/raid1/www/Hosts/bankrupt/TCR_Public/230104.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, January 4, 2023, Vol. 27, No. 3
Headlines
15005 NW CORNELL: Gets OK to Hire Arbaugh Law as Special Counsel
ACER THERAPEUTICS: FDA Approves OLPRUVA for Patients With UCDs
ALL FOR ONE MEDIA: Swings to $1.8M Net Income in FY Ended Sept. 30
AMAZING ENERGY: Creditors to Get Proceeds From Liquidation
AMERICAN WORKERS: Amends Insurety Claim Pay Details
AMERICANN INC: Posts $173K Net Loss in FY Ended Sept. 30
APOLLO ENDOSURGERY: To Convert $17.9M Debentures Into Common Shares
ASBURY AUTOMOTIVE: Fitch Alters Outlook on 'BB' IDR to Stable
ATLAS CUSTOM: Case Summary & Nine Unsecured Creditors
AYTU BIOPHARMA: Gary Cantrell to Quit as Director
BANTEC INC: Delays Filing of Form 10-K for Year Ended Sept. 30
BANYAN CAY: Secured Party Sets Feb. 17 Auction
BEER REPUBLIC: Case Summary & 20 Largest Unsecured Creditors
BELLA VENEZIA: Feb. 16 Hearing on Disclosure Statement
BELLA VENEZIA: Feb. 23, 2023 Disclosure Statement Hearing Set
BIOMARIN PHARMACEUTICAL: Egan-Jones Retains BB- Sr. Unsec. Ratings
BIOSTAGE INC: Selects IQVIA to Manage FDA-Approved Clinical Trial
CC HILLCREST: Gen. Unsecureds Will be Paid in Full
CEL-SCI CORP: Posts $36.7 Million Net Loss in FY Ended Sept. 30
CENTERPOINTE HOTELS: Voluntary Chapter 11 Case Summary
CENTERPOINTE PARTNERS: Voluntary Chapter 11 Case Summary
CHRIS PETTIT: Seeks to Expand Scope of Compass RE Texas' Services
CINEMARK HOLDINGS: Egan-Jones Retains CC Senior Unsecured Ratings
CLARUS THERAPEUTICS: Unsecureds to Get 0.7% to 13% in Sale Plan
CM RESORT: Unsecureds to Recover 86% in Creditor's Sale Plan
COMPUTE NORTH: Feb. 16 Hearing on Plan & Disclosures
COTTON WEAVE: Case Summary & 20 Largest Unsecured Creditors
COVE RUN CONTRACTING: Gets OK to Tap Christopher Wolfe as Manager
DCL HOLDINGS: U.S. Trustee Appoints Creditors' Committee
DIEBOLD NIXDORF: Davis Polk Advised Lenders in Recapitalization
DIOCESE OF HARRISBURG: Plan Has $18.25-Mil. for Abuse Claimants
DIVISION MANAGEMENT: Amends Unsecured Claims Pay Details
DOT DOT SMILE: Unsecureds Owed $1.8M to be Paid After Other Classes
EAST COAST CONSTRUCTION: Court Confirms Chapter 11 Plan
ECEC WIND-DOWN: Court Confirms Modified First Amended Plan
EMPIRE COMMUNITIES: Fitch Alters Outlook on B- LongTerm IDR to Neg.
EMPIRE SPORTS: Seeks Approval to Hire BRCS Inc. as Accountant
FAST RADIUS: Jan. 6 Expedited Hearing on Solicitation Motion
FINANCIAL GRAVITY: Delays Filing of Form 10-K for Fiscal 2022
FUSE GROUP: Incurs $444K Net Loss in FY Ended Sept. 30
GALLERIA WEST: Voluntary Chapter 11 Case Summary
GAUCHO GROUP: Board OKs Issuance of Additional RSUs Under 2017 Plan
GLEAMIN INC: Plan Projects Payments to Unsecured Creditors
GRECO BUILD: Taps Diane S. Perera as Construction Law Counsel
GULFSLOPE ENERGY: Incurs $8.7 Million Net Loss in FY Ended Sept. 30
H-CYTE INC: To Acquire 100% Membership Interests in Scion
HANSABEN INVESTMENTS: Poppy Bank Plan Outline Approved
IBARRA LLC: Case Summary & Six Unsecured Creditors
IGLESIAS DIOS: Extends Plan & Disclosures Deadline to Jan. 9
INOC PROPERTIES: Gets OK to Tap Glast Phillips & Murray as Counsel
KEYSTONE CLEANING: Seeks Approval to Hire Liberty Tax Service
LAS VEGAS SANDS: Fitch Affirms IDR at 'BB+', Outlook Negative
LEVI STRAUSS: Fitch Affirms LongTerm IDR at 'BB+', Outlook Stable
MACTAVISH PUBS: Taps Flaherty & O'Hara as Special Counsel
MERCURITY FINTECH: Signs New Deal to Sell $5 Million Worth of Units
METROHAVANA TOWN: Jan. 24 Hearing on Disclosure Statement
MICROSTRATEGY INC: Hikes Bitcoin Holdings to 132,500 as of Dec. 27
MILLION DOLLAR: Case Summary & 20 Largest Unsecured Creditors
MONROE GARDENS: Files Subchapter V Case
NEONODE INC: Forsakringsaktiebolaget Has 10% Stake as of Dec. 23
ORIGINCLEAR INC: Subsidiary Closes Acquisition of Fortune Rise
PANACEA LIFE: Repays in Full $1.1 Million Convertible Note
PANOB CAB: Small Business Plan Confirmed by Judge
PARAMOUNT REAL ESTATE: Case Summary & Nine Unsecured Creditors
QUICKER LIQUOR: Unsecureds to Get Pro Rata Share of Cash Payment
RELMADA THERAPEUTICS: Extends License Agreement 'Key Man' Provision
RENTZEL PUMP: BancFirst Says Agreement on Language Not Yet in Plan
RIGHT ON BRANDS: Board, Shareholders Approve Reverse Stock Split
RITE AID: Fitch Hikes LongTerm IDR to 'CCC'
SNIPER SERVICES: Court Confirms Reorganization Plan
SONIC AUTOMOTIVE: Fitch Affirms LongTerm IDR at BB, Outlook Stable
STEM HOLDINGS: Delays Filing of Form 10-K For Year Ended Sept. 30
STONE CLINICAL: BPOM Appointed as New Committee Member
TAMG REALTY: Case Summary & Four Unsecured Creditors
TENTRR INC: Case Summary & 20 Largest Unsecured Creditors
TOMS KING: Case Summary & 30 Largest Unsecured Creditors
VOIP-PAL.COM INC: Posts $3.7 Million Loss in FY Ended Sept. 30
WEBER INC: Unit Amends Credit Agreement With Bank of America
WILLIAMSBRIDGE-3067: Secured Party to Hold Auction on January 24
[*] FTI's Corp Restructuring Segment Promotes 35 Professionals
*********
15005 NW CORNELL: Gets OK to Hire Arbaugh Law as Special Counsel
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15005 NW Cornell, LLC and its affiliates received approval from the
U.S. Bankruptcy Court for the District of Oregon to employ Arbaugh
Law, PC as special counsel.
The Debtor needs the firm's legal assistance in connection with the
resolution of outstanding administrative expenses for fees and
costs to Motschenbacher & Blattner, LLP and Perkins Coie, LLP.
Arbaugh Law will be paid a retainer in the amount of $10,000.
Matthew Arbaugh, Esq., a partner at Arbaugh Law, 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:
Matthew A. Arbaugh, Esq.
Arbaugh Law, PC
121 SW Morrison St. Ste 1520
Portland, OR 97207
Tel: (971) 238-3556
Email: matt@arbaugh-law.com
About 15005 NW Cornell
15005 NW Cornell, LLC and its owner, Vahan Megar Dinihanian, Jr.,
sought Chapter 11 protection (Bankr. D. Ore. Case Nos. 19-31883 and
19-31886) on May 21, 2019.
Vahan Megar Dinihanian Jr. is an individual who owns and operates
multiple business entities, including several entities that own and
lease commercial real estate, a floral products business, and
entities that provide engineering and consulting services.
Dinihanian's principal business is operating Eagle Holdings, LLC,
which owns other real estate-centered entities.
15005 NW Cornell's primary asset is its 50 percent tenant-in-common
ownership interest in 37 acres of undeveloped real property in
Beaverton, Ore. Based in Beaverton, 15005 NW Cornell was estimated
to have $10 million to $50 million in assets and $1 million to $10
million in liabilities as of the bankruptcy filing.
Judge David W. Hercher oversees the cases.
15005 NW Cornell tapped Douglas Pahl, Esq., a partner at Perkins
Coie, LLP, as bankruptcy counsel. Motschenbacher & Blattner, LLP is
Dinihanian's general bankruptcy counsel.
ACER THERAPEUTICS: FDA Approves OLPRUVA for Patients With UCDs
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Acer Therapeutics Inc. said the U.S. Food and Drug Administration
(FDA) has approved OLPRUVA (sodium phenylbutyrate) for oral
suspension in the U.S. for the treatment of certain patients living
with urea cycle disorders (UCDs) involving deficiencies of
carbamylphosphate synthetase (CPS), ornithine transcarbamylase
(OTC), or argininosuccinic acid synthetase (AS).
"The FDA's approval of OLPRUVA, an innovative formulation of sodium
phenylbutyrate packaged for the first time in single-dose
envelopes, marks the culmination of our ongoing dedication to
develop new and differentiated treatment options for those affected
by rare diseases," said Chris Schelling, chief executive officer
and founder of Acer. "Patients who are living with UCDs now have
an alternative treatment option with OLPRUVA, to address some of
the challenges they may have with existing therapy. We are pleased
to be able to provide a new, approved treatment choice for those
living with this challenging disease."
Mr. Schelling continued, "This approval represents the first
FDA-approved product for Acer, validating our ability to identify
and develop treatments where science can be applied in novel ways
and make them available to patients as quickly and efficiently as
possible. In addition, this approval unlocks our Marathon debt
funding option and provides us with resources to advance our
pipeline of investigational product candidates."
"The daily challenges of living with a UCD can be overwhelming and
emotionally draining for patients and their families," said Tresa
Warner, president of the National Urea Cycle Disorders Foundation.
"We welcome new treatment options that can help patients,
caregivers and their healthcare teams manage UCDs."
OLPRUVA's approval triggers the availability of a $42.5 million
term loan to Acer under the previously announced March 2022 loan
agreement the Company entered into with affiliates of Marathon
Asset Management L.P. If Acer requests and receives the loan
proceeds, management believes it will have sufficient resources to
fund current operations into H2 2023.
OLPRUVA has been approved as an oral suspension by the FDA for the
treatment of patients with UCDs. UCDs are a group of rare, genetic
disorders that can cause harmful ammonia to build up in the blood,
potentially resulting in brain damage and neurocognitive
impairments, if ammonia levels are not controlled.1 Any increase in
ammonia over time is serious. Therefore, it is important to adhere
to any dietary protein restrictions and have alternative medication
options to help control ammonia levels.
"This FDA approval is a significant milestone for patients with
UCDs in the U.S., offering an additional choice to manage their
condition," added Jack Weinstein, chief executive officer of
Relief. "We look forward to building on OLPRUVA's approval in the
U.S. and expanding its availability into other territories outside
of the U.S."
OLPRUVA received FDA approval under section 505(b)(2) of the
Federal Food, Drug and Cosmetic Act (FDCA), a regulatory pathway
that allows applicants to rely, at least in part, on third party
data for approval. In its New Drug Application (NDA), Acer cited
preclinical and clinical safety and efficacy data from the
reference listed drug (RLD), BUPHENYL powder, which is approved as
adjunctive therapy in the chronic management of patients with UCDs
involving deficiencies of CPS, OTC or AS. In its NDA, Acer also
provided additional data including studies that evaluated the
bioavailability and bioequivalence of OLPRUVA compared to BUPHENYL
powder. The data from these studies, presented at the Society for
Inherited Metabolic Disorders (SIMD) Annual Meeting in April 2022
and the Genetic Metabolic Dieticians International (GMDI)
Conference in May 2022, showed that OLPRUVA was bioequivalent to
BUPHENYL powder.
Commitment to Patient Access
Acer intends to offer Navigator by Acer Therapeutics, a suite of
integrated patient support services designed to facilitate access
to therapy. Navigator by Acer Therapeutics is designed to assist
UCD patients with support, access, education, and adherence.
Financial Outlook
Acer is not currently providing specific revenue or operating
expense guidance for OLPRUVA. Based on current forecasted
operating expenses and revenue, and assuming receipt of the $42.5
million term loan funds from its March 2022 term loan arrangement
with Marathon (less the amount to repay the bridge loan and fees),
and Acer's existing cash and equivalents, Acer believes its cash
resources will be sufficient to fund its operations into H2 2023.
Further information with respect to Acer's March 2022 term loan
arrangement, as well as a bridge loan facility (as amended in
August 2022) and a convertible note financing which also funded in
March 2022 can be found in the SEC Filings section of Acer's
website.
About Acer Therapeutics
Acer Therapeutics Inc. -- http://www.acertx.com-- is a
pharmaceutical company focused on the acquisition, development and
commercialization of therapies for serious rare and
life-threatening diseases with significant unmet medical needs. In
the U.S., OLPRUVA (sodium phenylbutyrate) is approved for the
treatment of urea cycle disorders (UCDs) involving deficiencies of
carbamylphosphate synthetase (CPS), ornithine transcarbamylase
(OTC), or argininosuccinic acid synthetase (AS). Acer is also
advancing a pipeline of investigational product candidates for rare
and life-threatening diseases, including: OLPRUVA (sodium
phenylbutyrate) for treatment of various other inborn errors of
metabolism, including Maple Syrup Urine Disease (MSUD); ACER-801
(osanetant) for treatment of induced Vasomotor Symptoms (iVMS) and
Post-traumatic Stress Disorder (PTSD); EDSIVO (celiprolol) for
treatment of vascular Ehlers-Danlos syndrome (vEDS) in patients
with a confirmed type III collagen (COL3A1) mutation; and ACER-2820
(emetine), a host-directed therapy against a variety of viruses,
including cytomegalovirus, Zika, dengue, Ebola and COVID-19. In
March 2021, Acer entered into a Collaboration and License Agreement
with Relief for development and commercialization of OLPRUVA in
which Acer retains development and commercialization rights in the
U.S., Canada, Brazil, Turkey, and Japan.
Acer Therapeutics reported a net loss of $15.37 million for the
year ended Dec. 31, 2021, compared to a net loss of $22.89 million
for the year ended Dec. 31, 2020. As of Sept. 30, 2022, the
Company had $15.32 million in total assets, $27.53 million in total
liabilities, and a total stockholders' deficit of $12.21 million.
Boston, MA-based BDO USA, LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March 2,
2022, citing that the Company has recurring losses and negative
cash flows from operations that raise substantial doubt about its
ability to continue as a going concern.
ALL FOR ONE MEDIA: Swings to $1.8M Net Income in FY Ended Sept. 30
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All For One Media Corp. reported a net income of $1.83 million on
$8,993 of revenues for the year ended Sept. 30, 2022, compared to a
net loss of $3.11 million on $9,493 of revenues for the year ended
Sept. 30, 2021, according to the Company's Form 10-K filed with the
Securities and Exchange Commission.
As of Sept. 30, 2022, the Company had $105,475 in total assets,
$15.83 million in total liabilities, and a total stockholders'
deficit of $15.72 million.
Boca Raton, Florida-based Salberg & Company, P.A., the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated Dec. 29, 2022, citing that the Company has a net
income and cash used in operations of $1,835,497 and $496,569,
respectively, for the year ended September 30, 2022. The net
income was primarily the result of a gain from the extinguishment
of debt and gain on debt modification. Additionally, the Company
had an accumulated deficit, stockholders' deficit and working
capital deficit of $25,708,263, $15,725,345 and $15,587,845 as of
September 30, 2022. These matters raise substantial doubt about
the Company's ability to continue as a going concern.
All For One stated, "The ability to continue as a going concern is
dependent upon the Company generating profitable operations in the
future such as selling the completed Movie and/or to obtain the
necessary financing to meet its obligations and repay its
liabilities arising from normal business operations when they come
due. The Company's ability to raise additional capital through the
future issuances of common stock is unknown. The obtainment of
additional financing, the successful development of the Company's
contemplated plan of operations, and its transition, ultimately, to
the attainment of profitable operations are necessary for the
Company to continue operations."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1286459/000147793222009557/afom_10k.htm
About All For One Media
All for One Media Corp., incorporated in the State of Utah on March
2, 2004, is a media and entertainment company focused on creating,
launching and marketing original pop music groups commonly referred
to as "boy bands" and "girl groups." The Company's former
operations were in the business of acquiring, training, and
reselling horses with an emphasis in the purchase of thoroughbred
weanlings or yearlings that were resold as juveniles. All For One
is in the business of targeting the lucrative tween demographic
across a multitude of entertainment platforms. The Company expects
to generate revenues from movie receipts, sales, downloads and
streaming of original recorded music, videos, motion pictures,
music publishing, live performances, licensed merchandise and
corporate sponsorships.
AMAZING ENERGY: Creditors to Get Proceeds From Liquidation
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Amazing Energy MS, LLC, and its Affiliates filed with the U.S.
Bankruptcy Court for the Eastern District of Texas a Disclosure
Statement in support of their Joint Plan of Liquidation dated
December 29, 2022.
Amazing Energy LLC was formed in 2008 for the purpose of owning and
operating oil and gas leases in Pecos County, Texas. At its
inception, Amazing Energy LLC was owned by Jed Miesner.
On April 8, 2019, AEOG formed the company Amazing Energy Holdings,
LLC ("AEH"). AEH was formed and assigned various oil and gas leases
located in Wilkinson County, Mississippi. The property owned by
Amazing Energy that had been acquired from Wyatt was also
transferred to AEH.
On October 9, 2019, AEOG formed the company Amazing Energy MS, LLC
("AEMS") as a Mississippi entity. This entity was formed for the
primary purpose of developing the Mississippi oil and gas interests
that were acquired in October of 2019.
On February 20, 2019, AAPIM was granted a default judgment against
Amazing Energy LLC in the amount of $382,831.52. Thereafter,
Amazing Energy LLC transferred certain oil and gas leases located
in Lea County, New Mexico to AEH. These transfers resulted in a
lawsuit filed by AAPIM, LLC against Amazing Energy LLC, AEH and
others for fraudulent transfer.
This lawsuit was removed to the Bankruptcy Court as Adversary
Proceeding No. 20-04074 and has since been settled. As part of the
settlement, and included in the Plan, AAPIM acquired the
transferred property free and clear of all claims possessed by the
Debtor through a sale in the Bankruptcy Case in full satisfaction
of its Claim.
The Plan proposed is a consolidated Plan of reorganization for the
Debtors. The consolidated Plan is proposed based upon the following
facts a) the major assets that are in the name of Amazing Energy
Holdings, LLC were transferred for no value by Amazing Energy, LLC
to it and 2) nearly 99% of the creditors who filed proofs of claims
in Amazing Energy Holdings, LLC have also filed proofs of claim in
Amazing Energy, LLC and are in fact Amazing Energy, LLC creditors.
Pursuant to the Plan, (i) all assets and liabilities of the Debtors
will be distributed in accordance with the Plan, (ii) all unsecured
creditors of any Debtor will share pro-rata with other similarly
situated creditors in the assets distributed to the unsecured
creditors of either Debtor. Secured Creditors who possess a valid
and perfected security interest will be paid out of the proceeds
generated by the sale of their collateral or have the property that
serves as security for their claim be abandoned to them in
accordance with In Re Sandy Ridge.
The Debtors intend to liquidate the assets of the Estate and
distribute the funds to Allowed Claims pursuant to their priority
as set forth in the Bankruptcy Code.
Class 7 consists of General Unsecured Claims. Each holder of an
Allowed Class 7 Claim against the Debtors shall receive in full
satisfaction thereof, unless such holder agrees to accept lesser
treatment of such Claim, a Pro Rata share of Available Cash
available after payment in full of or reserve for all Allowed
Administrative Expense Claims, Allowed Priority Tax Claims,
required payments to Classes 1-6, and all Plan expenses. The timing
of any distribution shall be within the discretion of the
Reorganized Debtor. Class 7 is impaired.
Class 8 consists of Equity Interests. The Holders of Equity
Interests will receive no Distribution on account of their Equity
Interest, and such Equity Interests shall be deemed canceled as of
the Effective Date. Class 8 is conclusively deemed to reject the
Plan and is not entitled to vote to accept or reject the Plan.
The Plan shall constitute a monetization of the Debtors assets and
the proceeds from the monetization shall be distributed in
accordance with the Plan. The sale of the Sale Assets not
previously ordered shall be free and clear of all liens and claims
and the Confirmation Order shall constitute an order approving the
sale of the remaining assets of the Debtor with the Purchaser being
good faith purchaser of the Sale Assets.
On the Effective Date, all right, title and interest in and to the
Remaining Assets of the Debtors and their Estates shall vest in the
Reorganized Debtor, free and clear of any and all Liens and other
interests, for the purpose of monetization and/or distribution as
outlined in the Plan. From and after the Confirmation Date and
through the transfer of the property to such Winning Bidder, the
Debtors and their respective representatives shall be prohibited
from undertaking any actions in regard to such property that are
not approved, in writing, by the Winning Bidder.
The Plan shall be funded in accordance with the provisions of the
Plan from (a) Available Cash on the Effective Date; (b) Sales
Proceeds; and c) any payment to be received by the Debtors pursuant
to the Plan after the Effective Date from, among other things, any
reserves established by the Reorganized Debtor, the liquidation of
the Debtors' remaining assets, funding from the sale of the Sale
Assets, as provided herein, and the prosecution and enforcement of
causes of action of the Debtors after the Effective Date.
A full-text copy of the Disclosure Statement dated December 29,
2022, is available at https://bit.ly/3WGXVu7 from PacerMonitor.com
at no charge.
Counsel for Debtors:
Douglas S. Draper, Esq.
Heller, Draper, Patrick,
Horn & Manthey, LLC
650 Poydras Street, Suite 2500
New Orleans, LA 70130
Phone: (504) 299-3300
Email: ddraper@hellerdraper.com
About Amazing Energy
Amazing Energy MS, LLC, Amazing Energy Holdings, LLC, and Amazing
Energy, LLC, filed voluntary petitions for relief under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Miss. Case Nos. 20-01243,
201245 and 20-01244) on April 6, 2020.
On July 13, 2020, the cases were transferred to the U.S. Bankruptcy
Court for the Eastern District of Texas and were assigned new case
numbers (20-41558 for Amazing Energy MS, 20 41563 for Amazing
Energy Holdings and 20-41561 for Amazing Energy LLC). The cases
are jointly administered under Case No. 20-41558.
At the time of filing, Amazing Energy MS and Amazing Energy
Holdings disclosed assets of between $1 million and $10 million and
liabilities of the same range while Amazing Energy, LLC estimated
$10 million to $50 million in assets and $1 million to $10 million
in liabilities.
Judge Brenda T. Rhoades oversees the cases.
The Debtors are represented by Heller, Draper, Patrick, Horn &
Manthey, LLC and Wheeler & Wheeler, PLLC.
Arnold Jed Miesner, Lesa Renee Miesner, and JLM Strategic
Investments, LP, as secured creditors are represented by:
Carol Lynn Wolfram, Esq.
Rosa R. Orenstein, Esq.
Nathan M. Nichols, Esq.
LAW OFFICE OF CAROL LYNN WOLFRAM
P.O. Box 1925
Denton, TX 76202-1925
Tel: (940) 321-0019
Fax: (940) 497-1143
E-mail: clwolframlegal@gmail.com
AMERICAN WORKERS: Amends Insurety Claim Pay Details
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American Workers Insurance Services, Inc. and Association Health
Care Management, Inc., and Landon Jordan, submitted a Second
Amended Joint Plan of Reorganization dated December 29, 2022.
This Plan incorporates terms of the Global Settlement and the Plan
Modifications into the Amended Plan.
The Insurety Claim shall be treated as a part of Class 4. Insurety
shall not be entitled to any other Distributions under this Plan
except as a member of Class 4. The Reorganized Debtors shall have
no property interests in either the Insurety Commissions or the
Insurety Service Fees which shall remain the property of Insurety.
It is the intent that the payment of, and accounting for, the
Insurety Commissions and the Insurety Service Fees shall continue
after the Effective Date in the same manner as during the course of
the Bankruptcy Cases pursuant to the Agreed Amendment. Based on the
Insurety Claim, Insurety shall have an Allowed General Unsecured
Claim in the amount of $2,840,000 ("Allowed Insurety Claim"), all
which shall be paid as a part of Class 4. All other Claims by
Insurety against the Debtors or either of them shall constitute
Disallowed Claims.
On the Effective Date, the Reorganized Debtors shall pay to
Insurety the sum of $340,000 ("Initial Insurety Distribution")
utilizing funds from the Contributions from Jordan. In addition to
the Initial Insurety Distribution, Insurety shall receive 60
monthly Distributions totaling $2.5 million as follows:
* The first such monthly Distribution to Insurety shall be
made on the Effective Date, with 59 subsequent Distributions being
due and payable by the Debtors to Insurety on the first Business
Day of each of the next 59 successive calendar months following the
Effective Date; and
* The first such 36 monthly Distributions shall each be in the
amount of $33,333.34 each, and the last 24 monthly Distributions
shall each be in the amount of $54,166.66 each, for a total of $2.5
million.
Like in the prior iteration of the Plan, each holder of an Allowed
Class 6 General Unsecured Claims against AWIS shall receive
Distributions equal to 25% of any such Allowed Claims, payable in
48 substantially equal monthly installments, with the first such
installment being due and payable on the Initial Distribution Date
applicable to each such Allowed Claim, and with a like installment
being due on the first day of each successive calendar month
thereafter, until the aggregate Distributions on account of each
such Class 6 Allowed Claim are equal to 25% of each such Class 6
Allowed Claim.
Each holder of an Allowed Class 7General Unsecured Claims against
AHCM shall receive Distributions equal to 25% of any such Allowed
Claims, payable in 48 substantially equal monthly installments,
with the first such installment being due and payable on the
Initial Distribution Date applicable to each such Allowed Claim,
and with a like installment being due on the first day of each
successive calendar month thereafter, until such Distributions on
account of each Allowed Claim are equal to 25% of each Class 7
Allowed Claim.
On the Effective Date all existing Interests in each of the Debtors
shall be cancelled, and the holders of such Interests shall receive
no property or Distributions on account of the Interests. Pursuant
to section 1126(g), holders of Class 8 Interests are deemed to have
rejected the Plan.
On the Effective Date, all Assets of the Estates of both Debtors
shall be transferred to and vested in the Reorganized Debtors by
the Confirmation Order free and clear of all Liens, Claims, rights,
Interests and charges except as expressly provided in this Plan.
On the Effective Date, the New Equity shall be issued by the
Reorganized Debtors to Jordan or his designee(s) as directed by
Jordan. As consideration for the issuance of the New Equity, Jordan
shall make the following payments or provide the following benefits
to the Reorganized Debtors (collectively, the "Contributions"):
* On or before the Effective Date, Jordan shall pay to the
Reorganized Debtors the sum of $1.0 million;
* Jordan shall also cause the Servicing Agreement to be
modified; and
* Jordan has provided the Debtors with $320,000 to partially
fund the administrative claim pursuant to the DPG Settlement
Agreement and is entitled to an Allowed Administrative Expense
Claim, and shall have an Allowed Administrative Expense Claim based
on providing these funds to the Debtors to allow them to consummate
the DPG Settlement Agreement. However, Jordan will receive no
Distributions on account of this Allowed Administrative Expense
from the Reorganized Debtors until all Allowed Claims included in
Classes 1 through 7 have received all Distributions to which the
holders of such Allowed Claims are entitled to receive pursuant to
the Plan.
The $340,000 Insurety Initial Distribution shall be paid from the
$1.0 million cash included in the Contributions, and the balance of
such funds shall be used by the Debtors to fund Distributions
pursuant to the Plan.
The Global Settlement is incorporated as an integral part of the
Plan and shall also be evidenced by the Global Settlement
Agreement. Insurety shall receive the Allowed Insurety Claim based
on the Global Settlement, and the State Court Lawsuits shall be
dismissed subject to the terms set forth in, and otherwise in
accordance with the Global Settlement and the Global Settlement
Agreement. All Claims among the Debtors and Insurety in the State
Court Lawsuit shall be dismissed with prejudice pursuant to the
Global Settlement Agreement; provided, however, that nothing in the
Global Settlement Agreement, including the dismissal with prejudice
of Insurety's Claims against the Debtors, shall in any way impair
or impact Insurety's rights pursuant to this Plan based on its
Allowed Class 4 Claim. However, any Claims among Insurety and
Jordan, or among the Debtors and Gray, are addressed in, and
subject to, the Global Settlement Agreement.
The Reorganized Debtors' obligations under the Plan shall be funded
from the following: (a) the Contributions, (b) the Assets, and (c)
funds generated through the operation of the Reorganized Debtors'
businesses, including income derived from the Servicing Agreement.
A full-text copy of the Second Amended Joint Plan dated Dec. 29,
2022, is available at https://bit.ly/3WIYdAH from PacerMonitor.com
at no charge.
Attorneys for Debtors:
J. Robert Forshey, Esq.
Laurie Dahl Rea, Esq.
FORSHEY & PROSTOK LLP
777 Main St., Suite 1550
Fort Worth, TX 76102
Telephone: 817-877-8855
Facsimile: 817-877-4151
E-mail: bforshey@forsheyprostok.com
lrea@forsheyprostok.com
Attorneys for Landon Jordan:
Brian W. Zimmerman, Esq.
Nicholas J. Reisch, Esq.
SPENCER FANE LLP
3040 Post Oak Blvd, Suite 1300
Houston, TX 77056
Telephone: 713-552-1234
Facsimile: 713-963-0859
E-mail: bzimmerman@spencerfane.com
nreisch@spencerfane.com
About American Workers Insurance Services
American Workers Insurance Services, Inc. is a Rockwall,
Texas-based health insurance agency while Association Health Care
Management, Inc. is a provider of health care services. AHCM
conducts its business under the name Family Care.
AWIS and AHCM sought Chapter 11 protection (Bankr. N.D. Texas Lead
Case No. 19-44208) on Oct, 14, 2019 in Fort Worth, Texas. At the
time of the filing, AWIS listed up to $100 million in assets and up
to $50 million in liabilities while AHCM listed up to $100 million
in assets and up to $50 million in liabilities.
Judge Mark X. Mullin oversees the cases.
The Debtors tapped Forshey & Prosto, LLP as bankruptcy counsel and
J. Alexander CPA, LLC as auditor. The law firms of Oxendine Law
Group P.C., The Verde Law Firm PLLC, and Spencer Fane LLP serve as
special counsel.
AMERICANN INC: Posts $173K Net Loss in FY Ended Sept. 30
--------------------------------------------------------
Americann, Inc. reported a net loss of $173,244 on $2.52 million of
rental income for the year ended Sept. 30, 2022, compared to a net
loss of $862,893 on $0 of rental income for the year ended Sept.
30, 2021, according to the Company's latest Form 10-K filed with
the Securities and Exchange Commission.
As of Sept. 30, 2022, the Company had $15.44 million in total
assets, $9.63 million in total liabilities, and $5.80 million in
total stockholders' equity.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2016, issued a "going concern" qualification in its report dated
Dec. 29, 2022, citing that the Company has suffered recurring
losses from operations and has an accumulated deficit that raises
substantial doubt about its ability to continue as a going
concern.
Americann said, "While the Company is attempting to increase
operations and generate additional revenues, the Company's cash
position may not be significant enough to support the Company's
daily operations. Management intends to raise additional funds
through the sale of its securities.
