/raid1/www/Hosts/bankrupt/TCR_Public/221117.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, November 17, 2022, Vol. 26, No. 320
Headlines
ASTROTECH CORP: Incurs $2.5 Million Net Loss in First Quarter
BITNILE HOLDINGS: Obtains $18.9 Million in Secured Debt Financing
CANOPY GROWTH: S&P Lowers ICR to 'SD' on Distressed Debt Repayment
CELSIUS NETWORK: Spars With Customers on Crypto Account Custody
CENTRAL FLORIDA CIVIL: Unsecureds Will Get 1% in 60 Months
CUENTAS INC: Incurs $2.3 Million Net Loss in Third Quarter
CUENTAS INC: Jeffrey Lewis Quits as Director
DIFFUSION PHARMACEUTICALS: To Hold Annual Meeting on Dec. 30
ECTOR COUNTY: Assets Sold to Rockland Capital; Amends Unsec. Claims
ENVIVA INC: Fitch Assigns 'BB-' Rating on $100MM Unsecured Notes
ENVIVA INC: S&P Rates New $100MM Unsecured Tax-Exempt Bonds 'B+'
EXPRESSJET AIRLINES: Unsecureds to Recover 9.5% to 10.7% in Plan
FREE SPEECH: Hook Families Want Another $320M Damages to Cover Cost
FREE SPEECH: Trial of Alex Jones Moves to Punitive Damages Stage
G.D. III: Court Okays Appointment of Chapter 11 Trustee
GARRETT MOTION: Explores Various Options Including Sale
GATEWAY CASINOS: Moody's Ups CFR & Senior Secured Term Loan to B3
HERBALIFE NUTRITION: S&P Downgrades ICR to 'B+', Outlook Negative
JOSIAH'S TRUCKING: Move to Dismiss Avoidance Actions Denied
KABBAGE: Gets Court OK for $58Mil. Deal With Customers Bank
KEYWAY APARTMENT: Court OKs Appointment of Chapter 11 Trustee
KLX ENERGY: Appoints CEO Christopher Baker as Class I Director
KLX ENERGY: Posts $11.1 Million Net Income in Third Quarter
LECLAIRRYAN PLLC: Deadline to File Fund Claims Set for December 8
LIVEONE INC: Needs More Time to Complete Form 10-Q
LOMA LINDA: Fitch Hikes LongTerm IDR to 'BB+', Outlook Stable
MACRO CONCEPT: Complaints Against Decaro & Howell Dismissed
MEDICAL TECHNOLOGY: Unsecureds' Recovery "Unknown" in Plan
MESO DELRAY: Unsecured Creditors Will Get 13.8% of Claims in Plan
METHANEX CORP: Fitch Hikes LongTerm IDR to 'BB+', Outlook Stable
NATIONAL MEDICAL: Defendants Move to Stay/Leave to Appeal Denied
NATIONWIDE INVESTORS: Seeks to Hire Baker & Associates as Counsel
NATURALSHRIMP INC: Signs $5 Million Stock Purchase Deal With GHS
NAVIENT CORP: Loses Student Loan Bankruptcy Battle
NELSON BROTHERS: Seeks to Tap Hodgson Russ as Bankruptcy Counsel
NEOVASC INC: Reducer Obtains U.S. Outpatient Reimbursement
OLD FIELD: Voluntary Chapter 11 Case Summary
ONE IMPORTERS: Seeks to Tap Lipton Law Group as Bankruptcy Counsel
PARKWAY GENERATION: S&P Alters Outlook to Neg., Affirms 'BB' ICR
PETROLIA ENERGY: Disputes Counterclaims in Fraud Suit
PREFERRED READY-MIX: Judge Grants in Part Complaint for Turnover
RIOME PLUMBING: Dec. 22 Plan Confirmation Hearing Set
RODA EXPRESS: Seeks to Hire Carl M. Barto as Bankruptcy Counsel
SARONA PROPERTY: Taps Law Office of Adam I. Skolnik as Counsel
SEARS HOLDINGS: Plan Declared Effective After 3 Years
SEARS HOLDINGS: Solicitor General Can Weigh Ch. 11 Lease Fight
SIMON ZAROUR: Case Against U.S. Bank and Deutsche Bank, Dismissed
SPRING MOUNTAIN: Taps BNP Paribas Securities as Investment Banker
STEREOTAXIS INC: Incurs $4.9 Million Net Loss in Third Quarter
STONEBRIDGE VENTURES: Trustee Seeks to Tap Brian Thompson as Broker
STORED SOLAR: Trustee Seeks to Hire Preti Flaherty as Counsel
SUNGARD AS: Completes Sale of U.S. Assets, Winds Down Data Centers
TEAM HEALTH: Fitch Lowers LongTerm Issuer Default Rating to 'CCC'
THOMPSON ROSE: Trustee Gets OK to Tap Pino & Associates as Counsel
TRANS-LUX CORP: Incurs $466K Net Loss in Third Quarter
TUESDAY MORNING: Top Execs to Retire Early as New Owners Take Over
VENUE CHURCH: Seeks to Tap Greater Downtown Realty as Realtor
VICKERY CREEK: Seeks to Hire Freedom Law as Bankruptcy Counsel
WATER WIND: Gets OK to Hire GlassRatner as Expert Witness
WATER WIND: Gets OK to Tap Krista Webb Consulting as Expert Witness
WEINBERG HOLDINGS: Seeks to Hire Avrum J. Rosen as Legal Counsel
WESTBANK HOLDINGS: Unsecured Claims Under $4,500 to Recover 90%
ZACHAIR LTD: Court OKs Appointment of Chapter 11 Trustee
[*] Total Commercial Bankruptcy Filings Rise 5% in October 2022 Y/Y
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
ASTROTECH CORP: Incurs $2.5 Million Net Loss in First Quarter
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Astrotech Corporation has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $2.53 million on $38,000 of revenue for the three months ended
Sept. 30, 2022, compared to a net loss of $2.03 million on $187,000
of revenue for the three months ended Sept. 30, 2021.
As of Sept. 30, 2022, the Company had $52.85 million in total
assets, $2.13 million in total liabilities, and $50.72 million in
total stockholders' equity.
"The start of fiscal year 2023 has brought exciting progress to the
Company," stated Thomas B. Pickens, III, Astrotech's Chairman and
chief executive officer. "Our field trials have validated that the
AgLAB-1000-D2 represents a significant technological advancement by
using a mass-spectrometer to control in-situ chemical processing.
We also continue to make strides in our R&D efforts at BreathTech,
as we are now processing breath samples from patients and building
a library of VOC metabolites that will be integrated into our
BreathTest-1000. This library is important to the detection
abilities of our mass spectrometer technology, and we’re
encouraged at the progress we're making. Lastly, our Board has
authorized a share repurchase program to opportunistically invest
in our business as a means to remain committed to enhancing
long-term shareholder value," concluded Mr. Pickens.
Share Repurchase Program
On Nov. 9, 2022, Astrotech's Board of Directors authorized a share
repurchase program that allows the Company to repurchase up to $1
million of the Company's common stock beginning Nov. 17, 2022, and
continuing through and including Nov. 17, 2023. The shares may be
repurchased from time to time in open market transactions, through
block trades, in privately negotiated transactions, through
derivative transactions or by other means in accordance with
federal securities laws, including Rule 10b5-1 programs. The
timing, as well as the number and value of shares repurchased under
the program, will be determined by the Company at its discretion
and will depend on a variety of factors, including management's
assessment of the intrinsic value of the Company's common stock,
the market price of the Company's common stock, general market and
economic conditions, available liquidity, compliance with the
Company’s agreements, applicable legal requirements, and other
considerations. The share repurchase plan does not obligate the
Company to repurchase any specific number of shares and may be
suspended, modified, or discontinued at any time without prior
notice. The Company expects to fund the repurchases with available
working capital.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1001907/000143774922027104/astc20220930_10q.htm
About Astrotech
Astrotech Corporation (NASDAQ: ASTC) --
http://www.astrotechcorp.com-- is a mass spectrometry company that
launches, manages, and commercializes scalable companies based on
its innovative core technology through its wholly-owned
subsidiaries. 1st Detect develops, manufactures, and sells trace
detectors for use in the security and detection market. AgLAB is
developing chemical analyzers for use in the agriculture market.
BreathTech is developing a breath analysis tool to provide early
detection of lung diseases. Astrotech is headquartered in Austin,
Texas.
Astrotech reported a net loss of $8.33 million for the year ended
June 30, a net loss of $7.60 million for the year ended June 30,
2021, a net loss of $8.31 million for the year ended June 30, 2020,
and a net loss of $7.53 million for the year ended
June 30, 2019. As of June 30, 2022, the Company had $56.22 million
in total assets, $2.98 million in total liabilities, and $53.23
million in total stockholders' equity.
BITNILE HOLDINGS: Obtains $18.9 Million in Secured Debt Financing
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BitNile Holdings, Inc. and certain of its subsidiaries have
borrowed $18.9 million of principal amount of term loans from a
group of institutional investors. The Loans mature in 18 months,
which may be extended to 24 months, accrue interest at the rate of
8.5% per annum and are secured by certain assets of the Company and
various subsidiaries. Starting in January 2023, the lenders have
the right to require the Company to make monthly payments of $0.6
million, which will increase to $1.1 million in November 2023. The
Loans were issued with an original issue discount of $1.89
million.
The lenders received warrants to purchase approximately 4.5 million
shares of the Company's common stock, exercisable for four years at
$0.45 per share and warrants to purchase another approximately 4.5
million shares of the Company's common stock, exercisable for four
years at $0.75 per share, subject to adjustment.
The Loans are guaranteed by Ault Lending, LLC, a subsidiary of the
Company, Ault & Company, Inc., an affiliate of the Company, as well
as Milton C. Ault, III, the Company's executive chairman and the
chief executive officer of Ault & Company, Inc.
The proceeds from the Financing will be used for the purchase of a
private aircraft, to be used for business and charter services, and
for general working capital purposes.
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.
CANOPY GROWTH: S&P Lowers ICR to 'SD' on Distressed Debt Repayment
------------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Canopy
Growth Corp. (CGC) to 'SD' (selective default) from 'CC' and its
issue-level rating on the company's senior secured term loan
outstanding to 'D' (default) from 'CC'.
On Nov. 10, 2022, CGC completed the repayment of the first half of
its US$187.5 million term loan (of principal US$750 million
outstanding) at a discounted price of US$930 per US$1,000. The
second half of the exchange is expected in April 2023. With the
debt repayments, CGC also amended certain credit terms including a
decrease in the minimum liquidity covenant to US$100 million from
US$200 million.
According to S&P Global Ratings definitions, S&P views the
transaction as distressed and tantamount to a default and this
assessment reflects the feature of the transaction whereby
participating lenders received less value than they were initially
promised under the original securities.
CELSIUS NETWORK: Spars With Customers on Crypto Account Custody
---------------------------------------------------------------
Celsius Network is asking a New York bankruptcy judge to allow it
to maintain custody over certain of its customers accounts to
offset potential claims, while the account holders argued their
assets should be returned to them until Celsius proves those
claims.
Noting that they have identified significant cryptocurrency assets
that they do not believe are property of their estates, the Debtors
in September 2022 filed a motion to permit certain customers to
withdraw their cryptocurrency from the Custody Program and Withhold
Accounts. The Debtors though indicated that they believe that it
would be appropriate to turn over property to certain customers at
this time if the Debtors have potential causes of action with
respect to that property (e.g., avoidance actions). "Allowing
customers to withdraw property that could be subject to later
avoidance actions would be akin to choosing to drain a sink full of
water, and then trying to collect the water after it had drained
through the pipes—incredibly wasteful and inefficient if your
goal is to maximize water for later allocation and distribution,"
the Debtors said.
Custody and Withhold Issues
At the hearing on Sept. 14, 2022, the Bankruptcy Court requested
that the Debtors, the official committee of unsecured creditors,
the Ad Hoc Group of Custodial Account Holders, and the Ad Hoc Group
of Withhold Account Holders "meet and confer" to determine the best
path forward with respect to the issues raised in, and related to
the following: (a) Debtors' Motion Seeking Entry of an Order (I)
Authorizing the Debtors to Reopen Withdrawals for Certain Customers
with Respect to Certain Assets Held in the Custody Program and
Withhold Accounts (the "Custody and Withhold Motion"); (b) the Ad
Hoc Group of Withhold Account Holders' Motion for Relief from the
Automatic Stay (the "Withhold Lift Stay Motion"); (c) and the
Complaint [Adv. Pro. Docket No. 1] filed in the adversary
proceeding captioned Ad Hoc Group of Custodial Account Holders v.
Celsius Network LLC, et. al., Adv. Pro. No. 22-10964 (MG) (Bankr.
S.D.N.Y. Aug. 31, 2022) (the "Custody Complaint") (collectively,
the "Custody and Withhold Issues").
As reported in the TCR, the Parties have reached an agreement on a
path forward with respect to the Custody and Withhold Issues.
Pursuant to the Stipulation, the parties will brief the Custody and
Withhold Issues in two phases ("Phase I" and "Phase II"). The two
threshold legal issues for briefing in Phase I are as follows:
* whether assets in the Custody and Withhold accounts are
property of the Debtors' estates, including whether the Terms of
Use are unambiguous on the issue of ownership of such assets; and
* if the assets are not property of the Debtors' estates,
whether the Debtors should nonetheless be allowed to continue to
hold those assets, and maintain the status quo, with respect to
individuals and/or accounts where the Debtors have potentially
viable claims, including, without limitation, preference claims.
The Court-approved stipulation provides that the briefing schedule
on the Phase I Issues will be as follows:
* The Deadline for the Parties to file opening briefs on Phase
I Issues (which may include objections to the Custody and Withhold
Motion): 10 calendar days after the Declarations are filed.
* Deadline for the Parties to file responsive briefs on Phase I
Issues; and deadline to reply to any objection to the Custody and
Withhold Motion: Dec. 2, 2022 at 4:00 p.m., prevailing Eastern
Time.
* Hearing to be held on The Custody and Withhold Motion and
Phase I Issues: Dec. 7 and 8, 2022 at 9:00 a.m., prevailing Eastern
Time.
Custodial Account Holders' Opening Brief
"Custody Assets are not property of the Debtors' estates. The
Debtors and the Ad Hoc Group have both argued that under the clear
and unambiguous Terms of Use, title to Custody Assets is held by
the Custody Service user. The implications of his finding are
clear: the Debtors must unfreeze Custody Assets and permit Custody
Service users to withdraw their property on demand consistent with
the Terms of Use. There is no legal basis for the Debtors to hold
property that is not theirs in contravention of the will of the
title holders and true owners of such property—yet the Debtors
seek to distort the Bankruptcy Code to do so," The Ad Hoc Group of
Custodial Account Holders said in its opening brief.
"The Debtors' attempt to distinguish which Custody Assets are
returned to customers because of potential preference claims
likewise has no basis in law. Rather, Second Circuit precedent is
clear—the Debtors' rights to assets that are not property of the
estate only arises once property is actually recovered under
section 550 of the Bankruptcy Code. To withhold property of third
parties prior to recovery violates section 541 of the Bankruptcy
Code; violates state law (potentially resulting in claims and
causes of action against the Debtors for, among other things,
breach of contract, conversion, and other theories of damages); and
violates the Custody Service users' constitutional due process."
The Custodial Account Holders Group added, "This deprivation of
Custody Service users' property rights has significant
consequences. Without access to their property, the Custody Service
users are deprived of their property rights, including, among other
things, the ability to sell their assets and
reinvest the proceeds, de-risk their holdings due to cryptocurrency
market fluctuations, or choose a new custodian or other means of
storage for their property. To make matters worse, Custody Service
users are not compensated for the Debtors continuing to hold their
Custody Assets, and the Custody Assets may be harmed by the
vagaries of the market which Custody Service users are not able to
avoid because they are deprived of the right to sell (or otherwise
use) their property. 5 The Debtors do not get to keep property
belonging to others and subject them to potentially significant
losses simply because it would be administratively convenient for
the Debtors to do so. To rule otherwise would be to essentially
require Custody Service users to provide the Debtors with a no-cost
option at the users' risk."
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case No.
22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtor estimated assets and liabilities between $1
billion and $10 billion.
Kirkland & Ellis LLP is serving as legal counsel, Centerview
Partners is serving as financial advisor, and Alvarez & Marsal is
serving as restructuring advisor to Celsius. Stretto, the claims
agent, maintains the page https://cases.stretto.com/celsius
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. 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.
CENTRAL FLORIDA CIVIL: Unsecureds Will Get 1% in 60 Months
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Central Florida Civil, LLC filed with the U.S. Bankruptcy Court for
the Middle District of Florida a Subchapter V Plan of
Reorganization dated November 10, 2022.
The Debtor is the operator of a civil engineering/site prep
business which operates throughout the State of Florida. The
business was started in 2020 by Chad and Cara Converse and has
continuously operated since that time.
During 2022 as a result of supply chain related issues, the
Debtor's revenue began to substantially decline and the costs of
labor, materials and fuel substantially increased. The Debtor began
a series of merchant cash advance loans secured by receivables and
deducted on a daily basis. This severely disrupted cash flow of the
Debtor and caused the Debtor to become delinquent to the Internal
Revenue Service for payroll related taxes in the amount of
approximately $600,000.00.
As of August of 2022, the Debtor defaulted on numerous MCA and
supplier loans. However, the Debtor felt that the income would
significantly increase in the short term and allow a successful
reorganization for all secured, priority and unsecured debts.
Multiple creditors filed suit in Marion County and New York to
collect on past due obligations owed by the Debtor. This Chapter 11
followed in order to restructure the existing secured debt,
unsecured debt and other priority claims.
This Plan of Reorganization proposes to pay unsecured creditors of
the Debtor all disposable income during months 1-60 from future
income of the Debtor derived from income generated from the civil
engineering/site prep business that the Debtor owns.
This Plan provides for 18 class(es) of secured claims, 2 Classes of
Priority Claims and 1 class of unsecured claims. Unsecured
creditors holding allowed claims will receive distributions which
the proponent of this Plan has valued at approximately 1 cents on
the dollar based upon current projections of disposable income.
This Plan also provides for the payment of administrative and
priority claims either upon the effective date of the Plan or as
allowed under the Bankruptcy Code.
Class 19 consists of All General Unsecured Claims, including any
wholly unsecured second mortgage claims. To the extent that
unsecured claims are filed and allowed, the Debtor shall pay the
total amount of unsecured claims at the rate of $500.00 during
months 1-60 of the plan of reorganization for 1% repayment of all
unsecured claims.
The Debtor has obtained multiple cash collateral and officer salary
orders in order to continue the operations of the site prep company
while the Chapter 11 plan was formulated. The Debtor has assumed
it's largest construction contract (Simple Life Construction) and
made arrangements to repay any potential pre petition mechanic's
lien creditors through the terms of the assumption order. The Plan
proposed by the Debtor pays all priority and secured claims in full
within the plan period or contract period.
To the extent that unsecured claims are not paid in full at
confirmation, the Plan proposed utilizes the disposable income of
the Debtor from the business over a period of 60 months to repay
any allowed unsecured claims all disposable income. The Debtor has
continued to perform the Simple Life Construction job that is
expected to last an additional 3-4 months. That project will
produce a temporary surplus of income that will allow the debtor to
purchase supplies and other items for larger jobs in the future.
A full-text copy of the Subchapter V Plan dated November 10, 2022,
is available at https://bit.ly/3ExVL9t from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Bryan Keith Mickler, Esq.
Law Offices of Mickler & Mickler
5452 Arlington Expy
Jacksonville, FL 32211-6860
Office: 904-725-0822
Cell: 904-725-0822
Fax: 904-725-0855
Email: bkmickler@planlaw.com
About Central Florida Civil, LLC
Central Florida Civil, LLC provides a full range of services
relating to site preparation for commercial projects.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Court (Bankr. M.D. Fla. Case No. 22-01736) on August 31,
2022. In the petition signed by Chad M. Converse, manager, the
Debtor disclosed $2,469,641 in assets and $4,873,621 in
liabilities.
Judge Jason A. Burgess oversees the case.
Bryan K. Mickler, Esq., at the Law Offices of Mickler & Mickler,
LLP, is the Debtor's counsel.
CUENTAS INC: Incurs $2.3 Million Net Loss in Third Quarter
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Cuentas Inc. has filed with the Securities and Exchange Commission
its Quarterly Report on Form 10-Q disclosing a net loss of $2.27
million $1.14 million of revenue for the three months ended Sept.
30, 2022, compared to a net loss of $2.41 million on $109,000 of
revenue for the three months ended Sept. 30, 2021.
For the nine months ended Sept. 30, 2022, the Company reported a
net loss of $9.08 million on $2.21 million of revenue compared to a
net loss of $6.08 million on $489,000 of revenue for the same
period in 2021.
As of Sept. 30, 2022, the Company had $7.41 million in total
assets, $2.81 million in total liabilities, and $4.60 million in
total stockholders' equity.
Cuentas said, "To date, we have principally financed our operations
through the sale of our Common Stock. Nevertheless, management
anticipates that our current cash and cash equivalents position and
generating revenue from the sales of our digital products and
General-Purpose Reloadable Cards will provide us limited financial
resources for the near future to continue implementing our business
strategy of further developing our digital products and General
Purpose Reloadable Card, enhance our digital products offering and
increase our sales and marketing. Management has taken important
steps to reduce the financial burn rate and has curtailed some
ineffective marketing programs, concentrating on those programs
that have been proven to produce good results. Reduction of some
top-level personnel has brought savings to the company as current
executives took over the vacant positions at no additional cost to
the Company. Management plans to secure additional financing
sources, including but not limited to the sale of our Common Stock
in future financings. There can be no assurance, however, that the
company will be successful in raising additional capital or that
the company will have net income from operations to fund the
business plan of the company for the near future or long term.
"As of September 30, 2022, the Company had approximately $2,108
thousand in cash and cash equivalents, approximately $291 thousand
in negative working capital and an accumulated deficit of
approximately $47,304 thousand. These conditions raise substantial
doubt about the Company's ability to continue as a going concern.
On August 4, 2022, the Company, sold an aggregate of 1,655,000
shares of the Company’s common stock, $0.001 par value,
pre-funded warrants to purchase up to 2,569,044 shares of Common
and warrants to purchase up to 4,224,044 shares of Common Stock in
consideration of $3.0 million. The net proceeds to the Company,
after deducting placement agent fees and other offering expenses,
were approximately $2.7 million. Company's ability to continue as
a going concern is dependent upon raising capital from financing
transactions and revenue from operations. Management anticipates
their business will require substantial additional investments that
have not yet been secured. Management is continuing in the process
of fund raising in the private equity and capital markets as the
Company will need to finance future activities."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001424657/000121390022071655/f10q0922_cuentasinc.htm
About Cuentas
Headquartered in Miami, Florida, Cuentas, Inc. --
http://www.cuentas.com-- invests in financial technology and
engages in use of certain licensed technology to provide innovative
telecommunications, mobility, and remittance solutions to unserved,
unbanked, and emerging markets. The Company uses proprietary
technology and certain licensed technology to provide innovative
telecommunications and telecommunications mobility and remittance
solutions in emerging markets. The Company also offers wholesale
telecommunications minutes and prepaid telecommunications minutes
to consumers through its Tel3 division.
Cuentas reported a net loss attributable to the company of $10.73
million for the year ended Dec. 31, 2021, a net loss attributable
to the company of $8.10 million for the year ended Dec. 31, 2020, a
net loss attributable to the company of $1.32 million for the year
ended Dec. 31, 2019, and a net loss of $3.56 million for the year
ended Dec. 31, 2018. As of June 30, 2022, the Company had $7.47
million in total assets, $3.63 million in total liabilities, and
$3.84 million in total stockholders' equity.
CUENTAS INC: Jeffrey Lewis Quits as Director
--------------------------------------------
Jeffrey Lewis tendered his resignations as member of the board of
directors of Cuentas Inc. on Nov. 2, 2022.
Mr. Lewis resigned to focus on other endeavors and not in
connection with any disagreements with the Company, according to a
Form 8-K filed with the Securities and Exchange Commission.
About Cuentas
Headquartered in Miami, Florida, Cuentas, Inc. --
http://www.cuentas.com-- invests in financial technology and
engages in use of certain licensed technology to provide innovative
telecommunications, mobility, and remittance solutions to unserved,
unbanked, and emerging markets. The Company uses proprietary
technology and certain licensed technology to provide innovative
telecommunications and telecommunications mobility and remittance
solutions in emerging markets. The Company also offers wholesale
telecommunications minutes and prepaid telecommunications minutes
to consumers through its Tel3 division.
Cuentas reported a net loss attributable to the company of $10.73
million for the year ended Dec. 31, 2021, a net loss attributable
to the company of $8.10 million for the year ended Dec. 31, 2020, a
net loss attributable to the company of $1.32 million for the year
ended Dec. 31, 2019, and a net loss of $3.56 million for the year
ended Dec. 31, 2018. As of June 30, 2022, the Company had $7.47
million in total assets, $3.63 million in total liabilities, and
$3.84 million in total stockholders' equity.
DIFFUSION PHARMACEUTICALS: To Hold Annual Meeting on Dec. 30
------------------------------------------------------------
Diffusion Pharmaceuticals Inc. has changed the date of its 2022
annual meeting of stockholders from Dec. 16, 2022 to Dec. 30, 2022.
Additional details regarding the Annual Meeting, which will be
held virtually by means of remote communication, will be disclosed
in the Company's definitive proxy statement for the Annual Meeting
to be filed with the SEC.
As the date of the Annual Meeting differs by more than 30 days from
the anniversary date of the Company's 2021 annual meeting,
stockholders of the Company who wish to have a proposal, including
nominations of persons for election to the Board and proposals
under Rule 14a-8, considered for inclusion in the Company's proxy
materials for the Annual Meeting must deliver such proposal by
email to the Corporate Secretary at
proxyrequests@diffusionpharma.com, on or before the close of
business on Nov. 20, 2022. To be eligible for inclusion in the
proxy materials for the Annual Meeting, any such proposal must meet
the requirements set forth in the rules and regulations of the SEC
and the Company's bylaws, as amended.
About Diffusion Pharmaceuticals
Diffusion Pharmaceuticals Inc. is an innovative biotechnology
company developing new treatments that improve the body's ability
to bring oxygen to the areas where it is needed most, offering new
hope for the treatment of life-threatening medical conditions.
Diffusion's lead drug TSC was originally developed in conjunction
with the Office of Naval Research, which was seeking a way to treat
hemorrhagic shock caused by massive blood loss on the battlefield.
Diffusion reported a net loss of $24.09 million in 2021, a net loss
of $14.18 million in 2020, and a net loss of $11.80 million in
2019. As of June 30, 2022, the Company had $29.18 million in total
assets, $2.52 million in total current liabilities, and $26.67
million in total stockholders' equity.
ECTOR COUNTY: Assets Sold to Rockland Capital; Amends Unsec. Claims
-------------------------------------------------------------------
ECEC Wind-Down LLC, (f/k/a Ector County Energy Center LLC)
submitted a First Amended Disclosure Statement in support of the
First Amended Liquidating Plan dated November 14, 2022.
The Plan is a liquidating chapter 11 plan that provides for the
proceeds generated through the previously-consummated going concern
sale of substantially all of the Debtor's operating assets free and
clear of all liens, claims, encumbrances, and interests, to be
distributed to holders of Allowed Claims in accordance with the
terms of the Plan and the priority of claims provisions in the
Bankruptcy Code.
Prior to the Petition Date, the Debtor received a bid from Ector
County Generation LLC, an acquisition entity affiliated with
Rockland Capital, LLC (together with its assignees or designees,
"Rockland Capital") to acquire substantially all of Debtor's assets
for payment of $91,250,000, subject to potential adjustments. As
part of its offer, once accepted by the Debtor, Rockland Capital
agreed to serve as "stalkinghorse" bidder ("Stalking-Horse Bidder")
in that its bid would be subject to an overbid process during the
Debtor's chapter 11 case.
Following the Petition Date, the Debtor continued to market its
assets with the assistance of its investment banker in order to
solicit additional bids in higher amounts than submitted by the
Stalking-Horse Bidder in accordance with the bid procedures
approved by the Bankruptcy Court. Ultimately, the Debtor received
an overbid of approximately $96 million from a third-party bidder,
and an auction was scheduled for June 22, 2022 involving the
Stalking-Horse Bidder and that additional bidder.
By the conclusion of the auction conducted by the Debtor and its
investment banking firm, the Stalking-Horse Bidder had increased
its bid to the net amount of $141,556,250, subject to purchase
price adjustments plus an additional amount of up to $2,700,000 in
incentive consideration. The Stalking-Horse Bidder was declared the
highest and best bidder. The sale transaction closed, with the
Acquired Assets having been sold to the Stalking-Horse Bidder as
"Purchaser, " on July 12, 2022. Following the closing of the Sale,
the Debtor held Cash totaling approximately $154,002,000.
The largest portion of the general unsecured claims scheduled
consisted of Direct Energy's Disputed General Unsecured Claim of
$403 million, which liability the Debtor disputed, and ultimately
negotiated terms for allowance of Direct Energy unsecured claim. By
Stipulation, discussed above, ERCOT has also waived the right to
assert a proof of claim against the Debtor for any unfunded
settlement or default uplift charges, with its sole recourse
limited to recoupment against the $12,010.36 remaining cash
deposit. The $401,878,113.82 secured claim scheduled in favor of
the Prepetition Secured Lenders will be satisfied, solely with
respect to the Debtor under the Plan and Plan Support Agreement,
through the $75 million payment to the Prepetition Secured Lenders
in Class 2.
The Scheduled priority debt owing to the Ector County Appraisal
District for the Debtor's share of 2022 property taxes, of
approximately $390,971, has been satisfied in accordance with the
Sale Order. The scheduled priority claim of the PUCT in the amount
of $52,206 will be paid, in full, under the Plan, as will the
priority tax claims asserted by the State of Texas Comptroller's
office of approximately $30,027.41 unless not Allowed.
Class 5 consists of General Unsecured Claims That Are Not Class 6
or Class 7 General Unsecured Claims. Holders of Allowed Class 5
Claims, other than Direct Energy, shall receive, on the Effective
Date or 7 Business Days after such Allowed Class 5 Claim becomes an
Allowed Claim, payment in full in Cash equal to their Allowed
General Unsecured Claim. Direct Energy on the Effective Date shall
receive the balance of the Distributable Value after satisfaction
of or reserve for the Allowed Class 5 Claims not constituting the
Direct Energy Allowed Claim to the extent necessary to satisfy the
Direct Energy Allowed Claim up to the amount of the Direct Energy
Allowed Claim Cap.
In the event that, upon Distribution on the Effective Date of the
Distributable Value, Distributions to Direct Energy total less than
the Direct Energy Allowed Claim Cap, from time to time after the
Effective Date, Direct Energy shall receive payment in Cash of any
amounts released from the reserve established hereunder for Class 5
Claims not constituting Allowed Claims as of the Effective Date and
funds pursuant to the Wind-Down Reserves Waterfall until
Distributions to Direct Energy total an amount equal to the Direct
Energy Allowed Claim Cap. The allowed unsecured claims total 100%.
Class 6 consists of General Unsecured Claims Resulting from Winter
Storm Uri. Holders of Allowed Class 6 Claims shall receive, on
account of such Allowed Class 56 Claims: (i) on the Effective Date,
authority and relief from any stay, injunction, order or
prohibition against liquidating, but not collecting, the amount of
each such Holder's Allowed Class 6 Claim; (ii) on the Effective
Date, authority and relief from any stay, injunction, order or
prohibition against recovering any Allowed Class 6 Claim from and
solely to the extent of the Insurance Policies; and (iii) full
payment of any uninsured balance from and to the extent of the
Class 6 Reserve Amount.
Class 7 consists of Affiliate, Insider, and Inter-Company General
Unsecured Claims. Class 7 Claims are fully subordinated to the
Allowed Claims of all other Claims. Holders of Allowed Class 7
Claims shall receive, on account of such Allowed Class 7 Claims,
Pro Rata Distribution of any Distributable Value and any amounts of
the WindDown Reserves Waterfall remaining after payment in full of
all Allowed Claims in Classes 1 through 6 until such Class 7 Claims
are paid in full.
On the Effective Date or as soon thereafter as is reasonably
practicable, the Distribution Agent shall cause the Cash on Hand to
be used to fund the Wind-Down Reserve Account. The Wind-Down
Reserve Accounts consist of a Cash reserve of no more than $1m
million for Class 5 Claims that are Disputed (other than the Direct
Energy Allowed Claim) plus any potentially filed Rejection Damages
Claims, a reserve of $500,000 to be set aside for holders of
Allowed Class 6 Claims to the extent that those Claims are allowed
as General Unsecured Claims in amounts that exceed available
insurance coverage.
In addition, on the Effective Date, the Debtor or the Disbursing
Agent will cause the Cash received from Invenergy Thermal and
Invenergy Services in return of payments funded by the Debtor prior
to the Petition Date under the Shared Services Agreement of
approximately and $688,770.81 and $40,841.08, respectively, to fund
a Wind Down Account in the amount of $1.25 million to satisfy
post-Effective Date costs and expenses, and quarterly fee
obligations that will become due to the Office of the United States
Trustee.
