/raid1/www/Hosts/bankrupt/TCR_Public/221006.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, October 6, 2022, Vol. 26, No. 278
Headlines
22 ELM RYE: Wins Cash Collateral Access Thru Oct 30
8400 GROUP: Wins Cash Collateral Access on Final Basis
ACASTI PHARMA: Court Dismisses Remaining Stockholder Litigation
AG BROTHERS' FOOD: Voluntary Chapter 11 Case Summary
ALLENA PHARMACEUTICALS: Taps Stretto Inc. as Administrative Advisor
ANDOVER SENIOR: Wins Cash Collateral Access Thru Dec 31
ANTICANCER INC: Unsecureds Will Get 41% of Claims in 5 Years
B&G PROPERTY: Gets OK to Hire John Warekois as Accountant
BAUSCH + LOMB: S&P Affirms 'CCC+' ICR, Outlook Positive
BAUSCH HEALTH: S&P Upgrades ICR to 'CCC+', Outlook Stable
BLUE JAY: Claims Will be Paid From Future Business Operations
CAPSTONE GREEN: Appoints Celia Fanning as CAO, Controller
CHENIERE ENERGY: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
CINEWORLD GROUP: Clark Hill Represents MMM East, 2 Others
CIVITAS RESOURCES: Fitch Alters Outlook on 'BB-' IDR to Positive
DANA INC: Fitch Affirms 'BB+' LongTerm IDR & Alters Outlook to Neg.
E-BOX LLC: Gets Approval to Hire Payne Law Firm as Counsel
ECO PRESERVATION: Case Summary & Four Unsecured Creditors
ENERFLEX LTD: S&P Rates $625MM Senior Secured Notes 'BB-'
GRAUSTARK MEMBERS II: Voluntary Chapter 11 Case Summary
GRAUSTARK MEMBERS: Voluntary Chapter 11 Case Summary
HELIUS MEDICAL: Baker Tilly Replaces BDO USA as Auditor
HERO NUTRITIONALS: Gets OK to Hire Golden Goodrich as Legal Counsel
IBIO INC: Delays Filing of Form 10-K for Year Ended June 30
INSTASET PLASTICS: Case Summary & 20 Largest Unsecured Creditors
INTRADO CORP: Fitch Affirms 'B-' LongTerm IDR Amid StonePeak Deal
JORGABY FREIGHT: Wins Cash Collateral Access, DIP Loan
KALBARRI AUSTRALIA: Wins Cash Collateral Access Thru Dec 31
KW EXCAVATION: Seeks to Hire Carver Florek & James as Accountant
LAMB OF GOD: Future Income to Fund Plan Payments
LEHMAN BROTHERS INC: 14-Year Old Brokerage Liquidation Case Ends
LONESOME VALLEY: Wins Cash Collateral Access Thru Dec 30
LUMEN TECHNOLOGIES: S&P Lowers ICR to 'BB-', Off Watch Negative
MASTEN SPACE: Unsecureds to Recover 1% to 10% in Liquidating Plan
MATADOR RESOURCES: Fitch Hikes LongTerm IDR to 'BB-'
MMC JUICE: Hearing Today on Bid to Access Cash Collateral
MT VERNON MEMBERS: Voluntary Chapter 11 Case Summary
NORTHSIDE VENTURES: Case Summary & 14 Unsecured Creditors
PHOENIX SERVICES: Davis Polk Advises Lender on DIP Facility
PILATES AND YOGA: Seeks Cash Collateral Access
PREHIRED LLC: Sales Bootcamp Files Subchapter V Case
PUERTO RICO: Bankruptcy Judge Grants PREPA Litigation
QUICK LINKS: Gets OK to Hire Nordlander CPA as Accountant
REARDEN STEEL: Gets Interim OK to Hire Julianne Frank as Counsel
REPLICEL LIFE: Andrew Schutte Reports 15.2% Equity Stake
RIOT BLOCKCHAIN: Supplements Disclosure With Omitted Mt'l Weakness
RJRAMDHAN GROUP: Case Summary & Seven Unsecured Creditors
SEAICH CARD: Case Summary & 20 Largest Unsecured Creditors
SERMA HOLDINGS: Case Summary & Four Unsecured Creditors
SHEA HOMES: Moody's Raises CFR to Ba3 & Alters Outlook to Stable
SPG HOSPICE: Trustee Wins Cash Collateral Access Thru Jan 2023
SPRING MOUNTAIN: Files Emergency Bid to Use Cash Collateral
SPRINGS FIREPLACE: Case Summary & One Unsecured Creditor
TCH CONSTRUCTION: Case Summary & 19 Unsecured Creditors
TEEZ SALON: Wins Cash Collateral Access Thru Dec 31
TOWER HILL: A.M. Best Withdraws B(Fair) Financial Strength Rating
TRANSOCEAN LTD: Unit Issues $300M New Exchangeable Bonds Due 2029
TRILOGY INTERNATIONAL: Says Shares Can Be Traded After Dec. 31
UPLIFT RX: Trustee Sues Baker & Hostetler Over 'Massive Fraud'
VERTEX ENERGY: Provides Operational Update on Refinery
VOYAGER DIGITAL: Kilpatrick Townsend Updates on Equity Holders
WALL VENTURES: Seeks Cash Collateral Access
WCP SOLAR: Unsecureds Will Get 30% of Claims in Subchapter V Plan
WJA ASSET: Jan. 11, 2023 Plan Confirmation Hearing Set
WOUAFF WOUAFF: Taps Stevens Tax & Financial Services as Accountant
XPERI HOLDING: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable
YU HUA LONG: Amends Carter Parties Secured Claim Pay Details
[*] EPIQ: September Bankruptcy Filings Up 7% From 2021
[] Norton Rose Names Atkins Global Co-Head of Restructuring
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
22 ELM RYE: Wins Cash Collateral Access Thru Oct 30
---------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized 22 Elm Rye, Inc. to use cash collateral on an interim
basis in accordance with the budget, with a 10% variance, effective
nunc pro tunc as of September 18, 2022, and continuing through
October 30.
The Debtor asserts that continued access to cash collateral is
necessary to prevent immediate and irreparable harm to the Debtor's
estate.
The Debtor entered into (i) a Loan Agreement, dated as of September
21, 2021, as amended by the First Amendment to Loan Agreement,
dated as of October 13, 2021, (ii) a Security Agreement, dated as
of September 21, 2021, and (iii) other documents defined as "Loan
Documents" in the Loan Agreement with the Secured Lender pursuant
to which the Debtor borrowed the original principal amount of
$1,000,000. On September 21, 2021, FVP perfected the security
interest of Secured Lender in all assets of the Debtor by recording
a financing statement in the New York Slate Registry, file number
202109216522682.
The Debtor further acknowledges that the New York State Department
of Taxation and Finance also has a secured claim established by the
filing of two tax warrants in the total amount of $203,379, as set
forth in proof of claim 1-1 filed by DTF.
The use of the Debtor's assets, including bank accounts which
potentially constitutes collateral of the Secured Lender and DTF,
is essential to the continued preservation and maximization of the
Debtor's estate.
In addition to the existing rights and interests of the Secured
Lender and DTF in the Collateral and tor the purpose of adequately
protecting the Secured Lender and DTF from Collateral Diminution,
FVP and DTF is granted replacement liens to the same extent,
validity and priority that existed on the Petition Date, on all
post-petition property of the Debtor's estate and all proceeds,
rents, and pro tits thereof, including but not limited to accounts
receivables, to the extent Collateral Diminution occurs during the
Chapter 11 case, subject to (i) United States Trustee fees pursuant
to 28 U.S.C. Section 1930. together with interest, if any, pursuant
to 31 U.S.C. Section 3717 and any Clerk's filing fees, and (ii) the
fees and commissions of a hypothetical Chapter 7 trustee in an
amount not to exceed $10,000.
The Debtor will pay, timely and in full, all insurance premium
payments as they come due, and within five business days of
payment, provide proof of payment to FVP and DTF.
The final hearing on the matter is set for October 26 at 10 a.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3SYQg80 from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$52,949 for the week ending October 9;
$36,063 for the week ending October 16;
$44,088 for the week ending October 23; and
$40,452 for the week ending October 30.
About 22 Elm Rye Inc.
22 Elm Rye Inc. is a restaurant operator specializing in
Mediterranean cuisine. The Debtor sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-22544)
on August 16, 2022. In the petition signed by Alan Schoening,
president, the Debtor disclosed $1,318,000 in total assets and
$2,938,497 in total liabilities.
Judge Sean H. Lane oversees the case.
H. Bruce Bronson, Esq., at Bronson Law Office, P.C. is the Debtor's
counsel.
8400 GROUP: Wins Cash Collateral Access on Final Basis
------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey authorized
8400 Group, LLC to use cash collateral on a final basis in
accordance with the budget, with a 25% variance.
The Debtor requires immediate authority to use cash collateral to
continue its business operations without interruption toward the
objective of formulating an effective plan of reorganization.
Specifically, the Debtor is permitted to use cash collateral for:
a. the maintenance and preservation of its assets;
b. the continued operation of its business, including but not
limited to utility expenses and insurance costs; and
c. the payment of any United States Trustee Fees due under 28
U.S.C. section 1930.
The Debtor's real property located at 41 James Way, Eatontown, NJ
07724, which the Debtor asserts was recently appraised at
$3,100,000, is encumbered by three mortgage liens:
1. One held by Republic First Bank, which was reduced to a
final judgment in foreclosure in the amount of $1,392,847, plus
costs in the amount of $8,914.00 as of June 2, 2021, per the
Foreclosure Judgment;
2. The second held by First Commerce Bank with a current
outstanding balance of $4,922,450.46; and
3. Third held by the United States Small Business
Administration in the amount of $730,100.
The Debtor is not the borrower with respect to the First Commerce
Loans and First Commerce Bank is secured by collateral other than
the Property. The First Commerce Borrowers are current on their
payments on account of the First Commerce Loan.
Payments are not due on the SBA Loan until August 2023. The Secured
Lenders may take the position, and expressly reserve all rights to
assert during the pendency of this bankruptcy proceeding that their
respective claims are secured by continuing security interests in
and liens on the Debtor's Cash Collateral.
Under the Final Cash Collateral Order, the Debtor is not required,
at this time, to make any adequate protection payments to any of
the Secured Lenders, provided the First Commerce Loan payments
remain current and payments under the SBA Loan do not become due.
This provision does not excuse the Debtor from any requirements or
obligations arising under 11 U.S.C. section 362(d)(3).
A copy of the order and the Debtor's budget is available at
https://bit.ly/3CcSY30 from PacerMonitor.com.
The budget provides for total cash paid out, on a monthly basis, as
follows:
$12,733 for September 2022;
$11,583 for October 2022;
$10,833 for November 2022; and
$11,083 for December 2022.
About 8400 Group, LLC
8400 Group, LLC owns a one-story commercial building located at 41
James Way, Eatontown, NJ 07724 consisting of 10,770 +/- square feet
of office space -- eight bullpen offices, eight private offices,
two conference rooms, two executive offices--and a 2,500 +/- square
foot warehouse. The Debtor currently has three paying members who
utilize space with the Property pursuant to month-to-month
licensing arrangements. A related entity, Milife Health, LLC,
occupies the warehouse and a portion of the office space.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. N.J. Case No. 22-17174) on September 11,
2022. In the petition signed by Mervin A. Dayan, managing member,
the Debtor disclosed up to $10 million in assets and liabilities.
Judge Christine M. Gravelle oversees the case.
Richard D. Trenk, Esq., at Trenk Isabel Siddiqi & Shahdanian P.C.
is the Debtor's counsel.
ACASTI PHARMA: Court Dismisses Remaining Stockholder Litigation
---------------------------------------------------------------
A U.S. court has dismissed the remaining stockholder litigation
filed in connection with Acasti Pharma Inc.'s acquisition of Grace
Therapeutics, Inc. via merger in August 2021.
As previously disclosed, four stockholder lawsuits were filed
against Acasti and certain of its directors and officers in
connection with the Merger, claiming that the Company's public
disclosures relating to the Merger misstated or omitted material
information and violated Section 14(a) of the U.S. Securities
Exchange Act of 1934. Two of the four cases were voluntarily
dismissed. The remaining two cases were consolidated before Judge
Katherine Polk Failla in the United States District Court for the
Southern District of New York. Acasti and the individual
defendants filed a motion to dismiss on Feb. 25, 2022.
In a 45-page opinion, Judge Failla granted the motion to dismiss in
its entirety, finding that the consolidated complaint failed to
allege any facts showing that Acasti made a materially misleading
statement or material omission in its Merger-related disclosures.
Accordingly, subject to any appeal that may be taken in response to
the ruling, all four stockholder suits filed in connection with the
Merger have now been dismissed.
About Acasti Pharma
Acasti Pharma Inc. -- http://www.acastipharma.com-- is a
late-stage specialty pharma company with drug delivery capability
and technologies addressing rare and orphan diseases. Acasti's
novel drug delivery technologies have the potential to improve the
performance of currently marketed drugs by achieving faster onset
of action, enhanced efficacy, reduced side effects, and more
convenient drug delivery -- all which could help to increase
treatment compliance and improve patient outcomes.
Acasti Pharma reported a net loss and comprehensive loss of $9.82
million for the year ended March 31, 2022, compared to a net loss
and comprehensive loss of $19.68 million for the year ended March
31, 2021. As of March 31, 2022, the Company had $128.62 million in
total assets, $20.35 million in total liabilities, and $108.27
million in total shareholders' equity.
AG BROTHERS' FOOD: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: AG Brothers' Food Restaurants, LLC
d/b/a Mariscos El Nuevo Altata
7829 West Thomas Road
Phoenix, AZ 85033
Business Description: The Debtor owns and operates a restaurant
specializing in Mexican cuisine.
Chapter 11 Petition Date: October 4, 2022
Court: United States Bankruptcy Court
District of Arizona
Case No.: 22-06667
Judge: Hon. Madeleine C. Wanslee
Debtor's Counsel: Allan D. NewDelman, Esq.
ALLAN D. NEWDELMAN, P.C.
80 East Columbus Avenue
Phoenix, AZ 85012
Tel: 602-264-4550
Fax: 602-277-0144
Email: anewdelman@adnlaw.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Guadalupe M. Galaviz Quiroz as managing
member.
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/KBD3FFA/AG_BROTHERS_FOOD_RESTAURANTS_LLC__azbke-22-06667__0001.0.pdf?mcid=tGE4TAMA
ALLENA PHARMACEUTICALS: Taps Stretto Inc. as Administrative Advisor
-------------------------------------------------------------------
Allena Pharmaceuticals, Inc. received approval from the U.S.
Bankruptcy Court for the District of Delaware to hire Stretto, Inc.
as its administrative advisor.
The firm's services include:
a. assisting with, among other things, solicitation, balloting
and tabulation and calculation of votes for purposes of plan
voting;
b. preparing any appropriate reports, exhibits and schedules
of information;
c. preparing an official ballot certification and, if
necessary, testifying in support of the ballot tabulation results;
d. assisting with the preparation of the Debtor’s schedules
of assets and liabilities and statements of financial affairs and
gathering data in conjunction therewith;
e. generating, providing and assisting with claims objections,
exhibits, claims reconciliation and related matters;
f. facilitating any distributions pursuant to a confirmed plan
of reorganization;
g. providing confidential on-line workspaces or virtual data
rooms and publishing documents to such workspaces or data rooms;
and
h. providing such other claims processing, noticing,
solicitation, balloting and administrative services.
The firm will be paid as follows:
Analyst $33 - $66 per hour
Consultant (Associate/Senior Associate) $70 - $200 per hour
Director/ Managing Director $210 - $250 per
hour
Solicitation Associate $230 per hour
Director of Securities & Solicitations $250 per hour
Prior to the petition date, the Debtor provided Stretto an advance
in the amount of
$25,000.
Sheryl Betance, a senior managing partner at Stretto, disclosed in
a court filing that her firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Sheryl Betance
Stretto, Inc.
410 Exchange, Ste. 100
Irvine, CA 92602
Telephone: (714) 716-1872
Email: Sheryl.betance@stretto.com
About Allena Pharmaceuticals
Allena Pharmaceuticals, Inc. is a pre-commercial clinical
biopharmaceutical company dedicated to discovering, developing and
commercializing first-in-class, oral biological therapeutics to
treat patients with rare and severe metabolic and kidney disorders
such as gout and kidney stones. The company is based in Sudbury,
Mass.
Allena Pharmaceuticals filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No.
22-10842) on Sept. 2, 2022, with $14,368,000 in assets and
$3,455,000 in liabilities. Matthew Foster, chief restructuring
officer, signed the petition.
Judge Karen B. Owens presides over the case.
Matthew B. McGuire, Esq., at Landis Rath & Cobb, LLP represents the
Debtor as legal counsel. Stretto, Inc. is the Debtor's claims and
noticing agent, and administrative advisor.
ANDOVER SENIOR: Wins Cash Collateral Access Thru Dec 31
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Kansas extended a
prior order authorizing Andover Senior Care, LLC to continue using
cash collateral for its operating expenses on a final basis through
December 31, 2022.
The Debtor sought entry of a final order on its Motion to: (1)
Extend Prior Interim Order Authorizing Use of Cash Collateral; (2)
Authorize Payment from Cash Collateral of Additional Accounting
Expense for June 2022; and (3) Authorize Debtor to Disburse
Employee Retention Bonuses.
On August 19, 2022, the Court entered its Final Order Authorizing
Debtor's Use of Cash Collateral through September 30.
A copy of the order is available at https://bit.ly/3Mbrf7E from
PacerMonitor.com.
About Andover Senior Care, LLC
Andover Senior Care, LLC owns and operates an assisted living
facility in Andover, Kansas. The Debtor sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Kan. Case No.
22-10139) on March 11, 2022. In the petition signed by Dennis L.
Bush, managing member, the Debtor disclosed up to $10 million in
assets and up to $50 million in liabilities.
Judge Mitchell H. Herren oversees the case.
Mark Lazzo, Esq., at Mark J. Lazzo, Attorney At Law is the Debtor's
counsel.
ANTICANCER INC: Unsecureds Will Get 41% of Claims in 5 Years
------------------------------------------------------------
Anticancer, Inc., filed with the U.S. Bankruptcy Court for the
Southern District of California a First Amended Plan of
Reorganization dated September 29, 2022.
The Debtor produces a treatment designed to block the effects of
the amino acid methionine in the body. When successful, the
treatment can lead to the destruction of cancer cells, which appear
to be addicted to methionine.
In or about 2016, the Debtor entered into a joint venture with
Certis Oncology Solutions, Inc. ("Certis"), formerly PDOX, Inc.
(which was formerly PDOX, LLC, an entity founded in 2012 by the
Debtor). The joint venture ended acrimoniously, with each joint
venture suing the other.
On December 7, 2021, a Judgment was entered in the Damages Action
in favor of Certis on December 7, 2021 in the total sum of: (1)
$676,275 against Hoffman jointly and severally with the Debtor; and
(2) $844,673.68 against the Debtor (which includes the joint and
several portion of the award against Hoffman) (the "Judgment"). The
Debtor and Hoffman appealed the Judgment.
Commencing in December 2021, Certis pursued collection efforts on
the Judgment which left the Debtor with severely constrained
working capital to carry on its business. Certis also scheduled a
motion for the appointment of a Receiver for the purpose of
liquidating all of the Debtor's personal property and equipment
that the Debtor uses in the operation of its business, but the
Debtor filed a bankruptcy petition and commenced the instant Case
before the motion could be heard.
On or about June 24, 2022, the Debtor entered into a settlement
agreement with Certis (the "Certis Settlement"). Pursuant to the
Certis Settlement, among other things, the Debtor dismissed its
appeal of the Judgment, Certis released its liens against the
Debtor's property, and both parties released each other from any
liability that they may have had toward each other.
Class 1 consists of the Secured Claim of the California Employment
Development Department ("EDD"), which the Debtor believes is
secured by a first priority Deed of Trust encumbering the Debtor's
personal property. The EDD filed a Proof of Claim in the amount of
$47,165.31, designating $36,369.75 as a Priority Tax Claim, and the
balance as an Unsecured Claim. The EDD shall retain its lien, but
its Secured Claim shall be treated as a Priority Tax Claim pursuant
to Section 1129(9)(D) for purposes of this Plan. As such, the EDD's
claim as treated herein is therefore neither impaired nor
unimpaired.
Class 2 consists of the Secured Claim of Pearl Beta Funding LLC dba
Pearl Capital which the Debtor believes was perfected via a
financing statement filed with the California Secretary of State on
or about April 5, 2022. Pearl did not file a Proof of Claim.
According to the Debtor's records and Schedules, the amount owing
to Pearl is $3,248.00. The holder of an Allowed Class 2 Claim shall
retain its lien, and be paid its Allowed Claim in full over a
period of two years from the Effective Date without interest
thereon, or at such rate of interest as the Court may fix. Payments
shall be made in Quarterly installments and commence on the first
Quarter arising on the later of: (i) the Effective Date; (ii) the
date that such Claim becomes an Allowed Secured Claim by a Final
Order; or (iii) a date agreed to by the Claimholder and the Debtor.
Class 2 is impaired.
Class 3 consists of all Priority Claims, which includes Claims for
the payment of wages, salaries, or commissions, including vacation
severance, and sick leave pay earned by an individual. The Plan
proposes to pay the holder of an Allowed Class 3 Priority Claim the
full amount to which it may be entitled to priority as set forth in
Section 507(a)(4) of the Code by making deferred cash payments in
Quarterly installments, together with simple interest at the 5-year
U.S. Treasury rate of interest in effect on the Effective Date.
Class 4 consists of all Unsecured Claims that are: (i) asserted
against the Debtor and not otherwise entitled to priority; and (ii)
not otherwise classified. Holder of an Allowed Class 4 Claim shall
be paid a Pro Rata portion of the Unsecured Creditor Distribution
Fund that is not used to pay Priority Tax Claims. Payments shall be
made in Quarterly installments commencing on the first Quarter
arising after the later of: (i) the Effective Date; (ii) the date
that such Claim becomes an Allowed Secured Claim by a Final Order;
(iii) a date agreed to by the Claimholder and the Debtor; or (iv)
the date that the Unsecured Creditor Distribution Fund becomes
funded. Class 4 is impaired.
Class 5 consists of all shareholder equity interests in the Debtor.
The holder of a Class 5 Interest shall retain his/her/its full
equity interest in the Debtor. Class 5 is not impaired.
The Debtor's Plan proposes to pay Allowed Claims from the Debtor's
Net Profits over a five-year period beginning on the Effective Date
of the Plan (except that, in the case of Priority Tax Claims, the
Allowed Priority Tax Claims will paid over a five-year period
measured from the Petition Date).
The Debtor's total projected after-tax net profits over the five
year period is estimated to equal approximately $521,259.00, which
the Debtor estimates will be sufficient to pay, with interest, all
Allowed Administrative Expense Claims, all Allowed Secured Claims,
and all Allowed Priority Claims, including Allowed Priority Tax
Claims. After paying those claims, the projected balance remaining
in the estimated amount of approximately $59,979.76 will be
available to partially satisfy the claims of General Unsecured
Creditors. The Debtor presently estimates that General Unsecured
Creditors will receive an amount equal to approximately 41 percent
of their Allowed Claim.
The Debtor believes that the Plan is feasible. The Debtor's
Projections show that the Debtor's gross revenues in the first year
of the Debtor's Plan will be approximately $456,500.00, and that
over the course of five years, the Debtor's gross revenue will
average approximately $635,585.00 per year.
A full-text copy of the First Amended Plan of Reorganization dated
September 29, 2022, is available at https://bit.ly/3CvxDTP from
PacerMonitor.com at no charge.
Counsel for Debtor:
Kit James Gardner, Esq.
LAW OFFICES OF KIT J. GARDNER
501 West Broadway, Suite 800
San Diego, CA 92101
Telephone: (619) 525-9900
Facsimile: (619) 374-2241
About Anticancer, Inc.
Anticancer, Inc. produces a treatment designed to block the effects
of the amino acid methionine in the body. When successful, the
treatment can lead to the destruction of cancer cells, which appear
to be addicted to methionine. Anticancer also specializes in the
production and use of what are referred to in the scientific
community as athymic "nude" mice, which are specially bred mice
capable of growing a human tumor for the purpose of
experimentation.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Cal. Case No. 22-01058) on April 21,
2022. In the petition signed by Robert M. Hoffman, president, the
Debtor disclosed up to $50,000 in assets and up to $10 million in
liabilities.
Judge Laura S. Taylor oversees the case.
The Law Offices of Kit J. Gardner is the Debtor's counsel.
B&G PROPERTY: Gets OK to Hire John Warekois as Accountant
---------------------------------------------------------
B&G Property Investments, LLC received approval from the U.S.
Bankruptcy Court for the District of Oregon to hire John Warekois,
CPA LLC as its accountant.
The firm will receive a flat fee of $1,600 to prepare and file the
Debtor's federal, state, and local income tax returns for 2021, and
any other reporting as required by taxing authorities.
As disclosed in court filings, John Warekois does not represent
interests adverse to the Debtor and its estate.
The firm can be reached through:
John Warekois, CPA
John Warekois, CPA LLC
1150 Crater Lake Ave, Suite I
Medford, OR 97504
Phone: +1 541-772-2410
Email: jwarekois_feedback@oregontaxcpa.com
About B&G Property Investments
B&G Property Investments, LLC, a company in Medford, Ore., filed
its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ore. Case No. 22-60998) on July 29,
2022, with between $10 million and $50 million in both assets and
liabilities. Keith Boyd, manager, signed the petition.
Judge Thomas M. Renn presides over the case.
Douglas R. Ricks, Esq., at Vanden Bos & Chapman, LLP and John
Warekois, CPA LLC serve as the Debtor's legal counsel and
accountant, respectively.
BAUSCH + LOMB: S&P Affirms 'CCC+' ICR, Outlook Positive
-------------------------------------------------------
S&P Global Ratings affirmed its issuer credit rating on Bausch +
Lomb Corp. (B+L) at 'CCC+', consistent with the parent.
S&P said, "We cap our rating on B+L to that of BHC because we do
not consider B+L an insulated subsidiary and believe the relatively
weaker parent could divert assets from B+L or burden it with
liabilities during financial stress.
"Our stand-alone credit profile on B+L remains 'bb+'.
"We affirmed our rating on B+L's senior secured credit facility at
'CCC+'. Our recovery rating on the debt remains '3'.
"Our positive outlook reflects the potential for a higher rating on
B+L if the parent ultimately distributes its ownership to Bausch
shareholders, which could delink the rating from that of the parent
company.
"Our rating on BHC caps our 'CCC+' issuer credit rating on B+L. We
raised our rating on parent BHC to 'CCC+/Stable/--' from 'SD'
following the completion of its distressed exchange transaction. We
continue to expect that the remaining ownership of B+L will be
transferred to BHC's shareholders eventually, at which point the
rating may no longer be tied to the parent and we could raise the
rating in line with our stand-alone credit profile on B+L of 'bb+'.
We cap our rating because we do not consider B+L an insulated
subsidiary and believe the weaker parent could divert assets from
the subsidiary or burden it with liabilities during financial
stress.
"While B+L remains a restricted subsidiary, we could raise our
rating on it by one notch prior to the equity distribution if it
was designated as an unrestricted subsidiary. At that point, we
could consider B+L a partially insulated entity and apply a
one-notch uplift from the parent's rating to reflect the presence
of some outside shareholders and our potential view that the parent
has an incentive to preserve B+L's credit quality.
"Our outlook on B+L is positive. The rating is currently capped at
'CCC+', in line with parent company BHC. During the next 12 months,
we could raise the rating if the entity qualifies for notching due
to insulation given our belief that B+L's stand-alone credit
profile is stronger than that of its parent.
"We could raise the rating if B+L becomes an unrestricted
subsidiary of BHC. At that point, we could consider B+L a partially
insulated entity and apply a one-notch uplift from the rating on
the parent, given the presence of some outside shareholders and our
potential view that the parent has an incentive to preserve B+L's
credit quality. The subsidiary could be unrestricted within the
next 12 months once consolidated leverage (as per BHC's covenant
calculations) falls below 7.6x.
"If unrestricted, we could further raise the rating if we believe
B+L is fully insulated from Bausch Health, which could cause us to
assess credit quality on a stand-alone basis. This could occur once
BHC transfers its ownership stake in B+L to its shareholders. At
that point, it's likely the rating will no longer be tied to that
of Bausch Health and would be raised in line with B+L's stand-alone
credit profile.
"We could revise the outlook to stable if we believed that BHC
would not designate B+L as an unrestricted subsidiary over the next
12 months."
BAUSCH HEALTH: S&P Upgrades ICR to 'CCC+', Outlook Stable
---------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Bausch Health
Cos. Inc. to 'CCC+' from 'SD'. The outlook is stable.
S&P said, "We assigned our 'B-' issue-level rating to the new
first-lien notes and 'CCC' issue-level rating to the new
second-lien notes. The recovery ratings are '2' (70% to 90%;
rounded estimate: 80%) and '5' (10% to 30%; rounded estimate: 10%),
respectively.
"We lowered our issue-level ratings on BHC's existing secured debt
to 'B-' from 'B' to reflect the increased proportion of secured
debt in the capital structure. We raised our issue-level ratings on
the existing unsecured debt to 'CCC' from 'D'.
"The stable outlook reflects our expectation for mid-single-digit
percentage revenue growth and stable EBITDA margins over the next
12 months, supporting FOCF of over $1 billion. It also reflects our
expectation for sufficient liquidity to cover all fixed costs for
at least the next several years, despite our view that the capital
structure may be unsustainable over the longer term."
Bausch Health Cos. Inc. recently completed a distressed exchange on
its outstanding unsecured notes.
Adjusted leverage is lower following the distressed exchange, but
remains high at around 6x.BHC exchanged $5.59 billion of unsecured
debt for newly issued $1.774 billion first-lien notes, $352 million
second-lien notes, and $999 million intermediate holdco notes
(unrated) issued by a subsidiary holding 38.6% of Bausch + Lomb
Corp. (B+L) equity. The transaction reduced BHC's overall debt
burden by $2.465 billion, which is equivalent to about
three-quarters of a turn of leverage. S&P now expects adjusted
debt-to-EBITDA of 6.0x at year-end 2022, compared with its previous
expectation of 6.5x.
S&P said, "We continue to believe the capital structure could be
unsustainable longer term.Our base-case scenario assumes that
Norwich Pharmaceuticals will launch its generic version of Xifaxan
mid-2024, causing revenues and EBITDA to decline materially. We do
not believe there are sufficient candidates in the development
pipeline to cover lost sales of Xifaxan. BHC also appears committed
to completing the spin of B+L as soon as possible, which we view as
a credit negative for BHC given our expectation for an increase in
leverage and reduction in scale and diversity pro forma the
separation. We believe BHC could have trouble refinancing its still
sizeable debt maturities as they come due in 2025 and beyond,
especially if the spin is completed.
"We now forecast that BHC has opened a window to complete the spin
of B+L during 2023.BHC has publicly committed to lowering leverage
to 6.5x to 6.7x at the remainco before completing the spin. Our
base-case scenario forecasts that BHC will hit this target during
2023, prior to a potential generic Xifaxan launch. The credit
agreement also requires that remainco leverage falls below 7.6x
before BHC designates B+L as an unrestricted subsidiary--a
threshold we believe it has now passed.
