/raid1/www/Hosts/bankrupt/TCR_Public/221021.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, October 21, 2022, Vol. 26, No. 293
Headlines
AAD CAPITAL PARTNERS: Hits Chapter 11 Bankruptcy Protection
ADVANTAGE MANAGEMENT: Wins Cash Collateral Access Thru Jan 2023
AHIA TAXI: Unsecureds to Get $41 Per Month for 60 Months
ALVARENGA TRANSPORT: Unsecureds Will Get 0.5% in Subchapter V Plan
ANCHOR GLASS: S&P Downgrades ICR to 'CCC' on Refinancing Risk
ARA MACAO: Seeks to Expand Scope of Barrow & Williams' Employment
ARIAN MOWLAVI: PCO Submits Third Interim Report
ASTECH ENGINEERED: Seeks to Hire Hilco Valuation as Appraiser
AVINGER INC: All Five Proposals Passed at Annual Meeting
BELMONT TWIN: Case Summary & Six Unsecured Creditors
BIONIK LABORATORIES: Appoints New CEO and CFO
BITNILE HOLDINGS: Unit to Launch Bitcoin Marketplace Platform
BSPV-PLANO: Lender Agrees to Cash Collateral Access Thru Oct. 31
CAPITAL RIVER: Seeks to Hire Sandground West as Special Counsel
CAPSTONE GREEN: Registers 600K Additional Shares Under 2017 Plan
CARLISLE LOGISTICS: Files Emergency Bid to Use Cash Collateral
CELSIUS NETWORK: Core Scientific to Defend Interests
CELSIUS NETWORK: Examiner Taps Jenner & Block as Counsel
CELSIUS NETWORK: Opposes Bid to Appoint Preferred Equity Committee
CHARIOT PARENT: Fitch Lowers LongTerm IDR to 'B-', Outlook Stable
CHILD'S TRUCKING: Has Deal on Cash Collateral Access
CHRISTIAN CARE: Exclusivity Period Extended to Dec. 1
CINEWORLD GROUP: Goodsill Represents Interested Parties
CINEWORLD GROUP: Law Firm of Russell Represents Utility Companies
CLAIM JUMPER: U.S. Trustee Appoints Creditors' Committee
COALINGA, CA: S&P Lowers Bond Rating to 'BB+', Outlook Negative
CUMBERLAND RJ: In Chapter 11 Bankruptcy Protection
CUREPOINT LLC: Court OKs Bid to Appoint Chapter 11 Trustee
DR. R'KIONE: No Change in Patient Care, 2nd PCO Report Says
EAST COAST DIESEL: Seeks Chapter 11 Bankruptcy Protection
ELECTRIC LAST MILE: ourt Approves Asset Sale to Mullen
EMERGENT BIOSOLUTIONS: Moody's Lowers CFR to B1, Outlook Negative
ENDO INTERNATIONAL: Paul Weiss Updates on Cross-Holder Group
ENDO INTERNATIONAL: Taps PricewaterhouseCoopers Ireland as Auditor
EVERGREEN SITE: Seeks to Hire Fisher Skrobot as Special Counsel
EXPRESS GRAIN: Files Amendment to Disclosure Statement
FAIRFIELD HARBOURSIDE: Taps Hendren Redwine & Malone as Counsel
FLOWER ONE: Gets Court's CCAA Initial Stay Order
FLY LEASING: S&P Lowers ICR to 'SD' on Below-Par Debt Repurchases
GOLD WING: Case Summary & Eight Unsecured Creditors
GREAT PANTHER: To Restructure Under CCAA Proceeding
GREEN ENERGY: Court OKs Cash Collateral Access Thru Nov 28
GULFSLOPE ENERGY: Inks Deal to Sell Up to $650K Convertible Notes
HAWAIIAN AIRLINES: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
HERO NUTRITIONALS: Court OKs Deal on Cash Collateral Access
HOLONG CS: Court OKs Cash Collateral Access Thru Nov. 21
HONX INC: Seeks to Retain Control of Bankruptcy
IBEC LANGUAGE: Amends Unsecured Claims Pay; Plan Hearing Nov. 22
IBIO INC: Files Provisional Patent Relating to Cancer Treatment
INTELLIPHARMACEUTICS INT'L: Incurs $296K Net Loss in Third Quarter
JAGUAR HEALTH: Signs Amended License Agreement with SynWorld
JET OILFIELD SERVICES: Files for Chapter 11 Bankruptcy Protection
KABBAGE INC: Hires Omni Agent Solutions as Administrative Agent
KABBAGE INC: Seeks to Hire AlixPartners as Financial Advisor
KABBAGE INC: Seeks to Hire Richards Layton & Finger as Co-Counsel
KALBARRI AUSTRALIA: U.S. Trustee Unable to Appoint Committee
KALOS CAPITAL: Creditors to Get Proceeds From Liquidation
LHOTSE CIS LLC: Court OKs Cash Collateral Thru Nov. 21
LIVE NATION: S&P Raises ICR to 'B+' On Recovery in Event Activity
LUMILEDS: Latham & Watkins Touts Plan Confirmation After 46 Days
MAC'S KWIK STOP: Seeks to Hire Evans & Mullinix as Legal Counsel
MAJESTIC GARDENS: Hires Wedderburn & Jacobs as Special Counsel
MARINER HEALTH: Seeks to Hire Pachulski as Legal Counsel
MCGRAW-HILL EDUCATION: Fitch Affirms 'B+' LongTerm IDR
MINESEN COMPANY: Dane Field Appointed as Chapter 11 Trustee
MIRACLE CENTER: Wins Cash Collateral Access Thru Dec 31
MOBILESMITH INC: Hits Chapter 11 Bankruptcy Protection
MOLECULAR IMAGING: Seeks to Hire Gregory K. Stern as Attorney
MOLECULAR IMAGING: Seeks to Hire Peter Shannon & Co. as Accountant
MOLECULAR IMAGING: Taps D'aprile Properties as Real Estate Broker
MULLEN AUTOMOTIVE: Inks First Amendment to Bollinger Agreements
NICK'S CREATIVE: U.S. Trustee Unable to Appoint Committee
NORTHWEST SENIOR: Exclusivity Period Extended Until Oct. 26
PECF USS: S&P Downgrades ICR to 'CCC+', Outlook Stable
PHOENIX GUARANTOR: S&P Affirms 'B' ICR, Off CreditWatch Positive
PHOENIX SERVICES: U.S. Trustee Appoints 2 New Committee Members
PIPELINE HEALTH: Susan Goodman Appointed as Patient Care Ombudsman
QUINCY HEALTH: S&P Lowers ICR to 'CCC' on Wider Negative Cash Flow
RAGING BULL: Files for Chapter 11 Bankruptcy
REWALK ROBOTICS: Falls Short of Nasdaq Bid Price Requirement
SCF LLC: Committee Seeks to Hire EmergeLaw as Counsel
SPARKLES BEAUTY: Seeks Cash Collateral Access
STORED SOLAR: Court OKs Cash Collateral Access, $3.35MM DIP Loan
TORY BURCH: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
VANGUARD ROOFING: Unsecured Claims Under $1K to Recover 100%
XEBEC ADSORPTION: Files Under CCAA; Commences Sale Process
[*] U.S. Corporate Bankruptcies Dipped 16% In September 2022
[^] BOOK REVIEW: Transcontinental Railway Strategy
*********
AAD CAPITAL PARTNERS: Hits Chapter 11 Bankruptcy Protection
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AAD Capital Partners LLC filed for chapter 11 protection in the
Northern District of Georgia without stating a reason.
According to court filings, AAD Capital Partners LLC estimates $10
million to $50 million in debt to 1 to 49 creditors. The petition
states that funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Nov. 10, 2022, at 1:00 PM.
About AAD Capital Partners
AAD Capital Partners LLC, doing business as Peachtree Battle
Business Services, is a domestic limited liability company.
AAD Capital Partners LLC filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-58223) on
Oct. 12, 2022. In the petition filed by Edward Chen, as managing
member and owner, the Debtor reported assets and liabilities
between $10 million and $50 million.
The Debtor is represented by Ashley Reynolds Ray of Scroggins &
Williamson, P.C.
ADVANTAGE MANAGEMENT: Wins Cash Collateral Access Thru Jan 2023
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Wisconsin
authorized Advantage Management Beaver Dam, LLC and affiliates,
including Advantage Management Waupun LLC, to continue using cash
collateral on a final basis in accordance with their agreement with
KeyBank National Association through January 9, 2023.
KeyBank asserts an interest in the Debtors' cash collateral.
The Debtors and KeyBank agreed to amend the adequate protection
provisions for the Debtors' continued use of the Collateral.
Commencing November 1, 2022, and continuing on the first day of
each month afterwards until the Court orders otherwise,
Beaver Dam Holdings will pay no less than $11,382; and
Waupun Holdings will pay no less than $13,144
to KeyBank from rents received from Beaver Dam and Waupun.
As previously reported by the Troubled Company Reporter, on October
1, 2016, KeyBank extended to Beaver Dam a $4,762,900 loan. The
Beaver Dam Loan is evidenced by a Healthcare Facility Note dated as
of October 1, 2016. The indebtedness evidenced by the Beaver Dam
Note is secured by the Healthcare Mortgage, Assignment of Leases,
Rents and Revenue and Security Agreement (Wisconsin) dated as of
October 1, 2016 and recorded on October 26, 2016 as Instrument No.
1242896 in the Office of the Register of Deeds of Dodge County,
Wisconsin. The amount due under the Beaver Dam Loan, as of April 4,
2022, was $4,367,274.
On October 1, 2016, KeyBank extended to Waupun Holdings a
$8,057,000 loan. The Waupun Loan is evidenced by a Healthcare
Facility Note (Multistate) dated as of October 1, 2016. The amount
due under the Waupun Loan, as of April 4, 2022, was $7,387,752.
As adequate protection, the Lender was granted replacement liens
pursuant to Bankruptcy Code sections 361(2), 363(e), and 552(b) on
all assets of the Debtors now or hereafter existing. The liens have
the same seniority and priority as the Lender's existing liens on
the Properties evidenced by the Loan Documents.
A copy of the order is available at https://bit.ly/3VB2c1O from
PacerMonitor.com.
About Advantage Management Beaver Dam
Advantage Management Beaver Dam, LLC and affiliates, Advantage
Management Waupun, LLC, BDW Holdings Beaver Dam, LLC, and BDW
Holdings Waupun, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Wis. Case No. 22-21438) on April 4,
2022. At the time of the filing, the Debtor disclosed up to
$100,000 in assets and up to $10 million in liabilities.
Judge Beth E. Hanan oversees the case.
Jerome R. Kerkman, Esq., at Kerkman & Dunn serves as the Debtor's
legal counsel.
AHIA TAXI: Unsecureds to Get $41 Per Month for 60 Months
--------------------------------------------------------
Ahia Taxi, LLC, filed with the U.S. Bankruptcy Court for the
Southern District of New York a Subchapter V Chapter 11 Plan dated
October 17, 2022.
The Debtor is a corporation, who operates a taxicab, with the
referenced taxi medallion, #7B50 from May 24, 2017 to present. The
Chapter 11 filing stems from a dramatic decline in the value of the
taxi medallions, which constituted the collateral of the New York
Community Bank ("Bank") loan. Furthermore, the COVID-19 Pandemic
exacerbated an already declining market decimated the Yellow
Taxi-Cab industry.
The Debtor file this Sub Chapter V Chapter 11 Bankruptcy case on
July 18, 2022, in order to reach fair and equitable, feasible terms
of settlement, within the context of a Sub Chapter V Chapter 11
Plan of Reorganization.
The Debtor is refinancing his personal property to fund the
settlement and the Plan. The Plan Proponent's financial projections
show that the Debtor will have projected disposable income of
$75,000.00 to fully perform the terms of the plan no longer than
sixty months after confirmation. The Debtor proposes a 100% payment
to all his undisputed creditors and equity interest holders, under
his proffered liquidation analysis.
This Plan of Reorganization proposes to pay creditors of the Debtor
the value of the repossessed medallion, along with the time value
discount from the repossession date to the filing date using
personal property in the amount of $75,000.00.
Class 1 shall consist of secured claim of the creditor, of BGW
Holdings, LLC ("Bank"), in the amount of $75,000.00. The Debtor is
proposing to retain the taxi medallion #7B50 and make 60 equal
monthly payments of $1,250.00 to the Class I claimant in full
satisfaction of Debtor's secured obligations under the claim.
Class 2 consists of All priority unsecured claims allowed under §
502 of the Code consist of proof of claim one filed by Capital One
Bank (USA) by American InfoSource as agent, in the amount of
$2434.82 and make 60 equal payments of $40.58 to the Class II
claimant in full satisfaction of Debtor's unsecured obligations
under the claim.
Interest Holder will retain their interests in the Debtor.
The funds required for confirmation and the payment of claims
required to be paid on the Effective Date, shall be provided by the
Debtor and the Reorganized Debtor from the Debtor's employment as a
taxicab driver, commencing on the effective date of the plan.
A full-text copy of the Subchapter V Plan dated October 17, 2022,
is available at https://bit.ly/3sclJIv from PacerMonitor.com at no
charge.
About Ahia Taxi
Ahia Taxi, LLC, is a corporation, who operates a taxicab, with the
referenced taxi medallion, #7B50 from May 24, 2017 to present. The
Debtor is a corporation located at 3089 Decatur Avenue, Bronx, New
York 10467.
Ahia Taxi, LLC, filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-10987) on July 18, 2022.
The Debtor is represented by Thomas A. Farinella, Esq. of the LAW
OFFICE OF THOMAS A. FAIRNELLA, PC.
ALVARENGA TRANSPORT: Unsecureds Will Get 0.5% in Subchapter V Plan
------------------------------------------------------------------
Alvarenga Transport LLC filed with the U.S. Bankruptcy Court for
the Eastern District of California a Subchapter V Plan of
Reorganization dated October 17, 2022.
Debtor operates a trucking company, which specializes in
transporting a variety of commodities ranging from construction
material, general freight or large objects fitted to being
transported in flatbed or stepdeck trailers, all within the State
of California.
In 2019, Debtor was sued based on allegations that an employee of
Debtor illegally parked a track on the highway, and that this was a
contributing factor cause to a serious auto accident. Debtor does
not have enough funds to defend the lawsuit and to pay any damage
award. This case was filed to reorganize Debtor's debts, and to pay
as much as Debtor is able to its creditors.
This is an operating Plan. The Debtor will continue to operate its
business and revenues generated from that operation to fund the
Plan.
The Plan provides that Debtor will pay $7,500 per month for 60
months into a Distribution Fund that will be used to pay creditors
in this case.
Class 1 consists of the secured claim of CIT Bank, N.A., which is
secured by a 2014 Kenworth. The claim is fully secured. The Class 1
Claim shall be unmodified by the Plan.
Class 2 includes all allowed general unsecured claims in this case.
The Debtor believes to be all undisputed Class 2 claims total
$996,147.51. In addition, the Debtor disputes approximately
$17,900,000.00 in claims filed in this case. A small part of these
disputed claims arise from a PPP loan that was partially forgiven,
but was filed at the unforgiven amount. The balance of the disputed
claims, amounting to $17,500,000.00, arise from claims that are
based on a traffic accident and are contingent, unliquidated, and
undisputed. Debtor intends to object to these claims and to obtain
a court determination of the appropriate amount of the claims.
This Class shall be paid pro rata from payments received by the
Distribution Fund after all higher priority claims have been paid
in full. Debtor estimates that the total amount of distribution to
Class 2 claimants will be approximately $100,000.00 and will result
in a dividend of approximately 0.5% of the amount claims by Class 2
claimants, unless the disputed claims are reduced substantially.
Depending on the total amount of administrative expenses and the
amount disputed claims are reduced, the distributions to Class 2
creditors could be substantially greater. However, in no event will
the distribution to Class 2 creditors total less than $70,000.00.
Distributions to creditors shall be made quarterly. This Class is
impaired.
Class 3 consists of equity interests of the Debtor. Class 3 equity
interests will maintain their equity interests.
A full-text copy of the Subchapter V Plan dated October 17, 2022,
is available at https://bit.ly/3yYmbhr from PacerMonitor.com at no
charge.
Attorneys for the Debtor:
Peter L. Fear, Esq.
Gabriel J. Waddell, Esq.
Peter A. Sauer, Esq.
Fear Waddell, P.C.
7650 North Palm Avenue, Suite 101
Fresno, CA 93711
Telephone: (559) 436-6575
Facsimile: (559) 436-6580
Email: pfear@fearlaw.com
gwaddell@fearlaw.com
psauer@fearlaw.com
About Alvarenga Transport
Alvarenga Transport, LLC filed a voluntary petition for relief
under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr.
E.D. Cal. Case No. 22-11226) on July 18, 2022, listing as much as
$1 million in both assets and liabilities. Judge Jennifer E.
Niemann oversees the case.
Fear Waddell, PC serves as the Debtor's legal counsel.
The Subchapter V trustee:
David Sousa
P. O. Box 3167
Visalia, CA 93278-3167
Phone: (559) 242-2065
Email: Dave@fresnotrustee.com
ANCHOR GLASS: S&P Downgrades ICR to 'CCC' on Refinancing Risk
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S&P Global Ratings lowered its issuer credit rating on U.S. based
glass packaging manufacturer Anchor Glass Container Corp. to 'CCC'
from 'CCC+'. At the same time, S&P lowered its issue-level ratings
on the company's first-lien secured and second-lien secured credit
to 'CCC' from 'CCC+' and 'CC' from 'CCC-', respectively. The
recovery rating on the first-lien debt remains '4', indicating its
expectation for average (30%-50%; rounded estimate: 35%) recovery
of principal in payment default; the recovery rating on the
second-lien debt remains '6', indicating our expectation for
negligible (0%-10%; rounded estimate: 0%) recovery of principal.
The negative outlook reflects the risk that the company could
pursue a distressed exchange or restructuring that S&P views as
tantamount to default.
Anchor's upcoming maturities, recent performance, and market
conditions present elevated refinancing risk. Most of the debt in
Anchor's capital structure is maturing within the next 14 months;
its asset-based lending (ABL) credit facility is due Sept. 7, 2023,
and its first-lien debt (term loan and Incremental term loan) is
due Dec. 7, 2023 ($663 million in total). The company's ABL balance
has more than doubled in 2022 (to around $46.5 million at the end
of Sept 2022), primarily due to working capital needs as Anchor
continued to support higher sales, which has rebounded from 2021
through additional inventory build through the second quarter.
Anchor experienced high capital spending, along with revenue and
margin pressures in 2021 that caused it to deplete its cash balance
and make substantial draws on its ABL facility. Revenues declined
about 10% in 2021 on customer losses, which the company was mostly
able to supplement with incremental business wins throughout the
year. Additionally, Anchor faced continued production and inventory
challenges related to a furnace rebuild in the company's
Lawrenceburg, Ind. Plant and Covid related impacts at other plants.
These challenges disrupted its ability to serve customers and
further deteriorated margins; in addition to importing glass
products from Europe and producing with suboptimal assets to meet
customer demand, margins were also compressed by significant cost
inflation, a substantial portion of which the company was unable to
pass on in a timely manner.
S&P said, "We believe the company must refinance its capital
structure or amend its credit agreements to avoid defaulting on its
commitments. Although we believe operating performance will improve
in 2022, the company's high leverage and diminishing liquidity
increase the likelihood of a distressed exchange offer in the next
12 months.
"We expect the steps Anchor is taking to de-risk its business,
including negotiating timelier pass throughs and better positioning
its product lines, will help stabilize revenues and margins in the
coming quarters. Although demand for glass packaging remains
strong, we believe growth is hindered by material conversion and
changing consumer preferences (e.g., secular movement away from
beer). However, Anchor has shifted its product mix away from mass
beer and is currently focused on growing its specialty liquor and
food segments, which we believe can support higher margins and are
not as susceptible to material conversion."
The positive margin effects of Anchor's cost pass-throughs are
visible in the first half of 2022 as they have caught up with
inflation, and Anchor has been negotiating with customers to
further improve pass-through efficacy by moving toward quarterly or
monthly lags. The company's S&P Global Ratings-adjusted EBITDA
margin was around 12% in 2021, and it has improved to about 16% in
the first half of 2022. S&P said, "We expect this momentum to
continue, and, assuming constant volumes and demand, we expect the
company will pass on significant costs in 2023. Additionally, the
furnace rebuild in the company's Indiana plant is complete,
resulting in more cost-effective production and inventory
building."
S&P said, "We expect anchor to continue to improve its customer
concentration and reduce the risk and disruption associated with
losing a key customer. In 2017, Anchor had primarily three large
mass beer customers; in 2021, six customers made up about half of
Anchor's sales. The company believes it is on track to have no
customer represent more than 10% of its business by 2023, and it
does not dedicate furnaces to any specific customer.
"The negative outlook on Anchor Glass reflects its upcoming debt
maturities and deteriorating liquidity. We believe the company's
capital structure is currently unsustainable and that current
market conditions make refinancing unlikely, increasing the risk of
payment default over the next 12 months.
"We could lower our rating on Anchor if we believe a payment
default or distressed restructuring is inevitable within the next
six months.
"We could raise the rating on Anchor if the company successfully
refinances its upcoming maturities or extends them through an
amendment of its credit agreement in a manner we would not consider
tantamount with a default, in addition to generating sufficient
free cash flow to cover its debt service, capital spending
requirements, and working capital needs."
ESG credit indicators: E-3, E-2, G-3
ARA MACAO: Seeks to Expand Scope of Barrow & Williams' Employment
-----------------------------------------------------------------
S. Cary Forrester, the appointed trustee in the Chapter 11 case of
Ara Macao Holdings, LP, filed an emergency motion to expand the
scope of representation of, and to authorize the payment of a flat
fee to, his Belizean counsel, Barrow & Williams LLP.
The trustee requested that the court expand the scope of Barrow &
William's representation to include handling the carriage of sale
on the pending sale of the land on the Placencia Peninsula in
Belize.
The firm agreed to handle the carriage of sale for 1 percent of the
purchase price, which will be evenly divided between the trustee
and the buyer. If there are no higher and better offers, that would
amount to a fee of $58,000, with the trustee paying $29,000.
The firm can be reached through:
Tania M. Moody
Barrow & Williams LLP
84 Albert Street
Belize City, Belize
Phone: +501 227-5280
Email: tmoody@barrowandwilliams.com
About Ara Macao Holdings
Ara Macao Holdings, L.P. provides real estate development
services.
On April 6, 2018, an involuntary Chapter 11 petition was filed
against Ara Macao Holdings (Bankr. D. Ariz. Case No. 18-03615). The
petitioning creditors are KB Partners, Inc., Christopher de Sibert,
Gary Nitsche, Daniel Dorgan, Richard Umbach and Edgewater
Resources, LLC. They are represented by Patrick A Clisham, Esq., at
Engelman Berger, P.C.
On May 8, 2018, the involuntary proceeding was converted to a
voluntary Chapter 11 case (Bankr. D. Ariz. Case No. 18-03615).
Judge Paul Sala oversees the case. Ara Macao Holdings hired Burch
& Cracchiolo, P.A. as its bankruptcy counsel.
The U.S. Trustee for Region 14 appointed an official committee of
unsecured creditors in Ara Macao Holdings' bankruptcy case. The
committee is represented by Engelman Berger, P.C.
S. Cary Forrester is the Chapter 11 trustee appointed for Ara Macao
Holdings. The trustee hired Forrester & Worth, PLLC as bankruptcy
counsel and Snell & Wilmer LLP as special counsel.
ARIAN MOWLAVI: PCO Submits Third Interim Report
-----------------------------------------------
Tamar Terzian, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Central District of
California a third interim report regarding the quality of patient
care provided at Dr. Arian Mowlavi's surgical center.
The report, which covers the period from July 9 to Sept. 30, was
filed following the PCO's visit to the site during which she
reviewed various medical charts; observed interactions between the
staff and patients; conducted a tour of the surgical center and the
physician's office; and met with Dr. Mowlavi briefly to discuss any
potential concerns.
In her report, the PCO noted that there is sufficient supply for
surgical needs at the facility; sanitary practices are being
observed; medication is properly stored; and appropriate controls
concerning the security of controlled substances appeared to be in
place. The PCO commended the staff for being attentive to patients
and for being aware of the policies and procedures implemented to
make the office and the surgical center efficient.
Ms. Terzian has no recommendations currently. The PCO will continue
to monitor and is available to respond to any concerns or questions
of the court or interested party, according to the report.
A copy of the third interim report is available for free at
https://bit.ly/3TkvOib from PacerMonitor.com.
The ombudsman may be reached at:
Tamar Terzian, Esq.
Epps & Coulson, LLP
1230 Crenshaw Blvd.
Torrance, CA 90501
Telephone: (818) 242-1100
Facsimile: (818) 242-1012
Email: tterzian@eppscoulson.com
About Arian Mowlavi
Arian Mowlavi is a medical doctor specializing in reconstructive
and cosmetic surgery. Dr. Mowlavi conducts business through his
wholly owned medical corporation known as A.M. Cosmetic Surgery
Clinics, Inc., a California Corporation.
Dr. Mowlavi filed a voluntary petition for Chapter 11 protection
(Bankr. C.D. Calif. Case No. 22-10296) on Feb. 21, 2022. Judge
Scott C. Clarkson oversees the case.
ASTECH ENGINEERED: Seeks to Hire Hilco Valuation as Appraiser
-------------------------------------------------------------
Astech Engineered Products, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Hilco
Valuation Services, LLC as its appraiser.
The scope of Hilco Valuation’s Appraisal will be as follows:
-- Each asset will be clearly identified by manufacturer, model
number, serial number, year of manufacture, when available,
capacity, function and accessories.
-- Perishable tooling, inspection equipment, hand tools,
machine accessories, factory supplies, minor shop equipment, select
business machines and office furniture will be grouped, identified
and evaluated in aggregate lots.
-- Building related fixtures will be excluded from the
Appraisal.
-- Product related tooling, dies, fixtures and molds will be
excluded from the appraisal.
-- A total value will be provided in letterform, with a
Statement of Conditions and a signed Certification of Appraisal.
Hilco Valuation will receive a total fee in the amount of $17,500.
Sarah Baker, managing member of Hilco Valuation, disclosed in a
court filing that his firm does not hold or represent any interest
adverse to the Debtor's bankruptcy estate, and is "disinterested"
as defined in section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Sarah K. Baker
Hilco Valuation Services, LLC
5 Revere Dr., Suite 206
Northbrook, IL 60062
Phone: 847-849-2994
Email: sbaker@hilcoglobal.com
About Astech Engineered Products
Astech Engineered Products, Inc., a company in Santa Ana, Calif.,
produces welded honeycomb sandwich structures. The company offers
its products to the commercial, aerospace, marine, transportation,
and defense industries throughout the world.
Astech filed a petition for relief under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10635) on
July 15, 2022, listing $10 million to $50 million in assets and $1
million to $10 million in liabilities. David M. Klauder has been
appointed as Subchapter V trustee.
Brooks Wilkins Sharkey & Turco, PLLC and Cozen O'Connor serve as
the Debtor's bankruptcy counsels. Grobstein Teeple, LLP is the
financial advisor.
AVINGER INC: All Five Proposals Passed at Annual Meeting
--------------------------------------------------------
At the 2022 Annual Meeting of Avinger, Inc., which was held on Oct.
14, 2022, the shareholders:
(1) elected Jeff Soinski as a Class I director to serve until
the
2025 annual meeting of stockholders and until his successor
is duly elected and qualified;
(2) ratified the appointment of Moss Adams LLP as the Company's
independent registered public accounting firm for its fiscal
year ending Dec. 31, 2022;
(3) approved, on an advisory basis, the compensation paid to the
Company's named executive officers, as disclosed in the
Executive Compensation section of the Company's definitive
proxy statement'
(4) approved an amendment to the company's 2015 Equity
Incentive
Plan to (i) increase the number of shares reserved for
issuance under the plan by 1,750,000 shares and (ii) remove
provisions providing for the automatic annual increase in
the
shares reserved for issuance under the plan, as described in
the Company's definitive proxy statement; and
(5) approved the adjournment of the Annual Meeting, if
necessary,
to continue to solicit votes in favor of the foregoing
proposals.
About Avinger
Headquartered in Redwood City, California, Avinger, Inc. --
http://www.avinger.com-- is a commercial-stage medical device
company that designs and develops image-guided, catheter-based
system for the diagnosis and treatment of patients with Peripheral
Artery Disease (PAD).
Avinger reported a net loss applicable to common stockholders of
21.59 million for the year ended Dec. 31, 2021, a net loss
applicable to common stockholders of $22.87 million for the year
ended Dec. 31, 2020, a net loss applicable to common stockholders
of $23.03 million for the year ended Dec. 31, 2019, and a net loss
applicable to common stockholders of $35.69 million for the year
ended Dec. 31, 2018. As of June 30, 2022, the Company had $27.17
million in total assets, $21.85 million in total liabilities, and
$5.32 million in total stockholders' equity.
BELMONT TWIN: Case Summary & Six Unsecured Creditors
----------------------------------------------------
Debtor: Belmont Twin, LLC
225 Broadway
FL 39
New York, NY 10007
Business Description: The Debtor is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: October 20, 2022
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 22-42605
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: Avrum J. Rosen, Esq.
LAW OFFICES OF AVRUM J. ROSEN, PLLC
38 New St
Huntington, NY 11743-3327
Tel: 631-423-8527
Fax: 631-423-4536
Email: arosen@ajrlawny.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Serach Neustadt as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/SZKJMQY/Belmont_Twin_LLC__nyebke-22-42605__0001.0.pdf?mcid=tGE4TAMA
BIONIK LABORATORIES: Appoints New CEO and CFO
---------------------------------------------
Bionik Laboratories Corp. has appointed Richard Russo, Jr. as chief
executive officer and president, who previously served as chief
financial officer. Filling the role as executive vice president
and chief financial officer will be Dan Gonsalves, formerly
Bionik's corporate controller. Both appointments are effective
immediately.
Mr. Russo and Mr. Gonsalves will implement the Company's recently
announced strategic growth plan featuring a roadmap of branded
outpatient care centers, commercial expansion to new global
markets, and new efforts to amplify data collection and analysis
across its devices.
Bionik Laboratories' InMotion robotic devices are installed at 450
locations worldwide, including more than 300 in the United States.
As the Company looks ahead, it intends to focus on four areas of
growth with its new executive team. These areas include:
* Establish Bionik-Owned 'Centers of Excellence': The recently
announced initiative is intended to further establish Bionik as
the stroke recovery experts through Bionik owned and operated
neuro-care centers to be located throughout the US. The first such
center, located in Clermont, Florida, was acquired by Bionik in
September 2022, with further acquisition candidates being
evaluated.
* Continue Commercial Expansion Globally: Bionik InMotion
devices are present across 20 countries worldwide, and the Company
will continue its efforts to expand InMotion's presence to new
markets including the EU, China, Canada, and Brazil.
* Enhanced Data Collection Capabilities: A recent whitepaper
found patients utilizing InMotion robotic devices measured upwards
of 15-20% improvement over a 14-day time-frame. The new data
suggests additional sessions with InMotion robots improve a
patient's ability to move more smoothly, with intention, and in a
controlled manner. Bionik will continue to enhance this level of
data collection and use its centers of excellence as another
vehicle for collection to further provide patients and clinicians
with a personalized rehab experience. With the first flagship
center from Bionik now operating, additional data collection
efforts are underway.
* Focus on New Technology & Products: A focus on IoT and data
integration with existing products is expected to further enhance
Bionik's cloud-connected data analytics platform InMotion' Connect
to continue to provide positive patient outcomes. Real-time
performance metrics, prediction metrics for treatments and
outcomes, and more will lead towards the build of a large data-set
to further AI-powered outcomes.
"Bioniks' new strategic plan is designed to bring neuro-recovery
care centers nationwide to showcase and provide additional
accessibility to our technology and solutions through a patient
care model that goes beyond the boundaries of insurance," said Rich
Russo Jr., president and CEO of Bionik. "With my appointment as
CEO, I'm excited to have the confidence of the Board to lead Bionik
through the next stages of growth and development."
"The global neurorehabilitation devices market alone is projected
to reach $4.9 billion by 2028," said Dan Gonsalves, CFO and
executive vice president at Bionik. "With a growing installed base
of InMotion devices driving awareness and usage and a global
distribution strategy, Bionik expects to build on its upward
trajectory."
Bionik's Inmotion Therapy helps stroke survivors and those with
other neurological conditions to regain arm and hand movement by
training shoulder protraction/retraction, flexion/extension,
abduction/adduction, internal/external rotation, elbow
flexion/extension and hand grasp/release. InMotion robotic devices
guide the patient through specific tasks, aiming to improve motor
control of the arm and hand by increasing strength, range of motion
and coordination, and assisting with the provision of efficient,
effective, intensive sensorimotor therapy.
On Oct. 11, 2022, the Company and Mr. Russo entered into an
Amendment No. 2 to his employment agreement dated Nov. 30, 2020,
which in addition to the above appointments, provided for the
following:
* Current annual salary of $265,000 would increase to $325,000,
with the increase deferred and accruing until a later date.
* Bonus target would increase from 40% to 50%
The Board further granted to Mr. Russo options to purchase 60,000
shares of the Company's common stock at an exercise price per share
equal to the fair market value of the Company's common stock on
Oct. 6, 2022, the date of grant, and which will vest 1/3 on each of
the first three anniversaries of the grant date.
The Company also entered into an employment agreement with Mr.
Gonsalves, effective as of Oct. 6, 2022. Mr. Gonsalves will be
employed by the Company as its chief financial officer until
terminated pursuant to the termination provisions described in the
Employment Agreement. Pursuant to the terms of the Employment
Agreement, Mr. Gonsalves will receive an annual base salary of
$240,000 per annum. The annual base salary shall be reviewed on an
annual basis. Mr. Gonsalves may be entitled to receive an annual
bonus of up to 30% of annualized actual base salary, based on
performance in the previous fiscal year. He is also entitled to
participate in the Company's equity incentive plan, and shall be
granted options to purchase an aggregate of 60,000 shares of the
Company's common stock, at an exercise price per share equal to the
fair market value of the Company's common stock on Oct. 6, 2022,
the date of grant, and which will vest 1/3 on each of the first
three anniversaries of the grant date.
About BIONIK Laboratories
Bionik Laboratories Corp. -- http://www.BIONIKlabs.com-- is a
robotics company focused on providing rehabilitation and mobility
solutions to individuals with neurological and mobility challenges
from hospital to home. The Company has a portfolio of products
focused on upper and lower extremity rehabilitation for stroke and
other mobility-impaired patients, including three products on the
market and three products in varying stages of development.
Bionik reported a net loss and comprehensive loss of $10.41 million
for the year ended March 31, 2022, compared to a net loss and
comprehensive loss of $13.62 million for the year ended March 31,
2021. As of June 30, 2022, the Company had $4 million in total
assets, $2.41 million in total liabilities, and $1.60 million in
total stockholders' equity.
Toronto, Canada-based MNP LLP, the Company's auditor since 2015,
issued a "going concern" qualification in its report dated June 9,
2022, citing that the Company has experienced losses and has a
working capital deficiency and an accumulated deficit. These
conditions, along with other matters, raise substantial doubt about
Company's ability to continue as a going concern.
BITNILE HOLDINGS: Unit to Launch Bitcoin Marketplace Platform
-------------------------------------------------------------
BitNile Holdings, Inc.'s subsidiary, BitNile, Inc., has begun
development of a Bitcoin-based marketplace platform, which expects
to leverage blockchain and other emerging technologies. BNI
believes that the Marketplace will reduce the complexity of
transacting in Bitcoin and result in lower transaction fees than
traditional e-commerce. The Marketplace, planned for release in
the first half of 2023, will be a multi-vendor e-commerce platform
supporting a wide array of business sectors, including retail, real
estate, commodities, and other consumer-driven offerings.
With its planned advanced buyer and seller functionality,
third-party integrations, and enhanced security through a
comprehensive buyer and seller pre-verification program, the
Marketplace intends to provide a flexible, functional, and broad
e-commerce experience to its users. The Company intends for the
Marketplace to be a super-app, widely considered as a mobile or web
application that can provide multiple services, including payment
and financial transaction processing. The Marketplace will be
accessible through all modern web browsers and is expected to
include native iOS and Android mobile applications that will be
available for download on the Apple and Google Play Stores.