The Debtor shall also establish the Professional Fee Escrow Account
and shall fund such Professional Fee Escrow Account with Cash on
Hand, in an amount corresponding to the total unpaid amount of the
Professional Fees of the Debtor, the Prepetition Agent and the ad
hoc group of Prepetition Secured Lenders that have been incurred or
are projected to be incurred prior to the Effective Date. Upon the
funds in the WindDown Reserve Accounts becoming unnecessary for
their originally intended purpose, or no longer required to be
held, funds held in those reserves will be released and distributed
in accordance with the Wind-Down Reserves Waterfall.
A full-text copy of the First Amended Disclosure Statement dated
November 14, 2022, is available at https://bit.ly/3TFMArK from
Donlin Recano & Company Inc., claims agent.
Counsel to the Debtor :
Christopher A. Ward, Esq.
Michael V. DiPietro, Esq.
Polsinelli PC
222 Delaware Avenue, Suite 1101
Wilmington, DE 19801
Telephone: (302) 252-0920
Facsimile: (302) 252-0921
Email: cward@polsinelli.com
mdipietro@polsinelli.com
John J. Monaghan, Esq.
Lynne B. Xerras, Esq.
Kathleen M. St. John, Esq.
Holland & Knight LLP
10 St. James Avenue
Boston, MA 02116
Telephone: (617) 523-2700
Facsimile: (617) 523-6850
Email: john.monaghan@hklaw.com
lynne.xerras@hklaw.com
kathleen.stjohn@hklaw.com
- and -
David W. Wirt, Esq.
Phillip W. Nelson, Esq.
150 N. Riverside Plaza, Suite 2700
Chicago, IL 60606
Telephone: (312) 263-3600
Facsimile: (312) 578-6666
david.wirt@hklaw.com
phillip.nelson@hklaw.com
About Ector County Energy Center
Ector County Energy Center, LLC owns and operates a 330 MW natural
gas-fired power generating facility located in Ector County,
Texas.
Due to a large number of lawsuits following the 2021 winter storm,
Ector County Energy Center sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 22-10320) on April 11, 2022. In the
petition signed by CRO John D. Baumgartner, the Debtor estimated
assets between $50 million and $100 million and estimated
liabilities between $500 million and $1 billion.
Judge John T. Dorsey oversees the case.
The Debtor tapped Holland & Knight, LLP as lead bankruptcy counsel;
Polsinelli, PC as local counsel; Locke Lord, LLP and Crowell &
Moring, LLP as special counsels; Perella Weinberg Partners, LP and
Tudor, Pickering, Holt & Co. as investment bankers; and Grant
Thornton, LLP as restructuring advisor. John Baumgartner, managing
director at Grant Thornton, serves as the Debtor's chief
restructuring officer. Donlin Recano & Company Inc. is the claims
agent.
ENVIVA INC: Fitch Assigns 'BB-' Rating on $100MM Unsecured Notes
----------------------------------------------------------------
Fitch Ratings has assigned a 'BB-'/'RR4' rating to Enviva Inc.'s
(EVA; Issuer Default Rating BB-) issuance of $100 million of
30-year tax-exempt unsecured notes due in 2052. The senior
unsecured notes rank pari passu with existing senior unsecured
debt. Proceeds will be used in part to fund the construction of a
new 1.1 million metric tons per year (MTPY) pellet production plant
in Bond, Mississippi. Enviva continues to accelerate their growth
plans and increase production capacity as they scale the business
to meet rising demand. The Rating Outlook is Stable.
EVA's ratings reflect the stable and predictable nature of
contracted cashflows generated by its growing portfolio of wood
pellet production plants, and also reflect its growing customer
base, increasing scale of operations and regulatory support for
biomass.
KEY RATING DRIVERS
New Plant Increases Scale: Enviva is moving forward with the
construction of its new 1.1 million MTPY pellet production plant in
Bond, Mississippi to meet growing customer demand in Europe,
Caribbean and Asia. The Bond plant is the third of four planned
pellet production facilities at company's growing Pascagoula
cluster of assets which includes a deep-water shipping terminal.
This will be the second production plant that will be under
construction at the Pascagoula terminal after the company broke
ground on its plant in Epes, Alabama earlier this year. The Bond
plant is fully contracted and will further increase production
capacity by approximately 15%-20%.
The plant is projected to generate approximately $65 million of
EBITDA per annum, representing an EBITDA investment multiple of
approximately 5.0x, a savings of roughly two turns as compared to
previous investment multiples for new plants under the old MLP
structure.
The equity component of the financing for the new plant was
provided in part through an issuance of $346 million of common
stock in January. The new plant is expected to enter service in
mid-2024.
Volume Growth Under Long-Term Contracts: EVA maintains a robust
pipeline of projects and contracts under negotiation that provide a
pathway for significant growth over the next few years. EVA has a
weighted average remaining term of approximately 14.5 years and
contracted revenue backlog of approximately $21 billion for its
overall contract portfolio. In addition, EVA has a robust backlog
of contracts under negotiation that, if finalized, will allow for
accelerated intermediate-term growth.
EVA's counterparty contracts are primarily take-or-pay contracts
with a fixed price for the entire term of the contract subject to
annual inflation-based adjustment and price escalation.
Creditworthy Counterparties: Enviva's contracts are primarily with
large creditworthy counterparties, and Fitch expects a significant
increase in the diversification of EVA's customer base over the
next few years as Enviva continues to sign additional contracts and
expands its operations in the U.K., Europe (mainly Germany) and,
increasingly, Japan. Enviva continues to grow its customer base and
recently announced four new contracts with European customers
including two in Germany collectively totaling approximately 1
million MTPY with deliveries slated to begin in 2022-2024.
Additionally, Enviva is currently in negotiation with a prospective
state-owned utility customer in Taiwan to supply fuel for its
generating facilities after they announced plans to convert a large
coal plant totaling 4GW to biomass by 2025. The conversion of the
plant to biomass will require the consumption of roughly 1.8
million MTPY of biomass annually and if a contract is finalized,
will result in the need for additional production capacity.
By 2025, the company projects that 50% of its revenues will come
from Japanese customers, with the largest customers representing no
more than 15% of its contracts mix. In 2021, nearly all of EVA's
revenue was generated from six major customers, including Drax
Power Limited (a subsidiary of Drax Group Holdings Limited
[BB+/Stable]), Lynemouth Power Limited, MGT Power, RWE AG
(BBB+/Stable), Orsted A/S (BBB+/Stable) and Sumitomo Corp.
Corporate Reorganization Neutral to Ratings: Enviva's
organizational transformation to a corporate structure from an MLP
is manageable within its current credit profile. In Fitch's view,
construction risk is largely mitigated by EVA's portfolio of
long-term contracted cashflows with creditworthy counterparties,
the experience of the management team, and the maturity of the
design of the wood pellet production facilities including a
relatively short 18-month construction timeline.
Limited Size Constrains Ratings: EVA is growing rapidly, but at
this time its limited size constrains its ratings, with projected
EBITDA ranging from $240 million to $260 million in 2022. This is
modestly lower than prior expectations of $275 million-$300 million
in EBITDA as the company has faced pandemic-related labor,
production, and logistics challenges, a three-month delay of the
in-service date of their Lucedale production plant and higher costs
for purchased wood pellets. These headwinds are largely expected to
be temporary with EBITDA projected to increase to $305 million-$335
million in 2023, consistent with prior expectations.
Leverage Pressured; Deleveraging Expected: Fitch expects leverage
metrics to remain elevated over the next two years as Enviva
focuses on accelerating its capital spending program to support its
growing contract backlog. Fitch expects EBITDA leverage to increase
to 4.5x in 2023 as capex peaks and decline to less than 4.0x in
2025 as capital spending subsides. Due to strong demand the company
is moving forward with ongoing plant expansions and the
construction of its Epes and Bond plants in Alabama and
Mississippi, each with a 1 million MTPY capacity, respectively.
Deleveraging will be primarily due to the realization of a full
year of earnings following the in-service date of the new
production plants, but also reflects organic growth, including
ongoing plant expansions, and assumes the company will maintain its
conservative acquisition financing mix and lower its future plant
EBITDA investment multiples to approximately 5.0x from 7.0x as a
result of the simplification of its organizational structure.
Conservative Financial Strategy: Fitch expects that Enviva will
build six new greenfield plants over the next five years (averaging
one new plant per year), that FCFs will be fully contracted with
creditworthy counterparties, and that they will be financed by a
balanced 50/50 mix of equity and debt. Fitch believes EVA's
publicly stated financial policy supports the current ratings. This
includes achieving a 3.5x-4.0x leverage ratio, maintaining a
forward-looking annual dividend coverage of 1.5x, and targeting a
balanced 50/50 capital structure of equity and debt.
Regulatory Environment Should Remain Supportive: Fitch is concerned
about nascent proposals in the European Union to legislate biomass
as a carbon emitting fuel and not as renewable resource but
believes the regulatory environment in jurisdictions that EVA
serves should remain favorable in the near term. The proposed
change in law can be approved as soon as September as part of the
EU's Renewable Energy Directive and could serve to damper strong
customer demand. However, the backdrop of rising energy prices in
Europe could forestall any changes to regulating biomass in the
near term.
Meanwhile, EVA's core markets in Germany, the U.K. and Japan have
announced aggressive renewable targets and carbon reduction goals,
which should allow EVA to continue to gain market share as European
and Asian utilities, power generators and industrial customers
increasingly use biomass as an economic replacement in coal-fired
generating facilities to meet emissions targets.
The U.K. recently announced that it will cease all coal-fired
generation by October 2024, Germany will phase out coal generation
by 2038 and Japan recently doubled its renewable target to 36%-38%
by 2030.
DERIVATION SUMMARY
EVA is the world's leading supplier of utility-grade wood pellets
to major power generators across the globe. The company's cash flow
is supported by long-term take-or-pay contracts with utilities and
power generators that are currently subsidized by their local
government to produce electricity using renewable energy sources,
such as biomass. There are limited publicly traded comparable
companies for EVA given the size of the biomass sector as well as
the competitive landscape.
EVA is growing rapidly, but exhibits a much smaller scale of
operations than peers with expected annual EBITDA of more than $300
million in the near term. While EVA's credit profile is currently
hindered by its small scale of operations, its ratings are
reflective of long-term take-or-pay contract profile and a
supportive regulatory environment for the biomass industry.
Atlantica Sustainable Infrastructure Plc (AY; BB+/Stable) is a
comparable for EVA in the renewable energy space.
AY is a dividend, growth-oriented company that owns and manages a
diversified portfolio of contracted assets underpinned by long-term
contracts with credit-worthy counterparties in the power and energy
markets. Like EVA, AY generates cash flow under contract prices
with counterparties that benefit from supportive government
policies. However, AY is roughly 3.0x larger than EVA by size and
cash flow.
Fitch projects EVA's FFO leverage will average 4.4x over the next
three years (2022-2024), which is higher compared to AY's gross
leverage ratio (HoldCo debt/CAFD) in the mid- to high-3x range but
is positioned well with respect to the higher rated YieldCo's
negative sensitivity threshold of 4.0x. Sunoco LP (BB+/Stable) is a
comparable within the midstream space, given that Sunoco also
operates in a highly fragmented, competitive wholesale motor fuel
sector. Similar to EVA, Sunoco also has 12-year, take-or-pay fuel
supply agreement with a 7-Eleven subsidiary, under which Sunoco
will supply approximately 2.2 billion gallons of fuel annually.
While EVA's projected leverage is similar to Sunoco's, with YE 2021
FFO leverage at 4.3x and a long-term target of 4.0x, EVA is
one-third the size of Sunoco. Additionally, Fitch also does not
expect Sunoco to have major funding needs in the near term.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Revenue and EBITDA growth driven by increasing wood pellet export
volumes as well as annual inflation and price adjustment under
existing and new contracts;
- Accretive cash flow from construction of new wood pellet
production plants;
- Future construction of production plants averaging one per year
are assumed in forecast periods financed with 50/50 mix of equity
and debt;
- Capex averages $338 million per annum in 2022-2025 with peak
spending in 2023 and declines thereafter;
- Regulatory environment remains supportive for the biomass
industry in the jurisdictions that EVA's customers operate in.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Continued increase in size and scale of operations with EBITDA
greater than $300 million;
- Total debt with equity credit to EBITDA below 4.3x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Significant credit event with counterparties, including
multi-notch downgrade at EVA's major counterparties, which will
impair FCF into EVA;
- Unfavorable changes in regulatory environment with regard to
treatment and subsidies supporting biomass power generation as
renewable generation;
- Capex spending or unfavorable dividend policy that significantly
reduces liquidity or increases leverage;
- Total debt with equity credit to EBITDA above 5.0x.
LIQUIDITY AND DEBT STRUCTURE
Enhanced Liquidity: Since late 2021, EVA has increased its
financial flexibility by amending and extending its secured
revolving credit facility. The credit facility was upsized to $570
million from $525 million, borrowing costs remain the same, and the
maturity was extended by approximately one year to June 2027.
As of Sept. 30, 2022, EVA had approximately $106 million of
liquidity available under its $570 million revolving credit
facility including $8 million of unrestricted cash and cash
equivalents. Fitch expects the company to have adequate liquidity
to finance plant expansions and construction, fund its working
capital needs and dividend distributions in the near term.
To alleviate financing needs in the short term, management has
issued approximately $346 million of equity in January.
ISSUER PROFILE
Enviva Inc. is the world's largest supplier of utility-grade wood
pellets to major power generators by production capacity. The
company procures wood fiber and processes it into utility-grade
wood pellets, which are then transported to their customers
overseas through vessels via its deep-water ports in Virginia,
North Carolina and Mississippi and marine terminals in Georgia,
Alabama and Florida.
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
----------- ------ --------
Enviva Inc.
senior unsecured LT BB- New Rating RR4
ENVIVA INC: S&P Rates New $100MM Unsecured Tax-Exempt Bonds 'B+'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '5'
recovery rating to Enviva Inc.'s proposed $100 million senior
unsecured tax-exempt bonds due 2032. The '5' recovery rating
indicates its expectation for modest (10%-30%; rounded estimate:
20%) recovery in the event of default.
The proceeds from the tax-exempt bonds are limited to funding costs
associated with the new plant in Bond, Miss., and cannot be used
for general corporate purposes. Upon closing of the issuance,
proceeds will be placed in an account with a trustee, and Enviva
will drawdown on the funds as needed to fund the development,
construction, and ramp-up costs related to the new plant. The plant
will have capacity to produce more than 1 million metric tons per
year (MTPY) of wood pellets and will export from Enviva's terminal
at the Port of Pascagoula.
S&P's 'BB-' long-term issuer credit rating (ICR) and negative
outlook on the company are unchanged. The negative outlook reflects
its expectation that S&P Global Ratings-adjusted leverage will peak
in 2022 and decline in 2023.
Enviva is a producer and distributor of utility-grade wood pellets
for major power generators. The company sells most of its wood
pellets to customers in Europe, the U.K., and Japan. Enviva owns
and operates 10 plants in Florida, Georgia, Mississippi, North
Carolina, South Carolina, and Virginia, with a combined production
capacity of about 6.2 million metric tons of wood pellets per year.
The company builds fully contracted plants and port facilities. It
also exports wood pellets through its owned marine terminal assets
at the Port of Chesapeake, Va., and the Port of Wilmington, N.C.;
and from third-party marine terminals in Mobile, Ala., Panama City,
Fla., and Savannah, Ga.
ISSUE RATING—RECOVERY ANALYSIS
S&P said, "We assigned a 'B+' issue-level rating and '5' recovery
rating to Enviva's proposed senior unsecured tax-exempt bonds due
2032. The '5' recovery rating on the debt reflects our view that
lenders could expect a modest recovery in the event of default."
KEY ANALYTICAL FACTORS
S&P said, "Our simulated recovery scenario contemplates a default
in 2026 due to a decline in Enviva's EBITDA below the company's
consolidated fixed charges and debt maturities. We assume a decline
due to volumetric decreases in pellet demand caused by regulatory
changes. We have also taken into consideration in our valuation the
growth of the company from an EBITDA perspective.
"We believe that Enviva's underlying business would continue to
have considerable value and expect that the company would emerge
from bankruptcy with about $163 million in EBITDA."
Simulated default assumptions
-- Year of default: 2026
-- Default year EBITDA: $163 million
-- Implied enterprise value multiple: 5x
-- S&P assumes the company's $570 million revolver is 85% drawn
-- S&P includes the $100 million tax-exempt bonds in our measure
of senior unsecured debt
Simplified waterfall
-- Net enterprise value after 5% administrative costs: $775
million
-- Secured first-lien debt claims: $505 million
--Recovery expectations: N/A
-- Value available to senior unsecured debt: $270 million
-- Senior unsecured debt claims: $1.2 billion
--Recovery expectations: 10%-30% (rounded estimate: 20%)
Note: All debt amounts include six months of prepetition interest.
Ratings List
RATINGS AFFIRMED
ENVIVA INC.
Issuer Credit Rating BB-/Negative/-- BB-/Negative/--
ISSUE-LEVEL RATINGS AFFIRMED
ENVIVA INC.
ENVIVA PARTNERS FINANCE CORP.
Senior Unsecured B+ B+
Recovery Rating 5(20%) 5(20%)
NEW RATING
ENVIVA INC.
Senior Unsecured
USD tax exempt fac rev bnds (Enviva Inc. Proj)
(Green Bonds) series 2022 B+
Recovery Rating 5(20%)
EXPRESSJET AIRLINES: Unsecureds to Recover 9.5% to 10.7% in Plan
----------------------------------------------------------------
ExpressJet Airlines LLC submitted a First Amended Combined
Disclosure Statement and Chapter 11 Plan dated November 14, 2022.
Pursuant to the sale process, JSX Holdings, LLC, submitted a
proposal for substantially all the Debtor's assets by the proposal
deadline of September 30, 2022, for a purchase price of $9,000,000.
The Debtor, in a sound exercise of its business judgment,
determined that the Purchaser's proposal, as subsequently improved,
was the highest and best bid for the assets and therefore the
winning proposal.
The Debtor anticipates the sale approved by the Sale Order will
close on or before November 18, 2022. The Debtor expects the sale
of the remaining physical assets to yield approximately $9,000,000
in net proceeds for the benefit of the Debtor's Estate and its
creditors.
Following the sale of substantially all the Debtor's physical
assets to the Purchaser, the Debtor is focused principally on
winding down its business and preserving Cash held in the Estate.
The Debtor's Retained Assets currently consist of proceeds of the
sale to the Purchaser and certain Causes of Action. The Debtor also
has the Reorganization Assets. Under the Liquidation Toggle, this
Plan provides for the Debtor's Retained Assets to be distributed to
Holders of Allowed Claims in accordance with the terms of the Plan.
Under the Reorganization Toggle, this Plan provides for the
Reorganization Assets to vest in the Reorganized Debtor free and
clear of all Liens, claims, and encumbrances. The Plan Sponsor will
make the Plan Sponsor Contribution in exchange for the New Equity
Interests of the Reorganized Debtor. The Debtor's Retained Assets
and the Plan Sponsor Contribution will then be distributed to
Holders of Allowed Claims in accordance with the terms of the Plan.
Class 3 consists of Convenience Claims. Each Holder of an Allowed
Convenience Claim shall receive, in full and final satisfaction,
settlement, and release of and in exchange for its Allowed Class 3
Claim, payment in Cash equal to 50% of such Allowed Convenience
Claim on the Effective Date or as soon thereafter as reasonably
practicable. Class 3 initially shall consist of all General
Unsecured Claims that total $5,000 or less.
Payment to Class 3 is in lieu of any treatment as a Holder of a
Class 4 Claim. Any unsecured creditor with a General Unsecured
Claim that is above $5,000 electing treatment as a Convenience
Claim must affirmatively do so on its Class 4 Ballot. The amount of
claim in this Class total $146,000. This Class will receive a
distribution of 50% of their allowed claims.
Class 4 consists of General Unsecured Claims. Each Holder of an
Allowed General Unsecured Claim shall receive, in full and final
satisfaction, settlement, and release of and in exchange for its
Allowed Class 4 Claim, its Pro Rata share of the General Unsecured
Claim Distribution Fund. The allowed unsecured claims total $30.5
million. This Class will receive a distribution of 9.5% – 10.7%
of their allowed claims.
Class 6 consists of Equity Interests. If the Liquidation Toggle is
selected, then, on the Effective Date, all Existing Equity
Interests shall be deemed canceled, extinguished and discharged and
of no further force or effect, and the Holders of Existing Equity
Interests shall not be entitled to receive or retain any property
on account of such Interests.
If the Reorganization Toggle is selected, then, on the Effective
Date, all Existing Equity Interests shall be deemed canceled,
extinguished and discharged and of no further force or effect, and
the Holders of Existing Equity Interests shall not be entitled to
receive or retain any property on account of such Interests, and
100% of the New Equity Interests will be issued to the Plan Sponsor
in exchange for the Plan Sponsor Contribution.
The Debtor shall continue in existence after the Effective Date as
the Post-Effective Date Debtor for purposes of (1) winding down the
Debtor's Estate as expeditiously as reasonably possible and
liquidating any non-Cash Retained Assets held by the Post Effective
Date Debtor after the Effective Date, (2) resolving any Disputed
Administrative Claims, Priority Tax Claims, Secured Claims, Other
Priority Claims, Convenience Claims, and General Unsecured Claims,
(3) paying Allowed Claims in accordance with this Plan, (4)
enforcing and prosecuting claims, interests, rights, and privileges
under any Causes of Action in an efficient manner and only to the
extent the benefits of such enforcement or prosecution are
reasonably believed to outweigh the costs associated therewith, (5)
filing appropriate tax returns, and (6) administering the Plan in
an efficacious manner.
On the Effective Date, the Retained Assets and Reorganization
Assets shall vest in the Post-Effective Date Debtor for the purpose
of liquidating the Estate and consummating the Plan. The Retained
Assets and Reorganization Assets shall be held free and clear of
all Liens, Claims, and Interests of Holders of Claims and
Interests, except as otherwise provided in the Plan. Any
Distributions to be made under the Plan from the Retained Assets or
General Unsecured Claim Distribution Fund shall be made by the Plan
Administrator or his, her or its designee. The Post-Effective Date
Debtor and the Plan Administrator shall be deemed to be fully bound
by the terms of the Plan and the Confirmation Order.
The Confirmation Hearing has been scheduled for December 20, 2022
at 2:00 p.m. to consider final approval of the combined Disclosure
Statement and Plan and confirmation of the Plan.
A full-text copy of the First Amended Combined Disclosure Statement
and Plan dated November 14, 2022, is available at
https://bit.ly/3V7jkvn from Epiq Corporate Restructuring LLC,
claims agent.
Counsel to the Debtor:
Eric D. Schwartz, Esq.
Matthew B. Harvey. Esq.
Paige N. Topper, Esq.
Jonathan M. Weyand, Esq.
Sophie Rogers Churchill, Esq.
Morris, Nichols, Arsht & Tunnell LLP
1201 North Market Street, 16th Floor
Wilmington, DE 19899-1347
Telephone: (302) 658-9200
Facsimile: (302) 658-3989
Email: eschwartz@morrisnichols.com
mharvey@morrisnichols.com
ptopper@morrisnichols.com
jweyand@morrisnichols.com
srchurchill@morrisnichols.com
About Expressjet Airlines
ExpressJet Airlines, LLC -- https://expressjet.com/ -- is a
regional U.S. airline headquartered in College Park, Ga.
ExpressJet Airlines sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 22-10787) on Aug. 23,
2022, with between $10 million and $50 million in both assets and
liabilities. John Greenlee, president of ExpressJet Airlines,
signed the petition.
Morris, Nichols, Arsht & Tunnell, LLC and Eversheds Sutherland
(US), LLP serve as the Debtor's bankruptcy counsel and special
counsel, respectively. Epiq Corporate Restructuring, LLC is the
claims and noticing agent and administrative advisor.
FREE SPEECH: Hook Families Want Another $320M Damages to Cover Cost
-------------------------------------------------------------------
Edmund H. Mahony of aawHartford Courant (TNS) reports that Sandy
Hook families want another $320 million in damages to cover costs
of suing Alex Jones in Connecticut.
The Sandy Hook families who won nearly $1 billion from far-right
broadcaster Alex Jones want another $320 million or so more to
cover their legal costs, along with court orders that would force
him to produce an accounting of his assets and block what they
describe as his “fraudulent” attempts to conceal them.
The $320 million or so for legal fees and expenses — should
Superior Court Judge Barbara Bellis accept the figure — would
comprise one category of punitive damages the jury awarded against
Jones on Oct. 12. The jury also said Jones is liable for another
yet-to-be determined and potentially far greater punitive award for
violating the state's unfair trade practices law, known by the
acronym CUTPA.
Punitive damages are awarded for especially egregious behavior.
They are separate from the $965 million award, which the jury said
is compensation for the relatives and one first responder who sued
Jones for a decade of abuse from people who believe his claims that
the 2012 school massacre was a hoax and they are actors in a scheme
contrived by opponents of gun ownership.
The hearing Friday, November 4, 2022, ended without a resolution
and will resume Monday, when Bellis said she will hear arguments
about both legal and CUTPA punitive damages. Lawyers for the
families have provided Bellis with a calculation suggesting CUTPA
punitive damages of $2.75 trillion are reasonable based on the
hundreds of millions of times Jones’ Sandy Hook denials were
accessed, repeated and shared on the internet.
Bellis will decide the amount of both punitive damage awards in
coming weeks.
Lawyers following the case have said no one believes Jones will
produce billions or trillions of dollars in damages. But if a high
damage award survives an appeal and Jones’ anticipated moves in
bankruptcy court, they said aggressive collection efforts could put
him in the position of having to give up most of what he has and
much of his future income.
An economist testified in a related suit in Texas last summer that
Jones and his principal business, Free Speech Systems, are worth as
much as $270 million, an estimate that Jones said is too high.
Jones has put the company into bankruptcy, but has not filed for
personal bankruptcy.
The family lawyers, the Bridgeport firm Koskoff, Koskoff and
Bieder, said in a filing with the court that they are basing the
claim for legal costs on a one-third contingency agreement with the
15 plaintiffs in the suit. In addition, they said they had about
$1.5 million in costs.
The costs involved, among other things, payments to expert
witnesses, payments to Texas bankruptcy lawyers hired to combat
Jones’ attempts to delay the suit or protect assets, hundreds of
thousands of dollars for electronic data collection, 38 depositions
and travel.
The family lawyers also filed papers asking Bellis to issue orders
that would set in motion what likely would be years of efforts to
collect from Jones by attaching assets and compelling him to
identify and, in some cases produce, everything he owns or expects
to earn.
"There is a reasonable likelihood that Jones is about to and will
continue to fraudulently dispose of or has fraudulently disposed of
any of his money, property, or effects with intent to hinder, delay
or defraud his creditors, and there is reasonable likelihood that
Jones has fraudulently hidden or withheld money, property or
effects which should be liable to the satisfaction of his debts,"
the lawyers said.
Jones’ lawyer, Norm Pattis, has filed papers with the court
indicating he intends to press an array of challenges — to
Bellis’ rulings before and during trial, to the verdict and to
the calculation of damages by the plaintiffs.
In his filings with the court, Pattis said that because the jury
delivered an extraordinary compensatory verdict of nearly $1
billion, Bellis should award only "nominal" punitive damages for
legal expenses and CUTPA violations. Pattis also has filed motions
asking that the verdict be set aside or reduced.
Bellis has set a schedule that suggests briefing and arguments
about post verdict questions and damage awards could continue
through the end of the year. Jones has promised repeatedly to
appeal, but so far has done nothing to act on the promise.
Fifteen people sued Jones in the Connecticut case — parents,
spouses and siblings of the 20 first graders and six educators
murdered when a gunman shot his way into Sandy Hook Elementary
School in Newtown with an assault rifle, and an FBI agent who
rushed to the scene on Dec. 14, 2012. Within hours of the murders,
as relatives came to grips with their losses, Jones began what
would become years of bombastic broadcasts to an audience of
millions claiming that the relatives were actors in a phony
production staged to win support for gun control.
The relatives testified about being confronted by complete
strangers, at their homes, at shopping malls and while walking
along a city street 3,000 miles from Newtown. All said they were
the targets of what one parent called a full-on assault on social
media. The daughter of the murdered Sandy Hook Elementary School
principal said she received rape threats in the mail. Another
parent said a Sandy Hook denier threatened to dig up his son’s
grave to prove he had not been killed.
It was the second big verdict against Jones for spreading lies and
harassing relatives of Sandy Hook victims. In August 2022, a jury
in Texas awarded nearly $50 million in compensatory and punitive
damages to the parents of a murdered first grader who sued Jones
there. A third suit is pending in Texas.
In February 2022, relatives of Sandy Hook victims settled a lawsuit
against the company that made the assault rifle used in the
shooting for $73 million.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is the Debtor's counsel.
FREE SPEECH: Trial of Alex Jones Moves to Punitive Damages Stage
----------------------------------------------------------------
David Collins of 16 ABC WAPT reports that Infowars host Alex Jones
is facing the possibility of having more penalties heaped onto the
amount he already owes for spreading conspiracy theories about the
Sandy Hook Elementary School shooting, as the punitive damages
phase of his Connecticut trial is set to begin Friday in a lawsuit
filed by the victims' families.
A jury last month ordered Jones and his company, Free Speech
Systems, to pay nearly $1 billion in compensation to the Sandy Hook
families for the harm they suffered when he persuaded his audience
that the 2012 shooting that killed 26 people was a hoax perpetrated
by "crisis actors."
The jury also said punitive damages should be awarded. That amount
will be determined by Judge Barbara Bellis following evidentiary
hearings set for Friday, November 4, 2022, and Monday, November 7,
2022.
The plaintiffs' lawyers, in court filings, suggested punitive
damages could total $2.75 trillion based on one hypothetical
calculation, but have not asked for a specific amount.
"Justice requires that the Court's punitive damages award, punish
and deter this evil conduct," attorneys Alinor Sterling,
Christopher Mattei and Joshua Koskoff wrote in a motion. "Only a
punitive damages assessment of historic size will serve those
purposes."
Jones' lawyer, Norm Pattis, is arguing that any punitive damages
should be minimal, in part because the $1 billion compensatory
damages award is the functional equivalent of punitive damages due
to its extremely large amount.
"Few defendants alive could pay damages of this sum," Pattis wrote.
"Indeed, most defendants would be driven into bankruptcy, their
livelihood destroyed, and their future transformed into the bleak
prospect of a judgment debtor saddled for decades with a debt that
cannot be satisfied. To regard this as anything other than
punishment would be unjust."
Pattis did not return a message seeking comment. Mattei declined to
comment.
All the plaintiffs, including relatives of eight of the shooting
victims and an FBI agent who responded to the school, gave
emotional testimony during the trial, describing how they have been
threatened and harassed for years by people who believe the
shooting didn't happen.
Strangers showed up at some of their homes and confronted some of
them in public. People hurled abusive comments at them on social
media and in emails. And some said they received death and rape
threats.
Jones was found liable last year for damages to the families for
defamation, infliction of emotional distress and violating
Connecticut's Unfair Trade Practices Act. Although punitive damages
are generally limited to attorneys' fees for defamation and
infliction of emotional distress, there are no such limits for
punitive damages under the Unfair Trade Practices Act.
In a calculation in a plaintiffs' court filing, they said Jones'
comments about Sandy Hook were viewed an estimated 550 million
times on his and Infowars' social media accounts from 2012 to 2018.
They said that translated into 550 million violations of the Unfair
Trade Practices Act.
"If each of the 550 million violations were assessed at the $5,000
statutory maximum, the total civil penalty would be
$2,750,000,000,000 ($2.75 trillion)," their attorneys wrote.
They also said punitive damages for violations of the unfair trade
practices law typically are multiple times more than compensatory
damages.
As for legal fees, the plaintiffs and their lawyers have a retainer
agreement stipulating the law firm, Koskoff, Koskoff & Bieder, will
get one-third of any compensatory damages recovered from Jones and
Free Speech Systems. The firm says its legal costs in the case have
been nearly $1.7 million so far.
Jones has said on his Infowars show that it doesn't matter how
large the damages awards are, because he doesn't have $2 million to
his name and he wouldn't be able to pay the full amounts.
That contradicted testimony at a similar trial in Texas in August,
when a jury ordered Jones to pay nearly $50 million to the parents
of one of the children killed in the Sandy Hook shooting due to his
lies about the massacre.
A forensic economist testified that Jones and Free Speech Systems,
Infowars' parent company, have a combined net worth as high as $270
million, which Jones disputes. Free Speech Systems filed for
bankruptcy protection in the middle of the trial in Texas, while a
third trial over the hoax conspiracy is planned around the end of
the year.
Jones hawks nutritional supplements, survival gear and other
products on his show. Evidence at the Connecticut trial showed his
sales spiked around the time he talked about the Sandy Hook
shooting — leading the plaintiffs' lawyers to say he was
profiting off the tragedy.
In documents recently filed in Free Speech Systems' bankruptcy
case, a budget for the company for Oct. 29 to Nov. 25 estimated
product sales would total $2.5 million, while operating expenses
would be about $740,000. Jones' salary was listed at $20,000 every
two weeks.
Jones has vowed to appeal all the verdicts against him related to
Sandy Hook.
About Free Speech Systems
Free Speech Systems LLC is a broadcast media production and
distribution company that provides broadcasting aural programs by
radio to the public. Free Speech Systems is a family-run business
founded by Alex Jones.
FSS is presently engaged in the business of producing and
syndicating Jones' radio and video talk shows and selling products
targeted to Jones' loyal fan base via the Internet. Today, FSS
produces Alex Jones' syndicated news/talk show (The Alex Jones
Show) from Austin, Texas, which airs via the Genesis Communications
Network on over 100 radio stations across the United States and via
the internet through websites including Infowars.com.