Our stable outlook reflects our expectation for material revenue
and EBITDA declines from generic competition to Xifaxan starting in
2024, but sufficient liquidity to cover fixed costs for at least
the next several years. It also reflects our expectation that BHC
will finish the spin of B+L once adjusted leverage at the remainco
is 6.5x to 6.7x, which we forecast could occur during 2023.
"We could lower the rating if the risk of a near-term default
(including another distressed exchange) increases. This could
become more likely if BHC completes the spin of B+L, which would
increase leverage and potentially make it more difficult for BHC to
refinance its unsecured debt as it starts to come due in 2025.
"We view an upgrade as unlikely over the next 12 months, given the
uncertainty surrounding the spin and a generic launch of Xifaxan.
We could raise the rating after a positive outcome in the Xifaxan
trial appeal, which could lead us to believe the capital structure
is more sustainable long term."
ESG credit indicators: E-2, S-3, G-3
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis of BHC. It has exposure to elevated
interest in drug price reform in the U.S., where prices and
profitability are highest. We are skeptical the company can offset
this pressure by developing innovative drugs that benefit human
health given its focus in competitive therapeutic areas and its
relatively low proportion of spending on R&D as a percentage of
revenue."
BLUE JAY: Claims Will be Paid From Future Business Operations
-------------------------------------------------------------
Blue Jay Communications, Inc., filed with the U.S. Bankruptcy Court
for the Northern District of Ohio a Plan of Reorganization under
Subchapter V dated September 29, 2022.
Blue Jay Communications is an installer of commercial
telecommunication and network infrastructure throughout the Midwest
with a particular concentration in northern Ohio, Wisconsin,
southern Michigan, and Illinois.
The Debtor has been funded by a combination of supplier credit,
debt financing from Huntington National Bank ("HNB") guaranteed by
the Small Business Administration, nine (9) so-called merchant cash
advance ("MCA") lenders, and individual loans and leases for
particular vehicles and pieces of equipment.
The COVID epidemic severely impacted the Debtor's revenue and even
though the Debtor received assistance during this period in the
form of PPP loans, the Debtor began to experience a rapid increase
in orders from its customers addressing their own back log of work
that was postponed due to the COVID 19 pandemic. The attempts of
certain MCA Lenders to seize the Debtor's accounts receivable led
to the filing of this bankruptcy case.
The Debtor's financial projections prepared by Newpoint show that
the Debtor will have total projected disposable income for the
5-year period of $9,881,990 (the "Projected Disposable Income").
Regardless of the Projected Disposable Income, the Debtor will only
pay the Disposable Income actually generated from its operations in
full satisfaction of all Claims.
The final Plan payment is expected to be paid 60 months after the
Distribution Date of this Plan or when all Claims have been
Allowed.
This Plan of Reorganization under chapter 11 of the Bankruptcy Code
proposes to pay creditors of the Debtor from the future actual
disposable income of the Reorganized Debtor.
Creditors holding Allowed Claims in Classes 1, 3, 4, 7, 8 and 9
will receive Distributions which the Debtor has estimated to be
approximately 100 cents on the dollar during the term of this Plan.
Classes 2, 5 and 6 will also receive approximately 100% of their
Allowed Claims over the term of their remaining agreements with the
Debtor. This Plan provides for full payment of administrative
expenses and priority claims.
Class 8 consists of the Allowed Unsecured Claims of Creditors that
are owed less than $1,000.00 as of the Petition Date. The Debtor
estimates that there are 35 holders of Allowed Unsecured Claims who
have a total of $16,269.59 in Allowed Claims in this class. Allowed
Claims in this class will be paid by the Reorganized Debtor in full
in cash on the Distribution Date.
Class 9 consists of the Allowed Claims of Creditors other those in
Classes 1, 2, 3, 4, 5, 6, 7 or 8. The Debtor estimates that are 64
holders of Allowed Unsecured Claims who have approximately
$1,300,000.00 in Allowed Claims in this class as of the Petition
Date. Allowed Claims in this class shall receive a pro rata share
of 50% of the Debtor's actual Disposable Income from the
Reorganized Debtor commencing on the first business day after the
last calendar quarter in which the payment of Administrative
Expenses and Priority Tax Claims provided for in Article 4 of this
Plan, and in which Classes 1, 5, 6, 7 through and 8 are paid in
full occurs. Allowed Claims in this class will receive a quarterly
pro rata Distribution from the Reorganized Debtor and in each
calendar quarter thereafter until paid in full or the Plan reaches
5 years from the Distribution Date. No interest shall accrue on any
Claims in this Class.
Class 10 consists of the Allowed Unsecured Claims of John Houlihan
other than equity claims. These claims total $294,712.34. Mr.
Houlihan's unsecured claims will be paid in full once all allowed
claims in Classes 1, and 3 through 8 have been paid in full, and so
long as payments to Class 2 are current and after all payments due
to Class 9 have been made.
Class 11 consists of the outstanding stock issued by the Debtor,
all of which is owned by John Houlihan. Confirmation of this Plan
shall cause all prepetition stock issued by the Debtor to be
revested in and retained Mr. Houlihan as of the Petition Date and
shall subject to and based upon the terms and conditions as they
existed on the Petition Date including under any Articles of
Incorporation, By-Laws, and other duly executed corporate
documents.
The Plan will be implemented and funded through the future business
operations of the Reorganized Debtor. As a part of its
reorganization, the Debtor does not contemplate the sale of any
assets, however assets may be sold to the extent that it is later
determined they are no longer of value to the Reorganized Debtor's
business operation or their useful life for the Reorganized Debtor
has expired.
A full-text copy of the Plan of Reorganization dated September 29,
2022, is available at https://bit.ly/3CyuH8Y from PacerMonitor.com
at no charge.
About Blue Jay Communications
Blue Jay Communications, Inc. installs telecommunication and
network infrastructure throughout the Midwest with a particular
concentration in northern Ohio, southern Michigan, and Illinois. It
currently has offices in Cleveland, Marion, Toledo, and Youngstown,
Ohio, and St. Charles, Ill. The company serves major
telecommunications companies as its clients.
Blue Jay Communications filed a petition for Chapter 11 protection
(Bankr. N.D. Ohio Case No. 21-31915) on Nov. 9, 2021, disclosing
$5,145,458 in assets and $7,618,110 in liabilities. John F.
Houlihan, president, signed the petition.
Judge Mary Ann Whipple oversees the case.
The Debtor tapped Frederic P. Schwieg, Esq. at Frederic P Schwieg
Attorney at Law as bankruptcy counsel and Gino Pulito, Esq., at
Pulito and Associates, LLC as special counsel. Pease & Associates,
LLC and Newpoint Advisors Corporation serve as the Debtor's
accountant and financial advisor, respectively.
CAPSTONE GREEN: Appoints Celia Fanning as CAO, Controller
---------------------------------------------------------
Capstone Green Energy Corporation appointed Celia Fanning as the
Company's chief accounting officer and controller, effective Sept.
26, 2022. In this role, Ms. Fanning will become the Company's
principal accounting officer.
"Celia brings more than 22 years of finance experience and strong
financial acumen to the Capstone team," stated Darren Jamison,
president and chief executive officer of Capstone Green Energy.
"With a solid executive style, Celia will be instrumental in
quickly implementing improvements across our accounting and
reporting processes. We look forward to her participation in our
organization's transformation at this important time."
"I've been impressed by the innovation behind Capstone's technology
and the team's dedication to improving their global customer's
power needs and reducing the impact on the environment, all while
saving them money," said Celia Fanning, chief accounting officer
and controller of Capstone Green Energy. "I look forward to
working with the Capstone management team."
Prior to joining the Company, Ms. Fanning served as vice president
of Finance & Accounting at Groundwork Coffee Holdings, LLC from
April 2018 to February 2022. From September 2015 to October 2017,
Ms. Fanning served as vice president Finance at Spencer N.
Enterprises, Inc., Ms. Fanning served as vice president Finance and
Controller for Sentry Control Systems, LLC from February 2011 to
September 2015, Ms. Fanning was employed by JAKKS Pacific, Inc. as
Vice president Corporate Controller from February 2000 to February
2010.
Ms. Fanning received a Master of Business Administration from the
University of Southern California.
In connection with Ms. Fanning's appointment, the Compensation
Committee of the Board approved an annual base salary of $200,000,
effective as of the Effective Date.
In addition, Ms. Fanning's offer letter also provides that she will
be granted 15,000 restricted stock units, subject to the approval
of the Compensation Committee and effective as of Nov. 17, 2022,
which will vest over four years.
About Capstone Green Energy
Capstone Green Energy Corporation is a provider of customized
microgrid solutions and on-site energy technology systems focused
on helping customers around the globe meet their environmental,
energy savings, and resiliency goals. In April 2021, the Company
added additional products to its portfolio and shifted its focus to
four key business lines.
Capstone reported a net loss of $20.21 million for the year ended
March 31, 2022, a net loss of $18.39 million for the year ended
March 31, 2021, Capstone reported a net loss of $21.90 million for
the year ended March 31, 2020, and a net loss of $16.66 million for
the year ended March 31, 2019. As of March 31, 2022, the Company
had $100.77 million in total assets, $95.36 million in total
liabilities, and $5.41 million in total stockholders' equity.
CHENIERE ENERGY: Moody's Ups CFR to Ba1 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service upgraded Cheniere Energy, Inc.'s ("CEI")
Corporate Family Rating to Ba1 from Ba2 and its Senior Global Notes
to Ba1 from Ba3. CEI's Speculative Grade Liquidity (SGL) was
upgraded to SGL-1 from SGL-2 rating. The outlook on CEI's ratings
is changed to stable from positive.
Concurrently, Moody's upgraded Cheniere Energy Partners, L.P.'s
("CQP") Corporate Family Rating to Ba1 from Ba2 and ratings on its
Senior Global Notes to Ba1 from Ba2. Moody's also assigned SGL-3
Speculative Grade Liquidity (SGL) rating to CQP. The outlook on
CQP's ratings was changed to stable from positive.
"Cheniere Energy is well positioned to continue to strengthen its
balance sheet as it benefits from sustained strong demand and high
pricing for US liquified natural gas exports. The holding company
will continue to accrue additional cash flow in its marketing
operations in 2023 and will maintain substantial financial
flexibility and robust leverage profile as it funds the expansion
of LNG capacity at its Corpus Christi facility," said Elena
Nadtotchi, Moody's Senior Vice President.
Assignments:
Issuer: Cheniere Energy Partners, L.P.
Speculative Grade Liquidity Rating, Assigned SGL-3
Upgrades:
Issuer: Cheniere Energy Partners, L.P.
Corporate Family Rating, Upgraded to Ba1 from Ba2
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 (LGD4)
from Ba2 (LGD4)
Issuer: Cheniere Energy, Inc.
Corporate Family Rating, Upgraded to Ba1 from Ba2
Probability of Default Rating, Upgraded to Ba1-PD from Ba2-PD
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba1 (LGD4)
from Ba3 (LGD4)
Issuer: Cheniere Energy Partners, L.P.
Outlook, Changed To Stable From Positive
Issuer: Cheniere Energy, Inc.
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Cheniere Energy, Inc. (CEI)
The upgrade of CEI's CFR to Ba1 follows a significant reduction in
debt across the organizational structure, funded by additional
earnings and free cash flow generation in its marketing division,
that Moody's expect to remain exceptionally strong in 2023. The
upgrade of the ratings also reflects the company's improved
earnings diversification and success in improving credit profiles
of its principal subsidiaries and contributors to earnings,
including CQP, where it holds approximately a 51% stake, as well as
its wholly owned operating subsidiaries Cheniere Corpus Christi
Holdings, LLC (CCH, Baa3 stable) and Cheniere Marketing (unrated).
In anticipation of a significant multi-year investment announced by
CCH, CEI has reduced CCH's debt and created financial capacity to
fund this expansion through reinvestment of operating cash flows
and some additional borrowing by CCH, which should not
significantly increase consolidated leverage of CEI.
CEI has recently also updated its capital allocation policy and
established a balanced framework that gives priority to
reinvestment of operating cash flow in plant expansion and to
funding CEI's dividend. The company aims to allocate the remaining
free cash flow to debt reduction and to share repurchases in equal
measure, while maintaining solid liquidity. This updated financial
policy also includes Debt/EBITDA target for its consolidated
leverage of below 4x, that Moody's expects CEI to be able to
maintain amid normalized pricing conditions in the international
natural gas markets. CEI's demonstrated commitment to accelerated
reduction of debt and the overall balanced financial policy was
recognized in the assignment of higher Governance score of G-3, up
from G-4, and in the corresponding improvement in CEI's credit
impact score to CIS-3 from CIS-4.
High international LNG prices and strong performance in the
Marketing division should keep the company's consolidated leverage
significantly below its medium-term target of 4x Debt/EBITDA in
2022 and 2023. After significant debt prepayments in 2022, CEI's
stand-alone leverage should trend well below 1x debt/EBITDA and its
leverage calculated on a proportionately consolidated basis should
trend below 4.5x.
By largely debt-financing the construction of the nine operating
liquefaction trains across the two project sites to date, CEI has
accumulated significant absolute amounts of debt, including almost
$22.4 billion of project level debt, in addition to $4.2 billion of
intermediate holding company debt at CQP, all of which is
structurally senior to the $2 billion debt outstanding at CEI as of
June 31, 2022. Moody's expects the company to generate significant
free cash flow in 2022-23 and reinvest a significant portion of the
funds, reducing CEI's need to borrow to fund expansion of capacity
at CCH and allowing for accelerated reduction in existing debt
across the separate entities' capital structure.
While debt at CEI is structurally subordinated to substantial
amounts of secured project level debt and intermediate holding
company debt, CEI's debt service is well supported by residual cash
flow generated under long-term, take-or-pay style contracts with
largely investment grade counterparties across nine fully
operational natural gas liquefaction (LNG) trains, as well as by
unencumbered cash flow generated by its Marketing subsidiary.
CEI's liquidity position is very good, as evidenced by its SGL-1
SGL rating. As of June 30, 2022, CEI had consolidated balance sheet
cash of $3 billion (including $1.2 billion cash at CQP) and a fully
undrawn $1.25 billion secured revolving credit facility (unrated).
CEI's notes mature in 2028.
CEI's $2 billion senior unsecured notes are rated Ba1, the same as
the CFR, despite ranking behind its $1.25 billion secured revolving
credit facility given the limited utilization of the revolver.
Cheniere Energy Partners, L.P.'s (CQP)
CQP is a master limited partnership (MLP) that is approximately 51%
owned by CEI (-49% LP interest and 2% GP interest, wholly-owned by
CEI), and 49% by The Blackstone Group Inc., Brookfield Asset
Management Inc. and public unitholders. CQP owns Sabine Pass
Liquefaction LLC (SPL, Baa2 stable), a fully operational
liquefaction facility with an aggregate nameplate liquefaction
capacity of 30 MTPA, consisting of six liquefaction trains, as well
as five LNG storage tanks and two marine berths with a third marine
berth under construction; Sabine Pass LNG, L.P. (SPLNG), a
regasification terminal that has been in operation since 2008; and
Cheniere Creole Trail Pipeline, L.P. (CTPL), a 94-mile long
pipeline that provides natural gas supply transportation to SPL.
The upgrade of CQP's ratings to Ba1 follows the upgrade of SPL to
Baa2 stable, reflecting anticipated repayments in SPL's debt
leading to decline in CQP's consolidated leverage. With the
construction and expansion at SPL completed in February 2022,
Moody's expects CQP to maintain its consolidated leverage at or
around 4x Debt/EBITDA, and below 1.5x on stand-alone basis. CQP's
significant free cash flow generation is expected to be primarily
distributed to unitholders.
CQP's Ba1 CFR is supported by the predictability and recurring
nature of anticipated long-dated cash flow from its wholly-owned
operating subsidiaries CTPL and SPLNG and distributions from SPL.
Cash flow and distributions from these operating subsidiaries are
CQP's primary source of cash flow and debt repayment. These
positives are balanced by CQP's structurally subordinated position
to SPL's leveraged capital structure and significant ongoing
distribution requirements, typical for a MLP.
CQP's liquidity position is adequate, as evidenced by its SGL-3 SGL
rating. As of June 30, 2022, CQP had balance sheet cash of $1.2
billion and the company had a fully undrawn $0.75 billion secured
revolving credit facility (unrated). CQP's notes will mature in
2029, 2031 and 2032.
CQP's $4.2 billion senior unsecured notes are rated Ba1, at par
with the CFR. The standalone capital structure also includes $0.75
billion senior secured revolving credit facility maturing in 2024,
ranking ahead of the notes.
RATING OUTLOOK
The stable outlook maintained on CEI's ratings reflects Moody's
expectation of CEI's continued robust operating performance and
strong cash flow generation in 2023 that should reduce CEI's need
to borrow to fund expansion of capacity at CCH and help maintain
the improved leverage profile of the company during the
construction period.
CQP's stable outlook mirrors the stable outlook on SPL's ratings
and reflects CQP's heavy reliance on distributions from SPL along
with consistent cash flow from unrated subsidiaries, CTPL and
SPLNG.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Cheniere Energy, Inc. (CEI)
CEI's ratings could be upgraded in step with upgrades at SPL, CCH,
and CQP. The upgrade would also require CEI to maintain solid
leverage profile, with Debt/EBITDA below 4.5x, calculated on a
proportionate consolidation basis, and below 1x on a stand-alone
basis, as well as very good stand-alone liquidity.
CEI ratings could be downgraded as a result of a downgrade of SPL,
CCH, or CQP. The ratings could be also downgraded if leverage
increases above 5.5x debt/EBITDA on proportionate consolidation
basis, as a result of a change in financial policy, a material
disruption in LNG liquefaction operations, or a deviation in LNG
offtake contracting strategy that weakens cash flow certainty.
Cheniere Energy Partners, L.P.'s (CQP)
Given CQP's level of reliance on SPL cash flow, a rating upgrade or
downgrade at SPL would likely trigger a similar rating upgrade or
downgrade at CQP.
CQP's ratings could be upgraded if its leverage calculated on a
consolidated basis is maintained well below 4x Debt/EBITDA and it
strengthens its distribution coverage.
CQP's ratings could be downgraded if its Debt/EBITDA leverage
calculated on a consolidated basis exceeds 4.5x.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
Cheniere Energy, Inc. is headquartered in Houston, Texas. Through
its ownership and operation of two US-based LNG export facilities,
Sabine Pass Liquefaction LLC (SPL, Baa2 stable) and CCH, CEI is
established as one of the world's largest LNG exporters. Over 90%
of its liquefaction capacity is contracted through the mid-2030s,
with the remainder marketed by Cheniere Marketing under arm's
length contracts. CQP is a master limited partnership that owns
SPL, as well as five LNG storage tanks and two marine berths with a
third marine berth under construction; Sabine Pass LNG, L.P.
(SPLNG), a regasification terminal that has been in operation since
2008; and Cheniere Creole Trail Pipeline, L.P. (CTPL), a
94-mile-long pipeline that provides natural gas supply
transportation to SPL.
CINEWORLD GROUP: Clark Hill Represents MMM East, 2 Others
---------------------------------------------------------
In the Chapter 11 cases of Cineworld Group PLC, pursuant to Rule
2019 of the Federal Rules of Bankruptcy Procedure, the law firm of
Clark Hill PLC submitted a verified statement to disclose that it
is representing the following parties:
a. MMM East, Inc.
b. Vestar California XVII, LLC
c. CPT Riverside Plaza
As of September 30, 2022, each of the parties and their disclosable
economic interests are:
MMM East, Inc.
* Landlord of the premises where the Debtors' operate a theater in
San Diego, California.
* Amount of Claim: $161,186.52
Vestar California XVII, LLC
* Landlord of the premises where the Debtors' operate a theater in
El Cajon, California.
* Amount of Claim: $188,130.62
CPT Riverside Plaza
* Landlord of the premises where the Debtors' operate a theater in
Riverside, California.
* Amount of Claim: $192,457.09
Clark Hill reserves the right to amend this Verified Statement as
necessary.
Counsel for MMM East, Inc.; Vestar California XVII, LLC; CPT
Riverside Plaza can be reached at:
CLARK HILL PLC
Robert P. Franke, Esq.
Andrew G. Edson, Esq.
Audrey L. Hornisher, Esq.
901 Main St., Suite 6000
Dallas, TX 75202
Tel: (214) 651-4300
Fax: (214) 651-4330
E-mail: bfranke@clarkhill.com
aedson@clarkhill.com
ahornisher@clarkhill.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3fO0o5u
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. Tex. Lead Case No. 22-90168) on Sept. 7, 2022,
estimating more than $1 billion in assets and debt.
Judge Marvin Isgur oversees the case.
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.
CIVITAS RESOURCES: Fitch Alters Outlook on 'BB-' IDR to Positive
----------------------------------------------------------------
Fitch Ratings has affirmed Civitas Resources, Inc.'s (Civitas)
Long-Term Issuer Default Rating at 'BB-', its Reserve Based Loan
credit facility at 'BB+'/'RR1' and it senior unsecured notes at
'BB-'/'RR4'. The Rating Outlook has been revised to Positive from
Stable.
The Positive Outlook reflects Civitas' improved post dividend FCF
profile, the scale of its operations, the expectation Civitas will
remain one of the lowest levered exploration and production (E&P)
companies supported by a relatively low amount of debt in its
capital structure, as well as Fitch's improved comfort that Civitas
will be able to navigate Colorado's regulatory process such that it
won't unduly affect to is operations.
KEY RATING DRIVERS
Low Debt and Low Leverage: Fitch forecasts Civitas to have midcycle
total debt with equity credit-to-operating EBITDA leverage of
approximately 0.2x during its forecast. This is exceptionally low,
particularly for a non-investment-grade rating and translates to a
debt to flowing barrel of below $2,500/barrel (bbl). With Civitas
formation occurring in 4Q21 and having multiple leadership team
changes since then, it has not yet developed a track record of
maintaining a conservative policy, but the company targets and has
maintained a notably low 0.5x leverage level since its formation.
Civitas' leverage is supported by a low absolute debt level,
currently $400 million, consisting of a single issue maturing in
2026.
DJ Basin Consolidator: Since forming with the staged consolidation
through 2021 of Bonanza Creek, HighPoint Resources, Extraction Oil
and Gas and Crestone Peak Resources to create the largest pure-play
Denver-Julesburg (DJ) Basin producer, Civitas has continued to
consolidate the DJ Basin by acquiring Bison Oil and Gas in 1Q22.
The resulting 2Q22 production of 175 thousand barrels of oil
equivalent per day (mboepd) is currently the highest production
scale within Fitch's North American 'BB-' rating category E&P
peers.
Fitch expects Civitas to continue to act as a consolidator in the
DJ Basin when accretive acquisition opportunities become available
and expects non-DJ Basin acquisitions to be unlikely. Civitas'
single-basin focus increases its risk to basin-specific factors,
including Colorado's relatively more rigorous permitting
environment and risk of community opposition.
Near Two Years of Permits in Hand: At 2Q22 Citivas had nearly all
of its 2022 development plan permitted and approximately 20% of
2023 fully approved. Civitas' permitting status consists
approximately 575 wells in various stages of process on top of 270
locations that were approved prior to 2022, the latter of which at
Civitas current drilling pace would provide almost two years to
maintain production.
Civitas balances its three-rig program with drilling rig
allocations between its Southern position (e.g. Adams county,
Arapahoe county) where it has large blocky inventory positions that
are oilier and more rural, its rural Eastern position (e.g. eastern
Weld county and acquired Bison Oil & Gas acreage) and its Western
position (e.g. Broomfield county, Boulder, western portion of Weld
county) which is more developed, but is more likely to experience
permitting challenges.
FCF Prioritized Over Drill Bit Growth: Civitas aims to keep organic
production flat to benefit FCF generation. 50% of its FCF, gross of
working capital changes, is distributed to shareholders through a
variable dividend on top of a quarterly fixed dividend that
currently costs $39 million per quarter to maintain.
Under Fitch's base case, Civitas is forecast to generate post fixed
and variable dividend distribution FCF of approximately $700
million annually in both 2022 and 2023, which would provide Civitas
with funding for potential cash supported M&A, development
activities or further shareholder activities. Civitas FCF is
underpinned by its scale and a high liquid cut of 70% in 2Q22 (46%
oil, 24% natural gas liquids [NGLs], 30% gas) that supported a
quarterly unhedged cash netback of $56.2/bbl.
Hedging: At 2Q22 Civitas had approximately 27% and 2% of its
respective expected 2022 and 2023 oil production hedged, as well as
approximately 48% and 15% of its respective expected 2022 and 2023
natural gas production hedged. Civitas hedging percentages,
although reduced from the levels at its 2021 formation, provide
support to cash flow visibility to support its annual total capex
requirements at maintenance levels of approximately $1 billion.
Colorado Regulatory Risk: Fitch continues to assess regulatory risk
within Colorado as high relative to other hydrocarbon-producing
states. However, Fitch believes since the beginning of 2021 the
risk has lessened following the overhaul of state laws that changed
the Colorado Oil & Gas Conservation Commission's (COGCC) mission
from fostering the development of oil and gas resources to
regulating their development. The current rules, which established
a single-permit process rather than the previous multistep process,
have provided a tough but navigable framework that producers are
learning to operate within.
Fitch anticipates knowledge gained from permit applications and
continued collaboration with the COGCC and communities will help
the permitting process become more efficient over time. Civitas'
ESG investments to achieve a Scope 1 and Scope 2 carbon neutral
position through a combination of operational improvements and
emission offset credits also support its ability to continue to
permit development plans.
DERIVATION SUMMARY
Civitas is the largest producer within Fitch's 'BB-' rating
category with 2Q22 production of 175mboepd. This compares to
Permian Resources Corporation's expected approximately 145mboepd in
4Q22, SM Energy's 2Q22 production of 147mboepd and Vermilion Energy
85mboepd. Above the 'BB-' rating category, Civitas' production is
roughly in line with 'BB+' rated Murphy Oil's 173mboepd, materially
trails 'BB' rated Chesapeake Energy at 688mboped and 'BB+'
Occidental Petroleum at 1,150mboped.
Compared to the aforementioned peers, Civitas' unit economics
compare relatively well. With a 2Q22 unhedged cash netback
$56.2/bbl. Civitas, as non-Permian E&P, compares relatively well
against typically strong performing Permian peers such as SM Energy
at $57.8/bbl due to its low-cost structure and oil percentage (46%
in 2Q22). Compared to smaller sized 'BB-' peer Vermilion Energy,
who is currently benefiting from exposure to European prices with a
realized gas price of approximately $13/mcf in the quarter, Civitas
unhedged cash netback trails its approximately 64.7/bbl netback.
In addition to currently being the largest E&P in terms of
production scale within Fitch's North American E&P portfolio at the
'BB-' category, Civitas, has the lowest absolute debt level at $400
million, which supports forecast gross leverage of approximately
0.2x in 2022. Civitas' gross leverage, expected to be below 0.5x
through Fitch's forecast, is notably low compared with peers. The
company's concentration in the DJ Basin and its associated
regulatory and capital market risks temper the impact of Civitas'
low leverage on its rating.
KEY ASSUMPTIONS
- WTI of $95/bbl in 2022, $81/bbl in 2023, $62/bbl in 2024 and
$50/bbl thereafter;
- Henry Hub of $7/mcf in 2022, $5/mcf in 2023, $4/mcf in 2024
and $3/mcf thereafter;
- No organic production growth, assumed cash funded DJ basin
bolt-on acquisition in 2023 and 2024
- Midstream operations in line with historical results;
- Total capex of approximately $1 billion annually during
forecast period;
- Base dividend portion of dividend increases during the
forecast period;
- Assume no unmet firm capacity commitments after 2022;
- No share repurchases during the forecast period.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Further developing a permitting track record within the
state regulatory regime without unreasonable delays;
- Proven economic access to debt capital markets that
moderates potential future liquidity and refinance risks;
- Increased scale in areas within the DJ Basin or out of
basin diversification that helps mitigate overall regulatory
and community opposition event risks;
- Midcycle total debt with equity credit maintained at or
below 1.5x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Midcycle total debt with equity credit/operating EBITDA
sustained over 2.0x;
- A regulatory change that affects unit economics or
visibility on future operations;
- Sustained negative post-dividend FCF stressing liquidity
or underinvestment in asset base.
LIQUIDITY AND DEBT STRUCTURE
Simple Capital Structure: Civitas has a simple capital structure
with no short-term refinancing risk. At 2Q22 its liquidity position
consisted of a reserve-based loan credit facility with a $1 billion
elected commitment that is fully available outside of $12.4 million
letters of credit used, as well as $439 million of cash on its
balance sheet. The approximately $1.4 billion in liquidity sources
is expected to be supported by positive post dividend FCF through
Fitch's forecast.
Civitas' only debts are its revolving facility maturing in 2025 and
its $400 million senior unsecured debt issuance that matures in
2026.
ISSUER PROFILE
Civitas Resources, Inc. is an oil and gas producer focused on
developing and producing crude oil, natural gas and NGLs in
Colorado's Denver-Julesburg Basin.
ESG CONSIDERATIONS
Civitas Resources, Inc. has an ESG Relevance Score of '4' for
Exposure to Social Impacts due to the oil and gas sector regulatory
environment in Colorado and its exposure to social resistance,
which has a negative impact on the credit profile, and is relevant
to the rating in conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Debt Rating Recovery Prior
---- ------ -------- -----
Civitas Resources, Inc. LT IDR BB- Affirmed BB-
senior unsecured LT BB- Affirmed RR4 BB-
senior secured LT BB+ Affirmed RR1 BB+
DANA INC: Fitch Affirms 'BB+' LongTerm IDR & Alters Outlook to Neg.
-------------------------------------------------------------------
Fitch Ratings has affirmed Dana Incorporated's (Dana) Long-Term
Issuer Default Rating (IDR) at 'BB+'. Fitch has also affirmed
Dana's secured revolver rating at 'BBB-'/'RR1', as well as the
'BB+'/'RR4' ratings on the senior unsecured notes issued by Dana
and its Dana Financing Luxembourg S.a.r.l. (Dana Financing)
subsidiary.
Fitch's ratings apply to a $1.15 billion secured revolver and $2.3
billion of senior unsecured notes.
Fitch has revised the Rating Outlook to Negative from Stable.
The revision of Dana's Outlook to Negative from Stable reflects the
company's underperformance relative to Fitch's expectations over
the past year. Dana's EBITDA margin, FCF margin and leverage
metrics have all been weaker than Fitch expected over this time.
However, this underperformance has been primarily due to volatile
customer production schedules, which, along with inflation, has
sharply reduced Dana's profitability.
Industry operating conditions appear to be improving, and Fitch
expects they will improve further over the next two years. If
Dana's credit profile comes back in-line with its rating
sensitivities in this time, Fitch could revise the outlook back to
Stable. However, if Dana's credit profile does not materially
strengthen, despite a more stable production environment, Fitch
could downgrade the company's ratings.
KEY RATING DRIVERS
Recent Margin Pressure: Dana's ratings are supported by the
company's market position as a top global supplier of driveline
components for light, commercial and off-road vehicles, as well as
sealing and thermal products. However, highly volatile customer
production schedules driven by the semiconductor shortage over the
past year, along with inflationary pressures, have severely
affected the company's margins. Fitch expects Dana's EBITDA margin,
according to Fitch's methodology, to decline to around 7.0% in
2022, down from 8.6% in 2021, and well below the 11.5% level
achieved in both 2018 and 2019.