BNI has appointed veteran developer Douglas Gintz as its president
and chief product officer to lead the effort. Mr. Gintz is a
strategist, programmer, and marketer with broad experience
delivering technology and content solutions to a wide audience for
over 30 years. Specializing in emerging technologies, Mr. Gintz
has developed e-commerce applications, DNA reporting engines,
medical billing software, and manufacturing compliance systems for
companies ranging from startups to multinational corporations.
Milton "Todd" Ault, III, the Company's executive chairman, stated,
"Our plan is to build an innovative Bitcoin-focused e-commerce
platform that combines our experience in the cryptocurrency sector
with our long-term philosophy of investing in disruptive
technologies with a global impact. We believe the prospect of
powering e-commerce with Bitcoin is a huge opportunity. The global
business-to-consumer e-commerce market reached a value of $4.1
Trillion in 2021, according to IMARC Group, and Pew Research Center
reported that roughly three-in-ten Americans aged 18 to 29 say they
have invested in, traded or used a cryptocurrency. Our goal is to
deliver an innovative marketplace leveraging blockchain and other
innovative technologies. We are pleased to have Douglas on our
team to lead this effort."
"I'm excited to be leading an experienced team in reinventing what
it means to transact in crypto," said Douglas Gintz, president and
chief product officer of BNI. "Recently, online stores began
adding crypto payment solutions to their checkout processes in
response to demand, but that's not enough. Building a platform
from the ground up allows us to deliver more innovative, secure,
and seamless user experiences beyond just payments."
About BitNile Holdings
BitNile Holdings, Inc. (formerly known as Ault Global Holdings,
Inc.) -- www.BitNile.com -- is a diversified holding company
pursuing growth by acquiring undervalued businesses and disruptive
technologies with a global impact. Through its wholly and
majority-owned subsidiaries and strategic investments, the Company
owns and operates a data center at which it mines Bitcoin and
provides mission-critical products that support a diverse range of
industries, including defense/aerospace, industrial, automotive,
telecommunications, medical/biopharma, and textiles. In addition,
the Company extends credit to select entrepreneurial businesses
through a licensed lending subsidiary. BitNile's headquarters are
located at 11411 Southern Highlands Parkway, Suite 240, Las Vegas,
NV.
BitNile reported a net loss of $23.97 million for the year ended
Dec. 31, 2021, a net loss of $32.73 million for the year ended Dec.
31, 2020, a net loss of $32.94 million for the year ended Dec. 31,
2019, and a net loss of $32.98 million for the year ended Dec. 31,
2018. As of June 30, 2022, the Company had $596.27 million in
total assets, $133.98 million in total liabilities, $116.89 million
in redeemable noncontrolling interests in equity of subsidiaries,
and $345.40 million in total stockholders' equity.
BSPV-PLANO: Lender Agrees to Cash Collateral Access Thru Oct. 31
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas,
Sherman Division, entered an order amending the Final Cash
Collateral Order, such that:
* Paragraph P(ii) of the Final Order is amended by deleting
"$3,036,693.75" and replacing it with "$3,892,952.".
* Paragraph 5(ii) of the Final Order is amended by deleting
"August 26, 2022" and replacing it with "October 31, 2022".
* Paragraph 21 of the Final Order is amended by inserting ";
provided, however, that the Debtor agrees that the amount of the
accrued but unpaid interest of the Bonds as of the Petition Date
equals $3,982,952," after the reference to "set forth in P(i) or
(ii) above".
The Debtor's extended Cash Collateral Budget has been approved by
The Huntington National Bank, as Bond Trustee.
A copy of the order is available at https://bit.ly/3EMXhoB from
PacerMonitor.com.
About BSPV-Plano
BSPV-Plano, LLC, a company in Plano, Texas, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Texas Case No.
22-40276) on March 1, 2022, listing up to $100 million in both
assets and liabilities. Richard Shaw, manager, signed the
petition.
Judge Brenda T. Rhoades oversees the case.
Thomas D. Berghman, Esq., at Munsch Hardt Kopf and Harr, PC and
Grant Thornton, LLP serve as the Debtor's legal counsel and
financial advisor, respectively.
The Huntington National Bank is represented by Greenberg Traurig,
LLC and Ross & Smith, PC.
CAPITAL RIVER: Seeks to Hire Sandground West as Special Counsel
---------------------------------------------------------------
Capital River Enterprises, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of Virginia to hire Brian
D. West, Esq. and Sandground, West, Silek, Raminpour & Wright, PLC
as its special counsel.
Prepetition, the Debtor retained Sandground to file suit against
inter alia Messrs. Roupas and Abod and BCJCL, LLC (Lenders) in the
Superior Court of the District of Columbia, Case #2022 CA 000258
R(RP). The Lawsuit was filed in January 2022 and raised causes of
action to quiet title in the Properties, for tortious interference
with business relations, for slander of title, and for civil
conspiracy. Also prepetition, the Superior Court granted the
Lenders' motions to dismiss the Lawsuit and the Debtor has filed an
appeal of such adverse ruling in the District of Columbia Court of
Appeals, Appeal #22-CV-0548, which appeal remains pending. The
Debtor seeks to employ Sandground to continue prosecution of the
appeal and thereafter to complete any litigation against the
Lenders upon remand or otherwise.
The Sandground Firm will bill for services rendered at its usual
and customary hourly rate of $600 for services performed by Brian
D. West, Esq. and will seek the reimbursement of all out-of-pocket
expenses incurred.
The Sandground Firm and its members are disinterested persons
within the meaning of 11 U.S.C. Sec. 327, according to court
filings.
The firm can be reached through:
Brian D. West, Esq.
Sandground, West, Silek,
Raminpour & Wright, PLC
8229 Boone Blvd. Suite 610
Vienna, VA 22182
Phone: 703-564-4600
About Capital River Enterprises
Capital River Enterprises, LLC filed its voluntary petition for
relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. Va.
Case No. 22-11169) on Sep 6, 2022. At the time of filing, the
Debtor estimated $1,000,001 to $10 million in both assets and
liabilities.
Judge Brian F Kenney presides over the case.
Steven B. Ramsdell, Esq. at Tyler, Bartl & Ramsdell, P.L.C.
represents the Debtor as counsel.
CAPSTONE GREEN: Registers 600K Additional Shares Under 2017 Plan
----------------------------------------------------------------
Capstone Green Energy Corporation has filed with the Securities and
Exchange Commission a registration statement on Form S-8 to
register 600,000 additional shares of Common Stock reserved for
issuance under the 2017 Equity Incentive Plan. The Company
initially registered 300,000 shares of its common stock issuable
under the 2017 Plan pursuant to a Registration Statement on Form
S-8 filed with the SEC on Nov. 21, 2017, registered an additional
600,000 shares of its common stock issuable under the 2017 Plan
pursuant to a Registration Statement on Form S-8 filed with the SEC
on Nov. 7, 2019, registered an additional 500,000 shares of its
common stock issuable under the 2017 Plan pursuant to a
Registration Statement on Form S-8 filed with the SEC on Sept. 11,
2020 and registered an additional 500,000 shares of its common
stock issuable under the 2017 Plan pursuant to a Registration
Statement on Form S-8 filed with the SEC on Sept. 15, 2021. A
full-text copy of the prospectus is available for free at:
https://www.sec.gov/Archives/edgar/data/1009759/000155837022014965/tmb-20221012xs8.htm
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.
CARLISLE LOGISTICS: Files Emergency Bid to Use Cash Collateral
--------------------------------------------------------------
Carlisle Logistics, LLC asks the U.S. Bankruptcy Court for the
Northern District of Texas, Dallas Division, for authority to use
cash collateral and provide adequate protection.
The Debtor requires the use of cash collateral to make the payroll
and continue operations.
Prior to the bankruptcy, creditors Star Advance, Pearl Funding,
Meged Funding Silverline Services and Mantis Funding had each
delivered to the Debtor's customer and Debtor's bank, Navy Federal
Credit Union, notices pursuant to UCC section 9-404, section 9- 406
and section 9- 607 instructing the customers and the Bank to
withhold any funds due the Debtor and, instead, deliver those funds
to Star Advance et al.
At the time of the delivery of the Notices, no Creditor had a
Judgment against the Debtor.
As a result of the Notices, the Debtor has been unable to operate.
All creditors have failed and refused to release the Notices. The
Debtor's customers and Bank continue to hold funds that the Debtor
could use to reorganize. The funds held by the Debtor's customers
may constitute cash collateral.
As adequate protection, the Debtor is willing to provide the
Creditors with replacement liens pursuant to 11 U.S.C. section 552
in accordance with their existing priority without making any
determination at this time as to the validity or priority of the
claims asserted by the Creditors.
The Debtor also requests that the matter be set down for an
Emergency Hearing.
A copy of the Debtor's motion is available at
https://bit.ly/3VDsws8 from PacerMonitor.com.
About Carlisle Logistics, LLC
Carlisle Logistics, LLC operates a trucking business. Carlisle
Logistics sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. N.D. Tex. Case No. 22-31885) on October 10, 2022. In
the petition filed by Fred Carlisle, its managing member, the
Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Eric A. Liepins, Esq. is the Debtor's legal counsel.
CELSIUS NETWORK: Core Scientific to Defend Interests
----------------------------------------------------
Jamie Crawley of CoinDesk reports that Crypto hosting and mining
company Core Scientific (CORZ) has said it intends to pursue what
it feels it is owed by Celsius Mining, the mining affiliate of the
beleaguered crypto lender.
The firm said in a U.S. Securities and Exchange Commission (SEC)
filing on Wednesday, October 12, 2022, that it "intends to
vigorously defend its interests" and that it has retained legal
advisors to assist it with relation to Celsius Mining.
"An adverse or untimely ruling by the bankruptcy court that
provides Celsius the benefits of the Company's hosting services
without Celsius fully paying the costs of such services would have
a material effect on the Company's business, financial condition,
results of operations and cash flows," the firm said.
Core Scientific provides hosting services to Celsius Mining, for
which it claims to be owed around $5.4 million. Along with Celsius
Network, its parent company, Celsius Mining filed for Chapter 11
bankruptcy protection in the U.S. Bankruptcy Court for the Southern
District of New York in July 2022.
Last month, Celsius alleged that Core was in violation of the
automatic stay which Chapter 11 bankruptcy protection provides,
which prevents any enforcement action or the start or continuation
of other legal proceedings by creditors.
Core Scientific disagrees with the allegations made and will
continue to seek "resolution from the bankruptcy court and payment
of any outstanding amounts owed."
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtor estimated assets and liabilities between $1
billion and $10 billion.
Kirkland & Ellis LLP is serving as legal counsel, Centerview
Partners is serving as financial advisor, and Alvarez & Marsal is
serving as restructuring advisor to Celsius.
Stretto, the claims agent, maintain the page
https://cases.stretto.com/celsius
CELSIUS NETWORK: Examiner Taps Jenner & Block as Counsel
--------------------------------------------------------
Shoba Pillay, Esq., Chapter 11 examiner of Celsius Network, LLC and
its affiliates, seeks approval from the U.S. Bankruptcy Court for
the Southern District of New York to retain Jenner & Block, LLP as
her legal counsel.
The firm will render these services:
a. represent and assist the examiner in the discharge of her
duties and responsibilities;
b. assist the examiner in the preparation of reports and
represent her in the preparation of motions, applications, notices,
orders and other documents necessary in the discharge of the
examiner's duties;
c. represent the examiner at hearings and other proceedings
before this Court (and, to the extent necessary, any other court);
d. analyze and advise the examiner regarding any legal issues
that arise in connection with the discharge of her duties;
e. assist the examiner with interviews, examinations and the
review of documents and other materials in connection with the
examiner's investigation;
f. perform all other necessary legal services on behalf of the
examiner in connection with the Debtors' Chapter 11 cases; and
g. assist the examiner in undertaking any additional tasks or
duties that the court might direct or that the examiner might
determine are necessary and appropriate in connection with the
discharge of her duties.
The firm's hourly rates are as follows:
Partners $1,085 - $1,870
Counsel $900 - $1,650
Associates $700 - $1,095
Staff Attorneys $565 - $890
Discovery Attorneys $330 - $445
Paraprofessionals $295 - $555
Vincent Lazar,, Esq., a partner at Jenner & Block, disclosed in a
court filing that the firm and its attorneys neither hold nor
represent any interest adverse to the committee.
The firm can be reached through:
Vincent E. Lazar, Esq.
353 N. Clark Street
Chicago, IL 60654-3456
Phone: 312 222-9350
Fax: 312 527-0484
Email: csteege@jenner.com
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to
get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network, LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case
No.22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtors estimated assets and liabilities between $1
billion and $10 billion.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as legal counsels; Centerview Partners, LLC as
investment banker; and Alvarez & Marsal North America, LLC as
financial advisor. Stretto, the claims agent and administrative
advisor, maintains the page https://cases.stretto.com/celsius
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. The committee tapped White & Case, LLP as
its bankruptcy counsel; Elementus Inc. as its blockchain forensics
advisor; M3 Advisory Partners, LP as its financial advisor; and
Perella Weinberg Partners, LP as its investment banker.
Shoba Pillay, Esq., is the examiner appointed in the Debtors'
Chapter 11 cases. Jenner & Block, LLP and Huron Consulting
Services, LLC serve as the examiner's legal counsel and financial
advisor, respectively.
CELSIUS NETWORK: Opposes Bid to Appoint Preferred Equity Committee
------------------------------------------------------------------
Celsius Network, LLC and its affiliates ask the U.S. Bankruptcy
Court for the Southern District of New York to deny the motion to
appoint an official committee that will represent equity investors
in their Chapter 11 cases.
Last month, Community First Partners, LLC and three other equity
investors of Celsius Network Limited, one of the Celsius Network
affiliates, urged the court to appoint an equity committee, saying
they deserve an equal seat at the table given that equity investors
have a substantial likelihood of recovery in CNL's bankruptcy case.
"The requesting equity holders' contention that they should be on
equal footing with other stakeholders is blatantly incorrect when
creditor claims are statutorily paid ahead of equity claims,"
Celsius Network's attorney, Joshua Sussberg, Esq., at Kirkland &
Ellis, said. "The Bankruptcy Code prioritizes the treatment of
creditor claims above those of equity holders."
According to the attorney, the equity investors are already
represented by a bankruptcy attorney and using estate resources to
advance their interests is inappropriate.
The official committee representing unsecured creditors also
opposed the formation of an equity panel, saying the equity
investors "failed to establish that they have a substantial
likelihood of recovery" in the companies' Chapter 11 cases.
According to the committee, the companies are insolvent by $1.2
billion based on the testimony of their chief financial officer,
and that their total liabilities are approximately $329 million
greater than their total assets based on their latest monthly
operating report.
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtor estimated assets and liabilities between $1
billion and $10 billion.
Kirkland & Ellis LLP is serving as legal counsel, Centerview
Partners is serving as financial advisor, and Alvarez & Marsal is
serving as restructuring advisor to Celsius.
Stretto, the claims agent, maintains the page
https://cases.stretto.com/celsius
CHARIOT PARENT: Fitch Lowers LongTerm IDR to 'B-', Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has downgraded the ratings of Chariot Parent LLC and
Chariot Buyer LLC (collectively dba Chamberlain Group), including
the Long-Term Issuer Default Ratings (IDR) to 'B-' from 'B'. Fitch
has also downgraded the ratings of the company's first lien secured
revolver and term loan to 'B'/'RR3' from 'B+'/'RR3' and the
company's second lien term loan to 'CCC'/'RR6' from 'CCC+'/'RR6'.
The Rating Outlook is Stable.
The downgrade reflects Fitch's expectation that leverage will
remain elevated for the foreseeable future with Fitch-calculated
total debt to operating EBITDA above 8x at year-end 2022 before
declining to 7x at year-end 2023 relative to the 6.5x negative
rating sensitivity the 'B' IDR considered.
Chamberlain Group's 'B-' IDR and Stable Outlook reflect its high
leverage, which is counterbalanced by its strong profitability and
FCF margins, its solid competitive position, and diversified
end-markets. Chamberlain's extended maturity schedule, adequate
liquidity and manufacturing concentration risk are also factored
into the ratings and Outlook.
KEY RATING DRIVERS
Elevated Leverage Levels: Fitch expects total debt to operating
EBITDA (based on Fitch adjustments) to be above 8x at the end of
2022 and settle around 7x at the end of 2023 before declining to
between 6.5x and 7.0x at year-end 2024. Lower margins from cost
inflation and the lag of pricing actions, combined with weaker than
expected FCF generation have resulted in lower EBITDA and higher
debt levels than previously forecast. Fitch's rating case forecast
assumes modest margin recovery in 2023 and 2024.
Margin Pressure: Fitch expects EBITDA margins will situate around
19% in 2022 compared with Fitch's previous expectation of 21%-22%
due to input cost inflation and logistic cost increases. The
company has implemented pricing increases in 2022 to offset cost
inflation, which should benefit margins during the latter part of
2022 and into 2023 as these increases are fully realized. Fitch
expects EBITDA margins will increase to 21%-22% in 2023 and 2024
though this would be challenged in the event of continued cost
inflation. The company could report lower margins next year if cost
inflation and supply chain bottlenecks accelerate or continue
longer than Fitch's rating case forecast assumes, which could keep
leverage at elevated levels.
Lower FCF Generation: Fitch expects the company will generate FCF
margin of 2%-3% in 2022, below its previous expectation of
6.0%-6.5%, due to lower EBITDA margins, higher working capital due
to some inventory build-up, and higher interest payments. Fitch
expects Chamberlain will generate FCF margin of 4.5%-5.5% in 2023
and 2024, which is more in line with pre-pandemic levels.
Solid Overall Competitive Position: Chamberlain Group has
well-recognized brand names with leadership positions in served
residential and commercial access control end markets. The company
also has a well-diversified distribution channel comprised of
dealers and installers, distributors, OEMs and large retailers,
including The Home Depot and Lowe's. Fitch believes these
attributes provide the company with a solid position in the value
chain and support stable to growing margins.
Exposure to Repair Segment Limits Cyclicality: Fitch views
Chamberlain's well diversified end-market exposure positively as
the residential and commercial construction markets typically have
differing cycles and the retrofit market is less cyclical than the
new construction market. This should allow the company to generate
more stable revenues and cash flow through the cycle. Management
estimates that about 50% of revenues are directed to the
residential market, 41% to the commercial market, 4% to the
automotive market and 4% to international operations. Within its
residential segment, about 76% is directed to the retrofit market,
which includes a high proportion of non-discretionary break-fix
activity.
Manufacturing and Distribution Footprint: A vast majority of
Chamberlain's products are manufactured at its facility in Nogales,
Mexico and finished goods are shipped from this location to seven
distribution centers across North America. The strategic
manufacturing footprint allows the company to produce high-quality
products at competitive costs. However, it also exposes Chamberlain
to significant risks should disruptions occur at this facility.
Such was the case during the early part of the pandemic when the
company had a five-week shutdown at its production facility in
Nogales. Additionally, the company's sales were temporarily
disrupted during 2Q22 due to an order by the International Trade
Commission (ITC) requiring the company to cease from importing,
selling and distributing certain of its products that the ITC found
infringed on certain patents maintained by a competitor. Fitch
expects management will evaluate alternatives to hedge against the
manufacturing concentration risk.
Blackstone Ownership: Fitch expects the sponsor will maintain a
relatively high leverage tolerance as evidenced by the high
leverage multiple for the company's acquisition by Blackstone.
Fitch expects the company will lower leverage through EBITDA
growth, but will likely remain in the 6x-8x range during the rating
horizon. Realization of margin improvement in the next few years,
combined with a commitment from the sponsor to reduce debt modestly
beyond the required quarterly amortization, could provide positive
momentum for the ratings.
Fitch also expects Chamberlain will benefit from Blackstone's
ownership, including accelerating the company's growth in the
commercial garage door opener and access solutions market.
DERIVATION SUMMARY
Chamberlain has similar profitability and FCF metrics but higher
leverage than Fitch's public-rated universe of building products
manufacturers, which are concentrated in the low-investment-grade
rating categories. These peers typically have total-debt to
operating EBITDA of less than or equal to 3.0x and global operating
profiles.
Chamberlain also has modestly higher leverage than large building
products distributors rated by Fitch, including Park River
Holdings, Inc. (B/Negative) and LBM Acquisition, LLC (B/Stable).
Chamberlain is smaller in scale but is better positioned in the
value chain and has meaningfully higher profitability and FCF
metrics compared with these distributors.
Fitch applies its Parent and Subsidiary Linkage Criteria and uses a
consolidated approach in determining the ratings of Chariot Parent,
LLC and Chariot Buyer LLC. The linkage follows a weak parent/strong
subsidiary approach, and strong overall linkage between Chariot
Parent and Chariot Buyer. Fitch rates Chariot Parent as it is the
issuer of the financial statements and either directly or
indirectly owns Chariot Buyer (borrower under the credit
agreements) and all of the operating subsidiaries.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Revenues grow 6.0%-7.0% in 2022 and 2.0%-2.5% in 2023 and 2024;
- EBITDA margin of 18.5%-19.5% in 2022 and 21.0%-22.0% in 2023
and 2024;
- FCF margin of 2.0%-3.0% in 2022 and 4.5%-5.5% in 2023 and 2024;
- Debt to EBITDA of 8.0x-8.5x at the end of 2022 and 6.5x-7.5x
in 2023 and 2024;
- EBITDA/interest paid of 1.5x-2.0x during 2022 and 2.0x-2.5x
in 2023 and 2024.
Recovery Analysis Assumptions
The recovery analysis assumes that Chamberlain would be considered
a going-concern (GC) in bankruptcy and that the company would be
reorganized rather than liquidated. Fitch has assumed a 10%
administrative claim.
Chamberlain's GC EBITDA estimate of $250 million projects a
post-restructuring sustainable cash flow and is about 7% below
Fitch's estimated June 30, 2022 LTM EBITDA and 21% below Fitch's
projected 2022 EBITDA.
Fitch assumes that a default would occur from a meaningful and
continued decline in residential and commercial construction
activity, combined with the loss of one of its top customers. Fitch
estimates revenues that are 15% lower and EBITDA margins of about
17.9% (100 bps below projected 2022 EBITDA margin) would result in
about $250 million GC EBITDA, which would capture the lower revenue
base of the company after emerging from a downturn plus a
sustainable margin profile after right sizing.
An EV multiple of 6.5x EBITDA is applied to the GC EBITDA to
calculate a post-reorganization enterprise value. The 6.5x multiple
is below the 14.7x purchase multiple for the Chamberlain Group. The
EV multiple is higher than the 6.0x multiple Fitch uses for LBM
Acquisition, LLC and Park River Holdings, respectively. Fitch
believes Chariot has a stronger competitive position in the value
chain as a manufacturer compared with LBM and Park River, both of
which are distributors. The company also benefits from a dominant
market share, which is reflected in the EBITDA margins in the
high-teens.
The revolver is assumed to be fully drawn at default. The analysis
results in a recovery corresponding to an 'RR3' for the $250
million first lien revolver and $2.015 billion first lien secured
term loan and a recovery corresponding to an 'RR6' for the $600
million second lien secured term loan.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch's expectation that total debt-to-operating EBITDA will be
sustained below 6.5x;
- EBITDA to interest paid sustained above 2.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDA to interest paid sustained below 1.5x;
- Fitch's expectation that FCF generation will be sustained at
neutral or negative levels, leading to liquidity issues or
concerns.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity Position: Chamberlain had an adequate liquidity
position as of June 30, 2022 with cash of $52.9 million and roughly
$163 million of borrowing availability under its $250 million
revolving credit facility that matures in 2026.
Fitch expects the company to generate FCF margin of about 2.5%-3.0%
in 2022 and about 4.5%-5.5% annually (between $75 million to $100
million), which is sufficient to cover annual amortization of
$20.15 million under the 1L TL. The company has no debt maturities
until 2028, when the 1L TL matures.
ISSUER PROFILE
Chariot Parent LLC (dba Chamberlain Group) is a leading North
American provider of access control solutions, with a strong
position in residential garage doors openers, commercial door
opener and gate controls, and automotive garage access remotes.
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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Chariot Buyer LLC LT IDR B- Downgrade B
senior secured LT B Downgrade RR3 B+
Senior Secured
2nd Lien LT CCC Downgrade RR6 CCC+
Chariot Parent LLC LT IDR B- Downgrade B
CHILD'S TRUCKING: Has Deal on Cash Collateral Access
----------------------------------------------------
Child's Trucking, LLC and the U.S. Small Business Administration
advised the U.S. Bankruptcy Court for the Central District of
California, Los Angeles Division, that they have reached an
agreement regarding the Debtor's cash collateral and now desire to
memorialize the terms of this agreement into an agreed order.
The parties agreed that any and all of the Personal Property
Collateral constitutes the SBA's cash collateral, pursuant to 11
U.S.C. section 363(a). The SBA consents to the Debtor's use of cash
collateral through and including confirmation of a Chapter 11 exit
plan to pay ordinary and necessary expenses as set forth in the
budget.
Pre-petition, on June 17, 2020, the Debtor executed a U.S. Small
Business Administration Note, pursuant to which the Debtor obtained
a loan in the amount of $150,000. The Original Note was
subsequently amended on December 6, 2021, increasing the SBA Loan
amount to a total of $500,000. The terms of the Modification of
Note require the Debtor to pay principal and interest payments of
$2,497 every month beginning 24 months from the date of the
Original Note over the 30-year term of the SBA Loan, with a
maturity date of June 17, 2050. The SBA Loan has an annual rate of
interest of 3.75% and may be prepaid at any time without notice of
penalty.
As evidenced by a Security Agreement executed on June 17, 2020, and
the Amended SBA Loan Authorization and Agreement executed on
December 6, 2021, and a validly recorded UCC-1 filing on June 27,
2020 as Filing Number 207795046686, the SBA Loan is secured by all
tangible and intangible personal property.
As adequate protection, the SBA will receive a replacement lien on
all post-petition revenues of the Debtor to the same extent,
priority and validity that its lien attached to the cash
collateral. The scope of the replacement lien is limited to the
amount (if any) that cash collateral diminishes post-petition as a
result of the Debtor's post-petition use of cash collateral.
The Debtor will not use the cash collateral for payment to insiders
unless and until the Debtor has satisfied all requirements under
the Bankruptcy Code and Local Bankruptcy Rule 2014 for payment to
insiders.
The Debtor will remit payments to the SBA in the amounts and terms
as set forth in the applicable SBA Loan documents, with the first
payment proposed to be paid not later than December 17 in the
amount of $2,497.
The Debtor will use its best efforts to diligently seek
confirmation of a Chapter 11 plan. SBA reserves its right to object
to the Debtor's proposed Chapter 11 plan, and does not waive any
rights, claims or interests in the Chapter 11 bankruptcy case.
About Child's Trucking LLC
Child's Trucking LLC -- https://childstruckinglic.com/ -- is a
licensed and DOT-registered trucking company running freight
hauling business from York, Alabama.
Child's Trucking LLC filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
22-15362) on Oct. 1, 2022. In the petition filed by Canwar Childs,
as chief executive officer, the Debtor reported assets and
liabilities between $1 million and $10 million.
Patrick McGinnis Fritz has been appointed as Subchapter V trustee.
The Debtor is represented by Michael Jay Berger of the Law Offices
of Michael Jay Borger.
CHRISTIAN CARE: Exclusivity Period Extended to Dec. 1
-----------------------------------------------------
Christian Care Centers, Inc. and Christian Care Centers Foundation,
Inc. obtained a court order extending their exclusive right to file
a Chapter 11 plan and solicit acceptances from creditors to Dec.
1.
The ruling by Judge Stacey Jernigan of the U.S. Bankruptcy Court
for the Northern District of Texas allows the faith-based
organizations to remain in control of their bankruptcy while they
work to finalize and consummate the sale of most of their assets
and implement their strategy for confirming a Chapter 11
liquidating plan.
Since the bankruptcy court's approval of the sale on July 21, the
faith-based organizations continue to work with the buyer, North
Texas Benevolent Holdings, LLC, and various governmental entities
to get regulatory approvals to consummate the sale. This threshold
regulatory process is expected to continue until, at least, Nov.
1.
About Christian Care Centers
Christian Care Centers, Inc. (CCCI) was incorporated in 1947 as a
nonprofit Texas corporation. CCCI, a faith-based organization,
operates three senior living housing and health care campuses in
the Dallas/Fort Worth Metroplex. In addition, CCCI owns unimproved
real property in Dallas County and Tarrant County, adjacent to the
Mesquite and Fort Worth communities.
Meanwhile, Christian Care Centers Foundation, Inc. was incorporated
in 1994 also as a nonprofit Texas corporation. It is a supporting
organization that serves as an endowment organization for CCCI.
CCCI and Christian Care Centers Foundation sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Texas Lead Case
No. 22-80000) on May 23, 2022. In the petitions signed by Mark
Shapiro, chief restructuring officer, the Debtors disclosed up to
$100 million in both assets and liabilities.
Judge Stacey G. Jernigan oversees the cases.
The Debtors tapped Husch Blackwell, LLP as legal counsel; Houlihan
Lokey Capital, Inc. as investment banker; and Glassratner Advisory
& Capital, LLC as restructuring advisor. Mark Shapiro,
Glassratner's senior managing director, serves as the Debtors'
chief restructuring officer. Epiq Corporate Restructuring, LLC is
the claims, noticing, and solicitation agent.
The U.S. Trustee for Region 6 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on June 3,
2022. The committee is represented by Kane Russell Coleman Logan,
P.C.
Suzanne Koenig was appointed as patient care ombudsman for the
Debtors on July 5, 2022. Greenberg Traurig, LLP serves as the PCO's
legal counsel.
CINEWORLD GROUP: Goodsill Represents Interested Parties
-------------------------------------------------------
In the Chapter 11 cases of Cineworld Group PLC, et al., the law
firm of Goodsill Anderson Quinn & Stifel, a Limited Liability Law
Partnership LLP submitted a verified statement under Rule 2019 of
the Federal Rules of Bankruptcy Procedure, to disclose that it is
representing the Interested Parties.
Goodsill represents only the Interested Parties in these chapter 11
cases and accordingly the Interested Parties are the only persons
or entities with respect to which Goodsill is required to file a
Statement pursuant to Federal Rule of Bankruptcy Procedure 2019.
As of Oct. 14, 2022, each Interested Parties and their disclosable
economic interests are:
Castle & Cooke Commercial, Inc.
680 Iwilei Road, Suite 510
Honolulu, Hawaii 96817
* Nature of Claim: Landlord under Lease for the premises located
at 650 Iwilei Road, Honolulu, HI 96817
* Amount of Claim: $2,021,520.01
Castle & Cooke Corona Crossings, LLC.
One Dole Drive, Westlake
Village, CA 92281
* Nature of Claim: Landlord under Lease for the premises located
at 2650 Tuscany Street, Corona, CA 92281
* Amount of Claim: $4,117,478.46
Goodsill reserves all rights to amend or supplement this Rule 2019
Statement as necessary for any reason in accordance with Bankruptcy
Rule 2019.
Counsel for Creditors Castle & Cooke Commercial, Inc. and Castle &
Cooke Corona Crossings, LLC can be reached at:
Johnathan C. Bolton, Esq.
Goodsill Anderson Quinn & Stifel
999 Bishop Street, Suite 1600
Honolulu, HI 96813
Telephone: (808) 547-5600
Facsimile: (808) 547-5650
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3EVElEo
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.
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.
CINEWORLD GROUP: Law Firm of Russell Represents Utility Companies
-----------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
Russell R. Johnson III of the Law Firm of Russell R. Johnson III,
PLC submitted a verified statement to disclose that it is
representing the utility companies in the Chapter 11 cases of
Cineworld Group PLC, et al.
The names and addresses of the Utilities represented by the Firm
are:
a. American Electric Power
Attn: Dwight C. Snowden
American Electric Power
1 Riverside Plaza, 13th Floor
Columbus, Ohio 43215
b. Constellation NewEnergy, Inc.
Constellation NewEnergy — Gas Division, LLC
Attn: Mark J. Packel
Assistant General Counsel
c. Florida Power & Light Company
Attn: Alexandre Ximenes
Revenue Recovery Department RRD/LFO
4200 W Flagler St
Coral Gables, Florida 33134
d. Salt River Project
Attn: Breanna Holmes
Customer Credit Services ISB232
2727 E Washington St
Phoenix AZ 85034-1403
e. Tampa Electric Company
TECO Peoples Gas System
Attn: Barbara Taulton FRP, CAP
Florida Registered Paralegal
Tampa Electric Company
702 N. Franklin Street
Tampa, Florida 33602
f. Southern California Edison Company
Attn: Jeffrey S. Renzi, Esq.
Director and Managing Attorney
Southern California Edison Company, Law Department
2244 Walnut Grove Avenue
Rosemead, California 91770
g. San Diego Gas & Electric Company
Attn: Kelli S. Davenport, Bankruptcy Specialist
8326 Century Park Court
San Diego, CA 92123
h. The Connecticut Light & Power Company
Yankee Gas Services Company
NStar Electric Company of Western Massachusetts
Eversource Gas of Massachusetts
Public Service Company of New Hampshire
NStar Electric Company
NStar Gas Company
Attn: Honor S. Heath, Esq.
Eversource Energy
107 Selden Street
Berlin, Connecticut 06037
i. Virginia Electric and Power Company
d/b/a Dominion Energy Virginia
Attn: Sherry Ward
600 East Canal Street, 10th floor
Richmond, Virginia 23219
j. Dominion Energy South Carolina, Inc.
Public Service Company of North Carolina Incorporated
d/b/a Dominion Energy North Carolina
Attn: Jay Bressler 220 Operation Way
Cayce, South Carolina 29033
k. The Cleveland Electric Illuminating Company
Ohio Edison Company
Monongahela Power Company
Potomac Edison Company
Metropolitan Edison Company
Jersey Central Power & Light Company
Attn: Kathy M. Hofacre
FirstEnergy Corp.
76 S. Main St., A-GO-15
Akron, Ohio 44308
l. Baltimore Gas and Electric Company
Commonwealth Edison Company
PECO Energy Company
The Potomac Electric Power Company
Delmarva Power & Light Company
Atlantic City Electric Company
Attn: Lynn R. Zack, Esq.
Assistant General Counsel
Exelon Corporation
2301 Market Street, 523-1
Philadelphia, Pennsylvania 19103
m. PSEG Long Island
Attn: Jeremy Goldsmith
15 Park Drive
Melville, New York 11747
n. Public Service Electric and Gas Company
Attn: Matthew Cooney, Bankruptcy Department
80 Park Plaza, T5D
Newark, New Jersey 07102
o. Colonial Gas Cape Cod
KeySpan Energy Delivery Long Island
KeySpan Energy Delivery New York
Massachusetts Electric Company
Niagara Mohawk Power Corporation
Attn: Vicki Piazza, D-I
National Grid
300 Erie Boulevard West
Syracuse, NY 13202
p. New York State Electric and Gas Corporation
Attn: Kelly Potter
James A. Carrigg Center
Bankruptcy Department
18 Link Drive
Binghamton, NY 13904
q. Rochester Gas and Electric Corporation
Attn: Patricia Cotton
89 East Avenue
Rochester, NY 14649
r. Georgia Power Company
Attn: Daundra Fletcher
2500 Patrick Henry Parkway
McDonough, GA 30253
s. Orange & Rockland Utilities, Inc.
Attn: Jennifer Woehrle
390 W. Route 59
Spring Valley, New York 10977
t. Consolidated Edison Company of New York, Inc.
Attn: Christina J. Deleveaux, Esq.
Con Edison Law Department, Attn: Bankruptcy, 18th Floor
4 Irving Place
New York, New York 10003
u. Southern California Gas Company
Attn: Cranston J. Williams, Esq.
Office of the General Counsel
555 W. Fifth Street, GT14G1
Los Angeles, CA 90013-1034
v. Sacramento Municipal Utilities District
Attn: Randall J. Hakes, Esq.
