/raid1/www/Hosts/bankrupt/TCR_Public/221226.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, December 26, 2022, Vol. 26, No. 359
Headlines
100 ORCHARD STREET: Unsecureds Will Get 50% of Claims in 4 Years
ALWAYS CARING: Unsecureds Owed $117K to be Paid in Full W/ Interest
AMBER SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors
ART & ARCHITECTURE: Pettibon Entitled to Summary Judgment
AVAYA HOLDINGS: Nears Chapter 11 Bankruptcy Filing
BRAVE PARENT: Moody's Affirms 'B3' CFR & Rates First Lien Debt 'B2'
BW HOMECARE: S&P Downgrades Issuer Credit Rating to 'SD'
C & L DINERS: Seeks Approval to Hire Locke Lord as Co-Counsel
C & L DINERS: Seeks to Hire Heller, Draper & Horn as Legal Counsel
C&A TRANSPORTATION: Case Summary & 20 Largest Unsecured Creditors
CAROLINA CAJUNS: Unsecureds to Get Share of Income for 5 Years
CELSIUS NETWORK: Exclusive Filing Period Extended to Feb. 15
CLEARWATER PAPER: Moody's Affirms Ba2 CFR, Outlook Remains Stable
CMB SQUARED: Case Summary & 20 Largest Unsecured Creditors
COMPUTE NORTH: Amends Plan to Include CNCC GUC Claims Details
CONSOLIDATED ELEVATOR: Seeks to Hire Robert Dufour as Accountant
COVIS PHARMACEUTICALS: Lenders Tap Advisers Amid High Debt Load
DEVILLE CORP: Commercial Building Owner Files for Chapter 11
DIAMOND CREEK VILLA: Hits Chapter 11 Bankruptcy Protection
EMPIRE PRIME: Amends Plan to Resolve Community Loan Claim Issues
FLOSS BAR: Commences Subchapter V Bankruptcy Proceeding
FREEMANVILLE LIFEHOPE: Taps Falcone Law Firm as Bankruptcy Counsel
FTX TRADING: Plans to Sell LedgerX and Foreign Units in Bankruptcy
FTX TRADING: Top Execs Warned of Customer Fund Transfers to Alameda
GIRARDI & KEESE: Edelson PC Fraud Suit Stays in Chicago
GOODYHOUSE LLC: Exclusivity Period Extended to Jan. 20
GRECO BUILD: Unsecured Creditors Will Get 5% in Subchapter V Plan
GT REAL ESTATE: Court Confirms Chapter 11 Plan
HANSABEN INVESTMENTS: Poppy Bank Files Liquidating Plan
HEIRBNB LLC: Unsecured Creditors to Split $6K in Subchapter V Plan
HERO NUTRITIONALS: Claims to be Paid From Available Cash and Income
HOME TOWN FLORIDA: Seeks Approval to Tap Adam Law Group as Counsel
HOPE TRUCKER: Unsecured Creditors Will Get 54% of Claims in Plan
INDEPENDENCE FUEL: Unsecureds to Get $1,500 Per Month for 60 Months
INFOVINE INC: Seeks to Hire Baker & Associates as Legal Counsel
JP INTERMEDIATE: Moody's Cuts CFR to Caa3, Outlook Negative
KNIGHT HEALTH: Moody's Cuts CFR to B3 & Alters Outlook to Negative
KNIGHT HEALTH: S&P Lowers ICR to 'B-', Outlook Stable
LATAM AIRLINES: Don't Owe Bondholders Interest, Says 2nd Circuit
LEGACY EJY: Court Confirms Plan
LINDBLAD EXPEDITIONS: S&P Alters Outlook to Stable, Affirms B- ICR
MAGENTA BUYER: S&P Downgrades ICR to 'B-' on Dividend Recap Deal
MALLINCKRODT PLC: Out of ALS Drug Stock Lawsuit Due to Bankruptcy
MARCUS COMPANIES: Case Summary & 20 Largest Unsecured Creditors
MARYLAND ECONOMIC: Moody's Affirms Ba1 on 2016 Refunding Bonds
MASS PRODUCTIONS: Seeks to Hire Rountree as Legal Counsel
MEDICAL PROPERTIES: S&P Places 'BB+' ICR on Watch Negative
MONROE GARDENS: Voluntary Chapter 11 Case Summary
MONTGOMERY REALTY: Seeks Cash Collateral Access
MUSE THREADS: Case Summary & 19 Unsecured Creditors
NANI WALE O' PUAKO: Seeks Chapter 11 to Stop Foreclosure
NATURE COAST: Starts Subchapter V Bankruptcy Case
NEW CATHEDRAL OF GHWT: Starts Subchapter V Proceeding
NEW FORTRESS: Moody's Affirms B1 CFR & Alters Outlook to Negative
NEW FORTRESS: S&P Affirms 'BB-' ICR, Outlook Stable
ORBIT ENERGY: Seeks to Hire Ciardi Ciardi & Astin as Legal Counsel
P4L REALTY: Seeks to Hire Steidl and Steinberg as Legal Counsel
PARK PLACE: Voluntary Chapter 11 Case Summary
PEACOCK INTERMEDIATE II: Moody's Alters Outlook on B3 CFR to Neg.
PELLETIER MANAGEMENT: Continued Operations to Fund Plan
PG MOTORS: Voluntary Chapter 11 Case Summary
PM GENERAL: S&P Alters Outlook to Negative, Affirms 'B-' ICR
PRIME HEALTHCARE: S&P Affirms 'B-' ICR, Outlook Stable
RICHMOND HOSPITALITY: Exclusivity Period Extended to Jan. 13
RUBRYC THERAPEUTICS: Gets OK to Hire Countsy as Accountant
RUBRYC THERAPEUTICS: Taps Dorsey & Whitney as Bankruptcy Counsel
SL GREEN: S&P Lowers ICR to 'BB+' on Sustained Elevated Leverage
SNIPER SERVICES: Amends Several Secured Claims Pay Details
SPRINGFIELD HOUSE: Unsecureds to be Paid in Full in Plan
SWEET BRIAR COLLEGE: S&P Affirms 'BB' Rating on Revenue Bonds
TALEN ENERGY: Debt-to-Equity Bankruptcy Plan Okayed
TEXSTAR COUNTRY STORE: Taps Chad T. Wilson as Litigation Counsel
TORRID LLC: S&P Alters Outlook to Stable, Affirms 'B' ICR
WEEKLEY HOMES: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
WISE HEALTH: S&P Lowers Revenue Bond Rating to 'BB+' on Losses
ZOHAR FUNDS: 2nd Circuit Scrutinizes Trustee in Tilton Award Appeal
[^] BOND PRICING: For the Week from December 19 to 23, 2022
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100 ORCHARD STREET: Unsecureds Will Get 50% of Claims in 4 Years
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100 Orchard Street, LLC d/b/a Blue Moon Hotel, filed with the U.S.
Bankruptcy Court for the Southern District of New York a Disclosure
Statement to accompany Plan of Reorganization dated December 15,
2022.
The Debtor is a New York limited liability company that operates a
22-unit boutique hotel known as the Blue Moon Hotel located in
Manhattan's lower east side, at 100 Orchard Street, in a historical
building constructed in 1879.
The Debtor's principal, Randy Settenbrino, purchased the building
in 2002, and redesigned and restored what was a five-story tenement
into a stately eight-story hotel. The Hotel was instrumental in
revitalizing commerce south of Delancey Street. On May 19, 2022,
the Debtor was inducted into the Historic Hotels of America.
The Debtor believes the fair market value of the Hotel as of the
Confirmation Date is between $12 million and $15 million. Based
upon the current cap rates and the Debtor's recent operations, the
Debtor believes the Hotel is worth significantly less than the
amount set forth in the Colliers' appraisal. The Debtor and Brick
will attempt to reach an agreement as to the value of the Hotel for
confirmation purposes.
If the Debtor and Brick are unable to reach an agreement with
respect to a consensual plan of reorganization, the Bankruptcy
Court will have to determine the value of the Hotel. The valuation
of the Hotel may have a material effect upon the Debtor's ability
to confirm the Plan and effectuate the terms thereof.
The Hotel's revenues and net income significantly increased after
the Petition Date, with much higher occupancy rates, as well as
improved average daily rates for the Hotel's rooms.
Class 7 consists of the holders of Allowed Unsecured Claims. The
Debtor projects that the amount of Allowed Class 7 General
Unsecured Claims will total approximately $300,000 including the
SBA's Deficiency Claim.
Allowed Class 7 Claims (including any Deficiency Claim held by
Brick or the SBA) shall be paid 50% of their Allowed Claims without
interest over a period of 4 years from the Effective Date. Allowed
Class 7 Claims shall receive 10% on the Effective Date and yearly
payment of 10% on the 1st, 2nd, 3rd, and the 4th anniversary of the
Effective Date. In the event the Hotel is sold, the Class 7 Claims
shall be paid any remaining Net Hotel Sale Proceeds after payment
in full to Allowed Administrative Claims and Allowed Claims in
Classes 1-6.
Class 8 Equity Interests are held by Settenbrino and he shall
retain his equity interest in the Hotel. If the Hotel is sold, the
remaining Hotel Sale Proceeds shall be distributed to Class 8,
after payment in full to Allowed Administrative Claims and Allowed
Claims in Classes 1-7.
The Plan will be funded with the funds in the DIP Account, the
Debtor's net income from operating the Hotel, and from a
refinancing or sale of the Hotel. The Debtor projects that it will
have approximately $300,000 on hand as of June 1, 2023.
A full-text copy of the Disclosure Statement dated December 15,
2022, is available at https://bit.ly/3PPvFCT from PacerMonitor.com
at no charge.
Attorneys for 100 Orchard:
David H. Wander, Esq.
Scott Markowitz, Esq.
Alexander R. Tiktin, Esq.
Tarter Krinsky & Drogin LLP
1350 Broadway
New York, NY 10018
Tel: (212) 216- 8000
Email: dwander@tarterkrinsky.com
smarkowitz@tarterkrinsky.com
atiktin@tarterkrinsky.com
About 100 Orchard St. LLC
100 Orchard St. LLC operates a 22-room boutique hotel known as the
"Blue Moon Hotel," located in the lower east side of Manhattan, at
100 Orchard Street. The Hotel is a historical building built in
1879. Beginning in 2002, 100 Orchard redesigned the five-story
tenement and restored the building to function as a stately
eight-story hotel. It was a five-year art preservation and design
project that received an award by National Geographic, acknowledged
by the Historic Districts Council, and written up in 50 major
articles. The Hotel was instrumental in revitalizing commerce south
of Delancey Street.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-10358) on March 23,
2022.
In the petition signed by Randy Settenbrino, president and managing
member, the Debtor disclosed $25,341,713 in assets and $11,166,747
in liabilities.
Judge David S. Jones oversees the case.
Scott S. Markowitz, Esq., at Tarter Krinsky and Drogin, LLP, is the
Debtor's counsel.
ALWAYS CARING: Unsecureds Owed $117K to be Paid in Full W/ Interest
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Always Caring Health Care Services, Inc., filed with the U.S.
Bankruptcy Court for the Western District of Texas an Original Plan
of Reorganization accompanying the Original Disclosure Statement
dated December 15, 2022.
There are four types of classified claims under the Plan. These
Claims have been classified into different Classes.
Class 5 General Unsecured Claim consists of claim of Department of
Labor, unpaid wage claim to be paid to current & former employees
for overtime. On July 26, 2022, the DOL filed its original Proof
of Claim, Claim No. 4-1, in part for the General Unsecured Claim in
the amount of $117,396 for unpaid overtime wages to current and
former employees.
The General Unsecured Claim of the DOL in the amount of $117,396
will be paid in 36 monthly installments with interest at 5.25% in
the amount of $3,532 commencing on the Effective Date. The $3,532
monthly payment includes interest.
A failure by ACHCS to make a payment to the DOL under the terms of
the Plan shall be an event of default, and as to the DOL, there is
an event of default if payment is not received by the 15th day of
each month. If there is a default, the DOL must send a written
demand for payment, and said payment must be received by the DOL
within 15 days of the date of the demand letter. ACHCS can receive
up to three notices of default from the DOL; however, on the third
notice of default from the DOL the third notice cannot be cured,
and the DOL may accelerate its allowed claim(s), past and future,
and declare the outstanding amount of such claim(s) to be
immediately due and owing and pursue all available state and
federal rights and remedies. These default provisions pertain to
the entire claim(s) of the DOL, secured, unsecured priority, and
unsecured general.
Class 6 General Unsecured Claim - Department of Labor - Liquidated
Damages & General Unsecured Claim of the IRS. Class 6 will not
receive any distributions under the Plan for the reasons set forth
in the IRS and DOL objections.
Class 7 consists of the Equity Holder of ACHCS, Magdalene
Ullrich-Allen who will retain her equity interest in ACHCS.
The Plan is based on the future business revenue of ACHCS.
ACHCS believes that the Estate will generate sufficient future
income to fund the obligations under the proposed Plan and that no
further reorganization proceedings will be likely.
A full-text copy of the Original Plan of Reorganization dated
December 15, 2022, is available at https://bit.ly/3hQK59h from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Carlos A. Miranda, Esq.
Carlos G. Maldonado, Esq.
MIRANDA & MALDONADO, P.C.
5915 Silver Springs, Bldg. 7
El Paso, TX 79912
Tel: (915) 587-5000
Fax: (915) 587-5001
E-mail: cmiranda@eptxlawyers.com
About Always Caring Health Care Services
Always Caring Health Care Services, Inc., filed a petition for
Chapter 11 protection (Bankr. W.D. Tex. Case No. 22-30120) on Feb.
18, 2022, listing up to $50,000 in assets and up to $10 million in
liabilities. J. Thomas Ullrich, authorized representative, signed
the petition.
Judge H. Christopher Mott oversees the case.
The Debtor tapped Miranda & Maldonado, PC, as legal counsel.
AMBER SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors
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Debtor: Amber Solutions Corp, Inc.
7501 Lemont Rad, Suite 315C
Woodridge, IL 60517
Chapter 11 Petition Date: December 23, 2022
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 22-14825
Judge: Hon. Janet S. Baer
Debtor's Counsel: David Freydin, Esq.
LAW OFFICES OF DAVID FREYDIN
8707 Skokie Blvd
Suite 305
Skokie, IL 60077
Tel: 888-536-6607
Fax: 866-575-3765
Email: david.freydin@freydinlaw.com
Total Assets: $936,900
Total Liabilities: $4,893,020
The petition was signed by Erkinjon Esonov as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/UQSVGOQ/Amber_Solutions_Corp_Inc__ilnbke-22-14825__0001.0.pdf?mcid=tGE4TAMA
ART & ARCHITECTURE: Pettibon Entitled to Summary Judgment
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In the adversary proceeding captioned as In re Art & Architecture
Books of the 21st Century, Chapter 11, Debtor. Sam Leslie, plan
agent for Art & Architecture Books of The 21st Century, Plaintiff,
v. Ace Gallery New York Corporation, et al., Defendants, Bankruptcy
Case No. 2:13-bk-14135-RK, Adversary Proceeding No.
2:15-ap-01679-RK, Consolidated with Adversary Proceeding No.
2:14-ap-01771-RK, Adversary Proceeding No. 2:15-ap-01680-RK,
(Bankr. C.D. Cal.), Judge Robert Kwan for the Central District of
California, issues an amended report and recommendation amending
his prior report and recommendation issued on July 21, 2021.
Judge Kwan submits an amended report and recommendation as
originally submitted to the District Court pursuant to Federal Rule
of Bankruptcy Procedure 9033(d). He recommends that the District
Court (a) conduct a de novo review of the record, (b) adopt the
findings of fact and conclusions of law as set forth in the amended
report and recommendation, (c) grant the motion of Richard Pettibon
for summary judgment on his complaint-in-intervention, and (d)
issue an order for final judgment pursuant to Federal Rule of Civil
Procedure 54(b) and Federal Rule of Bankruptcy Procedure 7054
declaring that Raymond Pettibon owns the artworks that he created
and were in the custody of the Debtor on consignment.
The complaint-in-intervention asserts claims under California law
to quiet title to personal property, for declaratory relief that
Pettibon is the owner of the Pettibon Drawings and for recovery of
specific personal property, which claims are noncore state law
claims. It also relates to the counter-complaint of Douglas
Chrismas that was filed in response to the plan agent's Fifth
Amended Consolidated Complaint on behalf of the Debtor. Chrismas
sought similar claims for declaratory relief claiming title to art
works being held by the Debtor, including the Pettibon Drawings,
for related injunctive relief, conversion and replevin to recover
his claimed art works. Chrismas alleged that jurisdiction over his
counter-complaint arose under Federal Rule of Civil Procedure 13
made applicable to this adversary proceeding by Federal Rule of
Bankruptcy Procedure 7013. Chrismas later filed a First Amended
Counter-Complaint, asserting the same claims.
On the other hand, Chrismas' claims in his counter-complaints are
permissive, not compulsory, counterclaims because his claims of
title to certain art assets held by the plan agent from the
bankruptcy estate in Debtor's bankruptcy case do not arise of the
same transaction or occurrence as the plan agent's Fifth Amended
Consolidated Complaint against Chrismas asserting claims for
avoidance of transfers of assets, fraud, conversion and breach of
fiduciary duty relating to property transferred out of the Debtor.
Pettibon argues that the court may enter a final judgment on his
complaint in intervention as to Chrismas based on his filing of
permissive counterclaims in his counter-complaints in this
adversary proceeding.
Judge Kwan determines that he has subject matter jurisdiction over
Chrismas' claims of his counter-complaints and Pettibon's claim in
his complaint in intervention, because such claims are competing
claims to what is asserted to have been property of the bankruptcy
estate as the plan agent on behalf of the Debtor claims title to
the art assets. The plan agent and Pettibon have expressly
consented to the bankruptcy court jurisdiction in this adversary
proceeding by their statements of consent in at least one status
report filed in this adversary proceeding. Meanwhile, Chrismas in
the same status report and in his counter-complaints expressly
stated that he did not consent to the jurisdiction of the
bankruptcy court to enter a final judgment.
Citing Stern v. Marshall, 564 U.S. 462 (2011), Judge Kwan concludes
that absent consent of all of the parties to Pettibon's claims in
his complaint in intervention and Chrismas' counterclaims relating
to the Pettibon Drawings, the bankruptcy court lacks jurisdiction
to enter a final judgment on these claims. In case of Marshall, the
Supreme Court noted that the bankruptcy court lacked jurisdiction
over Vickie Marshall's counterclaim, which the bankruptcy court had
determined to be compulsory, but the Supreme Court found to be
permissive, and that the permissive/compulsory distinction did not
affect its analysis that the bankruptcy court did not have
jurisdiction to enter a final judgment on the counterclaim.
Judge Kwan, however, finds that he does have jurisdiction to hear
Pettibon's complaint in intervention and Chrismas's counterclaims
relating to the Pettibon Drawings, which are noncore claims under
its "related to" jurisdiction pursuant to 28 U.S.C. section
1334(b). Accordingly, Judge Kwan determines that it may issue
proposed findings of fact and conclusions of law pursuant to
Federal Rule of Bankruptcy Procedure 9033 in submitting its ruling
on the motion as a report and recommendation to the Central
District court of California for de novo review.
The uncontroverted facts establish that Pettibon consigned the
Pettibon Drawings to Ace Gallery, that ownership of the Pettibon
Drawings remained with Pettibon at all times, and that Pettibon is
the owner of the Pettibon Drawings today. The "Schedules of Assets
and Liabilities and Statement of Financial Affairs" signed by
Chrismas for the Debtor and filed under penalty of perjury in this
bankruptcy case on March 5, 2013 constitute an uncontroverted
evidentiary, if not judicial, admission that Chrismas does not own
the Pettibon Drawings in that the Debtor's schedules did not list
the Pettibon Drawings as assets held by Debtor for others, such as
Chrismas on his personal behalf.
Judge Kwan concludes that the absence of the Pettibon Drawings from
the list of assets Chrismas included on "Schedule B," constitutes
an uncontroverted evidentiary admission that Chrismas does not own
the Pettibon Drawings in that he failed to list the Pettibon
Drawings as his assets. Judge Kwan finds that Pettibon's direct
evidence shows that Pettibon consigned the Pettibon Drawings to Ace
Gallery and that Pettibon never sold the Drawings to Ace Gallery,
Chrismas, and/or the Debtor. Judge Kwan notes that "Chrismas has
produced no documents showing a sale or other transfer of ownership
to himself, or his entities, Ace Gallery, and/or the Debtor.
Chrismas's uncorroborated and self-serving assertion of ownership
is flatly contradicted by his prior sworn admissions and the
remainder of the record, and no reasonable jury could believe him.
Likewise, the Plan Agent has produced no evidence to dispute the
material facts. The Plan Agent has produced no evidence that the
Debtor owns the Pettibon Drawings."
Accordingly, Judge Kwan concludes that Raymond Pettibon is entitled
to (a) a declaratory judgment that he is the sole owner of each of
the Pettibon Drawings and (b) injunctive relief awarding him
possession of each of the Pettibon Drawings.
A full-text copy of the Amended Report and Recommendation dated
Dec. 9, 2022, is available at https://tinyurl.com/4zw3krba from
Leagle.com.
About Art and Architecture
Art and Architecture Books of the 21st Century, d/b/a Ace Gallery,
filed for a voluntary Chapter 11 petition on Feb. 19, 2013, in the
U.S. Bankruptcy Court for the Central District of California, Case
No. 13-14135. The petition was signed by Douglas Chrismas,
president. Judge Robert Kwan presides over the case. Joseph A.
Eisenberg, Esq., at Jeffer Mangels Butler & Mitchell LLP, serves as
counsel. The Debtor reported $1 million to $10 million in assets
and $10 million to $50 million in debts.
AVAYA HOLDINGS: Nears Chapter 11 Bankruptcy Filing
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IT firm Avaya Holdings Corp (AVYA.N) is reaching a chapter 11
bankruptcy filing to restructure its balance sheet, in a bid to
turn around its business and move past accounting problems, the
Wall Street Journal reported.
Avaya had said there was substantial doubt about its ability to
continue as a going concern in light of a debt maturity next 2023,
as per the Journal's report, which cited people familiar with the
matter.
Avaya, Reuters reported, said it was in talks with its financial
stakeholders regarding a comprehensive resolution to strengthen its
balance sheet.
One plan -- supported by a senior lender group, including Apollo
Global Management -- would significantly reduce Avaya's debt load
through chapter 11, wipe out shareholders and — pending the
completion of an internal investigation into controls over
financial reporting — provide directors and executives with
releases from potential litigation, the Journal reported.
Another plan, supported by holders of Avaya's unsecured bonds,
proposes to restructure the company out of court, including by
issuing new bonds and loans to retire some old debt, the report
said.
Avaya's shares have fallen nearly 97% this year, crimping its
market cap to around $45 million from more than $2 billion in
2021.
About Avaya Holdings Corp.
Avaya Holdings Corp. operates as a holding company. The Company,
through its subsidiaries, Avaya, Inc., provides business
collaboration and communications software solutions. The Company
offers unified communications, contact centers, real-time video,
and collaboration services.
BRAVE PARENT: Moody's Affirms 'B3' CFR & Rates First Lien Debt 'B2'
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Moody's Investors Service affirmed Brave Parent Holdings, Inc.'s
("BeyondTrust") ratings, including the B3 Corporate Family Rating
and B3-PD Probability of Default Rating and B2 first lien senior
secured instrument rating. Moody's also assigned a B2 instrument
level rating to the extended revolving credit facility due Jan
2025. The outlook is stable.
Affirmations:
Issuer: Brave Parent Holdings, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Backed Senior Secured First Lien Term Loan, Affirmed B2 (LGD3)
Backed Senior Secured First Lien Revolving Credit Facility,
Affirmed B2 (LGD3)
Assignments:
Issuer: Brave Parent Holdings, Inc.
Backed Senior Secured First Lien Revolving Credit Facility,
Assigned B2 (LGD3)
Outlook Actions:
Issuer: Brave Parent Holdings, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The B3 CFR reflects BeyondTrust's very high leverage, small scale,
and aggressive financial policies. Leverage is approximately 12x
(Moody's adjusted) as of September 2022 or about 8x on a cash
adjusted basis, up from near 7x in FY 2021. Moody's expects cash
leverage to further increase to over 9x for FY 2022 due to the
company's accelerated transition from one-time license revenue to
recurring subscription revenue, which initially lowers upfront cash
collections, and increased investments to drive future growth.
Although this transition has resulted in weakened credit metrics
this year, Moody's expects this trend will begin to reverse in 2023
with cash EBITDA improving. Moody's views the conversion to a
subscription model as credit positive over the long-term due to
improved revenue and cash flow visibility.
BeyondTrust benefits from a highly recurring revenue base with
strong retention rates, good liquidity, and market position as a
leading provider in the growing privileged access management and
secure remote access support markets. The company also benefits
from favorable industry trends including the ongoing rapid
technology adoption in privileged access, which has continued to
fuel rapid market growth. Total revenue increased 18% for the LTM
ended September 2022 with recurring revenues (defined as
maintenance contract and subscription contract derived revenues)
representing approximately 83% of Q3 total revenue, up from 73% a
year ago. Moody's expects revenue growth in the low to mid-teens
percentage range despite recessionary pressures. Cash EBITDA will
also improve as the negative impact from the transition to a
subscription model begins to reverse, which should reduce cash
leverage to below 8x over the next 12-18 months. However,
BeyondTrust's willingness to use debt to fund M&A could result in
persistently high leverage levels.
Moody's expects that BeyondTrust will maintain good liquidity over
the next 12 to 18 months supported by a cash balance around $90
million and an undrawn $40 million revolver. Over the next year,
Moody's anticipates that the company will generate free cash flow
to debt around 1-2% as cash EBITDA growth is offset by higher
interest expense. $33 million of the company's initial $40 million
revolver has been extended to January 2025 from April 2023.
BeyondTrust's revolving credit facility contains a springing
first-lien net leverage covenant set at 8.0x, that is tested when
the facility is drawn 30% or more. After the $7 million revolving
commitment expires in April 2023, the covenant is not tested until
the facility is drawn 40% or more. Moody's expect that the company
will maintain good cushion under the covenant over the next year.
The stable outlook reflects Moody's expectation that BeyondTrust
will be able to reduce leverage towards 8x while maintaining solid
organic growth even as the US economy will likely contract in a
couple of quarters of 2023 due to the high demand for security
software solutions. The stable outlook reflects Moody's expectation
for at least break even free cash flow and good liquidity.
BeyondTrust's ESG credit impact score (CIS-4) is highly negative,
primarily driven by the company's governance risks characterized by
private equity ownership and aggressive financial policy.
Moderately negative social risks stem from potential cybersecurity
breaches and access to skilled talent.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if a commitment to more conservative
financial policies is demonstrated and BeyondTrust's cash adjusted
leverage is sustained below 6.5x while free cash flow to debt is
maintained above 5%. The ratings could be downgraded if cash
adjusted leverage is sustained above 8x or liquidity weakens on
other than a temporary basis.
BeyondTrust, the operating subsidiary of debt issuing parent Brave
Parent Holdings, Inc., is a provider of Privileged Access
Management and Remote Support software solutions and services to
enterprise clients. BeyondTrust provides software solutions via
cloud, virtual appliance, and physical appliance platforms. The
company is private and is majority owned by funds affiliated with
Francisco Partners, with Clearlake Capital and management holding a
minority stake. BeyondTrust generated preliminary revenues around
$345 million for the LTM ended September 2022.
The principal methodology used in these ratings was Software
published in June 2022.
BW HOMECARE: S&P Downgrades Issuer Credit Rating to 'SD'
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S&P Global Ratings lowered its issuer credit rating on BW Homecare
Holdings LLC (d/b/a Elara Caring) to 'SD' (selective default) from
'CCC-' and lowered its issue-level rating on its first-lien term
loan to 'D' (default) from 'CCC-'.
S&P also affirmed its 'C' issue-level rating on the company's
second-lien debt, which is not affected by the proposed
transaction.
S&P intends to reassess its issuer and issue-level ratings on Elara
Caring in the near term to reflect the changes to the capital
structure as a result of this transaction.
Elara Caring completed a distressed exchange transaction with its
first-lien and 1.5-lien term loan holders. Lenders received pro
rata shares in new super-priority tranches of loans ranking junior
to new $125 million first-out debt, with approximately $125 million
of interest on term loans deferred as payment-in-kind (PIK) and an
extension of maturity dates.
S&P views the transaction as a distressed exchange. It involved the
exchange of the company's $630 million first-lien term loans and
$231 million 1.5-lien term loans for new super-senior second-out
(SSSO) and super-senior third-out (SSTO) term loans, which rank
junior to the new $50 million super-senior first-out (SSFO)
revolver and new $125 million SSFO term loans. In addition to a
lower relative ranking in the capital structure for first-lien term
loan holders, the transaction included a six-month maturity
extension to January 2026 from May 2025. Like first-lien lenders,
1.5-lien term loan debtholders exchanged their claims for a pro
rata share (at par value) in new SSTO term loans that rank junior
to the SSFO revolver, SSFO term loans, and SSSO term loans. The
exchange also included a maturity extension from November 2025 to
November 2026 and 33 months of PIK deferral, in addition to about
$46 million of previously deferred interest due from 2023-2026.
S&P views these exchanges as distressed and tantamount to default
because term loan lenders received less value than they were
initially promised under the original securities. Specifically, the
exchanges extended the maturity dates on both classes of securities
without adequate offsetting compensation. In addition, interest
payments will be meaningfully delayed for 1.5-lien lenders. The
transaction also resulted in a more junior ranking for first-lien
and 1.5-lien lenders given the addition of new priming debt.
S&P said, "We plan to reassess our issuer credit rating and
issue-level ratings in the near term. Over the coming weeks, we
will take into account the company's very high leverage and
challenged operating performance, which are only modestly offset by
improved liquidity provided by this transaction. We will also
reassess our recovery ratings on the company's debt to reflect the
increased proportion of super-priority debt within the capital
structure."
C & L DINERS: Seeks Approval to Hire Locke Lord as Co-Counsel
-------------------------------------------------------------
C & L Diners, LLC and affiliates seek approval from the U.S.
Bankruptcy Court for the District of Connecticut to hire Locke
Lord, LLP as co-counsel with Heller, Draper & Horn, LLC.
The firm's services include:
a. advising the Debtors with respect to their powers and
duties in the continued management and operation of their
business;
b. advising the Debtors with respect to all general bankruptcy
matters;
c. preparing legal papers;
d. representing the Debtors at court hearings and matters
pertaining to their affairs;
e. representing the Debtors in litigated matters that may
arise during their Chapter 11 cases;
f. advising the Debtors regarding any sale of their assets or
business;
g. attending meetings and negotiating with representatives of
the Debtors' creditors and other parties-in-interest, and
responding to creditor inquiries;
h. taking all necessary actions to protect and preserve the
Debtors' estate;
i. reviewing applications and motions;
j. negotiating and preparing, if applicable, a plan of
reorganization, disclosure statement and related documents, and
taking any necessary action to obtain confirmation of such plan;
k. representing the Debtors in connection with obtaining
post-petition loans and financing, if necessary;
l. reviewing and evaluating the Debtors' executory contracts
and unexpired leases and representing the Debtors in connection
with the rejection, assumption or assignment of such executory
contracts and unexpired leases;
m. reviewing and analyzing various claims of creditors and the
treatment of such claims, and filing or prosecuting any objections
thereto;
n. advising the Debtors on general corporate, securities, real
estate, litigation, environmental, labor, regulatory, tax, health
care, and other legal matters that may arise during the pendency of
their cases; and
o. other necessary legal services.