Dana's FCF has also been affected by the volatile production
schedules, as well as its own supply chain concerns. Rising
inventories drove a significant working capital-related use of cash
in 2021 that led to negative post-dividend FCF of $(292) million
and a -3.3% FCF margin.
Fitch expects a partial unwind of inventories to contribute to a
positive post-dividend FCF margin of about 1.5% in 2022, close to
historical levels, but below Fitch's previous expectations for the
year. Fitch expects Dana's margins and FCF will rise over the next
two years on better operating conditions, but there is no headroom
in the ratings for any further underperformance.
Diversified Product Portfolio: The diversification of Dana's
product portfolio across light, commercial and off-highway vehicles
is a credit strength, limiting its exposure to any single end
market. The company's light vehicle business is primarily weighted
toward full-frame pickups and sport utility vehicles in North
America, and the strength of these sales relative to other light
vehicle classes has supported demand for Dana's products throughout
the pandemic.
Electrification Investments: Dana has positioned itself as one of
the top producers of e-propulsion systems for commercial and
off-highway vehicles. These investments are a credit positive, as
they will help to hedge against technological change that could
lead to lower demand for Dana's traditional products. However, the
current market for electrified commercial and off-highway vehicles
is small, and ongoing investments in these technologies will weigh
on margins over the next several years. The company has noted that
its electric-vehicle business will result in about 30 basis points
of adjusted EBITDA margin compression in 2022.
Weakened FCF: Fitch expects Dana to produce positive post-dividend
FCF in 2022, a significant improvement after FCF turned strongly
negative in 2021. The heavy use of cash in 2021 was driven by cash
used for working capital, as volatile customer production schedules
and supply-chain constraints led the company to carry significantly
higher inventory levels during the year. Although this phenomenon
was seen across virtually all auto suppliers, it was particularly
pronounced at Dana. Based on Fitch's methodology, working capital
was a $447 million use of cash in 2021 and equated to 5.0% of the
company's revenue for the year, which was much higher than what has
been seen under typical operating conditions.
Fitch expects Dana's FCF margin over 2022 and 2023 to be around
1.5%, as the company runs off excess inventory and working capital
returns to more typical levels under normalized operating
conditions. Beyond 2023, Dana's FCF margins could potentially rise
above 2%. However, any significant ongoing FCF weakness could
contribute to a potential future downgrade. Fitch expects capex as
a percentage of revenue to run in the mid-4% range over the next
few years, which would be roughly in line with historical levels.
Higher Leverage: Fitch expects Dana's gross EBITDA leverage to rise
a bit in 2022, to around 3.3x, after declining to 3.1x in 2021. The
decline in 2021 was notably lower than the peak of 4.2x at YE 2020,
when Dana's operations were negatively affected by the pandemic.
The slight rise in 2022 is expected to be primarily due to lower
EBITDA, as the company continues to manage through highly volatile
customer production schedules.
Beyond 2022, Fitch expects EBITDA leverage to decline toward the
mid-2x range, and potentially toward the low-2x range in later
years, but this will be driven entirely by increased EBITDA, as the
company's debt, which is comprised almost entirely of senior
unsecured notes, is likely to remain steady for the next few years.
If EBITDA remains constrained by production issues, keeping EBITDA
leverage above 2.5x for a prolonged period, Fitch could downgrade
Dana's ratings. Fitch expects Dana to repay the $195 million of
revolver borrowings that were outstanding at June 30, 2022 within
the next 12 months. However, if those borrowings are not repaid,
any additional revolver borrowings, particularly to support further
negative working capital, could also contribute to a downgrade.
DERIVATION SUMMARY
Dana has a relatively strong competitive position focusing
primarily on driveline systems for light, commercial and off-road
vehicles. It also manufactures sealing and thermal products for
vehicle powertrains and drivetrains. Dana's driveline business
competes directly with the driveline businesses of American Axle &
Manufacturing Holdings, Inc. and Cummins Inc.'s Meritor unit,
although American Axle focuses on light vehicles, while Meritor
focuses on commercial and off-road vehicles.
From a revenue perspective, Dana is similar in size to American
Axle, although American Axle's driveline business is a little
larger than Dana's light vehicle driveline business. Compared with
Meritor, Dana has roughly twice the annual revenue overall, and
Dana's commercial vehicle and off-highway vehicle segments combined
are a little larger than Meritor's overall business.
Fitch views Dana's midcycle EBITDA leverage as roughly consistent
with other auto and capital goods suppliers in the 'BB' range, such
as Allison Transmission Holdings, Inc. (BB/Positive) or The
Goodyear Tire & Rubber Company (BB-/Stable). Prior to the pandemic,
Dana's EBITDA margins were relatively high for the 'BB' rating
category and in line with issuers in the low-'BBB' range. However,
its margins have more recently been in line other issuers in the
'BB' category.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Global light vehicle production rises about 3% in 2022,
including an 11% increase in North America, with a further recovery
in production seen in subsequent years;
- The global commercial vehicle and off-highway markets generally
recover in the mid- to high-single digit range in 2022, with an
outlook that varies by region and end-market, and further
production recovery is seen in these markets in subsequent years,
as well;
- Capex runs at about 4.0%-4.5% of revenue over the next several
years, which is relatively consistent with historical levels;
- Post-dividend FCF margins generally run in the 1.5%-2.5% range
over the forecast horizon;
- The company maintains a solid liquidity position, including cash
and credit facility availability;
- Any excess cash is used for small acquisitions or share
repurchases.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Sustained EBITDA margin above 12%;
- Sustained gross EBITDA leverage below 2.0x;
- Sustained post-dividend FCF margin above 2.0%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A lack of meaningful improvement in Dana's credit profile once
operating conditions stabilize;
- A shift in industry dynamics that leads to a meaningful loss of
share for Dana's products;
- Sustained gross EBITDA leverage above 2.5x;
- Sustained FCF margin below 1.0%;
- Sustained EBITDA margin below 10%.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: As of June 30, 2022, Dana had $340 million of
cash, cash equivalents and marketable securities. In addition to
its cash on hand, Dana maintains additional liquidity through a
$1.15 billion secured revolver that is guaranteed by the company's
wholly owned U.S. subsidiaries. The revolver is secured by
substantially all of the assets of Dana and its guarantor
subsidiaries and expires in 2026. As of June 30, 2022, there were
$195 million of borrowings outstanding on the revolver and $21
million of the available capacity was used to back LOCs, leaving
$934 million of available capacity.
Based on the seasonality in Dana's business, as of June 30, 2022,
Fitch has treated $100 million of Dana's cash and cash equivalents
as not readily available for the purpose of calculating net
metrics. This is an amount that Fitch estimates Dana would need to
hold to cover seasonal changes in operating cash flow, maintenance
capex and common dividends without resorting to temporary
borrowing.
Debt Structure: As of June 30, 2022, Dana's debt structure
primarily consisted of senior unsecured notes issued by both Dana
and its Dana Financing subsidiary, as well as the borrowings on its
secured revolver.
ISSUER PROFILE
Dana is an automotive and capital goods supplier focused on the
full-frame light truck, off-highway and commercial truck
end-markets. The company is headquartered in the U.S., and has
operations in North America, Europe, South America and the Asia
Pacific region.
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
---- ------ -------- -----
Dana Financing
Luxembourg S.a r.l.
senior unsecured LT BB+ Affirmed RR4 BB+
Dana Incorporated LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed RR4 BB+
senior secured LT BBB- Affirmed RR1 BBB-
E-BOX LLC: Gets Approval to Hire Payne Law Firm as Counsel
----------------------------------------------------------
E-Box, LLC received approval from the U.S. Bankruptcy Court for the
Western District of Tennessee to hire Payne Law Firm as its legal
counsel.
The firm's services include:
a. advising the Debtor regarding questions arising from
certain contract negotiations which will occur during the operation
of its business;
b. evaluating and objecting to claims of various creditors who
may assert security interests in the assets and who may seek to
disturb the continued operation of the business;
c. appearing in, prosecuting or defending suits and
proceedings, and taking all necessary and proper steps and other
matters and things involved in or connected with the affairs of the
estate of the Debtor;
d. representing the Debtor in court hearings and assisting in
the preparation of legal papers;
e. advising and consulting with Debtor in connection with any
reorganization plan, which may be proposed and any matters
concerning the Debtor; and
f. performing other necessary legal services for the Debtor.
Payne Law Firm will charge $300 per hour for service rendered by
Jerome Payne, Esq., the firm's owner.
As disclosed in court filings, Payne Law Firm does not represent
interests adverse to the Debtor or its estate in matters upon which
it is to be engaged.
The firm can be reached through:
Jerome C. Payne, Esq.
Payne Law Firm
605 Poplar Avenue, Suite 102
Memphis, TN 38105
Tel: 901-794-0884
Fax: 901-235-1246
Email: jerpaynelaw@gmail.com
About E-Box LLC
E-Box, LLC, an electronic manufacturing company in Collierville,
Tenn., sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. W.D. Tenn. Case No. 22-23526) on Aug. 23, 2022, with
between $10 million and $50 million in assets and between $1
million and $10 million in liabilities. Byron Brown, member, signed
the petition.
Judge M. Ruthie Hagan oversees the case.
The Law Offices of Craig M. Geno, PLLC and Payne Law Firm serve as
the Debtor's legal counsels.
ECO PRESERVATION: Case Summary & Four Unsecured Creditors
---------------------------------------------------------
Debtor: ECO Preservation, LLC
8132 Parkway Drive
Leeds, AL 35094
Business Description: The Debtor is a provider is a provider of
water, sewage and other systems.
Chapter 11 Petition Date: October 5, 2022
Court: United States Bankruptcy Court
Northern District of Alabama
Case No.: 22-02429
Judge: Hon. D. Sims Crawford
Debtor's Counsel: Harry P. Long, Esq.
THE LAW OFFICES OF HARRY P. LONG, LLC
10 W 11th Street Suite 2A
Anniston, AL 36201
Tel: (256) 237-3266
Email: hlonglegal18@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by J. Michael White as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/J7PRZ4Y/ECO_Preservation_LLC__alnbke-22-02429__0001.0.pdf?mcid=tGE4TAMA
ENERFLEX LTD: S&P Rates $625MM Senior Secured Notes 'BB-'
---------------------------------------------------------
S&P Global Ratings assigned its 'BB-' issue-level rating and '3'
recovery rating to Calgary, Alberta-based, Enerflex Ltd.'s $625
million senior secured notes due 2027. The company will place the
gross proceeds from the sale of the notes in escrow and the
noteholders will have a security interest in the escrow account and
the escrowed funds to secure the obligations under the notes
pending completion of the merger with Exterran Corp., expected to
occur in the fourth quarter 2022. Enerflex intends to use the net
proceeds from the notes, together with a $150 million secured term
loan (not rated), cash on hand and borrowings under its $700
million revolving credit facility, to refinance the existing debt
at Enerflex and Exterran and pay fees and expenses. Following the
merger, the proposed notes will be secured but junior to the
priority revolver and term loan, which will have "first out" status
according to the terms of the collateral agreement. Enerflex is a
global provider of full life-cycle service of equipment and systems
needed to compress, process, and treat natural gas, as well as
refrigeration systems and energy transition solutions.
The '3' recovery rating on the notes reflects our expectation that
lenders would receive meaningful (50%-70%; rounded estimate: 55%)
recovery if a payment default occurs. The 'BB-' issuer credit
rating and stable outlook are unchanged.
S&P said, "Our pro forma base case forecast for Enerflex is
somewhat stronger than our initial forecast from March 2022. We
continue to believe the company will maintain a conservative credit
profile with debt to EBITDA at the lower end of our 3x-3.5x range
for 2022 and less than 3x in 2023. We expected debt to EBITDA of
about 3.5x and low-3x in 2022 and 2023 respectively, under our
previous forecast."
S&P Global Ratings' simulated default scenario for Enerflex
contemplates a default arising from a prolonged period of weak
commodity prices, resulting in reduced revenue as customers are
unable to meet their contractual agreements and existing contracts
are not renewed.
ISSUE RATINGS--RECOVERY ANALYSIS
Simulated default assumptions:
S&P estimates a gross recovery value of about $1.1 billion assuming
that the company would be able to recoup lost revenue as volumes
and pricing rebound and operating margins stabilize through cost
cutting during the reorganization process.
-- Emergence EBITDA: $155 million
-- EBITDA multiple: 7x
-- Gross recovery value: $1.1 billion
Simplified waterfall:
-- Net enterprise value (after 5% administrative costs): $1.03
billion
-- Secured first-lien debt claims (including interest): $650
million
-- Total value available to unsecured claims: $380 million
-- Senior unsecured debt claims (including interest): $660
million
--Recovery expectations: 50%-70% (rounded estimate: 55%)
All debt includes six months of pre-petition interest.
GRAUSTARK MEMBERS II: Voluntary Chapter 11 Case Summary
-------------------------------------------------------
Debtor: Graustark Members II, LLC
4265 San Felipe Suite 1100
Houston, TX 77027
Chapter 11 Petition Date: October 4, 2022
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 22-90326
Judge: Hon. David R. Jones
Debtor's Counsel: Susan Tran Adams, Esq.
TRAN SINGH, LLP
2502 La Branch St.
Houston, TX 77004
Tel: (832) 975-7300
Email: stran@ts-llp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Christopher Bran as manager for Bran
Enterprises, LLC, Managing Partner of Debtor.
The Debtor filed an empty 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/3QVNK7Y/Graustark_Members_II_LLC__txsbke-22-90326__0001.0.pdf?mcid=tGE4TAMA
GRAUSTARK MEMBERS: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Graustark Members II, LLC
4265 San Felipe Suite 1100
Houston, TX 77027
Chapter 11 Petition Date: October 4, 2022
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 22-90326
Judge: Hon. David R. Jones
Debtor's Counsel: Susan Tran Adams, Esq.
TRAN SINGH, LLP
2502 La Branch St.
Houston, TX 77004
Tel: (832) 975-7300
Email: stran@ts-llp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Christopher Bran as Manager for Bran
Enterprises, LLC, Managing Partner of Debtor.
The Debtor filed an empty 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/WPXUHRY/Graustark_Members_II_LLC__txsbke-22-90326__0001.0.pdf?mcid=tGE4TAMA
HELIUS MEDICAL: Baker Tilly Replaces BDO USA as Auditor
-------------------------------------------------------
The Audit Committee of the Board of Directors of Helius Medical
Technologies, Inc.: (i) on Sept. 26, 2022, determined to dismiss
BDO USA, LLP, the Company's current independent registered public
accounting firm, and (ii) on Sept. 30, 2022, engaged Baker Tilly
US, LLP to serve as the Company's independent registered public
accounting firm for the Company's fiscal year ending Dec. 31, 2022.
BDO's reports on the Company's financial statements as of and for
the fiscal years ended Dec. 31, 2021 and 2020 did not contain any
adverse opinion or disclaimer of opinion, nor were they qualified
or modified as to uncertainty, audit scope, or accounting
principles, except that each of BDO's reports contained an
explanatory paragraph expressing substantial doubt regarding the
Company's ability to continue as a going concern. During the
fiscal years ended Dec. 31, 2021 and 2020 and the subsequent
interim periods through Sept. 26, 2022, there were no disagreements
(within the meaning of Item 304(a)(1)(iv) of Regulation S-K and the
related instructions) between the Company and BDO on any matter of
accounting principles or practices, financial statement disclosure,
or auditing scope or procedure which, if not resolved to BDO's
satisfaction, would have caused BDO to make reference thereto in
its reports. During the fiscal years ended Dec. 31, 2021 and 2020
and the subsequent interim periods through Sept. 26, 2022, there
were no "reportable events" within the meaning of Item 304(a)(1)(v)
of Regulation S-K.
During the fiscal years ended Dec. 31, 2021 and 2020 and the
subsequent interim periods through Sept. 26, 2022, neither the
Company nor anyone on its behalf has consulted with Baker Tilly
regarding: (i) the application of accounting principles to a
specific transaction, either completed or proposed, or the type of
audit opinion that might be rendered on the Company's financial
statements, and neither a written report nor oral advice was
provided to the Company that Baker Tilly concluded was an important
factor considered by the Company in reaching a decision as to any
accounting, auditing, or financial reporting issue; (ii) any matter
that was the subject of a disagreement (within the meaning of Item
304(a)(1)(iv) of Regulation S-K and the related instructions); or
(iii) any reportable event (within the meaning of Item 304(a)(1)(v)
of Regulation S-K).
About Helius Medical
Helius Medical Technologies, Inc. -- http://www.heliusmedical.com
-- is a neurotech company focused on neurological wellness. Its
purpose is to develop, license or acquire non-invasive technologies
targeted at reducing symptoms of neurological disease or trauma.
Helius Medical reported a net loss of $18.13 million for the year
ended Dec. 31, 2021, compared to a net loss of $14.13 million for
the year ended Dec. 31, 2020. As of June 30, 2022, the Company had
$6.55 million in total assets, $2.04 million in total liabilities,
and $4.50 million in total stockholders' equity.
Philadelphia, Pennsylvania-based BDO USA, LLP, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated March 14, 2022, citing that the Company has incurred
substantial net losses since its inception, has an accumulated
deficit of $137.0 million as of Dec. 31, 2021 and the Company
expects to incur further net losses in the development of its
business. These conditions raise substantial doubt about its
ability to continue as a going concern.
HERO NUTRITIONALS: Gets OK to Hire Golden Goodrich as Legal Counsel
-------------------------------------------------------------------
Hero Nutritionals, LLC received approval from the U.S. Bankruptcy
Court for the Central District of California to employ Golden
Goodrich, LLP as its legal counsel.
The firm's services include:
1. advising the Debtor with respect to the requirements and
provisions of the Bankruptcy Code, Federal Rules of Bankruptcy
Procedure, Local Bankruptcy Rules, U.S. Trustee Guidelines, and
other applicable requirements which may affect the Debtor;
2. assisting the Debtor in preparing and filing schedules and
statement of financial affairs, complying with and fulfilling U.S.
Trustee requirements, and preparing other documents;
3. assisting the Debtor in negotiations with creditors and
other parties-in-interest;
4. assisting the Debtor in the preparation of a disclosure
statement and formulation of a Chapter 11 plan;
5. advising concerning the rights and remedies of the estate
and of the Debtor in connection with adversary proceedings, which
may be removed to, or initiated in, the bankruptcy court;
6. preparing legal papers;
7. representing the Debtor in any proceeding or hearing in the
bankruptcy court where the rights of the estate and the Debtor may
be litigated, or affected; and
8. providing other necessary legal services.
The firm will undertake representation of the Debtor at hourly
rates ranging from $250 to $750, depending on the experience and
expertise of the attorney or paralegal performing the work.
On Aug. 11, the firm received a $6,738 retainer from the Debtor. Of
that amount, $4,338 was applied to pre-bankruptcy services and
expenses, leaving a balance of $2,400, which is maintained in the
firm's retainer account.
As disclosed in court filings, Golden Goodrich is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
David M. Goodrich, Esq.
Sonja M. Hourany, Esq.
Golden Goodrich, LLP
650 Town Center Drive, Suite 600
Costa Mesa, CA 92626
Telephone 714-966-1000
Facsimile 714-966-1002
Email: dgoodrich@go2.law
shourany@go2.law
About Hero Nutritionals
Hero Nutritionals, LLC, a company in Santa Ana, Calif., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
C.D. Calif. Case No. 22-11383) on Aug. 17, 2022, with up to $50
million in assets and up to $10 million in liabilities. Jennifer
Leigh Hodges, chief executive officer, signed the petition.
Judge Scott C. Clarkson oversees the case.
David M. Goodrich, Esq., at Golden Goodrich, LLP is the Debtor's
counsel.
IBIO INC: Delays Filing of Form 10-K for Year Ended June 30
-----------------------------------------------------------
iBio, Inc. has filed a Form 12b-25 with the Securities and Exchange
Commission notifying the delay in the filing of its Annual Report
on Form 10-K for the period ended June 30, 2022.
The Company was unable to file its Annual Report on Form 10-K by
the prescribed date without unreasonable effort or expense because
the Company was unable to ascertain certain information necessary
to complete the audit. The Company believes that the Annual Report
will be completed and filed within the fifteen-day extension period
provided under Rule 12b-25 of the Securities Exchange Act of 1934,
as amended.
Revenues for the fiscal year ended June 30, 2022, were
approximately $2.4 million, an increase of 1% over fiscal 2021.
R&D and G&A expenses for fiscal 2022 increased $7.7 million and
$12.1 million, respectively, over the comparable period in fiscal
2021. The growth in R&D and G&A reflects the Company's growing
investments in its pipeline, platform technologies, employees, and
related infrastructure.
iBio's consolidated net loss for the fiscal year ended June 30,
2022, was $50.3 million, an increased loss of $27.1 million
compared to 2021 due to increased R&D and administrative expenses
incurred to support the Company's business strategy and $10.2
million in Fraunhofer USA settlement income in fiscal 2021 that did
not recur in fiscal 2022 offset by $1.8 million in Fraunhofer USA
license revenue in fiscal 2022.
iBio held cash, cash equivalents and investments in debt securities
of $39.5 million as of June 30, 2022.
The Company has concluded there is substantial doubt about the
Company's ability to continue as a going concern. Accordingly, the
Company has been informed by its registered public accounting firm
that its audit opinion that will be included in the Company's
Annual Report on Form 10-K for the fiscal year ended June 30, 2022
to be filed with the Securities and Exchange Commission will
include an explanatory paragraph related to the Company's ability
to continue as a going concern.
About iBio Inc.
iBio, Inc. -- http://www.ibioinc.com-- is a plant-based biologics
manufacturing company. Its FastPharming System combines vertical
farming, automated hydroponics, and novel glycosylation
technologies to rapidly deliver high-quality monoclonal antibodies,
vaccines, bioinks and other proteins. iBio is developing
proprietary products which include biopharmaceuticals for the
treatment of cancers, as well as fibrotic and infectious diseases.
The Company's subsidiary, iBio CDMO LLC, provides FastPharming
Contract Development and Manufacturing Services along with
Glycaneering Development Services for advanced recombinant protein
design.
iBio reported a net loss attributable to the Company of $23.21
million for the year ended June 30, 2021, a net loss attributable
to the company of $16.44 million for the year ended June 30, 2020,
and a net loss attributable to the Company of $17.59 million for
the year ended June 30, 2019. As of March 31, 2022, the Company
had $115.37 million in total assets, $35.99 million in total
liabilities, and $79.38 million in total equity.
INSTASET PLASTICS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Instaset Plastics Company, LLC
FKA Instaset Acquisition Company
10101 Marine City Hwy
Anchorville, MI 48004
Business Description: The Debtor is a plastic fabrication company
in Michigan.
Chapter 11 Petition Date: October 5, 2022
Court: United States Bankruptcy Court
Eastern District of Michigan
Case No.: 22-47794
Debtor's Counsel: Lynn M. Brimer, Esq.
STROBL SHARP PLLC
300 East Long Lake Road
Suite 200
Bloomfield Hills, MI 48304-2376
Tel: (248) 540-2300
Total Assets: $1,373,383
Total Liabilities: $3,782,844
The petition was signed by McGustavus Miller, Jr., as chief
restructuring officer.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/3QTTOVI/Instaset_Plastics_Company_LLC__miebke-22-47794__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/3I5MVMQ/Instaset_Plastics_Company_LLC__miebke-22-47794__0001.0.pdf?mcid=tGE4TAMA
INTRADO CORP: Fitch Affirms 'B-' LongTerm IDR Amid StonePeak Deal
-----------------------------------------------------------------
Fitch Ratings has affirmed Intrado Corporation's Long-Term Issuer
Default Rating (IDR) at 'B-'. The Rating Outlook remains Negative.
Fitch has also affirmed Intrado's senior secured debt, including
its revolving credit facility and term loans, at 'B'/'RR3' and its
senior unsecured notes at 'CCC'/'RR6'.
The rating action follows Intrado's announcement of the sale of its
Safety business to Stonepeak. Fitch will likely revisit the ratings
and recovery ratings when the transaction closes. At this time, the
company's application of the net proceeds from the divestiture
towards debt reduction is uncertain.
KEY RATING DRIVERS
Sale of Safety business: Fitch's rating action follows Intrado's
announcement of the sale of its Safety business for approximately
$2.4 billion to Stonepeak. The transaction is expected to close in
1Q23, following customary regulatory approvals. While the company
has not disclosed the potential use of proceeds, Fitch believes a
significant portion of net proceeds (estimated at $2.3 billion)
will be applied towards prepayment of debt. Intrado has
historically applied 70%-85% of net proceeds from sale of Health
Advocate and Flowroute businesses to debt reduction.
Given the significant size of the Safety transaction compared to
previous divestitures and the 2024 term loan maturity, Fitch has
assumed 80% of net proceeds from the Safety sale will be used for
debt paydown in its current forecast.
Elevated Leverage: Based on Fitch's assumptions, it expects gross
leverage will decline to approximately 8x-8.5x in 2023-2024
(assuming refinancing or extension of remaining debt maturities in
2024) from over 10x expected in fiscal 2022. Even with potential
significant debt repayment from the Safety sale proceeds, the
company will have close to a total of $1.7 billion (depending on
the actual debt reduction) outstanding in term loans and senior
unsecured notes due to mature in 2024 and 2025, respectively,
resulting in an elevated refinancing risk.
Earnings Underperformed Fitch's Expectations: Intrado continued to
underperform against Fitch's prior expectations for revenue and
EBITDA in 1H2022. Cloud Collaboration revenue declines accelerated
as the company's focus shifted from UcaaS to Mosaicx. Notified (fka
Digital Media) declined over 20% in 1H2022, due to lower demand for
company's virtual events than expected. Life & Safety (LS) revenue
grew in low single digits and was affected by contract losses.
Traditional conferencing continued to report steep declines as
Fitch expected.
Evolving Business Mix: Intrado's revenue mix continues to evolve
from transitioning away from unified conferencing revenue (both
legacy and CC), and now as the Safety business is divested. Fitch
believes Intrado's business outlook is weakened over the forecast
post sale of the Safety business due to revenue pressures in the
remaining declining CC segment and current uncertain outlook in the
Notified segment.
The company's current core businesses are Mosaicx in CC, Digital
Workflows in LS, and Notified. Fitch expects EBITDA margins to
improve over the forecast as revenue mix evolves to higher margin
Digital Workflow in L&S segment, Mosaicx in CC segment and due to
cost cutting efforts in Notified. Nevertheless, Fitch acknowledges
there is significant execution risk to sustaining profitability and
EBITDA growth over the long term.
Financial Flexibility: Intrado has sufficient financial flexibility
for the rating category supported by cash balances and availability
under its revolver. The revolver availability as of end of 2Q22 is
constrained at 35% utilization by the springing First Lien Leverage
covenant. Fitch expects FCF to remain at a deficit in 2022 largely
due to an expected decline in EBITDA and rising interest rates
(although absolute interest cost is expected to decline with debt
paydown using Safety net proceeds). The company also incurs
significant restructuring costs that help drive future cost savings
but are incurred upfront and have an impact on FCFs.
Cost Savings to Support EBITDA: Intrado continues to expand its
cost management efforts, with the identification of a total of $370
million of cost savings (of which $327 million are realized) as of
2Q22 earnings release date. Additional cost take-outs focus more on
strategic initiatives, including product rationalization, facility,
staffing and a review of technology assets.
DERIVATION SUMMARY
Intrado's business profile entails an amalgamation of a diverse
portfolio of technology solutions, and is not directly comparable
to its peers, which may provide similar but different mix of
technology services. In the unified communications business,
Intrado competes with technology and telecom industry giants such
as Microsoft Corporation (AAA/Stable), AT&T (BBB+/Stable) and
Citrix Systems (BBB/Rating Watch Negative), which are investment
grade issuers.
In this category, it also competes with several mid- and
small-sized companies such as Avaya (CCC-) and LogMeIn (B/Stable).
Intrado has higher EBITDA margins than Avaya but also has higher
leverage. LogMeIn has comparable EBITDA margins but lower leverage
when compared with Intrado's metrics.
In the Life and Safety segment, Intrado competes with Bandwidth
(NR) and Motorola Solutions
(BBB-/ Stable), while in Digital Media it competes with companies
such as Business Wire (NR), Cision (NR)and several other
specialized service providers.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within The Rating Case for the Issuer:
- Fitch expects 2022 revenue slightly below $1.1 billion largely
due to steep declines in CC and legacy conferencing. 2023 revenue
declines over 40% due to the sale of Safety in 1Q23, continued
exacerbated declines in CC as the focus shifts to Mosaicx and
declines in EC segment;
- EBITDA margins decline in 2022 primarily due to lower margins in
CC ad Notified. Fitch expects margins to benefit over the forecast
from change in revenue mix and continued realization of cost
savings;
- Capex intensity is anticipated averaging near 6.5% over the
rating horizon;
- No dividends assumed in the model following cessation in 2017;
- Sale of the Safety business assumed in 1Q23 generates $2.3
billion of net proceeds after taxes and other costs. Fitch has
assumed 80% of the net proceeds will be used to pay down debt.
- The recovery assumptions will likely be revisited at the close
of Safety sale transaction.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Improvement in operating profile including positive revenue
growth exceeding Fitch's expectations, expansion of margins due to
restructuring efforts and/or realization of synergies and expansion
of customer base;
- Leverage (total debt/EBITDA) sustained below 6.5x;
-(CFO-Capex)/Total Debt sustained above 5%.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Inability to sustain organic revenue growth due to EC/CC segment
declines offsetting revenue growth from other segments;
- Deterioration of operating profile due to competition, an
inability to achieve desired efficiencies impacting operating
margins;
- Consistently negative FCFs;
- Interest coverage (Operating EBITDA/Interest paid) sustained
below 1.5x.
LIQUIDITY AND DEBT STRUCTURE
Fitch believes Intrado's liquidity is sufficient supported by the
cash balances and availability under the revolver. Fitch
anticipates the liquidity will also be supported by proceeds from
sale of Safety to the extent proceeds are not reinvested or
utilized for debt repayment. The total revolver commitment reduced
to $312.5 million following Flowroute sale. The revolver borrowing
capacity as of 2Q22 was reduced to 35% of the total commitment as
the company's first-lien leverage was above the specified threshold
in the credit agreement.
Fitch expects further reduction in revolver commitment post Safety
sale in line with provisions in the credit agreement. FCFs are
expected to remain negative, albeit deficits to reduce over the
next couple of years.
Intrado's debt structure as of June 30, 2022 includes a $312.5
million revolving facility, $2,755 million outstanding in
first-lien term loans maturing in 2024, and $686 million
outstanding on 2025 senior unsecured notes. The $11 million of
legacy 5.375% unsecured notes were repaid in July 2022. The
revolver is due to mature in Aug. 9, 2026 provided that if on July
11, 2024, the aggregate principal amount of loans outstanding under
term loan facility exceeds $50 million, then the RCF will mature on
July 11, 2024; or if on July 16, 2025, the aggregate principal
amount of the unsecured notes outstanding exceeds $50 million then
the RCF will mature on July 16, 2025.
