value of TBS's interest in the Collateral and
this administrative claim will have priority over and above all
other costs and expenses of the kind specified in, or ordered
pursuant to, 11 U.S.C. sections 503(b) or 507(a) of except as
otherwise provided therein.
The Debtor will maintain a factoring reserve account in the amount
of at least $50,000 and is authorized and directed to replenish the
reserve account to the minimum amount within seven days of
notification of a shortfall.
These events constitute an "Event of Default:"
a. The Debtors' Chapter 11 Case(s) is (are) converted to a
case (cases) under Chapter 7 of the Bankruptcy Code;
b. Any default under, breach of or failure to comply with, any
provisions of the Interim Order, including a failure to adhere to
the 14 Day Budget, within a permitted variance of 10% for revenue
or expenditures (not including costs of fuel for which there shall
be no cap on permitted variance), which breach is not cured within
seven business days after the Debtor's receipt of written notice
thereof;
c. Any lien, security interest or priority purported to be
created by the Interim Order will, for any reason cease to be valid
and enforceable in accordance with the original terms of this
Interim Order, or subsequent orders are entered by the Court
amending, modifying, supplementing, vacating or staying the Interim
Order without the written consent of the effected secured party;
d. The Court enters an order contrary to the provisions of the
Interim Order:
(i) granting any lien or security interest that is
senior or pari passu to any lien held by TBS in any of its
Collateral or any assets subject to the TBS Replacement Lien to any
person or entity other than TBS;
(ii) granting any lien or security interest that is
subordinate to any lien held by TBS in any of its Collateral or any
assets subject to the TBS Replacement Lien to any person or entity
excepting there from any replacement lien granted to the holder of
a Purchase Money Security Interest in Trucks, Trailers and or other
equipment utilized in the ongoing operations of the Debtor's
business, other than TBS without the prior written consent of TBS;
(iii) granting any lien or security interest that is
senior or pari passu to any lien held by Truist in any of its
collateral or any assets subject to the Truist Replacement Lien to
any person or entity other than Truist; and
(iv) granting any lien or security interest that is
subordinate to any lien held by Truist in any of its collateral or
any assets subject to the Truist Replacement Lien to any person or
entity excepting there from any replacement lien granted to the
holder of a Purchase Money Security Interest in Trucks, Trailers
and or other equipment utilized in the ongoing operations of the
Debtor’s business, other than Truist without the prior written
consent of Truist.
The final hearing on the matter is set for October 3, 2022, at 9:30
a.m.
A copy of the order is available at https://bit.ly/3UuvEWI from
PacerMonitor.com.
A copy of the 13-week budget is available at https://bit.ly/3CcA9hD
from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$93,878 for the week ending September 16, 2022;
$93,278 for the week ending September 23, 2022;
$94,970 for the week ending September 30, 2022;
$96,720 for the week ending October 7, 2022;
$90,949 for the week ending October 14, 2022;
$92,198 for the week ending October 21, 2022;
$140,081 for the week ending October 28, 2022;
$104,868 for the week ending November 4, 2022;
$104,148 for the week ending November 11, 2022;
$102,118 for the week ending November 18, 2022;
$102,919 for the week ending November 25, 2022;
$103,378 for the week ending December 2, 2022;
$101,528 for the week ending December 9, 2022; and
$101,528 for the week ending December 16, 2022.
About Jorgaby Freight Services
Jorgaby Freight Services LLC is a trucking services provider.
Jorgaby Freight Services LLC with affiliates Jorgaby Delivery
Services, Inc, Jorgaby Investments, LLC, and Jorgaby Logistix, Inc,
each filed a petition for relief under Subchapter V of Chapter 11
of the Bankruptcy Code (Bankr. S.D. Tex. Case Nos. 22-36208 to
22-36211) on Sept. 5, 2022.
In the petition filed by Magdiel Herrera, as COO, Jorgaby Freight
reported assets between $1 million and $10 million and liabilities
between $100,000 and $500,000.
Jarrod B Martin has been appointed as Subchapter V trustee.
The Debtors are represented by Donald L Wyatt of Attorney Donald
Wyatt PC.
JOURNEY PERSONAL: S&P Downgrades ICR to 'CCC+', Outlook Negative
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Raleigh,
N.C.-based personal care products manufacturer Journey Personal
Care Holdings Ltd. to 'CCC+' from 'B-'.
At the same time, S&P Global Ratings revised the business risk
profile on the company to vulnerable from weak and liquidity
assessment to less than adequate from adequate.
Finally, S&P Global Ratings lowered its issue-level rating on the
company's US$650 million senior secured term loan to 'CCC+' from
'B-'. The '3' recovery rating on the debt is unchanged, indicating
meaningful (50-70%; rounded estimate: 60%) recovery at default.
The negative outlook reflects S&P's view that JPC's EBITDA is
highly vulnerable to shifts in commodity costs and, given the
company's limited ability to adjust pricing , could delay
improvement in EBITDA and keep the debt-to-EBITDA ratio elevated
over the next 12 months. The outlook also incorporates the risks
that JPC is unable to generate sufficient EBITDA to cover its fixed
charges.
The downgrade reflects S&P's opinion that JPC's operating
performance will remain pressured through 2023, which could lead to
an unsustainable capital structure.
JPC's operating performance for year-to-date June 30, 2022, remains
pressured by the increase in raw materials costs largely because of
persistently elevated commodity prices. Approximately 70% of the
company's cost of goods sold (COGS) was composed of raw materials,
primarily fluff pulp, non-woven (polypropylene) polymers, and super
absorbent polymers. Furthermore, the spike in utilities and
in-bound freight costs exacerbated the pressures on the company's
EBITDA. Finally, the weakness in the euro-U.S.-dollar exchange rate
hampered the company's sales even though volumes remained steady.
As a result, the company's EBITDA for year-to-date June 30, 2022,
weakened meaningfully (down about 70%) compared with the same
period last year and S&P's previous expectations. At the same time,
JPC's debt-to-EBITDA ratio on a last-12-months to June 20, 2022,
basis deteriorated significantly to more than 10x from 8x at
year-end 2021.
S&P said, "We believe that the cost headwinds will continue to
weigh on the company's operating performance through 2023.
Specifically, we forecast over 50% lower 2022 EBITDA than in 2021
and that the company's debt-to-EBITDA ratio, on an S&P
Ratings-adjusted basis, will remain elevated. We also estimate that
the company's fixed-charge coverage ratio could remain tight in
2022 and 2023. We assess JPC's fixed charges consisting of
interest, debt amortization, cash taxes, and minimum capital
expenditure (capex) of about US$70 million-US$75 million.
Therefore, against the backdrop of rising interest costs, we
forecast that the company's internally generated EBITDA would be
insufficient to adequately cover fixed charges and it would need to
access cash on hand and the revolver. Finally, we believe that
JPC's EBITDA generation depends on favorable business and economic
conditions and only if the company sees some market-driven cost
pressures ease more materially, can it improve EBITDA in 2023."
Price increases and cost-saving initiatives should provide some
relief to operating performance in 2023, but will likely be
insufficient to cover headwinds.
JPC generates about 50% of total revenues from institutional
customers such as hospitals, long-term care institutions, and
nursing homes. The other 50% is generated from big-box retailers
and direct-to-consumers. In response to higher cost, JPC has
initiated pricing negotiations with its key retail and
institutional customers. However, given the largely fixed pricing
contracts with these customers, the company has limited ability to
immediately pass on the effect of cost inflation. S&P said,
"Although the company has begun benefiting from some price
increases, we note that there is a significant time lag between
increased COGS and when cost pass-through is reflected in revenue
and cash flow. JPC has also initiated cost-saving and efficiency
measures under its operating plan. We believe that these pricing
and cost-saving initiatives will gradually lead to improvement in
EBITDA in 2023." However, the uncertainty surrounding easing of
commodity prices and other input costs and the delay in realizing
higher pricing amplify the risks that recovery in EBITDA to
historical levels could be delayed.
JPC will rely on its modest cash balance and revolver facility to
maintain its liquidity cushion.
S&P said, "We forecast JPC will continue to preserve cash by
reducing its capex and rationalizing working capital. We forecast
low EBITDA levels for 2022; hence, we estimate that company will
exit 2022 with a meaningful free cash flow deficit. We expect JPC
will rely on its cash balance of US$20 million as of June 30, and
availability of about US$60 million under its asset-based lending
(ABL) facility to fund its fixed charges for the next 12 months.
Although the company has flexibility in liquidity at present, there
is risk of a shortfall should there be any delays in pricing
actions or unforeseen circumstances demand additional liquidity.
"The negative outlook reflects our view that JPC's EBITDA is highly
vulnerable to shifts in commodity costs and, given the company's
ability to adjust pricing, could delay improvement in EBITDA and
keep the debt-to-EBITDA ratio elevated over the next 12 months. It
also incorporates the risks that JPC is unable to generate
sufficient EBITDA to cover its fixed charges.
"We could lower the ratings if we envision specific default
scenarios such as the company's liquidity position deteriorating by
way of diminishing cash balances and lower availability on JPC's
ABL facility. We could also lower the ratings and if we believed
that a restructuring is imminent in the next 12 months.
"We could raise the ratings and revise the outlook to stable if the
company can demonstrate stability and growth in EBITDA and cash
flows such that it can comfortably cover its mandatory fixed
charges."
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 JPC, as is the case
for most rated entities owned by private-equity sponsors. We
believe the company's highly leveraged financial risk profile
points to corporate decision-making that prioritizes the interests
of the controlling owners. This also reflects the generally finite
holding periods and a focus on maximizing shareholder returns."
KAPCO FOODS: Seeks Cash Collateral Access
-----------------------------------------
Kapco Foods, LLC asks the U.S. Bankruptcy Court for the District of
South Carolina for authority to use cash collateral on which DMKA,
LLC d/b/a The Smarter Merchant and Forward Financing, LLC assert,
or may assert, a security interest and lien.
The Debtor requires the use of cash collateral to pay operational
expenses, such as employee wages, equipment leases, fuel costs,
utilities, parts and tire expenses, taxes, and insurance.
The Debtor proposes to use the funds generated from the operation
of its business, which is absolutely necessary for the continuation
of the business.
Smarter Merchant and Forward assert blanket liens in and to
substantially all of the Debtor's accounts, receivables, and/or
payment rights. Smarter Merchant asserts a secured claim in the
approximate amount of $100,000 and Celtic asserts a secured claim
in the approximate amount of $70,000.
As adequate protection for the use of cash collateral, the Debtor
agrees to provide Smarter Merchant and Forward with replacement
liens on post-petition cash collateral to the same extent and in
the same priority as their pre-petition liens, for any
post-petition diminution in the pre-petition cash collateral as
well as replacement liens on all other property that may be
acquired post-petition by the Debtor with such replacement liens
having the same extent and priority as their prepetition liens on
such property.
A copy of the motion is available at https://bit.ly/3xQxrMj from
PacerMonitor.com.
About Kapco Foods, LLC
Kapco Foods, LLC operates a hamburger restaurant as Checkers store
number 3703 in Goose Creek, South Carolina.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. S.C. Case No. 22-02586) on September 23,
2022. In the petition signed by Kathryn P. Pye, managing member,
the Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
W. Harrison Penn, Esq. at McCarthy, Reynolds, & Penn, LLC, is the
Debtor's counsel.
KEVIN LLOYD CATHCART: Trustee's Sale of Happy Valley Property OK'd
------------------------------------------------------------------
Judge Teresa H. Pearson of the U.S. Bankruptcy Court for the
District of Oregon authorized Kenneth S. Eiler, the Trustee of
Kevin Lloyd Cathcart, to sell the real property located at 702 SE
King Way, in Happy Valley, Oregon 97086, to Paul Anthony Carey and
Louise Elizabeth Carey for $575,000.
The Chapter 11 Trustee is authorized to disburse the sale proceeds
to pay the cost of sale, the realtor's commission, the Trustee's
post confirmation fees and expenses incurred to the date of
closing, the secured claim of the Bank of New York Mellon, the
secured claim of the Internal Revenue Service as provided in the
Debtor's confirmed Plan of Reorganization, and the balance then
remaining to allowed claims as provided in the Debtor's confirmed
Plan of Reorganization, provided however that the Chapter 11
Trustee will hold back $23,000 from the sale proceeds which will
not be disbursed until further order of the Court.
A hearing on the Motion was held on Sept. 1, 2022.
The bankruptcy case is Kevin Lloyd Cathcart, Case No.
20-30684-thp11 (Bankr. D. Or.).
KINGS RIVER: Files Emergency Bid to Use Cash Collateral
-------------------------------------------------------
Kings River Holdings, Inc. asks the U.S. Bankruptcy Court for the
Eastern District of Texas, Sherman Division, for authority to use
cash collateral in accordance with the budget, with a 15%
variance.
The Debtor does not anticipate having significant expenses outside
of its ordinary course of business during the first months of the
Bankruptcy Case. Proposed Cash Collateral usage is limited to
ordinary business operating expenses to maintain appropriate
manufacturing and installation procedures any ordinary marketing or
advertising costs the Debtor maintains to develop business, monthly
payments on the lease of the business office located at 6201
Technology Drive, Frisco, Texas, and to maintain an administrative
reserve for the Subchapter V Trustee's fees/costs.
The Debtor acquired Liberty Glass and Mirror through a transaction
in 2020. It has no other operations. As part of the acquisition,
the Debtor undertook certain secured debt obligations.
Specifically, on March 17, 2020, the Debtor obtained a loan from
Regions Bank through the U.S. Small Business Administration in the
amount of $2,103,800 payable over a ten-year period. The current
balance of the SBA Loan is approximately $1,700,000, with monthly
debt service obligations of $22,510.
The Secured Debt Obligation is personally guaranteed by the
Debtor's principal, Rhett Yeary and his wife, Lori Yeary, and is
otherwise secured by collateral comprising all or substantially all
of the Debtor's business assets and certain personal assets of Mr.
Yeary, as more particularly defined in each of the respective loan
documents. UCC-1 financing statements were contemporaneously filed
with respect to the Secured Debt Obligations. The Debtor has
likewise incurred other unsecured debt as part of its business
operations from Mr. Yeary.
The Debtor proposes to adequately protect the liens and security
interests of Regions Bank in connection with the Secured Debt
Obligations by granting first priority replacement liens against
all property of the Estate to the extent of any diminution in the
value of the cash collateral or any other collateral resulting from
the Debtor's use of the cash collateral. As long as the Debtor is
able to continue operating its business, the Debtor's anticipated
incoming revenue will be sufficient to maintain a positive net cash
flow adequately protecting the cash collateral. The Secured Debt
Obligations are also personally guaranteed by the Debtor's
President and guaranteed by the SBA.
A copy of the motion is available at https://bit.ly/3faXpDH from
PacerMonitor.com.
About Kings River Holdings, Inc.
Kings River Holdings, Inc. is a glass/hardware manufacturing and
installation company doing business under the assumed name Liberty
Glass and Mirror. The Debtor prides itself on providing high
quality manufactured glass goods for both residential and
commercial installation.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 22-41241) on September
23, 2022. In the petition signed by Rhett Yeary, president, the
Debtor disclosed up to $100,000 in assets and up to $10 million in
liabilities.
Thomas D. Berghman, Esq., at Munsch Hardt Kopf and Harr, PC is the
Debtor's counsel.
LAREDO PETROLEUM: S&P Upgrades ICR to 'B', Outlook Stable
---------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on
Oklahoma-based crude oil and natural gas exploration and production
(E&P) company Laredo Petroleum Inc. to 'B' from 'B-'.
S&P said, "At the same time, we raised our issue-level rating on
Laredo's senior unsecured notes to 'B+' from 'B'. The '2' recovery
rating is unchanged, indicating our expectation for substantial
(capped at 70%-90%; rounded estimate: 85%) recovery of principal in
the event of a payment default.
"The stable outlook reflects our view that the company will
generate a moderate amount of positive FOCF, which we expect it
will use to continue to reduce its debt. We forecast Laredo's
average funds from operations (FFO) to debt will be in the 55%-60%
range over the next 12-24 months.
"Our 'B' issuer credit rating reflects the company's improved
credit measures and anticipated debt reduction over the next 12
months.
"We expect that supportive commodity prices for the remainder of
2022 and 2023, coupled with a moderate capital spending program,
will enable Laredo to generate about $230 million of FOCF in 2022
and $400 million in 2023. This incorporates our current commodity
price assumptions--including West Texas Intermediate (WTI) crude
oil prices of $95 per barrel (bbl) for the remainder of 2022 and
$80/bbl in 2023 and Henry Hub natural gas prices of $8.25 per
million Btus (mmBtu) for the remainder of 2022 and $5.50/mmBtu in
2023--and capital expenditure (capex) of about $560 million in 2022
and $590 million in 2023. We expect Laredo will primarily use its
FOCF for debt reduction given its net debt target of $700
million-$750 million, which it expects to achieve by year-end 2023.
Based on its target, the company will need to reduce its net debt
by $400 million-$450 million relative to its position in mid-2022.
Laredo has repurchased about $92 million of its senior unsecured
notes in the open market since midyear and we expect it will mostly
reach its target through further actual debt repayment in the open
market or tenders, rather than by building cash. We believe the
company will use a smaller portion of its FOCF to repurchase its
common shares following its board's authorization of a $200 million
two-year share repurchase program, which runs through May 2024.
Laredo has repurchased about $16 million of its equity since
announcing the program in May 2022. Nonetheless, we expect the
company's anticipated permanent debt reduction will support
stronger credit measures going forward. Specifically, we project
average FFO to debt in the 55%-60% range in 2022 and 2023 and debt
to EBITDA of about 1.4x over the same period."
The company's recent transactions have improved its future drilling
inventory location count.
Laredo transformed its asset portfolio through a series of asset
acquisitions and divestments in 2021, which resulted in an oilier
asset base and an improved inventory of future drilling locations.
The company now has about eight years of drilling inventory in its
core Howard County and Glasscock County holdings, assuming it
maintains a two-rig drilling program. This compares with around
five years of inventory prior to the transactions, which S&P had
viewed as a negative rating consideration. Laredo will likely rely
on continued bolt-on acquisitions in the Midland Basin in order to
balance production and proved reserve growth with a suitable
drilling inventory.
The company's production and proved developed reserves remain small
compared with those of its similarly rated peers.
S&Ps aid, "We apply a negative one-notch comparative ratings
analysis modifier to our 'b+' anchor on Laredo to arrive at our
final 'B' issuer credit rating. This reflects the smaller scale of
the company's production and proved developed reserves compared
with that of its higher-rated peers, such as Chord Energy
(B+/Positive/--) and SM Energy (B+/Positive/--).
"The stable outlook on Laredo reflects our expectation that it will
maintain a modest drilling program over the next 12 months as it
continues to develop and expand its proved reserves. We anticipate
the company will generate positive discretionary cash flow and
continue to reduce its gross debt, which will support improved
credit measures over the next 12-24 months, including FFO to debt
of about 60%.
"We could lower our rating on Laredo if its credit measures weaken
such that its FFO to debt falls below 30% for a sustained period.
This would most likely occur if commodity prices decline well below
our current expectations or its capex materially exceeds our
forecast absent an offsetting improvement in its cash flow.
"We could raise our rating on Laredo if it increases its production
and proved developed reserves to levels more in line with those of
its higher-rated peers while maintaining FFO to debt of comfortably
above 45% and operating with a moderate financial policy, including
executing on its stated debt reduction plans."
ESG credit indicators: E-4, S-2, G-2
S&P said, "Environmental factors are a negative consideration in
our rating analysis of Laredo Petroleum Inc. because the E&P
industry is contending with the accelerating energy transition and
adoption of renewable energy sources. We believe falling demand for
fossil fuels will lead to declining profitability and returns for
the industry as it fights to retain and regain investors that seek
higher-return investments. Laredo is targeting a 31% reduction in
its scope 1 greenhouse gas (GHG) emissions by 2025 (from a 2019
baseline) and the elimination of its routine flaring by 2025. In
addition, Laredo has begun the process to certify its gas as
responsibly sourced gas."
LASHLINER INC: Gets OK to Hire Law Offices of D. Merrit as Counsel
------------------------------------------------------------------
Lashliner, Inc. received approval from the U.S. Bankruptcy Court
for the Western District of Washington to employ the Law Offices of
D. Merrit to handle its Chapter 11 bankruptcy case.
The firm will be paid at these rates:
Attorneys $370 per hour
Paralegals $150 per hour
The firm will also be reimbursed for its out-of-pocket expenses.
The Debtor paid the firm a retainer of $10,000.
Dmitry Merrit, Esq., a partner at Law Offices of D. Merrit,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Dmitry Merrit, Esq.
Law Offices of D. Merrit
14205 SE 36th Street, Suite 100
Bellevue, WA 98006
Tel: (360)322-4511
Fax: (323) 978-6598
Email: merritlaw@yahoo.com
About Lashliner Inc.
LashLiner Inc. is an innovative cosmetics brand, which conducts
business under the name Lashliner LLC. The company is based in
Woodinville, Wash.
LashLiner filed a petition for relief under Subchapter V of Chapter
11 of the Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-11273) on
Aug. 8, 2022, with between $1 million and $10 million in both
assets and liabilities. Kathryn E Perkins has been appointed as
Subchapter V trustee.
Judge Timothy W. Dore oversees the case.
Dmitry Merrit, Esq., at the Law Offices of D. Merrit & Associates,
is the Debtor's counsel.
LEVEL FOUR ORTHOTICS: Taps Verdolino & Lowey as Accountant
----------------------------------------------------------
Level Four Orthotics & Prosthetics, Inc. and its affiliates seek
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ Verdolino & Lowey, P.C. as their accountant and
financial advisor.
The firm's services include:
a. preparing tax returns and related documentation;
b. performing any accounting and bookkeeping services necessary
for the preparation of tax returns and other case requirements such
as the Office of the U.S. Trustee's required monthly operating
reports;
c. assisting in preparing the Debtors' statements of financial
affairs and schedules;
d. assisting in the preparation or review of cash flow and
related budget projections, and advising the Debtors as to
post-filing financing;
e. assisting the Debtors in reviewing and analyzing prospective
sale proposals and related services;
f. assisting in the review and analysis of the Debtors' business
and their operations;
g. assisting with regard to accounting and accounting system
matters;
h. assisting in reviewing, reconciling, analyzing and, if
necessary, objecting to proofs of claim;
i. reviewing the Debtors' books and records for possible
avoidable transactions such as preference and fraudulent transfer
claims including, but not limited to, under Bankruptcy Code
Sections 547 and 548;
j. assisting in the valuation and insolvency analyses and other
litigation issues and, if necessary, expert report preparation and
testimony;
k. assisting with plan development and preparation, if any,
including feasibility;
l. assisting with employee benefit plan issues, including 401k
plans;
m. assisting in obtaining, retaining and preserving electronic
and paper records;
n. providing general financial advisory services and assistance
with other related matters as may be directed by the Debtors and
their legal counsel, or the court; and
o. providing testimony in court if necessary.
Verdolino & Lowey will be paid at these rates:
Craig R. Jalbert $525 per hour
Donald M. Swanson $395 per hour
Other Professionals $250 to $425 per hour
The firm will also be reimbursed for its out-of-pocket expenses.
Craig Jalbert, a partner at Verdolino & Lowey, 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:
Craig R. Jalbert
Verdolino & Lowey, P.C.
124 Washington Street
Foxboro, MA 02035
Tel: 508-543-1720
Fax: 508-543-4114
Email: cjalbert@vlpc.com
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. It is based in Winter Park, Fla.
Level Four and five affiliates, including Cocco Enterprises, Inc.,
sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
22-10807) on Aug. 29, 2022. At the time of the filing, Level Four
reported assets and debt of $10 million to $50 million. The
Debtors have pre-bankruptcy loan obligations totaling $20,235,011
as of the petition date, secured by some or all of the assets of
each of the Debtors.
The Hon. J. Kate Stickles is the case judge.