The firm will be paid at these rates:
Partners $730 - $1,145 per hour
Associates $450 - $795 per hour
Locke Lord received a $35,000 retainer from the Debtors.
Ira Greene, Esq., a partner at Locke Lord, disclosed in a court
filing that his firm neither holds nor represents any interest
adverse to the Debtors.
The firm can be reached through:
Ira S. Greene, Esq.
Locke Lord LLP
601 Poydras Street, Suite 2660
New Orleans, LA 70130
Phone: 504-558-5100
Fax: 504-558-5200
Email: ira.greene@lockelord.com
About C & L Diners
C & L Diners, LLC and affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Conn. Lead Case No.
22-50599) on Nov. 8, 2022. In the petition filed by Herman Li,
operating member, the Debtors disclosed up to $10 million in both
assets and liabilities.
Judge Julie A. Manning oversees the cases.
Heller, Draper & Horn, LLC and Locke Lord, LLP serve as the
Debtors' legal counsels.
C & L DINERS: Seeks to Hire Heller, Draper & Horn as Legal Counsel
------------------------------------------------------------------
C & L Diners, LLC and affiliates seek approval from the U.S.
Bankruptcy Court for the District of Connecticut to hire Heller,
Draper & Horn, LLC as their primary bankruptcy counsel.
The firm's services include:
a. advising the Debtors with respect to their powers and
duties in the continued management and operation of their
business;
b. advising the Debtors with respect to all general bankruptcy
matters;
c. preparing legal papers;
d. representing the Debtors at court hearings and matters
pertaining to their affairs;
e. representing the Debtors in litigated matters that may
arise during their Chapter 11 cases;
f. advising the Debtors regarding any sale of their assets or
business;
g. attending meetings and negotiating with representatives of
the Debtors' creditors and other parties-in-interest, and
responding to creditor inquiries;
h. taking all necessary actions to protect and preserve the
Debtors' estate;
i. reviewing applications and motions;
j. negotiating and preparing, if applicable, a plan of
reorganization, disclosure statement and related documents, and
taking any necessary action to obtain confirmation of such plan;
k. representing the Debtors in connection with obtaining
post-petition loans and financing, if necessary;
l. reviewing and evaluating the Debtors' executory contracts
and unexpired leases and representing the Debtors in connection
with the rejection, assumption or assignment of such executory
contracts and unexpired leases;
m. reviewing and analyzing various claims of creditors and the
treatment of such claims, and filing or prosecuting any objections
thereto;
n. advising the Debtors on general corporate, securities, real
estate, litigation, environmental, labor, regulatory, tax, health
care, and other legal matters that may arise during the pendency of
their cases; and
o. other necessary legal services.
The firm's hourly rates are as follows:
Douglas S. Draper $450 per hour
Leslie A. Collins $300 per hour
Associates $300 - $375 per hour
Paralegals $150 per hour
Heller received payments totaling $205,000 as a retainer.
As disclosed in court filings, Heller, Draper & Horn is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Douglas S. Draper, Esq.
Heller, Draper & Horn, LLC
650 Poydras Street, Suite 2500
New Orleans, LA 70130
Phone: (504) 299-3300
Email: ddraper@hellerdraper.com
About C & L Diners
C & L Diners, LLC and affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Conn. Lead Case No.
22-50599) on Nov. 8, 2022. In the petition filed by Herman Li,
operating member, the Debtors disclosed up to $10 million in both
assets and liabilities.
Judge Julie A. Manning oversees the cases.
Heller, Draper & Horn, LLC and Locke Lord, LLP serve as the
Debtors' legal counsels.
C&A TRANSPORTATION: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: C & A Transportation, Inc.
2360 Spires Drive
Macon, GA 31216
Business Description: C & A is a professional commercial carrier.
Chapter 11 Petition Date: December 23, 2022
Court: United States Bankruptcy Court
Middle District of Georgia
Case No.: 22-51583
Judge: Hon. James P. Smith
Debtor's Counsel: G. Daniel Taylor, Esq.
STONE & BAXTER, LLP
577 Third Street
Macon, GA 31201
Tel: 478-750-9898
Fax: 478-750-9899
Email: dtaylor@stoneandbaxter.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Audrey Tidwell as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/NT47TGQ/C__A_Transportation_Inc__gambke-22-51583__0001.0.pdf?mcid=tGE4TAMA
CAROLINA CAJUNS: Unsecureds to Get Share of Income for 5 Years
--------------------------------------------------------------
The Carolina Cajuns, LLC, filed with the U.S. Bankruptcy Court for
the District of Connecticut a Plan of Reorganization dated Dec. 15,
2022.
The Debtor is a North Carolina limited liability company. The sole
member of the Debtor is Steven Galloway, who is also the President.
The Debtor became a franchisee of The Lost Cajun Enterprises, LLC
(the "TLCE") in 2018 and opened two full service, family-focused
restaurants in August and October, 2019.
One restaurant is located at 9709 Sam Furr Road, Huntersville,
North Carolina (the "Huntersville Restaurant") and one restaurant
was located at 108 Huffman Mill Road, Burlington, North Carolina
27215 (the "Burlington Restaurant"). The Debtor, as lessor, leases
the Huntersville Restaurant from Northcross Land & Development,
LLC, as lessee (the "Huntersville Landlord"). The Debtor, as
lessor, leased the Burlington Restaurant from DiFranco Investments,
LLC, Hoel Investments, LLC, and L&H Rogers Investments, LLC, as
lessee (collectively, the "Burlington Landlord").
On April 18, 2022, TLCE's founder sold the company to Mr. Robert
Stidham, the founder and CEO of Summa Franchise Consulting in
Scottsdale, Arizona. Mr. Stidham is also a certified Chief
Restructuring Officer. Prior to the Filing Date, the Debtor worked
with Mr. Stidham in an effort to restructure the Debtor's
agreements with its lenders and landlords, but such efforts proved
unsuccessful, ultimately leading to the filing of this Chapter 11
case.
The Debtor will utilize the income generated from the operations of
its business at the Huntersville Restaurant to fund distributions
to all Allowed Claims. The Plan undertakes to resolve all
Administrative Claims, Secured Claims, Priority Claims, Unsecured
Claims, and Interests.
Class 1 consists of the Allowed Secured Claim of UCB. According to,
inter alia, a UCC search performed in North Carolina, UCB also
holds a first priority security interest in the personal property
located at the Huntersville Restaurant. With respect to that
personal property, and absent an agreement between UCB and the
Debtor, the Allowed Secured Claim of UCB will be determined by a
motion under Bankruptcy Code section 506(a). The Debtor expects
that such a motion will determine that UCB is an under-secured
creditor. The Debtor does not expect the value of UCB's collateral
in the Huntersville Restaurant to exceed approximately $50,000.00.
The secured portion of UCB's Claim will be paid, in full, in Cash,
over the 5-year term of the Plan. The unsecured portion of UCB's
Claim will be treated with Allowed Unsecured Claims.
Class 2 consists of the Allowed Secured Claim of the SBA. The
Debtor believes there is still an outstanding balance on the EIDL
loan of approximately $472,900. Absent an agreement between the SBA
and the Debtor, the Allowed Secured Claim of the SBA will be
determined by a motion under Bankruptcy Code section 506(a). The
Debtor expects that such a motion will determine that SBA is, in
its entirety, the holder of an unsecured Claim. Further, such a
Claim may be the subject of an objection to Claim, and ultimately
determined therewith, as the SBA was included in the Schedules as
the holder of a contingent and unliquidated Claim, and the SBA did
not file a proof of Claim. To the extent the SBA is allowed a
Claim, it will be treated with Allowed Unsecured Claims.
Class 3 consists of the Allowed Unsecured Claims of the Debtor. The
Schedules indicate that there are approximately 7 creditors in this
Class. The Debtor estimates that the general unsecured Claims
against the Estate total approximately $169,709.00, without
consideration of the deficiency Claim of UCB and the SBA. This
Class is impaired under and is entitled to vote to accept or reject
the Plan. The Debtor shall pay each holder of a Class 3 Claim its
Pro Rata share, over the 5-year term of the Plan, from the Debtor's
net disposable income, after satisfaction of the Allowed Secured
Claim of UCB and Allowed Administrative Claims.
Class 4 consists of Steven Galloway, the sole member of the Debtor
and its President. This Class is unimpaired under and deemed to
accept the Plan. The Interest Steven Galloway, the holder of the
Class 4 Claim, shall be reinstated.
The Debtor will utilize the income generated from the operations of
its business at the Huntersville Restaurant to fund distributions
to all Allowed Claims.
A full-text copy of the Plan of Reorganization dated December 15,
2022, is available at https://bit.ly/3ViYuIP from PacerMonitor.com
at no charge.
Debtor's Counsel:
Jon P. Newton, Esq.
Reid and Riege, P.C.
One Financial Plaza, 21st Floor
Hartford, CT 06103
Tel: (860) 278-1150
Fax: (860) 240-1002
Email: jnewton@rrlawpc.com
About The Carolina Cajuns
The Carolina Cajuns, LLC, operates in the restaurant industry and
is based in Somers, Conn.
Carolina Cajuns sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Conn. Case No. 22-20640) on Sept. 16,
2022, with up to $50,000 in assets and up to $10 million in
liabilities. Steven A. Galloway, president of Carolina Cajuns,
signed the petition.
Judge James J. Tancredi oversees the case.
John P. Newton, Esq., at Reid and Riege, P.C., is the Debtor's
counsel.
CELSIUS NETWORK: Exclusive Filing Period Extended to Feb. 15
------------------------------------------------------------
A bankruptcy court extended the time Celsius Network, LLC and its
affiliates can keep exclusive control of their Chapter 11 cases,
giving them until Feb. 15 next year to file a bankruptcy plan.
The ruling by the U.S. Bankruptcy Court for the Southern District
of New York allows the companies to pursue their own plan for
emerging from Chapter 11 protection without the threat of a rival
plan from creditors.
The court extended the exclusive filing period despite unresolved
objections from Celsius customers and borrowers who asked to
terminate the period now, citing the time–consuming nature of the
bankruptcy process.
Meanwhile, Celsius was able to resolve objections from the official
unsecured creditors' committee and from the ad hoc group of
withhold account holders by agreeing to shorten the period of
exclusive control. The company originally requested to extend the
exclusive filing period to March 31.
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network, LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Case
No.22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtors estimated assets and liabilities between $1
billion and $10 billion.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as legal counsels; Centerview Partners, LLC as
investment banker; and Alvarez & Marsal North America, LLC as
financial advisor. Stretto is the claims agent and administrative
advisor.
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.
CLEARWATER PAPER: Moody's Affirms Ba2 CFR, Outlook Remains Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed Clearwater Paper Corporation's
Ba2 corporate family rating, Ba2-PD probability of default rating
and Ba3 senior unsecured notes rating. At the same time, Moody's
has upgraded the company's speculative grade liquidity rating to
SGL-1 from SGL-2. The outlook remains stable.
"The affirmation reflects Moody's expectations that Clearwater will
maintain solid credit metrics and very good liquidity over the next
12-24 months as it carries out major maintenance projects", said
Aziz Al Sammarai, Moody's analyst.
Affirmations:
Issuer: Clearwater Paper Corporation
Corporate Family Rating, Affirmed Ba2
Probability of Default Rating, Affirmed Ba2-PD
Senior Unsecured Regular Bond/Debenture, Affirmed Ba3 (LGD4) from
(LGD5)
Upgrades:
Issuer: Clearwater Paper Corporation
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-2
Outlook Actions:
Issuer: Clearwater Paper Corporation
Outlook, Remains Stable
RATINGS RATIONALE
Clearwater's Ba2 CFR benefits from good North American market
positions in private label tissue and high-end consumer paperboard
packaging; modest product diversity with a focus in two businesses
that typically have relatively stable end market demand; financial
leverage metrics that are supportive of current rating level (2.4x
at LTM September 2022); and very good liquidity.
Clearwater's rating is constrained by its relatively small revenue
base; significant financial exposure to market downtime and
maintenance outages; and vulnerability to significantly larger and
financially stronger competitors in both tissue and paperboard
packaging; exposure to higher than normal market pulp prices; cost
inflation that will limit margin expansion.
Clearwater has very good liquidity (SGL-1) with more than $420
million in liquidity sources compared to no current maturities.
Sources include $51 million of cash (September 2022), $271 million
available under the company's $275 million ABL facility expiring in
November 2027 (net of $3.7 million of LCs outstanding), and about
$100 million of positive free cash flow through 2023. The company
is subject to a springing fixed charge covenant of 1.1:1 if
revolver availability falls below the greater of 10% or $19
million. Moody's does not expect it to be applicable over the next
4 quarters (ample cushion if it springs). The company has limited
ability to raise liquidity from asset sales given its secured
capital structure.
The Ba3 rating on Clearwater's $545 million senior unsecured notes
are one notch below the CFR, reflecting the note holders'
subordinate position behind the $275 million asset based revolving
credit facility.
The stable outlook reflects Moody's expectation that Clearwater
will maintain very good liquidity and financial leverage of around
2.5x over the next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company is able to grow its
market position or diversity into other end markets such that
operating performance is more resilient, greater visibility into
the company's long term capital structure and growth strategy,
adjusted debt to EBITDA is sustained below 3x, normalized retained
cash flow to adjusted debt is sustained above 20%, and EBITDA
margins approach 16%.
The ratings could be downgraded if the company's operational
performance deteriorates significantly such that normalized
retained cash flow to adjusted debt is sustained below 10%,
adjusted debt to EBITDA are sustained above 4.5x, EBITDA margins
sustained below 10%, and liquidity weakens materially.
The principal methodology used in these ratings was Paper and
Forest Products published in December 2021.
Headquartered in Spokane Washington, Clearwater is a leading North
American producer of private label tissue products and bleached
paperboard.
CMB SQUARED: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: CMB Squared Inc.
DBA Canalyte Laboratories
1605 Spruce Street, Suite 100
Riverside, CA 92507
Business Description: CMB is part of the pharmaceuticals
manufacturing industry.
Chapter 11 Petition Date: December 23, 2022
Court: United States Bankruptcy Court
Central District of California
Case No.: 22-14787
Judge: Hon. Magdalena Reyes Bordeaux
Debtor's Counsel: Alan W. Forsley, Esq.
FLP LAW GROUP LLP
1875 Century Park Eat, Ste 2230
Los Angeles, CA 90067
Tel: (310) 284-7350
Fax: (310) 432-5999
Email: alan.forsley@flpllp.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Cheryl Bucsit as president & CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/GNYJEJQ/CMB_Squared_Inc__cacbke-22-14787__0001.0.pdf?mcid=tGE4TAMA
COMPUTE NORTH: Amends Plan to Include CNCC GUC Claims Details
-------------------------------------------------------------
Compute North Holdings, Inc., et al., submitted a Disclosure
Statement for the Amended Joint Liquidation Plan dated Dec. 15,
2022.
The Plan constitutes a liquidating Chapter 11 plan for the Debtors
and provides for Distribution of the Debtors' Assets already
liquidated or to be liquidated over time to Holders of Allowed
Claims in accordance with the terms of the Plan and the priority
provisions of the Bankruptcy Code.
Generally speaking, the Plan: (a) provides for the full and final
resolution of all Claims against and Interests in the Debtors; (b)
contemplates the appointment of a Plan Administrator to (i) market
and sell any remaining assets of the Debtors and otherwise wind
down the Debtors' businesses and affairs; (ii) pay and reconcile
Claims; and (iii) administer the Plan in an efficacious manner; (c)
provides for Cash distributions in accordance with the Plan; and
(d) pays Allowed Administrative Claims and Allowed Priority Claims.
On the Effective Date, the Debtors will effectuate the Wind-Down
Transactions contemplated by the Plan. As a result:
* On the Effective Date, the assets of the Debtors (other than
the Excluded Customer Equipment and the Retained Causes of Action)
shall vest in the Reorganized Debtors, and the Retained Causes of
Action shall vest in the Litigation Trust, for the purpose of
winding down the Estates, free and clear of all Liens, Claims,
charges, or other encumbrances;
* On the Effective Date, the Litigation trust shall be
created, and the Retained Causes of Action shall vest in the
Litigation Trust;
* The Reorganized Debtors shall continue in existence for
purposes of (a) winding down the Debtors' business and affairs as
expeditiously as reasonably possible consistent with the Wind-Down
Budget, (b) resolving Disputed Claims, (c) making distributions on
account of Allowed Claims, (d) funding distributions consistent
with the Wind-Down Budget, (e) filing appropriate tax returns, (f)
complying with its continuing obligations under the Plan, the
Confirmation Order, the Asset Purchase Agreement, if any, and (g)
administering the Plan in an efficacious manner;
* On the Effective Date, a Litigation Trust will be formed for
the purpose of enforcing and prosecuting claims, interests, rights,
and privileges under the Causes of Action identified on the
Schedule of Retained Causes of Action in an efficacious manner and
only to the extent the benefits of such enforcement or prosecution
are reasonably believed to outweigh the costs associated therewith;
and
* On the Effective Date, the Plan Administrator shall be
appointed and shall be authorized to administer, liquidate and
monetize the Debtors' Estates and distribute the Wind-Down
Distributable Cash, in accordance with the Plan and the Plan
Administrator Agreement.
Class 3 consists of all General Unsecured Claims. Each Holder of an
Allowed General Unsecured Claim shall be entitled to receive its
Pro Rata Share of the Wind-Down Distributable Cash remaining after
satisfaction of all Allowed Administrative Claims, Allowed Priority
Tax Claims, and Allowed Claims in Class 1 and Class 2, on account
of such General Unsecured Claim. Distributions of Wind Down
Distributable Cash shall be distributed by the Distribution Agent
on the applicable Distribution Date in accordance with the Plan
until all Allowed General Unsecured Claims in Class 3 are paid in
full (taking into account any distributions made by the Litigation
Trust on account of Allowed General Unsecured Claims) or the
Wind-Down Distributable Cash is exhausted.
Class 3A consists of all CNCC GUC Claims. On the Effective Date,
each CNCC GUC Claim shall be cancelled, released and extinguished,
and each Holder of a CNCC GUC Claim shall not receive or retain any
distribution, property, or other value on account of its CNCC GUC
Claim. Class 3A is Impaired under the Plan.
The Debtors shall fund distributions under the Plan with Wind-Down
Distributable Cash. The Debtors' Cash on hand, collection of
accounts receivable, the proceeds of Asset Sales, and liquidation
of the Debtors' remaining assets, provide adequate liquidity to
fund distributions to be made under the Plan and shall fund the
Administrative and Priority Claims Reserve, the Secured Claims
Reserve, the Professional Fee Escrow Account, the Plan
Administration Operating Reserve, and other obligations under the
Plan.
As of the date hereof, the Debtors had approximately $18.4 million
in Cash for satisfaction of Claims and their obligations under the
Plan. In addition, the Debtors expect to close Asset Sales in
advance of confirmation of the Plan for approximately $10.5 million
in Cash.
A full-text copy of the Disclosure Statement dated December 15,
2022, is available at https://bit.ly/3hGK87H from PacerMonitor.com
at no charge.
Counsel to the Debtors:
James T. Grogan III, Esq.
PAUL HASTINGS LLP
600 Travis Street, 58th Floor
Houston, TX 77002
Telephone: (713) 860-7300
Facsimile: (713) 353-3100
E-mail: jamesgrogan@paulhastings.com
- and -
Luc Despins, Esq.
Sayan Bhattacharyya, Esq.
Daniel Ginsberg, Esq.
200 Park Avenue
New York, NY 10166
Telephone: (212) 318-6000
Facsimile: (212) 319-4090
E-mail: lucdespins@paulhastings.com
sayanbhattacharyya@paulhastings.com
danielginsberg@paulhastings.com
- and -
Matthew Micheli, Esq.
Michael Jones, Esq.
71 South Wacker Drive, Suite 4500
Chicago, IL 60606
Telephone: (312) 499-6000
Facsimile: (312) 499-6100
E-mail: mattmicheli@paulhastings.com
michaeljones@paulhastings.com
About Compute North Holdings
Computer North Holdings, Inc. -- https://www.computenorth.com/ --
is a crypto mining data center company. Compute North has four
facilities in the U.S. -- two in Texas and one in both South Dakota
and Nebraska, according to its website.
While cryptocurrency prices skyrocketed during the pandemic (with
bitcoin surging by 300% in 2020), the Federal Reserve's decision to
curb rising inflation by hiking interest rates has since ushered in
some of the crypto market's biggest losses in history. After
amassing a record value above $3 trillion in November 2021, the
cryptocurrency market posted its worst first half ever --
plummeting more than 70% through July. Terra's luna token, a once
top cryptocurrency worth more than $40 billion, lost virtually all
its value within a week in May after sister token TerraUSD, a
stablecoin meant to hold a price of $1, broke its dollar peg as
markets collapsed.
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 include crypto lenders Celsius Network,
Three Arrows Capital, Voyager Digital, and crypto mining firm
Compute North.
Compute North Holdings and 18 affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Texas Lead Case
No. 22-90273) on Sept. 22, 2022. In the petitions signed by Harold
Coulby, as authorized signatory, the Debtors reported assets and
liabilities between $100 million and $500 million.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Paul Hastings, LLP as bankruptcy counsel;
Jefferies, LLC as investment banker; and Portage Point Partners as
financial advisor. Epiq Corporate Restructuring, LLC is the claims,
noticing and solicitation agent.
On Oct. 6, 2022, the Office of the U.S. Trustee for Region 7
appointed an official committee of unsecured creditors in these
Chapter 11 cases. The committee tapped McDermott Will & Emery LLP
as its counsel.
CONSOLIDATED ELEVATOR: Seeks to Hire Robert Dufour as Accountant
----------------------------------------------------------------
Consolidated Elevator Company, Inc. seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Robert Dufour, a certified public accountant and IRS-registered tax
preparer in Alta Loma, Calif.
The Debtor requires an accountant to prepare its financial reports,
including, but not limited to, income and expense reports,
financial statements, tax returns; and to provide bookkeeping
services.
Mr. Dufour will charge a flat fee of $8,650 for his services.
In court papers, Mr. Dufour disclosed that he is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
Mr. Dufour can be reached at:
Robert L. Dufour, CPA
7211 Meadowlark Place
Alta Loma, CA 91701
Phone: (909)941-1181
Email: rldcpa1@dufourcpa.com
About Consolidated Elevator Company
Consolidated Elevator Company, Inc. is a company in Covina, Calif.,
which provides elevator repairs services. Its employees consist of
mechanics, salespeople and support staff.
Consolidated Elevator Company sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-15611) on
Oct. 14, 2022. In the petition signed by its chief financial
officer, David J. Sandoval, the Debtor disclosed up to $10 million
in both assets and liabilities.
Judge Sandra R. Klein oversees the Debtor's Chapter 11 case.
RHM Law, LLP and Robert Dufour, CPA serve as the Debtor's
bankruptcy counsel and accountant, respectively.
COVIS PHARMACEUTICALS: Lenders Tap Advisers Amid High Debt Load
---------------------------------------------------------------
Giulia Morpurgo and Rachel Butt of Bloomberg News report that some
lenders to Apollo Global Management's Covis Pharmaceuticals Inc.
have tapped advisers in hopes of addressing the company's high debt
load, less than a year after the financing was sold to investors.
A group of lenders is getting advice from Weil Gotshal & Manges,
according to people familiar with the matter, who asked not to be
identified because they aren't authorized to speak about it. Covis
is weighing options including a liability management exercise or a
more comprehensive intervention to address its roughly $1.2 billion
in debt, one of the people added.
About Covis Pharmaceuticals
Covis Pharmaceuticals Inc., founded in 2011 and headquartered in
Luxembourg, is a global specialty pharmaceutical company that
markets therapeutic solutions for patients with life-threatening
conditions and chronic illnesses. On the Web:
http://www.covispharma.com/
DEVILLE CORP: Commercial Building Owner Files for Chapter 11
------------------------------------------------------------
Deville Corp. filed for chapter 11 protection in the Middle
District of Florida.
The Debtor is a Florida for-profit corporation with its principal
place of business in Hillsborough County, Florida. The Debtor was
formed for the purpose of owning and managing a single asset: a
commercial building located at 406-408 Broadway, Nashville,
Tennessee.
The Debtor has two shareholders each owning 50% of the shares of
the Debtor. The Pamela Cordell Martino Irrevocable Trust Dated the
2nd day of March 2020, whose co-trustees are Tanya Cordell Glaize
and Edgar L.T. Gay, owns 50% of the shares of the Debtor. The
other 50% of the shares of the Debtor are owned by Savannah
Capital, LLC, a Georgia limited liability company, who is a debtor
in a chapter 11 case pending before the Court at In re Savannah
Capital, LLC, Case No.: 8:22-bk-01431-CPM.
The Martino Trust and Savannah Capital are deadlocked with respect
to the Debtor and the path forward. The Debtor has a mortgage of
approximately $900,000 to FLA Nash that matures on March 1, 2023,
and the Debtor lacks the liquidity to satisfy the obligations. The
value of the Nashville Property exceeds the mortgage and other
debts, but without the ability to sell the Nashville Property the
Debtor is not able to satisfy its obligations.
The Debtor, acting through its sole director, filed the Chapter 11
case to monetize the Nashville Property under a purchase agreement
for $29 million in order to pay its creditors, and expects a
significant net amount available to distribute to shareholders.
According to court filings, Deville Corp. estimates $1 million to
$10 million in debt to 1 to 49 creditors. The petition states that
funds will be available to unsecured creditors.
About Deville Corp.
Deville Corp. is a Single Asset Real Estate (as defined in 11
U.S.C. Sec. 101(51B)).
Deville Corp. filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04930) on Dec. 14,
2022. In the petition filed by Edgar L.T. Gay, as president and
director, the Debtor reported assets between $10 million and $50
million and liabilities between $1 million and $10 million.
The Debtor is represented by:
Daniel R Fogarty, Esq.
Stichter, Riedel, Blain & Postler, P.A.
101 East 34th St.
Savannah, GA 31401
DIAMOND CREEK VILLA: Hits Chapter 11 Bankruptcy Protection
----------------------------------------------------------
Diamond Creek Villa LLC filed for chapter 11 protection in the
Northern District of California without stating a reason.
According to court filings, Diamond Creek Villa estimates between
$10 million and $50 million in debt owed to 1 to 49 creditors. The
petition states that funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Jan. 17, 2023, at 10:00 AM via Tele/Videoconference -
www.canb.uscourts.gov/calendars. Proofs of claim are due by April
17, 2023.
About Diamond Creek Villa
Diamond Creek Villa LLC filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-51125) on
Dec. 14, 2022. In the petition filed by Mark Allen, as manager,
the Debtor reported assets and liabilities between $10 million and
$50 million.
The case is overseen by Honorable Bankruptcy Judge M. Elaine
Hammond.
The Debtor is represented by:
Paul E. Manasian
Law Offices of Paul E. Manasian
21701 Steven Creek Blvd Suite 2610
Cupertino, CA 95014
EMPIRE PRIME: Amends Plan to Resolve Community Loan Claim Issues
----------------------------------------------------------------
Empire Prime Capital Investments Inc. submitted a Second
Modification to First Amended Plan of Reorganization under
Subchapter V dated December 15, 2022.
The Debtor proposes the Plan to address the concerns raised by
Community Loan Servicing. The changes proposed herein are neither
material nor adverse to any party and should be made a part of the
Plan approved in this case and are set forth as follows:
* Class 5(a) - Community Loan Servicing – Claim secured by
1840 Forest Lane, Garland, TX 75042. Community Loan Servicing
("CLS")'s Claim secured by the real property located at 1840 Forest
Lane, Garland, TX 7504 ("Property") shall be separately classified
as Class 5(a). CLS shall have an allowed secured Claim in the Plan.
Notwithstanding the expiration of the claims bar date, CLS may file
a late Proof of Claim. The Claim shall be unimpaired in the Plan
and paid pursuant to the terms of the pre-petition loan documents.
In the event of a postconfirmation default, the terms of the loan
documents shall control the rights of the parties. Nothing in the
Plan shall be construed as a release of the personal liability of
the non-filing obligor(s) under the loan documents. All other
provisions of the pre-petition loan documents shall control the
treatment of the Claim. CLS consents to the treatment of its Claim
in the Plan.
* Class 5(b) - Community Loan Servicing – Claim secured by
1820 Forest Lane, Garland, TX 75042. Community Loan Servicing
("CLS")'s Claim secured by the real property located at 1820 Forest
Lane, Garland, TX 75042 ("Property") shall be separately classified
as Class 5(b). CLS shall have an allowed secured Claim in the Plan.
Notwithstanding the expiration of the claims bar date, CLS may file
a late Proof of Claim. The Claim shall be unimpaired in the Plan
and paid pursuant to the terms of the pre-petition loan documents.
In the event of a postconfirmation default, the terms of the loan
documents shall control the rights of the parties. Nothing in the
Plan shall be construed as release of the personal liability of the
non-filing obligor(s) under the loan documents. All other
provisions of the pre-petition loan documents shall control the
treatment of the Claim. CLS consents to the treatment of its Claim
in the Plan.
* Class 5(c) - Community Loan Servicing – Claim secured by
1910 Forest Lane, Garland, TX 75042. Community Loan Servicing
("CLS")'s Claim secured by the real property located at 1910 Forest
Lane, Garland, TX 75042 ("Property") shall be separately classified
as Class 5(c). CLS shall have an allowed secured Claim in the Plan.
Notwithstanding the expiration of the claims bar date, CLS may file
a late Proof of Claim. The Claim shall be unimpaired in the Plan
and paid pursuant to the terms of the pre-petition loan documents.
In the event of a postconfirmation default, the terms of the loan
documents shall control the rights of the parties. Nothing in the
Plan shall be construed as release of the personal liability of the
non-filing obligor(s) under the loan documents. All other
provisions of the pre-petition loan documents shall control the
treatment of the Claim. CLS consents to the treatment of its Claim
in the Plan.
A full-text copy of the Second Modification to First Amended Plan
dated December 15, 2022, is available at https://bit.ly/3WDYoN3
from PacerMonitor.com at no charge.
Attorneys for Debtor:
Joyce W. Lindauer, Esq.
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
Email: joyce@joycelindauer.com
About Empire Prime Capital Investments
Empire Prime Capital Investments Inc. sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Case No.
22-31121) on June 27, 2022. In the petition filed by Juan D.
Favela, president, the Debtor estimated assets of $1 million to $10
million and liabilities less than $1 million.
Judge Michelle V. Larson oversees the case.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC serves
as the Debtor's counsel.
FLOSS BAR: Commences Subchapter V Bankruptcy Proceeding
-------------------------------------------------------
Floss Bar Inc. and affiliate Med Bar, LLC,filed for chapter 11
protection in the Southern District of New York. Each Debtor
elected on its voluntary petition to proceed under Subchapter V of
chapter 11 of the Bankruptcy Code.
According to court filings, Floss Bar estimates between $500,000 to
$1 million in debt owed to 1 to 49 creditors. The petition states
that funds will be available to unsecured creditors.