"Management believes that the actions presently being taken to
further implement its business plan and generate additional
revenues provide the opportunity for the Company to continue as a
going concern. While the Company believes in the viability of its
strategy to generate additional revenues and in its ability to
raise additional funds, there can be no assurances to that effect.
The ability of the Company to continue as a going concern is
dependent upon the Company's ability to further implement its
business plan and generate additional revenues."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1508348/000143774922029891/acan20220930_10k.htm
About AmeriCann
Americann, Inc. (OTCQB:ACAN) is a specialized cannabis company that
is developing state-of-the-art product manufacturing and greenhouse
cultivation facilities. Its business plan is based on the
continued growth of the regulated marijuana market in the United
States.
APOLLO ENDOSURGERY: To Convert $17.9M Debentures Into Common Shares
-------------------------------------------------------------------
Apollo Endosurgery, Inc. previously disclosed on Dec. 28, 2022,
that it notified the holders of its outstanding 6.0% Convertible
Debentures due 2026 that it elected to cause the eligible portion
of the aggregate principal amount of the Debentures outstanding to
be converted into shares of the Company's common stock at the fixed
conversion price of $3.25 per share and to issue shares of common
stock to satisfy accrued but unpaid interest through Dec. 28, 2022
("Forced Conversion"). Each share of the Company's common stock
issued in the Forced Conversion will be converted into the right to
receive $10 in cash, without interest, at the effective time of the
Merger pursuant to, and subject to, the Agreement and Plan of
Merger by and among the Company, Boston Scientific Corporation, a
Delaware corporation ("Parent"), and Textile Merger Sub, Inc., a
Delaware corporation and an indirect wholly owned subsidiary of
Parent ("Merger Sub"), providing for the merger of Merger Sub with
and into the Company, with the Company surviving the Merger as an
indirect wholly owned subsidiary of Parent.
In connection with the Forced Conversion, the Company will convert
$17,914,061 aggregate principal amount of the Debentures into
5,565,452 new shares of the Company's common stock to be issued to
the holders of the Debentures (which number includes shares to be
issued for accrued and unpaid interest). Following the Forced
Conversion, $2,531,439 aggregate principal amount of the Debentures
will remain outstanding due to beneficial ownership limitations
contained in such Debentures that prohibited conversion in the
Forced Conversion.
The Company will not receive any consideration in connection with
the Forced Conversion. The issuance of shares in the conversion
will be exempt from registration under the Securities Act of 1933,
as amended, in reliance on Section 3(a)(9) thereof.
About Apollo Endosurgery
Apollo Endosurgery, Inc. -- http://www.apolloendo.com-- is a
medical technology company focused on less invasive therapies to
treat various gastrointestinal conditions, ranging from
gastrointestinal complications to the treatment of obesity.
Apollo's device-based therapies are an alternative to invasive
surgical procedures, thus lowering complication rates and reducing
total healthcare costs. Apollo's products are offered in over 75
countries and include the OverStitch Endoscopic Suturing System,
the OverStitch Sx Endoscopic Suturing System, and the ORBERA
Intragastric Balloon.
Apollo Endosurgery reported a net loss of $24.68 million for the
year ended Dec. 31, 2021, a net loss of $22.61 million for the year
ended Dec. 31, 2020, and a net loss of $27.43 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $116.03
million in total assets, $73.72 million in total liabilities, and
$42.31 million in total stockholders' equity.
ASBURY AUTOMOTIVE: Fitch Alters Outlook on 'BB' IDR to Stable
-------------------------------------------------------------
Fitch Ratings has affirmed Asbury Automotive Group, Inc.'s
Long-Term Issuer Default Rating (IDR) at 'BB'. The Rating Outlook
has been revised to Stable from Negative.
Asbury's 'BB' rating reflects its top five position in the new and
used auto dealership industry following recent acquisitions with
projected 2022 revenue and EBITDA around $15 billion and $1.27
billion, respectively. The rating is supported by good cash flow
and balanced gross profit mix across segments that limits
sensitivity to the cyclical new and used vehicle markets. The
Outlook revision to Stable reflects the company's strong recent
performance, which improves Fitch's confidence in adjusted leverage
trending in the low-4x over time despite expectations of near-term
margin contraction.
KEY RATING DRIVERS
Strong Recent Performance: Asbury's operating results since 2020
have benefited from a strong vehicle pricing environment, growth in
used car volumes and increased parts and service spending. EBITDA
in 2021 was approximately $840 million relative to approximately
$345 million in 2019 despite ongoing new vehicle supply challenges,
demonstrating Asbury's business model resilience to the inherently
cyclical auto retail industry. EBITDA margins improved to around
8.6% in 2021 from 4.8% in 2019 on industry-wide strength in vehicle
margins and mix shifts toward the more profitable parts & service
and finance & insurance businesses.
LTM September 2022 EBITDA grew further to $1.26 billion although
Fitch estimates this is entirely due to recent acquisitions,
primarily the December 2021 acquisition of Larry
H. Miller Dealerships. While the industry has begun to experience
some vehicle volume declines in the first nine months of 2022 with
same store new and used vehicle unit sales down 23% and 2%
respectively, same store profits have remained steady given
continued gross margin strength and growth in non-vehicle
businesses.
Supply & Demand Reversal Expected: Fitch expects some reversal to
the recent pricing environment and moderation in Asbury's ancillary
business growth. EBITDA, which is expected to be around $1.27
billion in 2022, is projected to trend in the low to mid $800
million range beginning 2023 as vehicle margins decline from
historical highs. The combination of a somewhat softening consumer
and improving new vehicle supply could somewhat pressure selling
prices and, consequently, industry-wide margins.
Fitch believes Asbury could sustain EBITDA margins in the high 5%
to 6% range over the medium term, above the high 4% range prior to
2020, albeit below the mid-8% projected in 2022. Structurally
higher margin forecasts are largely due to expectations that the
new vehicle industry can retain some of the recent pricing strength
through tighter supply.
Leading Player in a Fragmented Industry: Asbury benefits from its
scale as one of the largest U.S. automotive dealership groups with
good OEM relationships. The company operates 198 franchises with
most located in the southeastern and western regions of the U.S.
The company has broad vehicle brand exposure and healthy ancillary
businesses including parts & service and finance & insurance, which
generate around 40% and 25% of gross profits, respectively.
Asbury's scale and cash flow generation allow it to navigate
through complex industry dynamics, invest in its core businesses,
M&A, and newer initiatives like its online platform Clicklane.
Industry incumbents such as Asbury benefit from high barriers to
entry due to protected franchise agreements that are regulated on
both a state and federal level. Additionally, dealerships require a
significant upfront capital investment for initial construction and
working capital. Success in the industry is also predicated on good
relationships with financing partners, including automotive
captive-finance entities, to achieve favorable floorplan financing
terms.
Strategic Plan: Asbury targets $32 billion in 2025 revenue from $15
billion projected in 2022. Much of the planned growth is to be
achieved through acquisitions ($6 billion) and its nascent online
business Clicklane ($7 billion), with the remainder via organic
expansion. Fitch views the company's willingness and ability to
invest in business expansion and capabilities as a competitive
advantage relative to smaller independent peers.
However, Fitch considers Asbury's forecast for Clicklane somewhat
aspirational given structural challenges growing a profitable
online vehicle business, including consumer preference for in-store
purchasing and inventory sourcing.
Absent material growth in the company's omnichannel platform or
additional transformative M&A, Fitch believes sales could trend
around $15 billion over the next two to three years, with EBITDA
sustained in the low- to mid- $800 million range.
Strong FCF; Reasonable Leverage: FCF was approximately $1.1 billion
in 2021, partly due to a $500 million working capital benefit.
Fitch expects FCF to be nearly $700 million in 2022 assuming some
working capital reversal and average around $500 million annually
thereafter. Asbury's good cash flow generation provides financial
flexibility through cycles and allows the company to invest in
strategic initiatives, including M&A.
Adjusted debt/EBITDAR, which trended in the low-3x prior to the
late-2021 Larry Miller acquisition, could trend in the low 4x range
beginning 2023, given Fitch's EBITDA forecast and assuming flattish
debt levels around $3.4 billion. Given its strategic plan Fitch
recognizes Asbury could undertake leveraging M&A transactions but
would expect the company to manage its balance sheet over term in
line with its net leverage target range of 2.5x to 3.0x (around
3.5x on an adjusted leverage basis). Asbury's 'BB' rating is
predicated on adjusted leverage below 4.25x, recognizing Asbury
could temporarily operate with leverage above its target given its
acquisitive posture.
DERIVATION SUMMARY
Asbury's 'BB'/Stable rating reflects its top five position in the
new and used auto dealership industry following recent acquisitions
with projected 2022 revenue and EBITDA around $15 billion and $1.27
billion, respectively. The rating is supported by good cash flow
and balanced gross profit mix across segments that limits
sensitivity to the cyclical new and used vehicle markets. The
rating assumes adjusted leverage trends in the low 4x over time.
Asbury's peers include dealership groups Sonic Automotive, Inc.
(BB/Stable) and AutoNation, Inc. (BBB-/Stable), auto parts retailer
AutoZone Inc. (BBB/Stable) and similarly rated jewelry retailer
Signet Jewelers Ltd.
Sonic's 'BB'/Stable rating reflects its top five position in the
U.S. new and used auto dealership industry with expected 2022
revenue and EBITDA of around $15 billion and around $600 million,
respectively, following strong recent organic growth and the late
2021 acquisition of RFJ Auto Partners, Inc. The rating is supported
by balanced gross profit mix across segments, which helps limit
financial sensitivity to the cyclical new and used vehicle market,
strong liquidity position supported by expected positive FCF, and
Fitch's expectation for adjusted leverage (capitalizing rent
expense at 8x) to trend around 4x, in line with the company's
historical adjusted leverage range.
AutoNation, whose business model is similar to that of Asbury,
holds a leading position in the auto retail segment and has a
history of good cash flows, which allows it to invest in growth
initiatives while effectively managing through an inherently
cyclical automotive industry. AutoNation's 'BBB-'/Stable ratings
consider the company's financial policy yielding adjusted leverage
around or below 3.0x historically.
Unlike Asbury, AutoZone competes in the retail auto parts and
accessories aftermarket. AutoZone's 'BBB'/Stable rating reflects
its leading position in auto parts retail, steady operating results
including high single digit five-year CAGRs in sales and EBITDA,
high profitability margins, and steady credit metrics with adjusted
leverage expected to trend in the high 2x range longer term.
AutoZone's operating trajectory is supported by generally benign
competition from direct peers and the industry's resilience to
discount and e-commerce competition due to inventory investment
requirements, a heavy service component and purchase immediacy
requirements.
The ratings consider AutoZone's financial policy and the
expectation that debt balances could grow over time to support the
company's share buyback program, in line with the company's
publicly articulated financial policy.
Signet's 'BB'/Stable rating reflects the company's recently strong
operating trajectory, which demonstrates success in the
implementation of its topline and other initiatives. Although Fitch
expects some near-term contraction from record 2021 results,
revenue and EBITDA beginning in 2023 are projected to trend in the
mid-$7 billion and mid-$800 million ranges, respectively, well
above pre-pandemic levels of $6 billion and $504 million. The
rating reflects expectations that Signet will be able to maintain
adjusted leverage (adjusted debt/EBITDAR, capitalizing leases at
8x) in the low-4x range, in line with their publicly articulated
financial policy.
KEY ASSUMPTIONS
- Revenue in 2022 is expected to grow over 50% to $15 billion from
$9.8 billion in 2020, largely due to the late 2021 acquisition of
LHM, which added around $5.7 billion in annualized revenue. This
assumes 25% growth in 4Q, lower than YTD September growth around
63% given the mid-December 2021 acquisition close and some
weakening in used vehicle unit sales. EBITDA could be around $1.27
billion in 2022, well above the approximately $840 million in 2021
albeit similar to LTM September 2022 results as 4Q22 EBITDA could
be flat to 4Q21 given same store volume declines.
- Revenue in 2023 could decline around 4% assuming mid-single digit
contraction in Asbury's vehicle business and somewhat more stable
results in its parts and service segment. EBITDA could decline to
around $825 million as Fitch assumes some reversal to recently
strong gross margins.
- In 2024/2025, revenue could expand low single digits annually,
with EBITDA approaching $900 million. EBITDA margins could settle
in the high 5% to 6% range, higher than the high 4% range seen
prior to the pandemic, given expectations of structurally tighter
new vehicle supply in the medium term and some benefits to scale
post the LHM acquisition.
- FCF, which was $1.1 billion in 2021 on strong EBITDA and a $500
million working capital benefit, could be around $700 million in
2022 assuming some working capital reversal. FCF beginning 2023
could average around $450 million given Fitch's EBITDA assumptions.
Asbury could use FCF for strategic initiatives, including M&A, or
share buybacks.
- Adjusted debt/EBITDAR, which averaged around 3.1x prior to 2021,
is projected to be approximately 3.1x in 2022, and could trend in
the low 4x range beginning 2023 given Fitch's EBITDA forecast and
flat debt in the $3.4 billion range.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An upgrade would result from adjusted debt/EBITDAR (capitalizing
lease expense at 8x) sustained below 3.75x, through better than
expected operating performance such as EBITDA sustained around $1
billion and/or financial policy actions.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A downgrade could result from weaker than expected operating
results, such as EBITDA sustained at or below $800 million, which
resulted in adjusted debt/EBITDAR (capitalizing leases at 8x)
sustained above 4.25x.
- Financial policy decisions, including debt financed M&A or share
repurchase, which results in adjusted debt/EBITDAR sustained above
4.25x could also yield a downgrade.
LIQUIDITY AND DEBT STRUCTURE
Good Liquidity
Total liquidity, excluding floorplan related liquidity resources,
as of Sept. 30, 2022 was $974 million supported by cash balances of
$537 million, including cash held in floor plan offset accounts,
which is readily available to Asbury, and $437.3 million in
available commitments under the company's credit facility including
availability in floor plan facilities that can be converted to
revolver availability. The company also has additional liquidity
resources through its used floorplan facility which may be used for
non-vehicle financing. Fitch does not contemplate floorplan
availability into total liquidity resources due to exclusion of
floorplan related payables from debt calculations.
Total debt as of Sept. 30, 2022 was $3.36 billion consisting of
approximately $1.1 billion in real estate and mortgage debt and
$2.250 billion in unsecured notes due between 2028 and 2032.
Fitch's forecast assumes flattish debt levels but recognizes the
company could make debt-financed investments, including M&A, over
time, within the context of its public net leverage target of below
3.0x (3.5x on a Fitch-defined adjusted leverage basis).
Floorplan Facilities
Automotive retailers, including Asbury, finance their inventories
with floorplan facilities, which have characteristics of both
payables and debt. Companies primarily use the facilities for new
car inventory and the source of these facilities is typically from
either financing arms of various automotive manufacturers or
lending institutions. The accounting treatment of these payables is
similar to that of accounts payables. These facilities lack a fixed
maturity date (loans due on demand) and a duration that is
generally paid within days after a car is sold. These loans are
often tied to manufacturer subsidies, which offset a portion, if
not all, of the borrowing costs. These facilities are provided on a
vehicle-by-vehicle basis.
Floorplan financing also incurs an interest expense (distinct from
debt interest) and in a liquidation scenario, floorplan payables
are secured by the collateral of the vehicle, gaining priority over
unsecured debt. However, Fitch excludes floorplan financing from
its primary leverage ratio calculation in deriving its rating for
Asbury. Fitch also adjusts EBITDA by moving floorplan-related
interest expense to COGS. In 2021, this adjustment increased COGS
and reduced EBITDA by $8.2 million. Fitch also recognizes that
these floorplan facilities are secured and would receive priority
over unsecured claims in a bankruptcy.
Recovery Considerations
Fitch does not employ a waterfall recovery analysis for issuers'
assigned ratings in the 'BB' category. The further up the
speculative-grade continuum a rating moves, the more compressed the
notching between the specific classes of issuances becomes. Fitch
rates Asbury's secured ABL Facility a 'BBB-'/'RR1' rating
indicating outstanding recovery prospects. Asbury's unsecured notes
are rated 'BB'/'RR4', indicating average recovery prospects.
ISSUER PROFILE
Asbury Automotive Group, Inc. is a new and used automotive retailer
that also provides parts & repair services and finance & insurance
products through lending institutions. Pro forma for acquisitions,
the company generated around $1.2 billion of EBITDA for the LTM
period September 2022.
SUMMARY OF FINANCIAL ADJUSTMENTS
In addition to treating floor plan interest expense as an operating
cost within cost of goods sold, Fitch adjusts for stock-based
compensation expense, acquisition related costs, legal settlements,
franchise impairment, and gains on the sale of real estate. Fitch
also treats interest on lease liabilities as an operating cost in
accordance with Fitch's corporate criteria at the time of the
rating committee.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Asbury Automotive
Group, Inc. LT IDR BB Affirmed BB
senior
unsecured LT BB Affirmed RR4 BB
senior secured LT BBB- Affirmed RR1 BBB-
ATLAS CUSTOM: Case Summary & Nine Unsecured Creditors
-----------------------------------------------------
Debtor: Atlas Custom Homes, Inc.
12808 Medena Court
Fort Worth, TX 76126
Chapter 11 Petition Date: January 3, 2023
Court: United States Bankruptcy Court
Northern District of Texas
Case No.: 23-40023
Debtor's Counsel: Eric A. Liepins, Esq.
ERIC A. LIEPINS
12770 Coit Road
Suite 850
Dallas, TX 75251
Tel: 972-991-5591
Fax: 972-991-5788
Email: eric@ealpc.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Douglas Haley as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's nine unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/ISL7YJY/Atlas_Custom_Homes_Inc__txnbke-23-40023__0001.0.pdf?mcid=tGE4TAMA
AYTU BIOPHARMA: Gary Cantrell to Quit as Director
-------------------------------------------------
Gary Cantrell, a member of the Board of Directors of Aytu
BioPharma, Inc., notified the Company of his intention to retire
from the Board.
According to the Company's Form 8-K filed with the Securities and
Exchange Commission, Mr. Cantrell did not advise the Company of any
disagreement with the Company on any matter relating to its
operations, policies or practices. The Company is initiating a
search for an additional member of the Board of Directors.
About Aytu BioPharma
Englewood, Colorado-based Aytu BioPharma, Inc., formerly known as
Aytu BioScience, Inc. -- http://www.aytubio.com-- is a
pharmaceutical company focused on commercializing novel
therapeutics and consumer healthcare products and developing
therapeutics for rare pediatric-onset or difficult-to-treat
diseases. The Company has two primary product candidates in
development, AR101 enzastaurin for the treatment of VEDS and
Healight (endotracheal light catheter) for the treatment the
treatment of severe, difficult-to-treat respiratory infections.
Aytu Biopharma reported a net loss of $110.17 million for the year
ended June 30, 2022, compared to a net loss of $58.29 million for
the year ended June 30, 2021. As of Sept. 30, 2022, the Company
had $150 million in total assets, $96.09 million in total
liabilities, and $53.91 million in total stockholders' equity.
Denver, Colorado-based Plante & Moran, PLLC, the Company's auditor
since 2015, issued a "going concern" qualification in its report
dated Sept. 27, 2022, citing that the Company's operations have
historically consumed cash and are expected to continue to consume
cash, which raises substantial doubt about the Company's ability to
continue as a going concern.
BANTEC INC: Delays Filing of Form 10-K for Year Ended Sept. 30
--------------------------------------------------------------
Bantec, Inc. filed with the Securities and Exchange Commission a
Form 12b-25 notifying a delay in the filing of its Annual Report on
Form 10-K for the fiscal year ended Sept. 30, 2022. The Company
said it was unable to compile the necessary financial information
required to prepare a complete filing. The Company expects to file
within the extension period.
About Bantec Inc.
Bantec, Inc., a product and service company, through its
subsidiaries and divisions, sells drones and related products
manufactured by third parties to various parties, including
facility managers, engineers, maintenance managers, purchasing
managers and contract officers who work for hospitals,
universities, manufacturers, commercial businesses, local and state
governments and the US Government. The Company also offers
technical services related to drone utilization.
Bantec reported a net loss of $1.88 million for the year ended
Sept. 30, 2021, compared to a net loss of $4.33 million for the
year ended Sept. 30, 2020. As of June 30, 2022, the Company had
$838,279 in total assets, $16.43 million in total liabilities, and
a total stockholders' deficit of $15.59 million.
Boca Raton, Florida-based Salberg & Company, P.A., the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated Jan. 7, 2022, citing that the Company has a net loss
and cash used in operations of $1,882,071 and $1,576,648
respectively, in fiscal 2021, and has a working capital deficit,
stockholders' deficit and accumulated deficit of $14,709,592,
$14,796,078 and $32,956,840 at Sept. 30, 2021. These matters raise
substantial doubt about the Company's ability to continue as a
going concern.
BANYAN CAY: Secured Party Sets Feb. 17 Auction
----------------------------------------------
Banyan Cay Resort Fund LLC ("secured party") will sell at public
auction sale all membership and other equity interests held by
Banyan Cay Mezzanine Borrower LLC ("Pledgor") in these companies:
(a) Banyan Cay Resort & Golf LLC; (b) Banyan Cay Dev LLC; and (c)
Banyan Cay Villas LLC ("pledged entity").
The equity interests secured Pledgor's indebtedness owed to Secured
Party in the principal amount of $5 million plus unpaid interest,
attorney's fees and other charges including the cost to sell the
equity interests ("debt").
The public auction sale will be held on Feb. 17, 2023, at 1:00 p.m.
by (a) in-person bidding conducted by auctioneer Eric Rubin at the
Offices of Moecker Auctions Inc., 1885 Marina Mile Blvd., Suite
103, Fort Lauderdale, FL 33315; and (b) online bidding via Zoom
through these link: https://bit.ly/BanyanUCC; Meeting ID No. 814
4153 0539; and Meeting Password 562491.
Parties interested in bidding on the equity interests must contact
the secured party's broker, Newmark, Attn: Brock Cannon,
brock.cannon@nmrk.com, 212-372-2066.
Upon execution of a non-disclosure agreement, the terms of public
sale as well as documentation and information that secured party
has in its possession will be made available on Newmark's online
date site
(https://rimarketplacecom/listing/23934/ucc-foreclosure-sale-west-palm-beach-fl-resort-golf-club)
concerning the equity interests, pledged entities, the debt and the
senior and mezzanine loan and intercreditor documents. Interested
parties who do not contact Newmark and register before the public
sale will be not be permitted to participate in bidding at the
public sale.
BEER REPUBLIC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Beer Republic Brewing, LLC
394 North Clayton St.
Lawrenceville, GA 30046
Case No.: 23-50032
Chapter 11 Petition Date: January 2, 2022
Court: United States Bankruptcy Court
Northern District of Georgia
Judge: Hon. Paul W. Bonapfel
Debtor's Counsel: Henry F. Sewell, Jr., Esq.
LAW OFFICES OF HENRY F. SEWELL, LLC
2964 Peachtree Road NW
Suite 555
Atlanta, GA 30305
Tel: 404-926-0053
Email: hsewell@sewellfirm.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by David Rice, principal, CEO, and
co-manager.
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/EMG76EQ/Beer_Republic_Brewing_LLC__ganbke-23-50032__0001.0.pdf?mcid=tGE4TAMA
BELLA VENEZIA: Feb. 16 Hearing on Disclosure Statement
------------------------------------------------------
Judge Robert A. Mark has set a hearing to consider approval of the
Disclosure Statement of Bella Venezia 211, LLC on Feb. 16, 2023, at
11:30 a.m. via Zoom Video Conference. The last day for filing and
serving objections to the disclosure statement is on Feb. 9, 2023,
which is seven days before Disclosure Hearing.
About Bella Venezia
Bella Venezia 211, LLC filed a petition for Chapter 11 protection
(Bankr. S.D. Fla. Case No. 22-11738) on March 2, 2022, listing as
much as $500,000 in both assets and liabilities. Laurent Bezaquen,
authorized representative, signed the petition.
Judge Robert A. Mark oversees the case.
The Debtor tapped Joel M. Aresty P.A. as legal counsel.
BELLA VENEZIA: Feb. 23, 2023 Disclosure Statement Hearing Set
-------------------------------------------------------------
Judge Robert A. Mark of the U.S. Bankruptcy Court for the Southern
District of Florida has entered an order within which February 23,
2023 at 11:30 a.m. is the hearing to consider approval of the
disclosure statement filed by Bella Venezia 211, LLC.
Judge Mark further ordered that February 16, 2023 is the deadline
for objections to disclosure statement.
A copy of the order dated December 27, 2022, is available at
https://bit.ly/3GaKDPn from PacerMonitor.com at no charge.
Attorney for the Plan Proponent:
Joel M. Aresty, Esq.
Joel M. Aresty, P.A.
309 1st Ave S
Tierra Verde FL 33715
Phone: 305-904-1903
Fax: 800-899-1870
Email: Aresty@Mac.com
About Bella Venezia
Bella Venezia 211, LLC filed a petition for Chapter 11 protection
(Bankr. S.D. Fla. Case No. 22-11738) on March 2, 2022, listing as
much as $500,000 in both assets and liabilities. Laurent Bezaquen,
authorized representative, signed the petition.
Judge Robert A. Mark oversees the case.
The Debtor tapped Joel M. Aresty P.A. as legal counsel.
BIOMARIN PHARMACEUTICAL: Egan-Jones Retains BB- Sr. Unsec. Ratings
------------------------------------------------------------------
Egan-Jones Ratings Company, on November 25, 2022, maintained its
'BB-' foreign currency and local currency senior unsecured ratings
on debt issued by BioMarin Pharmaceutical Inc.
Headquartered in Novato, California, BioMarin Pharmaceutical Inc.
develops and commercializes therapeutic enzyme products.
BIOSTAGE INC: Selects IQVIA to Manage FDA-Approved Clinical Trial
-----------------------------------------------------------------
Biostage, Inc. said it had selected IQVIA, a global provider of
advanced analytics, technology solutions and clinical research
services to the life sciences industry, as the contract research
organization (CRO) to manage its first clinical trial.
The FDA-approved clinical trial is an open-label trial assessing
both safety and efficacy in up to ten patients requiring the
removal of up to 6cm of their esophagus for any reason (including
cancer, trauma or birth defects) at up to five hospitals in the
U.S. The primary endpoint is the establishment of a continuous
biological conduit at three months following implantation.
In the first use of the Biostage Esophageal Implant product
candidate in a human cancer patient, this endpoint was met by one
month. This surgery was performed by Dr. Denis Wigle, the Chair of
Thoracic Surgery at the Mayo Clinic under an FDA-approved EIND
protocol and was published in the Journal of Thoracic Oncology
Clinical and Research Reports in August 2021. The procedure
demonstrated that our technology was able to successfully
regenerate esophageal tissue, including the mucosal lining, to
restore the integrity, continuity and functionality of the
esophageal tube.
David Green, Biostage's founder, Chair of the Board and interim
chief executive officer commented, "We are very pleased to be
partnering with IQVIA to perform the clinical trials needed to
bring our Biostage Esophageal Implant product candidate to the
patients who need it. According to the American Cancer Society,
current treatment options for patients diagnosed with esophageal
cancer result in only 20% survival at five years and according to
the World Health Organization's International Agency for Research
on Cancer, every year more than 600,000 patients worldwide are
diagnosed with esophageal cancer."
Wendy Stewart, president of Clinical Operations for IQVIA
commented, "Advancing healthcare is a top priority for IQVIA and we
are pleased to collaborate with Biostage in its first clinical
trial, to bring this important treatment to patients in need.
Through a strategic collaboration with AmerisourceBergen's World
Courier, a global specialty logistics provider, we will further
enhance our customized solutions and ensure these tissue samples
and engineered implants are handled with the care they deserve."
Contract Details
The preliminary contract that Biostage entered into with IQVIA is
for the first stage of work to prepare for the clinical trial.
Biostage anticipates entering into a second more comprehensive
contract with IQVIA that will cover the remaining aspects of the
trial. The clinical trial requires a staggered enrollment and two
years of follow up for each patient and hence Biostage expects the
trial to take between four and six years.
About Biostage
Holliston, Massachusetts-based Biostage, Inc. -- www.biostage.com
-- is a clinical-stage biotech company that uses cell therapy to
regenerate organs inside the human body to treat cancer, trauma and
birth defects. The Company has performed the world's first
regeneration of an esophagus in a human cancer patient. This
surgery was performed at Mayo Clinic and was published in August
2021.
Biostage reported a net loss of $7.98 million for the year ended
Dec. 31, 2021, compared to a net loss of $4.87 million for the year
ended Dec. 31, 2020. As of June 30, 2022, the Company had $5.16
million in total assets, $2.14 million in total liabilities, $4.02
million in series E convertible preferred stock, and a total
stockholders' deficit of $997,000.
Flushing, New York-based Wei, Wei & Co., LLP, the Company's auditor
since 2021, issued a "going concern" qualification in its report
dated March 31, 2022, citing that the Company has suffered
recurring losses from operations, has an accumulated deficit, uses
cash flows in its operations, and will require additional financing
to continue to fund its operations. This raises substantial doubt
about the Company's ability to continue as a going concern.
CC HILLCREST: Gen. Unsecureds Will be Paid in Full
--------------------------------------------------
The Court has entered an order approving the CC Hillcrest, LLC's
Second Amended Disclosure Statement for Debtor's First Amended Plan
of Reorganization.
A hearing on Debtor's First Amended Plan of Reorganization will be
held on February 1, 2023, at 2:00 p.m. before the Honorable Scott
W. Everett, United States Bankruptcy Court, 1100 Commerce Street,
14th Floor, Dallas, Texas 75242.
Objections to the Confirmation of the Plan must be filed and served
on counsel of record for the Debtor no later than January 25,
2023.
Ballots accepting or rejecting the Debtor's Plan of Reorganization
shall be submitted to counsel of record for the Debtor. The
deadline for submitting ballots is January 25, 2023.
Reorganization Plan
CC Hillcrest, LLC, submitted a Second Amended Disclosure Statement
for its First Amended Plan of Reorganization.
Under the Plan of Reorganization, the Debtor will continue its
business after confirmation of the Plan. The Debtor is the owner of
18.3 acres of real property and improvements located at 2019
Hillcrest Street Mesquite TX 75149, where the Debtor operates a
352-unit apartment complex known as the "Hillcrest Apartments" (the
"Property"). The Debtor will use its normal operating income to
make payments under the Plan and pay ordinary operating expenses.
In addition, the Debtor will use the proceeds of the $4,000,000 DIP
Loan to make repairs and improvements to the Property. In the
event of a sale of the Property, the Debtor will pay all noninsider
allowed claims in full from the sale proceeds at that time.
Under the Plan, Class 6 Allowed Unsecured Claims Other than Insider
and Tenant Claims will be paid in full on the earlier of 30 days
following the closing of a sale of the Property or the effective
date of the pLan, with interest accruing from the Effective Date at
the rate of 1% per annum. Class 6 is impaired.
Class 8 Allowed Unsecured Claims of Insiders will be paid in full
but only after full payment of Classes 1-7 and all Administrative
and Priority Claims according to the Plan. Class 8 Claimants may
vote on the Plan, but their Claims will not be counted for or
against Confirmation. Class 8 is impaired.
Attorneys for the 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
A copy of the Order dated Dec. 21, 2022, is available at
https://bit.ly/3BWnKhu from PacerMonitor.com.
A copy of the Second Amended Disclosure Statement dated Dec. 21,
2022, is available at https://bit.ly/3jumGuA from
PacerMonitor.com.
About CC Hillcrest
CC Hillcrest, LLC operates an apartment complex in Mesquite,
Texas.
CC Hillcrest sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-31362) on July 29,
2022. In the petition signed by its manager, Jared Remington, the
Debtor disclosed up to $50 million in both assets and liabilities.