6301 S Street, Mailstop A3l1
Sacramento, California 95817
w. The Ohio Gas Company d/b/a Dominion Energy Ohio
Attn: Marcy Boni
2100 Eastwood Avenue
Akron, Ohio 44305
The nature and the amount of claims (interests) of the Utilities,
and the times of acquisition thereof are as follows:
a. The following Utilities have unsecured claims against the
above-referenced Debtors arising from prepetition utility usage:
American Electric Power, Tampa Electric Company, Southern
California Edison Company, San Diego Gas and Electric Company, The
Connecticut Light & Power Company, Yankee Gas Services Company,
NStar Electric Company of Western Massachusetts, Eversource Gas of
Massachusetts, Public Service Company of New Hampshire, NStar
Electric Company, NStar Gas Company, Virginia Electric and Power
Company d/b/a Dominion Energy Virginia, Public Service Company of
North Carolina, Incorporated d/b/a Dominion Energy North Carolina,
The Cleveland Electric Illuminating Company, Ohio Edison Company,
Monongahela Power Company, Potomac Edison Company, Metropolitan
Edison Company, Jersey Centra Power & Light Company, Baltimore Gas
and Electric Company, Commonwealth Edison Company, The Potomac
Electric Power Company, PECO Energy Company, Delmarva Power & Light
Company, Atlantic City Electric Company, PSEG Long Island, Public
Service Electric and Gas Company, Colonial Gas Cape Cod, KeySpan
Energy Delivery Long Island, KeySpan Energy Delivery New York,
Massachusetts Electric Company, Niagara Mohawk Power Corporation,
New York State Electric and Gas Corporation, Rochester Gas &
Electric Corporation, Georgia Power Company, Orange & Rockland
Utilities, Inc., Consolidated Edison Company of New York, Inc.,
Southern California Gas Company, Sacramento Municipal Utility
District and The East Ohio Gas Company d/b/a Dominion Energy Ohio.
b. American Electric Power, Constellation NewEnergy, Inc.,
Constellation New Energy-Gas Division, LLC, Dominion Energy South
Carolina, Inc., Florida Power & Light Company, TECO People Gas
System, Salt River Project, Metropolitan Edison Company, PECO
Energy Company, The Potomac Electric Power Company, Delmarva Power
& Light Company and PSEG Long Island each held prepetition deposits
that wholly or partially secured prepetition debt.
c. Tampa Electric Company and Baltimore Gas and Electric
Company hold surety bonds that wholly or partially secured
prepetition debt.
d. Florida Power & Light Company holds a letter of credit that
it will make a claim upon for payment of the prepetition debt that
the Debtors owe to Florida Power & Light Company.
e. For more information regarding the claims and interests of
the Utilities in these jointly-administered cases, refer to the
Motion and Memorandum of Certain Utility Companies To:
(a) Vacate, an/or Reconsider, an/or Modify Order (I) Approving the
Debtors' Proposed Adequate Assurance of Payment For Future Utility
Services, (II) Prohibiting Utility Providers Front Altering,
Refusing, or Discontinuing Services, (III) Approving the Debtors'
Proposed Procedures For Resolving Adequate Assurance Requests, and
(IV) Granting Related Relief, and (b) Determine Adequate Assurance
of Payment As To the Utilities (Docket No. 430) filed in the
above-captioned, jointly-administered, bankruptcy cases.
The Law Firm of Russell R. Johnson III, PLC was retained to
represent the foregoing Utilities in September 2022. The
circumstances and terms and conditions of employment of the Firm by
the Companies is protected by the attorney-client privilege and
attorney work product doctrine.
The Firm can be reached at:
Russell R. Johnson, Esq.
LAW FIRM OF RUSSELL R. JOHNSON III, PLC
2258 Wheatlands Drive
Manakin-Sabot, VA 23103
Telephone: (804) 749-8861
Facsimile: (804) 749-8862
E-mail: russell@russelljohnsonlawfirm.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3gbulfI
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.
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.
CLAIM JUMPER: U.S. Trustee Appoints Creditors' Committee
--------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Chapter 11 cases
of Claim Jumper Acquisition Company, LLC and its affiliates.
The committee members are:
1. Jordan Farrah
c/o Aaron Gundzik, Esq.
14011 Ventura Blvd., Suite 206E
Sherman Oaks, CA 91423
Phone: (213) 542-2135
Email: aaron.gundzik@gghllp.com
2. Opry Mills Mall Limited Partnership
f/k/a Opry Mills Ltd.
c/o Ronald M. Tucker
Simon Property Group, Inc.
225 West Washington Street
Indianapolis, IN 46204
Phone: (317) 263-2346 – Phone
Email: rtucker@simon.com
3. GGP Holding II, Inc.
c/o Julie Minnick Bowden
Brookfield Properties Retail, Inc.
350 N. Orleans St., Suite 300
Chicago, IL 60654
Phone: (312) 960-2707
Email: Julie.Bowden@bpretail.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About Claim Jumper Acquisition Company
Claim Jumper Acquisition Company, LLC, and its affiliates operate
four restaurant concepts, Claim Jumper Steakhouse & Bar, Joe's Crab
Shack, Brick House Tavern + Tap, and Nashville Hot Chicken Shack,
that offer a variety of food and beverages in a distinctive,
casual, high-energy atmosphere.
Claim Jumper closed 29 of 62 stores and then on Oct. 3, 2022, filed
for Chapter 11 protection (Bankr. W.D. Pa. Lead Case No. 22-21941)
along with seven affiliates, including C Jumper Restaurant, Inc.
Claim Jumper Acquisition reported $1 million to $10 million in
assets and $10 million to $50 million in liabilities.
The Hon. Gregory L. Taddonio is the case judge.
The Debtors tapped Morris, Nichols, Arsht & Tunnell, LLP as general
bankruptcy counsel; Whiteford, Taylor & Preston, LLP as local
bankruptcy counsel; and Wyse Advisors, LLC as restructuring
advisor. Stretto is the claims and noticing agent.
COALINGA, CA: S&P Lowers Bond Rating to 'BB+', Outlook Negative
---------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'BB+' from
'BBB-' on Coalinga Public Financing Authority, Calif.'s outstanding
bonds, issued for the City of Coalinga. The outlook is negative.
"The lowered rating reflects the water utility's exposure to
drought conditions affecting its water supply from the Central
Valley Project, further constrained by the city's low household
incomes and high poverty rate, which we believe limit rate
flexibility," said S&P Global Ratings credit analyst Alexandra
Rozgonyi.
S&P said, "We understand that the system may borrow from the
general government for emergency water procurement, and that the
city likely has access to state drought funds, which mitigate
short-term liquidity risk. We believe that the development of a
drought-resilient alternative water source will be necessary for
the utility's long-term viability; however, the costs to fund
alternative supply may be prohibitive for the city's rate base
without additional external funding, which may become unavailable
over time, given competing demands for state and local resources.
"The negative outlook reflects the one-in-three chance we could
lower the rating if the water utility's financial position
deteriorates due to the potential costs of procuring high-priced
water supply given severe drought conditions, limited rate-raising
flexibility given below-average income indicators and high county
poverty rate, in addition to if the public works department does
not take the initiative to build an alternative water supply source
to reduce the reliance on volatile Central Valley Project
allocations.
"We could lower the rating further if management does not diversify
its water supply from 100% Central Valley Project or if the cost of
supplemental water and/or capital needs results in deterioration of
the water fund's already weak unrestricted liquidity position and
historically volatile all-in coverage.
"We could revise the outlook back to stable if management
diversifies its water supply, substantially limiting the potential
need to procure additional high-priced water to meet demand; builds
its unrestricted cash position; and maintains more stable all-in
coverage metrics."
As of June 30, 2021, the water and sewer systems supported about
$19.8 million of principal obligations.
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Physical Risks, Natural Capital, Risk management, Culture, and
Oversight
CUMBERLAND RJ: In Chapter 11 Bankruptcy Protection
--------------------------------------------------
Cumberland RJ Inc. filed for chapter 11 protection in the Northern
District of Georgia.
The Debtor operates a franchise of Rockin Jump, an indoor
trampoline park and
entertainment center.
As of the Petition Date, the Debtor employs ten full-time employees
and eighteen
part-time employees.
According to court filings, Cumberland RJ Inc. estimates $1 million
to $10 million in debt to 1 to 49 creditors. The petition states
that funds will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Nov. 14, 2022, at 10:00 AM.
About Cumberland RJ Inc.
Cumberland RJ Inc. -- https://rockinjump.com -- is an operator of a
trampoline park.
Cumberland RJ Inc. filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-21039) on Oct. 12,
2022. In the petition filed by Asif Amin Ali, as president, the
Debtor reported assets up to $500,000 and liabilities between $1
million and $10 million.
The Debtor is represented by Will B. Geer of Rountree, Leitman,
Klein & Geer, LLC.
CUREPOINT LLC: Court OKs Bid to Appoint Chapter 11 Trustee
----------------------------------------------------------
Judge Jeffery Cavender of the U.S. Bankruptcy Court for the
Northern District of Georgia granted the motion by Mark McCord,
M.D. and AMOA Finance, LLC to appoint a Chapter 11 trustee in the
bankruptcy case of Curepoint, LLC.
Judge Cavender ordered the U.S. Trustee for Region 21, the Justice
Department's bankruptcy watchdog overseeing the case, to appoint a
bankruptcy trustee, and Curepoint to perform all duties required
under the Bankruptcy Code, including the turnover of records and
property of the estate in its possession or control to the
bankruptcy trustee.
A copy of the order is available for free at https://bit.ly/3CyCoeb
from PacerMonitor.com.
About Curepoint LLC
Curepoint, LLC -- https://www.curepointcancer.com/ -- provides
radiation treatment for cancer patients at its facility in Dublin,
Ga.
Curepoint filed a petition for relief under Subchapter V of Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-56501) on
Aug. 19, 2022, with between $1 million and $10 million in both
assets and liabilities. Todd E. Hennings has been appointed as
Subchapter V trustee.
Judge Jeffery W. Cavender oversees the case.
Will B. Geer, Esq., at Rountree, Leitman, Klein & Geer, LLC is the
Debtor's counsel.
DR. R'KIONE: No Change in Patient Care, 2nd PCO Report Says
-----------------------------------------------------------
Tamar Terzian, the court-appointed patient care ombudsman, filed
with the U.S. Bankruptcy Court for the Central District of
California a second interim report regarding the quality of patient
care provided at Dr. R'Kione Britton Chiropractic Corp.'s health
care facility in West Los Angeles.
The report, which covers the period from Aug. 9 to Oct. 9, was
filed following the PCO's review of medical records and patient
reports of care rendered, direct observation of care, and visit to
the site during which she met with Dr. R'Kione and two lead staff
to discuss the day-to-day operations of the facility.
The PCO noted that there are no changes to report currently in
terms of the quality of care. The facility continues to provide the
patients the required standard of care, which include sufficient
equipment for treatment, the PCO noted in her report.
A copy of the second interim ombudsman report is available for free
at https://bit.ly/3S3GOzx from PacerMonitor.com.
The ombudsman may be reached at:
Tamar Terzian, Esq.
Epps & Coulson, LLP
1230 Crenshaw Boulevard, Suite 200
Torrance, CA 90501
Telephone: (213) 929-2390
Facsimile: (213) 929-2394
Email: tterzian@eppscoulson.com
About Dr. R'Kione Britton Chiropractic Corp.
Dr. R'Kione Britton Chiropractic Corporation is a Los Angeles based
healthcare company offering chiropractic, spinal and joint care;
neuropathy treatment; spinal decompression; soft tissue
rehabilitation and pain relief; muscle and joint injury
rehabilitation; chronic pain relief care; posture restoration;
laser therapy; peak performance and sports injury treatment; and
scar tissue treatment.
Dr. R'Kione Britton Chiropractic sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-13004)
on May 31, 2022. In the petition signed by Dr. R'Kione Britton,
president, the Debtor disclosed $226,317 in assets and $1,308,118
in liabilities.
Judge Deborah J. Saltzman oversees the case.
The Debtor tapped Steven E. Cowen, Esq., at S.E. Cowen Law as legal
counsel; Small Business Tax, Inc. as tax advisor; and Scott
Christansen, a principal at AAdvanced Business Systems, as
bookkeeper.
EAST COAST DIESEL: Seeks Chapter 11 Bankruptcy Protection
---------------------------------------------------------
East Coast Diesel LLC filed for chapter 11 protection in the Middle
District of North Carolina.
The Debtor is a North Carolina limited liability company that
repairs commercial trucks. It has 23 full-time employees.
The bankruptcy case was necessitated by state court litigation and
secured debt defaults.
In December 2018, the Debtor obtained a loan with North State Bank
in excess of $1 million. The loan is secured by the Debtor's
property at 2209 Dominion Street, Durham, NC. As of the Petition
Date, the aggregate amount outstanding to North State Bank is
$1.129 million.
The Debtor also owes State Bank $150,000, the U.S. Small Business
Administration $150,000, Thread Capital, LLC, $150,000, and NFS
Leasing $480,000.
According to court filings, East Coast Diesel LLC estimates $1
million to $10 million in debt to 50 to 99 creditors. The petition
states that funds will be available to unsecured creditors.
About East Coast Diesel LLC
East Coast Diesel LLC handles any major or minor truck and fleet
repair. It delivers professional fleet repair and maintenance
services on the East Coast since 2013.
East Coast Diesel LLC filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. M.D.N.C. Case No. 22-80197) on Oct.
12, 2022. In the petition filed by Robert Michael, as member and
manager, the Debtor reported assets and liabilities between $1
million and $10 million.
The Debtor is represented by Travis Sasser of Sasser Law Firm.
ELECTRIC LAST MILE: ourt Approves Asset Sale to Mullen
------------------------------------------------------
Electric Last Mile Solutions, Inc. in its Form 8-K filing with the
U.S. Securities and Exchange Commission dated October 17, 2022,
disclosed that on October 13, 2022, the United States Bankruptcy
Court for the District of Delaware issued an order (the "Sale
Order") approving the sale to Mullen Automotive Inc. of certain
assets for approximately $55.0 million and assumption and
assignment of contracts and related liabilities, which are
estimated to be approximately $37 million, of Electric Last Mile,
Inc. and Electric Last Mile Solutions, Inc., pursuant to the terms
and conditions of the Asset Purchase Agreement dated Sept. 16,
2022. Pursuant to the Agreement, the closing will take place
within 30 days after entry of the Sale Order.
Asset Purchase Agreement
In its Form 8-K filing with the U.S. Securities Exchange Commission
dated September 19, 2022, disclosed that on Sept. 16, 2022, Mullen
Automotive Inc. entered into a "stalking horse" Asset Purchase
Agreement (the "Agreement") with David W. Carickhoff, solely as
Chapter 7 trustee of the Bankruptcy Estates of Electric Last Mile
Solutions, Inc. and Electric Last Mile, Inc. (together, the
"Debtors").
Pursuant to the Agreement, Mullen agreed to purchase certain assets
of the Debtors, including a plant in Mishawaka, Indiana and
assumption of the related land contract, all inventory and tangible
personal property, customer and supplier information, and certain
intellectual property rights (such as patent applications) (the
"Assets"), out of the Chapter 7 Bankruptcy for approximately $55.0
million plus the assumption of monetary liabilities related to
assumed contracts, including the land contract, which are estimated
to be approximately $37 million. Pursuant to the Agreement, the
closing will take place within 30 days after entry of the sale
order of the Bankruptcy Court approving such sale pursuant to the
Bankruptcy Code in a form reasonably acceptable to Mullen and the
Seller.
Mullen provided a deposit of $5.5 million, which will be applied
towards the purchase price. The deposit will be retained by the
Seller if the Agreement is terminated based on a material breach of
the Agreement by Mullen or returned to Mullen if the Agreement is
otherwise terminated. If the Seller closes on a competing
transaction for the Assets, then, subject to any order of the
Bankruptcy Court, Mullen is entitled to a break-up fee in the
amount of $1.65 million.
About Electric Last Mile Solutions
Electric Last Mile Solutions, Inc. (Nasdaq: ELMS) has been focused
on defining a new era in which commercial vehicles run clean as
connected and customized solutions that make businesses more
efficient and profitable. ELMS' first vehicle, the Urban Delivery,
was anticipated to be the first Class 1 commercial electric vehicle
in the U.S. market. On the Web: http://www.electriclastmile.com/
Troy, Michigan-based Electric Last Mile Solutions, Inc., wholly
owns Electric Last Mile, Inc., the operating subsidiary.
Electric Last Mile Solutions and Electric Last Mile Inc. filed for
Chapter 7 bankruptcy (Bankr. D. Del. Case No. 22-10537 and
22-10538) on June 14, 2022.
Electric Last Mile Inc. estimated $50 million to $100 million in
assets and liabilities as of the bankruptcy filing. Electric Last
Mile Solutions estimated less than $50,000 in assets and debt.
The Debtors' counsel:
Kara Hammond Coyle
Young Conaway Stargatt & Taylor LLP
Tel: (302) 571-6600
E-mail: bankfilings@ycst.com
EMERGENT BIOSOLUTIONS: Moody's Lowers CFR to B1, Outlook Negative
-----------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Emergent
BioSolutions Inc. including the Corporate Family Rating to B1 from
Ba3, the Probability of Default Rating to B1-PD from Ba3-PD, the
senior unsecured rating to B3 from B1, and Speculative Grade
Liquidity Rating to SGL-4 from SGL-2. The outlook remains
negative.
The ratings downgrade reflects Moody's expectation for continued
operating losses in Emergent's services segment, which will more
than offset good performance in the products segment. In
particular, Emergent's contract development and manufacturing
organization (CDMO) will face uncertain revenue growth as it
transitions from COVID-related contracts that generated high
revenues for several years. However, the CDMO business faces high
costs, including those related to manufacturing quality compliance
in light of previous compliance lapses. Combined with increasing
erosion in the nasal naloxone franchise caused by generic
competition, Moody's anticipates that these factors will result in
higher financial leverage at least over the next 12 to 18 months.
The downgrade of Emergent's SGL-2 rating to SGL-4 primarily
reflects the upcoming maturity of the term loan and expiration of
the revolving credit facility in October 2023 because Moody's SGL
ratings do not assume credit market access. Upon refinancing of the
credit agreement, Moody's will reassess Emergent's SGL rating based
on factors including cash flow, revolver availability and covenant
cushion.
Social and governance considerations are material to the rating
action. Emergent faces heightened responsible production risks and
customer relations risks in its CDMO operations. This reflects high
costs associated with maintaining the CDMO infrastructure and
improving quality controls, while attracting new customers.
Governance considerations include compliance, credibility and track
record risks stemming from manufacturing quality challenges and
earnings shortfalls.
Downgrades:
Issuer: Emergent BioSolutions Inc.
Corporate Family Rating, Downgraded to B1 from Ba3
Probability of Default Rating, Downgraded to B1-PD from Ba3-PD
Senior Unsecured Regular Bond/Debenture, Downgraded to B3 (LGD5)
from B1 (LGD5)
Speculative Grade Liquidity Rating, to SGL-4 from SGL-2
Outlook Actions:
Issuer: Emergent BioSolutions Inc.
Outlook, Remains Negative
RATINGS RATIONALE
Emergent's B1 Corporate Family Rating reflects its niche position
supplying products that treat public health threats. Moody's
anticipates ongoing growth in Emergent's anthrax and smallpox
vaccines supplied to the US Strategic National Stockpile,
supplemented by the recent acquisition of smallpox treatment
Tembexa. Combined with nasal naloxone and several travel-related
offerings, the products business will sustain solid gross margins
above 60%.
Tempering these strengths, Emergent faces challenges in restoring
profitability in its CDMO due to high operating costs and uncertain
ability to attract significant new business. The CDMO business also
faces challenges in improving quality controls, given a warning
letter at its Baltimore Camden plant. Combined with steady erosion
in nasal naloxone due to generic competition, Moody's anticipates
that debt/EBITDA will rise to 4.0x to 5.0x over the next 12 to 18
months. In addition, Emergent has modest scale compared to global
pharmaceutical companies, with somewhat limited diversity at the
product and customer level.
Emergent's weak liquidity profile reflects the approaching October
2023 expiration of the revolver and maturity of the term loan,
which had approximately $380 million outstanding as of June 30,
2022. That being said, Emergent reported $358 million of cash on
hand at June 30, 2022, prior to the Tembexa acquisition. Moody's
believes that available cash on hand plus cash flow from operating
activities is sufficient to fund capital expenditures and term loan
amortization payments, excluding the final maturity.
Social and governance considerations are material to Emergent's
rating and are reflected in the CIS-4 credit impact score, highly
negative (previously CIS-3, moderately negative). Highly negative
social risk exposures are reflected in the S-4 score, including
customer relations and responsible production exposures related to
manufacturing compliance standards. That said, Emergent is less
exposed to drug pricing legislative risks compared to many
pharmaceutical companies due to its product mix skewed to vaccines
supplied directly to the US government. With respect to governance
considerations, Emergent faces highly negative exposures, reflected
in the G-4 score (previously G-3, moderately negative). Previous
compliance problems at the Bayview facility, a recent warning
letter at its Camden facility, the termination of the US Center for
Innovation in Advanced Development and Manufacturing contract,
combined with earnings setbacks have weakened the company's overall
track record. This will remain a challenge until success in
sustainably growing the CDMO business is more established.
The outlook is negative, reflecting headwinds related to the CDMO
business and the nasal naloxone franchise. While these are partly
mitigating by steady growth in anthrax and smallpox vaccines and
the recent acquisition of Tembexa, the credit profile is subject to
downward pressure until progress improving the CDMO business is
established.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to a downgrade include a very rapid decline
in CDMO revenue or nasal naloxone sales, delays in anthrax or
smallpox vaccine purchase orders from the US government, material
litigation, or failure to refinance the credit facilities.
Quantitatively, debt/EBITDA sustained above 4.5x could also result
in a downgrade.
Factors that could lead to an upgrade include, increased scale and
diversity, successful pipeline execution, and a clearer path
towards profitability in the CDMO business. Quantitatively,
debt/EBITDA sustained below 3.5x would support an upgrade.
Headquartered in Gaithersburg, Maryland, Emergent BioSolutions Inc.
is a life sciences company that provides pharmaceuticals, vaccines,
medical devices and contract manufacturing services related to
public health threats affecting civilian and military populations.
Revenues for the 12 months ended June 30, 2022 totaled
approximately $1.6 billion.
The principal methodology used in these ratings was Pharmaceuticals
published in November 2021.
ENDO INTERNATIONAL: Paul Weiss Updates on Cross-Holder Group
------------------------------------------------------------
Pursuant to Rule 2019 of the Federal Rules of Bankruptcy Procedure,
the law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP
submitted an amended verified statement to disclose an updated list
of Ad Hoc Cross-Holder Group that it is representing in the Chapter
11 cases of Endo International PLC, et al.
The Ad Hoc Cross–Holder Group of certain unaffiliated holders of
loans, notes, or other indebtedness issued under (i) that certain
Credit Agreement, dated as of April 27, 2017, by and among Endo
International plc, Endo Luxembourg Finance Company I S.a.r.l., and
Endo LLC, as borrowers, JPMorgan Chase Bank, N.A., as
administrative agent, and the lenders party thereto from time to
time; (b) that certain Indenture, dated as of March 25, 2021, by
and among Lux Borrower and Endo U.S. Inc., as issuers,
Computershare Trust Company, National Association, as trustee, and
the guarantors party thereto; (c) that certain Indenture, dated
March 28, 2019, by and among Par Pharmaceuticals, Inc., as issuer,
Computershare, as trustee, and the guarantors party thereto; (d)
that certain Indenture, dated as of April 27, 2017, by and among
Endo Designated Activity Company, Endo Finance LLC and Endo Finco
Inc., as issuers, Computershare, as trustee, and the guarantors
party thereto; (e) that certain Indenture, dated as of June 16,
2020, by and among Endo DAC, Endo Finance, and Endo Finco, as
issuers, Wilmington Savings Fund Society, FSB, as trustee, and the
guarantors party thereto; (f) that certain Indenture, dated as of
January 27, 2015, by and among Endo DAC, Endo Finance, and Endo
Finco, as issuers, UMB Bank, National Association, as trustee, and
the guarantors party thereto; (g) that certain Indenture, dated as
of July 9, 2015, by and among Endo DAC, Endo Finance, and Endo
Finco, as issuers, UMB Bank, as trustee, and the guarantors party
thereto; and (h) that certain Indenture, dated as of June 16, 2020,
by and among Endo DAC, Endo Finance, and Endo Finco, as issuers,
U.S. Bank Trust Company, National Association, as trustee, and the
guarantors party thereto hereby submits this amended verified
statement and in support thereof state as follows:
In April 2021, certain members of the Ad Hoc Cross-Holder Group
retained Paul, Weiss, Rifkind, Wharton & Garrison LLP to represent
them in connection with a potential restructuring involving the
above–captioned debtors and debtors-in-possession. From time to
time thereafter, certain additional holders of Obligations joined
the Ad Hoc Cross–Holder Group.
On August 18, 2022, Counsel filed the Verified Statement of the Ad
Hoc Cross-Holder Group Pursuant to Bankruptcy Rule 2019. Since
then, Members of the Ad Hoc Cross-Holder Group and the disclosable
economic interests in relation to the Debtors that such Members
hold or manage have changed. Accordingly, pursuant to Bankruptcy
Rule 2019, Counsel submits this Amended Statement.
As of Oct. 11, 2022, members of the Ad Hoc Cross-Holder Group and
their disclosable economic interests are:
Bank of America, N.A.
900 W Trade St.
NC1-026-05-41
Charlotte, NC 28255
* Term Loan Obligations: $5,743,995.35
BofA Securities, Inc
900 W Trade St.
NC1-026-05-41
Charlotte, NC 28255
* 6.125% Notes Obligations: $1,818,000
* 7.500% Notes Obligations: $11,948,000
* 5.875% Notes Obligations: $6,786,000
* 2L Notes Obligations: $76,000,000
* 2028 6.000% Obligations: $123,994,000
Banc of America Credit Products, Inc.
900 W Trade St.
NC1-026-05-41
Charlotte, NC 28255
* Revolving Credit Facility Obligations: $9,230,681.96
BlackRock Financial Management, Inc.
55 E. 52nd Street
New York, NY 10055
* 6.125% Notes Obligations: $2,945,000
* 7.500% Notes Obligations: $19,566,000
* 2L Notes Obligations: $11,142,000
Brigade Capital Management, LP
399 Park Avenue, 16th Floor
New York, NY 10022
* Term Loan Obligations: $14,673,520.35
* 6.125% Notes Obligations: 13,535,000
* 7.500% Notes Obligations: $24,352,000
* 5.875% Notes Obligations: $6,090,000
* 2L Notes Obligations: $45,404,000
* 2028 6.000% Obligations: $40,621,000
Canyon Capital Advisors LLC
2728 N. Harwood Street, 2nd Floor
Dallas, TX 75201
* Revolving Credit Facility Obligations: $11,692,197
* Term Loan Obligations: $135,843,636.14
* 6.125% Notes Obligations: $105,305,000
* 7.500% Notes Obligations: $42,797,000
* 2L Notes Obligations: $162,545,000
* 2028 6.000% Obligations: $99,851,000
Capital Research and Management Company
333 South Hope St., 55th Floor
Los Angeles, CA 90071
* 6.125% Notes Obligations: $23,340,000
* 7.500% Notes Obligations: $170,426,000
* 5.875% Notes Obligations: $11,744,000
* 2L Notes Obligations: $6,560,000
* 2028 6.000% Obligations: $53,676,000
Deutsche Bank Securities Inc.
One Columbus Circle, 7th Floor
New York, NY 10019
* Term Loan Obligations: 26,895,368
* 6.125% Notes Obligations: $(3,618,000) (short)
* 7.500% Notes Obligations: $(2,000,000) (short)
* 5.875% Notes Obligations: $3,975,000
* 2L Notes Obligations: $11,037,000
* 2028 6.000% Obligations: $15,506,000
* 2023 5.375% Notes Obligations: $101,000
Ellington Management Group
53 Forest Ave.
3rd Floor
Old Greenwich, CT 06870
* Term Loan Obligations: $8,000,000
* 6.125% Notes Obligations: $11,740,000
* 7.500% Notes Obligations: $2,500,000
* 2L Notes Obligations: $27,500,000
Franklin Advisers Inc.
1 Franklin Pkwy.
San Mateo, CA 94403
* 6.125% Notes Obligations: $72,980,000
* 7.500% Notes Obligations: $234,251,000
* 5.875% Notes Obligations: $62,516,000
* 2L Notes Obligations: $105,757,000
* 2028 6.000% Obligations: $6,393,000
Glenview Capital Management, LLC
767 Fifth Avenue, 44th Floor
New York, NY 10153
* 6.125% Notes Obligations: $61,586,000
* 7.500% Notes Obligations: $11,455,000
* 5.875% Notes Obligations: $8,145,000
* 2L Notes Obligations: $10,977,000
Invictus Global Management, LLC
310 Comal Street
Building A, Suite 229
Austin, Texas 78702
* Term Loan Obligations: $5,000,000
* 2L Notes Obligations: $13,000,000
* 2025 6.000% Obligations: $135,000
* 2028 6.000% Obligations: $12,500,000
J.P. Morgan Investment Management Inc.
1 East Ohio Street, 6th Floor
Indianapolis, IN 46204
* Term Loan Obligations: $3,806,339.40
* 6.125% Notes Obligations: $32,915,000
* 7.500% Notes Obligations: $101,397,000
* 5.875% Notes Obligations: $13,957,000
* 2L Notes Obligations: $32,808,000
* 2028 6.000% Obligations: $ 22,882,000
Livello Capital Management
1 World Trade Center, 85th Floor
New York, NY 10007
* 5.875% Notes Obligations: $2,000,000
* 2L Notes Obligations: $4,000,000
* 2028 6.000% Obligations: $8,000,000
Marathon Asset Management LP
One Bryant Park, 38th Floor
New York, NY 10036
* Term Loan Obligations: $86,381,928
* 6.125% Notes Obligations: $87,514,000
* 7.500% Notes Obligations: $54,979,000
* 2L Notes Obligations: $164,400,000
* 2028 6.000% Obligations: $133,041,000
Nomura Corporate Research and Asset Management
309 W 49th St. 9th Floor
New York, NY 10019
* 6.125% Notes Obligations: $15,568,000
* 7.500% Notes Obligations: $38,184,000
* 5.875% Notes Obligations: $1,250,000
* 2L Notes Obligations: $31,323,000
* 2025 6.000% Obligations: $200,000
* 2028 6.000% Obligations: $35,820,000
Oaktree Capital Management, L.P.
333 South Grand Ave, 28th Floor
Los Angeles, CA 90071
* Term Loan Obligations: $112,499,936.97
* 7.500% Notes Obligations: $109,432,000
* 2L Notes Obligations: $81,585,000
* 2028 6.000% Obligations: $108,489,000
O'Brien Staley Partners
3948 W. 49 1/2
Street Box 24794
Edina, MN 55424
* 7.500% Notes Obligations: $11,000,000
* 2L Notes Obligations: $10,000,000
Western Asset Management Company, LLC
385 East Colorado
Boulevard Pasadena, CA 91101
* 6.125% Notes Obligations: $550,000
* 7.500% Notes Obligations: $27,850,000
Whitebox Advisors LLC
3033 Excelsior Blvd., Suite 500
Minneapolis, MN 54416
* Term Loan Obligations: $3,465,250
* 6.125% Notes Obligations: $9,000,000
* 7.500% Notes Obligations: $36,032,000
* 2023 6.000% Obligations: $1,000,000
* 2028 6.000% Obligations: $10,000,000
Counsel for the Ad Hoc Cross-Holder Group can be reached at:
PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
Andrew N. Rosenberg, Esq.
Alice Belisle Eaton, Esq.
Andrew M. Parlen, Esq.
Alexander Woolverton, Esq.
1285 Avenue of the Americas
New York, NY 10019-6064
E-mail: arosenberg@paulweiss.com
aeaton@paulweiss.com
aparlen@paulweiss.com
awoolverton@paulweiss.com
A copy of the Rule 2019 filing, downloaded from PacerMonitor.com,
is available at https://bit.ly/3EWhoAI
About Endo International
Endo International plc is a generics and branded pharmaceutical
company. It develops, manufactures, and sells branded and generic
products to customers in a wide range of medical fields, including
endocrinology, orthopedics, urology, oncology, neurology, and other
specialty areas. On the Web: http://www.endo.com/
On August 16, 2022, Endo International and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549). The Company's cases are
pending before the Honorable James L. Garrity, Jr. The Company has
put up a Web site dedicated to its restructuring:
http://www.endotomorrow.com/
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as
legal counsel; PJT Partners LP as investment banker; and Alvarez &
Marsal as financial advisor. Kroll is the claims agent.
Roger Frankel, the legal representative for future claimants in the
Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway
Stargatt & Taylor, LLP as counsel and Ducera Partners LLC as
investment banker.
ENDO INTERNATIONAL: Taps PricewaterhouseCoopers Ireland as Auditor
------------------------------------------------------------------
Endo International plc and its subsidiaries seek approval from the
U.S. Bankruptcy Court for the Southern District of New York to
employ PricewaterhouseCoopers Ireland as statutory auditor for
certain of the Debtors.
PwC Ireland will perform statutory audit services for the Endo
Ireland Clients for the period ending Dec. 31, 2021 with the
objective of issuing a report to the relevant company's members on
whether in PwC Ireland's opinion:
-- the financial statements give a true and fair view of the
assets, liabilities and financial position of the relevant company
as at the end of the financial period and (save where an exemption
applies) of its profit or loss for the financial period;
-- the financial statements have been properly prepared in
accordance with Irish GAAP including FRS101 "Reduced Disclosure
Framework";
-- the financial statements have been properly prepared in
accordance with the Companies Act 2014 (the "2014 Act") and, where
applicable, other relevant legislation; and
-- the directors' report4 has been prepared in accordance with
applicable legal requirements and the information given in the
directors' report is consistent with the financial statements and
whether:
-- PwC Ireland has obtained all the information and
explanations which, to the best of PwC Ireland's knowledge and
belief, are necessary for the purposes of PwC Ireland's audit;
-- in PwC Ireland's opinion the accounting records of the
relevant company were sufficient to permit the financial statements
to be readily and properly audited;
-- the relevant company's balance sheet and (save where an
exemption in section 304 of the 2014 Act is availed of) the profit
and loss account are in agreement with the accounting records and
returns;
-- based on PwC Ireland's knowledge and understanding of the
relevant company and its environment obtained in the course of the
audit, whether PwC Ireland has identified any material
misstatements in the directors' report giving an indication of the
nature of any such misstatements; and
-- in addition, if the requirements of any of sections 305 to
312 of the 2014 Act ("Disclosure of directors' remuneration and
transactions"), are not complied with, PwC Ireland is required to
include in the PwC Ireland report, so far as PwC Ireland is
reasonably able to do so, a statement giving the required
particulars.
PwC Ireland will be paid as follows:
a. Endo DAC Engagement letter: fixed fee arrangement for the
statutory audit services for Endo DAC. Fixed fee arrangement of
EUR38,500 for the statutory audit services for the period ending
December 31, 2021 of which EUR14,250 was billed in the 90 days
pre-petition.
b. Endo Finance IV Engagement letter: fixed fee arrangement
for the statutory audit services for the Endo Finance IV Group.
Fixed fee arrangement of EUR179,000 for the statutory audit
services for the period ending December 31, 2021 of which EUR66,250
was billed in the 90 days pre-petition.
The firm will be paid at these hourly rates:
Endo DAC Endo Finance IV
Partner EUR680 EUR680
Director EUR510 EUR510
Senior Manager EUR475 EUR475
Manager EUR355 EUR355
Senior Associate EUR235 EUR235
Associate EUR150 EUR150
As disclosed in court filings, PwC Ireland is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through"
Gareth Hynes
PricewaterhouseCoopers
One Spencer Dock
North Wall Quay
Dublin 1 Ireland
Tel: +353 (0) 1 792 6000
Fax: +353 (0) 1 792 6200
Email: ghynes@gmail.com
About Endo International
Endo International plc is a generics and branded pharmaceutical
company. It develops, manufactures, and sells branded and generic
products to customers in a wide range of medical fields, including
endocrinology, orthopedics, urology, oncology, neurology, and other
specialty areas. On the Web: http://www.endo.com/
On August 16, 2022, Endo International and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549). The Company's cases are
pending before the Honorable James L. Garrity, Jr. The Company has
put up a Web site dedicated to its restructuring:
http://www.endotomorrow.com/
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom LLP as
legal counsel; PJT Partners LP as investment banker; and Alvarez &
Marsal as financial advisor. Kroll is the claims agent.