Floss Bar was established in 2017 as a mobile logistics business
enabling dentists and hygienists to provide dental care at the
workplaces of Floss Bar's corporate clients as part of onsite
wellness initiatives for their employees. It generated $540,000 in
2019 and $370,000 in 2020. Unfortunately, the Covid-19 pandemic
negatively impacted Floss Bar's operations. Due to the nationwide
regulations, many of Floss Bar's existing clients were forced to
pause their onsite wellness initiatives in March 2020. In
addition, many interested clients did not proceed to execute
contracts for future services due to uncertainty surrounding
Covid-19 restrictions. Floss Bar significantly scaled down its
operations to all but one client and ultimately has been dormant
since August 2022.
Floss Bar formed a subsidiary, Med Bar, in APril 2020 to provide
Covid-19 testing for employers at their workplace and for patients
at their local pharmacies. Med Bar formed a Clinical Laboratory
Improvement Amendments (CLIA)-waived laboratory, developed its
supply lines, and affiliated with physicians to enable these
services. The Covid business line was a temporary strategy to
allow for business continuity during the pandemic and to
strategically generate new clients for post-pandemic services by
helping companies when they needed it most. Floss Bar's
postpandemic plan was to return to its original mobile dental
logistics business and to expand Med Bar services beyond Covid-19
testing to include facilitating physical exams, vision screenings,
hearing screens, drug testing and other medical services.
Med Bar's Covid-19 business generated $5.6 million in revenue in
2020 and $11.4 million in revenue in 2021. Unfortunately for Med
Bar, despite Covid-19 infection rates across the country at peak
levels, in a decision issued Jan. 13, 2022, the U.S. Supreme Court
issued an opinion staying the enforcement of the Occupational
Safety and Health Administration (OSHA)'s requirements for Covid-19
vaccination or testing by large employers. This Supreme Court
decision negatively impacted Med Bar's Covid 19 testing business
instantly, as corporations were no longer required to provide for
Covid testing. Rising rates of vaccination resulted in reduced
demand for Covid-19 testing at pharmacies resulting in Med Bar
terminating this line of business in APril 2022.
Med Bar's business is reliant upon collections from insurance
companies. However, because many insurers did not work with new
laboratories early in the pandemic, insurers had materially
unperpad for a denied claims for Med Bar's services. Med Bar's
collections were also slowed due to significant errors and
underperformance of Med Bar's medical billing vendor, Dr. Chono,
Inc. These issues caused severe cash flow problems for the
Debtors. Cash expected to fund the post-pandemic plan was at
all-time lows and certain vendors have been threatening to sue for
payment.
Based on the foregoing, the Debtors were forced to scale back
operations and take various cost cutting measures. For instance,
the Debtors reduced their salaried staff by over 85% and have sold
and continue to sell their dental equipment and vehicles. The
Debtors entered into a Purchase and Sale of Future Receivables on
or about June 16, 2022, with Fora Financial Advance LLC in order to
refinance its existing debt. The Fora Agreement requires the
Debtor to remit $2,541 to Fora every day until FOra has been paid
in full, subject to a monthly reconciliation to reflect actual
future sale proceeds. Fora has agreed to reduce its daily
remittances to $520 per day, which is reflected on the Debtors'
proposed budget. As of Dec. 9, 2022, Fora is owed $431,910.
Ultimately, the Debtors have determined that it requires the
"breathing spell" afforded by the automatic stay provisions of the
Bankruptcy Code so that they may wind down its business in an
orderly fashion. The Debtors intend to collect their receivables
and service their remaining contracts. Med Bar has a long-term
agreement with the Massachusetts Department of Corrections to
provide Covid testing. It nets about $4,000 per week through this
contract and is expected to grow in 2023. Med Bar also has a
smaller long-term agreement with Jackson Electric Membership
Corporation to provide hotline services for Covid-related questions
from employees. Med Bar has provided management services to two
doctors and expects to earn about $500,000 for these services in
2023. Finally, Med Bar has $1.6 million in accounts receivable
including reimbursement claims against certain insurance companies
totaling about $522,000.
The Debtors believe that certain assets could be attractive to
buyers. They have dental equipment (estimated, and un-appraised,
value of about $137,000 owned by Floss Bar); a vehicle (worth about
$80,000), goodwill, and a large $4.7 million net operating loss.
They have a combined debt of about $1.9 million, including the
outstanding amount to Fora as well as large disputed claims of
Talis Biomedical (about $260,000), Greenpoint Rx (about $286,000)
and Dr. Chrono (about $129,000).
About Floss Bar
Floss Bar Inc. -- https://www.flossbar.com/ -- offers dental care
specializing in preventative, restorative & orthodontic dentistry.
Floss Bar Inc. and affiliate Med Bar, LLC, each filed a petition
for relief under Subchapter V of Chapter 11 of the Bankruptcy Code
(Bankr. S.D.N.Y. Lead Case No. 22-11671) on Dec. 15, 2022. In the
petition filed by Ewa Sadej as CEO, the Debtor reported assets
between $1 million and $10 million and liabilities between $1
million and $10 million.
The Debtors are represented by:
Vincent J. Roldan, Esq.
Mandelbaum Salsburg PC
40 Wall Street
New York, NY 1000
FREEMANVILLE LIFEHOPE: Taps Falcone Law Firm as Bankruptcy Counsel
------------------------------------------------------------------
Freemanville Lifehope House, LLC received approval from the U.S.
Bankruptcy Court for the Northern District of Georgia to hire The
Falcone Law Firm, P.C. as its counsel.
The firm's services include:
a. advising the Debtor regarding its rights, powers and duties
in the administration of its Chapter 11 case and assets of the
bankruptcy estate;
b. assisting the Debtor in connection with the analysis of its
assets, liabilities, financial condition and other matters related
to its business;
c. assisting in the preparation, negotiation and
implementation of a plan of reorganization;
d. advising the Debtor with regards to objections to or
subordination of claims and other litigation matters;
e. representing the Debtor with regard to the investigation of
the desirability and feasibility of the rejection and potential
assignment of any executory contracts or unexpired leases;
f. advising the Debtor with regard to all applications,
motions or complaints concerning reclamation, adequate protection,
sequestration, relief from stays, use of cash collateral,
disposition or other use of assets of the estate and other similar
matters;
g. assisting the Debtor in the sale or disposition of assets
of its bankruptcy estate;
h. preparing legal papers incidental to administration and
conducting examinations;
i. providing assistance to the Debtor with regard to the
proper receipt, disbursement and accounting of funds and property
of the estate; and
j. other legal services related to the case.
The hourly rates charged by the firm for its services are as
follows:
Attorneys $400 per hour
Associates $250 per hour
Paralegals $175 per hour
Staffs $75 per hour
Falcone Law Firm will also seek reimbursement for out-of-pocket
expenses.
Ian Falcone, Esq., a partner at Falcone Law Firm, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Ian M. Falcone, Esq.
Falcone Law Firm, P.C.
363 Lawrence Street
Marietta, GA 30060
Tel: (770) 426-9359
Email: Imffalconefirm.com
About Freemanville Lifehope House
Freemanville Lifehope House, LLC is primarily engaged in renting
and leasing real estate properties. It is based in Alpharetta, Ga.
Freemanville Lifehope House filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No.
22-59875) on Dec. 5, 2022. In the petition filed by its manager,
Mark Allen, the Debtor reported between $1 million and $10 million
in both assets and liabilities.
The Debtor is represented by Ian M. Falcone, Esq., at The Falcone
Law Firm, P.C.
FTX TRADING: Plans to Sell LedgerX and Foreign Units in Bankruptcy
------------------------------------------------------------------
FTX Trading has moved to put several of its businesses on the
auction block, including LedgerX, its Japanese and Singaporean
cryptocurrency exchanges, and its European digital assets and
derivatives business.
Prior to the filing of their chapter 11 cases, the Debtors operated
one of the largest cryptocurrency exchanges in the world (through
the FTX.com platform), operated a U.S. exchange for spot trading in
digital assets and tokens (through FTX US), operated quantitative
trading funds specializing in crypto assets (through Alameda
Research LLC and its affiliates) and conducted diverse private
investment and other businesses.
On Nov. 19, 2022, the Debtors announced that as part of the chapter
11 process, they would be launching a strategic review of their
global assets to begin maximizing recoverable value for
stakeholders. Based on their preliminary review, the Debtors own
or control a number of subsidiaries and assets that are regulated,
licensed and/or largely not integrated into the Debtors'
operations, within and outside of the United States. The Debtors
believe a number of these entities have solvent balance sheets,
independent management and valuable franchises. It is a priority of
the Debtors to explore sales, recapitalizations or other strategic
transactions with respect to such subsidiaries and assets.
By this Motion, the Debtors seek approval of bid procedures for,
and the sale of, these businesses of the Debtors, in each case,
including any associated contracts, rights or other property of the
Debtors:
* Embed Business: Non-Debtor Embed Financial Technologies Inc.,
a Delaware corporation, together with its wholly-owned non-Debtor
subsidiary, Embed Clearing LLC, a Delaware limited liability
company, operate a correspondent clearing and custody platform that
provides registered investment advisors, broker-dealers and other
financial institutions with APIs and brokerage services. Embed
Technologies was acquired in September 2022 by WRS, which continues
to directly own 100% of the common stock of Embed Technologies.
Embed Clearing is registered with the U.S. Securities and Exchange
Commission as a clearing broker-dealer and is a member of the
Financial Industry Regulatory Authority, Inc. ("FINRA"), The Nasdaq
Stock Market LLC, Investors Exchange LLC, The Depository Trust
Company, the National Securities Clearing Corporation and the
Options Clearing Corporation. The Debtors are soliciting bids for
the disposition of 100% of the common stock of Embed Technologies
held by WRS;
* LedgerX Business: Non-Debtor LedgerX LLC, a Delaware limited
liability company, is a digital currency futures and options
exchange and clearinghouse regulated by the Commodity Futures
Trading Commission (the "CFTC"). LedgerX offers and clears
futures, options and swaps contracts on digital assets and other
commodities primarily for U.S. persons and is registered with the
CFTC as a Designated Contract Market ("DCM"), Derivatives Clearing
Organization ("DCO") and Swap Execution Facility ("SEF"). LedgerX
was acquired in October 2021 by WRS, which continues to indirectly
own 100% of the interests of LedgerX through a holding company,
Debtor Ledger Holdings Inc., a Delaware corporation. The Debtors
are soliciting bids for the disposition of 100% of the interests in
LedgerX held by Ledger Holdings;
* FTX Japan Business: Debtor FTX Japan Holdings K.K., a Japanese
company, is the holding company for its wholly-owned subsidiaries
Debtor FTX Japan K.K. ("FTX Japan"), which operates a registered
cryptocurrency exchange providing residents of Japan the ability to
trade crypto and crypto derivatives, and Debtor Quoine Pte Ltd.
("FTX Singapore"), which operates a cryptocurrency exchange in
Singapore under exemption while its license application is being
processed, among certain other subsidiaries with limited
operations. FTX Japan is subject to the regulatory supervision of
the Financial Services Agency of Japan (the "JFSA") and is
registered as a Crypto-Asset Exchange Service Provider and Type I
Financial Instruments Business Operator. Previously known as
Liquid Group Inc., FTX Japan Holdings was acquired in April 2022 by
FTX Trading, which continues to directly own 100% of the equity
interests of FTX Japan Holdings. The Debtors are soliciting bids
for the disposition of the FTX Japan Business, which may involve a
sale of 100% of the interests in FTX Japan Holdings held by FTX
Trading or separate sales of 100% of the interests in FTX Japan or
FTX Singapore held by FTX Japan Holdings; and
* FTX Europe Business: Debtor FTX Europe AG, a Swiss corporation
limited by shares, is the holding company for a number of operating
and non-operating subsidiaries constituting the Debtors’ European
digital assets and derivatives business (not including the
Debtors’ crypto exchange). FTX Europe provides a technology
platform and exchange for crypto and equity derivatives trading for
EU institutional and retail investors and offers single asset
derivative contracts linked to equities or crypto assets, as well
as index-based futures contracts. FTX Europe's Cyprus subsidiary,
Debtor FTX EU Ltd., holds a license (currently suspended) as an
investment firm allowing it to provide its services in the European
Union member states, and has opted into the United Kingdom's
Temporary Permission Regime. FTX Europe's UAE subsidiary, Debtor
DAAG Trading, DMCC, is regulated as an exchange in Dubai (license
currently suspended). Formerly Digital Assets DA AG, FTX Europe
was acquired by FTX Trading in November 2021, which continues to
directly own 100% of the equity interests of FTX Europe. The
Debtors are soliciting bids for the disposition of the FTX Europe
Business, which may involve a sale of 100% of the interests in FTX
Europe held by FTX Trading or sales of stock and/or assets of FTX
Europe and/or its subsidiaries.
For organizational purposes, the Debtors consider the Embed
Business and
the LedgerX Business as part of the "WRS Silo", and the FTX Japan
Business and the FTX Europe Business as part of the "Dotcom Silo",
as described in the First Day Declarations.
Since the commencement of the Chapter 11 Cases, each of the
Businesses has experienced regulatory pressures which merit an
expeditious sale process. The Debtors and/or the Businesses have
been in active conversations with a number of regulators for the
Businesses, including FINRA with respect to Embed, the CFTC with
respect to LedgerX's registrations as a DCM, SEF and DCO, the JFSA
with respect to FTX Japan, and the Swiss Financial Market
Supervisory Authority ("FINMA") and the Cyprus Securities and
Exchange Commission ("CySEC") with respect to FTX Europe. The
licenses held by FTX Europe have been suspended along with its
operations, and FTX Japan is subject to business suspension and
business improvement orders. The longer operations are suspended,
the greater the risk to the value of the assets and the risk of a
permanent revocation of licenses.
In addition, each of the Businesses has experienced significant
customer and employee attrition pressures. Customer and employee
attrition is likely as long as the companies are owned by the
Debtors. The Debtors believe that a sale to an approved buyer may
allow the Businesses to continue and/or restart operations as going
concerns and, as a result,
maximize the value of the Businesses to the Debtors’ estates.
Because each of the Businesses was acquired by the Debtors fairly
recently, but before the Debtors commenced the Chapter 11 cases,
the Businesses have each operated on a generally independent basis
from the Debtors' other operations, holdings and investments. Each
of the Businesses has maintained segregated customer accounts. In
addition, each of the Businesses has a separate management team
from the Debtors' other businesses, Embed, LedgerX and FTX Europe
each maintain separate IT systems and Embed, FTX Europe and FTX
Japan Holdings each maintain separate headquarters. The relative
independence of each of the Businesses' operations from the
remainder of the Debtors' core business operations make a potential
sale process for each of the Businesses relatively less complex.
Since the commencement of the FTX Chapter 11 cases and the
announcement of the Debtors' strategic review of certain assets,
there has been significant interest expressed by third parties in
acquiring the Businesses. Having received dozens of unsolicited
inbound inquiries for the Businesses, the Debtors anticipate that a
broader marketing process will yield multiple offers for the
purchase of the Businesses. Considering the interest expressed by
third parties in the Businesses, the value of the Businesses and
the other rationales for selling the Businesses on an expeditious
timeline, the Debtors have determined that pursuing one or more
sales (the "Sale(s)") of the Businesses is important to preserve
and maximize the value of the Debtors' estates. No final decision
has been made to sell any of the Businesses, and any Sale will be
subject to the approval of the independent directors of the Debtors
as well as the approval of the Court.
To ensure that each of the Businesses is sold for the highest or
otherwise best bid(s), the Debtors have developed bid and auction
procedures to govern the sale of the Businesses. The Debtors
submit that the Bid Procedures are reasonable and designed with the
objective of generating the greatest level of interest in, and best
value for, the Businesses and that the time periods proposed in the
Bid Procedures will provide all parties with sufficient time and
information to formulate competitive bids for each of the
Businesses, while ensuring that the sale occurs in an expeditious
manner that preserves and maximizes the value of the Businesses.
The Debtors further submit that the Bid Procedures and the other
relief requested herein satisfy the requirements of section 363 of
the Bankruptcy Code and will facilitate the sale of the Businesses
for the highest or otherwise best value for the benefit of all of
the Debtors' stakeholders through a fair, open and transparent
process.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal the next day amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
Andrew G. Dietderich, James L. Bromley, Brian D. Glueckstein and
Alexa J. Kranzley at Sullivan & Cromwell LLP in New York, serve as
the Debtors' counsel.
Adam G. Landis, Kimberly A. Brown and Matthew R. Pierce at LANDIS
RATH & COBB LLP in Wilmington serve as local bankruptcy counsel to
FTX Group.
Alvarez & Marsal North America, LLC, is the Debtors' financial
advisor.
Kroll is the claims agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
Lawyers at Paul Weiss represented SBF but later renounced
representing the entrepreneur due to a conflict of interest.
FTX TRADING: Top Execs Warned of Customer Fund Transfers to Alameda
-------------------------------------------------------------------
Jonathan Randles of The Wall Street Journal reports that a top
executive of FTX's Bahamas subsidiary warned that country's
securities authority days before the company filed for bankruptcy
Nov. 11, 2022 of customer fund transfers to Alameda Research, a
cryptocurrency trading firm tied to FTX, according to documents
made public Wednesday. The warning prompted the regulator to
immediately seek a criminal investigation, according to the
documents.
Securities Commission Executive Director Christina Rolle requested
that the financial crimes unit of the Royal Bahamas Police Force
open an investigation into the subsidiary, FTX Digital Markets
Ltd., the same day based on the warning of FTX Digital Chairman
Ryan Salame.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal the next day amid reports on FTX regarding mishandled
customer funds and alleged US agency investigations.
At approximately 4:30 a.m. on Nov. 11, Bankman-Fried ultimately
agreed to step aside, and restructuring vet John J. Ray III was
quickly named new CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
A total of 102 entities related to FTX have filed for Chapter 11
protection.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, CEO
Bankman-Fried shared a document with investors on Nov. 10 showing
FTX had $13.86 billion in liabilities and $14.6 billion in assets.
However, only $900 million of those assets were liquid, leading to
the cash crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
Andrew G. Dietderich, James L. Bromley, Brian D. Glueckstein and
Alexa J. Kranzley at Sullivan & Cromwell LLP in New York, serve as
the Debtors' counsel.
Adam G. Landis, Kimberly A. Brown and Matthew R. Pierce at LANDIS
RATH & COBB LLP in Wilmington serve as local bankruptcy counsel to
FTX Group.
Alvarez & Marsal North America, LLC, is the Debtors' financial
advisor.
Kroll is the claims agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
Lawyers at Paul Weiss represented SBF but later renounced
representing the entrepreneur due to a conflict of interest.
GIRARDI & KEESE: Edelson PC Fraud Suit Stays in Chicago
-------------------------------------------------------
Joyce E. Cutler of Bloomberg Law reports that an Edelson PC lawsuit
accusing the defunct Girardi Keese law firm and principal Thomas
Girardi of fraud will remain in Chicago, a US judge ruled on
Thursday, December 15, 2022.
Judge Matthew Kennelly rejected a request by ex-Girardi Keese
partners to shift the case to a federal court in Los Angeles, where
the bankrupt firm was headquartered. Chicago-based Edelson is
suing to recoup money it says it's owed for services rendered as
local counsel in litigation over the 2018 of Lion Air flight
JT610.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It
served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter
7 trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
Telephone: (310) 640-1200
GOODYHOUSE LLC: Exclusivity Period Extended to Jan. 20
------------------------------------------------------
A judge extended the time GoodyHouse, LLC can keep exclusive
control of its Chapter 11 case, giving the company until Jan. 20
next year to file a bankruptcy plan.
The ruling by Judge Jeffery Deller of the U.S. Bankruptcy Court for
the Western District of Pennsylvania allows the company to pursue
its own plan without the threat of a competing plan from
creditors.
"It is prudent to extend the time to file [GoodyHouse's] Chapter 11
plan and disclosure statement in order to show the court and
creditors November and December profits, which will go a long way
towards funding and feasibility of a Chapter 11 plan," said the
company's attorney, Christopher Frye, Esq., at Steidl and
Steinberg, P.C.
About GoodyHouse LLC
GoodyHouse, LLC operates as a retail restaurant and food truck in
Western Pennsylvania.
GoodyHouse sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Pa. Case No. 22-20975) on May 23, 2022. In the
petition filed by its managing member, Walter Rainey, GoodyHouse
listed assets between $100,000 and $500,000 and liabilities between
$500,000 and $1 million.
Judge Jeffery A. Deller oversees the case.
Christopher M. Frye, Esq., at Steidl and Steinberg, P.C. and Wilke
& Associates serve as the Debtor's legal counsel and accountant,
respectively.
GRECO BUILD: Unsecured Creditors Will Get 5% in Subchapter V Plan
-----------------------------------------------------------------
Greco Build, Inc., filed with the U.S. Bankruptcy Court for the
Southern District of Florida a Small Business Plan of
Reorganization under Subchapter V dated December 15, 2022.
The Debtor is currently providing services with respect to the
construction of a single-family home located in Fort Lauderdale,
Florida pursuant to a Residential Construction Contract entered
into on May 24, 2021 between Mi Bella Casa, LLC ("Mi Bella") as the
property owner, and the Debtor as the general contractor (the "Mi
Bella Contract").
The Debtor is a target of proceedings supplementary filed in the
Fifteenth Judicial Circuit in and for Palm Beach County Florida in
Greco Builders, Inc., v. Kustin et al., Case No. 502018-CA-004473
MB-AE (the "State Court Case") in which Mr. Kustin, asserts, in
part, that the Debtor is the recipient of fraudulent conveyances
from Builders.
Debtor filed its Subchapter V Bankruptcy petition on Sept. 15,
2022, because the proceedings supplementary were interfering with
the Mi Bella Contract which Kustin asserts was fraudulently
conveyed to Debtor.
In addition to the Mi Bella Casa contract, the Debtor has under
taken a small remodel project for the total contract amount of
$23,000. The Debtor will submit plans to enter into a new contract
commencing in approximately February 2023. The 2023 project is
estimated to be a $2,000,000 contract. The Debtor generally
submits plans in order to generate a profit of 1% of the contract
bid, however, the bid will also include construction supervision
fees.
The Plan of Reorganization proposes to pay creditors from cash flow
generated by the Debtor's operations.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at approximately 5 cents on the dollar. This Plan also provides for
the payment of administrative and priority claims.
Class 1 will consist of the claim filed by Small Business
Administration ("SBA") which is proof of claim 7 in the amount of
$162,622 as fully secured. This claim is based upon a disaster
relief loan in the amount of $150,000 which was secured by the
assets of Builders. Those assets have a value of approximately
$22,000 Debtor disputes the secured status of the SBA to the extent
it exceeds $22,000. The Debtor proposes to pay the secured claim
of the SBA in 72 equal installments with interest at the note rate
of 3.75% which is estimated to be $298.19.
Class 2 will consist of all nonpriority unsecured claims. The
allowed unsecured claims total $949,521. The Debtor proposes to
pay unsecured creditors 5% of their claims in more than 60 equal
installments.
Class 3 will consist of the Debtor's sole shareholder Tom Greco who
will not receive a distribution under the plan but will retain his
ownership interest in the Debtor.
Prior to confirmation, the Debtor will establish a fund to be
maintained by Susan D. Lasky, P.A. The Debtor will deposit
sufficient funds into the Fund to pay Administrative Expenses and
make the first payment to all classes. Susan D. Lasky, P.A., will
be discharged after making the first distribution required by the
Plan, without further Order of the Court.
Property of the estate will revest in the Debtor, and the
creditors' treatment under the plan will be funded by the Debtor's
operating income and cash flow. The Debtor's 100% shareholder will
also contribute his supervision fees as necessary to fund this
plan.
A full-text copy of the Plan of Reorganization dated December 15,
2022, is available at https://bit.ly/3HXIOHV from PacerMonitor.com
at no charge.
About Greco Build
Greco Build, Inc., is in the business of construction management.
The Debtor filed a Chapter 11 petition (Bankr. S.D. Fla. Case No.
22-17150) on Sept. 15, 2022. The Debtor is represented by Susan D.
Lasky, Esq. of SUE LASKY, PA.
GT REAL ESTATE: Court Confirms Chapter 11 Plan
----------------------------------------------
Judge Karen B. Owen on Dec. 16, 2022, entered an order confirming
the Amended Plan of Reorganization of GT Real Estate Holdings,
LLC.
The Debtor's proposed plan implements the terms of the Plan Support
and Sponsorship Agreement with the Debtor's parent and DIP Lender,
DT Sports Holding, LLC. Under the Plan, among other things,
priority contractor claims and secured contractor claims will be
channeled to a $60 million settlement trust funded by the Plan
Sponsor, while general unsecured claims (including unsecured
contractor claims) are also channeled to the Settlement Trust and
will receive payment from (i) a $500,000 cash pool and (ii)
remaining funds in the Settlement Trust. The Debtor later
amended the Plan after reaching a settlement with the city of Rock
Hill, South Carolina that fully resolves all issues between the
parties and grants the City a $20 million Class 5 claim.
Rick Archer of Law360 reports that the Bankruptcy Court rejected
the releases in the Chapter 11 plan proposed by GT Real Estate.
The developer of a failed Carolina Panthers practice facility can't
channel claims against the company into a settlement trust or force
releases of third-party claims in its Chapter 11 plan, a Delaware
bankruptcy judge ruled Wednesday, Dec. 14, 2022.
"As part of the overall compromise and settlement of disputed
issues under the Plan that results in the contemplated treatment of
the Debtor's creditors, the Plan provides for (i) certain releases
contained in Article VIII.C of the Plan granted by the Debtor and
its Estate (the "Debtor Release"), (ii) certain releases contained
in Article VIII.D of the Plan (the "Third-Party Releases") granted
by the Releasing Parties, and (iii) a mutual release by and between
the Debtor and its Related Parties, on the one hand, and a Holder
of Class 5 Claims and its Related Parties, on the other hand
contained in Article VIII.E of the Plan (the "Class 5 Mutual
Release"), and (iv) a mutual release by and between the Debtor's
Related Parties, on the one hand, and MBM and its Related Parties,
on the other hand, contained in Article VIII.O of the Plan (the
"MBM Mutual Release"). The Third-Party Releases, the Class 5
Mutual Release, the MBM Mutual Release, and the Debtor Release are
necessary and appropriate in light of the specific facts and
circumstances surrounding this Chapter 11 Case and the
contributions by the Plan Sponsor, MBM, the Debtor, the City of
Rock Hill, South Carolina, a political subdivision of the State of
South Carolina and each of their respective Related Parties that
make the Plan and the recoveries contemplated thereunder possible,"
according to the Dec. 16 Plan Confirmation Order.
About GT Real Estate Holdings
GT Real Estate Holdings is a real estate company owned by David
Tepper. It was created to own and develop a mixed-use,
pedestrian-friendly community, sports, and entertainment venue,
that would also include a new headquarters and practice facility
for the Carolina Panthers, a National Football League team,
situated on a 234-acre site located in Rock Hill, South Carolina.
The company suspended further development of the Project in March
2022.
GT Real Estate Holdings sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Case No. 22-10505) on June 2,
2022. In the petition filed by Jonathan Hickman, as chief
restructuring officer, the Debtor reports estimated assets and
liabilities between $100 million and $500 million.
The Hon. Karen B. Owens is the case judge.
The Debtor tapped White & Case LLP as restructuring counsel; Farnan
LLP, as Delaware counsel; and Alvarez & Marsal as financial
advisor. Kroll Restructuring Administration LLC is the claims
agent.
HANSABEN INVESTMENTS: Poppy Bank Files Liquidating Plan
-------------------------------------------------------
Poppy Bank ("Bank"), the largest creditor of the Debtor, Hansaben
Investments, LLC ("Debtor"), filed a Chapter 11 Plan and a
Disclosure Statement for the Debtor.
This is a liquidating Plan. On the Effective Date, a date 15 days
after the Bankruptcy Court enters its Confirmation Order, Atlas
Property Group, a real estate broker with expertise in marketing
and selling California hotels such as the Debtor's sole asset, will
immediately list the Hotel for sale and use its best efforts to
procure a signed contract for sale with a competent buyer and
operator. The deadline to close a sale, unless the Bankruptcy
Court extends the deadline for cause, will be 5 months after the
Effective Date. Any such sale will be subject to overbid and then,
to Bankruptcy Court approval. The Bank will have the right to
credit bid as an overbidder in response to any such sale offer. If
there is no approved or closed sale by the Sale Deadline, the Bank
can complete its foreclosure sale against the Hotel.
Also, on the Effective Date, the Debtor must transfer all cash to
and cooperate with the Hotel's New Manager, who will take over from
the Debtor to operate the Hotel. The New Manager will be a team of
competent, disinterested experts on hotel management. The New
Manager will be authorized, following consultation with interested
parties including the Broker, to sign contracts for the sale of the
Hotel.
The Bank believes that any Hotel sale likely will be a "short
sale," in that the expected proceeds likely will not be sufficient
to pay off its liens, the outstanding real property taxes, the past
due sums owing to its franchisor, La Quinta Franchising, LLC (whose
franchise or license agreement will be "assumed" under the Plan),
the broker's commission, and other costs of sale. Accordingly, the
Plan provides that the Bank will pay or cause to be paid,
regardless of the outcome of the sale process, all such claims even
though it is not obligated to do so.
The Plan also requires the Bank to pay or cause to be paid all
Allowed Administrative Priority Claims, such as professional fees
and costs, and other Unclassified Claims, on the later of the
Effective Date or when the Claims become allowed. With regard to
the transient occupancy tax claims ("TOT") owing to the City of
Fairfield, currently exceeding $417,000, the Plan provides that TOT
will be paid in full over 5 years under the Plan, and likely sooner
than that because a purchaser through a Sale Transaction would
assume personal liability for TOT under applicable California law,
and if it failed to pay or reach agreement to do so with the City
of Fairfield, the Bank would pay TOT over time in consideration of
indemnity claims against the buyer if it does not pay. The Plan in
any case requires the Bank to make or cause to be made the first
payment to the City of Fairfield within 90 days of the Effective
Date.
The Plan provides Creditors who hold Allowed Unsecured Claims with
a "pot" in the amount of $50,000 to be distributed, Pro Rata, to
the holders of such Claims on or promptly after the Effective Date.
The Bank calculates that amount of the Unsecured Claims totals
$603,658.65. This total is derived from the Debtor's Schedules, and
from the proofs of claim filed in the case. Included as a general
Unsecured Claim is the $519,361.30 claim filed by the United States
Small Business Administration ("SBA"), which provided a loan to the
Debtor in 2021 secured only by the furniture and equipment at the
Hotel, a third priority lien behind the Bank's secured claims, a
lien that has no value. Also included as a general Unsecured Claim
is $6,060 of a Claim filed by the Franchise Tax Board secured by a
fourth priority lien against the Debtor's personal property.
The Plan provides further that if there is a Sale Transaction and
there are surplus funds from the sale, those will be distributed
Pro Rata to the holders of Allowed Unsecured Claims. The ownership
interests in the Debtor will be canceled on confirmation and
receive no distributions.
Attorneys for Secured Creditor and Plan Proponent, Poppy Bank, fka
First Community Bank:
Mitchell B. Greenberg, Esq.
ABBEY, WEITZENBERG, WARREN & EMERY, P.C.