Judge Scott W. Everett oversees the case.
Joyce W. Lindauer Attorney, PLLC is the Debtor's counsel.
CEL-SCI CORP: Posts $36.7 Million Net Loss in FY Ended Sept. 30
---------------------------------------------------------------
Cel-Sci Corporation reported a net loss of $36.70 million for the
year ended Sept. 30, 2022, compared to a net loss of $36.36 million
for the year ended Sept. 30, 2021, according to the Company's Form
10-K filed with the Securities and Exchange Commission.
As of Sept. 30, 2022, the Company had $50.52 million in total
assets, $18.36 million in total liabilities, and $32.16 million in
total stockholders' equity.
Potomac, Maryland-based BDO USA, LLP, the Company's auditor since
2005, issued a "going concern" qualification in its report dated
Dec. 27, 2022, citing that the Company has suffered recurring
losses from operations and has future liquidity needs that raise
substantial doubt about its ability to continue as a going
concern.
The Company stated, "CEL-SCI will need to raise additional funds in
order to continue its operations and additional funds may not be
available when CEL-SCI needs them on terms that are acceptable to
CEL-SCI, or at all. If adequate funds are not available to CEL-SCI
on a timely basis, CEL-SCI may be required to delay, limit, reduce
or terminate preclinical studies, clinical trials or other
development activities for Multikine, LEAPS, or any other product
candidates or technologies that CEL-SCI develops or acquires, or
delay, limit, reduce or terminate its sales and marketing
activities that may be necessary to commercialize its product
candidates. Due to recurring losses from operations and future
liquidity needs, there is substantial doubt about CEL-SCI's ability
to continue as a going concern without additional capital becoming
available. The substantial doubt about CEL-SCI's ability to
continue as a going concern could have an adverse impact on
CEL-SCI's ability to execute its business plan, result in the
reluctance on the part of certain suppliers to do business with
CEL-SCI, or adversely affect CEL-SCI's ability to raise additional
debt or equity capital."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/725363/000165495422016959/cvm_10k.htm
About CEL-SCI
CEL-SCI Corporation is a clinical-stage biotechnology company
focused on finding the best way to activate the immune system to
fight cancer and infectious diseases. Its lead investigational
therapy Multikine (Leukocyte Interleukin, Injection) completed a
pivotal Phase 3 clinical trial for patients who are newly diagnosed
with locally advanced (stage III and IV) primary (not yet treated)
squamous cell carcinoma of the head and neck (SCCHN). Multikine
has received Orphan Drug Status from the U.S. Food and Drug
Administration(FDA) for this indication.
CENTERPOINTE HOTELS: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: CenterPointe Hotels @ Texas II, LP
3906 Brookston Street
Houston, TX 77045
Case No.: 23-30023
Business Description: The Debtor is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: January 2, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Debtor's Counsel: David L. Curry, Jr., Esq.
OKIN ADAMS BARTLETT CURRY LLP
1113 Vine St., Suite 240
Houston, TX 77002
Tel: (713) 228-4100
Email: dcurry@okinadams.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by James O. Guillory Jr. as president.
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/YK5IXLY/CenterPointe_Hotels__Texas_II__txsbke-23-30023__0001.0.pdf?mcid=tGE4TAMA
CENTERPOINTE PARTNERS: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: CenterPointe Partners @ Texas, LLC
10505 East Fwy
Houston, TX 77029-1926
Case No.: 23-30025
Business Description: The Debtor is part of the traveler
accommodation industry.
Chapter 11 Petition Date: January 2, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Judge: Hon. Marvin Isgur
Debtor's Counsel: David L. Curry, Jr., Esq.
OKIN ADAMS BARTLETT CURRY LLP
1113 Vine St., Suite 240
Houston, TX 77002
Tel: (713) 228-4100
Email: dcurry@okinadams.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by James O. Guillory Jr. as manager.
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/YQE24RI/CenterPointe_Partners__Texas_LLC__txsbke-23-30025__0001.0.pdf?mcid=tGE4TAMA
CHRIS PETTIT: Seeks to Expand Scope of Compass RE Texas' Services
------------------------------------------------------------------
Eric Terry, the trustee appointed in the Chapter 11 cases of Chris
Pettit & Associates, PC and Christopher John Pettit, seeks approval
from the U.S. Bankruptcy Court for the Western District of Texas to
expand the scope of services of Compass RE Texas, LLC.
The trustee intends to sell a property located at 11 Champions Run,
San Antonio Texas, and requires the services of Compass RE Texas to
market the property.
If Compass RE Texas completes a sale, it will be entitled to a
commission of 4.50 percent of the sales price. In addition, Compass
RE Texas may cooperate with other brokers to show the property, in
which case the firm may offer to pay the other broker up to 2.50
percent of the sales price out of the 4.50 percent commission it
will receive.
As disclosed in court filings, Compass RE Texas is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Fred Hutt
Compass RE Texas, LLC
Corie Property Group
5800 Broadway, Suite 205
San Antonio, TX 78209
Mobile: 210-827-3986
Email: fred.hutt@compass.com
About Chris Pettit & Associates
Chris Pettit & Associates, PC, a personal injury law firm in Texas,
and principal Christopher John Pettit sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. W.D. Texas Lead Case
No. 22-50591) on June 1, 2022. In the petitions filed by Mr.
Pettit, the Debtors listed up to $50,000 in assets and up to
$500,000 in liabilities.
Judge Craig A. Gargotta oversees the cases.
Michael G. Colvard, Esq., at Martin & Drought, PC is the Debtors'
counsel.
Eric Terry, the trustee appointed in the Chapter 11 cases, tapped
Dykema Gossett, PLLC as bankruptcy counsel; Rogers Towers, PA as
Florida counsel; and Luttrell + Carmody Law Group and Villa &
White, LLP as litigation counsels.
CINEMARK HOLDINGS: Egan-Jones Retains CC Senior Unsecured Ratings
-----------------------------------------------------------------
Egan-Jones Ratings Company, on November 25, 2022, maintained its
'CC' foreign currency and local currency senior unsecured ratings
on debt issued by Cinemark Holdings, Inc. EJR also maintained its
'C' rating on commercial paper issued by the Company.
Headquartered in Plano, Texas, Cinemark Holdings, Inc. operates as
a movie theater.
CLARUS THERAPEUTICS: Unsecureds to Get 0.7% to 13% in Sale Plan
---------------------------------------------------------------
Clarus Therapeutics Holdings, Inc., et al. and the Official
Committee of Unsecured Creditors submitted a First Amended Combined
Disclosure Statement and Chapter 11 Plan of Liquidation.
On Sept. 5, 2022, the Debtors filed a motion seeking approval to
implement bidding procedures, designate a stalking horse bidder,
schedule an auction, approve assumption and assignment procedures,
schedule a sale hearing, approve the proposed sale and the
assumption and assignment of executory contracts and unexpired
leases. On Sept. 22, 2022, the Bankruptcy Court entered an order
approving the Bidding Procedures. The auction commenced Oct. 13,
2022, and concluded on Oct. 14, 2022. At the conclusion of the
auction, the Debtors determined the bid submitted by Tolmar, Inc.,
as the successful bid. On Oct. 26, 2022, the Court approved the
sale of substantially of the Debtors' assets pursuant to the terms
of the Asset Purchase Agreement by and among the Debtors, Tolmar
Inc. as purchaser, and Tolmar Holdings, Inc. (as guarantor), as
well as a form of Transition Services Agreement.
Pursuant to the Asset Purchase Agreement, Tolmar Inc. agreed to a
purchase price consisting of $7,250,000 in cash; royalty payments
during the Royalty Terms (i.e., until the third anniversary of the
sale Closing Date) in the amount of 6% of net sales of JATENZO
within the United States up to $20 million, and 10% for such net
sales greater than $20 million, with a minimum royalty payment of
$500,000 for each year of the Royalty Terms; milestone payments of
$3 million, $5 million or $7 million if net sales of JATENZO exceed
$30 million, $50 million or $70 million, respectively, during the
Royalty Term; and assumption of Cure Costs for all Contracts
assumed and assigned to the Purchaser. The Purchaser also
committed to commercialization within 30 days following Closing and
dedicating no less than 75 people for the commercialization,
marketing and sales of JATENZO.
On Oct. 27, 2022, the sale closed in accordance with the terms of
the Sale Order and the Asset Purchase Agreement. In accordance
with the Cash Collateral Order and the Sale Order, the Net Cash
Sale Proceeds of the Sale, along with Clarus' excess cash after
funding the Wind-Down Budget, in the total amount of $8,342,586,
were paid to the Indenture Trustee for the benefit of the Secured
Parties.
Following the sale, the Debtors are focused principally on winding
down their remaining operations, affairs and business, including
the final activities necessary in connection with the Transition
Services Agreement with the Purchaser. The Combined Disclosure
Statement and Plan provides for the Assets, to the extent not
Purchased Assets or already liquidated, to be liquidated over time
and the proceeds thereof to be distributed to Holders of Allowed
Claims in accordance with the terms of the Combined Disclosure
Statement and Plan and the treatment of Allowed Claims described
more fully herein. The Plan Administrator will effect such
liquidation and distributions. After the Effective Date, one or
more of the Debtors will continue its corporate existence for
Distribution purposes, and the Debtors will be dissolved by the
Plan Administrator as soon as is reasonably practicable.
Pursuant to the Cash Collateral Order, the Debtors, Committee and
Secured Parties agreed to the Plan Framework. However, the Plan
Framework was predicated on the assumption that the Secured Parties
have valid, fully-perfected, and nonvoidable security interests in
and liens on the Debtors' Assets, which the Committee reserved the
right to Challenge.
Following entry of the Cash Collateral Order, the Debtors, the
Committee and the Secured Parties engaged in extensive negotiations
and achieved a global resolution of their disagreements regarding
the validity of the Secured Parties' security interests and liens,
the allowance of the Prepetition Indenture Claims, and the
allocation of proceeds of the Debtors' assets. The Global
Settlement, which memorializes these resolutions, is designed to
achieve an economic settlement of Claims against the Debtors and an
efficient resolution of the Chapter 11 Cases. The Global
Settlement has been incorporated into the Combined Disclosure
Statement and Plan. Pursuant to the Global Settlement, the
Debtors, the Committee and the Secured Parties have agreed as
follows:
* On the Effective Date, a Creditor Trust will be established,
which shall: (i) administer the reserves established for
Unclassified Claims, (ii) administer the resolution, asset
administration, and distribution process for General Unsecured
Claims, (iii) prosecute the Retained Causes of Action transferred
to the Creditor Trust, and (iv) liquidate any assets transferred to
the Creditor Trust.
* A Plan Administrator will be appointed to perform those
actions specified in the Creditor Trust Agreement under the
direction of the Oversight Board;
* The Plan Administrator shall be selected (unless such
selection is agreed to by the Committee and Noteholders prior to
confirmation of the Combined Disclosure Statement and Plan) by the
Committee and be reasonably acceptable to the Debtors and the
Secured Parties;
* The Oversight Board shall consist of 3 members (2 selected by
the Committee and 1 selected by the Secured Parties) and each with
1 vote;
* The Secured Parties shall have Allowed Claims for all Claims
arising under or relating to the Indenture that remain unpaid and
outstanding as of the Effective Date, comprised of (i) a Secured
Claim, and (ii) to the extent the Allowed Claim is not paid in full
from the Asset Sale Proceeds and the Remaining Cash, an unsecured
deficiency Claim. For voting purposes only, the Secured Claim shall
be estimated at $7,250,000 and the unsecured deficiency Claim shall
be estimated at $35,875,000. The final amount of the deficiency
Claim shall be determined as soon as practicable following payment
to the Secured Parties of all Contingent Proceeds.
* On account of their Secured Claims, the Secured Parties shall
receive (i) all Remaining Cash and all Asset Sale Proceeds, minus
the GUC Priority Amount; (ii) the first D&O Policy Proceeds in an
amount equal to $3,019,000; and (iii) all proceeds of any
Prepetition Employee Payments Avoidance Actions.
* On account of their unsecured deficiency Claims, the Secured
Parties shall receive a pro rata share of the Creditor Trust
Interests, provided, however, that the GUC Priority Amount shall be
Distributed pro rata to Holders of Allowed General Unsecured Claims
other than the Secured Parties.
* The Secured Parties will forgo receipt of and fund for payment
to junior creditors Cash with an aggregate value in the amount of
at least $2,255,000 consisting of (1) Cash from the Asset Sale
Proceeds and/or Remaining Cash utilized pursuant to the Combined
Disclosure Statement and Plan to fund the Wind-Down Budget (as
amended)13 for satisfaction of, among other items, (i) Allowed
Administrative Claims incurred after the Closing Date, Allowed
Priority Tax Claims and Allowed Priority Non-Tax Claims, in
aggregate amount up to $250,000; (ii) costs of the Creditor Trust,
up to $250,000; (iii) U.S. Trustee Fees incurred after the Closing
Date, up to $125,000, and (iv) payment of various professionals'
fees; and (2) the GUC Priority Amount.
* In addition, the Secured Parties will forgo receipt of, in
order to increase potential recoveries to junior creditors, any
recovery on account of their Adequate Protection Superpriority
Claim pursuant to the Cash Collateral Order, which the Secured
Parties assert in the amount of at least $8,921,692.
* The Secured Parties shall waive, as of the date the Chapter 11
plan is filed with the Bankruptcy Court, the Replacement Liens
granted to the Secured Parties under the Cash Collateral Order and
any related claim under section 507(b) of the Bankruptcy Code.
* The Committee shall waive, as of the date the Chapter 11 plan
is filed with the Bankruptcy Court, all of its rights set forth in
footnote 4 of the Cash Collateral Order and the Challenge rights
set forth in paragraph 7 of the Cash Collateral Order.
* The Combined Disclosure Statement and Plan shall include
appropriate release, exculpation and injunction provisions.
* The Secured Parties will vote to accept the Combined
Disclosure Statement and Plan and will not make a Release Opt-Out
Election.
Pursuant to Section 1123 of the Bankruptcy Code, the Combined
Disclosure Statement and Plan incorporates the Global Settlement,
which constitutes a settlement of claims. The entry of the
Confirmation Order shall constitute the Bankruptcy Court's approval
of the compromises and settlements underlying the limited
substantive consolidation of the Debtors' Estates and all other
compromises and settlements. The Bankruptcy Court's findings shall
constitute its determination that such compromises and settlements,
and the limited substantive consolidation of the Debtors' Estates,
are in the best interests of the Debtors, their estates, their
creditors, and other parties-in-interest, and are fair, equitable,
and within the range of reasonableness.
Under the Plan, Class 4 General Unsecured Claims total $50 million
-- comprised of the Prepetition Indenture Deficiency Claim in the
amount of $35,875,000 and other General Unsecured Claims in the
amount of approximately $14,000,000. Each Holder of an Allowed
General Unsecured Claim, including the Prepetition Indenture
Deficiency Claim, shall receive in exchange for such Allowed
General Unsecured Claim: (A) such Holder's pro rata share of the
Creditor Trust Interests; provided, however, that the first
Distribution up to the GUC Priority Amount, shall be distributed
pro rata to Holders of Allowed General Unsecured Claims other than
Holders of the Prepetition Indenture Deficiency Claims; or (B) such
other treatment which the Debtors or the Creditor Trust, as
applicable, and the Holder of such Allowed General Unsecured Claim
have agreed upon in writing. Creditors will recover approximately
0.7% to 13% of their claims. The recovery range stated pertains to
recoveries of Holders of Allowed General Unsecured Claim other than
the Indenture Trustee Deficiency Claim. The actual recovery may be
greater than stated in the event the final amount of the
Prepetition Indenture Deficiency Claim is determined to be less
than $35,875,000. The Secured Parties' recovery on account of the
Prepetition Indenture Deficiency Claim will be less than the
recoveries to Holders of other Allowed General Unsecured Claims
because, pursuant to the Global Settlement, the Secured Parties
have agreed that they will not receive any portion of the GUC
Priority Amount. Class 4 is impaired.
"Creditor Trust" shall mean the trust with a term of not more than
5 years (subject to extensions as provided therein) to be
established under the Combined Disclosure Statement and Plan and
the Creditor Trust Agreement.
"GUC Priority Amount" shall mean cash in the amount of $100,000.
Counsel for the Debtors:
Michael H. Goldstein, Esq.
Barry Z. Bazian, Esq.
Kizzy L. Jarashow, Esq.
Artem Skorostensky, Esq.
GOODWIN PROCTER LLP
The New York Times Building, 620 Eighth Avenue
New York, NY 10018-1405
Tel: (212) 813-8800
Fax: (212) 355-3333
E-mail: mgoldstein@goodwinlaw.com
bbazian@goodwinlaw.com
kjarashow@goodwinlaw.com
askorostensky@goodwinlaw.com
- and -
L. Katherine Good, Esq.
Aaron H. Stulman, Esq.
POTTER ANDERSON & CORROON LLP
1313 North Market Street, 6th Floor
Wilmington, DE 19801
Tel: (302) 984-6000
Fax: (302) 658-1192
E-mail: kgood@potteranderson.com
astulman@potteranderson.com
Counsel for the Official Committee of Unsecured Creditors
Dennis C. O'Donnell, Esq.
DLA PIPER LLP (US)
1251 Avenue of the Americas
New York, NY 10020
Tel: (212) 335-4500
Fax: (212) 335-4501
E-mail: dennis.odonnell@us.dlapiper.com
- and -
Stuart M. Brown, Esq.
Aaron S. Applebaum, Esq.
DLA PIPER LLP (US)
1201 North Market Street, Suite 2100
Wilmington, DE 19801
Tel: (302) 468-5700
Fax: (302) 394-2341
E-mail: stuart.brown@us.dlapiper.com
aaron.applebaum@us.dlapiper.com
A copy of the First Amended Combined Disclosure Statement dated
Dec. 21, 2022, is available at https://bit.ly/3BZaTej from
PacerMonitor.com.
About Clarus Therapeutics Holdings
Clarus Therapeutics Holdings, Inc. operates as a pharmaceutical
company focused on the commercialization of JATENZO (testosterone
undecanoate), the first oral testosterone replacement, or
testosterone replacement therapy, of its kind approved by the U.S.
Food and Drug Administration.
Clarus Therapeutics Holdings, Inc. and Clarus Therapeutics, Inc.
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Del. Case No. 22-10845) on Sept. 5, 2022. In the
petitions signed by Lawrence R. Perkins, chief restructuring
officer, the Debtors disclosed $48,940,000 in total assets and
$62,003,000 in total debts.
Judge Mary F. Walrath oversees the cases.
The Debtors tapped Goodwin Procter, LLP as bankruptcy counsel;
Potter Anderson & Corroon, LLP as local and conflicts counsel;
Raymond James & Associates, Inc. as investment banker; and
SierraConstellation Partners, LLC as restructuring advisor.
SierraConstellation CEO Lawrence R. Perkins serves as the Debtors'
chief restructuring officer. Stretto, Inc. is the claims and
noticing agent and administrative advisor.
On Sept. 16, 2022, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in these Chapter 11
cases. The committee tapped DLA Piper LLP (US) as legal counsel and
Alvarez & Marsal North America, LLC as financial advisor.
CM RESORT: Unsecureds to Recover 86% in Creditor's Sale Plan
------------------------------------------------------------
MAR Living Trust submitted a Fifth Amended Joint Plan of
Reorganization and Fifth Amended Joint Disclosure Statement for CM
Resort, LLC, et al.
The MAR Living Trust is a creditor and 100% equity owner of all the
Debtors.
The Plan is a joint plan of reorganization filed by MAR Living
Trust to provide for the reorganization of all the Debtors. On the
Effective Date of the Plan, CM Resort LLC, Specfac Group LLC and
Sundance Lodge LLC will sell all their Real Property to CM Capital
Group, LLC ("CM Capital") in exchange for the cash sum of
$3,600,000.00 (the "Purchase Price"), pursuant to the provisions
and under the authority of 11 U.S.C. Section 363. The Reorganized
Debtors will then use those funds to make all payments due under
the Plan. CM Capital is a single purpose entity recently formed for
the purpose of acquiring the Real Property of the Reorganized
Debtors pursuant to the Plan. The Purchase Price will be funded by
multiple individuals who are investing into CM Capital. No later
than 14 days prior to the Confirmation Hearing, CM Capital will
provide the Plan Proponent a verifiable bank account statement
confirming the presence of at least $3,600,000 in cash in the
account, and the Plan Proponent will offer the bank statement into
evidence at the Confirmation Hearing as proof of CM Capital's
ability to fund the Purchase Price. At the Confirmation Hearing,
an authorized representative of CM Capital may appear and offer
evidence of CM Capital's ability and willingness to fund the
Purchase Price under the terms of the Plan. Information regarding
funding will be provided through discovery after approval of the
Disclosure Statement.
On the Effective Date CM Capital will purchase the Real Property of
the Debtors for $3,600,000.00. The Reorganized Debtors will use the
proceeds of sale to pay the Break Up Fee, Allowed Administrative
Expense Claims and classified Claims as provided under the Plan.
The Plan Proponent estimates that the total pool of funds available
for non-Insider allowed unsecured claims after payment in full of
the Break Up Fee, Allowed Administrative Expense Claims and Allowed
Secured Claims will be $1,477,632.00, which would result in a
recovery of approximately 86% to these claimants. This percentage
may change depending on possible claim duplications and
adjustments.
The feasibility of the Plan is not dependent on the future income
or expenses of the Debtors, but only on the ability of Texas Land
Venture 12, LLC to fund the Purchase Price to CM Capital. The
application of the Purchase Price to make payments under the Plan
is demonstrated by the chart attached hereto as Exhibit B. The Plan
Proponent will present evidence at the Confirmation hearing of
Texas Land Venture 12, LLC's ability and willingness to fund the
Purchase Price to CM Capital. The Plan is superior to the Chapter
11 Trustee's Sale Motion ) because it provides more cash to
creditors and because the estates will not have to pay the
significant closing costs and brokerage commission connected with a
sale of the Real Property.
Attorneys for MAR Living Trust, Plan Proponent
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
A copy of the Disclosure Statement dated Dec. 21, 2022, is
available at https://bit.ly/3hNSHgO from PacerMonitor.com.
About CM Resort
Based in Gordon, Texas, CM Resort LLC, a single asset real estate,
filed a voluntary petition for bankruptcy under Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Tex. Case No. 18-43168) on Aug. 15,
2018. The case is jointly administered with the Chapter 11 cases
filed by CM Resort Management LLC and nine other companies. Case
No. 18-43168 is the lead case.
In the petition signed by Mark Ruff, member and authorized agent,
CM Resort estimated $1 million to $10 million in assets and $10
million to $50 million in liabilities. Judge Russell F. Nelms
presides over the case.
Gerrit M. Pronske, Esq., at Pronske Goolsby & Kathman, P.C., is CM
Resort's legal counsel.
John Dee Spicer was appointed as Chapter 11 trustee. The trustee
is represented by Cavazos Hendricks Poirot, P.C.
COMPUTE NORTH: Feb. 16 Hearing on Plan & Disclosures
----------------------------------------------------
Judge Marvin Isgur has entered an order conditionally approving the
Disclosure Statement of Compute North Holdings, Inc., et al.
These dates are established (subject to modification as necessary)
with respect to the solicitation of votes to accept, and voting on,
the Plan, as well as filing objections to confirmation of the Plan
and approving the Disclosure Statement on a final basis (all times
prevailing Central Time):
* The deadline to file a schedule of retained causes of action
will be on Jan. 13, 2023, at 4:00 p.m.
* The deadline to File Plan Supplement will be on Jan. 18, 2023,
at 4:00 p.m.
* The voting deadline will be on Feb. 1, 2023, at 4:00 p.m.
* Objections to the Plan and/or to final approval of the
Disclosure Statement will not be considered by the Court unless
such objections are timely filed and properly served in accordance
with this Order. Specifically, all objections to confirmation of
the Plan or requests for modifications to the Plan, if any, must be
filed and served on or before February 1, 2023, at 4:00 p.m.,
prevailing Central Time.
* The deadline to File Confirmation Brief and Plan and
Disclosure Statement Objection Response Deadline will be on
February 8, 2023.
* The deadline to File Voting Report will be on Feb. 8, 2023.
* The combined Hearing Date will be on Feb. 16, 2023, at 1:30
p.m.
Liquidating Plan
Compute North Holdings, Inc., et al., filed a Second Amended Joint
Liquidating Chapter 11 Plan and a corresponding Disclosure
Statement.
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. The Plan contemplates the
appointment of a Plan Administrator to implement the terms of the
Plan and make Distributions in accordance with its terms. Except as
otherwise provided by Order of the Bankruptcy Court, Distributions
will occur at various intervals after the Effective Date as
determined by the Plan Administrator in accordance with the Plan.
The primary objective of the Plan is to maximize the value of
recoveries to all Holders of Allowed Claims and Allowed Interests
and to distribute all property of the Estates that is or becomes
available for distribution generally in accordance with the
priorities established by the Bankruptcy Code. The Debtors believe
that the Plan accomplishes this objective and is in the best
interest of the Estates and therefore seek to confirm the Plan.
Only holders of Class 3 General Unsecured Claims, Class 4 Parent
GUC Claims, Class 7 Preferred Equity Interests and Class 8 Parent
Equity Interests are entitled to vote to accept or reject the
Plan.
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. The
Debtors believe that Confirmation of the Plan will maximize the
value of the Debtors' remaining assets, and will avoid the lengthy
delay and additional cost of liquidation under chapter 7 of the
Bankruptcy Code.
On the Effective Date, the Debtors will effectuate the Wind-Down
Transactions contemplated by the Plan. As a result:
* On the Effective Date, pursuant to sections 1141(b) and (c) of
the Bankruptcy Code, 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 as provided hereunder, (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.
Unsecured claims will be treated as follows:
* Class 3. Holders of Class 3 General Unsecured Claims will 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 3 is impaired.
* Class 3A CNCC GUC Claims. On the Effective Date, each CNCC
GUC Claim shall be cancelled 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.
* Class 4 Parent GUC Claims. On the Effective Date, each Parent
GUC Claim shall be discharged and released, and each Holder of an
Allowed Parent GUC Claim shall be entitled to receive its Pro Rata
Share of the Wind-Down Distributable Cash, if any, remaining after
satisfaction of all Allowed Administrative Claims, Allowed Priority
Tax Claims, and Allowed Claims in Class 1, Class 2, and Class 3, on
account of such Parent GUC Claim. Distributions of Wind-Down
Distributable Cash shall be distributed on the applicable
Distribution Date by the Distribution Agent in accordance with the
Plan until all Allowed Parent GUC Claims in Class 4 are paid in
full (taking into account any distributions made by the Litigation
Trust on account of Parent GUC Claims) or the Wind-Down
Distributable Cash is exhausted; provided, however, that all
Distributions to Holders of Allowed Parent GUC Claims shall be
subject to the Plan Administrator first paying in full (x) all
operating expenses of the Reorganized Debtors and/or reserving in
the Plan Administrator Operating Reserve for such operating
expenses as is reasonable and appropriate and (y) all Holders of
General Unsecured Claims. Class 4 is impaired.
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.
The Debtors have 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.
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
A copy of the Disclosure Statement dated Dec. 21, 2022, is
available at https://bit.ly/3YHkgcp from PacerMonitor.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.
COTTON WEAVE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Cotton Weave Estates, LLC
801 S. Highway 78
Ste. 307
Wylie TX 75098
Case No.: 23-40030
Business Description: Cotton Weave is part of the residential
building construction industry.
Chapter 11 Petition Date: January 2, 2023
Court: United States Bankruptcy Court
Eastern District of Texas
Debtor's Counsel: Mark Castillo, Esq.
CARRINGTON, COLEMAN, SLOMAN, & BLUMENTHAL, LLP
901 Main St. Ste. 5500
Dallas, TX 75202
Tel: 214-855-3000
Email: markcastillo@ccsb.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ryan Cole as CEO.
A copy of the Debtor's list of 20 largest unsecured creditors is
available for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/ULRLW3I/Cotton_Weave_Estates_LLC__txebke-23-40030__0002.0.pdf?mcid=tGE4TAMA
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/UOYUKJY/Cotton_Weave_Estates_LLC__txebke-23-40030__0001.0.pdf?mcid=tGE4TAMA
COVE RUN CONTRACTING: Gets OK to Tap Christopher Wolfe as Manager
-----------------------------------------------------------------
Cove Run Contracting, LLC received approval from the U.S.
Bankruptcy Court for the Northern District of West Virginia to
employ Christopher Wolfe as manager.
Mr. Wolfe owns Cove Run Contracting and has worked for the company
as chief operating officer since its inception in 2008.
As manager, Mr. Wolfe's duties will include estimating and
obtaining construction jobs; supervising foreman; obtaining and
servicing construction; and managing the day-to-day operations of
the business.
Mr. Wolfe will be paid a monthly fee of $12,500.
As disclosed in court filings, Mr. Wolfe neither holds nor
represents interests adverse to the company and its bankruptcy
estate.
About Cove Run Contracting
Cove Run Contracting, LLC, a company in Anmoore, W.Va., filed its
voluntary petition for Chapter 11 protection (Bankr. N.D.W.V. Case
No. 22-00478) on Nov. 3, 2022, with up to $50,000 in assets and $1
million to $10 million in liabilities. Christopher M. Wolfe, owner,
signed the petition.
Judge David L. Bissett oversees the case.
Caldwell & Riffee, PLLC serves as the Debtor's legal counsel.
DCL HOLDINGS: U.S. Trustee Appoints Creditors' Committee
--------------------------------------------------------
The U.S. Trustee for Region 3 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of DCL
Holdings USA, Inc. and its affiliates.
The committee members are:
1. The Shepherd Color Company
Attn: Chris Manning
4539 Dues Dr
Cincinnati, OH 45246
Phone: (513) 874-0714
Email: cmanning@shepherdcolor.com
2. Oriental Color Corp., Ltd.
Attn: He Li
24th Building, Shui Xin Ge
Hangzhou 310004, China
Phone: 86 57185091969
Email: heli@ocolor.com
3. Carlfors Bruk AB
Attn: Fredrik Gustafsson
Box 44
SE-561 21 Huskvarna
Sweden
Phone: 46 36 38 95 00
Email: fredrik.gustafsson@carlfors-se
4. AksharChem (India) Ltd.
Attn: Hitarth Vaidya
167-168, Village Indrad, Kadi Kalol Road
Mehsana Dist. Gujarat 382715
Phone: 91 75750 06506
Email: hitarth@aksharchemindia.com
5. Biddle Sawyer Corporation
Attn: Andrew Chavkin
505 8th Ave
New York, NY 10018
Phone: (212) 736-1580
Email: andrew@biddlesawyer.com
6. Vertellus Specialties Austria GmbH
Attn: Anne Frye
201 North Illinois Street, Suite 1800
Indianapolis, IN 46204
Phone: (317) 225-0859
Email: afrye@vertellus.com
7. Unique Chemical Limited
Attn: Li Haifang and Brian Mitteldorf
19F Shangmao Century Plaza
No. 49 Zhongshan South Road
Nanjing, 210005, China
Phone: 86 25 86887400
Email: lhaifang@uniquechemical-nj.com
blm@cabcollects.com
Official creditors' committees serve as fiduciaries to the general
population of creditors they represent. They may investigate the
debtor's business and financial affairs. Committees have the right
to employ legal counsel, accountants and financial advisors at a
debtor's expense.
About DCL Holdings
DCL Holdings (USA) Inc. -- https://www.pigments.com/ -- offers the
broadest range of colour pigments and preparations for the
coatings, plastics and ink industries worldwide. The company is a
global leader in the supply of color pigments and dispersions for
the coatings, plastics and ink industries, according to its Web
site.