Due to the content of Alex Jones' shows, Jones and FSS have faced
an all-out ban of Infowars from mainstream online spaces. Shunning
from financial institutions and banning Jones and FSS from major
tech companies began in 2018.
Conspiracy theorist Alex Jones has been sued by victims' family
members over Jones' lies that the 2012 Sandy Hook Elementary School
shooting was a hoax.
Jones' InfoW LLC and affiliates, IWHealth, LLC and Prison Planet
TV, LLC, filed petitions under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 22-60020) on April
18, 2022.
The Debtors agreed to the dismissal of the Chapter 11 cases in June
2022 after the Sandy Hook victim families dismissed the three
bankrupt companies from their lawsuits.
Free Speech Systems filed a voluntary petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex.
Case No. 22-60043) on July 29, 2022. In the petition filed by W.
Marc Schwartz, as chief restructuring officer, the Debtor reported
assets and liabilities between $50 million and $100 million.
Melissa A Haselden has been appointed as Subchapter V trustee.
Raymond William Battaglia, of Law Offices of Ray Battaglia, PLLC,
is the Debtor's counsel.
G.D. III: Court Okays Appointment of Chapter 11 Trustee
-------------------------------------------------------
A U.S. bankruptcy judge approved the appointment of an independent
trustee to oversee the Chapter 11 case of G.D. III, Inc.
Judge Michelle Harner of the U.S. Bankruptcy Court for the District
of Maryland approved the appointment of Patricia Jefferson, a
principal at Miles & Stockbridge P.C., to take over G.D. III's
bankruptcy case, citing the "absence of effective internal
controls, disclosure and information deficiencies, and the failure
to file the required monthly operating reports" by the company.
On Nov. 4, the U.S. Trustee for Region 4 asked the bankruptcy judge
to approve Ms. Jefferson's appointment following the examiner's
initial report, which showed G.D. III's failure to keep adequate
records of the profitability of its projects, including the Hanover
project.
During his investigation, the examiner discovered that Lakewood
Commercial Funding is providing a revolving construction loan
related to the Hanover project and that draws and reimbursements to
George Divel, III, president of G.D. III, were coming from that
lending rather than from funds from Hanover's own operations as Mr.
Divel has testified.
"G.D. III is not trustworthy. Its prior performance has resulted in
an order to George Divel III to disgorge $454,434, and creditors
cannot have any confidence in present management in light of the
examiner's report," the U.S. Trustee said in court papers.
About G.D. III
G.D. III, Inc. is a Baltimore-based company engaged in renting and
leasing real estate properties.
G.D. III filed its voluntary petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D. Md. Case No. 22-12393) on May 3,
2022, with $6,500,000 in assets and $7,549,273 in liabilities.
George Divel, III, president of G.D. III, signed the petition.
Judge Michelle M. Harner presides over the case.
Timothy Mummert, Esq., at Mummert Law Firm and Richard Fleischer,
CPA serve as the Debtor's legal counsel and accountant,
respectively.
GARRETT MOTION: Explores Various Options Including Sale
-------------------------------------------------------
Kiel Porter and Gillian Tan of Bloomberg News reports that Garrett
Motion Inc., a maker of turbochargers and other automotive
equipment, is exploring strategic options including a sale,
according to people familiar with the matter. The stock rose as
much as 17%.
The Rolle, Switzerland-based company is working with an adviser on
a possible sale, said the people, who asked not to be identified
because they weren't authorized to speak publicly. Garrett is
expected to attract interest from companies looking to enhance
their electric-vehicle operations, one of the people said. Nothing
is imminent, the people added.
"We do not comment on rumors or speculation," a representative for
Garrett said in an emailed statement.
Garrett, originally known as Honeywell Transportation Systems, was
spun off in 2018. It filed for Chapter 11 bankruptcy protection in
2020 after struggling with loan repayments. The company emerged
from bankruptcy last year with the support of stakeholders
including Centerbridge Partners and Oaktree Capital Management,
according to a statement.
Led by President and Chief Executive Officer Olivier Rabiller,
Garrett makes turbo-charging systems for electrified vehicles. It
generated about $3.6 billion in revenue in 2021.
About Garrett Motion
Based in Switzerland, Garrett Motion Inc. (NYSE: GTX) designs,
manufactures, and sells highly engineered turbocharger and
electric-boosting technologies for light and commercial vehicle
original equipment manufacturers and the global vehicle and
independent aftermarket.
Garrett Motion and its affiliates sought Chapter 11 protection
(Bankr. S.D.N.Y. Lead Case No. 20-12212) on Sept. 20, 2020. Garrett
disclosed $2.066 billion in assets and $4.169 billion in
liabilities as of June 30, 2020.
The Debtors tapped Sullivan & Cromwell LLP as counsel, Quinn
Emanuel Urquhart & Sullivan LLP as co-counsel, Perella Weinberg
Partners, and Morgan Stanley & Co. LLC as investment bankers, and
AlixPartners LP as restructuring advisor. Kurtzman Carson
Consultants LLC is the claims agent.
On October 5, 2020, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors in the Debtors' Chapter
11 cases. White & Case LLP and Conway MacKenzie, LLC, serve as the
creditors' committee's legal counsel and financial advisor,
respectively.
The U.S. Trustee also appointed an official committee to represent
equity security holders in the Debtors' cases. The equity committee
tapped Glenn Agre Bergman & Fuentes LLP as its legal counsel, MAEVA
Group LLC as a financial advisor, and Cowen and Company, LLC as an
investment banker.
Centerbridge Partners, L.P., and Oaktree Capital Management, L.P.,
as Plan Sponsors are represented in the case by Milbank as legal
counsel and Houlihan Lokey, Inc., as financial advisor.
Kirkland & Ellis is legal counsel to Honeywell, and TRS Advisors
LLC and Centerview Partners LLC are its financial advisors.
Jones Day is s legal counsel to each Additional Investor, and
Rothschild & Co. is their financial advisor.
Fried, Frank, Harris, Shriver & Jacobson LLP, is the legal counsel
and Ducera Partners LLC, is the financial advisor to The Baupost
Group, LLC.
Ropes & Gray LLP is the legal counsel, and Moelis & Co., the
financial advisor to the Consenting Noteholders.
Gibson, Dunn & Crutcher LLP, is the legal counsel and PJT Partners
LP the financial advisor to the Consenting Lenders.
GATEWAY CASINOS: Moody's Ups CFR & Senior Secured Term Loan to B3
-----------------------------------------------------------------
Moody's Investors Service upgraded Gateway Casinos & Entertainment
Limited's corporate family rating to B3 from Caa1, the probability
of default rating to B3-PD from Caa1-PD and the senior secured term
loan rating to B3 from Caa1. The rating outlook is stable.
"The upgrade reflects the expected improvement in Gateway's
near-term operating performance with the re-opening of all casino
properties within its Ontario, British Columbia and Alberta
footprints." said Jason Mercer, Vice President – Senior Analyst
at Moody's. "However, Moody's believe Gateway will continue to face
challenges from its leverage, which reduces its financial
flexibility, as well as from a decelerating economy which will
reduce customer traffic."
Upgrades:
Issuer: Gateway Casinos & Entertainment Limited
Corporate Family Rating, Upgraded to B3 from Caa1
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
Senior Secured 1st Lien Term Loan, Upgraded to B3 (LGD4) from Caa1
(LGD4)
Outlook Actions:
Issuer: Gateway Casinos & Entertainment Limited
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Gateway's credit profile benefits from: (1) strong market position
protected by substantial barriers to entry through a provincial
licensing system; (2) favorable regulatory frameworks including
capital incentive programs to support the casino operator's
recovery from pandemic-mandated shut downs; (3) adequate liquidity;
(4) a stable pre-pandemic operating and property development track
record; and (5) a normalization of customer traffic following the
end of pandemic restrictions.
However, its profile is constrained by: (1) high leverage, with
Moody's adjusted debt to EBITDA projected to remain at 6.9x by year
end 2023; (2) increasing debt servicing costs in a rising interest
rate environment; and (3) historically aggressive financial
policies but currently tempered by restrictive provisions within
its senior secured term loan.
Gateway's adequate liquidity reflects Moody's estimates, as of June
30, 2022, that its cash on hand of CAD250 million compares well to
cash outflows of close to CAD44 million through year end 2023
largely from mandatory debt and lease repayments. The company does
not have access to a committed revolving credit facility. Moody's
expects that free cash flow generation will be essentially
break-even as Gateway maintains its debt maintenance obligations
and completes a previously committed renovation and expansion to an
existing property. Moody's assumes the company does not elect the
partial PIK option under the term loan, available through May 2023.
Gateway is required to maintain maximum net leverage ratio of 8x,
stepping down to 7x beginning with the quarter ended December 2023.
About CAD30 to CAD35 million of cash will form part of the cash
float for the operation in Ontario. Moody's has assumed the British
Columbia Lottery Corporation (BCLC) will supply the company's cash
float in British Columbia through until at least December 2022.
Gateway's secured first lien term loan is rated B3, at the same
level as the CFR, since it represents the preponderance of
liabilities in the capital structure.
The stable outlook reflects Moody's expectation that Gateway will
sustain its current leverage level as operations normalize while
maintaining adequate liquidity over the next 12 to 18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if adjusted debt/EBITDA is
sustainable under 6x (7x expected for FYE 2022); EBIT/Interest
remains above 2x (1.0x expected at YE 2022); and capital projects
are successfully completed while adequate liquidity is maintained.
The ratings could be downgraded if liquidity weakens; adjusted
debt/EBITDA is sustained above 8x; or if operational performance is
impacted by repeat casino closures or a slower than anticipated
recovery.
The principal methodology used in these ratings was Gaming
published in June 2021.
Gateway, headquartered in Burnaby, British Columbia, Canada, is a
privately-owned gaming and entertainment company and second largest
non-government gaming operator in Canada. The company is
majority-owned (74%) by The Catalyst Capital Group Inc. (Catalyst),
a private equity firm. Tennebaum Capital Partners, LLC is a
minority owner.
HERBALIFE NUTRITION: S&P Downgrades ICR to 'B+', Outlook Negative
-----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
Herbalife Nutrition Ltd. to 'B+' from 'BB-' because S&P believes
macroeconomic headwinds including high inflation have reduced
consumer demand for the company's products. S&P also believes
challenges recruiting productive new members might persist, though
recognize a potential worsening of labor market conditions could
ease this headwind. S&P forecasts S&P Global Ratings-adjusted
leverage will deteriorate to around 4x in 2022.
S&P said, "We also lowered our issue-level ratings on the senior
secured debt to 'BB' from 'BB+' and on the senior unsecured debt to
'B+' from 'BB-'. The '1' recovery rating on the senior secured debt
remains unchanged while we revised the recovery rating on the
senior unsecured debt to '4' because of sizable declines in the
company's Chinese market and exit from Russia.
"The negative outlook reflects the potential for a lower rating
anytime over the next 12 months if Herbalife is not able to prevent
further EBITDA deterioration, resulting in forecasted adjusted
leverage sustained above 4.5x. We could also lower the rating if
the company is unable to stabilize and improve performance ahead of
sizable upcoming debt maturities; or if we believe recent
distributor challenges are permanent--resulting in a weaker
business risk assessment.
"We believe macroeconomic headwinds and challenges recruiting
productive new members will persist into 2023, which will delay
meaningful credit ratio improvement. The direct selling industry
continues to face difficulties in recruiting and motivating its
members, especially members that joined the industry in 2021.
Additionally, a tight labor market and wider availability of
full-time opportunities have reduced the company's ability to
recruit and motivate new members effectively. While we continue to
consider Herbalife as a more resilient and geographically diverse
business than some of the other direct sales companies we rate,
Herbalife is not immune to weakening industry trends depicted by a
25% drop-off in its S&P Global Ratings-adjusted EBITDA over the
last 12 months compared with the same period last year, resulting
in its S&P Global Ratings-adjusted leverage deteriorating to 3.9x
as of September 2022 from about 3.0x as of September 2021.
"Except for India, the company reported weaker performance in
almost all of its other large regions including China, Western
Europe, and the U.S., and we expect this will continue into 2023
exacerbated by supply chain headwinds and significant input cost
inflation. Our base case economic forecast now reflects a shallow
recession in the U.S. in 2023, which could make it easier for the
company to attract members. However, we believe end-customer demand
has substantially weakened from 2021 levels partly because of
generally high inflation and the magnitude of pricing increases
implemented.
"We assume adjusted EBITDA will decline around 15% in 2023 compared
with pre-pandemic levels because of the aforementioned factors, and
partially offset by modest restructuring initiatives and prudent
discretionary spending. Consequently, we now expect adjusted
leverage of around 4.0x at end of 2022, and around 3.8x at end of
2023 following material debt repayment. In our opinion, the
guidance withdrawal likely signals unusually high volatility that
management is currently seeing in its business.
"Our base case forecast assumes that Herbalife will prudently
manage free operating cash flow (FOCF), including scaling back
share repurchases, to manage sizable debt maturities over the next
three years. We assume no further share repurchases in 2022 and an
immaterial amount in 2023 as Herbalife prepares to tackle its
upcoming debt maturities, the earliest being its $550 million
2.625% convertible notes due March 15, 2024 (though $200 million
may need to be repaid by Sept. 15, 2023, to prevent the start of a
credit facility maturity acceleration if certain leverage
thresholds are exceeded). We estimate the company will meet the
relevant leverage thresholds when required (beginning in September
2023) and will not trigger any acceleration of its bank debt
maturity (see liquidity section for details). This also includes
our assumption that the company will proactively redeem a
sufficient amount of convertible notes to avoid a bank facility
maturity acceleration in 2023, although this may not be required.
"Nevertheless, we believe it's possible Herbalife may not be able
to refinance its term loans at satisfactory terms (including
materially higher interest rates) when they become due if credit
markets remain weak and the company is unable to improve
performance.
"We expect the company will continue to generate positive FOCF over
the forecasted period, although below the levels generated over the
past five years. Our FOCF also includes our expectations for higher
capital expenditures (capex) reflecting the company's ongoing
investments required for Herbalife One, an initiative centered
around launching a new single digital platform that creates a
simplified and integrated experience for distributors and
customers. The company expects to spend an incremental $250 million
over the next three years on this investment.
"The negative outlook reflects the potential for a lower rating
over the next 12 months if Herbalife is not able to prevent further
EBITDA deterioration, resulting in forecasted adjusted leverage
sustained above 4.5x."
This could result if the company is unable to:
-- Improve performance ahead of sizable debt maturities in
2024-2025;
-- Re-energize the distributor base, particularly the number and
productivity of new distributors;
-- Offset macroeconomic challenges including a recession amid
lower consumer spending, high input costs, and foreign currency
headwinds; and
-- Fend off potentially escalating competition from numerous
weight-management focused competitors in many formats including
traditional grocery stores, direct sellers, and online.
S&P said, "We could also lower the rating if we believe recent
distributor challenges are permanent resulting in a weaker business
risk assessment; if Herbalife's financial policy unexpectedly
becomes more aggressive, especially with respect to share
repurchases; or, while unlikely, it appears the bank facility
maturities will accelerate to late 2023.
"We could revise our outlook to stable over the next 12 months if
Herbalife presents a concrete plan to manage its upcoming debt
maturities either through repayments or refinancing at satisfactory
terms and can stabilize and improve EBITDA such that forecasted
adjusted leverage is sustained below 4.5x."
This could result if:
-- Solid sales growth returns because of higher volumes driven by
potentially easing macroeconomic conditions (especially inflation)
and more productive distributors; and
-- A modest recession helps the company attract more people
seeking to enhance their income.
ESG credit indicators: E-2; S-3; G-3
JOSIAH'S TRUCKING: Move to Dismiss Avoidance Actions Denied
-----------------------------------------------------------
the Court denied motion to dismiss the complaint filed by the
Defendants Law Office of Rogelio Solis, PLLC and Ana Gomez in the
case styled IN RE: JOSIAHS TRUCKING, LLC, Chapter 7, Debtor.
CATHERINE STONE CURTIS, Plaintiff, v. LAW OFFICE OF ROGELIO SOLIS
PLLC and ANA GOMEZ, Defendants, Case No. 21-70009, Adversary No.
21-7002, (Bankr. S.D. Tex.).
In her Complaint, Catherine Stone Curtis (Chapter 7 Trustee) pleads
that on or around January 12, 2021, Brooklyn Specialty made a
$1,000,000 transfer to Solis's IOLTA account on behalf of Gomez.50
From the IOLTA, a check for $680,000 was made payable to Gomez and
another check for $320,000 was made payable to Solis in
satisfaction of the attorney's fees owed by Gomez.51 Plaintiff
alleges that Gomez was an initial transferee and Solis was an
immediate or mediate transferee.52 Trustee seeks to avoid the
initial transfer of $1,000,000 pursuant to 11 U.S.C. § 547 and to
recover $680,000 from Gomez and $320,000 from Solis pursuant to 11
U.S.C. § 550.53
Sometime in December 2020, an automobile accident occurred when the
trailer from a tractor trailer owned by Josiah's Trucking, LLC
collided with a vehicle carrying Carlos Tellez, Jr., and Anna
Isabel Ortiz, ultimately resulting in their deaths. Anna Isabel
Ortiz is survived by the Defendant Ana Gomez and Reyes Adrian
Ortiz. Carlos Tellez, Jr. is survived by Sonia Tellez, Carlos
Tellez, Rose Mary Rodriquez, and I. Tellez, a minor. Shortly after
the Accident both Gomez and the Tellez Family engaged counsel and
began the claims process. Gomez employed the Solis Law Firm, and
the Tellez Family engaged Escobedo & Cardenas.
At the time of the accident, Brooklyn Specialty Insurance Company
RRG, Inc. insured the Debtor and the applicable limit of liability
under the policy is $1 million. Gomez, through the Solis Law Firm,
made a Stowers demand on Brooklyn Specialty for the limits of the
policy and Brooklyn Specialty paid as much as $1 million into
Solis's IOLTA account Ana Gomez, thereby exhausting the alleged
Policy Limits.
On Jan. 26, 2021, the Tellez Family filed an involuntary bankruptcy
petition against Josiah's Trucking under chapter 7. In February
2021, Plaintiff Catherine Curtis ("Trustee"), then the interim
trustee, filed the Complaint to Avoid and Recover Transfer Pursuant
to 11 U.S.C. Section 547 and 550, thereby initiating the Adversary
Proceeding against the Defendants.
In her Complaint, the Trustee pleads that on Jan. 12, 2021,
Brooklyn Specialty made a $1 million transfer to Solis's IOLTA
account on behalf of Gomez. From the IOLTA, a check for $680,000
was made payable to Gomez and another check for $320,000 was made
payable to Solis in satisfaction of the attorney's fees owed by
Gomez. The Trustee alleges that Gomez was an initial transferee and
Solis was an immediate or mediate transferee. Trustee seeks to
avoid the initial transfer of $1,000,000 pursuant to 11 U.S.C.
Section 547 and to recover $680,000 from Gomez and $320,000 from
Solis pursuant to 11 U.S.C. Section 550. In addition, the Trustee
alleges that over $8 million in claims related to the accident
threaten the Debtor's estate here, far above the $1 million Policy
Limit.
The Defendants offer three main arguments as to why their Motion to
Dismiss should be granted. First, Defendants argue that Trustee's
Section 547 claim should be dismissed because Trustee has failed to
allege a transfer of the Debtor's property. Second, the Defendant's
assert that since Trustee's Section 547 claim for avoidance should
be dismissed, both of Trustee's Section 550 claims for recovery
must also be dismissed. Finally, in the alternative, the Defendants
argue that because Solis is as an immediate or mediate good faith
transferee, Trustee's claim to recover the $320,000 transfer to
Solis under Section 550(b)(1) should be dismissed.
The Court determines that the Trustee has properly pled that the
Debtor had an interest in the Policy Proceeds and denies the
Defendants' first argument. The Court finds that the Debtor has an
equitable interest in maximizing the use of the Policy Proceeds to
settle $8 million in related claims as possible. Following the
rationale of Begier v. IRS, 496 U.S. 53, 59 n.3 (1990), the Court
maintains that even though the Policy Proceeds were transferred
fourteen days before the bankruptcy filing, the Debtor's equitable
interest in the Policy Proceeds remains since the avoidance
provision preserves the assets that are included in the bankruptcy
estate, and the Debtor would still have had an equitable interest
in those proceeds if not for the transfer.
Since the Defendants' first argument fails as they have not raised
a sufficient basis for dismissal under Section 547, the Court rules
that the Defendant's second argument is also without merit.
Moreover, the Court overrules the Defendants' third argument that
Plaintiff is precluded from recovery from Solis under Section
550(b)(1) as an immediate or mediate good faith transferee. The
Court finds that the face of the Complaint does not show that Solis
received the transfer without knowledge of voidability — as a
result, dismissal under Rule 12(b)(6) becomes inappropriate.
A full-text copy of the MEMORANDUM OPINION dated Nov. 9, 2022, is
available at https://tinyurl.com/437c7ruf from Leagle.com.
About Josiah's Trucking
A group of creditors represented by Shelby A. Jordan, Esq., filed a
Chapter 7 involuntary petition against Josiah's Trucking, LLC on
Jan. 26, 2021. Shelby Jordan, Esq., represents the creditors.
Judge Eduardo V. Rodriguez converted the Chapter 7 case into one
under Chapter 11 (Bankr. S.D. Texas Case No. 21-70009) on Feb. 25,
2021, and approved the appointment of Catherine Curtis as
bankruptcy trustee in the Debtor's Chapter 11 case on March 10,
2021.
Ms. Curtis is represented by Pulman, Cappuccio & Pullen, LLP in the
Debtor's Chapter 11 case. The trustee also tapped Locke Lord, LLP
as her special litigation counsel and John Mosley as her
accountant.
KABBAGE: Gets Court OK for $58Mil. Deal With Customers Bank
-----------------------------------------------------------
Online lender Kabbage Inc. received court approval Monday, November
7, 2022, for a $58 million settlement with Customers Bank when a
Delaware bankruptcy judge said it made sense to resolve outstanding
claims between the parties arising from the federal Paycheck
Protection Program.
As earlier reported, Kabbage Inc., d/b/a KServicing, sought
approval of a settlement that will resolve certain contractual
disputes between the Company and Customers Bank that arose in
connection with the Parties' participation in the Paycheck
Protection Program launched in April 2020 by the U.S. Small
Business Administration at the direction of Congress.
For more than 20 months the Company has attempted to recover
approximately $65.5 million from CB on account of certain servicing
and referral fees due to the Company and, in response, CB has
alleged a number of claims against the Company in connection with
the Company's performance of servicing obligations under the CB
Agreements.
The Settlement Agreement reflects a comprehensive resolution of the
various Disputes between the Parties and will result in the Company
(i) recovering $58 million in outstanding fees, with an
approximately $23 million cash infusion to the Debtors shortly upon
and subject to approval of the Motion by the Court, (ii) receiving
a release of potentially significant contingent and unliquidated
claims asserted by CB against the Debtors and their estates, (iii)
reaching an agreement with CB with respect to servicing obligations
under applicable contracts, and (iv) ending the costs and expended
resources attendant in protracted negotiations and litigation.
About Kabbage Inc.
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. 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 Aug. 16, 2020, much of the Company's business was
sold to American Express Travel Related Services Company, Inc. 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.
To implement the wind down of their businesses, on Oct. 3, 2022,
Kabbage, Inc. d/b/a KServicing and certain of its affiliates each
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. D. Del. Lead Case No.
22-10951). Judge Craig T. Goldblatt oversees the cases.
Kabbage Inc. estimated $500 million to $1 billion in assets and
debt as of the bankruptcy filing.
The Debtors tapped Weil, Gotshal & Manges, LLP as general counsel;
Richards, Layton & Finger, PA as local counsel; AlixPartners, LLC
as financial advisor; KPMG International Limited as fraud review
services provider; and Jones Day, LLP as government investigations
counsel. Greenberg Traurig is counsel to the Debtors' board of
directors. Omni Agent Solutions, Inc. is the claims agent and
administrative advisor.
KEYWAY APARTMENT: Court OKs Appointment of Chapter 11 Trustee
-------------------------------------------------------------
A U.S. bankruptcy judge approved the appointment of an independent
trustee to take over the Chapter 11 case of Keyway Apartment
Rentals, LLC.
Judge Michelle Harner of the U.S. Bankruptcy Court for the District
of Maryland approved the appointment of Patricia Jefferson, a
principal at Miles & Stockbridge P.C., to oversee Keyway's
bankruptcy case, citing the "absence of effective internal
controls, disclosure and information deficiencies, and the failure
to file the required monthly operating reports" by the company.
On Nov. 4, the U.S. Trustee for Region 4 asked the bankruptcy judge
to approve Ms. Jefferson's appointment in light of the initial
report filed by the examiner. During his investigation, the
examiner found out that Keyway's managing member was unaware of the
company's expenditures and assets and exercised no control over
cash flow, which was not managed in compliance with the
requirements of the company's secured lending agreements.
"Keyway is not properly controlled and, therefore, cannot be found
to be trustworthy, and creditors cannot have any confidence in
present management in light of the examiner's report," the U.S.
Trustee said in court filings.
About Keyway Apartment Rentals
Keyway Apartment Rentals, LLC is a Maryland limited liability
company that owns a 63-unit residential apartment complex situated
upon three parcels of real property known as 113 Kinship Road, 122
Kinship Road, and 123 Willow Spring Road in Dundalk, Baltimore
County, Md.
Keyway sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Md. Case No. 22-13389) on June 21, 2022. In the
petition signed by its managing member, George Divel, III, the
Debtor disclosed $6,653,350 in assets and $4,252,151 in
liabilities.
Judge Michelle M. Harner oversees the case.
Joseph M. Selba, Esq., at Tydings and Rosenberg, LLP is the
Debtor's legal counsel.
KLX ENERGY: Appoints CEO Christopher Baker as Class I Director
--------------------------------------------------------------
The Board of Directors of KLX Energy Services Holdings, Inc.
appointed the Company's President and Chief Executive Officer,
Christopher Baker, as a Class I Director of the Board, effective on
Nov. 8, 2022, as disclosed in a Form 8-K filed with the Securities
and Exchange Commission.
About KLX Energy
Headquartered in Wellington, Florida, KLX Energy Services Holdings,
Inc. is a provider of diversified oilfield services to leading
onshore oil and natural gas exploration and production companies
operating in both conventional and unconventional plays in all of
the active major basins throughout the United States. The Company
delivers mission critical oilfield services focused on drilling,
completion, intervention and production activities for the most
technically demanding wells from over 60 service facilities located
in the United States. KLXE's complementary suite of proprietary
products and specialized services is supported by technically
skilled personnel and a broad portfolio of innovative in-house
research and development, manufacturing, repair and maintenance
capabilities.
KLX Energy reported a net loss of $93.8 million for the 11-month
transition period ended Dec. 31, 2021, compared to a net loss of
$332.2 million for the fiscal year ended Jan. 31, 2021. As of
Sept. 30, 2022, the Company had $440.1 million in total assets,
$156.5 million in total current liabilities, $295.6 million in
long-term debt, $26 million in long-term operating lease
obligations, $17.5 million in long-term finance obligations, $0.4
million in other non-current liabilities, and a total stockholders'
deficit of $55.9 million.
* * *
As reported by the TCR on Feb. 23, 2021, Moody's Investors Service
completed a periodic review of the ratings of KLX Energy Services
Holdings, Inc. and other ratings that are associated with the same
analytical unit. KLX Energy Services Holdings, Inc.'s (KLXE) Caa1
Corporate Family Rating reflects the company's relatively small
scale while providing a range of well completion, intervention,
drilling and production services in a highly cyclical industry.
As reported by the TCR on March 31, 2022, S&P Global Ratings
affirmed its 'CCC+' issuer credit rating on KLX Energy Services
Holdings Inc. S&P said "Our 'CCC+' rating continues to reflect
KLXE's unsustainable credit metrics."
KLX ENERGY: Posts $11.1 Million Net Income in Third Quarter
-----------------------------------------------------------
KLX Energy Services Holdings, Inc. has filed with the Securities
and Exchange Commission its Quarterly Report on Form 10-Q
disclosing a net income of $11.1 million on $221.6 million of
revenues for the three months ended Sept. 30, 2022, compared to a
net loss of $18.8 million on $139 million of revenues for the three
months ended Oct. 31, 2021.
For the nine months ended Sept. 30, 2022, the Company reported a
net loss of $16.3 million on $558.3 million of revenues compared to
a net loss of $80.6 million on $341.7 million of revenues for the
nine months ended Oct. 31, 2021.
As of Sept. 30, 2022, the Company had $440.1 million in total
assets, $156.5 million in total current liabilities, $295.6 million
in long-term debt, $26 million in long-term operating lease
obligations, $17.5 million in long-term finance lease obligations,
$0.4 million in other non-current liabilities, and a total
stockholders' deficit of $55.9 million.
"Our strong third quarter results represented a record quarter for
the Company since the merger," stated Chris Baker, president and
chief executive officer of KLX. "Despite the ever-volatile
commodity price backdrop, the market remains highly constructive,
driving increased demand and pricing for KLX's services. The
industry's tightness in skilled labor and quality assets, coupled
with KLX's ability to leverage efficiencies when mobilizing and
deploying our personnel and equipment, enabled KLX to reduce white
space, drive utilization and improve pricing. I am pleased to say
that both revenue and margin increased in every KLX Geo segment,
underpinned by quarter over quarter improvements in every KLX
product line."
"Looking to the end of the year, we expect a seasonally strong
fourth quarter driven by continued strength in commodity prices and
operator reluctance to relinquish efficient service providers for a
short break as they transition from 2022 programs to 2023 programs.
We expect fourth quarter sequential revenue to be flat to slightly
up relative to the third quarter and a fourth quarter Adjusted
EBITDA margin of 15% to 17% primarily due to product line mix
shifts and typical seasonality and transitory regulatory events,
specifically in the Rocky Mountains and to a lesser extent in the
Northeast. That being said, as we look ahead to next year, we are
optimistic about 2023 given our third quarter 2022 performance and
fourth quarter 2022 expectations. Based on our current forward
visibility, we expect the first quarter of 2023 to start strong and
are confident that we will realize another step-up in results as we
exit the winter weather season and enter the second quarter of 2023
moving forward. A favorable macro backdrop and net pricing
improvements should allow us to maintain positive free cash flow
through the remainder of 2022, and we believe this trend will
continue into 2023," concluded Baker.
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1738827/000173882722000038/klxe-20220930.htm
About KLX Energy
Headquartered in Wellington, Florida, KLX Energy Services Holdings,
Inc. is a provider of diversified oilfield services to leading
onshore oil and natural gas exploration and production companies
operating in both conventional and unconventional plays in all of
the active major basins throughout the United States. The Company
delivers mission critical oilfield services focused on drilling,
completion, intervention and production activities for the most
technically demanding wells from over 60 service facilities located
in the United States. KLXE's complementary suite of proprietary
products and specialized services is supported by technically
skilled personnel and a broad portfolio of innovative in-house
research and development, manufacturing, repair and maintenance
capabilities.
KLX Energy reported a net loss of $93.8 million for the 11-month
transition period ended Dec. 31, 2021, compared to a net loss of
$332.2 million for the fiscal year ended Jan. 31, 2021. As of
March 31, 2022, the Company had $379.5 million in total assets,
$131.1 million in total current liabilities, $275.1 million in
long-term debt, $29 million in long-term operating lease
obligations, $11.1 million in long-term finance lease obligations,
$400,000 million in other non-current liabilities, and a total
stockholders' deficit of $67.2 million.
* * *
As reported by the TCR on Feb. 23, 2021, Moody's Investors Service
completed a periodic review of the ratings of KLX Energy Services
Holdings, Inc. and other ratings that are associated with the same
analytical unit. KLX Energy Services Holdings, Inc.'s (KLXE) Caa1
Corporate Family Rating reflects the company's relatively small
scale while providing a range of well completion, intervention,
drilling and production services in a highly cyclical industry.
As reported by the TCR on March 31, 2022, S&P Global Ratings
affirmed its 'CCC+' issuer credit rating on KLX Energy Services
Holdings Inc. S&P said "Our 'CCC+' rating continues to reflect
KLXE's unsustainable credit metrics."
LECLAIRRYAN PLLC: Deadline to File Fund Claims Set for December 8
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia set
Dec. 8, 2022, as the deadline for any person asserting any interest
in any additional post-petition segregated funds against
LeClairRyan PLLC to submit a claim, by (a) certified mail or (b)
overnight delivery to:
Paula S. Beran, Esq.
Tavenner & Beran PLC
20 N. 8th Street
Richmond, VA 23219
Email: PBeran@TB-LawFirm.com
On Sept. 12, 2019, the Debtor filed a motion seeking authority to
pay certain third-party vendors providing services to, or for the
benefit of, clients certain sums for which the Debtor had
previously billed its clients for reimbursement of certain
expenses. Certain of said funds were place in a separate account
("segregated account"). The motion was continued for a hearing to
be held after Oct. 4, 2019, which the Debtor's Chapter 11 cases was
converted to Chapter 7 proceeding ("conversion date").
After the conversion date, Lynn L. Tavenner, appointed interim
trustee for the Debtor's case, obtained authority to address
certain of the funds in the segregated account. Thereafter, the
trustee, with the assistance of others, examined the facts and
circumstances related to funds in the segregated account received
after the petition date. Said examination revealed, among other
things:
a) certain amounts that are designated as unpaid in the Debtor's
books and records may actually have been paid to the respective
client vendor and
b) the nature of some of the remittances suggests that the funds
are property of the estate.