100 Stony Point Road, Suite 200
Santa Rosa, CA 95401
Telephone: (707) 542-5050
Facsimile: (707) 542-2589
E-mail: mgreenberg@abbeylaw.com
A copy of the Disclosure Statement dated Dec. 14, 2022, is
available at https://bit.ly/3HL9kEu from PacerMonitor.com.
About Hansaben Investments
Hansaben Investments, LLC, owns the 60-room franchised La Quinta
Inn and Suites located at 316 Pittman Road, Fairfield, CA. The
entity is owned by the Patel Family, and Hitesh Patel is the
manager.
Hansaben Investments sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-30258) on May 25,
2022. In the petition filed by Hitesh Patel, manager, the Debtor
disclosed $10,030,061 in assets and $8,330,389 in liabilities.
Judge Dennis Montali oversees the case. Thomas Willoughby, Esq.,
at Felderstein Fitzgerald Willoughby Pascuzzi Rios LLP, is the
Debtor's counsel.
Two other affiliates controlled by the Patel family have sought
Chapter 11 protection: Prithvi Investments, LLC, and Rudra
Investments, LLC.
HEIRBNB LLC: Unsecured Creditors to Split $6K in Subchapter V Plan
------------------------------------------------------------------
Heirbnb, LLC filed with the U.S. Bankruptcy Court for the Middle
District of Tennessee a Plan of Reorganization under Subchapter V
dated December 15, 2022.
The Debtor generates income by renting Airbnb properties and then
subleases them as short rentals. In 2019, HeirBNB, LLC was formed,
and grew to 18 properties at its peak.
On or about November 1, 2022, the owner of approximately 16 Airbnb
properties elected to terminate the business relationship with the
Debtor, which resulted in the debts far exceeding the income to
service the debts. Accordingly, this Chapter 11 has been filed to
bring the debts in line with the income.
This Plan of Reorganization proposes to pay the creditors of the
Debtor from future income of the Debtor.
Class 2 shall consist of the claim of Small Business
Administration. SBA has an allowed first position secured claim
generally described as a blanket lien on the Debtor's business
assets. The amount of the claim as of the date of the filing of the
Petition is estimated at $687,506.63. On the Effective Date
following Confirmation of this Plan, the Debtor shall value the
claim at $60,000.00, at 7% interest rate and at a monthly payment
in the amount of $1,188.07 per month for a period of 60 months.
Class 3 shall consist of all unsecured claims. The claims in this
class shall be paid a pro-rate distribution of $6,000.00 commencing
on the Effective Date of the plan, payable at the rate of $100.00
per month, until the total amount specified herein has been paid.
Class 4 shall consist of the interests of the individual Debtor in
property of the estate. The Debtor will retain all ownership rights
in property of the estate.
The Debtor anticipates the funds to meet the plan payments shall
come from the daily operations of the Debtor's AirBNB business.
A full-text copy of the Plan of Reorganization dated December 15,
2022, is available at https://bit.ly/3v9Koz4 from PacerMonitor.com
at no charge.
Attorney for Debtor:
Steven L. Lefkovitz, Esq.
908 Harpeth Valley Place
Nashville, Tennessee 37221
Phone: (615) 256-8300
Fax: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About Heirbnb LLC
Heirbnb, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 22-04015) on Dec. 14,
2022. In the petition signed by Kate Carson, owner, the Debtor
disclosed $2,525 in assets and $1,099,032 in liabilities. Judge
Charles M. Walker oversees the case. Steven L. Lefkovitz, Esq., at
Lefkovitz and Lefkovitz, is the Debtor's legal counsel.
HERO NUTRITIONALS: Claims to be Paid From Available Cash and Income
-------------------------------------------------------------------
Hero Nutritionals, LLC, filed with the U.S. Bankruptcy Court for
the Central District of California a Disclosure Statement
describing Reorganization Plan dated Dec. 15, 2022.
In 1997, the Debtor became the first company to introduce a
nutrient-rich, allnatural gummy bear for children called Yummi
Bears(R). The inspiration for these "yummi gummies" came from its
founder and CEO Jennifer Hodges' nieces and nephews.
Notwithstanding its many successes, and like too many businesses,
Hero was hit particularly hard by the Covid-19 pandemic. Hero fell
behind on several of its debt obligations despite its best
efforts.
On February 25, 2022, the Debtor's landlord, One Morgan, LLC
("Landlord") initiated an unlawful detainer proceeding seeking to
evict the Debtor from the warehouse where it manufactured its
gummies and had various assets stored. Thereafter, an eviction was
scheduled for August 18, 2022 following entry of the Landlord's
unlawful detainer judgment. To reorganize its debts and gain some
breathing room to negotiate with the Landlord, the Debtor filed a
voluntary chapter 11 petition on August 17, 2022.
The Plan is a reorganizing Plan. Payments due under the Plan will
be made from cash on hand as of the Effective Date of the Plan, the
ordinary course sale of the Debtor's existing inventory, and future
revenues generated by the Reorganized Debtor through the licensing
of the Debtor's intellectual property rights. The Debtor expects to
receive approximately $541,952 from the ordinary course sale of its
current inventory, with an aggregate expense of $165,105 to store
and ship the current inventory.
The Debtor plans to supplement its income by licensing its
intellectual property rights. Based upon estimated sales, which
incorporate historical sales of the Debtor at full capacity, the
Debtor avers a 2.5% to 5% licensing fee will generate between
$642,805 to $1,285,610 in revenue to fund the Plan. Based upon the
Debtor's cash on hand and expected income, as well as the Debtor's
contention that certain claims will be reduced or disallowed, the
Debtor believes the Plan will pay all claims in full.
Class 1 consists of McCormick's Secured Claim in the amount of
$2,621,866.81. McCormick is not an insider of the Debtor and is
impaired under the Plan. McCormick's claim will be treated as
follows:
* $2,054,537.76: undisputed portion of the Claim previously
paid from the proceeds of the Sale.
* $567,329.05: disputed portion of the Claim. To the extent
the disputed portion of McCormick's Secured Claim is allowed by the
Class 1 Claim Allowance Order, it will be paid in full on the later
to occur of (i) 10 days following the Effective Date, and (ii) 10
days following the date of entry of the Class 1 Claim Allowance
Order.
Class 3 under this Plan consists of all Allowed General Unsecured
Claims. There are a total of approximately $3,660,88.74 of asserted
Class 3 Claims between Class 3 Claims scheduled by the Debtor and
Class 3 Claims asserted in timely filed proofs of claim. Each
holder of an allowed Class 3 Claim will receive a pro rata share of
the unencumbered cash not reserved for the Class 1 Claim, and after
all Allowed Administrative Claims priority Claims, which are not
classified, including Priority Tax Claims, are paid in full.
While the Debtor anticipates there will be a recovery for holders
of Class 3 Claims, it is not possible at this time to estimate the
ultimate recovery for holders of Class 3 Claims because so much
will depend on the extent to which Claims are disallowed and/or
subordinated, and the extent to which the Debtor is able to
successfully monetize the remaining assets of the Debtor.
Class 4 consists of the claim of Jennifer Hodges private retirement
plan for its contribution to the purchase of a mogul for the
Debtor's operations. As part of a purchase of the mogul, which as
sold as part of the Sale of the Hard Assets, Jennifer Hodges,
through a private retirement plan in which Ms. Hodges is the
trustor, trustee, and beneficiary, paid 637,152.55 euros to Winkler
for the mogul.
To the extent the Court determines Ms. Hodges holds a right to the
Sale proceeds, Ms. Hodges' claim will be paid upon a final order of
the Court approving a distribution to Ms. Hodges' private
retirement plan, should the Court enter such an order. The Debtor
will reserve $800,000.0010 for payment to Ms. Hodges' private
retirement plan. If, however, the Court determines Ms. Hodges'
private retirement plan is not entitled to a full reimbursement for
the purchase of the mogul, the debt owed to Ms. Hodges' private
retirement plan will be treated as a Class 3 General Unsecured
Claim and will be impaired under the Plan.
The Debtor expects to receive approximately $541,952 from the
ordinary course sale of its current inventory, with an aggregate
expense of $165,105 to store and ship the current inventory. The
Debtor plans to supplement its income by licensing its intellectual
property rights.
Based upon estimated sales, which incorporate historical sales of
the Debtor at full capacity, the Debtor believes a 2.5% to 5%
licensing fee will generate between $642,805 to $1,285,610 in
revenue to fund the Plan. Based upon the Debtor's cash on hand and
expected income, as well as the Debtor's contention that certain
claims will be reduced or disallowed, the Debtor believes the Plan
will pay all claims in full.
A full-text copy of the Disclosure Statement dated December 15,
2022, is available at https://bit.ly/3WWu40z from PacerMonitor.com
at no charge.
Counsel for Debtor:
David M. Goodrich, Esq.
Sonja M. Hourany, Esq.
Golden Goodrich, LLP
650 Town Center Drive, Suite 600
Costa Mesa, CA 92626
Telephone 714-966-1000
Facsimile 714-966-1002
Email: dgoodrich@go2.law
shourany@go2.law
About Hero Nutritionals
Hero Nutritionals, LLC, a company in Santa Ana, Calif., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
C.D. Cal. Case No. 22-11383) on Aug. 17, 2022, with up to $50
million in assets and up to $10 million in liabilities. Jennifer
Leigh Hodges, chief executive officer, signed the petition.
Judge Scott C. Clarkson oversees the case.
David M. Goodrich, Esq., at Golden Goodrich, LLP and Cohnreznick,
LLP serve as the Debtor's legal counsel and financial advisor,
respectively.
HOME TOWN FLORIDA: Seeks Approval to Tap Adam Law Group as Counsel
------------------------------------------------------------------
Home Town Florida, LLC seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to hire Adam Law Group,
P.A. as its legal counsel.
The firm's services include:
(a) advising the Debtor regarding its powers and duties;
(b) advising the Debtor with respect to its responsibilities
in complying with the U.S. Trustee's Operating Guidelines and
Reporting Requirements and with the Local Rules of this court;
(c) preparing legal papers;
(d) protecting the interest of the Debtor in all matters
pending before the court; and
(e) representing the Debtor in negotiations with its creditors
and in the preparation of its disclosure statement and plan of
reorganization.
The firm received a retainer of $6,000, plus filing fee of $1,738.
The hourly rate of Thomas Adam, Esq., the owner of Adam Law Group,
is $350 while the hourly rate of paralegals is $150.
Mr. Adam 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:
Thomas C. Adam, Esq.
Adam Law Group, P.A.
326 N. Broad St., Ste. 208
Jacksonville, FL 32202
Telephone: (904) 329-7249
Email: tadam@adamlawgroup.com
About Home Town Florida
Home Town Florida, LLC sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-02331) on
Nov. 21, 2022, with up to $50,000 in assets and $100,001 to
$500,000 in liabilities. Judge Jacob A. Brown oversees the case.
The Debtor is represented by Thomas C. Adam, Esq., at Adam Law
Group, P.A.
HOPE TRUCKER: Unsecured Creditors Will Get 54% of Claims in Plan
----------------------------------------------------------------
Hope Trucker Logistics, LLC, filed with the U.S. Bankruptcy Court
for the Eastern District of Virginia a Plan of Reorganization for
Small Business dated December 15, 2022.
The Debtor is a limited liability company. Since March 2021, the
Debtor has been in the business of general freight trucking,
delivering freight across the lower 48 states.
After defaulting on some of the equipment loans and the
repossession of various equipment by the debtor, the Debtor decided
to file the current bankruptcy petition to recover the equipment,
to weather the negative market conditions, to seek better equipment
and better price points and interest rates, and to work on a plan
for refinance and repayment of its existing loans.
The Plan Proponent's financial projections show that the Debtor
will have projected disposable income of $325,800.00. The final
Plan payment is expected to be paid on February 15, 2028.
The Debtor's revenues have increased since the bankruptcy filing
since it is now renting out two of its trucks and trailers to
drivers. It also anticipates an improvement in revenues as it
seeks an additional truck to rent by January 2023. The Debtor has
a network of drivers who are ready to operate additional trucks as
necessary.
This Plan of Reorganization proposes to pay creditors of the Debtor
from the present and future cash flow generated by its business.
Secured creditors holding allowed claims will receive
distributions, which the proponent of this Plan estimates at
$84,806.38. Total secured creditors holding as listed on Schedule D
are $84,806.38, thus the plan provides a payout of approximately
100 cents on the dollar to secured creditors.
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan estimates
at $212,895. Total unsecured nonpriority claims as listed on
Schedule F are $391,889, thus the plan provides a payout of
approximately 54 cents on the dollar to unsecured creditors. This
Plan also provides for the payment of administrative claims in
full.
Class 2 consists of Secured claims. Secured creditors in Class 2
shall be paid 100% of scheduled claims, which is a total of
$84,806. Monthly payments shall be made in the amount of $1,413
starting on March 1, 2023, until paid in full.
Class 3 consists of Non-priority unsecured creditors. Unsecured
creditors in Class 3 shall be paid the remaining projected
disposable income of the Debtor after payment of the claims of
administrative creditors and secured creditors in full. Based on
the estimations of administrative claims and secured claims,
unsecured creditors will be paid a total of $212,895.00, or 54% of
scheduled claims. Monthly payments toward Class 3 claimants shall
be made in the amount of $1,674.91 starting March 1, 2023 and
ending in December 1, 2023, after which the monthly payments will
increase to $4,016.58 starting January 1, 2024 until paid in full,
which shall be split pro rata among Class 3 claimants based on the
size of their claims.
Class 4 consists of Equity security holders of the Debtor. Equity
security holders will not be paid pursuant to the plan. Faisal Khan
will retain his 100% equity interest in the LLC.
The Debtor shall continue to operate its business and generate the
necessary funds to make the proposed payments in this Chapter 11
Plan from its monthly disposable income over the plan term. Faisal
Khan shall continue to serve as Managing Member of the Debtor and
be responsible as its sole owner for operation of the Debtor.
A full-text copy of the Plan of Reorganization dated December 15,
2022, is available at https://bit.ly/3WDh6nX from PacerMonitor.com
at no charge.
Attorney for the Plan Proponent:
Ashvin Pandurangi, Esq.
Vivona Pandurangi, PLC
211 Park Ave.
Falls Church, VA 22046
Tel: (571) 969-6540
Fax: (571) 699-0518
Email: ashvinp@vpbklaw.com
About Hope Trucker Logistics
Hope Trucker Logistics, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. E.D. Va. Case No. 22-11038) on
Aug. 6, 2022. In the petition signed by Faisal Khan, sole member,
the Debtor disclosed up to $500,000 in both assets and
liabilities.
Judge Klinette H. Kindred oversees the case.
Ashvin Pandurangi, Esq., at Vivona Pandurangi, PLC, is the Debtor's
counsel.
INDEPENDENCE FUEL: Unsecureds to Get $1,500 Per Month for 60 Months
-------------------------------------------------------------------
Independence Fuel Systems, LLC, filed with the U.S. Bankruptcy
Court for the Eastern District of Texas a Second Amended Plan of
Reorganization.
The Debtor operates 6 unmanned compressed natural gas fueling
stations around Texas. The Debtor is currently owned by 42 owners
with various ownership percentages. At the present time the CEO of
the company is Brad Thiessen.
After reviewing the information regarding the state of the company
and the impending Receivership Judgment, new Board decided that the
only way to save the company for its employees and its Members was
to file for a Chapter 11, subchapter V bankruptcy.
The Debtor filed this case on July 13, 2022 and has continued to
operate the business. Post-petition the current management has
maintained operations and has paid all its post-petition debts as
they have become due. It is anticipated that after confirmation,
the Debtor will continue in business. Based upon the projections,
the Debtor believes it can service the debt to the creditors.
The Debtor has also instituted a lawsuit against its primary
secured creditor Origin Bank seeking a declaratory judgement of its
lien position as well as damages for actions taken by the Bank.
Class 6 consists of Allowed Unsecured Claims. All unsecured
creditors, other than Class 7 Unsecured Creditors, shall share pro
rata in the unsecured creditors pool. The Debtor shall make monthly
payments commencing 30 days after the effective date of $1,500 into
the unsecured creditors' pool. The amount represents the Debtor's
disposable income. The Debtor shall make up to 60 payments into the
unsecured creditors pool. The Class 6 creditors are impaired.
Class 7 consists of Allowed Insider Claims. All Allowed Claims of
Debtor's former management and their related companies shall be
subordinated to the Class 6 creditor claims. All Allowed Class 7
Claims shall share paid pro rata in Debtor's Disposable Income
after all Allowed Class 6 creditors have been paid in full. The
Allowed Class 7 Claims shall be entitled to receive any of the
remaining 60 monthly payments after the Class 6 creditors have been
paid in full. Claims of Raymond Russell, Matthew Russell and
Eastman are not included in Class 7 as they have released their
claims against the Debtor. Class 7 are impaired.
The current owner will receive no payments under the Plan; however,
they will be allowed to retain their ownership in the Debtor.
Debtor anticipates the continued operations of the business to fund
the Plan.
A full-text copy of the Second Amended Plan dated December 15,
2022, is available at https://bit.ly/3VmPtOW from PacerMonitor.com
at no charge.
Attorneys for Debtor:
Eric A. Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road
Suite 850
Dallas, Texas 75251
Ph. (972) 991-5591
Fax (972) 991-5788
About Independence Fuel Systems
Independence Fuel Systems, LLC, owner of gasoline stations in
Texas, sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. E.D. Texas Case No. 22-60301) on July 14, 2022, with
up to $50,000 in assets and up to $10 million in liabilities.
Charles Neuberger, chairman of the Board of Managers, signed the
petition.
Judge Joshua P. Searcy oversees the case.
Eric A. Liepins, P.C., is the Debtor's bankruptcy counsel. The Law
Office of PJ Putman, P.C. and Valdez Washington, LLP serve as the
Debtor's special counsel.
INFOVINE INC: Seeks to Hire Baker & Associates as Legal Counsel
---------------------------------------------------------------
Infovine, Inc. seeks approval from the U.S. Bankruptcy Court for
the Southern District of Texas to hire Baker & Associates as its
legal counsel.
The firm's services include:
(a) analyzing the financial situation and rendering advice and
assistance to the Debtor;
(b) advising the Debtor with respect to its duties;
(c) preparing and filing schedules of assets and liabilities,
statements of affairs, answers, motions and other legal papers;
(d) representing the Debtor at the first meeting of creditors
and such other services as may be required during the bankruptcy
proceedings;
(e) representing the Debtor in all proceedings before the
bankruptcy court and in any other judicial or administrative
proceeding where the rights of the Debtor may be litigated or
otherwise affected;
(f) preparing and filing a disclosure statement, if required,
and Chapter 11 plan of reorganization; and
(g) assisting the Debtor in any matters relating to or arising
out of its Chapter 11 case.
The Debtor will compensate Baker & Associates in accordance with
its normal billing practice and will reimburse for its necessary
disbursement and expenses.
The firm received a retainer in the amount of 11,738 from the
Debtor.
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 InfoVine
Founded in 1999, Infovine, Inc. provides direct mail operations for
both for-profit and non-profit organizations.
InfoVine filed a petition for relief under Subchapter V of Chapter
11 of the Bankruptcy Code (Bankr. S.D. Texas Case No. 22-33393) on
Nov. 15, 2022, with between $1 million and $10 million in both
assets and liabilities. Brendon D. Singh has been appointed as
Subchapter V trustee.
Judge Jeffrey P. Norman oversees the case.
The Debtor is represented by Reese W. Baker, Esq., at Baker &
Associates.
JP INTERMEDIATE: Moody's Cuts CFR to Caa3, Outlook Negative
-----------------------------------------------------------
Moody's Investors Service downgraded JP Intermediate B, LLC's (dba
as The Juice Plus Company, "Juice Plus") Corporate Family Rating to
Caa3 from Caa1 and its Probability of Default Rating to Caa3-PD
from Caa1-PD. Moody's also downgraded Juice Plus' first lien senior
secured revolving credit facility and term loan ratings to Caa2
from B3. The rating outlook is negative.
The rating downgrades reflect Moody's expectations that Juice Plus'
operating performance and operating cash flow will continue to
deteriorate amid high distributor churn and inflationary pressures
on the consumers over the next 12 months. Meaningful sales declines
and earnings resulted in high leverage where the capital structure
is becoming unsustainable without a meaningful operational
turnaround. Moody's also expects liquidity to weaken as the
expiration of the revolving credit facility is approaching in
November 2023 and rising interest rates and lower earnings reduce
free cash flow. Juice Plus' sales force is a significant driver of
revenue across the company's direct selling model, and Moody's
anticipates it will be challenging to quickly and meaningfully
improve the distributor base due to additional opportunities for
workplace flexibility that have become more common through
increased hybrid work arrangements. Moody's projects that EBITDA
will likely decline in fiscal year 2023 (ending April 2023) as
costs remain elevated. Moody's has growing concerns related to the
sustainability of the company's capital structure and there is
elevated potential for a distressed exchange or other debt
restructuring.
Governance risk considerations are material to the rating action.
The company faces high governance risk reflecting a very aggressive
financial policy with regards to sustained elevated leverage.
Governance risk is further exacerbated by private equity ownership,
which increases the risk of shareholder friendly actions that come
at the expense of creditors including elevated risk of a distressed
exchange.
The following ratings are affected by the action:
Ratings Downgraded:
Issuer: JP Intermediate B, LLC
Corporate Family Rating, Downgraded to Caa3 from Caa1
Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD
Backed Senior Secured 1st Lien Bank Credit Facility, Downgraded to
Caa2 (LGD3) from B3 (LGD3)
Outlook Actions:
Issuer: JP Intermediate B, LLC
Outlook, Remains Negative
RATINGS RATIONALE
Juice Plus' Caa3 CFR reflects Moody's concern that economic,
competitive, and structural headwinds will continue to create
challenges for Juice Plus to slow revenue declines and quickly
execute a turnaround strategy. The company's direct selling model
also increases the risk of adverse regulatory and/or legal actions.
Moody's is concerned that the company will face difficulty
mitigating revenue and earnings declines. This will impact Juice
Plus' credit metrics, constrain its ability to repay debt, and
pressure the company's liquidity position. The rating is supported
by the company's broad product suite that is largely focused on
wellness and weight loss products. The rating is also supported by
a variable cost structure given the outsourced manufacturing model,
as well as sales commissions and marketing expenses that fluctuate
with sales volume. Social factors driven by an aging population and
obesity trends that support demand for health, wellness and weight
loss products also benefit the credit profile.
Liquidity is weak considering diminishing projected free cash flow
and the November 2023 revolver expiration. Juice Plus had $74.4
million of cash as of October 2022 and $2.5 million available under
its $50 million revolving credit facility. Moody's projects a
modest positive $5 - $10 million of free cash flow in fiscal year
ending April 2023. Moody's believes the cash balance may not be
sufficient to fund the $22.5 million of required annual term loan
amortization, and repayment of the revolver if the facility is not
extended. A revolver maturity extension would improve the company's
liquidity though it is not assumed in Moody's liquidity analysis.
The credit facility has a maximum net leverage covenant of 3.75x
and Moody's believes the leverage covenant headroom to be very low
over the next 12 months, and a covenant violation very likely. The
maturity profile is weak with the revolving facility expiring in
November 2023 and the term loan maturing in November 2025.
Social risks are a key consideration to Juice Plus' credit profile
particularly human capital and customer relations. The company
depends on its distributor sales force to sell its products.
Distributors can sell products to the public — often by word of
mouth, social media, and direct sales. Distributors can also earn
commissions, not only for their own sales, but also for sales made
by the people they recruit, which can lead to unfavorable
regulatory scrutiny. The Federal Trade Commission has taken action
in the past on a number of multi-level marketing companies and in
some instances has made those companies pay fines. In addition,
changes to consumer preferences can also drive shifts in demand.
Juice Plus products and labeling are also subject to FDA
oversight.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects Moody's expectation that Juice Plus'
operating initiatives will stabilize EBITDA and that free cash flow
will be modestly positive between $5 to $10 million over the next
12-18 months, although constrained by increasing liquidity pressure
due to the upcoming revolving credit facility expiration, the high
amount of required annual term loan amortization, and potential for
a covenant violation. These factors could increase the risk of a
distressed exchange or other default.
The ratings could be downgraded if the company does not stabilize
customer count, the distributor count, revenue, and earnings.
Increased likelihood of a distressed exchange, or deterioration of
liquidity including an inability to proactively refinance the
revolver, increasing revolver utilization, or continued weak free
cash flow, could also lead to a downgrade.
Before Moody's would consider an upgrade, Juice Plus would need to
materially improve its operating performance. Moody's would need to
gain greater comfort that Juice Plus' capital structure is
sustainable and free cash flow is sufficient to meet debt service.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
JP Intermediate B, LLC (dba The Juice Plus Company, "Juice Plus")
headquartered in Collierville, Tennessee, is a direct-seller of
whole-food, plant based nutritional supplements (96% of revenue)
and Tower Garden products. Products are available in a variety of
delivery formats including capsules, soft chewable (gummies),
shakes and bars. The company operates through a multi-level
marketing system in North America and a number of international
markets. Juice Plus generated approximately $487 million in annual
revenue for the latest twelve months ending October 31, 2022, and
was acquired by private equity firm Altamont Capital Partners in a
November 2018 leveraged buyout.
KNIGHT HEALTH: Moody's Cuts CFR to B3 & Alters Outlook to Negative
------------------------------------------------------------------
Moody's Investors Service downgraded Knight Health Holdings LLC
(ScionHealth or the "Company") Corporate Family Rating to B3 from
B2, the Probability of Default Rating to B3-PD from B2-PD, and the
senior secured term loan to B3 from B2. Moody's revised the outlook
to negative from stable.
The ratings downgrade reflects Moody's expectations that
ScionHealth's leverage will likely remain elevated for an extended
period. Moody's estimates ScionHealth's debt to EBITDA will
increase to over 7x by FYE 2022 driven by rising labor cost and
interest rate expense. Moody's expects debt/EBITDA will remain
elevated and liquidity to be weak beyond the next 12-18 months.
While Moody's anticipates that the contemplated acquisition of
Cornerstone Healthcare Group (Cornerstone) will be leverage
neutral, there is potential for operational disruption and
challenges in integration as ScionHealth continues to complete its
restructuring efforts following last year's combination of
businesses and separation from LifePoint Health, Inc. (B2,
negative).
The negative outlook reflects Moody's view that operating expenses
will continue to pressure profitability and liquidity in the near
term. This will pose challenges to the company's pace of
deleveraging as well as cashflow generation.
Social risk considerations are material to the rating action. The
company's reliance on highly specialized clinical labor makes it
vulnerable to worsening supply-demand imbalance of such labor and
the resultant spike in labor costs. This risk has become more
pronounced after the COVID pandemic, which triggered increased
retirement and a shift from permanent positions to temporary
staffing, especially for nurse professionals.
Moody's took the following rating actions:
Downgrades:
Issuer: Knight Health Holdings LLC
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Secured Term Loan B, Downgraded to B3 (LGD4) from B2
(LGD4)
Outlook Actions:
Issuer: Knight Health Holdings LLC
Outlook, Changed to Negative from Stable
RATINGS RATIONALE
The B3 Corporate Family Rating reflects ScionHealth's elevated
financial leverage, labor pressures and low organic growth outlook
for the overall business. Moody's calculates pro forma leverage to
be approximately 5.8x for LTM June 30, 2022, which Moody's
forecasts to increase to roughly 7.3x for FYE 2022. Moody's
anticipates that leverage will gradually decline to 6.2x FYE 2023.
Moody's expects that labor pressures will negatively impact margins
and profitability for the remainder of 2022 and part of 2023. That
said, the use of contract labor and costs for contract labor will
improve, which Moody's expect will contribute to leverage
improvement in the latter half of 2023 and beyond. The addition of
Cornerstone will further contribute to margin expansion as
synergies are realized and wage pressure subsides in the LTAC
business.
The rating is supported by ScionHealth's minimal reliance on a
single state Medicaid program or single commercial payor given its
locations in 25 states and diverse payors' mix. Further, the rating
benefits from ScionHealth's large scale with over $3 billion in
combined revenue and diversified service line offering.
Moody's anticipates that ScionHealth will maintain weak liquidity,
supported by a $450 million ABL revolving credit facility that has
about $161 million drawn and about $48.3 million of cash on hand on
June 30, 2022. Moody's forecasts ScionHealth will likely need to
rely on external sources for liquidity and will further draw on its
ABL facility to fund operational deficiencies and working capital
swings as labor pressures continue to impact the business. Further,
Moody's expects that ScionHealth will continue to burn cash, using
about $150 million in 2022, and estimates negative $50 million of
free cash flow in 2023.
ESG considerations have a highly negative impact on Knight Health
Holdings LLC's (ScionHealth) rating (CIS-4) reflecting a highly
negative governance and social credit risk exposures. Credit
exposure to environmental risks considerations is moderately
negative (E-3). This is driven by the company's high exposure to
physical climate risk as ScionHealth has moderate concentration in
California, Texas and Florida which makes the company susceptible
to hurricanes and other extreme weather conditions. Facilities may
experience disruption in the business and or property damage from
storms.
Credit exposure to social credit risk considerations is highly
negative (S-4). ScionHealth faces social risk regarding the
affordability of its services. The affordability of healthcare has
garnered substantial social and political attention. In addition,
the company relies on Medicare and Medicaid for a substantial
portion of reimbursement. Any changes to reimbursement to Medicare
or Medicaid directly impacts revenue and profitability. Regarding
responsible production, while there is no disclosed litigation or
other contingencies, as a healthcare service provider, the company
remains at risk to government investigations and patient-related
liability. ScionHealth is also exposed to labor pressures and human
capital constraints as the company relies on highly specialized
labor to provide its services.
Credit exposure to governance risk considerations is highly
negative (G-4). Governance scores reflect ScionHealth's private
equity ownership, which increases the likelihood for aggressive
financial policies, such as debt-funded shareholder distributions.
Additionally, ScionHealth is a newly created entity, and thus has a
limited track record of execution.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if ScionHealth improves its liquidity
profile and demonstrates organic revenue and earnings growth.
Quantitatively and Debt-to-EBITDA sustained below 5.5 times could
support an upgrade.
The ratings could be downgraded if liquidity weakens further
demonstrated by sustained negative free cash flow. Additionally,
ongoing operational deterioration including ongoing margin
pressures and business disruptions caused by business integration
could result in a downgrade.
Knight Health Holdings LLC is a leading provider of a
community-based acute and post-acute care, with 18 short-term acute
care hospitals and 61 long-term acute care facilities across 25
states. Revenue is approximated at $3.3 billion as of June 30,
2022. The company is owned by private equity firm Apollo Funds &
Management and LifePoint Health, Inc.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
KNIGHT HEALTH: S&P Lowers ICR to 'B-', Outlook Stable
-----------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Knight
Health Holdings' (doing business as [d/b/a] Scion Health) to 'B-'
from 'B'. At the same time, S&P lowered its issue-level rating to
'B-' from 'B' on the company's senior secured debt, The '3'
recovery rating indicates its expectation for meaningful (50%-70%;
rounded estimate: 55%) recovery in the event of default.
The stable outlook reflects S&P's expectations for the company's
performance to improve over the next 12 months with
low-single-digit volume growth along with decreasing, but still
elevated, labor costs.
Knight's performance has been significantly below S&P's
expectations.