DCL Holdings (USA) and five affiliates sought Chapter 11 bankruptcy
protection (Bankr. D. Del. Lead Case No. 22-11319) on Dec. 20,
2022. In the petition filed by its chief restructuring officer,
Scott Davido, the Debtor reported between $100 million and $500
million in both assets and liabilities.
The Debtors tapped King & Spalding, LLP as bankruptcy counsel;
Richards, Layton & Finger, P.A. as Delaware counsel; TM Capital
Corp. as investment banker; and Ankura Consulting Group, LLC as
restructuring advisor. Kroll Restructuring Administration, LLC is
the claims agent.
DIEBOLD NIXDORF: Davis Polk Advised Lenders in Recapitalization
---------------------------------------------------------------
Davis Polk advised an ad hoc group of noteholders and lenders to
Diebold Nixdorf, Incorporated in connection with a comprehensive
cross-border debt recapitalization transaction that entailed: a new
$400 million superpriority senior secured term loan financing, the
issuance by Diebold of extended-maturity term loans in exchange for
existing first-lien term loans, a consent solicitation with respect
to existing first-lien bonds, the issuance of junior-lien bonds in
exchange for unsecured bonds and the exchange of revolving loans
for commitments under a new global ABL facility.
Diebold automates, digitizes and transforms the way people bank and
shop. As a partner to the majority of the world's top 100 financial
institutions and top 25 global retailers, its integrated solutions
connect digital and physical channels conveniently, securely and
efficiently for millions of consumers each day. The company has a
presence in more than 100 countries with approximately 22,000
employees worldwide.
The Davis Polk restructuring team included partners Damian S.
Schaible and Adam L. Shpeen, counsel Christian Fischer, Robert
(Bodie) Stewart and Christopher Robertson and associates Dylan A.
Consla, Samuel Wagreich and Eric Hwang. The finance team included
associates Jason Palios and Bryan Mendiola. The capital markets
team included partners Maurice Blanco and Caitlin L. Wood, counsel
Faisal Baloch and associate Javier Felix. The tax team included
partner Lucy W. Farr and associate Yixuan Long. All members of the
Davis Polk team are based in the New York office.
Davis Polk refers to Davis Polk & Wardwell LLP, a New York limited
liability partnership, and its associated entities.
About Diebold Nixdorf
Diebold Nixdorf, Incorporated (NYSE: DBD) -- www.DieboldNixdorf.com
-- automates, digitizes and transforms the way people bank and
shop. As a partner to the majority of the world's top 100 financial
institutions and top 25 global retailers, the Company's integrated
solutions connect digital and physical channels conveniently,
securely and efficiently for millions of consumers each day. The
Company has a presence in more than 100 countries with
approximately 22,000 employees worldwide.
Diebold Nixdorf reported a net loss of $78.1 million for the year
ended Dec. 31, 2021, a net loss of $267.8 million for the year
ended Dec. 31, 2020, and a net loss of $344.6 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $2.91
billion in total assets, $3.90 billion in total current
liabilities, $89.3 million in pensions, post-retirement and other
benefits, $114.8 million in deferred income taxes, $120.1 million
in other liabilities, and a total deficit of $1.32 billion.
* * *
As reported by the TCR on May 25, 2022, Moody's Investors Service
downgraded Diebold Nixdorf, Inc.'s Corporate Family Rating to Caa2
from B2. Moody's said Diebold's operating performance has been
impacted by pandemic-related supply chain challenges, which were
unexpectedly exacerbated in Q1 2022 by social distancing measures
in China and the Russia-Ukraine military conflict.
In October 2022, S&P Global Ratings lowered its issuer credit
rating on Diebold Nixdorf Inc. to 'CC' from 'CCC+'. The downgrade
follows Diebold's announcement that it has entered into an
Transaction Support Agreement (TSA) with certain lenders to
restructure its debt profile, provide it with additional liquidity,
and extend its maturity runway.
DIOCESE OF HARRISBURG: Plan Has $18.25-Mil. for Abuse Claimants
---------------------------------------------------------------
Roman Catholic Diocese of Harrisburg submitted an Amended Joint
Chapter 11 Plan of Reorganization and a corresponding Disclosure
Statement.
The Plan establishes the Trust, which initially will be funded in
the amount of $18,250,000 by: (i) assets of and contributions from
the Debtor; (ii) assets of and contributions from the Parishes,
Schools, Related Non-Debtor Entities, and Other Insured Entities;
and (iii) settlement proceeds from settlements with the Settling
Insurers. The initial funds being contributed to the Trust are as
follows:
* Debtor $5,500,000
* Parishes, Schools, and Other Insured Entities $2,000,000
* Settling Insurers $10,750,000
The contribution by each of the foregoing was reached as the result
of extensive negotiations regarding, among other things, the extent
of liability faced by each entity, the ability of each entity to
pay, and insurance coverage available for the types of claims being
satisfied by the Trust. In exchange for the contributions to the
Trust, (a) the Debtor and Reorganized Debtor, (b) the Parishes, (c)
the Schools, (d) Related Non-Debtor Entities, (e) Other Insured
Entities, (f) each of the foregoing Persons' respective past,
present, and future Affiliates, and related companies, (g) each of
the foregoing Persons' respective successors and assigns, and (h)
solely to the extent of and in their capacity as such, any and all
the foregoing Persons' respective past and present Agents shall be
deemed "Protected Parties" that, along with the Settling Insurers
that are contributing to the Trust, are entitled to the benefit of
certain releases, exculpation, and injunctions, all as more
specifically set forth in this Disclosure Statement and the Plan.
Similarly, in exchange for the contributions to the Trust, the
Settling Insurers will likewise be entitled to the benefit of
certain releases, exculpation, and injunctions, all as more
specifically set forth in this Disclosure Statement and the Plan.
The Trustee will liquidate the Trust Assets and fairly distribute
the proceeds to the Survivor Claimants, pursuant to the allocation
protocol contained in the Survivor Claim Distribution Plan.
The Plan further provides that the holders of the General Unsecured
Claims will be paid in full, that all Survivor Claims will be
channeled to the Trust, and that the Debtor will receive a
discharge from all remaining Claims, permitting the Debtor to
continue its missions, ministry, and other charitable activities
after confirmation of the Plan.
The following classes are impaired and entitled to vote on the
Plan:
Class Designation
----- -----------
4 Known Survivor Claims
5 Unknown Survivor Claims
7 Non-Survivor Litigation Claims
9 Parish and School Claims
Under the Plan, Class 3 General Unsecured Claims total $354,058.77.
At the sole option of the Reorganized Debtor: (a) each Class 3
Claimant shall receive payment in Cash in an amount equal to such
Allowed General Unsecured Claim, payable on or as soon as
reasonably practicable after the last to occur of (i) the Effective
Date, (ii) the date on which such General Unsecured Claim becomes
an Allowed General Unsecured Claim, and (iii) the date on which the
Class 3 Claimant and the Debtor or Reorganized Debtor, as
applicable, shall otherwise agree in writing; or (b) satisfaction
of such Allowed General Unsecured Claim in any other manner that
renders the Allowed General Unsecured Claim Unimpaired, including
Reinstatement. Class 3 is unimpaired.
To be counted, completed ballots must be actually received by the
Debtor's solicitation and claims agent by 11:59 p.m. (prevailing
Eastern time), on Jan. 27, 2023.
Attorneys for the Debtor:
Blake D. Roth, Esq.
Tyler N. Layne, Esq.
WALLER LANSDEN DORTCH & DAVIS, LLP
511 Union Street, Suite 2700
Nashville, TN 37219
Telephone: (615) 244-6380
Facsimile: (615) 244-6804
E-mail: blake.roth@wallerlaw.com
tyler.layne@wallerlaw.com
- and -
Matthew H. Haverstick, Esq.
Joshua J. Voss, Esq.
KLEINBARD, LLC
Three Logan Square
1717 Arch Street, 5th Floor
Philadelphia, Pennsylvania 19103
Telephone: (215) 568-2000
Facsimile: (215) 568-0140
E-mail: mhaverstick@kleinbard.com
jvoss@kleinbard.com
A copy of the Disclosure Statement dated Dec. 21, 2022, is
available at https://bit.ly/3jmIDM5 from Epiq, the claims agent.
About Roman Catholic Diocese of Harrisburg
The Diocese of Harrisburg is comprised of 89 parishes in 15
counties in Central Pennsylvania.
The Roman Catholic Diocese of Harrisburg sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. M.D. Pa. Case No.
20-00599) on Feb. 19, 2020, listing up to $10 million in assets and
up to $100 million in liabilities. Judge Henry W. Van Eck oversees
the case.
The Debtor tapped Waller Lansden Dortch & Davis, LLP as legal
counsel; Kleinbard, LLC as special counsel; Keegan Linscott &
Associates, PC as financial advisor; and Epiq Corporate
Restructuring, LLC as claims and noticing agent. The Hon. Michael
Hogan has been tapped as unknown abuse claims representative.
The U.S. Trustee for Regions 3 and 9 appointed a committee to
represent tort claimants in the Chapter 11 case of the Roman
Catholic Diocese of Harrisburg. The Tort Claimants' Committee is
represented by Stinson, LLP.
DIVISION MANAGEMENT: Amends Unsecured Claims Pay Details
--------------------------------------------------------
Division Management, LLC, submitted a First Amended Disclosure
Statement relating to Amended Chapter 11 Plan dated December 29,
2022.
The primary objective of the Debtor's First Amended Chapter 11 Plan
of Reorganization is to provide a mechanism for either
restructuring its debts or completing the liquidation of the
Debtor's assets, including causes of action, if any, held by, or in
favor of, the Debtor, reconciling and fixing the claims asserted
against the Debtor and distributing the net liquidation proceeds in
conformity with the distribution scheme provided by the Bankruptcy
Code.
If the Plan is one of liquidation, pursuant to section 1141(d)(3)
of the Bankruptcy Code, the Debtor will not receive a discharge,
and will not engage in business after a Final Decree has been
entered and its chapter 11 case is closed. All equity interests in
the Debtor will be canceled and these equity interest will not
receive a distribution under the Plan.
On November 14, 2022, this Court entered an Order allowing the
Plaintiffs the right to proceed with their claims against HCC so
long as no resulting judgment against the Debtor and the Debtor is
not required to incur the cost of defense for such action. The
Court further ordered that Woodward was not specifically stayed
from asserting any defenses it believes is appropriate in response
to the Creditors amended petition filed in the Louisiana
Litigation.
Woodward filed a motion for relief from the automatic stay in order
to pursue its cross-claims against the Debtor in the Louisiana
Litigation. These claims include claims for negligence, negligent
misrepresentation, unfair trade practices, breach of contract, and
indemnification.
On December 29, 2022, the Court entered an Order Conditionally
Denying Woodward's Motion for Relief from Stay, without prejudice,
to its right to re-assert the relief sought in its Motion for
Relief. The Court's Order further provided that the stay did not
bar the Debtor's pending breach of contract claim against Woodward
in the Louisiana Litigation, nor Woodward's defense of that claim,
from proceeding in the Civil District Court for the Parish of
Orleans, State of Louisiana, Case No. 2018-00935. In all other
respects the automatic stay remains in effect to stay the
collection or execution of any judgment obtained against the Debtor
by Woodward or the continuation of the legal proceedings against
the Debtor.
Burks Litigation. Pre-petition, the Debtor was also involved in
additional litigation pending in Louisiana styled Clarence Burks,
Jr. v. The Burlington Insurance Company, et. al., Case No. 2019
11359, which is pending in the Civil District Court for the Parish
of Orleans, State of Louisiana ("Burks Litigation"). The Burks
Litigation involves multiple claims against the Debtor for personal
injuries allegedly suffered by workers while riding in a personnel
material hoist rented by the Debtor. The Burlington Insurance
Company is defending the Debtor in this lawsuit. The Debtor fully
expects any claim to be covered under its insurance policy issued
through Burlington. It further expects that the Burks Litigation
will proceed in Louisiana upon the filing of a Motion for Relief
from automatic stay provided that the collection or execution of
any judgment obtained against the Debtor by Burks is subject to the
terms of the Debtor's Plan. The Burks claim is a disputed claim
within Class 3.
Class 2 consists of all allowed general unsecured claims which are
impaired. The total amount of unsecured claims exceeds $500,000.
The claims principally relate to the amounts owed to UPSCO in
regards to breach of contract obligations, but also include damages
from the rejection of executory contracts, unexpired lease claims,
deficiencies on secured claims, contract damage claims or open
account claims and damages arising from or related to any
liquidated or contingent claim including the Burks Litigation,
except those in Classes 3 and 4.
Holders of general unsecured claims without priority which are
Allowed Claims as determined on or before the Effective Date of the
Plan shall be paid a pro rata distribution from the Liquidation
Fund (Liquidation Fund to be established) or, depending upon the
total amount of Allowed unsecured claims, from future operations of
the Debtor. No Holders of Allowed General Unsecured Claims shall be
entitled to receive post-petition interest on its Allowed Claim.
If one or more claims asserted against the Debtor in either the
Louisiana Litigation or the Mississippi Litigation are liquidated
in an amount such that the Debtor, in its sole discretion, does not
reasonably believe that its reorganization is feasible, then in
such event the Debtor will sell its assets, in whole or in part,
through an auction process.
The Debtor's decision to pursue an auction is largely dependent
upon a final determination as whether there is insurance coverage
for the Debtor in the Louisiana Litigation, since the existence of
insurance coverage would reduce the amount of allowed unsecured
claims in Class 4. In the event there is no insurance coverage
available to the Debtor, then the greater the likelihood that the
Debtor will pursue to sell its assets via an auction. The Debtor
must decide prior to June 30, 2023 whether it is going to
reorganize its business affairs under this Plan or alternatively
whether it will liquidate its assets as provided for under its
Plan.
The proceeds of the Sale of the Assets will be the primary funding
for the Plan. The Plan Administrator will use the proceeds from the
Sale to repay the Class 1 Allowed Secured Claims, as well as
certain closing and other expenses related to the Debtor's
operations, the Sale, and the Debtor's bankruptcy including
Administrative Claims. The remaining proceeds will be distributed
to the remaining Allowed Unsecured Claims pursuant to the Plan and
Confirmation Order.
A full-text copy of the First Amended Disclosure Statement dated
December 29, 2022, is available at https://bit.ly/3jN4jBd from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Kevin D. Heard, Esq.
HEARD, ARY & DAURO, LLC
303 Williams Avenue SW, Park Plaza Suite 921
Huntsville, AL 35801
Tel: (256) 535-0817
Fax: (256) 535-0818
E-mail: kheard@heardlaw.com
About Division Management
Division Management LLC, doing business as Eagle Access LLC, is
engaged in commercial and industrial machinery and equipment rental
and leasing business.
Division Management sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ala. Case No. 22-80896) on May 26,
2022. In the petition signed by Eugene R. Sak, manager, the Debtor
disclosed $1,005,874 in assets and $463,781 in liabilities.
The case is assigned to Honorable Bankruptcy Judge Clifton R.
Jessup Jr.
Kevin D. Heard, of Heard, Ary & Dauro, LLC, is the Debtor's
counsel.
DOT DOT SMILE: Unsecureds Owed $1.8M to be Paid After Other Classes
-------------------------------------------------------------------
Dot Dot Smile, LLC, submitted a First Amended Subchapter V Chapter
11 Plan.
Since the Debtor is transitioning to an online business model, its
assets principal asset consists of its inventory. The current
market value of the Debtor's inventory is $4,000,000 (if sold in
the ordinary course of the Debtor's business). The Debtor
estimates that the value of its website is $5,000 and estimates
that the value of its trade name Dot Dot Smile, LLC, to be
$100,000.
Under the Plan, Class 10 General Unsecured Claims total $1,812,036.
The class will be paid in full, with no interest on pro rata basis
after payment of classes 1 through 9, per the payment schedule. No
interest will be paid on these claims. Class 10 is impaired.
The Plan shall be funded by the ongoing business operations of DDS
as follows:
* Administrative Claims: June 15, 2023 (est): $120,000 - $138,000
* Plan Payment 1 Dec. 15, 2023: $100,000
* Plan Payment 2: Dec. 15, 2024: $150,000
* Plan Payment 3: Dec. 15, 2025: $200,000
* Plan Payment 4: Dec. 15, 2026: $250,000
* Plan Payment 5: Dec. 15, 2027: $300,000 (plus any amounts
necessary to pay all allowed claims in full).
Status Conference Hearing will be on Jan. 24, 2023 at 1:30 p.m. in
Courtroom 304, 3420 Twelfth St., Riverside, California.
Attorneys for Subchapter V Debtor:
Jeffrey S. Shinbrot, Esq.
JEFFREY S. SHINBROT, APLC
15260 Ventura Blvd., Suite 120
Sherman Oaks, CA 91403
Tel: (310) 659-5444
Fax: (310) 878-8304
E-mail: jeffrey@shinbrotfirm.com
A copy of the Disclosure Statement dated Dec. 21, 2022, is
available at https://bit.ly/3Wv0fEw from PacerMonitor.com.
About Dot Dot Smile
Dot Dot Smile, LLC is a wholesaler of children's clothing in
Riverside, Calif.
Dot Dot Smile sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-13361) on Sept. 3,
2022, with $4,478,922 in assets and $5,638,742 in liabilities. CEO
Jeffrey Eugene Thompson signed the petition.
Judge Wayne E. Johnson oversees the case.
Jeffrey S. Shinbrot, APLC is the Debtor's legal counsel.
EAST COAST CONSTRUCTION: Court Confirms Chapter 11 Plan
-------------------------------------------------------
Judge Robert E. Littlefield, Jr., has entered an order confirming
the Amended Small Business Subchapter V Chapter 11 Plan of
Liquidation East Coast Construction & Renovations, LLC.
The Debtor qualifies as a debtor under Subchapter V of Chapter 11
of the Bankruptcy Code.
No parties objected to confirmation of the Plan.
Votes for acceptance or rejection of the Plan were solicited and
tabulated fairly, in good faith and otherwise in compliance with
Sections 1125 and 1126 of the Bankruptcy Code and Bankruptcy Rules
3017 and 3018. All impaired classes established under the Plan
have accepted the Plan. Accordingly, sections 1129(a)(7),
1129(a)(8), and 1129(a)(10) are satisfied and the Plan is
consensual.
The Plan has been proposed in good faith and not by any means
forbidden by law.
Each holder of a Claim has accepted the Plan or will receive or
retain under the Plan property of a value, as of the Effective Date
of the Plan, that is not less than the amount that such holder
would receive or retain if the Debtor was liquidated under Chapter
7 of the Bankruptcy Code on such date.
The Plan provides adequate means for the implementation of the Plan
pursuant to section 1123(a)(5) of the Bankruptcy Code.
The Plan complies with Sections 1189 and 1190 of the Bankruptcy
Code because it was filed by the Debtor not later than 90 days
after the Petition Date, and includes: (i) a brief history of the
business operations of the Debtor, (ii) a liquidation analysis, and
(iii) information with respect to the ability of the Debtor to make
the payments proposed under the Plan. The Debtor, as plan
proponent, has met its burden of proving the elements of section
1129(a) of the Bankruptcy code, made applicable to the Debtor by
Section 1191(a) of the Bankruptcy Code, by a preponderance of the
evidence.
About East Coast Construction
East Coast Construction & Renovations, LLC, is a Limited Liability
Company in the business of general construction and contracting. It
is operated and managed by its sole member, Mr. Joel Burgess.
East Coast Construction & Renovations filed sought protection for
relief under Subchapter V of Chapter 11 of the Bankruptcy Code
(Bankr. N.D.N.Y. Case No. 21-10701) on July 21, 2021, listing up to
$100,000 in assets and up to $500,000 in liabilities. Judge Robert
E. Littlefield, Jr. oversees the case.
Michael L. Boyle, Esq., at Boyle Legal, LLC and Jill M. Flinton,
CPA, PLLC serve as the Debtor's legal counsel and accountant,
respectively.
ECEC WIND-DOWN: Court Confirms Modified First Amended Plan
----------------------------------------------------------
Judge John T. Dorsey has entered an order confirming the Modified
First Amended Liquidating Chapter 11 Plan of ECEC Wind-Down LLC
(f.k.a. Ector County Energy Center LLC).
All objections to the Plan, to the extent they have not been
withdrawn or otherwise resolved prior to entry of this Confirmation
Order, are hereby expressly overruled.
The Court finds that Class 2, Class 3, Class 5, Class 6, and Class
7 are impaired under the Plan and entitled to vote to accept or
reject the Plan.
As evidenced by the Balloting Declaration, Classes 2, 3, 5, 6 and 7
voted to accept the Plan. The Court finds that Class 8 is impaired
under the plan and the Holder of Interests classified in Class 8 is
conclusively deemed to have rejected the Plan pursuant to section
1126(g) of the Bankruptcy Code. Class 1 and Class 4 are unimpaired
and conclusively presumed to have accepted the Plan pursuant to
section 1126(f) of the Bankruptcy Code.
As detailed in the Supporting Documents and the Disclosure
Statement, confirmation of the Plan is in the best interests of all
holders of Claims and holders of Equity Interests, as required of
section 1129(a)(7) of the Bankruptcy Code. The Debtor has
demonstrated that each holder of an impaired Claim in Classes 2, 3,
5, 6 or 7 has accepted the Plan, or will receive, upon the
Effective Date of the Plan, no less than such holders would receive
in a hypothetical chapter 7 liquidation of the Debtor's Estate.
Holders of Equity Interests classified in Class 8 are receiving the
same treatment that would be afforded in a chapter 7 liquidation,
thereby satisfying section 1129(a)(7).
Each class has accepted the Plan, or is not impaired, as follows:
(a) Class 1 under the Plan, consisting of Other Priority Claims,
is unimpaired and therefore, is deemed to accept the Plan;
(b) Class 2, consisting of the Prepetition Term Lender Claims,
is impaired. Class 2 voted to accept the Plan.
(c) Class 3, consisting of the Prepetition Revolving Lender
Claims, is impaired. Class 3 voted to accept the Plan;
(d) Class 4 is unimpaired and therefore, is deemed to accept the
Plan;
(e) Class 5, consisting of General Unsecured Claims that are not
Class 6 or Class 7 Claims, is impaired. Class 5 voted to accept the
Plan;
(f) Class 6, consisting of General Unsecured Claims for Personal
Injury or Property Damage or Other Causes of Action Arising from
Winter Storm Uri, voted to accept the Plan;
(g) Class 7, consisting of Claims of Insiders and Affiliates, is
impaired. Class 7 voted to accept the Plan; and
(h) Class 8 consists of the Holders of Equity Interests, an
impaired Class that is not receiving or retaining any property
under the Plan. Class 8 is deemed to have rejected the Plan.
As set forth in the Supporting Documents, the Plan complies with
section 1129(a)(10) of the Bankruptcy Code insofar as at least one
class of Claims that is impaired under the Plan has accepted the
Plan, determined without including any acceptance of the Plan by
any insider. Those Classes are Classes 2, 3, 5 and 6.
Even though the requirements of subparagraph (8) of Bankruptcy Code
section 1129(a) are not met since Class 8, Equity Interests, is
deemed to reject the Plan, the Plan is still confirmable under
Section 1129(b).
No Voting Class has voted to reject the Plan. Rather, there is only
one Class that is deemed to reject the Plan, Class 8, comprised
solely of the holder of the Equity Interest that is not receiving a
distribution under the Plan.
As of the Effective Date, all of the Rejected Contracts shall be
deemed rejected pursuant to 11 U.S.C. Sec. 365(a). Any proofs of
claim asserting rejection damage claims must be filed no later than
the date that is 30 days after the Debtor files and serves the
Notice of Effective Date on parties to rejected contracts.
About Ector County Energy Center
Ector County Energy Center, LLC owns and operates a 330 MW natural
gas-fired power generating facility located in Ector County,
Texas.
Due to a large number of lawsuits following the 2021 winter storm,
Ector County Energy Center sought Chapter 11 bankruptcy protection
(Bankr. D. Del. Case No. 22-10320) on April 11, 2022. In the
petition signed by CRO John D. Baumgartner, the Debtor estimated
assets between $50 million and $100 million and estimated
liabilities between $500 million and $1 billion.
Judge John T. Dorsey oversees the case.
The Debtor tapped Holland & Knight, LLP as lead bankruptcy counsel;
Polsinelli, PC as local counsel; Locke Lord, LLP and Crowell &
Moring, LLP as special counsels; Perella Weinberg Partners, LP and
Tudor, Pickering, Holt & Co. as investment bankers; and Grant
Thornton, LLP as restructuring advisor. John Baumgartner, managing
director at Grant Thornton, serves as the Debtor's chief
restructuring officer. Donlin Recano & Company Inc. is the claims
agent.
EMPIRE COMMUNITIES: Fitch Alters Outlook on B- LongTerm IDR to Neg.
-------------------------------------------------------------------
Fitch Ratings has revised Empire Communities Corp.'s Outlook to
Negative from Stable. Fitch has also affirmed Empire's Long-term
Issuer Default Rating (IDR) at 'B-'.
The Negative Outlook reflects Empire's weak financial flexibility
amid challenging housing market conditions. Fitch also expects
weakening operating results as affordability continues to constrain
demand, leading to revenue declines and margin contraction next
year and the expectation of limited headroom relative to Fitch's
negative sensitivities. While Fitch's Rating Case does not assume a
severe contraction, the likelihood of one has increased, and
negative rating actions could result should market fundamentals
track closer to the Downgrade Case than the Ratings Case.
A downgrade of the IDR could result from the company's inability to
extend the maturity of its revolving credit facility. Fitch also
envisions negative rating actions could result in a more pronounced
downturn and/or the management team employing aggressive capital
allocation strategies that diminish liquidity. Such actions by
management would be a departure from Fitch's expectations and the
strategy employed by Empire during the beginning of the pandemic.
KEY RATING DRIVERS
Weak Financial Flexibility: Empire has weak financial flexibility
with cash of CAD104 million and CAD13 million of borrowing
availability under its USD265 million secured revolving credit
facility (CAD294 million outstanding) that matures in December
2023. The company recently upsized its revolver commitment from
USD225 million to USD265 million.
High Leverage and Limited Rating Headroom: Fitch expects Empire's
leverage to improve in 4Q22 as it reduces debt; however, this ratio
is forecast to remain elevated as housing market conditions weaken
in 2023 and into 2024. Net debt to capitalization (excluding CAD35
million of cash classified by Fitch as not readily available for
working capital and excluding non-controlling equity interest) is
expected to be about 77% at the end of 2022, down from 80.7% as of
Sept. 30, 2022. Fitch expects net debt to capitalization will
remain between 76%-78% during the rating horizon, leaving limited
headroom relative to Fitch's negative rating sensitivity of 80%.
Fitch forecasts Empire's EBITDA leverage (after distributions from
unconsolidated JVs and distributions to non-controlling interests)
to be 6.6x for 2022 compared to 7.6x in 2021, owing to higher
revenues and slightly better EBITDA margins. Fitch expects EBITDA
leverage will be between 9x-11x in 2023 and 2024 due to lower
revenues and margins.
Limited Geographic Diversification: The company is meaningfully
less geographically-diversified compared with most of the U.S.
homebuilders in Fitch's coverage. Empire's geographic concentration
in select markets leaves the company exposed to an outsized impact
during cyclical downturns. During 3Q22, Empire had 52 average
active communities across five markets in the U.S. (Austin, San
Antonio and Houston, TX, Atlanta, GA and various locations in North
Carolina) and operations in the Greater Golden Horseshoe (including
the Greater Toronto area) in the Southern Ontario region of
Canada.
Strong Local Market Position in Canada: Empire is one of the
leading low-rise builders in the Greater Golden Horseshoe region
and Greater Toronto Area. Fitch views this as an advantage as scale
in local metro markets provides homebuilders with efficiencies in
purchasing and also enhances access to the local labor pool and
land. Empire is predominantly a 2nd tier player (top 20 builder) in
its U.S. markets given that it has only recently entered the U.S.
Exposure to High-Rise Condominium Projects: Empire's high-rise
projects in Canada typically require significant upfront capital
before generating revenues. A majority of these projects also take
an extended period of time to construct, thus increasing the risk
particularly in a housing downturn. The company's high-rise
projects are about 98% pre-sold as of Sept. 30, 2022. Sales of
high-rise units typically require at least a 20% down payment from
the buyers, and, according to management, developers have recourse
to the buyers should they decide to walk away from these
contracts.
Empire currently has five high-rise condominium projects,
contributing about 15% of 3Q22 YTD revenues and 14.2% of gross
profit. Fitch expects a larger contribution from these projects in
4Q22 as the company completed one of its projects. Fitch expects
meaningfully lower contribution from high-rise projects in 2023 and
2024.
Land Strategy: The company has a longer land position compared to
its U.S. peers due to its exposure to the land-constrained Greater
Golden Horseshoe market (including its high-rise operations) as
well as its land development operations. The company's long overall
land position, particularly in its land development operations in
the U.S., makes the company susceptible to impairment charges if
housing market conditions deteriorate. As of Sept. 30, 2022, Empire
controlled 23,994 lots, including 1,087 lot equivalents for its
high-rise business and 4,407 lots for its land development
operations. The company has an 11.3-year land supply (including
high-rise units and land development operations).
Empire has successfully increased its lots under option in its U.S.
homebuilding operation, with optioned land accounting for about 46%
of its total lots controlled, up from 39% last year. When isolating
its U.S. homebuilding operations, Empire's total lots controlled of
6.4 years is in line with its large U.S. public peers while its
owned lot position of 3.4 years is slightly above average.
Cash Flow: Fitch expects Empire will generate negative cash flow
from operations (CFO, including distributions to non-controlling
interests and distributions from unconsolidated JVs) of CAD125
million to CAD175 million in 2022 due to higher land and
development spending. By comparison, Empire generated negative CFO
of CAD68 million in 2021. Fitch expects Empire will generate
slightly positive CFO in 2023 of 3%-4% of revenues as it lowers
land and development spending, while continuing the build-out of
its high-rise projects.
Empire's IDR reflects Fitch's expectation that management will
lower inventory spending if market conditions deteriorate and
monetize its housing inventory. This should allow Empire to
generate strong cash flow and use it to pay down debt or build cash
on the balance sheet during housing downturns. However, given the
company's exposure to high-rise projects, the ability to generate
cash may not be as immediate as homebuilders focused on
single-family homes as the high-rise projects, which take longer to
construct, would need to be completed before Empire can monetize
their backlog.
Rating Incorporates Housing Cyclicality: The company's rating
incorporates the cyclicality of the housing market. Fitch expects
meaningful contraction in Empire's U.S. homebuilding operations as
well as lower high-rise deliveries in Canada in 2023 following the
completion of one of its high-rise projects in 2022. Fitch expects
deliveries from its Canadian low-rise operations to increase in
2023, owing to the company's strong backlog. Fitch expects further
revenue declines in 2024 as the housing market remains weak.
Empire's EBITDA margins are forecast to fall 150 bps-250 bps in
2023 and 200 bps-250 bps in 2024.
Prospects for Downgrade Case Increasing: Fitch's Ratings Case
forecast does not assume a meaningful contraction similar to the
last housing downturn. Should that be the case, there could be
negative momentum on the ratings, particularly if management
employs an aggressive capital allocation strategy.
DERIVATION SUMMARY
Empire Communities is meaningfully smaller and less geographically
diversified when compared with the U.S. homebuilders in Fitch's
coverage. The company's net debt to capitalization ratio of 80% and
EBITDA leverage of 8x are significantly higher than its peers. The
company's overall land position is also longer than its peers,
although its land position in the U.S. is comparable to the large
U.S. public homebuilders. Lastly, Empire's risk profile is higher
given its exposure to high-rise projects as well as its land
development operations. Its EBITDA margin is comparable to its U.S.
peers.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer:
- Revenues increase 23%-26% in 2021 and decline 16%-20% in 2023 and
high-single digits in 2024;
- EBITDA margin of 15%-15.5% in 2022, 12.5%-13.5% in 2023 and
10%-12% in 2024;
- Fitch-calculated net debt to capitalization of 76%-78% at YE
2022-YE 2024;
- Empire generates negative CFO of CAD125 million to CAD175 million
in 2022 and CFO margin of 3%-4% in 2023 and 9.5%-10.5% in 2024;
- EBITDA/interest incurred coverage of 2.4x in 2022, 1.6x in 2023
and 1.1x-1.3x in 2024.