The Debtors tapped Ruberto, Israel & Weiner, P.C. as bankruptcy
counsel; Cross & Simon, LLC as local counsel; and Verdolino &
Lowey, P.C. as accountant and financial advisor. Kroll
Restructuring Administration, LLC is the claims agent.
LIVEWELL ASSISTED: Wins Cash Collateral Access Thru Oct 31
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized Livewell Assisted Living,
Inc. to use cash collateral on an interim basis in accordance with
the budget, with a 10% variance, through October 31, 2022.
The Debtor requires the use of cash collateral to continue its
ongoing operations. The budget provides for $345,000 in projected
income through October 31.
The possible lienholders of the Debtor's cash collateral are:
Creditor Balance owed
-------- ------------
U.S. Small Business Administration $510,017
Itria Ventures $54,483
Forward Financing $114,062
Vox Funding $80,300
Delta Bridge Funding $33,973
Wynwood Capital Group $44,970
United Fund USA $24,481
Seabrook Funding $52,465
EBF Holdings $66,960
CFG Merchant Funding $95,153
Green Grass Capital $47,680
The secured creditors are granted liens in after-acquired revenue
to the same extent and priority as they had prior to the filing of
the case.
A further hearing on the matter is scheduled for October 25 at
10:30 a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3xSkpxW from PacerMonitor.com.
The Debtor projects $345,000 in revenue and $341,186 in total
expenses for the month of October.
About Livewell Assisted Living
Livewell Assisted Living, Inc., a part of the continuing care
retirement communities industry, filed its voluntary petition for
Chapter 11 protection (Bankr. E.D.N.C. Case No. 22-00264) on Feb.
7, 2022, listing up to $500,000 in assets and up to $10 million in
liabilities. Justin Beckett, president, signed the petition.
Judge David M. Warren oversees the case.
Travis Sasser, Esq., at Sasser Law Firm represents the Debtor as
legal counsel.
LOTUS SKY: Wins Interim Cash Collateral Access
----------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division, authorized Lotus Sky, LLC to use cash collateral
on an interim basis in accordance with the budget, with a 15%
variance.
An immediate and critical need exists for the Debtor to obtain
funds in order to continue the operation of its business.
New Millennium Bank may claim that substantially all of the
Debtor's assets are subject to its Prepetition Liens as secured
lender.
To the extent of any diminution in value in the Pre-Petition
Collateral of the Secured Lender, New Millennium Bank is granted
valid, binding, enforceable, and perfected liens co-extensive with
the Secured Lender's pre-petition liens in all currently owned or
hereafter acquired property and assets of the Debtor.
The replacement liens granted are automatically perfected without
the need for filing of a UCC-1 financing statement with the
Secretary of State's Office or any other such act of perfection.
The Debtor will pay to the Secured Lender $4,000 on or before the
5th of each month starting in October 2022, as adequate protection
for use of cash collateral.
The final hearing on the matter is set for October 5, 2022, at 1:30
p.m.
A copy of the order and the Debtor's two-week budget is available
at https://bit.ly/3Sl0src from PacerMonitor.com.
The Debtor projects $17,500 in gross revenue and $13,756 in total
expenses.
About Lotus Sky, LLC
Lotus Sky, LLC operates as an OYO Hotel in Amarillo, Texas. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Tex. Case No. 22-31618) on September 2, 2022. In
the petition signed by Kunal Patel, owner, the Debtor disclosed up
to $10 million in both assets and liabilities.
Judge Michelle V. Larson oversees the case.
Joyce Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC is the
Debtor's counsel.
MACON DOOR: Interim Cash Collateral Access
------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Georgia, Macon
Division, authorized Macon Door & Hardware, Inc. to use cash
collateral on an interim basis in accordance with the budget.
As adequate protection, the Debtor is directed to provide all
prepetition liens of Daniel R. Pike, First Savings Bank, the U.S.
Small Business Administration, HYG Financial Services, Inc., and
Samson Horus, LLC.
The Debtor will pay when due, postpetition property taxes with
respect to the properties held by the Respondents as collateral, in
accordance with the Budget and the Interim Order.
A final hearing on the matter is set for October 25, 2022 at 10
a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3CdMaU2 from PacerMonitor.com.
The budget provides for total expenses, on a monthly basis, as
follows:
$155,749 for the month of September 2022;
$167,649 for the month of October 2022;
$167,749 for the month of November 2022;
$197,849 for the month of December 2022;
$197,849 for the month of January 2023; and
$212,849 for the month of February 2023.
About Macon Door & Hardware
Macon Door & Hardware Inc. — https://www.macondoor.com/ — is a
distributor of division 8 & 10 materials in the Middle Georgia
area.
Macon Door & Hardware filed a petition for relief under Subchapter
V of Chapter 11 of the Bankruptcy Code (Bankr. M.D. Ga. Case No.
22-51044) on Sept. 9, 2022. In the petition filed by Daniel L.
Pike, as president, the Debtor reported assets and liabilities
between $1 million and $10 million.
Judge Austin E. Carter oversees the case.
Robert M. Matson has been appointed as Subchapter V trustee.
The Debtor is represented by Ward Stone, Jr., Esq., at Stone &
Baxter, LLP.
MAMBA PURCHASER: S&P Alters Outlook to Stable, Affirms 'B' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on Boca Raton, Fla.-based
Mamba Purchaser Inc. (doing business as MDVIP) to stable from
negative and affirmed its 'B' issuer credit rating.
At the same time, S&P affirmed its 'B' issue-level rating on the
company's secured first-lien debt and its 'CCC+' issue-level rating
on its second-lien debt.
The stable outlook reflects MDVIP's improved credit metrics and
return to a relatively modest, but reliable, business expansion
following its leveraged buyout (LBO), with EBITDA interest coverage
of more than 2x and free operating cash flow (FOCF) to debt of more
than 5%.
MDVIP has recently improved its credit metrics. S&P siad, "Despite
our expectation for some EBITDA margin erosion in 2023 due to
increased staff and physician acquisition costs, we view the
company's expansion as back on track, which is evidenced by the
recent net increase in its number of physicians following the
interruption stemming from the coronavirus pandemic."
S&P said, "The stable outlook reflects our view that the company's
ability to increase its salesforce to a level comparable with its
pre-pandemic staffing will contribute to an expansion in its
business and improving credit metrics.During the year ended June
30, 2022, MDVIP increased its salesforce back to full capacity,
which supports our expectation for an expansion in both its
affiliated physician base and total membership. The company's
ability to sign net new physicians was subdued during the pandemic
due to the higher number of physician retirements and the delay of
its sales efforts because of COVID-related travel limitations. In
addition, MDVIP is adding partnerships with hospitals, such as its
new agreement with a hospital to source physicians over the next
five years. These efforts are critical to the company because it
must continually add new physicians to offset its physician
retirements and adequately cover its member patients. We expect
MDVIP's operating expenses will increase over the next 12 months
due to wage inflation, an expansion in the size of its salesforce,
and elevated physician acquisition costs. This will lead to a 150
basis point (bps) decline in the company's EBITDA margin in fiscal
year 2023 relative to its to 19.8% margin in fiscal year 2022
(ended June 30, 2022). However, we expect MDVIP will steadily
increase its number of physicians and members while maintaining its
current credit metrics, most notably its free cash flow
generation."
MDVIP operates with modest scale and a narrow focus in the niche
concierge medicine market, though it doesn't face reimbursement
risk. Concierge medicine is a premium service that charges
membership fees for enhanced physician access and time, including
24/7 availability. The market is small and highly fragmented with
an estimated size of about $7 billion-$8 billion. Despite having a
leading market presence with 4x more physicians than its
second-largest direct competitor, the market is fragmented and
features low barrier to entry, which provides MDVIP with only
modest market share. The company also faces competition from other
pure-play concierge medicine competitors and a small, but growing,
number of not-for-profit hospitals opening concierge primary care
practices at various price points. Direct primary care physicians
that charge lower membership prices also pose a competitive
threat.
MDVIP benefits from the recurring and visible revenue stream from
its membership-based business model. Its affiliated physician and
member retention rates are strong at about 98% and 100%,
respectively. While the company boasted a strong member-retention
rate (102%) during the pandemic, we expect it will experience some
increase in its cancellations over next 12 months due to the
recessionary environment. Nevertheless, this risk is partially
offset by MDVIP's asset-light requirements and flexible cost
structure. The company also benefits from its national
footprint--with a presence in 44 states--in a largely fragmented
market, as well its leading market position.
S&P said, "We believe the industry will continue to consolidate as
players seek to increase their scale and geographic reach. The
success of MDVIP's business depends on its ability to identify and
transition prospective physicians and patients onto its network.
Hence, we believe the company may incur higher physician
acquisition and transition costs for an extended period as its
competition intensifies. We also believe the competition for
physicians could intensify further as more physicians retire and
the number of small group and solo physician practices declines.
"We forecast FOCF to debt of more than 5%, EBITDA interest coverage
exceeding 2x, and S&P Global Ratings-adjusted leverage in the 7x-8x
range for fiscal year 2023.We expect MDVIP will generate strong
free cash flow and S&P Global Ratings-adjusted leverage in 7x-8x
range in fiscal year 2023. The company has improved its credit
metrics over the last few quarters, with EBITDA interest coverage
of more than 2x, FOCF to debt exceeding 5%, and S&P Global
Ratings-adjusted leveraged in the low-7x range for the 12 months
ended March 31, 2022. Although we believe MDVIP's margins will
decline by about 150 bps due to an increase in its operating
expenses during the fiscal year ending June 30, 2023, we also
expect strong cash flow generation (FOCF to debt of above 5%) and
S&P Global Ratings-adjusted leverage. All of the company's debt
bears variable interest rates; however, it has hedged its
first-lien term loan by using interest rate caps, which will
partially mitigate the headwinds from rising interest rates.
"The stable outlook on MDVIP reflects our expectation it will
increase its organic revenue by the mid-single-digit percent area
and generate FOCF to debt of more than 5% over the next couple of
years supported by its leading position in the concierge health
care market. We also believe the company will benefit from the
return of its full salesforce, which will likely support a boost in
its total number of physicians and, hence, its total membership.
"We could lower the rating if MDVIP's free cash flow to debt
declines below 3.0% and its S&P Global Ratings-adjusted leverage
increases above 10x with no clear prospects for recovery. This
could occur due to a slower-than-expected expansion in its top line
coupled with operational setbacks and a more than 450 bps drop in
its margin, which would likely stem from heightened competition, a
severe economic downturn, an elevated number of physician
retirements, or difficulty in acquiring new physicians and/or
members.
"We could consider raising our rating on MDVIP if it significantly
expands its business while sustaining leverage of less than 5x,
which would likely require it to exceed our base-case revenue
growth assumptions, improving its EBITDA margin above 20% on a
sustained basis. However, we would likely view any improvement in
the company's credit metrics as temporary given our belief its
financial-sponsor ownership would support aggressive financial
policies."
MEDICAL DEPOT: S&P Rates $55MM Super-Senior Term Loan 'B'
---------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '1'
recovery rating to Medical Depot Holdings Inc.'s $55 million
super-senior term loan. The '1' recovery rating indicates S&P's
expectation for very high (90%-100%; rounded estimate: 95%)
recovery in the event of a payment default. The company plans to
use the proceeds from this issuance to fund its general working
capital uses. S&P's '5' recovery rating on Medical Depot's existing
first-lien debt remains unchanged, indicating its expectation for
modest recovery in the event of a payment default. However, S&P
revised its rounded recovery estimate to 10% from 15% because the
super-priority debt will now rank ahead of the first-lien debt in
the company's capital structure. S&P's '6' recovery rating on
Medical Depot's existing second-lien debt is unchanged.
S&P said, "Despite the cash inflows from the transaction, our
outlook on the company remains negative because of its persistently
high leverage and our expectation for cash flow deficits in 2022
and 2023. Medical Depot's liquidity remains tight and we now expect
working capital usage of about $50 million in 2022, compared with
our previous expectation of $10 million, because it will need to
invest more in inventory to fill its backlog. Accordingly, while
the debt raise will likely offset its higher working capital cash
usage, we believe it has little flexibility for an
underperformance.
"Our 'CCC+' issuer credit rating on Medical Depot reflects its high
leverage and cash flow deficits, which could cause its capital
structure to become unsustainable over the longer term. In
addition, the company's low margins and the commodity-like nature
of its products are key risks that expose it to price-based
competition. The rating also reflects our expectation that the
unfavorable macroeconomic environment, including ongoing supply
chain disruptions, cost inflation, and rising interest rates, will
burden its profitability and cash flow and lead to persistently
high leverage. These factors are partially offset by Medical
Depot's leading position in the durable medical device space."
S&P's base-case scenario assumes:
-- Revenue declines by the low single digit percent area in 2022
due to reduced demand for respiratory products following the
earlier the stages of the coronavirus pandemic, which will be
somewhat offset by increased demand for its durable medical
equipment (DME) products; and
-- S&P Global Ratings-adjusted EBITDA margins decrease by 120
basis points (bps)-150 bps due to cost inflation, especially
related to freight and supply costs, which it partially offsets
with price increases.
Based on these assumptions, S&P forecasts the following metrics:
-- A free operating cash flow (FOCF) deficit of about $65
million-$70 million in 2022 and likely remain negative in 2023;
and
-- S&P Global Ratings-adjusted leverage remains elevated at more
than 12x in 2022.
S&P said, "Although we believe Medical Depot can service its
financial obligations and corporate expenses over the next 12
months, certain qualitative factors limit our assessment of its
liquidity to less than adequate. Specifically, we do not believe
the company could withstand a low-probability, high-impact adverse
event without needing to refinance. We also do not believe it has
prudent risk management or a high standing in the credit markets.
Furthermore, Medical Depot only has a $2.5 million revolver that it
uses for its letters of credit. We expect the company to secure a
$55 million new money super-senior term loan once the transaction
closes because it is already committed."
Principal liquidity sources:
-- About $47 million of cash on the balance sheet as of the
quarter ended June 30, 2022.
Principal liquidity uses:
-- Debt amortization of about $5 million;
-- Negative cash funds from operations of about $10 million;
-- Capital expenditure of about $5 million in the next 12 months;
and
-- Working capital outflows of about $50 million.
The company has a maximum first-lien net leverage covenant of 7.5x
and the new issuance would add a minimum liquidity covenant of $15
million.
In the second quarter of 2022, Medical Depot's first-lien leverage
was 6.53x (about 13% headroom). S&P expects the company will likely
remain in compliance with its covenants for the rest of 2022 and
believe it has little headroom for an underperformance.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Medical Depot's capital structure comprises the $55 million
super-senior term loan, a $2.5 million secured revolver for letters
of credit, a $122 million first-lien term loan, a $430 million
first-lien term loan, a new money $37 million first-lien term loan
(not rated), and a $4 million second-lien term loan. It also had
about $62 million borrowed under a receivable securitization
facility as of June 30, 2022.
-- The first-lien lenders receive a 100% stock pledge of foreign
subsidiaries in the collateral package.
-- S&P said, "Our '1' recovery rating on the $55 million
super-priority debt indicates our expectation for very high
recovery (90%-100%; rounded estimate: 95%). Our '5' recovery rating
on the first-lien debt indicates our expectation for modest
(10%-30%; rounded estimate: 10%) recovery in the event of a payment
default. Our '6' recovery rating on the second-lien term loan
indicates our expectation for negligible (0%-10%; rounded estimate:
0%) recovery in the event of a payment default."
-- S&P said, "Under our simulated default scenario, we assume
Medical Depot experiences revenue declines and deteriorating cash
flow because of competitive pressures, cuts to public health care
reimbursements, and a general economic downturn. Given the
company's significant debt load, we anticipate that a relatively
modest deterioration in its cash flow would significantly impair
its ability to adequately meet its fixed-charge obligations."
-- S&P said, "We estimate a gross recovery valuation of $306
million by applying a 5.0x multiple to our assumed emergence EBITDA
of $61 million. We assume that under our simulated default
scenario, Medical Depot would be able to cut costs and stabilize
its business such that it generates EBITDA of about $61 million. We
applied a 5.0x multiple to reflect the company's going-concern
prospects given its established operating platform in the DME
space."
Simulated default assumptions
-- Simulated year of default: 2024
-- Implied enterprise value multiple: 5x
-- EBITDA at emergence: $61 million
Simplified waterfall
-- Net enterprise value at default (after 5% administrative
costs): $291 million
-- Obligor/nonobligor split: 69%/31%
-- Less: priority claims (receivable securitization borrowings):
$102 million
-- Less: debt at the non-guarantor subsidiaries (including the
receivable securitization): $27 million
-- Collateral value available to senior secured creditors: $143
million
-- Super-senior debt: $67 million
--Recovery expectations: 90%-100% (rounded estimate: 95%)
-- First-lien debt: $685 million
--Recovery expectations: 10%-30% (rounded estimate: 10%)
-- Second-lien debt: $4 million
--Recovery expectations: 0%-10% (rounded estimate: 0%)
Note: All debt amounts include six months of prepetition interest.
MICHAEL LOUIS ENDICOTT: $4.1MM Rancho Property Sale to Norick OK'd
------------------------------------------------------------------
Judge Margaret M. Mann of the U.S. Bankruptcy Court for the
Southern District of California authorized Michael Louis Endicott
and Christa Rae Endicott to sell the real property located at 15747
Via De Santa Fe, Rancho, in Santa Fe, California 92091, to Joseph
H. Norick for $4.1 million.
The Sale is on the terms and conditions set forth in the Debtors'
Motion, as well as the Purchase Agreement dated June 6, 2022 and
all amendments relating thereto. It will be free and clear of all
liens, claims, and encumbrances.
The Debtors will be allowed to pay from sale of the Property all
creditor claims as set forth and contained in the Debtors' Motion.
Should any dispute arise as to the amount owed to any creditor, the
amount in dispute will be paid to the client trust account of Craig
E. Dwyer, Esq., until the claim/lien dispute has been resolved by
settlement or judicial determination. As to any amount in dispute,
the lien holder's rights in the Property will carry over and attach
to the sale proceeds until the claim/lien dispute has been
resolved.
The Court orders that any dispute or claim that may arise while the
Sellers remain as DIP in Bankruptcy Case #21-04731-MM11 and/or
while their bankruptcy ease remains open will be subject to the
exclusive jurisdiction of the Court and will not be subject to
mediation and/or arbitration.
Michael Louis Endicott and Christa Rae Endicott sought Chapter 11
protection (Bankr. S.D. Cal. Case No. 21-04731) on Dec. 23, 2021.
The Debtors tapped Craig Dwyer, Esq., as counsel.
MID SOUTH RECYCLING: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------------
Mid South Recycle, Inc. asks the U.S. Bankruptcy Court for the
Eastern District of Arkansas for authority to use cash collateral
on an emergency basis.
The Debtor requires the use of cash collateral for the continued
operation of the business to pay its employees, operating expenses,
administrative expenses, and otherwise conduct the business affairs
of the Debtor.
The primary source of income for the Debtor's operations has been
hauling scrap materials for recycle and refurbishing within
Arkansas and Texas.
Post-petition, the Debtor expects to reorganize its debts and
obligations and prepare a plan of reorganization for the benefit of
its secured and unsecured creditors.
Alternative Funding, Greenwich Business Capital, Family Business,
and Smarter Merchant have an interest in the cash collateral.
The Debtor's ability to use the cash collateral will terminate upon
(i) the conversion of the Chapter 11 case to a Chapter 7; or (ii)
the confirmation of a plan of reorganization by an order that
becomes final and non-appealable unless use of the rents is
contemplated; or (iii) subsequent Court order.
The Debtor agrees not to pay any pre-petition debts with the cash
collateral permitted to be used except upon Court orders.
The Debtor proposes the cash collateral budget of $6,288 per week
to avoid irreparable harm until further notice and any subsequent
Court order.
The Debtor proposes to account monthly for the collection and
expenditure of the cash collateral via the monthly operating report
required pursuant to the regulations of the office of the United
States Trustee and other applicable law.
The Debtor will retain in the two debtor-in-possession accounts
sufficient monthly revenue to pay operating requirements, including
payroll taxes, state and federal, customary vendor debt, and
utilities.
A copy of the motion is available at https://bit.ly/3UwNto6 from
PacerMonitor.com.
About Mid South Recycling
Mid South Recycling Inc. primarily operates in the Recycling, Waste
Materials business/industry.
Mid South Recycling Inc. filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. E.D. Ark.
Case No. 22-12261) on Aug. 19, 2022. In the petition filed by Lisa
Garretson, as officer, the Debtor reported assets between $1
million and $10 million and liabilities between $500,000 and $1
million.
The Debtor is represented by Vanessa Cash Adams of AR Law Partners,
PLLC.
Donald A. Brady, Esq., at Brady Law Firm is the Subchapter V
trustee.
MTPC LLC: Seeks Approval of Revised Bid Procedures for All Assets
-----------------------------------------------------------------
MTPC, LLC, PCPT Hamlin, LLC, and the Proton Therapy Center seek
approval from the U.S. Bankruptcy Court for the Middle District of
Tennessee of their renewed/revised bidding procedures in connection
with the auction sale of substantially all assets of MTPC and
PCPT.
The sale will be free and clear of all liens, claims, interests,
charges, and encumbrances, with any such liens, claims, interests,
charges, and encumbrances attaching to the net proceeds of the
sale.
Certain parties interested in the assets offered for sale by the
Selling Debtors requested clarity from them that certain
Court-approved bid procedures and protections governed the process
run by the Selling Debtors to sell their assets. As such, the
Selling Debtors are filing the Motion and seeking approval of bid
procedures similar to the bid procedures the Court already approved
("Bid Procedures I") to provide that clarity to such interested
parties. They believe that entry of an order will accelerate the
sale process run by them and their eventual exit from chapter 11,
which they and their advisors believe is necessary to maximize
value (and minimize expense) for the benefit of all stakeholders.
In April 2021, the Debtors and its Court-approved investment
banker, Houlihan Lokey Capital, Inc. ("HL"), initiated a process to
sell substantially all of their assets to the highest or best
offer.
On Aug. 13, 2021, the Debtors filed their Expedited Motion for
Entry of Orders (I)(A) Approving Bid Procedures for Sale of
Substantially all of the Debtors' Assets, (B) Scheduling Auction
for and Hearing to Approve Sale of Substantially all of the
Debtors' Assets, (C) Approving Form and Manner of Notice of Sale,
Auction, and Sale Hearing, (D) Approving Assumption and Assignment
Procedures, and (E) Granting Related Relief and (II)(A) Approving
Sale of Substantially all of the Debtors' Assets, (B) Authorizing
Assumption and Assignment of Executory Contracts and Unexpired
Leases, and (C) Granting Related Relief (the "Bid Procedures Motion
I").
On Aug. 27, 2021, the Court entered the Bid Procedures Order I.
Among other things, the Bid Procedures Order I approved the Bid
Procedures I. It also authorized the Debtors to select Stalking
Horse Bidder(s) and offer certain bid protections to a Stalking
Horse Bidder, including a "break fee" that does not exceed 4% of
the cash purchase price offered by a Stalking Horse Bidder if one
was selected by the Debtors. The bid protections awarded by the
Debtors pursuant to the Bid Procedures Order I were (a) a breakup
fee that does not exceed 3% of the cash purchase price contemplated
by a Stalking Horse APA, and (b) an expense reimbursement
that would not exceed $500,000.
Neither Selling Debtor selected a stalking horse bidder during this
initial sale process or offered bid protections. The Bid
Procedures Order I also approved a process to provide notice to
contract counterparties of potential assumptions and assignments
related to the sale process.
On Aug. 30, 2021, the Debtors served a Notice of 365 Contracts that
May be Assumed and Assigned in Connection with the Sale Transaction
to such counterparties identifying proposed contracts and leases
that could be assumed and assigned along with estimated cure costs.