As such, the trustee filed a motion seeking procedures to address
the post-petition segregated funds, which was granted by Court
order. The trustee filed a second motion to address additional
funds placed in the segregated account on or before Feb. 28, 2020,
in the aggregate amount of $85,082.14, which was granted by Court
order, ECF No. 1639, establishing the following procedures for
asserting any interest in the additional post-petition segregated
funds.
About LeClairRyan PLLC
Founded in 1988, LeClairRyan PLLC is a national law firm with 385
attorneys, including 160 shareholders, at its peak. The firm
represented thousands of clients, including individuals and local,
regional, and global businesses.
Following massive defections by its attorneys LeClairRyan, members
of the firm in July 2019 voted to effect a wind-down of the
Debtor's operations.
LeClairRyan PLLC sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 19-bk-34574) on Sept. 3, 2019, to effect the wind-down of its
affairs.
In its Chapter 11 petition, the firm listed a range of 200-999
creditors owed between $10 million and $50 million. The firm claims
assets of $10 million to $50 million.
The Hon. Kevin R Huennekens is the case judge.
Richmond attorneys Tyler Brown and Jason Harbour of Hunton Andrews
Kurth represented LeClairRyan in the case. Protiviti was the
Debtor's financial adviser for the liquidation.
The bankruptcy case was converted to a Chapter 7 liquidation on
Oct. 24, 20219. Lynn L. Tavenner was named a Chapter 7 trustee, and
then Benjamin C. Ackerly, a successor trustee.
The Chapter 7 trustee Ackerly's counsel:
Tyler P. Brown
Hunton Andrews Kurth LLP
Tel: 804-788-8200
E-mail: tpbrown@huntonak.com
LIVEONE INC: Needs More Time to Complete Form 10-Q
--------------------------------------------------
LiveOne, Inc. filed a Form 12b-25 with the Securities and Exchange
Commission with respect to its Quarterly Report on Form 10-Q for
the period ended Sept. 30, 2022.
LiveOne was unable to file with the SEC its Quarterly Report within
the prescribed time period without unreasonable effort or expense
as the Company needs additional time to complete certain financial
disclosures and analyses to be included in the Form 10-Q. The
Company also requires additional time to finalize its consolidated
financial statements and the notes thereto. The Company expects to
file the Form 10-Q with the SEC as soon as possible, but no later
than Nov. 21, 2022, the fifth calendar day following the prescribed
due date of the Form 10-Q.
About LiveOne
Headquartered in Los Angeles, California, LiveOne, Inc. (NASDAQ:
LVO) (formerly known as LiveXLive Media, Inc.) is a creator-first,
music, entertainment and technology platform focused on delivering
premium experiences and content worldwide through memberships and
live and virtual events.
LiveOne reported a net loss of $43.91 million for the year ended
March 31, 2022, compared to a net loss of $41.82 million for the
year ended March 31, 2021. As of June 30, 2022, the Company had
$72.37 million in total assets, $82.15 million in total
liabilities, and a total stockholders' deficit of $9.78 million.
Los Angeles, California-based BDO USA, LLP, the Company's former
auditor, issued a "going concern" qualification in its report dated
June 29, 2022, citing that the Company has suffered recurring
losses from operations, negative cash flows from operating
activities and has a net capital deficiency that raise substantial
doubt about its ability to continue as a going concern.
LOMA LINDA: Fitch Hikes LongTerm IDR to 'BB+', Outlook Stable
-------------------------------------------------------------
Fitch Ratings has upgraded Loma Linda University Medical Center's
(LLUMC) Issuer Default Rating (IDR) to 'BB+' from 'BB'. Fitch has
also upgraded to 'BB+' from 'BB' the ratings on revenue bonds
issued by the California Statewide Communities Development
Authority on behalf of LLUMC.
The Rating Outlook is Stable.
Entity/Debt Rating Prior
----------- ------ -----
Loma Linda University
Medical Center (CA) LT IDR BB+ Upgrade BB
Loma Linda
University Medical
Center (CA) /General
Revenues/1 LT LT BB+ Upgrade BB
SECURITY
The bonds are secured by a gross receivables pledge and a mortgage
pledge of the obligated group (OG). There are also debt service
reserve funds (DSRF) in place. The OG includes LLUMC, LLU
Children's Hospital, the LLUMC - Murrieta hospital, and Loma Linda
University Behavioral Medicine Center. The OG accounts for almost
all of the consolidated system assets and revenues. Fitch's
analysis is based on the consolidated system.
ANALYTICAL CONCLUSION
The upgrade to 'BB+' incorporates LLUMC's major new hospital, which
is now open, and the system has been operating in their new
environment for more than one year, removing a considerable risk
factor. As the only academic medical center (AMC) and only
children's hospital serving a large population base in the Inland
Empire, LLUMC is well positioned from a competitive perspective.
Assuming a reasonable pace of operating performance, the system's
capital-related metrics should show improvement over time, even
under a stress case in Fitch's forward-looking scenario analysis,
especially given that capital spending plans are somewhat limited
and much of that capex is expected to be funded by external sources
(e.g., State of California Prop 4 funding for children's
hospitals).
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
High Acuity Academic Provider in Challenging Market
LLUMC's midrange revenue defensibility is characterized by its
broad reach for tertiary and quaternary services as the only AMC
and children's hospital covering a broad geography and population
base in the Inland Empire service area, which includes the
population centers of San Bernardino County and northern Riverside
County. While competing hospitals are present and inpatient market
share is dispersed among a number of providers, LLUMC is the
exclusive or decidedly leading provider of many high-end services.
While Medi-Cal (Medicaid) and self-pay represent a very high 40% or
more of LLUMC's gross revenue (including 41.5% in fiscal 2022),
this is common for AMCs, particularly those that are designated
trauma centers and those that include large children's hospitals
(LLUMC's children's hospital represents nearly one-quarter of
system total operating revenue).
Demographic indicators of the service area are generally considered
to be stable. Both San Bernardino and Riverside counties are
experiencing population growth slightly above the U.S. average. The
unemployment rate in the Riverside-San Bernardino-Ontario MSA is
just above the national average (per U.S. Bureau of Labor
Statistics data).
LLUMC's revenue defensibility is bolstered by its strong
relationship with Loma Linda University (LLU, IDR: A+). LLUMC's and
LLU's campuses are adjacent. The university operates eight schools,
seven of which are focused on healthcare education and research,
including schools of medicine, nursing, and public health. While
LLU and LLUMC are separate legal organizations and not obligated on
each other's debt, they are tightly aligned and the medical system
is integral to the university's teaching and research.
Operating Risk: 'a'
Variable but Generally Good Operating Margins; Macro Pressures
Present
Historically, while variable, LLUMC's operating EBITDA margins are
generally strong. Between fiscals 2017 and 2022, LLUMC's operating
EBITDA margin averaged approximately 10% (ranging from a low of
6.5% in fiscal 2022 to a high of nearly 16% in fiscal 2018).
As the region's AMC and only children's hospital, demand for LLUMC
is considerable and growing with the opening of the new Dennis and
Carol Troesh medical campus in August 2021. Since opening the new
hospital, many key volumes have increased noticeably, even though
the first full fiscal year of the hospital will not be until fiscal
2023. Key areas of volume gain in fiscal 2022 over fiscal 2021
include inpatient admissions (up 3.4%, and up 8.7% including
observation stays), unique patients (up nearly 17%), outpatient
surgeries (up 8.0%), and outpatient visits (up 9.1%).
While these volume gains in fiscal 2022 were particularly notable
given the surge in omicron variant COVID patients in late calendar
2021 and early calendar 2022, the ongoing nurse labor disruptions
that have affected the entire sector have resulted in LLUMC facing
fiscal challenges. Even with considerable demand, LLUMC's operating
margins were compressed in fiscal 2022 with a -2.4% operating
margin and 6.5% operating EBITDA margin. Like nearly the entire US
hospital sector, LLUMC had to face material labor pressures,
general inflation, and the omicron surge. LLUMC had to contend with
these challenges while simultaneously bearing the burden of ramping
up operations at the new hospital.
Looking forward, Fitch expects that despite ongoing macro
pressures, LLUMC should generally generate good operating EBITDA
margins, even if metrics do not quite match the strong results
recorded prior to the pandemic. Operating margins likely will be
variable as the state's Hospital Quality Assurance Fee Program is
not distributed evenly (although on the whole this program provides
considerable cash flow to LLUMC).
With the opening of the new hospital in late summer 2021, capital
spending plans are limited at LLUMC. And much of the capex that is
planned is expected to receive significant external support. For
example, the planned LLUMC children's outpatient center is slated
to receive as much as $135 million in voter approved state
proposition 4 funding. LLUMC (and LLU) has a history of successful
fundraising.
Financial Profile: 'bb'
Financial Profile Improving but Remains Modest
LLUMC's financial profile is improving but still modest and
consistent with a below investment grade rating. Nevertheless, key
capital-related metrics should improve over time.
At audited FYE 2022 (June 30 year-end), LLUMC's unrestricted cash
and investments exceeded $805 million (Medicare advances moved from
unrestricted cash to restricted) and total debt was more than $2.2
billion. This translated to cash-to-debt of 43% at FYE 2022
(including DSRFs in the numerator).
LLUMC participates in the North American Division of Seventh-day
Adventist multiemployer frozen defined benefit (DB) pension plan.
The frozen DB plan was 100% funded as of the most recent
measurement date (Jan. 1, 2021), so cash-to-adjusted debt is the
same as cash-to-debt at 43% (Fitch only includes the portion of a
DB pension plan that is below 80% funded when calculating adjusted
debt).
LLUMC's capital-related ratios should improve over time, even in a
stress case of Fitch's forward-looking scenario analysis. In the
stress case the net adjusted debt-to-adjusted EBITDA ratio remains
unfavorably positive, although approaches a more palatable 3x by
year five. Cash-to-adjusted debt does not fall below 35% and
reaches 50% by year four. Net adjusted debt-to-adjusted EBITDA
consistently below 3x and cash-to-adjusted debt sustained above 50%
would indicate a financial profile more consistent with an
investment grade rating.
Asymmetric Additional Risk Considerations
No asymmetric additional risk considerations were applied in this
rating determination.
Financial covenants in LLUMC's MTI include a minimum debt service
coverage ratio of 1.1x and minimum cash on hand of 60 days. LLUMC
met the financial covenants based on fiscal 2022 results (although
debt service coverage would have been below 1.0x without QAF
funding).
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Liquidity deterioration beyond Fitch's stress scenario leading to
weaker cash-to-adjusted debt that is expected to remain below 40%;
- Sustained thinner operating EBITDA margins that would be more
consistent with a midrange operating risk profile assessment.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Improved cash-to-adjusted debt above 50%, particularly if the
operating EBITDA margin is sustained in the 8% - 9% range.
CREDIT PROFILE
LLUMC is part of Loma Linda University Health (LLUH), which also
includes LLU, the Faculty Medical Group (LLUFMG), and several other
related organizations. A board restructuring in April 2015 resulted
in one unified board for the organization and the decision to
coordinate fiscal year ends for all LLUH members.
LLUMC, located approximately 60 miles east of Los Angeles in Loma
Linda, CA. The system operates 1,046 beds, including 364 Children's
Hospital beds. LLUMC offers tertiary and quaternary series and has
the only level I trauma center and level IV neonatal intensive care
unit in the Inland Empire service area.
LLU is a private university affiliated with the Seventh-Day
Adventist Church. It is the flagship health sciences university for
the Church and its extensive network of health systems.
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.
MACRO CONCEPT: Complaints Against Decaro & Howell Dismissed
-----------------------------------------------------------
District Judge Deborah L. Boardman of the Maryland District Court
granted the motions to dismiss the complaints filed by the
Defendants in these two separate, but nearly identical cases styled
as MACRO CONCEPT, LLC, et al., Plaintiffs, v. DECARO & HOWELL,
P.C., et al., Defendants, ABIMBOLA DARAMOLA, et al., Plaintiffs, v.
DECARO & HOWELL, P.C., et al., Defendants, Civ. Nos. DLB-22-496,
DLB-22-498, (D. Md.).
Macro Concept, LLC and Grace Solutions, LLC are limited liability
companies with offices in Laurel, Maryland. The Daramolas —
mother Abimbola, father Gbamgbade, and daughter Olaide — are the
current and founding members of both companies. They are of African
descent and identify as African Americans. In the late 1990s and
early 2000s, the companies acquired various properties in Baltimore
and Gwynn Oak, Maryland. Macro and Grace borrowed money from
Potomac Valley Bank — the predecessor in interest to PNC Bank —
to acquire the properties and build on them; only two properties,
Reisterstown Citgo and Liberty Citgo, were owned debt free. The
total amount of the loans was approximately $4.25 million.
The Plaintiffs retained the law firm DeCaro & Howell, P.C. as
counsel during the negotiation of the agreement with their longtime
business partner, fuel supplier Carroll Independent Fuel Company.
The proposed deal with Carroll included the creation of a new
entity, HJR Benson Loan Docs, LLC ("HJR Benson"), to acquire the
PNC loans; management of the properties by Carroll; the payment of
monthly mortgages to HJR Benson; the remission of excess revenues
to Macro and Grace; and the provision of quarterly reports on
business activities.
At the time, the Plaintiffs had an ongoing attorney-client
relationship, the firm "would advise the Daramolas on every aspect
of their business ventures." Thomas F. DeCaro, Jr. and Marla L.
Howell, the firm's named partners, undertook the remainder of the
refinancing negotiations, with Howell taking the lead and DeCaro in
a secondary role.
On the advice and counsel of the Defendants, the Plaintiffs
executed the Term Sheet in May 2009 with the understanding that new
promissory notes and leases would be prepared consistent with its
terms. However, the terms of the agreement that the Plaintiffs
agreed to on Sept. 11, 2009 did not reflect the terms in the Term
Sheet. Thus, after the five-year initial interest period ended and
the rates ballooned in 2016, HJR Benson Loan Docs, LLC declared
Macro and Grace in default and initiated foreclosure proceedings.
In response to the default, Macro and Grace again filed for Chapter
11 bankruptcy. During the bankruptcy litigation, the Plaintiffs
discovered the changes to the interest rates in the final
agreement. Neither DeCaro nor Howell communicated with HJR Benson
or Carroll to obtain accounting or other financial records, and
neither advised the Plaintiffs on any course of action to gain
compliance with the loan terms. The bankruptcy court declined to
confirm a Chapter 11 plan for Macro and Grace and dismissed the
petitions.
The default triggered cross-collaterization and cross-default
provisions in the other promissory notes, and on May 14, 2021, HJR
Benson notified Macro and Grace of the default of all their notes
with outstanding aggregate debt of $5.8 million. Three of Macro and
Grace's properties were sold at auction on August 26, 2021.
Additionally, the two properties owned by the plaintiffs without
debt were lost immediately after the signing of the September 11,
2009 agreement. The Daramolas eventually took out a second mortgage
on their family home to cover their financial obligations.
Hence, the Plaintiffs filed suit against the law firm of DeCaro &
Howell, P.C. and attorneys Howell and DeCaro in two separate
actions (Civ. Nos. DLB-22-496 and DLB-22-498). In No. DLB-22-496,
Macro and Grace are the plaintiffs. In No. DLB-22-498, the
Daramolas are the plaintiffs. Each suit involves the same legal
claims and, generally, the same allegations — that the
Defendants' racially motivated, deficient representation caused
them to suffer significant financial harm.
On the other hand, the Defendants move to dismiss both complaints
for identical reasons. They argue that the Plaintiffs fail to
allege race discrimination and that all the claims accrued more
than a decade ago and are barred by the statute of limitations.
The Court agrees with the Defendants that the Plaintiffs fail to
allege facts plausibly supporting an inference of racial
discrimination, as required to assert a Section 1981 claim. The
Court notes that "the Plaintiffs, who are African Americans (or
companies owned by African Americans), allege very troubling
conduct by their former attorneys. . . that the Defendants failed
to review transaction documents before the closing date, were
absent from the closing meeting, and misrepresented that the
transaction documents reflected the negotiated deal. However, they
do not allege any facts supporting an inference that the Defendants
intended to discriminate against them based on their race. . . Any
connection between the Plaintiffs' race and DeCaro's hands-off
approach or Howell's indifference is speculative. None of their
alleged acts or statements relates to race."
Because the Plaintiffs offer only speculation and conclusory
allegations, the Court cannot reasonably infer that the defendants
intended to discriminate against them in the provision of legal
services because of their race. Accordingly, the Court dismissed
Count I.
The Court routinely declines to exercise jurisdiction over state
law claims if all federal claims have been dismissed. Here, the
remaining claims raise only questions of state law, which turn on
an interpretation of the Maryland discovery rule and statute of
limitations. The Court, therefore, declines to exercise
supplemental jurisdiction over the remaining state law claims and,
therefore, does not reach the statute of limitations question.
A full-text copy of the MEMORANDUM OPINION dated Nov. 9, 2022, is
available at https://tinyurl.com/53u6v3ns from Leagle.com.
bout Macro Concepts LLC
Macro Concepts, LLC sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Md. Case No. 16-26359) on December 6,
2017, listing up to $50,000 in assets and up to $500,00 in
liabilities. The petition was signed by its managing member,
Abimbola Daramola. The Debtor is represented by Richard S. Basile,
Esq.
MEDICAL TECHNOLOGY: Unsecureds' Recovery "Unknown" in Plan
----------------------------------------------------------
Medical Technology Associates II, Inc., filed with the U.S.
Bankruptcy Court for the District of Delaware a First Amended
Subchapter V Plan of Reorganization dated November 10, 2022.
The Debtor was established in 2015 as a Delaware company, with a
current principal place of business and its home office at 1176
Tourmaline Dr., Thousand Oaks, CA 91320.
The Debtor is a biopharmaceutical company focused on the research
and development ("R&D") and future manufacturing and
commercialization of hemoglobin-based oxygen carrier ("HBOC") for
various indications and applications related to the use of blood,
including trauma and organ preservations.
As a result of that value-defeating litigation and other headwinds,
the Debtor experienced a liquidity crisis and required new
investment in order to fund its operations. As of June 12, 2022,
the Debtor only had $116,231.23 cash available. Without further
capital injection, the Debtor could not continue operations at its
current burn rate. Moreover, the Debtor had spent in excess of $3
million in legal fees relating to the litigation with Rausch and
WTE2 and was unable to attract new investment with this level of
litigation expense and uncertainty.
The Debtor has relocated its operations to Thousand Oaks,
California and no longer uses the Malvern property. Unfortunately,
after a nine-month effort by CBRE, there were no viable offers by
any parties to take assignment of the Malvern property and purchase
the equipment located there. As a result, the Debtor is in the
process of liquidating the remaining equipment at the Malvern
location with Liquidity Services Operations, LLC.
Class 1 consists of General Unsecured Claims. Except to the extent
that a Holder of an Allowed General Unsecured Claim agrees to a
less favorable or different treatment, each Holder of an Allowed
General Unsecured Claim shall receive: (i) their Pro Rata
distribution of GUC Pool, or (ii) such other treatment to the
Holder of an Allowed General Unsecured Claim as to which the Debtor
or Reorganized Debtor, as applicable, and the Holder of such
Allowed General Unsecured Claim shall have agreed upon in writing.
Class 1 is impaired by this Plan. The allowed unsecured claims
total $11,727,522.
The estimated recovery for General Unsecured Claims is "unknown at
this time", according to the Subchapter V Plan.
Class 2 consists of the Equity Interests in the Debtor. On the
Effective Date, the Equity Interests in the Debtor shall be
discharged, cancelled, released, and extinguished and Holders of
Equity Interests shall neither receive any Distributions nor retain
any property under this Plan for or on account of such Equity
Interests. Class 2 is impaired by and conclusively deemed to reject
the Plan and, therefore, Holders of the Debtor's Equity Interests
are not entitled to vote to accept or reject this Plan.
The Plan will be funded by Cash on Hand as of the Effective Date
and the proceeds of the Plan Note. Additionally, upon the Effective
Date, all property of the Debtor, tangible and intangible,
including, without limitation, claims, causes of action, licenses,
furniture, fixtures and equipment, will revert, free and clear of
all Claims and Interests except as provided in this Plan to the
Reorganized Debtor. Thereafter, the Newco Assets will be
Transferred to Newco.
The terms of the Plan Note Documents shall be agreed to between the
Reorganized Debtor and the Plan Note Funder. On the Effective Date,
the Plan Note Documents shall be executed and delivered by the
Reorganized Debtor and Plan Note Lender. Confirmation of this Plan
shall be deemed to constitute approval of the Plan Note Documents,
and, subject to the occurrence of the Effective Date, authorization
for the Reorganized Debtor to enter into and perform its
obligations in connection with the Plan Note Documents without the
need for any further action.
The Reorganized Debtor will continue to operate with the primary
purpose of resolving its litigation issues with WTE2 and Rasuch and
administering the Plan and its remaining assets. Following the
Effective Date, the Newco Assets will be transferred to Newco which
will then operate such assets.
A full-text copy of the First Amended Subchapter V Plan dated
November 10, 2022, is available at https://bit.ly/3GkLRJq from
PacerMonitor.com at no charge.
Attorneys for Debtor:
GELLERT SCALI BUSENKELL & BROWN, LLC
Michael Busenkell, Esq.
Ronald S. Gellert, Esq.
Bradley P. Lehman, Esq.
1201 N. Orange St., Ste. 300
Wilmington, Delaware 19801
Telephone: (302) 425-5800
Facsimile: (302) 425-5814
Email: mbusenkell@gsbblaw.com
rgellert@gsbblaw.com
blehman@gsbblaw.com
About Medical Technology Associates II
Medical Technology Associates II, Inc. -- https://www.8biomed.com/
-- is a biotechnology venture company in Thousand Oaks, Calif. It
conducts business under the name 8BioMed.
Medical Technology Associates II filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Del.
Case No. 22-10534) on June 14, 2022, listing up to $10 million in
assets and up to $50 million in liabilities. Richard E. Furtek has
been appointed as Subchapter V trustee.
Judge Craig T. Goldblatt oversees the case.
Michael G. Busenkell, Esq., at Gellert Scali Busenkell & Brown, LLC
and Hangley Aronchick Segal Pudlin & Schiller, P.C. serve as the
Debtor's bankruptcy counsel and special litigation counsel,
respectively.
MESO DELRAY: Unsecured Creditors Will Get 13.8% of Claims in Plan
-----------------------------------------------------------------
Meso Delray LLC d/b/a Meso Beach House, filed with the U.S.
Bankruptcy Court for the Southern District of New York a Plan of
Reorganization dated November 14, 2022.
This Plan is designed as a mechanism for the reorganization of
Debtor. The Debtor operated a 300-seat restaurant located on the
intercoastal waterway at 800 E. Atlantic Avenue, Delray Beach, FL
(the "Restaurant").
On or about September 15, 2022, the Restaurant was sold for
$2,350,000, with the Debtor's property lease having been cured of
any deficiencies in payment and the secured lender, FVP Servicing
LLC (the "Secured Lender"), having received funds to satisfy its
senior secured loan, in full.
Class 1 consists of all Allowed Priority Claims, other than
Priority Tax Claims. The Allowed Priority Claims, if any, shall be
paid in full in Cash on the Effective Date. The Allowed Priority
Claims consist of pre-petition wages not to exceed $15,100 earned
within 180 days prior to the Petition Date, in an aggregate amount
of approximately $3,471.32. The Debtor knows of no other Allowed
Priority Claims.
Class 2 consists of Allowed Secured Claims. There is one secured
claim, stemming from a judgment, and that claim was filed as an
unsecured debt and one claim based on a deposit for a wedding
received by Debtor which is also being treated as a secured claim
since it was a deposit to be held until the event occurred.
Class 3 consists of Unsecured Claims. Allowed Class 3 Claims shall
be paid from Cash available after the payment of the Allowed
Claims. Class 3 Unsecured Claims are Impaired and are entitled to
vote.
Class 4 consists of the Equity Interest of the limited liability
owners of Debtor. There will be no distributions to the Equity
Interests in that there are insufficient funds to repay all the
Allowed Unsecured Claims. The holders of the Class 4 Interests
under this Plan are deemed to have rejected the Plan. Therefore,
holders of the Equity Interests are not entitled to vote to accept
or reject the Plan.
On the Effective Date (or as soon after as possible) the Debtor
will pay or reserve (1) Administrative Expense Claims, Priority Tax
Claims and U.S. Trustee Fees (2) priority tax claims, other than
priority tax claims, and (3) secured claims. In addition, the
Debtor will reserve $25,000 for the wind down costs of the Debtor
including tax preparation, legal costs and fees and final payments
to GRA for winding up the Debtor.
Payments to holders of Allowed Unsecured Claims under the Plan will
be made from the balance of funds which are expected to be
approximately $309,324.52. Given a pool of unsecured debt of
approximately $2,232,260, the percentage to Allowed Unsecured
Claims will be approximately 13.8%. The Debtor will reserve funds
for Disputed Claims and in the event, those Disputed Claims are
ultimately not paid, those funds will be added to the pool of funds
for distribution or used for windup expenses of the Debtor.
Likewise, any successful preference item claims will be added to
the pool of funds for distribution or for windup expenses. In
addition, Professional fees for services rendered by the Debtor's
attorneys subsequent to the Effective Date in connection with the
Plan or the Debtor's Chapter 11 case, and reimbursement of expenses
relating to such services may be paid by the Debtor without prior
court approval.
A full-text copy of the Plan of Reorganization dated November 14,
2022, is available at https://bit.ly/3tyWm4v from PacerMonitor.com
at no charge.
Counsel for the Debtor:
H. Bruce Bronson, Esq.
Bronson Law Offices, P.C.
480 Mamaroneck Ave
Harrison, NY 10528-1621
Tel: (877) 385-7793
Email: hbbronson@bronsonlaw.net
About Meso Delray
Meso Delray, LLC operates a restaurant in Delray Beach, Fla., which
specializes in Mediterranean cuisine.
Meso Delray sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-22388) on June 27,
2022. In the petition signed by its managing member, Alan
Schoening, the Debtor disclosed up to $10 million in both assets
and liabilities.
Judge Sean H. Lane oversees the case.
The Debtor tapped H. Bruce Bronson, Esq., at Bronson Law Office,
P.C. as legal counsel and Lester S. Caesar, CPA as accountant.
METHANEX CORP: Fitch Hikes LongTerm IDR to 'BB+', Outlook Stable
----------------------------------------------------------------
Fitch Ratings has upgraded Methanex Corporation's Long-Term Issuer
Default Rating (IDR) to 'BB+' from 'BB' and upgraded all associated
unsecured debt to 'BB+'/'RR4' from 'BB'/'RR4'. The Rating Outlook
is Stable. The 'BB+' rating reflects the company's position as the
largest global supplier of methanol, with a global distribution
network and 9.2 million metric tons (MT) in production capacity.
The ratings also reflect the company's portfolio high grading, good
historical financial performance, and solid historical FCF and
leverage metrics.
Offsetting considerations include methanol's sensitivity to crude
and natural gas prices and China's demand, particularly at
methanol-to-olefins (MTO) facilities, and the significant expense
associated with maintaining shipping and storage facilities. The
upgrade reflects an improved demand environment, with realized
prices sufficient to allow the company to simultaneously reduced
leverage and fund its Geismar 3 (GS) project, alongside a more
conservative medium-term capital deployment policy.
KEY RATING DRIVERS
Solid Methanol Price Environment: Methanex and other methanol
producers continue to benefit from historically high methanol
contract prices, with average realized price for the company above
$400/MT in 2022. Though Fitch anticipates a degree of normalization
as global fuel supply comes back online, a generally favorable
pricing environment for olefins and polyolefins coupled with
ongoing strength in fuel demand should continue to drive a strong
methanol pricing environment, and the company maintains a
meaningful North American hedge position. This dynamic has led to
robust cash generation, with FCF above $350 million on an LTM basis
despite elevated capital expenditures. Fitch anticipates similarly
robust cash generation over the ratings horizon as the company's
capital expenditures related to the G3 project fall off.
Improving Operational Profile: Fitch believes that Methanex has the
liquidity and FCF generation to complete the cost-advantaged G3
expansion with little to no incremental debt. The company has
roughly $1.3 billion in combined liquidity between its readily
available cash and revolver commitment as of 3Q22. Fitch believes
that given the current demand profile, the company will likely be
able to fund the project using balance sheet cash and FCF, with the
significant capacity addition and associated cost benefits serving
to strengthen the company's long-term operational profile without
adding debt to the balance sheet.
G3 Project Nearing Completion: Methanex's $1.25 billion-$1.35
billion, 1.8 million MT Geismar 3 (G3) expansion created short-term
risks and longer-term opportunities for the credit. At an estimated
$775/MT, the Brownfield G3 project has a number of cost advantages,
including shared storage and terminal facilities; lack of need to
build a reformer given the ability to use purge gas; procurement
synergies, and amortization of other fixed costs over a larger
production base.
With major equipment onsite and engineering largely complete, Fitch
notes that the majority of execution risk is now behind the
company, with roughly $450 million to $500 million in capital
expenditures remaining. The company expects production to begin in
the 4th quarter of 2023, ultimately resulting in around a 25%
increase in operating capacity.
Energy Applications Drive Price: Methanol prices are volatile, and
correlated to oil prices, while methanol's feedstock costs are
linked to natural gas and coal prices in Asia. As a result, sharp
declines in the oil/gas price ratio can periodically pressure the
credit. Methanol demand is increasingly driven by methanol for
energy applications, which, prior to the downturn, had been the
fastest growing component of demand, and included MTO plants;
gasoline blendstocks to increase octane (MTBE); a substitute for
bunker fuel and as an industrial boiler fuel. Energy applications
for methanol are sensitive to demand in China, particularly MTO,
which could cap methanol prices.
Low Cost Producer: Methanex is the largest global supplier of
methanol, with 9.2 million MT in current production capacity, and
sales of 10.7 million MT or about 13% of the methanol market.
Natural gas is the main feedstock and is its single largest
expense. Methanex's portfolio benefits from low cost/stranded gas.
The company's plants outside North America have credit-friendly
contract structures, which include a low initial fixed gas price,
plus a variable component that is shared between Methanex and the
gas supplier as methanol prices rise.
This structure is countercyclical insofar as it lowers the
company's costs in a down-cycle in exchange for surrendering some
methanol price-related gains on the upside. Methanex's North
American plants (Geismar 1 & 2, and Medicine Hat, Canada) lack
these features but benefit from low gas prices linked to the shale
revolution.
DERIVATION SUMMARY
Relative to the IG chemical companies, Methanex has exhibited
relatively higher cash flow volatility. The company's single
product focus on methanol means it is less diversified than
integrated chemical producers such as Eastman Chemical Company
(BBB-/Stable) and Westlake Chemical (BBB/Positive), and more in
line with certain U.S. Oil and Natural Gas producers like CNX
Resources Corporation (BB+/Stable). YE 2021 Total Debt with Equity
Credit/Operating EBITDA for Methanex was 2.4x, which compares
favorably to Eastman and unfavorably to Westlake at 3.0x and 1.5x,
respectively.
Fitch anticipates Methanex's leverage to increase from its present
level of 2.0x as prices come down from historic highs, but notes
that the additional capacity at the company's cost-advantaged G3
facility may offset some degree of price moderation once the
facility begins production in late 2023. The company's commodity
focus and near-term high capital spending are offset by the
company's strong position as the world's largest supplier of
methanol, its portfolio of geographically diversified, low-cost
plants and the supportive pricing environment. MEOH's margins are
in line with IG chemical peers but more cyclical given methanol's
linkage to crude and coal pricing, and sensitivity to China's
demand for methanol in energy applications.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Methanol prices come down from historic highs as energy prices
moderate;
- G3 expansion completed in late 2023, operational in 2024;
- No incremental debt used to fund G3;
- Share repurchases resume, with balance sheet cash around $300
million.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Credible commitment to operating with a structurally lower debt
level, resulting in mid-cycle total debt with equity
credit/operating EBITDA durably below 2.5x;
- Sustained improvements to the operational profile which reduce
cash flow volatility, potentially including increased product
diversification, a significant increase in the use of methanol as a
marine fuel, or other measures which increase price, cost, or
volumetric stability.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Total debt with equity credit/Operating EBITDA durably above
3.5x, potentially due to borrowing activity during a sustained
trough in methanol prices and a lower demand for MTO production;
- Sustained disruption in operations of major facilities;
- Cost overruns, delays, or realization of other execution risk
related to G3 expansion leading to stepped up borrowings.
LIQUIDITY AND DEBT STRUCTURE
Ample Liquidity: As of Q3 2022, Methanex had $962 million in
readily available cash and $300 million in availability on its
revolving credit facility. The improved demand environment will
likely allow the company to cover the remaining capital
expenditures related to G3 without taking on incremental debt, with
roughly $450 million to $500 million in G3 construction costs
remaining. Liquidity will remain sufficient, with the company
maintaining full availability on its $300 million revolver. Fitch
anticipates that the company will be able to address its $300
million bond maturity in 2024 in a timely and sufficient manner.
ISSUER PROFILE
Methanex is the world's largest supplier of methanol, with
approximately 9.3 million MT of nameplate production capacity
across New Zealand, the U.S., Trinidad, Egypt, Canada and Chile.
Its low-cost position is driven by access to cheap/stranded natural
gas feedstocks and advantageous contract structures.