ISSUER PROFILE
Intrado is a leading global provider of technology‐enabled
communication and network infrastructure services. It provides
essential solutions for a diverse client base that includes Fortune
1000 companies, state and local governments, and small and medium
enterprises in a variety of vertical industries.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of 3 - 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
---- ------ -------- -----
Intrado Corporation LT IDR B- Affirmed B-
senior unsecured LT CCC Affirmed RR6 CCC
senior secured LT B Affirmed RR3 B
JORGABY FREIGHT: Wins Cash Collateral Access, DIP Loan
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Jorgaby Freight Services, LLC and its
debtor-affiliates, on an interim basis, to use cash collateral and
obtain postpetition financing.
TBS Factoring Service, LLC objected to the Debtor's request but
indicated it is willing to extend post-petition financing to the
Debtor provided that its interests are adequately protected.
Truist Bank also objected to the Debtor's request but indicated it
would consent to the Debtor's use of cash collateral and the
proposed debtor-in-possession financing from TBS, provided its
interests in the Debtors' property and cash collateral are
adequately protected.
TBS Factoring Deal
In the ordinary course of its business, the Debtor generates
invoices from its customers, which it sells to TBS 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 owes 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.
Due to its ongoing and reciprocal obligations, the Factoring
Agreement is an executory contract within the meaning of 11 U.S.C.
section 365(a) and must assume, provided that TBS consents.
Pursuant to section 365(a) and Federal Rule of Bankruptcy Procedure
6006(a), TBS has agreed to assumption of the Factoring Agreement on
the terms and conditions set forth in the Final Order.
According to the Bankruptcy Court, the Factoring Agreement is
approved as DIP Financing for the Debtor. Pursuant to 11 U.S.C.
sections 363(a), (b), and (c), and 364(a), (b), (c)(1) and (c)(1),
the Debtor is authorized to sell invoices and accounts to TBS, and
TBS is authorized to purchase the invoices and account from the
Jorgaby pursuant to the terms and conditions of the Factoring
Agreement, as such terms and conditions are modified by the Final
Order. More specifically, in addition to other modifications set
forth therein, the factoring discount under the Factoring Agreement
is increased to 2.5% of the face amounts of factored invoices,
rather than the pre-petition factoring discount of 1.5%, until the
Effective Date of the Debtors' plan of reorganization, if any, at
which time the Final Order will expire.
TBS asserts a first priority, perfected, lien or interest in the
Debtor's accounts receivable, invoices and other rights to payment,
reserves, reserve accounts, proceeds of accounts, currency, bank
accounts, and cash equivalents. TBS asserts that it timely filed
UCC-1 financing statements and continuation statements to perfect
its pre-petition liens on cash collateral and other assets securing
the TBS Indebtedness. The amount of the TBS Indebtedness allegedly
secured by the TBS Cash Collateral is $774,368 (as of September 12,
2022), which represents the face amount of unpaid invoices
purchased by TBS under the factoring agreement.
Generally, the TBS Indebtedness is reduced by the collection of
factored invoices. However, the TBS Indebtedness may increase
whenever unpaid or short-paid invoices are charged back to the
Debtor under the terms of the Factoring Agreement.
The Debtor maintains a cash reserve under the Factoring Agreement
to pay fees due under the Factoring Agreement and to cover the
risks and costs of Charge Backs. The Debtor's Cash Reserve (as of
September 12, 2022) is $54,647, and there were no unpaid Charge
Backs at that time. Generally, TBS uses the Cash Reserve to cover
Charge Backs. If the Cash Reserve were exhausted, the Debtor would
be required to reimburse TBS directly for unpaid or short paid
invoices. The Cash Reserve is part of the TBS Cash Collateral.
Cash Collateral Access
Truist Bank asserts a perfected, lien or interest in the Debtor's
accounts receivable, invoices and other rights to payment,
reserves, reserve accounts, proceeds of accounts, currency, bank
accounts, and cash equivalents. Truist's interest in the Truist
Cash Collateral is junior to TBS's interest.
The Debtor requires the TBS Cash Collateral and the Truist Cash
Collateral to operate in Chapter 11, to preserve assets of the
estate, to fund business operations, to provide for maintenance,
repair and road worthiness of rolling stock and to pay
post-petition tax and toll obligations, to pay professional fees,
and to pay the expenses of its reorganization.
The Debtor needs post-petition financing through its Factoring
Agreement with TBS to generate the funds necessary to operate in
Chapter 11, to preserve assets of the estate, to fund business
operations, to provide for maintenance, repair and road worthiness
of rolling stock and to pay post-petition tax and toll obligations,
to pay professional fees, and to pay the expenses of its
reorganization.
As adequate protection, TBS is 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. The Court appoints a Chapter 11 trustee, responsible
person, or other successor in interest to the Debtor in Possession,
unless TBS expressly agrees in writing to such appointment;
c. 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 will
be no cap on permitted variance), which breach is not cured within
seven business days after the Debtor's receipt of written notice
thereof;
d. 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 the Final
Order, or subsequent orders are entered by the Court amending,
modifying, supplementing, vacating or staying the Final Order
without the written consent of the effected secured party;
e. 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
The Final Order will expire upon the effective date of the Debtor's
plan of reorganization or December 8, 2022, whichever comes first.
The Final Order may be extended by up to 60 days by agreement of
the parties thereto, provided that the Debtor provides a new,
mutually agreeable cash collateral budget for the extended period.
A copy of the order is available at https://bit.ly/3Tbkcy7 from
PacerMonitor.com.
About Jorgaby Freight Services
Jorgaby Freight Services LLC is a trucking services provider.
Jorgaby Freight Services LLC and affiliates Jorgaby Delivery
Services, Inc, Jorgaby Investments, LLC, and Jorgaby Logistix, Inc,
filed separate petitions 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.
Judge Jeffrey P. Norman oversees the case.
Jarrod B. Martin has been appointed as Subchapter V trustee.
The Debtors are represented by Donald L. Wyatt, Esq., at Attorney
Donald Wyatt PC.
TBS Factoring Service, LLC is represented by:
Robert A. Simon, Esq.
Whitaker Chalk Swindle & Schwartz PLLC
301 Commerce Street, Suite 3500
Fort Worth, TX 76102
Email: rsimon@whitakerchalk.com
Truist Bank, as creditor, is represented by:
Jason T. Rodriguez, Esq.
Higier Allen & Lautin, PC
2711 North Haskell Ave., Suite 2400
Dallas, TX 76204
Tel: (972) 716-1888
Email: jrodriguez@higierallen.com
KALBARRI AUSTRALIA: Wins Cash Collateral Access Thru Dec 31
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Tennessee,
Western Division, entered an order authorizing Kalbarri Australia,
LLC to use cash collateral on an interim basis in accordance with
its agreement with Simmons Bank.
The Debtor intends to continue using the rents from its property in
Memphis, Tennessee, in the ordinary course of its business.
The Debtor is permitted to use cash collateral for the limited
purpose of satisfying the expenses listed in the Budget actually
incurred during the operation of the Debtor's business between
August 24, 2022, and December 31, 2022.
Simmons Bank is the holder of a duly executed Business Loan
Agreement dated July 5, 2017. Pursuant to the BLA, the Debtor and
Logistics Resources executed a Promissory Note dated July 5, 2017,
in favor of Simmons Bank in the original principal amount of
$2,400,000. As of August 25, 2022, the outstanding balance due on
the BLA was $2,057,205. As of the Petition Date, the BLA was in
Default and remains in Default. The contract rate of interest is
4.66%, and the BLA accrues interest at a rate of $263.45 per diem.
Simmons Bank is the holder of a duly executed Deed of Trust dated
July 5, 2017, which secures the indebtedness evidenced by the BLA
and the Note. This instrument has been duly recorded with the
Shelby County Register's Office at Instrument # 17074133.
Simmons Bank is the holder of a duly executed Assignment of Rents
dated July 5, 2017, the terms and conditions of which are
incorporated herein by reference which secures the indebtedness
evidenced by the BLA and the Note. This instrument has been duly
recorded with the Shelby County Register's Office at Instrument #
17074134.
To adequately protect Simmons Bank in connection with the use by
the Debtor of cash collateral and any other property upon which
security interests and liens have been previously granted by the
Debtor to the Bank, the Court confirms the grant, assignment and
pledge by the Debtor to the Bank of a post-petition security
interest and lien (of the same validity, extent and priority as the
Bank's pre-petition security interests in its Pre-petition
Collateral) in and to (a) all proceeds from the lease and use of
its Collateral.
The security interests and liens granted will be valid, perfected
and enforceable security interests and liens on the property of the
Debtor's estate without further filing or recording of any document
or instrument or any other actions.
Prior to the Debtor's petition date, the Debtor's rents were
collected into a consolidated bank account held in the name of its
parent company, Logistics Resources, LLC-S, an Indiana limited
liability company, whereby, Logistics Resources maintained books
and records of the Debtor's rents and expenditures. The Debtor
will deposit all post-petition rents in a debtor in possession bank
account opened in accordance with the guidelines of the United
States Trustee Program, Region 8.
Beginning September 1, 2022, the Court set $15,500 per month as an
adequate protection payment amount, which will be payable by the
15th of every month, except that the September 2022 payment will be
paid on or before October 10. The Court finds that $15,500 per
month is just and equitable for adequate protection in light of the
per diem interest accruing on the indebtedness. However, Simmons
Bank will have the right to petition the Court to increase adequate
protection payments.
As a condition of the Debtor's use of cash collateral and as
protection from the consequences of the imposition of the automatic
stay, Simmons Bank is entitled to adequate protection pursuant to
Sections 361 and 363 (e) of the Bankruptcy Code.
As additional adequate protection for Creditor, the Debtor will
preserve, maintain and insure the Collateral, with appropriate
endorsements naming Simmons Bank as additional insured and loss
payee and provide proof thereof to the Bank.
A copy of the order is available at https://bit.ly/3V6jyUj from
PacerMoniotor.com.
About Kalbarri Australia LLC
Kalbarri Australia LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. W.D. Tenn. Case No. 22-23562) on
August 25, 2022. In the petition filed by George X. Canno, as
manager, the Debtor reports estimated assets and liabilities
between $1 million and $10 million each.
Judge Denise E. Barnett oversees the case.
The Debtor is represented by Adam M. Langley, Esq., at Butler Snow,
LLP.
KW EXCAVATION: Seeks to Hire Carver Florek & James as Accountant
----------------------------------------------------------------
KW Excavation, Inc. seeks approval from the U.S. Bankruptcy Court
for the District of Utah to employ Carver Florek & James as its
accountant.
The firm's services include:
a. advising the Debtor regarding matters of tax law and tax
filings;
b. assisting the Debtor from time to time with respect to
corporate or other business law matters that may be necessary or
appropriate in its Chapter 11 case; and
c. assisting the Debtor in carrying out its duties under the
Bankruptcy Code.
The accountants responsible for the services are Steven Carver and
Nicole Stamback who will be paid an hourly fee of $210, and a flat
fee of $1,350 for tax preparation.
As disclosed in court filings, Mr. Carver and Ms. Stamback are
"disinterested" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Steven Carver, CPA
Nicole Stamback
Carver Florek & James
2246 University Park Blvd
Layton, UT 84041
Phone: (801)926-1177
Fax: (801)926-1178
Email: steve@cfjcpa.com
About KW Excavation Inc.
KW Excavation, Inc., a utility system construction services
provider in Morgan, Utah, sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Utah Case No. 22-21925) on May 25,
2022, with up to $100,000 in assets and up to $10 million in
liabilities. Janeice Whitaker, president and owner of KW
Excavation, signed the petition.
Judge William T. Thurman oversees the case.
Knufe Rife, Esq., at Rife Law Office and Carver Florek & James
serve as the Debtor's legal counsel and accountant, respectively.
LAMB OF GOD: Future Income to Fund Plan Payments
------------------------------------------------
Lamb of God Christian Center, Inc., filed with the U.S. Bankruptcy
Court for the Southern District of Alabama a Plan of Reorganization
under Subchapter V dated September 29, 2022.
The Debtor is a corporation founded by Bishop Trevor Law in the
year of July 2019. Debtor's mission is to empower people to receive
the knowledge of the word of God to ultimately lead those in the
most loving way.
Due to the pandemic, the Debtor had to cancel in person services
from April 1, 2020 to July 2020. The Debtor returned to in person
services in August of 2020 until the present year. In the present
year of 2022, things begin to get back on track with new vision and
added membership.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $2,000.00. The Plan
payment proposes a payout to its largest creditor, New Pilgrim
Missionary Baptist Church, over 24 months.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow from operations, or future income.
Non-priority unsecured creditors holding allowed claims will
receive distributions which the proponent of this Plan has valued
at approximately zero ($0.00) as there are no Non-priority
Unsecured Creditor.
This Plan also provides for the payment of administrative and
priority claims.
Class 2 consists of the secured claim of New Pilgrim Missionary
Baptist Church, Inc. According to the Proof of Claim filed by the
Creditor, New Pilgrim is secured by a Vendor's Lien Deed, with a
balance owed as of July 29, 2022, is $151,000.00. The Debtor
proposes to pay this debt by making the required monthly payments
of $1,000.00 per month at 0% interest, per agreement of the
parties, plus any late charges, until the remaining balance has
been paid in full.
Also included in said Proof of Claim, there is a prepetition
arrearage claim of $7,603.01. As to this claim, the Debtor proposes
to pay this claim in full with 0% interest over 24 months at
$317.00 per month with the first payment due and payable starting
45 days from the effective date of confirmation.
Class 4 consists of Equity security holders of the Debtor. Bishop
Trevor Law will retain his 100% ownership of the Debtor.
The Debtor will be able to pay claims from the Debtor's income
accrues from tithes offerings, and donations. Based on post Covid
increased participation and attendance, the Debtor generates more
than sufficient income to fund the Plan. The Debtor's expenses
include normal operating costs, such as utilities, insurance,
salaries and maintenance, plus the mortgage payment to its secured
lender and arrearage paid pursuant to its Plan of Reorganization.
A full-text copy of the Plan of Reorganization dated September 29,
2022, is available at https://bit.ly/3V4pOf5 from PacerMonitor.com
at no charge.
About Lamb of God
Lamb of God Christian Center, Inc., is a corporation founded by
Bishop Trevor Law in July 2019. The Debtor filed Chapter 11
Petition (Bankr. S.D. Ala. Case No. 22-11063) on June 2, 2022.
The Debtor is represented by Barry A Friedman, Esq. of BARRY A
FRIEDMAN & ASSOCIATES, PC.
LEHMAN BROTHERS INC: 14-Year Old Brokerage Liquidation Case Ends
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Alex Wolf of Bloomberg Law reports that the liquidation of Lehman
Brothers Inc. came to a close following 14 years of court
proceedings that returned over $115 billion to the defunct
brokerage's customers and creditors.
Judge Shelley C. Chapman of the US Bankruptcy Court for the
Southern District of New York issued an order Wednesday, September
28, 2022, closing the brokerage estate's liquidation proceedings,
which began in September 2008 under the Securities Investor
Protection Act (SIPA).
Judge Chapman also granted Wednesday, September 28, 2022, final
approval of the legal fees for the trustee overseeing the
liquidation process, totaling $424 million through the end of July
2022.
In early September, James W. Giddens), as trustee for the
liquidation of the business of Lehman Brothers Inc. under the
Securities Investor Protection Act, 15 U.S.C. § 78aaa et seq.
("SIPA"), filed a motion for an order discharging the Trustee,
canceling his bond, closing the LBI estate, and granting related
relief in furtherance of the estate's closure.
100% Recovery for Customer Claims
When this liquidation was commenced in 2008 -- at a time when U.S.
financial
markets collapsed and caused one of the greatest financial crises
in our nation's history -- few people could have envisioned that
customers and secured, administrative, and priority creditors would
recover the full value of their accounts, much less that the
unsecured creditors of LBI would
receive substantial distributions.
Today, approximately 14 years later and after completing 100%
distributions on all allowed customer claims and all allowed
secured, administrative, and priority claims, and final
distributions totaling at least 41.2841% on all allowed
non-subordinated unsecured claims of non-affiliated creditors, the
Trustee, with the supervision and assistance of the Securities
Investor Protection Corporation ("SIPC") and this Court, has
completed all steps required to conclude the liquidation and close
the LBI estate. This result was made possible through innovative
Court-approved agreements and procedures that substantially
expedited the administration of the LBI estate.
As detailed in the Trustee's Final Report and Account, which was
filed with the Court on August 3, 2022, pursuant to SIPA section
78fff-1(c) and section 704(a)(9) of the Bankruptcy Code, this was
the largest SIPA liquidation in history and one of unprecedented
complexity amidst the worst economic crisis since the Great
Depression, and the recoveries to general creditors far exceeded
any reasonable estimate of recoveries when the liquidation
commenced. The LBI proceeding dealt with numerous complex issues
-- many of
first impression that established key precedents for future SIPA
proceedings – and 76 parallel affiliate proceedings involving
hundreds of affiliates in 16 jurisdictions around the world and
affiliate settlements that exceeded $100 billion. It also involved
the administration of over 15,000 general creditor claims, many of
which required contested litigation and appeals.
The Trustee received approximately 125,000 customer claims through
the SIPA
account transfer and customer claims processes seeking the return
of nearly $180 billion in cash and securities. The customer estate
closed in December 2017, with allowed customer claims receiving 100
percent recoveries and the general estate receiving an overall
reallocation of $3.112 billion in excess customer property.
After the last remaining general claims litigation concluded, the
estate’s only remaining significant assets were unliquidated,
contingent assets that would take additional time to mature (the
"Contingent Assets"). The Trustee determined to create a separate,
post-closing trust structure (the "LBI Liquidating Trust") and
assign the remaining Contingent Assets to that
structure to be liquidated over an extended period, without
unnecessarily prolonging the LBI estate. To create the most
efficient solution for LBI’s creditors – incentivized by the
opportunity to end their exposure to Lehman's historic failure at a
premium in excess of what they would
otherwise receive – the Trustee proposed, and the Court approved,
the Voluntary Supplemental Distribution. The Voluntary
Supplemental Distribution narrowed the group of allowed general
unsecured creditors that received interests in the LBI Liquidating
Trust to sixty-two participants,
several of which are related, resulting in only fifty
relationships.5
The Liquidating Trust Agreement between the Trustee and Christopher
K. Kiplok, as Trust Administrator, executed on June 28, 2022, and
previously approved by this Court on May 25, 2022,6 further
expedited the wind down
of the LBI estate. Shifting the Contingent Assets to the LBI
Liquidating Trust permitted the Trustee to seek his discharge and
close the LBI estate, while also enabling potential recoveries from
the proceeds of the remaining contingent LBI estate assets to the
holders of allowed general unsecured creditor claims. The
availability of the LBI Liquidating Trust eliminated the need for
the Trustee to accept a "fire-sale" discount on any estate asset.
It will enable the Liquidating Trust Beneficiaries to receive
potential further distributions from the proceeds of the Contingent
Assets.
With the LBI Liquidating Trust established and all Contingent
Assets transferred to it, all remaining residual assets of the
estate abandoned (ECF No. 15369), and the Final Report issued, the
Trustee has fully administered the LBI estate.
About Lehman Brothers
Lehman Brothers Holdings Inc. -- http://www.lehman.com/-- was the
fourth largest investment bank in the United States. For more than
150 years, Lehman Brothers has been a leader in the global
financial markets by serving the financial needs of corporations,
governmental units, institutional clients and individuals
worldwide.
Lehman Brothers Holdings filed for Chapter 11 bankruptcy (Bankr.
S.D.N.Y. Case No. 08-13555) on Sept. 15, 2008. Lehman's bankruptcy
petition disclosed US$639 billion in assets and US$613 billion in
debts, effectively making the firm's bankruptcy filing the largest
in U.S. history. Several other affiliates followed thereafter.
The Debtors' bankruptcy cases were assigned to Judge James M. Peck.
Judge Shelley Chapman took over the case after Judge Peck retired
from the bench to join Morrison & Foerster.
A team of Weil, Gotshal & Manges, LLP, lawyers led by the late
Harvey R. Miller, Esq., serve as counsel to Lehman. Epiq
Bankruptcy Solutions serves as claims and noticing agent.
Dennis F. Dunne, Esq., Evan Fleck, Esq., and Dennis O'Donnell,
Esq., at Milbank, Tweed, Hadley & McCloy LLP, in New York, served
as counsel to the Official Committee of Unsecured Creditors.
Houlihan Lokey Howard & Zukin Capital, Inc., served as the
Committee's investment banker.
On Sept. 19, 2008, the Honorable Gerard E. Lynch of the U.S.
District Court for the Southern District of New York, entered an
order commencing liquidation of Lehman Brothers, Inc., pursuant to
the provisions of the Securities Investor Protection Act (Case No.
08-CIV-8119 (GEL)). James W. Giddens was appointed as trustee for
the SIPA liquidation of the business of LBI. He is represented by
Hughes Hubbard & Reed LLP.
The Bankruptcy Court approved Barclays Bank Plc's purchase of
Lehman Brothers' North American investment banking and capital
markets operations and supporting infrastructure for US$1.75
billion. Nomura Holdings Inc., the largest brokerage house in
Japan, purchased LBHI's operations in Europe for US$2 plus the
retention of most of employees. Nomura also bought Lehman's
operations in the Asia Pacific for US$225 million.
The Debtors' chapter 11 plan was confirmed by the Bankruptcy Court
on Dec. 6, 2011 and became effective on March 6, 2012. The Debtors
have commenced making distributions to holders of allowed claims
and will continue to make distributions in accordance with the Plan
until the liquidation of their assets is complete.
LONESOME VALLEY: Wins Cash Collateral Access Thru Dec 30
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The U.S. Bankruptcy Court for the District of Arizona authorized
Lonesome Valley Brewing, Inc. to use cash collateral in accordance
with the budget, with a 10% variance, through December 30, 2022.
The Court said the Applicable Creditors will receive replacement
liens in the post-petition assets, including cash, to the same
extent, validity, and priority as their interest in cash collateral
as of the Petition Date up to the value of any depreciation in the
unavoidable portion of such interest during the pendency of the
Case. All parties reserve all rights regarding the extent,
validity, and priority of the Applicable Creditors interests in
Estate property, including cash collateral.
As previously reported by the Troubled Company Reporter, the Debtor
had an estimated $5,556 in deposit accounts. As of the Petition
Date, the Debtor estimates it had $11,964 in pending proceeds from
unprocessed credit card transactions at the time of filing.
The Debtor is unaware of any creditor having a perfected interest
or control over the Debtor's Accounts as of the Petition Date.
The Debtor believes the U.S. Small Business Administration holds a
first-priority interest in the Debtor's pre-petition assets,
including the receivables. The SBA asserts a $736,496 claim.
The Debtor believes the SBA Claim may be lower than asserted but
does not believe that its assets exceed the value of the SBA
Claim.
The Debtor is aware of the following additional parties who have
asserted or may assert a security interest in the Debtor's accounts
or receivables:
a. Arizona Department of Revenue
b. Greenbox Capital/Merchant Capital Group, LLC
c. Holloway Funding Group/ Adam Wines Consulting, LLC
d. IOU Central Inc.
e. DMKA, LLC
The Debtor is also aware that these agencies have filed financing
statements on behalf of unnamed creditors that assert an interest
in the Debtor's accounts or receivables.
a. Corporation Service Company
b. First Corporate Solutions
Apart from the SBA, the Debtor does not believe these Applicable
Creditors have any interest in the Debtor's assets under 11 U.S.C.
section 506(a)(1).
A copy of the order and the Debtor's budget for the period from
October to December 2022 is available at https://bit.ly/3SCzkEH
from PacerMonitor.com.
The budget provides total expenses, on weekly basis, as follows:
$18,035 for the week ending October 7, 2022;
$4,923 for the week ending October 14, 2022;
$19,000 for the week ending October 21, 2022; and
$5,005 for the week ending October 28, 2022.
About Lonesome Valley Brewing, Inc.
Lonesome Valley Brewing, Inc. operates two bar and restaurant
locations in northern Arizona: a craft brewery in Prescott Valley
and a pub in Prescott.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 22-05747) on August 29,
2022. In the petition signed by Joanne Cole, chief financial
officer, the Debtor disclosed up to $500,000 in assets and up to
$10 million in liabilities.
Judge Brenda K. Martin oversees the case.
Thomas H. Allen, Esq., at Allen Barnes & Jones, PLC is the Debtor's
counsel.
LUMEN TECHNOLOGIES: S&P Lowers ICR to 'BB-', Off Watch Negative
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
telecommunications provider Lumen Technologies Inc. to 'BB-' from
'BB' and removed the rating from CreditWatch, where we placed it
with negative implications on March 1, 2022. At the same time, S&P
lowered its issue-level rating on Level 3's senior secured debt to
'BB+' from 'BBB-', its issue-level rating on its senior unsecured
debt to 'BB-' from 'BB', our issue-level rating on Lumen's senior
secured debt and the unsecured debt at Qwest Corp. to 'BB+' from
'BBB-', and its issue-level rating on Qwest Cap Funding's senior
unsecured debt to 'BB-' from 'BB' and removed the ratings from
CreditWatch.
S&P said, "Our 'BB-' issue-level rating on Lumen's senior unsecured
debt remains on CreditWatch with negative implications. The
ultimate rating outcome will depend on the mix of secured and
unsecured debt that the company repays as part of the transaction.
Lumen tendered certain unsecured debt issues at Lumen and Qwest
Capital Funding, as well as Embarq Florida's secured first mortgage
bonds, redeeming approximately $3 billion in notes at completion of
the tender offer. Given the remaining proceeds, the company may pay
down debt further, including potentially secured debt.
"The negative outlook reflects the possibility that we could lower
our rating on Lumen over the next 12 months if discretionary cash
flow (DCF) deficits, stemming from its substantial common dividend
and lower earnings, cause its leverage to rise to 4.75x.
"The operating and financial performance of Lumen's business
segment (about 80% of its pro forma sales) remains weak and we
believe it will likely face a mid-single-digit percent decline in
its top line in the near term.The enterprise segment has
underperformed over the last couple of years due to secular
industry pressures as its customers transitioned to less-expensive
networking technologies. During the second quarter of 2022, large
enterprise revenue declined by 6.5% relative to the prior-year
period and by 5.4% excluding the sale of the correctional
facilities business. Similarly, Lumen's mid-market enterprise
revenue fell by 5.3% year over year. Despite a strong sales funnel,
we expect this migration to lower-priced software-defined
networking solutions will contribute to a decline in the overall
revenue from the company's enterprise segment over the next couple
of years. Furthermore, S&P Global economists believe the U.S. will
likely enter a recession in 2023. Unlike many other
telecommunications providers, Lumen has a large exposure to
business customers, that will likely scale back their information
technology (IT) spending and headcount in the event of an economic
downturn, which could lead to a faster-than-expected decline in its
revenue.
"Lumen's FTTH deployment could improve its top line trends over the
longer-term, though we estimate it will contribute to some margin
pressure, higher capex, and low free operating cash flow (FOCF)
over the next couple of years. The company has built out fiber to
2.9 million homes, or about 13% of its total footprint on a pro
forma basis, with the goal of building out 1.5 million to 2 million
homes per year over the next several years. That said, fiber
broadband only represents about 16% of Lumen's pro forma mass
markets revenue. Management believes it can improve its revenue mix
by divesting its legacy voice and digital subscriber line (DSL)
services as part of its asset sale to Apollo. Although Lumen plans
to accelerate its FTTH deployments to cover 57% of the homes in its
territory, it will likely take time to offset the declines in its
copper broadband, video, and voice services businesses. In
addition, while the company estimates that the cost per passing
will be around $1,000, global supply chain constraints and rising
interest rates could lead to higher costs, increased capex, and
ongoing FOCF deficits. The successful execution of its fiber
network upgrade plan, including achieving penetration rates
approaching 40%, will be critical to improving the company's
top-line trends.
"Lumen's large common dividend will make it challenging to reduce
its leverage as it upgrades its network. The company pays just over
$1 billion in annual dividends. However, we believe the lost cash
flow from the assets sales (which we estimate at about $1.1
billion), its higher capital spending to support its FTTH
deployments, and lower EBITDA will likely contribute to negative
DCF and higher leverage, in the low- to mid-4x area by 2023 and the
high 4x area by 2024, absent a dividend cut. We believe a dividend
reduction would enhance Lumen's financial flexibility during the
investment cycle, enabling it to improve its leverage over the
longer term.
"Our issue-level rating on Lumen's senior unsecured debt remains on
CreditWatch negative. We lowered our issue-level ratings on Lumen's
debt by one notch, in line with our downgrade of the company.
However, our 'BB-' issue-level rating on Lumen's senior unsecured
debt remains on CreditWatch negative. We expect the company will
use the proceeds from the asset sales to repay not only debt from
the recent $3 billion tender, but also potentially secured debt,
which could improve the recovery prospects for its senior unsecured
creditors and support a higher recovery rating. However, full
paydown of unsecured debt from the asset sale proceeds could lead
us to leave our '5' recovery rating unchanged while lowering our
issue-level rating to 'B+' (one notch below the issuer credit
rating) from 'BB-'.
"The negative outlook on Lumen reflects the possibility we could
lower our rating over the next 12 months if DCF deficits because of
the company's substantial common dividend and lower earnings due to
secular industry pressures and aggressive competition result in
leverage rising above 4.75x."
S&P could lower its rating on Lumen if:
-- The revenue declines in its enterprise segment remain
elevated;
-- The company experiences execution missteps in its FTTH
deployments such that it does not achieve sufficient penetration
levels to expand its revenue and earnings; or
-- Higher capex levels, lower EBITDA, and its large common
dividend cause it to generate higher-than-expected DCF deficits
such that its leverage rises above 4.75x.
S&P could revise its outlook on Lumen to stable if:
-- It improves the top-line performances in its mass markets and
enterprise segments, leading to modest earnings growth;
-- The company sells other non-core assets that enable it to
reduce its leverage; and
-- The company reduces its dividend such that it generates
positive DCF, despite its elevated capex, and maintains S&P Global
Ratings-adjusted leverage in the mid-4x area.
ESG credit indicators: E-2, S-2, G-2
MASTEN SPACE: Unsecureds to Recover 1% to 10% in Liquidating Plan
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Masten Space Systems Inc., filed with the U.S. Bankruptcy Court for
the District of Delaware a Combined Disclosure Statement and
Chapter 11 Plan of Liquidation dated September 29, 2022.
The Debtor is a rocket and spacecraft company headquartered in
Mojave, California. Founded by David Masten in 2004 in Santa Clara,
California, the Debtor is a Delaware corporation owned by 15
stockholders.
To get the Debtor's spacecraft to the moon, the Debtor contracted
with SpaceX in July 2020 to provide launch services on one of its
launch vehicles (the "SpaceX Launch Agreement"). The significant
delays in completing the TO 19C contract modification had two key
impacts: (i) the Debtor was unable to paper the launch schedule
change from 2021 to 2022; and (ii) the Debtor was unable to pay the
full amount of a December 2021 milestone payment to SpaceX.
Unfortunately, due to its adverse financial circumstances, the
Debtor has not been able to catch up on its payments due to SpaceX.
Per the terms of the SpaceX Launch Agreement, SpaceX officially
terminated the launch contract on June 30, 2022, due to the
Debtor's failure to make timely payments.
The Debtor recognized a sale of the business as a going concern
likely would need to be done through bankruptcy. To that end, the
Debtor sought to arrange postpetition financing to provide the
Debtor with sufficient funds to complete a sale process.