The Selling Debtors held an auction for substantially all their
assets on Dec. 1, 2021. At the auction, Provision Trust, Inc. was
declared the successful bidder for substantially all of the Selling
Debtors' assets. On Jan. 25, 2022, the Court entered two orders at
Docket Nos. 1001 and 1002 approving the sale of substantially all
assets of the Selling Debtors to Provision Trust. Provision Trust
failed to close the proposed sales by the required closing date,
which was Feb. 28, 2022; therefore, on May 21, 2022, the Selling
Debtors filed a notice of defaults on the Court's docket.
On May 29, 2022, the Selling Debtors filed a notice terminating the
asset purchase agreements between Provision Trust and MTPC and
Provision Trust and PCPT Hamlin and advised the central
stakeholders in the Chapter 11 Cases that it would recommence the
marketing process as to each. The Selling Debtors and their
advisors have continued to negotiate and work with several
interested parties to finalize a Sale Transaction or restructuring
transaction(s). They anticipate receiving asset purchase
agreements or chapter 11 plan term sheets in the near future
outlining a transaction(s) that would allow the Selling Debtors to
exit chapter 11.
Through the Motion, the Selling Debtors seek an order from the
Court authorizing and approving (a) the (renewed) Bid Procedures
II, (b) the Bid Procedures Order II, (c) required/conforming
changes to the earlier-approved forms of notice, (d)
re-solicitation of bids for substantially all the Selling Debtors'
assets pursuant to the Bid Procedures II, (e) the Bid Protections
II for such Stalking Horse Bidder(s), and (f) procedures to set a
hearing on the Sale Transactions, which may include an auction or
auctions.
The Selling Debtors seek to resolicit bids for the sales of
substantially all their assets, which may involve an Auction or
chapter 11 plan. To provide a framework for the resolicitation
process, they seek an order authorizing and approving the Bid
Procedures II.
The following is a brief summary of the significant differences in
the proposed Bid Procedures II:
a. The Selling Debtors seek authorization to appoint a
Stalking Horse Bidder.
b. Interested parties who desire to have their bids
considered as a Stalking Horse Bid should deliver a Qualified Bid
and markup of the Form APA, as soon as possible to the Selling
Debtors and their advisors.
c. The Selling Debtors will file with the Court and serve a
notice if a Stalking Horse Bidder is selected. If the Selling
Debtors desire to select a Stalking Horse Bidder before the hearing
on this Motion, the Selling Debtors will file a notice proposing
such Stalking Horse Bid in advance of the hearing on this Motion in
anticipation of identifying the date of the Sale Hearing in
consultation with the Court, the Committee, and the Bond Trustee,
as to availability for such a hearing.
d. Pursuant to the Bid Procedures Order II, the Selling
Debtors may elect to provide Bid Protections to the selected
Stalking Horse Bidder(s) for each Sale Transactions.
e. An expense reimbursement up to $300,000 in the aggregate
to compensate for reasonable and documented out-of-pocket fees and
expenses of the Stalking Horse Bidder(s) -- note: the
previously-approved Expense Reimbursement in Bid Procedures I was
$500,000.
f. A breakup fee; provided, however, that with respect to any
particular Stalking Horse APA, (i) the total Breakup Fee will not
exceed 3% of the cash purchase price contemplated by such Stalking
Horse APA, and (ii) the total Bid Protections will not exceed 4%of
the cash purchase price
g. When either Selling Debtor has received a signed asset
purchase agreement that it has accepted/approved, the Selling
Debtor(s) will coordinate with the Court to identify availability
for a Sale Hearing on the Sale Transaction contemplated in the APA
and set a Sale Hearing.
h. The Selling Debtors will file a notice of the APA that
will be the subject of the Sale Hearing with this Court and serve
the same on interested parties known to the Debtors, including the
relevant contract counterparties.
i. Once the Sale Hearing is set, and no later than three
business days after the date is confirmed with the Court, the
Selling Debtors will serve a conformed Sale Hearing and Auction
Notice on the same interested parties.
j. To be considered by the Selling Debtors, interested
parties must submit a Qualified Bid four business days prior to the
Sale Hearing.
k. When the Selling Debtors serve the conformed Sale Hearing
and Auction Notice, they will also file and serve with the Court
and the relevant contract counterparties, respectively, a conformed
Notice of Desired 365 Contracts.
l. Contract counterparties must file objections to the
proposed cure amount by the earlier of (i) 21 days after the filing
of a notice of the potential assumption and assignment of contracts
or unexpired leases relating to the Selling Debtor's assets, and
(ii) seven days prior to the Sale Hearing
m. Contract Counterparties must file objections to proposed
adequate assurance of future performance under such an executory
contract or unexpired lease, one business day prior to the Sale
Hearing.
n. If the Selling Debtors receive competing Qualified Bids,
the Selling Debtors may, after consultation with the Bond Trustee
and the Committee, conduct the Auction on the date of the Sale
Hearing at a time to be determined, either at the Sale Hearing, or
an alternate location and time as will be timely communicated to
all persons entitled to attend the Auction, as determined by the
Selling Debtors in consultation with the Consultation Parties.
o. All objections to the proposed sale must be filed seven
day prior to the Sale Hearing.
p. If the Auction is conducted at the originally noticed Sale
Hearing and a party, other than the party identified in the notice
setting the Sale Hearing, is the successful bidder, the Selling
Debtor will file a notice with the Court containing (i) the
identity of the Successful Bidder, (ii) the terms of the successful
bid, and (iii) the date and time for the continued Sale Hearing to
approve the sale to the Successful Bidder and serve such notice on
all parties entitled to such notice, as provided in the Bid
Procedures II.
q. The Selling Debtors may terminate the auction process at
any time without further notice or approval.
For the reasons set forth, the Selling Debtors believe the Bid
Procedures II are fair, equitable, and appropriate under the
circumstances and should be approved.
The Selling Debtors submit that the renewed/revised
assumption-and-assignment procedures are appropriate and should be
approved.
Because time is of the essence with regard to the Sale
Transaction(s), the Selling Debtors request that the Court waives
the 14-day stay provided in Bankruptcy Rules 6004(h) and 6006(d).
A hearing, in-person or by video, on the Motion is set for Oct. 4,
2022, at 11:00 a.m. (CT). If a participant chooses the video
option, access information is as follows:
https://www.zoomgov.com/j/16124444713; Meeting ID 161 2444 4713.
The Objection Deadline is Sept. 27, 2022.
About MTPC LLC
MTPC LLC is a proton-therapy cancer-treatment center that serves a
multi-state area of the Southeastern United States and began
operations in 2018. It is a freestanding center with three active
treatment rooms including one fixed beam and two gantries. MTPC
is
located in a 43,500-square-foot building adjacent to the campus of
the Williamson Medical Center, in Franklin, Tenn.
MTPC's affiliate, The Proton Therapy Center, LLC, is a Tennessee
limited liability company that was organized in 2010. It is a
freestanding center with three active treatment rooms including
one
fixed beam and two gantries. Proton Therapy Center is located in
an 88,000-square-foot building on the campus of the Provision Case
CARES Cancer Center at Dowell Springs, in Knoxville, Tenn., a
comprehensive healthcare campus focusing on cancer treatment,
patient care, research, and education.
PCPT Hamlin, another affiliate of MTPC, is a Florida limited
liability company that was organized in 2018. It includes an
approximately 36,700-square-foot building in the 900-acre Hamlin
planned development in the "Town Center" of the 23,000-acre
"Horizon West" planning area of West Orange County.
MTPC and its affiliates sought Chapter 11 protection (Bankr. M.D.
Tenn. Lead Case No. 20-05438) on Dec. 15, 2020.
As of Aug. 31, 2020, MTPC's unaudited financial statements
reflected total assets of approximately $105.6 million and total
liabilities of approximately $131.2 million. Proton Therapy
Center's unaudited financial statements reflected total assets of
approximately $93.4 million and total liabilities of approximately
$130.2 million. Meanwhile, PCPT Hamlin's unaudited financial
statements reflected total assets of approximately $139.2 million
and total liabilities of approximately $138.5 million.
The Hon. Randal S. Mashburn is the case judge.
The Debtors tapped McDermott Will & Emery LLP as lead bankruptcy
counsel, Waller Lansden Dortch & Davis LLP as co-counsel with
McDermott, Trinity River Advisors LLC as restructuring advisor,
and
CRS Capstone Partners LLC as financial advisor. Stretto is the
claims agent.
The U.S. Trustee for Region 8 appointed an official committee of
unsecured creditors on Jan. 8, 2021. The committee is represented
by Sills Cummis & Gross P.C. and Manier & Herod, P.C.
NATIONWIDE FREIGHT: Wins Cash Collateral Access Thru Oct 31
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Illinois, Eastern
Division, authorized Nationwide Freight Systems, Inc. to use cash
collateral on an interim basis through October 31, 2022.
In exchange for the Debtor's use of cash collateral, PNC Bank
National Association, Vox Funding, LLC and Forward Financing, LLC
are granted, as adequate protection for their purported secured
interests in the Debtor's property, the following:
1. The Debtor will permit the Secured Creditors to inspect,
upon reasonable notice and within reasonable hours, the debtor's
books and records. By October 14, 2022, the Debtor must also
provide PNC and any other Secured Creditor that requests it, the
following information:
a. Current A/R aging report;
b. Balance sheet for the Debtor; and
c. An analysis of the proposed budget showing the actual
amounts that the debtor expended and received compared to the
amounts on the budget.
2. The Debtor must maintain and pay premiums for insurance to
cover all of its assets from fire, theft and water damage and upon
request provide proof of insurance to any Secured Creditor who asks
for it.
Without limiting or waiving the Secured Creditors' rights to
request additional adequate protection, the Secured Creditors are
granted valid, perfected, enforceable security interests in and to
the Debtor's post-petition assets, including all proceeds and
products which are now or hereafter become property of the
bankruptcy estate to the extent and priority of their alleged
pre-petition liens, if valid, but only to the extent of any
diminution in the value of those assets.
No later than October 14, the Debtor must pay PNC $10,000, plus the
monthly interest accruing on the PNC Note at the non-default
contract rate of interest, as additional adequate protection to PNC
for the use of its cash collateral during the period covered the
order covers. The payment is without prejudice to any party's right
to dispute how PNC should apply the payment and PNC's right to seek
additional adequate protection. PNC must provide the Debtor with a
calculation the monthly interest by October 7.
A further interim hearing on the motion is scheduled for October 24
at 10 a.m.
A copy of the order and the Debtor's 13-week budget through
December 2, 2022, is available at https://bit.ly/3r24FEE from
PacerMonitor.com.
The budget provides for total expenses (amounts in thousands), on a
weekly basis, as follows:
$115.4 for the week ended September 9, 2022;
$115.4 for the week ended September 16, 2022;
$115.4 for the week ended September 23, 2022;
$115.4 for the week ended September 30, 2022;
$115.8 for the week ended October 7, 2022;
$116.8 for the week ended October 14, 2022;
$117.9 for the week ended October 21, 2022;
$117.9 for the week ended October 28, 2022;
$119.4 for the week ended November 4, 2022;
$119.9 for the week ended November 11, 2022;
$120.1 for the week ended November 18, 2022;
$120.8 for the week ended November 25, 2022; and
$122.2 for the week ended December 2, 2022.
About Nationwide Freight Systems, Inc.
Nationwide Freight Systems, Inc. is an asset-based transportation
and logistics provider located in Elgin, Illinois. It provides
transportation, logistics, and distribution services to the
printing, retail, hospitality and textile industries, and also to
many manufacturing and wholesale companies of various sizes. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Ill. Case No. 22-06364) on June 6, 2022. In the
petition signed by Robert D. Kuehn, president, the Debtor disclosed
up to $1 million in assets and up to $10 million in liabilities.
Judge Benjamin A. Goldgar oversees the case.
David K. Welch, Esq., at Burke, Warren, Mackay and Serritella, PC
is the Debtor's counsel.
NCR CORP: Fitch Puts 'BB-' LongTerm IDR on Rating Watch Evolving
----------------------------------------------------------------
Fitch Ratings has placed the 'BB-' Long-Term Issuer Default Rating
(IDR) of NCR Corporation and IDRs for subsidiary co-borrowers - NCR
Limited, NCR Nederland B.V., and NCR Global Solutions Limited - on
the company's senior secured facilities as well as issue-level
ratings on Rating Watch Evolving following its announcement it will
separate into two separate companies. Fitch expects to resolve the
Rating Watch when the company provides more details on the planned
separation, including intended capital structure and financial
policy. This will likely be in 2023 as the company gets closer to
its YE 2023 planned separation.
Fitch rates the senior secured revolver and term loans issued by
each of the entities at 'BB+'/'RR2'. Fitch also rates its senior
unsecured bonds and convertible preferred shares issued by NCR
Corp. at 'BB-'/'RR4'.
The ratings affect approximately $6.2 billion of gross debt as of
June 2022, not including unused capacity on the $1.3 billion senior
secured revolving facility and including $275 million of preferred
stock.
KEY RATING DRIVERS
Separation into Two Companies: The Rating Watch reflects
uncertainty surrounding the projected 2023 separation of the
company into two public companies and what the capitalization of
each entity would be post spin-off. Fitch believes the company will
remain solidly positioned in many of its end markets, albeit faces
secular risk in the ATM business. Fitch also expects both companies
will generate solid and positive FCF that should enable them each
to grow over time. However, final capitalization and stand-alone
cost profiles will guide the ability of each company to scale
and/or execute as separate entities.
Cardtronics Acquisition: Fitch believes the vast majority of the
company's YTD revenue and EBITDA increase is owed to the inorganic
contribution from its June 2021 Cardtronics acquisition ($2.7
billion deal). FX, supply chain issues and continued pandemic
recovery in other parts of business have negatively impacted
results in recent quarters. Fitch expects these issues could become
less of a headwind (and potentially help results) in 2023 and
beyond. The pandemic further accelerated consumers' shift away from
cash, which presents risk to the ATM business. However, Fitch
believes offsetting this risk to some extent ongoing outsourcing to
providers such as NCR as banks continue to close branches.
Cardtronics claims to operate the world's largest nonbank ATM
network.
Recurring Revenue: Approximately 62% of 1H22 revenue is from
recurring revenue, including products and services under contract
where revenue is recognized over time. This recurring mix is
materially lower than other companies Fitch rates in the payments
and technology industries and is a consideration with respect to
the IDR. Management seeks to grow this mix to up to 70% of total
sales by 2024, which Fitch believes will come via a combination of
internal sales initiatives, growth in payment processing (via its
December 2018 JetPay acquisition) and incremental M&A.
ATM Challenges: Fitch believes ATM sales and network fees could be
pressured over the medium/long term as consumer habits shift
further away from cash, although increased bank outsourcing could
act as an offset. Consumers shifted further away from cash in
recent years, particularly in certain markets such as the U.S. The
Nilson Report projects cash usage (USD volume) among U.S. consumer
payments could decline by 23% from 2020-2025 and cash as a
percentage of U.S. payments transactions could shrink to 8%-9% by
2025 versus 17%-18% in 2020. Fitch believes demand for cash/ATMs
will have a long tail and NCR, as one of the market leaders in both
hardware sales and as an independent network operator (via
Cardtronics) will continue to derive material profitability from
the business.
Competitive End Markets: NCR has meaningful presence in its key end
markets, but competition is intense and fragmented in a number of
areas. NCR has leading market share in retail point of sale (POS),
restaurant software and self-checkout systems and is the #2 vendor
in ATM manufacturing with 25%-30% share behind that of Diebold
Nixdorf, Inc. It is also the world's largest non-bank ATM operator
following its Cardtronics acquisition. However, it faces a range of
competition from large fintech providers (FIS, Fiserv, others),
technology-focused disruptors and others that could limit growth
over time.
Leverage Profile: Fitch expects the company will generate
meaningful positive FCF in 2H22 and 2023 that could enable it to
reduce leverage in the coming year, although there is uncertainty
regarding stand-alone capitalization profiles for NCR and the
spun-off entity. Fitch calculates NCR's gross debt/EBITDA near 4.7x
at June 2022, or above Fitch's negative rating sensitivity for the
'BB-' rating category. However, Fitch believes management could use
FCF to improve its leverage profile through its separation by YE
2023. Gross leverage was in the 3x-4x range prior to the
Cardtronics acquisition, which Fitch believes is manageable for the
rating category if the company can return to these levels.
Solid Cash Flow: Fitch views the company's historic track record of
solid FCF generation as a key rating consideration. NCR generated
positive FCF in all except two years from 2007-2021, with 2012-2013
being negatively impacted by approximately $800 million of pension
contributions (FCF was positive during these years adjusted for
these items). The company burned FCF in 1H22 due to working capital
investments, but Fitch believes NCR will generate meaningful FCF on
a FY 2022 basis and continue to generate solid FCF in 2023 and
beyond. Post separation, FCF generation for each company will be
dependent upon each entity's capitalization and stand-alone cost
profiles.
Underfunded Pension: Fitch believes NCR's unfunded pension could be
a use of cash in the future. Future contributions should be
manageable given the company's historic track record of positive
FCF generation. NCR's pension obligation was $3.0 billion and was
underfunded by $502 million at Dec. 31, 2021. The company has
domestic and foreign defined benefit pension and postemployment as
well as domestic postretirement plans.
DERIVATION SUMMARY
Fitch's ratings and Outlook for NCR are supported by the company's
market position across its business, diversification of end
markets, history of positive FCF generation, and manageable
leverage for the rating category. NCR does not have any direct
comparables that compete across all of its segments given the
diverse nature of its end markets, but Fitch assesses the rating
relative to other payment and technology companies that provide a
range of similar software, hardware and service offerings.
Unlike other companies Fitch rates in the fintech space, NCR's
exposure to payments processing is minimal and the company derives
most of its revenue and profitability from software, services and
hardware. It operates a meaningfully lower margin business than
other Fitch-rated fintech peers due to a higher mix of hardware and
services. Euronet Worldwide, Inc. (BBB/Stable) is materially
smaller by revenue and EBITDA but historically managed a much more
conservative balance sheet. NCR has a much stronger operating
position than competitor Diebold Nixdorf Incorporated, which has
much higher leverage, lower EBITDA margins (high-single digit
percentage versus NCR's in the mid/high-teens) and burned FCF in
recent years.
KEY ASSUMPTIONS
- Organic revenue growth in the low to mid-single digit range in
the coming years;
- EBITDA margins expand modestly to the high-teens, after being
negatively impacted in 2022 from supply chain issues and FX;
- Capex near 5% of revenue, or similar to recent years;
- Majority of excess cash flow assumed used for debt reduction in
the near term until the company achieves net leverage below
3.5x. Share repurchases resumed after target leverage is
achieved;
- Gross leverage decreases from the current mid- to high-4.0x
range at June 2022 to mid-3x range by YE 2024 via debt
reduction and EBITDA growth.
RATING SENSITIVITIES
Fitch expects to resolve the Rating Watch Evolving upon receiving
further clarity on NCR's stand-alone (NewCo) capitalization and
financial policy, which likely could lead the agency to downgrade
or stabilize at NCR's current IDR and ratings.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch-defined gross leverage, or total debt with equity credit
to operating EBITDA, sustained at/below 3.5x;
- Revenue expected to grow by low-to-mid-single digit percentage
(3%-5%) or higher over multiple years, signaling an improved
long-term growth profile;
- Further clarity on NCR's stand-alone (NewCo) capitalization and
financial policy could lead us to stabilize the outlook at the
current IDR.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Gross leverage sustained at/above 4.0x;
- FCF margins expected to be sustained near 1.0% or below, or
below historical levels;
- Competitive and/or structural changes to industry that pressure
revenue, EBITDA and/or FCF.
LIQUIDITY AND DEBT STRUCTURE
Sufficient Liquidity: NCR's liquidity is stable and should support
its operations, growth and M&A strategy in the coming years
although it remains unclear what the liquidity profile will look
like upon separation in 2023. Liquidity is supported by: (i) $398
million of cash and equivalents as of June 2022, although much of
this ($318 million) was held by foreign subsidiaries and could be
taxed if returned to the U.S.; (ii) undrawn capacity on its $1.3
billion senior secured revolver; (iii) FCF generation, which ranged
from $223 million-$629 million per year from 2016-2021 (FCF margins
of 4%-10%); and (iv) up to $300 million of capacity under its A/R
securitization facility. Management expects to generate the low-end
of $400 million-$500 million in FCF in 2022, after spending heavily
on working capital initiatives in 1H22.
Debt Profile: The majority of NCR's debt is fixed rate, including
various senior unsecured notes issuances. Outstanding debt consists
of: (i) $1.8 billion on a senior secured term loan facility; (ii)
$420 million drawn on its $1.3 billion senior secured revolver; and
(iii) $3.3 billion of senior unsecured notes with maturities
ranging from 2027-2030. The company has a $1.3 billion senior
secured revolver and a $300 million trade receivables
securitization facility available for liquidity needs. The company
also has $275 million of series A convertible preferred stock
outstanding, which Fitch considers to be debt as per Fitch's
Corporate Hybrids Criteria.
ISSUER PROFILE
NCR operates as a software, services and hardware enterprise
solutions provider, with products targeted at the banking,
restaurant and hospitality sectors. Its offerings include digital
banking and payment solutions, multivendor connected device
services, ATMs, POS terminals and barcode scanners. The company is
publicly traded on the NYSE under the ticker "NCR".
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
NCR Corporation
LT IDR BB- Rating Watch On BB-
senior unsecured LT BB- Rating Watch On RR4 BB-
preferred LT BB- Rating Watch On RR4 BB-
senior secured LT BB+ Rating Watch On RR2 BB+
NCR Limited
LT IDR BB- Rating Watch On BB-
senior secured LT BB+ Rating Watch On RR2 BB+
NCR Nederland B.V.
LT IDR BB- Rating Watch On BB-
senior secured LT BB+ Rating Watch On RR2 BB+
NCR Global
Solutions Limited
LT IDR BB- Rating Watch On BB-
senior secured LT BB+ Rating Watch On RR2 BB+
NICK'S CREATIVE: Files Emergency Bid to Use Cash Collateral
-----------------------------------------------------------
Nick's Creative Marine, Inc. asks the U.S. Bankruptcy Court for the
Southern District of Florida, West Palm Beach Division, for
authority to use the cash collateral of its various creditors.
The Debtor requires the use of cash collateral to pay the Debtor's
regular operating expenses in the regular course of business, as
well as the administrative expenses in these Chapter 11 proceedings
as they become due.
GE Commercial Distribution Finance Corporation may have a lien on
the cash collateral of the Debtor by virtue of a UCC-1 filed on
October 9, 2007 (Instrument No. 200706732683) in the Florida
Secured Transaction Registry. Pursuant to the UCC-1 Financing
Statement, the secured assets include all accounts, price
protection payments, factory holdbacks, incentive payments and any
other amounts due to the Debtor.
Northpoint Commercial Finance may have a lien on the cash
collateral of the Debtor by virtue of a UCC-1 filed on October 21,
2019 (Instrument No. 201909951674) in the Florida Secured
Transaction Registry. Pursuant to the UCC-1 Financing Statement,
the secured assets include all of the Debtor's assets.
The U.S. Small Business Administration may have a lien on the cash
collateral of the of the Debtor by virtue of a UCC-1 filed on
February 15, 2022 (Instrument No. 20220049462X) in the Florida
Secured Transaction Registry. Pursuant to the UCC-1 Financing
Statement, the SBA has a security interest in accounts and deposit
accounts of the Debtor.
Seacoast National Bank may have a lien on the cash collateral of
the of the Debtor by virtue of the above referenced UCC-1 filed by
the Small Business Association on February 15, 2022 (Instrument No.
20220049462X) in the Florida Secured Transaction Registry. Pursuant
to the UCC-1 Financing Statement, the SBA has a security interest
in accounts and deposit accounts of the Debtor.
As adequate protection, the Debtor will grant a replacement lien to
GE, Northpoint, SBA and Seacoast to the same extent as any
pre-petition lien, pursuant to 11 U.S.C. section 361(2) on and in
all property set forth in the respective security agreements and
related lien documents on an interim basis through and including
the interim hearing in this matter, without any waiver by the
Debtor as to the extent, validity or priority of said liens.