Roger Frankel, the legal representative for future claimants in
these Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway
Stargatt & Taylor, LLP as counsel and Ducera Partners LLC as
investment banker.
EVERGREEN SITE: Seeks to Hire Fisher Skrobot as Special Counsel
---------------------------------------------------------------
Evergreen Site Holdings Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Ohio to hire the Law
Offices of Fisher, Skrobot, and Sheraw, LLC, as its special
counsel.
The firm's services include:
(a) representation in that certain Ohio 4th District Court of
Appeals proceeding, Karry Gemmell v Evergreen Site Holdings, Inc.,
Case No. 22CA-0004 related to same;
(b) representation in that certain Hocking County Common Pleas
Court proceeding, Karry Gemmell v Evergreen Site Holdings, Inc.,
Case No. 21CV0004 related to same;
(c) potential State Court actions against any tenants residing
or operating businesses at the real property commonly known as
15111 State Route 664 (Parcel ID No. 02-000833.0201) and 0 State
Route 664 (Parcel ID No. 02-000833.0200), Logan, Ohio, 43138;
(d) assistance in the collection of certain rents and
receivables held by Reg Martin, Receiver of Hocking Peaks Adventure
Park, LLC; and
(e) performing other legal services as may be required that
are in the best interest of the estate or its creditors.
The firm will be paid at these rates:
Attorneys:
David Skrobot $275/hour
Beth M. Miller $275/hour
Paralegals:
Georgette Skrobot $120/hour
Lisa Lumbatis $120/hour
Richard Phelps $120/hour
David Skrobot, Esq., member at Fisher, Skrobot, and Sheraw,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
David Skrobot, Esq.
Fisher, Skrobot, and Sheraw, LLC
Motorist Insurance Building
471 E Broad St # 1810
Columbus, OH 43215
Telephone: (614) 233-6950
Fax: (614) 233-6960
Email: dskrobot@fisherskrobot.com
About Evergreen Site Holdings
Evergreen Site Holdings filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Ohio
Case No. 22-52799) on Sept. 22, 2022. In the petition filed by
Jack K. Beatley, as president, the Debtor reported assets and
liabilities between $1 million and $10 million.
Matthew T. Schaeffer has been appointed as Subchapter V trustee.
The Debtor is represented by Denis E Blasius.
EXPRESS GRAIN: Files Amendment to Disclosure Statement
------------------------------------------------------
Express Grain Terminals, LLC, submitted a First Amended Disclosure
Statement describing Plan of Liquidation dated October 17, 2022.
The Debtor provides this First Amended Disclosure Statement in
order to update the original Disclosure Statement and to correct
certain technical defects in it.
In light of the consensual resolution of most of that litigation,
the Debtor remains a Debtor-in-possession, but is only a shell of
its former self. Its assets consist of cash (all of which is
already promised to creditors and parties-in-interest with secured,
administrative and priority claims) and various causes of actions
that need to be asserted, prosecuted and liquidated to finality.
The sets purchased by UMB have been sold or otherwise disposed of
to third parties who are operating the Debtor's grain warehouse and
storage facilities in Sidon and Minter City, Mississippi, and
(through a separate entity) assets at Greenwood that are the
manufacturing operations.
The Debtor has in savings accounts or escrows proceeds from the
sale of golf carts, liquidation of the Debtor's prior hedge fund,
sale of rolling stock, collection of accounts receivable, surcharge
funds, funds that have been carved out for specific purposes, a few
miscellaneous and isolated assets that were not sold or transferred
to UMB (or to other purchasers), Chapter 5 avoidance causes of
action and other claims and causes of action, including collection
of accounts receivable and, perhaps, directors and officers claims
against one of the Debtor's officers and majority shareholder. The
Debtor also owns claims under the Employee Retention Tax Credit
("ERTC") legislation.
The 557 Settlement Order (and underlying agreements) settled and
compromised substantially all of the claims that farmers had
asserted against the Debtor as a result of the Debtor's failure to
pay all of the farmers who sold corn and soybeans to the Debtor in
the fall of 2021. As a result, the Court has entered numerous
orders withdrawing many of those motions to assume executory
contracts for the sale of commodities because those claims have
been released.
In addition, subsequent to the filing of the original Disclosure
Statement, Dr. Michael Coleman's ("Dr. Coleman") counsel has
provided information to Debtor's counsel regarding some of the
transfers that were purportedly made to Dr. Coleman. There are 5
transactions involved as to which Dr. Coleman contends that he did
not receive, directly or indirectly, any of the proceeds of those
transfers.
Many of those motions have been settled and resolved as a result of
the entry of the Settlement Order, so that farmers who elected to
be included within Group 1 of the settlement (as set forth in the
9019 motion and the Settlement Order) or in Group 2 (as also set
forth in the 9019 motion and the Settlement Order), all of those
farmers as to whom motions to assume executory contracts were
directed will be released from any obligations under those motions
and executor contracts, which will include not only farmers
actually specifically named in the motions to assume but affiliates
of those farmers who might have been farming under names other than
those directly electing to be placed in Group 1 or Group 2.
The Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* Unsecured creditors in this case will receive, upon the
final distribution in this case, all remaining cash which has not
been used to pay prior Classes.
* The equity security interests will be cancelled, terminated
and held for naught upon the Effective Date of the Plan.
The Plan will establish the Express Grain Liquidating Trust for the
purpose of receiving and liquidating the Debtor, its property and
assets, and distributing funds to holders of claims and interests.
On the Effective Date, all property and assets of the Debtor and
the Debtor's estate shall constitute trust assets, specifically
including all of the Debtor's claims and causes of action retained,
and shall, without further action on the part of any party be
deemed: (a) to be merged with and into the pool of property and
assets constituting the trust assets; and (b) to be transferred to
and vested in the Liquidating Trust free and clear of all liens,
encumbrances, claims and interests, except for those claims and
interests specifically provided for under the Plan or the
Confirmation Order.
A full-text copy of the First Amended Disclosure Statement dated
October 17, 2022, is available at https://bit.ly/3SgE4yL from
PacerMonitor.com at no charge.
Debtor's Counsel:
Craig M. Geno, Esq.
Law Offices Of Craig M. Geno, PLLC
587 Highland Colony Parkway
Ridgeland, MS 39157
Tel: (601) 427-0048
Email: cmgeno@cmgenolaw.com
About Express Grain Terminals
Greenwood, Mississippi-based Express Grain Terminals, LLC, produces
soy products such as oil and biodiesel.
Express Grains Terminals and its affiliates, Express Biodiesel, LLC
and Express Processing, LLC, sought Chapter 11 protection (Bankr.
N.D. Miss. Lead Case No. 21-11832) on Sept. 29, 2021. At the time
of the filing, Express Grains Terminals listed up to $50 million in
assets and up to $100 million in liabilities. Judge Selene D.
Maddox oversees the cases.
The Law Offices of Craig M. Geno, PLLC, is the Debtors' legal
counsel.
UMB Bank, N.A., the Debtors' lender, is represented by Spencer Fane
LLP.
FAIRFIELD HARBOURSIDE: Taps Hendren Redwine & Malone as Counsel
---------------------------------------------------------------
Fairfield Harbourside Condominium Association, Inc. seeks approval
from the U.S. Bankruptcy Court for the Eastern District of North
Carolina to hire Hendren Redwine & Malone, PLLC to serve as legal
counsel in its Chapter 11 case.
The firm will be paid based upon its normal and usual hourly
billing rates and will be reimbursed for its out-of-pocket
expenses.
The firm holds the sum of $5,681.59 as retainer.
Jason Hendren, Esq., a partner at Hendren Redwine & Malone,
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:
Jason L. Hendren, Esq.
Rebecca F. Redwine, Esq.
Benjamin E.F.B. Waller, Esq.
Hendren Redwine & Malone, PLLC
4600 Marriott Drive, Suite 150
Raleigh, NC 27612
Tel: (919) 420-7867
Email: jhendren@hendrenmalone.com
rredwine@hendrenmalone.com
bwaller@hendrenmalone.com
About Fairfield Harbourside
Condominium Association
Fairfield Harbourside Condominium Association, Inc filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D.N.C. Case No. 22-02267) on Oct. 4, 2022. At the
time of filing, the Debtor estimated $500,001 to $1 million in
assets and $100,001 to $500,000 in liabilities.
Judge Joseph N Callaway presides over the case.
Jason L. Hendren, Esq. at Hendren Redwine & Malone, PLLC represents
the Debtor as counsel.
FLOWER ONE: Gets Court's CCAA Initial Stay Order
------------------------------------------------
Flower One Holdings Inc., FO Labour Management Ltd. and Flower One
Corp. sought and obtained an Initial Order of the Supreme Court of
British Columbia pursuant to the Companies' Creditors Arrangement
Act ("CCAA").
PricewaterhouseCoopers Inc. LIT ("PwC") was appointed as the
Monitor.
As a result of the CCAA filing, there is a stay of proceedings in
place until Oct. 25, 2022, (the "Initial Stay"), subject to any
extensions of the Initial Stay that the Court might grant upon
application by the Company. Notice of the CCAA and the Monitor's
appointment will be emailed or mailed to all affected creditors
shortly.
The next court application will be on Oct. 25, 2022. The Monitor
will post regular status updates to this website and post future
Monitor reports and court materials, as they become available
during the CCAA proceedings.
The decision to commence CCAA proceedings was made after careful
consideration of the Canadian Company's financial position and
significant consultation with certain key creditors of Flower One.
The CCAA proceedings are intended to facilitate a restructuring of
the Canadian Company’s balance sheet and the injection of
additional capital, with a view of Flower One going private by the
end of the 2022 calendar year, thereby eliminating the
administrative burden and significant expense associated with being
a publicly listed company.
Only Flower One Canada has filed for protection from its creditors
under the CCAA. The Flower One Group's Operating Subsidiaries
(listed below) have not filed for protection under the CCAA and
will continue to operate in the ordinary course.
PwC has set up a website at https://www.pwc.com/ca/FONE, where
updates on the Canadian restructuring process, the Monitor's
reports to the Court, Court Orders and other information will be
posted as soon as they are available. For specific questions about
the CCAA, please contact the Monitor via email at
ca_flowerone@pwc.com or by phone at 604-484-3477.
Flower One -- https://flowerone.com/ -- is the largest cannabis
cultivator, producer, and full-service brand fulfillment partner in
the state of Nevada.
FLY LEASING: S&P Lowers ICR to 'SD' on Below-Par Debt Repurchases
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Fly Leasing
Ltd. to 'SD' (selective default) from 'CCC-'. At the same time, S&P
lowered its issue-level ratings on the company's senior unsecured
notes to 'D'.
S&P's 'CCC+' issue-level rating on Fly Funding II S.a.r.l.'s term
loan is unchanged.
The downgrade reflects Fly's below-par debt repurchases of a
portion of its senior unsecured notes due October 2024. The company
has disclosed that in the past month, it repurchased $49.1 million
of principal amount of its 7% senior unsecured notes due October
2024 ($390.5 million outstanding as of June 30, 2022). Based on
recent pricing data, S&P expects Fly to have repurchased the notes
at prices well below par, likely representing about 55%-75% of
principal value. The company has also received authorization from
its Board of Directors to pursue additional repurchases of up to
$50 million.
S&P said, "We view these repurchases as a distressed exchange and
tantamount to a default because its creditors received less than
the principal amount they were originally promised. Therefore, we
lowered our rating on these notes to 'D' from 'CC'. We also lowered
our issuer credit rating on Fly to 'SD' from 'CCC-' because the
default only affected the senior unsecured notes due October 2024.
Our issue-level rating on Fly Funding II S.a.r.l's term loan
remains 'CCC+'.
"We plan to reevaluate our issuer credit rating and issue-level
ratings on Fly in the coming days and will likely raise our issuer
credit rating to the 'CCC' category. Our review of the company will
focus on its capital structure, business prospects, and its
liquidity position. We will likely keep the unsecured notes rating
at 'D' until we believe the likelihood of further repurchases is
remote."
Despite the ongoing debt repurchases, Fly's upcoming debt
obligations remain sizeable. The company is current on the Fly
Aladdin facility ($106 million of which was outstanding as of July
31, 2022) that matures in June 2023, and the maturity of the 7%
senior unsecured notes is around two years away ($300 million of
which will likely be outstanding even if the company completes the
additional proposed repurchases).
Carlyle Aviation Partners, Fly's parent, has historically accessed
the aircraft asset-backed securities market to meet its financing
needs. S&P said, "However, we believe Fly's ability to refinance
its debt obligations through a new issuance in the capital markets
is currently limited given the current volatility in the capital
markets, and a weaker macroeconomic environment. We also continue
to view Carlyle's financial policy with respect to Fly as very
aggressive, which further limits the company's liquidity
position."
ESG credit indicators: E-2; S-3; G-3
GOLD WING: Case Summary & Eight Unsecured Creditors
---------------------------------------------------
Debtor: Gold Wing Trading Inc.
4519 Everett Avenue
Vernon, CA 90058
Chapter 11 Petition Date: October 20, 2022
Court: United States Bankruptcy Court
Central District of California
Case No.: 22-15733
Debtor's Counsel: RoseAnn Frazee, Esq.
FRAZEE LAW GROUP
5133 Eagle Rock Blvd
Los Angeles, CA 90041
Tel: (323) 274-4287
Email: roseann@frazeelawgroup.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Maggie Jun Lei as chief financial
officer.
A copy of the Debtor's list of eight unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/EVJPSTQ/Gold_Wing_Trading_Inc__cacbke-22-15733__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/EGXUMYA/Gold_Wing_Trading_Inc__cacbke-22-15733__0001.0.pdf?mcid=tGE4TAMA
GREAT PANTHER: To Restructure Under CCAA Proceeding
---------------------------------------------------
Great Panther Mining Limited was granted an initial order ("Initial
Order") to convert its proceedings under the Bankruptcy and
Insolvency Act (Canada) into proceedings ("CCAA Proceedings") under
the Companies' Creditors Arrangement Act, as amended ("CCAA").
Pursuant to the Initial Order, Alvarez & Marsal Canada Inc. was
appointed as monitor in the CCAA Proceedings.
The Initial Order granted a stay of proceedings until Oct. 14, 2022
("Stay Period") and provided that during the Stay Period, no
proceedings may be commenced against or in respect of the Company.
A copy of the Certificate of Filing of the NOI issued by the Office
of the Superintendent of Bankruptcy ("OSB") and other information
in respect of these NOI Proceedings is posted on the Proposal
Trustee's website at https://www.alvarezandmarsal.com/GPR.
Counsel for Great Panther:
McCarthy Tétrault LLP
Attn: Lance Williams
Nathan Stewart
Forrest Finn
Sue Danielisz
Suite 2400, 745 Thurlow Street
Vancouver, BC V6E 0C5
Email: lwilliams@mccarthy.com
nstewart@mccarthy.com
ffinn@mccarthy.com
sdanielisz@mccarthy.com
Monitor can be reached at:
Alvarez & Marsal Canada Inc.
Attn: Anthony Tillman
Pinky Law
Suite 902, 925 West Georgia Street
Vancouver, BC V6C 3L2
Email: atillman@alvarezandmarsal.com
pinky.law@alvarezandmarsal.com
Counsel for the Monitor:
Fasken Martineau DuMoulin LLP
Attn: Kibben Jackson
Rebecca Nguinambaye
Suzanne Volkow
550 Burrard St #2900
Vancouver, BC V6C 0A3
Email: kjackson@fasken.com
rnguinambaye@fasken.com
svolkow@fasken.com
Great Panther Mining Limited -- https://www.greatpanther.com/ --
operates a precious metals mining and exploration company.
GREEN ENERGY: Court OKs Cash Collateral Access Thru Nov 28
----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Rome Division, authorized Green Energy Transport LLC to use cash
collateral on a final basis in accordance with the budget, with a
15% variance through November 28, 2022.
Comerica Bank asserts an interest in the Debtor's cash collateral
pursuant to a prepetition credit agreement. As of the Petition
Date, the aggregate amount of principal owed by the Debtor under
the Prepetition Credit Documents was not less than $9,004,687,
together with any interest, fees, costs, and other charges or
amounts paid, incurred, or accrued prior to the Petition Date in
accordance with the Prepetition Credit Documents.
The Debtor will provide Comerica Bank with adequate protection in
the form of monthly payments in the amount of $50,000, which will
be paid to the Lender on October 1 and November 1, and on the first
day of each month thereafter to the extent that the Order is
extended for any portion of that month.
To partially satisfy the first $50,000 adequate protection payment
due on October 3, Comerica Bank is authorized to debit $47,684 from
the Debtor's account. No later than October 3, the Debtor was to
place into the account $2,316 or any greater amount as may be
necessary to satisfy the $50,000 adequate protection payment due
October 3, and the Lender is authorized to debit that amount from
the account.
As further adequate protection, Comerica is granted a properly
perfected security interest in and lien upon all of the Debtor's
assets and property.
The Court's order acknowledged that State Bank and Trust Company
and Kubota Credit Corporation, U.S.A. may assert an interest in the
Debtor's cash collateral, but neither has appeared in the Cases or
otherwise come forward.
Debtor entities that are affiliated to Green Energy and also
parties to the Credit Agreement with Comerica -- Renewable Energy
Holdings of Georgia, LLC; Cash Environmental Resources, LLC; Cash
Development, LLC; Coastal Landfill of Florida, LLC; and Cash
Environmental Holdings, LLC -- have each filed a voluntary Chapter
11 petition. Cash Development, Renewable Energy and Green Energy
also have sought authorization to use cash collateral in their
respective bankruptcy cases. Neither Cash Environmental Holdings
nor Cash Environmental Resources have filed a motion to use cash
collateral and do not have permission or authority to use cash
collateral from the Lender. The cases are not jointly
administered.
A copy of the order is available at https://bit.ly/3g51wla from
PacerMonitor.com.
About Green Energy Transport LLC
Green Energy Transport LLC specializes in hauling, disposal, and
recycling of construction demolition waste with its headquarters
located at 2859 Paces Ferry Road, Suite 1150, Atlanta, GA, 30339.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-41010) on August 26,
2022. In the petition filed by Carson Cash King, authorized
representative, the Debtor disclosed up to $50,000 in assets and up
to $500,000 in liabilities.
Judge Barbara Ellis-Monro oversees the case.
Cameron M. McCord, Esq., at Jones & Walden, LLC is the Debtor's
counsel.
GULFSLOPE ENERGY: Inks Deal to Sell Up to $650K Convertible Notes
-----------------------------------------------------------------
GulfSlope Energy, Inc. entered into a securities purchase agreement
with 1800 Diagonal Lending, under which the Company will issue and
sell to the Buyer up to an aggregate of $650,000 of convertible
promissory notes, which will be convertible into shares of the
Company's common stock, par value $0.001 per share, of which
$55,000 will be purchased upon the signing of the SPA, with
additional tranches of financing subject to further agreement by
and between the Buyer and the Company. The SPA contains customary
representations, warranties and agreements and customary conditions
to closing.
Pursuant to the terms of the SPA, at the First Closing, the Company
sold to the Buyer a Convertible Note in the principal amount of
$55,000. The Note has an annual interest rate equal to 8% and a
maturity date of April 8, 2023. At the Maturity Date the Company
shall pay to the Holder an amount in cash representing all
outstanding Principal and accrued and unpaid Interest.
Subject to the terms of the Convertible Note, six months after the
Issuance Date, the Holder is entitled to convert at the Conversion
Price any portion of the outstanding and unpaid Principal and
accrued Interest into fully paid and nonassessable shares of Common
Stock. The number of shares of Common Stock issuable upon
conversion of any Conversion Amount is determined by dividing (x)
such Conversion Amount by (y) the Conversion Price. The
"Conversion Price" is 65% of the lowest daily VWAP price (as
reported by Bloomberg, LP) for the 10 consecutive trading days
immediately preceding the date of determination.
The Convertible Debenture contains customary representations,
warranties and agreements typical in convertible notes. The
Offering was exempt from registration under Section 4(a)(2) of the
Securities Act.
About Gulfslope
Headquartered in Houston, Texas, Gulfslope Energy, Inc. --
http://www.gulfslope.com-- is an independent crude oil and
natural
gas exploration and production company whose interests are
concentrated in the United States Gulf of Mexico federal waters.
GulfSlope Energy commenced commercial operations in March 2013.
Gulfslope reported a net loss of $2.23 million for the year ended
Sept. 30, 2021, compared to a net loss of $2.42 million for the
year ended Sept. 30, 2020. As of June 30, 2022, the Company had
$9.46 million in total assets, $13.92 million in total liabilities,
and a total stockholders' deficit of $4.45 million.
Houston, Texas-based Pannell Kerr Forster of Texas, P.C., the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated Dec. 29, 2021, citing that the
Company has accumulated losses, and further losses are anticipated
in developing the Company's business, which raise substantial doubt
about its ability to continue as a going concern.
HAWAIIAN AIRLINES: Fitch Affirms 'B-' LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed the Long-Term Issuer Default Ratings
(IDR) of Hawaiian Airlines and its parent company, Hawaiian
Holdings, Inc., at 'B-'. The Rating Outlook is Stable.
Hawaiian's 'B-' rating reflects Fitch's expectations for the
company to operate with elevated leverage and weak operating
margins at least through 2023. Rising macroeconomic pressures,
persistent inflation, and volatile fuel prices are also near-term
rating concerns. Risks are offset by the company's sizeable
liquidity balance, which stood at $1.4 billion at 6/30/2022,
negligible net debt balance, and limited near-term demands on cash.
Fitch expects Hawaiian's credit metrics to improve beyond 2023. A
Positive Rating Outlook could be warranted in the next twelve
months dependent upon an stable macroeconomic environment and
improving margins.
Fitch has also affirmed the 'B+/RR2' rating on Hawaiian's $1.2
billion senior secured notes issued by S.P.V. Hawaiian Brand
Intellectual Property, Ltd, and Hawaiian Miles Loyalty, Ltd. and
guaranteed by Hawaiian Airlines, Inc. and Hawaiian Holdings, Inc.
The transaction is backed by Hawaiian's loyalty program and its
brand intellectual property.
Separately, Fitch has downgraded the ratings for Hawaiian Airlines
2013-1 class A certificates to 'BB-' from 'BB'. The downgrade
reflects the weakening recovery prospects due to a higher than
expected decline in values for the A330-200. Fitch has also
increased depreciation rate assumption from 6% to 7% for Fitch's
Tier 2 aircraft portfolio, including the aircraft in this
transaction, reflecting long-term aircraft value trends. Fitch
believes values of the A330-200s are unlikely to fully recover due
to a large number of aircraft in storage, replacement from existing
aircraft with newer technology and competition from Boeing 787s.
The rating achieved through the bottom up approach acts as a rating
floor. Further downgrade of the EETCs is unlikely absent a
downgrade of Hawaiian Airline's IDR, and/or a change in Fitch's
assessment of the affirmation factor.
KEY RATING DRIVERS
Hawaii Traffic Rebounding: Fitch expects the recovery in air
traffic to Hawaii to continue at least through early 2023. Demand
from U.S. continues to be robust. Total visitors to Hawaii through
August of this year are down only 13% from 2019 levels, despite a
slow rebound in Asian traffic. Robust demand has driven strong
yields, which allowed Hawaiian to reach 97% of 2019 revenue in Q2
despite traffic remaining down 13.8%.
The re-opening of travel to and from Japan effective in early
October, along with loosening restrictions in other Asian countries
will continue to be a driver. Japan is a key source of tourist
demand for Hawaii, accounting roughly 15% of total visitors in
2019. Travel restrictions in Japan have led to a delayed recovery,
with Japanese arrivals down 91% from 2019 levels through August of
this year. The strong dollar will be headwind as USD/JPY rates are
at levels not seen since the early 1990's, making U.S. travel more
expensive for Japanese tourists, but pent up demand is still
expected to drive a partial recovery from current low levels.
Macroeconomic Issues/Fuel are a Headwind: Rising recessionary risks
and persistent inflation are headwinds that may delay Hawaiian's
recovery beyond Fitch's prior expectations. Fitch expects the U.S.
to enter recession territory some time in 2023. In the case of a
modest recession, Fitch does not anticipate a sharp downturn in
demand for Hawaiian vacations given pent up demand for travel, and
the higher income level of the average visitor. Hawaii has also
held up well during past downturns, for instance Hawaiian's revenue
passenger miles declined by only 2.5% in 2008 before recovering to
pre-recession levels in 2009. Nevertheless, economic pressures may
dampen what otherwise was expected to be a stronger recovery, which
may push a return to more normalized profit and credit metrics into
2024.
Unit Costs Pressures: Labor, airport rents, general inflation and
inefficient levels of operations are contributing to unit cost
pressures in 2022. Hawaiian expects full year non-fuel unit costs
to be up roughly 14% compared to 2019 levels, which is roughly in
line with guidance from its North American peers, all of which are
facing similar pressures. Labor inefficiencies are a headwind
across the industry as airlines have staffed up, but have not yet
fully restored their schedules.
For instance, Hawaiian's active headcount at 6/30/2022 was 5.8%
below the same period in 2019, but its 2Q capacity was still 13.8%
below 2Q 2019. Fitch expects Hawaiian to see some relief in 2023 as
Japan re-opens and the airline can better utilize its fleet and
crews, but unit costs are likely to remain well above pre-pandemic
levels.
Hawaiian Reducing Debt: Hawaiian's total adjusted debt balance at
6/30/2022 was down roughly 17% from its peak. While total debt
remains well above pre-pandemic levels, Hawaiian is also holding a
significant cash balance, and net debt is slightly below where it
stood at YE 2019. Hawaiian paid down $113 million in EETC debt in
the first half of 2022 through the maturity of its 2013-1 class B
certificates and prepayment of its 2020-1 certificates. Despite
declining debt balances, Fitch expects Hawaiian's leverage metrics
to remain elevated for the current rating at least through YE 2023
as jet fuel prices and cost pressures keep margins well below
pre-pandemic levels. Leverage is expected to drop to levels that
are supportive of a higher credit rating beyond 2023 as
profitability improves.
Market Concentration: Hawaiian's ratings have always been
constrained by its reliance on tourist travel to the Hawaiian
Islands. The COVID pandemic highlighted that risk as quarantine
restrictions led to a delayed recovery relative to other U.S.
airlines. Unlike more diverse competitors, Hawaiian has greater
exposure to risks such as natural disasters that could adversely
affect its home market. Market concentration risk for Hawaiian is
partly offset by the relative resilience of leisure travel to the
islands which are perennially viewed as a top-tier vacation
destination.
FCF to Remain Negative: Fitch expects Hawaiian to generate negative
FCF through the forecast period driven by margins remaining below
pre-pandemic levels along with upcoming widebody deliveries. FCF
margins are likely to remain in the negative single digits through
at least 2024. Overall, Fitch views Hawaiian's upcoming capital
expenditures as manageable given the finance-ability of upcoming
787 deliveries along the company's solid liquidity balance.
Depending on the economic environment, Fitch expects Hawaiian to
either finance a portion of its deliveries to maintain liquidity,
or in a more benign environment, pay for aircraft with cash leaving
the aircraft unencumbered. Hawaiian has orders for 10 787-9s that
are expected to be delivered from 2023-2026, though early
deliveries may slip depending on Boeing's ability to produce the
aircraft.
HA 2013-1 Class A Certificates Downgrade: The class A certificates
rating of 'BB-' are based on Fitch's bottom-up approach and
incorporate a three-notch uplift from Hawaiian's IDR of 'B-'. The
notching reflects the medium/high affirmation factor and the
presence of a liquidity facility. The transaction fails to pass
Fitch's 'A' or 'BBB' level stress test as the appraised values for
the A330-200 have sharply declined over the past two years and
conservative stress assumptions used in Fitch's analysis. In such
cases, our EETC criteria state that the rating achieved through the
bottom-up approach can act as a rating floor.
Weakening recovery prospects for the class A certificates have
driven a one notch downgrade. Base values for the A330-200s in the
portfolio declined by 14% yoy, outpacing Fitch's expectations.
Fitch has also increased depreciation rate assumption by 1% across
all aircraft type to better reflect long-term value trends. Fitch
believes values of the A330-200s are unlikely to fully recover due
to a large number of aircraft in storage, replacement from existing
aircraft with newer technology and competition from Boeing 787s.
Due to the lower base value and higher depreciation rates,
principal recovery of the class A is projected to be at
approximately 80% to 85% in near term, below the 91% level which
Fitch would typically consider a strong recovery and award uplift.
Further downgrade on the EETCs is unlikely absent a downgrade of
Hawaiian Airline's IDR, and/or a change in Fitch's assessment of
the affirmation factor.
The affirmation factor for the collateral aircraft is unchanged at
medium/high. The A330-200s in the pool make up a significant
portion of Hawaiian's widebody fleet and are important for the Asia
market, making it unlikely that the aircraft in the pool would be
rejected in the case of a bankruptcy. The affirmation factor is
negatively affected by Hawaii's plan to bring in 10 Boeing 787-9s
with purchase rights for an additional 10 aircraft with scheduled
deliveries between 2023 to 2026. These fuel-efficient, long-range
aircraft with more premium seats available will compete with and
are a strong substitute to existing A330-200 aircraft.
DERIVATION SUMMARY
Hawaiian's projected credit metrics for 2022 and 2023 are in line
with other airlines rated in the low 'B' category including WestJet
and American Airlines. Prior to the pandemic, Hawaiian benefited
from above industry average operating margins and a conservative
financial policy. Hawaiian's ability to produce above average
margins post-pandemic is uncertain due to increased competition in
its home market.
Credit metrics have been pressured across the global airline
industry due to the severe impact that COVID has had on air travel.
The impact for Hawaiian was more severe due to its less diverse
route structure that focuses heavily on travel to its home market
and significant travel restrictions that deterred air traffic to
the state. Hawaiian's leverage metrics are expected remain elevated
over the next year due to debt raised during the pandemic and
weakened profitability.
EETC:
The 'BB-' rating on the HA 2013-1 class A certificates is multiple
notches below the rating on many comparable class A certificates
issued by other airlines. The notching differential is driven by
the concentration and depressed values of the A330-200s in the
transaction and Hawaii's low corporate credit rating relative to
other airlines.
The 'BB-' rating on the class B certificates represents a
three-notch uplift from Hawaiian's IDR of 'B-' (maximum uplift is
five notches). The rating is in line with the B tranche ratings of
certain American Airlines class B certificates, which Fitch views
as having similar affirmation factors and recovery prospects.
American Airlines is also rated 'B-'. The class B certificates are
rated one notch below certain class B certificates in certain other
American airlines EETCs where recovery prospects are higher.
KEY ASSUMPTIONS
- Hawaiian's traffic (RPMs) increase by ~45% in 2022 followed
by a low double digit increase in 2023 driven by solid
demand to the islands;
- Unit revenues up in the mid 20% range in 2022 before
moderating in 2023 with modest single-digit growth
thereafter;
- Jet fuel prices average around $3.40 per gallon in
2022 and $3.20 per gallon in 2023.
EETC
- Key assumptions within the rating case for the issuer include
a harsh downside scenario in which Hawaiian declares
bankruptcy, chooses to reject the collateral aircraft, and
where the aircraft are remarketed in the midst of a severe
slump in aircraft values. Hawaiian's bankruptcy is
hypothetical, and is not Fitch's current expectation;
- Fitch's analysis incorporates a 7% annual depreciation rate
for Tier 2 aircraft. Fitch has increased its depreciation
rate assumptions by 1%, reflecting updated analysis of
historical aircraft value trends;
- Fitch's recovery analyses utilize its 'BB' level stress
tests and include a full draw on liquidity facilities and
assumptions for repossessions and remarketing costs.
Aircraft Value Stresses
- A330-200: A level stress at 40%, BBB level stress at 35%,
and BB level stress at 30%.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- A sustained recovery in traffic to the Hawaiian Islands;
- Increasing confidence in Hawaiian's ability to manage
through current economic conditions, evidenced by operating
margins moving closer to pre-pandemic levels;
- Expectations for total adjusted debt/EBITDAR to fall below 5x;
- FFO fixed-charge coverage moving toward 2x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Total liquidity falling below $500 million;
- FFO fixed-charge coverage sustained at or below 1x.
EETC:
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Positive rating actions are unlikely at this time due to
uncertainty
on the airline industry and remaining depressed values for the
A330-200 aircraft.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Due to the sharp decline in appraised values for aircraft in the
HA 2013-1 transaction, Fitch is using a bottom-up approach for
its class
A certificates. The rating achieved through the bottom up
approach acts
as a rating floor. Fitch views a further downgrade of the EETCs
is
unlikely absent a downgrade of Hawaiian Airline's IDR, and/or a
change in Fitch's assessment of the affirmation factor.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: As of June 30, 2022, Hawaiian had total readily
available liquidity of $1.4 billion including $747 million in
short-term investments and $235 million in available credit
facilities, or about equivalent to 50% of 2019 revenues. Fitch
applies a 30% discount to corporate debt and other fixed income
securities, and 100% discount to Equity Securities before factoring
them into the company's liquidity.
Fitch considers the company's maturity schedule as manageable as
the schedule is well spread. Hawaiian has $23.7 million of
long-term debt set to mature in 2H22 and an additional $48 million
in 2022.
Hawaiian's debt structure primarily consists of secured borrowings
and aircraft-backed debt. The company issued a $1.2 billion secured
note backed by its loyalty program and its brand intellectual
property in February 2021. Hawaiian issued $444.6 million in
enhanced equipment trust certificates (EETC) in 2013 consisting of
six 2013 and 2014 vintage A330-200s.
The rest of Hawaiian's borrowing primarily consists of aircraft
loan agreements secured by Boeing 717s, Japanese Yen denominated
aircraft loans, capital leases on aircraft and loans under the PSP
programs.
HA 2013-1: The transaction features an 18-month liquidity facility
provided by Natixis (A+/F1/Negative).
Recovery Analysis: Fitch's recovery analysis assumes that Hawaiian
would be reorganized as a going concern in bankruptcy rather than
liquidated. Fitch has assumed a 10% administrative claim. Fitch's
estimate for the value available to the loyalty program-backed
creditors is based on an internally generated discounted cash flow
(DCF) analysis using conservative assumptions for future cash
flows. This analysis results in secured creditors receiving
superior recovery, in the 71%-90% range or 'RR2' range.
ISSUER PROFILE
Hawaiian Holdings, Inc. is the parent company of Hawaiian Airlines,
Inc., Hawaii's largest airline. The company, is dedicated to
serving customers coming to and from Hawaii and those traveling
between the islands of Hawaii.
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.
Entity/Debt Rating Recovery Prior
----------- ------ ------- -----
Hawaiian Holdings, Inc. LT IDR B- Affirmed B-
Hawaiian Brand
Intellectual Property,
Ltd.
senior secured LT B+ Affirmed RR2 B+
Hawaiian Airlines, Inc. LT IDR B- Affirmed B-
HawaiianMiles
Loyalty, Ltd.
senior secured LT B+ Affirmed RR2 B+
Hawaiian Airlines
2013-1 Pass Through
Trust
senior secured LT BB- Downgrade BB
HERO NUTRITIONALS: Court OKs Deal on Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Santa Ana Division, authorized Hero Nutritionals, LLC to use cash
collateral on an interim basis in accordance with its agreement
with McCormick 107, LLC through November 1, 2022.
As previously reported by the Troubled Company Reporter, the
material provisions of the Stipulation are:
1. The Debtor is authorized to use the approximately $5,000
cash collateral of McCormick pursuant to 11 U.S.C. section
363(c)(2), from September 1 through and including November 1, 2022,
or when McCormick's lien is paid in full, whichever occurs first,
for the specific purpose of paying independent contractors to
operate the Debtor's equipment for prospective buyers and to pay
property insurance premiums.
2. The Debtor will not use McCormick's cash collateral, as
agreed to therein, for payment to insiders.
3. The use of cash collateral may be renewed upon subsequent
stipulation with McCormick or an order of the Court authorizing use
of McCormick's cash collateral.