On or prior to the September 2, 2022, bid deadline, the Debtor
received the Stalking Horse Bid from Astrobotic for $4,500,000,
plus payments of amounts necessary to cure assumed executory
contracts, plus a waiver of Astrobotic's claims against the
Debtor's estate.
On September 8, 2022, the Bankruptcy Court conducted a hearing to
consider approval of the Sale to Astrobotic. The Sale closed on
September 9, 2022, and the Debtor received $2,678,300 from
Astrobotic. This amount represents the sum due after accounting for
the cash portion of the purchase price, the cost of certain
contracts during the Designation Period, and the credit bid of the
full amount of the DIP loan, plus all fees and interest. From the
proceeds, $183,658.52 is being segregated as adequate protection
for the asserted Secured Claim of Wallace and Smith Contractors.
This Combined Plan and Disclosure Statement contemplates the
establishment of a liquidating trust by and through which the
Liquidating Trustee will marshal the remaining assets of the
Debtor's estate, including the proceeds from the sale of
substantially all of the Debtor's assets which was approved by the
Bankruptcy Court on September 8, 2022 and consummated on September
9, 2022, review the Claims, and make Distributions from the
remaining Assets of the Estate to Holders of Allowed Claims and
Allowed Equity Interests, as set forth herein and consistent with
the priority of claim provisions of the Bankruptcy Code.
Class 3 consists of General Unsecured Claims. Each Holder of an
Allowed General Unsecured Claim shall receive in full and final
satisfaction, settlement, and release of and in exchange for its
Allowed Class 3 Claim its Pro Rata share of the General Unsecured
Claim Distribution Fund. Class 3 General Unsecured Claims are
impaired and entitled to vote. The allowed unsecured claims total
$23,200,000. This Class will receive a distribution of 1% - 10% of
their allowed claims.
Class 6 consists of Equity Interests. On the Effective Date, all
Interests shall be deemed canceled, extinguished and of no further
force or effect, and the Holders of Interests shall not be entitled
to receive or retain any property on account of such Interest.
On the Effective Date the Debtor will transfer all of its Assets to
the Liquidation Trust, for Distribution in accordance herewith. The
Confirmation Order shall be deemed to, pursuant to sections 363 and
1123 of the Bankruptcy Code, authorize, among other things, all
actions as may be necessary or appropriate to effect any
transaction described in, approved by, contemplated by, or
necessary to effectuate the Combined Disclosure Statement and Plan.
Following the Effective Date, the Liquidation Trustee shall take
all actions reasonably necessary to dissolve the Debtor under any
applicable laws.
A full-text copy of the Combined Disclosure Statement and Plan
dated September 29, 2022, is available at https://bit.ly/3MeRiLa
from PacerMonitor.com at no charge.
Counsel to the Debtor:
Jeffrey R. Waxman, Esq.
Brya M. Keilson, Esq.
Sarah M. Ennis, Esq.
Morris James LLP
500 Delaware Ave #1500
Wilmington, DE 19801
Phone: +1 302-888-6800
Email: jwaxman@morrisjames.com
Email: bkeilson@morrisjames.com
Email: sennis@morrisjames.com
About Masten Space Systems
Masten Space Systems, Inc. -- https://www.masten.aero -- is a space
infrastructure company in Mojave, Calif.
Masten Space Systems filed for Chapter 11 protection (Bankr. D.
Del. Case No. 22-10657) on July 29, 2022, with between $10 million
and $50 million in both assets and liabilities. David Masten,
president and chief technology officer of Masten Space Systems,
signed the petition.
The Debtor tapped Morris James, LLP as bankruptcy counsel; Alston &
Bird, LLP as special counsel; Gavin/Solmonese, LLC as financial
advisor and restructuring advisor; and Stretto, Inc. as balloting
agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtor's Chapter 11 case on Aug. 16,
2022. The committee is represented by Kilpatrick Townsend &
Stockton, LLP and Cozen O'Connor.
MATADOR RESOURCES: Fitch Hikes LongTerm IDR to 'BB-'
----------------------------------------------------
Fitch Ratings has upgraded the Long-Term Issuer Default Ratings
(IDRs) of Matador Resources Company (Matador) and MRC Energy
Company to 'BB-' from 'B+'. Fitch has also affirmed the issue-level
ratings for MRC's reserve-based lending credit facility (RBL) at
'BB+'/'RR1' and Matador's senior unsecured notes at 'BB-' and
revised the recovery rating to 'RR4' from 'RR3'. The Rating Outlook
is Stable.
The upgrade reflects the company's production growth momentum,
management's continued commitment to a conservative financial
policy and significant gross debt reduction, which has materially
improved credit metrics.
Matador's ratings reflect the company's high margin, oil-weighted
Delaware acreage, supportive midstream assets, strong unit
economics and cash netbacks, sub-1.0x leverage and clear maturity
schedule. These factors are partially offset by the company's
smaller size compared with similar-rated peers and uncertainty
around long-term economic inventory life and unit economics,
particularly in the Northern Delaware acreage.
KEY RATING DRIVERS
Significant Gross Debt Reduction: Matador's continued execution on
gross debt reduction has meaningfully enhanced its balance sheet
and the company is well-positioned to withstand future commodity
price downturns. The company has repaid $663 million of gross debt
since 3Q20 ($288 million through Sept. 12, 2022), which includes
$475 million of RBL borrowings and $188 million of notes via open
market repurchases.
Total gross debt consists of just $862 million of notes due 2026
and leads to Fitch-calculated leverage of 0.5x in 2022 and 0.8x at
Fitch's long-term base case price assumptions of $50 WTI and $2.75
Henry Hub. Fitch expects management will continue its conservative
financial policy with potential for further note repurchases and
expectations for measured increases to the dividend over the rating
horizon.
Seven-Rig Drilling Program: Fitch believes Matador's seven-rig
drilling program will generate high single-digit production growth
leading to 125 thousand barrels of oil equivalent per day (Mboepd)
by 2024 and strong FCF through the rating horizon. Total production
averaged 110.8 Mboepd in 2Q22 following increased drilling activity
across its acreage. Management has primarily targeted Wolfcamp A
and the lower Bone Spring intervals with 160-acre spacing, but has
also seen strong well results in the Avalon and upper Bone Spring
across the acreage position.
Fitch expects continued operational momentum as an additional 27
wells will turn to sales in Antelope Ridge and Ranger Areas in 2H22
and believes management will look toward further development of its
Northern acreage (Arrowhead, Ranger and Twin Lakes) into 2023.
Strong FCF Generation; Measured Distributions: Fitch forecasts
post-dividend FCF of approximately $1.0 billion in 2022 and $600
million in 2023 at Fitch's price deck under the current seven-rig
drilling program. Fitch expects the company will maintain its
$0.40/share dividend with potential for measured increases in the
near and medium term. Fitch does not expect management to initiate
a share repurchase program and believes excess cash will to be
split between further debt reduction, increases to the dividend,
additional investment into the upstream and midstream assets and
potential bolt-on M&A activity.
Delaware-Focused Asset Base: As of Dec. 31, 2021, Matador's asset
profile consists of approximately 124,800 net acres in the core of
the Delaware basin split between Eddy and Lea counties in addition
to smaller non-core acreage positions in the Eagle Ford (25,100 net
acres) and Haynesville (17,700 net acres). The company's Delaware
acreage has high oil exposure (approximately 58% as of 2Q22), is
largely held by production (HBP) and supports two-mile laterals
across a majority of drilling locations.
Approximately 29% of the acreage is on federal lands; however,
approximately 75% of this acreage is HBP and almost all of the
remaining acreage is not subject to expiration before 2028. Fitch
believes the high-quality asset profile supports the company's
FCF-focused strategy and management's commitment to two-mile
laterals should help improve drilling and completions costs per
foot and lead to efficiency gains.
Supportive Midstream Assets: Matador's recent acquisition of Pronto
Midstream and midstream joint venture assets at San Mateo provide
both operational benefits through overall reduced transportation
costs and lower marketing fees in addition to performance
incentives from partner Five Point Energy LLC. The San Mateo assets
offer 460 MMcf/d of gas processing capacity, 370 Mbbl/d of water
disposal capacity and oil gathering and transportation systems,
which covers nearly all of Matador's Delaware acreage.
Matador received $49 million in performance incentives in 2021 and
$22.75 million in 1Q22 from Five Point and continues to meet
threshold requirements to earn up to an additional $100
million-$150 million of incentives through 2024 which support the
FCF and liquidity profiles.
Proactive Hedging Strategy: Fitch believes Matador will remain
opportunistic and maintain adequate hedge coverage throughout the
rating horizon consistent with historical averages. Matador is
currently hedging approximately 50% of its oil and 65% of gas
production for the remainder of 2022 primarily through collars. Oil
hedge coverage does drop off in 2023, but Fitch expects the company
will remain proactive and enter into hedges to support the dividend
and offer downside price protection.
Long-Term Inventory Uncertainty: Fitch believes Matador has
sufficient acreage to maintain operational momentum in the medium
term, but there is uncertainty around maintenance of unit economics
outside of the company's approximately 8-10 years of high quality
locations. Management has previously defined these locations as
those with an average well-level IRR of at least 15% at
$30bbl-$40/bbl oil and $2.00/mcf gas prices. Fitch believes well
results outside of these locations and its proven Wolfcamp A and
lower Bone Spring intervals could vary, although recent results in
the Avalon and Upper Bone Spring have been strong.
The company may need to redirect or deploy additional capital to
further de-risk more prospective intervals, particularly in the
Northern Delaware, or execute M&A to maintain economic inventory
life over the long term. However, at current commodity prices the
number of economic locations expands considerably.
DERIVATION SUMMARY
Matador's 2Q22 production averaged 110.8 Mboepd (58% oil), which is
similar to CrownRock L.P (BB-/Stable; 115 Mboepd in 3Q21, 57% oil),
larger than Earthstone Energy, Inc. (B+/Stable; 77.1 Mboepd in
2Q22, 37% oil), but smaller than SM Energy Company (BB-/Stable;
146.6 Mboepd, 46% oil), Permian Resources Corp. (BB-/Stable; 145
Mboepd expected in 4Q22, 52% oil), and DJ basin peer Civitas
Resources, Inc. (BB-/Stable; 175.2 Mboepd in 2Q22, 46% oil).
The company's continued cost reduction efforts and high oil mix
have led to peer-leading Fitch-calculated unhedged netbacks of
$71.9/boe in 2Q22. This compares favorably with SM Energy
($57.8/boe), primarily driven by SM's higher natural gas cut,
Earthstone ($51.3/boe) and Civitas ($57.2/boe). Matador's gross
debt of $787 million leads to leverage of 0.5x in 2022, which is
among the lowest of the peer group.
KEY ASSUMPTIONS
- WTI oil price of $95/bbl in 2022, $81/bbl in 2023, $62/bbl in
2024 and $50/bbl in the long term;
- Henry Hub natural gas price of $7.00/mcf in 2022, $5.00/mcf in
2023, $4.00/mcf in 2024, $3.00 in 2025 and $2.75 in the
long-term;
- Double-digit production growth in 2022 followed by mid-to-high
single-digit growth thereafter;
- Capex of approximately $1.0 billion in 2022 followed by
production-linked spending thereafter;
- $0.40/share base dividend with measured increases in
shareholder returns;
- No material M&A activity.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Production growth resulting in average daily production
approaching 150 Mboepd;
- Maintenance of economic inventory life and continued
de-risking of longer-term unit economics;
- Mid-cycle debt/EBITDA sustained below 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Loss of operational momentum resulting in average
production sustained below 100 Mboepd;
- Inability to extend economic inventory life that leads
to expectations for weakened unit economics;
- Material reduction in liquidity or inability to access
debt capital markets;
- Mid-cycle debt/EBITDA sustained above 2.5x.
LIQUIDITY AND DEBT STRUCTURE
Ample Liquidity: As of 2Q22, Matador had $230 million cash on hand
and full borrowing capacity under its $775 million RBL ($2.0
billion borrowing base). The company fully repaid the RBL
borrowings in 1Q22 and has since reduced the 2026 notes balance by
$188 million through Sept. 12, 2022. The RBL is subject to a
semi-annual borrowing base redetermination and was affirmed at $2.0
Billion in April. Matador's maturity schedule remains clear with
both the RBL and senior notes maturing in 2026.
ISSUER PROFILE
Matador Resources Company is an independent exploration and
production company primarily focused in the Delaware Basin in
Southeast New Mexico and West Texas.
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
---- ------ -------- -----
Matador Resources
Company LT IDR BB- Upgrade B+
senior unsecured LT BB- Affirmed RR3 BB-
MRC Energy Company LT IDR BB- Upgrade B+
senior secured LT BB+ Affirmed RR1 BB+
MMC JUICE: Hearing Today on Bid to Access Cash Collateral
---------------------------------------------------------
MMC Juice Investors, Co. asks the U.S. Bankruptcy Court for the
Northern District of Illinois, Eastern Division, for authority to
use cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to finance its
ongoing post-petition business operations.
As with all restaurants and similar retail operations, the Debtor
suffered significant financial hardship during the onset of
COVID-19 and the resulting lock-down of business. The Debtor has
not been able to fully rebound from the setback.
The Debtor's management has determined that it is no longer
feasible for them to continue to operate the business. However,
Debtor has been able to locate a potential purchaser of the assets
of the Debtor which will allow the restaurant to remain open as a
going concern and maximize the value of the assets for the benefit
of creditors and maintain employee jobs. The Debtor will notice and
set for hearing on October 13, 2022, a motion to approve the
bidding procedures to implement the sale and auction of the Debtor
assets. The Debtor will require the use of cash collateral during
this period in order to maintain operations and preserve the going
concern value of the business. The asset sale will yield
substantially more value than a closure of the business and Chapter
7 filing.
Prior to the Petition Date, the Debtor borrowed certain sums of
money from Newtek Small Business Finance, LLC retail businesses,
pursuant to certain promissory notes, business loan agreements,
security agreements, pledge agreements, collateral assignments, and
other agreements, instruments, certificates and documents. As of
the Petition Date, the Debtor is indebted to the Secured Lender in
the total amount, including principal and interest of approximately
$260,000.
In addition to the Newtek lien, the U.S. Small Business
Administration has potential secured interest in the Debtor's
accounts by means of a EIDL loan and security agreement with a
balance of $175,300. The SBA lien is junior to the Newtek lien and
is either wholly unsecured, or partially secured under 11 U.S.C.
section 506.
As adequate protection for the Secured Lender's interest in the
cash collateral, the Debtor proposes to use the cash collateral
solely for the purposes outlined in the Interim Cash Collateral
Order. The Debtor further proposes to: (1) for any diminution in
value of the Secured Lender's interests in the cash collateral from
and after the Petition date, grant Secured Lender a replacement
lien on all of the Debtor's assets; (2) for any diminution in value
of the Secured Lender's interests in the cash collateral from and
after the Petition date, grant the Secured Lender an administrative
expense claim pursuant to Section 507(b).
A hearing on the matter is set for October 6, 2022 at 11 a.m.
A copy of the order is available at https://bit.ly/3MeOjCs from
PacerMonitor.com.
About MMC Juice Investors, Co.
MMC Juice Investors, Co. operates a Clean Juice restaurant under a
franchise agreement with Clean Juice Franchise Co. The Debtor
operates in a shopping center in Naperville, IL and has been in
business since 2019.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-11403) on October 3,
2022. In the petition signed by Michelle Constantino, president,
the Debtor disclosed up to $500,000 in both assets and
liabilities.
Richard G Larsen, Esq., at SpringerLarsenGreene, LLC, is the
Debtor's counsel.
MT VERNON MEMBERS: Voluntary Chapter 11 Case Summary
----------------------------------------------------
Debtor: Mt Vernon Members, LLC
4203 Montrose Blvd Suite 400
Houston, TX 77006
Chapter 11 Petition Date: October 4, 2022
Court: United States Bankruptcy Court
Southern District of Texas
Case No.: 22-90328
Judge: Hon. David R. Jones
Debtor's Counsel: Susan Tran Adams, Esq.
TRAN SINGH, LLP
2502 La Branch St.
Houston, TX 77004
Tel: (832) 975-7300
Email: stran@ts-llp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Christopher Bran as manager for Bran
Enterprises, LLC, Managing Partner of Debtor.
The Debtor filed an empty 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/6JQKWNQ/Mt_Vernon_Members_LLC__txsbke-22-90328__0001.0.pdf?mcid=tGE4TAMA
NORTHSIDE VENTURES: Case Summary & 14 Unsecured Creditors
---------------------------------------------------------
Debtor: Northside Ventures, LLC
100 Washington
Michigan City, IN 46360
Business Description: The Debtor is a Single Asset Real Estate
as defined in 11 U.S.C. Section 101(51B).
Chapter 11 Petition Date: October 5, 2022
Court: United States Bankruptcy Court
Northern District of Indiana
Case No.: 22-31027
Debtor's Counsel: Bruce de'Medici, Esq.
DE'MEDICI LAW
318 West Adams Street 1600
Chicago, IL 60606
Tel: (312) 731-6778
Email: bdemedici@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jason Gatzka as manager.
A copy of the Debtor's list of 14 unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/ZMP7J3I/Northside_Ventures_LLC__innbke-22-31027__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/ZCNREEY/Northside_Ventures_LLC__innbke-22-31027__0001.0.pdf?mcid=tGE4TAMA
PHOENIX SERVICES: Davis Polk Advises Lender on DIP Facility
-----------------------------------------------------------
Davis Polk advised the prepetition administrative agent, collateral
agent, lender and issuing bank in connection with a $125 million
post-petition super priority senior secured multiple draw term loan
credit facility (the "DIP Facility") for Phoenix Services Topco,
LLC and certain of its debtor subsidiaries (collectively, "Phoenix
Services", or the "Company"). On September 29, 2022, the U.S.
Bankruptcy Court for the District of Delaware entered an order
approving the DIP Facility on an interim basis. The DIP Facility
consists of $50 million in new money term loans and $75 million in
rolled up prepetition loans, with an additional $75 million roll-up
of prepetition loans to be addressed at the Second Day Hearing in
connection with entry of a final order approving the DIP Facility.
Phoenix Services was founded in 2007 and is headquartered in
Radnor, Pennsylvania. The Company provides mission-critical
services to leading, global steel-producing companies at 39 sites
throughout the United States, Europe, South America and Africa,
including the removal, handling and processing of molten slag (a
co-product of the steel-making process), as well as the preparation
and transportation of metal scraps, raw materials and finished
products. Phoenix Services is the second-largest services provider
to steel mills domestically and the third largest globally based on
market position.
The Davis Polk restructuring team included partner Brian M.
Resnick, counsel Erika D. White and associates Jonah A. Peppiatt,
Hailey W. Klabo and Cole M. Hanson. The finance team included
partner Meyer C. Dworkin and counsel Sanders Witkow. All members of
the Davis Polk team are based in the New York office.
About Phoenix Services Topco
Phoenix Services Topco, LLC provides a suite of services to global
steel-producing companies, primarily including the removal,
handling, and processing of molten slag at customer sites, as well
as the preparation and transportation of metal scraps, raw
materials, and finished products.
Phoenix Services Topco, LLC and 8 affiliates, including Phoenix
Services Holdings Corp., sought protection under Chapter 11 of the
U.S. Bankruptcy Code on Sept. 27, 2022. Phoenix Services Topco,
LLC is the lead case (Bankr. D. Del. Lead Case No. 22-10906).
In the petitions signed by Robert A. Richard, chief financial
officer, the Debtor disclosed up to $1 billion in both assets and
liabilities.
Judge Mary J. Walrath oversees the case.
The Debtors tapped Weil, Gotshal, and Manges LLP as legal counsel,
AlixPartners, LLP as financial advisor, PJT Partners Inc. as
investment banker, and Stretto as claims and noticing agent.
Barclays Bank PLC, as DIP/First Lien Group lender, is represented
by Gibson, Dunn & Crutcher LLP.
Credit Suisse Loan Funding LLC, as DIP Lender, is represented by
Pachulski Stang Ziehl & Jones LLP.
PILATES AND YOGA: Seeks Cash Collateral Access
----------------------------------------------
Pilates and Yoga Center, LLC asks the U.S. Bankruptcy Court for the
Southern District of Florida, West Palm Beach Division, for
authority to use cash collateral for an additional 30 days under
the same terms that the Court allowed in its October 12, 2022
order.
As previously reported by the Troubled Company Reporter, the Debtor
was permitted to use cash collateral on an interim basis in
accordance with the budget.
First Citizens Bank & Trust holds a security interest in all of the
Debtor's assets including all accounts, receivables, future,
fixtures, equipment, etc.
As adequate protection for the aggregate diminution of the cash
collateral resulting from the Debtor's use thereof, First Citizens
was granted, nunc pro tunc as of the commencement of these Chapter
11 cases, a replacement lien pursuant to 11 U.S.C. section 361(2)
on and in all property of the Debtor acquired or generated after
the Petition Date, but solely to the same extent and priority, and
of the same kind and nature, as the property of the Debtor securing
the prepetition obligations to First Citizens under the
Pre-Petition Loan Documents.
In the event that diminution occurs in the value of cash collateral
from, First Citizens will be granted an administrative claim under
section 507(b) of the Bankruptcy Code, with priority over all other
administrative expense claims, subject to the Carve Out.
The Replacement Liens granted are valid and perfected without the
need for the execution or filing of any further documents or
instruments.
A copy of the order is available at https://bit.ly/3C6VWGl from
PacerMonitor.com.
About Pilates and Yoga Center, LLC
Pilates and Yoga Center, LLC owns and operates two pilates and yoga
studios. The studios are operated in leased locations at 901 N
Congress Ave, Unit D-103, Boynton Beach, FL and 223 Sunset Ave, Ste
160, Palm Beach, FL.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-16923-MAM) on
September 6, 2022. In the petition signed by Holly Andronicescu,
managing member, the Debtor disclosed up to $100,000 in assets and
up to $500,000 in liabilities.
Judge Erik P. Kimball oversees the case.
Brian K. McMahon, Esq., at Brian K. McMahon, PA is the Debtor's
counsel.
PREHIRED LLC: Sales Bootcamp Files Subchapter V Case
----------------------------------------------------
Prehired LLC filed for chapter 11 protection in the Southern
District of New York. The Debtor elected on its voluntary petition
to proceed under Subchapter V of chapter 11 of the Bankruptcy
Code.
Prehired Inc. is a company that helps paying members get hired,
promoted and pursue a 6-figure potential career in software sales.
The founder, Joshua Jordan, developed Science Based Sales, a
deliberate step-by-step program to train Prehired members in
software sales. Prehired is the only tech sales career launch
program to be on Hubspot's top sales training programs list three
years in a row. Prehired is also Career Karma's "Top Tech Sales
Bootcamp."
Starting 2019, the Company offered Income Share Agreements
("ISAs"), which allowed a member to delay making payments until
after the member: (1) completed Prehired's program; and (2)
obtained a job with a certain income threshold. Darius Goldman is
the CEO of Meratas Inc., the primary service provider and
originator of Prehired’s ISAs, and he has also been legal counsel
for Prehired.
From December 2021 into early 2022, Prehired had approximately 300
ISA agreements in default. Prehired Accelerator, LLC, was created
in Florida on September 1, 2021, to hold defaulted ISAs and to
pursue collection activities on them. Prehired also filed 289
lawsuits in Delaware's Justice of the Peace Court to enforce
defaulted ISAs.
In its bankruptcy petition, Prehired estimated less than $10
million in total debt and between 1,000 and 5,000 creditors. The
petition states funds will be available to unsecured creditors.
Prehired said it is the focus of investigations by Attorneys
General in at least sixteen states, including Delaware and South
Carolina. Prehired LLC creditors are dispersed across the country
in at least 38 states.
Since April 2022, the Delaware Consumer Protection Unit has issued
approximately five subpoenas to Prehired. The Delaware CPU has
ntimated that Prehired may have engaged in violations of the
Delaware Consumer Protection Act given its program representations
and that Prehired had to cease collection efforts on all defaulted
ISAs, irrespective of when and where the ISA was executed. The
Delaware CPU argues that any arbitrations or litigations by
Prehired to collect on the debts would be met with a request from
the CPU for injunctive relief to stop these
actions.
Before the Delaware CPU investigation began, Prehired had sixteen
staff members. Given the Delaware CPU’s position stopping
Prehired from collecting on defaulted debts and precluding Prehired
from enrolling new members, Prehired has had to terminate 14 staff
members. Accordingly, only two staff members remain working
full-time, and one individual is assisting in answering inquiries
arising from the investigations on an unpaid
basis.
Prehired's new membership enrollments dropped from around 30 each
month to less than ten each month, and presently zero, given the
Delaware CPU’s position.
Prehired's inability to pursue debt collection actions against
defaulted customers has prevented Prehired from obtaining
additional income streams needed to operate, including maintaining
and increasing staff.
The Delaware CPU's actions, and its position concerning ISAs, has
resulted in Prehired having to file for bankruptcy protection
despite the fact that Prehired's program has changed the lives of
hundreds of its members for the better. Prehired estimates that if
one compares the members' reported income in aggregate before they
joined Prehired with the members' reported income in aggregate
after having completed Prehired's program, an additional
$30,000,000.00 in income is generated every year by these members
because they joined Prehired, and this amount will continue to grow
each year as their careers blossom.
Prehired rejects any notion that its program is fraudulent and
misled consumers. Indeed, even before Prehired knew of the
investigations against it, Prehired had released hundreds of
members from having to pay their ISA commitments in response to
their adverse personal circumstances; this decision not to enforce
the ISA payments resulted in Prehired forgoing $12,000,000 in
income that it otherwise would have been entitled to.
Prehired rejects the notion that it "pushed" people out of its
program and prevented them from completing it. It was and is a
member's choice whether to voluntarily abandon or withdraw from
Prehired's training program and membership. In fact, Prehired's
position is that it always took steps to proactively help members
who -- because of their life circumstances – were having issues
complying with the program's requirements.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Nov. 9, 2022, at 02:00 PM at Office of UST (TELECONFERENCE ONLY) -
CHAPTER 11s.
About Prehired LLC
Prehired LLC -- https://Prehired.io-- is a $0 down 12-week sales
bootcamp that guarantees job placement as an SDR at tech
companies.
Prehired, LLC, filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-11293) on Sept. 28, 2022. In the petition filed by Christopher
D. Warren, the Debtor reports estimated assets and liabilities
between $1 million and $10 million.
Heidi J. Sorvino has been appointed as Subchapter V trustee.
The Debtor is represented by Christopher D. Warren of Warren Law
Group.
PUERTO RICO: Bankruptcy Judge Grants PREPA Litigation
-----------------------------------------------------
Michelle Kaske of Bloomberg News reports that Puerto Rico's
financial oversight board must file a debt-restructuring plan for
its bankrupt power utility by Dec. 1, 2022, according to a federal
judge, who ruled that the court will begin litigating certain
issues of the workout.
US District Court Judge Laura Taylor Swain Wednesday approved a
request by the island's Congressionally appointed oversight board
to litigate how much of the power utility's revenue bondholders are
entitled to. She also decided that court-ordered mediation should
continue and set the Dec. 1, 2022 deadline for a new plan to reduce
$9 billion of Puerto Rico Electric Power Authority debt.
The Financial Oversight and Management Board for Puerto Rico
announced Sept. 16, 2022, that it has reached an impasse in
mediations with bondholders over the restructuring of PREPA's debt
and fled a required schedule with the U.S. District Court for the
District of Puerto Rico to resume litigation against PREPA
bondholders.
The Oversight Board filed its proposed litigation schedule in
compliance with a prior court order requiring it to file, among
other options, an expedited litigation schedule for various
disputes with PREPA's creditors. The Oversight Board also
encouraged further mediation and negotiations with all parties as
the litigation progresses.
The litigation will focus on whether the bondholders' security
interest securing their bond claims is limited to the money PREPA
deposits in accounts the bond trustee created pursuant to the trust
agreement governing the issuance of the bonds. The trust agreement
requires PREPA to deposit money into these accounts only after
PREPA pays its operating expenses. The Oversight Board asserts the
trust agreement limits the bondholders' security interest to monies
in this fund, and that bondholders have no claim against PREPA that
is not satisfied by the money currently in the fund.
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.
QUICK LINKS: Gets OK to Hire Nordlander CPA as Accountant
---------------------------------------------------------
Quick Links, Inc. received approval from the U.S. Bankruptcy Court
for the Eastern District of North Carolina to hire Nordlander CPA,
PLLC as its accountant.
The firm's services include:
1. reviewing books and records for years 2021 and 2022;
2. reviewing available source documents, including bank
statements, deposit items, canceled checks, credit card statements,
etc. from 2021 to 2022;
3. inspecting internal controls and making recommendations on
the business operations to ensure proper accounting for the
bankruptcy court;
4. maintaining books and records, advising on payroll and
sales tax requirements, and issuing reports as necessary; and
5. providing a written summary of the findings, deposition
testimony, or court testimony, if necessary.
The firm will be paid $300 an hour for its services.
As disclosed in court filings, Nordlander is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Robert Nordlander, CPA, CFE
Nordlander CPA, PLLC
4004 Ballard Farm Rd
Colfax, NC 27235
Phone: +1 336-421-2392
Fax: (336) 419-1977 - Fax
Email: robert@nordlandercpa.com
About Quick Links
Quick Links, Inc. sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-01847) on Aug. 18,
2022, with up to $100,000 in assets and up to $50,000 in
liabilities.
Judge Pamela W. Mcafee oversees the case.
J.M. Cook, Esq., at J.M. Cook, P.A and Nordlander CPA, PLLC serve
as the Debtor's legal counsel and accountant, respectively.
REARDEN STEEL: Gets Interim OK to Hire Julianne Frank as Counsel
----------------------------------------------------------------
Rearden Steel Manufacturing, LLC received interim approval from the
U.S. Bankruptcy Court for the Southern District of Florida to hire
Julianne Frank, P.A. to serve as legal counsel in its Chapter 11
case.
The hourly rates charged by the firm for its services range from
$100 to $400.
Julianne Frank received a retainer in the amount of $18,262.
Julianne Frank, Esq., disclosed in a court filing that she and her
firm do not represent any interest adverse to the Debtor and its
bankruptcy estate.
Ms. Frank can be reached at:
Julianne Frank, Esq.
Julianne Frank, P.A.
4495 Military Trail, Suite 107
Jupiter, FL 33458
Phone: 561-389-8660
Email: julianne@jrfesq.com
About Rearden Steel Manufacturing
Rearden Steel Manufacturing, LLC, a metal fabricator in Florida,
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, with between $1 million and $10 million. Tarek Kirk Kiem has
been appointed as Subchapter V trustee.
The Debtor is represented by Julianne R. Frank.
REPLICEL LIFE: Andrew Schutte Reports 15.2% Equity Stake
--------------------------------------------------------
Andrew Schutte, a director of RepliCel Life Sciences Inc.,
disclosed in a Schedule 13D filed with the Securities and Exchange
Commission that as of May 4, 2022, he beneficially owns 6,839,037
common shares of the Company, representing 15.22 percent of the
shares outstanding. The percentage ownership was calculated based
on the aggregate of 44,925,565 common shares, which consists of:
(i) 42,749,565 common shares outstanding as of May 4, 2022; and
(ii) 2,176,000 common shares that may be issuable on exercise of
warrants, all within sixty days, pursuant to Rule 13d-3 of the
Act.