S&P said, "Although volume at both its acute care hospitals and
long-term acute care (LTAC) units has been lower than we expected,
higher costs, particularly labor, have been the key driver for the
underperformance. Similar to its peers, contract labor utilization
and bill rates rose significantly. We expect contract labor costs
to decrease over the next 12 months, but we believe it will remain
elevated, and that permanent labor costs will also increase at a
higher rate. Revenue has been affected by lower acuity levels as
the pandemic impact subsides."
S&P expected Knight to remain highly leveraged.
S&P said, "We now expect S&P Global Ratings-adjusted debt-to-EBITDA
leverage will be 10.5x and 7.1x (about 8.5x and 5.7x, excluding the
preferred equity) in 2022 and 2023, respectively. This compares to
our previous forecast of adjusted leverage of 5.3x and 5.0x (about
4.1x and 3.8x, excluding the preferred equity) in 2022 and 2023,
respectively. We expect cash flow to be weaker than our previous
expectations, with discretionary cash flow deficits, after capital
expenditures and distribution to non-controlling interests, of $195
million and $40 million in 2022 and 2023, respectively. Cash flow
in 2022 includes about $45 million in costs related to the
LifePoint transaction completed in December 2021 and costs
associated with terminating leases. Our analysis includes a sizable
increase in interest expense in 2023 because its variable-rate debt
is unhedged."
The pending acquisition of Cornerstone Healthcare Group could
improve margins.
Cornerstone is an operator of LTAC facilities, including several
smaller "hospital-in-hospital" facilities. These facilities
typically generate higher margin than Knight's larger LTAC
facilities due to lower overhead costs. Following the acquisition,
we expect Knight to divest certain non-strategic assets.
S&P said, "Our stable outlook reflects our expectation that
Knight's performance will improve over the next 12 months with
low-single-digit volume growth along with decreasing, but still
elevated, labor costs.
"We could lower our rating if Knight Health's margins fell short of
our base case scenario such that the company continued to generate
sizable cash flow deficits that reduced liquidity. Under that
scenario, we believe its capital structure may be unstainable. In
our view, this could happen if there were a sizable cut in
reimbursement rates, weaker-than-expected patient volume, continued
significant utilization of contract labor, or potential integration
or other operational challenges leading to higher costs.
"We will consider an upgrade if the company reduces adjusted
debt-to-EBITDA leverage to below 7x on a sustained basis and is
able to achieve sustained annual discretionary cash flow to debt
above 3%."
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis. Our assessment of the
company's financial risk profile as aggressive reflects corporate
decision-making that prioritizes the interests of the controlling
owners, in line with our view of the majority of rated entities
owned by private-equity sponsors. Our assessment also reflects the
generally finite holding periods and a focus on maximizing
shareholder returns."
LATAM AIRLINES: Don't Owe Bondholders Interest, Says 2nd Circuit
----------------------------------------------------------------
Alex Wolf of Bloomberg Law reports that Latam Airlines Group SA won
an appellate court's affirmation that the bankrupt Chilean
airline's reorganization plan doesn't have to include $150 million
interest payments tied to its subsidiary's bonds.
The airlines' decision to avoid paying the interest didn't impair
the claims of investors who held bonds issued by Latam's Brazilian
subsidiary Tam Linhas Aereas SA, the US Court of Appeals for the
Second Circuit ruled Wednesday, December 14, 2022.
US bankruptcy law protects Latam from paying the TLA bondholders
additional accrued interest, the court ruled, affirming a lower
court ruling that approved Latam's reorganization plan.
About LATAM Airlines Group
LATAM Airlines Group S.A. -- http://www.latam.com/-- is a
pan-Latin American airline holding company involved in the
transportation of passengers and cargo and operates as one unified
business enterprise. It is the largest passenger airline in South
America.
Before the onset of the COVID-19 pandemic, LATAM offered passenger
transport services to 145 different destinations in 26 countries,
including domestic flights in Argentina, Brazil, Chile, Colombia,
Ecuador and Peru, and international services within Latin America
as well as to Europe, the United States, the Caribbean, Oceania,
Asia and Africa.
LATAM and its 28 affiliates sought Chapter 11 protection (Bankr.
S.D.N.Y. Lead Case No. 20-11254) on May 25, 2020. Affiliates in
Chile, Peru, Colombia, Ecuador and the United States are part of
the Chapter 11 filing.
The Debtors disclosed $21,087,806,000 in total assets and
$17,958,629,000 in total liabilities as of Dec. 31, 2019.
The Hon. James L. Garrity, Jr., is the case judge.
The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as
bankruptcy counsel, FTI Consulting as restructuring advisor, Lee
Brock Camargo Advogados as local Brazilian litigation counsel, and
Togut, Segal & Segal LLP and Claro & Cia in Chile as special
counsel. The Boston Consulting Group, Inc. and The Boston
Consulting Group UK LLP serve as the Debtors' strategic advisors.
Prime Clerk LLC is the claims agent.
The official committee of unsecured creditors formed in the case
tapped Dechert LLP as its bankruptcy counsel, Klestadt Winters
Jureller Southard & Stevens, LLP as conflicts counsel, UBS
Securities LLC as investment banker, and Conway MacKenzie, LLC as
financial advisor. Ferro Castro Neves Daltro & Gomide Advogados is
the committee's Brazilian counsel.
The Ad Hoc Group of LATAM Bondholders tapped White & Case LLP as
counsel.
Glenn Agre Bergman & Fuentes, LLP, led by managing partner Andrew
Glenn and partner Shai Schmidt, has been retained as counsel to the
Ad Hoc Committee of Shareholders.
LEGACY EJY: Court Confirms Plan
-------------------------------
Judge J. Kate Stickles has entered an order confirming and
approving the Combined Disclosure Statement and Plan of Legacy Ejy
Inc., et al.
Any and all objections to the Combined Disclosure Statement and
Plan that have not been withdrawn or resolved prior to the
Confirmation Hearing are hereby overruled.
On the Effective Date, all existing EJY Equity Interests in the
Debtors shall be cancelled and the Plan Administrator shall be
deemed to hold one common share in PostEffective Date Debtor Legacy
EJY, Inc. (f/k/a Enjoy Technology, Inc.) solely for the benefit of
holders of Allowed Claims. For the avoidance of doubt, the Plan
Administrator shall not be entitled to receive any Distribution
under the Plan on account of such EJY Equity Interest. Further,
effective as of the Effective Date, all directors and officers of
the Debtors shall be discharged, and the Plan Administrator shall
serve as the sole fiduciary of the Post-Effective Date Debtors.
The Plan has been proposed in good faith and not by any means
forbidden by law. In so finding, the Court has considered the
totality of the circumstances of these chapter 11 cases and found
that all constituencies acted in good faith. The Plan is the
result of extensive, good faith, arm's length negotiations among
the Debtors and their principal constituencies.
Notwithstanding the fact that Class 4 (Intercompany Claims) and
Class 5 (EJY Equity Interests) have been deemed to reject the Plan,
the Plan may be confirmed pursuant to section 1129(b) of the
Bankruptcy Code. The evidence in support of the Plan that was
proffered, admitted, or adduced at or prior to the Confirmation
Hearing is reasonable, persuasive, credible, and accurate, has not
been controverted by other evidence, and establishes that the Plan
satisfies the requirements of section 1129(b) of the Bankruptcy
Code. First, all of the requirements of section 1129(a) of the
Bankruptcy Code other than section 1129(a)(8) have been met.
Second, the Plan is fair and equitable with respect to such
Classes. The Plan has been proposed in good faith, is reasonable,
and meets the requirements that (a) no Holder of any Claim or
Equity Interest that is junior to each such Classes will receive or
retain any property under the Plan on account of such junior Claim
or Equity Interest and (b) no Holder of a Claim in a Class senior
to such Classes is receiving more than 100 percent on account of
its Claim or Equity Interest. Third, the Plan does not discriminate
unfairly with respect to such Classes because similarly situated
Holders of Claims and Equity Interests will receive substantially
similar treatment on account of their Claims and Equity Interests
irrespective of Class. Accordingly, the Plan satisfies the
requirement of section 1129(b)(1) and (2) of the Bankruptcy Code.
The Plan may therefore be confirmed despite the fact that not all
Impaired Classes have voted to accept the Plan.
Legacy Ejy Inc., et al. submitted an Amended Combined Statement and
Chapter 11 Plan of Liquidation dated Dec. 9, 2022.
"GUC 3A Priority Amount" means the first $12,500,000 of Net
Distributable Assets available for distribution to Class 3A
exclusively.
The Debtors in these chapter 11 cases are Legacy EJY, Inc., Legacy
EJY Operating Corp. and Legacy EJY Subsidiary LLC.
As of the Petition Date, the Debtors' obligations under the
Unsecured Promissory Note totaled not less than $10 million, plus
accrued interest and expenses.
On the Petition Date, the Debtors also filed the DIP Motion, asking
the Bankruptcy Court to, among other things, authorize the Debtors
to obtain the DIP Facility from the DIP Lender, authorize the
Debtors to use "cash collateral," as such term is defined in the
section 363 of the Bankruptcy Code, grant the DIP Lender a senior,
priming lien on certain prepetition collateral securing the DIP
Facility, and modifying the automatic stay imposed by section 362
of the Bankruptcy Code to the extent necessary to implement and
effectuate the terms and provisions of the DIP Documents. The
Bankruptcy Court entered an Order granting the relief requested in
the motion on an interim basis on July 1, 2022 and thereafter
entered the Final DIP Order granting the relief requested in the
motion on a final basis on July 26, 2022.
On August 11, 2022, the United States Trustee and the Committee
filed objections to certain fees and expenses requested by Evercore
Group L.L.C. as a DIP Professional. On August 25, 2022, the
Bankruptcy Court entered the Consent Order Resolving Objections of
the Office of the United States Trustee and the Of ficial Committee
of Unsecured Creditors to DIP Professionals' Fees and Expenses,
which resolved the objections as set forth therein.
Sale Consummated
On August 31, 2022, the sale was consummated and contemporaneously
therewith, the Debtors repaid the DIP Facility in full with the
proceeds from the Sale in accordance with the Final DIP Order and
Sale Order.
On July 3, 2022, the Debtors filed their motion seeking, inter
alia, (i) approval of the bid procedures in connection with the
Sale and (ii) approval of the Stalking Horse Agreement. On July
25, 2022, the Debtors filed a declaration of Marc D. Puntus in
support of the Sale Motion. On July 26, 2022, the Bankruptcy Court
held a hearing on the bid procedures portion of the relief
requested in the Sale Motion, and that same day, entered the
Bidding Procedures Order approving such relief.
In an effort to achieve the highest or otherwise best bid for all
or substantially all of their assets, the Debtors and their
advisors continued to market the Debtors' assets on a postpetition
basis in accordance with the Bankruptcy Court-approved bidding
procedures. Beginning in July 2022, the Debtors and their advisors
reached out to 32 prospective buyers, including parties that the
Debtors had engaged with prepetition, parties that had reached out
to the Debtors post-petition and certain parties identified by the
Committee. Combined with the prospective buyers that were contacted
prepetition, the Debtors and their advisors solicited the most
likely purchasers of the Debtors' assets. Although most parties
declined to participate in the process, the Debtors did execute a
non-disclosure agreement with one new prospective buyer. The
Debtors provided information regarding their business and
operations to such party, including through a management
presentation and data room access. Ultimately, the Debtors did not
receive a bid from such party or any other party by the bid
deadline on August 8, 2022. Accordingly, the Debtors selected
Asurion (or its designee as permitted under the Asset Purchase
Agreement) as the successful bidder in accordance with the Bidding
Procedures Order.
On August 12, 2022, the Bankruptcy Court approved the sale, and on
August 31, 2022, the sale was consummated and contemporaneously,
the Debtors repaid the DIP Facility in full with the proceeds from
the Sale in accordance with the Final DIP Order and Sale Order.
46% to 64% Recovery
Under the Plan, Class 3A General Unsecured Claims totaling
$26,250,000 to $26,750,000 will recover 46% to 64% of their claims.
Each Holder of an Allowed General Unsecured Claim shall receive
(x)(i) its Pro Rata share (considering only Class 3A General
Unsecured Claims) of the GUC 3A Priority Amount and (ii) its Pro
Rata share (considering both Class 3A General Unsecured Claims as
reduced by distribution of the GUC 3A Priority Amount and Class 3B
Unsecured Note Claim) of the Remaining Distributable Assets or (y)
such other treatment as may be agreed upon by such Holder and the
Debtors or the Plan Administrator, as applicable. Class 3A is
impaired.
Class 3B Unsecured Note Claim total $10,136,986.30 and will recover
0-31% of their claims. The Holder of an Allowed Unsecured Note
Claim shall receive its Pro Rata share (considering both Class 3A
General Unsecured Claims as reduced by distribution of the GUC 3A
Priority Amount and the Class 3B Unsecured Note Claim) of the
Remaining Distributable Assets, or such other treatment as may be
agreed upon by such Holder, on the one hand, and the Debtors or the
Plan Administrator, as applicable, on the other hand. For the
avoidance of doubt, the Holder of the Unsecured Note Claim shall
not share in the GUC 3A Priority Amount. Class 3B is impaired.
Allowed Claims and any amounts necessary to wind down the Debtors'
Estates shall be paid from the Debtors' Assets, subject to the
limitations and qualifications described herein.
Co-Counsel to the Debtors:
Daniel J. DeFranceschi, Esq.
Paul N. Heath, Esq.
Brendan J. Schlauch, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square, 920 North King Street
Wilmington, DE 19801
Tel: (302) 651-7700
Fax: 302-651-7701
E-mail: defranceschi@rlf.com
heath@rlf.com
schlauch@rlf.com
Co-Counsel to the Debtors:
Cullen Drescher Speckhart, Esq.
Weiru Fang, Esq.
COOLEY LLP
1299 Pennsylvania Avenue, NW, Suite 700
Washington, DC 20004
Tel: (202) 842-7800
Fax: (202) 842-7899
E-mail: cspeckhart@cooley.com
wfang@cooley.com
- and -
Michael A. Klein, Esq.
Evan Lazerowitz, Esq.
Joseph W. Brown, Esq.
55 Hudson Yards
New York, NY 10001
Tel: (212) 479-6000
Fax: (212) 479-6275
E-mail: mklein@cooley.com
elazerowitz@cooley.com
jbrown@cooley.com
A copy of the Order dated Dec. 14, 2022, is available at
https://bit.ly/3PC6Rhm from PacerMonitor.com.
A copy of the Amended Combined Statement and Chapter 11 Plan of
Liquidation dated Dec. 14, 2022, is available at
https://bit.ly/3W3TE3q from PacerMonitor.com.
About Legacy EJY
Enjoy Technology, Inc., now known as Legacy EJY, Inc., provides a
commerce-at-home experience for consumers through their network of
mobile retail stores. It is based in Palo Alto, Calif.
Enjoy Technology and affiliates, Enjoy Technology Operating Corp.
and Enjoy Technology, LLC, sought protection under Chapter 11 of
the Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-10580) on June
30, 2022. In the petition signed by its chief legal officer and
corporate secretary, Tiffany N. Meriweather, Enjoy Technology, Inc.
disclosed $111,661,000 in total assets and $69,956,000 in
liabilities.
Judge J. Kate Stickles oversees the cases.
The Debtors tapped Cooley, LLP and Richards, Layton, and Finger
P.A. as legal counsels; Centerview Partners, LLC as investment
banker; PricewaterhouseCoopers, LLP as auditor; and Todd Zoha of AP
Services, LLC as chief financial officer. Stretto, Inc., is the
claims, noticing agent and administrative advisor.
Asurion, LLC, a Delaware Limited Liability Company, as DIP lender,
is represented by Gibson, Dunn & Crutcher LLP, Bass, Berry & Sims
PLC, and Pachulski Stang Ziehl & Jones, LLP.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases on July 11, 2022. Fox Rothschild, LLP and FTI Consulting,
Inc. serve as the committee's legal counsel and financial advisor,
respectively.
* * *
On Aug. 12, 2022, the court approved the sale of the Debtors'
assets to Asurion. The Debtors changed their names to Legacy EJY,
Inc., Legacy EJY Operating Corp. and Legacy EJY Subsidiary, LLC
following the sale of the assets.
LINDBLAD EXPEDITIONS: S&P Alters Outlook to Stable, Affirms B- ICR
------------------------------------------------------------------
S&P Global Ratings revised its rating outlook on U.S.-based
expedition cruise and land-based adventure travel provider Lindblad
Expeditions Holdings Inc. to stable from negative and affirmed all
ratings, including the 'B-' issuer credit rating.
S&P said, "The stable outlook reflects our forecast for significant
improvement in credit measures in 2023 driven by anticipated
revenue and EBITDA growth, expedition sailings under more normal
operating conditions, and occupancy levels more in line with
pre-pandemic levels, despite our expectation for credit measures to
remain very weak in 2022.
"We revised the rating outlook to stable because Lindblad's forward
bookings support significant credit measure improvement in 2023.
Lindblad has indicated that it has booked a similar percentage of
potential revenue for 2023 compared to the same time in 2019,
despite a 39% increase in capacity, which includes the delivery of
the National Geographic Endurance in March 2020 and the National
Geographic Resolution in 2021. Additionally, gross bookings are
significantly higher than guest cancellations (or delayed travel)
and cancellations are subsiding. We assume that occupancy in 2023
will improve over 2022 levels but will remain slightly below 2019
levels, and Lindblad's 2023 leverage could plausibly return to the
mid-6x area. Lindblad's average booking window is typically around
nine months, and we believe the company's longer booking window
compared to most mass-market cruise companies and other leisure
operators provides sufficient revenue visibility to stabilize the
rating outlook. Revenue visibility at Lindblad is greater during
the first half of 2023, a period that is seasonally stronger than
the contemporary cruise space. Increased revenue visibility also
helps facilitate expense and cash management. Notwithstanding these
factors, our current base-case assumption for demand for future
cruise bookings could underperform if high levels of inflation
reduce discretionary spending on travel, or stock market volatility
diminishes the wealth of its target demographic in North America.
These events could cause customers to cancel current 2023 bookings
or further delay travel to 2024.
"We believe Lindblad's 2023 operating performance will improve
materially. We expect Lindblad's occupancy and EBITDA will continue
to improve in the first quarter of 2023 because its vessels will be
operating for a full year under more relaxed travel restrictions
and protocols, particularly the elimination of the COVID-19 testing
requirement for returning to the U.S. (Lindblad sourced more than
90% of its expedition cruise guests from the U.S. between 2019 and
2021.) We expect occupancy will continue to recover towards 2019
levels (but will remain below historical levels), given that travel
protocols will likely loosen further outside the U.S., and the
company will have a full year of operations across their entire
fleet (with increased capacity) and with its acquired businesses in
its land experiences segment.
"These forward-looking drivers offset a recovery that has been
slower in 2022 than we previously forecasted. We expect Lindblad to
generate an EBITDA loss during the full year 2022, compared to our
previously forecasted EBITDA to be flat to 2019 levels. This was
largely because of travel and operating restrictions during the
omicron variant in early 2022, and some residual consumer fears
around the transmissibility and requirements for testing, which has
resulted in travel delays and cancelations.
"We believe liquidity will remain adequate over the next 12 months.
We believe Lindblad has sufficient liquidity to support the
continued ramp-up of operations over the next 12 months, following
a very high level of leverage and negative free operating cash flow
(FOCF) anticipated in 2022. Lindblad had about $116 million in
unrestricted cash and full access under its $45 million revolver as
of Sept. 30, 2022, which is typically a heavy cash usage quarter
given the seasonality of the business. We expect there are no
material usages of cash over the next 12 months other than its
Export Credit Agency (ECA) amortization payments and interest
payments on the company's senior secured notes. The company pushed
out maturities and refinanced its capital structure in February
2022, and there are no ships currently on order.
"We expect Lindblad's liquidity will be further enhanced by cash
inflows from deposits and final payments on bookings for 2023, in
addition to bookings for 2024 that the company is marketing.
"Increasing macroeconomic risks could threaten Lindblad's recovery.
As the U.S. economy heads into 2023, rising prices and interest
rates will likely eat away at household purchasing power. As a
result, our economists lowered their U.S. GDP growth forecast to
1.8% for 2022 and -0.1% for 2023, as the economy falls into a
shallow recession in the first half of the year. While our baseline
now includes a recession, we can't rule out chances of a harder
landing if the Federal Reserve (Fed) aggressively hikes rates to
quell inflation. Although the shift in spending to experiences from
goods may continue for a while longer, continued high prices
through most of next year damages household purchasing power, which
could cause leisure consumers to pull back on the price they are
willing to pay for travel. If cruise operators need to lower their
prices to fill ships, it could slow their ability to reduce
leverage, especially if fuel and other costs remain elevated."
Cruise operators, including Lindblad, are exposed to oil prices,
which are significantly higher than in 2019 and could further
weaken cruise companies' EBITDA and margin recovery. Fuel costs
represented about 4% of Lindblad's total operating expenses in
2019.
Notwithstanding these macroeconomic risks, Lindblad's niche product
offering in the adventure-cruise segment results in a smaller
addressable customer base, and its brand concentration with
National Geographic and small scale (in terms of ships and
itineraries) may be less vulnerable to discounting and generate
higher net yields compared with other cruise operators during a
recession.
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Social--Health and safety.
S&P said, "The stable outlook reflects our forecast for significant
improvement in credit measures in 2023, driven by revenue and
EBITDA growth, expedition sailings under more normal operating
conditions, and occupancy levels more in line with pre-pandemic
levels. However, we expect credit measures to remain very weak in
2022.
"We could lower the rating if operating performance in 2023 is
weaker than we expect, if liquidity becomes pressured, or if we
conclude the capital structure may be unsustainable. Such a
scenario could result from heightened customer travel fears or
further restrictions that diminish Lindblad's ability to sail,
combined with a more negative impact from the anticipated U.S.
recession than we have assumed in our current base case.
"We could consider a one-notch upgrade if we believed the company's
revenues and EBITDA improved and the company sustained adjusted
leverage under 6x."
ESG credit indicators: To E-3, S-4, G-2; from E-3, S-5, G-2
S&P said, "We believe health and safety risks for Lindblad will
moderate enough to change our social credit indicator to S-4 from
S-5, as COVID restrictions and consumer fears around cruising are
less of an overhang next year, and the company's collection of
land-based businesses have recovered. Health and safety factors
remain a negative consideration in our credit analysis of Lindblad,
reflecting the leverage overhang from incremental debt issued
during the pandemic to finance its cash burn during that period.
Additionally, risk remains around regional health concerns,
possible new health and safety measures, a resumption in travel
restrictions, and potential capacity limits that could affect the
recovery. Lindblad also faces safety risks such as accidents that
could hurt its brand and reputation, leading to lower customer
demand, declining net revenue yields, increased cash flow
volatility, and weaker credit measures. Environmental factors are a
moderately negative consideration because of ship emissions from
the industry's heavy use of fuel, increasing environmental
regulations, and potential environmental damage that could result
from a ship accident."
MAGENTA BUYER: S&P Downgrades ICR to 'B-' on Dividend Recap Deal
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on Magenta
Buyer LLC (borrowing entity for McAfee Enterprise's organizational
structure) to 'B-' from 'B'.
S&P said, "We also lowered our issue-level rating on the first-lien
credit facility to 'B-' from 'B' with a '3' recovery rating, and
lowered our second-lien rating on its second second-lien term loan
to 'CCC' from 'CCC+', with a '6' recovery rating.
"The stable outlook reflects our expectation that Magenta Buyer's
leverage will fall to low-6x by fiscal year end 2023, driven by
significant progress made on synergies following its carveout out
of McAfee and the FireEye acquisition. Although we expect weaker
free cash flow over the next two years, our base-case assumes that
the company will have sufficient liquidity to manage transition to
ACV contracts."
Magenta plans to issue up to $415 million incremental first-lien
term loan, with $50 million of the proceeds going to cash and the
rest for a dividend.
S&P said, "We expect negative free operating cash flow in 2022 and
break even in 2023 due to the transition to ACV contracts and
higher interest expense. The company will go through a transition
to shorter-length contract subscriptions. With the shorter-duration
contracts, the company's advance payments will decrease, resulting
in significant but temporary working capital outflow. We expect
working capital uses of about $300 million over the next two years
as the company transitions to ACV contracts. The management plans
to raise $415 million first-lien debt for dividend
recapitalization, which will take the company's total debt to about
$4.3 billion. All the debt is of a floating nature and with the
rising interest rate climate, the company's annual interest expense
could reach close to $450 million. We expect the company's free
operating cash flow (FOCF) to turn negative in 2022. We project
FOCF/debt of about negative 3% in fiscal 2022 and anticipate FOCF
to reach breakeven during fiscal 2023."
The company demonstrated good performance through fiscal 2022.
Magenta Buyer LLC's performance during its first year as a
stand-alone company has been in line with S&P Global Ratings-base
case expectations. Bookings and revenues are tracking well to S&P's
2022 model. Liquidity continues to be very good with more than $300
million in balance sheet cash and full access to its $125 million
revolving credit facility. The company is on target to generate
about $200 million in synergies by early fiscal 2023. S&P expects
the company to manage any macroeconomic weakness during 2023.
Some leveraging risk in case ownership decides to separate Trellix
and Skyhigh Security. S&P said, "Given the two management teams for
Trellix and Skyhigh Security, we believe there is some risk of a
spinoff of the smaller Skyhigh Security business--although there
are no current plans to do so. Skyhigh comprises just 12% of
revenue but it is a fast-growing business (in the nearly 8% to 10%
range) with high recurring revenue (nearly 86% during the 12 months
ended 2022). Trellix has seen flat growth in a growing
cybersecurity market over the past three years. We expect Trellix'
revenues to be down 1% in 2023. Although the Skyhigh business is
much smaller and represents only one-eighth of the total business,
we expect any spinoff to be a leveraging event."
S&P said, "The stable outlook reflects our expectation that Magenta
Buyer's leverage will fall to low-6x by fiscal year end 2023,
driven by significant progress made on actioned synergies following
its carveout out of McAfee and the FireEye acquisition. Although we
expect weaker free cash flow over the next two years, our base-case
assumes that the company will have sufficient liquidity to manage
transition to ACV contracts.
"We could lower our rating on Magenta Buyer if it faces
lower-than-expected renewal rates and product sales due to
increasing competition and pricing pressure in its core security
offerings such that its free operating cash flow materially
declines, and we view its capital structure as unsustainable."
S&P could considers raising its rating on Magenta Buyer if it
completes its restructuring plans, improves its profitability, and
sustains the following metrics:
-- S&P Global Ratings-adjusted leverage below the mid-7x area;
and
-- Reported free cash flow to debt of more than 5%.
ESG credit indicators: E-2 S-2 G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of the company, as is
the case for most rated entities owned by private-equity sponsors.
We believe Magenta Buyer LLC's highly leveraged financial risk
profile points to corporate decision-making that prioritizes the
interests of the controlling owners. This also reflects the
generally finite holding periods and a focus on maximizing
shareholder returns."
MALLINCKRODT PLC: Out of ALS Drug Stock Lawsuit Due to Bankruptcy
-----------------------------------------------------------------
Martina Barash of Bloomberg Law reports that a securities class
action alleging Mallinckrodt PLC and its top officers failed to
disclose problems with a drug for amyotrophic lateral sclerosis
won't proceed against the company now that its bankruptcy plan is
approved.
But the pension fund spearheading the suit will continue to pursue
claims against the 10 individual defendants, according to a filing
in the US District Court for the District of New Jersey. The court
recently approved the pension fund's voluntary dismissal of
Mallinckrodt.
About Mallinckrodt PLC
Mallinckrodt -- http://www.mallinckrodt.com/-- is a global
business consisting of multiple wholly-owned subsidiaries that
develop, manufacture, market and distribute specialty
pharmaceutical products and therapies. The company's Specialty
Brands reportable segment's areas of focus include autoimmune and
rare diseases in specialty areas like neurology, rheumatology,
nephrology, pulmonology and ophthalmology; immunotherapy and
neonatal respiratory critical care therapies; analgesics; and
gastrointestinal products. Its Specialty Generics reportable
segment includes specialty generic drugs and active pharmaceutical
ingredients.
On Oct. 12, 2020, Mallinckrodt plc and certain of its affiliates
sought Chapter 11 protection in Delaware (Bankr. D. Del. Lead Case
No. 20-12522) to seek approval of a restructuring that would reduce
total debt by $1.3 billion and resolve opioid-related claims
against them.
Mallinckrodt plc disclosed $9,584,626,122 in assets and
$8,647,811,427 in liabilities as of Sept. 25, 2020.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Latham & Watkins, LLP and Richards, Layton &
Finger, P.A. as their bankruptcy counsel; Arthur Cox and Wachtell,
Lipton, Rosen & Katz as corporate and finance counsel; Ropes &
Gray, LLP as litigation counsel; Torys, LLP as CCAA counsel;
Guggenheim Securities, LLC as investment banker; and AlixPartners,
LLP as restructuring advisor. Prime Clerk, LLC is the claims
agent.
The official committee of unsecured creditors retained Cooley, LLP,
as its legal counsel; Robinson & Cole, LLP as co-counsel; and
Dundon Advisers, LLC as financial advisor.
On Oct. 27, 2020, the U.S. Trustee for Region 3 appointed an
official committee of opioid-related claimants. The OCC tapped
Akin Gump Strauss Hauer & Feld, LLP as its lead counsel; Cole
Schotz as Delaware co-counsel; Province, Inc. as financial advisor;
and Jefferies, LLC as investment banker.
* * *
Mallinckrodt plc on June 16, 2022, announced that it has
successfully completed its reorganization process, emerged from
Chapter 11 and completed the Irish Examinership proceedings.
Implementing the Plan and the Scheme strengthens the Company's
balance sheet, reduces its total debt by approximately $1.3 billion
and enables it to move forward with more than $250 million in cash
and cash equivalents on hand. The Plan and Scheme include key
legal settlements that resolve opioid claims brought against the
Company and litigation matters involving Acthar Gel, among other
claims, and provides for significant equitization of the Company's
guaranteed unsecured notes.
MARCUS COMPANIES: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: The Marcuse Companies, Inc.
Marcuse & Son, Inc.
3501 N Main Street
Fort Worth, TX 76106
Business Description: The Debtor is a distributor of air
compressors and air compressor parts in
North Texas. It also sells industrial
sized blast & paint rooms/booths.
Chapter 11 Petition Date: December 23, 2022
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 22-43146
Judge: Hon. Edward L. Morris
Debtor's Counsel: Joseph F. Postnikoff, esq.
LAW OFFICES OF JOSEPH F. POSTNICKOFF, PLLC
777 Main St Ste 600
Forth Worth, TX 76102-5368
Tel: (817) 335-9400
Email: jpostnikoff@postnikofflaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Sydney A. English as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/LQMVDBA/The_Marcuse_Companies_Inc__txnbke-22-43146__0001.0.pdf?mcid=tGE4TAMA
MARYLAND ECONOMIC: Moody's Affirms Ba1 on 2016 Refunding Bonds
--------------------------------------------------------------
Moody's Investors Service has revised the rating outlook to stable
from negative on the Maryland Economic Development Corporation's
(MEDCO) Student Housing Refunding Revenue Bonds (University of
Maryland, College Park Projects) Series 2016. At this time, Moody's
has also affirmed the Ba1 rating on the student housing project's
$109,185,000 of outstanding bonds.