A copy of the motion is available at https://bit.ly/3ScUid0 from
PacerMonitor.com.
About Nick's Creative Marine, Inc.
Nick's Creative Marine, Inc. owns a marine supply store in Riviera
Beach, Florida. The Debtor sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-17170) on
September 16, 2022. In the petition signed by Nicholas Scafidi,
vice-president, the Debtor disclosed up to $50,000 in assets and up
to $10 million in liabilities.
Judge Erik P. Kimball oversees the case.
Craig I. Kelley, Esq., at Kelly, Fulton & Kaplan, P.L., is the
Debtor's counsel.
ODONATA LTD: Gets Cash Collateral Access Thru June 2023
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Odonata Ltd. d/b/a Cowlick's Japan, to use cash
collateral on an interim basis in accordance with the budget.
The Debtor's right to use cash collateral will expire on the
earlier to occur of: (a) June 30, 2023; (b) a later date upon which
the Court fixes, or (c) a breach of the Agreement which is not
timely cured as may be permitted therein.
The Debtor executed a promissory Note in favor of the Small
Business Administration on June 19, 2020, in the original principal
amount of $150,000 with respect to an Economic Injury Disaster Loan
made by the SBA to the Debtor. To secure its obligations under the
Original Note, the Debtor executed a Security Agreement in favor of
the SBA.
On May 17, 2021, the Debtor executed a 1st Modification of Note,
increasing the principal amount of the EIDL to $400,000. To secure
its obligations to the SBA pursuant to the Modified Note, the
Debtor executed an Amended Security Agreement in favor of the SBA.
The Security Agreements grant the SBA a first priority security
interest in all assets of the Debtor. On June 30, 2022, the SBA
perfected its Pre-Petition Liens in the Collateral by filing a
UCC-1 Financing Statement with the Secretary of State of the State
of New York.
As of the Petition Date, the Debtor was indebted to the SBA in the
amount of $409,770 in connection with the EIDL. Pursuant to a
Public Notice issued in March 2022, the first interest payment on
the EIDL is not due until December 19, 2022. As of the Petition
Date, the Debtor was not in default under the Notes.
The Debtor is directed to remit $2,019 to the Lender, representing
the regular, "interest only" payment amount due under the Loan
Documents, to the Lender as adequate protection for the use of cash
collateral.
All remissions of funds will be applied by the Lender in accordance
with the Loan Documents.
As partial adequate protection, the SBA is granted valid,
perfected, and enforceable liens upon and security interests in any
cash collateral, all properly of the Debtor acquired before the
Petition Date.
The Replacement Liens will have the same priority, extent, and
validity as the Pre-Petition Liens of the SBA.
These events constitute an "Event of Default:"
a. Conversion. The entry of an order by the Court converting
the Case to a case under chapter 7 of the Bankruptcy Code;
b. Dismissal. The entry of an order by the Court dismissing
the Case pursuant to section 1112(b) or 305 of the Bankruptcy Code
or otherwise;
c. Non-Compliance. The Debtor's failure to comply with any
other provision of this Agreement;
d. Sale of Assets. The Debtor's consummation of the sale or
transfer of Collateral outside of the ordinary course of its
business without an order of the Court authorizing the same; and/or
e. Senior Liens. The Debtor's grant of a lien, claim or other
encumbrance upon the Collateral or cash collateral senior in
priority or pari passu with any of the Lender’s Pre-Petition
Liens or Replacement Liens.
A copy of the order is available at https://bit.ly/3SiOgqS from
PacerMonitor.com.
About Odonata Ltd.
Odonata Ltd., doing business as Cowlicks Japan, is a multi-services
venture company dedicated to developing a wide range of services
and products through various ventures and venues.
Odonata sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 22-10946) on July 5, 2022, listing
up to $500,000 in assets and up to $1 million in liabilities. Angel
Nieves, president of Odonata, signed the petition.
The case is assigned to Judge Michael E. Wiles.
Douglas J. Pick, Esq., at Pick & Zabicki LLP is the Debtor's
counsel.
OFF-SPEC SOLUTIONS: Wins Cash Collateral Access Thru July 2023
--------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Idaho authorized
Off-Spec Solutions, LLC, dba Cool Mountain Transport, to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance.
The Debtor requires the use of cash collateral to operate its
business in the ordinary course and maintain its properties in
accordance with state and federal law.
The Debtor's lender, Fifth Third Bank, N.A., consented to the
Debtor's use of cash collateral and use, sale or lease of other
collateral during the term of the Court's order.
The Debtor is authorized and directed to accept capital
contributions from its existing members in the aggregate amount of
$165,000, $45,000 of which was made on or before August 18, 2022,
$60,000 of which was made on or before September 8, 2022, and
$60,000 of which was made on or before September 18, 2022.
The Capital Contributions will be treated as equity in the Debtor
and not debt. The Debtor is authorized to execute any documents
related to the Capital Contributions provided they are consistent
with the Order and in form and substance acceptable to the Lender.
As adequate protection, the Lender is granted valid and perfected,
replacement security interests in, and liens on, all of the
Debtor's right, title and interest in, to and under the Collateral,
subject only to any validly perfected security interest or lien
senior to the liens of the Lender on the Petition Date.
The Replacement Liens granted will constitute valid and duly
perfected security interests and liens.
To the extent the adequate protection of the interests of the
Lender in the Collateral proves insufficient, the Lender is granted
an administrative expense claim, subject to a carve-out of $400,000
from funds held on deposit by third parties such as monies held by
WEX Bank, Electronic Funds Source, or Wheels Insurance.
In addition, the Debtor will make a monthly adequate protection
payment to Lender for a 30-day month in the amount of $20,367 and
for 31 day month in the amount of $20,771 to be applied as payment
of (i) the monthly interest accrued on the Revolving Line of Credit
Loan, the Term Loan and the Capital Expenditure Loan, (ii) monthly
principal due on the Term Loan, and (iii) monthly principal for the
Kenworth Tractor secured by the Capital Expenditure Loan.
The Debtor is authorized to pay ATC West Texas, LLC an adequate
protection payment in the amount of $11,000 in satisfaction of ATC
West's mechanic's/possessory lien and in exchange for release of
possession and control to the Debtor of the Freightliner New
Cascadia, Serial No: 3AKJHHDR2NSNB8372 tractor truck serviced by
ATC West. ATC West shall retain its rights to assert an unsecured
claim for any remaining balances asserted by ATC West and the
estate shall retain its rights to review and object to any such
unsecured claim.
The Debtor's right to use cash collateral will terminate upon the
earlier of (a) the occurrence of (a) Default occurs, or (b) the
effective date of the Debtor's Plan of Reorganization which has
been confirmed by a Court order entered in the Chapter 11 Case or
(c) July 31, 2023.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3dBhAu3 from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$390,417 for the week ending September 22, 2022;
S483,614 for the week ending September 29, 2022;
$443,289 for the week ending October 6, 2022;
$354,489 for the week ending October 13, 2022;
$408,802 for the week ending October 20, 2022;
$464,510 for the week ending October 27, 2022;
$297,206 for the week ending November 3, 2022;
$473,917 for the week ending November 10, 2022;
$274,795 for the week ending November 17, 2022;
$586,399 for the week ending November 24, 2022;
$295,004 for the week ending December 1, 2022;
$494,692 for the week ending December 8, 2022; and
$292,961 for the week ending December 15, 2022.
About Off-Spec Solutions
Off-Spec Solutions LLC, doing business as Cool Mountain Transport,
is a trucking company located in Nampa, Idaho.
Off-Spec Solutions LLC filed a petition for relief under Subchapter
V of Chapter 11 of the Bankruptcy Code on (Bankr. D. Idaho Case No.
22-00346) on August 5, 2022. In the petition filed by Richard
Coyle, as president, the Debtor reported between $1 million and $10
million in both assets and liabilities.
Matthew Todd Christensen, Esq., at Johnson May, PLLC, is the
Debtor's counsel.
The Subchapter V trustee is Matthew W. Grimshaw, Esq., at Grimshaw
Law Group, P.C.
OLYMPIA SPORTS: Seeks Use of Cash Collateral on Interim Basis
-------------------------------------------------------------
Olympia Sports Acquisitions LLC and affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for authority to use
cash collateral on an interim basis, pending a final hearing.
The Debtor requires the use of cash collateral to pay any expenses,
payments, and/or disbursements of the Debtors or incurred by the
Debtors except for those items which are then due and expressly
permitted under the Interim Order.
Prior to the Petition Date, the Debtors entered into a Credit
Agreement dated May 28, 2021 by and among White Oak Commercial
Finance, LLC, as administrative agent and collateral agent, for
itself and for the lenders party thereto from time to time, and
certain of the Debtors, as borrowers and/or guarantors thereunder.
Pursuant to the Security Agreements and all other Prepetition Loan
Documents that purport to create a lien in favor of the Prepetition
Agent, the Debtors granted to the Prepetition Agent, for the
benefit of themselves and the Prepetition Lenders, to secure the
Prepetition Obligations, a first priority security interest in and
continuing lien on substantially all of the Debtors' assets and
property.
As of the Petition Date, the Debtors were indebted to the
Prepetition Secured Parties in the aggregate amount of $169,455,
including: (a) accrued and unpaid interest in the amount of $985,
(b) collateral management fee in the amount of $4,000, (c) Unused
Line Fee in the amount of $1,250, (d) Early Termination Fee in the
amount of $100,000, (e) unpaid bank charges in the amount of $888,
(e) lien search and filing fees in the amount of $8,498, and (f)
accrued and unpaid Credit Party Expenses in the amount of $53,833.
As adequate protection, the Prepetition Secured Parties will
receive, postpetition and replacement liens and superpriority
claims as adequate protection against any diminution in value of
the Prepetition Agent's interest in the Prepetition Collateral,
including cash collateral.
The Debtors will also pay (i) all Outstanding Obligations as of the
Petition Date and (ii) the Prepetition Secured Parties' attorneys,
financial advisors' and accountants' fees and disbursements
incurred after the Petition Date.
The Adequate Protection Liens will be effective and perfected as of
the Petition Date and without the necessity of the execution by the
Debtors of mortgages, security agreements, pledge agreements,
financing statements or other agreements.
A hearing on the matter is set for October 6, 2022 at 11:30 a.m.
A copy of the motion is available at https://bit.ly/3LwALlg from
PacerMonitor.com.
About Olympia Sports
Olympia Sports Acquisitions, LLC, is a sporting goods retail
company that maintains brick and mortar locations across the East
Coast, including Maine, New Hampshire, Vermont, New York,
Massachusetts, Rhode Island, and New Jersey.
On Sept. 11, 2022, Olympia Sports and several affiliates,
including, RSG Acquisitions, LLC, Project Running Specialties,
Inc., and The Running Specialty Group, LLC, sought Chapter 11
bankruptcy protection (Bankr. D. Del. Lead Case No. 22-10853).
Olympia Sports estimated assets of $1 million to $10 million and
liabilities of $10 million to $50 million as of the bankruptcy
filing.
The Debtors tapped Shulman Bastian Friedman & Bui LLP as general
bankruptcy counsel; Morris James LLP as local Delaware counsel; and
Force 10 Partners as restructuring advisor. BMC Group is the
claims agent.
OMNICROBE NATURAL: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Omnicrobe Natural Solutions, Inc.
2550 North FM 1229
Colorado City, TX 79512
Business Description: Omnicrobe Natural is engaged in providing
scientific research and development
services.
Chapter 11 Petition Date: September 28, 2022
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 22-50147
Debtor's Counsel: David R. Langston, Esq.
MULLIN HOARD & BROWN, L.L.P.
P.O. Box 2585
Lubbock, TX 79408
Tel: 806-765-7491
Email: drl@mhba.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert Polley as CEO.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/H3ZIP3Y/Omnicrobe_Natural_Solutions_Inc__txnbke-22-50147__0001.0.pdf?mcid=tGE4TAMA
OT MERGER: S&P Alters Outlook to Negative, Affirms 'B-' ICR
-----------------------------------------------------------
S&P Global Ratings revised its outlook on global saw chain
manufacturer OT Merger Corp. to negative from stable and affirmed
its 'B-'issuer credit rating on the company.
S&P said, "We also affirmed our 'B-'issue-level rating and '3'
recovery rating on OT Merger's first-lien debt facilities as well
as our 'CCC+' issue-level rating and '5' recovery rating on the
senior unsecured notes.
"The negative outlook reflects our expectation that S&P Global
Ratings-adjusted debt-to-EBITDA could remain elevated above 9x, and
that free operating cash flow (FOCF) will likely be negative over
the next 12 months."
OT Merger continues to experience pressure from inflation, which
will materially affect operating performance in 2022. While gross
margins sequentially improved in the second quarter, prices for
steel and freight remain elevated and the lag in pricing offsets
favorable volume mix, causing S&P Global Ratings-adjusted EBITDA
margins to fall over 500 basis points (bps) from the prior year.
This pressure should be relatively temporary once OT Merger can
work through its higher cost inventory and inflation moderates.
However, pricing will continue to be a significant driving force
over the next 12 months and could present further risks if the
company cannot pass through costs in an effective and efficient
manner. OT Merger is also strategically evaluating its cost
structure, which should improve margins going forward, but the high
costs are a likely headwind this year. As a result, S&P anticipates
leverage could remain above 9.0x in 2022.
A favorable demand environment should provide modest top-line
expansion over the next 12 months, despite expectations for some
slowdown in original equipment manufacturer (OEM) markets. For the
last 12 months (LTM) ended June 30, 2022, OT Merger reported sales
growth of 8.8% on continued demand for products in North America
and favorable pricing mix. S&P said, "With a healthy backlog of
over $320 million, we believe this trend should continue for at
least the next quarter or two. However, the company has seen some
slowdown in orders from OEM customers who are experiencing higher
channel inventory. A reduction in demand for consumer power
equipment could also affect sales over the next 12-18 months given
the surge of growth in these markets during the pandemic, when
secular trends supported gardening and other outdoor activity. As
such, we anticipate revenue to grow in the mid-single-digit percent
area in 2022 and be relatively flat in 2023."
FOCF is likely to remain negative in 2022 although liquidity
remains intact. Higher costs of steel and inventory catch-up
purchases during the second quarter led to sizable working capital
outflows and further draws on its revolving facilities. S&P said,
"While we expect this trend to somewhat reverse in the second half
of 2022, we anticipate full-year working capital will remain a use
of cash, resulting in negative FOCF of $30 million-$50 million.
With about $43 million of cash on the balance sheet and $106
million of availability on the combined asset base and revolving
credit facilities, we expect OT Merger to maintain adequate
liquidity over the next 12 months, even with its current cash flow
deficit. However, we note a modest degree of risk to the rating
from a cash flow perspective, and, if the company cannot pass
through prices or adopts more aggressive financial policies that
favor acquisitions or shareholder returns, liquidity could easily
become constrained."
S&P said, "The negative outlook reflects our view that OT Merger's
leverage will remain elevated and FOCF is likely to be negative
over the next 12 months. Specifically, we expect leverage to
improve toward 9x, but the company could underperform our base-case
forecast if it faces lower than expected demand, continued pricing
pass-through and supply chain pressure, or greater strategic and
restructuring costs."
S&P could lower its rating over the next 12 months if:
-- Weak profitability and negative cash flow generation persists
such that we view its capital structure as unstainable or
anticipate a distressed exchange offering. Specifically, this could
be characterized by leverage remaining above 9x with limited to no
prospects for improvement;
-- OT Merger's liquidity position weakens significantly due to
underperformance; or
-- The company increases its reliance on its revolver such that it
triggers the leverage covenant, and S&P believes it cannot maintain
headroom of at least 15%.
S&P could revise its outlook to stable over the next 12 months if:
-- S&P believes OT Merger can generate enough operating profit to
improve and maintain leverage well below 9x;
-- Its S&P Global Ratings-adjusted FOCF is neutral to positive;
and
-- Liquidity remains adequate.
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 OT Merger, as is the
case for most rated entities owned by private-equity sponsors. We
believe its 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."
PDC ENERGY: S&P Alters Outlook to Positive, Affirms 'BB' ICR
------------------------------------------------------------
S&P Global Ratings revised its outlook on Colorado-based
exploration and production (E&P) company PDC Energy Inc. to
positive from stable and affirmed its 'BB' issuer credit rating and
its 'BB' issue-level rating on its senior unsecured debt.
S&P said, "The positive outlook reflects the potential we will
raise our ratings if we believe PDC can continue to successfully
navigate the Colorado permitting process, including approval of
it's Guanella Comprehensive Area Plan (CAP), to maintain a
significant permit runway. In addition, an upgrade would require
improving the proved developed reserve base and related reserve
life relative to peers. Finally, our outlook assumes PDC will
maintain conservative financial policies, including FFO to debt of
comfortably above 60%, under most crude oil and natural gas price
scenarios."
PDC has made material progress toward establishing a permitting
framework that support its future drilling.
S&P believes the company has made material progress in navigating
Colorado's revised permitting process over the past year. For
example, it received approval for its Kenosha Oil and Gas
Development Plan (OGDP), which covers 60 wells, and is currently
scheduled to receive a final determination from the Colorado Oil &
Gas Conservation Commission on its Guanella CAP on Dec. 7, 2022. If
approved, the CAP would add about 450 drilling locations to PDC's
inventory. The successful approval of the Guanella CAP would
further demonstrate the company's ability to navigate Colorado's
regulatory environment. In addition, through its acquisition of
Great Western, PDC inherited the Broe OGDP (30 wells) and Ocho Pad
(10 wells). Including its drilled uncompleted wells (DUCs) and
existing permits, the approval of the Guanella CAP would provide it
with a well program that could extend beyond the next six years
depending on its drilling levels.
Favorable oil and natural gas prices, as well as the company's
measured capital spending and debt repayment, support strong credit
measures.
S&P said, "We expect PDC will continue to focus on a combination of
debt repayment and shareholder distributions, particularly the
repayment of the outstanding credit facility debt stemming from its
acquisition of Great Western Petroleum last May. Like much of the
industry, the company has focused on generating cash flow for debt
repayment and shareholder returns with a goal of returning at least
60% of its cash flow--after its base dividend--to its shareholders.
We expect PDC's financial measures will remain strong under most
price environments. Specifically, we forecast FFO to debt of well
over 100% in 2022 and 2023 and anticipate its FFO to debt will
likely exceed 60% under our long-term price assumptions. Likewise,
we estimate PDC's debt to EBITDA will remain below 1x under the
same conditions." These measures, combined with the company's
strong liquidity, provide it with a cushion to help absorb any
unanticipated delays in its permitting.
The company's size and scale are at the stronger end of the range
relative to those of its peers with similar business risk
profiles.
S&P said, "PDC's production in the second quarter of 2022 was
235,000 barrels of oil equivalent per day (mboe/d) and as of Dec.
31, 2021, it had estimated proved reserves of about 1,000 million
barrels of oil equivalent (mmboe) pro forma for the Great Western
acquisition, which is larger than that of most of its peers we
assess as being in the weak business risk category. However, a
relatively high proportion (about 50%) of the company's reserves
are classified as proved undeveloped, which indicates that it will
require significant capital expenditure to develop them. PDC has
approximately 230,000 net acres in the Wattenberg Field in the
Denver-Julesburg (DJ) Basin of Colorado and about 25,000 net acres
in the Delaware Basin in Texas. Our ratings reflect the higher
regulatory hurdles and more complicated permitting processes in the
DJ Basin, which somewhat offset the benefits from its scale.
However, PDC's DJ acreage is largely in Weld County and most of it
is in unincorporated rural areas, which have been more
accommodating to the oil and gas industry and are more likely to
approve oil and gas permits relative to more urban areas.
"The positive outlook on PDC reflects the progress it has made in
obtaining permits to provide an adequate drilling horizon under the
revised Colorado permitting framework. The outlook also reflects
our expectation for a very strong financial performance under most
price environments, including our long-term price assumptions,
which will provide it with a buffer to offset some of the elevated
regulatory hurdles it faces in Colorado.
"We could revise our outlook on PDC to stable if we do not believe
it will be able to successfully navigate the new Colorado
permitting process, potentially due to a significant delay in, or
failure to gain approval for, the Guanella CAP. We could also
revise our outlook to stable if, contrary to our expectations, the
company pursues a much more aggressive financial policy such that
FFO/debt is sustained below 60% with no near-term remedy.
"We could raise our ratings on PDC by one notch to 'BB+' if we
believe it will be able to consistently obtain regulatory approval
for its permits, including the Guanella CAP, under the revised
Colorado framework. In addition, we will also want its percentage
of proved developed reserves and related reserve life to improve to
levels more consistent with peers. At the same time, we would
expect a very strong financial performance, including FFO to debt
of comfortably above 60% under most pricing scenarios (including
our long-term pricing assumptions of $50 per barrel [/bbl] for West
Texas Intermediate [WTI] crude oil and $2.75 per million Btus
[mmBtu] for Henry Hub natural gas)."
ESG credit indicators: E-4, S-2, G-2
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis on PDC Energy Inc. because the E&P
industry is contending with an accelerating energy transition and
the adoption of renewable energy sources. We believe falling demand
for fossil fuels will lead to declining profitability and returns
for the industry as it fights to retain and regain investors that
seek higher return investments. PDC's exposure to Colorado's more
stringent regulatory environment is mitigated by its focus in Weld
County, which has historically been more favorable for the
industry. PDC has set goals to reduce its greenhouse gas (GHG)
emissions intensity by 60% by 2025 and 74% by 2030 and its methane
emissions intensity by 50% by 2025 and 70% by 2030. Additionally,
management recently added sustainability key performance indicators
(KPIs) to its credit facility that could affect its margin and
commitment fees depending on its ability to meet its goals."
PREHIRED LLC: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Prehired, LLC
8 The Green Ste B
Dover, DE 19901
Chapter 11 Petition Date: September 27, 2022
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 22-11293
Debtor's Counsel: Christopher D. Warren, Esq.
WARREN LAW GROUP
519 8th Avenue, 25th Floor
New York, NY 10018
Tel: 866-928-5838
Email: chris@warren.law
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Joshua Jordan as CEO.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/35KPSYQ/Prehired_LLC__nysbke-22-11293__0001.0.pdf?mcid=tGE4TAMA
PROFESSIONAL TECHNICAL: Paladin Buying Operating Assets for $4.6MM
------------------------------------------------------------------
Professional Technical Security Services, Inc., seeks approval from
the U.S. Bankruptcy Court for the Northern District of California
to sell substantially all its operating assets to Paladin Security
Group Ltd. or its designee for $4.6 million.
The primary debts precipitating the bankruptcy case are taxes owing
by Debtor.
The Debtor has very little traditional secured debt. There are
only five asserted secured claims in the case:
a. City National Bank (Claim No. 14, Commercial Loan)
(collateral securing all Inventory, Chattel Paper, Accounts,
Equipment, General Intangibles, Securities and Instruments -
$499,144.35;
b. Internal Revenue Service (Claim No. 1 as amended the 6th
time on 8/25/22; 2014-2022 FICA, FUTA, Corp, Penalty; Tax Liens
recorded 4/3/18, 4/11/18, 10/7/21, 10/19/21, and 10/25/21)
(collateral securing all of right, title and interest to property)
- $14,745,366.93 (Secured portion is $6,416,846.01);
c. City and County of San Francisco (Claim No. 4, Unsecured
Business Property Tax Assessment No. 2017-44208 (annual regular tax
bill) for 180 Montgomery) (collateral securing 180 Montgomery, San
Francisco, CA 94104) - $1,245.80
d. Toyota Motor (Sch D, 2.4; Financing of purchase of 2019
Toyota C-HR on 1/10/21) (collateral securing 2019 Toyota C-HR) -
$21,000 (secured portion is $19,000); and
e. Toyota Motor Credit (Sch D, 2.5; Financing of purchase of
2018 Toyota C-HR on 1/10/21) (collateral securing 2018 Toyota C-HR)
- $20,000 (secured portion is $17,000).