Pursuant to a subscription agreement dated May 4, 2022, the
Reporting Person purchased 2,116,167 units of the Issuer at a price
of CDN$0.18 per Unit in a private transaction for total
consideration CDN$380,910. Each Unit consists of one Share and
one-half of one non-transferable share purchase warrant. Each
Warrant entitles the Reporting Person to acquire one Share at a
price of CDN$0.40 per Warrant Share until May 4, 2025.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1205059/000108503722000077/schedule13dsept2022.htm
About Replicel
RepliCel Life Sciences Inc. is a regenerative medicine company
focused on developing cell therapies for aesthetic and orthopedic
conditions affecting what the Company believes is approximately one
in three people in industrialized nations, including
aging/sun-damaged skin, pattern baldness, and chronic tendon
degeneration. These conditions, often associated with aging, are
caused by a deficit of healthy cells required for normal tissue
healing and function. These cell therapy product candidates are
based on RepliCel's innovative technology, utilizing cell
populations isolated from a patient's healthy hair follicles.
Replicel Life reported a net loss and comprehensive loss of C$4.07
million for the year ended Dec. 31, 2021, compared to a net loss
and comprehensive loss of C$1.58 million for the year ended Dec.
31, 2020. As at Dec. 31, 2021, the Company had C$591,794 in total
assets, C$7.43 million in total liabilities, and a total
shareholders' deficiency of C$6.84 million.
Vancouver, British Columbia-based BDO Canada LLP, the Company's
auditor since 2010, issued a "going concern" qualification in its
report dated June 28, 2022, citing that the Company has accumulated
losses of $42,231,642 since its inception and incurred a loss of
$4,073,315 during the year ended Dec. 31, 2021. These events or
conditions, along with other matters, indicate that a material
uncertainty exists that may cast substantial doubt about its
ability to continue as a going concern.
RIOT BLOCKCHAIN: Supplements Disclosure With Omitted Mt'l Weakness
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Riot Blockchain, Inc. is supplementing its disclosures regarding
the material weaknesses identified by management, as set forth
under Part I - Item 4. "Controls and Procedures" of its Quarterly
Reports on Form 10-Q for the fiscal quarters ended March 31, 2022,
and June 30, 2022, as filed on May 10, 2022, and Aug. 15, 2022,
respectively, with the omitted material weakness set forth below.
Due to administrative oversight, the material weakness, which was
previously disclosed under Part II - Item 9A. "Controls and
Procedures" of the Company's Annual Report on Form 10-K for the
year ended Dec. 31, 2021, as filed on March 16, 2022, was
inadvertently omitted from each of the Quarterly Reports.
Accordingly, the Company filed a current report on Form 8-K with
the Securities and Exchange Commission to correct this omission,
and the below material weakness should be read in conjunction with
the other material weaknesses set forth in the Quarterly Reports.
Except as presented in this filing, the Company is not updating any
other information in the Quarterly Reports.
Omitted Material Weakness:
The Company did not properly design and implement controls to
ensure that certain inputs and assumptions utilized in the
valuation of intangible assets identified in its accounting for
business combinations were reasonable in the circumstances. Such
deficiency also resulted in material adjustments required to the
Company's provision for income taxes.
The Company's disclosures under Part I - Item 4. "Controls and
Procedures" of its Quarterly Report for the quarter ended June 30,
2022, is hereby presented as follows, in order to illustrate the
above described correction:
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive
Officer (principal executive officer) and our Chief Financial
Officer (principal financial officer), has evaluated the
effectiveness of our disclosure controls and procedures (as such
term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange
Act) as of June 30, 2022 to ensure that the information required to
be disclosed by the Company in the reports that it files or submits
under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms,
and that information required to be disclosed in the reports we
file or submit under the Exchange Act is accumulated and
communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, to allow timely decisions
regarding required disclosures. Based on this evaluation, our
management concluded that our disclosure controls and procedures
were not effective at the reasonable assurance level as of June 30,
2022, due to the following material weaknesses:
1) The Company did not design and/or implement user access
controls to ensure appropriate segregation of duties that would
adequately restrict user and privileged access to the financially
relevant systems and data to the appropriate Company personnel.
2) The Company did not design and implement program change
management controls for certain financially relevant systems to
ensure that IT program and data changes affecting the Company's (i)
financial IT applications, (ii) digital currency cold storage
wallets and mining equipment, and (iii) underlying accounting
records, are identified, tested, authorized and implemented
appropriately to validate that data produced by its relevant IT
system(s) were complete and accurate. Automated process-level
controls and manual controls that are dependent upon the
information derived from such financially relevant systems were
also determined to be ineffective as a result of such deficiency.
3) The Company did not properly design or implement controls to
ensure that data received from third parties is complete and
accurate. Such data is relied on by the Company in determining
amounts pertaining to revenue - mining and cryptocurrency assets
held is complete and accurate. Automated process-level controls
and manual controls that are dependent upon the information derived
from such financially relevant systems were also determined to be
ineffective as a result of such deficiency.
4) The Company did not properly design and implement controls to
ensure that certain inputs and assumptions utilized in the
valuation of intangible assets identified in its accounting for
business combinations were reasonable in the circumstances. Such
deficiency also resulted in material adjustments required to the
Company's provision for income taxes.
5) During testing of procedures during 2021, the Company's
subsidiary, Whinstone, did identify that there were material
weaknesses over internal controls at Whinstone. The weaknesses
noted that Whinstone did not properly document the design of its
internal controls; did not design and implement procedures to
ensure proper segregation of duties and all transactions are
entered and disclosed timely and accurately in accordance with
GAAP, which includes transactions with related parties.
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.
RJRAMDHAN GROUP: Case Summary & Seven Unsecured Creditors
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Debtor: RJRamdhan Group LLC
2060 W 21st St
Jacksonville, FL 32209-4746
Business Description: RJRamdhan owns an investment property
located at 2060 W 21st St, Jacksonville, FL
valued at $559,028.
Chapter 11 Petition Date: October 4, 2022
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 22-01998
Judge: Hon. Jason A. Burgess
Debtor's Counsel: Chad Van Horn, Esq.
VAN HORN LAW GROUP, P.A.
500 NE 4th St Ste 200
Fort Lauderdale, FL 33301-1163
Tel: (954) 765-3166
Email: chad@cvhlawgroup.com
Total Assets: $619,028
Total Liabilities: $1,360,167
The petition was signed by Jonathan Ramdhan as manager.
A copy of the Debtor's list of seven unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/ED4OIAY/RJRamdhan_Group_LLC__flmbke-22-01998__0003.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/WHHRVPA/RJRamdhan_Group_LLC__flmbke-22-01998__0001.0.pdf?mcid=tGE4TAMA
SEAICH CARD: Case Summary & 20 Largest Unsecured Creditors
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Debtor: Seaich Card & Souvenir Corporation
d/b/a Seaich Corporation
4375 W 1980 S
Salt Lake, UT 84104
Business Description: Seaich Card is a privately held company in
the wholesale trade business.
Chapter 11 Petition Date: October 5, 2022
Court: United States Bankruptcy Court
District of Utah
Case No.: 22-23909
Judge: Hon. R. Kimball Mosier
Debtor's Counsel: Matthew M. Boley, Esq.
COHNE KINGHORN, P.C.
111 E. Broadway, 11th Floor
Salt Lake City, UT 84111
Tel: 801-363-4300
Email: mboley@cohnekinghorn.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Uriah Kennedy as president.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/GA7FIMY/Seaich_Card__Souvenir_Corporation__utbke-22-23909__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Cargo-Link International $373,542
881 South 3760 West
Salt Lake City, UT 84104
Email: nfenton@cargolink.com
2. Zhejiang Willing $365,772
Foreign Trading Co. Ltd
308 North
Zhongshan Road
Hangzhou China
24233-2000
Email: lena@cstsports.com
3. Tianjin RSD Bicycleco, Ltd. $288,162
Rm 207-10 2
Quanjian Rd
Douzhangshuang
Twn Wuqing Dstct
Tiajin China
06110-2000
Email: jerry@rsdbicycle.com
4. Shanghai QiQu $176,924
Youle Co., Ltd.
No. 1517 Yanchao
Rd Pudong
Shangai China
20000-0100
Email: emilyfu@qiqufun.com
5. New Time Plastic Inventory $154,361
Manufacturing Limited
Unit 503 5/F
Silvercord Twr2
30 Canton Rd TSIM
Sha Tsui
Kowloon Hong Kong
Email: sales8@infatables.cn
6. Ryder Truck Rent $137,595
Payable, Inc
11690 NW 105 Street
Miami, FL 33178
Email: realestate@ryder.com
7. Hebei Sujie Bike Co., Ltd. $111,311
Room 1803,
Ximeihuajie
Building, No.8
Huifeng Road,
TJ21080048, Qiaoxi Dist
Shijiazhuang, Hebei,
China 05000
Email: sales@sujiebike.com
8. TQL Logistics $110,480
745 W New Circle
Rd Bldg 200 Ste 300
Lexington, KY 40511
Email: cbevins@tql.com
9. Block Logistics $73,898
PO Box 3354
Salt Lake City, UT 84110
Email: phillip@shipblock.com
10. Guangdong Shunde $57,165
Noon Elec. Appliance
Floor 1-4 Bldg A No
8 Zhiey R Beijao Twn
Shunde Dstct, Foshan
Guangdong China
52730
Email: dina@douhe-tec.com
11. Baiajn Plastics Product Ltd $54,296
No. 108 Heshi Rd.
Hekengcun Qiantou Twn
Dongguan
Guangdong China, IA 52300
Email: baijian2018@163.com
12. AlphaGraphics $36,899
309 E State St.
American Fork, UT
84003
Email: ar615@alphagraphics.com
13. Huizhou Licheng $35,598
Inflatable Toys Products
No 1 Industrial Zone
Luo Cun Changning T
BOluo Country
Huizhou
Guangdong China
52730
Email: lcwj3@lcwjpvc.cn
14. Keith W Taufer $25,000
750 N 390 E
American Fork, UT 84003
15. Wuyi Chaoyang $23,758
Plastic Co., Ltd.
No 8 Shenliu
Siaowei Garden Niubei
Jin Industrial Zone Wuyi
Zhejiang China 31570
Email: sales1@china-chaoyang.com
16. Edd L Harrach $20,000
257 E Hampton Ave.
Salt Lake City, UT
84111
17. Aurimar Miranda-Rocha $20,000
1296 N Colonel Road
Salt Lake City, UT
84116
18. TForce Freigh Freight $16,963
28013 Network Place
Chicago, IL 60673
Email: ardepartment@ar.tforcefreight.com
19. Wen X Gomez $16,000
3310 Hardin Street
Castle Rock, CO 80109
20. Ningbo Jiaview $15,530
Supply Chain Co., Ltd.
4 Floor Bldg 3 Shangdong
Business Center
926 Canghai Rd
Ningbo China
31236-2000
Email: billy.qiu@zjfreight.com
SERMA HOLDINGS: Case Summary & Four Unsecured Creditors
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Debtor: SERMA Holdings, LLC
8132 Parkway Drive
Leeds, AL 35094
Business Description: The Debtor is engaged in activities related
to real estate.
Chapter 11 Petition Date: October 5, 2022
Court: United States Bankruptcy Court
Northern District of Alabama
Case No.: 22-02430
Judge: Hon. Tamara O. Mitchell
Debtor's Counsel: Harry P. Long, Esq.
THE LAW OFFICES OF HARRY P. LONG, LLC
10 W 11th Street Suite 2A
Anniston, AL 36201
Tel: (256) 237-3266
Email: hlonglegal8@gmail.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by J. Michael White as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/OFO4DMQ/SERMA_Holdings_LLC__alnbke-22-02430__0001.0.pdf?mcid=tGE4TAMA
SHEA HOMES: Moody's Raises CFR to Ba3 & Alters Outlook to Stable
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Moody's Investors Service upgraded the Corporate Family Rating and
senior unsecured notes of Shea Homes Limited Partnership to Ba3
from B1 and the Probability of Default Rating to Ba3-PD from B1-PD.
The company's speculative grade liquidity rating is unchanged at
SGL-2. The outlook was revised to stable from positive.
"The upgrade recognizes Shea Homes' improved credit profile as the
company implements its growth strategy through the opening of new
communities, which has resulted in margin growth and deleveraging,"
stated Moody's Vice President-Senior Analyst Griselda Bisono.
"Moody's expect Shea Homes to weather the current weakening housing
market well, and actually reduce leverage further, with debt to
capitalization trending towards 31% by 2024 as a result of
increased retained earnings and some debt repayment," added
Bisono.
The stable outlook reflects Moody's expectation that Shea Homes
will maintain a conservative financial policy, including low
leverage and good liquidity.
Upgrades:
Issuer: Shea Homes Limited Partnership
Corporate Family Rating, Upgraded to Ba3 from B1
Probability of Default Rating, Upgraded to Ba3-PD from B1-PD
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 (LGD4)
from B1 (LGD4)
Outlook Actions:
Issuer: Shea Homes Limited Partnership
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Shea Homes' Ba3 CFR reflects its broad mix of home offerings across
multiple price points, strong brand recognition and prudent
leverage profile. Gross margin will moderate over the next 18-24
months to about 20-21%, which considers price reductions through
the use of incentives to maintain volume, offset by reduced,
although still high, raw material costs and easing supply chain
constraints. Also, despite expected lower home sale growth amid a
rising mortgage interest rate environment, Shea Homes mix of move
up and luxury products should help reduce earnings volatility, as
these product types tend to have more stability through economic
cycles relative to entry level homes. These factors are offset by
the company's California concentration, which makes up close to
half of Shea Homes' revenue. Finally, the rating considers industry
cost pressures, including land, labor and materials that could
negatively impact gross margin, as well as the cyclical nature of
the homebuilding industry that could lead to protracted revenue
declines.
Shea Homes' SGL-2 rating reflects Moody's expectation that the
company will maintain good liquidity over the next 12 to 18 months
despite expected negative free cash flow in 2022 and 2023. Moody's
forecast take into account a combination of increased land
investment to support future growth and increased tax distribution
to the company's shareholders due to higher pretax income. Moody's
expects the company to comfortably cover its capital needs with
cash on balance sheet, which is expected to remain between $200-225
million through 2024. Moody's also expects the company's $175
million senior unsecured revolver will remain largely undrawn over
this same time horizon.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Shea Homes maintains strong credit
metrics, including debt to book capitalization sustained below 40%
and EBIT to interest above 5.0x. An upgrade would also require
maintenance of a good liquidity profile, including consistent free
cash flow generation. Finally, an upgrade would require a
meaningful increase in size and scale, while continuing to
diversify geographically.
The ratings could be downgraded if debt to book capitalization
approaches 50%, EBIT to interest falls below 4.0x or adjusted gross
margins fall below 20%, all on a sustained basis. A downgrade would
also result should Shea Homes experience a material deterioration
in liquidity or engages in aggressive shareholder friendly
activities.
Established in 1968 and headquartered in Walnut, CA, Shea Homes
Limited Partnership is one of the largest private homebuilding
companies in the US.
The principal methodology used in these ratings was Homebuilding
And Property Development Industry published in January 2018.
SPG HOSPICE: Trustee Wins Cash Collateral Access Thru Jan 2023
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The U.S. Bankruptcy Court for the District of Arizona authorized
James Cross, the duly appointed and acting Chapter 11 Trustee of
SPG Hospice, LLC, Scottsdale Physicians Group, PLC, and United
Telehealth Corp., to use cash collateral on an interim basis
through January 31, 2023, in accordance with the budget, with a 10%
variance and the Debtors' agreement with Arizona Bank & Trust and
TOPPS, LLC.
As previously reported by the Troubled Company Reporter, the
Debtors are in default to Arizona Bank under several loan
documents.
On March 18, 2020, Arizona Bank made: (1) a multiple advance loan
(Loan No. XXXXX6771) in the maximum principal amount of $4,000,000
to the Borrowers for working capital and other general corporate
purposes; and (2) a term loan (Loan No. XXXXX6772) in the maximum
principal amount of $1,950,000 to refinance certain existing term
debt of the Borrowers. The RLC Loan and the Term Loan were
evidenced by the "Loan Agreement" executed by the Borrowers and
Arizona Bank with an effective date of March 18, 2020.
On March 18, 2020, the Borrowers, as makers, executed the
"Revolving Promissory Note" in the maximum loan amount of
$4,000,000 in favor of Arizona Bank, as payee. The RLC Note had a
maturity date of March 18, 2021.
On March 18, 2020, the Borrowers, as makers, also executed the
"Term Promissory Note" in the principal sum of $1,950,000 in favor
of Arizona Bank, as payee. The Term Note had a maturity date of
March 18, 2024.
TOPPS, LLC contended it made two loans to debtor SPG:
* The first, made on June 23, 2021, in the principal amount of
$1.5 million, is evidenced by, among other things, a Secured
Promissory Note in the principal amount of $1.5 million and a
Collateral Security Agreement through which, among other things,
SPG granted TOPPS a security interest in the accounts receivable
described therein. The security interest was perfected by the
filing of a UCC-1 financing statement with the Arizona Secretary of
State on July 7, 2021.
* The second, made on September 30, 2021, in the principal
amount of $750,000, is evidenced by, among other things, a Secured
Promissory Note in the principal amount of $750,000 and a
Collateral Security Agreement through which, among other things,
SPG granted TOPPS a security interest in the accounts receivable
described therein. The security interest was perfected by the
filing of a UCC-1 financing statement with the Arizona Secretary of
State on October 15, 2021.
Consistent with the Budget and as a form of adequate protection,
during the first week of the month, the Trustee will pay to Arizona
Bank the equivalent of interest only on the three matured Loans,
i.e., $23,000. In addition to the Minimum Adequate Protection
Payment, by no later than the fifteenth day of each month during
the Extension Period, the Trustee will pay to Arizona Bank an
additional payment equal to 10% of the average net operating income
of the Debtors during the prior three-month period Pursuant to 11
U.S.C. sections 363 and 364, Arizona Bank will reverse the Setoff
and release the $1.2 million to the Debtor's estate to be used
exclusively as set forth in the Agreed Order. After the
reconsideration period expires, and upon further Court order, the
Trustee will compensate the healthcare providers represented by Mr.
Cotterman using the $1,200,000 in accordance with the terms of the
Advance Agreement with HonorHealth.
The Court said Arizona Bank, TOPPS, and the Trustee may agree to
extend the use of cash collateral pursuant to the Order past the
Extension Period, as well as additional budgets approved by Arizona
Bank and TOPPS on the same terms of the Order by agreement and
without further notice to any parties or further orders of the
Court.
A copy of the order and the Debtors' budgets is available at
https://bit.ly/3EjpD9Y from PacerMonitor.com.
SPG, SPG Hospice project $6,921,293 in total inflows and $6,804,430
in total outflows for the 30-week ending December 30, 2022.
About SPG Hospice, LLC
SPG Hospice, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 22-02385) on April 19,
2022. In the petition signed by Nima Ghadimi, managing member, the
Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Eddward P. Ballinger Jr. oversees the case.
Jonathan Philip Ibsen, Esq., at Canterbury Law Group, LLP is the
Debtor's counsel.
SPRING MOUNTAIN: Files Emergency Bid to Use Cash Collateral
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Spring Mountain Vineyard Inc. asks the U.S. Bankruptcy Court for
the Northern District of California, Santa Rosa Division, for
authority to use cash collateral on an interim basis pending a
final hearing.
The Debtor's sole secured creditor is MGG California LLC, which is
the administrative agent and collateral agent for a group of
lenders who are affiliated with MGG. The Debtor obtained a $185
million loan from MGG in October 2018. Since that date, the Debtor
and MGG have amended the credit facility twice, entered into a
forbearance agreement, and amended the terms of that forbearance
agreement two times, most recently in July 2022. As a result of
these transactions, with one exception, MGG possesses a security
interest in all of the Debtor's assets: its real property, its 135
vineyard blocks occupying 150 acres, the grapes that are currently
being harvested, two winery buildings, the estate manor, 79,000
cases of wine inventory, the caves where the Debtor stores its wine
casks, the well and reservoir where the Debtor gets its liquor
license, its accounts receivable, and its cash.
MGG will likely inform the Court that regular monthly payments on
the Loan have not been made for some time. The Debtor asserts there
is an element of truth to that fact, however, the following is also
true which is that the following lump sum payments have been made
to MGG as a result of the liquidation of certain collateral that
they hold and as a result of payment(s) made by the Debtor or its
principal.
Those payments are as follows:
A. Principal Reduction Payment Through Real Estate Sale of
Principal's Residence -- $40 million
B. Principal Reduction Payment January 2022 -- $25 million
C. Principal Reduction Payment Through Payment by Insurance
Carrier for Fire Damage Suffered at the Debtor's Vineyard which was
remitted to MGG pursuant to its security interests in the policy --
$7.25 million
Whether through asset sales of assets of the Debtor's principal,
Mr. Jaqui Safra or through collections on insurance claims, since
2018, MGG has been paid $72.25 million. In addition, with regular
payments and the application of the interest reserve, the total MGG
has received is approximately $103.6 million. In spite of these
very substantial payments, MGG's indebtedness has accrued interest
at a rate of 16% per annum for a number of years. Having borrowed
$185 million in 2018 and having paid over $100,000,000 toward that
debt, MGG's debt has increased by $20 million.
MGG also has a security interest in two non-Debtor assets. As a
result of the amendments to the credit facility after October 2018,
the Debtor's beneficial owner Mr. Jacob Safra pledged additional
collateral to MGG to secure the Loan. He pledged a 100% interest in
the Debtor (held by a company -- Freecrest Limited -- controlled by
Mr. Safra). Additionally, he granted MGG a $75 million third lien
in a company owned by Mr. Safra -- Encyclopaedia Britannica, Inc.,
the company that holds the famed Encyclopedia Britannica and
Merriam-Webster dictionary and thesaurus, a company with an
estimated value of $450 million to $550 million. The two liens
ahead of MGG total less than $150 million, making MGG's lien in
Britannica oversecured by three times.
On September 30, 2022 -- the day after the Petition Date -- Mr.
Safra transferred $600,000 of his own money into the Debtor's bank
account as an equity infusion. He did this voluntarily for the
purpose of covering any operating shortfall in the cash collateral
budget which the Debtor asks the Court to approve on an interim
basis.
The Unrestricted Cash will provide an operating cushion that will
cover the Debtor's operating costs through November 30, 2022. Mr.
Safra will make an additional cash infusion of $1.4 million by
November 15 in order to cover operating costs through December 31.
The Debtor claims MGG will likely indicate that Mr. Safra is
unreliable or has made promises not kept over the course of this
Loan. The Debtor begs to differ. Mr. Safra has paid MGG $72.5
million through the sale of his assets or from insurance policy
recoveries from the Glass Fire.
The Debtor contends MGG's adequate protection comes from a
combination sources. The first is the equity cushion provided by
all of the collateral in which the MGG has an interest:
* real property (recently appraised at $218.7 million),
* the Debtor's 79,000 cases of wine inventory ($164 million at
retail, $80 million at wholesale), and
* the third lien in Britannica ($75 million).
Additionally, as shown in the Declaration of Jay B. Spievack, MGG
has a security interest in a litigation action filed by the Debtor
against a number of its insurers for damages suffered and not paid
by the insurance carriers stemming from the Glass Fire. Mr.
Spievack, an expert in insurance coverage litigation, projects the
lawsuit is worth $35 million.
Not only does MGG have a security interest in this eventual
recovery, but they have already collected and applied to their
prepetition debt, $7.25 million of the total of $8.25 million that
has been paid by certain of the Debtor's insurance carriers. The
total value of that collateral is $408,700 based upon the wholesale
value of the Debtor's inventory, and $492.7 million based upon the
retail value of the Debtor's wine inventory.
MGG is owed, as of the Petition Date, $205 million. Further, the
value of the underlying collateral is increasing. Wine inventory
increases in value as it ages, and the Debtor's vineyard property
has steadily and dramatically increased in value over the years.
The second source of protection for MGG is the Debtor's plan to pay
down MGG and refinance the Property. Mr. Safra has engaged, and is
actively working with, well-known bankers at William Blair &
Company to monetize the equity of Britannica. The private placement
-- which is expected to close by the end of the year -- will enable
Mr. Safra to pay $75 million to MGG, reducing the amount owing to
approximately $130 million, and at that debt level, Mr. Safra will
be able to obtain a refinance of the Loan.
A hearing on the matter is set for October 6 at 3 p.m.
A copy of the motion is available at https://bit.ly/3C9Hbm5 from
PacerMonitor.com.
About Spring Mountain Vineyard Inc.
Spring Mountain Vineyard Inc. is a privately owned estate comprised
of four vineyards. Spring Mountain Vineyard's beneficial owner is
Jacob Safra, who also owns Encyclopaedia Britannica, Inc., the
company that holds the famed Encyclopedia Britannica and
Merriam-Webster dictionary and thesaurus, with an estimated value
of $450 million to $550 million.
Spring Mountain Vineyard sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-10381) on
September 29, 2022. In the petition signed by Constantine S.
Yannias, as president, the Debtor disclosed up to $500 million in
both assets and liabilities.
Judge Charles Novack oversees the case.
Victor A. Sahn, Esq., at Greenspoon Marder, LLP, is the Debtor's
counsel.
SPRINGS FIREPLACE: Case Summary & One Unsecured Creditor
--------------------------------------------------------
Debtor: Springs Fireplace Properties LLC
1008 Springs Fireplace Road
East Hampton, NY 11937
Business Description: The Debtor has equitable interest in a
property located at 444 E. 57th Street, Apt.
6D New York, NY having a comparable sale
value of $1.40 million.
Chapter 11 Petition Date: October 4, 2022
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 22-72699
Judge: Hon. Louis A. Scarcella
Debtor's Counsel: Rachel L. Kaylie, Esq.
LAW OFFICES OF RACHEL L. KAYLIE, P.C.
1702 Avenue Z
Suite 205
Brooklyn, NY 11235
Tel: 718-615-9000
Fax: 718-228-5988
Email: rachel@kaylielaw.com
Total Assets: $1,400,000
Total Liabilities: $4,286,579
The petition was signed by Michael Dubin as owner.
The Debtor listed First Republic Bank as its only unsecured
creditor holding a claim of $23,599.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/POULMEQ/Springs_Fireplace_Properties_LLC__nyebke-22-72699__0001.0.pdf?mcid=tGE4TAMA
TCH CONSTRUCTION: Case Summary & 19 Unsecured Creditors
-------------------------------------------------------
Debtor: TCH Construction Group, Inc.
f/d/b/a TCH Construction Group LLC
1509 W. 5th Street
Lumberton, NC 28358
Business Description: TCH is a construction company in Lumberton,
North Carolina.
Chapter 11 Petition Date: October 4, 2022
Court: United States Bankruptcy Court
Eastern District of North Carolina
Case No.: 22-02268
Judge: Hon. David M. Warren
Debtor's Counsel: Laurie B. Biggs, Esq.
BIGGS LAW FIRM PLLC
9208 Falls of Neuse Road Suite 120
Raleigh, NC 27615
Tel: (919) 375-8040
Fax: (919) 341-9942
Email: lbiggs@biggslawnc.com
Total Assets: $5,667,974
Total Liabilities: $787,144
The petition was signed by Timothy W. Monroe as vice-president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 19 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/RNSR22Q/TCH_Construction_Group_Inc__ncebke-22-02268__0001.0.pdf?mcid=tGE4TAMA
TEEZ SALON: Wins Cash Collateral Access Thru Dec 31
---------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas,
Sherman Division, authorized Teez Salon and Spa, LLC to continue
using cash collateral on a final basis in accordance with the
budget, through December 31, 2022.
The court said the rights and protections afforded to Bankers
Healthcare Group, LLC pursuant to the First Interim Cash Collateral
Order are extended through and including December 31.
As previously reported by the Troubled Company Reporter, the Debtor
asserted it has an immediate need to use the cash collateral of
Bankers Healthcare Group, LLC, the Debtor's secured creditor, which
claims a lien on substantially all of the Debtor's property
including accounts, equipment, inventory and other personal
property. The cash collateral will be used to continue the Debtor's
ongoing operations.
As adequate protection, the Secured Lender was granted valid,
binding, enforceable, and perfected replacement liens in accordance
with Bankruptcy Code Sections 361, 363, 364(c)(2), 364(e), and 552,
co-extensive with its pre-petition 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 Debtor may also use cash collateral to pay any Subchapter V
Trustee fees incurred and awarded during the case.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3C6m1W5 from PacerMonitor.com.
About Teez Salon and Spa, LLC
Teez Salon and Spa, LLC owns and operates a hair salon. The Debtor
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. E.D. Tex. Case No. 22-41050) on August 21, 2022. In the
petition filed by Justin Lattimore, managing member, the Debtor
disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Brenda T. Rhoades oversees the case.
Howard Marc Spector, Esq., at Spector & Cox, PLLC is the Debtor's
counsel.
TOWER HILL: A.M. Best Withdraws B(Fair) Financial Strength Rating
-----------------------------------------------------------------
AM Best has downgraded the Financial Strength Rating to B (Fair)
from B+ (Good) and the Long-Term Issuer Credit Rating (Long-Term
ICR) to "bb" (Fair) from "bbb-" (Good) of Tower Hill Prime
Insurance Company (Tower Hill Prime) (Gainesville, FL). The outlook
of these Credit Ratings (ratings) is negative. Concurrently, AM
Best has withdrawn these ratings as the company has requested to no
longer participate in AM Best's interactive rating process.
The ratings reflect Tower Hill Prime's balance sheet strength,
which AM Best assesses as adequate, as well as its marginal
operating performance, limited business profile and appropriate
enterprise risk management (ERM).
The downgrade of Tower Hill Prime's Long-Term ICR reflects a
significant decline in its overall risk-adjusted capitalization, as
measured by the Best Capital Adequacy Ratio (BCAR), to the very
strong level from the strongest level, coupled with continued
surplus erosion and elevated financial leverage of the holding
company. While Tower Hill Prime has benefitted from capital
contributions through the holding company and the issuance of
surplus notes, the quality of operating company capital has
deteriorated as surplus notes currently make up more than half of
Tower Hill Prime's second quarter 2022 surplus. Additionally, Tower
Hill Prime continues to face challenges in adequately setting
reserves. Reserves, which continue to develop adversely despite
strengthening measures, are influenced partly by widespread social
inflation driven by increased litigation in the company's operating
territory. Combined with the aforementioned issues is continually
climbing financial leverage of the holding company, Tower Hill
Holdings, Inc., which AM Best's continues to view as negative,
adding pressure to the overall balance sheet strength assessment.
The negative outlooks reflect AM Best's concern related to the
effectiveness of current risk mitigation strategies as they relate
to Tower Hill Prime's ERM assessment and the execution risk of
exiting the volatile Florida personal lines segment. Tower Hill
Prime has planned to non-renew about 50% of its Florida personal
lines business by the end of 2022 and completely exit the segment
by 2023. The company's Florida personal lines policies will be
moved to Tower Hill Insurance Exchange, a separate entity from
Tower Hill Prime created specifically to house this volatile
segment. Furthermore, the negative outlooks reflect pressure on the
company's operating performance with the severity of recent results
not aligning with AM Best's assessment of marginal. Tower Hill
Prime faces several challenges ranging from severe hurricanes, more
frequent lower level weather-related events and social inflation.