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
----------- ------ -------- -----
Methanex Corp. LT IDR BB+ Upgrade BB
senior
unsecured LT BB+ Upgrade RR4 BB
NATIONAL MEDICAL: Defendants Move to Stay/Leave to Appeal Denied
----------------------------------------------------------------
District Judge Michael M. Baylson of the Pennsylvania Eastern
District Court denies the Motion to Stay, as well as the Motion for
Leave to Appeal, filed by the Defendants in the civil case styled
NATIONAL MEDICAL IMAGING, LLC v. U.S. BANK, N.A., et al., Case No.
22-3744, (E.D. Pa.).
The parties in this case have been involved in a multi-year,
lengthy, and complex proceeding in the Bankruptcy Court. One of the
long pending claims is the Plaintiffs' claim for attorneys' fees
and costs, totaling over $4.2 million, pursuant to Chapter 11, for
which a trial is scheduled to start on Nov. 28, 2022, before Judge
Frank.
The Defendants have filed a Motion for Stay of that proceeding in
Bankruptcy Court which was denied by Judge Frank on Oct. 12, 2022.
Judge Frank noted that a pending Third Circuit appeal of a related
Bankruptcy Court order among the parties and concluded that the
presence of an "issue overlap" did not warrant delaying the trial
for attorneys' fees and costs. Judge Frank's decision to deny a
stay is based on sound docket control and Third Circuit precedent.
Pursuant to a longstanding rule, the Third Circuit does not accept
jurisdiction over an appeal if other motions, such as a petition
for attorneys' fees and costs, are still pending in a lower court.
As Judge Frank noted, a request for stay pending appeal is most
commonly made after the Bankruptcy Court issues a final order
resolving litigation before it, because, almost always, only final
orders may be appealed from the Bankruptcy Court to the District
Court by an aggrieved party.
The Court finds that the Defendants failed to show that Judge Frank
abused his discretion or acted contrary to law in denying the
Motion to Stay. Likewise, the Court cannot find adequate
justification to delay proceedings by certifying an interlocutory
appeal. Such an appeal would not materially advance the termination
of this litigation, but rather could unnecessarily prolong it. The
Court notes that the delay that would result from a stay or
interlocutory appeal would be harmful to both parties.
A full-text copy of the MEMORANDUM dated Nov. 9, 2022, is available
at https://tinyurl.com/3vmfaj3a from Leagle.com.
About National Medical
National Medical Imaging, LLC, and National Medical Imaging Holding
Company, LLC provide medical and diagnostic laboratory services
with a principal place of business located at 1425 Brickell Ave.,
Apt. 57E, Miami.
U.S. Bank's DVI Receivables Trusts and other alleged creditors
filed involuntary chapter 11 petitions (Bankr. E.D. Pa. Case Nos.
05-12714 and 05-12719) against Philadelphia, Pa.-based National
Medical Imaging, L.L.C., and National Medical Imaging Holding
Company, L.L.C., on March 3, 2005. The Creditors amended the
involuntary petitions three times: on Nov. 10, 2008; April 10,
2009; and on Aug. 26, 2009, following a contested hearing.
On June 12, 2020, National Medical Imaging and National Medical
Imaging Holding Company filed voluntary petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Pa. Lead Case No.
20-12618). At the time of the filings, each Debtor disclosed assets
of $10 million to $50 million and liabilities of the same range.
Judge Eric L. Frank oversees the case. The Debtors have tapped
Dilworth Paxson LLP as their bankruptcy counsel and Kaufman, Coren&
Ress, P.C. and Karalis P.C. as their special counsel. On October
23, 2020, the Debtors hired Erwin Chemerinsky, the dean, and Jesse
H. Choper Distinguished Professor of Law of the University of
California, Berkley School of Law, as their special counsel.
Before Debtors' voluntary Chapter 11 filing, DVI Receivables Trusts
and other creditors filed involuntary Chapter 11 petitions (Bankr.
E.D. Pa. Case Nos. 05-12714 and 05-12719) against Debtors on March
3, 2005.
In 2014, National Medical Imaging hit U.S. Bank N.A. and eight
others with a $50 million lawsuit in Pennsylvania federal court
alleging the bank ruined its business by forcing it into
involuntary bankruptcy proceedings just as it was beginning to
implement a turnaround plan. National Medical Imaging claims that
the involuntary bankruptcy petitions ultimately destroyed its
business even though the cases were ultimately tossed.
NATIONWIDE INVESTORS: Seeks to Hire Baker & Associates as Counsel
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Nationwide Investors, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Baker &
Associates as its legal counsel.
The firm will render these services:
(a) analyze the financial situation and render advice and
assistance to the Debtor;
(b) advise the Debtor with respect to its duties;
(c) prepare and file all appropriate petitions, schedules of
assets and liabilities, statements of affairs, answers, motions,
and other legal papers;
(d) represent the Debtor at the first meeting of creditors and
such other services as may be required during the bankruptcy
proceedings;
(e) represent the Debtor in all proceedings before the court
and in any other judicial or administrative proceeding where the
rights of the Debtor may be litigated or otherwise affected;
(f) prepare and file a Disclosure Statement (if required) and
Chapter 11 plan of reorganization; and
(g) assist the Debtor in any matters relating to or arising
out of the captioned case.
Prior to the petition date, the firm received a retainer in the
amount of $5,000 from the Debtor.
The Debtor will compensate Baker & Associates in accordance with
its normal billing practice and will reimburse for its necessary
disbursement and expenses.
Reese Baker, Esq., an attorney at Baker & Associates, disclosed in
a court filing that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Reese W. Baker, Esq.
Baker & Associates
950 Echo Lane, Ste. 300
Houston, TX 770024
Telephone: (713) 869-9200
Facsimile: (713) 869-9100
Email: courtdocs@bakerassociates.net
About Nationwide Investors
Nationwide Investors, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-33128) on Oct.
21, 2022. In the petition signed by its authorized agent, Wade
Riner, the Debtor disclosed up to $1 million in assets and up to
$50,000 in liabilities.
Judge Christopher M. Lopez oversees the case.
Reese W. Baker, Esq., at Baker & Associates, is the Debtor's legal
counsel.
NATURALSHRIMP INC: Signs $5 Million Stock Purchase Deal With GHS
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NaturalShrimp Incorporated entered into a purchase agreement with
GHS Investments LLC, an accredited investor, in a directly
negotiated transaction.
Pursuant to the GHS Purchase Agreement, the Company may require GHS
to purchase a maximum of up to 64,000,000 shares of the Company's
common stock based on a total aggregate purchase price of up to
$5,000,000 over a one-year term that ends on Nov. 4, 2023. If the
full $5,000,000 of GHS Purchase Shares is purchased, the Company
estimates that the net proceeds from the sale of the shares of GHS
Purchase Shares, after deducting estimated offering expenses
payable by the Company (including to financial advisors) will be
approximately $4,400,000. The Company intends to use the net
proceeds from this offering for working capital and general
corporate purposes.
The GHS Purchase Agreement provides that, upon the terms and
subject to the conditions and limitations set forth in the
agreement, the Company has the right from time to time during the
term of the agreement, in its sole discretion, to deliver to GHS a
purchase notice directing GHS to purchase a specified number of GHS
Purchase Shares. A GHS Purchase will be made in a minimum amount
of $10,000 and up to a maximum of $1,500,000 and provided that, the
purchase amount for any purchase will not exceed 200% of the
average of the daily trading dollar volume of the Company's common
stock during the 10 business days preceding the purchase date.
Notwithstanding the foregoing dollar limitations, the Company and
GHS may, from time to time, mutually agree (in writing) to waive
the aforementioned limitations for a relevant Purchase Notice,
which waiver, for the avoidance of doubt, shall not exceed the
4.99% beneficial ownership limitation contained in the GHS Purchase
Agreement. The "Purchase Price" means, with respect to a purchase
made pursuant to the GHS Purchase Agreement, 90% of the lowest VWAP
(as defined in the GHS Purchase Agreement) during the Valuation
Period (the 10 consecutive business days immediately preceding, but
not including, the applicable purchase date). The Company shall
deliver a number of GHS Purchase Shares equal to 112.5% of the
aggregate purchase amount for such GHS Purchase divided by the
Purchase Price per share for such GHS Purchase, against payment by
GHS to the Company of the purchase amount with respect to such
Purchase (less documented deposit and clearing fees, if any), as
full payment for such GHS Purchase Shares via wire transfer of
immediately available funds.
The GHS Purchase Agreement prohibits the Company from directing GHS
to purchase any GHS Purchase Shares if those shares, when
aggregated with all other shares of Common Stock then beneficially
owned by GHS and its affiliates, would result in GHS and its
affiliates having beneficial ownership, at any single point in
time, of more than 4.99% of the then total outstanding shares of
the Common Stock.
The Company will control the timing and amount of any sales of GHS
Purchase Shares to GHS.
Events of default under the GHS Purchase Agreement include the
following:
* the effectiveness of the registration statement registering
the sale of the GHS Purchase Shares lapses for any reason or such
registration statement (or the prospectus forming a part thereof)
is unavailable to GHS for resale of any or all of the GHS Purchase
Shares to be issued to GHS under the GHS Purchase Agreement;
* the Common Stock is suspended from trading on the principal
market for a period of two consecutive trading days, during which
time the Company may not direct GHS to purchase any shares during
that time;
* the Common Stock is delisted such that the Common Stock is not
trading on any principal market;
* the failure for any reason by the transfer agent to issue GHS
Purchase Shares to GHS within three business days after the date on
which GHS was entitled to receive the shares;
* the Company breaches any representation, warranty, covenant or
other term or condition under the GHS Purchase Agreement, its
Schedules, or any related document if the breach could have a
material adverse effect and except, in the case of a breach of a
covenant that is reasonably curable, only if the breach continues
for a period of at least five business days;
* a proceeding against the Company is commenced by any person or
entity pursuant to or within the meaning of any bankruptcy law;
* the Company, pursuant to or within the meaning of any
bankruptcy law, (i) commences a voluntary case, (ii) consents to
the entry of an order for relief against it in an involuntary case,
(iii) consents to the appointment of a custodian of it or for all
or substantially all of its property, or (iv) makes a general
assignment for the benefit of its creditors or is generally unable
to pay its debts as they become due;
* a court of competent jurisdiction enters an order or decree
under any bankruptcy law that (i) is for relief against the Company
in an involuntary case, (ii) appoints a custodian of the company or
for all or substantially all of its property, or (iii) orders the
liquidation of the Company; or
* if at any time the Company is not eligible to transfer its
Common Stock electronically as DWAC Eligible.
So long as an Event of Default has occurred and is continuing, the
Company shall not deliver to GHS any Purchase Notice.
The GHS Purchase Shares will be issued to GHS in a registered
direct offering, pursuant to which the GHS Purchase Shares are
registered under the Securities Act of 1933, as amended, pursuant
to a prospectus supplement to the Company's currently effective
registration statement on Form S-3 (File No. 333-253953), which was
initially filed with the U.S. Securities and Exchange Commission on
March 5, 2021, and was declared effective on March 22, 2021. A
prospectus supplement for the Offering was filed on Nov. 4, 2022
and is available on the SEC’s web site at http://www.sec.gov.
The GHS Purchase Agreement contains customary representations,
warranties and agreements by the Company and GHS, customary
conditions to closing, indemnification obligations of the parties,
including for liabilities under the Securities Act and other
obligations of the parties.
Further, pursuant to the terms of the GHS Purchase Agreement, from
Nov. 4, 2022 until the date that is the later of (i) the closing of
the transactions whereby Yotta Merger Sub, Inc. will merge with and
into the Company, with the Company as the surviving company; and
(ii) the 12 month anniversary of the first delivery of GHS Purchase
Shares, upon any issuance by the Company or any of its subsidiaries
of Common Stock or Common Stock equivalents for cash consideration,
indebtedness or a combination of units thereof, GHS shall have the
right to participate in any financing, up to an amount of the
Subsequent Financing equal to 100% of the Subsequent Financing on
the same terms, conditions and price provided for in the Subsequent
Financing. Following the Merger, the Participation Maximum shall
be 50% of the Subsequent Financing.
About NaturalShrimp
NaturalShrimp, Inc. is a publicly traded aqua-tech Company,
headquartered in Dallas, with production facilities located near
San Antonio, Texas. The Company has developed a commercially viable
system for growing shrimp in enclosed, salt-water systems,
using patented technology to produce fresh, never frozen, naturally
grown shrimp, without the use of antibiotics or toxic chemicals.
NaturalShrimp systems can be located anywhere in the world to
produce gourmet-grade Pacific white shrimp.
Naturalshrimp reported a net loss of $86.30 million for the year
ended March 31, 2022, a net loss of $3.59 million for the year
ended March 31, 2021, and a net loss of $4.81 million for the year
ended March 31, 2020. As of June 30, 2022, the Company had $35.45
million in total assets, $24.71 million in total liabilities, $2.02
million in series E redeemable convertible preferred stock, $43.61
million in series F redeemable convertible preferred stock, and a
total stockholders' deficit of $34.89 million.
Dallas, Texas-based Turner, Stone & Company, L.L.P., the Company's
auditor, issued a "going concern" qualification in its report dated
June 29, 2022, citing that the Company has suffered significant
losses from inception and has a significant working capital
deficit. These conditions raise substantial doubt about its
ability to continue as a going concern.
NAVIENT CORP: Loses Student Loan Bankruptcy Battle
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Alex Wolf of Bloomberg Law reports that private student loan
borrowers won a nationwide injunction barring Navient Corp. from
trying to collect on certain loans that they believe should have
been discharged in bankruptcy, but their quest for financial relief
from the debt servicer is just heating up.
Courts have chipped away in recent years at the long-held notion
that a debtor can't wipe out any type of student loan debt in
bankruptcy without a burdensome showing of "undue hardship."
The plaintiffs, who sued Navient in a proposed class action in New
York bankruptcy court, now want the class certified so they can
seek further relief from privately issued student loans that
exceeded college attendance costs. But getting any class certified
is difficult in the first place, an ordeal that is exacerbated by
certain precedents limiting a bankruptcy court's jurisdictional
authority.
Still, the case against the massive loan servicer is being closely
monitored, as the outcome could dramatically affect tens of
thousands of student loans.
"You're talking about hundreds of millions of dollars still
outstanding and hundreds of millions of dollars that have been paid
back already," said plaintiffs' attorney Adam Shaw of Boies
Schiller Flexner LLP.
The preliminary injunction, issued on Oct. 17. 2022 by Judge
Elizabeth Stong of the US Bankruptcy Court for the Eastern District
of New York, prevents Navient from trying to collect on so-called
Tuition Answer loans from many former recipients across the
country. Navient has appealed the injunction and is expected to
challenge the case at every turn.
"Every step of this case will be appealed to the extent appeals
will be allowed," said John Rao, an attorney with the National
Consumer Law Center.
Bankruptcy Courts' Jurisdiction
If the plaintiffs, Hilal K. Homaidan and Reeham Youssef, are
successful in getting their putative class certified, the borrowers
will try to seek damages and claw back payments made on those
beyond-college-expenses loans after they received a bankruptcy
discharge, Shaw said.
Stong's rulings so far are encouraging for the plaintiffs, but
Navient believes a nationwide injunction is unlikely to withstand
scrutiny on appeal.
Federal appeals courts in the past "have uniformly held that a
bankruptcy court doesn't have the authority to address the alleged
violation of discharge injunctions issued outside of the district
in which the bankruptcy court sits," the company said in an October
filing.
In a 2019 ruling in another case involving Navient, the US Court of
Appeals for the Fifth Circuit said that some education loans can be
summarily discharged in bankruptcy, but "a bankruptcy court does
not have authority to enforce the discharge injunctions entered in
other districts."
Navient ultimately settled the underlying Fifth Circuit case by
returning up to $2.5 million to a class of people who went through
bankruptcy in Texas, Louisiana, or Mississippi—all within the
circuit's jurisdiction.
"The question is ‘can the court go beyond the main plaintiffs?'"
Rao said. "The Fifth Circuit has already said 'no' to this."
But Stong has been careful in Homaidan’s case, evidenced by her
"very detailed" 111-page opinion granting the injunction, Rao said.
The court also acknowledged plaintiffs’ evidence that Navient
previously warned investors that certain loans might be subject to
discharge.
"She's really dealing with an amazing amount of jurisdictional
bankruptcy questions on top of the student loan issues," said Rao.
Seeking Class Action
Discharging federal student loan debt in bankruptcy can be
prohibitively difficult because it requires borrowers to litigate
and show that repayment would be overly burdensome. For many years
it was commonly believed that the same applied to private student
loans.
But in the last five years, borrowers have had success convincing
courts that certain private loans fall into the category of debt
that can be more easily discharged.
The US Court of Appeals for the Second Circuit last 2021 became the
third federal appeals court to find that private education loans
can potentially be discharged in a standard consumer bankruptcy
case.
Homaidan and Youssef contend that the loans Navient continues to
bill for were discharged in bankruptcy because those loans exceeded
the cost of attendance at a Title IV college. Such loans don't
count as a “qualified education loan” exempt from discharge
under the bankruptcy code, they argue.
Stong said the putative class has "shown a likelihood of
irreparable injury in the absence of relief."
But bankruptcy presents tricky legal questions with respect to
broad class certification, said University of Utah law professor
Jason Iuliano.
Getting a class certified in a bankruptcy court can be difficult
because it may be hard to determine commonality of claims among
debtors and address alleged violations of discharge orders from
other courts.
"For an injunction to be applied nationwide, that's pretty common,"
Iuliano said. "But I wouldn't read too many tea leaves that a
nationwide class action is going to get off the ground."
In an unsuccessful bid to freeze Stong's decision, Navient said the
court lacked authority to grant nationwide relief. The company also
argues that the loans were taken out "to pay qualified education
expenses."
Navient declined to comment on the case, but noted that the loans
at issue in the injunction make up a small portion of its
portfolio.
Special Treatment
However the Homaidan case proceeds, consumers and bankruptcy
attorneys are increasingly coming to accept that some student loans
can be discharged in bankruptcy even without proving that continued
payment would be an undue hardship.
Until recently, "courts had not looked closely at the statute,"
said Dalié Jiménez, a professor at University of California,
Irvine School of Law. While Navient and others may have previously
taken advantage of ambiguities in the law, "not all student loans
are what’s included in the bankruptcy code," she said.
Beyond efforts for broad class relief, more individuals are
initiating bankruptcy court actions to challenge collection of
private student loan debt that may have qualified for discharge,
said Rao.
"There's certainly a lot more questions of whether this is a loan
that qualifies for that special treatment," he said. "The big issue
is how many of these loans are really out there."
About Navient Solutions
Navient Solutions is the servicing unit of student loan giant
Navient Corp. (Nasdaq:NAVI). Navient Solutions is a wholly-owned
subsidiary of Navient Corp. and acts as the principal management
company for most of Navient's business activities. Navient
Solutions' servicing division manages and operates the loan
servicing functions for Navient and its affiliates.
According to PacerMonitor.com, Sarah Bannister, Brandon Hood, and
LaBarron Tate have filed an involuntary Chapter 11 petition against
Navient Solutions, LLC (Bankr. S.D.N.Y. Case No. 21-10249) on Feb.
8, 2021, saying they were owed a combined $45,684 in "overpayments"
that they say the servicer illegally collected.
The Petitioners reportedly had their private student debts
discharged in bankruptcy but have been hounded and lied to for more
than a decade to repay discharged debts.
The Petitioners' counsel:
Austin C. Smith, Esq.
Smith Law Group LLP
95 Cove Hollow Rd
East Hampton, NY 11937
E-mail: acsmithlawgroup.com
aconnellsmith@gmail.com
NELSON BROTHERS: Seeks to Tap Hodgson Russ as Bankruptcy Counsel
----------------------------------------------------------------
Nelson Brothers West Seneca Investor Units, LLC seeks approval from
the U.S. Bankruptcy Court for the Western District of New York to
employ Hodgson Russ, LLP as its counsel.
The firm will advise the Debtor with respect to its duties in this
Chapter 11 case under the Bankruptcy Code.
The hourly rates of the firm's counsel and staff are as follows:
Attorneys $285 - $400
Paraprofessionals $185 - $200
James C. Thoman, Esq. $400
In addition, the firm will seek reimbursement for expenses
incurred.
James Thoman, Esq., a partner at Hodgson Russ, disclosed in a court
filing that his firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
James C. Thoman, Esq.
Hodgson Russ, LLP
140 Pearl Street, Suite 100
Buffalo, NY 14202
Telephone: (716) 848-1361
Email: jthoman@hodgsonruss.com
About Nelson Brothers West Seneca Investor Units
Nelson Brothers West Seneca Investor Units, LLC filed a voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
W.D.N.Y. Case No. 22-10980) on Oct. 19, 2022, with up to $10
million in both assets and liabilities. Brian Nelson, an authorized
representative, signed the petition.
Judge Carl L. Bucki oversees the case.
James C. Thoman, Esq., at Hodgson Russ, LLP is the Debtor's legal
counsel.
NEOVASC INC: Reducer Obtains U.S. Outpatient Reimbursement
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Neovasc Inc. said that the Centers for Medicare and Medicaid
Services has assigned the Neovasc Reducer implant procedure a new
outpatient reimbursement code payment status indicator, enabling
U.S. hospitals to be reimbursed for the device and implant
procedure.
Effective Jan. 1, 2023, the implantation of the Reducer in an
outpatient setting is assigned to Healthcare Common Procedure
Coding System code 0645T and payable under the Ambulatory Payment
Classifications ("APC") Code 5194, Level 4 Endovascular Repair.
APCs are the U.S. government's method of paying for outpatient
services for the Medicare and Medicaid programs. The new
classification enables the device and procedure to be reimbursed in
the current COSIRA-II clinical trial single arm registry and upon
potential commercial approval in the United States. The randomized
arm of the COSIRA-II clinical trial previously received
reimbursement approval in the United States under a dedicated HCPCS
code (C9783).
"Today's news is another important step in securing coding,
coverage, and payment for the Reducer in the United States. We now
have adequate reimbursement for the Reducer, in the CMS population,
for both inpatient and outpatient procedures, both during the
COSIRA-II Clinical Trial, and upon potential commercialization in
the United States," stated Neovasc President and Chief Executive
Officer Fred Colen. "Our reimbursement journey has been remarkably
successful around the world. We are beginning to see broader
adoption in markets where we have successfully obtained
reimbursement and look forward to continued rapid growth and
commercial expansion."
Neovasc began a comprehensive reimbursement program in 2019 to
establish all the necessary components for diagnosis and treatment
of refractory angina in the United States. The Company has worked
tirelessly with its physician advisors, consultants, CMS, the
American Medical Association, and multiple cardiology societies to
secure all the necessary approvals and codes for the diagnosis of
refractory angina and the implantation of the Reducer in both
inpatient and outpatient settings.
About Neovasc Inc.
Neovasc -- www.neovasc.com -- is a specialty medical device company
that develops, manufactures and markets products for the rapidly
growing cardiovascular marketplace. The Company develops minimally
invasive transcatheter mitral valve replacement technologies, and
minimally invasive devices for the treatment of refractory angina.
Its products include the Neovasc Reducer, for the treatment of
refractory angina, which is not currently commercially available in
the United States (2 U.S. patients have been treated under
Compassionate Use) and has been commercially available in Europe
since 2015, and Tiara, for the transcatheter treatment of mitral
valve disease, which is currently under clinical investigation in
the United States, Canada, Israel and Europe.
Neovasc reported a net loss of $24.89 million for the year ended
Dec. 31, 2021, following a net loss of $28.70 million for the year
ended Dec. 31, 2020. As of March 31, 2022, the Company had $60.05
million in total assets, $16.28 million in total liabilities, and
$43.77 million in total equity.
Vancouver, Canada-based Grant Thornton LLP, the Company's auditor
since 2002, issued a "going concern" qualification in its report
dated March 9, 2022, citing that the Company incurred a
comprehensive loss of $25.2 million during the year ended Dec. 31,
2021. These conditions, along with other matters, raise
substantial doubt about the Company's ability to continue as a
going concern as at Dec. 31, 2021.
OLD FIELD: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Old Field Holdings Inc.
190 Old Field Road
East Setauket, NY 11733
Business Description: The Debtor owns a single-family residence
located at 190 Old Field Road, East
Setauket, NY 11733 valued at $4 million.
Chapter 11 Petition Date: November 16, 2022
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 22-73213
Judge: Hon. Robert E. Grossman
Debtor's Counsel: Theresa A. Driscoll, Esq.
MORITT HOCK & HAMROFF LLP
400 Garden City Plaza
Suite 200
Garden City, NY 11530-3336
Tel: 516-873-2000
Fax: 516-873-2010
Email: tdriscoll@moritthock.com
Total Assets: $4,069,821
Total Liabilities: $1,929,019
The petition was signed by Jorge Villar as president.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/PYP5OKA/Old_Field_Holdings_Inc__nyebke-22-73213__0001.0.pdf?mcid=tGE4TAMA
ONE IMPORTERS: Seeks to Tap Lipton Law Group as Bankruptcy Counsel
------------------------------------------------------------------
One Importers and Distributors, LLC seeks approval from the U.S.
Bankruptcy Court for the District of Massachusetts to employ Lipton
Law Group, LLC as its legal counsel.
The firm will render these services:
(a) advise the Debtor with respect to its duties;
(b) advise the Debtor with respect to any plan of
reorganization and any other matters relevant to the formulation
and negotiation of a plan of reorganization;
(c) represent the Debtors at all hearings in this matter;
(d) prepare all necessary legal papers;
(e) review and analyze the nature and validity of any liens
asserted against the Debtors' property;
(f) review and analyze claims against the Debtor, the
treatment of such claims and the preparation, filing or prosecution
of any objections to claims; and
(g) perform all other legal services as may be necessary or
appropriate during the Debtor's bankruptcy proceeding.
Marques Lipton, Esq., an attorney at Lipton Law Group, will be
compensated at his hourly rate of $300, plus expenses.
Prior to the petition date, the firm received a retainer in the
amount of $6,000 from the Debtor.
Mr. Lipton disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Marques C. Lipton, Esq.
Lipton Law Group, LLC
945 Concord Street
Framingham, MA 01701
Telephone: (508) 202-0681
Email: marques@liptonlg.com
About One Importers and Distributors
One Importers and Distributors, LLC operates a wholesale commercial
bakery at 100 Weymouth St., Unit # G2, Rockland, Mass. It owns the
commercial condominium unit in which it operates.
One Importers and Distributors sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 22-11592) on
Nov. 11, 2022. In the petition signed by its manager, Maria Betania
Damota, the Debtor disclosed up to $1 million in both assets and
liabilities.
Marques C. Lipton, Esq., at Lipton Law Group, LLC, is the Debtor's
counsel.
PARKWAY GENERATION: S&P Alters Outlook to Neg., Affirms 'BB' ICR
----------------------------------------------------------------
S&P Global Ratings revised the outlook to negative from stable and
affirmed its 'BB' rating on Parkway Generation LLC's senior secured
term loan facilities.
The recovery rating of '1', indicating S&P's expectation of
substantial (90%-100%; rounded estimate: 90%) recovery in a default
scenario, is unchanged.
The negative outlook reflects the possibility that the project
could underperform S&P's base-case scenario in the next 12-24
months due to lower-than-expected sweeps, materially lower capacity
factors, or higher emissions costs. S&P expects the project to
sweep $85 million-$95 million in the next 12 months starting
October 2022.
Parkway is an eight-asset power portfolio with 4,805 megawatts (MW)
nameplate capacity in the Eastern Mid-Atlantic Area Council (EMAAC)
and Mid-Atlantic Area Council (MAAC) zones of the PJM
Interconnection (PJM). The project's assets operate on a merchant
basis and sell power into the Public Service Enterprise Group Inc.
(PSEG) and Potomac Electric Power Co. zones of PJM.
An affiliate of ArcLight Capital Partners LLC entered into an
agreement to acquire the portfolio of assets from PSEG in February
2022. ArcLight funded the acquisition with a mix of equity and
$1.14 billion of debt.
-- With the incremental TLB debt, the project will have leverage
of $251 per kilowatt (kW), representing significantly less leverage
on a per-kW basis than that of several projects with operations in
PJM that are rated by S&P Global Ratings. S&P's leverage measure
includes both term loans, B and C. The term loan C typically
supports standby letters of credit and funds restricted cash
retained by the business.
-- All assets except Keys Energy Center (Keys) are in EMAAC, and
capacity prices in that region have a significant premium over the
regional transmission organization price due to transmission
constraints. About half of the portfolio's cash flow is expected to
come from known capacity prices through May 2023 and Keys'
seven-year fixed-price capacity sales agreement through May 2026.
-- Parkway's two main facilities, Keys and Sewaren, are both
recent new builds with long forecast asset lives that employ
advanced turbine technology, leading to very competitive heat
rates.
-- Parkway's dual-fuel assets should benefit from upside potential
from oil-fired production during extreme weather conditions.
-- Parkway sells all its power on a merchant basis. The wholesale
market is highly competitive. Like all merchant power plants,
especially those in non-constrained regions, the assets face market
risks, such as power demand, commodity prices, and PJM capacity
price volatility.
-- The portfolio depends on natural gas as the primary fuel source
for each of its generating units. During the life of its assets,
Parkway is exposed to risks from competing technologies, as well as
future greenhouse gas legislation, which could meaningfully
increase the project's variable costs.
-- The portfolio has assets of varying age, several of which
(namely, the peaking assets) will likely retire by 2040. Therefore,
the project will rely on a smaller number of assets to generate
cash flow to repay debt toward the end of its useful life. If cash
flow is weaker than expected early in the project's life, the
project--as currently constructed--might have trouble repaying debt
toward the latter part of its useful life.
-- The project pays out tax distributions of up to $40 million per
year. These distributions come after debt service in the waterfall
and do not affect S&P's debt service coverage ratio (DSCR)
measures. However, they represent a drag on the project's ability
to repay debt.
Normalized long-term spark spreads and lower capacity prices,
coupled with higher debt, will pressure DSCRs starting mid-2023.
S&P said, "We anticipate that the higher TLB debt balance due to
this issuance will be partially offset by our revised assumptions.
As a result, we revised the outlook to negative to reflect our view
that the project could underperform in terms of sweep expectations,
which would lead to a higher debt balance and weaker DSCRs."
S&P said, "In terms of our base-case assumptions, we are projecting
higher energy gross margins for 2022 and 2023, normalizing by 2024
and beyond. At the same time, we have revised downward our capacity
price assumptions. The recent auction also resulted in lower
cleared capacity prices in MAAC and EMAAC starting in mid-2023. The
combined impact of our change in capacity price assumptions,
normalized long-term spark spreads, and higher emissions costs in
2023 is expected to put downward pressure on cash flow available
for debt service and DSCRs starting in mid-2023.
"As a result, we now forecast a lower minimum DSCR of 1.43x in
2024, with an average post-refinancing DSCR of about 1.77x.
"Although we still view these metrics as supportive of the rating,
this compares unfavorably with our previous expectation of a
minimum DSCR of about 1.84x in June 2023. While unfavorable, we
expect that DSCRs will return to above 1.7x starting in 2025.
"We do not expect improved spark spreads will result in accelerated
debt repayment.We expect higher spark spreads will not be
sufficient to offset the $175 million distribution and higher
interest expense for the remainder of 2022 and 2023. Furthermore,
we note that this upsizing negates the effect of robust performance
in 2022 in terms of energy margin, which could have led to sweep
repayment."
The higher interest expense is a result of rising interest rates
and increased debt. The project has partially hedged interest rates
in 2023; however, it is fully exposed to floating rates thereafter.
Mandatory amortization on the TLB is 1% annually and as a result
the debt repayment is reliant on cash flow sweeps.
S&P said, "We expect the TLB will have close to $660 million
outstanding at maturity, which is about $90 million higher than our
previous forecast, before the $75 million upsizing. At the same
time, our minimum DSCR of above 1.75x in the post-refinancing
period is still supportive of the rating.
"Upsizing and distribution are credit negative. The $75 million TLB
add-on and concurrent distribution will pressure DSCRs in 2024. In
our view, this emphasizes the project's reliance on mandatory debt
amortization of 1% annually and cash flow sweeps to pay down debt.
We expect $85 million-$95 million in cash flow sweeps over the next
12 months, and expect the project will rely on sweeps for debt
repayment and to support our forecast DSCRs.
"The negative outlook reflects the possibility that the project
could underperform our base-case scenario in the next 12-24 months
due to lower-than-expected sweeps, materially lower capacity
factors, or higher emissions costs. We expect the project will
sweep $85 million-$95 million in the next 12 months starting
October 2022."
S&P could lower the rating on Parkway's debt if the project does
not sweep at least $75 million over the next 12 months. This could
stem from:
-- Weaker realized spark spreads or lower PJM capacity prices for
delivery year 2024-2025 and beyond;
-- Unplanned outages that substantially affect generation;
-- Economic factors in which the power plants are regularly kept
at minimum load; or
-- The project's excess cash flow does not translate into debt
paydown as S&P expects.
S&P could revise the outlook to stable if it believes Parkway will
achieve DSCRs above 1.7x over the remainder of the project's asset
life. This could stem from:
-- Secular developments in the PJM wholesale market that
positively influence the power and capacity prices for an extended
period;
-- Steady operational performance; and
-- Continued access to relatively inexpensive natural gas
feedstock.
PETROLIA ENERGY: Disputes Counterclaims in Fraud Suit
-----------------------------------------------------
As previously disclosed, on March 11, 2022, Petrolia Energy
Corporation and Petrolia Canada Corporation, an affiliate of
Petrolia, filed a lawsuit in the 133rd Judicial District Court,
Harris County Texas (Cause No. 2022-15278), against Jovian
Petroleum Corporation, Zel Khan and Quinten Beasley.