Recovery Analysis
Empire Communities' business profile could yield a distressed
enterprise value of approximately CAD1.17 billion on the
liquidation value of its inventory, receivables and PP&E. Fitch had
previously assumed an enterprise value using a going concern
approach. The CAD1.17 billion in resulting liquidation value
exceeds Fitch's assessment of Empire's CAD900 million valuation as
a going concern, given the high value of the company's inventory
(low-rise and high-rise projects and land). The going concern
valuation is based on CAD150 million EBITDA estimate, reflecting
Fitch's view of a sustainable, post reorganization EBITDA level.
The GC EBITDA is 17% lower than the Sept. 30, 2022 LTM EBITDA.
Fitch assumes Empire could generate a 6.0x EBITDA multiple in a
going concern sale. Fitch has assumed a 10% administrative claim.
The liquidation estimate reflects Fitch's view of the value of
balance sheet assets that can be realized in sale or liquidation
processes conducted during a bankruptcy or insolvency proceeding
and distributed to creditors:
- 55% advance rate on inventory to account for shrinkage as well as
impairment charges in a housing downturn;
- 75% advance rate on receivables;
- 50% advance rate on PP&E.
Fitch assumed that the company's USD265 million secured revolving
credit facility is fully drawn based on 3Q22 borrowings and LCs.
The secured credit facility and Empire's high-rise project loans
are senior to the company's unsecured notes in the waterfall.
The allocation of the value in the liability waterfall results in a
recovery corresponding to an 'RR1' for the senior secured revolving
credit facility and a recovery corresponding to an 'RR4' for the
unsecured notes. A material increase in the secured high-rise debt
or the secured revolving credit facility without a corresponding
increase in Fitch's EV assumptions in a recovery scenario could
lead to negative rating action on the unsecured notes.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to an
Outlook Revision to Stable:
- Improvement in financial flexibility as evidenced by the
extension/renewal of the maturity of its secured revolver credit
facility at terms that are similar to the existing facility;
- Fitch's expectation that net debt to capitalization sustains
below 80% and EBITDA interest coverage is consistently above
1.25x.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Net debt-to-capitalization below 65% and EBITDA leverage
consistently below 6x and the company maintains a healthy liquidity
position;
- Fitch may also consider positive rating actions if the company
further diversifies its operations in the U.S. while maintaining a
leadership position in the Greater Golden Horseshoe and Greater
Toronto areas, while reporting net debt-to-capitalization
approaching 65% and EBITDA leverage around 6.0x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Deterioration in liquidity profile, including inability to renew
its revolving credit facility, meet covenant requirements or the
company consistently generating negative cash flow from
operations;
- EBITDA interest coverage below 1.25x;
- Inventory to debt consistently below 1.0x;
- Net debt to capitalization consistently above 80%.
LIQUIDITY AND DEBT STRUCTURE
Weak Financial Flexibility: Empire has weak financial flexibility
with cash of CAD104 million and CAD13 million of borrowing
availability under its USD265 million secured revolving credit
facility that matures in December 2023. The company recently
upsized its revolver commitment from USD225 million to USD265
million.
The company has CAD5.8 million of debt maturing for the remainder
of 2022 and CAD467.5 million of credit facilities and mortgage debt
coming due in 2023, including CAD294 million under its revolving
credit facility.
ISSUER PROFILE
Empire Communities Corp. is one of the largest private homebuilders
in North America. The company has leading market positions in the
Greater Golden Horseshoe and Greater Toronto areas in Canada and
has a small, albeit growing presence in the U.S.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Empire Communities
Corp. LT IDR B- Affirmed B-
senior unsecured LT B- Affirmed RR4 B-
senior secured LT BB- Affirmed RR1 BB-
EMPIRE SPORTS: Seeks Approval to Hire BRCS Inc. as Accountant
-------------------------------------------------------------
Empire Sports & Entertainment, Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Ohio to employ BRCS,
Inc. as its accountant.
The Debtor requires an accountant to prepare its monthly operating
reports and tax returns, and provide other accounting services.
The firm will charge these hourly fees:
Dean Raab $90 per hour
Evangelia Washington $60 per hour
As disclosed in court filings, BRCS neither holds nor represents
any interest adverse to the Debtor's estate.
The firm can be reached through:
Dean Raab
BRCS, Inc.
5845 Karric Square
Dublin, OH 43016
About Empire Sports & Entertainment
Empire Sports & Entertainment, Inc. is a full-service event
management and production company specializing in corporate events,
sporting events, meetings and conferences, hospitality services,
and non-profit events. It is based in Dublin, Ohio.
Empire Sports & Entertainment sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. S.D. Ohio Case No. 22-52666) on
Sept. 12, 2022, with up to $500,000 in assets and up to $10 million
in liabilities. Alexander M. Schaffe, president of Empire Sports &
Entertainment, signed the petition.
Judge Mina Nami Khorrami oversees the case.
Strip, Hoppers, Leithart, McGrath & Terlecky Co., LPA and BRCS,
Inc. serve as the Debtor's legal counsel and accountant,
respectively.
FAST RADIUS: Jan. 6 Expedited Hearing on Solicitation Motion
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will convene
a hearing on Jan. 6, 2023 at 2:00 p.m. (ET), to consider approval
of the Combined Plan and Disclosure Statement of Fast Radius, Inc.,
for solicitation purposes. The Court approved the Debtors' motion
for an expedited hearing and shortening notice of the Plan
solicitation motion.
Responses or objections to the Solicitation Motion must be filed by
no later than January 4, 2023 at 4:00 p.m. (ET) and served on the
following parties: (i) counsel for the Debtors, (ii) the Office of
the United States Trustee, and (iii) proposed counsel to the
official committee of unsecured.
The Debtors are authorized to file any written reply in further
support of the Solicitation Motion by no later than January 5, 2023
at 10:00 a.m. (ET) or submit any reply orally at the Omnibus
Hearing.
About Fast Radius
Fast Radius, Inc. (Nasdaq: FSRD) -- https://www.fastradius.com/ --
is a cloud manufacturing and digital supply chain company in
Chicago, Ill.
Fast Radius, Inc. and affiliates, Fast Radius Operations, Inc. and
Fast Radius PTE Ltd., sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 22-11051) on
Nov. 7, 2022. In the petition signed by Patrick McCusker,
authorized signatory, Fast Radius, Inc. disclosed $69.3 million in
assets and $55.2 million in liabilities.
The Debtors tapped DLA Piper LLP (US) and Bayard, P.A. as legal
counsel; Lincoln Partners Advisors, LLC as investment banker;
Alvarez & Marsal North, America, LLC as financial advisor; and
Stretto, Inc. as claims, administrative, solicitation, and
balloting agent.
The U.S. Trustee for Region 3 has appointed an official committee
of unsecured creditors in the Chapter 11 cases of Fast Radius, Inc.
and its affiliates. Potter Anderson & Corroon LLP serves as the
committee's counsel.
FINANCIAL GRAVITY: Delays Filing of Form 10-K for Fiscal 2022
-------------------------------------------------------------
Financial Gravity Companies, Inc. filed a Form 12b-25 with the
Securities and Exchange Commission stating it is unable to file
its Annual Report on Form 10-K for the fiscal year ended Sept. 30,
2022, in a timely manner because the Company was not able to
complete timely its financial statements without unreasonable
effort or expense.
About Financial Gravity
Headquartered in Austin Texas, Financial Gravity Companies, Inc. is
a parent company of stock brokerage, investment advisory, asset
management, tax planning for business and personal, and financial
advisor services companies.
Financial Gravity reported a net loss of $7.42 million for the year
ended Sept. 30, 2021, compared to a net loss of $791,675 for the
year ended Sept. 30, 2020. As of Dec. 31, 2021, the Company had
$4.35 million in total assets, $2.19 million in total liabilities,
and $2.16 million in total stockholders' equity.
Fort Worth, Texas-based Weaver and Tidwell, LLP, the Company's
auditor since 2020, issued a "going concern" qualification in its
report dated Dec. 29, 2021, citing that the Company incurred a net
loss and a net use of operating cash in the current year and
currently has a retained deficit that raises substantial doubt
about its ability to continue as a going concern.
FUSE GROUP: Incurs $444K Net Loss in FY Ended Sept. 30
------------------------------------------------------
Fuse Group Holding Inc. reported a net loss of $444,492 on $200,000
of revenue for the year ended Sept. 30, 2022, compared to a net
loss of $1.02 million on $700,000 of revenue for the year ended
Sept. 30, 2021, according to the Company's Form 10-K filed with the
Securities and Exchange Commission.
As of Sept. 30, 2022, the Company had $106,125 in total assets,
$525,847 in total liabilities, and a total stockholders' deficit of
$419,722.
Diamond Bar, California-based KCCW Accountancy Corp., the Company's
auditor since 2022, issued a "going concern" qualification in its
report dated Dec. 28, 2022, citing that as of Sept. 30, 2022, the
Company had recurring losses from operations, an accumulated
deficit, and a negative cash flows from operating activities. As
such there is substantial doubt about its ability to continue as a
going concern.
Fuse Group stated, "If we are not successful in developing the
mining business and establishing profitability and positive cash
flow, additional capital may be required to maintain ongoing
operations. We have explored and continue to explore options to
provide additional financing to fund future operations as well as
other possible courses of action. Such actions may include, but
are not limited to, securing lines of credit, sales of debt or
equity securities (which may result in dilution to existing
shareholders), loans and cash advances from other third parties or
banks, and other similar actions. There can be no assurance we
will be able to obtain additional funding (if needed), on
acceptable terms or at all, through a sale of our common stock,
loans from financial institutions, or other third parties, or any
of the actions discussed above. If we cannot sustain profitable
operations, and additional capital is unavailable, lack of
liquidity could have a material adverse effect on our business
viability, financial position, results of operations and cash
flows."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1636051/000118518522001464/fusegroup20220930_10k.htm
About Fuse Group
Headquartered in Arcadia, CA, Fuse Group Holding Inc. currently
explores opportunities in mining. On Dec. 6, 2016, the Company
incorporated Fuse Processing, Inc. in the State of California.
Processing seeks business opportunities in mining and is currently
investigating potential mining targets in Asia and North America.
Fuse Group is the sole shareholder of Processing.
GALLERIA WEST: Voluntary Chapter 11 Case Summary
------------------------------------------------
Debtor: Galleria West Loop Investments, LLC
5900 Balcones Drive, Suite 100
Austin, TX 78731
Business Description: The Debtor is primarily engaged in renting
and leasing real estate properties.
Chapter 11 Petition Date: January 3, 2023
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 23-50027
Debtor's Counsel: Ron Satija, Esq.
HAYWARD PLLC
7600 Burnet Road, Suite 530
Austin, TX 78757
Tel: (737) 881-7102
Email: rsatija@haywardfirm.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Dward Darjean as manager.
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/QLTK4PA/Galleria_West_Loop_Investments__txwbke-23-50027__0001.0.pdf?mcid=tGE4TAMA
GAUCHO GROUP: Board OKs Issuance of Additional RSUs Under 2017 Plan
-------------------------------------------------------------------
As reported on Gaucho Group Holdings, Inc.'s Current Report on Form
8-K filed with the Securities and Exchange Commission on June 30,
2022, the Company issued a total of 26,278 of restricted stock
units subject to vesting. A total of 13,139 vested on Sept. 18,
2022, and on Dec. 18, 2022, the remaining RSUs vested and the
Company issued 13,020 shares of common stock pursuant to the
vesting provisions of the RSUs, of which, a total of 11,407 shares
of common stock were issued to certain officers and directors of
the Company.
On Dec. 24, 2022, the Board of Directors of the Company approved
the issuance of additional RSUs pursuant to the 2017 Equity
Incentive Plan effective Dec. 31, 2022 subject to vesting,
representing 767,280 shares of common stock of the Company to
certain employees, contractors, consultants and advisors in
exchange for services to the Company in the fiscal year 2022. The
RSUs will have a price per share equal to the closing price of the
shares of common stock on the Nasdaq as of Dec. 30, 2022. A third
of the RSUs will vest on the date of grant, which is Dec. 31, 2022.
Thereafter, one-third of the RSUs will vest on the first
anniversary of the date of grant, and the remaining one-third to
vest on the second anniversary of the date of grant.
About Gaucho Group
Headquartered in New York, NY, Gaucho Group Holdings, Inc. --
http://www.algodongroup.com-- was incorporated on April 5, 1999.
Effective Oct. 1, 2018, the Company changed its name from Algodon
Wines & Luxury Development, Inc. to Algodon Group, Inc., and
effective March 11, 2019, the Company changed its name from Algodon
Group, Inc. to Gaucho Group Holdings, Inc. Through its
wholly-owned subsidiaries, GGH invests in, develops and operates
real estate projects in Argentina. GGH operates a hotel, golf and
tennis resort, vineyard and producing winery in addition to
developing residential lots located near the resort. In 2016, GGH
formed a new subsidiary and in 2018, established an e-commerce
platform for the manufacture and sale of high-end fashion and
accessories. The activities in Argentina are conducted through its
operating entities: InvestProperty Group, LLC, Algodon Global
Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties
II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its
wines in Europe through its United Kingdom entity, Algodon Europe,
LTD.
Gaucho Group reported a net loss of $2.39 million for the year
ended Dec. 31, 2021, a net loss of $5.78 million for the year ended
Dec. 31, 2020, and a net loss of $6.96 million for the year ended
Dec. 31, 2019. As of Sept. 30, 2022, the Company had $25.39
million in total assets, $6.86 million in total liabilities, and
$18.53 million in total stockholders' equity.
GLEAMIN INC: Plan Projects Payments to Unsecured Creditors
----------------------------------------------------------
Gleamin Inc. submitted a First Amended Plan of Reorganization.
Under the Plan, the Debtor will devote all of its projected
Disposable Income toward the payment of creditors. The Plan will
be funded with the funds that are not for the payment of
expenditures necessary for the continuation, preservation, or
operation of the business of the Debtor. The Plan provides for
payment of Administrative Expenses, Priority Tax Claims, and
Allowed Secured Claims in accordance with the Bankruptcy Code, and
projects payment to Allowed General Unsecured Claims. Finally,
holders of Equity Interests will retain their equity interests as
they existed on the Petition Date.
Under the Plan, Class 2 General Unsecured Claims total
$3,773,696.93. All Allowed General Unsecured Claims shall be paid
pro rata in monthly installments from Disposable Income commencing
on the month in which all Administrative Claims, Priority Tax
Claims, and Secured Claims have been paid in full. Such monthly
payments shall continue until the Last Distribution Date. Class 2
is impaired.
The Plan will be funded by the proceeds realized from the
operations of the Debtor.
The Plan assumes available Disposable Income for Distributions to
be on average no less than $11,400 per month for 4 years. However,
all Excess Payments for any particular month shall be applied to
any Disposable Income shortfall for any subsequent month or
months.
A hearing on the confirmation of the Plan is scheduled for Jan. 10,
2023, at 3:00 P.M., Eastern Standard Time in Courtroom No. 5, 5th
Floor, at the U.S. Bankruptcy Court, District of Delaware, 824 N.
Market Street, Wilmington, Delaware 19801. Objection to the
confirmation of the Plan will be on Dec. 30, 2022, at 4:00 P.M.,
Eastern Standard Time. Ballots regarding the voting on the Plan
must be returned by Dec. 30, 2022, at 5:00 P.M., Eastern Standard
Time.
Counsel to the Debtor:
Joseph C. Barsalona II, Esq.
PASHMAN STEIN WALDER HAYDEN, P.C.
1007 North Orange Street 4th Floor #183
Wilmington, DE 19801-1242
Telephone: (302) 592-6496
A copy of the First Amended Plan of Reorganization dated Dec. 21,
2022, is available at https://bit.ly/3hTMQXp from
PacerMonitor.com.
About Gleamin
Inc.
Gleamin Inc. is an innovative skin beautifying and cleansing
company created by Jordan Smyth.
Gleamin Inc. filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Case No.
22-10768) on Aug. 18, 2022. In the petition filed by Joran Smyth,
as founder and CEO, the Debtor reported assets and liabilities
between $1 million and $10 million each.
David M. Klauder has been appointed as Subchapter V trustee.
Pashman Stein Walder Hayden, P.C., led by Joseph Charles Barsalona
II, is the Debtor's counsel.
GRECO BUILD: Taps Diane S. Perera as Construction Law Counsel
-------------------------------------------------------------
Greco Build, Inc. seeks approval from the U.S. Bankruptcy Court for
the Southern District of Florida to hire Diane S. Perera P.A. as
its special counsel.
The Debtor needs the firm's legal advice on construction law
issues, including licensing issues arising from a claim filed by
James Kustin with the State of Florida Department of Business and
Professional Regulation.
The firm has agreed to provide services at the rate of $350 per
hour for attorney fees, plus expenses incurred.
As disclosed in court filings, Diane S. Perera is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Diane S. Perera, Esq.
Diane S. Perera P.A.
12485 SW 137th Ave Ste 105
Miami, FL 33186
Phone: +1 305-252-1388
About Greco Build
Greco Build, Inc. operates a construction management business. The
Debtor filed a Chapter 11 petition (Bankr. S.D. Fla. Case No.
22-17150) on Sept. 15, 2022, with as much as $50,000 in both assets
and liabilities.
Judge Peter D. Russin oversees the case.
Susan D. Lasky, Esq., at Sue Lasky, PA and Diane S. Perera P.A.
serve as the Debtor's bankruptcy counsel and special construction
law counsel, respectively.
GULFSLOPE ENERGY: Incurs $8.7 Million Net Loss in FY Ended Sept. 30
-------------------------------------------------------------------
Gulfslope Energy, Inc. reported a net loss of $8.70 million on $0
of revenues for the year ended Sept. 30, 2022, compared to a net
loss of $2.23 million on $0 of revenues for the year ended Sept.
30, 2021, according to the Company's Form 10-K filed with the
Securities and Exchange Commission.
As of Sept. 30, 2022, the Company had $5.47 million in total
assets, $13.99 million in total liabilities, and a total
stockholders' deficit of $8.52 million.
Houston, Texas-based Pannell Kerr Forster of Texas, P.C., the
Company's auditor since 2019, issued a "going concern"
qualification in its report dated Dec. 29, 2022, citing that the
Company has a net capital deficiency, and further losses are
anticipated in developing the Company's business, which raise
substantial doubt about its ability to continue as a going
concern.
Gulfslope stated, "We have incurred losses since our inception
resulting in an accumulated deficit of approximately $68.9 million
and negative working capital totaling approximately $13.8 million
at September 30, 2022. Further losses are anticipated as we
continue to develop our business. To continue as a going concern,
we estimate that we will need approximately $10 million to meet our
obligations and planned operating expenditures through December
2023. These expenditures include prospect development and pursuit
of acquisition costs, lease rentals to the BOEM, general and
administrative expenses, and costs associated with IT and seismic
acquisition and processing. In addition, we plan to extend the
agreements associated with our loans from related parties, the
accrued interest payable on these loans, as well as the Company's
accrued liabilities. We plan to finance our operations through
equity and/or debt financings, and strategic transactions to
include farm-outs, asset sales or mergers. There are no assurances
that financing will be available with acceptable terms, if at all.
If we are not successful in obtaining financing, our operations
would need to be curtailed or ceased or the Company would need to
sell assets or consider alternative plans up to and including
restructuring."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1341726/000183988222030611/gspe-10k_093022.htm
About Gulfslope
Headquartered in Houston, Texas, Gulfslope Energy, Inc. --
http://www.gulfslope.com-- is an independent crude oil and
natural gas exploration and production company whose interests are
concentrated in the United States Gulf of Mexico federal waters.
GulfSlope Energy commenced commercial operations in March 2013.
H-CYTE INC: To Acquire 100% Membership Interests in Scion
---------------------------------------------------------
H-Cyte, Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission it entered into an acquisition agreement with
Scion Solutions, LLC, an Indiana limited liability company, and the
members of Scion, pursuant to which the Scion Members sold the
Company 100% of Scion's issued and outstanding membership interests
in exchange for an aggregate of 123,153 shares of the Company's
common stock, $0.001 par value per share, and performance payments
due upon the Company's achieving certain milestones as set out on
Schedule C of the Agreement.
The Acquisition Agreement further provides that for every share of
Company common stock issued pursuant to the exercise or conversion
of those securities identified on Schedule B to the Acquisition
Agreement, the Scion Members shall receive shares of the Company's
common stock in an amount sufficient to keep the Scion Members'
collective ownership of the Company's common stock at 20% of the
Company's issued and outstanding common stock. The Company's Chief
Scientific Officer, Tanya Rhodes was a 33.33% member of Scion and
received 41,051 shares of the Company's Common Stock in the
Acquisition.
About H-CYTE Inc.
Headquartered in Tampa, Florida, H-CYTE Inc. --
http://www.HCYTE.com-- is a hybrid-biopharmaceutical company
dedicated to developing and delivering new treatments for patients
with chronic respiratory and pulmonary disorders.
H-Cyte reported a net loss of $4.80 million for the year ended Dec.
31, 2021, compared to a net loss of $6.46 million on $2.15 million
of revenues for the year ended Dec. 31, 2020. As of Sept. 30,
2022, the Company had $240,559 in total assets, $8.39 million in
total liabilities, and a total stockholders' deficit of $8.15
million.
Tampa, Florida-based Frazier & Deeter, LLC, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated Feb. 25, 2022, citing that he Company has negative working
capital, has an accumulated deficit, has a history of significant
operating losses and has a history of negative operating cash flow.
These factors raise substantial doubt about the Company's ability
to continue as a going concern.
HANSABEN INVESTMENTS: Poppy Bank Plan Outline Approved
------------------------------------------------------
Judge Dennis Montali has entered an order approving the Second
Amended Disclosure Statement dated December 19, 2022, filed by
Poppy Bank for Hansaben Investments, LLC, a California Limited
Liability Company.
Jan. 20, 2023, is fixed as the last day for filing written
acceptances or rejections of the plan.
Jan. 27, 2023, is fixed for the hearing on confirmation of the
plan.
Jan. 20, 2023, is fixed as the last day for filing and serving
written objections to confirmation of the plan.
By no later than De. 30, 2022, the Plan dated Dec. 14, 2022, the
Second Amended Disclosure Statement, and a ballot conforming to
Ballot for Accepting or Rejecting Plan of Reorganization (Official
Form 314) shall be mailed to creditors, equity security holders,
and other parties in interest, and shall be transmitted to the
United States Trustee.
Attorneys for POPPY BANK, f/k/a 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
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.
IBARRA LLC: Case Summary & Six Unsecured Creditors
--------------------------------------------------
Debtor: Ibarra LLC
228 West 136th Street
New York, NY 10030
Business Description: Ibarra owns in fee simple title a real
property located at 228 West 136th
Street, New York, NY 10030 valued at
$2.5 million.
Chapter 11 Petition Date: January 3, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-10003
Judge: Hon. Martin Glenn
Debtor's Counsel: Julio E. Portilla, Esq.
LAW OFFICE OF JULIO E. PORTILLA, P.C.
555 Fifth Avenue, 17th Floor
New York, NY 10017
Tel: (212) 365-0292
Fax: (212) 365-4417
Email: jp@julioportillalaw.com
Total Assets: $2,500,123
Total Liabilities: $1,320,000
The petition was signed by Diana Ibarra as member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/BYOAVQY/Ibarra_LLC__nysbke-23-10003__0001.0.pdf?mcid=tGE4TAMA
IGLESIAS DIOS: Extends Plan & Disclosures Deadline to Jan. 9
------------------------------------------------------------
Judge Edward A. Godoy has entered an order granting Iglesias Dios
Es Amor Inc.'s motion seeking a 21-day extension of time to file
the Disclosure Statement and Reorganization Plan until Jan. 9,
2023.
In seeking the extension, the Debtor explained that it has prepared
the disclosure statement and reorganization plan however, the same
needs to be discussed with the congregation of the Church to seek
their approval.
About Iglesias Dios Es Amor
Iglesias Dios Es Amor, Inc., filed its voluntary petition for
relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.P.R.
Case No. 21-03508) on Nov. 29, 2021, with as much as $1 million in
both assets and liabilities. Elias Reyes Ortiz, president, signed
the petition.
Judge Edward A. Godoy oversees the case.
The Debtor tapped Gerardo L. Santiago Puig, Esq., at Santiago Puig
Law Offices as legal counsel and Juan C. Pomales Torres as
accountant.
INOC PROPERTIES: Gets OK to Tap Glast Phillips & Murray as Counsel
------------------------------------------------------------------
INOC Properties, LP received approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Glast Phillips &
Murray, P.C. as its legal counsel.
The firm's services include:
(a) providing the Debtor with legal advice regarding its
powers and duties in the continued operation of its business and
the management of its property;
(b) taking all necessary action to protect and preserve the
Debtor's estate;
(c) preparing legal papers;
(d) assisting the Debtor in preparing and filing a plan of
reorganization;
(e) performing other legal services for the Debtor in
connection with its Chapter 11 case; and
(f) performing such legal services as the Debtor may request
with respect to any matter, including, but not limited to,
corporate finance and governance, contracts, antitrust, labor, and
tax.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Brandon Tittle, Esq. $495 per hour
Associate $325 per hour
Paralegals $225 per hour
Brandon Tittle, Esq., a partner at Glast, Phillips & Murray,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Brandon J. Tittle, Esq.
Glast, Phillips & Murray, P.C.
14801 Quorum Drive, Suite 500
Dallas TX 75254-1449
Telephone: (972) 419-7186
Facsimile: (972) 419-8329
Email: btittle@gpm-law.com
About INOC Properties
INOC Properties, LP, a limited partnership in Prairie View, Texas,
sought Chapter 11 protection (Bankr. S.D. Texas Case No. 21-33906)
on Dec. 6, 2021, with $1 million to $10 million in both assets and
liabilities. Kollye Kilpatrick, president of INOC Properties,
signed the petition.
Judge Christopher M. Lopez oversees the case.
Brandon J. Tittle, Esq., at Tittle Law Group, PLLC is the Debtor's
legal counsel.
KEYSTONE CLEANING: Seeks Approval to Hire Liberty Tax Service
-------------------------------------------------------------
Keystone Cleaning Services LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of Pennsylvania to hire
Liberty Tax Service.
The services to be performed by the firm include payroll services
at $120 per payroll; payroll returns at $300 per quarter; annual
income tax returns at $850 to $950 annually; monthly bookkeeping at
$125 per hour; and other miscellaneous services, as needed, at $75
per hour.
As disclosed in court filings, Liberty Tax Service is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Troy Owen
Liberty Tax Service
868 Fourth Avenue
New Kensington, PA 15068
Phone: (724) 339-1922
About Keystone Cleaning Services
Keystone Cleaning Services, LLC does business as a commercial
cleaning service in Western Pennsylvania.
Keystone Cleaning Services sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. W.D. Penn. Case No. 22-22193) on
Nov. 11, 2022. In the petition signed by its managing member,
Gregory W. Hutcherson, the Debtor disclosed up to $500,000 in
assets and up to $50,000 in liabilities.
Judge Jeffery A. Deller oversees the case.
Christopher M. Frye, Esq., at Steidl & Steinberg, P.C., is the
Debtor's legal counsel.
LAS VEGAS SANDS: Fitch Affirms IDR at 'BB+', Outlook Negative
-------------------------------------------------------------
Fitch Ratings has affirmed the 'BB+' Issuer Default Ratings (IDRs)
of Las Vegas Sands Corp. (LVSC), Sands China, Ltd. (SCL), and
Marina Bay Sands Pte. Ltd (MBS, collectively LVS). In addition,
Fitch has affirmed LVSC's and SCL's unsecured debt at 'BB+'/'RR4
'and MBS's secured debt at 'BBB-'/'RR2'. Fitch has removed the
Rating Watch Negative for all of LVS and its subsidiaries' ratings.
The Rating Outlook is Negative.
The removal of the Rating Watch reflects SCL's signing of a new,
10-year gaming concession in Macau on December 16, with reasonable
terms and commitments, in Fitch's opinion. Visitation recovery
remains a key risk and supports the Negative Outlook, given LVS'
still high leverage metrics that are balanced by strong excess
liquidity. Fitch's forecast continues to result in LVS regaining
'BB+' gross leverage metrics by 2024, but net leverage metrics are
stronger and consistent with a 'BB+' rating beginning in 2023.
KEY RATING DRIVERS
Recovery Trajectory Driving Outlook: The removal of the concession
overhang eliminates a material credit risk; however, the recovery
of gross gaming revenues (GGR) and visitation into Macau remain a
key credit concern, despite positive recent developments. Fitch's
Base Case contemplates Macau GGR performance in 2023-2025 at 50%,
70%, and 90% of 2019 levels, respectively.
Fitch believes pent-up demand is possible for gaming and
leisure-oriented activities following nearly three years of
pandemic restrictions for Mainland gamblers in China. Other global
gaming jurisdictions experienced fast recoveries to pre-pandemic
levels of demand once travel restrictions were lifted, often less
than one year (e.g. Las Vegas in 2021, Singapore expected in 2023).
Visitation remains significantly depressed and monthly visitation
and GGR figures will influence Fitch's degree of confidence in
whether a recovery begins to take hold.
The recent easing of travel restrictions and COVID-19 protocols by
the Chinese, Macau and Hong Kong governments is a positive, but its
impact to Macau's operating performance will be more meaningful by
mid-2023 given the rapidly increasing number of COVID-19 cases in
China. China and Macau's exit from "Zero COVID" is also still in a
nascent stage, and it remains to be seen how macro and other
policies will respond during this critical transition period.
As the virus circulates more widely, a temporary period of economic
volatility may be unavoidable, given China's limited levels of
naturally acquired immunity, comparatively low vaccine booster
coverage for the elderly, and the experience of other economies
that have pursued a similar path.
Delayed De-levering Trajectory: Fitch expects LVS' gross leverage
to remain elevated and inconsistent with investment grade until at
least 2025. Gross leverage is forecasted to be 6.9x, and 4.4x in
2023 and 2024, respectively. Net leverage is stronger but still
inconsistent with investment grade until 2024. LVS' net leverage
will be back in the 2x range beginning 2024 under Fitch's
assumption that shareholder returns do not resume until 2024, and
their payout relative to cash flow is consistent with pre-pandemic
levels.
Longer term, Fitch believes LVS is willing to manage its balance
sheet consistent with investment grade and that the pandemic has
not altered its long held conservative financial policies. LVS has
a solid track record of publicly articulating its leverage policy
and adhering to prudent balance sheet management. This includes
reducing shareholder returns and debt in 2015 amid deterioration in
Macau operations, halting shareholder returns during the pandemic,
and maintaining its Las Vegas asset sale proceeds as excess
liquidity.
Meaningful Upcoming Maturities: LVS has a number of maturities
approaching that should be manageable in the context of its strong
liquidity and Fitch's expectation of a recovery in SCL cash flows.
This includes $6.1 billion in cash (including cage cash), of which
$1.4 billion is at SCL, $745 million is at MBS, and $3.9 billion is
at LVSC. However, persistent operating weakness in Macau may
require LVSC to further support SCL, which in turn would reduce its
own financial flexibility. Positively, LVSC has open access to MBS'
strong underlying cash flows (subject to a 4.25x MBS leverage test
for unlimited access, Fitch estimate: 2.6x for YE2022) and MBS has
$2.6 billion in borrowing capacity related to its ongoing
construction projects.