TRANSOCEAN LTD: Unit Issues $300M New Exchangeable Bonds Due 2029
-----------------------------------------------------------------
In connection with the closing of the previously announced private
exchange and purchase transactions, Transocean Inc., a wholly-owned
subsidiary of Transocean Ltd., issued $300,000,000 aggregate
principal amount of new 4.625% Senior Guaranteed Exchangeable Bonds
due 2029 (the "New Exchangeable Bonds"), guaranteed by the Parent
and Transocean Holdings 1 Limited, Transocean Holdings 2 Limited
and Transocean Holdings 3 Limited, and 22,175,910 warrants to
purchase shares, CHF 0.10 per share, of the Parent, in exchange for
(a) $72,976,000 aggregate principal amount of the Company's
existing 0.5% Exchangeable Bonds due 2023 and fully and
unconditionally guaranteed by the Parent, (b) $43,254,000 aggregate
principal amount of the Company's existing 7.25% Senior Notes due
2025 issued by Transocean Inc. and fully and unconditionally
guaranteed by the Parent and the Guarantors, and/or (c)
$188,095,000 in cash.
Transocean intends to use the proceeds from the sale of the New
Exchangeable Bonds and Warrants (i) to repurchase $13.8 million in
outstanding principal of the 2025 Priority Guaranteed Notes for
$11.7 million plus accrued and unpaid interest and (ii) for general
corporate purposes.
Indenture Relating to the New Exchangeable Bonds
The New Exchangeable Bonds were issued pursuant to an indenture,
dated Sept. 30, 2022, between the Company, the Parent and the
Guarantors, and Truist Bank, as trustee.
The New Exchangeable Bonds have an initial exchange rate of
290.6618 per $1,000 principal amount of bonds (equivalent to
approximately $3.44 per Share) and will be exchangeable into
Shares, cash or a combination thereof at the election of the
Company. On or after March 30, 2026, the Company may redeem the
New Exchangeable Bonds if the closing price of the Shares has
exceeded 115% of the exchange price for at least 20 trading days in
a consecutive 30-day trading period, subject to a make-whole
payment through March 30, 2028, for any exchanges effectuated
following such redemption.
The Indenture contains covenants that, among other things, limit
the Company's ability to allow its subsidiaries to incur certain
additional indebtedness, incur certain liens on its drilling rigs
or drillships without equally and ratably securing the New
Exchangeable Bonds, engage in certain sale and lease-back
transactions covering any of its drilling rigs or drillships and
consolidate, merge or enter into a scheme of arrangement qualifying
as an amalgamation. The Indenture also contains customary events of
default.
Indebtedness under the New Exchangeable Bonds may be accelerated in
certain circumstances upon an event of default as set forth in the
Indenture.
In the event of a "fundamental change" (as defined in the
Indenture), holders of the New Exchangeable Bonds may require the
Company to repurchase all or any portion of their New Exchangeable
Bonds for cash at a repurchase price equal to 101% of the principal
amount of such New Exchangeable Bonds on the fundamental change
repurchase date, plus accrued and unpaid interest, if any, to, but
excluding, such repurchase date. In the event of a "listing
failure event" or a "tax event" (both as defined in the Indenture),
holders of the New Exchangeable Bonds may require the Company to
repurchase all or any portion of their New Exchangeable Bonds for
cash at a repurchase price equal to 100% of the principal amount of
such New Exchangeable Bonds on the repurchase date, plus accrued
and unpaid interest, if any, to, but excluding, such repurchase
date.
Warrant Agreement
The terms of the Warrants are governed by a warrant agreement,
dated Sept. 30, 2022, between the Company, the Parent and
Computershare Inc. and Computershare Trust Company, N.A.
collectively as warrant agent.
Each Warrant is exercisable either in full or in part, at the
election of the holder, for one Share at any time after the date of
issuance until 5:00 p.m., New York City time, on March 13, 2026, at
an exercise price equal to $3.71 per Share, subject to customary
anti-dilution adjustments.
The Warrant Agreement provides, among other things, that the
Company, in its sole discretion, may elect to require holders of
Warrants to exercise on either a cash or cashless basis. If at any
time prior to the Expiration Time, the closing sale price of Parent
shares on the New York Stock Exchange equals or exceeds $10.00 per
Share, subject to adjustment in accordance with the Warrant
Agreement, for a period of five consecutive trading days, the
Company will have the right to effect an exercise of all but not
less than all of the Warrants upon notice to the holders of the
Warrants.
About Transocean
Transocean Ltd. is an international provider of offshore contract
drilling services for oil and gas wells. The Company specializes
in technically demanding sectors of the offshore drilling business
with a particular focus on ultra-deepwater and harsh environment
drilling services.
Transocean reported a net loss of $591 million for the year ended
Dec. 31, 2021, a net loss of $568 million for the year ended Dec.
31, 2020, and a net loss of $1.25 billion for the year ended Dec.
31, 2019. As of June 30, 2022, the Company had $20.55 billion in
total assets, $1.53 billion in total current liabilities, $7.84
billion in total long-term liabilities, and $11.17 billion in total
equity.
* * *
As reported by the TCR on Sept. 20, 2022, S&P Global Ratings
lowered its issuer credit rating on Switzerland-domiciled offshore
drilling contractor Transocean Ltd. S&P said, "The negative
outlook reflects that we expect to lower our issuer credit rating
to 'SD' (selective default) upon the completion of the
transactions, which we expect around Sept. 30, 2022. Thereafter,
we intend to review our ratings on Transocean to incorporate the
debt exchanges, other recent events, and our forward-looking
opinion on the creditworthiness of the entity."
TRILOGY INTERNATIONAL: Says Shares Can Be Traded After Dec. 31
--------------------------------------------------------------
Trilogy International Partners Inc. announced that because it no
longer qualifies as a foreign private issuer under United States
securities laws, its current resale registration of Trilogy common
shares on Form F-3 will not be available as of the close of
business on Dec. 31, 2022.
The termination of the resale registration will not affect the
ability of investors who are non-US persons, as defined in
Regulation S of the US Securities Act of 1933, as amended, to
continue to sell their Common Shares in 2023 or thereafter.
US persons who hold Common Shares will continue to be able to sell
their shares after Dec. 31, 2022 pursuant to Regulation S of the
1933 Act so long as such sales are made on a designated offshore
securities market such as the Toronto Stock Exchange, on which the
Common Shares are currently listed, or a trading board of the TSX
Venture Exchange, on which Trilogy would expect to be listed should
it no longer qualify for trading on the Toronto Stock Exchange.
Regulation S requires that a US person selling unregistered shares
on a DOSM not know that the sale has been pre-arranged with a buyer
in the US.
US persons may also sell unregistered Common Shares via a private
placement.
Trilogy advises US persons who may wish to sell Common Shares after
Dec. 31, 2022 to consult with counsel and their brokers to ensure
that any sales comply with applicable securities regulations.
About Trilogy International
Bellevue, Washington-based Trilogy International Partners Inc.
formerly operated wireless and broadband telecommunications
subsidiaries in Bolivia and New Zealand. It sold its interests in
those subsidiaries in May 2022, distributed a substantial portion
of its proceeds from those transactions to shareholders in the form
of a return of capital in June 2022, and has adopted a plan to
liquidate.
Trilogy reported a net loss of $194.37 million in 2021 following a
net loss of $79.68 million in 2020. As of Dec. 31, 2021, Trilogy
had $803.86 million in total assets, $1.05 billion in total
liabilities, and a total shareholders' deficit of $246.03 million.
* * *
As reported by the TCR on April 6, 2022, Fitch withdrew Trilogy's
ratings for commercial reasons. Fitch reserves the right in its
sole discretion to withdraw or maintain any rating at any time for
any reason it deems sufficient.
UPLIFT RX: Trustee Sues Baker & Hostetler Over 'Massive Fraud'
--------------------------------------------------------------
The liquidating trustee for Uplift RX, LLC, has commenced an
adversary proceeding against law firm Baker & Hostetler, LLP for
acts and omissions of the firm and its attorneys, while they
provided legal services to certain Debtor business entities within
the Alliance Healthcare Network from November 2014 until November
2019.
Yvette Austin Smith, on behalf of the post-confirmation Liquidating
Trust estates of the Debtors, and as assignee of the claims of the
estate's three largest creditors -- LifeScan, Inc., Roche
Diagnostics Corp., and Roche Diabetes Care, Inc. ("Test Strip
Manufacturers"), says Baker provided a broad array of legal
services that permitted management and employees to gain illicit
profits by making materially inaccurate representations to various
third parties.
Starting in November 2014, Baker was retained to "represent
Alliance Health with respect to FDA and Healthcare general
regulatory, corporate diligence and compliance matters." In
February 2017, the FBI raided Alliance's offices and seized company
records. In March, the Debtors' secured lender shut off their
access to cash. As a result of these developments, Alliance could
no longer do business and retained Baker as its
bankruptcy/restructuring counsel. In April 2017, the company filed
voluntary Chapter 11 bankruptcy petitions. Baker continued to
represent Alliance during the Chapter 11 cases through September
13, 2019, the Effective Date of the confirmed Plan.
According to the lawsuit filed in Bankruptcy Court, Baker's legal
services enabled and otherwise provided cover to the company's
deceitful management, directors, and employees -- Scheme
Participants -- to operate, manage, and finance a sophisticated
insurance scheme intertwined with a panoply of improper and
deceptive business practices that caused more than $100 million in
damages to the Debtors and the Test Strip Manufacturers.
At all relevant times, Alliance retained and primarily used the
legal services of three law firms as its dedicated "outside
counsel":
* Baker,
* Bennett Tueller Johnson & Deere, LLC, a local firm based in
Salt Lake City, Utah, and
* Brown & Fortunato PC, a local firm based in Amarillo,
Texas.
Each of these firms, including Baker, enabled the company to
continue to perpetrate, propagate, and otherwise engage in the
Questionable Business Practices, according to the Trustee.
Baker and its attorneys had intimate knowledge of the Questionable
Business Practices as a result of (i) the direct knowledge they
gained while performing legal services on behalf of Alliance, and
(ii) the knowledge they gained from Baker partner Lee Rosebush's
service on Alliance's Board of Directors (which was approved of and
encouraged by Baker).
According to the Complaint, the Scheme Participants conspired to
obtain not-for-retail ("NFR") blood glucose test strips
manufactured and packaged by the Test Strip Manufacturers for sale
by mail-order to beneficiaries of insurance plans that cover
mail-order test strips. The Scheme Participants then arranged for
Alliance-affiliated pharmacies to dispense these test strips to
beneficiaries of pharmacy-benefit insurance plans that covered only
retail test strips. They then submitted fraudulent insurance claims
to the pharmacy-benefit plans, falsely representing that they had
dispensed retail strips. In so doing, the Scheme Participants
fraudulently exploited the substantial difference in wholesale list
price and insurance reimbursement rates between the NFR strips and
the retail strips.
"This lawsuit stems from a straightforward and yet massive fraud.
Shockingly, at the heart of the wrongdoing was the extensive
involvement of one of the nation's largest law firms, Baker &
Hostetler, LLP ("Baker"). For more than two years, Baker helped a
series of corporate executives carry out blatant insurance fraud.
Baker had purported to offer its client expert counsel in
healthcare law, but when attorneys at the firm learned that their
client was engaged in fraudulent activity -- a fraud that was
highly profitable for the client -- the attorneys shirked their
ethical duties and instead used their legal skills and national
reputation to facilitate the illegal activity," the Trustee said in
the 102-page complaint filed Sept. 26, 2022.
"Baker's involvement in the illegal activity at Alliance was
extensive. Baker intentionally misled auditors who were looking for
evidence of precisely the kind of criminal activity that was in
fact occurring; it designed a labyrinth of corporate shell
companies to hide the extent of, and thereby perpetuate, the fraud;
and it installed one of its partners, Lee Rosebush, on Alliance's
Board of Directors to cement the close relationship between
Alliance and Baker. These activities, along with the imprimatur of
legitimacy that representation by Baker's nationally recognized
healthcare practice created, allowed the wrongdoers to conceal
their fraudulent misdeeds for far longer than they may have
otherwise done."
Special Litigation Counsel for the Liquidating Trustee:
David C. Cimo, Esq.
Marilee A. Mark, Esq.
CIMO MAZER MARK PLLC
100 S.E. 2nd Street, Suite 3650
Miami, FL 33131
Tel: (305) 374-6482
Fax: (305) 374-6488
Email: dcimo@cmmlawgroup.com
Email: mmark@cmmlawgroup.com
About Uplift RX
Uplift Rx, LLC, owned and operated a network of pharmacies across
the United States that specialized in providing prescriptions to
patients with chronic health conditions, including diabetes. Uplift
Rx, along with other affiliated entities together make up the
Alliance Healthcare family, a group of privately held companies
headquartered in South Jordan, Utah. The Alliance network consists
of 20 pharmacies across the country, including three pharmacies in
Texas. Since 2006, the Alliance Healthcare companies have been
working to improve the well-being of those with chronic health
conditions such as diabetes.
Uplift Rx, LLC and certain of its affiliates sought protection
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 17-32186) on April 7 and 8, 2017. In the petitions signed by
CEO Jeffrey C. Smith, the Debtors estimated assets of less than $1
million and liabilities of $50 million to $100 million. The cases
were assigned to Judge Marvin Isgur. The Debtors tapped Baker &
Hostetler LLP as legal counsel.
On May 3, 2017, the Office of the U.S. Trustee appointed an
official committee of unsecured creditors. The committee tapped
Fox Rothschild LLP as its legal counsel.
In May 2017, Ronald L. Glass was appointed as the Debtors' Chapter
11 trustee. The trustee hired BakerHostetler LLP as his legal
counsel, and GlassRatner Advisory & Capital Group LLC as his
financial advisor.
The U.S. Trustee for Region 7 on May 3, 2019, appointed five
creditors to serve on an official committee of unsecured creditors
in the Chapter 11 cases of Uplift Rx, LLC, and its affiliates.
Foley & Lardner LLP, replacing Fox Rothschild LLP, served as
counsel to the committee. FTI Consulting, Inc., served as its
financial advisor and forensic accountant.
VERTEX ENERGY: Provides Operational Update on Refinery
------------------------------------------------------
Vertex Energy, Inc. provided an update to its operational and
financial outlook for the Company's Mobile, Alabama Refinery.
Throughput volumes for the third quarter of 2022 are now estimated
to be approximately 68,000 - 69,000 barrels per day (bpd). The
reduced estimated throughput volumes for the quarter, versus the
Company's previously communicated guidance, reflect management's
decision to accelerate significant planned maintenance following
recent and temporary crude supply issues. These supply issues
resulted from third-party disruptions, impacting Vertex's
supplier's ability to fulfill its contracted supply mandate for
water-borne crude oil (which have since been resolved). Including
the impact of these updates, operating expense per barrel for the
third quarter of 2022 is estimated to be approximately $4.25 -
$4.50 per barrel, capture rate on the benchmark Gulf Coast 2-1-1
crack spread is anticipated to remain at 50%-54%, and total capital
expenditures are estimated to remain at $30 - $35 million, for the
third quarter of 2022, as previously communicated.
Updated Projected Outlook
Prior Outlook Updated Outlook
Range Range
(as of 8/9/22) (as of 9/29/22)
------------- ---------------
Mobile Refinery Throughput 72,000 - 74,000 68,000 - 69,000
Volume (bpd)
Direct Operating
Expense ($/barrel) $3.50 - $3.75 $4.25 - $4.50
Capture Rate (%)* 50% - 54% No Change
Capex ($/MM) $30 - $35 No Change
In response to the reduced access to contracted crude supply
volumes, the Company proactively accelerated and completed
maintenance on one of its crude oil distillation units (CDU), as
well as a catalyst change on its distillate and reformer units, a
significant future planned turnaround event, typically performed
every four years, which had been planned for the first quarter of
2023. The opportunistic acceleration of maintenance on the facility
makes use of this unplanned period of curtailment in throughput
volumes by eliminating the need for an additional future period of
downtime necessary to perform such operations. This decision,
along with other minor facility maintenance operations completed
during the period, helps to ensure optimal facility performance and
enhance yields and maximum refinery throughput capacity, ahead of
the anticipated heating oil demand season, together with projected
robust product economics for the fourth quarter of 2022 and first
quarter 2023, based on past years demand.
All aforementioned third-party supply issues have since been
resolved, and all maintenance was completed safely, on time, and
within budget. The Company expects to return to the refinery's
stated operational capacity by the first week of October.
"The unanticipated disruption to our contractually mandated supply
of crude oil, while negatively affecting third quarter throughput
volumes, has once again proved our team's ability to respond to
adverse events in a way that maximizes operational flexibility and
economic value," stated Benjamin P. Cowart, president and CEO of
Vertex, who continued, "By seizing the opportunity to accelerate
significant maintenance on the facility, we believe we have further
improved our position to fully capitalize on the continued strength
in product margins throughout the typically seasonally strong
fourth quarter, as our hedge position rolls off."
No Expected Impact from Hurricane Ian
Hurricane Ian made U.S. landfall as a Category 4 hurricane on
Wednesday, Sept. 28, 2022. At this time, throughput volumes and
operations at the Mobile, Alabama refinery have not been impacted
by the storm, nor does management anticipate any material future
direct impact associated with this storm.
About Vertex Energy
Houston-based Vertex Energy, Inc. is an energy transition company
focused on the production and distribution of conventional and
alternative fuels. Vertex owns a refinery in Mobile (AL) with an
operable refining capacity of 75,000 barrels per day and more than
3.2 million barrels of product storage, positioning it as a leading
supplier of fuels in the region. Vertex is also a processor of
used motor oil, with operations located in Houston and Port Arthur
(TX), Marrero (LA), and Columbus (OH). Vertex also owns a
facility, Myrtle Grove, located on a 41-acre industrial complex
along the Gulf Coast in Belle Chasse, LA, with existing
hydroprocessing and plant infrastructure assets, that include nine
million gallons of storage.
Vertex Energy reported a net loss of $7.66 million for the year
ended Dec. 31, 2021, a net loss of $11.40 million for the year
ended Dec. 31, 2020, and a net loss of $5.49 million for the year
ended Dec. 31, 2019. As of Dec. 31, 2021, the Company had $266.06
million in total assets, $192.55 million in total liabilities,
$43.45 million in total temporary equity, and $30.07 million in
total equity.
VOYAGER DIGITAL: Kilpatrick Townsend Updates on Equity Holders
--------------------------------------------------------------
In the Chapter 11 cases of Voyager Digital Holdings, Inc., et al.,
the law firm of Kilpatrick Townsend & Stockton LLP submitted an
amended report under Rule 2019 of the Federal Rules of Bankruptcy
Procedure, to disclose an updated list of members of Ad Hoc Group
of Equity Interest Holders that it is representing.
As of Sept. 28, 2022, members of the Ad Hoc Group and their
disclosable economic interests are:
STEPHEN TALLEY
* VDL Shares: 538,809
* Economic interests: Certain interests arising from status as a
proposed class member in the class action,
De Sousa v. Voyager Digital Ltd. et al.,
Ontario Superior Court of Justice File No.
CV-22-683699-00CP.
RYAN VICE
* VDL Shares: 148,249
* Economic interests: Certain interests arising from status as a
proposed class member in the class action,
De Sousa v. Voyager Digital Ltd. et al.,
Ontario Superior Court of Justice File No.
CV-22-683699-00CP.
FRANCINE DE SOUSA
* VDL Shares: 13,000
* Economic interests: Certain interests arising from status as
lead plaintiff in the class action, De Sousa
v. Voyager Digital Ltd. et al., Ontario
Superior Court of Justice File No. CV-22-
683699-00CP.
DHESAKA JAYASURIYA
* VDL Shares: 1,983
* Economic interests: Certain interests arising from status as a
proposed class member in the class action,
De Sousa v. Voyager Digital Ltd. et al.,
Ontario Superior Court of Justice File No.
CV-22-683699-00CP.
MICHEL LASSONDE
* VDL Shares: 3,000
* Economic interests: Certain interests arising from status as a
proposed class member in the class action,
De Sousa v. Voyager Digital Ltd. et al.,
Ontario Superior Court of Justice File No.
CV-22-683699-00CP.
SHIKAR PARTAB
* VDL Shares: 4,515
On or about September 19, 2022, AHG retained Kilpatrick Townsend
and Dundon Advisers, LLC in connection with the above-captioned
Chapter 11 Cases.
On September 19, 2022, Kilpatrick Townsend filed its original
Verified Statement Pursuant to Rule 2019 [Dkt. No. 436].
Should additional members join the AHG, Kilpatrick Townsend will
file additional Statements as necessary to comply with Bankruptcy
Rule 2019.
Each member of the AHG has consented to Kilpatrick Townsend's
representation of the group. Kilpatrick Townsend does not represent
any member of the AHG in its individual capacity.
Furthermore, upon information and belief formed after due inquiry,
Kilpatrick Townsend has no independent claims against or equity
interests in VDL or its affiliated debtor entities.
The information contained in this Statement and/or Exhibit A
attached hereto is intended only to comply with Bankruptcy Rule
2019 and is not intended for any other use or purpose, including,
without limitation, any restriction or limitation on the rights,
abilities, or arguments of the AHG. Nothing in this Statement or
Exhibit A hereto, should be construed as (i) a limitation upon, or
waiver of, any member's right to assert, file, and/or amend claims,
if any, in accordance with applicable law and any orders entered in
these Chapter 11 Cases, or (ii) an admission with respect to any
fact or legal theory. Kilpatrick Townsend reserves the right to
amend or supplement this Statement on behalf of the AHG.
Counsel of the Ad Hoc Group of Equity Interest Holders can be
reached at:
KILPATRICK TOWNSEND & STOCKTON LLP
David M. Posner, Esq.
Kelly E. Moynihan, Esq.
The Grace Building
1114 Avenue of the Americas
New York, NY 10036
Telephone: (212) 775-8700
Facsimile: (212) 775-8800
E-mail: dposner@kilpatricktownsend.com
kmoynihan@kilpatricktownsend.com
- and -
KILPATRICK TOWNSEND & STOCKTON LLP
Paul M. Rosenblatt, Esq.
1100 Peachtree Street NE, Suite 2800
Atlanta, GA 30309
Telephone: (404) 815-6500
Facsimile: (404) 815-6555
E-mail: prosenblatt@kilpatricktownsend.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3ryGONa
About Voyager Digital Holdings
Based in Toronto, Canada, Voyager Digital Holdings Inc. --
https://www.investvoyager.com/ -- runs a cryptocurrency platform.
Voyager claims to offer a secure way to trade over 100 different
crypto assets using its easy-to-use mobile application. Through its
subsidiary Coinify ApS, Voyager provides crypto payment solutions
for both consumers and merchants around the globe.
Voyager Digital Holdings Inc. and two affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead
Case No. 22-10943) on July 5, 2022. In the petition filed by
Stephen Ehrlich, chief executive officer, the Debtors estimated
assets and liabilities between $1 billion and $10 billion.
Michael E. Wiles oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy
counsel; Berkeley Research Group, LLC as financial advisor; Moelis
& Company as investment banker; and Consello Group as strategic
financial advisor. Stretto, Inc. is the claims agent.
On July 19, 2022, the U.S. Trustee for the Southern District of New
York appointed an official committee of unsecured creditors in
these Chapter 11 cases. The committee tapped Epiq Corporate
Restructuring, LLC as noticing and information agent.
WALL VENTURES: Seeks Cash Collateral Access
-------------------------------------------
Wall Ventures, Inc. asks the U.S. Bankruptcy Court for the Southern
District of Indiana, Indianapolis Division, for authority to use
cash collateral and grant replacement liens.
The Debtor urgently needs working capital to continue its ordinary
course business operations.
The Debtor operates a trucking service that is a specialty last
mile delivery contractor for FedEx. Its drivers either take their
vehicles home for the evening or leave them at the FedEx
facilities, allowing the Debtor to operate out of its principal's
home. The Debtor financed its acquisition of rolling stock using
traditional purchase money financing but when that proved
insufficient it turned to more volatile sources of operating cash
using internet lenders. Despite the fundamentally unmanageable cash
flow those credit facilities present, the Debtor has a core
operating profitability that will allow it to reorganize, and that
profitability is what drives its ability to leverage cash
collateral for the benefit of all of its creditors.
Prior to the bankruptcy filing date, the Debtor's liquidity needs
were met primarily through the daily operation of the business of
the Debtor and the collection of its accounts receivable in the
ordinary course of the Debtor's business. When cash flow got tight
the Debtor incurred short-term high-risk loans from several such
lenders. It appears that all of those lenders perfected their
interests by filing UCC-1 financing statements but the Debtor is
unable to identify which of those creditors did so as the name of
the secured party is obscured by the use of agents in the financing
statements.
Pearl Delta Funding, LLC, has exercised rights purportedly granted
to it by the Debtor to attach the Debtor's accounts receivable, as
evidenced by the notice delivered to FedEx by Pearl. As a result of
such demand, FedEx has advised the Debtor that it will not deliver
the funds represented by such account. As part of any Order entered
by the Court on the Motion, the Debtor requests that FedEx be
directed to remit those funds to the Debtor, not Pearl. The Amount
due from FedEx is approximately $28,000. The Debtor also has
approximately $7,500 in bank balances and has earned another week's
worth of revenue by working for FedEx on account in the amount of
approximately $14,000. It does appear Pearl is a perfected secured
creditor based on the UCC-1 form it attaches to its demand but
based on the above such interest appears to be subordinate to SBA.
The SBA lien secures the Debtor's EIDL obligation.
A copy of the motion is available at https://bit.ly/3UYqoLz from
PacerMonitor.com.
About Wall Ventures, Inc.
Wall Ventures, Inc. operates a trucking service that is a specialty
last mile delivery contractor for FedEx. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Ind. Case No. 22-03961) on October 4, 2022. In the petition
signed by Steven S. Wall, president, the Debtor disclosed up to
$50,000 in assets and up to $500,000 in liabilities.
KC Cohen, Esq., at KC Cohen, Lawyer, PC, is the Debtor's counsel.
WCP SOLAR: Unsecureds Will Get 30% of Claims in Subchapter V Plan
-----------------------------------------------------------------
WCP Solar Services, LLC filed with the U.S. Bankruptcy Court for
the Northern District of Illinois a Small Business Plan of
Reorganization under Subchapter V dated September 29, 2022.
WCP is a full-service engineering firm that specializes in the
design, development, and installation of Solar Photovoltaic and
Thermal Systems. WCP first incorporated under the law of the State
of Illinois on November 6, 2009.
Prior to Covid19, the Debtor's revenue was increasing and the
overall business was excelling. However, the shutdowns and
restrictions Covid19 created caused WCP to lose employees, and
fulfilling contracts became impossible. Since the lifting of most
Covid19 restrictions, WCP is able to fulfill its ongoing
contractual obligations and has several new contracts already
executed and several more pending final details and execution.
The Debtor is the proponent of this Plan as well as the Disbursing
Agent if the plan is consensual. If the Plan is not consensual,
Matthew Brash, Sub-Chapter V Trustee will be the disbursing agent.
WCP proposes to pay Administrative Claims and Priority Creditors
100% of their allowed claims and General Unsecured Creditors
approximately 30% of the allowed claims.
The Debtor's Plan provides for payments to allowed claims from
revenue created by contractual jobs to install Solar Systems in
commercial properties.
Class 4 consists of Allowed General Unsecured Claims. Debtor has
110 general unsecured creditors totaling a balance of
$3,563,598.96. Each Holder of Allowed Class 4 Claims shall be paid
approximately 30% of their claims pro rata in 60 equal installments
beginning on the effective date.
The Debtor lists 8 projects that are in the bidding/development
stages. Based upon history 50% of these incoming projects go to
contract. Debtor lists 50% of the projected net revenue from these
projects on the attached projections with proposed project specific
budgets. If WCP obtains any income above what is listed on the
projections, 50% of all net profits will be tendered to unsecured
creditors as additional payments.
The Debtor is investigating accounts receivable as of the date of
filing. If upon review Debtor finds any account balance is
recoverable, any proceeds from collection efforts will be
distributed to general unsecured creditors as additional payments.
Class 5 consists of Insider General Unsecured Claims. Everton
Walters has a total unpaid wage pursuant to contract in the amount
of $493,430.02 at the time of filing. Everton Walters received
reimbursement in the amount of $25,545.37 for various pre-petition
operating expenses leaving a balance of $467,975.65.
Leila Walters has three separate claims: 1) Unpaid wages
-$161,309.71, 2) Unpaid Wages prior to being an insider -
$69,992.04, and 3) Reimbursement for credit card charges
$20,881.40. WCP Reality has a prepetition claim in the amount of
$6,526.21 for payments due. With the exception of the $20,881.40
charge that still needs to be paid to Citibank, USA, both Everton
Walters, Leila Walters and WCP Reality subjugate their claims to be
paid after general unsecured creditors.
This Plan provides for distributions to the holders of allowed
claims from Debtor's net revenue from current pending contracts and
upcoming contracts for the installation on solar energy systems in
commercial buildings.
This Plan is self-executing. The Debtor shall not be required to
execute any newly created documents to evidence the claims, liens
or terms of repayment to the holder of any Allowed Claim, except
for the Restructured Promissory Note and all other loan documents.
A full-text copy of the Plan of Reorganization dated September 29,
2022, is available at https://bit.ly/3M6S9xc from PacerMonitor.com
at no charge.
Debtor's Counsel:
Paul M. Bach, Esq.
Bach Law Offices, Inc.
P.O. Box 1285
Northbrook, IL 60062
Telephone: (847) 564-0808
Email: pnbach@bachoffices.com
About WCP Solar Services
WCP Solar Services, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No.
22-07424) on July 1, 2022. The petition was signed by Everton
Walters as authorized representative of the Debtor. At the time of
the filing, the Debtor listed up to $50,000 in assets and up to $10
million in liabilities.
Judge David D. Cleary presides over the case.
Paul M. Bach, Esq., at Back Law Offices, Inc. serves as the
Debtor's counsel.
WJA ASSET: Jan. 11, 2023 Plan Confirmation Hearing Set
------------------------------------------------------
WJA Real Estate Opportunity Fund I, LLC ("WJA REO Fund I"), and CA
Real Estate Opportunity Fund I, LLC ("CA REO Fund I")(together, the
"REO Fund I Debtors"), Debtor Affiliates of WJA Asset Management,
LLC, filed with the U.S. Bankruptcy Court for the Central District
of California a Disclosure Statement describing Joint Chapter 11
Plan of Liquidation.
On September 29, 2022, Judge Scott C. Clarkson approved the
Disclosure Statement and ordered that:
* January 11, 2023, at 1:30 p.m., is the hearing to consider
confirmation of the Joint Chapter 11 Plan of Liquidation of WJA
Real Estate Opportunity Fund I, LLC and CA Real Estate Opportunity
Fund I, LLC.
* November 15, 2022, at 5:00 p.m. is fixed as the last day to
submit ballots accepting or rejecting the Plan.
* November 30, 2022 is fixed as the last day for the Debtors
to file and serve their memorandum of points and authorities in
support of confirmation of the Plan, together with any supporting
declarations and a ballot tabulation summary.
* December 14, 2022 is fixed as the last day to file and serve
any objection to confirmation of the Plan.
* December 21, 2022 is fixed as the last day to file replies
to any objection to confirmation of the Plan.
A copy of the order dated September 29, 2022, is available at
https://bit.ly/3M5EB5j from PacerMonitor.com at no charge.
Attorneys for the Debtors:
Philip E. Strok, Esq.
Kyra E. Andrassy, Esq.