RATINGS RATIONALE
The change in outlook to stable from negative reflects the recovery
of project occupancy to pre-covid levels with fall 2021 and 2022
occupancy at close to 100%. The project's successful lease-up
resulted in a Moody's adjusted debt service coverage of 1.45x in
fiscal year 2022 (1.28x including the repayment of about $1.7M of
deferred university expenses out of a total $2.27M owed). The
project's capital and furnishings fund, which was drawn down
significantly during covid, has been replenished. Though project
coverage has returned to healthy levels, the opening of several new
off-campus student housing projects through 2024 will increase
competitive pressures that could impact demand. The current rating
provides cushion to incorporate the potential weakening of demand,
rising debt service and expense pressures due to inflation.
RATING OUTLOOK
The outlook is stable. The strong financial performance and
occupancy in the near term will offset competitive and inflationary
pressures.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
- Sustained strong financial performance as measured by
consistently high debt service coverage levels in the foreseeable
more competitive environment
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
- A decline in occupancy levels that lead to a weakened financial
position
- Prolonged increases in expense growth and/or deterioration in
revenue that leads to draws on available reserves
LEGAL SECURITY
The bonds are special limited obligations payable solely from the
revenues of the project and other funds held with the Trustee and
do not constitute obligations for the issuer or the university.
PROFILE
Established in 1984, the Maryland Economic Development Corporation
enables the State of Maryland to develop property for economic
purposes which serve the public interest. The purpose of the
corporation is to assist in the expansion, modernization, and
retention of existing Maryland business, and to attract new
business to the State. MEDCO's Student Housing Refunding Revenue
Bonds (University of Maryland, College Park Projects) Series 2016
financed two student housing projects called South Campus Commons
and The Courtyards with a total of 2,899 beds on or near the campus
of the University of Maryland, College Park.
METHODOLOGY
The principal methodology used in this rating was Global Housing
Projects published in June 2017.
MASS PRODUCTIONS: Seeks to Hire Rountree as Legal Counsel
---------------------------------------------------------
Mass Productions, Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of Georgia to hire Rountree,
Leitman, Klein & Geer, LLC as its legal counsel.
The firm's services include:
(a) providing the Debtor with legal advice regarding its powers
and duties in the management of its property;
(b) preparing legal papers;
(c) assisting in the examination of claims of creditors;
(d) assisting with the formulation and preparation of a
disclosure statement and plan of reorganization and with the
confirmation and consummation thereof; and
(e) other necessary legal services.
The hourly rates of the firm's attorneys and staff are as follows:
William A. Rountree, Attorney $495
Will B. Geer, Attorney $495
Michael Barger, Attorney $495
Hal Leitman, Attorney $425
David S. Klein, Attorney $425
Alexandra Dishun, Attorney $425
Benjamin R. Keck, Attorney $425
Barret Broussard, Attorney $395
Elizabeth Childers, Attorney $350
Ceci Christy, Attorney $350
Caitlyn Powers, Attorney $275
Zach Beck, Law Clerk $195
Sharon M. Wenger, Paralegal $195
Kayte Moore, Paralegal $175
Megan Winokur, Paralegal $150
Catherine Smith, Paralegal $150
The firm received a pre-bankruptcy retainer of $10,000 from the
Debtor.
William Rountree, Esq., a partner at Rountree Leitman Klein & Geer,
disclosed in a court filing that his firm is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
William A. Rountree, Esq.
Will B. Geer, Esq.
Caitlyn Powers, Esq.
Rountree Leitman Klein & Geer, LLC
Century Plaza I
2987 Clairmont Road, Suite 350
Atlanta, GA 30329
Telephone: (404) 584-1238
Facsimile: (404) 704-0246
Email: wrountree@rlkglaw.com
wgeer@rlkglaw.com
cpowers@rlkglaw.com
About Mass Productions
Mass Productions, Inc. sought protection for relief under Chapter
of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-59871) on Dec.
5, 2022, with up to $50,000 in assets and $100,001 to $500,000 in
liabilities. Judge Sage M. Sigler presides over the case.
William A. Rountree, Esq., at Rountree Leitman Klein & Geer, LLC
represents the Debtor as counsel.
MEDICAL PROPERTIES: S&P Places 'BB+' ICR on Watch Negative
----------------------------------------------------------
S&P Global Ratings placed all of its ratings on U.S. hospital real
estate investment trust Medical Properties Trust Inc. Trust,
including its 'BB+' issuer credit rating, on CreditWatch with
negative implications.
The negative CreditWatch signals that, given the increased exposure
to Steward and continued operational stress for the tenant, S&P is
reviewing and reassessing its view of the company's business risk
profile. S&P expect to resolve the CreditWatch placement within the
next quarter.
Medical Properties Trust's increased exposure to its top tenant
Steward, as well as the heightened concerns around Steward's
indeterminate credit quality, have pressured S&P's view of its
business risk. Over the past few quarters, Medical Properties Trust
has disposed of non-Steward-operated assets, which gradually
increased its concentration with its top tenant. As of March 31,
2022, Steward accounted for 17.9% of Medical Property Trust's pro
forma gross assets (which assumed the completion of the sale of the
Utah hospitals) and 28% of its first-quarter 2022 revenue. Since
the sale of the Utah hospitals was challenged by the Federal Trade
Commission and ultimately not completed, the proportion of the
company's gross assets operated by Steward increased to 26% as of
Sept. 30, 2022, and Steward accounted for 29.5% of its
third-quarter 2022 revenue.
Furthermore, there has been an expectation that Steward's operating
performance would improve as S&P moved past the coronavirus
pandemic. However, despite the solid rent coverage metrics Medical
Properties Trust has reported for the tenant, there continues to be
signs of pressure. Medical Properties Trust provided a $150 million
loan to Steward during the second quarter of 2022, and Steward had
difficulty extending its ABL facility. Though not all of the
details surrounding the situation have been disclosed, Steward's
failure to deliver its 2021 audited financial statements and
address its ABL facility in a timely manner, along with its need
for continued financial support from Medical Properties Trust over
the past year, have further called into question the credit quality
of Medical Properties Trust's largest tenant (Steward has since
extended the facility by one year and delivered its 2021 audited
financials).
S&P said, "The CreditWatch placement reflects the increased
exposure to Steward and continued operational stress for the
tenant. As a result, we are reassessing our view of Medical
Properties Trust's business risk profile. We expect to resolve the
CreditWatch placement within the next quarter."
ESG credit indicators: E-2, S-2, G-3
MONROE GARDENS: Voluntary Chapter 11 Case Summary
-------------------------------------------------
Debtor: Monroe Gardens, LLC
225 Pinewood Dr
Beckley, WV 25801
Business Description: Monroe Gardens owns three properties in
Talcott, WV; Roanoke, VA; and Beckley, WV
having a total aggregate value of $2.29
million.
Chapter 11 Petition Date: December 22, 2022
Court: United States Bankruptcy Court
Southern District of West Virginia
Case No.: 22-50094
Judge: Hon. B. Mckay Mignault
Debtor's Counsel: Andrew S. Nason, Esq.
PEPPER AND NASON
8 Hale St.
Charleston, WV 25301
Tel: 304-346-0361
Fax: 304-346-1054
Email: tinas@peppernason.com
Total Assets: $2,296,100
Total Liabilities: $699,681
The petition was signed by Jennifer Monroe as manager.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/C3OKBEQ/Monroe_Gardens_LLC__wvsbke-22-50094__0001.0.pdf?mcid=tGE4TAMA
MONTGOMERY REALTY: Seeks Cash Collateral Access
-----------------------------------------------
Montgomery Realty Group, LLC asks the U.S. Bankruptcy Court for the
Northern District of California, Oakland Division, for authority to
use cash collateral to fund the ordinary operating expenses of its
property.
The Property is a portion of a shopping center which consists
generally of large "big box" retailers on the periphery of the
Center, facing a central parking lot. Previously, the sole tenants
of the portion of the Center constituting the Property were Jo
Ann's Fabrics and Burlington Coat Factory.
In 2018, the Debtor refinanced the Property and obtained mortgage
financing for the Property from Cathay Bank, with the mortgage to
mature in November of 2023.
Cathay Bank is the Debtor's sole secured creditor holding a
perfected security interest in the Debtor's Property and its rental
income, providing it with cash collateral rights. During the months
pre-petition, Cathay took actions which had the effect of leading
tenants to withhold their rent. The Debtor seeks a court
determination that the Tenants should pay their rent to the Debtor
and that Cathay is barred from seeking a collection from the
Tenants.
In order to increase the revenues generated by the Property and to
eliminate the appearance of a vacant store front, the Debtor
entered into a temporary license of the street-level store front
portion of the Burlington Coat Factory space to Tee Enterprises,
LLC, fka Jack Pot Bins, for the greater of $10,000 per month or a
percentage of gross sales.
As of early 2022, the Property was and had long been stable. Jo
Ann's rent amply covered the mortgage payments to Cathay Bank, and
even in the absence of a replacement tenant for the Burlington
space, the aggregate annual cash needs of the Property were modest
and readily met. The Property's monetary obligations were all
timely met, and there was more than 18 months before the Cathay
mortgage would mature in November of 2023, ample time to arrange
for a refinance.
Through a letter dated April 29, 2022, Cathay Bank declared the
mortgage in default.
On September 7, 2022, Cathay made written demand on the tenants
that they pay all further rent to Cathay. That led the tenants to
stop remitting rent to anyone. Through a second set of demand
letters to the tenants dated December 16, 2022, Cathay recited the
non-payment of rent and threatened to sue the tenants to require
the payment of rent to Cathay.
As a result of the foregoing, the Property has been converted from
a stable rental property capable of sustaining its debt service and
operating expenses into the commercial equivalent of a wasteland,
unable to generate any revenue, having accrued without payment
months of operating expenses, including past-due utility bills and
unpaid co-ownership expense charges.
Cathay's Interference has left the Debtor in a financially weakened
status without any source of rental income. If the Debtor causes
the Tenants to resume their payment of rent, the Debtor intends to
use such funds to pay the ordinary and necessary operating expenses
of the Property, consistent with its prior usage.
The Debtor proposes to provide Cathay with a replacement lien
against its post-petition assets to provide it with adequate
protection for the use of its cash collateral. The Debtor also
proposes to use cash collateral solely to fund the ordinary and
necessary operating expenses of the Property. The Debtor does not
propose to make any payments or provide any other relief to Cathay
at this time.
A copy of the motion is available at https://bit.ly/3HVBX1W from
PacerMonitor.com.
About Montgomery Realty Group, LLC
Montgomery Realty Group, LLC is the owner of the commercial real
property located at 1675 Willow Pass Road, Concord, California.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-41290) on December
20, 2022. In the petition signed by Raj Maniar, manager, the Debtor
disclosed up to $50 million in both assets and liabilities.
Michael St. James, Esq., at St. James Law, P.C, is the Debtor's
legal counsel.
MUSE THREADS: Case Summary & 19 Unsecured Creditors
---------------------------------------------------
Debtor: Muse Threads Inc.
452 Oakwood Street SE
Washington, DC 20032
Business Description: The Debtor operates an e-commerce clothing
store.
Chapter 11 Petition Date: December 23, 2022
Court: United States Bankruptcy Court
District of Columbia
Case No.: 22-00238
Judge: Hon. Elizabeth L. Gunn
Debtor's Counsel: Mahlon Mowrer, Esq.
THE BELMONT FIRM
1050 Connecticut NW
Suite 500
Washington, DC 20036
Tel: (202) 930-4010
Email: mahlon@dcbankruptcy.com
Total Assets: $1,639,487
Total Liabilities: $784,772
The petition was signed by Whitney Mirts as majority shareholder.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 19 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/NXDLQJQ/Muse_Threads_Inc__dcbke-22-00238__0001.0.pdf?mcid=tGE4TAMA
NANI WALE O' PUAKO: Seeks Chapter 11 to Stop Foreclosure
--------------------------------------------------------
Nani Wale O' Puako LLC, et al., and its affiliates filed for
chapter 11 protection in the District of Hawaii.
The Debtors own 4 parcels of land in Kapalaoa, Hawaii.
As of the Petition Date, the Debtors had one secured creditor,
Superior Investments XIX, Inc. On Nov. 1, 2019, Superior made a
loan in the principal amount of $16,000,000 to the Debtors and
Brian Anderson. The purpose of the Loan was to finance the
acquisition of the four lots in Kapalaoa, Hawaii.
Prepetition, in October 2020, Superior filed a complaint against
the Debtor and Anderson in the Circuit Court of the First Circuit
of the State of Hawaii, 1CCV-20-1404, seeking, among other
remedies, judgment against Borrowers and foreclosure of its
mortgage lien. On Aug. 23, 2022, Superior moved for, and was
granted, summary judgment in respect of its remedy of foreclosure.
As of April 30, 2022, the amount due and owing under the Note,
inclusive of principal, interest, and real property taxes advanced
by Superior pursuant to the terms of the Note and Mortgage, but
exclusive of Superior's fees and costs (including attorney's fees
and costs), was determined to be in the amount of $26,886,844.
On Dec. 14, 2022, the eve of the confirmation hearing in the
Foreclosure Action, Debtors filed their petitions for voluntary
bankruptcy commencing the subject bankruptcy cases.
According to court filings, Nani Wale O' Anahulu estimates between
$10 million and $50 million in debt owed to 1 to 49 creditors. The
petition states that funds will not be available to unsecured
creditors.
About Nani Wale O' Puako
Nani Wale O' Puako LLC, et al., are Single Asset Real Estates as
defined in 11 U.S.C. Sec. 101(51B).
NANI WALE O' PUAKO LLC, NANI WALE O' LAIKA LLC, NANI WALE O'
ANAHULU LLC, and NANI WALE O' 'ANAEHO' OMALU LLC each filed a
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
D. Hawaii Case No. 22-00899) on Dec. 14, 2022. In the petition
filed by Brian A Anderson, as managing member, the Debtor reported
assets and liabilities between $1 million and $10 million each.
The Debtors are represented by:
Jerrold K. Guben, Esq.
O'Connor Playdon & Guben
46-5127 Kalake Street
Kamuela, HI 96743
Tel: (808) 987-4585
NATURE COAST: Starts Subchapter V Bankruptcy Case
-------------------------------------------------
Nature Coast Development Group LLC filed for chapter 11 protection
in the Northern District of Florida. The Debtor elected on its
voluntary petition to proceed under Subchapter V of chapter 11 of
the Bankruptcy Code.
The Debtor is a limited liability company having its principal
place of business at 7272 Cardinal Trail, Fanning Springs, Florida
32693. The Debtor was created to construct a 65,000 square foot,
five-story, and 88-room Best Western Premier Hotel in Gilchrist
County, Florida (the "Hotel Project"). The Hotel Project is
located at 7900 State Road 26, Fannings Springs, Florida 32693.
The Hotel Project will include a rooftop lounge, a swimming pool, a
conference center, a wedding venue, horse stalls, and elaborate
equestrian center. The Hotel Project is located just across the
highway from Fanning Springs State Park. The Hotel Project will be
a first of its kind in the area when complete. The Hotel Project
was developed with the assistance of local and state government
agencies and shall be a hallmark of eco-tourism in the State of
Florida.
In September 2018, the Debtor entered a contract with WB Services,
Inc., to function as the prime contractor for the Hotel Project for
a total sum of $8,150,000. WB agreed to provide certain labor,
services, and materials for the Hotel Project, including site work,
site concrete, FF&E, and the pool/patio. Daniel Brewster and
Barretta & Brewer Associates, Inc., provided architectural services
(including all designs and drawings) for the Hotel Project.
To fund the Hotel Project, the Debtor, and an affiliated entity,
Villasis, LLC, obtained preliminary financing from Seacoast
National Bank, as successor by merger to Freedom Bank, secured by a
commercial mortgage encumbering property that would be the site of
the Hotel Project. To secure full funding of the Hotel Project,
Seacoast required WB to obtain a performance bond covering the
entire scope of the Hotel Project. The United States Specialty
Insurance Company ultimately executed a guaranteed performance and
payment bond for the full amount of the Construction Contract.
In February 2019, the Debtor obtained full funding for the Hotel
Project in the form of a $9,800,000 United States Department of
Agriculture ("USDA") guaranteed construction permanent loan from
Seacoast, secured by a commercial mortgage encumbering the property
of the Hotel Project site and additional property adjacent to the
Hotel Project site.
Accordingly, on April 1, 2019, WB began work on the Hotel Project.
WB was supposed to achieve substantial completion of the Hotel
Project within 360 calendar days. WB materially breached numerous
obligations under the Construction Contract and was terminated on
Sept. 22, 2020. For example, WB (1) submitted pay applications
based on false information; (2) misappropriated construction loan
funds; (3) failed to supply sufficient workers or materials to the
project; and (4) failed to pay subcontractors or suppliers pursuant
to the Construction Contract. Indeed, WB received approximately
$493,000 in construction loan funds to purchase FF&E, but never
actually purchased or delivered the FF&E to the Hotel Project site.
WB only completed 50% of the Hotel Project, despite receiving over
$6,000,000 for the Hotel Project.
After WB's termination, the Surety repudiated the Bond's coverage
of the entire Hotel Project and imposed a hold notice on the
construction loan funds. The Debtor's issues with WB and the
Surety triggered monetary and non-monetary defaults with Seacoast
and construction of the Hotel Project completely halted. The Debtor
is now involved in three separate lawsuits with Seacoast National
Bank, the Surety, WB, subcontractors, and other associated
entities.
The Debtor filed the instant Chapter 11 case to preserve the going
concern value of its business operations, to restructure its debt
obligations, and ultimately allow for a successful reorganization
for all stakeholders. The Debtor will explore all options related
to debtor-in-possession financing, new equity structure, and exit
financing to resume and complete construction on the Hotel
Project.
According to court filings, Nature Coast Development Group
estimates between $1 million to $10 million in debt owed to 1 to 49
creditors. The petition states that funds will be available to
unsecured creditors.
About Nature Coast Development Group
Nature Coast Development Group LLC filed a petition for relief
under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr.
N.D. Fla. Case No. 22-10200) on Dec. 14, 2022. In the petition
filed by Marites Padot, as managing member, the Debtor reported
assets between $10 million and $50 million and liabilities between
$1 million and $10 million.
The Debtor is represented by:
Justin M. Luna, Esq.
Latham, Shuker, Eden, & Beaudine, LLP
7272 Cardinal Trail
Fanning Springs, FL 32693
NEW CATHEDRAL OF GHWT: Starts Subchapter V Proceeding
-----------------------------------------------------
The New Cathedral of GHWT filed for chapter 11 protection in the
Western District of Tennessee. The Debtor elected on its voluntary
petition to proceed under Subchapter V of chapter 11 of the
Bankruptcy Code.
The Debtor disclosed $5.873 million in total assets against total
liabilities of $289,600 in its schedules. The Debtor owns real
property at 110 Faxon Ave., Memphis, TN 38105-2517, valued at $3.5
million.
According to court filings, The New Cathedral of GHWT says it has 1
to 49 creditors, and that funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Jan. 18, 2023, at 9:00 AM at Room 400, Memphis, TN. Proofs of
claim are due by March 29, 2023.
About The New Cathedral of GHWT
The New Cathedral of GHWT is the fee simple owner of three
properties located in Memphis, TN, having a total current value of
$4,035,000.
The New Cathedral of GHWT filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. W.D.
Tenn. Case No. 22-25533) on Dec. 14, 2022. In the petition filed by
Mark Allen, as manager, the Debtor reported assets between $100,000
and $500,000 and liabilities between $1 million and $10 million.
The case is overseen by Honorable Bankruptcy Judge Jennie D.
Latta.
Craig M. Geno has been appointed as Subchapter V trustee.
The Debtor is represented by:
Toni Campbell Parker, Esq.
1110 Faxon Ave.
Memphis, TN 38105-2517
NEW FORTRESS: Moody's Affirms B1 CFR & Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service affirmed the B1 Corporate Family Rating
of New Fortress Energy Inc. (NFE) and the B1 ratings on its senior
secured notes. NFE's Speculative Grade Liquidity rating SGL-3 is
not changed. The rating outlook changed to negative from positive.
"The negative outlook on the ratings follows NFE's announcement of
its new distribution policy that will result in a very large
dividend in January 2023, and potentially large payments
thereafter, just as the company is accelerating its large scale
transformative investment in its own LNG capacity. The new
distribution policy and greatly increased capital spending raises
financial and funding risks in 2023-24 and together with the
increased exposure to commodity price risk indicates an aggressive
turn in financial policy and rising business risks," said Elena
Nadtotchi, Senior Vice President at Moody's.
Affirmations:
Issuer: New Fortress Energy Inc.
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Senior Secured Regular Bond/Debenture, Affirmed B1 (LGD3)
Outlook Actions:
Issuer: New Fortress Energy Inc.
Outlook, Changed to Negative from Positive
RATINGS RATIONALE
The negative outlook reflects Moody's assessment of increased
financial risks and its concern about NFE's decision to redirect
significant cash flow to shareholders, even as the company relies
on its future cash flow generation to fund large capital
investments in 2023-24.
In Moody's opinion, NFE's financial policy has a clear shareholder
bias, even though high growth in earnings enabled NFE to reduce its
Debt/EBITDA leverage to below 5x in 2022. The company takes
significant commodity price risk on its planned LNG sales from to
be constructed floating LNG facilities as it aims to maximize its
operating cash flow to in turn fund a large part of the project
costs in 2023-24. The decision to raise dividends in 2023
significantly adds to the overall risk profile of the company.
While the company has achieved exceptionally fast growth in scale
and scope of operations in the past two years, there is also a
continuous transformation of NFE's growth strategy and business
model which entails execution and funding risks.
The B1 CFR reflects high execution and financial risks inherent to
the large scale project to construct five small scale floating LNG
(FLNG) facilities in 2023-2024. NFE has significant funding needs
in 2023-24, principally driven by the FLNG projects, as well as the
increased shareholder distributions, including $0.6 billion
semi-annual dividend announced for January 2023. The company plans
to invest more than $2 billion a year to fund construction of
several floating LNG producing units, with the first such unit
expected to start its operations in the middle of 2023. NFE plans
to fund this significant expansion through reinvestment of cash
received from divestments made in 2022 and with operating cash flow
to be generated in 2023-24. While NFE's EBITDA more than doubled in
2022, boosted by highly profitable cargo sales on the spot LNG
market and by capacity expansion of its natural gas import
terminals, the operating cash flow is still relatively modest
compared to the growth investment needs in the next two years. The
new LNG capacity is not yet supported by long term LNG sales
contracts, leaving the funding plan reliant on continuous strength
of spot LNG market and exposing NFE to significant commodity price
risk.
NFE's liquidity is tight because of high growth capital investment
requirements and high dividend payments in 2023. The SGL-3 rating
assumes that the company will continue to proactively manage its
capital requirements and will be able to increase its committed
liquidity to build some funding headroom. At the end of September
2022, NFE reported $364 million in cash balances (prior to the
closing of Sergipe divestment in October 2022 that brought about
$530 million in total cash proceeds). The liquidity position is
further supported by a $440 million revolver facility maturing in
2026. NFE may also draw on its substantial alternate liquidity
sources, including its infrastructure power assets, as well as its
demonstrated ability to raise equity and debt to support growth.
NFE's next scheduled maturity is "Barcarena" term loan raised by
several operating subsidiaries in Brazil and maturing in February
2024. At September 30, 2022, the company reported $97 million
outstanding under this loan.
NFE's senior secured notes are rated B1, at the level of the CFR,
and are supported by assets and guarantees of some of its operating
subsidiaries in the Caribbean and in Latin America. NFE took steps
to significantly reduce structural complexity as it refinanced
through a sale and lease back transaction the debt previously
maintained at the level of various subsidiaries operating its LNG
vessels. NFE retains a modest amount of debt at its operating
subsidiaries, secured against assets of one of its operating
subsidiaries in Jamaica.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The B1 ratings may be downgraded if NFE's liquidity position
weakens further or if the deleveraging trend is reversed as a
result of a decline in cash flow or raising significant additional
debt with debt/EBITDA exceeding 5x. Moody's may also downgrade the
ratings if risks related to the large scale expansion exceed
initial expectations, including an adverse change in natural gas
market conditions, or rising technological, execution and
construction risks resulting in cost overruns or construction
delays.
The B1 CFR could be upgraded if the company successfully delivers
its first FLNG facility by mid-2023 and demonstrates a line of
sight to funding its 2024 capacity expansion from operations. The
upgrade of the ratings will also require lowering commodity price
risk exposure and improving liquidity position with greater
financial flexibility and liquidity headroom to support growing
operations.
New Fortress Energy Inc. is a US-listed, high growth energy
infrastructure company with regasification and distribution natural
gas operations in Jamaica, Puerto Rico, Mexico, Nicaragua, Brazil
and in the US. The company is making significant investment to
build natural gas liquefaction capacity in 2023-24 and become an
integrated supplier of natural gas and LNG.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
NEW FORTRESS: S&P Affirms 'BB-' ICR, Outlook Stable
---------------------------------------------------
S&P Global Ratings affirmed its issuer credit rating on New
Fortress Energy Inc. (NFE) of 'BB-'.
S&P said, "We raised the issue-level rating on its secured debt to
'BB' from 'BB-' and revised the recovery rating to '2' from '3'.
The recovery rating of '2' indicates our expectation for
substantial (70%-90%; rounded estimate: 70%) recovery in a payment
default.
"The stable outlook reflects our expectation that the company will
continue to generate strong cash flow through 2023, likely
improving credit measures from high merchant margins. This is
somewhat tempered by execution risk related to the construction,
deployment, and operation of its FLNG units."
High LNG prices and the global supply-and-demand disruption will
continue to support financial metrics during the next 12-24
months.
Global LNG market conditions continue to support NFE's credit
profile. S&P estimates the company generates about 50% of its
EBITDA from take-or-pay, capacity, or other tolling arrangements
that provide good visibility into NFE's future cash flows. However,
most of the improvement in EBITDA during the next 12-18 months will
be from the sale of merchant cargos, primarily to European buyers.
While merchant cash flows can be less predictable, S&P believes the
global market being short gas, coupled with increasing demand, is
likely to continue. The ability to displace more expensive
feedstocks with a larger carbon footprint partially offsets
near-term merchant risk.
NFE's evolving corporate strategy as a gas-to-power company and
financial policy are key drivers for the credit rating.
NFE's recent announcement on its updated dividend policy does not
harm its credit profile, in our view, but financial policy
decisions that balance shareholder returns and the needs of
creditors will be a key driver for the rating. NFE's dividend
payout target of up to 40% of annual EBITDA while balancing the
need to fully fund growth initiatives could strengthen the balance
sheet given the potential for outsize operating margins in the
global LNG market. S&P will consider NFE's track record of
maintaining conservative leverage targets, including absolute debt
as the company expands, as the main driver. In addition, NFE like
its peers, is being opportunistic in providing logistics to the
market as demand for natural gas and LNG continues to outpace
supply. That said, most of its higher-rated peers, such as Cheniere
Energy Inc. and Venture Global Calcasieu Pass LLC, have stronger
business profiles because they have a significant base of EBITDA
backed by long-term contracts and benefit from the sale of merchant
volumes. NFE has indicated it will shift its merchant cargos to
contracts over time, which could lead us to reassess our view of
the business risk profile.
S&P also believe NFE's vertical integration of upstream adds some
risk. The company's partnership with PEMEX, Mexico's state-owned
oil and gas company, effectively has it integrating into the
upstream business as it will fund and complete the development of
the Lakash deepwater natural gas field for its FLNG unit in 2024.
If successful, NFE stands to benefit disproportionally from natural
gas production, but it also carries the risk of developing the
field.
NFE's exposure to developing markets poses some risks.
S&P said, "A key tenet of NFE's strategy of supplying gas and power
to developing countries, in our view, adds risk. Our sovereign
ratings on many of these countries--including Brazil, Jamaica, and
Nicaragua--are relatively weak. Materiality, diversification, and
stress scenarios are key factors we will use to determine if any
one country exposure could be a constraint on our rating on NFE. We
also believe that once the FLNG units are operational, these assets
will provide counterparty diversification that could help offset
NFE's exposure to weaker jurisdictions.
"We forecast NFE's credit measures could significantly improve if
the company executes on its 2023 growth initiatives.
"It could realize significant EBITDA upside if global LNG market
dynamics remain favorable and NFE executes on its initial FLNG unit
by the end of the first quarter 2023. While margins could be
volatile, we believe LNG margins from merchant cargo sales could
provide significant EBITDA uplift. Our base case is somewhat
conservative but reflects the potential for average merchant
margins in the $20 area per million Btu (mmBtu). We project NFE's
debt to EBITDA to be about 4.3x in 2022, which could improve by a
full turn in 2023 depending on margins and FLNG project execution.
"The stable outlook reflects our expectation that NFE will continue
to generate strong cash flow through 2023, which could allow it to
improve credit measures and debt to EBITDA below 4x in 2023. The
outlook is also tempered by our view that the construction timing
and operation of FLNG units has some execution risk and that the
company's credit improvement is generally tied to the continuation
of outsized global LNG margins over the next 12-18 months."
S&P could lower the rating if:
-- Market dynamics change and cash flow generation falters, the
deployment of the FLNG units is delayed, or NFE adopts a more
aggressive financial policy such that S&P believes the adjusted
leverage ratio could approach 5x;
-- The company finances new projects or acquisitions with
additional debt; or
-- An increasing portion of EBITDA depends on merchant pricing
that adds volatility to total cash flow.
S&P could raise the rating if:
-- NFE's credit measures continue to improve such that debt to
EBITDA is consistently below 3.5x, it successfully deploys and
efficiently operates its FLNG unit during the next several
quarters, and the company funds its various growth initiatives with
internally generated cash flow, without adding substantial debt to
its capital structure;
-- It continues to increase scale with creditworthy customers
under long-term contracts that could lead us to improve S&P's
assessment of the business risk profile; or
-- Country risk in its future geographic footprint does not pose a
constraint on the rating.
ESG credit indicators: E-4, S-2, G-2
ORBIT ENERGY: Seeks to Hire Ciardi Ciardi & Astin as Legal Counsel
------------------------------------------------------------------
Orbit Energy & Power, LLC seeks approval from the U.S. Bankruptcy
Court for the District of New Jersey to hire Ciardi Ciardi & Astin
as its legal counsel.
The firm's services include:
a. providing the Debtor with legal advice regarding its
powers and duties;
b. preparing legal papers; and
c. other bankruptcy services, including the filing of a
Chapter 11 plan of reorganization.
The firm will charge these hourly fees:
Partners $575 per hour
Associates $375 to $450 per hour
Paralegals $150 per hour
Albert Ciardi, III, Esq., a partner at Ciardi Ciardi & Astin,
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:
Albert A. Ciardi, III, Esq.
Ciardi Ciardi & Astin
1905 Spruce Street
Philadelphia, PA 19103
Telephone: (215) 557-3550
Email: aciardi@ciardilaw.com
About Orbit Energy & Power
Orbit Energy & Power, LLC is a solar energy contractor in Mantua,
N.J.
Orbit Energy & Power filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. D.N.J. Case No. 22-19628) on Dec. 6,
2022. In the petition filed by its managing member, Sean Angelini,
the Debtor reported assets between $1 million and $10 million and
liabilities between $10 million and $50 million.
The Debtor is represented by Albert A. Ciardi, III, Esq., at Ciardi
Ciardi & Astin.
P4L REALTY: Seeks to Hire Steidl and Steinberg as Legal Counsel
---------------------------------------------------------------
P4L Realty and Rentals, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Pennsylvania to hire Steidl and
Steinberg, P.C. to handle its Chapter 11 case.