The balance of the claims asserted against the Debtor's estate are
roughly $11.7 million in priority claims (primarily tax claims) and
$5.4 million in general unsecured (roughly half of which are
disputed and unliquidated claims by two former employees). The
professional fees accrued during the pendency of this case
currently exceed $500,000.
The Debtor has the following three commercial office space leases
and four executory contracts, including:
a. 340 Pine Street LLC - Lease for office premises at 340 Pine
Street, San Francisco (Current rent is $11,862.33, Security deposit
of $12,217.58);
b. Brickell Avenue Consulting LLC - Contract for the Debtor's
acting Controller (Fee is $8,500 per month); and
c. CEP Investors XII LLC - Lease for offices at 111 Sutter,
Suite 550, San Francisco (Current rent is $49,629.39. The base
rent increases by $1,205.98 on 4/1/23. Security deposit of
$82,908.42).
Although Debtor generates almost $3 million in accounts receivable
each month, it frequently experiences cashflow constraints. Its
largest expense is its payroll, which totals roughly $2.8 million
monthly and is paid bi-weekly. It is current on all wages and
salary payments to its employees.
Unfortunately, the Debtor continued to operate at a net loss of
roughly $500,000 per month post-petition. In light thereof, it
quickly determined the 363 Sale, followed by a plan of
reorganization tailored to the results of the 363 Sale, was in the
best interest of the estate.
On May 19, 2022, the Court entered an order approving the
application and authorizing the Debtor to employ B. Riley Advisory
Services to serve as its Financial Advisor in the 363 Sale process.
To date, B. Riley has contacted approximately 104 potential
purchasers and held discussions with 5 of them. Four potential
purchasers have executed Non-Disclosure Agreements and have access
to the electronic data room.
On June 21, 2022, the Debtor filed its Motion to Approve Bid and
Sale Procedures and Related Relief, requesting the entry of an
order approving the procedures to be implemented in the 363 Sale
process. On July 14, 2022, the Court granted the Sale Procedures
Motion and entered its Order Approving Sale Procedures. The Sale
Procedures Order sets forth certain deadlines related to the 363
Sale. By the stipulation of the Committee, CNB and Debtor, and
orders approving such stipulations, one such deadline -- the Bid
Deadline -- was subsequently extended to allow additional time for
interested parties to formulate their offers.
The Sale Procedures Order also allows Debtor, in its discretion
upon consultation with the Committee, to designate a Stalking Horse
Bid. A flat Breakup Fee of $75,000 was approved for such Stalking
Horse Bid. Additional auction procedures, including a Minimum
Initial Overbid and Minimum Bid Increments, were also established
by the Sale Procedures Order. Finally, the Sale Procedures Order
allows the Debtor to add or modify procedures if such modification
will better promote the goals of the sale process, provided such
modifications are not inconsistent with the Sale Procedures Order.
After further conversations with the bidder and its counsel, as
well as consultation with the Committee and CNB, the Debtor
determined the Second Offer could not meet the requirements to be
designated a Qualified Bid. Without another Qualified Bid, the
Auction became superfluous. The Debtor determined Paladin to be
the Successful Bidder, subject to the Court's approval via the Sale
Motion.
The salient terms of the APA are:
a. Purchase Price: Approximately $4.6 million
b. Paladin will retain Mr. Reyes in an ongoing role. However,
the Management Agreement with GAB will not be assigned to Paladin.
c. APA to be drafted signed as soon as possible. Sale Hearing
to go forward, with Closing as soon as practicable after approval
of the sale.
d. Customer Contracts will all be transferred to Paladin.
e. Cash on hand at closing and Avoidance Action will be
retained by Debtor.
The accrued fees of B. Riley through July 2022 totaled $90,706.
Significant addition time was and will be incurred by B. Riley
subsequent to the end of July. The Debtor estimates the total
compensation that would be due to B. Riley for a sale with a $4.6
million purchase price would be roughly $375,000. However, the
estimated purchase price of $4.6 million is not sufficient to pay
all secured claims in full. The Debtor is working with the secured
creditor to arrive at a carveout for administrative claims to allow
the 363 Sale to go forward. In light thereof, B. Riley has agreed
to accept a reduced total fee of $175,000, in addition to its
$25,000 retainer, plus out-of-pocket expenses estimated to be
between $3,500 and $4,000 paid upon closing of the 363 Sale. The
fees, if approved, would be paid out of the proceeds of sale after
closing.
The Debtor asks the entry of an order approving its assumption of
the Sutter and Oakland Leases, and its rejection of the Pine Lease.
It reserved the right in the Lease Motion to modify its decisions
regarding the assumption or rejection of each Lease prior to the
hearing on the Lease Motion, in light of the results from the
pending 363 Sale and the ultimate decision by the Successful Bidder
as to whether it wants to have such Leases assigned. The Lease
Motion was noticed to be heard concurrently with the Sale Hearing.
The Debtor further requests that the Purchased Assets should be
sold free and clear of any liens, claims, or interests in such
property, with any such liens attaching to the net sale proceeds of
the Assets.
The Debtor anticipates it will obtain IRS consent to the sale and
agreement on a carveout, in which case the remaining proceeds will
be paid to the IRS on its secured claim. If an agreement is not
reached, the liens of the IRS and the City and County of San
Francisco are the subject of bona fide disputes that will be
addressed subsequently in the case either through an adversary
proceeding or claim objection. Under those circumstances, it would
be inappropriate to require the Debtor to distribute any amount to
these entities until the issue of priority and the other claims for
relief are resolved
The Debtor requests approval of its assumption and assignment of
the Assigned Contracts, as may be designated by Paladin, in
connection with the 363 Sale.
For the reasons set forth, the Debtor respectfully requests that
the Court enters an order: (i) Granting the Sale Motion, (ii)
Authorizing Debtor to sell the Purchased Assets to the Purchaser
under the terms described, (iii) Allowing the payment of the
undisputed liens of CNB upon closing, (iv) Providing that the sale
is free and clear of the asserted secured interests of the IRS
and City and County of San Francisco with any such interests
attaching to the proceeds of the sale, (v) Approving the Purchaser
as a buyer in good faith in accordance with Section 363(m) of the
Bankruptcy Code, (vi) Approving the assumption and assignment of
the Assigned Contracts as the Purchaser may so direct upon further
due diligence as to the Leases as described, (vii) Approving the
Stipulated B. Riley Fee and allowing payment thereof upon closing,
(viii) Waiving the provisions of Bankruptcy Rules 6004(h) and
6006(d), and (ix) Granting such other and further relief as the
Court deems just and proper under the circumstances.
About Professional Technical
Professional Technical Security Services, Inc. is a company in San
Francisco, Calif., that provides professional security staffing.
It
conducts business under the name Protech Bay Area.
Professional Technical sought Chapter 11 bankruptcy protection
(Bankr. N.D. Calif. Case No. 22-30062) on Feb. 1, 2022, disclosing
assets of more than $14 million and liabilities of more than $26
million.
Judge Hannah L. Blumenstiel oversees the case.
Stephen D. Finestone, Esq., at Finestone Hayes, LLP and Constangy,
Brooks, Smith & Prophete, LLP serve as the Debtor's bankruptcy
counsel and special counsel, respectively. Bachecki, Crom & Co.,
LLP is the Debtor's accountant, while GlassRatner Advisory &
Capital Group, LLC serves as the Debtor's financial advisor.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors on May 9, 2022. The committee is represented
by
Daren Brinkman, Esq., at Brinkman Portillo Ronk, PC.
PROVECTUS BIOPHARMACEUTICALS: Board OKs Proposed $5-Mil. Financing
------------------------------------------------------------------
The board of directors of Provectus Biopharmaceuticals, Inc.
approved a financing term sheet, which sets forth the terms under
which the Company will use its best efforts to arrange for
financing of a maximum of $5,000,000.
Pursuant to the 2022 Term Sheet, a 2022 Note will convert into
shares of the Company's Series D-1 Convertible Preferred Stock, par
value $0.001 per share within twelve months of the issue date of
the 2022 Note, subject to certain exceptions.
The 2022 Financing
Subject to the terms and conditions of the 2022 Term Sheet, the
Company will use its best efforts to arrange for the 2022
Financing, which amounts will be obtained in several tranches. The
proceeds from the 2022 Financing will be used to fund the Company's
drug discovery and development program, as currently constituted
and envisioned, and to fund the Company's general and
administrative expenses.
Structure of the Financing
The 2022 Financing will be in the form of an unsecured convertible
loan from various investors that will be evidenced by convertible
promissory notes. In addition to customary provisions, the 2022
Note contains the following provisions:
(i) The Loan will bear interest at the rate of eight percent per
annum on the outstanding principal amount of the Loan that has been
funded to the Company;
(ii) The Loan shall be due and payable in full on the earliest of:
(i) the date upon which an event of default occurs and is
continuing; (ii) a change of control of the Company; or (iii)
twelve months after the issue date of a 2022 Note; and
(iii) The outstanding principal amount and interest payable under
the Loan is convertible at the Investor's option as follows:
(a) The Loan is voluntarily convertible into shares of the
Company's Series D-1 Preferred Stock at any time while the Loan is
outstanding at a price per share equal to $2.8620;
(b) The Loan is automatically convertible into shares of the
Company's Series D-1 Preferred Stock twelve months after the issue
date of a 2022 Note at a price per share equal to $2.8620; and
(c) The Series D-1 Preferred Stock is convertible into 10 shares
of the Company's common stock, par value $0.001 per share.
Closing of the 2021 Financing
Pursuant to the approval of the 2022 Financing by the Board, the
Board approved the closing of the financing that the Board approved
on Aug. 13, 2021. The 2021 Financing was in the form of an
unsecured convertible loan from various investors that were
evidenced by convertible promissory notes. As of Sept. 20, 2022,
the Company had received 2021 Notes totaling $2,335,000.
The Company believes the issuance of the 2021 Notes was exempt, and
the issuance of the 2022 Notes will be exempt, from the
registration requirements of the Securities Act of 1933, as
amended, by virtue of Section 4(a)(2) of the Securities Act (or
Rule 506 of Regulation D promulgated thereunder) as transactions
not involving a public offering.
About Provectus
Provectus Biopharmaceuticals, Inc. is a clinical-stage
biotechnology company developing immunotherapy medicines based on
a family of small molecules called halogenated xanthenes. The
Company's lead HX molecule is rose bengal sodium.
Provectus reported a net loss of $5.54 million for the year ended
Dec. 31, 2021, compared to a net loss of $6.68 million for the year
ended Dec. 31, 2020. As of Dec. 31, 2021, the Company had $3.51
million in total assets, $7.70 million in total liabilities, and a
total stockholders' deficiency of $4.19 million.
Los Angeles, CA-based Marcum LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated March
29, 2022, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
PUERTO RICO: PREPA Bondholders Seek Bankruptcy Case Dismissal
-------------------------------------------------------------
Robert Slavin of The Bond Buyer reports that Puerto Rico Electric
Power Authority bondholders asked the bankruptcy court Monday to
dismiss the proceedings as a step to appointing a receiver for the
authority after the Oversight Board abruptly ended mediation
Saturday morning.
The bondholders may get to choose the receiver for the authority,
which could "set affordable and sustainable electricity rates
sufficient for PREPA to pay its debts and improve the quality of
its service," the bondholders said.
PREPA owes $8.26 billion in bond principal, more than $700 million
in fuel line of credit loans, as well as other debt. It has been in
Title III bankruptcy since summer 2017.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States that's facing a massive bond debt of $70 billion,
a 68% debt-to-GDP ratio and negative economic growth in nine of the
last 10 years.
The Commonwealth of Puerto Rico has sought bankruptcy protection,
aiming to restructure its massive $74 billion debt-load and $49
billion in pension obligations.
The debt restructuring petition was filed by Puerto Rico's
financial oversight board in U.S. District Court in Puerto Rico
(Case No. 17-01578) on May 3, 2017, and was made under Title III of
2016's U.S. Congressional rescue law known as the Puerto Rico
Oversight, Management, and Economic Stability Act ('PROMESA').
The Financial Oversight and Management Board later commenced Title
III cases for the Puerto Rico Sales Tax Financing Corporation
(COFINA) on May 5, 2017, and the Employees Retirement System (ERS)
and the Puerto Rico Highways and Transportation Authority (HTA) on
May 21, 2017. On July 2, 2017, a Title III case was commenced for
the Puerto Rico Electric Power Authority ("PREPA").
U.S. Chief Justice John Roberts has appointed U.S. District Judge
Laura Taylor Swain to oversee the Title III cases. The Honorable
Judith Dein, a United States Magistrate Judge for the District of
Massachusetts, has been designated to preside over matters that may
be referred to her by Judge Swain, including discovery disputes,
and management of other pretrial proceedings.
Joint administration of the Title III cases, under Lead Case No.
17-3283, was granted on June 29, 2017.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets, as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose; and Hermann D. Bauer, Esq., at
O'Neill & Borges are on-board as attorneys.
McKinsey & Co. is the Board's strategic consultant, Ernst & Young
is the Board's financial advisor, and Citigroup Global Markets Inc.
is the Board's municipal investment banker.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at
https://cases.primeclerk.com/puertorico
Epiq Bankruptcy Solutions LLC is the service agent for ERS, HTA,
and PREPA.
O'Melveny & Myers LLP is counsel to the Commonwealth's Puerto Rico
Fiscal Agency and Financial Advisory Authority (AAFAF), the agency
responsible for negotiations with bondholders.
The Oversight Board named Professor Nancy B. Rapoport as fee
examiner and to chair a committee to review professionals' fees.
* * *
The two Title III plans of adjustment have been confirmed to date,
for the Commonwealth and COFINA debtors.
QST INGREDIENTS: Files Emergency Bid to Use Cash Collateral
-----------------------------------------------------------
QST Ingredients and Packaging, Inc. asks the U.S. Bankruptcy Court
for the District of Nevada for authority to use cash collateral on
an emergency interim in accordance with the budget.
The Debtor requires the use of cash generated by its operations and
in its bank accounts in order to continue its operations.
The Emergency Interim Order is proposed to terminate on October 22,
2022, and thus is simply a temporary four-week interim measure to
allow the Debtor to continue operating and allow it to conduct
discussions concerning a potential more permanent cash collateral
arrangement or obtain final adjudication from the Court.
The Debtor has only one secured creditor with a lien against the
Debtor's cash collateral, as defined in 11 U.S.C. section 363(a):
Citibank N.A. is owed approximately $218,000 in total and has a
first position security interest in the Debtor's assets. Citibank
appears to have perfected a security interest by recording a UCC-1
Financing Statement with the Nevada Secretary of State. The amount
owed to Citibank consists of approximately $59,000 owed on a
Commercial Loan account ending in 9233, approximately $42,000 owed
on commercial credit card account ending in 7425, and approximately
$117,000 on a different commercial credit card account ending in
4771. The Debtor has not yet verified, but at this point assumes,
that all amounts are secured due to standard
cross-collateralization terms likely included in the underlying
lending agreements.
While the Debtor is hopeful that Citibank will consent to the
Debtor's use of its cash collateral, the Debtor believes the
creditor's secured claim will be more than adequately protected by
an equity cushion and the Debtor's continued business operations.
A copy of the motion is available at https://bit.ly/3fp9QMo from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3r8NAsv from
PacerMonitor.com.
The budget provides for total cash disbursements, on a weekly
basis, as follows:
$240,500 for the week ending October 1, 2022;
$188,050 for the week ending October 8, 2022;
$192,150 for the week ending October 15, 2022; and
$216,700 for the week ending October 22, 2022.
About QST Ingredients and Packaging, Inc.
QST Ingredients and Packaging, Inc. owns and operates a smoke
flavoring manufacturing business.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 22-13383) on September 21,
2022. In the petition sined by Marc Rinehart, Sr., CEO, the Debtor
disclosed up to $10 million in both assets and liabilities.
Judge Mike K. Nakagawa oversees the case.
Ryan Andersen, Esq., at Andersen Law Firm, Ltd. is the Debtor's
counsel.
QST INGREDIENTS: Starts Subchapter V Case
-----------------------------------------
QST Ingredients and Packaging Inc. has sought bankruptcy protection
in Nevada.
The Debtor's business consists of custom spice blending and
specialty ingredient manufacturing operations for commercial
customers.
The Debtor has a production facility located in California and
another production facility located in Tennessee. The facility in
California prepares and packages spice blends and mixes for
commercial customers. The facility in Tennessee manufatures liquid
smoke. The Debtor employs a total of 32 employees and works with
over 30 third-party vendors.
Marc Rinchart, Sr., is the president and CEO of the Debtor and a
71% majority shareholder.
Rinchart started the business as a sole proprietorship in January
of 2000. In December of 2000, Chris Topps joined the business
venture, became a 50% shareholder, and subsequently controlled the
finances of QST. In 2019, Mr. Topps' health and ability to attend
to day-to-day operations declined significantly, and he became
completely disabled starting in November of 2019. Since November
of 2019, Mr. Rinchart regained sole responsibility for management
of the Debtor.
According to Mr. Rinchart, while in control of the finances of QST,
Mr. Topps made several large withdrawals from QST, including by
having QST make the monthly payments for a vacation home that Mr.
Topps had purchased in Oxnard, California. These transfers left
QST with a serious lack of cash on hand, and led to the continuing
and cash flows issues. In addition, in July 2017, the Debtor
obtained a secured loan through Citibank, N.A., in the amount of
$700,000 and by June 2020, the Debtor received notice from Citibank
that it was in default on the loan.
Through bankruptcy, the Debtor will maintain its business
operations and restructure its liabilities to again emerge as a
profitable going-concern business.
QST Ingredients estimates debt of less than $10 million and between
1 and 49 creditors. The petition states that funds will be
available to unsecured creditors.
About QST Ingredients and Packaging
QST Ingredients and Packaging Inc. is a Rancho Cucamonga,
California-based custom blending and specialty ingredient company
QST Ingredients and Packaging sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Nev. Case No. 22-13383) on
Sept. 21, 2022. In the petition filed by Marc Rinehart, Sr., as
CEO, the Debtor reported assets and liabilities between $1 million
and $10 million.
The Debtor is represented by Ryan A. Andersen of ANDERSEN LAW FIRM,
LTD.
RB SIGMA: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------
Debtor: RB Sigma, LLC
DBA RB Medical Supply, LLC
DBA Amorvax
6111 Heisley Rd.
Mentor, OH 44060
Business Description: RB Sigma is a medical device manufacturer in
Mentor, Ohio.
Chapter 11 Petition Date: September 28, 2022
Court: United States Bankruptcy Court
Northern District of Ohio
Case No.: 22-12913
Judge: Hon. Jessica E. Price Smith
Debtor's Counsel: Richard H. Nemeth, Esq.
NEMETH & ASSOCIATES, LLC
526 Superior Ave. East, Suite 333
Cleveland, OH 44114
Tel: (216) 502-1300
Fax: (216) 502-1301
Email: mail@ohbklaw.com
Total Assets: $799,454
Total Liabilities: $2,508,877
The petition was signed by Justin Bloyd as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/YEGMQTA/RB_Sigma_LLC__ohnbke-22-12913__0001.0.pdf?mcid=tGE4TAMA
RE-BUILD SEVILLE: Voluntary Chapter 11 Case Summary
---------------------------------------------------
Debtor: Re-Build Seville, LLC
712 N Jefferson Street
Jackson, MS 39202
Business Description: The Debtor is a Single Asset Real Estate (as
defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: September 28, 2022
Court: United States Bankruptcy Court
Southern District of Mississippi
Case No.: 22-01976
Judge: Hon. Jamie A. Wilson
Debtor's Counsel: G. Adam Sanford, Esq.
MCRANEY & MCRANEY
Post Office Drawer 1397
Clinton, MS 39060
Tel: 601-924-5961
Email: adam@mcraneymcraney.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by J. Stephen Tracy as manager.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/CPJJ5TI/Re-Build_Seville_LLC__mssbke-22-01976__0001.0.pdf?mcid=tGE4TAMA
REARDEN STEEL: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------
Rearden Steel Manufacturing LLC asks the U.S. Bankruptcy Court for
the Southern District of Florida, West Palm Beach Division, for
authority to use cash collateral on an interim basis effective as
of September 16, 2022.
On April 24, 2019, Paradise Bank took a first position mortgage on
the Debtor's real estate, its primary operating facility at 5350
Steel Boulevard, and took a blanket secured lien interest in all
tangible and intangible assets of the Debtor, including its cash
and receivables. Paradise fully perfected its secured lien
interest, including the filing of a UCC financing statement on
April 25, 2019.
The outstanding principal balance remaining to and owing to
Paradise as of the date of filing is approximately $1,931,190. The
value of the building as of the date of filing is estimated to be
approximately $1.8 million and the value of all remaining
collateral of Paradise is estimated to exceed $200,000. Paradise is
fully secured and is in fact an oversecured creditor. The Debtor
should be allowed full and unencumbered access of its cash and
receivables as they are essential to the continued business
operations of the Debtor and any constraint thereon will unduly
prejudice the Debtor and its chances for reorganization.
A copy of the motion and the Debtor's budget is available at
https://bit.ly/3So4PSY from PacerMonitor.com.
The budget provides for total expenses, on a monthly basis, as
follows:
$45,393 for the month of October 2022;
$45,393 for the month of November 2022;
$45,393 for the month of December 2022;
$45,393 for the month of January 2023;
$45,393 for the month of February 2023; and
$45,393 for the month of March 2023.
About Rearden Steel Manufacturing
Rearden Steel Manufacturing LLC is a metal fabricator in Florida.
Rearden Steel Manufacturing filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla.
Case No. 22-17243) on Sept. 16, 2022. In the petition filed by
Lynn Shepard, as managing member, the Debtor reported assets and
liabilities between $1 million and $10 million.
Tarek Kirk Kiem has been appointed as Subchapter V trustee.
The Debtor is represented by Julianne R. Frank.
REHME CUSTOM: Cash Collateral Access, $150,000 of DIP Loan OK'd
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Laredo Division, authorized Rehme Custom Doors & Lighting, Inc.
d/b/a Rehme Steel Windows & Doors to use cash collateral and access
$150,000 of a proposed $500,000 post-petition financing on an
interim basis for the period of September 23 through October 6,
2022.
As previously reported by the Troubled Company Reporter, the
Company's 100% owner and manager, Peter J. Rehme, has agreed to
extend $500,000 in post-petition credit. The proposed facility
would roll up over $2 million in unsecured notes already owed to
Rehme into a new, secured obligation. Rehme would be entitled to
interest only payments at a rate of 3% per annum during a
three-year subchapter V plan period.
As adequate protection, the Lender will have a perfected lien on
the Company's assets and a super-priority administrative claim on
account of amounts advanced under the Loan Documents after entry of
the Interim Order; provided the lien and super-priority
administrative claim status secures and relates to only amounts
actually advanced under the Loan Documents after entry of the
Interim Order and not on any other amounts otherwise owed to the
Lender without further Court order.
The automatic stay under 11 U.S.C. section 362 is modified solely
to the extent necessary to perfect the Lender's security interest
and to collect payment pursuant to the terms of the Loan Documents.
Absent further Court order and relief granted, the automatic stay
otherwise remains in effect as to other actions, including but not
limited to enforcement or actions taken against property of the
estate in the event of a default.
A copy of the order is available at https://bit.ly/3rb8qaJ from
PacerMonitor.com.
About Rehme Custom Doors & Lighting, Inc.
Rehme Custom Doors & Lighting, Inc. d/b/a Rehme Steel Windows &
Doors manufactures doors and windows. The Debtor sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Case
No. 22-50059) on September 9, 2022. In the petition signed by Peter
J. Rehme, president, the Debtor disclosed $1,001,370 in total
assets and $4,944,534 in total liabilities.
Judge David R. Jones oversees the case.
Christopher Murray, Esq., at Jones Murray, LLP is the Debtor's
counsel.