In the petition against the Defendants, Petrolia and Petrolia
Canada alleged causes of action for fraud and breach of contract
against all the named Defendants and breach of fiduciary duty
claims against Defendants Zel Khan and Quinten Beasley. Defendant
Zel Khan was a former CEO and Director of Petrolia, and Defendant
Quinten Beasley was a former senior vice president and director of
Petrolia Canada.
Petrolia and Petrolia Canada are demanding a jury trial and are
seeking monetary relief of more than $1 million against the
Defendants.
In September 2022, Defendants filed an amended answer and
counterclaims. The Defendants are seeking indemnification under
the Company's governing documents and statutory provisions.
Beasley is also seeking repayment of the outstanding balance of
$5,000 plus accrued interest in connection with a promissory note
entered into with the Company on July 14, 2016.
On Oct. 11, 2022, Petrolia and Petrolia Canada filed a general
denial of all of the Defendants' counterclaims.
Petrolia said the outcome of the above litigation is currently
unknown; however, the Company disputes the Defendants'
counterclaims and intends to defend the matter vigorously, while
also continuing to seek all damages which it is due.
On Sept. 27, 2022, the Financial Industry Regulatory Authority
pulled the Company's stock symbol due to inactivity in the
Company's security for a year. The Company said it is taking steps
to become current in its filings with the Securities and Exchange
Commission and upon becoming current in its filings with the
Securities and Exchange Commission, it plans to engage a market
maker to file a Form 15c2-11 with FINRA and obtain a stock symbol.
About Petrolia
Petrolia Energy Corporation is engaged in the exploration and
development of oil and gas properties. Since 2015, the Company
has
established a strategy to acquire, enhance and redevelop
high-quality, resource in place assets. As of 2018, the Company
has
included strategic acquisitions in western Canada while actively
pursuing the strategy to execute low-cost operational solutions,
and affordable technology.
Petrolia Energy reported a net loss of $10.31 million for the year
ended Dec. 31, 2020, compared to a net loss of $2.89 million for
the year ended Dec. 31, 2019. As of Sept. 30, 2021, the Company
had $7.22 million in total assets, $11.87 million in total
liabilities, and a total stockholders' deficit of $4.65 million.
Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
May 13, 2022, citing that the company suffered recurring net losses
from operations for the years ended December 31, 2020 and 2019 and
has a working capital deficit at Dec. 31, 2020, which raises
substantial doubt about its ability to continue as a going concern.
PREFERRED READY-MIX: Judge Grants in Part Complaint for Turnover
----------------------------------------------------------------
In the adversary proceeding titled IN RE: PREFERRED READY-MIX LLC,
Chapter 11, Debtor. PREFERRED READY-MIX LLC, Plaintiff, v. ROBERT
BERLETH and BERLETH AND ASSOCIATES, Defendants, Case No. 21-33369,
Adversary No. 22-3040, (Bankr. S.D. Tex.), Bankruptcy Judge Jeffrey
Norman granted in part and denied in part the Debtor Preferred
Ready Mix LLC's Complaint for Turnover and related relief.
Prior to the filing of this adversary proceeding the Debtor was the
owner/operator of concrete mixing trucks. The Debtor is a limited
liability corporation, which is 50% owned by Robert Foran. After a
Texas state court suit styled Roesle v. Foran et al, 19-DVC-267154,
in Fort Bend County, 400th Judicial District Court, entered default
judgment against Foran and Nolan Star Trucking, LLC, Robert Berleth
was appointed as State Court receiver.
On Oct. 1, 2021, Berleth seized six Peterbilt Mixer Trucks, a 2003
Ford Model F250, compressor and tools on the Ford Truck, office
supplies and office records from the Debtor. On Oct. 14, 2021, the
Debtor filed a Chapter 11 case. While demand for turnover was not
made immediately after the petition date due to due to issues of
the Debtor's counsel, demand was properly made by the Debtor's new
counsel for return of these items on Nov. 10, 2021.
By Oct. 21, 2022, Berleth had actual notice of the bankruptcy
filing. At this juncture, the Court would have expected an orderly
progression in this case given proper notice by the Debtor of the
filing and the demand for possession of the seized assets by
counsel — seized assets would have been turned over to the
Debtor, and Berleth would have filed a claim for administrative
expenses — but this did not occur.
Consequently, the Debtor brought this adversary proceeding against
Berleth under four counts: turnover, stay violation, conversion and
disallowance of claim. The Debtor contends that Berleth
intentionally and improperly used the leverage of his possession of
the Debtor's major assets and made demands for payment against the
Debtor in order to thwart immediate turnover. Additionally, Berleth
[or his agents] collected estate assets from the Debtor in the form
of a $2,500 payment without Court authority.
The Court finds that Berleth's failure to act to turn over assets,
together with his demands, effectively held the major assets of the
debtor hostage. The Court strongly disagrees with Berleth's
testimony where he indicated that he had followed the rules in this
bankruptcy case because he attempted to use his position as a state
court appointed receiver to thwart the provisions of 11 U.S.C.
Sections 542 and 543.
By clear and convincing evidence, the Debtor has met its burden as
to the six Peterbilt Mixer Trucks, the 2003 Ford Model F250 and the
compressor. The Court can find that as to this property prior to
turnover (1) the property was in the possession, custody or control
of another entity; (2) the property could be used in accordance
with the provisions of Section 363; and (3) the property had more
than inconsequential value to the debtor's estate. However, as to
the remainder of the property claimed by the Debtor to be subject
to turnover, the evidence is less substantial and fails to meet a
burden of clear and convincing evidence or even a lesser
evidentiary standard of a preponderance of the evidence.
On Feb. 18, 2022, Berleth provided an accounting to the Court in
the underlying bankruptcy case and confirms the turnover of the six
Peterbilt Mixer Trucks, the 2003 Ford Model F250 and the compressor
has already occurred on Nov. 20, 2021 and Dec. 6, 2021.
Now, the Debtor seeks damages as a result of Berleth's actions,
including attorney fees and costs. However, the Debtor did not call
a witness for attorney's fees, so no attorney fees are awarded. But
the Court grants damages of $500 per day, for each of the six
Peterbilt Trucks and the Ford Truck, for each of the ten days the
vehicles were not turned over. Therefore, there is a total damage
award of $35,000.
The Court finds also Berleth's actions were with actual knowledge
of the bankruptcy filing and intentional, with the intent to
deprive the Debtor of his assets — these actions were not in good
faith and in contravention of the provisions of the automatic stay.
Furthermore, the Court finds that Berleth did more than just
passive retention of estate property, as demand was made. Given the
finding of bad faith and intentional actions by Berleth, the Court
awards punitive damages of $10,000.
Accordingly, the Court grants the Debtor the amount of $45,000,
which comprised of actual damages in the amount of $35,000 and
punitive damages in the amount of $10,000. The Court further orders
that Berleth's administrative claim in the amount of $7,000 is
disallowed after finding that Berleth's claimed administrative
expense was of no benefit to the estate and its creditors. The
claim is either wholly or mostly self-serving and inflated due to
his improper actions.
Finally, the Court finds that the Debtor has failed in its burden
of proof of conversion. The Debtor's evidence of ownership, its
legal title, and possession of the tools it claims were converted
by Berleth is lacking. The Debtor had no inventory of the tools it
claims were converted. Moreover, there was no specific list of
tools reflected in the asset schedules filed in the Chapter 11
case. Accordingly, the Court denies relief on the count of
conversion.
A full-text copy of the Memorandum Opinion dated Nov. 9, 2022, is
available at https://tinyurl.com/2p8mx26k from Leagle.com.
About Preferred Ready-Mix
Preferred Ready-Mix, LLC, filed a petition for Chapter 11
protection (Bankr. S.D. Tex. Case No. 21-33369) on Oct. 14, 2021,
listing as much as $1 million in both assets and liabilities.
Lincoln M. Catchings, III, vice president, signed the petition.
Judge Jeffrey P. Norman oversees the case.
The Debtor tapped Joyce W. Lindauer Attorney, PLLC, as legal
counsel.
RIOME PLUMBING: Dec. 22 Plan Confirmation Hearing Set
-----------------------------------------------------
On Nov. 4, 2022, Riome Plumbing & Mechanical LLC filed with the
U.S. Bankruptcy Court for the District of New Jersey a Disclosure
Statement describing Chapter 11 Plan of Reorganization.
On Nov. 10, 2022, Judge Andrew B. Altenburg, Jr. approved the
Disclosure Statement and ordered that:
* Dec. 22, 2022 at 10:00 am is fixed as the date and time for
the hearing on confirmation of the plan.
* Written acceptances, rejections or objections to the plan
shall be filed with the attorney for the plan proponent not less
than 7 days before the hearing on confirmation of the plan.
A copy of the order dated November 10, 2022, is available at
https://bit.ly/3tAhGGU from PacerMonitor.com at no charge.
Attorneys for Debtor:
David A. Kasen, Esq.
KASEN & KASEN, P.C.
Society Hill Office Park, Suite #3
1874 E. Marlton Pike
Cherry Hill, NJ 08034
Telephone: (856) 424-4144
Fax: (856) 424-7565
Email: dkasen@kasenlaw.com
About Riome Plumbing
Riome Plumbing & Mechanical LLC is Categorized under Plumbers and
Plumbing Contractors.
Riome Plumbing & Mechanical LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. N.J. Case No. 22-14859) on
June 14, 2022. In the petition filed by Tyrone Pitts, as managing
member, the Debtor reports estimated assets and liabilities between
$500,000 and $1 million. David A. Kasen, of Kasen & Kasen PC, is
the Debtor's counsel.
RODA EXPRESS: Seeks to Hire Carl M. Barto as Bankruptcy Counsel
---------------------------------------------------------------
RODA Express Logistics, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ the Law Office
of Carl M. Barto as its counsel.
The firm will render these services:
(a) analyze financial situation and render advice and
assistance to the Debtor;
(b) advise the Debtor with respect to its duties;
(c) prepare and file legal papers;
(d) represent the Debtor at the first meeting of creditors and
such other services as may be required during the bankruptcy
proceedings;
(e) represent the Debtor in all proceedings before the court
and in any other judicial or administrative proceeding where the
rights of the Debtor may be litigated or otherwise affected;
(f) prepare and file a disclosure statement (if required) and
Chapter 11 plan of reorganization; and
(g) assist the Debtor in any matters relating to or arising
out of its Chapter 11 case.
Prior to the petition date, the firm received a retainer of $11,738
from the Debtor.
The hourly rates of the firm's counsel and staff are as follows:
Carl M. Barto, Esq. $350
Maria Lilia C. Barto, Esq. $350
Paralegals $90
Mr. Barto disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Carl M. Barto, Esq.
Law Office Of Carl M. Barto
817 Guadalupe
Laredo, TX 78040
Telephone: (956) 725-7500
Email: cmblaw@netscorp.net
About RODA Express Logistics
RODA Express Logistics LLC is a licensed trucking company running
freight hauling business from Laredo, Texas.
RODA Express Logistics filed a petition for relief under Subchapter
V of Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No.
22-50069) on Oct. 10, 2022, with between $1 million and $10 million
in both assets and liabilities. Catherine Stone Curtis has been
appointed as Subchapter V trustee.
Judge David R. Jones oversees the case.
The Debtor is represented by Carl Michael Barto, Esq., at the Law
Office of Carl M. Barto.
SARONA PROPERTY: Taps Law Office of Adam I. Skolnik as Counsel
--------------------------------------------------------------
The Sarona Property Land Trust UAD April 10, 2017, through its
trustee Nazy Ben-Amram, seeks approval from the U.S. Bankruptcy
Court for the Southern District of Florida to employ the Law Office
of Adam I. Skolnik, PA as legal counsel.
The firm will render these services:
(a) advise the Debtor with respect to its powers and duties;
(b) advise the Debtor with respect to its responsibilities in
complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements, the requirements of the Bankruptcy Code,
the Federal Rules of Bankruptcy Procedure, and applicable
bankruptcy rules;
(c) assist the Debtor in the investigation and pursuit of
property of the estate, and the sale of some or all of its assets,
if needed;
(d) assist the Debtor in the formulation, dissemination and
approval of a disclosure statement and Chapter 11 plan;
(e) prepare legal documents;
(f) protect the interest of the Debtor in all matters pending
before the court;
(g) represent the Debtor in negotiation with its creditors in
the preparation of a plan; and
(h) perform all other necessary functions for the proper
administration of the bankruptcy estate.
The hourly rates of the firm's professionals are as follows:
Adam I. Skolnik, Esq. $500
Paralegals $155
In addition, the firm will seek reimbursement for expenses
incurred.
Prior to the petition date, the firm received a retainer of $7,500
from the Debtor's trustee.
Mr. Skolnik disclosed in a court filing that his firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Adam I. Skolnik, Esq.
Law Office of Adam I. Skolnik, PA
1761 West Hillsboro Boulevard, Suite 201
Deerfield Beach, FL 33442
Telephone: (561) 265-1120
Email: askolnik@skolniklawpa.com
About The Sarona Property Land Trust UAD
The Sarona Property Land Trust UAD April 10, 2017 is the fee simple
owner of three properties located in Hallandale Beach, Florida
having an aggregate value of $2.12 million.
The Sarona Property Land Trust UAD sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case No. 22-18621)
on Nov. 6, 2022. In the petition signed by trustee, Nazy Ben Amram,
the Debtor disclosed up to $2,126,311 in total assets and $747,019
in total liabilities.
The Law Office of Adam I. Skolnik, PA serves as the Debtor's
counsel.
SEARS HOLDINGS: Plan Declared Effective After 3 Years
-----------------------------------------------------
Sears Holdings Corp. said Oct. 31, 2022, that all conditions
precedent to
the Effective Date of the Second Amended Joint Chapter 11 Plan
were satisfied or waived in accordance with the Plan and the Plan
was substantially consummated. Accordingly, October 29, 2022 is
the Effective Date of the Plan.
As of the Effective Date, the permanent injunction set forth in
Section 15.8 of the Plan is now in place. Judge Robert D. Drain
earlier confirmed the Plan on Oct. 15, 2019.
Down to 20+ Stores
Edmund H. Mahony of Hartford Courant (TNS) reports that Sears
Holdings has emerged from bankruptcy after more than 10,000 court
filings and a four-year stay that saw the department store chain
shrink from almost 700 stores to less than two dozens.
The bankruptcy estate's reorganization plan took effect on Oct. 29,
2022, signaling an end to Chapter 11 and the start of a liquidation
process for its remaining assets.
Sears Holdings is a shell company. It sold its stores in February
2019 to ESL Investments, an affiliate of former Sears chair Eddie
Lampert. The $5.2 billion sale included more than 400 retail
locations.
Syracuse University professor of retail practice Ray Wimer doesn't
expect the remaining 20+ Sears stores from that sale to survive.
"They do not have an appealing value proposition to customers and
the amount of competition in the retail marketplace offering
similar goods means the end will come at some point," he told FOX
Business.
Sears once advertised itself as "Where America Shops" and boasted
merchandise lines from supermodel Cheryl Tiegs and "Charlie’s
Angel's" star Jaclyn Smith.
At its peak, Sears, Roebuck was the world's largest retailer, with
nearly 3,500 Sears and Kmart stores, including 2,350 full-line and
off-mall stores, and 1,100 specialty retail stores. Sears also had
a portfolio of prominent brands and operating businesses, including
Kenmore, DieHard, Craftsman, Sears Home Services, Sears Auto
Centers and Innovel.
Competitor Walmart had just over 3,000 stores: 1,353 discount
stores and 1,713 Supercenters.
Lampert, then chair of Kmart Holding, bought Sears for $11 billion
in March 2005 in a bid to hold off brick-and-mortar competitors
such as Walmart and e-commerce competitors such as Amazon.
At the time of the merger, the Sears-Kmart combo, called
Transformco, had annual revenues of $55 billion, a fifth of
Walmart's fiscal 2004 total of $256 billion.
Amazon had annual revenue of $2.54 billion. Since then, the world's
largest online retailer has grown to $469.8 billion in sales while
Walmart ended 2021 at $572.8 billion. Transformco is private and
does not report financial results.
Sears tried to stave off bankruptcy by closing stores and selling
assets. Sears sold its Craftsman brand to Stanley Black & Decker in
2017 for $775 million and closed 300 stores in 2018.
It wasn't enough.
The company entered bankruptcy in October 2018 with 687 stores.
Like many brick-and-mortar retailers, the department store fell
victim to declining sales. Revenues dropped 53.8% in the five years
prior to bankruptcy, prompting some vendors to demand unfavorable
payment schedules, reduce subsidies or ask for cash in advance as a
condition for continued delivery of merchandise.
Lampert bought Sears' remaining assets in a January 2019 bankruptcy
auction and acquired Sears Hometown and Outlet Stores in June 2022.
He sold DieHard to Advance Auto for $200 million in December 2019.
Transformco has continued to sell off stores and closed the final
15 Sears Auto Center locations in January 2023.
Professor Wimer says, based on what he has seen, he expects the
Sears stores to die a slow death, noting it's unlikely anyone would
be interested in buying any of Sears' assets, if Lampert were
interested in selling, given the small footprint of the remaining
stores.
There are now less than two dozen Sears stores, excluding smaller
format Hometown Stores, according to BroStocks and the Sears
website.
About Sears Holdings Corp.
Sears Holdings Corporation -- http://www.searsholdings.com/--
began as a mail ordering catalog company in 1887 and became the
world's largest retailer in the 1960s. At its peak, Sears was
present in almost every big mall across the U.S., and sold
everything from toys and auto parts to mail-order homes. Sears
claims to be a market leader in the appliance, tool, lawn and
garden, fitness equipment, and automotive repair and maintenance
retail sectors.
Sears and Kmart merged to form Sears Holdings in 2005 when they had
3,500 US stores between them. Kmart emerged in 2005 from its own
bankruptcy.
Unable to keep up with online stores and other brick-and-mortar
retailers, a long series of store closings left it with 687 retail
stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands
as of mid-October 2018. At that time, the Company employed 68,000
individuals.
As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total
assets against $11.33 billion in total liabilities.
Unable to cover a $134 million debt payment due Oct. 15, 2018,
Sears Holdings Corporation and 49 subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15,
2018. The Hon. Robert D. Drain is the case judge.
The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel;
M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as
investment banker; DLA Piper LLP as real estate advisor; and Prime
Clerk as claims and noticing agent.
The U.S. Trustee for Region 2 appointed nine creditors, including
the Pension Benefit Guaranty Corp., and landlord Simon Property
Group, L.P., to serve on the official committee of unsecured
creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP
as legal counsel; FTI Consulting as financial advisor; and Houlihan
Lokey Capital, Inc. as investment banker.
The U.S. Trustee for Region 2 on July 9, 2019, appointed five
retirees to serve on the committee representing retirees with life
insurance benefits in the Chapter 11 cases.
* * *
In February 2019, Bankruptcy Judge Robert Drain authorized Sears
Holdings approval to sell the business to majority shareholder and
CEO Eddie Lampert for approximately $5.2 billion. Lampert's ESL
Investments, Inc., won an auction to acquire substantially all of
Sears' assets, including the "Go Forward Stores" on a going-concern
basis. The proposal allowed 425 stores to remain open and provided
ongoing employment to 45,000 employees.
The new parent is Transform SR Brands LLC, doing business as
Transformco, referred to as "New Sears". Transform is an American
privately held company formed on Feb. 11, 2019, to acquire some of
the assets of Sears Holdings Corporation. The new company is owned
by Eddie Lampert's ESL Investments.
SEARS HOLDINGS: Solicitor General Can Weigh Ch. 11 Lease Fight
--------------------------------------------------------------
Vince Sullivan of Law360 reports that the U.S. Supreme Court on
Monday, November 7, 2022, granted the request of the solicitor
general to weigh in on a lease sale fight between formerly bankrupt
retailer Sears and the Mall of America over the transfer of a store
lease at the sprawling Minnesota shopping center.
Reuters reported in June 2022 that the U.S. Supreme Court agreed to
hear Mall of America's challenge to a lower court ruling finding it
had to honor an extremely tenant-friendly lease it had made with
Sears Holdings Corp, which was sold to a new owner during the U.S.
department store chain's bankruptcy case.
In its March petition, Mall of America had urged the high court to
take the case asking it to review the extent to which U.S.
bankruptcy law limits the appeals of bankruptcy sales. Mall of
America argued appeals related to asset sales and lease transfers
are common in Chapter 11 cases, but that appeals courts have split
on the extent to which they were allowed.
The lease at issue, signed in 1991, offered Sears rent of just $10
a year for 100 years at the Mall of America in Minneapolis,
Minnesota. After Sears went bankrupt in 2018, it sold its assets
for $5.2 billion to Sears Holdings Corp former chairman Eddie
Lampert and his hedge fund ESL Investments Inc, and the Mall of
America lease was transferred to Transform Holdco LLC, a new
company formed by Sears' new owners.
Mall of America attempted to stop the lease transfer during the
bankruptcy case. But the 2nd U.S. Circuit Court of Appeals found in
December 2021 that bankruptcy law did not allow it to appeal a
lease transfer that was "integral" to a court-approved bankruptcy
sale.
In its petition, Mall of America argued that bankruptcy law limits
the ability of courts to unwind a sale after appeal, but it did not
prevent appeals entirely.
Transform did not initially oppose Mall of America's district court
appeal of the lease transfer. But when that court ruled against it,
Transform filed its own appeal to the 2nd Circuit, where it argued
that the dispute should never have been heard in the district court
at all.
Transform, in a reply to the petition, said that Sears' long-term
retail leases were "a substantial portion of the value of what it
purchased." Preventing appeals over bankruptcy sales generally
benefits both buyers and sellers, because it allows buyers to offer
higher prices rather than hedging against the risk of a successful
appeal, Transform said.
The case is MOAC Mall Holdings LLC v. Transform Holdco LLC, U.S.
Supreme Court, No. 21-1270
For petitioner: Douglas Hallward-Driemeier, Gregg Galardi, Andrew
Devore and Daniel Egan of Ropes & Gray; and Gregory Otsuka of
Larkin Hoffman Daly & Lindgren
For Transform Holdco: Eric Brunstad of Dechert; Amy Wolf of
Wachtell, Lipton, Rosen & Katz; and Craig Martin of
About Sears Holdings Corp.
Sears Holdings Corporation -- http://www.searsholdings.com/--
began as a mail ordering catalog company in 1887 and became the
world's largest retailer in the 1960s. At its peak, Sears was
present in almost every big mall across the U.S., and sold
everything from toys and auto parts to mail-order homes. Sears
claims to be a market leader in the appliance, tool, lawn and
garden, fitness equipment, and automotive repair and maintenance
retail sectors.
Sears and Kmart merged to form Sears Holdings in 2005 when they had
3,500 US stores between them. Kmart emerged in 2005 from its own
bankruptcy.
Unable to keep up with online stores and other brick-and-mortar
retailers, a long series of store closings left it with 687 retail
stores in 49 states, Guam, Puerto Rico, and the U.S. Virgin Islands
as of mid-October 2018. At that time, the Company employed 68,000
individuals.
As of Aug. 4, 2018, Sears Holdings had $6.93 billion in total
assets against $11.33 billion in total liabilities.
Unable to cover a $134 million debt payment due Oct. 15, 2018,
Sears Holdings Corporation and 49 subsidiaries sought Chapter 11
protection (Bankr. S.D.N.Y. Lead Case No. 18-23538) on Oct. 15,
2018. The Hon. Robert D. Drain is the case judge.
The Debtors tapped Weil, Gotshal & Manges LLP as legal counsel;
M-III Partners as restructuring advisor; Lazard Freres & Co. LLC as
investment banker; DLA Piper LLP as real estate advisor; and Prime
Clerk as claims and noticing agent.
The U.S. Trustee for Region 2 appointed nine creditors, including
the Pension Benefit Guaranty Corp., and landlord Simon Property
Group, L.P., to serve on the official committee of unsecured
creditors. The committee tapped Akin Gump Strauss Hauer & Feld LLP
as legal counsel; FTI Consulting as financial advisor; and Houlihan
Lokey Capital, Inc. as investment banker.
The U.S. Trustee for Region 2 on July 9, 2019, appointed five
retirees to serve on the committee representing retirees with life
insurance benefits in the Chapter 11 cases.
* * *
In February 2019, Bankruptcy Judge Robert Drain authorized Sears
Holdings approval to sell the business to majority shareholder and
CEO Eddie Lampert for approximately $5.2 billion. Lampert's ESL
Investments, Inc., won an auction to acquire substantially all of
Sears' assets, including the "Go Forward Stores" on a going-concern
basis. The proposal allowed 425 stores to remain open and provided
ongoing employment to 45,000 employees.
The new parent is Transform SR Brands LLC, doing business as
Transformco, referred to as "New Sears". Transform is an American
privately held company formed on Feb. 11, 2019, to acquire some of
the assets of Sears Holdings Corporation. The new company is owned
by Eddie Lampert's ESL Investments.
SIMON ZAROUR: Case Against U.S. Bank and Deutsche Bank, Dismissed
-----------------------------------------------------------------
District Judge John G. Koeltl grants the Defendants' motion to
dismiss the case styled SIMON ZAROUR, Plaintiff, v. U.S. BANK
NATIONAL ASSOCIATION, ET AL., Defendants, No. 22-cv-4786 (JGK),
(S.D. New York) for lack of subject matter jurisdiction.
This action arises from the foreclosure of two properties, one in
Lyndhurst, N.J., and the other in Fair Lawn, N.J. In May 2006,
Zarour borrowed $378,000 from Argent Mortgage Company, LLC, signed
a promissory note, and executed a mortgage on the Lyndhurst
property in favor of Argent. Zarour defaulted on the Lyndhurst
Mortgage. Argent assigned the Lyndhurst Mortgage to U.S. Bank,
which filed a foreclosure action against Zarour in the Superior
Court of New Jersey. The state court later entered final judgment
against Zarour for $725,662 plus interest. Similar events
transpired around the property in Fair Lawn. In March 2007, Zarour
borrowed $332,240 from American Brokers Conduit. In July 2011,
American Brokers assigned the Fair Lawn Mortgage to Deutsche Bank.
Zarour defaulted on the Fair Lawn Mortgage which prompted Deutsche
Bank to file a foreclosure action against Zarour. The state court
entered final judgment against Zarour for $653,319 plus interest.
The Fair Lawn property was later sold at a foreclosure sale.
Simon Zarour, brought this action against the Defendants, alleging
that the Defendants submitted "inadequate/incomplete documentation"
to the bankruptcy court and that the bankruptcy court improperly
relied on this documentation in dismissing Zarour's bankruptcy,
which allegedly "resulted in [Zarour's] properties ... being
scheduled for being sold unlawfully." Zarour also alleges that the
Defendants "did not and do not have standing to move against him"
in the bankruptcy because they had not been properly assigned the
underlying mortgages.
Now, Zarour asks this Court "to find that the ruling by the
bankruptcy court was and is void" and to award him "the value of
the loss of properties" through foreclosure, among other relief. On
the other hand, the Defendants move to dismiss Zarour's complaint
for lack of subject matter jurisdiction under the Rooker-Feldman
doctrine and for failure to state a claim under the doctrines of
res judicator and collateral estoppel.
The Court determines that pursuant to the Rooker-Feldman doctrine,
it is barred from exercising jurisdiction over this action because
Zarour's complaint "effectively challenges state court judgments."
Under the Rooker-Feldman doctrine, a federal district court does
not have subject matter jurisdiction over a case that seeks to
reverse or modify a state court decision, or a case in which the
federal claims presented are "inextricably intertwined" with the
merits of a state court judgment.
The Court notes that Zarour lost his foreclosure actions in New
Jersey state courts, and the judgments in those cases were rendered
well before the proceedings in this action began. Now, however,
Zarour complains of injuries caused by those state-court judgments,
and Zarour invites this Court to review and reject those
foreclosure judgments and to award him damages, including for the
value of the properties sold after foreclosure. Through these
allegations and requests, Zarour expressly challenges the final
judgments entered by the state courts. The Court finds that the
Rooker-Feldman doctrine bars Zarour's claims.
Consequently, the Court finds it unnecessary to consider the
Defendants alternative argument that the complaint must be
dismissed under the doctrines of res judicata and collateral
estoppel.
A full-text copy of the MEMORANDUM OPINION AND ORDER dated Nov. 9,
2022, is available at https://tinyurl.com/2p8ea5bj from
Leagle.com.
Simon Zarour sought for Chapter 11 protection (Bankr. S.D.N.Y. Case
No. 15-23381) on September 24, 2015.
SPRING MOUNTAIN: Taps BNP Paribas Securities as Investment Banker
-----------------------------------------------------------------
Spring Mountain Vineyard Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
BNP Paribas Securities Corp. as its investment banker.
BNP will render these services:
(a) assist the Debtor in preparing marketing materials in
conjunction with a possible sale transaction;
(b) assist the Debtor in identifying potential buyers or
parties in interest to a sale transaction and assist in the due
diligence process;
(c) assist and advise the Debtor concerning the terms,
conditions, and impact of any proposed sale transaction; and
(d) provide testimony before the bankruptcy court concerning
any of the services identified above.
The firm will be compensated as follows:
(a) a transaction fee equal to the greater of (i) $1.5 million,
and (ii) with respect to a sale transaction the sum of the
following:
(i) 2.25 percent of the transaction value if the transaction
value is less than $200 million;
(ii) 2.5 percent of the transaction value if the transaction
value is equal to or more than $200 million and less than $300
million; or
(iii) 2.75 percent of the transaction value if the transaction
value is equal to or more than $300 million.
(b) Notwithstanding the foregoing, to the extent a transaction is
consummated exclusively through a credit bid pursuant to 363(k) of
the Bankruptcy Code, the transaction fee shall be equal to $1.5
million.
Perry DeLuca, a managing director at BNP, disclosed in a court
filing that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Perry DeLuca
BNP Paribas Securities Corp.
787 7th Avenue
New York, NY 10019
Telephone: (212) 841-3000
Email: perry.deluca@bankofthewest.com
About Spring Mountain Vineyard
Spring Mountain Vineyard Inc. is a privately owned estate comprised
of four vineyards. Its beneficial owner is Jacob Safra, who also
owns Encyclopaedia Britannica, Inc.
Spring Mountain Vineyard sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-10381) on Sept.
29, 2022, with $100 million to $500 million in both assets and
liabilities. Constantine S. Yannias, president of Spring Mountain
Vineyard, signed the petition.
Judge Charles Novack oversees the case.
The Debtor tapped Greenspoon Marder, LLP as bankruptcy counsel;
Cohen Tauber Spievack & Wagner PC, Stanzler Law Group, PC, and
Abbott & Kindermann, Inc. as special counsels; and BNP Paribas
Securities Corp. as investment banker. Getzler Henrich &
Associates, LLC and Jigsaw Advisors, LLC provide interim management
services and outside winery operations and management services,
respectively.
STEREOTAXIS INC: Incurs $4.9 Million Net Loss in Third Quarter
--------------------------------------------------------------
Stereotaxis, Inc. has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q reporting a net loss
of $4.92 million on $7.66 million of total revenue for the three
months ended Sept. 30, 2022, compared to a net loss of $4.62
million on $9.11 million of total revenue for the three months
ended Sept. 30, 2021.
For the nine months ended Sept. 30, 2022, the Company reported a
net loss of $14.14 million on $20.85 million of total revenue
compared to a net loss of $7.36 million on $26.78 million of total
revenue for the nine months ended Sept. 30, 2021.
As of Sept. 30, 2022, the Company had $56.07 million in total
assets, $22.72 million in total liabilities, $5.58 million in
convertible preferred stock, and $27.77 million in total
stockholders' equity.
"Stereotaxis continues to demonstrate robust commercial and
technological progress," said David Fischel, Chairman and CEO. "We
received two system orders in the third quarter, and have already
received two additional signed purchase contracts as we start the
fourth quarter, reflecting continued global demand for our robotic
technology. Our growing system backlog of over $13 million, along
with a healthy capital pipeline, sets us up well for the coming
year."
"Alongside this commercial execution, we are making significant
progress on a robust innovation strategy. The CE Mark submission
of the MAGiC ablation catheter successfully passed a completeness
check by the notified body and is in the midst of its technical
review. Development of the accessible next generation robotic
system is progressing well and remains on track for an initial
launch next summer. Our collaboration with MicroPort is advancing
rapidly on multiple fronts and we expect near-term regulatory
submission of the Genesis system in China."
"This progress brings us closer to a future when the benefits of
robotic magnetic navigation are broadly accessible, available with
a vibrant ecosystem in electrophysiology, and impactful across
multiple endovascular indications. We are cognizant of the
importance of financial prudence and remain confident in the
ability to advance our strategy, generate organic growth, and reach
profitability with our current financial resources."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001289340/000149315222031744/form10-q.htm
About Stereotaxis
Based in St. Louis, Missouri, Stereotaxis, Inc. --
http://www.stereotaxis.com-- designs, manufactures and markets an
advanced robotic magnetic navigation system for use in a hospital's
interventional surgical suite, or "interventional lab", that the
Company believes revolutionizes the treatment of arrhythmias by
enabling enhanced safety, efficiency, and efficacy for
catheter-based, or interventional, procedures. The Company's
primary products include the Genesis RMN System, the Odyssey
Solution, and related devices. The Company also offers to its
customers the Stereotaxis Imaging Model S x-ray System.