The firm will be paid at the rate of $300 per hour and will be
reimbursed for its out-of-pocket expenses.
The firm received from the Debtor a retainer in the amount of
$5,000, plus $1,738 filing fee.
Christopher Frye, Esq., a partner at Steidl and Steinberg,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Christopher M. Frye, Esq.
Steidl and Steinberg, P.C.
2830 Gulf Tower
707 Grant Street
Pittsburgh, PA 15219
Phone: 412- 391-8000
Email: chris.frye@steidl-steinberg.com
About P4L Realty and Rentals
P4L Realty and Rentals, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No.
22-22386) on Dec. 2, 2022, with up to $50,000 in assets and
$100,001 to $500,000 in liabilities. Christopher M. Frye, Esq., at
Steidl and Steinberg, P.C. represents the Debtor as counsel.
PARK PLACE: Voluntary Chapter 11 Case Summary
---------------------------------------------
Debtor: Park Place Realty Ventures 2 LLC
670 Myrtle Avenue
Brooklyn, NY 11205
Business Description: Park Place is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: December 22, 2022
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 22-43177
Judge: Hon. Jil Mazer-Marino
Debtor's Counsel: Leo Jacobs, Esq.
JACOBS PC
595 Madison Avenue FL 39
New York, NY 10022
Tel: (212) 229-0476
Email: leo@jacobspc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Joseph Freund as managing member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/7JZZVFQ/Park_Place_Realty_Ventures_2_LLC__nyebke-22-43177__0001.0.pdf?mcid=tGE4TAMA
PEACOCK INTERMEDIATE II: Moody's Alters Outlook on B3 CFR to Neg.
-----------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Peacock
Intermediate Holding II, L.P. ("Pelican Products"), including the
B3 corporate family rating and B3-PD probability of default rating.
Moody's also affirmed the B2 senior secured first lien debt ratings
at the company's wholly owned subsidiary Pelican Products, Inc.
Concurrently, Moody's changed the outlook to negative from stable.
The ratings affirmation of Pelican reflect Moody's expectation that
despite very high leverage, well above 8.5 times, as of September
30, 2022 and weak credit metrics, Pelican will experience
improvement in growth and profitability, over the next 12-18 months
due to price increases, higher government sales in EMEA and
manufacturing cost initiatives.
The change in outlook reflects Moody's view that debt-to-EBITDA
will be sustained at very high levels, likely remaining around 8x
through the end of 2023. The buildup in inventory has also resulted
in negative free cash flow the last four quarters, which is
considerably weaker than the positive $27 million Moody's expected
for 2022 at the time of the leverage buyout (LBO) in November of
2021. Further, liquidity is adequate, with Moody's expecting a
continuation of negative free cash flow and higher cash interest
expense in 2023, partly offset by the recently upsized $95 million
ABL facility and full availability under the cash flow revolver.
Moody's took the following actions on Peacock Intermediate Holding
II, L.P. and Pelican Products, Inc.:
Affirmations:
Issuer: Peacock Intermediate Holding II, L.P.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Issuer: Pelican Products, Inc.
Backed Senior Secured Revolving Credit Facility, Affirmed B2
(LGD3)
Backed Senior Secured First Lien Term Loan, Affirmed B2 (LGD3)
Outlook Actions:
Issuer: Peacock Intermediate Holding II, L.P.
Outlook, Changed To Negative From Stable
Issuer: Pelican Products, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
The ratings are constrained by Pelican Products' weak track record
of free cash flow, due to higher working capital spending on
inventories, elevated one-time expenses associated with its
strategic corporate review last year and cost associated with the
LBO. Further, the company's capital structure consists of $722
million in variable rate debt, which Moody's expect cash interest
costs to meaningfully increase in 2023 to between $75 million to
$85 million. This will significantly impact profitability and cash
flow. The ratings reflect Moody's expectation for negative free
cash flow in 2023 and adjusted debt-to-EBITDA that will remain
around 8.0x (pre-cost savings) over that time frame.
Pelican Product's ratings benefit from strong brand recognition for
quality protective cases along with its focus on product
diversification and investments in innovation to enhance its
competitiveness. Moody's expects the company will further benefit
from increased demand for their BioThermal products (about 30% of
revenue) to the healthcare industry, driven by growing sales to the
pharmaceutical sector and clinical trial organizations. This should
provide some offset to the meaningful pressure on weakening
industrial and consumer markets along with slowing sales to various
commercial sectors.
Moody's expects Pelican Products to operate with adequate liquidity
over the next 12-18 months. Liquidity is supported by the upsized
ABL facility on October 28, 2022 by $25 million to $95 million,
resulting in $42 million of availability. Additional external
liquidity support is provided by its $40 million revolving credit
facility expiring in 2026 that was full available as of September
30, 2022. Through 2023, Moody's expects cash of around $30 million
despite negative free cash flow due to higher working capital.
Borrowings under the ABL revolver are subject to a springing fixed
charge coverage requirement of 1.0x if availability declines below
the greater of 10% of commitments or $6 million. The cash flow
revolver is subject to a springing first lien net leverage maximum
ratio of 7.25x if borrowings are greater than 40% of the committed
amount.
The negative outlook reflects Moody's expectation of elevated
leverage and event risk amid earnings headwinds from weak and
volatile key end markets, recessionary pressures and rising
interest rate expense.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Pelican Products increases its scale
and exhibits organic revenue growth, while also maintaining free
cash flow to debt above 3.5x, debt-to-EBITDA below 5.5x and good
liquidity.
Ratings could be downgraded with a deterioration in liquidity or a
reliance on revolver borrowings. Additionally, weakening sales or a
noticeable drop in margins that prevent debt-to-EBITDA from
declining to a level approaching 7 times could result in a
downgrade. EBITA-to-interest sustained below 1.5x or continued
negative free cash flow could also result in a downgrade.
Leveraging debt financed acquisitions or shareholder distributions
would also pressure the ratings.
The principal methodology used in these ratings was Manufacturing
published in September 2021.
Pelican Products designs, develops, manufactures and markets
high-performance protective cases, temperature-controlled packaging
solutions, portable lighting systems and rugged gear, for use in a
variety of end markets including life sciences, law enforcement,
military, aerospace, entertainment, industrial and outdoor markets.
Pelican Products is owned by private equity firm Platinum Equity
LLC. Pelican Products is based in Torrance, CA, and operates in 26
countries with 24 international offices and 7 manufacturing
facilities. Revenue was approximately $555 million for the last
twelve months ended September 30, 2022.
PELLETIER MANAGEMENT: Continued Operations to Fund Plan
-------------------------------------------------------
Pelletier Management and Consulting LLC filed with the U.S.
Bankruptcy Court for the Southern District of Ohio a Plan of
Reorganization dated Dec. 15, 2022.
The Debtor was formed on Sept. 10, 2009, in Colorado and is owned
by Nancy J. Pelletier and managed by her husband Gaetan Pelletier,
Chief Executive Manager. The Debtor has managed and consulted the
businesses and real estate investments owned by Nancy and/or Gaetan
Pelletier.
As a result of investments in Texas and litigation arising from
same, the bulk of the real property holdings of the Debtor were
liquidated pursuant to the non-judicial foreclosure process in
Texas and the management/consulting work of the Debtor (other than
as relates to log home sales) has been concluded.
The Plan provides for (1) liquidation of the North Dakota real
property and distribution the net sale proceeds to the general
unsecured creditors (net of closing costs and capital gains taxes)
and (2) distribution from the ongoing operations of the Debtor over
the course of the Term, which is 3 years from the First
Distribution Date – or to November 15, 2025.
The Debtor intends to retain the real property located in Ohio and
to continue its involvement in consulting with the land contract
tenant for that property.
Class 3 which consists of claims of real estate taxes against the
North Dakota real property will be paid from the sale proceeds from
the closing of the sale of the property.
Class 4 which consists of the secured claim of REH, as to which the
Debtor will make distributions to be distributed by the
Distribution Agent varying amounts as the claim until the claim is
determined, but generally on terms of the principal amortized over
25 years, payable at the end of 20 (with a balloon) at the interest
rate of 5.75% and with non-principal arrearage amounts to be paid
evenly over 20 years.
Class 5 claims consist of general unsecured creditors and the
unsecured portion of the claim of any secured creditors. The
general unsecured creditors shall receive (1) the net sale proceeds
from the sale of the North Dakota property (net of sale expenses,
including realtor's commissions, payoff of any liens and
encumbrances, and estimated capital gains taxes), which shall be
transferred to the Distribution Agent at closing; (2) the excess of
funds escrowed from payments to the Class 4 claims; (3) the Net
Excess Funds on each of the Distribution Dates as identified in the
projections and (4) although not subject to projection, to the
extent that the Debtor collects on its claims against REH and
Interbank, any collections on such claims during the term shall be
subject to pro rata distribution.
Debtor anticipates the continued operations of the business will be
adequate to fund the Plan over the Term. The Debtor shall be
entitled to pursue its claims against REH and Interbank such that
the automatic bankruptcy stay shall no longer preclude the Debtor's
prosecution of its claims, which are the subject of an appeal filed
by the Debtor, provided, however, that so long as the Debtor
remains current in payments provided for in the Plan, REH may not
pursue its foreclosure or any collection efforts against the assets
of the Debtor.
A full-text copy of the Plan of Reorganization dated December 15,
2022, is available at https://bit.ly/3GdTzok from PacerMonitor.com
at no charge.
Counsel for Debtor:
Patricia J. Friesinger, Esq.
Coolidge Wall Co., LPA
33 W. First Street, Ste. 200
Dayton, OH 45402
Telephone: (937) 449-5776
Facsimile: (937) 223-6705
Email: friesinger@coollaw.com
About Pelletier Management and Consulting
Pelletier Management and Consulting LLC filed a petition for relief
under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr.
S.D. Ohio Case No. 22-31296) on Sept. 16, 2022. In the petition
filed by Gaetan Pelletier, chief executive manager, the Debtor
reported assets between $500,000 and $1 million and estimated
liabilities between $1 million and $10 million.
Donald W. Mallory has been appointed as Subchapter V trustee.
The Debtor is represented by Patricia J. Friesinger, Esq., at
Coolidge Wall Co., LPA.
PG MOTORS: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: PG Motors, LLC
1121 Tamiami Trail
Bradenton, FL 34205
Chapter 11 Petition Date: December 24, 2022
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 22-05081
Debtor's Counsel: Buddy D. Ford, Esq.
BUDDY D. FORD, P.A.
9301 West Hillsborough Avenue
Tampa, FL 33615-3008
Tel: (813) 877-4669
Fax: (813) 877-5543
Email: All@tampaesq.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kirk E. Grell as president/managing
member.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/B5HSFLA/PG_Motors_LLC__flmbke-22-05081__0001.0.pdf?mcid=tGE4TAMA
PM GENERAL: S&P Alters Outlook to Negative, Affirms 'B-' ICR
------------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on PM
General Purchaser LLC (AM General) and revised the outlook to
'negative' from 'stable'.
At the same time, S&P affirmed its 'B-' rating on the company's
$600 million senior secured notes. The '4' recovery rating is
unchanged.
The negative outlook reflects S&P's expectation that S&P Global
Ratings-adjusted debt to EBITDA will be 9x-9.5x in 2022 and 8x-8.5x
in 2023.
Revenue and EBITDA have been lower than expected since the pandemic
as slow government spending delays orders. During the height of the
COVID-19 pandemic, a lot of defense funding was repurposed and
military training was almost completely halted. This delayed new
vehicle sales and significantly impaired the aftermarket business.
While the aftermarket is starting to show significant growth, new
vehicle orders continue to experience delays as government spending
has been slower than expected in some areas. While recovery has
also been much slower than expected, S&P still expects growth in
terms of new vehicle revenue in 2023.
New vehicle sales for Ukraine and surrounding countries, as well as
potential new contracts, could help revenue growth over the next
few years. AM General is already sending vehicles to Ukraine,
although funding continues to take time and turning revenue into
cash can be an additional delay. There are also a few potential new
revenue sources on the horizon, as AM General competes for the new
Joint Light Tactical Vehicle (JLTV) contract with the U.S. Army,
with Oshkosh Defense as the incumbent. The U.S. Army is expected to
award the 5-year contract in January 2023 with five one year
options to follow. It could provide significant new revenue for AM
General if its bid is successful, though it would require
investment to update production capacity. AM General will also
compete for the Army's Common Tactical Truck (CTT) contract, also
likely to be awarded in early 2023.
Liquidity is unlikely to be a problem in the near term. Despite a
low cash balance and the inability to borrow on its revolver due to
covenant restraint, AM General should be able to service its modest
cash needs with inflows generated from operations. S&P doesn't
expect the company to draw further on its revolver, and with no
near-term debt maturities, AM General should have some headroom to
grow its earnings and generate positive cash flow against modest
spending requirements.
S&P said, "The negative outlook reflects our expectation that
leverage will remain above 8x through 2023 as new vehicle sales are
slow to recover and rising costs impact margins. We expect S&P
Global Ratings-adjusted debt to EBITDA of 9x-9.5x in 2022 and
8x-8.5x in 2023 while free cash flow is slightly positive.
"We could lower our ratings on AM General if debt to EBITDA rises
to a point that we believe the capital structure is unsustainable,
or free cash flow is negative and we don't expect it to improve,
constraining liquidity." This could occur if:
-- Demand from the Department of Defense (DoD) remains lower than
expected for longer than expected;
-- Supply chain issues persist, resulting in delayed sales; or
-- The company experiences operating inefficiencies causing delays
or cost overruns, resulting in significant cash outflows.
S&P could revise the outlook to stable if the company's EBITDA
improves such that we expect debt to EBITDA to remain below 8x and
positive free cash flow. This could occur if:
-- New vehicle sales and aftermarket revenue improves more rapidly
than expected;
-- The company manages costs such that EBITDA margins improve on
higher revenues; and
-- AM General wins the new JLTV contract, securing a visible new
revenue stream, though a significant capital investment would be
required.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance is a moderately negative consideration, as is
the case for most rated entities owned by private-equity sponsors.
We believe the company's highly leveraged financial risk profile
points to corporate decision-making that prioritizes the interests
of the controlling owners. This also reflects the generally finite
holding periods and a focus on maximizing shareholder returns."
PRIME HEALTHCARE: S&P Affirms 'B-' ICR, Outlook Stable
------------------------------------------------------
S&P Global Ratings affirmed its 'B-' issuer credit rating on Prime
Healthcare Services Inc. and its 'B-' issue-level rating on its
senior secured notes.
The stable outlook reflects S&P's expectations that Prime will
experience an improvement of labor costs, a stabilization of
patient volume trends, and continued support from state subsidy
programs.
Prime experienced higher costs and softer revenue in 2022. Similar
to peers, the use of contract labor rose significantly, increasing
costs while the sizable reduction in CARES Act grants, softer
patient volume, and lower patient acuity levels negatively affected
profitability. However, we expect some decrease in labor costs,
along with improvement in patient volume in 2023, aided by local
initiatives to drive volume. The company has also implemented
aggressive expense management controls to lower costs along with
lower rent expense following the acquisition of nine hospitals
purchased out of the lease with Medical Properties Trust (MPT).
S&P said, "We expect S&P Global Ratings-adjusted debt to EBITDA to
temporarily increase significantly to 6.9x in 2022 but decrease
closer to historical levels of about 4.3x in 2023. Although we do
not expect Prime to generate the same EBITDA levels of 2020 and
2021, which benefited from CARES Act grants, we believe improved
volume and decreasing costs should help EBITDA in 2023 return
closer to the baseline EBITDA we believe this business can produce
without the underlying patient volume disruptions encountered
during the peak of the pandemic. However, we expect EBITDA to be
suppressed to some degree by labor costs that will still remain
somewhat elevated. Hence, we expect discretionary cash flow to
improve in 2023."
Some market-specific issues are unlikely to continue in 2023.
Certain hospitals, including St. Mary Regional Medical Center in
Reno, Nev., experienced material volatility in EBITDA due to
hospital-specific issues, including closing down its unprofitable
obstetrics, neonatal intensive care unit, and pediatrics units due
to a shortage of obstetrics physicians and anesthesiologists. St.
Mary's also experienced a managed care contract cancellation that
negatively affected volume. S&P does not expect similar events to
affect results in 2023.
The stable outlook reflects S&P's expectation that Prime will
experience an improvement of labor costs, a stabilization of
patient volume trends, and continued support from state subsidy
programs.
S&P said, "We could lower the rating if the company's patient
volume trends weakened, if we expected sustainably higher labor
costs above previous expectations, or if there were an adverse
change in state subsidy programs, particularly California's
Hospital Quality Assurance Fee program. In addition, we expect the
ongoing migration of Medicare and Medicaid to managed care plans
will continue to be a headwind for operating performance, possibly
further hurting margins and causing cash flow deficits. A lower
rating would call into question the sustainability of Prime's
capital structure.
"We could raise the rating if its strategy to improve patient
volume and reduce its dependence on government payors were
successful such that it appeared likely to result in sustainably
better financial results. Under this scenario, we would expect
leverage to decline below 4x and discretionary cash flow to debt,
including all distributions and capital lease payment, to rise
above 5%."
ESG credit indicators: E-2, S-2, G-5
Governance factors have a negative influence on S&P's credit rating
of Prime, reflecting the company's family-controlled ownership, a
board structure that is controlled by the chairman and has no
turnover, and a history of adverse litigation events.
RICHMOND HOSPITALITY: Exclusivity Period Extended to Jan. 13
------------------------------------------------------------
Richmond Hospitality, LLC has been given more time to file its plan
for emerging from Chapter 11 protection.
Judge Jil Mazer-Marino of the U.S. Bankruptcy Court for the Eastern
District of New York extended the exclusivity period for the
company to file its Chapter 11 plan of reorganization to Jan. 13,
2023, and to solicit votes on the plan to March 14, 2023.
The ruling allows the company to pursue its own plan to exit
bankruptcy without the threat of a rival plan from creditors.
About Richmond Hospitality
Richmond Hospitality, LLC is a real estate hotel development owner
and operator that was poised to develop an 80-room Best Western
Vibe hotel in Staten Island.
Richmond Hospitality filed its voluntary petition under Chapter 7
of the Bankruptcy Code on March 16, 2022. On May 18, 2022, the
court ordered the conversion of the case to one under Chapter 11
(Bankr. E.D.N.Y. Case No. 22-40507). At the time of the filing, the
Debtor listed $1 million to $10 million in both assets and
liabilities.
Judge Jil Mazer-Marino presides over the case.
Joseph S. Maniscalco, Esq., at LaMonica Herbst & Maniscalco, LLP
and Stuart R. Berg, P.C. serve as the Debtor's bankruptcy counsel
and special litigation counsel, respectively.
RUBRYC THERAPEUTICS: Gets OK to Hire Countsy as Accountant
----------------------------------------------------------
RubrYc Therapeutics Inc. received approval from the U.S. Bankruptcy
Court for the Northern District of California to hire Countsy, an
RGP Company.
Countsy will serve as the Debtor's general accountant, providing
bookkeeping and financial services to the Debtor.
The firm will be paid at these rates:
CFO $295 per hour
IT System Expert $175 per hour
Senior Accountant $95 per hour
Junior Accountant $65 per hour
As disclosed in court filings, Countsy does not hold any interest
adverse to the Debtor and its estate.
The firm can be reached through:
Ken Cucarola, CPA
Countsy, an RGP Company
444 Castro St Suite 1110
Mountain View, CA 94041
About RubrYc Therapeutics
RubrYc Therapeutics, Inc. -- http://www.rubryc.com/-- is a
biotechnology company that integrates chemistry and computation to
decode therapeutically significant protein interfaces,
revolutionizing the discovery of antibody-based drugs. The company
is based in San Carlos, Calif.
RubrYc Therapeutics filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Calif. Case No. 22-30583) on Oct.
27, 2022. In the petition filed by its chief executive officer,
Isaac Bright, M.D., the Debtor reported assets between $1 million
and $10 million and liabilities between $10 million and $50
million.
Judge Dennis Montali oversees the case.
Dorsey & Whitney, LLP and Countsy, an RGP Company serve as the
Debtor's legal counsel and accountant, respectively.
RUBRYC THERAPEUTICS: Taps Dorsey & Whitney as Bankruptcy Counsel
----------------------------------------------------------------
RubrYc Therapeutics, Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of California to hire Dorsey &
Whitney, LLP as its bankruptcy counsel.
The firm's services include:
a) preparing all necessary pleadings in connection with the
administration of the Debtor's Chapter 11 case;
b) advising the Debtor regarding its rights and obligations;
c) providing the Debtor with advice, representing the Debtor
and preparing necessary documents in the areas of bankruptcy law,
debt restructuring, asset dispositions and other areas of
commercial law as requested;
d) advising the Debtor with respect to actions to protect and
preserve its estate during the pendency of the case, including the
prosecution of actions by the Debtor, the defense of actions
commenced against the Debtor, negotiations concerning litigation in
which the Debtor is involved and objections to claims filed against
the estate; and
e) other necessary legal services.
Dorsey's hourly rates are as follows:
Matthew J. Olson $695 per hour
Rachel Stoian $640 per hour
Corina Yulisa $690 per hour
Law Clerks/Paralegals $110 - $385 per hour
As disclosed in court filings, the firm's attorneys neither hold
nor represent any interest adverse to the Debtor and its estate.
Dorsey & Whitney can be reached through:
Matthew Jon Olson, Esq.
Dorsey & Whitney, LLP
167 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
Telephone: (650) 857-1717
Facsimile: (650) 618-1913
Email: olson.matt@dorsey.com
About RubrYc Therapeutics
RubrYc Therapeutics, Inc. -- http://www.rubryc.com/-- is a
biotechnology company that integrates chemistry and computation to
decode therapeutically significant protein interfaces,
revolutionizing the discovery of antibody-based drugs. The company
is based in San Carlos, Calif.
RubrYc Therapeutics filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Calif. Case No. 22-30583) on Oct.
27, 2022. In the petition filed by its chief executive officer,
Isaac Bright, M.D., the Debtor reported assets between $1 million
and $10 million and liabilities between $10 million and $50
million.
Judge Dennis Montali oversees the case.
Dorsey & Whitney, LLP and Countsy, an RGP Company serve as the
Debtor's legal counsel and accountant, respectively.
SL GREEN: S&P Lowers ICR to 'BB+' on Sustained Elevated Leverage
----------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on SL Green
Realty Corp. to 'BB+' from 'BBB-'. The outlook is stable.
S&P said, "The stable outlook reflects our expectation that SL
Green's office properties will continue to attract high-quality
tenants and that the company will be able to maintain adequate
operating performance, despite pressures from a looming economic
slowdown and hybrid working environment. The stable outlook
incorporates our expectation for debt to EBITDA to remain in the
mid-to-high 10x through 2024.
"We believe the magnitude and pace at which SL Green will lower
leverage metrics remains uncertain given its reliance on asset
sales over the next 12 to 24 months. During its recent Investor
Day, SL Green guided to $2.4 billion in dispositions during 2023,
more heavily weighted towards the second half of the year. The
company plans to use the proceeds to reduce debt. In our view, the
transaction market will remain challenging over the next 12 months
in light of a looming recession and sustained rate hikes. We
believe the strength of the dollar relative to Middle Eastern and
Asian currencies could also cause foreign investors to pause on
sizable investments. As such, we believe there is still substantial
uncertainty on the magnitude and pace of lowering debt to EBITDA to
pre COVID levels of below 10x. Although we acknowledge SL Green's
track record on dispositions (over $1 billion in 2020, $1.2 billion
in 2021 and $650 million in 2022) of high-quality assets, we
believe the timing of dispositions could be challenging and will
likely result in a more prolonged elevated debt leverage, which
worsened following its recent $1.9 billion acquisition of 245 Park
Avenue (inclusive of $1.7 billion of secured debt). Still, we
expect some improvement in credit protection metrics largely driven
by free rent burn-off at One Vanderbilt ($105 million in cash NOI),
the anticipated equity contribution for One Madison development
($577 million) and some asset sales (about $1.5 billion under our
base case). Under our base case, we estimate debt to EBITDA in the
mid-to-high 10x area in 2023.
"We believe deteriorating credit metrics heighten risks for SL
Green in light of a looming economic recession further pressured by
secular trends from remote working.SL Green's development-focused
growth strategy has led to sustained elevated debt leverage metrics
over the past few years (adjusted debt to EBITDA has averaged 11x
over the last three years). The company's sizable investments in
long-cycled office properties and asset sales constrained EBITDA
expansion. Concurrently, while SL Green recycled capital from asset
sales to partially fund investments and an aggressive share
repurchase program, the company's debt balance (including the
company's pro rata debt from unconsolidated entities) also rose
materially, pressuring credit protection metrics. Although we see
elevated debt to EBITDA as somewhat inherent to a developer's
financial risk (as development properties require significant
funding well in advance of any EBITDA generation), we believe that
COVID's disruption to the office market put additional pressure to
cash net operating income (NOI) during 2020 and 2021 as the company
agreed to longer average free rent periods and increased tenant
improvements over that time, while leverage during 2022 was further
elevated due to its acquisitive strategy.
"We believe there is high visibility for cash flows from One
Vanderbilt materializing into cash NOI through 2023 (99% lease
rate). However, we believe that future leasing activity at its One
Madison project (55% pre-leased) might be jeopardized by a slowdown
in demand for office properties, creating uncertainty for cash NOI
accretion particularly in 2024. In addition, we believe that recent
investment activities including the acquisition of 245 Park Avenue
(which added over $1.7 billion in debt), further limit near-term
improvement in credit metrics. For the last 12 months as of Sept.
30, 2022, S&P Global Ratings-adjusted debt to EBITDA was 15x
compared with 12.5x a year before. We estimate debt to EBITDA at
about 14x by year-end 2022 before improving to the high 10x area in
2023.
"SL Green's best-in class office portfolio is underscored by its
strong leasing volumes. We expect SL Green's operating performance
will outperform market averages given its high-quality
characteristics, as demonstrated by its strong leasing activity
over the past two years. However, we believe that the economic
slowdown will negatively affect leasing volumes in 2023 as
companies tend to pause long-term decisions while some companies
might also experience headcount reduction, limiting the need for
incremental office space. We think rents for the stabilized
portfolio would also suffer in a recession, as the company strives
to maintain occupancy levels. We also think rents in new
development projects (One Madison) could see modest pressure
relative to those initially underwritten. We expect a generally
weaker operating environment for office properties given its
cyclical nature during economic downturns and its direct
correlation to GDP and employment growth.
"Lastly, we believe the broad adoption of remote working will
continue to reshape the competitive landscape and further pressure
key indicators over the coming years. In this context, we think SL
Green's same-property NOI growth will be muted in 2023, although
cash EBITDA will benefit from cash rent commencements at One
Vanderbilt in 2023 and at One Madison in 2025 (we estimate at about
$50 million under current underwriting), contributing to
improvement in credit metrics.
"We expect SL Green's interest coverage metrics to see increased
pressure from higher interest rates despite recent hedging
protection measures.SL Green's exposure to floating rate debt (year
to date under 10% on a pro rata basis) heightens the impact of
higher funding costs on interest expense, (resulting in weaker
coverage metrics and cash flows). SL Green is undergoing an intense
liability management to preserve earnings under the current rising
interest rate environment. During the third quarter, it executed
$1.25 billion of fixed rate corporate swaps. As of Sept. 30, 2022,
the weighted average interest rate was 3.99% (compared with 3.15%
at the end of 2021) and fixed-charge coverage (FCC) was 2.1x
(compared with 2.3x a year before). We estimate FCC will decline
below 2.0x over the next few quarters."
After the end of the third quarter, SL Green repaid $500 million of
unsecured bonds with a fixed rate of 3.25%, replacing them with a
new $400 million unsecured term loan that bears interest at 140
basis points (bps) over the secured overnight financing rate
(SOFR), which was subsequently swapped to fixed rate of 4.45%.
S&P said, "The stable outlook reflects our expectation that SL
Green's office properties will continue to attract high-quality
tenants and that the company will be able to maintain adequate
operating performance, despite pressures from a looming economic
slowdown and the hybrid working environment. The stable outlook
incorporates our expectation for debt to EBITDA to remain in the
mid-to-high 10x area through 2023."
S&P could lower its ratings on SL Green if debt to EBITDA is
sustained above 13x or if FCC falls below 1.3x. This could occur
from:
-- Further pressure in operating metrics such as growing
vacancies, declining rents or lengthening free rent periods that
delay accretive cash NOI; or
-- An aggressive financial policy characterized by a resumption of
material share repurchases or sizable development projects
S&P said, "We think an upgrade is unlikely over the next two years.
However, we could raise our ratings if debt to EBITDA declines to
and is sustained below 10x, with FCC above 2.1x, for at least three
consecutive quarters, demonstrating commitment and consistency to a
more prudent financial policy. At the same time, we would expect
improving fundamentals for office properties with stabilizing
occupancy and rent spreads."
ESG credit indicators: E-2, S-2, G-2
S&P said, "ESG factors are an overall neutral consideration in our
credit rating analysis of SL Green Realty. Rated office REITs like
SL Green typically have a significant portion of their portfolio in
green assets (i.e., LEED, BREAM, etc.), particularly in gateway
markets, catering to tenants in life science and technology. While
this is increasingly a differentiator, SL Green's higher percentage
of green properties has not yet had a material influence on our
credit rating."
SNIPER SERVICES: Amends Several Secured Claims Pay Details
----------------------------------------------------------
Sniper Services, LLC, submitted an Amended Plan of Reorganization
dated Dec. 15, 2022.
The treatment of and consideration to be received by holders of
allowed claims or interests shall be in full settlement, release,
and discharge of their respective claims, debts, or interests as
against the Debtor subject to the provisions.
Class 3 consists of Texas Comptroller claims. The Texas
Comptroller has filed a Proof of Claim asserting priority tax claim
in amount of $25,020 for Sales and Use Tax. The Debtor shall pay
the priority amounts in the Comptroller's 1 Proof of Claim in full
in equal monthly payments with interest at the rate of 4.75% per
annum within 60 months of the Petition Date, commencing on the
Effective Date.
Notwithstanding anything to the contrary in the Plan or this Order,
as to the Texas Comptroller of Public Accounts and the Texas
Workforce Commission (collectively the "State of Texas"), nothing
in the Plan or this Order shall: (1) affect or impair any setoff or
recoupment rights of the State of Texas under applicable bankruptcy
and nonbankruptcy law and all such rights are preserved; (2) affect
or impair any rights of the State of Texas to pursue any non-debtor
third parties for tax debts or claims; (3) be construed to preclude
the payment of interest and/or penalties, if any, on the State of
Texas' administrative expense claim(s); (4) modify, to the extent
that interest is payable as to any claim of the State of Texas, the
statutory interest rate under applicable nonbankruptcy law; (5)
impose, in relation to administrative expense claims of the State
of Texas, a requirement to file a motion or application for payment
as a condition of its allowance or to receive payment for such
claims and such claims are allowed upon filing, subject to an
objection; (6) confer exclusive jurisdiction upon the Bankruptcy
Court; and (7) be construed as a compromise or settlement of any
liability, claim, cause of action, suit, right, or interest of the
State of Texas.