4. As adequate protection, McCormick will receive a
replacement lien against all assets of the estate, subject to
existing liens, to have the same extent, validity, scope, and
priority as the prepetition liens held by the secured parties. This
lien will be in addition to any other liens of McCormick against
the assets and property of the Debtor as of the Petition Date.
5. The replacement lien is valid, perfected, and enforceable
without the need of any further recording. McCormick is authorized
to file a certified copy of the cash collateral order and any other
necessary and related documents.
6. Nothing in the Stipulation will be a waiver of the Parties'
rights to seek or assert other relief in future matters.
7. The Debtor and McCormick will request entry of an order
approving the Stipulation; however, this Stipulation will be in
effect pending Court approval.
A copy of the order is available at https://bit.ly/3gi3yyE from
PacerMonitor.com.
About Hero Nutritionals, LLC
Hero Nutritionals, LLC is the first company to introduce a
nutrient-rich, all-natural gummy bear for children called Yummi
Bears. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-11383) on August 17,
2022. In the petition signed by Jennifer Leigh Hodges, chief
executive officer, the Debtor disclosed up to $50 million in assets
and up to $10 million in liabilities.
Judge Scott C. Clarkson oversees the case.
David M. Goodrich, Esq., at Golden Goodrich LLP, is the Debtor's
counsel.
HOLONG CS: Court OKs Cash Collateral Access Thru Nov. 21
--------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston, Division, entered a second interim order granting Holong
CS, LLC authority to use the cash collateral of Guaranty Bank &
Trust, N.A.
The Debtor requires the use of cash collateral to continue its
ongoing operations. Guaranty Bank is the only secured creditor
located through a UCC search that would have an interest in cash
collateral.
The Debtor says it can adequately protect the interests of the
Secured Lender by providing post-petition liens, a priority claim
in the Chapter 11 bankruptcy case, and cash flow payments.
The Court entered a first interim order on October 14 permitting
the Debtor to use cash collateral on an interim basis in accordance
with the budget, with a 10% variance, through the date of the final
hearing set for October 19.
With the entry of the Second Interim Order, Bankruptcy Judge
Christopher Lopez has now set the final hearing for November 21.
A copy of the Debtor's motion is available at
https://bit.ly/3CwlYDe from PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3VETvE3 from
PacerMonitor.com.
The Debtor projects $65,000 in gross revenue and $59,310 in total
expenses for one month.
About Holong CS LLC
Holong CS LLC filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-32935) on Oct. 3,
2022. In the petition filed by Jack Kaphle, as manager, the Debtor
reported assets and liabilities between $1 million and $10
million.
Jarrod B Martin has been appointed as Subchapter V trustee.
The Debtor is represented by Joyce Williams Lindauer of Joyce W.
Lindauer Attorney, PLLC.
Guaranty Bank & Trust, N.A is represented in the case by:
John Ivie, Esq.
1401 Burnham Drive
Colven, Tran & Meredith, P.C.
Plano, TX 75093
Telephone: (469) 400-6173
Facsimile: (469) 533-0337
E-mail: john@colvenandtran.com
HONX INC: Seeks to Retain Control of Bankruptcy
-----------------------------------------------
HONX, Inc. is seeking court approval to remain in control of its
bankruptcy while it conducts an estimation of claims against the
company related to asbestos exposure.
In its motion, the company asked the U.S. Bankruptcy Court for the
Southern District of Texas to extend its exclusive right to file a
Chapter 11 plan and solicit votes from creditors to Jan. 31 and
March 2, respectively.
HONX will use the extension to evaluate and estimate over 400
asbestos claims against the company and its parent, Hess
Corporation. Both companies were defendants to about 580 asbestos
lawsuits in the U.S. Virgin Islands when they filed for Chapter 11
protection.
Over the past few months, the company participated in mediation for
a quick resolution of asbestos claims. In connection with the
mediation, HONX and the unsecured creditors' committee in September
signed a stipulation to extend the exclusivity periods to file the
company's plan and solicit acceptances to Nov. 2 and Jan. 2,
respectively. However, efforts to mediate asbestos claims failed.
Veronica Polnick, Esq., at Jackson Walker, LLP, said another
extension of the exclusivity periods will give the company "an
opportunity to continue to pursue the estimation process as an
important step toward a confirmable Chapter 11 plan."
"Given the complexity of this Chapter 11 case, [HONX] should be
afforded significant time to progress its Chapter 11 case,
including the estimation process," the company's attorney said.
The exclusivity motion is on the court's calendar for Nov. 2.
About Honx Inc.
Honx Inc. is a subsidiary of Hess Corporation, a publicly-traded
global energy company. HONX is the corporate successor of Hess Oil
Virgin Islands Corporation, which owned and operated an oil
refinery in St. Croix, U.S. Virgin Islands from the beginning of
its construction in 1965 until a non-operating entity with minimal
assets consisting primarily of a 50% ownership in a joint venture
from 1998 to 2016, and post-2016 it has continued its corporate
existence solely to manage its alleged asbestos liabilities related
to the refinery.
Honx sought Chapter 11 bankruptcy protection (Bankr. S.D. Tex. Case
No. 22-90035) on April 28, 2022. In the petition signed by Todd R.
Snyder, chief administrative officer, the Debtor disclosed $10
million to $50 million in assets and $500 million to $1 billion in
liabilities.
Judge Marvin Isgur oversees the case.
The Debtor tapped Kirkland & Ellis and Jackson Walker, LLP as
bankruptcy counsels; Piper Sandler Companies/TRS Advisors, LLC as
investment banker and financial advisor; and Bates White, LLC as
asbestos consultant. Stretto, Inc. is the claims, noticing and
solicitation agent.
The Honorable Barbara J. Houser (Ret.) was appointed as the legal
representative for future asbestos claimants in this Chapter 11
case. Ms. Houser tapped Young Conaway Stargatt & Taylor, LLP as
bankruptcy counsel; O'ConnorWechsler, PLLC as local counsel; FTI
Consulting, Inc., as financial advisor; and NERA Economic
Consulting as consultant.
IBEC LANGUAGE: Amends Unsecured Claims Pay; Plan Hearing Nov. 22
----------------------------------------------------------------
IBEC Language Institute, Inc., submitted a First Amended Disclosure
Statement for the Small Business Plan of Reorganization dated
October 17, 2022.
The Debtor and Kazuo Endo (the Debtor's Principal) have reached an
agreement with its prior landlord. Additionally, the Debtor has
been successful in avoiding and reclassifying Citibank NA and NYC
Department of Finance's claims, and the Debtor is poised to move
forward with its Plan of Reorganization.
Class 2 consists of Allowed General Unsecured Claims. General
Unsecured Claims are claims that are not Administrative, Secured or
Priority Claims, or Interests that arose prior to the Petition Date
and include Claims based upon trade accounts payable and Claims
based upon the rejection of an executor contract or lease during
the Chapter 11 Case. Class 2 consists of holders of Allowed General
Unsecured Claims. The Debtor estimates that Class 2 Claims total
approximately $309,307.17.
The Debtor shall pay to holders of Class 2 General Unsecured Claims
an aggregate 10% distribution on account of Allowed Class 2
Unsecured Claims, payable in 12 quarterly installments without
interest, commencing on the Effective Date. The absolute priority
rule requires that the Class 4 Interests may only retain their
interest if Class 2 votes to accept the Plan. Allowed Class 2
Claims are impaired under this Plan and holders of such Claims
shall be entitled to vote to accept or reject the Plan.
Class 4 consists of Kazuo Endo and Chieko Endo, the holders of
Interests in the Debtor. Class 4 Interest holders shall retain
their interests in the Debtor, subject to acceptance of the Plan by
holders of Class 2 General Unsecured Claims as required by the
absolute priority rule, and are not expected to receive any
monetary distributions under the Plan. Class 4 Interests are
unimpaired and deemed to accept the Plan.
The Plan shall be funded with the Debtor's Cash and net operating
proceeds and shall be distributed by the Debtor.
Absolute Priority Rule
The absolute priority rule provides that if all impaired classes do
not accept the plan, then junior classes may not receive or retain
an interest in any property. Under the Plan, Class 2 is impaired.
The Plan provides for Class 4 to retain its equity interest. If
Class 2 does not accept the Plan then Class 4 cannot retain its
equity interest. This would result in liquidation. There is an
exception to this rule in the event the equity holders make a
substantial and essential contribution in exchange for their
continued ownership, which is not applicable under this Plan.
The hearing at which the Court will consider final approval of this
Disclosure Statement and determine whether to confirm the Plan will
take place on November 22, 2022 at 10:00 a.m.
Objections to final approval of the Disclosure Statement and
confirmation of the Plan must be filed by November 15, 2022 at 5:00
p.m.
A full-text copy of the First Amended Disclosure Statement dated
October 17, 2022, is available at https://bit.ly/3VNqVjU from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
KIRBY AISNER & CURLEY, LLP
700 Post Road, Suite 237
Scarsdale, New York 10583
Tel: (914) 401-9500
Dawn Kirby, Esq.
dkirby@kacllp.com
About IBEC Language
IBEC Language Institute, Inc., has offered courses on American
culture and business English communication skill development to
Japanese business people and their families in New York City.
IBEC Language filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y. Case No. 21-22455) on Aug. 6, 2021. The Debtor was
estimated to have less than $100,000 in assets and less than
$500,000 in liabilities as of the bankruptcy filing. The Debtor is
represented by Dawn Kirby, Esq. of KIRBY AISNER & CURLEY LLP.
IBIO INC: Files Provisional Patent Relating to Cancer Treatment
---------------------------------------------------------------
iBio, Inc. said that it has filed a provisional patent with the
United States Patent and Trademark Office entitled, "Epidermal
Growth Factor Receptor Variant III Antibodies," relating to
materials and methods for treating cancer, and particularly to the
use of anti-EGFRvIII antibodies to reduce or eliminate cells that
express the truncated EGFRvIII, and to treat cancer.
The Company now owns or licenses a total of 107 patents, of which
101 are owned and six are licensed. Of the 101 owned patents, 25
are issued in the U.S. and 76 are international.
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 $50.30
million for the year ended June 30, 2022, 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
June 30, 2022, the Company had $99.41 million in total assets,
$35.92 million in total liabilities, and $63.48 million in total
equity.
INTELLIPHARMACEUTICS INT'L: Incurs $296K Net Loss in Third Quarter
------------------------------------------------------------------
Intellipharmaceutics International Inc. reported its results of
operations for the three and nine months ended Aug. 31, 2022.
The Company recorded a net loss and comprehensive loss of $296,043
on $19,068 of revenue for the three months ended Aug. 31, 2022,
compared to a net loss and comprehensive loss of $1.26 million on
$0 of revenue for the three months ended Aug. 31, 2021.
For the nine months ended Aug. 31, 2022, the Company reported a net
loss and comprehensive loss of $2.02 million on $36,046 of revenue
compared to a net loss and comprehensive loss of $3.19 million on
$0 of revenue for the same period in 2021.
As of Aug. 31, 2022, the Company had $1.44 million in total assets,
$11.59 million in total liabilities, and a total shareholders'
deficiency of $10.15 million.
As of Aug. 31, 2022, the Company's cash balance was $79,649.
Intellipharmaceutics said, "We currently expect to meet our
short-term cash requirements from potential revenues for approved
generic products or other collaborations, other available financing
and by cost savings resulting from reduced R&D activities and
staffing levels, as well as quarterly profit share from Par.
Effective May 5, 2021 our exclusive license agreements with Tris
Pharma, Inc. for generic Seroquel XR, generic Pristiq and generic
Effexor XR were mutually terminated. Products were never supplied
nor distributed under the licenses. Termination of the exclusive
agreements may provide opportunity for the Company to explore
options of supplying the products to multiple sources on
non-exclusive bases. However, there can be no assurance that the
products previously licensed to Tris Pharma will be successfully
commercialized and produce significant revenues for us. We will
need to obtain additional funding to, among other things, further
product commercialization activities and development of our product
candidates. Potential sources of capital may include, if
conditions permit, equity and/or debt financing, payments from
licensing and/or development agreements and/or new strategic
partnership agreements. There can be no assurance that we will be
able to enter into additional collaborations or, if we do, that
such arrangements will be commercially viable or beneficial. The
Company has funded its business activities principally through the
issuance of securities, loans from related parties ... and funds
from development agreements. There is no certainty that such
funding will be available going forward or, if it is, whether it
will be sufficient to meet our needs. Our future operations are
highly dependent upon our ability to source additional funding to
support advancing our product candidate pipeline through continued
R&D activities and to expand our operations. Our ultimate success
will depend on whether our product candidates are approved by the
FDA, Health Canada, or the regulatory authorities of other
countries in which our products are proposed to be sold and whether
we are able to successfully market our approved products. We
cannot be certain that we will receive such regulatory approval for
any of our current or future product candidates, that we will reach
the level of revenues necessary to achieve and sustain
profitability, or that we will secure other capital sources on
terms or in amounts sufficient to meet our needs, or at all."
A full-text copy of the press release is available for free at:
https://www.sec.gov/Archives/edgar/data/1474835/000165495422013767/ipii_ex993.htm
Intellipharmaceutics
Intellipharmaceutics International Inc. is a pharmaceutical company
specializing in the research, development and manufacture of novel
and generic controlled-release and targeted-release oral solid
dosage drugs. The Company's patented Hypermatrix technology is a
multidimensional controlled-release drug delivery platform that can
be applied to a wide range of existing and new pharmaceuticals.
Intellipharmaceutics has developed several drug delivery systems
based on this technology platform, with a pipeline of products
(some of which have received FDA approval) in various stages of
development. The Company has ANDA and NDA 505(b)(2) drug product
candidates in its development pipeline. These include the Company's
abuse-deterrent oxycodone hydrochloride extended release
formulation ("Oxycodone ER") based on its proprietary nPODDDS novel
Point Of Divergence Drug Delivery System (for which an NDA has been
filed with the FDA), and Regabatin XR (pregabalin extended-release
capsules).
Intellipharmaceutics reported a net loss and comprehensive loss of
$5.14 million for the year ended Nov. 30, 2021, compared to a net
loss and comprehensive loss of $3.39 million for the year ended
Nov. 30, 2020. As of Feb. 28, 2022, the Company had $1.89 million
in total assets, $10.90 million in total liabilities, and a total
stockholders' deficit of $9.01 million.
Toronto, Canada-based MNP LLP, the Company's auditor since 2016,
issued a "going concern" qualification in its report dated Feb. 28,
2022, citing that the Company has suffered recurring losses from
operations and has a net capital deficiency that raise substantial
doubt about its ability to continue as a going concern.
JAGUAR HEALTH: Signs Amended License Agreement with SynWorld
------------------------------------------------------------
Jaguar Health, Inc. entered into an Amended and Restated License
and Services Agreement with SynWorld Technologies Corporation, a
corporation duly incorporated under the laws of Canada
("Licensee"), C&E Telecom, LTD, a company organized under the laws
of the British Virgin Islands, and Tao Wang, which agreement
amended and restated in its entirety the License and Services
Agreement, dated as of June 28, 2022, by and among the same
parties, as amended by the First Amendment to the License and
Services Agreement, dated as of
Aug. 18, 2022, by and between Licensor and Licensee.
Pursuant to the Original License Agreement, (i) the Company (A)
granted Licensee an exclusive license to commercialize a
canine-specific pharmaceutical product utilizing crofelemer as its
active drug substance, which product is marketed in the United
States under the trademark Canalevia and Canalevia-CA1, for the
treatment, prevention or amelioration of diarrhea in dogs in the
People's Republic of China, excluding Hong Kong, and (B) engaged
Licensee as a service provider to prepare, submit and obtain
regulatory approval of the Product for the Licensed Indication in
the Licensee Territory on behalf of the Company and (ii) Licensee
(A) agreed to pay the Company a license fee equal to $5 million,
which fee is payable in monthly installments during the initial
two-year term of the Original License Agreement, and (B) committed
to purchasing up to $5 million worth of unregistered shares of
common stock of the Company over the initial two-year term of the
Original License Agreement. As consideration for the Services to
be provided by Licensee under the Original License Agreement, the
Company would pay Licensee a service fee of up to $5 million,
payable in monthly installments in the form of unregistered shares
of Common Stock over the initial two-year term of the Original
License Agreement. The price per Service Share would be equal to
the Minimum Price (as defined under Nasdaq Listing Rule 5635(d)) of
the Common Stock at the time of such issuance, provided that such
price shall in no event be less than (A) $0.25 per share, with
respect to such shares that are issued prior to the six-month
anniversary of the effective date of the Amendment, and (B) $0.31
per share, with respect to such shares that are issued on or after
the six-month anniversary of the effective date of the Amendment.
The Amended License Agreement, among other things, (i) removes (A)
the Licensee's commitment to purchase the Subscription Shares and
(B) the Floor Price that the issuance of the Service Shares is
subject to, such that the Service Shares will be issued at a price
per share equal to the Minimum Price at the time of such issuance,
and (ii) provides the Company with the discretion to elect to pay
for the Licensee's Services either in cash or in the Service Shares
in terms of each monthly installment.
In addition, the Amended License Agreement (i) provides the Company
with a unilateral right to cause the parties to the Amended License
Agreement to suspend their respective obligations under the Amended
License Agreement without terminating such agreement, and (ii)
acknowledges that (A) the License Fee due and payable by the
Licensee for September 2022, (B) the obligation of Licensee to
purchase the Subscription Shares for September 2022, and (C) the
Service Fee due and payable by the Company for September 2022 are
all waived in full.
Consistent with the terms of the Original License Agreement, under
no circumstances will the number of shares of Common Stock issued
by the Company under the Amended License Agreement (i) exceed
19.99% of the total shares outstanding of the Company or (ii)
result in the total number of shares of Common Stock held by
Licensee and its affiliates exceeding 19.99% of total shares
outstanding of the Company at any given time, in each case unless
stockholder approval is obtained.
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar Health reported a net loss and comprehensive loss of $52.60
for the year ended Dec. 31, 2021, a net loss and comprehensive loss
of $33.81 million for the year ended Dec. 31, 2020, a net loss and
comprehensive loss of $38.54 million for the year ended Dec. 31,
2019, and a net loss of $32.15 million for the year ended Dec. 31,
2018. As of June 30, 2022, the Company had $49.88 million in total
assets, $47.13 million in total liabilities, and $2.76 million in
total stockholders' equity.
Larkspur, California-based RBSM, LLP, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
March 11, 2022, citing that the Company has an accumulated deficit,
recurring losses, and expects continuing future losses. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
JET OILFIELD SERVICES: Files for Chapter 11 Bankruptcy Protection
-----------------------------------------------------------------
Jet Oilfield Services LLC filed for chapter 11 protection in the
Western District of Texas without stating the reason.
Jet Oilfield Services provides services for completions operations
in the oil and gas industry. Its employees provide completions
operations with the technical expertise to use its patented
fracking values in completing their operations in to producing
wells. The company has yards located in Texas, Louisiana and New
Mexico. It has approximately 75 employees and 12 independent
contractors.
The Debtor was formed as a Texas limited liability company. Its
original registered office was listed as 8511 Ridgelea, Dallas, TX
75209, which is the home of one of its members. In other
documents, it has listed addresses in Houston, Shreveport and
Longview. The Debtor does not appear to have a central office
where records are kept and business is transacted. The Debtor has
chosen venue in the Western District of Texas, Midland Division
based upon the location of its Midland yard, which it believes to
be the principal location of its assets.
The Debtor has four members: Brandon Owen, Thomas Smith, Loran
Mosely and Brandon Wilkens. Each of the members has executed a
Unanimous Consent authorizing the Chapter 11 filing.
Brandon Owen, who is the 60% member, will be taking a leave of
absence immediately upon the filing of the case.
The Debtor has engaged Angelo DeCaro as Chief Restructuring
Officer, to supervise the Debtor's finances and operations, to
investigate the viability of its business and to investigate
whether there have been any improprieties with regard to the
Debtors’ funds.
The Debtor’s Profit & Loss Statement through August 31, 2022
shows Total Income of $34,609,671 and Net Income of $10,078,336.
However, the document shows obvious errors which call its accuracy
into question. Specifically, its shows that total income of
$34,609,671 less cost of goods sold of $12,220 equals gross profit
of $27,719,098.
In addition to lenders holding traditional liens, the Debtor
entered into agreements with five Merchant Cash Advance lenders as
follows:
Date Lender Amount Advanced Amount
"Purchased"
---- ------ ---------------
------------------
08/11/2022 Canon Advance, LLC $2,000,000
$2,999,000
08/12/2022 Premier Fund US $2,100,000
$3,357,000
08/29/2022 Reliance Financial $3,000,000
$4,512,000
09/14/2022 Spin Capital $3,000,000
$4,500,000
Unknown BMF Unknown
$5,000,000
According to court filings, Jet Oilfield Services LLC estimates $10
million to $50 million in debt to 100 to 199 creditors. The
petition states that funds will not be available to unsecured
creditors.
About Jet Oilfield Services
Jet Oilfield Services LLC provides support activities for mining,
and oil and gas extraction industry.
Jet Oilfield Services LLC filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. W.D. Tex. Case No. 22-22-70126)
on October 12, 2022. In the petition filed by Charles V. Long Jr.,
as managing member and owner, the Debtor reported assets and
liabilities between $10 million and $50 million each.
The Debtor is represented by Stephen W. Sather of Barron &
Newburger, PC.
KABBAGE INC: Hires Omni Agent Solutions as Administrative Agent
---------------------------------------------------------------
Kabbage, Inc. d/b/a KServicing received approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Omni Agent
Solutions, Inc. as its administrative agent.
The firm will render these services:
a. assist with, among other things, solicitation, balloting,
and tabulation of votes; prepare any related reports, as required
in support of confirmation of a chapter 11 plan, and in connection
with such services, process requests for documents from parties in
interest, including, if applicable, brokerage firms, bank
back-offices, and institutional holders;
b. prepare an official ballot certification and, if necessary,
testify in support of the ballot tabulation results;
c. assist with the preparation of the Debtors' schedules of
assets and liabilities and statements of financial affairs and
gather data in conjunction therewith;
d. provide a confidential data room, if requested by the
Debtors;
e. manage and coordinate any distributions pursuant to a
chapter 11 plan if designated as distribution agent under such
plan; and
f. provide such other solicitation, balloting and other
administrative services.
The firm will be paid at these rates:
Customer Service $52.50 - $150
Project Administrators $52.50 - $150
Project Supervisors $52.50 - $150
Systems, Programming,
Graphic Support Staff $52.50 - $139.50
Project Managers $52.50 - $150
Consultants $52.50 - $150
Directors $157.50 - $187.50
Solicitation Consultants
& Executives $172.50 - $187.50
The retainer fee is $12,500.
Paul Deutch, executive vice president of Omni Agent Solutions,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Paul H. Deutch
Omni Agent Solutions
5955 De Soto Avenue Suite 100
Woodland Hills, CA 91367
Tel: (818) 906-8300
Fax: 818-783-2737
Email: lacontact@omniagnt.com
About KServicing
Founded in 2010 and headquartered in Atlanta, Georgia, Legacy
Kabbage (a predecessor of KServicing) -- http://www.kservicing.com
-- was one of the leading fintech providers of working capital to
small businesses for over a decade. Legacy Kabbage began as a
proprietary online lending platform for small businesses, providing
loan services to over 250,000 American small businesses, many of
which were businesses that struggled to receive adequate funding
through traditional banking institutions. Legacy Kabbage offered a
variety of services to small business owners, including providing
small business loans, access to flexible lines of credit, business
checking accounts, online bill payment methods, cash flow
visualization tools, and e-gift certificates through its website
and software application. From 2020-2021, the Company provided and
facilitated necessary funding to small business owners through PPP
loans during the COVID-19 pandemic. The Company's existing
technology infrastructure spearheaded its PPP work, which led to a
total of $7 billion in loans being originated by the Company.
The origination and servicing of PPP Loans and small business loans
to eligible borrowers was critical during a time of unprecedented
health and economic uncertainty brought about by the COVID-19
pandemic. On August 16, 2020, much of the Company's business was
sold to American Express Travel Related Services Company, Inc.
pursuant to an executed Agreement and Plan of Merger. As a result
of the merger, KServicing now operates in a limited capacity as (i)
a servicer and subservicer of PPP Loans, (ii) a software services
provider for lenders of PPP Loans, and (iii) a servicer of a minor
portfolio of non-PPP small business loans.
Kabbage is a trademark of American Express used under license;
Kabbage, Inc. d/b/a KServicing is not affiliated with American
Express.
KABBAGE INC: Seeks to Hire AlixPartners as Financial Advisor
------------------------------------------------------------
Kabbage, Inc. d/b/a KServicing seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to employ
AlixPartners, LLP as its financial advisor.
The firm will render these services:
Restructuring
-- Work with the Debtors and their team to further identify
and implement both short-term and long-term liquidity-generating
and cost-reduction initiatives.
-- Assist the Debtors in developing a global wind-down plan
and a detailed work plan identifying key milestones and in setting
appropriate priorities.
-- Assist the Debtors' management and their professionals
specifically assigned to sourcing, negotiating and implementing any
financing in conjunction with the Chapter 11 Plan and the overall
restructuring, as applicable.
-- Assist the Debtors' management in the design and
implementation of a restructuring strategy designed to maximize
value, taking into account the unique interests of all
constituencies.
-- Work with senior management to negotiate and implement
restructuring initiatives and evaluate strategic alternatives.
Communication with Outsiders
-- Assist in negotiations with stakeholders and their
representatives regarding the restructuring.
-- Assist in negotiations with potential acquirers of the
Debtors' assets.
-- Assist in communication and/or negotiate and implement
restructuring initiatives and evaluate strategic alternatives.
Bankruptcy Case Management
-- Assist in managing the "working group" professionals who
are assisting the Debtors in the wind down process or who are
working for the Debtors' various stakeholders to improve
coordination of their efforts and individual work product to be
consistent with the Debtors' overall restructuring goals.
-- Assist in obtaining and presenting information required by
parties in interest in the Debtors' bankruptcy process, including
official committees appointed by the Court and the Court itself.
-- Assist the Debtors in other business and financial aspects
of a Chapter 11 proceeding, including, but not limited to,
development of a disclosure statement, Chapter 11 Plan, first day
motions and petitions.
-- Assist with the preparation of the statement of affairs,
schedules and other regular reports required by the Court, as well
as provide assistance in areas such as testimony before the Court
on matters that are within AlixPartners' areas of expertise.
-- Assist as requested in supporting any litigation that may
be brought against the Debtors in the Court.
-- Assist as requested in analyzing preferences and other
avoidance actions.
-- Manage the claims reconciliation processes.
-- Assist the Debtors with electronic data collection.
Finance and Cash Management
-- Assist the Debtors with providing financial leadership and
support.
-- Assist the Debtors and their management in developing and
maintaining a short-term cash flow forecasting tool and related
methodologies and to assist with planning for alternatives as
requested by the Debtors.
-- Assist the Debtors in developing an actual to forecast
variance reporting mechanism including written explanations of key
differences.
Miscellaneous
-- Assist with such other matters as may be requested that
fall with AlixPartners' expertise and that are mutually agreeable.
AlixPartner will be paid at these rates:
Managing Director $1,060 - $1,335 per hour
Director $840 - $990 per hour
Senior Vice President $700 - $795 per hour
Vice President $510 - $685 per hour
Consultant $190 - $505 per hour
Paraprofessional $320 - $340 per hour
The firm will also be reimbursed for its out-of-pocket expenses.
AlixPartner received a retainer of $500,000 from the Debtors.
Deborah Rieger-Paganis, managing director at AlixPartners,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Deborah Rieger-Paganis
AlixPartners, LLP
909 Third Avenue, 30th Floor
New York, NY 10022
Tel: (212) 490-2500
Fax: (212) 490-1344
Email: dpaganis@alixpartners.com
About KServicing
Founded in 2010 and headquartered in Atlanta, Georgia, Legacy
Kabbage (a predecessor of KServicing) -- http://www.kservicing.com
-- was one of the leading fintech providers of working capital to
small businesses for over a decade. Legacy Kabbage began as a
proprietary online lending platform for small businesses, providing
loan services to over 250,000 American small businesses, many of
which were businesses that struggled to receive adequate funding
through traditional banking institutions. Legacy Kabbage offered a
variety of services to small business owners, including providing
small business loans, access to flexible lines of credit, business
checking accounts, online bill payment methods, cash flow
visualization tools, and e-gift certificates through its website
and software application. From 2020-2021, the Company provided and
facilitated necessary funding to small business owners through PPP
loans during the COVID-19 pandemic. The Company's existing
technology infrastructure spearheaded its PPP work, which led to a
total of $7 billion in loans being originated by the Company.
The origination and servicing of PPP Loans and small business loans
to eligible borrowers was critical during a time of unprecedented
health and economic uncertainty brought about by the COVID-19
pandemic. On August 16, 2020, much of the Company's business was
sold to American Express Travel Related Services Company, Inc.
pursuant to an executed Agreement and Plan of Merger. As a result
of the merger, KServicing now operates in a limited capacity as (i)
a servicer and subservicer of PPP Loans, (ii) a software services
provider for lenders of PPP Loans, and (iii) a servicer of a minor
portfolio of non-PPP small business loans.
Kabbage is a trademark of American Express used under license;
Kabbage, Inc. d/b/a KServicing is not affiliated with American
Express.
KABBAGE INC: Seeks to Hire Richards Layton & Finger as Co-Counsel
-----------------------------------------------------------------
Kabbage, Inc. d/b/a KServicing seeks approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Richards,
Layton & Finger, P.A. as its co-counsel.
The firm's services include:
a. assisting in pre-bankruptcy preparation and planning;
b. assisting in preparing necessary petitions, motions,
applications, answers, orders, reports, and papers necessary to
commence these Chapter 11 Cases;
c. advising the Debtors of their rights, powers, and duties
as debtors and debtors in possession under chapter 11 of the
Bankruptcy Code;
d. taking all necessary actions to protect and preserve the
Debtors’ estates, including the prosecution of actions on the
Debtors’ behalf, the defense of any actions commenced against the
Debtors in the Chapter 11 Cases, the negotiation of disputes in
which the Debtors are involved, and the preparation of objections
to claims filed against the Debtors’ estates;
e. assisting with any sale or sales of assets, including
preparing any necessary motions and papers related thereto;
f. assisting in preparing the Debtors’ disclosure statement
and any related motions, pleadings, or others documents necessary
to solicit votes on any plan of reorganization;
g. assisting in preparing the Debtors’ chapter 11 plan;
h. prosecuting on behalf of the Debtors any proposed plan and
seeking approval of all transactions contemplated therein and in
any amendments thereto; and
i. performing all other necessary legal services in connection
with the prosecution of these Chapter 11 Cases.
The firm will be paid at these rates:
Directors $850 to $1,300 an hour
Counsel $725 to $750 an hour
Associates $425 to $700 an hour
Paraprofessionals $315 an hour
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, the
following is provided in response to the request for additional
information:
a) The firm did not agree to any variations from, or
alternatives to, its standard or customary billing arrangements for
this engagement.
b) None of the firm's professionals included in this engagement
have varied their rate based on the geographic location for these
Chapter 11 cases.
c) The firm has advised the Debtors in connection with their
restructuring efforts and in contemplation of these Chapter 11
Cases since on or about Sep. 9, 2022. Other than the periodic
adjustments, the billing rates and material financial terms of the
firm's engagement have not changed post-petition from the
pre-bankruptcy arrangement.
d) The firm, in conjunction with the Debtors, is developing a
prospective budget and staffing plan for these Chapter 11 cases.
Daniel DeFranceschi, Esq., a director at Richards Layton & Finger,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Daniel DeFranceschi, Esq.
Richards, Layton & Finger, P.A.
One Rodney Square, 920 North King Street
Wilmington, DE 19801
Tel: 302-651-7816
Email: defranceschi@rlf.com
About KServicing
Founded in 2010 and headquartered in Atlanta, Georgia, Legacy
Kabbage (a predecessor of KServicing) -- http://www.kservicing.com
-- was one of the leading fintech providers of working capital to
small businesses for over a decade. Legacy Kabbage began as a
proprietary online lending platform for small businesses, providing
loan services to over 250,000 American small businesses, many of
which were businesses that struggled to receive adequate funding
through traditional banking institutions. Legacy Kabbage offered a
variety of services to small business owners, including providing
small business loans, access to flexible lines of credit, business
checking accounts, online bill payment methods, cash flow
visualization tools, and e-gift certificates through its website
and software application. From 2020-2021, the Company provided and
facilitated necessary funding to small business owners through PPP
loans during the COVID-19 pandemic. The Company's existing
technology infrastructure spearheaded its PPP work, which led to a
total of $7 billion in loans being originated by the Company.
The origination and servicing of PPP Loans and small business loans
to eligible borrowers was critical during a time of unprecedented
health and economic uncertainty brought about by the COVID-19
pandemic. On August 16, 2020, much of the Company's business was
sold to American Express Travel Related Services Company, Inc.
pursuant to an executed Agreement and Plan of Merger. As a result
of the merger, KServicing now operates in a limited capacity as (i)
a servicer and subservicer of PPP Loans, (ii) a software services
provider for lenders of PPP Loans, and (iii) a servicer of a minor
portfolio of non-PPP small business loans.
Kabbage is a trademark of American Express used under license;
Kabbage, Inc. d/b/a KServicing is not affiliated with American
Express.
KALBARRI AUSTRALIA: U.S. Trustee Unable to Appoint Committee
------------------------------------------------------------
The U.S. Trustee for Region 8 disclosed in a court filing that no
official committee of unsecured creditors has been appointed in the
Chapter 11 case of Kalbarri Australia, LLC.
About Kalbarri Australia
Kalbarri Australia, LLC, a Memphis-based company, sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Tenn.
Case No. 22-23562) on Aug. 25, 2022. In the petition filed by
George X. Canno, manager, the Debtor disclosed between $1 million
and $10 million in both assets and liabilities.
Judge Denise E. Barnett oversees the case.
The Debtor tapped Adam M. Langley, Esq., at Butler Snow, LLP as
bankruptcy counsel, and G. Gregory Voehringer, Esq., at Voehringer
Law Firm, PC as special counsel.
KALOS CAPITAL: Creditors to Get Proceeds From Liquidation
---------------------------------------------------------
Kalos Capital, Inc., filed with the U.S. Bankruptcy Court for the
Northern District of Georgia a Chapter 11 Plan of Liquidation dated
October 17, 2022.
Kalos is a Georgia corporation that was formed in 1997. Kalos was
approved as a FINRA broker dealer in February 1998 with a limited
scope of selling private placement securities. In December 2001,
Kalos was approved as a retail broker dealer and opened an office
in April 2002.
Kalos offered non-public investments known as GPB Capital Holdings,
LLC ("GPB") from August 2014 to May 2018. GPB was formed March 19,
2013 to serve as the general partner of GPB Holdings, LP
("Holdings"), a private equity fund that was focused on acquiring
controlling interests in early- stage and middle-market,
income-producing private companies engaged in the automotive
retail, information technology, and healthcare industries.
In June 2018, GPB was unable to complete its financial audits and
failed to file timely registration statement with the SEC. In
February 2021, the SEC appointed an independent monitor of GPB
Holdings. In May 2022, GPB began filing audited financials.
In the second half of 2019, Kalos began receiving GPB arbitration
demands. In 2020, Kalos's revenue declined sharply due to the COVID
shutdown. At the same time, the expense of attorneys' fees and
settlements related to GPB increased exponentially creating a
perfect storm that ultimately led to Kalos' demise. By mid-summer
2020, Kalos determined that due to the increasing legal expense,
Kalos could not survive by continuing to litigate, negotiate
settlements and mediate claims. Kalos made the decision with advice
of counsel to try to conduct a global mediation wrapping up all the
outstanding GPB cases into one mediation.
The mediation began on December 17, 2020 and concluded with a
settlement in late January 2021. However, since this time,
attorneys filed more arbitrations against Kalos. To date, the legal
fees related to the arbitrations, tolling agreements, and
complaints against Kalos have exceeded $9,189,461.