SCL's $1.45 billion unsecured revolver matures in July 2023 and
$1.8 billion in unsecured notes maturing August 2025. Of note,
SCL's revolving credit facility relationship banks have been
supportive throughout the pandemic and provided covenant relief as
recently as November 2022. LVSC has $1.75 billion in unsecured
notes maturing August 2024.
Concession Overhang Removed: All six incumbents were awarded new
10-year gaming concessions that were signed on December 16, 2022.
The potential for losing a concession previously drove LVS'
Negative Rating Watch, combined with the potential for more onerous
operating terms and capital commitments, none of which transpired.
Fitch views the completion of the concession process positively for
Macau's gaming regulatory environment relative to other global
gaming jurisdictions, given the government's pragmatic approach.
The new gaming law and capex commitments under the new concessions
are reasonable and the concession re-bidding process was executed
efficiently. In addition, all US-based operators received new
concessions despite previous investment community concerns of
US-Sino relations and speculation of their potential impact on the
concession process.
Manageable Development Pipeline: LVS is spending an aggregate $4.3
billion in Singapore (including a $1.1 billion one-time payment
already made in second-quarter 2019) to expand Marina Bay Sands
with a new hotel tower, incremental gaming and MICE space, and a
15,000-seat entertainment venue. This also includes a $1 billion
refresh of the existing hotel tower to introduce improved suite
product. The MBS expansion project spending will not ramp up until
2024 due to pandemic-related delays, while the $750 million left to
spend on Towers One and Two will be spent from 2022-2023. There are
minimal funding concerns and the Singapore projects are viewed
positively from a return perspective and will increase residual
equity for LVSC.
In Macau, the company committed to spending a minimum of MOP 30.2
billion (~$3.8 billion) over the 10-year concession term through
2033. This will skew primary toward non-gaming amenities to further
enhance SCL's footprint in Macau, though no additional hotel rooms
were included in SCL's commitments. The magnitude will be
manageable from a cash flow perspective as operations normalize and
are reasonable in the context of SCL's historical capex spending.
As of YE2022, the company has completed the $2.2 billion conversion
of Sands Cotai Central into the Londoner in Macau, as well as the
Grand Suites at Four Seasons Macau and Londoner Court.
Strong Ratings Linkage: Fitch mainly analyzes LVS on a consolidated
basis because the rating linkage between the parent and
subsidiaries is strong. Currently Fitch deems MBS, which is almost
fully recovered post-pandemic, to be the stronger subsidiary and
there are few restrictions inhibiting LVSC's access to MBS' cash.
In relation to SCL, which has been struggling post-pandemic to
date, LVSC is the stronger parent as it has $4 billion of cash,
receives royalty fees from MBS and SCL, and has access to MBS' cash
flows and equity value.
Fitch believes that SCL has strong operational and strategic value
to LVSC, which supports equalization of IDRs. Per Fitch's base case
assumptions, by 2025, when Macau GGR will recover to 90% of 2019
levels supported by more relaxed COVID policies, Fitch expects all
three entities to have similar standalone credit profiles, which
was the case prior to COVID. To the extent, the Macau gaming market
recovery meaningfully underperforms Fitch's expectations for the
recovery trajectory (50% by 2023 and 70% by 2024), Fitch could
consider negatively differentiating SCL's IDR from LVSC and MBS to
account for LVSC's limited resources to indefinitely support SCL.
The long-term ability to support SCL should Macau's recovery remain
prolonged is becoming an increasingly forefront concern in light of
upcoming major maturities at both LVS and SCL, large capex program
at MBS, and the recent volatile state of the capital markets.
DERIVATION SUMMARY
LVS historically has maintained an investment-grade credit profile
due to its high-quality assets in attractive regulatory regimes,
strong financial profile and commitment to a conservative financial
policy. Long term, Fitch expects the company to manage its credit
profile in a consistent manner, but the operating environment in
Macau has led to an extended period of time of weak consolidated
financial metrics.
Positively, the company took prudent steps to manage its balance
sheet during the ongoing operating stresses caused by the pandemic.
This includes halting shareholder returns as operating cash flows
declined and its public commitment not to resume them until cash
flows have stabilized and at a level commensurate with their
growth.
LVS' peers include Seminole Tribe of Florida (BBB/Stable), which
maintains lower leverage, enjoys a degree of exclusivity in a deep
Florida market, and is not facing similar operating headwinds in
the U.S. relative to LVS' jurisdictions that rely more on
international visitation. Conversely, Seminole has less
discretionary distributions that partially fund tribal government
operations and is less diversified. Genting Berhad (BBB/Stable) and
its subsidiaries have international diversification similar to LVS,
which includes some degree of economic exclusivity (Malaysia,
Singapore) and some subject to more competition (Las Vegas, New
York). Its leverage is lower than LVS' and its end markets have
enjoyed a faster recovery relative to Macau's.
KEY ASSUMPTIONS
- Macau revenues are down 50%, 30%, and 10% from 2023, 2024, and
2025, respectively, compared with 2019 levels. SCL property EBITDA
margins of 22%, 33%, and 39% forecasted for 2023, 2024, and 2025;
- In Singapore, revenues approach pre-pandemic levels in 2023. The
faster recovery in Singapore is supported by the updated premium
suite product and the nation's continued recovery in international
visitation. This assumption does not yet include material inbound
Chinese visitation, which could further increase MBS' performance.
Property margins in the low 50% range;
- Annual capex spending in $1.0 billion-$1.4 billion range through
2025, which includes remaining development capex in Macau and
Singapore, as well as some of the $3.8 billion committed to be
spent in Macau during the new concession's 10-year term. No share
repurchases are assumed. Fitch assumes the resumption of dividends
coincides with the stability and growth of operating cash flow,
which is during 2024 per the agency's assumptions. Fitch forecasts
a payout ratio relative to total EBITDA that is consistent with
pre-pandemic levels;
- LVS maintains a material amount of excess cash, including its Las
Vegas asset sale proceeds, given its conservative financial policy
and the low likelihood of material capex in any new jurisdiction in
the medium-term (should LVS pursue any new gaming licenses);
- MBS capex is funded through property cash flows and Fitch does
not expect its delayed draw term loan to be utilized in the near
term;
- Maturities at SCL and LVSC in 2023-2025 are refinanced/amended &
extended.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- A track record of improved visitation into Macau, coupled with a
commensurate improvement in underlying cash flow generation at SCL
could result in the Outlook being revised to Stable;
- The company maintains its existing financial policies and
leverage (debt/EBITDA) sustains below 4.0x and 3.5x on a gross and
net basis, respectively, with some flexibility to go outside these
thresholds temporarily during development cycles or periods of
operating pressure
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Macau operations fail to meet expectations of improvement,
leading to worsening credit metrics and reduced confidence in the
company's ability to refinance upcoming maturities at SCL and LVSC.
This could lead to SCL's IDR and instrument ratings being
downgraded should Fitch reconsider the application of its PSL
criteria;
- The company deviates from its existing financial policies and
leverage (debt/EBITDA) sustains above 5.0x and 4.5x on a gross and
net basis, respectively, with some flexibility to go outside these
thresholds temporarily during development cycles or periods of
operating pressure. Fitch expects gross leverage to return within
the negative rating sensitivities by YE 2024. A material deviation
from this timeframe due to an earlier restart of shareholder
friendly activity or worse than anticipated recovery trajectory
could lead to negative rating action.
LIQUIDITY AND DEBT STRUCTURE
LVS' liquidity is strong, with $5.8 billion excess cash net of $400
million in estimated cage and system cash as of Sept. 30, 2022. LVS
received meaningful cash proceeds from the Venetian sale during
1Q22, the total consideration of which was $6.25 billion (includes
a $1.2 billion sellers note). In addition, LVS has roughly $2.9
billion of aggregate revolver availability. The nearest maturities
include the $1.4 billion outstanding under the revolver at SCL in
2023 and $1.75 billion LVSC senior unsecured note coming due 2024.
Fitch expects consolidated discretionary FCF (cash flow from
operations minus maintenance capex) to turn positive in 2023 and
accelerate meaningfully in 2024, thanks to Singapore's strong
performance and Macau's expected recovery. However, LVS has
development capex in Singapore and may look to resume its dividends
as operations normalize. Therefore, Fitch-defined FCF could
potentially remain negative through Fitch's forecast horizon
depending on the company's pace of dividend resumption.
ISSUER PROFILE
LVS owns and operates six casino resorts, including five in Macau
and one in Singapore. LVS's Macau subsidiary, Sands China, is 70%
owned with the balance being publicly traded on the Hong Kong Stock
Exchange.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Las Vegas Sands Corp. LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed RR4 BB+
Marina Bay Sands
Pte. Ltd. LT IDR BB+ Affirmed BB+
senior secured LT BBB- Affirmed RR2 BBB-
Sands China Ltd. LT IDR BB+ Affirmed BB+
senior unsecured LT BB+ Affirmed RR4 BB+
LEVI STRAUSS: Fitch Affirms LongTerm IDR at 'BB+', Outlook Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed Levi Strauss & Co.'s (Levi) Long-Term
Issuer Default Rating (IDR) at 'BB+'. The Rating Outlook is
Stable.
Levi's ratings reflect its position as one of the world's largest
branded apparel manufacturers, with broad channel and geographic
exposure, while also considering the company's narrow focus on the
Levi brand and in bottoms.
The ratings consider the company's good execution both from a
topline and a margin standpoint, which support Fitch's longer-term
expectations of low-single digit revenue and EBITDA growth.
Although there could be some near-term pressure to operating
results given ongoing shifts in consumer behavior, difficult
comparisons, and global macroeconomic uncertainty, Fitch expects
that Levi will be able to maintain adjusted leverage (adjusted
debt/EBITDAR, capitalizing leases at 8x) below 3.5x over time.
KEY RATING DRIVERS
Focused Strategy Supports Operating Trajectory: Levi has
intensified efforts to both shift its business toward
direct-to-consumer channels like retail and e-commerce and to
streamline its cost structure. These efforts have helped improve
Levi's margins, provide increased control over its business and
sales, and permit further reinvestments for future growth. Levi's
margin strategies have helped to offset some of the near-term
inflationary and supply-chain pressures seen by the company and
support Fitch's expectations that EBITDA margins will trend in the
mid-to-upper 13% level beginning in 2023, relative to 13.0% in
2019.
Fitch projects Levi's revenue could decline in the low-single
digits in 2023, driven in-part by difficult comparisons and an
increased focus on services like travel and entertainment following
pandemic-induced softness. Beginning in 2024, Fitch projects that
Levi's revenue could grow modestly towards USD6.3 billion by 2026
versus 2019's USD5.8 billion, supported by good operational
execution around its topline initiatives, as well as by the recent
acquisition of Beyond Yoga, which is expected to contribute
approximately USD100 million in 2022 revenue.
Strategic Growth Initiatives: Management has outlined three
strategic initiatives that should support Fitch's expectation of
low single digit positive sales growth over time. The first is to
drive the profitable core businesses and brands through product
innovation and strengthened customer relationships. The core
businesses include the Levi's men's bottoms business globally, and
key global wholesale accounts, such as Walmart, Inc. (AA/Stable).
Secondly, Levi plans to expand its direct-to-consumer (DTC)
channel, including both its retail and e-commerce businesses. The
company's owned retail stores (28%) and online channel (8%)
accounted for 36% of sales in 2021. Management has targeted growing
DTC to over half of the business by 2027. Levi plans to grow its
direct penetration through retail unit expansion and investments in
its e-commerce operations to improve the online customer experience
and functionality. Levi benefits from its scale and good cash flow
generation, which helps it invest in the broad assets and
capabilities required to build and maintain strong omnichannel
models.
Thirdly, management plans to focus on continuing to diversify the
portfolio while expanding into less-penetrated categories and
markets. Businesses to expand include men's tops and outerwear,
women's apparel and key emerging markets, such as India and China.
During August 2021, Levi acquired Beyond Yoga, a women's athletic
apparel company, further diversifying its brand portfolio and
leaning into the women's market. Beyond Yoga is expected to
generate approximately USD100 million in revenue in 2022 with
minimal EBITDA contribution.
Strong Historical Top-Line Growth: Levi's top-line accelerated in
fiscals 2017 (8%), 2018 (14%) and 2019 (3%), following modestly
positive constant-currency growth the prior few years. Strong
growth across categories and geographies demonstrate that the
company's merchandising and branding efforts bore fruit. Levi's
brand and offering have been trend-right, and the company
successfully exploited opportunities to capitalize on this momentum
through new product assortments, brand and celebrity
collaborations, and square-footage expansion.
Levi's positive constant currency growth is evidence of its
somewhat resilient business model in the face of apparel industry
volatility, particularly for U.S. mid-tier apparel retailers. The
company's product portfolio is primarily basic denim product, which
is more replenishment-oriented and relatively less susceptible to
fashion trend changes over time. The company is also broadly
distributed across retail channels, including department store and
specialty, but also general merchandise/discount and online; thus,
Levi is somewhat agnostic to the impact of shifts in shopping
channels.
Modest Leverage; Strong FCF: Assuming flattish debt levels and
Fitch's EBITDA forecast, Levi's adjusted leverage is expected to
remain below 3.5x, in-line with recent history (aside from 2020).
Levi benefits from its good cash flow generation which is expected
to trend in the USD300-USD400 million range (pre-dividends)
beginning in 2023.Levi does not have a publicly articulated
leverage target, however, in June 2022, the company shared its
capital allocation strategy, centering around the following
priorities: capex (targeted at 3.5%-4% of annual revenue),
shareholder returns (55%-65% of FCF allocated towards dividends and
share repurchases), and M&A. In August 2021 Levi acquired Beyond
Yoga for approximately USD400 million in an all cash transaction.
Fitch expects that Levi could make additional cash-funded
acquisitions in the future.
DERIVATION SUMMARY
Levi's ratings consider the company's good execution both from a
topline and a margin standpoint, which support Fitch's longer-term
expectations of low-single digit revenue and EBITDA growth.
Although there could be some near-term pressure to operating
results given ongoing shifts in consumer behavior, difficult
comparisons, and global macroeconomic uncertainty, Fitch expects
that Levi will be able to maintain adjusted leverage (adjusted
debt/EBITDAR, capitalizing leases at 8x) below 3.5x over time.
Levi's 'BB' rated peers include Tempur Sealy International, Inc.
(TPX, BB+/Stable), Signet (BB/Stable) and Samsonite
(BB-/Negative).
Tempur Sealy's rating reflects the increased scale of operations
and good operating momentum relative to peers, which has been
driven by expanded distribution and market share gains supported by
operating initiatives that expanded TPX's omnichannel presence,
enhanced the brand/product portfolio and improved manufacturing
capabilities. Fitch believes this has led to a sustainable
competitive advantage with increased confidence in TPX's ability to
sustain EBITDA of around $900 million. Barring a large debt
financed acquisition, Fitch projects TPX will maintain long-term
gross leverage in the mid-2.0x area.
Signet's 'BB'/Stable rating reflect its leading market position as
a U.S. specialty jeweler with approximately 9% share of a highly
fragmented industry. The rating considers its recently strong
operating trajectory, which demonstrates success in the
implementation of its topline and other initiatives. Although Fitch
expects some near-term contraction from record 2021 results,
revenue and EBITDA beginning 2023 are projected to trend in the
mid-$7 billion and mid-$800 million ranges, respectively, well
above pre-pandemic levels of $6 billion and $504 million. The
rating reflects expectations that Signet will be able to maintain
adjusted leverage (adjusted debt/EBITDAR, capitalizing leases at
8x) in the low-4x range, in line with their publicly articulated
financial policy. The rating reflects expectations that Signet will
be able to maintain adjusted leverage (adjusted debt/EBITDAR,
capitalizing leases at 8x) in the low-4x range, in line with their
publicly articulated financial policy.
Samsonite's 'BB-'/Negative rating reflects the company's position
as the world's largest travel luggage company, with strong brands
and historically good organic growth. The rating considers the
strong improvement in global travel, which has supported
Samsonite's operational rebound, along with the company's progress
in paying down pandemic era debt, in line with Fitch's
expectations. However, the Negative Outlook reflects the continued
uncertainty regarding the exact timing and trajectory of
Samsonite's full recovery, which could be negatively impacted in
the near-term by broader global macroeconomic uncertainty.
Fitch expects that Samsonite will finish 2022 with adjusted
leverage somewhat elevated for its rating at around 5.3x versus
5.0x in 2019, before gradually approaching the high-4x range, as
appropriate for the rating, in 2023. The company would need to show
continued operational improvements alongside ongoing debt reduction
to support its rating.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer
- Fitch projects Levi's 2022 (year ending November 2022) revenue
could expand around 6% toward USD6.1 billion, relative to 2019
levels of USD5.8 billion. FY 2022 revenue will include USD100
million in incremental revenue from the Beyond Yoga acquisition.
After growing approximately 12% for the nine months ended Aug. 28,
2022, revenue in 4Q22 and into 2023 is expected to decline modestly
given difficult comparisons and shifts in spend to services. Fitch
expects low-single digit revenue growth thereafter, aided by Levi's
medium-term growth initiatives.
- EBITDA, which rebounded from USD360 million in 2020 to nearly
USD900 million in 2021, could moderate slightly in 2022 towards
USD850 million as the company faces elevated inflationary pressures
and a more promotional environment. Fitch expects margins to trend
in the mid-to-upper 13% level beginning in 2023, relative to 13.0%
in 2019, as some cost reductions and process improvements
undertaken during the pandemic could prove to be permanent. Ongoing
business shifts toward Levi's direct-to-consumer channel should
also benefit margins over time.
- In 2022, FCF, post-dividends, is expected to be around USD80
million, declining year-over-year versus 2021, given working
capital strain and increases to capex and dividends. Assuming
neutral working capital, FCF, post-dividends, in 2023 could be in
the mid-USD200 million range. Fitch expects the company could use
FCF towards growth investments, including tuck-in acquisitions.
- Adjusted leverage declined from 6.1x in 2020 to 3.0x in 2021 on
debt-repayment and EBITDA rebound. Fitch expects adjusted leverage
to remain below 3.5x, assuming no change to current debt levels of
approximately USD1.0 billion.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- A sustained mid-single-digit annual increase in constant-currency
revenue and EBITDA such that EBITDA approached $900 million on
current debt levels, yielding adjusted debt/EBITDAR below 3.0x;
- Alternatively, portfolio actions including acquisitions that
enhanced Levi's scale while lessening Levi's concentration on the
Levi brand and its bottoms business, could result in Fitch viewing
Levi's current financial profile, including adjusted debt/EBITDAR
sustained under 3.5x, as appropriate for a 'BBB-' rating;
- In addition to the above, a publicly stated financial policy
could support positive rating action.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Top line weakness and increased marketing / promotion investments
driving EBITDA below $700 million, resulting in sustained adjusted
debt /EBITDAR over 3.5x.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Levi's liquidity is strong, supported by cash on
hand of USD498.9 million and revolver availability of USD837.5
million as of Aug. 28, 2022, based on Levi's borrowing base, no
outstanding borrowings and net of USD12.5 million of letters of
credit and other minor borrowings. The USD850 million revolving
credit facility is secured by U.S. and Canadian inventories,
receivables and the U.S. Levi trademark, and benefits from upstream
guarantees from the domestic operating companies. In November 2022,
Levi entered into an amendment to its ABL credit agreement, thereby
providing a USD150 million accordion option to the existing USD850
million ABL facility.
As of Aug. 28, 2022, the company's capital structure consisted of
its USD850 million revolving credit facility due January 2026, its
unsecured EUR475 million notes due in March 2027 and its unsecured
USD500 million notes due in March 2031.
RECOVERY CONSIDERATIONS Fitch does not employ a waterfall recovery
analysis for issuers assigned ratings in the 'BB' category. The
further up the speculative grade continuum a rating moves, the more
compressed the notching between the specific classes of issuances
becomes. Fitch rates Levi's ABL revolver 'BBB-'/'RR1', indicating
outstanding recovery prospects in the event of default. Fitch rates
Levi's unsecured notes 'BB+'/'RR4', indicating average recovery
prospects.
ISSUER PROFILE
Levi is one of the world's largest branded apparel companies, with
fiscal 2021 (ended November 2021) revenues and EBITDA of USD5.8
billion and USD896 million, respectively.
SUMMARY OF FINANCIAL ADJUSTMENTS
Historical and projected EBITDA is adjusted to add back non-cash
stock-based compensation and exclude non-recurring charges. Fitch
has adjusted the historical and projected debt by adding 8.0x
annual gross rent expense.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Levi Strauss & Co. LT IDR BB+ Affirmed BB+
senior secured LT BBB- Affirmed RR1 BBB-
senior unsecured LT BB+ Affirmed RR4 BB+
MACTAVISH PUBS: Taps Flaherty & O'Hara as Special Counsel
---------------------------------------------------------
MacTavish Pubs, Inc. received approval from the U.S. Bankruptcy
Court for the Western District of Pennsylvania to hire the law firm
of Flaherty & O'Hara, P.C. to assist in the renewal and
reactivation of its liquor license.
The firm will process the license renewal and reactivation work for
a flat fee of $3,000, plus costs. Mark Flaherty, Esq., the firm's
attorney who will be providing the services, charges an hourly fee
of $425.
As disclosed in court filings, Flaherty & O'Hara is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Mark F. Flaherty, Esq.
Flaherty & O'Hara, P.C.
610 Smithfield Street, Suite 300
Pittsburgh, PA 15222
Phone: 412-456-2007
Email: mark@flatery-ohara.com
About MacTavish Pubs
MacTavish Pubs Inc., a pub in Pittsburgh, Pa., filed its voluntary
petition for relief under Chapter 11 of the Bankruptcy Code (Bankr.
W.D. Pa. Case No. 22-22310) on Nov. 21, 2022, with up to $50,000 in
assets and $1 million to $10 million in liabilities. Andrew
Topping, president of MacTavish Pubs, signed the petition.
Matthew M. Herron, Esq., at The Debtor Doctors, LLC and Flaherty &
O'Hara, P.C. serve as the Debtor's bankruptcy counsel and special
counsel, respectively.
MERCURITY FINTECH: Signs New Deal to Sell $5 Million Worth of Units
-------------------------------------------------------------------
Mercurity Fintech Holding Inc. announced that on Dec. 23, 2022, in
connection with its private investment in public equity financing
("PIPE"), it entered into a Securities Purchase Agreement with an
accredited non-U.S. investor to offer and sell the Company's units,
each consisting of one ordinary share and three Warrants for total
gross proceeds of $5 million. The closing of this third PIPE
financing together with the consummation of the first and second
PIPE financing would yield total gross proceeds of $13.15 million
invested in the Company's shares and warrants by third parties in
the second half of 2022. The Company expects to use the net
proceeds from the three rounds of PIPE financing to develop its
Web3 and blockchain infrastructure, expand its consultation
services, and pursue the licensure for cryptocurrency from New York
State Department of Financial Services although the Company cannot
provide any assurance on actually obtaining the "BitLicense" in the
near future or at all.
Pursuant to the SPA, the Company shall issue an aggregate of
4,545,454,546 units at a purchase price of $0.00110 per unit for
total gross proceeds of approximately $5,000,000. Each unit shall
consist of one ordinary share and three Warrants, with each Warrant
entitling the investor to purchase one ordinary share at the
exercise price of $1/360th per ordinary share subject to certain
adjustments and conditions. The warrants shall have a term of
three years from the issuance date.
The securities were sold in a private placement and have not been
registered under the Securities Act of 1933, as amended, and may
not be offered or sold in the United States absent registration
with the Securities and Exchange Commission or an applicable
exemption from such registration requirements.
"It took hundreds of years to build Wall Street, but with crypto
everything is accelerated. Despite the fluctuation of capital
markets, we plan to dedicate three years in building the Web3 and
blockchain infrastructure, and we believe that we will prosper from
our business model and steadfast devotion to this exciting and
ever-expanding space," said Shi Qiu, the Company's chief executive
officer. "We are proud to announce this most recent PIPE financing
together with the consummation of the first two rounds of PIPE
financing totaling $13.15 million in the second half of 2022. We
would like to thank our investors for sharing our vision of the
future and supporting our company by giving us the responsibility
of building it. In early 2023, the Company plans to release a
detailed growth strategy to the public to outline the Company's
strategic vision for the next three years."
About Mercurity
Formerly known as JMU Limited, Mercurity Fintech Holding Inc. is a
digital fintech group powered by blockchain technology. The
Company's primary business scope includes digital asset trading,
asset digitization, cross-border remittance and other services,
providing compliant, professional, and digital financial services
to its customers. The Company recently began to narrow in on
Bitcoin mining, digital currency investment and trading, and other
related fields. This shift has enabled the company to deepen its
involvement in all aspects of the blockchain industry, from
production to circulation.
Mercurity reported a net loss of $20.75 million for the year ended
Dec. 31, 2021, a net loss of $1.65 million for the year ended
Dec. 31, 2020, a net loss of $1.22 million for the year ended Dec.
31, 2019, a net loss of $123.24 million for the year ended Dec. 31,
2018, and a net loss of $161.90 million for the year ended Dec. 31,
2017.
METROHAVANA TOWN: Jan. 24 Hearing on Disclosure Statement
---------------------------------------------------------
Judge Laurel M. Isicoff set a hearing to consider approval of
MetroHavana Town Homes, LLC's Disclosure Statement on Jan. 24, 2023
at 9:30 a.m. in United States Bankruptcy Court - C. Clyde Atkins
Courthouse 301 N Miami Avenue, Courtroom 8, Miami Florida 33128.
The last day for filing and serving objections to the Disclosure
Statement is on Jan. 17, 2023. Objections to the disclosure
statement must be filed with the court and served on (i) the
debtor; (ii) the plan proponent (if other than the debtor); (iii)
all committees that have been appointed; (iv) any chapter 11
trustee or examiner that has been appointed; and (v) the U.S.
Trustee.
About Metrohavana Town Homes
MetroHavana Town Homes, LLC, a Miami-based company, sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Fla. Case No. 22-11349) on Feb. 18, 2022, with up to $10
million in both assets and liabilities. Kelly Beam, owner of
MetroHavana Town Homes, signed the petition.
Judge Laurel M. Isicoff oversees the case.
Christina Vilaboa-Abel, Esq., at Cava Law, LLC is the Debtor's
counsel.
MICROSTRATEGY INC: Hikes Bitcoin Holdings to 132,500 as of Dec. 27
------------------------------------------------------------------
MicroStrategy Incorporated announced the following:
* During the period between Nov. 1, 2022 and Dec. 21, 2022,
MicroStrategy, through its wholly-owned subsidiary
MacroStrategy LLC, acquired approximately 2,395 bitcoins for
approximately $42.8 million in cash, at an average price of
approximately $17,871 per bitcoin, inclusive of fees and
expenses.
* On Dec. 22, 2022, MacroStrategy sold approximately 704
bitcoins
for cash proceeds of approximately $11.8 million, at an
average
price of approximately $16,776 per bitcoin, net of fees and
expenses. MicroStrategy plans to carry back the capital
losses
resulting from this transaction against previous capital
gains,
to the extent such carrybacks are available under the federal
income tax laws currently in effect, which may generate a tax
benefit.
* On Dec. 24, 2022, MacroStrategy acquired approximately 810
bitcoins for approximately $13.6 million in cash, at an
average
price of approximately $16,845 per bitcoin, inclusive of fees
and expenses.
After giving effect to the transactions described above,
MicroStrategy, together with its subsidiaries, increased its
bitcoin holdings by 2,500 bitcoins, from approximately 130,000
bitcoins as of Oct. 31, 2022, to approximately 132,500 bitcoins as
of Dec. 27, 2022. The approximately 132,500 bitcoins held by
MicroStrategy and its subsidiaries as of Dec. 27, 2022 were
acquired at an aggregate purchase price of approximately $4.03
billion and an average purchase price of approximately $30,397 per
bitcoin, inclusive of fees and expenses.
As previously disclosed, on Sept. 9, 2022, MicroStrategy entered
into a Sales Agreement with Cowen and Company, LLC and BTIG, LLC,
as sales agents, pursuant to which MicroStrategy may issue and sell
shares of its class A common stock, par value $0.001 per share,
having an aggregate offering price of up to $500.0 million from
time to time through the Agents. On Dec. 28, 2022 the Company also
announced that, during the period between Oct. 1, 2022 and Dec. 27,
2022, MicroStrategy had issued and sold an aggregate of 218,575
Shares under the Sales Agreement, at an average gross price per
Share of approximately $213.16, for aggregate net proceeds to
MicroStrategy (less sales commissions and expenses) of
approximately $46.4 million.
About MicroStrategy
Microstrategy Incorporated is an enterprise analytics software and
services company. Since its founding in 1989, MicroStrategy has
been focused on empowering organizations to leverage the immense
value of their data. MicroStrategy pursues two corporate
strategies in the operation of its business. One strategy is to
acquire and hold bitcoin and the other strategy is to grow its
enterprise analytics software business.
MicroStrategy reported a net loss of $535.48 million for the year
ended Dec. 31, 2021, and a net loss of $7.52 million for the year
ended Dec. 31, 2020. For the nine months ended Sept. 30, 2021, the
Company reported a net loss of $445.50 million. As of Sept. 30,
2022, the Company had $2.54 billion in total assets, $2.74 billion
in total liabilities, and a total stockholders' deficit of $200.29
million.
* * *
As reported by the TCR on June 15, 2021, S&P Global Ratings
assigned its 'CCC+' issuer credit rating to Tysons Corner,
Va.-based MicroStrategy Inc. S&P said, "The stable outlook
reflects our expectation that MicroStrategy's operating results
will remain consistent over the next 12 given its good recurring
revenue base and the low interest expense on its convertible debt,
which will allow it to maintain good EBITDA interest coverage and
generate positive free operating cash flow. We expect these
factors to enable the company to sustain its capital structure over
the subsequent 12 months."
MILLION DOLLAR: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Million Dollar Smile, LLC
2235 Pacific Hwy #768
San Diego, CA 92101
Case No.: 23-00001
Business Description: Million Dollar Smile provides general
dentistry, cosmetic dentistry, orthodontics,
endodontics, implants, and emergency
services.
Chapter 11 Petition Date: January 2, 2022
Court: United States Bankruptcy Court
Southern District of California
Judge: Hon. Margaret M. Mann
Debtor's Counsel: Steven R. Fox, Esq.
THE FOX LAW CORPORATION, INC.
17835 Ventura Blvd.
Suite 306
Encino, CA 91316
Tel: (818) 774-3545
Email: srfox@foxlaw.com
Total Assets: $152,969
Total Liabilities: $1,458,620
The petition was signed by Angelo De Simone as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/QCK5H5A/Million_Dollar_Smile_LLC__casbke-23-00001__0001.0.pdf?mcid=tGE4TAMA
MONROE GARDENS: Files Subchapter V Case
---------------------------------------
Monroe Gardens LLC filed for chapter 11 protection in the Southern
District of West Virginia. The Debtor elected on its voluntary
petition to proceed under Subchapter V of chapter 11 of the
Bankruptcy Code.
According to court filings, Monroe Gardens LLC estimates between
$500,000 and $1 million in debt owed to 1 to 49 creditors. The
petition states that funds will be available to unsecured
creditors.
The Debtor owns property at Raleigh County, West Virginia. Monroe
Gardens is a two-member LLC, with one member James E. MOnroe, Jr.,
and the other member being Jennifer W. Monroe, his former spouse.
James Monroe has a pending Chapter 7 bankruptcy case (Bankr. S.D.
W.Va. Case No. 22-50019). Roberts L. Johns (the Chapter 7 trustee
in James Monroe's case), and Ms. Jennifer Monroe agreed on the
Chapter 11 filing for Monroe Gardens.