RELMADA THERAPEUTICS: Perceptive Advisors, et al. Hold 7% Stake
---------------------------------------------------------------
Perceptive Advisors LLC, Joseph Edelman, and Perceptive Life
Sciences Master Fund, Ltd. disclosed in a Schedule 13G filed with
the Securities and Exchange Commission that as of Sept. 16, 2022,
they beneficially own 2,099,952 shares of common stock of Relmada
Therapeutics, Inc., representing 7 percent of the shares
outstanding.
The ownership percentage reported is based on 30,060,518
outstanding shares of Common Stock, as reported in the Issuer's
Form 10-Q filed on Aug. 11, 2022. A full-text copy of the
regulatory filing is available for free at:
https://www.sec.gov/Archives/edgar/data/1224962/000119312522250190/d383090dsc13g.htm
About Relmada Therapeutics Inc.
Relmada Therapeutics Inc. is a late-stage pharmaceutical company
addressing diseases of the central nervous system (CNS), with a
focus on major depressive disorder (MDD).
Relmada reported a net loss of $125.75 million for the year ended
Dec. 31, 2021, a net loss of $59.45 million for the year ended Dec.
31, 2020, and a net loss of $15 million for the year ended Dec. 31,
2019. As of Dec. 31, 2021, Relmada had $223.32 million in total
assets, $15.06 million in total liabilities, and $208.26 million in
total stockholders' equity.
RIOT BLOCKCHAIN: May Issue 10M Shares Under 2019 Equity Plan
------------------------------------------------------------
Riot Blockchain, Inc. filed a Form S-8 registration statement with
the Securities and Exchange Commission to register an additional
10,000,000 shares of its common stock, no par value per share for
issuance with respect to equity awards made under the Riot
Blockchain, Inc. 2019 Equity Incentive Plan, as amended. These
10,000,000 additional shares of Common Stock have been reserved for
issuance under the 2019 Equity Plan pursuant to the Third Amendment
to the 2019 Equity Plan, as approved by the Company's stockholders
at the 2022 annual meeting of stockholders on July 27, 2022.
A full-text copy of the prospectus is available for free at:
https://www.sec.gov/Archives/edgar/data/1167419/000107997322001149/riot_s8.htm
About Riot Blockchain
Headquartered in Castle Rock, Colorado, Riot Blockchain, Inc. --
http://www.RiotBlockchain.com-- specializes in cryptocurrency
mining with a focus on bitcoin. The Company is expanding and
upgrading its mining operations by securing the most energy
efficient miners currently available. Riot is headquartered in
Castle Rock, Colorado, and the Company's mining facility operates
out of upstate New York, under a co-location hosting agreement with
Coinmint.
Riot Blockchain reported a net loss of $7.93 million for the year
ended Dec. 31, 2021, a net loss of $12.67 million for the year
ended Dec. 31, 2020, a net loss of $20.30 million for the year
ended Dec. 31, 2019, and a net loss of $60.21 million for the year
ended Dec. 31, 2018. As of June 30, 2022, the Company had $1.44
billion in total assets, $147.66 million in total liabilities, and
$1.29 billion in total stockholders' equity.
RTW CONSTRUCTION: Cash Collateral Access, DIP Loan OK'd
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey authorized
RTW Construction, Inc. on an interim basis, to use cash collateral
and obtain post-petition financing from Change Capital Holdings I,
LLC.
As previously reported by the Troubled Company Reporter, the DIP
Loan is a revolver that will allow the Debtor to obtain funds,
repay, and obtain more funds up to the maximum principal amount of
$1,000,000 with a maximum outstanding amount during the initial
13-week period of not more than $250,000.
The Debtor acknowledges that separate and apart from its
negotiations with the DIP Lender, the Debtor has assured First
Indemnity of America Insurance Company that proceeds of each of the
Debtor's contracts for which FIA issued a surety bond will be
deposited into a segregated bank account and used first for
paying:
(a) beneficiaries of the New Jersey Trust Fund Act (NJ Rev.
Stat section 2A:44-148) associated with that particular Bonded
Contract who are unpaid at the time of the Debtor's receipt of the
funds; or
(b) paying FIA directly to the extent that FIA pays such
claims (e.g., claims to subcontractors and material suppliers for
that particular Bonded Contract).
The security interest and lien granted post-petition by the Debtor
to the DIP Lender pursuant to the DIP Loan Documents is approved
and granted on a first priority basis on all assets of the Debtor,
subject to (i) valid and properly perfected pre-petition liens and
(ii) the Trust Fund Act.
As adequate protection for the Debtor's continued use of the DIP
Lender's cash collateral, to the extent of any diminution in the
value of its collateral, the DIP Lender continues to be granted a
replacement lien in all of the Debtor's presently owned or
hereafter acquired property and assets.
The DIP Lender is also granted, to the extent of any diminution in
the value of its collateral, an allowed super priority
administrative claim as provided in section 507(b) of the
Bankruptcy Code against the Debtor's estate which will have
priority in payment over any other indebtedness and/or obligations
now in existence or incurred hereafter by the Debtor and over all
administrative expenses or charges against property arising in the
Debtor's Chapter 11 case or any superseding Chapter 7 case.
The Debtor's authorization to use cash collateral and obtain DIP
Financing pursuant to the Order, will be in effect for the period
commencing with the date of the commencement of the case through
and including the earlier of the entry of a Final Order or
September 13, 2022. The Debtor and the DIP Lender may amend or
provide for new Budgets and extend the Expiration Date, without the
need for further Court approval provided that any amended Budget
and notice of any extension of the Expiration Date is filed with
the Court.
A hearing to consider the DIP Financing and entry of a Final Order
is scheduled for October 4, 2022, at 10 a.m.
A copy of the order is available at https://bit.ly/3qYzo5B from
PacerMonitor.com.
About RTW Construction, Inc.
RTW Construction, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 21-18595) on November
4, 2021. In the petition signed by Randy Worrell, chief executive
officer, the Debtor disclosed $1,376,365 in assets and $3,032,627
in liabilities.
Judge Christine M. Gravelle oversees the case.
Vincent Roldan, Esq., at Mandelbaum and Salsburg PC is the Debtor's
counsel.
Change Capital Holdings I, LLC, the DIP lender, is represented by
Henry G. Swergold, Esq. at Platzer, Swergold, Goldberg, Katz &
Jaslow, LLP.
RUBY PIPELINE: Auction of Substantially All Assets Set for Dec. 13
------------------------------------------------------------------
Judge Craig T. Goldblatt of the U.S. Bankruptcy Court for the
District of Delaware authorized the bidding procedures proposed by
Ruby Pipeline, LLC relating to the auction sale of (1)
substantially all of the Debtor's assets, or (2) its reorganized
equity, in all cases excluding (i) cash and cash equivalents, and
(ii) all estate causes of action, including any avoidance actions,
and the proceeds derived therefrom.
The Debtor is authorized to implement the Bidding Procedures, in
accordance with the following timeline, as may be extended or
modified in the Debtor's reasonable business judgment, by filing a
notice of such extension or modification on the Court's docket.
a. Deadline to submit Non-Binding Indications of Interest (the
"IOI Date") - Oct. 3, 2022, at 4:00 p.m. (ET)
b. Deadline to file Notice of Stalking Horse Bidder - Nov. 14,
2022, at 4:00 p.m. (ET)
c. Deadline to submit Bids - Dec. 7, 2022, at 4:00 p.m. (ET)
d. Deadline to file objections to Stalking Horse Bid
Protections - No later than seven calendar days after filing of
Notice of Stalking Horse Bidder
e. Deadline to notify Bidders of status as Qualified Bidders -
One business day prior to Auction
f. Auction, if necessary, to be conducted at (i) the offices
of Weil, Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY
10153, and/or (ii) virtually, pursuant to procedures to be
announced to bidders (if other Qualified Bids received for the
Company) - Dec. 13, 2022
g. Deadline to file Notice of (a) Successful Bid(s) and
Back-Up Bid(s) and (b) Identity of Successful Bidder(s) and Back-Up
Bidder(s) (if an Auction is held) - Within one business day after
the conclusion of the Auction
h. Deadline to file objections to Stalking Horse Sale
Transaction (if no Auction held) - Dec. 7, 2022, at 4:00 p.m. (ET)
i. Sale Hearing for Stalking Horse Sale Transaction (if no
Auction held) - Dec. 19, 2022, at 10:00 a.m. (ET)
j. Deadline to file objections to Sale Transaction (if an
Auction is held) - Dec. 21, 2022, at 4:00 p.m. (ET)
k. Sale Hearing for Sale Transaction (if an Auction held) -
Dec. 28, 2022, at 10:00 a.m. (ET)
l. Consummation of Sale Transaction (the "Target Closing
Date") - No later than Jan. 4, 2023, or such later date if
necessitated by applicable regulatory approvals
The Debtor is authorized to designate one or more Stalking Horse
Bids for the Company in accordance with the procedures set forth
and subject to the terms and conditions of the Exclusivity Order.
If the Debtor designates any Stalking Horse Bidders, it will file
with the Court, serve on the Objection Notice Parties, and cause to
be published on https://cases.ra.kroll.com/rubypipeline/ maintained
by its claims and noticing agent, Kroll Restructuring
Administration, LLC for its chapter 11 case: (i) a Notice of
Stalking Horse Bidder and a Proposed Stalking Horse Order. The
Stalking Horse Objection is seven calendar days after service of
the applicable Notice of Stalking Horse Bidder.
The Debtor is authorized to take all reasonable actions necessary
or appropriate to implement the Bidding Procedures in accordance
with the terms of the Bidding Procedures Order and the Bidding
Procedures.
Within one business day after the conclusion of the Auction, the
Debtor will file with the Court, serve on the Objection Notice
Parties, and cause to be published on the Kroll Website, a Notice
of Auction Results. The Sale Objection Deadline is Sale Objection
Deadline is seven calendar days before the Sale Hearing.
The Sale Notice is approved.
The Debtor will assign to the Successful Bidder(s), pursuant to the
applicable asset purchase agreement the Company, free and clear of
all liens, claims, interests, and encumbrances. It will assign to
the Successful Bidder(s) the Company, free and clear of any
Preferential Right.
The Assumption and Assignment Procedures and the Assignment and
Cure Notice are approved. The Debtor will file the Assignment and
Cure Notice with the Court and, as soon as reasonably practicable
thereafter, the Debtor will post a copy of the Assignment and
Cure Notice on the Kroll Website. The Adequate Assurance Objection
Deadline is seven calendar days after service of the Assignment and
Cure Notice.
Notwithstanding the possible applicability of Bankruptcy Rules
6004(h), 6006(d), 7062, 9007, 9008, and 9014, or any applicable
provisions of the Local Rules or otherwise, the terms and
conditions of the Bidding Procedures Order will be immediately
effective and enforceable upon its entry, and no automatic stay of
execution will apply to the Bidding Procedures Order.
The Debtor is authorized to take all reasonable steps necessary or
appropriate to carry out the relief granted in the Bidding
Procedures Order.
The other salient terms of the Bidding Procedures are:
a. Initial Bid: At the outset of the Auction, the Debtor will
determine and announce the highest or otherwise best bid for the
Company, which bid will serve as the starting bid. Subject to the
Stalking Horse Protections (if any), the Minimum Overbid Amount
with respect to a Stalking Horse Bid (if any), whether in one or a
combination of Qualified Bids, will be the amount of the
Termination Payment, if applicable, plus an amount announced by the
Debtor.
b. Deposit: 10% of the proposed purchase price
c. Bid Increments: To be announced by the Debtor at the
Auction
A copy of the Bidding Procedures is available for free at
https://tinyurl.com/2jrajjyw from PacerMonitor.com free of charge.
About Ruby Pipeline
Ruby Pipeline, LLC, a Houston-based natural gas pipeline company,
sought Chapter 11 bankruptcy protection (Bankr. D. Del. Case No.
22-10278) on March 31, 2022. In the petition filed by Will W.
Brown, as commercial vice-president, Ruby Pipeline listed $500
million to $1 billion in both assets and liabilities.
Judge Craig T. Goldblatt oversees the case.
Richards, Layton & Finger, P.A. and Weil Gotshal & Manges, LLP are
the Debtor's bankruptcy counsels while PJT Partners, LP is the
investment banker. Kroll Restructuring Administration, LLC,
formerly known as Prime Clerk, LLC, is the claims and noticing
agent and administrative advisor.
Counsel to the Ad Hoc Group and Special Counsel to the Indenture
Trustee are Morris, Nichols, Arsht & Tunnell LLP, and Davis Polk &
Wardwell LLP.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors on April 19, 2022. Brown Rudnick, LLP and
Benesch, Friedlander, Coplan & Aronoff LLP serve as the
committee's
bankruptcy counsel and Delaware counsel, respectively.
SAN JORGE HOSPITAL: U.S. Trustee Appoints Edna Diaz De Jesus as PCO
-------------------------------------------------------------------
Mary Ida Townson, the U.S. Trustee for Region 21, appointed Edna
Diaz De Jesus as patient care ombudsman for San Jorge Children's
Hospital, Inc.
Section 333 of the Bankruptcy Code provides that the patient care
ombudsman shall:
* Monitor the quality of patient care provided to patients of
a debtor, to the extent necessary under the circumstances,
including interviewing patients and physicians.
* Immediately file with the court a motion or a written
report, with notice to the parties in interest if he determines
that the quality of patient care provided to patients of a debtor
is declining significantly or is otherwise being materially
compromised.
* Notice is given that in his capacity as the patient care
patient care ombudsman in this case, the Puerto Rico State Patient
Ombudsman is expressly permitted to delegate any of his duties and
responsibilities, save and except for his reporting obligations as
set forth in Section 333 (b) (2) of the Bankruptcy Code, to his
staff. Upon appropriate delegation of authority, all such
individuals may act on behalf of the Patient Care Ombudsman in this
case.
* If for any reason Edna Diaz De Jesus should be replaced as
the Puerto Rico Patient Care Ombudsman, her duly appointed
successor shall be substituted as the patient care ombudsman in
this case without the necessity for further notice.
* Edna Diaz De Jesus may resign her position as patient care
ombudsman in this case for any reason upon 20 days written notice
to the United States Trustee, with said notice to be delivered to
the United States Trustee.
A copy of the notice is available for free at
https://bit.ly/3DSNlJW from PacerMonitor.com.
The Ombudsman may be reached at:
Edna Diaz De Jesus
Procuradora del Paciente
Oficina del Procurador del Paciente
PO Box 11247
San Juan, Puerto Rico 00910-2347
Tel: (787) 977-0909
Fax: (787) 977-0915
About San Jorge Children's Hospital
San Jorge Children's Hospital, Inc. operates a hospital
specializing in pediatrics. It is based in San Juan, P.R.
San Jorge Children's Hospital filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case
No. 22-02630) on Sept. 1, 2022, with between $10 million and $50
million in both assets and liabilities. Edward P. Smith, chief
operating officer, signd the petition.
Judge Maria De Los Angeles Gonzalez presides over the case.
Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC represents
the Debtor as counsel.
SEAHORSE RESTAURANTS: Hearing Today on Continued Cash Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, will hold a hearing today, September 29, 2022 at 1:30
p.m., to consider the request of Seahorse Restaurants, LLC to
further use cash collateral.
The Court previously permitted the Debtor to use cash collateral on
an interim basis, with a 10% variance, pending a further hearing.
As previously reported by the Troubled Company Reporter, the Debtor
intends to use cash collateral to pay operating expenses and the
costs of administering the Chapter 11 case.
The Debtor's primary secured creditor is UCC Filer 6269, which
filed a UCC-1 asserting a security interest in all receipts,
accounts, and proceeds from the debtor. The Lender is owed
approximately $160,000.
As adequate protection, the Lender is granted a replacement lien in
and upon all of the categories and types of collateral in which
they held a security interest and lien as of the Petition Date to
the same extent, validity and priority that they held as of the
Petition Date.
The Debtor will maintain insurance coverage for the collateral in
accordance with the obligations under the loan and security
documents.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3Sx90ve from PacerMonitor.com.
The Debtor projects $27,500 in cash receipts and $26,030 in total
expenses for two weeks.
About Seahorse Restaurants, LLC
Seahorse Restaurants, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-03707) on
September 12, 2022. In the petition filed by Vikas Bansal,
authorized member, the Debtor disclosed up to $1 million in both
assets and liabilities.
Judge Roberta A. Colton oversees the case.
Edward J. Peterson, Esq., at Stichter, Riedel, Blain & Postler,
P.A., is the Debtor's counsel.
SMART BAKING: Wins Cash Collateral Access Thru Nov 1
----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida,
Orlando Division, authorized Smart Baking Company, LLC to use cash
collateral on an interim basis in accordance with the budget
through November 1, 2022.
As adequate protection, Mareth Collective Trusts, LLC and the
United States Small Business Administration will have perfected
postpetition liens against cash collateral to the same extent and
with the same validity and priority as their prepetition liens,
without the need to file or execute any documents as may otherwise
be required under applicable non-bankruptcy law.
The Debtor will maintain insurance coverage for its property and
operations in accordance with their obligations as
debtors-in-possession and as required under the loan and security
documents with the Secured Creditors. Proof of such coverage will
be provided upon request.
A continued hearing on the matter is scheduled for November 1 at 11
a.m.
A copy of the order and the Debtor's budget for the period from
September 1 to October 31, 2022 is available at
https://bit.ly/3DWcx25 from PacerMonitor.com.
The Debtor projects $122,301 in starting cash balance and $2010,445
in total expenses for October 2022.
About Smart Baking Company, LLC
Smart Baking Company, LLC is a food manufacturer in Florida,
offering snack cakes, hamburger buns and breakfast items.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-02365) on July 5,
2022. In the petition signed by Harvey F. Heuvel, chief executive
officer, the Debtor disclosed up to $10 million in both assets and
liabilities.
Justin M. Luna, Esq., at Latham Luna Eden and Beaudine LLP is the
Debtor's counsel.
SP STAR: Has Deal on Cash Collateral Access
-------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, approved a stipulation between SP Star
Enterprise, Inc., dba Platinum Showgirls LA, and the U.S. Small
Business Administration regarding the Debtor's use of cash
collateral.
On June 25, 2020, the Debtor executed a U.S. Small Business
Administration Note, pursuant to which the Debtor obtained a loan
in the amount of $150,000. The terms of the Note require the Debtor
to pay principal and interest payments of $731 every month
beginning 12 months from the date of the Note over the 30-year term
of the SBA Loan, with a maturity date of June 25, 2050. The SBA
Loan has an annual rate of interest of 3.75% and may be prepaid at
any time without notice of penalty.
As evidenced by the Security Agreement executed on June 25, 2020,
and a validly recorded UCC-1 filing on July 4, 2020 as Filing
Number 207802072674, the SBA Loan is secured by all tangible and
intangible personal property.
Based upon the SBA's secured lien against the Personal Property
Collateral, including but not limited to, cash collateral, the
Debtor requested that the SBA permit it to use cash collateral
retroactive to the Petition Date on the terms and conditions set
forth below. Pursuant to the Stipulation and subject to further
Court order, the SBA has agreed to permit the Debtor to use cash
collateral.
The Debtor represents to the SBA that it will make no additional or
unauthorized use of the cash collateral retroactive from the SBA
Loan date until December 15, 2022, or the entry of an Order
Confirming the Debtor's Plan of Reorganization, whichever occurs
earlier.
As adequate protection, retroactive to the Petition Date, the SBA
will receive a replacement lien on all post-petition revenues of
the Debtor to the same extent, priority and validity that its lien
attached to the cash collateral. The scope of the replacement lien
is limited to the amount (if any) that cash collateral diminishes
post-petition as a result of the Debtor's post-petition use of cash
collateral. The replacement lien is valid, perfected and
enforceable and shall not be subject to dispute, avoidance, or
subordination, and this replacement lien need not be subject to
additional recording.
As adequate protection, the Debtor will commence monthly payments
of $731 to the SBA on October 1, 2022, continuing until further
order of the Court or entry of an Order Confirming the Debtor's
Plan of Reorganization, whichever occurs earlier.
The SBA will be entitled to a super-priority claim over the life of
the Debtor's bankruptcy case, pursuant to 11 U.S.C. section 503(b),
507(a)(2) and 507(b), which claim will be limited to any diminution
in the value of SBA's collateral, pursuant to the SBA Loan, as a
result of Debtor's use of cash collateral on a post-petition
basis.
The Debtor also agrees to:
-- maintain insurance on the Personal Property Collateral;
-- designate the SBA as a loss payee or additional insured in
accordance with the SBA Loan and related loan documents; and
-- provide proof of insurance within seven days upon the SBA's
written request.
This Stipulation will remain in effect until December 15, 2022, or
until the Parties enter into an amended Stipulation or a consensual
Chapter 11 Plan, or until the case is converted or dismissed,
whichever first occurs.
A copy of the stipulation and the Debtor's budget is available at
https://bit.ly/3UqNqdw from PacerMonitor.com.
The budget provides for total expenses, on a monthly basis, as
follows:
$64,430 for August 2022;
$65,630 for September 2022;
$71,461 for October 2022;
$72,561 for November 2022; and
$72,761 for December 2022.
About SP Star Enterprise
Located in Los Angeles, California, Platinum Showgirls LA provides
an after-hours hangout with sexy dancers entertaining all night.
SP Star Enterprise Inc., doing business as Platinum Showgirls LA,
filed a petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. C.D. Cal. (Case No. 22-14502) on August 18, 2022. In the
petition filed by Mohan S. Makkar, as president, Debtor disclosed
at least $1 million in liabilities against assets of less than
$100,000.
Gregory Kent Jones has been appointed as Subchapter V trustee.
The Debtor is represented by W. Derek May, of the Law Office of W.
Derek May.
SPECTRUM BRANDS: S&P Alters Outlook to Negative, Affirms 'B' ICR
----------------------------------------------------------------
S&P Global Ratings affirmed all its ratings on Spectrum Brands
Holdings Inc., including its 'B' issuer credit rating, and revised
our outlook to negative from stable.
The negative outlook reflects S&P's expectation that leverage will
remain elevated over the next 12 months as the company manages
through weak macroeconomic conditions with delayed margin recovery,
while the timing and outcome of the HHI sale remains uncertain.
The U.S. Department of Justice's civil antitrust lawsuit seeking to
block the sale of Spectrum Brands's hardware and home improvement
(HHI) business to Assa Abloy increases the likelihood of the
transaction not materializing, and at the very least pushes the
timeline of closing until mid-fiscal 2023. S&P would view the HHI
sale as positive for Spectrum's credit quality given the prospect
of significant deleveraging with the after-tax cash proceeds.
Management indicated that both Spectrum and Assa Abloy will
challenge the lawsuit, and S&P assumes resolution by the fourth
quarter of fiscal 2023. It estimates that Spectrum's pro forma S&P
Global Ratings-adjusted debt to EBITDA as of July 3, 2022,
(including HHI) is in the high-6x area.
Tough macroeconomic conditions and the delay of meaningful debt
repayment from the disposal of HHI will pressure credit metrics for
about the next nine months. In the third quarter, Spectrum reported
that company-defined adjusted EBITDA for continuing operations
declined 19% year over year despite organic net sales growth of
4.4%. The consumer products sector has been plagued with persistent
inflation across raw materials, freight, and labor. Spectrum has
not been immune with about $290 million to $310 million ($300
million mid-point) in incremental costs expected for the full
fiscal 2022 (compared to $263 million S&P Global Ratings-adjusted
continuing operations EBITDA in 2021). The company has raised
prices across all categories, but the lag in implementation means
that the full effects of these price increases are only now being
felt as of the third quarter of 2022. Management announced that it
eliminated 17% of salaried positions in the third quarter, which
should generate $30 million in annualized savings. S&P said,
"Nevertheless, we assume S&P Global Ratings-adjusted EBITDA from
continuing operations will decline about 20% in 2022; including
estimated $300 million in HHI adjusted EBITDA, S&P adjusted
leverage is in the high-6x area, compared to our 7x downgrade
trigger. It is uncertain if Spectrum will bring back the HHI
segment into continuing operations prior to an antitrust lawsuit
ruling, so we continue to exclude it in our forecast. If the
company overcomes the lawsuit and the sale goes through, we
estimate pro forma adjusted leverage after expected debt paydown in
the low-6x area. We continue to assume Spectrum would use about
$2.1 billion of the anticipated $3.5 billion in net after-tax cash
proceeds to repay all borrowings under its upsized $1.1 billion
revolver ($775 million outstanding pro forma for the Tristar
acquisition); term loan B ($395 million outstanding); $450 million,
5.75% notes due in 2025; and EUR425 million ($446 million
equivalent), 4% notes due in 2026. We will update our forecast as
more information becomes available, including the HHI sale status
and use of cash received (either from HHI net disposal proceeds or
$350 million termination fee from Assa Abloy)."