Robert S. Marticello, Esq.
Michael L. Simon, Esq.
SMILEY WANG-EKVALL, LLP
3200 Park Center Drive, Suite 250
Costa Mesa, California 92626
Telephone: 714 445-1000
Facsimile: 714 445-1002
E-mail: pstrok@swelawfirm.com
kandrassy@swelawfirm.com
rmarticello@swelawfirm.com
msimon@swelawfirm.com
About WJA Asset Management
Luxury Asset Purchasing International, LLC, et al., are part of a
network of entities or "Funds" formed to offer a range of
investment opportunities to individuals. Many of the existing funds
are performing and some Funds had substantial gains. However,
certain Funds, i.e., those invested in private trust deeds secured
by real estate, suffered losses.
William Jordan Investments, Inc. ("Advisor"), is a registered
investment advisor. Laguna Hills, California-based WJA Asset
Management, LLC ("Manager"), is the managing member of Luxury, et
al. William Jordan was the president and sole owner of Advisor and
was the sole member and manager of Manager.
On May 18, 2017, Luxury and its affiliates filed voluntary
petitions under Chapter 11 of the United States Bankruptcy Code. On
May 25, 2017, four other affiliated filed voluntary Chapter 11
petitions. On June 6, 2017, CA Real Estate Opportunity Fund III
filed its Chapter 11 petition. The Debtors' cases are jointly
administered under Bankr. C.D. Cal. Lead Case No. 17-11996, and the
Debtors continue to operate their businesses and manage their
affairs as DIP.
Pursuant to court orders, Howard Grobstein is now serving as the
chief restructuring officer of the Debtors and Mr. Jordan no longer
has any ongoing role in the Debtors' operations.
At the time of the filing, WJA estimated assets of less than
$500,000 and liabilities of $1 million to $10 million.
Judge Scott C. Clarkson presides over the cases.
Lei Lei Wang Ekvall, Esq., Philip E. Strok, Esq., Robert S.
Marticello, Esq., and Michael L. Simon, Esq., at Smiley
Wang-Ekvall, LLP, serve as counsel to the Debtors. Ann Moore of
Norton Moore Adams has been tapped as special counsel. Elite
Properties Realty is the broker.
WOUAFF WOUAFF: Taps Stevens Tax & Financial Services as Accountant
------------------------------------------------------------------
Wouaff Wouaff, LLC received approval from the U.S. Bankruptcy Court
for the Middle District of Florida to hire Stevens Tax & Financial
Services, Inc. as its accountant.
The firm's services include:
a. preparing financial projections;
b. analyzing accounting issues and advising the Debtor
regarding the proper accounting treatment of events;
c. reviewing bankruptcy accounting procedures as required by
the Bankruptcy Code and generally accepted accounting principles;
d. reviewing reports or filings as required by the bankruptcy
court or the Office of the United States Trustee including monthly
operating reports;
e. reviewing and assisting in the preparation and filing of
any tax returns;
f. assisting in state and local tax matters; and
g. advising on the tax consequences of proposed plans of
reorganization.
The Debtor agreed to pay Stevens $225 per hour and a retainer of
$1,000 for its services.
As disclosed in court filings, Stevens is a "disinterested person"
within the meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Richard L. Stevens, CPA
Stevens Tax & Financial Services, Inc.
16601 Ivy Lake Drive
Odessa, FL 33556
Tel: 813-789-8075
Email: rick@stevenstaxgroup.com
About Wouaff Wouff
Wouaff Wouff, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 8:22-bk-01595) on April
21, 2022, with up to $50,000 in assets and up to $500 million in
liabilities. Julian M. Mackenzie, managing member, signed the
petition.
Judge Michael G. Williamson oversees the case.
Marshall G. Reissman, Esq., at Reissman Law Group, P.A. is the
Debtor's counsel.
XPERI HOLDING: Moody's Affirms 'Ba3' CFR, Outlook Remains Stable
----------------------------------------------------------------
Moody's Investors Service affirmed Xperi Holding Corporation's
ratings, including the Corporate Family Rating of Ba3, Probability
of Default Rating of Ba3-PD, and the Senior Secured Term Loan due
2028 (Term Loan) of Ba3. The Speculative Grade Liquidity (SGL)
rating remains unchanged at SGL-1. The outlook is stable.
On October 1, 2022, Xperi's Product business segment (Product),
which accounted for about 53% of Xperi's revenues for the 12 months
ended June 30, 2022, will spin off to shareholders, who will
receive shares in this separate, publicly-traded entity. The shares
of this new entity will begin public trading on October 3, 2022.
Xperi's remaining operations will be renamed Adeia and will remain
the obligor of the Term Loan. Adeia's shares will trade under a new
ticker symbol.
Although Adeia's revenue base will be reduced by over 50% due to
the separation of the Product operations, profitability and cash
flow will improve, given the much lower profitability and the cash
consumption of the Product operations relative to Adeia.
Affirmations:
Issuer: Xperi Holding Corporation
Corporate Family Rating, Affirmed Ba3
Probability of Default Rating, Affirmed Ba3-PD
Gtd Senior Secured 1st Lien Term Loan, Affirmed Ba3 (LGD3)
Outlook Actions:
Issuer: Xperi Holding Corporation
Outlook, Remains Stable
RATINGS RATIONALE
Xperi's Ba3 CFR reflects the consistent free cash flow (FCF)
generation proforma for the spin-off of the Product business. The
steady FCF is driven by the high profit margin intellectual
property (IP) licensing revenues and the modest capital intensity
of operations. Xperi's IP assets of over 9,500 patents creates a
base of about $375 million of annual revenues, which should benefit
over time from periodic blocks of revenues due to litigation
settlements and from an expanding patent portfolio. Moody's expects
that Xperi will follow a conservative financial policy such that
FCF to debt (Moody's adjusted) will exceed 20% over the next 12 to
18 months.
Xperi's CFR is constrained by the small revenue scale, with
revenues of about $438 million (twelve months ended June 30, 2022,
proforma) and limited revenue diversity following the spin-off of
the Product business. While the licensing revenues generate high
profit margins, periodic litigation settlements can create revenue
volatility, particularly for semiconductor IP settlements, due to
revenue recognition requirements. Moreover, at license maturity,
relicensing can sometimes require litigation to enforce Xperi's IP,
leading to delayed collections and lumpy revenue upon settlement.
The stable outlook reflects Moody's expectation that proforma
revenues will decline modestly over the next 12 to 18 months
reflecting a challenging comparison to the June 2022 twelve months
revenues, which included a large license settlement. Moody's
expects that profitability will remain strong over the period, with
the EBITDA margin above 65% (Moody's adjusted) and annual FCF
generation of at least $225 million.
The Ba3 rating on the Term Loan reflects the single class debt
structure with only a modest cushion of unsecured liabilities in
the capital structure. The debt benefits from collateral,
comprised of a first lien on all assets.
The SGL-1 reflects Xperi's very good liquidity, which is supported
by consistent FCF and a large cash balance. Moody's expects that
Xperi will generate FCF of at least $225 million over the next
year. Although Xperi does not have a revolving credit facility,
Moody's expects that Xperi will maintain cash of at least $75
million.
Xperi's ESG Credit Impact Score is moderately negative, reflecting
its moderate exposure to governance and social risks related to
financial strategy and human capital risk. Xperi's exposure to
environmental risks are low.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Xperi:
- Recurring baseline licensing revenues are sustained above $500
million annually.
- Reduces debt such that FCF to debt (Moody's adjusted) is
sustained above 50%.
The ratings could be downgraded if:
- Recurring baseline revenues decline to less than $325 million
annually.
- Financial policy becomes more aggressive, with FCF to debt
(Moody's adjusted) sustained at less than 20%
Xperi Holding Corporation, based in San Jose, California, will be
renamed Adeia following the spin-off of the Product business, which
will be renamed Xperi Inc., on October 1, 2022. Adeia licenses
intellectual property related to content discovery, digital video
recording, video-on-demand, and multi-screen functionality. Adeia
also develops and licenses technologies and intellectual property
used in semiconductor chip manufacturing and image processing for
consumer electronics as well as audio technology.
The principal methodology used in these ratings was Software
published in June 2022.
YU HUA LONG: Amends Carter Parties Secured Claim Pay Details
------------------------------------------------------------
Teng Huang, the assignee of the legal right and claims of Daniel
Chan and Tina Kwan, submitted a First Amended Disclosure Statement
which relates to the accompanying First Amended Plan dated
September 29, 2022.
The Plan is a liquidating plan with the Chapter 11 Trustee to
remain as Estate Representative throughout the Plan term.
Class 1 consists of the Secured Claim of the Carter Parties (Claim
No. 5). The Proof of Claim is filed in the sum of $1,988,167. The
Proof of Claim is filed in the sum of $1,988,167 as a secured
claim, which is the subject of an adversary proceeding titled Teng
Huang v. Carter, etc., et. al, in Adv. No.2:20-ap-1639-DS. The
parties have agreed to settle the adversary proceeding and seek the
court's approval of a motion to approve the settlement pursuant to
FRBP 9019-1.
The Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* Class 2 consists of Non-Priority Unsecured Claims. Unsecured
creditors are impaired. There are two categories of similar claims
based on Debtor's assumption of debt from Magnus Sunhill Group,
LLC, which are all treated as Non-Priority unsecured claims to be
paid pro rata. Funds not paid to satisfy Class 2 will be
distributed pursuant to the Plan, regardless of whether the Estate
Representative objects or seeks to subordinate claims pursuant to
Section 510(b) or 510(c) of the Bankruptcy Code. No interest
accruing from and after the Petition Date shall be paid on Allowed
Non-priority unsecured claims absent the existence of Residual
Funds, in which case interest accruing from and after the Petition
Date at the Federal Judgment Rate shall be paid pro rata to the
extent of available.
* Class 3 is the equity security holder of the Debtor, a
limited liability company, LA YHL Investments, Inc., its sole
member, which will continue to hold the equity in the Debtor if
Class 2 votes to accept the Plan. If Class 2 does not vote to
accept the Plan, then the membership interests in the Debtor will
be extinguished unless the member infuses new money into the Debtor
in an amount to be determined by the Bankruptcy Court, most likely
at the time of a hearing on confirmation of the Plan, in order to
satisfy the requirements of the New Value Exception to the Absolute
Priority Rule. If LA YHL acquires the equity, then it shall receive
any money, property or other value remaining when plan payments
have been completed.
The Trustee is holding $21,362,452. Administrative expenses are
estimated to be $2,500,000 under Chapter 11 scenario. Plan
Proponent anticipates that no taxes will be due. The Plan reserves
$2,300,000 for the Carter Claim No. 5, Class 1. Monies not paid to
Class 1 will be added to the balance available for payment to Non
Priority Unsecured Claims, Class 2.
Teng believes the Plan is feasible because it provides for a
complete liquidation of the Debtor, which has adequate means of
implementation for this purpose.
Costs to administer the assets is estimated to be: $2,500,000,
which includes a $1,000,000 reserve for the Estate Representative's
post-confirmation administrative activities. The Estate
Representative shall be authorized to incur expenses in the sum of
$10,000 monthly without prior court approval or notice to creditors
and will be required to seek the court's authority to incur more
than $10,000 monthly. The Estate Representative may carry forward
funds from prior quarters of unused spending.
A full-text copy of the First Amended Disclosure Statement dated
September 29, 2022, is available at https://bit.ly/3CAjQvt from
PacerMonitor.com at no charge.
Attorneys for Teng Huang:
THE FOX LAW CORPORATION, INC.
Steven R. Fox, SBN 138808
srfox@foxlaw.com
Janis G. Abrams, SBN 98331
jabrams@foxlaw.com
17835 Ventura Boulevard, Suite 306
Encino, California 91316
Tel: 818.774.3545; Fax: 818.774.3707
About Yu Hua Long Investments
Yu Hua Long Investments, LLC, is engaged in the development of real
property located in the City of Monterey Park, California.
Yu Hua Long Investments filed a Chapter 11 petition (Bankr. C.D.
Cal. Case No. 16-22745) on Sept. 26, 2016, estimating less than $1
million in both assets and liabilities.
Judge Deborah J. Saltzman presides over the case.
Timothy J. Yoo was appointed Chapter 11 trustee for the Debtor. The
Trustee hired Levene Neale Bender Yoo & Brill, LLP as bankruptcy
counsel; Re/Max Omega as broker; R.Y. Properties, Inc. as real
property consultant; and SLBiggs as accountant.
[*] EPIQ: September Bankruptcy Filings Up 7% From 2021
------------------------------------------------------
Year-over-year U.S. bankruptcy filings increased 7% across all
chapters for the second consecutive month in September, according
to data released Oct. 5, 2022, from Epiq's Bankruptcy Analytics
platform.
There were 33,184 total filings registered in September 2022, up 7%
from last September's total of 30,922. Commercial chapter 11
filings also rose, with 437 in September, a 76% increase compared
to 249 filings in September 2021.
There were 1,994 commercial filings in September 2022, an increase
of 16% compared to 1,721 in September 2021. The 31,190 individual
filings in September also represented a 7% increase from the
September 2021 total of 29,201. Subchapter V small business filings
registered the largest%age increase with 150 filings in September
2022, a 79% increase over the 84 filings in September 2021.
"While year-over-year comparisons indicate bankruptcies are
trending upward, all chapter year-to-date new filings are 9% lower
than they were at the end of the third quarter last year," said
Gregg Morin, vice president, business development and revenue at
Epiq Bankruptcy. "While we anticipate economic pressures will
continue to push filing trends higher overall, we're still seeing
mixed results month-over-month by individual chapters and debtor
types."
Although September saw significant year-over-year increases, 2022
year-to-date filings continue to run below 2021 totals. Total U.S.
bankruptcy filings decreased 9% during the first nine months of the
year, as the 284,773 filings dropped from the 312,647 filings in
2021. The 268,901 total individual filings through the first three
quarters of 2022 also represented a 9% decrease from the individual
filing total of 295,166 through the first three quarters of 2021.
Commercial bankruptcy filings during the first nine months of the
year dipped 9% to 15,872 from the 17,481 filings during the same
period in 2021. Commercial chapter 11 filings decreased 3% during
the first nine months of 2022 from the same period a year ago, as
the 2,831 filings declined from the 2,915 filings in 2021.
Conversely, the 1,079 subchapter V filings during the period
increased 8% over the 995 subchapter V filings during the first
nine months of 2021.
"The weight of inflation, rising interest rates and concern over
supply chain channels continue to have an economic impact on
companies and families," said ABI Executive Director Amy
Quackenboss. "Bankruptcy provides distressed households and
businesses with the opportunity to rebuild their financial
futures."
ABI has partnered with Epiq Bankruptcy to provide the most current
bankruptcy filing data for analysts, researchers, and members of
the news media. Epiq Bankruptcy is the leading provider of data,
technology, and services for companies operating in the business of
bankruptcy. Its new Bankruptcy Analytics subscription service --
https://bankruptcy.epiqglobal.com/analytics -- provides on-demand
access to the industry's most dynamic bankruptcy data, updated
daily.
For further information about the statistics or additional
requests, please contact ABI Public Affairs Officer John Hartgen at
703-894-5935 or jhartgen@abi.org.
[] Norton Rose Names Atkins Global Co-Head of Restructuring
-----------------------------------------------------------
Global law firm Norton Rose Fulbright said Oct. 5, 2022, that
Australian partner Scott Atkins has been appointed global co-head
of financial restructuring and insolvency, alongside US-based
partner Howard Seife.
Scott and Howard lead a global team of bankruptcy, financial
restructuring and insolvency lawyers at the forefront of the most
significant cross-border restructuring and insolvency cases
involving complex multi-jurisdictional issues and regional
insolvency laws.
Scott is a leading lawyer in one of the most reputable
restructuring and insolvency practices in the Asia-Pacific region,
having been repeatedly recognized as Australia's only 'Eminent
Practitioner' for this category in the Chambers and Partners
regional legal rankings.
Along with this work, Scott is also the chair and head of risk
advisory for the firm in Australia and president and an inaugural
fellow of INSOL International, as well as chair of INSOL's Asian
Advisory Council. He is a member of the International Insolvency
Institute and a Fellow of the Australian Academy of Law. Scott is
the immediate past president of the Australian Restructuring
Insolvency and Turnaround Association.
Scott brings a long history of advising on international matters.
He led a team, working with the Asian Development Bank and the
Union Supreme Court of Myanmar, to draft a new insolvency and
restructuring framework for Myanmar, culminating in the passage of
Myanmar's Insolvency Law in February 2020 – a transformative and
economically important piece of legislation. This has led to
similar current advisory work for Scott and the firm in Armenia.
Norton Rose Fulbright global chief executive partner Gerry Pecht
commented: "We are thrilled to have Scott join Howard in leading
this globally renowned team for our clients and our firm.
Bankruptcy, financial restructuring and insolvency is a major focus
of our cross-border work, and we are fortunate to be trusted by
multi-national clients to advise on their most complex matters.
Scott's history of leading insolvency associations, and the unique
perspective he has gained from helping countries to modernize their
insolvency regimes, will be an enormous benefit to our clients and
people."
Scott Atkins commented: "Through the remainder of 2022 and into
next year, we expect greater economic headwinds as the result of
inflationary pressure, governments winding back COVID support
measures and continuing geo-political unrest, supply chain
constraints and rising interest rates. These factors will see an
increase in cross-border and domestic restructuring and insolvency
matters, which we are well placed to help our clients navigate. I
am honoured to join Howard in leading our global financial
restructuring and insolvency team at this important time for our
clients and the firm."
Mr. Atkins can be reached at:
Scott Atkins
Chair, Australia
Head of Risk Advisory, Australia
Partner
NORTON ROSE FULBRIGHT AUSTRALIA
Sydney
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[^] Recent Small-Dollar & Individual Chapter 11 Filings
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In re Adam, LLC
Bankr. S.D. Ala. Case No. 22-11979
Chapter 11 Petition filed September 26, 2022
See
https://www.pacermonitor.com/view/TSC7LHA/Adam_LLC__alsbke-22-11979__0001.0.pdf?mcid=tGE4TAMA
represented by: Frances Hoit Hollinger, Esq.
FRANCES HOIT HOLLINGER, LLC
E-mail: FranHollinger@aol.com
In re Adeel Mahmood
Bankr. N.D. Cal. Case No. 22-50878
Chapter 11 Petition filed September 27, 2022
represented by: Vinod Nichani, Esq.
In re Edgar Sanchez
Bankr. D. Conn. Case No. 22-50513
Chapter 11 Petition filed September 27, 2022
In re Advanced Integration Systems Inc.
Bankr. M.D. Fla. Case No. 22-03524
Chapter 11 Petition filed September 27, 2022
See
https://www.pacermonitor.com/view/BFIIJ4Y/Advanced_Integration_Systems_Inc__flmbke-22-03524__0001.0.pdf?mcid=tGE4TAMA
represented by: Jeffrey S. Ainsworth, Esq.
BRANSONLAW, PLLC
E-mail: jeff@bransonlaw.com
In re Yerre'esto Patton and Antoinette Michelle Patton
Bankr. N.D. Ill. Case No. 22-11060
Chapter 11 Petition filed September 27, 2022
represented by: Daniel Kolodziej, Esq.
In re Jean-Jacques Senechal, Jr.
Bankr. E.D.N.Y. Case No. 22-72589
Chapter 11 Petition filed September 27, 2022
represented by: Ronald Weiss, Esq.
In re Sun Boricua Pa'l Mundo, Inc.
Bankr. D.P.R. Case No. 22-02809
Chapter 11 Petition filed September 27, 2022
See
https://www.pacermonitor.com/view/KOPATUY/SUN_BORICUA_PAL_MUNDO_INC__prbke-22-02809__0001.0.pdf?mcid=tGE4TAMA
represented by: Homel Mercado Justiniano, Esq.
E-mail: hmjlaw2@gmail.com
In re Hector Javier Rullan Nieves
Bankr. D.P.R. Case No. 22-02808
Chapter 11 Petition filed September 27, 2022
represented by: Homel Mercado Justiniano, Esq.
In re 10975 South Vermont Ave LLC
Bankr. C.D. Cal. Case No. 22-15271
Chapter 11 Petition filed September 28, 2022
See
https://www.pacermonitor.com/view/NGHBVCQ/10975_South_Vermont_Ave_LLC__cacbke-22-15271__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Omid Bahrami-Daghigh
Bankr. N.D. Cal. Case No. 22-40946
Chapter 11 Petition filed September 28, 2022
In re House of Change, Inc.
Bankr. D. Md. Case No. 22-15339
Chapter 11 Petition filed September 28, 2022
See
https://www.pacermonitor.com/view/EGKQJCQ/House_of_Change_Inc__mdbke-22-15339__0001.0.pdf?mcid=tGE4TAMA
represented by: Brett Weiss, Esq.
THE WEISS LAW GROUP
E-mail: brett@BankruptcyLawMaryland.com
In re Carnegie Development LLC
Bankr. S.D. Miss. Case No. 22-01983
Chapter 11 Petition filed September 28, 2022
See
https://www.pacermonitor.com/view/JZLTZ4I/Carnegie_Development_LLC__mssbke-22-01983__0001.0.pdf?mcid=tGE4TAMA
represented by: R. Michael Bolen, Esq.
HOOD & BOLEN, PLLC
E-mail: rmb@hoodbolen.com
In re Building 219 Corp
Bankr. E.D.N.Y. Case No. 22-42378
Chapter 11 Petition filed September 28, 2022
See
https://www.pacermonitor.com/view/GYETV4A/Building_219_Corp__nyebke-22-42378__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Suchanan Aksornnan
Bankr. E.D.N.Y. Case No. 22-42388
Chapter 11 Petition filed September 28, 2022
represented by: Joel Shafferman, Esq.
In re Five Star Acquisition, Inc.
Bankr. W.D.N.Y. Case No. 22-10861
Chapter 11 Petition filed September 28, 2022
See
https://www.pacermonitor.com/view/WXLA6UI/Five_Star_Acquisition_Inc__nywbke-22-10861__0001.0.pdf?mcid=tGE4TAMA
represented by: Arthur G. Baumeister, Jr., Esq.
BAUMEISTER DENZ LLP
E-mail: abaumeister@bdlegal.net
In re McClellan Trucking, Inc.
Bankr. W.D. Pa. Case No. 22-10437
Chapter 11 Petition filed September 28, 2022
See
https://www.pacermonitor.com/view/NPY6KMY/McClellan_Trucking_Inc__pawbke-22-10437__0001.0.pdf?mcid=tGE4TAMA
represented by: Guy C. Fustine, Esq.
KNOX MCLAUGHLIN GORNALL & SENNETT, P.C.
E-mail: gfustine@kmgslaw.com
In re Jamestown Building Corporation, Inc.
Bankr. E.D. Va. Case No. 22-50624
Chapter 11 Petition filed September 28, 2022
See
https://www.pacermonitor.com/view/LZRIG6A/Jamestown_Building_CorporationInc__vaebke-22-50624__0001.0.pdf?mcid=tGE4TAMA
represented by: W. Greer McCreedy, II, Esq.
THE MCCREEDY LAW GROUP
E-mail: mccreedy@mccreedylaw.com
In re Ana M. Ahmad
Bankr. C.D. Cal. Case No. 22-15290
Chapter 11 Petition filed September 29, 2022
represented by: Thomas Ure, Esq.
In re Eugene Harrington
Bankr. E.D.N.Y. Case No. 22-42406
Chapter 11 Petition filed September 29, 2022
In re Nestor Algarin Lopez
Bankr. D.P.R. Case No. 22-02832
Chapter 11 Petition filed September 29, 2022
represented by: Jesus Batista Sanchez, Esq.
In re Shagtastic Enterprises Inc.
Bankr. E.D. Ark. Case No. 22-12702
Chapter 11 Petition filed September 30, 2022
See
https://www.pacermonitor.com/view/TM2ML6Y/Shagtastic_Enterprises_Inc__arebke-22-12702__0001.0.pdf?mcid=tGE4TAMA
represented by: Lyndsey D. Dilks, Esq.
DILKS LAW FIRM
E-mail: ldilks@dilkslawfirm.com
In re Terrio Tavarus Pass, Sr.
Bankr. M.D. Ga. Case No. 22-30523
Chapter 11 Petition filed September 30, 2022
In re James D. Carlson and Cristen H. Carlson
Bankr. N.D. Ill. Case No. 22-11315
Chapter 11 Petition filed September 30, 2022
represented by: Robert Benjamin, Esq.
GOLAN CHRISTIE TAGLIA LLP
Email: rrbenjamin@gct.law
In re CRW Agency, Inc
Bankr. N.D. Ohio Case No. 22-60994
Chapter 11 Petition filed September 30, 2022
See
https://www.pacermonitor.com/view/TZZS4NY/CRW_Agency_Inc__ohnbke-22-60994__0001.0.pdf?mcid=tGE4TAMA
represented by: Edwin H. Breyfogle, Esq.
EDWIN H. BREYFOGLE
E-mail: edwinbreyfogle@sssnet.com
In re Artur Gorilovsky
Bankr. E.D.N.Y. Case No. 22-42428
Chapter 11 Petition filed September 30, 2022
represented by: Alla Kachan, Esq.
In re Paige Hall Bluhdorn
Bankr. S.D.N.Y. Case No. 22-22739
Chapter 11 Petition filed September 30, 2022
represented by: Joshua Douglass, Esq.
In re Brenda L. Lugo
Bankr. D.P.R. Case No. 22-02891
Chapter 11 Petition filed September 30, 2022
represented by: Jesus E. Batista Sanchez, Esq.
THE BATISTA LAW GROUP
E-mail: jeb@batistasanchez.com
In re Jerry L. Teal, Sr.
Bankr. E.D. Tenn. Case No. 22-12205
Chapter 11 Petition filed September 30, 2022
represented by: Steven Lefkovitz, Esq.
In re Teal Properties, Inc.
Bankr. E.D. Tenn. Case No. 22-12203
Chapter 11 Petition filed September 30, 2022
See
https://www.pacermonitor.com/view/6JQR7MA/Teal_Properties_Inc__tnebke-22-12203__0001.0.pdf?mcid=tGE4TAMA
represented by: Steven L. Lefkovitz, Esq.
LEFKOVITZ & LEFKOVITZ
E-mail: slefkovitz@lefkovitz.com
In re Rare HTX LLC
Bankr. S.D. Tex. Case No. 22-32880
Chapter 11 Petition filed September 30, 2022
See
https://www.pacermonitor.com/view/RWGRELI/Rare_HTX_LLC__txsbke-22-32880__0001.0.pdf?mcid=tGE4TAMA
represented by: Troy J. Wilson, Esq.
WILSON & ASSOCIATES PLLC
E-mail: tjwlaw777@yahoo.com
In re Madjak, LLC
Bankr. W.D. Tex. Case No. 22-10641
Chapter 11 Petition filed September 30, 2022
See
https://www.pacermonitor.com/view/EHJHLRA/Madjak_LLC__txwbke-22-10641__0001.0.pdf?mcid=tGE4TAMA
represented by: Stephen W. Sather, Esq.
BARRON & NEWBURGER, P.C.
E-mail: ssather@bn-lawyers.com
In re CTG Holding Hroup LLC
Bankr. S.D. Fla. Case No. 22-17693
Chapter 11 Petition filed October 2, 2022
See
https://www.pacermonitor.com/view/OKYIWEA/CTG_Holding_Hroup_LLC__flsbke-22-17693__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael A. Frank, Esq.
LAW OFFICES OF FRANK & DE LA GUARDIA
E-mail: Pleadings@bkclawmiami.com
In re Jeffrey Scott Liolios
Bankr. C.D. Cal. Case No. 22-11701
Chapter 11 Petition filed October 3, 2022
represented by: James Till, Esq.
In re Miguel Torres Huertas
Bankr. M.D. Fla. Case No. 22-03563
Chapter 11 Petition filed October 3, 2022
represented by: William Porter III, Esq.
LAW OFFICES OF L. WILLIAM PORTER III,
P.A.
In re MMC Juice Investors, Co
Bankr. N.D. Ill. Case No. 22-11403
Chapter 11 Petition filed October 3, 2022
See
https://www.pacermonitor.com/view/KEPNWBI/MMC_Juice_Investors_CO__ilnbke-22-11403__0001.0.pdf?mcid=tGE4TAMA
represented by: Richard G. Larsen, Esq.
SPRINGERLARSENGREENE, LLC
E-mail: rlarsen@springerbrown.com
In re Chandra Corporation
Bankr. D.N.J. Case No. 22-17836
Chapter 11 Petition filed October 3, 2022
See
https://www.pacermonitor.com/view/XFLWALQ/Chandra_Corporation__njbke-22-17836__0001.0.pdf?mcid=tGE4TAMA
represented by: Scott D. Sherman, Esq.
MINION & SHERMAN
E-mail: ssherman@minionsherman.com
In re Lakshman R Paidi and Sirisha Mallidi
Bankr. D.N.J. Case No. 22-17832
Chapter 11 Petition filed October 3, 2022
represented by: Brian Hannon, Esq.
NORGAARD O'BOYLE & HANNON
In re Sky Electric LLC
Bankr. D.N.J. Case No. 22-17816
Chapter 11 Petition filed October 3, 2022
See
https://www.pacermonitor.com/view/6EAOWJQ/Sky_Electric_LLC__njbke-22-17816__0001.0.pdf?mcid=tGE4TAMA
represented by: Milica A. Fatovich, Esq.
HOOK & FATOVICH, LLC
E-mail: ihook@hookandfatovich.com;
mfatovich@hookandfatovich.com
In re Ansar Property Development, Inc.
Bankr. E.D.N.Y. Case No. 22-72677
Chapter 11 Petition filed October 3, 2022
See
https://www.pacermonitor.com/view/F2NXHEA/Ansar_Property_Development_Inc__nyebke-22-72677__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Royal Banquet Hall & Catering, LLC
Bankr. S.D.N.Y. Case No. 22-22744
Chapter 11 Petition filed October 3, 2022
See
https://www.pacermonitor.com/view/FIQ4ROI/Royal_Banquet_Hall__Catering__nysbke-22-22744__0001.0.pdf?mcid=tGE4TAMA
represented by: Nader J. Sayegh, Esq.
LAW OFFICES OF NADER J. SAYEGH, P.C.
E-mail: sayeghlaw@aol.com
In re Margot O. Burrell
Bankr. E.D. Tex. Case No. 22-41302
Chapter 11 Petition filed October 3, 2022
represented by: John Lewis, Esq.
In re SBW Properties, LLC
Bankr. N.D. Tex. Case No. 22-31838
Chapter 11 Petition filed October 3, 2022
See
https://www.pacermonitor.com/view/SWJDM2Q/SBW_Properties_LLC__txnbke-22-31838__0001.0.pdf?mcid=tGE4TAMA
represented by: Eric A. Liepins, Esq.
ERIC A. LIEPINS
E-mail: eric@ealpc.com
In re A&D Tests, Inc.
Bankr. W.D. Tex. Case No. 22-60436
Chapter 11 Petition filed October 3, 2022
See
https://www.pacermonitor.com/view/C2BJ4QI/AD_Tests_Inc__txwbke-22-60436__0001.0.pdf?mcid=tGE4TAMA
represented by: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
E-mail: joyce@joycelindauer.com
In re Scott W. Charmoli and Lynne M. Charmoli
Bankr. E.D. Wisc. Case No. 22-24358
Chapter 11 Petition filed October 3, 2022
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