About Monroe Gardens
Monroe Gardens LLC owns three properties in Talcott, WV; Roanoke,
VA; and Beckley, WV having a total aggregate value of $2.29
million.
Monroe Gardens LLC filed a petition for relief under Subchapter V
of Chapter 11 of the Bankruptcy Code (Bankr. S.D. W.Va. Case No.
22-50094) on December 23, 2022. In the petition filed by Mark
Allen, as manager, the Debtor reported assets between $500,000 and
liabilities between $1 million and $10 million.
The case is overseen by Honorable Bankruptcy Judge B. Mckay
Mignault.
Joe Mark Supple has been appointed as Subchapter V trustee.
The Debtor is represented by:
Andrew S. Nason
Pepper & Nason
225 Pinewood Dr
Beckley, WV 25801
NEONODE INC: Forsakringsaktiebolaget Has 10% Stake as of Dec. 23
----------------------------------------------------------------
In an amended Schedule 13G filed with the Securities and Exchange
Commission, Forsakringsaktiebolaget Avanza Pension disclosed that
as of Dec. 23, 2022, it beneficially owns 1,364,472 shares of
common stock of Neonode Inc., representing 10.05 percent of the
shares outstanding. A full-text copy of the regulatory filing is
available for free at:
https://www.sec.gov/Archives/edgar/data/87050/000110465922130069/tm2233507d1_sc13ga.htm
About Neonode
Neonode Inc. (NASDAQ:NEON) -- http://www.neonode.com-- provides
advanced optical sensing solutions for contactless touch, touch,
gesture control, and in-cabin monitoring.
Neonode reported a net loss attributable to the company of $6.45
million for the year ended Dec. 31, 2021, a net loss attributable
to the company of $5.61 million for the year ended Dec. 31, 2020,
and a net loss attributable to the Company of $5.30 million for the
year ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had
$17.79 million in total assets, $1.90 million in total liabilities,
and $15.89 million in total stockholders' equity.
ORIGINCLEAR INC: Subsidiary Closes Acquisition of Fortune Rise
--------------------------------------------------------------
OriginClear Inc. said its subsidiary, Water On Demand, Inc. has
closed the acquisition of Fortune Rise Sponsor, LLC, a Delaware
limited liability company, which is the sponsor of Fortune Rise
Acquisition Corp.
Pursuant to a Membership Interest Purchase and Transfer Agreement
and Securities Transfer Agreement with the members of the Sponsor,
the Company acquired the membership interests of the Sponsor and is
now the beneficial owner of 2,343,750 shares of Class B Common
Stock of the SPAC, each of which is exercisable into one share of
Class A Common Stock of the SPAC. The purchase price for the
membership interests was $403,516.61.
The SPAC is a blank check company incorporated in February 2021 as
a Delaware corporation formed for the purpose of effecting a
merger, capital stock exchange, asset acquisition, stock purchase,
reorganization or similar business combination with one or more
businesses.
While the SPAC may pursue an acquisition opportunity in any
business, industry, sector or geographical location, it is focusing
on industries that complement its management team's background, and
it intends to capitalize on the ability of its management team to
identify and acquire a business where its management team has
extensive experience.
The Company also assumed the obligation to make any necessary
extension payments in connection with the extension of the period
of time in which the SPAC may consummate its initial business
combination as described in the SPAC's S-1 Registration Statement,
including the three-month extension from Nov. 5, 2022 to Feb. 5,
2023 referenced in the press release dated Nov. 1, 2022.
The SPAC is a "shell company" as defined under the Exchange Act of
1934, as amended, because it has no operations and nominal assets
consisting almost entirely of cash. The SPAC will not generate any
operating revenues until after the completion of its initial
business combination, at the earliest. To date, the SPAC's efforts
have been limited to organizational activities and activities
related to its initial public offering as well as the search for a
prospective business combination target.
About OriginClear
Headquartered in Clearwater, Florida, Originclear, Inc. --
www.originclear.tech -- is a water technology company which has
developed in-depth capabilities over its 14-year lifespan. Those
technology capabilities have now been organized under the umbrella
of OriginClear Tech Group. OriginClear, under the brand of
OriginClear Tech Group, designs, engineers, manufactures, and
distributes water treatment solutions for commercial, industrial,
and municipal end markets.
OriginClear reported a net loss of $2.12 million for the year ended
Dec. 31, 2021. As of June 30, 2022, the Company had $5.01 million
in total assets, $17.70 million in total liabilities, $12.18
million in commitments and contingencies, and a total shareholders'
deficit of $24.87 million.
Houston, Texas-based M&K CPAS, PLLC, the Company's auditor since
2019, issued a "going concern" qualification in its report dated
April 6, 2022, citing that the Company suffered a net loss from
operations and has a net capital deficiency, which raises
substantial doubt about its ability to continue as a going concern.
PANACEA LIFE: Repays in Full $1.1 Million Convertible Note
----------------------------------------------------------
Panacea Life Sciences Holdings, Inc. disclosed in a Form 8-K filed
with the Securities and Exchange Commission that it repaid in full
on Dec. 21, 2022, a 10% original issue discount senior convertible
promissory note in the amount of $1,110,306.85.
The repayment was funded with borrowings under the Company's line
of credit with its chief executive officer, which was amended to
increase the Company's borrowing capacity thereunder to $5 million
in connection with the repayment.
On Nov. 16, 2021, Panacea Life entered into a Securities Purchase
Agreement with an institutional investor pursuant to which the
Company sold the Note in the principal amount of $1,100,000 and
five-year warrants to purchase 785,715 shares of the Company's
common stock, par value $0.0001 per share at an exercise price of
$1.40 per share pursuant to the terms and conditions of the SPA for
a total purchase price of $1,000,000. The Warrants are exercisable
for a five-year term at an exercise price of $1.40 per share,
subject to certain adjustments which are substantially similar to
those contained in the Note, including the Qualified Offering
adjustment. The maturity date of the Note was Nov. 16, 2022.
About Panacea
Panacea Life Sciences Holdings, Inc. formerly known as Exactus Inc.
(OTCQB:EXDI) -- http://www.exactusinc.com-- is a Nevada
corporation organized under the name Solid Solar Energy, Inc in
2008 and renamed Exactus, Inc. in 2016. The Company has pursued
opportunities in Cannabidiol since 2019. During most of 2020 the
Company was engaged in marketing of hemp derived products sourced
from its leased farming operation.
Panacea Life reported a net loss of $4.78 million for the year
ended Dec. 31, 2021, compared to a net loss of $5.23 million for
the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company
had $19.98 million in total assets, $20.42 million in total
liabilities, and a total stockholders' deficit of $439,907.
Lakewood, CO-based BF Borgers CPA PC, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
arch 25, 2022, citing that the Company's significant operating
losses raise substantial doubt about its ability to continue as a
going concern.
PANOB CAB: Small Business Plan Confirmed by Judge
-------------------------------------------------
Judge Jil Mazer-Marino of the U.S. Bankruptcy Court for the Eastern
District of New York has entered an order confirming the Amended
Chapter 11 Small Business Plan of Reorganization of Panop Cab,
Corp., and its Debtor affiliates.
The Debtors have proposed the Plan in good faith and is not by any
means forbidden by law. All payments made or promised to be made
under the Plan have been disclosed to the Court, are reasonable or,
if such payments are to be fixed after confirmation of the Plan,
will be subject to the approval of the Court as reasonable.
With respect to claims or a class of priority claims of a kind
specified in sections 507(a)(1)- (8) of the Bankruptcy Code, each
holder of such claim or a claim of such class will receive, on
account of such claim, cash on the effective date of the Plan equal
to the allowed amount of such claim, unless the holder of such
claim has agreed otherwise.
Moreover, the release of the mortgage with respect to the property
located at 248 East 31 Street, Apt 9C, NY, NY 10016, referenced in
the Settlement Agreement between the Debtors and National Credit
Union Administration Board as Liquidating Agent for LOMTO Federal
Credit Union ("NCUA"), will be executed, provided and recorded by
NCUA after a Settlement Agreement consenting to such release is
executed between Matreiya Transportation Corp. and DePalma
Acquisition Corp. and approved through the entry of a final
non-appealable order entered by the Bankruptcy Court in the
bankruptcy proceeding entitled In re: Matreiya Transportation
Corp.
A copy of the Confirmation Order dated December 27, 2022, is
available at https://bit.ly/3GxEttV from PacerMonitor.com at no
charge.
Attorneys for the Debtors:
Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
3099 Coney Island Avenue
Brooklyn, NY 11235
Telephone: (718) 513-3145
About Panop Cab, et al.
Panop Cab, Corp., et al., are taxi mini fleet corporations located
at 1620 Caton Avenue, Brooklyn, New York 11226.
Panop Cab, Corp., based in Brooklyn, NY, and its debtor-affiliates
sought Chapter 11 protection (Bankr. E.D.N.Y. Lead Case No.
19-47710) on Dec. 26, 2019.
In their petitions, the Debtors estimated these assets and
liabilities:
Total Assets Total Liabilities
------------ -----------------
Panop Cab, Corp. $310,200 $1,135,000
Matreiya Trans Corp. $157,164 $330,000
222 East Corp. $314,700 $1,135,000
Rainee Trans, Corp. $312,752 $1,135,000
MLS Managment Corp $311,692 $1,135,000
The petitions were signed by Michael L. Simon, president.
The LAW OFFICES OF ALLA KACHAN, P.C. serves as bankruptcy counsel.
PARAMOUNT REAL ESTATE: Case Summary & Nine Unsecured Creditors
--------------------------------------------------------------
Debtor: Paramount Real Estate Holdings, LLC
801 S. Highway 78
Suite 307
Wylie TX 75098
Case No.: 23-40020
Business Description: The Debtor is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: January 2, 2023
Court: United States Bankruptcy Court
Eastern District of Texas
Debtor's Counsel: Mark Castillo, Esq.
CARRINGTON, COLEMAN, SLOMAN, & BLUMENTHAL,
L.L.P.
901 S. Main St. Ste. 5500
Dallas TX 75202
Tel: 214-855-3000
Email: markcastillo@ccsb.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Ryan Cole as CEO.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/C4A7MEA/Paramount_Real_Estate_Holdings__txebke-23-40020__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' Nine Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Ideal Partners Mechanical Suppliers or Vendors $26,342
6913 Camp Bowie Blvd.
Ste. 181
Fort Worth, TX, 76116
Steve Slemmons
Tel: 817222-1283
2. MetroPro Construction Suppliers or Vendors $19,083
5969 County Road 488
Nevada, TX, 75173
Vuong Nguyen
Tel: 469-441-1989
3. Ideal Fire & Security Suppliers or Vendors $10,634
6913 Camp Bowie Blvd.
Ste. 181
Fort Worth, TX, 76116
Steve Slemmons
Tel: 817-222-1283
4. Beto's Painting & Remodeling Suppliers or Vendors $7,160
3125 Teakwood Dr.
Garland, TX, 75044
Roberto Rosas
Tel: 214-803-1427
5. Tri County IL, Inc. Suppliers or Vendors $6,785
4623 Boeing Dr.
Rockford, IL, 61109
Joe Hathaway
Tel: 547-774-6407
6. Revolve LED Suppliers or Vendors $1,583
2880 N. Berkeley Rd.
Ste. 8
Duluth, GA, 30096
Tel: 877-718-0808
7. Internal Revenue Service Taxes & Other $0
Centralized Insolvency Operation Government Units
Post Office Box 7346
Philadelphia, PA, 19101-7346
8. Collin County Tax Assessor Taxes & Other $0
2300 Bloomdale Rd. Government Units
Ste. 2324
Frisco, TX, 75071
9. Princeton ISD Taxes & Other $0
321 Panther Pkwy. Government Units
Princeton, TX, 75407
QUICKER LIQUOR: Unsecureds to Get Pro Rata Share of Cash Payment
----------------------------------------------------------------
Quicker Liquor LLC and Nevada Wine Cellars, Inc., submitted a Third
Amended Joint Chapter 11 Plan of Reorganization as Modified.
On Aug. 15, 2022, Debtors and the Moody Trust negotiated the
Settlement with the assistance of Senior Bankruptcy Judge Gregg
Zive. The Settlement is to be implemented through confirmation of
the Plan, and the Settlement also contains agreements with regard
to the conduct of the Parties prior to Confirmation. If this Plan
is not confirmed, neither the Debtors nor the Moody Trust are bound
to the terms of the Settlement. Subject to confirmation of this
Plan, the terms of the Settlement are as follows:
* Pursuant to the Settlement, the Moody Trust shall have an
Allowed Secured Claim of $6,091,000, secured by the assets of the
Debtors (the Moody Claim).
* If Moody Trust is paid the sum of $6,091,000 on or before
November 15, 2022 (the Moody Payoff), such payment shall be in full
and complete satisfaction of all of the Moody Trust’s claims, and
Debtors (and related parties) and the Moody Trust (and related
parties) shall fully and finally release each other from all
claims.
* If the payment of $6,091,000 is not timely made:
-- Moody Trust or its assignee ("Purchaser") shall, through
the Plan, purchase all assets of NWC for a combined price of
$250,000 cash and contribution of the Moody Claim. $19,420.31 of
the $250,000 shall be paid directly to Larson & Zirzow and the
balance shall be paid to NWC's counsel, Carlyon Cica Chtd., to be
held in that firm's trust account for payment of allowed
administrative claims as allowed, and the balance of which is to be
distributed as set forth in the Plan.
-- Purchaser shall assume all secured claims of NWC and
shall continue to make payments due to secured creditors
post-closing. The aggregate amount of all assumed claims shall not
exceed $115,000.
-- Purchaser shall obtain new liquor licenses. Current
management will close out existing liquor licenses. Purchaser or
its designated entity shall change the name of The Pahrump Winery
to a different name within two business days after the Acquisition
Date.
-- Purchaser shall offer a minimum of six months' employment
to all individuals employed by NWC as of August 15, 2022, and still
employed immediately prior to closing. Alternatively, such
employees shall be offered (by Purchaser) a reasonable severance
payment, with a minimum of two weeks’ pay and additional amounts
commensurate with other factors such as length of employment.
-- Purchaser shall pay the sum of $450,000 to JEH at or
prior to closing of the sale. Such payment shall be made through
escrow, and shall be utilized, first, to pay all allowed
administrative expenses of QL and then the balance to be
distributed to JEH. The Moody Claim in the amount equal to
$6,091,000 shall be satisfied either by the Moody Payment or as a
part of the payment for the Moody Purchase. All other terms of the
Settlement shall be a part of the treatment of the Moody Claim.
Under the Plan, Class 7 NWC Allowed General Unsecured Claims will
be paid their pro rata share of the Cash Payment following payment
of Administrative Claims and Priority Claims. Class 7 is impaired.
"Cash Payment" refers to the $250,000 cash payment to be made by
Purchaser to NWC in the event of a Moody Purchase.
The Debtor may raise funds to obtain the Moody Payoff through any
means, including sale of assets, financing, or investor funds. In
the event of a Moody Payoff, payment to other creditors shall be
made from funds obtained in operations. Otherwise, the Plan shall
be effectuated through the Moody Purchase. The Moody Purchase shall
include sale of all assets of NWC free and clear of all liens,
claims and interests as provided by 11 U.S.C. Sec. 363(f). The
transfers effectuated through the Moody Purchase shall, pursuant to
11 U.S.C. Sec. 1146(a), be free and clear of all transfer taxes,
stamp taxes, or similar taxes.
Counsel for Nevada Wine Cellars Inc.:
Candace C. Carlyon, Esq.
Tracy M. O'steen, Esq.
CARLYON CICA CHTD.
265 E. Warm Springs Road, Suite 107
Las Vegas, NV 89119
Telephone: (702) 685-4444
Facsimile: (725) 220-4360
E-mail: ccarlyon@carlyoncica.com
tosteen@carlyoncica.com
Counsel for Debtor Quicker Liquor:
A.J. Kung, Esq.
Brandy L. Brown, Esq.
KUNG & BROWN
1020 Garces Avenue
Las Vegas, NV 89101
Telephone: (702) 382-0883
Facsimile: (702) 382-2720
E-mail: ajkung@ajkunglaw.com
bbrown@ajkunglaw.com
A copy of the Third Amended Joint Chapter 11 Plan dated Dec. 21,
2022, is available at https://bit.ly/3BZBfwN from
PacerMonitor.com.
About Quicker Liquor
Quicker Liquor, LLC, and its affiliate, Nevada Wine Cellars, Inc.,
filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Nev. Lead Case No. 22-10331) on Jan. 31,
2022. In their petitions, the Debtors listed as much as $10 million
in both assets and liabilities. Kathy Trout, managing member,
signed the petitions.
Judge Mike K. Nakagawa oversees the cases.
Quicker Liquor and Nevada Wine Cellars are represented by Kung &
Brown and Carlyon Cica Chtd., respectively. The Law Offices of
Timothy Elson serves as the Debtors' special counsel.
The Debtors filed a joint Chapter 11 plan of reorganization on May
31, 2022.
RELMADA THERAPEUTICS: Extends License Agreement 'Key Man' Provision
-------------------------------------------------------------------
Drs. Charles E. Inturrisi and Paolo Manfredi (collectively, the
"Licensor") and Relmada Therapeutics, Inc. have entered into an
Amendment No. 2 to their License Agreement extending the duration
of the "Key Man" provisions of the License Agreement, pursuant to
which the Licensor may terminate the License Agreement if the
Company terminates the employment of its Chief Executive Officer,
Dr. Sergio Traversa, for any reason other than for specified causes
determined by a majority of its Board of Directors (including
fraud, gross negligence, unauthorized use of its confidential
information, conduct including harassment or discrimination, breach
of fiduciary duty or uncured material breach), or if the Company:
(a) substantially modifies Dr. Traversa's job responsibilities
or decision-making rights in connection with the development and
commercialization of esmethadone;
(b) removes him from the role of chief executive officer other
than in connection with a permitted change-of-control transaction;
(c) materially reduces his compensation; or
(d) assigns or transfers its rights under the License Agreement
or the esmethadone intellectual property without Dr. Traversa's
consent, in each case (termination or the events in (a) through
(d)) during a specified period, which originally ended on the later
of five years from the original effective date of the License
Agreement or Dec. 31, 2022.
Relmada is party to the License Agreement dated as of Jan. 16,
2018, as amended, with the Licensor, pursuant to which the Licensor
granted the Company a license to commercialize esmethadone
(REL-1017) in the context of psychiatric use and certain further
inventions regarding esmethadone.
The new amendment extended this period until Dec. 31, 2027. The
License Agreement was not otherwise modified.
About Relmada Therapeutics
Relmada Therapeutics Inc. is a clinical-stage biotechnology company
focused on the development of esmethadone (d-methadone,
dextromethadone, REL-1017), an N-methyl-D-aspartate (NMDA) receptor
antagonist. Esmethadone is a new chemical entity (NCE) that
potentially addresses areas of high unmet medical need in the
treatment of central nervous system (CNS) diseases and other
disorders.
Relmada reported a net loss of $125.75 million for the year ended
Dec. 31, 2021, a net loss of $59.45 million for the year ended Dec.
31, 2020, and a net loss of $15 million for the year ended Dec. 31,
2019. As of Sept. 30, 2022, the Company had $187.12 million in
total assets, $20.78 million in total current liabilities, and
$166.34 million in total stockholders' equity.
RENTZEL PUMP: BancFirst Says Agreement on Language Not Yet in Plan
------------------------------------------------------------------
BancFirst, an Oklahoma state banking corporation, and creditor in
the bankruptcy case, filed an objection to confirmation of Rentzel
Pump Manufacturing, LP's Amended Plan of Reorganization filed by
Debtor, Rentzel Pump Manufacturing, LP.
BancFirst and the Debtor have a tentative understanding regarding
the language to be used in the Plan as it pertains to BancFirst and
its claims, but such language has not yet been fully agreed to and
incorporated into the Plan.
BancFirst believes that such an agreement between the parties can
and should occur, without the need for a hearing, but BancFirst
nevertheless filed an objection out of an abundance of caution, as
the current version of the Plan does not contain all of the
language that BancFirst believes should be included in the Plan as
it pertains to BancFirst and its claims.
Attorneys for the BancFirst:
Joel W. Harmon, Esq.
Tim J. Gallegly, Esq.
CROWE & DUNLEVY
Braniff Building, 324 N. Robinson Ave., Suite 100
Oklahoma City, OK 73102
Tel: (405) 235-7700
Fax: (405) 239-6651
E-mail: joel.harmon@crowedunlevy.com
tim.gallegly@crowedunlevy.com
About Rentzel Pump Manufacturing
Rentzel Pump Manufacturing, LP, sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. W.D. Okla. Case No. 22-10541)
on May 25, 2022. In the petition signed by Randall Rentzel,
president, the Debtor disclosed up to $500,000 in assets and up to
$10 million in liabilities.
Judge Sarah A. Hall oversees the case.
Gary D. Hammond, Esq., at Mitchell & Hammond is the Debtor's
counsel.
Oklahoma State Bank, as lender is represented by Phillips Murrah,
P.C.
RIGHT ON BRANDS: Board, Shareholders Approve Reverse Stock Split
----------------------------------------------------------------
The Board of Directors and majority shareholders of Right on
Brands, Inc. have approved a reverse split of the Company's common
stock at a ratio of 1 for 250 and declare that it is in the best
interest of the Company and its shareholders. The Reverse stock
split has an Effective Date of Jan. 14, 2023; a Declaration Date of
Jan. 15, 2023; a Record Date of January 17; and a Payment Date of
Jan. 28, 2023.
No fractional shares will be issued to those whose shareholdings
following the reverse stock split will not be a whole number; such
fractional shares will be rounded up to the nearest whole number.
After giving effect to the Reverse Stock Split, the amount of the
total authorized capital stock of the Corporation will still be
110,000,000 shares consisting of 100,000,000 authorized shares of
Common Stock, no par value, and 10,000,000 shares of Preferred
Stock, par value $0.001 per share; 10,000,000 shares of which shall
remain series A preferred stock, par value $0.0001 per share,
maintaining voting rights equal to 50% plus 1 votes of all votes in
any common stock vote and conversion rate of 5 common shares for
every 1 preferred share converted. All certificates of designation
in effect of any class of preferred shares in effect before the
Reverse Stock Split will remain in effect unchanged after the
Reverse Stock Split.
About Right on Brands
Right on Brands, Inc.'s business is conducted through its
wholly-owned subsidiaries, Humbly Hemp, Endo Brands, and Humble
Water Company. Humbly Hemp sells and markets a line of hemp
enhanced snack foods. Humble Water Company is in a partnership
with Springhill Water Co. to develop a line of High Alkaline,
Natural Mineral Water, and a bottling and packaging facility. Endo
Brands creates and markets a line of CBD consumer products and
through ENDO Labs, a joint venture with Centre Manufacturing,
creates white label products and formulations for CBD brands.
Right On Brands is at the focus of health and wellness.
Right On Brands reported a net loss attributable to the company of
$257,016 for the year ended March 31, 2022, compared to a net loss
attributable to the company of $1.85 million for the year ended
March 31, 2021. As of June 30, 2022, the Company had $246,856 in
total assets, $618,983 in total liabilities, and a total
stockholders' deficit of $372,127.
Dallas, Texas-based Turner, Stone & Company, L.L.P., the Company's
auditor since 2019, issued a "going concern" qualification in its
report dated July 8, 2022, citing that the Company has suffered
significant losses from inception and had a significant loss from
operations. These conditions raise substantial doubt about its
ability to continue as a going concern.
RITE AID: Fitch Hikes LongTerm IDR to 'CCC'
-------------------------------------------
Fitch Ratings has upgraded Rite Aid Corporation's Long-Term Issuer
Default Rating (IDR) to 'CCC' from 'C' following the completion of
its amended tender offer. Rite Aid's prior 'C' rating reflected
Fitch's view that the original terms of the tender offer
represented a Distressed Debt Exchange (DDE) although the amended
terms remove the coercive nature of the original offer and thus
Fitch no longer deems the transaction a DDE.
Rite Aid's 'CCC' rating is lower than its pre-tender 'B-' rating,
as its capital structure looks increasingly unsustainable given
ongoing operational challenges as the company approaches its 2025
maturities. Heightening refinancing risk is somewhat mitigated by
Rite Aid's ample liquidity of well over $1 billion under its
revolver, supported by a rich asset base of pharmaceutical
inventory and prescription files.
KEY RATING DRIVERS
Tender Demonstrates Untenable Capital Structure: In December 2022,
Rite Aid completed a tender in which approximately $160 million of
secured notes due 2025 were purchased for approximately $120
million, yielding approximately $320 million remaining in the
tranche. The original terms of the tender, since rescinded,
required bondholders to consent to the release of collateral and
certain covenants. Based on these terms, Fitch deemed the tender a
DDE but given the withdrawal of the consent requirement the tender
is considered opportunistic.
The tender offer, although ultimately not a DDE, highlights Rite
Aid's challenges in addressing its capital structure given
continued operational weakness. The company may be challenged to
refinance its remaining 2025 secured notes without a default,
including a DDE. Rite Aid, somewhat unique within retail, has
strong liquidity via its ample borrowing base of inventory,
prescription files and receivables and could use these assets to
help navigate its upcoming maturities.
Structural Disadvantages: Although Rite Aid has good local market
share positions, its scale and geographic concentration relative to
Walgreens Boots Alliance, Inc. and CVS Health Corp. likely
negatively affects its ability to compete for inclusion in
pharmaceutical contracts. Rite Aid's footprint of 2,324 stores as
of Nov. 26, 2022, almost half of which are in four states, compares
with the national footprints of approximately 10,000 and 9,000 for
CVS (including pharmacies within Target stores) and Walgreens U.S.,
respectively.
In addition, Rite Aid's weak FCF limits its ability to make
customer-facing investments to drive loyalty and traffic,
particularly as larger competitors accelerate investments and newer
entrants such as Amazon.com, Inc. (AA-/Stable) fight for share.
Complex Industry Fundamentals: Despite projections of continued
modest growth in pharmaceuticals revenue, the healthcare industry
remains complex, with intricate relationships among critical
industry constituents, strategic initiatives by large participants
and regulatory overlay. Rite Aid benefits from close relationships
with end customers, which Fitch believes is a critical structural
advantage for drug retailers, and some business diversification
through its pharmacy benefit manager (PBM) Elixir. However, Rite
Aid's challenged operations and regional focus following store
divestiture weakened its competitive positioning, particularly
given the rise of preferred and narrow pharmaceutical networks.
Gross Margin Pressure: Retail pharmacy reimbursement pressure on
gross margins is intense. Pressure has resulted from increased
penetration of the government as a pharmaceutical payer under the
Medicare/Medicaid programs, ongoing pressure from commercial payers
and a mix shift toward the "90-day at retail" offering. Growth in
preferred/narrow networks may also be a factor, as participants
sacrifice margins for network inclusion to drive volume.
Challenging EBITDA Trend: Rite Aid's operating performance has been
weak, with EBITDA declining from approximately $850 million in 2015
(pro forma following the transfer of about 40% of the store base to
Walgreens Boots Alliance) to approximately $530 million in 2019,
prior to the coronavirus pandemic. Fitch believes EBITDA declines
are the consequence of Rite Aid's structural challenges and
somewhat subpar execution.
EBITDA for the TTM ending November 2022 eroded further to
approximately $370 million, due to continued operational
challenges. Fitch expects EBITDA to trend near TTM results in 2022
although EBITDA could decline to the mid-$300 million range in 2023
given a major customer loss at Elixir. Assuming some of Rite Aid's
topline and cost reduction efforts gain traction, EBITDA could
stabilize in the high $300 million range beginning 2024.
New Initiatives to Stabilize EBITDA: The company is implementing
several initiatives to improve top-line results. To drive revenue
growth, the company sees opportunities to cross-market its PBM and
retail assets to mid-market employers, Medicare Part D participants
and other target groups. The company is also investing in a more
holistic care approach with its pharmacy customers to drive loyalty
and incremental purchases, and is adding omnichannel capabilities
such as improved digital/mobile shopping experience and in-store
pick-up options, including lockers.
Evidence of success of these initiatives is somewhat limited given
the company's overall revenue and EBITDA trend, despite some
occasionally positive indications like good Elixir client growth in
2020. These positives have generally been offset by other
headwinds, such as the recently announced contract cancellation of
a major Elixir client.
Elevated Leverage; Limited FCF; Good Liquidity: Rite Aid's
operating challenges resulted in elevated adjusted leverage, which
averaged 7.4x over the past four years. Given Fitch's EBITDA
assumptions and recent capital structure activity, adjusted
leverage could be in the 8x range in 2022/2023.
FCF has been somewhat volatile although generally negative in
recent years due to EBITDA declines and working capital movements.
FCF (excluding receivables sales) could be an outflow in the $200
million to $250 million range in 2022, given weak operations,
rising interest expense and working capital swings. FCF beginning
2023 could be modestly negative, up to around $50 million in annual
outflows, assuming lower working capital swings. Somewhat
mitigating Rite Aid's high leverage and weak cash flow is Rite
Aid's ample liquidity which was $1.3 billion as of August 2022 and
expected to be at least $1 billion over time given its strong asset
base of pharmaceutical inventory and prescription files.
DERIVATION SUMMARY
Rite Aid's 'CCC' rating reflects Fitch's view that the company's
capital structure looks increasingly unsustainable given ongoing
operational challenges as the company approaches its 2025
maturities. Fitch expects adjusted leverage (adjusted debt/EBITDAR,
capitalizing leases at 8x) to hover near 8x, with negative FCF
projected over the rating horizon given Rite Aid's operational
challenges. Heightening refinancing risk is somewhat mitigated by
Rite Aid's ample liquidity of well over $1 billion under its
revolver, supported by a rich asset base of pharmaceutical
inventory and prescription files.
Rite Aid has significantly smaller scale and weaker operating
metrics than Walgreens Boots Alliance and CVS, which may have a
negative effect on its relative ability to compete for inclusion in
pharmacy networks. Rite Aid's cash flow is projected to be
negative, and its leverage profile is significantly higher than
that of its larger peers, limiting its ability to invest
meaningfully in its business.
Retail peers rated 'CCC' include Party City Holdco Inc. Party
City's rating reflects the recent, rapid deterioration in its
operating and liquidity profile and Fitch's belief that Party
City's capital structure is likely untenable. Under Fitch's rating
case assumptions, Party City will generate significant negative
free cash flow in 2022, and the company has limited liquidity
headroom to navigate further operational missteps. Fitch expects
Party City's adjusted leverage (including rent capitalized at 8x)
to exceed 10x in 2022, and could remain elevated above 8x through
2024. Party City may be challenged to address its capital
structure, which substantively matures in 2025/2026, without a
default unless operations meaningfully improve over the next 12-18
months.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within The Rating Case for the Issuer:
- Revenue could decline around 3% to $23.8 billion in 2022 from
$24.6 billion in 2021, largely due to around 100 store closures,
coronavirus vaccine volume declines and some client loss at Elixir,
somewhat offset by modestly positive same store sales. Revenue is
projected to decline toward $23 billion in 2023 given a major
client loss at Elixir but grow modestly beginning 2024 given slight
same store sales growth.
- EBITDA, which was approximately $475 million in 2021, could
decline to the high $300 million range in 2022 given topline
declines, somewhat mitigated by the benefit of unprofitable store
closures. Margins could trend in the 1.6% range relative to the
high-1% range the prior two years and the mid-2% range in
pre-pandemic 2019. EBITDA could decline to the mid-$300 million
range in 2023 given revenue loss, improving thereafter to the
high-$300 million range given ongoing cost reduction efforts and
some topline growth.
- FCF, excluding receivables sales, could be an outflow in the $200
million to $250 million range in 2022 compared with a $155 million
inflow in 2021 given EBITDA declines, higher interest expense and
working capital swings. FCF beginning 2023 could be modestly
negative, with outflows up to $50 million on an annual basis given
Fitch's EBITDA assumptions and fewer working capital swings.