Stereotaxis reported a net loss of $10.72 million for the year
ended Dec. 31, 2021, a net loss of $6.65 million for the year ended
Dec. 31, 2020, and a net loss of $4.59 million for the year ended
Dec. 31, 2019. As of June 30, 2022, the Company had $56.68 million
in total assets, $21.15 million in total liabilities, $5.58 million
in series A convertible preferred stock, and $29.94 million in
total stockholders' equity.
STONEBRIDGE VENTURES: Trustee Seeks to Tap Brian Thompson as Broker
-------------------------------------------------------------------
Arturo Cisneros, the appointed trustee in the Chapter 11 case of
Stonebridge Ventures, LLC, seeks approval from the U.S. Bankruptcy
Court for the Central District of California to employ Brian
Thompson, a real estate broker at Winterstone Real Estate and
Development.
The trustee needs a broker to assist in the marketing and sale of
the Debtor's real properties located at 1, 5, and 7 Makena Lane,
Rancho Mirage, Calif.
Mr. Thompson will be compensated as follows:
(a) 1 Makena Lane - sales commission of 5 percent, unless
broker represents both trustee and the buyer, in which case sales
commission shall be 2 percent. Additionally, should Vincent
Battaglia purchase the property, the total commission will be
agreed to in good faith and shall be less than 5 percent;
(b) 5 Makena Lane - sales commission of 5 percent, unless
Darryl Lews purchases the property, and no cooperated broker is
involved, in which case broker's commission shall be 1.5 percent;
and
(c) 7 Makena Lane - sales commission of 6 percent, unless
broker represents both trustee and the buyer, in which case sales
commission shall be 2 percent. Additionally, should Vincent
Battaglia purchase the property, the total commission will be
agreed to in good faith and shall be less than 5 percent.
Mr. Thompson disclosed in a court filing that he is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The real estate broker can be reached at:
Brian Thompson
Winterstone Real Estate and Development
23792 Rockfield Blvd.
Lake Forest, CA 92630
Telephone: (949) 689-9893
About Stonebridge Ventures
Stonebridge Ventures, LLC, a company in Newport Beach, Calif.,
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. C.D. Calif. Case No. 22-11556) on Sept. 10, 2022, with up
to $10 million in both assets and liabilities. Joshua R. Pukini,
director and chief financial officer, signed the petition.
Judge Theodor Albert oversees the case.
Summer M. Shaw, Esq., at Shaw & Hanover, PC is the Debtor's legal
counsel.
Arturo M. Cisneros, the court-appointed Chapter 11 trustee, is
represented by Malcolm Cisneros, A Law Corporation.
STORED SOLAR: Trustee Seeks to Hire Preti Flaherty as Counsel
-------------------------------------------------------------
Anthony Manhart, the trustee appointed in the Chapter 11 case of
Stored Solar Enterprises, Series LLC, seeks approval from the U.S.
Bankruptcy Court for the District of Maine to employ Preti
Flaherty, LLP as his counsel.
Preti Flaherty will provide these services:
(a) advise the trustee with respect to his powers and duties
in this case;
(c) review the schedules, statement of financial affairs and
related bankruptcy petition items and documents, and advise the
trustee regarding the same;
(d) assist the trustee in his investigation and analysis of
the acts, conduct, assets, liabilities, and financial condition of
the Debtor, the pre-bankruptcy and post-petition transactions of
the Debtor, and other matters relevant to the administration of
this case;
(e) consult with the trustee to evaluate potential assets of
the Debtor's estate;
(f) review documents, records, and correspondence regarding
property of the estate and potential sale of property of the
estate, Debtor's financial information, and issues related to
administration of the estate, and advise and assist the trustee
regarding the same;
(g) assist the trustee in his negotiations with various
interested parties in this case;
(h) advise and assist the trustee with respect to the
preparation of motions for authority to sell real and personal
property of the estate, related issues related to administration of
the estate, and advise and assist the trustee regarding same;
(i) advise and assist the trustee with respect to discovery
conducted pursuant to Federal Rule of Bankruptcy Procedure 2004;
(j) review, advise, and assist the trustee with respect to
claims;
(k) review time entries of trustee's counsel for the
application period, draft application and all related items, and
discuss the same with the trustee; and
(l) perform other necessary legal services for the trustee.
The hourly rates of the firm's counsel and staff are as follows:
Partners/Directors $300 – $520
Of Counsel $300 – $500
Associates $230 – $400
Paralegals $150 – $250
Anthony Manhart, Esq., an attorney at Preti Flaherty, disclosed in
a court filing that his firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Anthony J. Manhart, Esq.
Preti Flaherty, LLP
One City Center
P.O. Box 9546
Portland, ME 04112
Telephone: (207) 791-3000
Email: amanhart@preti.com
About Stored Solar Enterprises
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.
Stored Solar sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Me. Case No. 22-10191) on Sept. 14,
2022. In the petition signed by its manager, William Harrington,
the Debtor disclosed $50 million to $100 million in assets and $10
million to $50 million in liabilities.
Judge Michael A. Fagone oversees the case.
The Debtor tapped George J. Marcus, Esq., at Marcus Clegg as its
legal counsel and Spinglass Management Group, LLC as its
restructuring advisor.
Anthony J. Manhart was appointed as trustee in this Chapter 11
case. The trustee tapped Preti Flaherty, LLP as his counsel.
SUNGARD AS: Completes Sale of U.S. Assets, Winds Down Data Centers
------------------------------------------------------------------
Dan Swinhoe of DCD reports that Sungard Availability Services
(Sungard AS) has completed its asset sell-off after declaring
bankruptcy earlier this 2022.
The company announced the successful completion of the previously
announced Asset Purchase Agreements (APAs) with 11:11 Systems
(11:11) and 365 Data Centers (365).
Managed service provider 11:11 has acquired Sungard AS’ North
American Recovery Services (RS) business, as well as its North
American Cloud and Managed Services (CMS) business and Consulting
business. 11:11 will operate essentially all of Sungard AS’ IT
systems and provide services back to 365 and Sungard AS, and
operate four data centers previously part of Sungard AS.
365 acquired the majority of Sungard AS' U.S.-based Colocation and
Network Services business, with eight data centers including
network assets, becoming part of the 365 portfolio.
The companies said 'approximately 90 percent' of Sungard AS'
employees in North America and India will transition to 11:11 or
365 in connection with the transactions.
Sungard AS said it will now "pivot to the winddown: of its
remaining US-based assets, which includes four North American data
center facilities not included in any of the other transactions.
The company said it is continuing to evaluate options for its
remaining international subsidiaries in Europe.
"While restructuring and operating all or some of the business was
one of the options we evaluated, we believe – as did our Board
and investors – that the sale of the assets was the right
decision for all stakeholders, including our customers that have
continued to rely on us. For our employees, I’m pleased to say
that almost the entire Sungard AS team in North America and India
will transition to 11:11 and 365. Together, they will continue to
build on the value that we've created and delivered for customers,
while joining two innovative and growing companies," said Michael
K. Robinson, CEO and President of Sungard Availability Services.
"Our customers can have confidence knowing they will work with many
of the team members that support them today, and will do so with
the same systems, tools, and processes."
Sungard AS was advised by Akin Gump Strauss Hauer & Feld LLP,
Jackson Walker LLP, Cassels Brock & Blackwell LLP, FTI Consulting,
Inc., DH Capital, LLC, and Houlihan Lokey Capital, Inc.
This year saw Sungard's UK, US, and Canadian operations all file
for bankruptcy. Sungard’s US unit filed for Chapter 11 bankruptcy
in April 2022, three years after coming out of bankruptcy. Among
the issues listed were high leasing costs and underused space. CEO
Michael Robinson also blamed the Covid-19 pandemic and the rising
energy process.
365 announced it was acquiring eight facilities in early August,
while 11:11 announced plans to acquire Sungard's Cloud Managed
Services business a few weeks later. Bloomberg reported that 365
bid $52.5 million for the business. A precise breakdown of which
companies have acquired which data centers and which facilities
will be wound down hasn't been shared, though there has been no
mention of the company's four Canadian facilities.
After its own bankruptcy filing, most of Sungard's UK operation has
been sold off to UK telco Daisy Group and MSP Redcentric.
Sungard's closure marks the end of one of the pioneers of the data
center industry. The original SunGard was founded in 1978 s as the
computer services division of the Sun Oil Company and spun off in
1983 to provide disaster recovery services. Sungard Availability
Services was spun out of the wider company in 2014, with the
original parent gradually sold off unit by unit.
About Sungard AS New Holdings
Sungard Availability Services is a Wayne, Pa.-based
information-technology services provider owned by Angelo Gordon,
Blackstone Credit, FS/KKR Advisor LLC and Carlyle Group Inc. It
provides disaster recovery services, colocation and network
services, cloud and managed services and workplace recovery to
customers in North America, Europe and Asia.
The company and its affiliates filed for Chapter 11 protection
twice in three years.
Sungard filed for Chapter 11 bankruptcy in 2019 with a prepackaged
plan that was approved by a New York bankruptcy court one day after
it was filed.
Sungard AS New Holdings, LLC and affiliates, including Sungard
Availability Services, LP, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-90018) on April
11, 2022. Judge David R. Jones oversees the case.
In the petition signed by Michael K. Robinson, CEO and president,
Sungard AS disclosed up to $1 billion in both assets and
liabilities.
Sungard Availability Services (UK) Limited, an indirect subsidiary
of Holdings, entered into administration in the UK on March 25,
2022. Meanwhile, Sungard Canada filed an application for
recognition in Canada under the Companies Creditors' Arrangement
Act of its Chapter 11 case.
Akin Gump Strauss Hauer & Feld LLP and Jackson Walker serve as
legal counsel to the Debtors. Cassels Brock & Blackwell LLP, serves
as their Canadian legal counsel. DH Capital, LLC and Houlihan
Lokey, Inc., act as investment bankers. FTI Consulting, Inc.,
serves as financial and restructuring advisor.
Alvarez & Marsal Canada Inc., serves as Canadian court-appointed
information officer and is represented by Bennett Jones, LLP as
counsel in connection with the Canadian proceedings.
Kroll Restructuring Administration, LLC serves as notice and claims
agent.
Proskauer Rose, LLP and Gray Reed & McGraw, LLP serve as counsel to
Acquiom Agency Services LLC, the Term Loan DIP agent, and Term Loan
DIP lenders.
PNC Bank, National Association, serves as administrative agent and
collateral agent, under the DIP ABL facility. PNC is represented
by Thompson Coburn Hahn & Hessen LLP as counsel.
TEAM HEALTH: Fitch Lowers LongTerm Issuer Default Rating to 'CCC'
-----------------------------------------------------------------
Fitch Ratings has downgraded its Long-Term Issuer Default Rating
(IDR) on Team Health Holdings, Inc. (TMH) to 'CCC' from 'CCC+' and
removed the Positive Rating Outlook assigned prior to TMH reporting
results for the first nine months of 2022, in which
Fitch-calculated EBITDA declined y/y by nearly 30%.
Fitch previously assumed stabilizing fundamentals and expected
progress in de-risking the capital structure, with a focus on
refinancing the company's non-extended term loan due February 2024
and senior unsecured notes due February 2025. However, pressure
from secular- and pandemic-driven challenges to volume, pricing and
operating margins has since increased, driving down EBITDA, albeit
with FCF still positive but now constrained by significant balance
sheet exposure to rising interest rates.
With Fitch-calculated leverage now exceeding 8.0x through the
senior secured debt and 10.0x overall, Fitch sees access to the
debt capital markets to refinance significant near-term maturities
as increasingly limited. This is the key driver of Fitch's rating
action, as Fitch sees $1.2 billion of term loans due February 2024
materially elevating near-term risk of a distressed debt exchange
or principal payment default.
KEY RATING DRIVERS
Leading Position in Increasingly Challenged Subsector: TMH is one
of a handful of large national providers in the fragmented
outsourced healthcare staffing market, with leading scale enhancing
its capabilities in contracting with hospital systems and
commercial health insurers. That said, with revenues sourced
primarily from contracted physician services and emergency
department (ED) staffing comprising the majority thereof, Fitch
expects top line growth prospects to be constrained by secular
pressure on ED care pricing and volumes (especially lower-acuity
visits).
Sources of secular volume pressure include both larger,
better-capitalized health insurers and the expanding universe of
capitated value-based care providers focusing on reducing ED use
(with increasingly prevalent high-deductible plans constraining
demand) and increasing competition from alternative settings
including urgent care clinics, evidencing the subsector's weak
barriers to entry. Volumes will also face pressure from Medicaid
eligibility redeterminations permitted following the COVID-19
Public Health Emergency, which is now expected to be extended until
at least mid-April 2023.
On the pricing front, ED care reimbursement faces a 10% cut in 2023
on Medicare cases comprising about 1/4 of revenue absent uncertain
legislative intervention. Fitch also expects commercial rates to
remain pressured by the evolving implementation of the No Surprises
Act (NSA), with health insurers allegedly engineering low median
in-network payment rates for ED care to depress NSA-arbitrated
out-of-network payment determinations.
Pandemic-Driven Volatility Further Pressuring Margins: The ebb and
flow of the COVID-19 pandemic has been disrupting operations, with
depressed ED patient visits (and elective volumes generally)
driving inefficiencies in clinical labor expense (comprises >80%
of TMH costs), given the need to maintain hospital staffing
readiness. The cost of staffing the ED to handle volatile volumes
that have increasingly disappointed in recent quarters, and the
inefficiency of ED physicians handling sub-license tasks amid
constrained nursing labor availability, have created negative
operating leverage and pressured EBITDA margins. Fitch sees limited
opportunity for TMH to improve margins in the near-term, which in
turn has negative implications for its ability to materially reduce
leverage from unsustainably-elevated levels.
Elevated Leverage and Near-Term Maturities Pose Increasing Default
Risk: Fitch sees heightened near-term risk of a distressed debt
exchange or principal payment default with leverage now exceeding
8.0x through the senior secured loans and 10.0x overall, as this is
likely to limit TMH's access to capital markets to refinance its
near-term maturities. Key among these are the $300 million L+300
Revolver due November 2023 (undrawn with $288mm available as of
September 30), the $1.2 billion L+275 Term Loan B due February 2024
and $714 million of 6.375% senior unsecured notes due February
2025.
Even if lenders are inclined to be supportive, a refinancing and/or
extension of these near-term debt maturities may be further
complicated by the maturity of its $1.4 billion S+525 Term Loan B
due March 2027 springing to November 2024 absent an earlier
transaction reducing all outstanding TMH senior unsecured notes to
$250 million or less, thus likely requiring the holistic but more
challenging approach of refinancing most or all of its balance
sheet amid notably adverse capital markets conditions.
Liquidity Supports Ordinary-Course Operations; FCF Positive but
Limited: While liquidity as of Sept. 30, 2022 included $384 million
of cash and an undrawn $300 million revolver (available at least
through its November 2023 maturity) is more than adequate to fund
ordinary-course operations, it is insufficient to address the full
quantum of near-term maturities absent access to the debt capital
markets. While the modest capex needs of the business facilitate
positive FCF, Fitch expects margin pressure to constrain FCF to
modestly positive levels in the near term, reflecting an ascending
cash interest burden with at least 3/4 of its debt exposed to
rising interest rates.
Fitch also expects working capital could be a further constraint,
with DSO in A/R potentially increasing from the bottom of its
historical range of 65-70, cash deposits increasing to support an
anticipated ramp-up in payor litigation claims, and accrued
liabilities declining after paying out about $60 million in 4Q22 to
settle certain legacy divestiture liabilities and physician
compensation litigation (notably follows about $50 million paid in
2021 to settle federal False Claims Act litigation, with
considerable litigation still pending, including a large payor
claiming over $100 million in upcoding). That said, Fitch notes
that TMH recently prevailed in litigation asserting that
UnitedHealth (UNH) underpaid for certain pre-2020 anesthesia claims
in Florida (netting it $11 million plus costs and interest), and
has several other cases pending entailing what TMH believes are
similar facts.
Other Challenges Remain: Margins and FCF remain under pressure from
the evolving implementation of the NSA and an ongoing dispute with
UNH, but Fitch does not expect material further downside on this
front. TMH is out-of-network with UNH after the latter unilaterally
cut reimbursement rates and the parties commenced litigation. As
Fitch does not assume this dispute will be resolved in the near
term, Fitch's projections for TMH do not reflect any potential
future improvement in payor mix or litigation outflows or inflows.
As TMH has steadfastly and publicly stated that it does not engage
in balance billing, Fitch does not expect any material related
pressure on collections.
DERIVATION SUMMARY
The 'CCC' Long-Term IDR on TMH reflects secular and pandemic-driven
headwinds to ED care volume and pricing, which have compressed
operating margins and increased leverage to levels that Fitch
believes are unsustainable. The company's credit profile benefits
from good depth and competitive scale relative to peers Mednax (not
rated) and Envision Healthcare (not rated) in physician staffing
service lines including emergency medicine and anesthesia. With TMH
owned by affiliates of Blackstone after a 2017 LBO (and peer
Envision acquired by KKR in a 2018 LBO), private equity ownership
has influenced the credit profile, generally entailing higher
leverage and more aggressive financial policy.
While the company's credit profile has also benefitted historically
from low capex needs facilitating more consistent and stable FCF
generation than health care providers generally, Fitch anticipates
only modest positive FCF beyond 2022 due to recent compression in
operating margins and the company's significant balance sheet
exposure (at least 75%) to rising interest rates.
Moreover, the positive FCF that TMH has generated historically has
largely funded expansion as opposed to reducing leverage by paying
down debt. Fitch's ratings further reflect its view that high
leverage, now exceeding 8.0x through its senior secured debt and
10.0x overall, is likely to limit TMH's access to capital markets
to refinance near-term debt maturities, elevating near-term risk of
either a distressed debt exchange or principal payment default.
The 'B-'/'RR2' ratings for TMH's senior secured debt, including its
revolver and term loans, are notched above the 'CCC' Long-Term IDR
to reflect Fitch's expectation of a 71%-90% recovery under a
bankruptcy scenario. The 'CC'/'RR6' rating on TMH's senior
unsecured notes is notched below the 'CCC' Long-Term IDR to reflect
Fitch's expectation of a 0%-10% recovery under a bankruptcy
scenario, which solely includes an assumed 1% concession payment
from senior secured creditors.
Fitch estimates an enterprise value (EV) on a going concern basis
of $2.4 billion for TMH after deducting 10% for administrative
claims, which is based on assumed post-reorganization EBITDA of
$374 million and a 7.0x multiple. This post-reorganization EBITDA
estimate is $40 million (12%) above Fitch's 2022 EBITDA forecast of
$334 million, as Fitch expects at least a portion of certain volume
and pricing pressures driven by the COVID-19 pandemic and the
company's ongoing payor dispute with UNH is likely to subside
within the time horizon in which an exit from a restructuring
process is likely to occur.
The primary drivers of the post-reorganization EBITDA estimate are
the negative implications of commercial payor contract disputes and
the assumed persistence of constrained profitability. To date,
Fitch does not believe that the COVID-19 pandemic has altered the
longer-term valuation prospects for the healthcare services
industry and Fitch's post-reorganization EBITDA and multiple
assumptions for TMH are unchanged from the last ratings review.
The 7.0x multiple used for TMH reflects a stressed multiple versus
the multiple of approximately 11.0x that Blackstone paid for TMH in
2017. Fitch also notes that KKR paid about 10.0x EBITDA for
staffing industry peer Envision Healthcare. This 7.0x multiple is
also closely aligned with historical observations of healthcare
industry bankruptcy emergence multiples. In a recent study, Fitch
determined that the historical median exit multiple for healthcare
and pharmaceutical industry bankruptcies was about 6.3x.
Fitch's recovery analysis also assumes the company's $300 million
revolver is fully drawn and includes this amount within an
estimated $2.95 billion of senior secured claims, which further
includes Fitch's estimate of certain to-be-accrued PIK interest
that would otherwise be due in February 2024.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Revenue growth in the low-single digits through 2025, surpassing
pre-pandemic revenue in 2023;
- EBITDA margins sustained in the 7%-8% range over the forecast
period;
- Acquisitions totaling $25 million annually and no shareholder
distributions;
- CapEx of $35 million-$40 million annually and annual FCF of
nearly $100 million in 2022, contracting to about $25 million
thereafter;
- Leverage sustained above 8.0x over the forecast period; and
- No allocation of FCF towards voluntary debt repayment.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Extension of maturity or refinancing of its $300 million L+300
revolving credit facility due November 2023 or obtaining a
comparable alternate source of liquidity;
- Refinancing of its $1.2 billion L+275 Term Loan B due February
2024 and its $0.7 billion of 6.375% senior unsecured notes due
February 2025, provided such refinancing would not comprise a
distressed debt exchange as defined by Fitch;
- Significant improvement in operating margins, reduction in
leverage and improvement in capital markets conditions supporting a
refinancing of near-term debt maturities.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Announcement of transactions comprising a distressed debt
exchange as defined by Fitch;
- Failure to extend the maturity of or refinance its $300 million
L+300 revolving credit facility before maturity in November 2023 or
obtain a comparable alternate source of liquidity;
- Failure to refinance its $1.2 billion L+275 Term Loan B due
February 2024 or its $0.7 billion of 6.375% senior unsecured notes
due February 2025;
- Failure to pay interest and debt principal when due.
LIQUIDITY AND DEBT STRUCTURE
Adequate Sources of Liquidity: As of September 30, 2022, sources of
liquidity include $384 million of unrestricted cash and an undrawn
revolver of $288 million (net of $12 million outstanding letters of
credit), the latter of which will be accessible only through its
November 2023 maturity absent a further extension or refinancing.
While the modest capex needs of the business support positive FCF
generation, Fitch expects margin pressure to constrain FCF to
modestly positive levels over the rating horizon, particularly with
about 3/4 of its debt exposed to rising interest rates.
ISSUER PROFILE
Team Health Holdings, Inc. (TMH) is a U.S.-based national
healthcare outsourcing company that supports more than 2,600
civilian and military hospitals, clinics, and physician groups in
48 states by providing staffing, administrative and consulting
services. TMH is a large player in the physician staffing market
based on revenue, patient visits, and number of clients, focusing
on ED care (comprising the majority of its revenue), anesthesiology
and inpatient services. TMH has been privately owned by affiliates
of Blackstone since its February 2017 LBO.
ESG CONSIDERATIONS
TMH has an ESG Relevance Score of '4' for Exposure to Social
Impacts due to societal and regulatory pressures to contain growth
in healthcare spending in the U.S. This dynamic has a negative
impact on the credit profile and is relevant to the rating in
conjunction with other factors.
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Team Health
Holdings, Inc. LT IDR CCC Downgrade CCC+
senior
unsecured LT CC Downgrade RR6 CCC-
senior secured LT B- Downgrade RR2 B
senior secured LT B- Downgrade RR2 B
THOMPSON ROSE: Trustee Gets OK to Tap Pino & Associates as Counsel
------------------------------------------------------------------
Lisa Holder, the trustee appointed in the Chapter 11 case of
Thompson Rose Chapel, LLC, received approval from the U.S.
Bankruptcy Court for the Eastern District of California to employ
Pino & Associates as bankruptcy counsel.
The firm will render these services:
(a) identify, review, and recover potential assets and
undisclosed assets;
(b) negotiate, sell, or otherwise liquidate assets of the
estate;
(c) advise trustee regarding litigation matters related to the
bankruptcy case;
(d) analyze claims, exemptions, and motions in the bankruptcy
case under applicable Federal and California authorities;
(e) investigate the Debtor's financial affairs;
(f) prosecute and defend any other litigation or contested
matters that may arise relating to trustee's administration of the
bankruptcy case;
(g) prepare legal papers; and
(h) perform all legal services for trustee that may be
necessary and proper in furtherance of her duties as trustee in
this matter.
The hourly rates of the firm's counsel and staff are as follows:
Estela O. Pino $400
Associate $300
Law Clerk/Paralegal $150
In addition, the firm will seek reimbursement for expenses
incurred.
Estela Pino, Esq., an attorney at Pino & Associates, disclosed in a
court filing that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Estela O. Pino, Esq.
Ramandeep Kaur Mahal, Esq.
Pino & Associates
1520 Eureka Rd., Suite 101
Roseville, CA 95661
Telephone: (916) 641-2288
Facsimile: (916) 244-0989
Email: epino@epinolaw.com
rmahal@epinolaw.com
About Thompson Rose Chapel
Thompson Rose Chapel, LLC -- https://www.thompsonrosechapel.com/ --
is an independent family-owned funeral home and has been serving
families in Sacramento and surrounding counties since 1948. Its
motto is "Families Come First". The business is located at 3601 5th
Ave., Sacramento, Calif.
Thompson Rose Chapel sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Cal. Case No. 22-21727) on July 12,
2022. In the petition filed by its managing member, Ginger Brown,
the Debtor listed $1 million to $10 million in both assets and
liabilities.
Judge Christopher D. Jaime oversees the case.
Gabriel E. Liberman, Esq., at the Law Offices of Gabriel Liberman,
APC is the Debtor's counsel.
Lisa Holder was appointed as trustee in this Chapter 11 case. The
trustee tapped Pino & Associates as general bankruptcy counsel.
TRANS-LUX CORP: Incurs $466K Net Loss in Third Quarter
------------------------------------------------------
Trans-Lux Corporation has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net loss
of $466,000 on $4.80 million of total revenues for the three months
ended Sept. 30, 2022, compared to a net loss of $999,000 on $2.86
million of total revenues for the three months ended Sept. 30,
2021.
For the nine months ended Sept. 30, 2022, the Company reported net
income of $557,000 on $15.75 million of total revenues compared to
a net loss of $2.79 million on $8.34 million of total revenues for
the same period during the prior year.
As of Sept. 30, 2022, the Company had $11.83 million in total
assets, $22.36 million in total liabilities, and a total
stockholders' deficit of $10.53 million.
Trans-Lux stated, "Due to the onset of the COVID-19 pandemic in
2020, the Company experienced a reduction in sales orders from
customers in 2020 and 2021, which has just recently started to
rebound. The Company recorded net income of $557,000 in the nine
months ended September 30, 2022 but recorded a net loss of $5.0
million in the year ended December 31, 2021. The Company had
working capital deficiencies of $9.3 million and $9.8 million as of
September 30, 2022 and December 31, 2021, respectively.
"The Company is dependent on future operating performance in order
to generate sufficient cash flows in order to continue to run its
businesses. Future operating performance is dependent on general
economic conditions, as well as financial, competitive and other
factors beyond our control, including the impact of the current
economic environment, the spread of major epidemics (including
coronavirus), increases in interest rates and other related
uncertainties such as government-imposed travel restrictions,
interruptions to supply chains, extended shut down of businesses
and the impact of inflation. In order to more effectively manage
its cash resources, the Company had, from time to time, increased
the timetable of its payment of some of its payables, which delayed
certain product deliveries from our vendors, which in turn delayed
certain deliveries to our customers.
"If we are unable to (i) obtain additional liquidity for working
capital, (ii) make the required minimum funding contributions to
the defined benefit pension plan, (iii) make the required principal
and interest payments on our outstanding 8 1/4% Limited convertible
senior subordinated notes due 2012 (the "Notes") and 9 1/2%
Subordinated debentures due 2012 (the "Debentures") and/or (iv)
repay our obligations under our Loan Agreement (hereinafter
defined) with Unilumin, there would be a significant adverse impact
on our financial position and operating results. The Company
continually evaluates the need and availability of long-term
capital in order to meet its cash requirements and fund potential
new opportunities. Due to the above, there is substantial doubt as
to whether we will have adequate liquidity, including access to the
debt and equity capital markets, to continue as a going concern
over the next 12 months from the date of issuance of this Form
10-Q."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/99106/000151316222000128/tlx-20220930.htm
About Trans-Lux
Headquartered in New York, New York, Trans-Lux Corporation --
http://www.trans-lux.com-- designs and manufactures TL Vision
digital video displays for the financial, sports and entertainment,
gaming, education, government, and commercial markets. With a
comprehensive offering of LED Large Screen Systems, LCD Flat Panel
Displays, Data Walls and scoreboards (marketed under Fair-Play by
Trans-Lux), Trans-Lux delivers comprehensive video display
solutions for any size venue's indoor and outdoor display needs.
Trans-Lux reported a net loss of $4.97 million for the 12 months
ended Dec. 31, 2021, compared to a net loss of $4.84 million for
the 12 months ended Dec. 31, 2020. As of Dec. 31, 2021, the Company
had $8.65 million in total assets, $19.60 million in total
liabilities, and a total stockholders' deficit of $10.95 million.
New Haven, CT-based Marcum LLP, the Company's auditor since 2015,
issued a "going concern" qualification in its report dated April
14, 2022, citing that the Company has a significant working capital
deficiency, has incurred significant losses and needs to raise
additional funds to meet its obligations and sustain its
operations. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
TUESDAY MORNING: Top Execs to Retire Early as New Owners Take Over
------------------------------------------------------------------
Maria Halkias of The Dallas Morning News reports that Tuesday
Morning Corp.'s top three executives, including CEO Fred Hand, have
"decided to retire" from the close-out retailer as new owners take
control of the business that started in Dallas in 1974.
Tuesday Morning Corp.'s top three executives, including CEO Fred
Hand, have "decided to retire" from the close-out retailer as new
owners take control of the business that started in Dallas in
1974.
The Tuesday Morning store in Hillside Village in Dallas is shown in
2021. Dallas-based Tuesday Morning Corp. operates 487 stores in 40
states.
The Tuesday Morning store in Hillside Village in Dallas is shown in
2021. Dallas-based Tuesday Morning Corp. operates 487 stores in 40
states.
The Dallas-based company changed control in September 2022 with a
new $32 million debt agreement from Retail Ecommerce Ventures and
Ayon Capital. That transaction kept the company out of bankruptcy
for the second time in two years.
The new board, which is co-chaired by Tai Lopez and Alex Mehr, has
put a new management team in place to run the chain of 487 stores
in 40 states. Lopez and Mehr formed Retail Ecommerce Venture to
purchase several retail names as companies liquidated in
bankruptcy. They continue to operate online under the brand names
they purchased, including Pier 1 Imports, Linens ‘n Things,
Dressbarn and RadioShack.
Hand, who had been CEO since May 2021 and had extensive retail
experience, most recently at competitor Burlington, was succeeded
on Friday, November 4, 2022, by Andrew Berger, a board member since
September. Berger has 25 years of investment analysis and business
consulting experience, and he will also become interim chief
financial officer.
Marc Katz, Tuesday Morning’s chief operating officer and interim
chief financial officer, was also from Burlington. He is retiring
after joining Tuesday Morning in May 2021.
Bill Baumann, who is chief information officer and chief marketing
officer, also becomes chief operating officer. Baumann is taking on
responsibilities of the chief merchant on an interim basis with the
departure of Paul Metcalf.
Among the three departing executives, Metcalf had been with Tuesday
Morning the longest. He joined the company as acting chief merchant
in April 2019.
Hand, Katz and Metcalf will consult with the company through June
30, 2022, the company said.
About Tuesday Morning
Tuesday Morning Corporation is one of the original off-price
retailers specializing in name-brand, high-quality products for the
home, including upscale home textiles, home furnishings,
housewares, gourmet food, toys and seasonal décor, at prices
generally below those found in boutique, specialty and department
stores, catalogs and on-line retailers. Based in Dallas, Texas, the
Company opened its first store in 1974 and currently operates 487
stores in 40 states. On the Web: http://www.tuesdaymorning.com/
Tuesday Morning Corporation, then with around 700 stores in 40
states, filed Chapter 11 protection on May 27, 2020 (Bankr. N.D.
Tex. Lead Case No. 20-31476). Tuesday Morning, which sought
bankruptcy protection with its subsidiaries, disclosed total assets
of $92 million and total liabilities of $88.35 million as of April
30, 2020.
The Hon. Harlin Dewayne Hale was the case judge.
The Debtors tapped Haynes and Boone, LLP as general bankruptcy
counsel; Alixpartners LLP as financial advisor; Stifel, Nicolaus &
Co., Inc. as investment banker; A&G Realty Partners, LLC as real
estate consultant; and Great American Group, LLC as liquidation
consultant. Epiq Corporate Restructuring, LLC was the claims and
noticing agent. The official committee of unsecured creditors
tapped Munsch Hardt Kopf & Harr, P.C., as counsel.
* * *
Tuesday Morning announced Jan. 4, 2021, it has successfully
completed its reorganization and emerged from Chapter 11
bankruptcy. Tuesday Morning is supported by a $110 million
asset-backed lending facility provided by J.P. Morgan, Wells Fargo,
and Bank of America. The Company further optimized its store
footprint and exited Chapter 11 with 490 of its best performing
stores. Following emergence from Chapter 11, Tuesday Morning began
trading on Jan. 21, 2021, on OTCQX under the symbol "TUEM" and then
commenced trading on the Nasdaq Capital Market on May 25, 2021,
under the ticker symbol "TUEM".
VENUE CHURCH: Seeks to Tap Greater Downtown Realty as Realtor
-------------------------------------------------------------
The Venue Church, Inc. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Tennessee to employ Greater
Downtown Realty, LLC, doing business as KW Commercial, as realtor.
The Debtor needs a realtor to assist in the sale of its real estate
located at 6401 Lee Highway, Chattanooga, Tenn.
Greater Downtown Realty will receive a commission of 5 percent of
the sales price.