S&P said, "Spectrum's core continuing operations have had a
challenging 2022, and we believe contributions from the Tristar
acquisition in February have tracked lower than management's
expectations. Lower consumer spending on home appliances and high
retailer inventories with lower replenishment orders have been key
drivers of weaker than expected performance in Spectrum's home and
personal care segment. Organic net sales increased just $7 million,
or 0.7%, in the first nine months of 2022 despite price increases
across the portfolio, implying material volume declines. We also
believe volumes for Tristar have been pressured given just $66
million in net sales reported in the third quarter, compared to
last-12-months net sales of $547 million at the time of acquisition
(though we recognize that the holiday season in the December
quarter is crucial for the Tristar business). Year-to-date organic
net sales in the home and garden segment declined 4.2% due to
unfavorable weather conditions, including cold and rain in the
beginning of the growing season and drought in the summer months.
This reduced category demand and replenishment orders. Higher
commodities and transportation costs across all segments reduced
consolidated company defined EBITDA margin to 8.7% from 14% year to
date.
"The negative outlook also reflects tightening cushion on the
company's financial maintenance covenant. Spectrum's revolving
credit facilities contain a maximum net leverage financial
maintenance covenant of 6x. A combination of higher debt
(borrowings under the revolver to fund the Tristar acquisition this
year) and steadily declining EBITDA has resulted in covenant
leverage of 5.4x (includes about $300 million of HHI EBITDA) as of
July 3, which represents just 9.8% EBITDA cushion. This compares to
covenant leverage of 3.5x and 41.8% cushion as of Sept. 30, 2021.
We believe EBITDA could decline further in the coming quarters,
which could require the company to seek covenant relief, which
would likely be received.
"The negative outlook reflects our expectation that leverage will
remain elevated over the next 12 months as the company manages
through weak macroeconomic conditions with delayed margin recovery,
while the timing and outcome of the HHI sale remains uncertain. We
also assume margin recovery for the company's core segments will
take time. S&P Global Ratings-adjusted leverage could remain
elevated in the 6x-7x area through 2023."
S&P could lower the rating if it lowers its view of the business
risk or project that adjusted leverage will be sustained above 7x,
potentially due to:
-- Debt levels remaining elevated in the event that HHI is not
sold;
-- Operational challenges are further exacerbated by lower demand,
persistent inflation, and supply chain bottlenecks; or
-- Difficulties integrating recent acquisitions.
S&P could also lower its rating if liquidity tightens meaningfully
or the risk of a covenant violation increases due to poor
performance and continued roadblocks in selling HHI.
S&P could revise the outlook to stable if it expects the company
will sustain adjusted leverage comfortably below 7x, potentially
by:
-- Repaying debt with HHI net proceeds as anticipated;
-- Meaningfully improving profitability; and
-- Successfully integrating recent acquisitions.
ESG credit indicators: E-2, S-2, G-2
SUMMER AVE: Wins Cash Collateral Access Thru Jan 2023
-----------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Western Division, authorized Summer Ave LLC to use cash collateral
under the same terms and conditions of the Court's previous order,
through January 12, 2023.
As previously reported by the Troubled Company Reporter, the
creditors that claim security interests in the Debtors' properties
are Community Loan Servicing, LLC and Belvidere Capital, LLC.
As adequate protection for any diminution in value as a result of
the Debtor's use of cash collateral, all secured creditors were
granted replacement liens and security interest to the same extent,
validity, and enforceability of their perfected security interests
as of the petition date not subject to avoidance.
A hearing on the matter is set for January 12 at 11 a.m.
About Summer Ave, LLC
Summer Ave, LLC is a limited liability company that owns commercial
property, consisting of three buildings and two parking lots, each
on a separate parcel, with building addresses of (i) 431-435 White
Street, (ii) 429 White Street and 752 Sumner Avenue, and (iii) 760
Sumner Avenue, Springfield, Massachusetts.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 22-30140) on April 28,
2022. In the petition signed by Louis Masaschi, manager, the Debtor
disclosed $778,100 in assets and $4,058,600 in liabilities.
Judge Elizabeth D. Katz oversees the case.
The Law Offices of Louis S. Robin represents the Debtor as
counsel.
SUMMIT FINANCIAL: Court OKs Deal on Cash Collateral
---------------------------------------------------
The U.S. Bankruptcy Court for the District of California, Santa Ana
Division, authorized Summit Financial, Inc. and CalPrivate Bank to
use cash collateral on an interim basis through December 31, 2022,
in accordance with its agreement with CalPrivate Bank and the
United States Small Business Administration.
The Court approved the Stipulation in its entirety. The Debtor may
continue using cash collateral from October 1 through and including
December 31, 2022, pursuant to the Revised Budget and pursuant to
the same terms and conditions that were approved by the Court in
its Fourth Cash Collateral Order.
As provided in the Stipulation, all other terms and conditions of
the Fourth Cash Collateral Order will remain in full force and
effect.
The secured creditors, solely to the extent of any diminution in
the value of the cash collateral, 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.
The Debtor will pay CalPrivate Bank its contractual monthly payment
at $9,363.34 per month.
The Debtor will pay the SBA its contractual monthly payment at $731
per month.
A copy of the order is available at https://bit.ly/3C7KoTp from
PacerMonitor.com.
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.
Arent Fox LLP is the Debtor's counsel.
THE HACIENDA: Files Subchapter V Case
-------------------------------------
The Hacienda Company LLC filed for chapter 11 protection. The
Debtor elected on its voluntary petition to proceed under
Subchapter V of chapter 11 of the Bankruptcy Code.
The Debtor disclosed $2.865 million in assets against liabilities
of $2.201 million in its schedules. The Hacienda Co. estimates
between 1 and 49 creditors. The petition states that funds will be
available to unsecured creditors.
Gross operating revenue was $15.14 million in 2020 but dropped to
$1.363 million in 2021. Operating revenue for the period Jan. 1,
2022, through the filing date was $0.
In 2021, the Company said it earned $32.39 million from the sale of
the company's assets.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Oct. 12, 2022, at 10:00 AM at UST-LA2, TELEPHONIC MEETING.
CONFERENCE LINE:1-866-816-0394, PARTICIPANT CODE:5282999.
Proofs of claim are due by Nov. 30, 2022.
About The Hacienda Company LLC
The Hacienda Company LLC filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal.
Case No. 22-15163) on September 21, 2022. In the petition filed by
Hannah Buchan, as manager, the Debtor reported assets and
liabilities between $1 million and $10 million each.
Susan Seflin has been appointed as Subchapter V trustee.
The Debtor is represented by David L. Neale of Levene, Neale,
Bender, Yoo & Golubchik L.L.P.
TOYS 'R' US: Has Confidential Settlement With D&Os and Carriers
---------------------------------------------------------------
The TRU Creditor Litigation Trust, the trust created for creditors
under Toys "R" Us, Inc.'s confirmed Chapter 11 plans, is asking the
Bankruptcy Court for approval of a settlement resolving its
litigation against the Debtors' former directors and officers.
Pursuant to the settlement, the insurance carriers will promptly
pay the Trust an agreed amount in full and final resolution of the
Trust's claims against the D&Os and insurance carriers.
The settlement amount, as well as the resulting recovery by
creditors as a result of the settlement, has been redacted from
publicly available court filings.
Since the Trust's inception upon the effective dates of the
confirmed Plans in early 2019, it has diligently pursued its
mandate, including
the investigation and pursuit of claims against the Debtors' former
directors and officers. Following years of hard-fought
prosecution, as well as two separate court-ordered mediations, the
parties have reached an arm's-length resolution.
The Settlement permits the Trust, which was initially funded with
$5 million, to provide a payout to its beneficiaries.
Trust recognizes that the Debtors' pre- and post-petition creditors
suffered many hundreds of millions of dollars of harm as a result
of the
Debtors' bankruptcy and ultimate wind-down, and the Trust had
confidence that its claims were both legally and factually
compelling on the merits. Regardless of the Trust's confidence in
its claims, however, the inherent limitations on the Trust's
ability to collect on those claims provided under the bankruptcy
Plans -- limiting recoveries on claims against directors and
officers to available Insurance Policies -- meant that the Trust
would only be able to recover a small percentage of creditors'
losses, even if its claims were ultimately successful at trial.
While the Insurance Policies originally had total limits of $95
million, the available amount under those policies was eroding over
time as a result of defense costs and other judgments or
settlements paid by the Carriers (as defined in the Settlement
Agreement). As of the date of the
Settlement Agreement, the Trust has been advised by Defendants'
counsel that the remaining insurance coverage available was
approximately $63 million5 - with the bulk of the original coverage
limits having been spent defending against the Trust's claims.
Absent a settlement, the
remaining coverage would be further eroded by continued defense
costs through trial (currently scheduled for May 2023) and
inevitable appeals potentially stretching into 2024 or beyond.
About Toys "R" Us
Toys "R" Us, Inc., was an American toy and juvenile-products
retailer founded in 1948 and headquartered in Wayne, New Jersey, in
the New York City metropolitan area. Merchandise was sold in 880
Toys "R" Us and Babies "R" Us stores in the United States, Puerto
Rico and Guam, and in more than 780 international stores and more
than 245 licensed stores in 37 countries and jurisdictions.
Merchandise was also sold at e-commerce sites including Toysrus.com
and Babiesrus.com.
On July 21, 2005, a consortium of Bain Capital Partners LLC,
Kohlberg Kravis Roberts, and Vornado Realty Trust invested $1.3
billion to complete a $6.6 billion leveraged buyout of the
company.
Toys "R" Us, Inc., and certain of its U.S. subsidiaries and its
Canadian subsidiary voluntarily filed for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D. Va. Lead Case No. Case No.
17-34665) on Sept. 19, 2017. In addition, the Company's Canadian
subsidiary voluntarily commenced parallel proceedings under the
Companies' Creditors Arrangement Act ("CCAA") in Canada in the
Ontario Superior Court of Justice. The Company's operations
outside of the U.S. and Canada, including its 255 licensed stores
and joint venture partnership in Asia, which are separate entities,
were not part of the Chapter 11 filing and CCAA proceedings.
The Company's consolidated balance sheet showed $6.572 billion in
assets, $7.891 billion in liabilities, and a stockholders' deficit
of $1.319 billion as of April 29, 2017.
Judge Keith L. Phillips presides over the Chapter 11 cases.
In the Chapter 11 cases, Kirkland & Ellis LLP and Kirkland & Ellis
International LLP served as the Debtors' legal counsel. Kutak Rock
LLP served as co-counsel. Toys "R" Us employed Alvarez & Marsal
North America, LLC as its restructuring advisor; and Lazard Freres
& Co. LLC as its investment banker. It hired Prime Clerk LLC as
claims and noticing agent. Consensus Advisory Services LLC and
Consensus Securities LLC, served as sale process investment banker.
A&G Realty Partners, LLC, served as its real estate advisor.
On Sept. 26, 2017, the U.S. Trustee for Region 4 appointed an
official committee of unsecured creditors. The Committee retained
Kramer Levin Naftalis & Frankel LLP as its legal counsel; Wolcott
Rivers, P.C., as local counsel; FTI Consulting, Inc., as financial
advisor; and Moelis & Company LLC as investment banker.
Grant Thornton was the monitor appointed in the CCAA case.
Liquidation of Stores
Toys "R" Us, Inc., on March 15, 2018, sought court approval to
start the process of conducting an orderly wind-down of its U.S.
business and liquidation of inventory in all 735 of the Company's
U.S. stores, including stores in Puerto Rico.
Toys "R" Us Limited, Toys "R" Us, Inc.'s UK arm with 105 stores and
3,000 employees, was sent into administration in the United Kingdom
in February 2018. Unable to find a buyer, Moorfields Advisory
Limited shut the all stores in April 2018.
TRANSPORTATION DEMAND: Court OKs Deal on Cash Collateral Access
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Michigan
authorized Transportation Demand Management, LLC to continue using
cash collateral in accordance with its agreement with First
Security Bank of Washington until the confirmation of the Debtors'
Plan of Reorganization.
The parties agreed that the Debtor may use cash collateral on the
terms and conditions set forth in the Court's Final Order Granting
Authority to Use Cash Collateral dated May 5, 2022.
As previously reported by the Troubled Company Reporter, the Debtor
was permitted to use cash collateral on a final basis, in
accordance with the budget, with a 10% variance.
As adequate protection for the Debtor's use of cash collateral,
First Security Bank was granted replacement liens in the Debtor's
post-petition cash, accounts receivable and inventory, and related
proceeds, to the same extent and priority as any duly perfected and
unavoidable liens in cash collateral held by the Secured Creditor
as of the Petition Date, limited to the amount of any cash
collateral of the Secured Creditor as of the Petition Date, to the
extent that any cash collateral of the Secured Creditor is actually
used by the Debtor. The replacement lien does not include, without
limitation, a lien on avoidance action proceeds.
A copy of the stipulation is available at https://bit.ly/3xHvvWl
from PacerMonitor.com.
A copy of the order is available at https://bit.ly/3UtsWkr from
PacerMonitor.com.
About Transportation Demand Management, LLC
Transportation Demand Management, LLC is a motorcoach and minibus
operator in the Pacific Northwest with a fleet of over 90
motorcoaches and mini buses of varying size generating more than
$15M in annual sales.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-10482-MLB) on March
26, 2022. In the petition signed by Gladys Gillis, chief executive
officer, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Marc Barreca oversees the case.
Nathan T. Riordan, Esq., at Wenokur Riordan PLLC is the Debtor's
counsel.
TREES CORP: TCM Tactical Entities Report 6.4% Equity Stake
----------------------------------------------------------
In a Schedule 13G filed with the Securities and Exchange
Commission, these entities reported beneficial ownership of shares
of common stock of Trees Corporation:
Shares Percent
Beneficially of
Reporting Person Owned Class
---------------- ------------ --------
TCM Tactical Opportunities Fund II LP 4,912,349 4.8%
TCM Series Fund LP -
TCM Tactical Opportunities Series 1,632,800 1.6%
Troob Capital Advisors LLC 4,912,349 4.8%
TCM Tactical Opportunities LLC 1,632,800 1.6%
Douglas M. Troob 6,545,149 6.4%
Peter J. Troob 6,545,149 6.4%
As of Sept. 23, 2022, the Reporting Persons may be deemed to
beneficially own approximately 6.4% of the outstanding shares of
Common Stock. The percentage is based on 102,737,333 shares of
Common Stock outstanding, which is the sum of (i) 96,192,184 shares
of Common Stock outstanding as of Aug. 9, 2022, and (ii) 6,545,149
shares of Common Stock issuable upon the exercise of the Warrants.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1477009/000101359422000606/trees13g092322.htm
About Trees Corp
Headquartered in Denver, Colorado, Trees Corporation (formerly
known as General Cannabis Corp) -- provides services and products
to the regulated cannabis industry. The Company is a trusted
partner to the cultivation, production and retail sides of the
cannabis business.
General Cannabis reported a net loss of $8.87 million for the year
ended Dec. 31, 2021, compared to a net loss of $7.68 million for
the year ended Dec. 31, 2020. As of June 30, 2022, the Company had
$22.99 million in total assets, $12.58 million in total
liabilities, and $10.41 million in total stockholders' equity.
Salt Lake City, Utah-based Haynie & Company, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated March 25, 2022, citing that the Company has suffered
recurring losses from operations and has negative working capital
that raise substantial doubt about its ability to continue as a
going concern.
UNIVERSITY RX: Seeks Cash Collateral Access
-------------------------------------------
University RX, LLC asks the U.S. Bankruptcy Court for the Eastern
District of Wisconsin for authority to use cash collateral on an
interim basis and provide adequate protection through December 31,
2022.
The Debtor currently has only one employee, Jean-Pierre, who does
not draw any salary from the Debtor. The Debtor does not provide
any benefits to Mr. Jean-Pierre.
The Debtor's primary source of income is the proceeds it receives
from the sale of regulated drugs in its pharmacy. The Debtor has no
other substantial source of income upon which it can rely to
continue its operations. The Debtor does run a small mini-mart
business in the front of the pharmacy.
The Debtor operates out of a commercial building owned by With
Studios, Inc dba Withco.
Prior to the Petition Date, the Debtor entered into financing
arrangements with Last Chance Funding, Inc., in the form of a
merchant agreement. As of the Petition Date, Debtor is obligated to
LCF in the total amount of $11,771.
As security for Debtor's obligations to LCF, pursuant to the
Merchant Agreement, the Debtor pledged all of its assets now owned
or hereafter acquired and wherever located. LCF properly perfected
its first position lien on the Debtor's personal property pursuant
to a UCC financing Statement filed on April 29,2021 as Filing
#20210429000586-3.
As of the Petition Date, the value of the Debtor's personal
property upon which LCF asserts a properly perfected,
first-position security interest in, is as follows:
* Mini-mart and Pharmacy Equipment - $ 16,700
* Accounts Receivable - unknown
* Pharmacy - unknown
* Mini-mart merchandise - unknown
In order to operate its business during this reorganization and
meet its ordinary business expenses, the Debtor must have immediate
access to and the use of its cash collateral.
The relief requested will permit the Debtor to operate while
adequately protecting LCF with payments of $100 per month.
The Debtor will also provide LCF with a replacement lien and keep
all of LCF's collateral insured.
A copy of the motion and the Debtor's budget is available at
https://bit.ly/3xXBEOm from PacerMonitor.com.
The Debtor projects $41,500 in total cash receipts and $36,758 in
total cash paid out.
About University Rx
University Rx, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Wis. Case No. 22-23932) on Sept. 6,
2022, with up to $1 million in both assets and liabilities. Jude P.
Jean-Pierre, authorized person, signed the petition.
Judge Beth E. Hanan oversees the case.
Michelle A. Angell, Esq., at Krekeler Law, SC serves as the
Debtor's counsel.
VIRGINIA VON SCHAEFER: U.S. Trustee Appoints Tamar Terzian as PCO
-----------------------------------------------------------------
Peter Anderson, the U.S. Trustee for Region 16, appointed Tamar
Terzian, Esq., a partner at Epps & Coulson, LLP, as patient care
ombudsman for Virginia Von Schaefer MD, Inc.
The appointment was made pursuant to the order from the U.S.
Bankruptcy Court for the Central District of California directing
the Justice Department's bankruptcy watchdog to appoint a patient
care ombudsman.
Ms. Terzian disclosed in a court filing that she is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
Ms. Terzian can be reached at:
Tamar Terzian, Esq.,
Epps & Coulson, LLP
515 South Figueroa Street, Suite 1020
Los Angeles, CA 90071
Tel: (213) 929-2357/(213) 929-2390
Fax: (213) 929-2394
Email: tterzian@eppscoulson.com
About Virginia Von Schaefer
Virginia Von Schaefer MD, Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-11547)
on Sept. 8, 2022, with up to $50,000 in assets and up to $500,000
in liabilities. Judge Theodor Albert oversees the case.
Virginia Von Schaefer is represented by Omero Banuelos, Esq.
VIRTU FINANCIAL: Fitch Affirms 'BB-' LongTerm IDR, Outlook Stable
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Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDRs) and senior secured first lien debt ratings of Virtu
Financial LLC and its debt-issuing subsidiary, VFH Parent LLC
(collectively Virtu) at 'BB-'. The Rating Outlook is Stable.
The IDRs of subsidiary Impala Borrower LLC have been affirmed and
withdrawn as they are no longer considered by Fitch to be relevant
to the agency's coverage because the debt issued by this entity has
been repaid and Fitch does not expect the entity to issue debt
going forward.
KEY RATING DRIVERS
IDRs and Senior Debt
The affirmation of Virtu's ratings reflects its established market
position as a technology-driven market maker across various venues,
geographies and products, its solid scale, improving
diversification, strong operating performance, experienced
management team that has executed against strategic objectives, and
the expectation that Virtu will maintain moderate leverage and
reasonable liquidity in a lower volatility environment.
Additionally, Fitch believes that Virtu's market-neutral trading
strategies in highly liquid products and extremely short holding
periods minimize market and liquidity risks.
Primary rating constraints include elevated operational risks
inherent in technology-driven trading, reliance on volatile
transactional revenue, the firm's primarily secured, concentrated
corporate funding profile and heightened regulatory scrutiny of
high frequency trading, payment for order flow mechanisms and
alternative trading systems. These risks are partially mitigated by
Virtu's robust risk controls, as evidenced by minimal instances of
material historical operational losses.
Virtu's EBITDA margin on a gross revenue basis has been strong, at
42.7% for the TTM ended June 30, 2022 (2Q22), above the firm's
four-year average of 39.7% and substantially above Fitch's
quantitative benchmark range for 'bb' category securities firms
with low balance sheet usage of 10% to 20%. Fitch believes Virtu's
EBITDA margins will decline as trading levels normalize, but remain
consistent with historical levels supported by the optimized cost
structure as a result of successful execution on cost synergies
from acquisitions as well as from expanded markets and products.
Fitch notes that Virtu has gradually expanded strategies into
market making of cryptocurrencies. Incorporated into today's
affirmation and the Stable Outlook is Fitch's expectation that this
activity will remain modest over near-to-medium term in the context
of Virtu's net revenues as well as balance sheet exposures.
Virtu's cash flow leverage was 1.6x for the TTM ended 2Q22, falling
within Fitch's 'bbb' category range of 1.5x-2.5x for securities
firms; up from 1.2x for the TTM 2Q21 as a result of lower absolute
adjusted EBITDA as well as higher levels of debt following the
firm's term loan upsize at the beginning of 2022. As earnings
normalize, Fitch continues to expect leverage, excluding short-term
borrowings, to trend towards the firm's target of 2.00x-2.25x. An
inability to maintain leverage at-or-below 2.5x on a sustained
basis would be viewed negatively by Fitch.
Interest coverage (adjusted EBITDA to interest expense) dropped to
13x for the TTM ended 2Q22, from 16.3x in 2021 and down from a high
of 18.8x in 2020. Interest coverage will likely decline in concert
with adjusted EBITDA as well as a higher rate environment, but
Fitch expects it to remain well-above above Fitch's 'bb' category
quantitative benchmark range for securities firms with low balance
sheet usage of 3x to 6x.
Fitch views Virtu's liquidity as adequate, as the risks of its
confidence-sensitive and predominantly secured funding profile are
partially offset by the largely liquid balance sheet. Virtu's
operating liquidity needs depend on various factors, including
exchange and counterparty collateral requirements and settlements,
which can vary with the size of Virtu's trading assets and
liabilities and market volatility. Still, these needs are generally
predictable due to Virtu's market-neutral trading strategies.
Virtu maintains secured broker-dealer credit facilities, short-term
bank loans and prime brokerage credit facilities to finance its
short-term (mostly overnight) inventory, clearing margin and
settlement. Fitch excludes these short-term facilities from its
corporate leverage calculation, as short-term borrowings are
secured by the trading inventory, similar to securities financing
transactions. Virtu had an aggregate of $376.4 million outstanding
on the broker-dealer facilities and prime brokerage facilities as
of 2Q22, which are partially netted within receivables from
broker-dealers and clearing organizations. Corporate debt almost
exclusively consists of a $1.8 billion senior secured term loan due
in 2029.