Class 4 consists of the Allowed Secured Claim of Ford Motor Credit
Company. On or about January 22, 2020, Debtor executed that certain
Texas Motor Vehicle Retail Installment Contract ("Contract") in
favor of Sam Pack's Ford Country of Lewisville ("Ford") for the
purchase of that certain 2014 F-150 VIN 2 1FTFX1CFXEKF77853
("Vehicle"). Ford has filed a Proof of Claim in the amount of
$8,830.55 ("Ford Secured Claim"). Debtor shall pay the Ford Secured
Claim in 36 equal monthly installments with interest at the rate of
8% per annum commencing on the Effective Date. Ford shall retain
its lien on the Vehicle until paid in full in accordance with the
terms of this Plan.
Class 5 consists of the Allowed Secured Claim of Deere & Company
dba John Deere Financial. On or about July 30, 2019 Debtor executed
that certain Retail Installment Contract- Security Agreement
("Contract") with John Deere Financial ("Deere") for the purchase
of certain equipment more full described in the Contract
("Collateral"). Deere has perfected its lien on the Collateral.
Deere has filed a Proof of Claim in the amount of $60,073.89.
("Deere Secured Claim"). On or about July 23, 2022, the Court
entered its Agreed Order Modifying Automatic Stay ("Agreed Order").
Pursuant to the terms of the Agreed Order the Debtor has been
paying Deere $1,486 per month since July 2022. The Deere Secured
Claim less all payments received post-petition shall be paid in
full over 48 months commencing on the Effective Date with 5%
interest. Deere shall retain its lien position on the Collateral
until paid in full in accordance with the terms of this Plan.
Like in the prior iteration of the Plan, Class 5 Unsecured
Creditors shall receive their pro rata share of 60 monthly payments
of $500 commencing on the Effective Date until all Allowed
Unsecured Creditors have been paid in full. The unsecured creditors
shall receive 100% of their allowed claims under this Plan.
The Debtor's obligations under this Plan will be satisfied out of
the ongoing operations of the Reorganized Debtor. The Debtor
believes the projections to be accurate based upon current business
operations. The Debtor does not intend to dramatically alter the
current expenses or income over the Plan term.
A full-text copy of the Amended Plan of Reorganization dated
December 15, 2022, is available at https://bit.ly/3FXhnvA from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Eric A. Liepins, Esq.
ERIC A. LIEPINS, P.C.
12770 Coit Road, Suite 850
Dallas, TX 75251 a
Tel: (972) 991-5591
Fax: (972) 991-5788
About Sniper Services
Sniper Services, LLC filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. Case No.
22-41502) on July 4, 2022, disclosing up to $50,000 in assets and
up to $500,000 in liabilities. Eric A. Liepins, Esq., is the
Debtor's counsel.
SPRINGFIELD HOUSE: Unsecureds to be Paid in Full in Plan
--------------------------------------------------------
Springfield House Bed and Breakfast, LLC, filed with the U.S.
Bankruptcy Court for the Middle District of Pennsylvania a First
Plan of Reorganization dated December 15, 2022.
The Debtor is a Limited Liability Company organized under the laws
of the State of Wyoming. Since 2020, the Debtor has operated a bed
and breakfast business known as "Springfield House Bed and
Breakfast" (herein "the Bed and Breakfast") located at 126 E. Main
Street, Boalsburg, Centre County, Pennsylvania.
This bankruptcy was precipitated by the adverse impacts of the
COVID-19 worldwide pandemic on the business. Bookings and revenues
decreased substantially during the course of the pandemic and the
Debtor and the Debtor's business was unable to service or refinance
its secured debt obligations which ultimately led to a mortgage
foreclosure action being initiated by McHardy.
However, since the lifting of COVID-19 related restrictions, there
has been a continued increase to the number of guests staying at
the Bed and Breakfast, which, have in turn, contributed to a
restoration the Bed and Breakfast to its pre-pandemic value. The
post-petition efforts of the Debtor and its members to preserve the
Real Estate and to continue the Bed and Breakfast business continue
to add value for the benefit of all creditors.
The Debtor has listed the Real Estate for sale and intends to sell
it to pay allowed claims. The listing agreement with the appointed
real estate agent expires on April 30, 2023. If an offer is
received either as a result of the current real estate listing or
at auction, the Debtor will file a motion pursuant to section 363
of the Bankruptcy Code seeking confirmation of the selection of the
Buyer and to approve the terms of the sale.
If the Real Estate has not been sold by April 30, 2023, the Debtor
will make efforts to expose the Real Estate for sale at public
auction, under terms of an amended chapter 11 plan and bidding
procedures approved by the bankruptcy court. The Debtor will file a
motion with the Bankruptcy Court seeking to approve proposed
bidding procedures, Amended Chapter 11 Plan and the selection of an
auctioneer by May 15, 2023. Then the Debtor will expose the Real
Estate to public auction within 20 days of a final approval of
bidding procedures by the Bankruptcy Court. Secured Creditors in
Classes 3 and 4 shall be entitled to credit bid their respective
claims at such an auction.
This is a consensual 100% plan and proposes that the Debtor
maintain its business operations while its principal asset, its
Real Estate, is marketed and sold for its highest and best use as a
bed and breakfast.
Prior to the sale and during the implementation of this Plan,
Debtor requires all income generated from the business to maintain
normal business operations and to pay operational expense.
Continuation of the business pending sale is necessary to preserve
and enhance the value of the business and the Real Estate. The
Debtor's ability to maintain its business operations through the
date of settlement is essential in order to maximize the sale price
and enhance the value of the Real Estate. After conclusion of the
sale, the Debtor will cease business operations.
Class 5 consists of General Unsecured Claims. The Debtor shall make
payment to allowed unsecured claims from the sale proceeds in the
amount set forth in the unsecured creditors proof of claim. This
Class shall receive full payment. The allowed unsecured claims
total $113,188.45. This Class is unimpaired.
Equity holders will not receive proceeds except to the extent that
Classes 1-5 have been paid in full.
The income generated from the Debtor's operation of the Bed and
Breakfast will serve as the funding source for the Debtor's
operational expenses maintaining the Real Estate and for periodic
payments to holders of Administrative Claims in Class 1, as
approved by the Bankruptcy Court.
The Debtor has engaged the services of Eric Hurvitz, a licensed
professional realtor to market the Debtor's real estate. The real
estate has been listed for sale since October 20, 2022. The
Property was listed on the Multiple Listing Service (MLS) for
$825,000.00 on October 20, 2022. On December 07, 2022 the Debtor
reduced the listing priced to $799,900.00 in order to generate
additional interest and potential sale activity.
A full-text copy of the Plan of Reorganization dated December 15,
2022, is available at https://bit.ly/3hOGSqM from PacerMonitor.com
at no charge.
Counsel for Debtor:
Brent C. Diefenderfer, Esq.
CGA Law Firm
135 North George Street
York, PA 17401
Tel: (717) 848-4900
Email: bdiefenderfer@cgalaw.com
About Springfield House Bed & Breakfast
Springfield House Bed and Breakfast, LLC, filed a Chapter 11
bankruptcy petition (Bankr. M.D. Pa. Case No. 22-01675) on Sept. 7,
2022, with up to $1 million in both assets and liabilities. Judge
Mark J. Conway oversees the case.
Brent C. Diefenderfer, Esq., at CGA Law Firm, is the Debtor's legal
counsel.
SWEET BRIAR COLLEGE: S&P Affirms 'BB' Rating on Revenue Bonds
-------------------------------------------------------------
S&P Global Ratings revised its outlook to positive from stable and
affirmed its 'BB' long-term rating on Amherst Industrial
Development Authority, Va.'s series 2006 educational facilities
revenue refunding bonds, issued for Sweet Briar College (Sweet
Briar or SBC).
"The revised outlook and affirmed rating reflect SBC's improved
enrollment with full-time equivalent enrollment of approximately
450 students for both fall 2022 and 2021 up from a low of 319
students in fall 2017, an anticipated return to operating
profitability in fiscal 2023 from a slight deficit in fiscal 2022
and a generally healthy balance sheet with low debt, rapid debt
amortization, and more-than-adequate liquidity," said S&P Global
Ratings credit analyst Ken Rodgers.
Sweet Briar's total debt outstanding as of its latest audited
fiscal year ended June 30, 2022, was about $11.2 million including
a minor amount of capital leases ($201,000) and an operating lease
($594,000). All bonded indebtedness is fixed rate and is secured by
an unconditional general obligation pledge of the college.
The rating reflects our view of the college's somewhat improved,
but still vulnerable, enterprise profile and strong financial
profile with the latter more reflective of the college's financial
resources that are more than sufficient to support the rating given
its low debt and rapid debt amortization.
Sweet Briar College is a private women's liberal arts and sciences
college in the community of Sweet Briar, 50 miles south of
Charlottesville in the foothills of the Blue Ridge Mountains. It
was established under the will of Indiana Fletcher Williams in
memory of her only daughter.
TALEN ENERGY: Debt-to-Equity Bankruptcy Plan Okayed
---------------------------------------------------
Alex Wolf of Bloomberg Law reports that power generation company
Talen Energy Supply LLC won bankruptcy court approval of a
restructuring plan that converts $1.4 billion of debt to equity and
contemplates raising up to $1.9 billion in new equity financing.
The company, a unit of Talen Energy Corp., and its affiliated
entities can emerge from bankruptcy under a Chapter 11 plan to be
formally approved by Judge Marvin Isgur of the US Bankruptcy Court
for the Southern District of Texas. Isgur said at a hearing
Thursday, December 15, 2022, he would sign off on the company's
reorganization proposal following a final review of revisions made
to the exculpation clauses.
About Talen Energy Corp.
Allentown, Pennsylvania-based Talen Energy Corp. is an independent
power producer founded in 2015. Riverstone Holdings LLC completed
its acquisition of the remaining 65% stake of Talen Energy in 2016
for $5.2 billion.
Talen Energy Corporation, through subsidiary Talen Energy Supply
LLC, is one of the largest competitive power generation and
infrastructure companies in North America. Through subsidiary
Cumulus Growth, TEC is developing a large-scale portfolio of
renewable energy, battery storage, and digital infrastructure
assets across its expansive footprint. On the Web:
https://www.talenenergy.com/
TES owns and/or controls approximately 13,000 Megawatts of
generating capacity in wholesale U.S. power markets, principally in
the Mid-Atlantic, Texas and Montana. Woodlands, Texas-based TES
runs 18 power generation facilities, at eight of which rely on
natural gas to make electricity.
Talen Energy Supply, LLC, and 71 affiliates sought Chapter 11
protection (Bankr. S.D. Tex. Lead Case No. 22-90054) on May 9,
2022. The Hon. Marvin Isgur is the case judge.
Talen Energy Corporation (TEC), its Cumulus Growth subsidiary, and
TES' LMBE subsidiaries are excluded from the in-court process.
TES has retained Weil Gotshal & Manges LLP as its legal advisor,
Evercore as its investment banker and Alvarez & Marsal as its
financial advisor for its restructuring. Kroll is the claims
agent.
TEC is represented by PJT Partners as financial advisors and Vinson
& Elkins as legal counsel.
Cumulus Growth is represented by Ardea Partners and DH Capital as
its investment bankers, and Gibson Dunn as legal counsel.
The Consenting Noteholders are represented by Kirkland & Ellis LLP
and Rothschild & Co US Inc.
TEXSTAR COUNTRY STORE: Taps Chad T. Wilson as Litigation Counsel
----------------------------------------------------------------
TexStar Country Store, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to hire Chad T. Wilson Law
Firm, PLLC as its special litigation counsel.
The Debtor requires a special litigation counsel to pursue a fire
damage insurance claim.
Chad T. Wilson Law Firm will receive a contingency fee of 40
percent of any gross amount collected, plus all reasonable costs
and expenses incurred.
As disclosed in court filings, Chad T. Wilson Law Firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Patrick Mcginnis, Esq.
Chad T. Wilson Law Firm, PLLC
455 East Medical Center Blvd., Suite 555
Webster, TX 77598.
Phone: 833-942-0678
About Texstar Country Store
Texstar Country Store, LLC sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 22-32114) on
Nov. 8, 2022. In the petition signed by its managing member, Jan
Dombach, the Debtor disclosed up to $500,000 in both assets and
liabilities.
Judge Michelle V. Larson oversees the case.
DeMarco Mitchell, PLLC and Chad T. Wilson Law Firm, PLLC serve as
the Debtor's bankruptcy counsel and special litigation counsel,
respectively.
TORRID LLC: S&P Alters Outlook to Stable, Affirms 'B' ICR
---------------------------------------------------------
S&P Global Ratings revised its outlook to stable from positive and
affirmed all its ratings on U.S.-based plus-size women's
direct-to-consumer apparel brand Torrid LLC, including its 'B'
issuer credit rating on the company.
The stable outlook reflects S&P's view that, although sales and
profitability will likely stay pressured over the next year amid a
challenging operating environment, the company will sustain
leverage of about 3x.
A changing macroeconomic environment has slowed demand, leading to
a reversal of the company's good operating trends. While the
company benefited from pent-up demand in 2021 and support from a
continued trend toward casual apparel, Torrid's sales declined 5.4%
in the third quarter compared with the same period last year.
Demand for the company's products has slowed amid the challenging
economic backdrop as price-sensitive consumers pull back on
discretionary spending (particularly in apparel categories) and
pivot toward promotional offerings. Importantly, the slowdown in
consumer spending during the third quarter coincided with the
company's Torrid Cash Event, which typically makes up a large
portion of quarterly sales. Given ongoing inflationary pressures
and our expectation for a shallow recession in the first half of
2023, we now forecast a low-single-digit percentage decline in
revenue for fiscal 2022 and revenue roughly flat to modestly down
in fiscal 2023. We recognize that the company's plan to open 25-30
stores annually in 2022 and 2023 with an increased focus on Torrid
Curve stores, which support customer acquisition efforts and
increased customer spending, should partially offset lower demand.
Excess inventory has led to a marked decline in profitability. S&P
Global Ratings-adjusted EBITDA margins declined 630 basis points
(bps) in the quarter ended Oct. 29, 2022. This included a 850-bps
decline in gross margin attributable to increased markdowns and
promotional activity. S&P said, "We expect promotional activity
will remain elevated for the next several quarters as the company
clears through excess merchandise amid slowing consumer demand. We
note that the company ended the third quarter with total inventory
up 25% relative to last year. We also expect ongoing cost
pressures, including product and freight costs, will continue to
weigh on profitability over the next 12 months. As such, we
forecast adjusted margins in the mid-teens percent area through
fiscal 2023, down materially from 23% in 2021."
Torrid's relatively low leverage and moderate free operating cash
flow (FOCF) generation support the rating. S&P said, "We expect the
company will generate sufficient cash to comfortably fund annual
capital expenditures of about $30 million and annual amortization
requirements of $17.5 million on the term loan. Specifically, we
forecast FOCF of $50 million-$60 million in fiscals 2022 and 2023.
However, we now expect S&P Global Ratings-adjusted leverage will
remain in the high-2x to low-3x area (relative to our previous
expectation for leverage in the low-2x area) through fiscal 2023 on
sustained top-line and profitability headwinds."
The company's participation in a highly competitive market,
relatively smaller size, and limited operating track record under
current management present additional risks. S&P said, "With
roughly $1.3 billion in sales, Torrid is in our view a small player
in the highly fragmented and competitive plus-size apparel
industry. We expect increased competition as more retailers enter
the market, some of which are larger and more well capitalized. We
also view Torrid's significant mall presence as a risk, given
sector trends and declines in mall traffic. We believe omnichannel
capability will become an increasingly important competitive factor
given customers' continued rapid adoption of e-commerce. Torrid is
well positioned with e-commerce penetration of 63% in fiscal 2021.
Moreover, we believe there may be execution risks associated with
strategic initiatives, such as increasing store count, building
e-commerce capabilities, and investing in infrastructure given the
company's recent growth and limited track record. We therefore
apply a negative comparable rating analysis modifier to our
analysis."
The stable outlook reflects S&P's view that, although sales and
profitability will likely stay pressured over the next year amid a
challenging operating environment, Torrid will sustain leverage at
about 3x.
S&P could lower the rating if leverage were sustained above 5x or
Torrid's cash flow eroded. This could occur if:
-- The company reported lower-than-expected earnings as a result
of increased competitive pressures or operational missteps; or
-- The company shifted toward more aggressive financial policies,
including sponsor-led leveraging transactions and
shareholder-friendly activities such as dividends.
S&P would consider an upgrade if:
-- Torrid demonstrated a clear track record of executing its
merchandise initiatives and store expansion under new management,
leading to sustained profitability growth; and
-- S&P forecasts leverage sustained in the mid-2x area or better.
S&P said, "We could also consider an upgrade if the company
meaningfully expanded its market presence while effectively
competing against larger competitors in the plus-size apparel
market, leading us to favorably revise our business risk
assessment."
ESG credit indicators: E-2, S-2, G-2
S&P said, "ESG factors have an overall neutral consideration in our
credit rating analysis of Torrid LLC. While the company is majority
owned by financial sponsor Sycamore Partners Management L.P., the
company is also held publicly, and we believe its two independent
board members provide risk oversight on behalf of all stakeholders.
We see the broader apparel retail industry as exposed to changes in
consumer behavior and the increasing focus on social issues such as
diversity, equity, and inclusion. Torrid's focus on female
empowerment, body positivity, and inclusivity resonates well with
its customer base and contributed to consistent double-digit
percent sales growth pre-pandemic."
WEEKLEY HOMES: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
--------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based homebuilder
Weekley Homes LLC to stable from positive and affirmed its 'BB-'
issuer credit and issue-level ratings.
The stable outlook reflects S&P's belief that the private
homebuilder's profits peaked this year and will likely trend
downward in 2023, which will cause its debt to EBITDA to rise to
about 2.5x in 2023, a level it views to be supportive of the
current rating.
Weekley's profit will likely decline sharply in 2023 from its
2022.
S&P said, "The homebuilder's EBITDA will likely decline by about
40% in 2023 to roughly $240 million, which is down from our
estimate of more than $400 million in 2022, due mainly to weakening
demand trends across most of its markets. However, while this level
of profit is lower than its results in 2020 and 2021 ($290 million
and $367 million, respectively), our 2023 EBITDA assumption exceeds
Weekley's pre-COVID levels amid the current housing cycle.
"We do not expect any changes to the company's debt load from its
recent levels of less than $600 million. Therefore, we anticipate
the company's leverage ratio will likely increase to about 2.5x
(from below 2.0x in 2020-2022) over the next two years."
The company will likely moderate its spending as its profitability
declines and shift to funding its spending with its internal cash
flows.
S&P said, "We think Weekley will look to offset the decline in its
EBITDA by further moderating its spending on land and finished
lots. Therefore, our base-case forecasts assume the company's DCF
will turn positive in 2023 (about $60 million) and widen above $100
million in 2024. With new orders trending firmly downward
industry-wide, we think the builder will replace its inventories at
near replenishment levels, and anticipate incremental spending
aimed mainly at lot options and finished lots rather than raw
land."
The builder's small size and scale remain a key hurdle to achieving
a higher rating even though its leverage ratios remain modest.
Weekley operates in only a dozen states and just 20 markets. Its
pace of roughly 5,000 closings per year approximates its historical
pre-COVID levels even as most of its peers have increased their
volumes over this span and widened their market share leads by
building on their related advantages.
The company's 'BB'-rated peers, such as KB Home, M/I Homes Inc.,
and Meritage Homes Corp., are all larger, have better profit
margins, and benefit from broader geographic diversity. Each has
seen similar benefits to leverage ratios resulting largely from
profit improvements that also compare to Weekley's. Meanwhile,
Weekley still generates more than one-third of its revenue, and
maintains a similar proportion of its inventory, in its home state
of Texas.
In terms of ongoing profitability, the company's scale disadvantage
relative to its peers is evident in its comparatively high selling,
general, and administrative (SG&A) costs, of about 14% of its home
sales, and subpar EBITDA margins.
S&P said, "The stable outlook reflects our belief that Weekley's
profits peaked this year and will likely trend firmly downward in
2023, which will cause its debt to EBITDA to rise to about 2.5x in
2023. However, we anticipate its more-moderate spending will likely
help it generate firmly positive DCF through next year.
"We could lower our rating on Weekley to 'B+' if its debt to EBITDA
trends above 3x. This could occur if the company adds about $200
million of new borrowings or its EBITDA falls to about $180 million
(or by about two-thirds relative to our 2022 estimate).
"While very unlikely, we could upgrade Weekley to 'BB' during the
next 12 months if it both significantly increases the scale of its
operations--to bring it closer in size to its larger 'BB'-rated
peers (e.g., KB Home, Meritage, Mattamy Group Corp.)--and it
sustains leverage of 2x or below."
ESG credit indicators: E-3, S-2, G-3
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of Weekley Homes. The
company is subject to a variety of local, state, and federal
statutes, ordinances, rules, and regulations concerning health and
environmental protection. Governance factors are also a moderately
negative consideration based on our assessment of the company's
overreliance on a few key personnel. Although we don't view the
Weekley family's involvement as detrimental to the company, we
believe they could make self-advancing decisions, such as dividend
distributions, as they have in the past."
WISE HEALTH: S&P Lowers Revenue Bond Rating to 'BB+' on Losses
--------------------------------------------------------------
S&P Global Ratings lowered its long-term rating to 'BB+' from
'BBB-' on the Decatur Hospital Authority (doing business as Wise
Health System, or Wise), Texas' series 2014A, 2021B, and 2021C
hospital revenue bonds. At the same time, S&P lowered its
underlying rating (SPUR) to 'BB+' from 'BBB-' on Wise's series
2021A and 2021B insured hospital revenue bonds. The outlook is
negative.
"The rating action reflects our view of Wise's significantly
escalating losses, which, when coupled with a lack of balance sheet
cushion and expectations for further losses, results in a credit
profile that is more commensurate with a speculative-grade rating,"
said S&P Global Ratings credit analyst Concy Richards.
The negative outlook reflects S&P's expectation that Wise Health
will continue to generate negative operating performance and weak
cash flow, which could result in covenant violations and further
balance sheet deterioration during the outlook period.
ZOHAR FUNDS: 2nd Circuit Scrutinizes Trustee in Tilton Award Appeal
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Jeff Montgomery of Law360 reports that a Second Circuit judge
pressed an attorney for the Chapter 7 trustee of a bankrupt
ambulance business overseen by Lynn J. Tilton and her Patriarch
companies, asking if the trustee may have contributed to the
business' collapse and thus undermined the justification for a
$39.2 million damages award against Tilton.
About the Zohar Funds
New York-based Patriarch Partners, LLC, is a private equity firm
specializing in acquisition, buyouts, and turnaround investment in
distressed American companies and brands. Patriarch Partners was
founded by Lynn Tilton in 2000. Lynn Tilton and her affiliates
held substantial equity stakes in portfolio companies, which
include iconic American manufacturing companies with tens of
thousands of employees.
The Zohar funds were created to raise money through selling a form
of notes called collateralized loan obligations to investors that
was then used to extend loans to dozens of distressed mid-size
companies, often in connection with the acquisition of those
companies out of bankruptcy.
Patriarch bought "distressed" companies via funding from a series
of collateralized loan obligations (CLOs) marketed through
Patriarch via its $2.5 billion "Zohar" funds. Tilton placed the
funds into bankruptcy in 2018 in an attempt to keep Patriarch's
portfolio from being liquidated by Zohar creditors including bond
insurer MBIA, which insured $1 billion worth of Zohar notes.
Combined debt of the funds is estimated at $1.7 billion.
Zohar CDO 2003-1, Zohar CDO 2003-1 Corp., Zohar II 2005-1, Limited,
Zohar II 2005-1 Corp., Zohar III, Limited, and Zohar III, Corp.
(collectively, the "Zohar Funds"), sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D. Del. Case Nos. 18-10512 to
18-10517) on March 11, 2018. In the petition signed by Lynn
Tilton, director, the Debtors were estimated to have $1 billion to
$10 billion in assets and $500 million to $1 billion in
liabilities.
Young Conaway Stargatt & Taylor, LLP, is the Debtors' bankruptcy
counsel.
[^] BOND PRICING: For the Week from December 19 to 23, 2022
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Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
AMC Entertainment
Holdings Inc AMC 10.000 38.691 6/15/2026
AMC Entertainment
Holdings Inc AMC 5.750 39.961 6/15/2025
AMC Entertainment
Holdings Inc AMC 6.125 28.111 5/15/2027
AMC Entertainment
Holdings Inc AMC 5.875 26.799 11/15/2026
AMC Entertainment
Holdings Inc AMC 10.000 38.633 6/15/2026
AMC Entertainment
Holdings Inc AMC 10.000 38.923 6/15/2026
Accelerate Diagnostics AXDX 2.500 94.000 3/15/2023
Air Methods Corp AIRM 8.000 8.010 5/15/2025
Air Methods Corp AIRM 8.000 10.323 5/15/2025
Audacy Capital Corp CBSR 6.500 19.862 5/1/2027
Audacy Capital Corp CBSR 6.750 16.977 3/31/2029
Audacy Capital Corp CBSR 6.750 18.281 3/31/2029
Avaya Inc AVYA 8.000 60.800 12/15/2027
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bed Bath & Beyond Inc BBBY 5.165 9.562 8/1/2044
Bed Bath & Beyond Inc BBBY 3.749 22.300 8/1/2024
Bed Bath & Beyond Inc BBBY 4.915 9.944 8/1/2034
Buckeye Partners LP BPL 6.375 85.061 1/22/2078
BuzzFeed Inc BZFD 8.500 61.000 12/3/2026
Carvana Co CVNA 5.625 45.920 10/1/2025
Carvana Co CVNA 5.625 46.026 10/1/2025
Clovis Oncology Inc CLVS 1.250 20.125 5/1/2025
Clovis Oncology Inc CLVS 4.500 19.875 8/1/2024
Clovis Oncology Inc CLVS 4.500 19.875 8/1/2024
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 11.872 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 1.783 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 6.000 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 12.251 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 1.445 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 5.789 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 12.192 8/15/2026
Diebold Nixdorf Inc DBD 8.500 54.283 4/15/2024
Dillard's Inc DDS 7.875 99.551 1/1/2023
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Energy Transfer LP ET 6.250 87.025 N/A
Envision Healthcare Corp EVHC 8.750 28.250 10/15/2026
Envision Healthcare Corp EVHC 8.750 31.220 10/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 15.994 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 64.967 7/15/2023
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 15.992 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 64.967 7/15/2023
Federal Home Loan Banks FHLB 0.200 99.301 12/29/2022
Federal Home Loan Banks FHLB 0.120 99.860 12/28/2022
Federal Home Loan Banks FHLB 0.350 99.353 12/29/2022
Federal Home Loan Banks FHLB 0.130 99.746 12/29/2022
Federal Home Loan Banks FHLB 0.140 99.366 12/29/2022
GNC Holdings Inc GNC 1.500 0.819 8/15/2020
GTT Communications Inc GTTN 7.875 1.125 12/31/2024
GTT Communications Inc GTTN 7.875 6.750 12/31/2024
General Electric Co GE 4.200 78.000 N/A
Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022
Gossamer Bio Inc GOSS 5.000 32.240 6/1/2027
ION Geophysical Corp IO 8.000 11.000 12/15/2025
Lannett Co Inc LCI 7.750 17.199 4/15/2026
Lannett Co Inc LCI 4.500 14.270 10/1/2026
Lannett Co Inc LCI 7.750 23.008 4/15/2026
Lightning eMotors Inc ZEV 7.500 62.357 5/15/2024
MAI Holdings Inc MAIHLD 9.500 34.455 6/1/2023
MAI Holdings Inc MAIHLD 9.500 34.455 6/1/2023
MAI Holdings Inc MAIHLD 9.500 34.455 6/1/2023
MBIA Insurance Corp MBI 15.339 7.672 1/15/2033
MBIA Insurance Corp MBI 15.986 7.470 1/15/2033
Macquarie Infrastructure
Holdings LLC MIC 2.000 94.050 10/1/2023
Marathon Digital
Holdings Inc MARA 1.000 23.750 12/1/2026
Morgan Stanley MS 1.800 71.527 8/27/2036
Morgan Stanley
Finance LLC MS 12.100 37.750 11/24/2023
National CineMedia LLC NATCIN 5.875 20.355 4/15/2028
National CineMedia LLC NATCIN 5.750 2.848 8/15/2026
National CineMedia LLC NATCIN 5.875 20.802 4/15/2028
OMX Timber Finance
Investments II LLC OMX 5.540 0.850 1/29/2020
Party City Holdings Inc PRTY 8.750 27.868 2/15/2026
Party City Holdings Inc PRTY 6.625 4.000 8/1/2026
Party City Holdings Inc PRTY 8.750 27.789 2/15/2026
Party City Holdings Inc PRTY 6.625 3.946 8/1/2026
Party City Holdings Inc PRTY 8.061 24.984 7/15/2025
Party City Holdings Inc PRTY 8.061 26.624 7/15/2025
Pluralsight Inc PS 0.375 44.625 3/1/2024
Polar US Borrower
LLC / Schenectady
International
Group Inc SIGRP 6.750 37.059 5/15/2026
Polar US Borrower
LLC / Schenectady
International
Group Inc SIGRP 6.750 37.224 5/15/2026
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rite Aid Corp RAD 7.700 38.105 2/15/2027
RumbleON Inc RMBL 6.750 31.514 1/1/2025
Sears Holdings Corp SHLD 8.000 2.875 12/15/2019
Sears Holdings Corp SHLD 6.625 2.035 10/15/2018
Shift Technologies Inc SFT 4.750 14.287 5/15/2026
TMX Finance LLC /
TitleMax Finance Corp TMXFIN 11.125 91.784 4/1/2023
TMX Finance LLC /
TitleMax Finance Corp TMXFIN 11.125 93.213 4/1/2023
TMX Finance LLC /
TitleMax Finance Corp TMXFIN 11.125 93.213 4/1/2023
TPC Group Inc TPCG 10.500 60.000 8/1/2024
TPC Group Inc TPCG 10.500 59.500 8/1/2024
Talen Energy Supply LLC TLN 6.500 46.000 6/1/2025
Talen Energy Supply LLC TLN 10.500 46.750 1/15/2026
Talen Energy Supply LLC TLN 6.500 42.000 9/15/2024
Talen Energy Supply LLC TLN 10.500 46.564 1/15/2026
Talen Energy Supply LLC TLN 6.500 42.000 9/15/2024
Talen Energy Supply LLC TLN 10.500 46.564 1/15/2026
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tricida Inc TCDA 3.500 9.875 5/15/2027
US Renal Care Inc USRENA 10.625 21.272 7/15/2027
US Renal Care Inc USRENA 10.625 24.453 7/15/2027
United Community
Banks Inc/GA UCBI 4.500 97.125 1/30/2028
UpHealth Inc UPH 6.250 30.661 6/15/2026
Veeco Instruments Inc VECO 2.700 99.520 1/15/2023
WeWork Cos Inc WEWORK 7.875 44.901 5/1/2025
WeWork Cos Inc WEWORK 7.875 45.766 5/1/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 32.900 7/10/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 35.417 7/10/2025
Wesco Aircraft Holdings WAIR 8.500 49.708 11/15/2024
Wesco Aircraft Holdings WAIR 13.125 23.416 11/15/2027
Wesco Aircraft Holdings WAIR 13.125 23.416 11/15/2027
Wesco Aircraft Holdings WAIR 8.500 49.682 11/15/2024
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