On October 4, 2022, Kalos filed its Form BDW (Uniform Request for
Broker-Dealer Withdrawal) to withdraw its registration from FINRA
and the Security and Exchange Commission. Kalos no longer has any
customer accounts and is no longer a broker dealer. The customer
accounts are held at custodians of Fidelity – National Financial
Services, RBC Financial Services and Equity Advisor Solutions. Upon
filing the BDW, the customer accounts are serviced by in-house
teams at each custodian.
The Plan provides for the liquidation of the Debtor's Estate and
the orderly payment of Allowed Claims. Additionally, the Plan
provides for the Contribution by certain individuals to the
Debtor's Estate to pay Allowed Claims and a release of individuals
related to the Debtor from any Claims against those individuals
that are in any way related to the Debtor.
Class 1 consists of on-Tax Priority Claims. Pursuant to 11 USC
1129(a)(9)(B) each holder of an Allowed Non-Tax Priority Claim will
receive:
* if such class has accepted the plan, deferred cash payments
of a value, as of the effective date of the plan, equal to the
allowed amount of such claim; or
* if such class has not accepted the plan, cash on the
effective date of the plan equal to the allowed amount of such
claim;
Class 2 consists of all Allowed Unsecured Claims. Each Holder of an
Allowed Unsecured Claim in Class 2 shall receive distributions from
the Debtor. The distribution to each Holder of Allowed Unsecured
Claim in Class 2 shall equal the Pro Rata Share of the Holder's
Allowed Claim multiplied by the proceeds, net of expenses, from the
liquidation of the Assets.
The scheduled amount of General Unsecured Claims is $2,014,286.
However, the vast majority of those Claims are disputed. The amount
of Allowed General Unsecured Claims could decrease if some General
Unsecured Claims are disallowed. Additionally, that number could
increase if additional General Unsecured Claims are filed and
ultimately Allowed. Under the Plan, pursuant to the Liquidation
Analysis, there is estimated to be approximately $1,004,000
available to pay General Unsecured Claims. This is only an
estimate, however, and multiple factors could change the ultimate
amount available for General Unsecured Claims.
Class 3 consists of any and all interests of the Debtor that are
property of the Debtor's Estate. Subject to and in accordance with
Sections 6.1 and 6.2 of the Plan, and applicable non-bankruptcy
law, on the Effective Date, (a) all Assets will be liquidated and
distributed to Holders of Allowed Claims If there are any funds or
property after Allowed Claims are paid in full, those remaining
funds or property shall be distributed to the Debtor.
Following the Effective Date, the Debtor shall pay, from the Assets
and the Contribution, Holders of Allowed Claims all payments due
under the Plan. Holders of Allowed Claims in Class 1 will receive
their treatment as set forth in Section 5.1. Holders of Allowed
Unsecured Claims in Class 2 shall receive their Pro Rata Share of
the Assets and the Contribution net of the expenses of
distribution. In the event that a Claim in Class 2 is Disallowed
pursuant to a Final Order, the Holder of such Claim shall
immediately forfeit any right to a distribution by the Debtor. If
there are any funds or property remaining after distributions are
made to all Allowed Claims in Class 2, those remaining funds or
property shall be distributed to the Debtor.
In accordance therewith and the Plan, the Debtor shall, among other
things, liquidate and manage the Assets and make Distributions to
Holders of Allowed Claims in accordance with the terms and
conditions of the Plan. The Debtor will make Distributions to the
Holders of Allowed Administrative Claims and Allowed Fee Claims
payable after the Effective Date.
A full-text copy of the Liquidating Plan dated October 17, 2022, is
available at https://bit.ly/3CRq7lb from PacerMonitor.com at no
charge.
Debtor's Counsel: Marc P. Solomon, Esq.
BURR & FORMAN LLP
171 17th Street, NW
Suite 1100
Atlanta, GA 30363
Tel: (205) 251-3000
Fax: (205) 458-5100
Email: msolomon@burr.com
About Kalos Capital
Kalos Capital, Inc. is a Georgia corporation that was formed in
1997. Kalos was approved as a FINRA broker dealer in February 1998
with a limited scope of selling private placement securities. The
Debtor filed Chapter 11 Petition (Bankr. N.D. Ga. Case No.
22-58326) on October 17, 2022.
Hon. Sage M. Sigler oversees the case. Marc P. Solomon, Esq. of
BURR & FORMAN LLP is the Debtor's Counsel. In the petition signed
by Carol Wildermuth, CFO, the Debtor disclosed $1 million to $10
million in assets and liabilities.
LHOTSE CIS LLC: Court OKs Cash Collateral Thru Nov. 21
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston, Division, entered a second interim order giving Lhotse
CIS, LLC authority to use the cash collateral of Guaranty Bank &
Trust, N.A.
The Debtor requires the use of cash collateral to continue its
ongoing operations.
Guaranty Bank is the only secured creditor located through a UCC
search that would have an interest in cash collateral. The Debtor
says it can adequately protect the interests of the Secured Lender
by providing the Secured Lender with post-petition liens, a
priority claim in the Chapter 11 bankruptcy case, and cash flow
payments.
On October 14, the Court entered an initial order authorizing the
Debtor to use cash collateral in accordance with the budget, with a
10% variance, through the date of the final hearing, set for
October 19.
With the entry of the Second Interim Order, Bankruptcy Judge
Christopher Lopez has now set the final hearing for November 21.
A copy of the Debtor's motion is available at
https://bit.ly/3EEzlDZ from PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3g967Ti from
PacerMonitor.com.
The Debtor projects $65,000 in gross revenue and $60,010 in total
expenses for one month.
About Lhotse CIS LLC
Lhotse CIS LLC operates a Country Inn & Suites located in Houston,
Texas. The Debtor filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Case No.
22-bk-32937) on Oct. 3, 2022. In the petition filed by Jack
Kaphle, as manager, the Debtor reported assets and liabilities
between $1 million and $10 million.
Chris Quinn has been appointed as Subchapter V trustee.
The Debtor is represented by Joyce Williams Lindauer of Joyce W.
Lindauer Attorney, PLLC.
Guaranty Bank & Trust, N.A is represented in the case by:
John Ivie, Esq.
1401 Burnham Drive
Colven, Tran & Meredith, P.C.
Plano, TX 75093
Telephone: (469) 400-6173
Facsimile: (469) 533-0337
E-mail: john@colvenandtran.com
LIVE NATION: S&P Raises ICR to 'B+' On Recovery in Event Activity
-----------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Live Nation
Entertainment Inc. to 'B+' from 'B'. The outlook is positive.
S&P said, "We also raised our issue-level rating on the company's
senior secured debt one notch to 'BB-' from 'B+', in line with the
higher issuer credit rating and raised our issue-level rating on
the company's unsecured debt to 'B' from 'B-'.
"The positive outlook reflects our expectation that Live Nation
will sustain leverage below 5x through fiscal 2023, despite our
expectation for a modest softening in demand for live entertainment
as consumer spending declines amid inflationary pressure and
recessionary concerns. We believe the company will continue to
benefit from a robust pipeline of events, strong pricing within its
ticketing segment relative to prepandemic pricing, and growth in
its high-margin sponsorship segment.
"The upgrade to 'B+' reflects our expectation that Live Nation will
sustain leverage of around 4x through fiscal 2023 even if a U.S.
economic recession reduces demand for live events.
"We expect that a continued uptick in the number of concerts and
shows will buffer the impact of a modest decline in ticket pricing
and on-site spending levels. In our updated base case, we forecast
mid-single-digit percent growth in the number of events held
globally in 2023 despite a record number of shows in 2022. We
forecast fan growth will be in line or just above event growth,
with very minimal to no impact from the pandemic or concerns
regarding virus transmission in the first half of 2023.
"Growth is primarily resulting from a stronger recovery in
international events and a full year absent any impact from
COVID-19. The outsized number of events will help buffer the impact
from weaker on-site spending levels and a decline in ticket prices,
though we expect ticket prices to remain well above 2019 levels. We
expect a modest mid-single-digit percent decline in revenue per fan
in 2023, ending about 15%-20% above 2019 levels. We estimate that
revenue per fan will remain around 20%-25% above prepandemic levels
in 2022. We forecast Ticketmaster's revenues will grow in the low-
to mid-single-digit percent area. We forecast that an increase in
the number of tickets sold, in line with our forecast for concert
activity, will be modestly offset by weaker pricing. We believe the
company has benefited from a mix shift toward premium seating over
the course of the pandemic, which was the result of pent-up
consumer savings and demand for live events.
"However, given significantly weaker consumer sentiment likely at
the beginning of 2023 and the absence of fiscal stimulus as seen in
2021 and 2022, we expect attendance to shift toward lower-priced
products. Lastly, the company's advertising and sponsorship segment
has expanded tremendously since 2019. We expect revenues from the
segment will be approximately 50% above 2019 levels in 2022 and
will continue to grow approximately 5%-10% per year, driven by the
company's expanded market presence in Latin America. We expect a
modest improvement in S&P Global Ratings-adjusted EBITDA margins
compared to 2019 as a larger percentage of EBITDA is derived from
the company's higher-margin ticketing and sponsorship segments. We
forecast EBITDA margin of 10%-11% and S&P Global Ratings-adjusted
leverage in the low-4x area through 2023."
The industry is susceptible to a downturn if consumer discretionary
spending decreases.
S&P said, "However, we believe that elevated event activity could
buffer the company's operating performance against a recession in
2023. In September, S&P Global economists downwardly revised their
base-case forecast for U.S. GDP and consumer discretionary spending
in 2022 and 2023. We forecast that the U.S. economy will fall into
a recession beginning in the first half of 2023, with recent
indicators showing cracks in the foundation as the U.S. economy
heads into 2023, as rising prices and interest rates eat away at
household purchasing power. We believe that Live Nation could be
somewhat insulated from declines in discretionary spending in 2023
because of a higher number of events expected over at least the
next 12 months. While our base case assumes a decline in revenue
per fan and ticket prices, the impact of such declines is offset by
growth in event activity and ticket volumes. Additionally, we
believe that demand for events will remain more resilient over the
course of a recession than in the past because of a shift back
toward services as compared to spending on consumer goods during
the pandemic. Live Nation has historically benefitted from a shift
in spending toward experiences, particularly with younger
consumers.
"Nonetheless, we believe Live Nation is exposed to changing
consumer tastes and social trends. The company's potential
inability to anticipate, or delay in reacting to, these changes
could adversely affect its business. In addition, Live Nation could
incur losses if artists do not perform as frequently as anticipated
or tours are cancelled or rescheduled because live music tours are
typically booked several months in advance with a fixed guaranteed
amount paid to the artist. However, while the company's revenue
relies on consumer discretionary spending, we believe the ticketing
segment provides more stability and predictability to the business
thanks to its multiyear contracts with venues and its extensive
relationship network with artists. Ticketmaster has positive
working capital cash flow characteristics because it receives cash
in advance of events. Therefore, the company is able to maintain
large cash balances even when excluding the cash it receives on
behalf of third parties."
Live Nation is the largest global concert promoter and a leader in
the event ticketing business.
The company has transformed itself into a vertically integrated
music company. As such, it benefits from a strong competitive
position in the live entertainment industry and has diversified
beyond the volatile and low-margin concert promotion and touring
business, which is a flywheel for the company's other assets
(particularly its ticket sales business). The company controls a
leading global network of venues through which it promotes an
expansive portfolio of performers. Prior to the pandemic the
company promoted shows for over 5,000 artists. Live Nation
monetizes these assets through the sale of concert tickets,
concessions, and high-margin corporate sponsorships. Ticketmaster
is the market leader in the primary ticket sales industry. In a
normal economic environment it benefits from steady growth rates
and a stable contractual profile, which offsets some of the
competitive pressures the company faces from established
competitors in the ticketing resale segment and potential new
entrants.
S&P said, "The positive outlook reflects our expectation that Live
Nation will continue to benefit from a robust pipeline of events,
strong pricing compared to historical levels within its ticketing
segment, and growth in its high-margin sponsorship segment. As a
result, we forecast Live Nation's revenue to increase in the low-
to mid-single-digit percent area and adjusted EBITDA margin of
about 10%, which result in leverage of around 4x next year."
S&P could raise its rating on Live Nation if:
-- S&P expects the company to sustain adjusted leverage below 5x;
and
-- Forecasted free operating cash flow (FOCF) to debt remains
above 5%.
S&P said, "We could revise our outlook to stable if we expect
adjusted leverage to increase and remain above 5x through 2024 or
forecasted FOCF declines below 5%. This would likely necessitate an
economic recession that results in a significant decline in
discretionary consumer spending. While S&P Global's macroeconomic
outlook incorporates a recession beginning in the first half of
2023, we believe that Live Nation's operating results will be
buffered from a decline in attendance and on-site spending because
of the elevated number of events."
ESG credit indicators: To E-2, S-3, G-3; From E-2, S-4, G-3
S&P said, "Social factors are now a moderately negative
consideration in our credit rating analysis of Live Nation. We
believe that the risk of material postponements or declines in
attendance, driven by a resurgence in COVID-19 case counts, has
sufficiently lessened since our last analysis in January. Live
Nation experienced substantial health and safety challenges due to
event cancellations and social distancing measures during the
pandemic. However, over the course of 2022, as concerns regarding
the virus dissipated, attendance, revenue, and EBITDA recovered to
record levels. Generally, we see the sector as sensitive to health
and safety issues and exposed to event risk such as isolated
incidents that cause harm to the health and safety of its
concertgoers. Any temporary reduction in demand for concerts,
litigation, additional security investments, and potential monetary
judgments if the company isn't adequately insured can cause
volatility in cash flow and credit measures. However, if incidents
are isolated, cash flow declines are usually temporary and
eventually recover once fears subside. Governance factors are a
moderately negative consideration in our credit rating analysis.
Live Nation has faced ongoing regulatory scrutiny amid antitrust
issues dating back to 2010 when it acquired Ticketmaster. The
consent decree was set to expire in 2020 but was extended to 2025
due to concerns that Live Nation potentially violated it. Though we
don't expect material monetary penalties, this continued scrutiny
by the U.S. Department of Justice could limit Live Nation's ability
to effectively monetize Ticketmaster and optimize its operations."
LUMILEDS: Latham & Watkins Touts Plan Confirmation After 46 Days
----------------------------------------------------------------
Lumileds Holding B.V., a global leader in innovative lighting
solutions, announced that the United States Bankruptcy Court for
the Southern District of New York has confirmed the Company's Plan
of Reorganization. Lumileds plans to emerge from the Chapter 11
process the week of October 31 following the satisfaction of
certain administrative items before the Plan becomes effective.
The fully consensual Plan was confirmed by the court 46 days after
the Company's bankruptcy filing and received support of over 99% of
first lien lenders. Under the terms of the Plan, Lumileds will
complete a comprehensive financial restructuring transaction which
will reduce the Company's funded debt by approximately US$1.4
billion, provide capital to accelerate Lumileds' growth, and enable
further investment in innovation that will allow the Company to
pursue additional strategic opportunities.
Latham & Watkins LLP represents Lumileds as restructuring counsel
with a cross-practice and cross-border team led by Global Chair of
the Restructuring & Special Situations Practice George Davis and
New York partners George Klidonas and Anu Yerramalli, with
associates Misha Ross, Liza Burton, Chris Beaucage, Alistair
Fatheazam, Randall Weber-Levine, Scott Yousey, Ali Zablocki, Whit
Morley, and Cáit O'Neill. The bankruptcy litigation team was led
by New York partner Chris Harris and Boston counsel Betsy Marks,
with associates Signa Mahung and Leandra Joseph. Advice was also
provided on environmental matters by Washington, D.C. partner
Stacey VanBelleghem, with associate Peter Viola; on capital markets
matters by New York partner Senet Bischoff, with associates Sara
Johnson and Adam Picker; on finance matters by New York partner
Nicole Fanjul, with associate Daniel Ovadia; on employee
compensation and benefits matters by New York counsel Rifka Singer,
with associate Alisa Hand; on tax matters by Chicago partner Joe
Kronsnoble and Washington, D.C. partner Nick DeNovio, with
associate Pierce Pandolph; on insurance matters by San Diego
partner Drew Gardiner; on intellectual property matters by
Washington, D.C. partner Morgan Brubaker; on antitrust matters by
New York partner Katherine Rocco, Brussels counsel Wesley Lepla,
and Washington, D.C. counsel Patrick English; on corporate matters
by New York partner Daniel Mun, London partner Huw Thomas, and
Century City counsel Michael Montgomery; on real estate matters by
Los Angeles partner Kim Boras; and on German matters by Hamburg
partner Frank Grell and Frankfurt/Hamburg counsel Daniel
Splittgerber.
About Lumileds Holding B.V.
Lumileds Holding B.V. is a global manufacturer of innovative
lighting solutions. In the 1960s, the Company expanded its
offerings to also include state-of-the-art LED devices alongside
the automotive lighting technologies that it had continued to
innovate. Today, the Company continues to develop and manufacture
high-tech lighting products for the automotive, mobile device,
consumer, general lighting, and industrial markets.
Lumileds Holding and several affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 22-11155) on Aug. 29, 2022. In the petition signed by Johannes
Paulus Teuwen, chief financial officer, Lumileds Holding disclosed
up to $100 million in assets and up to $500 million in
liabilities.
Judge Lisa G. Beckerman oversees the case.
The Debtor tapped Latham & Watkins LLP as legal counsel, Paul,
Weiss, Rifkind, Wharton & Garrison LLP as special financing and
employee compensation counsel, AlixPartners, LLP as financial
advisor, and Evercore Inc. as investment banker, and Epiq Corporate
Restructuring, LLC as claims and noticing agent.
Davis Polk & Wardwell LLP serves as counsel to the DIP Lenders.
The Secured Lender Group retained Gibson Dunn & Crutcher LLP,
Loyens & Loeff N.V., Roland Berger LP, and PJT Partners LP, as
counsel or financial advisor.
MAC'S KWIK STOP: Seeks to Hire Evans & Mullinix as Legal Counsel
----------------------------------------------------------------
Mac's Kwik Stop, Inc. filed an amended application seeking approval
from the U.S. Bankruptcy Court for the District of Kansas to hire
Evans & Mullinix, P.A. to represent the Debtor in its Chapter 11
proceedings.
The firm will be paid at these rates:
Colin N. Gotham, Esq. $300 per hour
Paralegals $125 per hour
The firm received a retainer in the amount of $5,000, plus the
filing fee of $1,738.
Evans & Mullinix will also require reimbursement for its
out-of-pocket expenses.
As disclosed in court filings, Evans & Mullinix and its members are
disinterested within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Colin N. Gotham, Esq.
Evans & Mullinix, P.A.
7225 Renner Road, Suite 200
Shawnee, KS 66217
Phone: (913) 962-8700
Fax: (913) 962-8701
Email: cgotham@emlawkc.com
About Mac's Kwik Stop
Mac's Kwik Stop, Inc. sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Kan. Case No. 22-20857) on Sep 8,
2022. In the petition filed by Mohammed N. Nobi, president, the
Debtor disclosed up to $500,000 in both assets and liabilities.
Judge Robert D. Berger oversees the case.
Colin Gotham, Esq., at Evans & Mullinix, P.A. is the Debtor's
counsel.
MAJESTIC GARDENS: Hires Wedderburn & Jacobs as Special Counsel
--------------------------------------------------------------
Majestic Gardens Condominium C Association, Inc. seeks approval
from the U.S. Bankruptcy Court for the Southern District of Florida
to hire Wedderburn & Jacobs, P.A. as its special counsel.
The firm will represent the Debtor in collection efforts, lien
foreclosure, foreclosure, and other state court proceedings as well
as general association matters.
The firm will charge $350 per hour for its services.
The firm requires a retainer in the amount of $8,500.
Wedderburn & Jacobs does not hold or represent any interest adverse
to the Debtor or its estate, as disclosed in court filings.
The firm can be reached through:
Bruce R. Jacobs, Esq.
Wedderburn & Jacobs, P.A.
6100 Hollywood Boulevard, Suite 201
Hollywood, FL 33024
Tel: (954) 961-1992
Fax: (954) 961-1995
Email: Bruce@wjlawyers.com
About Majestic Gardens Condominium C
Association Inc.
Majestic Gardens Condominium C Association, Inc. filed its
voluntary petition for Chapter 11 protection (Bankr. S.D. Fla. Case
No. 21-18653) on Sept. 3, 2021, listing up to $500,000 in assets
and up to $50,000 in liabilities. Judge Peter D. Russin oversees
the case.
Van Horn Law Group, P.A. and the Law Offices of Valancy & Reed,
P.A. serve as the Debtor's bankruptcy counsel and general counsel,
respectively.
MARINER HEALTH: Seeks to Hire Pachulski as Legal Counsel
--------------------------------------------------------
Mariner Health Central, Inc. and Parkview Operating Company, LP
seek approval from the U.S. Bankruptcy Court for the District of
Delaware to hire Pachulski Stang Ziehl & Jones LLP as their
counsel.
The firm's services include:
a. providing legal advice regarding local rules, practices,
and procedures;
b. reviewing and commenting on drafts of documents to ensure
compliance with local rules, practices, and procedures;
c. filing documents as requested by co-counsel, Raines Feldman
LLP, and coordinating with the Debtors' claims agent for service of
documents;
d. preparing agenda letters, certificates of no objection,
certifications of counsel, and notices of fee applications and
hearings;
e. preparing hearing binders of documents and pleadings,
printing of documents and pleadings for hearings;
f. appearing in Court and at any meeting of creditors on
behalf of the Debtors in its capacity as co-counsel with Raines
Feldman;
g. monitoring the docket for filings and coordinating with
Raines Feldman on pending matters that need responses;
h. preparing and maintaining critical dates memorandum to
monitor pending applications, motions, hearing dates and other
matters and the deadlines associated with same; distributing
critical dates memorandum with Raines Feldman for review and any
necessary coordination for pending matters;
i. handling inquiries and calls from creditors and counsel to
interested parties regarding pending matters and the general status
of these Cases, and, to the extent required, coordinating with
Raines Feldman on any necessary responses; and
j. providing additional administrative support to Raines
Feldman, as requested.
The firm will be paid at these hourly rates:
Partners $945 to $1,775
Of Counsel $725 to $1,425
Associates $675 to $825
Paraprofessionals $460 to $495
Laura Davis Jones, Esq., a partner at Pachulski, disclosed in a
court filing that her firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Laura Davis Jones, Esq.
David M. Bertenthal, Esq.
Timothy P. Cairns, Esq.
919 North Market Street, 17th Floor
P.O. Box 8705
Wilmington, DE 19899
Tel: (302) 652-4100
Fax: (302) 652-4400
Email: ljones@pszjlaw.com
dbertenthal@pszjlaw.com
tcairns@pszjlaw.com
About Mariner Health Central and
Parkview Operating Company
Mariner Health Central, Inc. provides administrative, clinic and
operational support services to skilled nursing facilities,
including the 121-bed facility operated by Parkview Operating
Company, LP.
Mariner and Parkview sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Lead Case No. 22-10877) on Sept. 19, 2022. The
Debtors estimated assets of $1 million to $10 million and
liabilities of $10 million to $50 million as of the bankruptcy
filing.
The Debtors tapped Raines Feldman LLP as general bankruptcy
counsel; Pachulski Stang Ziehl & Jones LLP as local Delaware
counsel; and SierraConstellation Partners LLC as Provider of
Additional Personnel to Support CRO. Kurtzman Carson Consultants
LLC is the claims agent.
MCGRAW-HILL EDUCATION: Fitch Affirms 'B+' LongTerm IDR
------------------------------------------------------
Fitch Ratings has affirmed McGraw-Hill Education, Inc's. (MHE)
Long-term Issuer Default Rating (IDR) at 'B+', senior first lien
secured debt at BB+'/'RR1', and senior unsecured notes at
'B'/'RR5'. Fitch has also assigned a 'BB+'/'RR1' rating to MHE's
$200 million ABL Revolver Credit Facilities, reflecting solid
recovery prospects and its senior position in the company's capital
structure. The Rating Outlook is Stable.
The rating is driven by MHE's solid operating performance
post-pandemic, margin improvement and the company's ongoing digital
transformation.
KEY RATING DRIVERS
Deleveraging Capacity: MHE's leverage has increased somewhat,
primarily due to its acquisition of Achieve3000 and the $4.5
billion LBO by Platinum Equity, LLC in July 2021. Total Debt /
EBITDA was 6.0x as of March 31, 2022, compared to 5.5x the year
before. However, MHE's EBITDA generation in Q1'23 (58.5% increase
yoy), reflecting total leverage of 5.3x on a LTM basis. The
increase was driven by the company's cost savings realization and
ongoing digital transformation, resulting in a more efficient cost
structure and improved margins, and the solid performance of its
K-12 segment YTD. Fitch assumes leverage will continue to decline
over the rating horizon due to further operating improvements
primarily driven by the ongoing digital transformation and positive
momentum of the conversion cycle in the U.S.
Improved EBITDA Margin: MHE realized around $100 million in cost
savings through the end of FY22 and identified approximately $50
million in additional synergies as part of Platinum's LBO. These
savings and improved business performance resulted in an improved
Adj. EBITDA margin on an LTM basis as of June 30, 2022 of 37.8%
compared to 35.2% at close of FYE2022 and 33.3% at the end of 2021.
In addition to these synergies and cost savings, MHE has also seen
a significant cost structure improvement as result of its digital
transformation.
Coronavirus Impact and Post-Pandemic Outlook: The pandemic's effect
on state budgets was muted by several rounds of direct and indirect
federal stimulus injections, with more than $235 billion directly
allocated to education. The American Rescue Plan (ARP) provides
$350 billion of direct aid to state and local governments,
including $130 billion for K-12 schools easing the burden on both
state and local governments. While local governments derive varying
portions of their revenues from property taxes, they were
responsible for funding school safety measures, including
establishing and maintaining remote learning infrastructure.
During prior periods of economic stress, K-12 adoptions were rarely
cancelled or even delayed (and then only for one year). While Fitch
will continue to pay close attention to near-term adoption
calendars for delays, delays do not represent a near-term concern
given the significant stimulus funding.
For higher ed, the potential for cuts in funding and student aid is
always an issue. Fitch believes long-term enrollment will stabilize
as college degrees remain a necessity for many jobs. In addition,
college enrollment typically increases during recessions as jobs
are harder to find and people look to augment their skills.
Finally, most funding for higher ed course materials comes directly
from students. However, near-term enrollment continues to be
affected by pandemic disruptions, including students delaying
starting or returning to school (gap year).
Diversified Revenue Profile: On an LTM basis ending June 30, 2022,
approximately 37% of MHE's total reported revenues were derived
from higher ed content, 44% from K-12 content, and about 19% from
its international and global professional content. The company
generated approximately 59% of its total consolidated revenue from
digital content with 41% from its printed products (compared to 47%
of printed revenue in 2020), increasingly delivering results of its
digital transformation more evident over the last adoption cycle.
Leading Market Share: MHE holds leading positions in its two
largest segments. The company has a strong market share in the U.S.
higher ed market, with its digital offerings showing continued
growth. However, the overall market remains under pressure due to
ongoing enrollment decline. For the U.S. K-12 publishing market,
Fitch believes Houghton Mifflin Harcourt, MH and Savvas Learning
Company (f.k.a. Pearson U.S. K12 Education), collectively, hold
more than 80% market share.
Long-Term Digital Opportunity: Fitch believes the transition to
digital will continue apace, with digital billings growing to 71%
of LTM June 30, 2022 total billings from 33% in FY15 (K-12 billings
are excluded from this number due to adoption-related variations).
During 1Q23, revenue generated from its digital contented
represented 51% of total consolidated revenue. Fitch expects the
transition to digital, accelerated by the pandemic, to continue,
allowing for a more efficient cost structure. Fitch expects MHE to
continue investing in its digital products, including through small
bolt-on acquisitions.
DERIVATION SUMMARY
McGraw-Hill is well positioned in the domestic K-12 and global HE
textbook publisher markets, with additional global exposure to
professional education content and services. Following the
announced acquisition of Achieve3000, the expanded MHE platform
will continue to have a solid position as one of the leading global
providers of a full set of content and services across a broader
range of education segments.
MHE's increased scale will provide meaningful advantages and create
significant barriers to entry to new or smaller publishers. It will
also provide opportunities for product cross-pollination along with
substantial synergies that will improve margins.
KEY ASSUMPTIONS
For 2023, a high-single digit revenue increase is assumed,
reflecting the fully integrated and first run-rate year of
Achieve3000, offsetting with a reduced revenue growth in both its
digital and printed services across segments, reflecting a
high-single digit growth rate for digital and print revenue.
A weaker adoption cycle and macro-economic deterioration in 2024
result in a slower pace of growth.
For 2025 and beyond, revenue growth returns to mid-single digits.
Fitch assumes that the company will continue to roll-out its
digital conversion strategy impacting primarily its Higher Ed, K-12
and Global Professional segments, resulting in an improved cost
structure (vs. printed services) and better EBITDA margins over the
long term.
In terms of Adj. EBITDA, a margin compression is assumed during
2023 and 2024 at 32.4% and 30.9%, respectively, coming from 35.2%
of EBITDA margin in 2022. The margin compression is the result of
higher manufacturing and operating expenses coupled with headwinds
and cost structure challenges associated with the integration of
Achieve3000.
For the rest of the projection, Fitch modelled EBITDA margins
bouncing back to the 32% level in 2025, and eventually improving to
34% by the end of the projection, assuming the company continues
with its market penetration, cross-selling and digital conversion
strategies.
Other assumptions include:
- 2.0% to 2.5% of net revenues in capex (capital
intensity) per year.
- About $70 million dollars per year in acquisitions throughout
the projection, reflecting ongoing consolidation opportunities
in the industry.
- NWC financing need ranging from $37 million to $18 million per
year to reflect additional opex.
- $50 million in cash flows from changes in deferred revenues
per year to reflect a more stable digital adoption and cost
structure.
- $75 million of additional investment related to the development
of its digital content and solutions.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes MH would be reorganized as a
going-concern in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim.
MHE's recovery analysis assumes significant K-12 adoptions delays
followed by market share loss, driven by an inability to win enough
upcoming adoptions and ongoing industry issues in the higher ed
segment dragging down revenues, which pressure margins. The
post-reorganization GC EBITDA of $550 million is based on Fitch's
estimate of MH's average EBITDA over a normal cycle but also
reflecting an improved cost structure as result of a number of cost
saving initiatives post-LBO, the full integration of Achieve3000,
and the ongoing digital transformation that offers an improved
margin (vs. its printed business), which have permanently reset the
company's cost structure.
Fitch assumes MH will receive a GC recovery EV multiple of 7.0x
EBITDA. The estimate considered several factors. HMHC and Pearson
have traded at a mid-teen median EV/EBITDA. Platinum acquired MH
for $4.6 billion, or 8.7x Fitch-calculated adjusted EBITDA,
including the change in deferred revenues and Fitch-estimated
savings. In February 2019, Pearson sold its K-12 business for 9.5x
operating profit (EBITDA was not disclosed). In March 2013 Apollo
Global Management LLC acquired MH from S&P Global, Inc. for $2.5
billion, or approximately 7x estimated EBITDA.
During the last financial recession, Pearson traded at about 8.0x
EV/EBITDA, while neither MH nor HMHC were public at the time. In
2014, Cengage emerged from bankruptcy with a $3.6 billion
valuation, equating to an emergence multiple of 7.7x.
Fitch assumes the ABL Credit facilities will be 75% drawn ($150
million outstanding) and the $150 million revolver will be 100%
drawn at bankruptcy. Under this scenario it estimates full recovery
prospects for the proposed first lien senior secured credit
facilities and rates them 'BB+/RR1', or three notches above MH's
'B+' IDR. The unsecured debt is notched down to 'B'/'RR5' given the
increase in MH's secured debt to fund the Achieve3000 acquisition
and the resultant reduced recovery prospects.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Debt reduction is sufficient to drive total leverage (Total
Debt
/ Adj. EBITDA), including annualized realized cost savings,
below
5.0x on a sustainable basis.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Mid-single-digit cash revenue declines, which may be driven by
declines or no growth in digital products caused by a lack of
execution or adoption by professors.
- MH's financial policy becomes more aggressive, including M&A
and
shareholder returns, and total leverage remains above 6.0x for
extended periods of time.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: As of June 30, 2022, MHE reported a liquidity
position of $511 million composed by $166 million of cash on
balance and full availability under its ABL Revolving facilities
($200 million) and Cash Flow Revolving facility ($150 million).
Liquidity is further supported by Fitch's expectation of annual FCF
in excess of $300 million annually.
No Significant Near-Term Maturities: The next debt maturities
coming are the ABL and Cash Flow Revolving facilities due in July
2026, currently there is no outstanding amount drawn. Outside of
these two facilities, the next maturities do not occur until 2028
when the 2022 Term Loan B and Secured Notes become due.
ISSUER PROFILE
MHE is a leading provider of physical and digital technology
enabled adaptive learning tools and platforms to higher ed,
pre-Kindergarten through12 grade, (K-12) and professionals and
companies.
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.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
McGraw-Hill
Education, Inc. LT IDR B+ Affirmed B+
senior secured LT BB+ New Rating RR1
senior unsecured LT B Affirmed RR5 B
senior secured LT BB+ Affirmed RR1 BB+
MINESEN COMPANY: Dane Field Appointed as Chapter 11 Trustee
-----------------------------------------------------------
Tiffany Carroll, Acting U.S. Trustee for Region 15, appointed Dane
Field as Chapter 11 trustee for The Minesen Company.
The Chapter 11 trustee bond is initially set at $16,100,000. The
bond may require adjustment as the trustee collects and liquidates
assets of the estate, and the trustee is directed to inform the
Office of the U.S. Trustee when changes to the bond amount are
required or made.
A copy of the appointment is available for free at
https://bit.ly/3Mzet2E from PacerMonitor.com.
The Chapter 11 trustee can be reached at:
Dane Field
P.O. Box 4198
Honolulu, Hawaii 96812
Ph: (808) 232-8788
Email: Dfield1963@spectrum.net
About The Minesen Company
The Minesen Company -- http://www.innatschofield.com/-- owns a
transient military lodging facility at Schofield Barracks in
central Oahu known as the Inn at Schofield Barracks. It is based in
Wahiawa, Hawaii.
The Minesen Company filed a petition for Chapter 11 protection
(Bankr. D. Hawaii Case No. 19-00849) on July 4, 2019, with up to
$50 million in assets and up to $10 million in liabilities. Max
Jensen, president of The Minesen Company, signed the petition.
Judge Robert J. Faris oversees the case.
The Debtor tapped Goodsill Anderson Quiin & Stifel as bankruptcy
counsel; Snell & Wilmer, LLP, Keith M. Kiuchi, A Law Corporation
and Crowell & Moring, LLP as special counsels; Joseph M. Salvator
CPA, PC as accountant; and Schlissel & Associates, LLC as tax
advisor.
MIRACLE CENTER: Wins Cash Collateral Access Thru Dec 31
-------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Northern Division, authorized Miracle Center Church of Ventura
County, Inc. to use cash collateral on an interim basis in
accordance with the budget through December 31, 2022.
A continued hearing on the Motion will be held on December 13 at 2
p.m.
The Debtor must file a Third Amended Motion For Authority To Use
Cash Collateral on or before December 13, at 2 p.m. The Debtor and
its counsel must appear in person at the continued hearing on
Motion.
Any party-in-interest may lodge opposition or other replies to the
Third Amended Motion by December 7.
The Debtor will make monthly adequate protection payments to the
secured creditor, The First Christian Church of Ventura County, in
the amount of $25,663 by the fifteenth of the applicable month.
The Debtor will make no payments to any unsecured creditors on
account of prepetition debt unless approved by the Court.
As previously reported by the Troubled Company Reporter, the First
Christian Church of Ventura County is the Debtor's only secured
creditor claiming a security interest in the amount of
approximately $3,208,233 against the Debtor's real property located
at County of Ventura Assessors Parcel Number 082-0-120-445. First
Christian is the sole lienholder against the Property and the
Debtor disputes the amount of First Christian's claim.
First Christian's interest in the Property is protected by an
adequate equity cushion whereby their secured claim amount
(disputed) is $3,208,233 and the estimated fair market value of the
Property is $3,390,299 based on the County of Ventura assessed
valuation as of July 5.
A copy of the order is available at https://bit.ly/3D0cl0X from
PacerMonitor.com.