At 2Q22, Virtu had $811 million in cash and equivalents to support
operating activities, capital expenditures and for general
corporate purposes, as well as approximately $1.9 billion of
available borrowing capacity on short-term credit facilities. The
balance sheet also includes highly liquid trading assets and
liabilities, primarily securities inventory, which could be
liquidated and turned into cash, as necessary, in a one- to
three-day settlement time frame under normal market conditions.
Fitch expects Virtu to continue to distribute a substantial part of
its operating cash flow to its shareholders. The combined payout,
consisting of dividends and share repurchases amounted to 120.7% of
operating cash flows in the TTM ended 2Q22.
The Stable Outlook reflects Fitch's expectation that Virtu will
maintain a low market risk profile, strong profitability margins,
as expressed by an EBITDA margin of above 30%, cash flow leverage
below 2.5x on a gross debt to adjusted EBITDA basis, and adequate
liquidity.
The secured term loan rating is equalized with Virtu's IDR,
reflecting average recovery prospects in a stress scenario.
SUBSIDIARY AND AFFILIATED COMPANIES
The ratings of VFH Parent LLC are equalized with those of Virtu,
reflecting the full ownership and unconditional guarantee on the
debt issued by those entities.
RATING SENSITIVITIES
IDRs and Senior Debt
Positive rating action is likely limited to the 'BB' rating
category given the significant operational risk inherent in
technology-driven trading.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Consistent operating performance, including maintenance of
EBITDA margins above 30% during lower volatility environments;
- Minimal operational losses over a longer time period;
- Maintaining cash flow leverage consistently below 2.0x on a
gross debt/adjusted EBITDA basis;
- Increased funding flexibility, including the addition of a
laddered, unsecured funding component and demonstrated access
to third party funding through market cycles.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- An inability to maintain leverage at or below 2.5x on a gross
debt/adjusted EBITDA basis;
- An idiosyncratic liquidity event, particularly if the result of
a material operational or risk management failure;
- A material deterioration in interest coverage, approaching 3x;
- Adverse legal or regulatory actions against Virtu, which
results in a material fine, reputational damage, or alteration
in the business profile;
- An inability to maintain Virtu's market position in the face of
evolving market structures and technologies;
- A material shift into trading less-liquid products or a
material increase in position holding periods without a
commensurate increase in the tangible equity base.
SUBSIDIARY AND AFFILIATED COMPANIES
The ratings of VFH Parent LLC are equalized with those of Virtu and
would be expected to move in tandem.
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
---- ------ -----
VFH Parent LLC LT IDR BB- Affirmed BB-
senior secured LT BB- Affirmed BB-
Impala Borrower LLC LT IDR BB- Affirmed BB-
LT IDR WD Withdrawn BB-
Virtu Financial LLC LT IDR BB- Affirmed BB-
WATERBRIDGE MIDSTREAM: Fitch Alters Outlook on 'B-' IDR to Positive
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Fitch Ratings has affirmed WaterBridge Midstream Operating LLC's
(WATOPE) Long-Term Issuer Default Rating (IDR) at 'B-'. The senior
secured rating has been affirmed at 'B'/'RR3'. The Rating Outlook
has been revised to Positive from Stable.
The Positive Outlook reflects WATOPE's strong performance in 1H22,
with momentum into the 2Q22 portion of YTD, with 22% yoy growth in
produced water volumes in the Delaware basin. Volumes drove higher
operating margins than Fitch had previously expected. Fitch expects
the stronger margins and volumes to continue into 2H22 and 2023.
The ratings recognize WATOPE's stronger EBITDA performance has
driven significant improvement in WATOPE's EBITDA to interest
coverage. Fitch acknowledges that the current interest rate trends
and overall volatility makes for some uncertainty. Fitch's interest
rate outlook was increased the week of Sept. 12, 2022 (e.g., WATOPE
is expected to be charged applicable margin plus 4% in 2023). To
resolve the Positive Outlook Fitch looks to WATOPE to have Fitch
run-rate forecast of interest coverage hitting over 2.0x and a
solid liquidity prospect.
KEY RATING DRIVERS
Improving Coverage and Leverage Metrics: WATOPE's performance
through 2Q22 has benefited from both growth in volumes and margins.
Despite interest rates rising above Fitch's 2021-vintage forecast
of 2022, volume growth has driven adjusted EBITDA interest coverage
(a similar metric to the previously referenced FFO fixed charge
coverage) improvement to 2.2x as of LTM 2Q22. Both Delaware basin
and Arkoma basin volumes exceeded Fitch's old forecast. EBITDA
coverage is expected to remain around 2.0x in 2023. Fitch expects
hydrocarbon prices to drop from 2023 to 2024 per the Fitch Price
Deck (e.g. WTI $62/bbl in 2024) which could challenge coverage to
remain at or above the 2.0x level in later years of the forecast.
Fitch expects leverage (total debt with equity credit to operating
EBITDA) to continue declining through 2023. LTM leverage at 2Q22
was approximately 7x. As WATOPE continues to benefit from increased
drilling activities and is generating positive FCF, excess
available cash is expected by Fitch to be applied to repay the term
loan (beyond the required 1% amortization). Fitch views leverage as
likely to decline from LTM 2Q22 leverage in 2023.
Liquidity Overhang: The senior debt structure has provisions to
protect the debt in the event the holder of the A-1 Preferred Units
was to continue to have a cash redemption right in early 2024.
Fitch acknowledges that the single holder of the A-1 units and
WATOPE are in documentation on a positive amendment. Fitch assumes
the amendment closes. Fitch will monitor the successful resolution,
and, in the meantime notes that in the unexpected case where the
amendment is not consummated, the revolving credit facility and
term loan B would have expiration and maturity (respectively) in
September 2023.
Volumetric Risk: WATOPE is benefitting from the positive shifting
outlook for production growth in the Delaware basin which has
accelerated in 2022. While not a problem in LTM period ending in
June 30, 2022, volumes are exposed to indirect commodity price
exposure in the event drilling on WATOPE's dedicated acreage
becomes less competitive versus other locations and customers
decide to move rigs elsewhere. WATOPE does not have a material
amount of minimum volume commitments. Fitch expects growth through
2023, yet as recent history has shown us in 2020, producers can
quickly slow or stop production and WATOPE's volumes will be
impacted with little protection.
Adding Commercial Contracts: With the increase in hydrocarbon
pricing providing a tailwind in 2022, WATOPE has been active in
adding new and expanding existing commercial contracts with
producers in the Delaware basin. Capital expenditures are expected
to tick up as WATOPE expands its infrastructure to support customer
needs, and then moderate in 2023 and over the forecast.
Customer Concentration: WATOPE has acreage dedications with several
large investment grade customers and is modestly diversified
compared to pure-play gathering peers. The company is exposed to
customer concentration as its three largest customers accounted for
46.1% of revenues in 2021. M&A activity has been active over the
past few years which is an overall positive for WATOPE's
counterparty credit profile.
Nearly all of WATOPE's producer contracts are fixed fee with CPI
escalators, an exception being Trinity Operating (USG) LLC,
(Trinity; NR but a subsidiary of Nextra Energy, Inc. A-/Stable)
WATOPE and Trinity have made adjustments from time to time to seek
win-win outcomes. Fitch expects that with LNG exports putting
upward pressure on natural gas prices there should be an improved
profit contribution from Oklahoma.
Limited Scale & Size: WATOPE is a water midstream/solutions
provider that operates predominantly in the southern Delaware
region of the Permian basin, with a small percentage of operations
in the Arkoma basin in Oklahoma. Given the predominant single basin
focus and lack of business line diversity, WATOPE possesses
outsized sensitivity to a slow-down in Delaware basin production as
materialized in 2020. The company is expected to generate annual
EBITDA less than $300 million over the forecast consistent with
issuers below the 'BB-'rating category.
DERIVATION SUMMARY
WATOPE is somewhat unique in the midstream sector in that it is a
pure play water solutions business. The only other Fitch rated
midstream company with a significant water solutions focus is
Rattler Midstream, LP (Rattler; BB+/RWP). Rattler's standalone
credit profile is stronger than WATOPE due to its more robust
credit metrics, its larger size and its integration with its
investment-grade controlling equity-holder (Diamondback;
BBB/Stable).
In terms of customer concentration WATOPE has good diversification
with a mix of investment grade and non-investment grade producers.
As Ratter's primary counterparty is investment grade rated
Diamondback, Fitch believes WATOPE has slightly higher counterparty
risk, but Fitch notes that Diamondback poses a concentration risk
to an extent that WATOPE does not have Historically, volumes at
WATOPE have been more volatile than those of Rattler. The picture
is better lately. Diamondback has somewhat restrained drilling
activities limiting Rattlers volumetric risk. This is exemplified
by Rattler's 2Q22 YoY water disposal volumes up 4.5% verses
WATOPE's Delaware volumes up 22% for the same period.
Comparing geographies, Fitch regards Rattler to have a superior
profile. Within the Permian basin Rattler operates in both the
Delaware sub-basin and the Midland sub-basin. WATOPE only has
operations in the Delaware basin with some diversity to the Arkoma
basin in Oklahoma. Fitch takes a more constructive view on
long-term volumes in the Midland than in Oklahoma.
The driving force in the rating differences are the differences in
financial metrics. Fitch expects Rattler's leverage to be around
2.7x in 2022-2023 comparing favorably to WATOPE's significantly
higher leverage profile.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Fitch price deck, e.g., 2023 price of West Texas Intermediate
of $81 per barrel, and 2024 of $62;
- Delaware produced water annual volume growth in the low double
digits for 2022 and the high single digits in 2023, then
tapering off slightly in outer forecast years;
- Capex spending in line with management's expectations;
- Base interest rate applicable to the revolving credit facility
and term loan reflects the Fitch Global Economic Outlook,
e.g.,4.0% for 2023 and 2024;
- Excess FCF used to pay down outstanding revolver borrowings in
2022 and partial term loan repayment beginning in 2023; both
senior debt facilities remain effective/outstanding going into
the beginning of 2024, based on Fitch's expectation of WATOPE
dealing with the springing maturity provisions;
- The recovery analysis uses assumptions that cause WATOPE to be
considered a going-concern in bankruptcy. Fitch has assumed a
10% administrative claim (standard). The going-concern EBITDA
estimate of $135 million reflects Fitch's view of a
sustainable, post-reorganization EBITDA level upon which Fitch
bases the valuation of the company. The going concern EBITDA is
approximately $5 million higher than Fitch's previous going
concern estimate which reflects better company results since
the last forecast, as well as steady industry-wide West Texas
oil volumes. As per criteria, the going concern EBITDA reflects
some residual portion of the distress that caused the default;
- Fitch used a 6.0x EBITDA multiple is in line with
reorganization multiples for the energy sector. There have been
limited bankruptcy and reorganizations within the midstream
space but two bankruptcies, Azure Midstream and Southcross
Holdings LP (2016) had multiples between 5.0x and 7.0x,
ascertained by Fitch's best efforts attempts at devising
estimates.
Away from the midstream sub-sector of Energy, in its more recent
Bankruptcy Case Study Report, "Energy, Power and Commodities
Bankruptcies Enterprise Value and Creditor Recoveries" published in
September 2021, the median enterprise valuation exit multiplies for
51 energy cases for which this data was available was 5.3x, with a
wide range of multiples observed.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- If the trend of increasing volumes and EBITDA persists and
WATOPE de-links the senior debt maturity from the preferred
instrument, then Fitch would likely upgrade the company if in
the forecast the EBITDA to interest coverage is sustained above
2.0x;
- Interest coverage is above 2.0x and is forecast to be sustained
above 2.0x;
- Leverage (total debt with equity credit/operating EBITDA)
expected to be below 7.0x on a sustained basis;
- In addition to the coverage metrics, improved circumstances
concerning liquidity.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A forecast by Fitch that the 1.1x debt service coverage ratio
covenant will be breached;
- Adjusted EBITDA interest coverage below 1.5x;
- Lack of pro-active management of liquidity, including but not
limited to the repayment and/or extension of the revolving
credit facility that may expire as early as 4Q23;
- Volume declines (trailing quarterly) in WATOPE's Delaware basin
system, except if caused by one-off events;
- A significant event at a major customer that will probably
impair WATOPE's cash flow.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Limited: As of June 30, 2022, WATOPE had approximately
$42.1 million of liquidity consisting entirely of cash on hand. The
company as of June 30, 2022 had $45 million of outstanding
borrowings on the $100 million super-senior revolving credit
facility (which, as noted above, if the A-1 preferred equity
amendment is not consummated, will become due in September 2023,
along with term loan B). A partial paydown of $25 million was made
in August 2022.
The revolving credit facility has a springing net leverage covenant
of 5.0x with any incremental draw above $45 million, which limits
the company's ability to draw on it in the near term. Fitch expects
that WATOPE will be able to fund its cash needs through a
combination of operating cash flow and cash on hand. WATOPE would
likely require sponsor support to maintain adequate liquidity if it
were to undertake a significant growth project or acquisition.
The term loan requires a standard mandatory amortization of 1% of
original loan amount per annum and compliance with a debt service
coverage ratio covenant threshold of 1.1x. The company was in
compliance with its financial covenants as of June 30, 2022. Fitch
expects WATOPE to maintain compliance with its covenants through
the forecast period.
ISSUER PROFILE
WaterBridge Midstream Operating, LLC provides water services to oil
& gas producers in Texas and Oklahoma.
SUMMARY OF FINANCIAL ADJUSTMENTS
Preferred units. Owing to the change of control provision in the
preferred units, among other terms that tip the judgment the same
way, the preferred units receive zero equity credit (i.e., are
treated like debt for purposes of calculating leverage). WATOPE is
deemed to have as imputed debt-like instruments two series of
preferred units. As to calculations of coverage metrics, PIK
distributions and future value claims for deferred coupons are
excluded.
ESG CONSIDERATIONS
WaterBridge Midstream Operating LLC has an ESG Relevance Score of
'4' for Group Structure due to due to related party transactions
with affiliate companies, which has a negative impact on the credit
profile, and is relevant to the rating[s] in conjunction with other
factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
WaterBridge Midstream
Operating LLC
LT IDR B- Affirmed B-
senior secured LT B Affirmed RR3 B
WRIGHT EXPERIENCE: Files Subchapter V Case
------------------------------------------
The Wright Experience Inc. filed for bankruptcy protection in
Virginia. The Debtor elected on its voluntary petition to proceed
under Subchapter V of chapter 11 of the Bankruptcy Code.
The Wright Corporation is primarily in the business of building and
selling aircraft modelled on the aircraft originally built by
Wilbur Wright and Orville Wright. Kenneth W. Hyde is the sole
owner, president and sole officer of the Company.
Mr. Hyde and the Company were facing foreclosure of two leases
containing aircraft and property located in hangers at an airport
located in Fauquier County, Virginia.
The Debtor has filed a lawsuit in the Circuit Court of Fauquier
County, Virginia, to seek an injunction against the foreclosures on
grounds that (a) the parties who advertized the foreclosures had
not been properly appointed as substitute trustees for one of the
foreclosures; (b) that the creditor overstated the amount of the
secured principal as tone of the debts secured by one of the deeds
of trust; and (c) that the defendants on Aug. 25, 2022 advertised
in the Washington Post a mistaken address for the location of the
property advertised for foreclosure.
After the court refused to issue an injunction, the Debtor filed
for Chapter 11 protection. Mr. Wright, an obligor of the Debtor's
debts, contemplated on filing for Chapter 13 bankruptcy but did not
do so because the amount of his debts exceeded the limits for
Chapter 13 bankruptcy.
The Wright Experience estimated debt of less than $10 million and
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. 20, 2022, at 02:00 PM at Alexandria division. Proof of claim
are due by Jan. 18, 2023.
About The Wright Experience
The Wright Experience Inc. manufactures aerospace products and
parts.
The Wright Experience Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 22-11257) on
Sept. 21, 2022. In the petition filed by Kenneth W. Hyde, as
president, the Debtor reported assets and liabilities between $1
million and $10 million.
Marc E. Albert has been appointed as Subchapter V trustee.
The Debtor is represented by:
Henry W. McLaughlin, III
The Law Office of Henry McLaughlin, P.C.
707 E Main St. Ste 1050
Richmond, VA 23219
Tel: 804-205-9020
Fax: 804-205-9029
Email: henry@mclaughlinvalaw.com
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represented by: Vincent Ansetti, Esq.
LAW OFFICE OF ANSETTI AND ASSOCIATES
E-mail: vincent@ansettilaw.com
In re Sussex Development Corp
Bankr. E.D.N.Y. Case No. 22-72527
Chapter 11 Petition filed September 22, 2022
See
https://www.pacermonitor.com/view/PW6YOVY/Sussex_Development_Corp__nyebke-22-72527__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Goal's Gym LLC
Bankr. D. Utah Case No. 22-23708
Chapter 11 Petition filed September 22, 2022
See
https://www.pacermonitor.com/view/EVUFJ7A/Goals_Gym_LLC__utbke-22-23708__0001.0.pdf?mcid=tGE4TAMA
represented by: Ted F. Stokes, Esq.
STOKES LAW PLLC
E-mail: ted@stokeslawpllc.com
In re Russell Edwin Anderson
Bankr. W.D. Va. Case No. 22-60960
Chapter 11 Petition filed September 22, 2022
represented by: David Cox, Esq.
COX LAW GROUP
E-mail: david@coxlawgroup.com
In re Curtis Leo Slife and Vickie Lynn Slife
Bankr. D. Ariz. Case No. 22-06367
Chapter 11 Petition filed September 23, 2022
represented by: Patrick Keery, Esq.
KEERY MCCUE, PLLC
E-mail: pfk@keerymccue.com
In re John Richard Conti
Bankr. M.D. Fla. Case No. 22-00980
Chapter 11 Petition filed September 23, 2022
represented by: Kenneth Herron, Esq.
In re KLMG Food, LLC
Bankr. M.D. Ga. Case No. 22-51107
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/WPNOOPY/KLMG_Food_LLC__gambke-22-51107__0001.0.pdf?mcid=tGE4TAMA
represented by: J. Robert Williamson, Esq.
SCROGGINS & WILLIAMSON, P.C.
E-mail: centralstation@swlawfirm.com
In re MP Zebulon, LLC
Bankr. M.D. Ga. Case No. 22-51106
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/I7XWCRA/MP_Zebulon_LLC__gambke-22-51106__0001.0.pdf?mcid=tGE4TAMA
represented by: J. Robert Williamson, Es.q
SCROGGINS & WILLIAMSON, P.C.
E-mail: centralstation@swlawfirm.com
In re MP Byron, LLC
Bankr. M.D. Ga. Case No. 22-51109
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/XLAQTTY/MP_Byron_LLC__gambke-22-51109__0001.0.pdf?mcid=tGE4TAMA
represented by: J. Robert Williamson, Esq.
SCROGGINS & WILLIAMSON, P.C.
E-mail: centralstation@swlawfirm.com
In re MP Dublin, LLC
Bankr. M.D. Ga. Case No. 22-51110
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/WQCZX4A/MP_Dublin_LLC__gambke-22-51110__0001.0.pdf?mcid=tGE4TAMA
represented by: J. Robert Williamson, Esq.
SCROGGINS & WILLIAMSON, P.C.
E-mail: centralstation@swlawfirm.com
In re MP Heritage Place, LLC
Bankr. M.D. Ga. Case No. 22-51111
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/JUPGGRI/MP_Heritage_Place_LLC__gambke-22-51111__0001.0.pdf?mcid=tGE4TAMA
represented by: J. Robert William, Esq.
SCROGGINS & WILLIAMSON, P.C.
E-mail: centralstation@swlawfirm.com
In re MP Perry, LLCMP Perry, LLC
Bankr. M.D. Ga. Case No. 22-51112
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/XFIZONQ/MP_Perry_LLC__gambke-22-51112__0001.0.pdf?mcid=tGE4TAMA
represented by: J. Robert Williamson, Esq.
SCROGGINS & WILLIAMSON, P.C.
E-mail: centralstation@swlawfirm.com
In re Crosslinks Family Practice, LLC
Bankr. N.D. Ga. Case No. 22-20957
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/2KV5TYA/Crosslinks_Family_Practice_LLC__ganbke-22-20957__0001.0.pdf?mcid=tGE4TAMA
represented by: William Rountree, Esq.
ROUNTREE, LEITMAN, KLEIN & GEER, LLC
E-mail: wrountree@rlkglaw.com
In re 220 Lebanon Street LLC
Bankr. D. Mass. Case No. 22-11362
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/XYREEEA/220_Lebanon_Street_LLC__mabke-22-11362__0001.0.pdf?mcid=tGE4TAMA
represented by: Matthew T. Desrochers, Esq.
LAW OFFICE OF MATTHEW T. DESROCHERS
E-mail: matthewtdesrochers@gmail.com
In re E R A Logistics Inc.
Bankr. D.N.J. Case No. 22-17520
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/O354AAQ/E_R_A_Logistics_Inc__njbke-22-17520__0001.0.pdf?mcid=tGE4TAMA
represented by: David Stevens, Esq.
SCURA WIGFIELD, HEYER, STEVENS &
CAMMAROTA LLP
E-mail: dstevens@scura.com
In re Duran Transfer, Inc.
Bankr. W.D. Pa. Case No. 22-10431
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/OV2GUFY/Duran_Transfer_Inc__pawbke-22-10431__0001.0.pdf?mcid=tGE4TAMA
represented by: Guy C. Fustine, Esq.
KNOX MCLAUGHLIN GORNALL & SENNETT, P.C.
E-mail: gfustine@kmgslaw.com
In re Roberto Ramos Ramos and Sonia Noemi Caban Miranda
Bankr. D.P.R. Case No. 22-02789
Chapter 11 Petition filed September 23, 2022
represented by: Jesus Batista Sanchez, Esq.
In re Augusta Burgers Express, Inc.
Bankr. D.S.C. Case No. 22-02588
Chapter 11 Petition filed September 23, 2022
See
https://www.pacermonitor.com/view/QGV7UPQ/Augusta_Burgers_Express_Inc__scbke-22-02588__0001.0.pdf?mcid=tGE4TAMA
represented by: W. Harrison Penn, Esq.
MCCARTHY, REYNOLDS & PENN, LLC
E-mail: hpenn@mccarthy-lawfirm.com
In re Brothers Pizza 5 LLC
Bankr. D. Nev. Case No. 22-13430
Chapter 11 Petition filed September 25, 2022
See
https://www.pacermonitor.com/view/P2FTCSY/BROTHERS_PIZZA_5_LLC__nvbke-22-13430__0001.0.pdf?mcid=tGE4TAMA
represented by: David Riggi, Esq.
RIGGI LAW
E-mail: riggilaw@gmail.com
In re Community Mortuary L.L.C.
Bankr. M.D. Ga. Case No. 22-70831
Chapter 11 Petition filed September 26, 2022
See
https://www.pacermonitor.com/view/HHQOOVI/Community_Mortuary_LLC__gambke-22-70831__0001.0.pdf?mcid=tGE4TAMA
represented by: David L. Bury, Jr., Esq.
STONE & BAXTER, LLP
E-mail: dbury@stoneandbaxter.com
In re Walter Stewart Jackson, Jr.
Bankr. M.D. Ga. Case No. 22-70830
Chapter 11 Petition filed September 26, 2022
In re Sparkles Beauty Bar LLC
Bankr. D. Nev. Case No. 22-13453
Chapter 11 Petition filed September 26, 2022
See
https://www.pacermonitor.com/view/YTEGCYA/SPARKLES_BEAUTY_BAR_LLC__nvbke-22-13453__0001.0.pdf?mcid=tGE4TAMA
represented by: Seth D. Ballstaedt, Esq.
FAIR FEE LEGAL SERVICES
E-mail: help@bkvegas.com
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
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liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
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then-ending.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
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Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
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Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2022. All rights reserved. ISSN: 1520-9474.
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