The firm can be reached through:
Joe Del Valle
Greater Downtown Realty, LLC
1830 Washington Street
Chattanooga, TN 37408
Telephone: (423) 664-1900
Email: Joe.delValle12@gmail.com
About Venue Church
Venue Church Inc., a megachurch in Tennessee, sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. E.D. Tenn.
Case No. 22-11829) on Aug. 23, 2022, with up to $5 million in
assets and more than $3 million in debt. Tavner Smith, president of
Venue Church, signed the petition.
Judge Shelley D. Rucker oversees the case.
The Debtor is represented by Tom Bible Law as counsel.
VICKERY CREEK: Seeks to Hire Freedom Law as Bankruptcy Counsel
--------------------------------------------------------------
Vickery Creek Properties, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Georgia to employ
Freedom Law, LLC as its counsel.
Freedom Law will render these services:
(a) advise the Debtor generally regarding matters of
bankruptcy law;
(b) conduct examinations of witnesses, claimants or adverse
parties, and prepare legal documents;
(c) perform those legal services necessary to the Debtor's
bankruptcy case;
(d) advise the Debtor concerning a Chapter 11 plan; and
(e) take all other actions necessary for the proper
preservation and administration of the Debtor's Chapter 11 estate.
The hourly rates of the firm's counsel and staff are as follows:
Kevin J. Cowart $300
Administrative work $150
On Oct. 28, the firm received $15,000 as an advanced fee and
pre-bankruptcy retainer from the Debtor.
Kevin Cowart, Esq., an attorney at Freedom Law, disclosed in a
court filing that the firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Kevin J. Cowart, Esq.
Freedom Law, LLC
P.O. Box 892
Roswell, GA 30077
Telephone: (706) 438-1000
Email: kevin@freedomlawllc.com
About Vickery Creek Properties
Vickery Creek Properties, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-58788) on
Oct. 31, 2022. In the petition signed by its chief executive
officer, Jonathan Golden, the Debtor disclosed up to $10 million in
both assets and liabilities.
Kevin J. Cowart, Esq., at Freedom Law, LLC serves as the Debtor's
counsel.
WATER WIND: Gets OK to Hire GlassRatner as Expert Witness
---------------------------------------------------------
Water Wind & Sky, LLC seeks approval from the U.S. Bankruptcy Court
for the Western District of Washington to employ GlassRatner
Advisory & Capital Group, LLC, doing business as B. Riley Advisory
Services, as expert witness.
The Debtor needs an expert witness at its evidentiary hearing on
Dec. 13.
J. Michael Issa, a senior managing director at GlassRatner, will be
paid at his hourly rate of $575. Other GlassRatner professionals'
rates range from $350 to $575.
As disclosed in court filings, the members and employees of
GlassRatner do not represent interests adverse to the Debtor's
estate.
The firm can be reached through:
J. Michael Issa
GlassRatner Advisory & Capital Group, LLC
19800 MacArthur Boulevard, Suite 820
Irvine, CA 92612
Telephone: (949) 407-6620
Email: missa@brileyfin.com
About Water Wind & Sky
Water Wind & Sky, LLC, a domestic limited liability company, sought
Chapter 11 bankruptcy protection (Bankr. W.D. Wash. Case No.
22-10752) on May 5, 2022, with up to $10 million in both assets and
liabilities. Mark Goldberg, managing member, signed the petition.
Judge Timothy W. Dore oversees the case.
Armand J. Kornfeld, Esq., at Bush Kornfeld, LLP and McNaul Ebel
Nawrot & Helgren, PLLC serve as the Debtor's bankruptcy counsel and
special counsel, respectively.
WATER WIND: Gets OK to Tap Krista Webb Consulting as Expert Witness
-------------------------------------------------------------------
Water Wind & Sky, LLC seeks approval from the U.S. Bankruptcy Court
for the Western District of Washington to employ Krista Webb
Consulting as environmental expert witness.
The Debtor needs an expert witness at its evidentiary hearing on
Dec. 13.
Krista Webb Consulting's hourly rate is $450 for expert witness
testimony and $150 for preparatory work.
As disclosed in court filings, the members and employees of Krista
Webb Consulting do not represent interests adverse to the Debtor's
estate.
The firm can be reached through:
John William Webb
Krista Webb Consulting
5045 Ne Minder Rd.
Poulsbo WA 98370
Telephone: (360) 265-3984
About Water Wind & Sky
Water Wind & Sky, LLC, a domestic limited liability company, sought
Chapter 11 bankruptcy protection (Bankr. W.D. Wash. Case No.
22-10752) on May 5, 2022, with up to $10 million in both assets and
liabilities. Mark Goldberg, managing member, signed the petition.
Judge Timothy W. Dore oversees the case.
Armand J. Kornfeld, Esq., at Bush Kornfeld, LLP and McNaul Ebel
Nawrot & Helgren, PLLC serve as the Debtor's bankruptcy counsel and
special counsel, respectively.
WEINBERG HOLDINGS: Seeks to Hire Avrum J. Rosen as Legal Counsel
----------------------------------------------------------------
Weinberg Holdings, LLC seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ The Law
Offices of Avrum J. Rosen, PLLC as its counsel.
The firm will render these legal services:
(a) advise the Debtor of its rights and duties;
(b) oversee preparation of necessary reports to the court or
creditors;
(c) conduct all appropriate investigation or litigation; and
(d) perform any other necessary duty in aid of the
administration of the estate.
The hourly rates of the firm's counsel and staff are as follows:
Partner $620
Associates $325 – $525
Paraprofessional $100 – $150
As disclosed in court filings, The Law Offices of Avrum J. Rosen is
disinterested within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Avrum J. Rosen, Esq.
Alex E. Tsionis, Esq.
The Law Offices of Avrum J. Rosen, PLLC
38 New Street
Huntington, NY 11743
Telephone: (631) 423-8527
Email: arosen@ajrlawny.com
About Weinberg Holdings
Weinberg Holdings, LLC is a New York-based company, which conducts
business under the names The Boiler Room Bar and The Watering Hole.
Weinberg Holdings sought Chapter 11 bankruptcy protection (Bankr.
S.D.N.Y. Case No. 22-11444) on Oct. 31, 2022, listing under $1
million in both assets and liabilities. Neil Weinberg, managing
member, signed the petition.
Judge Philip Bentley oversees the case.
The Law Offices of Avrum J. Rosen, PLLC serves as the Debtor's
counsel.
WESTBANK HOLDINGS: Unsecured Claims Under $4,500 to Recover 90%
---------------------------------------------------------------
Joshua L. Bruno, sole member of Westbank Holdings, LLC, Cypress
Park Apartments II, LLC, Forest Park Apartments, LLC, Liberty Park
Apartments, LLC, Washington Place, LLC, and Riverview Apartments,
LLC (collectively, "Debtors") submitted a Plan of Reorganization
and Disclosure Statement dated November 14, 2022.
Each of the Debtors is a limited liability company organized under
the laws of the State of Louisiana. The sole member and manager of
each Debtor is Joshua L. Bruno. He has over twenty-two years'
experience in the operation of businesses and properties similar to
those of the Debtors.
The Properties are mixed-income apartment buildings which provide
affordable housing to residents of New Orleans. Each property has a
laundry room located at the site. Amenities of the properties
include security cameras, Wi-Fi, landscaping, and courtyards. The
apartments within the properties include appliances and granite
countertops. The Debtors' primary source of cashflow is the
collection of rents of the apartments at the respective
properties.
The primary purpose of the Plan is to reorganize the debts of the
Debtors and make distributions to holders of Allowed Claims.
The Plan contemplates payments to all holders of Allowed Claims
against the Debtor based upon the cash flow created through the
business operations of the Debtor and new loans. The holders of
Equity Interests will not receive any distribution.
Plan Filed by Westbank Holdings, LLC:
* Class 4 General Unsecured Convenience Class. Holders of
General Unsecured Claims of $4,500.00 or less will be a member of
this class. Allowed Class 4 Claims will be paid 90% of the claim on
the Effective Date from the Plan Fund in full satisfaction of its
claim. Holders of General Unsecured Claims with claims in excess of
$4,500.00 can elect to reduce its claim to $4,500.00 and receive
90% of the claim on the Effective Date from the Plan Fund in full
satisfaction of its claim. The total estimate of Class 4 Claims is
$20,707.
* Class 7 General Unsecured Claims. The total estimate of the
Class 3 Claim is $15,693,013general unsecured deficiency claim of
Fannie Mae. Each holder of an Allowed Class 7 Claim will receive
such holder's Pro Rata share (shared along with Holders of Class 5
and 6 Claims) if Class 2 receives Option 1(A) or Option 2
treatment. If Class 2 receives Option 1(B) treatment, the Class 2
payments shall be paid over a period of 5 years without interest.
Quarterly payments will commence on the fifteenth day of the second
calendar quarter after the Effective Date, with payments continuing
the 15th day of each successive calendar quarter. Holders of
Allowed Class 7 Claims shall also receive proceeds of Retained
Avoidance Actions, Pro Rata Share with Holders of Allowed Class 5
and 6 Claims.
Plan Filed by Cypress Park Apartments II, LLC:
* Class 4 General Unsecured Convenience Class. Holders of
General Unsecured Claims of $4,500.00 or less will be a member of
this class. Allowed Class 4 Claims will be paid 90% of the claim on
the Effective Date from the Plan Fund in full satisfaction of its
claim. Holders of General Unsecured Claims with claims in excess of
$4,500.00 can elect to reduce its claim to $4,500.00 and receive
90% of the claim on the Effective Date from the Plan Fund in full
satisfaction of its claim. The total estimate of Class 4 Claims is
$3,348.
* Class 7 General Unsecured Claims. The total estimate of the
Class 3 Claim is $881,859.06 general unsecured deficiency claim of
Fannie Mae. Except to the extent that a holder of an Allowed
General Unsecured Claim agrees to a less favorable treatment, each
holder of an Allowed Class 7 Claim will receive such holder's Pro
Rata share (shared along with Holders of Class 5 and 6 Claims) if
Class 2 receives Option 1(A) or Option 2 treatment. If Class 2
receives Option 1(B) treatment, the Class 2 payments shall total
over a period of 5 years without interest. Monthly payments will
commence on the fifteenth day of the second month after the
Effective Date, with payments continuing the 15th day of each
successive calendar month. Holders of Allowed Class 7 Claims shall
also receive proceeds of Retained Avoidance Actions, Pro Rata Share
with Holders of Allowed Class 5 and 6 Claims.
Plan Filed by Forest Park Apartments, LLC:
* Class 4 General Unsecured Convenience Class. Holders of
General Unsecured Claims of $4,500.00 or less will be a member of
this class. Allowed Class 4 Claims will be paid 90% of the claim on
the Effective Date from the Plan Fund in full satisfaction of its
claim. Holders of General Unsecured Claims with claims in excess of
$4,500.00 can elect to reduce its claim to $4,500.00 and receive
90% of the claim on the Effective Date from the Plan Fund in full
satisfaction of its claim. The total estimate of Class 4 Claims is
$4,038.67.
* Class 7 General Unsecured Claims. The total estimate of the
Class 3 Claim is $244,326.03 general unsecured deficiency claim of
Fannie Mae. Each holder of an Allowed Class 7 Claim will receive
such holder's Pro Rata share (shared along with Holders of Class 5
and 6 Claims) if Class 2 receives Option 1(A) or Option 2
treatment. If Class 2 receives Option 1(B) treatment, the Class 2
payments shall be paid over a period of 5 years without interest.
Quarterly payments will commence on the fifteenth day of the second
calendar quarter after the Effective Date, with payments continuing
the 15th day of each successive calendar quarter. Holders of
Allowed Class 7 Claims shall also receive proceeds of Retained
Avoidance Actions, Pro Rata Share with Holders of Allowed Class 5
and 6 Claims.
Plan Filed by Liberty Park Apartments, LLC:
* Class 4 General Unsecured Convenience Class. Holders of
General Unsecured Claims of $4,500.00 or less will be a member of
this class. Allowed Class 4 Claims will be paid 90% of the claim on
the Effective Date from the Plan Fund in full satisfaction of its
claim. Holders of General Unsecured Claims with claims in excess of
$4,500.00 can elect to reduce its claim to $4,500.00 and receive
90% of the claim on the Effective Date from the Plan Fund in full
satisfaction of its claim. The total estimate of Class 4 Claims is
$4,537.33.
* Class 7 General Unsecured Claims. Each holder of an Allowed
Class 7 Claim will receive such holder's Pro Rata share (shared
along with Holders of Class 5 and 6 Claims) if Class 2 receives
Option 1(A) or Option 2 treatment. If Class 2 receives Option 1(B)
treatment, the Class 2 payments shall be paid over a period of 5
years without interest. Quarterly payments will commence on the
fifteenth day of the second calendar quarter after the Effective
Date, with payments continuing the 15th day of each successive
calendar quarter. Holders of Allowed Class 7 Claims shall also
receive proceeds of Retained Avoidance Actions, Pro Rata Share with
Holders of Allowed Class 5 and 6 Claims.
Plan Filed by Washington Place, LLC:
* Class 4 General Unsecured Convenience Class. Holders of
General Unsecured Claims of $4,500.00 or less will be a member of
this class. Allowed Class 4 Claims will be paid 90% of the claim on
the Effective Date from the Plan Fund in full satisfaction of its
claim. Holders of General Unsecured Claims with claims in excess of
$4,500.00 can elect to reduce its claim to $4,500.00 and receive
90% of the claim on the Effective Date from the Plan Fund in full
satisfaction of its claim. The total estimate of Class 4 Claims is
$5,034.84.
* Class 7 General Unsecured Claims. The total $732,202.12
general unsecured deficiency claim of Fannie Mae. Each holder of an
Allowed Class 7 Claim will receive such holder's Pro Rata share
(shared along with Holders of Class 5 and 6 Claims) if Class 2
receives Option 1(A) or Option 2 treatment. If Class 2 receives
Option 1(B) treatment, the Class 2 payments shall be paid over a
period of 5 years without interest. Quarterly payments will
commence on the fifteenth day of the second calendar quarter after
the Effective Date, with payments continuing the fifteenth (15th)
day of each successive calendar quarter. Holders of Allowed Class 7
Claims shall also receive proceeds of Retained Avoidance Actions,
Pro Rata Share with Holders of Allowed Class 5 and 6 Claims.
Plan Filed by Riverview Apartments, LLC:
* Class 4 General Unsecured Convenience Class. Holders of
General Unsecured Claims of $4,500.00 or less will be a member of
this class. Allowed Class 4 Claims will be paid 90% of the claim on
the Effective Date from the Plan Fund in full satisfaction of its
claim. Holders of General Unsecured Claims with claims in excess of
$4,500.00 can elect to reduce its claim to $4,500.00 and receive
90% of the claim on the Effective Date from the Plan Fund in full
satisfaction of its claim. The total estimate of Class 4 Claims is
$2,936.
* Class 7 General Unsecured Claims. The total estimate of the
Class 3 Claim is $1,077,929.11 general unsecured deficiency claim
of Fannie Mae. Each holder of an Allowed Class 7 Claim will receive
such holder's Pro Rata share (shared along with Holders of Class 5
and 6 Claims) if Class 2 receives Option 1(A) or Option 2
treatment. If Class 2 receives Option 1(B) treatment, the Class 2
payments shall be paid over a period of 5 years without interest.
Quarterly payments will commence on the fifteenth day of the second
calendar quarter after the Effective Date, with payments continuing
the 15th day of each successive calendar quarter. Holders of
Allowed Class 7 Claims shall also receive proceeds of Retained
Avoidance Actions, Pro Rata Share with Holders of Allowed Class 5
and 6 Claims.
If Class 7 votes to accept the Plan, to the extent that Cash Flow
for any given calendar year (2023 - 2027) of the excess will be
paid to Holders of Allowed Class 7 Claims, to be shared Pro Rata
with Holders of Class 5 and 6 Claims to the extent such Class(es)
vote to accept the Plan. Cash flow is defined as GAAP net income
less estimated required tax distributions to owners and principal
payments on all debt obligations of the Reorganized Debtor.
The Debtor's ability to make the payments and distributions
required under the Plan depends upon repairing and leasing
apartments in the future that generates sufficient available cash
flow to pay all operational expenses and to make the payments and
distributions required under the Plan.
A full-text copy of the Disclosure Statement dated November 14,
2022, is available at https://bit.ly/3hPdpMO from PacerMonitor.com
at no charge.
Attorneys for Joshua L. Bruno:
CONGENI LAW FIRM, LLC
LEO D. CONGENI
650 Poydras Street, Suite 2750
New Orleans, LA 70130
Telephone: 504-522-4848
Facsimile: 504-910-3055
Email: leo@congenilawfirm.com
About Westbank Holdings
Westbank Holdings, LLC is a New Orleans, La.-based company
primarily engaged in renting and leasing real estate properties.
Westbank Holdings and its affiliates filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La.
Lead Case No. 22-10082) on Jan. 27, 2022. In its petition, Westbank
Holdings listed as much as $50 million in both assets and
liabilities. Joshua Bruno, manager, signed the petition.
Judge Meredith S. Grabill oversees the cases.
Frederick L. Bunol, Esq., at The Derbes Law Firm, LLC, Alvendia
Kelly & Demarest, LLC and G Rowland CPA & Associates serve as the
Debtors' bankruptcy counsel, special counsel and accountant,
respectively. Richard W. Cryar, a partner at F M Reed Company, is
the Debtors' chief restructuring officer.
Dwayne M. Murray, the Chapter 11 trustee appointed in the Debtors'
cases, tapped Fishman Haygood, LLP as counsel and Patrick J. Gros,
CPA, as accountant.
ZACHAIR LTD: Court OKs Appointment of Chapter 11 Trustee
--------------------------------------------------------
A U.S. bankruptcy judge approved the appointment of an independent
trustee to take over Zachair, Ltd.'s Chapter 11 case.
Judge Thomas Catliota of the U.S. Bankruptcy Court for the District
of Maryland approved the appointment of Lawrence Katz, a partner at
Hirschler Fleischer PC, to replace Dr. Nabil Asterbadi, president
and owner of Zachair, and take over the company's bankruptcy case.
On Oct. 27, the U.S. Trustee for Region 4, who oversees bankruptcy
cases in Maryland, filed a motion seeking to give control of
Zachair's estate to a bankruptcy trustee, citing Dr. Asterbadi's
"conflicts of interest" that might interfere with his fiduciary
duties to the company.
The filing followed Dr. Asterbadi's decision to cancel the Oct. 7
auction of approximately 423.45 acres of real property in Prince
George's County, Md., which the U.S. Trustee sees as an attempt by
the owner to continue to market the property and obtain a higher
price.
"Dr. Asterbadi wants to obtain a higher price for the property so
that he, as an equity owner, can benefit from the sale," the U.S.
Trustee said. "Continued delay in selling the property is
increasing administrative expenses to the detriment of the
unsecured creditors."
More than two years after Zachair filed for Chapter protection,
general unsecured creditors of the company are at least $3.5
million further away receiving payment on their claims, according
to the attorney.
About Zachair Ltd.
Clinton, Md.-based Zachair, Ltd. was formed by Dr. Nabil Asterbadi
to acquire Hyde Field, an airport for commercial and general
aviation. Hyde Field is located near Andrews Air Force Base,
National Harbor, Downtown Washington DC, and nearby Northern
Virginia. It offers a 3000' lighted runway with a day and night
instrument approach. For more information, visit
http://www.hydefield.com/
Zachair filed a Chapter 11 petition (Bankr. D. Md. Case No.
20-10691) on Jan. 17, 2020, with $10 million to $50 million in
assets and $1 million to $10 million in liabilities. Mr. Asterbadi,
president and owner of Zachair, signed the petition.
Judge Thomas J. Catliota oversees the case.
Whiteford Taylor & Preston, LLP, is the Debtor's legal counsel. CC
Services Corporation and Mendelson & Mendelson, CPAs, P.C., are the
Debtor's tax accountants.
[*] Total Commercial Bankruptcy Filings Rise 5% in October 2022 Y/Y
-------------------------------------------------------------------
ABL Advisor reports that commercial chapter 11 filings for
bankruptcy increased 2 percent in October 2022 to 304 filings from
297 filings the previous 2021. Small business filings, captured as
subchapter V elections within chapter 11, increased 28 percent to
131 in October 2022 from 102 in October 2021. The 1,886 total
commercial filings in October 2022 represented a 5 percent increase
from 1,798 commercial filings in October 2021.
Consumer chapter 13 filings increased 27 percent to 13,627 in
October 2022 from the 10,767 filings in October 2021, according to
data provided by Epiq Bankruptcy, the leading provider of U.S.
bankruptcy filing data. Total bankruptcy filings in the United
States increased 4 percent to 32,695 in October over the 31,493
total filings in October 2021.
Overall individual filings increased 4 percent in October 2022, as
the 30,809 filings were up over the 29,695 individual filings
registered in October 2021.
"With inflation increasing the costs of goods and services, and
with interest rates rising, families and businesses have been
presented with tough financial decisions," said ABI Executive
Director Amy Quackenboss. "Though filing rates are still below
their pre-pandemic totals, struggling households and businesses are
still turning to bankruptcy for relief from mounting economic
challenges."
All filing chapters in October 2022 registered a decrease compared
to September's figures. October's total bankruptcy filings
represented a two percent decrease when compared to the 33,194
total filings recorded the previous month. Total individual filings
for October represented a one percent decrease from September 2022
individual filing total of 31,179. Individual chapter 13 filings
also registered a 1 percent decrease from September's individual
chapter 13 total of 13,814. The commercial filing total represented
a 7 percent decrease from the September commercial filing total of
2,015. Commercial chapter 11 filings decreased 32 percent from the
445 filings the previous month, while subchapter V elections within
chapter 11 decreased 16 percent from the 156 filed in September.
"While comparing month-over-month or year-over-year filings is one
way to determine what's trending in the bankruptcy market, the
delta between new filings and closed cases is another valuable
capacity metric," said Gregg Morin, Vice President of Business
Development and Revenue at Epiq Bankruptcy.
Not since 2010 have there been more new filings in a year than
cases that were closed and it's trending that way again in 2022, as
there have been 61,857 more cases closed than were opened through
October 2022 compared to the same period in 2021. For the past four
months, the difference has steadily decreased, from 7,627 in July,
to 6,516 in August, 5,291 in September, and 3,252 in October.
ABI has partnered with Epiq Bankruptcy to provide the most current
bankruptcy filing data for analysts, researchers, and members of
the news media. Epiq Bankruptcy is the leading provider of data,
technology, and services for companies operating in the business of
bankruptcy.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re David Gonen
Bankr. S.D. Fla. Case No. 22-18647
Chapter 11 Petition filed November 8, 2022
represented by: Joel Aresty, Esq.
In re Isatou Properties Investments LLC
Bankr. S.D. Fla. Case No. 22-18653
Chapter 11 Petition filed November 8, 2022
See
https://www.pacermonitor.com/view/VQ2MHTY/Isatou_Properties_Investments__flsbke-22-18653__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Bergen 2C 1062 LLC
Bankr. E.D.N.Y. Case No. 22-42803
Chapter 11 Petition filed November 8, 2022
See
https://www.pacermonitor.com/view/6L7XUVI/Bergen_2C_1062_LLC__nyebke-22-42803__0001.0.pdf?mcid=tGE4TAMA
represented by: Stacey Simon Reeves, Esq.
LAW OFFICE OF STACEY SIMON REEVES
E-mail: stacey_simon@msn.com
In re C & M Trucking Enterprises Inc.
Bankr. W.D. Tenn. Case No. 22-24919
Chapter 11 Petition filed November 8, 2022
See
https://www.pacermonitor.com/view/SRBLTFQ/C__M_Trucking_Enterprises_Inc__tnwbke-22-24919__0001.0.pdf?mcid=tGE4TAMA
represented by: Curtis Johnson, Esq.
JOHNSON AND JOHNSON PC
E-mail:
cjohnson@johnsonandjohnsonattys.com
In re TexStar Country Store, LLC
Bankr. N.D. Tex. Case No. 22-32114
Chapter 11 Petition filed November 8, 2022
See
https://www.pacermonitor.com/view/FOKHABI/TexStar_Country_Store_LLC__txnbke-22-32114__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert T. DeMarco, Esq.
DEMARCO MITCHELL, PLLC
In re Crane Man, Inc.
Bankr. S.D. W.Va. Case No. 22-20172
Chapter 11 Petition filed November 8, 2022
See
https://www.pacermonitor.com/view/UZ6ZNSI/Crane_Man_Inc__wvsbke-22-20172__0001.0.pdf?mcid=tGE4TAMA
represented by: Andrew S. Nason, Esq.
PEPPER AND NASON
E-mail: tinas@peppernason.com
In re Robert Woodrow Williams and Karen Lynne Williams
Bankr. D. Ariz. Case No. 22-07509
Chapter 11 Petition filed November 9, 2022
represented by: Patrick Keery, Esq.
KEERY MCCUE, PLLC
E-mail: pfk@keerymccue.com
In re Douglas M. Bez
Bankr. W.D. Mich. Case No. 22-02301
Chapter 11 Petition filed November 9, 2022
represented by: Greg Ekdahl, Esq.
KELLER & ALMASSIAN, PLC
In re M'Proved Metal Crafters, LLC
Bankr. S.D. Miss. Case No. 22-51295
Chapter 11 Petition filed November 9, 2022
See
https://www.pacermonitor.com/view/KHQ46KA/MProved_Metal_Crafters_LLC__mssbke-22-51295__0001.0.pdf?mcid=tGE4TAMA
represented by: Patrick Sheehan, Esq.
SHEEHAN AND RAMSEY, PLLC
E-mail: Pat@sheehanramsey.com
In re Stephen Stromsdorfer and Michele Stromsdorfer
Bankr. E.D. Mo. Case No. 22-43518
Chapter 11 Petition filed November 9, 2022
represented by: Robert Eggmann, Esq.
In re Ashton Alexander Properties, LLC
Bankr. D.N.J. Case No. 22-18903
Chapter 11 Petition filed November 9, 2022
See
https://www.pacermonitor.com/view/EQVM33I/Ashton_Alexander_Properties_LLC__njbke-22-18903__0001.0.pdf?mcid=tGE4TAMA
represented by: Albert A. Ciardi III, Esq.
CIARDI CIARDI & ASTIN
E-mail: aciardi@ciardilaw.com
In re Ashton Alexander Properties I, LLC
Bankr. D.N.J. Case No. 22-18904
Chapter 11 Petition filed November 9, 2022
See
https://www.pacermonitor.com/view/MBYL6MY/Ashton_Alexander_Properties_I__njbke-22-18904__0001.0.pdf?mcid=tGE4TAMA
represented by: Albert A. Ciardi III, Esq.
CIARDI CIARDI & ASTIN
E-mail: aciardi@ciardilaw.com
In re ATS Group, LLC
Bankr. D.N.J. Case No. 22-18906
Chapter 11 Petition filed November 9, 2022
See
https://www.pacermonitor.com/view/WMS7WWI/ATS_Group_LLC__njbke-22-18906__0001.0.pdf?mcid=tGE4TAMA
represented by: Albert A. Ciardi III, Esq.
CIARDI CIARDI & ASTIN
E-mail: aciardi@ciardilaw.com
In re Dean Taly Properties, Inc.
Bankr. D.N.J. Case No. 22-18907
Chapter 11 Petition filed November 9, 2022
See
https://www.pacermonitor.com/view/JIHNG6Y/Dean_Taly_Properties_Inc__njbke-22-18907__0001.0.pdf?mcid=tGE4TAMA
represented by: Albert A. Ciardi III, Esq.
CIARDI CIARDI & ASTIN
E-mail: aciardi@ciardilaw.com
In re Dean Taly Properties I, LLC
Bankr. D.N.J. Case No. 22-18909
Chapter 11 Petition filed November 9, 2022
See
https://www.pacermonitor.com/view/7H3OJRQ/Dean_Taly_Properties_I_LLC__njbke-22-18909__0001.0.pdf?mcid=tGE4TAMA
represented by: Albert A. Ciardi III, Esq.
CIARDI CIARDI & ASTIN
E-mail: aciardi@ciardilaw.com
In re Julie Thomas Goggin
Bankr. S.D.N.Y. Case No. 22-22848
Chapter 11 Petition filed November 9, 2022
represented by: Justin Walker, Esq.
In re MWH Trucking LLC
Bankr. E.D.N.C. Case No. 22-02578
Chapter 11 Petition filed November 9, 2022
See
https://www.pacermonitor.com/view/PHR34IQ/MWH_Trucking_LLC__ncebke-22-02578__0001.0.pdf?mcid=tGE4TAMA
represented by: David F. Mills, Esq.
NARRON WENZEL, P.A.
E-mail: dmills@narronwenzel.com
In re Marlin Krider Land & Timber Inc.
Bankr. W.D.N.C. Case No. 22-50256
Chapter 11 Petition filed November 9, 2022
See
https://www.pacermonitor.com/view/ZBII55A/Marlin_Krider_Land__Timber_Inc__ncwbke-22-50256__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas C. Flippin, Esq.
LAW OFFICES OF THOMAS C. FLIPPIN
E-mail: tom@flippinlaw.com
In re The Speedy O'Hare Express, Inc.
Bankr. M.D. Tenn. Case No. 22-03641
Chapter 11 Petition filed November 9, 2022
See
https://www.pacermonitor.com/view/4FMU3JI/THE_SPEEDY_OHARE_EXPRESS_INC__tnmbke-22-03641__0001.0.pdf?mcid=tGE4TAMA
represented by: Steven L. Lefkovitz, Esq.
LEFKOVITZ & LEFKOVITZ
E-mail: slefkovitz@lefkovitz.com
In re Mark Lynn Duke and Regina Duke
Bankr. W.D. Tex. Case No. 22-10746
Chapter 11 Petition filed November 9, 2022
represented by: Susan Tran, Esq.
In re William Joseph Namen, II
Bankr. M.D. Fla. Case No. 22-02272
Chapter 11 Petition filed November 10, 2022
represented by: Bryan K. Mickler, Esq.
In re Alexander Ejiroghene Osowa
Bankr. N.D. Ga. Case No. 22-59135
Chapter 11 Petition filed November 10, 2022
represented by: Will B. Geer, Esq.
In re Eureka Realty Corp.
Bankr. S.D.N.Y. Case No. 22-11487
Chapter 11 Petition filed November 10, 2022
See
https://www.pacermonitor.com/view/ZWU5RCA/Eureka_Realty_Corp__nysbke-22-11487__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Michael James Reedy and Kristen Elizabeth Fields-Reedy
Bankr. E.D. Tenn. Case No. 22-51102
Chapter 11 Petition filed November 10, 2022
In re Supreme Worx LLC
Bankr. M.D. Fla. Case No. 22-04035
Chapter 11 Petition filed November 11, 2022
See
https://www.pacermonitor.com/view/WLJTFZI/Supreme_Worx_LLC__flmbke-22-04035__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Velasquez, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
E-mail: dvelasquez@lathamluna.com
In re Serenity House Detox Palm Beach, LLC
Bankr. S.D. Fla. Case No. 22-18717
Chapter 11 Petition filed November 11, 2022
See
https://www.pacermonitor.com/view/VFI6QJA/Serenity_House_Detox_Palm_Beach__flsbke-22-18717__0001.0.pdf?mcid=tGE4TAMA
represented by: Adam I. Skolnik, Esq.
LAW OFFICE OF ADAM I. SKOLNIK, PA
E-mail: askolnik@skolniklawpa.com
In re Midwest Heart and Vascular Associates, S.C.
Bankr. N.D. Ill. Case No. 22-13129
Chapter 11 Petition filed November 11, 2022
See
https://www.pacermonitor.com/view/B5535TQ/Midwest_Heart_and_Vascular_Associates__ilnbke-22-13129__0001.0.pdf?mcid=tGE4TAMA
represented by: David E. Cohen, Esq.
FISHER COHEN WALDMAN SHAPIRO, LLP
E-mail: DCohen@fishercohen.com
In re Gayle Yvonne Morton-Dickerson
Bankr. C.D. Cal. Case No. 22-16209
Chapter 11 Petition filed November 13, 2022
represented by: Onyinye Anyama, Esq.
In re Hustle Workshop LLC
Bankr. D. Colo. Case No. 22-14466
Chapter 11 Petition filed November 14, 2022
See
https://www.pacermonitor.com/view/O2UY3NQ/Hustle_Workshop_LLC__cobke-22-14466__0001.0.pdf?mcid=tGE4TAMA
represented by: Nathaniel J. Thompson, Esq.
LAW OFFICE OF NATHANIEL J. THOMPSON, LLC
E-mail: nathaniel@njtlaw.net
In re ComedyMX LLC
Bankr. D. Del. Case No. 22-11181
Chapter 11 Petition filed November 14, 2022
See
https://www.pacermonitor.com/view/ODGEZYA/ComedyMX_LLC__debke-22-11181__0001.0.pdf?mcid=tGE4TAMA
represented by: Lori A. Schwartz, Esq.
LEECH TISHMAN ROBINSON BROG, PLLC
E-mail: lschwartz@leechtishman.com
In re ComedyMx Inc.
Bankr. D. Del. Case No. 22-11182
Chapter 11 Petition filed November 14, 2022
See
https://www.pacermonitor.com/view/PRGJZ2Q/COMEDYMX_INC__debke-22-11182__0001.0.pdf?mcid=tGE4TAMA
represented by: Lori A. Schwartz, Esq.
LEECH TISHMAN ROBINSON BROG, PLLC
E-mail: lschwartz@leechtishman.com
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
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however, be complete or accurate. The Monday Bond Pricing table
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are not intended to reflect actual trades. Prices for actual
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*********
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