About Miracle Center Church of Ventura County, Inc.
Miracle Center Church of Ventura County, Inc. is a tax-exempt
religious organization. The Debtor sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-10664)
on August 29, 2022. In the petition signed by Alonzo McCowan,
CEO/president, the Debtor disclosed $3,472,792 in assets and
$3,387,733 in liabilities.
Judge Ronald A. Clifford III oversees the case.
John K. Rounds, Esq., at Rounds & Sutter LLP is the Debtor's
counsel.
MOBILESMITH INC: Hits Chapter 11 Bankruptcy Protection
------------------------------------------------------
MobileSmith Inc. filed for chapter 11 protection in the Eastern
District of North Carolina.
The Debtor operates a software development company that works in
the area of
medical care and treatment planning.
According to court filings, MobileSmith Inc. estimates $1 million
to $10 million in debt to 1 to 49 creditors. The petition states
that funds will be available to unsecured creditors.
Prior to filing, the Debtor owed some $5,000,000 to Comerica Bank.
In its communications with the Debtor, Comerica has claimed a
blanket security interest in the assets of the Debtor
About MobileSmith Inc.
MobileSmith Inc. -- https://www.mobilesmith.com -- is a leader in
the digital health and mobile development sector.
MobileSmith Inc. filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-02319) on October
12, 2022. In the petition filed by Gleb Mikhailov, as chief
financial officer and chief executive officer, the Debtor reported
assets between $100 million and $500 million and liabilities
between $1 million and $10 million.
The Debtor is Represented by J.M. Cook of J.M. Cook, P.A.
MOLECULAR IMAGING: Seeks to Hire Gregory K. Stern as Attorney
-------------------------------------------------------------
Molecular Imaging Chicago, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to hire
Gregory K. Stern, P.C. as its legal counsel.
The firm's legal services include:
(a) reviewing assets, liabilities, loan documentation,
executory contracts and other relevant documentation;
(b) preparing list of creditors, list of twenty largest
unsecured creditors, schedules and statement of financial affairs;
(c) giving the Debtor legal advice with respect to its powers
and duties as Debtor in Possession in the operation and management
of his financial affairs;
(d) assisting the Debtor in the preparation of schedules,
statement of affairs and other necessary documents;
(e) preparing applications to employ attorneys, accountants or
other professional persons, motions for turnover, motion for use of
cash collateral, motions for use, sale or lease of property, motion
to assume or reject executory contracts, disclosure statement,
plan, applications, motions, complaints, answers, orders, reports,
objections to claims, legal documents and any other necessary
pleading in furtherance of reorganizational goals;
(f) negotiating with creditors and other parties in interest,
attending court hearings, meetings of creditors and meetings with
other parties in interest;
(g) reviewing proofs of claim and solicitation of creditors'
acceptances of plan; and,
(h) performing all other legal services for the Debtor, as
Debtor in Possession, which may be necessary or in furtherance of
his reorganizational goals.
The attorneys' hourly rates are as follows:
Gregory K. Stern, Esq. $550
Dennis E. Quaid, Esq. $550
Monica C. O'Brien, Esq. $500
Rachel S. Sandler, Esq. $385
The firm received payment of a pre-petition minimum fee in the
amount of $20,000.
Gregory K. Stern, P.C. does not represent interests adverse to the
Debtor and its estate in the matters upon which they are to be
engaged, according to court filings.
The attorneys can be reached through:
Gregory K. Stern, Esq.
Dennis E. Quaid, Esq.
Monica C. O'Brien, Esq.
Rachel S. Sandler, Esq.
Gregory K. Stern, P.C.
53 West Jackson Boulevard, Suite 1442
Chicago, IL 60604
Phone: (312) 427-1558
Email: greg@gregstern.com
dquaid3@gmail.com
monica@gregstern.com
rachel@gregstern.com
About Molecular Imaging Chicago
Molecular Imaging Chicago LLC is dedicated to providing diagnostic
testing services, including PET/CT, MRI (Open and High Field),
Diagnostic CT, EMG/NCV, Ultrasound, Arthrogram, and Digital X-Ray
services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. N.D. Ill. Case No. 22-10864) on Sep. 22,
2022. In the petition signed by Rajeev Batra, managing member, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Jacqueline P. Cox oversees the case.
Gregory K. Stern, Esq., at Gregory K. Stern, P.C., is the Debtor's
counsel.
MOLECULAR IMAGING: Seeks to Hire Peter Shannon & Co. as Accountant
------------------------------------------------------------------
Molecular Imaging Chicago, LLC seeks the approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to hire
Peter Shannon & Co. as its accountant.
The firm's services include:
a) preparing tax returns, both federal and state;
b) providing federal and state income tax advice to the Debtor
and negotiating with taxing authorities as necessary;
c) aiding and assisting the attorney(s) of record with regard
to any legal issues;
d) aiding and assisting the Debtor in inventorying books and
records and advising the Debtor regarding books and records
retention; and
e) performing all other accounting services for the Debtor, as
Debtor In Possession, which may be necessary or in furtherance of
reorganizational goals.
The firm received a retainer in the amount of $3,000.
Peter Shannon & Co. does not represent interests adverse to the
Debtor and the estate in the matters upon which they are to be
engaged, according to court filings.
The firm can be reached through:
Steven Grant, CPA
Peter Shannon & Co.
6412 Joliet Road, Suite 1
Countryside, IL 60525
Tel: (708) 482-3000
Email: cpa@petershannonco.com
About Molecular Imaging Chicago
Molecular Imaging Chicago LLC is dedicated to providing diagnostic
testing services, including PET/CT, MRI (Open and High Field),
Diagnostic CT, EMG/NCV, Ultrasound, Arthrogram, and Digital X-Ray
services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. N.D. Ill. Case No. 22-10864) on Sep. 22,
2022. In the petition signed by Rajeev Batra, managing member, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Jacqueline P. Cox oversees the case.
Gregory K. Stern, Esq., at Gregory K. Stern, P.C., is the Debtor's
counsel.
MOLECULAR IMAGING: Taps D'aprile Properties as Real Estate Broker
-----------------------------------------------------------------
Molecular Imaging Chicago, LLC seeks the approval from the U.S.
Bankruptcy Court for the Northern District of Illinois to hire
Gabriela Chawla and d'aprile Properties as its real estate
brokers.
Ms. Chawla will list and sell the Debtor's commercial property
located at 215 Remington Boulevard, Unit J, Bolingbrook, Illinois.
The broker will receive compensation equal to 6 percent of the
purchase price.
Ms. Chawla and d'aprile Properties represent no interests adverse
to the Debtor or to the estate in matters upon which they are to be
engaged, according to court fillings.
The firm can be reached through:
Gabriela Chawla
d'aprile Properties
1732 W Hubbard St Ste 1D
Chicago, IL 60622
Phone: (312) 492-7900
Email: GChawla@daprileproperties.com
About Molecular Imaging Chicago
Molecular Imaging Chicago LLC is dedicated to providing diagnostic
testing services, including PET/CT, MRI (Open and High Field),
Diagnostic CT, EMG/NCV, Ultrasound, Arthrogram, and Digital X-Ray
services.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. N.D. Ill. Case No. 22-10864) on Sep. 22,
2022. In the petition signed by Rajeev Batra, managing member, the
Debtor disclosed up to $500,000 in assets and up to $10 million in
liabilities.
Judge Jacqueline P. Cox oversees the case.
Gregory K. Stern, Esq., at Gregory K. Stern, P.C., is the Debtor's
counsel.
MULLEN AUTOMOTIVE: Inks First Amendment to Bollinger Agreements
---------------------------------------------------------------
Mullen Automotive Inc. previously consummated the acquisition of
544,347 shares of common stock of Bollinger Motors, Inc. pursuant
to (i) that Common Stock Purchase Agreement, dated Sept. 7, 2022,
by and among Bollinger Motors, the Company and Robert Bollinger,
(ii) that Common Stock Purchase Agreement, dated Sept. 7, 2022, by
and between Bollinger and the Company, (iii) that Common Stock
Purchase Agreement, dated Sept. 7, 2022, by and between John
Masters and the Company, and (iv) that Common Stock Purchase
Agreement, dated Sept. 7, 2022, by and between Seaport Global Asset
Management SPV LLC – Series A and the Company. In connection
with the entry into the Purchase Agreements, the Company, Bollinger
Motors, Bollinger and Continental Stock Tranfer and Trust Company,
in its capacity as escrow agent, entered into a Cash Escrow
Agreement, dated Sept. 7, 2022. Additionally, the Company,
Bollinger Motors, Bollinger and Continental Stock Tranfer and Trust
Company, in its capacity as transfer agent, entered into a Stock
Reservation Agreement, dated Sept. 7, 2022.
On Oct. 7, 2022, the parties entered into a First Amendment to each
of the Primary Purchase Agreement, the Cash Escrow Agreement and
the Stock Reservation Agreement.
Pursuant to the First Amendment to the Primary Purchase Agreement,
dated Oct. 7, 2022, by and among the Company, Bollinger Motors and
Bollinger, Section 1.3(c) of the Primary Purchase Agreement was
replaced, such that after the closing, the Company will pay
$32,000,000 to Bollinger Motors by making the following installment
payments: (a) on or before the 30th day of November, 2022
$15,500,000 will be paid to Bollinger Motors; (b) on or before the
fifth business day of February 2023 $5,500,000 will be paid to
Bollinger Motors; (c) on or before the fifth business day of May
2023 $5,500,000 will be paid to Bollinger Motors, and (d) on or
before the fifth business day of August 2023 $5,500,000. On or
before the 30th day of November 2022, the Company shall deposit
$16,500,000 with the Escrow Agent to be held in a cash escrow
account. The Additional Escrowed Cash shall be payable to
Bollinger Motors in accordance with Section 2.1 of the Cash Escrow
Agreement, as amended. The Additional Escrowed Cash shall be used
to allow the Escrow Agent to automatically pay to Bollinger Motors
the Installment Payments, together with the automatic release of
the Cash Escrow Agreement, as reflected on the amended Schedule 2
to the Cash Escrow Agreement.
The Amendment to the Primary Purchase Agreement also amended and
restated Section 1.3(d) of the Primary Purchase Agreement such
that, immediately prior to the closing, the Company shall enter
into the Stock Reservation Agreement and instruct the Transfer
Agent to reserve for issuance, in the name of the Bollinger Motors,
shares of common stock of the the Company valued at $38,400,000
(calculated using the five trading day volume weighted average
price, which shall be determined for any trading day (or any
trading period) via a Bloomberg Terminal). In addition, the number
of Reserved Shares shall be adjusted on a quarterly basis to ensure
that the value of such Reserved Shares is at all times equal to at
least 120% of the unpaid Installment Payments. The Reserved Shares
will act as security and collateral for the Installment Payments,
in each case, subject to the terms and conditions set forth in the
Stock Reservation Agreement, as amended. In the event that the
Company fails to timely pay the First Installment Payment, timely
deposit the Additional Escrowed Cash with the Escrow Agent, timely
pay the Payment Default Amount, or timely pay the Deposit Payment
Penalty Amount, the Company shall instruct the Transfer Agent to
reserve for issuance additional Reserved Shares with a value equal
to 120% of the cash value of the First Installment Payment,
Additional Escrowed Cash, Payment Default Amount, or Deposit
Payment Penalty Amount, as applicable.
Additionally, the Amendment to the Primary Purchase Agreement added
a new Section 1.3(f), such that in the event that the Company does
not timely pay the First Installment Payment in-full in accordance
with Section 1.3(c) and the Cash Escrow Agreement, the Company
shall pay to Bollinger Motors an additional $1,500,000 in cash as a
penalty on the 30th day of November, 2022. In the event that the
Company does not timely deposit the Additional Escrowed Cash with
the Escrow Agent in accordance with Section 1.3(c), the Company
shall pay to Bollinger Motors an additional $1,500,000 in cash as a
penalty on the 30th day of November, 2022. The failure of the
Company to timely pay to Bollinger Motors the First Installment
Payment, timely deposit the Additional Escrowed Cash with the
Escrow Agent, timely pay the Payment Default Penalty Amount, or
timely pay the Deposit Payment Penalty Amount shall each be deemed
to be a Missed Installment Issuance pursuant to Section 3.1 of the
Stock Reservation Agreement, as amended, and Bollinger and
Bollinger Motors shall in any such case be entitled to the remedies
under Section 3.1 with respect to a Missed Installment Issuance
(including but not limited to having the Transfer Agent issue to
Bollinger Motors such number of the Reserved Shares with a value
equal to the cash value of the Missed Installment Issuance). In
addition, any such failure shall be deemed to be a "Mullen Default"
as defined in, and in accordance with, the Amended and Restated
Stockholders Agreement of Bollinger Motors, by and among the
Bollinger Motors, Bollinger, the Company and the other stockholders
named therein. Each of the Payment Default Penalty Amount and the
Deposit Payment Penalty Amount shall bear interest at a rate of 15%
per year, based on the number of elapsed days and a 365 day year,
until such amounts are paid in cash in full (inclusive of all
accrued interest).
Lastly, the Amendment to the Primary Purchase Agreement provides
that upon confirmation that the Additional Escrowed Cash has been
deposited with the Escrow Agent and the First Installment Payment
has been paid in accordance with Section 1.3(c) of the Primary
Purchase Agreement, as amended, and the Escrow Agreement, the
Company, Bollinger and Bollinger Motors shall instruct the Transfer
Agent under the Stock Reservation Agreement, as amended, to
eliminate the reservation of the Reserved Shares.
Pursuant to the First Amendment to the Cash Escrow Agreement, dated
Oct. 7, 2022, by and among the Company, Bollinger Motors, Bollinger
and the Escrow Agent, Section 1.1 of the Cash Escrow Agreement was
amended to provide that: (i) on or prior to the 30th day of
November, 2022, the Company will be depositing with the Escrow
Agent an additional amount equal to $16,500,000, and such amount
shall be held in accordance with the terms of the Escrow Agreement;
(ii) the term Cash Escrow Amount shall be defined to include the
Installment Escrow at such time as the Installment Escrow is
deposited with the Escrow Agent; and (iii) upon receipt of the
Installment Escrow, the Escrow Agent is instructed to pay the
Installment Payments in accordance with Section 2.1 (and Schedule
2) of the Cash Escrow Agreement, as amended.
Additionally, the Amendment to the Cash Escrow Agreement deleted
the Schedule 2 originally attached to the Cash Escrow Agreement,
and replaced it in its entirety with a new Schedule 2 to propery
reflect the revised Installment Payments.
Pursuant to the First Amendment to the Stock Reservation Agreement,
dated Oct. 7, 2022, by and among the Company, Bollinger Motors,
Bollinger and the Transfer Agent, Section 2.4 of the Stock
Reservation Agreement was amended such that, notwithstanding
anything contained in the Stock Reservation Agreement to the
contrary, in no event shall the number of shares of the Company's
Common Stock to be issued pursuant to the Bollinger Purchase
Agreement, the Masters Purchase Agreement and the Seaport Purchase
Agreement plus the number of the Reserved Shares, as adjusted from
time pursuant to Section 2.4, exceed 19.99% of the Company's issued
and outstanding common stock immediately prior to the closing of
the transactions contemplated in the Primary Purchase Agreement and
the Secondary Purchase Agreements. For the avoidance of doubt, the
parties agree that any adjustments required to be made to ensure
compliance with the immediately preceding sentence shall be made to
the number of Reserved Shares only. In addition, if an upward
adjustment of the Reserved Shares pursuant to Section 2.4 is ever
limited because of the Share Cap, then upon such Share Cap
Limitation Event, the Company shall upward adjust the Reserved
Shares in accordance with Section 2.4 to the Share Cap and shall be
prohibited during the remainder of the term of the Stock
Reservation Agreement, as amended, from any downward adjustment
pursuant to Section 2.4 (unless such downward adjustment is
required to meet the Share Cap at which point such downward
adjustment will only be made to the number of Reserved Shares
necessary to comply with the Share Cap, such required downward
adjustment, the "Share Cap Compliance Adjustment") until all
Installment Payments have been made to Bollinger Motors. If a
Share Cap Limitation Event has occurred, the parties agree that,
after each Installment Payment is made, review of a potential
adjustment pursuant to Section 2.4 will occur with each Installment
Payment and that, in accordance with the immediately previous
sentence and subject to any necessary Share Cap Compliance
Adjustment, only an upward adjustment to the number of Reserved
Shares up to the Share Cap would be permissible.
Additionally, the Amendment to the Stock Reservation Agreement
provides that the parties to the Stock Reservation Agreement
acknowledge and agree that, without limiting anything contained in
the such agreement (including Section 3.1 thereof) and in addition
to the provisions contained therein, the failure of the the Company
to timely pay the First Installment Payment, timely deposit the
Additional Escrowed Cash with the Escrow Agent, timely pay the
Payment Default Amount, or timely pay the Deposit Payment Penalty
Amount shall each be deemed to be a Missed Installment Issuance
pursuant to Section 3.1 and Bollinger and Bollinger Motors shall in
any such case be entitled to the remedies thereunder with respect
to a Missed Installment Issuance (including but not limited to
having the Transfer Agent issue to Bollinger Motors such number of
the Reserved Shares with a value equal to the cash value of the
Missed Installment Issuance). Furthermore, upon confirmation that
the Additional Escrowed Cash has been deposited with the Escrow
Agent and the First Installment Payment has been paid in accordance
with Section 1.3(c) of the Primary Purchase Agreement, as amended,
the Company, Bollinger and the Bollinger Motors shall instruct the
Transfer Agent under the Stock Reservation Agreement, as amended,
to eliminate the reservation of the Reserved Shares.
About Mullen
Mullen Automotive Inc. (fka Net Element Inc.) operates a Southern
California-based electric vehicle company that operates in various
verticals of businesses focused within the automotive industry.
The Company has two electric vehicles under development, one of
which the Company expects to begin delivery of in the second
quarter of 2024. Mullen has several divisions that operate
synergistic businesses, being: CarHub, a digital platform that
leverages artificial intelligence to offer an interactive solution
for buying, selling and owning a car, and Mullen Energy, a division
focused on advancing battery technology and emergency point-of-care
solutions.
Mullen Automotive reported a net loss of $44.24 million for the
year ended Sept. 30, 2021, compared to a net loss of $30.18 million
for the year ended Sept. 30, 2020. As of June 30, 2022, the Company
had $84.26 million in total assets, $65.11 million in total
liabilities, and $19.16 million in total stockholders' equity.
Fort Lauderdale, Florida-based Daszkal Bolton LLP, the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated Dec. 29, 2021, citing that the Company has sustained
net losses, has indebtedness in default, and has liabilities in
excess of assets, which raise substantial doubt about its ability
to continue as a going concern.
NICK'S CREATIVE: U.S. Trustee Unable to Appoint Committee
---------------------------------------------------------
The U.S. Trustee for Region 21, until further notice, will not
appoint an official committee of unsecured creditors in the Chapter
11 case of Nick's Creative Marine Inc., according to court
dockets.
About Nick's Creative Marine
Nick's Creative Marine, Inc. owns a marine supply store in Riviera
Beach, Fla. The Debtor sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-17170) on
September 16, 2022. In the petition signed by Nicholas Scafidi,
vice-president, the Debtor disclosed up to $50,000 in assets and up
to $10 million in liabilities.
Judge Erik P. Kimball oversees the case.
Craig I. Kelley, Esq., at Kelly, Fulton & Kaplan, P.L., is the
Debtor's counsel.
NORTHWEST SENIOR: Exclusivity Period Extended Until Oct. 26
-----------------------------------------------------------
Northwest Senior Housing Corp., the operator of the Edgemere
retirement facility in Dallas, has until next week to pursue its
own Chapter 11 plan and remain in control of its bankruptcy.
Judge Michelle Larson of the U.S. Bankruptcy Court for the Northern
District of Texas extended to Oct. 26 Northwest's exclusive right
to file a plan to exit bankruptcy protection.
The court ruling allows UMB Bank, N.A., and Lifespace Communities,
Inc., Northwest's sponsor, to file a competing plan after Oct. 26,
while prohibiting others to propose a plan for the Edgemere
operator unless they first file a motion seeking such authority.
Northwest originally requested to extend the exclusivity period
until Feb. 8 next year so it can resolve its lawsuit against
Intercity Investment Properties, Inc., the landlord of the Dallas
retirement community. The operator argued its current financial
condition is not enough basis to deny its first request for
exclusivity extension.
The official unsecured creditors' committee and UMB Bank, however,
pressed the court to shorten the period of exclusive control so
that others can file a rival plan. Both cited increasing concerns
over Northwest's administrative insolvency and the inability of the
operator to timely resolve the Intercity litigation.
Northwest filed a reorganization plan in August, which provides for
the Intercity litigation to be tried first and for Edgemere to
continue operating after the litigation is resolved and the lease
is modified. The Edgemere operator, however, recently announced
that it was not prepared to go to trial in December and proposed to
reschedule the trial for Feb. 13. Meanwhile, UMB refused to advance
an additional $6 million to finance an extension of the trial date
and extend the maturity date of the bankruptcy loan it provided to
Northwest.
About Northwest Senior Housing Corp.
Northwest Senior Housing Corporation, doing business as Edgemere,
is a Texas non-profit corporation and is exempt from federal income
taxation as a charitable organization described under Section
501(c)(3) of the Internal Revenue Code of 1986, as amended.
Northwest Senior Housing Corporation was formed for the purpose of
developing, owning and operating a senior living community now
known as Edgemere.
Northwest Senior Housing Corporation and its affiliates sought
Chapter 11 bankruptcy protection (Bankr. N.D. Texas Lead Case No.
22-30659) on April 14, 2022. The petitions were signed by Nick
Harshfield, treasurer. At the time of the filing, Northwest Senior
Housing listed $100 million to $500 million in both assets and
liabilities.
Judge Michelle V. Larson oversees the cases.
Polsinelli, PC and FTI Consulting Inc. serve as the Debtors' legal
counsel and business advisor, respectively. Kurtzman Carson
Consultants, LLC is the Debtors' notice, claims and balloting agent
and administrative advisor.
The official committee of unsecured creditors tapped Foley &
Lardner, LLP as legal counsel, and Ankura Consulting Group, LLC as
financial advisor.
The Debtors filed their proposed Chapter 11 plan of reorganization
and disclosure statement on August 3, 2022.
PECF USS: S&P Downgrades ICR to 'CCC+', Outlook Stable
------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on PECF USS
Intermediate Holding III Corp. (d/b/a United Site Services; USS)
to 'CCC+' from 'B-'.
S&P said, "At the same time, we lowered our rating on the company's
senior secured debt to 'CCC+' from 'B-'. We also lowered the
ratings on the unsecured debt to 'CCC-' from 'CCC'. The recovery
ratings on the secured and unsecured debt remain at '3' and '6',
respectively.
"The stable outlook reflects our view that, while we expect credit
metrics to be at unsustainable levels for the next few quarters,
the company's adequate liquidity position and favorable debt
maturity profile provides the company with some cushion at the
rating."
The downgrade reflects a meaningful weakening in EBITDA and free
cash flows over the past few quarters following the October 2021
recapitalization, leading to debt leverage deteriorating to
unsustainable levels.
S&P said, "The recapitalization in October 2021 led to debt to
EBITDA deteriorating to around 8x, with our base-case expectations
that weighted-average debt to EBITDA would improve to around 7x
within 12 months. Additionally, at that time, we had expected USS
to generate solid free cash flow in 2022. Given meaningful cost
inflation (primarily labor and fuel) that the company has been
unable to fully pass on to customers, EBITDA and EBITDA margins
have been significantly weaker than expectations. Additionally, the
company has seen a bit of a reduction in service frequency
requested by customers, following a spike during the height of the
COVID-19 pandemic. As a result, S&P Global Ratings-adjusted debt to
EBITDA weakened to above 9x on a last-12-month (LTM) basis for the
period ended June 2022, and we expect the company to end 2022 with
leverage of about 9x. The weaker-than-expected EBITDA, coupled with
working capital outflows and spending on growth capex and
acquisitions has led to our revised expectations that free cash
flow will be modestly negative in 2022.
"In 2023, we would expect moderate EBITDA growth and positive free
cash flow generation, given our expectation that the company will
remain focused on passing through price increases, a more
normalized cost environment (particularly compared to 2022), and
modest volume growth. We believe financial policies will remain
aggressive given the private equity ownership, and a track record
of supplementing organic growth through acquisitions. We believe
there is ample opportunity to continue to expand, given the
company's focus on improving route density (which boosts margins),
the highly fragmented nature of the industry and the fact that USS
does not have a presence in about half of the U.S.
"Our view of the company's business risk profile reflects its
limited diversity, given a focus on portable sanitation and
meaningful exposure to cyclical end markets.
"Overall business activity is strongly tied to the residential and
nonresidential construction markets (about 45% of total revenues),
which tend to be project-oriented. Weak construction activity
during past downturns has significantly decreased revenues and
EBITDA. Portable sanitation is also a niche industry, estimated at
$6 billion. While we believe its increased scale, geographic
density, and efforts to expand into relatively less cyclical
markets (e.g., industrials) better position it to weather a
potential economic slowdown, we still believe USS is susceptible to
significant demand volatility in a market downturn."
Somewhat offsetting these risks is the company's leading position
as the only national player in the niche portable sanitation
market. The company is one of the few participants capable of
servicing national brands across the U.S. Its expanding line of
complementary services, such as fencing and rolloff dumpsters,
bolsters its market position. S&P believes this strengthens USS's
value proposition as a "one-stop shop" for site-management needs.
These factors support its good operating performance and high
customer retention rate. The company's events business (about 10%
of revenues), has continued to improve, given the return to live
sporting events and concerts that were canceled or had limited
attendance in 2020.
S&P said, "The stable outlook reflects our expectation that EBITDA
will be depressed through 2022, leading to meaningfully weaker debt
leverage, compared to our previous expectations. Despite this, we
expect operating performance should improve into 2023, driven by
organic volume growth and increased pricing to offset a rise in
labor and fuel costs. As a result, we believe that while debt to
EBITDA will remain near double-digit levels in 2022, that weighted
average debt to EBITDA will be closer to 8x. We expect the company
will continue pursuing bolt-on acquisitions, although in a measured
fashion that preserves adequate liquidity. We also do not believe
that the covenants will spring over the next year, and the company
has no meaningful upcoming debt maturities."
S&P could lower the ratings on USS within the next year if:
-- Earnings deteriorated due to weak end-market demand in its core
residential and nonresidential construction end markets, or the
company is unable to implement price increases to offset higher
costs;
-- Revenues were about 10% lower than S&P's expectations, combined
with a 500 basis points (bps) decline in EBITDA margins compared to
its base case;
-- The company were to undertake a transaction that S&P viewed as
a distressed exchange;
-- Liquidity weakens materially due to persistent negative free
cash flow generation and compliance with covenants were to become
challenging; or
-- The company completed larger-than-expected debt-funded
acquisitions or did a large dividend recap.
-- If some of these were to occur, S&P believes debt to EBITDA
could weaken to the double digits and remain there.
S&P could raise its ratings within the next year if:
-- Volumes and pricing were stronger than S&P projects, such that
EBITDA margins were about 200 bps higher than its base-case
expectations. In such a scenario, S&P believes weighted average
debt to EBITDA would approach 7x.
-- S&P believes that the company's financial policies would
support maintaining such leverage, even after incorporating
potential acquisitions and shareholder rewards.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Environmental and social credit factors have no material
influence on our rating analysis of PECF USS Intermediate Holding
III Corp. Governance factors have a moderately negative impact on
our rating analysis because we view financial sponsor-owned
companies with aggressive or highly leveraged financial risk
profiles as demonstrating corporate decision-making that
prioritizes the interests of the controlling owners, typically with
finite holding periods and focus on maximizing shareholder
returns."
PHOENIX GUARANTOR: S&P Affirms 'B' ICR, Off CreditWatch Positive
----------------------------------------------------------------
S&P Global Ratings affirmed the 'B' issuer credit rating on
Lousiville, Ky-based Phoenix Guarantor Inc. (d/b/a BrightSpring
Health Services), removed the rating from CreditWatch where S&P
place it Oct. 28, 2021, with positive implications, and assigned a
positive outlook. S&P also removed its issue-level ratings from
CreditWatch and affirmed its 'B' issue-level rating on its senior
secured facilities and its 'CCC+' ratings on its second-lien debt.
The positive outlook reflects S&P's view of at least a one-in-three
chance that the company executes an IPO within the next year and
uses a portion of the proceeds to reduce adjusted debt leverage
below 5.5x.
Due to a prolonged weak market for initial public offerings (IPOs),
S&P believes the prospects of a public offering and subsequent debt
reduction within the next few months from BrightSpring have
declined.
S&P said, "We believe the company is still looking to launch an IPO
and will moderate its financial policy relative to recent years so
that it may take advantage of a favorable launch window. This view
is supported by the company's recently announced divestment of
Equus Workforce Solutions and significantly lower spending on
acquisitions.
"The ratings on BrightSpring are constrained by its below- average
profitability for the broader health care services industry,
exacerbated by reimbursement risk, relatively low barriers to entry
in many of its offerings, and still high leverage. Absent an IPO,
we expect leverage will remain high in the 6.5x-6.7x range. The
company derives about one-third of total revenue from Medicare Part
D and about 25% from Medicaid. These concentrations expose the
company to reimbursement risk as governments seek to reduce costs.
However, we view this risk as slightly offset by the cost-saving
nature of many of the services the company provides to "must serve"
populations and in-home care settings. Each of Brightspring's
subsectors is highly fragmented and competitive, with numerous
local competitors. Barriers to entry are low and there are few
opportunities for differentiation in each segment. Still,
BrightSpring's record for quality provides some differentiation
when competing for and renewing larger contracts.
"Over the past year, BrightSpring has expanded its revenue by about
20% while maintaining relatively stable margins during a period
when many health care services peers have experienced significant
setbacks. We believe this demonstrates the resilience of the
company's business model of offering diversified and complementary
services. BrightSpring has been much less severely impacted, with
revenue rising by over 20% and EBITDA rising by over 10% over the
last twelve months. With annual revenues and adjusted EBITDA now
exceeding $7 billion and $500 million, respectively, BrightSpring
has sufficient scale to execute.
"The positive outlook reflects our view of at least a one-in-three
chance that the company executes an IPO within the next year and
uses a portion of the proceeds to reduce adjusted debt to EBITDA to
below 5.5x.
"We could raise our rating on BrightSpring within the next 12
months if it lowers its adjusted debt to EBITDA below 5.5x and
provides insight about its commitment to lower leverage. This could
occur as a result of the company using proceeds of an IPO to reduce
debt.
"We could revise our outlook on BrightSpring to stable if prospects
for an IPO become unlikely or if we expect its leverage will
generally remain above 5.5x. This could occur if the company
pursues substantial debt-financed acquisitions or dividends."
PHOENIX SERVICES: U.S. Trustee Appoints 2 New Committee Members
---------------------------------------------------------------
The U.S. Trustee for Regions 3 and 9 appointed Cleveland-Cliffs
Steel, LLC and C&B Marine as new members of the official committee
of unsecured creditors in the Chapter 11 cases of Phoenix Services
Topco, LLC and its affiliates.
The committee is now composed of:
1. Boyd Company
Attn: Ms. Karen Ferris, General Credit Manager
10001 Linn Station Road
Louisville, KY 40223
Phone: (502) 774-4441
Email: KarenFerris@BoydCAT.com
2. Alta Construction Equipment Illinois, LLC
Attn: Mr. Andrew Rundle, Director of Finance
13211 Merriman Road
Livonia, MI 48150
Phone: (248) 449-6700
Email: andrew.rundle@altg.com
3. Tredroc Tire Services, LLC
Attn: Mr. Chris DiGiorgio, Chief Financial Officer
2450 Lunt Avenue
Elk Grove Village, IL 60007
Phone: (630) 706-1109
Email: cdigiorgio@redroc.com
4. Cintas Corporation
Attn: Mr. Jamie Ramsey
Deputy General Counsel - Litigation
Phone: (513) 972-2026
Email: ramseyj@cintas.com
5. Midwest Operating Engineers Pension Trust Fund
Attn: Mr. Thomas M. Bernstein
Fund Administrator
c/o Elizabeth A. LaRose
Phone: (708) 579-6666
Email: elarose@local150.org
6. Cleveland-Cliffs Steel, LLC
Attn: R. Christopher Cebula
Executive Vice President, Logistics
9227 Centre Point Drive
West Chester, OH 45069
Phone: (513) 425-2681
Email: Christopher.cebula@clevelandcliffs.com
7. C&B Marine
Attn: David A. Orme, C.O.O.
50 E. River Center Blvd., Suite 1180
Covington, KY 41011
Phone: (859) 217-2252
Email: dorme@carlislebray.com
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, Phoenix Services Topco disclosed up to $1 billion in both
assets and liabilities.
Judge Mary J. Walrath oversees the cases.
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.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee of unsecured creditors in the Debtors' Chapter 11 cases
on Oct. 11, 2022. Justin R. Alberto, Esq., at Cole Schotz P.C. is
the committee's legal counsel.
PIPELINE HEALTH: Susan Goodman Appointed as Patient Care Ombudsman
------------------------------------------------------------------
Kevin Epstein, the U.S. Trustee for Region 7, appointed Susan
Goodman, Esq., as patient care ombudsman for Pipeline Health
System, LLC and its affiliates.
Ms. Goodman is an attorney at Pivot Health Law, LLC, in Oro Valley,
Ariz.
In court papers, Ms. Goodman disclosed that she is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
A copy of the notice is available for free at
https://bit.ly/3ewRlFD from PacerMonitor.com.
The ombudsman may be reached at:
Susan N. Goodman, RN, JD
Pivot Health Law, LLC
P.O. Box 69734
Oro Valley, AZ 85737
Telephone: 520-744-7061
Email: sgoodman@pivothealthaz.com
About Pipeline Health Systems
Pipeline Health Systems, LLC is an independent, community-focused
healthcare network that offers a wide range of medical services to
the communities it serves, including maternity care, cancer
treatment, behavioral health, rehabilitation, general surgery, and
hospice care. Headquartered in El Segundo, California, Pipeline's
operations include seven safety net hospitals across California,
Texas, and Illinois, with approximately 310 physicians and over
1,150 beds to serve patients, and a company-wide workforce of over
4,200.
Pipeline Health Systems and its affiliates sought Chapter 11
protection (S.D. Texas Lead Case No. 22-90291) on Oct. 2, 2022.
In
the petition signed by Andrei Soran, authorized signatory, Pipeline
Health Systems disclosed $500 million to $1 billion in assets and
liabilities.
The Hon. David R. Jones is the case judge.
The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy
counsel; Jackson Walker, LLP as local bankruptcy counsel; Ankura
Consulting Group, LLC as restructuring advisor; and Jefferies, LLC
as financial advisor and investment banker. Epiq Corporate
Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' cases on Oct. 13, 2022. Sarah
Schultz, Esq., serves as the committee's bankruptcy attorney.
QUINCY HEALTH: S&P Lowers ICR to 'CCC' on Wider Negative Cash Flow
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Quincy
Health LLC to 'CCC' from 'B-' and its issue-level rating on its
secured term loan to 'CCC' from 'B-'. The '3' recovery rating
indicates its expectation for meaningful (50%-70%; rounded
estimate: 50%, down from 55%) recovery in the event of a payment
default.
S&P said, "Our negative outlook is based on our view of continued
weak operating performance and cash flow deficits, along with the
company's weak liquidity position, increased possibility of a
distressed exchange, and potential term loan covenant violation,
which could result in a default.
"We believe the company will violate its term loan covenant unless
it obtains an amendment. The company is in discussions with lenders
to obtain an amendment. The current covenant requires
debt-to-EBITDA leverage of 5.75x in the third quarter of 2022, and
with our expectations of continued weak operating performance, we
believe the covenant will be breached, resulting in a potential
default.
"We view liquidity as weak. We estimate that the company had about
$30 million-$35 million cash on hand and about $9 million available
under its $130 million asset-based lending (ABL) facility as of
Aug. 31, 2022. We believe the company is unlikely to be able to
withstand adverse events without a substantial capital injection
over the next 12 months, even after factoring in cost cutting,
including corporate staff and capital expenditures. We believe the
financial sponsors could provide some liquidity in the form of a
loan and Quincy could enter into some equipment sales/leaseback
agreements."
Pending, but uncertain, sales of hospital assets could provide
liquidity. Quincy recently signed a definitive agreement to sell
four hospitals for about $150 million, with an expected closing in
the fourth quarter of 2022. The company also has signed letters of
intent for several other hospitals. In the aggregate, if these
transactions are completed, gross proceeds would approach $500
million. S&P expects the proceeds from any sale would be used to
pay down debt with only a modest amount retained on the company's
balance sheet. However, the successful completion of these
transactions is uncertain because previous hospital sales were not
successfully completed. Further, if these hospitals are sold, the
remaining operations will be significantly smaller, with much lower
revenue and EBITDA generation potential.
S&P said, "We expect adjusted debt-to-EBITDA leverage to be above
15x in both 2022 and 2023.We expect continued soft volumes in the
second half of 2022 and into 2023 because we believe some
non-COVID-19 patients will continue to stay away from hospitals and
as acuity levels continue to decline. Supply and labor costs,
particularly contract labor, have increased sharply but we see this
slowing by year-end 2022. The company has implemented several
cost-cutting measures, including corporate staff reductions and
limiting capital expenditures. Still, we expect much lower EBITDA
generation in 2022 and 2023 resulting in adjusted debt-to-EBITDA
levels well above 15x in 2022 and 2023.
"Our negative outlook is based on our view of continued weak
operating performance and sizable cash flow deficits, along with
the company's weak liquidity position and potential term loan
covenant violation, which could result in a default.
"We could lower the rating if the company did not obtain an
amendment to its term loan covenant and breached the covenant,
resulting in a default. We could also lower the rating if the
company were unsuccessful in selling its hospital assets, thereby
keeping liquidity weak, or if the company pursued a distressed
exchange.
"We could raise the rating or revise the outlook if the company
were able to obtain an amendment to its term loan covenant and to
successfully complete the sale of hospital assets and pay down some
debt, thereby improving its liquidity position."
ESG credit factors: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis. Our assessment of the
company's financial risk profile as highly leveraged reflects
corporate decision-making that prioritizes the interests of the
controlling owners, in line with our view of the majority of rated
entities owned by private-equity sponsors. Our assessment also
reflects the generally finite holding periods and a focus on
maximizing shareholder returns."
RAGING BULL: Files for Chapter 11 Bankruptcy
--------------------------------------------
Raging Bull Investments Limited filed for chapter 11 protection in
the Southern District of Florida.
The Debtor is a limited partnership that owns a 1.5% working
interest in and to the oil & gas lease covering the North 1/2 of
Section 9, Block 54T-1 Lease from Thomas N. McKnight, Jr., et al to
Chi Energy, Inc., dated December 14, 2002, Volume 29, page 268,
Official Public Records, Loving County, TX.
The Debtor's business address is 7706 Santee Terrace Lake Worth, FL
33467. The operations are managed by EOG Resources, Inc. EOG
collects the income associated with the Debtor's percentage
interest in the project, pays all relevant expenses and then
distributes the income to the Debtor.
The Debtor owns a 1.5% interest in an oil and gas lease in Loving
County, Texas. Without authority, Mark Croft's ex-wife, who is a
limited partner, transferred the aforementioned lease out of the
name of the Debtor and into her name and Mark Croft’s names
individually. This was seemingly done to collect 50% of the
monthly net income from EOG in breach of a Promissory Note in favor
of Mark Croft (secured) and a Consulting Agreement Mark Croft has
with the Debtor. Due to this transfer, EOG has placed a hold on
payment of the income and expenses due to creditors on behalf
of the Debtor.
According to court filings, Raging Bull Investments Limited
estimates $1 million to $10 million in debt to 1 to 49 creditors.
The petition states that funds will be available to unsecured
creditors.
About Raging Bull Investments Limited
Raging Bull Investments Limited filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
22-17916) on October 12, 2022. In the petition filed by Mark S.
Croft, as manager and partner, the Debtor reported assets between
$500,000 and $1 million and liabilities between $10 million and $50
million.
The Debtor is represented by Craig I Kelley of Kelley, Fulton &
Kaplan, P.L.
REWALK ROBOTICS: Falls Short of Nasdaq Bid Price Requirement
------------------------------------------------------------
ReWalk Robotics Ltd. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that it received a notification
letter from The Nasdaq Stock Market LLC indicating that the Company
did not satisfy the requirement for continued listing on The Nasdaq
Capital Market under Nasdaq Listing Rule 5550(a) to maintain a
minimum bid price of $1 per share. The Company became deficient
with Rule 5550(a) as of Oct. 10, 2022 as its closing bid price was
less than $1 per share for 30 consecutive business days. As in the
past, the Bid Price Letter is a notice of deficiency, not
delisting, and does not currently affect the listing or trading of
ReWalk ordinary shares on The Nasdaq Capital Market.
The Company has 180 days, or until April 10, 2023, to comply with
Rule 5550(a) by maintaining a closing bid price of at least $1 per
share for 10 consecutive business days. Additionally, the Company
may be eligible for a second 180-day period to satisfy Rule
5550(a)'s minimum bid price requirement, if, as of April 10, 2023,
the Company continues to have a market value of publicly held
shares of at least $1 million, meets all other initial listing
standards of The Nasdaq Capital Market (with the exception of the
bid price requirement) and provides written notice of its intention
to cure the deficiency during such second compliance period. The
Company intends to monitor closely the closing bid price of its
ordinary shares and to consider plans for regaining compliance with
Rule 5550(a). While the Company plans to review all available
options, there can be no assurance that it will be able to regain
compliance with the applicable rules during the 180-day compliance
period, any subsequent extension period, or at all.
If the Company does not regain compliance with Rule 5550(a) during
the applicable cure period, Nasdaq will notify the Company that its
ordinary shares are subject to delisting. The Company would then
be permitted to appeal any delisting determination to a Nasdaq
Hearings Panel. The Company's ordinary shares would remain listed
on The Nasdaq Capital Market pending the panel's decision after the
hearing.
About ReWalk Robotics
ReWalk Robotics Ltd. -- http://www.rewalk.com-- develops,
manufactures, and markets wearable robotic exoskeletons for
individuals with lower limb disabilities as a result of spinal cord
injury or stroke. ReWalk's mission is to fundamentally change the
quality of life for individuals with lower limb disability through
the creation and development of market leading robotic
technologies. Founded in 2001, ReWalk has headquarters in the
U.S., Israel and Germany.
ReWalk Robotics reported a net loss of $12.74 million for the year
ended Dec. 31, 2021, a net loss of $12.98 million for the year
ended Dec. 31, 2020, a net loss of $15.55 million for the year
ended Dec. 31, 2019, a net loss of $21.67 million for the year
ended Dec. 31, 2018, and a net loss of $24.72 million for the year
ended Dec. 31, 2017. As of June 30, 2022, the Company had $85.80
million in total assets, $4.88 million in total liabilities, and
$80.91 million in total shareholders' equity.
SCF LLC: Committee Seeks to Hire EmergeLaw as Counsel
-----------------------------------------------------
The official committee of unsecured creditors of SCF LLC seeks
approval from the U.S. Bankruptcy Court for the Western District of
Tennessee to hire EmergeLaw, PLLC as its counsel.
The firm's services include:
a. assisting, advising and representing the Committee in its
consultations with the Debtor regarding the administration of the
Case;
b. assisting, advising and representing the Committee with
respect to the Debtor's retention of professionals and advisors in
connection with the Debtor's business and the Case;
c. assisting, advising and representing the Committee in
analyzing the Debtor's assets and liabilities, investigating the
extent and validity of liens and participating in and reviewing any
proposed asset sales, any asset dispositions, financing
arrangements and cash collateral stipulations or proceedings;
d. assisting, advising and representing the Committee in any
manner relevant to reviewing and determining the Debtor's rights
and obligations under leases and other executory contracts;
e. assisting, advising and representing the Committee in
investigating the acts, conduct, assets, liabilities and financial
condition of the Debtor, the Debtor's operations and the
desirability of the continuance of any portion of those operations,
and any other matters relevant to the Case or to the formulation of
a plan;
f. assisting, advising and representing the Committee in
connection with any sale of the Debtor's assets;
g. assisting, advising and representing the Committee in its
participation in the negotiation, formulation, or objection to any
plan of liquidation or reorganization;
h. assisting, advising and representing the Committee in
understanding its powers and its duties under the Bankruptcy Code
and the Bankruptcy Rules and in performing other services as are in
the interests of those represented by the Committee;
i. assisting, advising and representing the Committee in the
evaluation of claims and on any litigation matters, including
avoidance actions; and
j. providing such other services to the Committee as may be
necessary in these Cases.
The firm will be paid at these rates:
Robert J. Gonzales $575 per hour
(reduced to $495)
Nancy B. King $525 per hour
(reduced to $495)
Other EmergeLaw Partners $425 to $750 per hour
Associates and Law Clerks $150 to $350 per hour
Paralegals $150 to $195 per hour
EmergeLaw is disinterested within the meaning of 11 U.S.C. Secs.
101(14) and 327, according to court filings.
The firm can be reached through:
Robert J. Gonzales, Esq.
Nancy B. King, Esq.
EmergeLaw, PLLC
4000 Hillsboro Pike, Suite 1112
Nashville, TN 37215
Phone: (615) 815-1535
Email: robert@emerge.law
nancy@emerge.law
About SCF LLC
SCF, LLC provides integrated logistics and barge transportation
services on the U.S. The company is based in Adamsville, Tenn.
SCF sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. W.D. Tenn. Case No. 22-10809) on July 27, 2022. In the
petition filed by Doug Blaylock, chief financial officer, the
Debtor listed $1 million to $10 million in assets and $10 million
to $50 million in liabilities.
Judge Jimmy L. Croom oversees the case.
Steven N. Douglass, Esq., at Harris Shelton Hanover & Walsh, PLLC,
is the Debtor's counsel.
SPARKLES BEAUTY: Seeks Cash Collateral Access
---------------------------------------------
Sparkles Beauty Bar LLC asks the U.S. Bankruptcy Court for the
District of Nevada for authority to use cash collateral on an
interim and continuing basis.
The Debtor seeks to utilize the revenue generated by the business
to provide services to customers, for the purchase of any goods to
be sold, payment of maintenance expenses, insurance premiums,
utilities, or any other necessary business expense, and for no
other purposes.
The Debtor is under the opinion that there is not any cash
collateral but is seeking approval for the motion in the event any
creditor believes otherwise.
The Debtor anticipates its revenue and expenses over the next six
months are expected to be more than sufficient to pay for the
purchase of any goods to be sold, payment of maintenance expenses,
insurance premiums, utilities, or any other necessary business
expense.
The Debtor disputes that any secured creditor has cash collateral
rights, as the only scheduled secured creditors are Everest
Business Funding for a membership subscription, Fox Business
Funding for a Membership Subscription, and Premier Capital Funding
for a Membership Subscription. The Debtor does not believe that any
of the secured creditors' alleged claims include a provision for
cash collateral rights.
A copy of the Debtor's motion is available at
https://bit.ly/3MDITRs from PacerMonitor.com.
About Sparkles Beauty Bar LLC
Sparkles Beauty Bar LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bakr. D. Nev. Case No. 22-13453) on September
26, 2022. In the petition signed by Stacey Bledsoe, managing
member, the Debtor disclosed up to $500,000 in both assets and
liabilities.
Seth D Ballstaedt, Esq., at Fair Fee Legal Services, is the
Debtor's legal counsel.
STORED SOLAR: Court OKs Cash Collateral Access, $3.35MM DIP Loan
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maine authorized
Stored Solar Enterprises, Series LLC to use cash collateral on an
interim basis and obtain postpetition financing.
The Debtor is permitted to obtain senior secured postpetition
financing up to an interim amount of $3,350,000 and aggregate
principal amount of up to $9,000,000 from Hartree Partners, LP
pursuant to the terms and conditions set forth in the Motion and
the DIP Financing Term Sheet.
The Lender will have no obligation to advance funds under the
Postpetition Financing unless all of the conditions precedent to
the making of such advance under the DIP Financing Term Sheet and
the Interim Order have been satisfied in full or waived by Hartree
in its sole discretion.
As of the Petition Date, Hartree as Secured Party holds valid,
enforceable, secured, and allowable claims against the Borrower on
account of the Secured Note Obligations equal to not less than (a)
$540,000 of principal amount outstanding under the Secured Note;
(b) $8,345,479 in balances due to the Lender under the Borrower
ISDA; (c) not less than $215,263 in accrued but unpaid prepetition
professional fees and expenses, (d) any and all other accrued but
unpaid interest, fees, costs, expenses, charges, advances, claims,
debts, and other obligations that have accrued as of the Petition
Date to the Secured Party; and (e) all post-Petition Date interest,
fees, costs, and charges allowed on such claims.
The DIP Facility will mature on the earliest of:
a. January 13, 2023;
b. October 28, 2022, if on such date the Sale Procedures
Approval Order has not been entered by the Bankruptcy Court;
c. November 14, 2022, if on such date (i) definitive DIP
documentation consistent with the Term Sheet and otherwise in form
and substance acceptable to the DIP Lender has not been entered
into or (ii) the Final DIP Order has not been entered by the
Bankruptcy Court;
d. any breach by the Borrower which has not been cured or
waived within three business days of Borrower's receipt of notice
of breach;
e. dismissal of the Chapter 11 Case, the appointment of a
chapter 11 trustee or an examiner, conversion of the Chapter 11
Case into a case under chapter 7 of the Bankruptcy Code, or the
effective date of a plan in the Chapter 11 Case;
f. the closing date of (i) a successful credit bid of the
Secured Note Obligations and/or DIP Facility obligations or (ii)
any other sale of the Facilities; and
g. other customary circumstances to be mutually agreed.
The Debtor will comply with these Chapter 11 milestones which
milestones may be extended in writing by the DIP Lender in their
sole and absolute discretion:
a. no later than October 13, 2022, the Borrower will have
filed a motion seeking approval on an emergency basis of the DIP
Facility in form and substance satisfactory to the DIP Lender;
b. no later than October 14, 2022, the Bankruptcy Court will
have entered the Interim DIP Order in form and substance
satisfactory to the DIP Lender;
c. no later than October 18, 2022, the Borrower will have
filed the Approval, Procedures and Sale Motion on an emergency
basis in form and substance satisfactory to the DIP Lender;
d. no later than October 28, 2022, the Bankruptcy Court will
have entered the Sale Procedures Approval Order;
e. no later than November 14, 2022, the Bankruptcy Court will
have entered the Final DIP Order; and
f. no later than December 27, 2022, the sale of the Facilities
has closed.
As adequate protection of the Lender's interest in the Prepetition
Collateral, the Lender is granted liens and security interests in
and on all right, title and interest of the Debtor and its estate
in prepetition and postpetition property of the Debtor and its
bankruptcy estate.
To the extent that the Adequate Protection Liens granted do not
provide the Lender with adequate protection of its interests in the
Prepetition Collateral, the Lender will have a super-priority
administrative expense claim to the fullest extent permitted under
Section 507(b) of the Bankruptcy Code as necessary to fully
compensate the Lender for any diminution in the value of its
interests in the Prepetition Collateral.
A preliminary telephonic hearing on entry of a final order
approving the matter is set for October 27, 2022, at 2 p.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3s2shtg from PacerMonitor.com.
The budget provides for total expenses, on a weekly basis, as
follows:
$674,864 for the week ending October 21, 2022;
$310,199 for the week ending October 28, 2022;
$560,747 for the week ending November 4, 2022;
$558,471 for the week ending November 11, 2022;
$357,887 for the week ending November 18, 2022; and
$998,790 for the week ending November 25, 2022.
About Stored Solar Enterprises, Series LLC
Stored Solar Enterprises, Series LLC owns and operate seven
biomass-fueled, renewable energy generating facilities located in
Maine, Massachusetts and New Hampshire. The Plants produce electric
energy which is transmitted into, and earns payments from, the ISO
New England power grid. Stored Solar has 87 employees.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Me. Case No. 22-10191) on September 14,
2022. In the petition signed by William Harrington, manager, the
Debtor disclosed up to $100 million in assets and up to $50 million
in liabilities.
Judge Michael A. Fagone oversees the case.
George J. Marcus, Esq., at Marcus Clegg, is the Debtor's counsel.
TORY BURCH: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
-----------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based luxury
lifestyle brand Tory Burch LLC to stable from positive. S&P
affirmed its ratings, including the 'BB-' issuer credit rating.
S&P said, "The stable outlook reflects our expectation that sales
will remain lackluster through at least the next two quarters, with
modest margin compression resulting in S&P Global Ratings-adjusted
debt to EBITDA remaining in the low- to mid-2x area over the next
12 months. It also incorporates our expectation that the company
will convert its preferred stock to common equity at year-end.
"Global economic slowdown coupled with rising inflation, a higher
cost of funding, and extended lockdowns in China is reducing Tory
Burch's sales growth prospects, in our view. For the next 12-18
months, we are lowering our forecasts for sales and margins.
Although luxury brands tend to be more resilient during a
recessionary environment, we believe Tory Burch's market position
in the luxury accessible segment is more sensitive to macroeconomic
pressures as consumers in this bucket tend to pull back on
discretionary spending faster than those in the top luxury level.
"During the first half of 2022, Tory Burch's net sales declined
3.5%. We expect growth in the second half, largely driven by a
typically strong fourth quarter due to holiday sales. However, we
anticipate sales will be roughly flat for the full year (compared
with double-digit percent gains previously expected) and that 2023
will remain sluggish amid an increasingly likely recession. In
North America (about 75% of revenue), we expect sales volume to
slow, partially offset by the company's ability to increase prices.
At the same time, we expect earnings from international sales will
face sustained headwinds from currency exchange fluctuations and a
strong dollar relative to all other currencies, despite modest
growth in constant currency. In addition, we believe the Zero COVID
policy and extended lockdowns in China (about 10% of revenue) will
be a drag for growth and increase intra-year earnings volatility."
Higher freight charges and inflationary costs over the next 12
months will continue to hurt margins, further limiting EBITDA
expansion. Through the first half of the year, Tory Burch reduced
overall promotions and implemented price increases that increased
average unit selling prices. However, in response to a more
challenging operating environment, the company is weighing
incremental price increases against declining demand. S&P
anticipates modest gross margin compression from increased freight
costs, inflationary pressures, and supply chain disruptions in
2022, which will persist in 2023. At the same time, Tory Burch's
first-half selling, general, and administrative costs increased
from higher expenses on public relations, marketing, and SAP
implementation. In addition, margins may continue to be hindered by
lockdown measures in China.
As of June 30, 2022, S&P Global Ratings-adjusted EBITDA margins
declined to 19.1% from 23.2% a year before. S&P estimates EBITDA
margin for year-end 2022 will remain below 20% and improve to about
20% area in 2023, well below our prior expectation of 25%.
S&P said, "We expect debt to EBITDA will remain above 2x in the
next 12-18 months. As of June 30, S&P Global Ratings-adjusted debt
to EBITDA was 3.7x and we expect it to improve to the mid- to
low-2x area by year-end and the low-2x area through 2023. This will
be largely driven by the company's preferred stock, which we treat
as debt and expect will be converted to equity at year-end.
"We expect Tory Burch will maintain a prudent financial policy and
prioritize cash flow generation in 2023 following minimal free
operating cash flow (FOCF) in 2022. FOCF was negative in the first
half of 2022, reflecting increased inventories from slow sales,
delayed new product deliveries, built-up inventory in China, and
higher capital expenditure (capex) for investments in new stores,
renovations, and SAP implementation. For the second half, we expect
FOCF to turn positive, fueled by fourth-quarter generation,
including reducing inventories and capex. We see the company's
revision of capex to about $100 million from $120 million as a
credit positive and reflective of its prudent financial policy.
"The stable outlook reflects our expectation for lackluster sales
and modest margin compression, keeping S&P Global Ratings-adjusted
debt to EBITDA in the low- to mid-2x area over the next 12 months.
The stable outlook incorporates our expectation that the company
will convert its preferred stock to common equity at year-end."
S&P could lower the ratings if:
-- Tory Burch's operating performance continues to deteriorate
beyond S&P's current expectations due to a weakening retail
environment, operating missteps, or increasing competitive
pressures. Under this scenario, S&P would likely view the business
less favorably; or
-- The company pursues a more aggressive financial policy, such as
debt-financed dividends, leading to leverage approaching 4x.
S&P could raise the ratings if:
-- Revenue increases ahead of our expectations and EBITDA margins
trend to the mid-20% area while the company maintains a disciplined
financial policy, including potential dividends that support
leverage sustained below 2x; or
-- Tory Burch's expansion initiatives are successful and the
company strengthens its business profile with sustained growth and
profitability.
ESG credit indicators: E-2, S-2, G-2
S&P said, "ESG factors are an overall neutral consideration in our
credit rating analysis of Tory Burch LLC. We note the risk of
significant disruption to the brand and operations if key personnel
are lost because of its reliance on its emblematic founder and
creative director, Tory Burch."
VANGUARD ROOFING: Unsecured Claims Under $1K to Recover 100%
------------------------------------------------------------
Vanguard Roofing, LLC, filed with the U.S. Bankruptcy Court for the
Western District of Virginia a Chapter 11 Plan of Liquidation dated
October 17, 2022.
The Debtor is a Virginia Limited Liability Company solely owned by
Gary M. Greenwood. The Company was established in 2018 and provides
roofing services throughout Virginia.
The Debtor's prepetition financial problems began when the company
suffered a large loss when it had to replace a large roof it
installed for a customer. The financial problems lead to the Debtor
filing its petition in this case for relief under chapter 11 of the
Bankruptcy Code on July 18, 2022 and electing to proceed under
subchapter V of chapter 11.
The Debtor expects a strong turnaround post-petition. The Debtor
has eliminated some costly expenses of the business and realigned
its pricing to improve its financial situation.
The Debtor believes that the restructuring of its obligations
pursuant to this Plan will enable it to continue to operate its
business with a positive cash flow that will enable the Debtor's
business to reorganize and survive. Based on the Debtor's
projections of future cash flows, it believes that it will be able
to make all future payments required under this Plan and operate
without the need for further reorganization. The final payment
under the Plan is expected to occur 60 months following the
confirmation of the plan.
This Plan under chapter 11 of the Bankruptcy Code proposes to pay
creditors of the Debtor from the projected disposable income of the
Debtor.
Non-priority unsecured creditors holding allowed claims will
receive distributions in accordance with this Plan that exceed the
amount such claims would receive in a Chapter 7 liquidation. This
Plan also provides for the payment of administrative claims and
expenses and priority claims.
Class 4 consists of the unsecured claim of Kalamata. All
distributions toward the allowed unsecured claim of Kalamata shall
be made from Plan Payments. Class 4 Creditors shall be paid 100% of
their allowed claims. Class 4 allowed claims shall be paid (a) Pro
Rata share with Class 3, 4, and 5 in Available Cash and to the
extent of sufficient funds by payment of Monthly Installments, or
(b) upon such other terms as may be agreed to by the holder of such
Claim and the Reorganized Debtor. Class 4 is impaired under the
Plan.
Class 5 consists of general unsecured creditors. Distributions from
Plan Payments shall only be made in Class 5 to allowed claims. Such
distribution, to be shared among the entire class of holders of
allowed unsecured claims, will be, in fact, an amount in excess of
the amount that such holders would so receive or retain if the
Debtor were liquidated under a Chapter 7 bankruptcy. Class 5
allowed claims shall be paid (a) Pro Rata share with Class 3, 4,
and 5 in Available Cash and to the extent of sufficient funds by
payment of Monthly Installments, or (b) upon such other terms as
may be agreed to by the holder of such Claim and the Reorganized
Debtor. Class 5 is impaired under the plan.
Class 6 consists of creditors holding unsecured claims of less than
$1,000. These Convenience Claims will not be paid in pro rata
payments with any other unsecured claims. All Convenience Claims
will be paid 100% of their allowed claims from Plan Payments in
Monthly Installments. Class 6 is impaired under the Plan.
Class 7 consists of Equity Interest in Vanguard. Class 7 is
unimpaired under the Plan within the meaning of § 1124 of the
Bankruptcy Code and is deemed to have accepted the Plan. Upon the
Effective Date, all holders of Equity Interests in Vanguard shall
retain the Equity Interests that they held on the Effective Date.
Holders of Equity Interests in Vanguard are not entitled to, and
shall not receive, any distribution of Available Cash on account of
such Equity Interests under the Plan until holders of all Allowed
Claims have been paid in full with Legal Interest.
The Debtor will operate its business prior to and following
confirmation of this Plan to fund the distributions. Upon and after
the Effective Date, the reorganized Debtor shall have all powers
provided for under this Plan and the Confirmation Order and shall
have all of the powers provided by § 1184 of the Bankruptcy Code.
The Debtor's disposable income shall be utilized to complete the
Plan Payments.
A full-text copy of the Plan of Reorganization dated October 17,
2022, is available at https://bit.ly/3TFATSl from PacerMonitor.com
at no charge.
Counsel for Debtor:
Martin C. Conway, Esq.
Conway Law Group, PC
12934 Harbor Drive, Suite 107
Woodbridge, VA 22192
Tel: (703) 783-9935
Email: martin@conwaylegal.com
About Vanguard Roofing
Vanguard Roofing, LLC operates a roofing contracting business. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. W.D. Va. Case No. 22-60697) on July 18, 2022. In the
petition signed by Gary Greenwood, chief executive officer, the
Debtor disclosed up to $500,000 in both assets and liabilities.
Judge Rebecca B. Connelly oversees the case.
Martin C. Conway, Esq., at Conway Law Group, PC is the Debtor's
counsel.
XEBEC ADSORPTION: Files Under CCAA; Commences Sale Process
----------------------------------------------------------
Xebec Adsorption Inc., Xebec RNG Holdings Inc., Applied Compression
Systems Ltd., Compressed Air International Inc., Xebec Holding USA
Inc., Enerphase Industrial Solutions Inc., CDA Systems, LLC, Xebec
Adsorption USA Inc., The Titus Company, Nortekbelair Corporation,
XBC Flow Services - Wisconsin Inc., California Compression, LLC and
Xebec Systems USA, LLC, sought and obtained a First Day Initial
Order under the Companies' Creditors Arrangement Act ("CCAA") from
the Quebec Superior Court (Commercial Division), district of
Montreal.
The Court also issued a Bidding Procedures Order that, among other
things, authorized Xebec to implement a sale and investment
solicitation process ("SISP") in accordance with the terms hereof.
This SISP sets out the manner in which (i) binding bids for
executable transaction alternatives involving the shares and the
business, property and assets of Xebec and of any of its affiliates
("Business") will be solicited from interested parties, (ii) any
such bids received will be addressed, (iii) any Successful Bid will
be selected, and (iv) Court approval of any Successful Bid will be
sought. Such transactions may include, among other things, a sale
of some or all of the Business's shares, assets and business and an
investment in the Business, each of which shall be subject to all
terms set forth in this SISP.
The SISP will be conducted by Xebec under the oversight of Deloitte
Restructuring Inc., in its capacity as court-appointed monitor
("Monitor"), with the assistance of National Bank Financial Inc. as
financial advisor.
Parties who wish to have their bids considered will be expected to
participate in the SISP as conducted by Xebec and the Financial
Advisor in accordance with the present bidding procedures set out
herein ("Bidding Procedures") governing the solicitation o f offers
or proposals for the acquisition of the Business or some portion
thereof.
A copy of the initial order and the monitor's report are available
on at https://insolvencies.deloitte.ca/Xebec.
Attorneys for Companies:
Osler, Hoskin & Harcourt LLP
2100 - 1000 De La Gauchetiere Street West
Montreal, QC H3B 4W5
Sandra Abitan
Tel: 514-904-5648
Email: sabitan@osler.com
Julien Morissette
Tel: 514-904-5818
Email: jmorissette@osler.com
Ilia Kravtsov
Tel: 514-904-5385
Email: ikravtsov@osler.com
Monitor can be reached at:
Deloitte Restructuring Inc.
La Tour Deloitte
500 - 1190 Av. des Canadiens-de-Montreal
Montreal, QC H3B 0M7
Jean-François Nadon
Tel: 514-390-0959
Email: jnadon@deloitte.ca
Julie Mortreux
Tel: 514-393-5400
Email: jmortreux@deloitte.ca
Patrick Fillion
Tel: 514-393-7034
Email: pfillion@deloitte.ca
Frederic Turbide
Tel: 514-393-5258
Email: fturbide@deloitte.ca
Attorneys for the Monitor:
McCarthy Tetrault LLP
2500 - 1000 De La Gauchetiere Street West
Montreal, QC, H3B 0A2
Email: notification@mccarthy.ca
Jocelyn T. Perreault
Tel: 514-397-7092
Email: jperreault@mccarthy.ca
Gabriel Faure
Tel: 514-397-4182
Email: gfaure@mccarthy.ca
Marc-Etienne Boucher
Tel: 514-397-5463
Email: meboucher@mccarthy.ca
National Bank of Canada can be reached at:
National Bank of Canada
600 De La Gauchetière St. West Montreal
Quebec, H3B 4L2
Attorneys for National Bank of Canada:
Borden Ladner Gervais LLP
900 - 1000 De La Gauchetiere St. West
Montreal QC H3B 5H4
Isabelle Desharnais
Tel: 514-954-3134a
Email: idesharnais@blg.com
Kevin Mailloux
Tel: 514-879-1212
Email: kmailloux@blg.com
Xebec Adsorption Inc. -- https://xebecinc.com/ -- provides
end-to-end systems for gas purification and the production of
renewable gases such as renewable natural gas and renewable
hydrogen.
[*] U.S. Corporate Bankruptcies Dipped 16% In September 2022
------------------------------------------------------------
Adam Zaki of CFO reports that despite a whirlwind of reports of
economic troubles in almost every industry, corporate bankruptcy
filings in the United States are at their lowest in more than a
decade, according to S&P Global Market Intelligence data. The 31
filings that took place in September were a 16% dip from the 37
filings in August.
As of the end of last month, 279 companies had filed for bankruptcy
in 2022, which the S&P reports is the lowest since at least 2010.
According to the S&P data, which includes public and private
companies with assets or liabilities of at least $10 million, the
rate of corporate filings for bankruptcy in the first nine months
is off 14% from 2021.
"The period of low bankruptcy filings certainly won’t last
forever," Chris Hudgins, data analyst at S&P Global Intelligence
and author of the report, told CFO. "Those companies that were able
to stay afloat with the help of federal assistance may be in
trouble if they haven’t addressed underlying business issues."
Despite June 2022's peak of 39 bankruptcies, 2022 has seen few
midsize and large businesses go belly up. Leading the way as an
industry was industrials with 48 filings as of the end of
September. Consumer discretionary businesses didn’t trail far
behind with 43 filings. Healthcare rounded out the top three with
28 filings so far this year.
Pandemic-induced restrictions on businesses were the cause of
higher bankruptcies in 2020, thus making the numbers being recorded
now appear low only in comparison, according to Hudgins.
“We saw a large number of filings in 2020 as many of the
most-vulnerable companies filed for bankruptcy during the COVID-19
pandemic,” he said. “Some of those companies that might have
been able to hold out a bit longer under normal circumstances were
instead pushed over the edge into bankruptcy due to the economic
conditions.”
According to an Oct. 4, 2022 report by S&P Global Market
Intelligence, worsening financial conditions suggest the U.S. is
likely to enter a recession with a mild decline in GDP growth, but
with unemployment rising to 6% from 3.5%. Therefore, it's not
surprising analysts like Hudgins believe that these numbers may not
stay low for too much longer.
"Due to the bankruptcy timeline of the more-vulnerable companies
being accelerated in 2020, along with the availability of
government relief programs helping more borderline companies stay
afloat, we recorded a small count of filings in 2021 and 2022," he
said. "Given the current economic conditions and rising interest
rates, I would expect to see the pace of bankruptcy filings pick up
in the future."
When asked specifically about the sustainability of the dipping
bankruptcy rates, Hudgins made it clear it is a matter of letting
conditions play themselves out.
"We will have to wait and see how long it takes for the current
economic challenges to materialize through the bankruptcy filings,"
he said. "Government assistance is now coming to an end, and the
economy is facing new problems with sustained high inflation and
rising interest rates."
Hudgins talked about the recent evaporation of cheap credit in the
U.S. economy, a capital stream many businesses of all sizes relied
on to rebuild, expand, or stay afloat during and after
pandemic-induced woes.
"As interest rates are increasing, credit availability is getting
more limited and costly. Banks are also starting to tighten their
lending standards," Hudgins said. "Companies looking to finance
debt may find it difficult and more expensive, which could prove
even more troublesome for those with large debt sums coming due as
their options for refinancing narrow."
Despite only having 13 total filings in 2022, the information
technology industry accounts for three of the four largest
bankruptcies this 2022. OSG Group Holdings, Aearo Technologies, and
Celsius Network each had more than $1 billion dollars in
liabilities at the time of their filings. Aearo and Celsius filed
for bankruptcy in July and OSG in August.
Unlike the previous three months, September had no bankruptcy
filings with more than $1 billion in reported liabilities in any
industry, according to the data.
[^] BOOK REVIEW: Transcontinental Railway Strategy
--------------------------------------------------
Transcontinental Railway Strategy, 1869-1893: A Study of
Businessmen
Author: Julius Grodinsky
Publisher: Beard Books
Softcover: 439 pages
List Price: $34.95
Order your personal copy at
http://amazon.com/exec/obidos/ASIN/1587980037/internetbankrupt
Railroads were pioneers of the American frontier. Union Pacific;
Central Pacific; Kansas and Pacific; Chicago, Rock Island and
Pacific; Chicago, Burlington and Quincy; Atchison, Topeka and Santa
Fe: these names evoke boom times in America, the excitement and
tumult of seemingly limitless growth and opportunity, frontiers to
tame, fortunes to be made. Railroads opened up vast supplies of
raw materials, agricultural products, metals, and lumber. The
public gain was incalculable: job creation, low-cost
transportation, acceleration of westward immigration, and
settlement of the frontier.
The building of the western railway system in the United States was
described at the time as "one of the greatest industrial feats in
the world's history." This book tells the story of the
trailblazers of the Western railway industry, men with a stalwart
willingness to take on extraordinary personal financial risk. As a
group, these initial railroad promoters were smart, bold,
tenacious, innovative, and fiercely competitive. Some were
cautious with their and their investors' money, some reckless.
Most met with financial setbacks, some with total failure, some
time and time again. They often sold out at great losses, leaving
their successors to derive the benefits later.
Bitter competition existed among these men. They fought to position
their "roads" in a limited number of mountain passes, rivers, and
valleys; and to chart routes which connected major production areas
with major consumption areas. They cajoled and begged almost anyone
for capital. They created and tried to defend monopolies. They
bullied each other, invaded each other's territories, and
retaliated against each other. They staged wage wars. They agreed
not to compete with each other, and bought each other out.
The book opens in May of 1869, just after the completion of the
first transcontinental route joining the Union Pacific Railroad and
the Central Pacific Railroad in Ogden, Utah. The companies'
long-term prospects were excellent, but right then they were
desperate for cash. Union Pacific alone was more than $15 million
in debt. Additional financing was proving scarce. By 1870, more
than 40 railroads were floating bonds, "at almost any price for
ready cash," wrote one contemporary observer. Still, funds were
raised and construction went on, both of transcontinental lines and
branch lines.
As railway lines in the West were built in relatively unsettled
areas, traffic was light and returns correspondingly low. To
increase business, the companies found ways to encourage population
growth along their routes. Much-needed funding came from
immigration services set up by the railways themselves.
Agricultural areas sprang up along the routes. Sometimes volume of
traffic expanded too fast, and equipment shortages and construction
delays occurred. Or, drought, recession, and low agricultural
prices meant more red ink.
This book takes the reader through the boom times and bust times of
the greatest growth of railways the world has ever seen. The author
uses a myriad of sources showing painstaking and creative research,
including contemporary news accounts; railway company financial
records and archives; contemporary industry journals; Congressional
records; and personal papers, letters, memoirs and biographies of
the main players. It's a good, solid read.
Professor Julius Grodinsky was born in 1896 and died July 9, 1962,
in Philadelphia, Pennsylvania.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2022. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
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