- Adjusted debt/EBITDAR (capitalizing leases at 8x) could trend in
the 8x range beginning 2022 assuming debt levels remain near $3
billion.
- No impact is modelled for total coverage, volume or pricing based
on any legislative activity affecting the pharmaceutical industry.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An upgrade would result from increased confidence in the
company's ability to sustain EBITDA near $500 million, modestly
positive FCF, and adjusted debt/EBITDAR (capitalizing leases at 8x)
below 7.5x. The company would also need to address its 2025-2027
maturities without a default, including a DDE.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Deteriorating sales and profitability trends that lead to EBITDA
trending toward $300 million, consistently negative FCF, and
fixed-charge coverage below 1.0x.
- Increased concerns regarding the company's ability to
successfully address its upcoming maturities without a default.
LIQUIDITY AND DEBT STRUCTURE
Good Liquidity: Rite Aid had liquidity of approximately $1.3
billion at Nov. 26, 2022, supported by $103 million of cash and a
projected $1.3 billion in availability under its ABL facility, net
of letters of credit.
The company's credit facility includes a $2.85 billion ABL (upsized
from $2.8 billion in December 2022) and $400 million FILO term loan
(upsized from $350 million in December 2022). Both instruments
mature August 2026 although have a springing maturity to 91 days
prior to the July 2025 maturity of Rite Aid's approximately $320
million of secured notes, should any of these notes remain
outstanding at that time. The ABL and FILO term loan are and
secured by first liens against Rite Aid's strong asset base of
inventory, including pharmaceutical inventory, receivables and
valuable prescription files.
The company has undertaken a series of debt repayment and exchange
activities over the past several years. Rite Aid's recent activity
includes a July 2022 tender in which approximately $192 million in
principal value of debt was purchased for $150 million. In December
2022, Rite Aid completed a tender in which approximately $160
million of secured notes due 2025 were purchased for approximately
$120 million, yielding approximately $320 million remaining in the
tranche.
Following the December 2022 tender, the company's capital structure
consists of its ABL and FILO term loan, $1.2 billion of senior
secured notes in two tranches due 2025 and 2026, and approximately
$188 million of unsecured notes due 2027 and 2028. The secured
notes are secured by a second lien on ABL collateral and a first
lien on most of Rite Aid's remaining assets, including property,
plant and equipment. The company owned 101 stores, two distribution
centers and its corporate headquarters as of Feb. 26, 2022.
Rite Aid maintains good liquidity, given its valuable asset base,
despite a history of operating challenges. The value of Rite Aid's
asset base is supported by the 11.5x EBITDA multiple implied by
Walgreens' original offer to buy Rite Aid in October 2015 for $17.2
billion and the 16.0x multiple Walgreens paid for 1,932 stores
during 2017-2018. Following the purchase, Walgreens announced plans
to close 600 of the stores and transfer prescription files to
nearby Walgreens locations, further illustrating the value placed
on prescription files.
Recovery
Rite Aid's business profile could yield a distressed enterprise
value of approximately $4.3 billion on its estimated $3.4 billion
liquidation value on inventory, receivables, prescription files and
owned real estate and a $900 million enterprise value for Elixir.
Fitch notes that its approximately $7.25 value ascribed per
prescription file could prove conservative, given recent
transaction multiples in the low- to mid-teens.
The $900 million for the Elixir business values the company at 6.5x
EBITDA of $140 million, compared with Fitch's 2022 Elixir EBITDA
projection of close to $150 million. This is well below the $2
billion, or 13.0x EBITDA, Rite Aid paid for the business in 2015.
PBM valuations have declined over the past several years, although
Express Scripts Holding Company (BBB+/Stable) was acquired by Cigna
Corporation at an enterprise valuation of approximately 9.0x TTM
EBITDA in December 2018. Fitch has reduced its Elixir valuation
from its prior $1 billion range given ongoing weakness in
operations, including the loss of a major client beginning 2023,
and recent receivables sale which lower Elixir's valuation.
The $4.3 billion in resulting liquidation value exceeds Fitch's
assessment of Rite Aid's $3.0 billion valuation as a going concern.
The going concern valuation is based on $500 million in distressed
EBITDA, modestly below 2019 results, as Fitch views Rite Aid's
pre-pandemic operating trajectory as somewhat distressed. Fitch
assumes Rite Aid could generate a 6.0x EBITDA multiple in a
going-concern sale, somewhat lower than valuations implied in the
Walgreens sale process due to ongoing declines in the company's
operations.
Given a $4.3 billion liquidation value and a 10% reduction for
administrative claims, the ABL, which Fitch assumes to be 80%
drawn, the $400 million FILO term loan and $1.2 billion in
remaining secured notes would be expected to have outstanding
recovery prospects. The ABL, FILO, and secured notes are thus rated
'B'/'RR1'. The approximately $188 million unsecured notes would be
expected to have poor recovery prospects and are therefore rated
'CC'/'RR6'.
ISSUER PROFILE
Rite Aid is the third-largest drugstore chain in the U.S. based on
revenues and number of stores (2,324 as of Nov. 26, 2022) and
filled approximately 238 million prescriptions in 2021. The company
serviced 1.0 million customers daily in 2021.
SUMMARY OF FINANCIAL ADJUSTMENTS
Historical and projected EBITDA is adjusted to add back non-cash
stock-based compensation and exclude charges related to LIFO
adjustments, M&A, restructuring, and legal settlements. Fitch has
adjusted historical and projected debt by adding 8x yearly
operating lease expense.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Rite Aid Corporation LT IDR CCC Upgrade C
senior unsecured LT CC Downgrade RR6 CCC
senior secured LT B Downgrade RR1 BB-
senior secured LT B Upgrade RR1 CCC
SNIPER SERVICES: Court Confirms Reorganization Plan
---------------------------------------------------
The Court has entered an order approving the Disclosure Statement
on a final basis and confirming the Amended Plan of Reorganization
of Sniper Services, LLC. The modifications to the Original Plan
embodied within the Plan are approved.
The Debtor's original Plan of Reorganization dated Nov. 1, 2022,
was filed on Nov. 4, 2022. The Debtor's Amended Plan, as modified
by further amendments, was filed Dec. 19, 2022.
An objection to confirmation was timely filed by Ford Motor Credit
Company LLC. The objection to confirmation filed by Ford has been
resolved by the agreements reflected in the Plan.
At least one class of impaired claims (Class 5) has voted to accept
the Plan.
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.
SONIC AUTOMOTIVE: Fitch Affirms LongTerm IDR at BB, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed Sonic Automotive Inc.'s Long-Term Issuer
Default Rating (IDR) at 'BB'. The Rating Outlook is Stable.
Sonic's 'BB' rating reflects its top five position in the U.S. new
and used auto dealership industry. The rating also reflects
expected medium term revenue and EBITDA of around $14 billion and
around $550 million, respectively, following strong recent organic
growth and the late 2021 acquisition of RFJ Auto Partners, Inc. The
rating is supported by balanced gross profit mix across segments,
which helps limit financial sensitivity to the cyclical new and
used vehicle market, strong liquidity position supported by
expected positive FCF, and Fitch's expectation for adjusted
leverage (capitalizing rent expense at 8x) to trend around 4x, in
line with the company's historical adjusted leverage range.
KEY RATING DRIVERS
Strong Recent Performance: Sonic's operating results beginning 2020
have benefited from a strong vehicle pricing environment and growth
in used car volumes at its franchised dealerships. EBITDA in 2021
was approximately $630 million relative to approximately $300
million in 2019 despite ongoing new vehicle supply challenges,
demonstrating Sonic's business model resilience to the inherently
cyclical auto retail industry. EBITDA margins improved to around
5.1% in 2021 from 2.8% in 2019 largely due to industry-wide
strength in vehicle margins.
LTM September 2022 EBITDA grew further to approximately $720
million, supported by the December 2021 acquisition of dealership
group RJF Auto Partners Group, which generated around $120 million
in annual EBITDA prior to the acquisition. The company has seen
continued EBITDA growth in its existing franchised dealership
business despite some vehicle volume declines, with same store
gross profits up 8% on a continued strong pricing environment and
growth in Sonic's automotive parts and service business. This
growth has been somewhat offset by accelerating declines in Sonic's
EchoPark segment.
Supply & Demand Reversal Expected: Fitch expects some reversal to
the recent pricing environment to pressure operating results.
EBITDA, which is expected to be around $700 million in 2022, could
trend in the mid $500 million range beginning 2023 as vehicle
margins decline from historical highs. The combination of a
somewhat softening consumer and improving new vehicle supply could
somewhat pressure selling prices and, consequently, industry-wide
margins.
Fitch believes Sonic could sustain EBITDA margins in the high 3% to
4% range over the medium term, above the high 2% range prior to
2020 albeit below the 5% projected in 2022. Structurally higher
margin forecasts are largely due to expectations that the new
vehicle industry can retain some of the recent pricing strength
through tighter supply.
Leading Player in a Fragmented Industry: Sonic benefits from its
scale, as one of the largest U.S. automotive dealership groups with
good OEM relationships. The company operates 111 franchises and 52
used car superstores (of which 41 are Echo Park branded) with most
located in the southeastern region of the U.S., California and
Texas. The company has broad vehicle brand exposure and healthy
ancillary businesses including parts & service and finance &
insurance, which generate around 40% and 25% of franchised
dealership gross profits, respectively. Sonic's scale and cash flow
generation allow it to navigate through complex industry dynamics,
invest in its core businesses, M&A, and newer initiatives like
EchoPark.
Industry incumbents such as Sonic benefit from high barriers to
entry due to protected franchise agreements that are regulated on
both a state and federal level. Additionally, dealerships require a
significant upfront capital investment for initial construction and
working capital. Success in the industry is also predicated on good
relationships with financing partners, including automotive
captive-finance entities, to achieve favorable floorplan financing
terms.
EchoPark Opportunity: While Sonic sees growth opportunities in its
core dealership business, its primary longer-term expansion channel
is the EchoPark segment, which is focused on a simplified,
no-haggle selling model of high quality one- to four-year old
vehicles priced up to $3,000 below competitors. While revenue for
this segment has grown from around $250 million in 2017 to $2.3
billion in 2021, overall EBITDA generation was negligible prior to
2020 and has weakened to approximately negative $93 million in the
TTM September 2022 due to inventory sourcing challenges and
negative customer response to rising used car prices.
Fitch recognizes the growth potential of EchoPark in a fragmented
used auto market and near-term efforts to improve profitability,
including expense reductions and initiatives to improve customer
affordability like sourcing older vehicles. However, given recent
operating challenges, Fitch expects EchoPark's contribution to
Sonic's EBITDA over the next two to three years to be negligible at
best.
Strong FCF; Reasonable Leverage: FCF was approximately $300 million
in 2021 following a nearly $200 million negative working capital
swing. Fitch expects FCF to average $400 million beginning 2022
despite some EBITDA moderation beginning 2023 on improved working
capital swings. Sonic's good cash flow generation provides
financial flexibility through cycles and allows the company to
invest in strategic initiatives, including M&A to help grow and
diversify its business.
Adjusted debt/EBITDAR, which trended in the low-to-mid-3x over the
past three years, could be around 3.4x in 2022 and the low 4x
beginning 2023. This assumes debt levels around $1.9 billion,
higher than the $1.6 billion at YE 2022 following the company's new
$327 million mortgage facility term loans in November 2022, some of
which was used to repay existing mortgage debt. The company does
not have a public leverage target and its 'BB' rating assumes it
operates with adjusted leverage below 4.25x.
DERIVATION SUMMARY
Sonic's 'BB'/Stable rating reflects its top five position in the
U.S. new and used auto dealership industry with expected 2022
revenue and EBITDA of around $15 billion and around $600 million,
respectively, following strong recent organic growth and the late
2021 acquisition of RFJ Auto Partners, Inc. The rating is supported
by balanced gross profit mix across segments, which helps limit
financial sensitivity to the cyclical new and used vehicle market,
strong liquidity position supported by expected positive FCF, and
Fitch's expectation for adjusted leverage (capitalizing rent
expense at 8x) to trend around 4x, in line with the company's
historical adjusted leverage range.
Sonic's peers include dealership groups Asbury Automotive, Inc.
(BB/Stable) and AutoNation, Inc. (BBB-/Stable), auto parts retailer
AutoZone Inc. (BBB/Stable) and similarly rated jewelry retailer
Signet Jewelers Ltd.
Asbury's 'BB'/Stable rating reflects its top five position in the
new and used auto dealership industry following recent acquisitions
with projected 2022 revenue and EBITDA around $15 billion and $1.27
billion, respectively. The rating is supported by good cash flow
and balanced gross profit mix across segments that limits
sensitivity to the cyclical new and used vehicle markets. The
rating assumes adjusted leverage trends in the low 4x over time.
AutoNation, whose business model is similar to that of Asbury,
holds a leading position in the auto retail segment and has a
history of good cash flows, which allows it to invest in growth
initiatives while effectively managing through an inherently
cyclical automotive industry. AutoNation's 'BBB-'/Stable ratings
consider the company's financial policy yielding adjusted leverage
around or below 3.0x historically.
Unlike Sonic, AutoZone competes in the retail auto parts and
accessories aftermarket. AutoZone's 'BBB'/Stable rating reflects
its leading position in auto parts retail, steady operating results
including high single digit five-year CAGRs in sales and EBITDA,
high profitability margins, and steady credit metrics with adjusted
leverage expected to trend in the high 2x range longer term.
AutoZone's operating trajectory is supported by generally benign
competition from direct peers and the industry's resilience to
discount and e-commerce competition due to inventory investment
requirements, a heavy service component and purchase immediacy
requirements.
The ratings consider AutoZone's financial policy and the
expectation that debt balances could grow over time to support the
company's share buyback program, in line with the company's
publicly articulated financial policy.
Signet's 'BB'/Stable rating reflects the company's recently strong
operating trajectory, which demonstrates success in the
implementation of its topline and other initiatives. Although Fitch
expects some near-term contraction from record 2021 results,
revenue and EBITDA beginning in 2023 are projected to trend in the
mid-$7 billion and mid-$800 million ranges, respectively, well
above pre-pandemic levels of $6 billion and $504 million. The
rating reflects expectations that Signet will be able to maintain
adjusted leverage (adjusted debt/EBITDAR, capitalizing leases at
8x) in the low-4x range, in line with their publicly articulated
financial policy.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within The Rating Case for the Issuer
- Revenue in 2022 could expand around 12% to $14 billion from $12.4
billion in 2021, largely due to the full-year addition of RFJ
(around $3 billion in annual revenue at the time of the acquisition
in December 2021) and flattish to modest declines in Sonic's
existing dealership and EchoPark business due to ongoing new
vehicle supply challenges. EBITDA in 2022 could expand to close to
$700 million from approximately $630 million in 2021 as
contribution from RFJ and gross margin upside in existing
franchised dealerships is somewhat mitigated by challenges at
EchoPark, which could lose around $100 million of EBITDA in 2022.
- Revenue in 2023 could modestly decline given some weakening in
the vehicle pricing environment after several strong years,
somewhat mitigated by expansion in the EchoPark business and
improved new vehicle supply. Longer term, organic revenue growth
could be around 4% assuming some store count growth at EchoPark and
modest growth at Sonic's existing dealerships.
- EBITDA beginning 2023 could contract to the mid-$500 million
range, assuming some reversal to the recently strong vehicle
pricing environment. EBITDA margins could trend in the high-3% to
4% range, lower than the 5% expected in 2022 but above the 2.8%
range seen in pre-pandemic 2019 given expectations of structurally
tighter new vehicle supply in the medium term and some benefits to
scale post the RFJ acquisition.
- FCF, which was essentially breakeven in 2021 on working capital
swings, could be around $200 million in 2022 assuming less working
capital usage. FCF could remain in the $200 million range beginning
2023 given Fitch's EBITDA forecast and assuming neutral working
capital. Fitch expects FCF could be used for strategic initiatives,
including M&A, and share buyback, in addition to modest required
mortgage-backed debt payments.
- Adjusted debt/EBITDAR, which declined from close to 5.0x in
2017/2018 to around 3x in 2020/2021, could trend in the low-3x in
2022 following the November 2022 debt issuance. Adjusted leverage
could trend around 4x beginning 2023 given Fitch's EBITDA
projections and assuming debt around $1.7 billion to $1.8 billion.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Increased confidence in Sonic maintaining adjusted debt/EBITDAR
(capitalizing lease expense at 8x) below 3.75x, either through a
public articulated or demonstrated financial policy, alongside
operating performance in line with Fitch's current expectations.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Financial policy decisions, including debt financed M&A or share
repurchase, which results in adjusted debt/EBITDAR (capitalizing
lease expense at 8x) sustained above 4.25x.
- Weaker than expected operating results due to market share loss
and/or execution missteps, evidenced by EBITDA trending below $500
million, would also lead to negative action.
LIQUIDITY AND DEBT STRUCTURE
Good Liquidity: Total liquidity as of Sept. 30, 2022 was $482
million comprised of $171 million in cash and floor plan deposit
balances and close to $311 million in available liquidity resources
under its various lines of credit. Total liquidity includes $281
million available (net of LOCs) under the company's $350 million
ABL credit facility maturing 2025 and $34 million available under a
$112 million mortgage facility maturing 2024.
Total debt as of Sept. 30, 2022 was $1.5 billion consisting of $82
million in borrowings under the mortgage facility, $312 million in
mortgage debt with various maturities through 2033, and $1.15
billion in unsecured notes due 2029/2031. In November 2022, the
company issued $327 million of new debt under its mortgage
facility, part of which was used to repay existing borrowings under
the facility ($78 million). The company also extended this mortgage
facility through November 2027.
Floorplan Facilities: Automotive retailers, including Sonic,
finance their inventories with floorplan facilities, which have
characteristics of both payables and debt. Companies primarily use
the facilities for new car inventory and the source of these
facilities is typically from either financing arms of various
automotive manufacturers or lending institutions. The accounting
treatment of these payables is similar to that of accounts
payables. For example, floorplan financing is categorized as a
floorplan payable, shown as short-term liabilities on the balance
sheet, with the change in floorplan payables treated as a working
capital change (trade payable) of financing activity (non-trade
payable) on the statement of cash flows.
Additionally, these facilities lack a fixed maturity date (loans
due on demand) and a duration that is generally paid within days
after a car is sold. These loans are often tied to manufacturer
subsidies, which offset a portion, if not all, of the borrowing
costs. These facilities are provided on a vehicle-by-vehicle
basis.
Floorplan financing also incurs an interest expense (distinct from
debt interest) and in a liquidation scenario, floorplan payables
are secured by the collateral of the vehicle, gaining priority over
unsecured debt. Fitch excludes floorplan financing from its primary
leverage ratio calculation in deriving its rating for Sonic. Fitch
also adjusts EBITDA by moving floorplan-related interest expense to
COGS. In 2021, this adjustment increased COGS and reduced EBITDA by
$16.7 million. Fitch also recognizes that these floorplan
facilities are secured and would receive priority over unsecured
claims in a bankruptcy.
Recovery Considerations:
Fitch does not employ a waterfall recovery analysis for issuers'
assigned ratings in the 'BB' category. The further up the
speculative-grade continuum a rating moves, the more compressed the
notching between the specific classes of issuances becomes. Fitch
rates Sonic's secured ABL Facility a 'BBB-'/'RR1' indicating
outstanding recovery prospects. Sonic's $1.15 billion unsecured
notes are rated 'BB'/'RR4', indicating average recovery prospects.
ISSUER PROFILE
Sonic Automotive Inc. is a new and used automotive retailer which
also provides additional services including parts & repair services
and finance & insurance through lending institutions.
SUMMARY OF FINANCIAL ADJUSTMENTS
In addition to treating floor plan interest expense as an operating
cost within cost of goods sold. Fitch adjusts for stock-based
compensation expense, impairment charges, and loss or gains on
asset disposals.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Sonic Automotive,
Inc. LT IDR BB Affirmed BB
senior
unsecured LT BB Affirmed RR4 BB
senior secured LT BBB- Affirmed RR1 BBB-
STEM HOLDINGS: Delays Filing of Form 10-K For Year Ended Sept. 30
-----------------------------------------------------------------
Stem Holdings, Inc. filed a Form 12b-25 with the Securities and
Exchange Commission stating it is unable to file its Form 10-K for
the year ended Sept. 30, 2022, within the prescribed time period
without unreasonable effort or expense.
The Company anticipates that it will file its Form 10-K within the
grace period provided by Exchange Act Rule 12b-25.
About Stem Holdings
Headquartered in Boca Raton, Florida, Stem Holdings, Inc. --
http://www.stemholdings.com-- is a multi-state, vertically
integrated, cannabis company that, through its subsidiaries and its
investments, is engaged in the manufacture, possession, use, sale,
distribution or branding of cannabis, and holds licenses in the
adult use and medical cannabis marketplace in the states of Oregon,
Nevada, California, Oklahoma and Massachusetts.
Stem Holdings reported a net loss of $64.6 million for the year
ended Sept. 30, 2021, compared to a net loss of $11.5 million for
the year ended Sept. 30, 2020. As of June 30, 2022, the Company
had $41.93 million in total assets, $14.67 million in total
liabilities, and $27.26 million in total shareholders' equity.
Deer Park, IL-based LJ Soldinger Associates, LLC, the Company's
auditor since 2017, issued a "going concern" qualification in its
report dated Jan. 13, 2022, citing that the Company, and its
affiliates, had net losses of $64.4 million and $11.5 million,
negative working capital of $2.954 million and $9.235 million and
accumulated deficits of $115.750 million and $51.386 million as of
and for the year ended Sept. 30, 2021 and 2020, respectively. In
addition, the Company has commenced operations in the production
and sale of cannabis and related products, an activity that is
illegal under United States Federal law for any purpose, by way of
Title II of the Comprehensive Drug Abuse Prevention and Control Act
of 1970, otherwise known as the Controlled Substances Act of 1970.
These facts raise substantial doubt as to the Company's ability to
continue as a going concern.
STONE CLINICAL: BPOM Appointed as New Committee Member
------------------------------------------------------
David Asbach, Acting U.S. Trustee for Region 5, appointed BPOM, LLC
as new member of the official committee of unsecured creditors in
the Chapter 11 case of Stone Clinical Laboratories, LLC.
According to the latest OUST notice, Common Cents Systems, Inc. is
no longer a member of the committee.
As of Dec. 29, the members of the committee are:
1. Hologic, Inc. (Acting Chairperson)
Attention: Dru Greenhalgh
10210 Genetic Center Drive
San Diego, CA 92121
Phone: 858-410-8567
Email: dru.greenhalgh@hologic.com
Counsel:
Paul R. Hage, Esq.
Jaffe Raitt Heuer & Weiss, P.C.
27777 Franklin St., Ste. 2500
Southfield, MI 48067
Phone: 248-727-1543
Email: phage@jaffelaw.com
2. Woman's Hospital Foundation
Attention: April Chiasson
100 Woman's Way
Baton Rouge, LA 70817
Counsel:
E. Trent McCarthy, Esq.
7922 Picardy Ave.
Baton Rouge, LA 70809
Phone: 225-266-5000
Email: tmcarthy@themccarthylawfirm.com
3. BPOM, LLC
c/o Adams & Reese, LLP
701 Poydras Street, Suite 4500
New Orleans, LA 70139
Counsel:
Robin Cheatham
701 Poydras Street, Suite 4500
New Orleans, LA 70139
Phone: 504-5
Email: Robin.cheatham@arlaw.com
About STONE Clinical Laboratories
STONE Clinical Laboratories, LLC is a full-service clinical
reference laboratory that specializes in preventative and molecular
diagnostics testing. The company is based in New Orleans, La.
On July 15, 2021, Whale Capital, L.P., Hologic, Inc. and Woman's
Hospital Foundation filed an involuntary Chapter 11 petition
against the Debtor. On Jan. 10, 2022, the court entered the order
for relief, thereby, commencing the Chapter 11 case (Bankr. E.D.
La. Case No. 21-10923). The petitioning creditors are represented
by The Derbes Law Firm LLC, Jaffe Raitt Heuer & Weiss P.C., and The
McCarthy Law Firm.
Judge Meredith S. Grabill presides over the case.
Heller, Draper & Horn, LLC and Gordian Seaport Advisors, LLC serve
as the Debtor's legal counsel and investment banker, respectively.
David Asbach, acting U.S. Trustee for Region 5, appointed an
official committee of unsecured creditors on Feb. 3, 2022. The
committee is represented by Liskow & Lewis, APLC.
TAMG REALTY: Case Summary & Four Unsecured Creditors
----------------------------------------------------
Debtor: Tamg Realty Inc
1290 W Spring St, Suite 222
Smyrna GA 30080
Business Description: Tamg is a boutique real estate brokerage
firm serving clients who desire to buy,
sell, or lease residential or commercial
properties.
Chapter 11 Petition Date: January 3, 2023
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 23-50051
Debtor's Counsel: April Lash, Esq.
THE WYNN LASH LAW OFFICE, LLC
255 Racetrack Road
McDonough GA 30252
Tel: 678-764-6854
Email: april@wynnlashlaw.com
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Tiffany Gray as owner.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/HICFHXI/Tamg_Realty_Inc__ganbke-23-50051__0001.0.pdf?mcid=tGE4TAMA
TENTRR INC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Tentrr, Inc.
25 West 39th Street
Suite No. 7007
New York, NY 10018
Business Description: Tentrr is a booking platform with over 1,000
fully equipped, ready-to-go campsites across
the USA.
Chapter 11 Petition Date: January 2, 2023
Court: United States Bankruptcy Court
District of Delaware
Case No.: 23-10000
Debtor's
General
Bankruptcy
Counsel: MAYERSON & HARTHEIMER, PLLC
Debtor's
Local
Delaware
Counsel: Frederick B. Rosner, Esq.
THE ROSNER LAW GROUP LLC
824 N. Market Street, Suite 810
Wilmington, DE 19801
Tel: (302) 777-111
Email: rosner@teamrosner.com
Debtor's
Financial
Advisors: AARON FELDON AND JOHNNY CHAU
Debtor's
Notice,
Claims, &
Solicitation
Agent: OMNI AGENT SOLUTIONS
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Anand Subramanian as 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/O36XI5Y/Tentrr_Inc__debke-23-10000__0001.0.pdf?mcid=tGE4TAMA
TOMS KING: Case Summary & 30 Largest Unsecured Creditors
--------------------------------------------------------
Seven affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
TOMS King (Ohio) LLC (Lead Case) 23-50001
220 N. Smith Street
Suite 305
Palatine, IL 60067-8500
TOMS King LLC 23-50002
TOMS King (Illinois) LLC 23-50003
TOMS King (Penn.) LLC 23-50004
TOMS King (Virginia) LLC 23-50005
TOMS King (Ohio II) LLC 23-50006
TOMS King III LLC 23-50007
Business Description: The Debtors are franchisees of Burger King
restaurants. The Debtors operate 90 Burger
King restaurants spanning four states:
Illinois, Ohio, Pennsylvania, and Virginia.
Chapter 11 Petition Date: January 2, 2023
Court: United States Bankruptcy Court
Northern District of Ohio
Judge: Hon. Alan M. Koschik
Debtors' Counsel: Thomas R. Allen, Esq.
Richard K. Stovall, Esq.
James A. Coutinho, Esq.
ALLEN STOVALL NEUMAN & ASHTON LLP
10 W. Broad St., Ste. 2400
Columbus, Ohio 43215
Tel: (614) 221-8500
Fax: (614) 221-5988
Email: allen@ASNAlaw.com
stovall@ASNAlaw.com
coutinho@ASNAlaw.com
- and -
Matthew P. Ward, Esq.
Ericka F. Johnson, Esq.
Morgan L. Patterson, Esq.
Todd A. Atkinson, Esq.
William D. Curtis, Esq.
WOMBLE BOND DICKINSON (US) LLP
1313 North Market Street, Suite 1200
Wilmington, Delaware 19801
Tel: (302) 252-4320
Fax: (302) 252-4330
Email: matthew.ward@wbd-us.com
ericka.johnson@wbd-us.com
morgan.patterson@sbd-us.com
todd.atkinson@wbd-us.com
will.curtis@wbd-us.com
Debtors'
Claims &
Noticing
Agent: OMNI AGENT SOLUTIONS, INC.
TOMS King (Ohio) LLC's
Estimated Assets: $0 to $50,000
TOMS King (Ohio) LLC's
Estimated Liabilities: $10 million to $50 million
The petitions were signed by Daniel F. Dooley as chief
restructuring officer.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/FMAWVDQ/TOMS_King_Ohio_LLC__ohnbke-23-50001__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/FIHYZ2I/TOMS_King_LLC__ohnbke-23-50002__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/FW2AYPY/TOMS_King_Illinois_LLC__ohnbke-23-50003__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/FQJFU2Q/TOMS_King_Penn_LLC__ohnbke-23-50004__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PC7BZSA/TOMS_King_Virginia_LLC__ohnbke-23-50005__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/POMX7QA/TOMS_King_Ohio_II_LLC__ohnbke-23-50006__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/PKDDUMQ/TOMS_King_III_LLC__ohnbke-23-50007__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
------ --------------- ------------
1. Burger King Corporation Franchisor & $7,043,827
5505 Blue Lagoon Drive Landlord
Miami, FL 33126
Tel: (330) 758-0835
2. American Finance OPR Landlord $2,367,882
Partnership LP
P.O. Box 715352
Cincinnati, OH 45271-5352
Email: Email: dsatasia@arlcap.com
3. Holtzman Oil Corporation Landlord $281,294
P.O. Box 8
Mount Jackson, VA 22842
Email: dshreiner@holtzmancorp.com
4. Service Properties Trust Landlord $194,428
c/o the RMR Group LLC
P.O. Box 776903
Chicago, IL 60677-6903
Tel: (267) 705-2045
Email: svcretail@rmrgroup.com
5. King of Northern Virginia LP Landlord $169,016
P.O. Box 1547
San Ramon, CA 94583
Email: lromero@rp.cpa
6. Brinks Inc Contractual- $160,817
P.O. Box 101031 Banking
Atlanta, GA 30392
Tel: (330) 758-7378
Email: remitadvice@brinksinc.com
7. Gridpoint Inc. Energy $154,524
11911 Freedom Drive, Suite 850 Management
Reston, VA 20190 Vendor
Email: gpar@gridpoint.com
8. Venable LLP Legal $135,988
P.O. Box 62727
Baltimore, MD 21264-2727
9. Case Snow Management Inc. Landscaping $100,000
356 John Dietsch Boulevard
North Attleboro, MA 02763
Email: accounting@casefms.com
10. Eagle Trading Int'l Corp. Contractual- $81,098
6255 W. Howard Street Maintenance
Niles, IL 60714
Email: billing@roofingsource.com
11. Mazeltov LLC Landlord $72,456
42 Pasarela Drive, Unit 106
Rancho Mission Viejo, CA 92694
Email: ricci.zukerman@gmail.com
12. Knickerbocker Assets LLC Landlord $68,265
8 Sawmill Lane
Cold Spring Harbor, NY 11724
Email: bdthorst@gmail.com
13. King NG Landlord $67,608
129 Purvis Road
Butler, PA 16001
Email: kingng2@yahoo.com
14. Sicom Systems Technology $65,383
P.O. Box 930157
Atlanta, GA 31193-0157
Email: ar@sicom.com
15. Ecolab Inc. Contractual- $64,536
26252 Network Place Maintenance
Chicago, IL 60673-1262
Tel: (800) 325-1671
16. SH Park Associates LLC Landlord $60,547
9610 Atwood Road
Vienna, VA 22182
Email: shpark4ks@gmail.com
17. Michael Giurbino Landlord $59,895
35077 Beach Road
Dana Point, CA 92624-1705
Email: giurbino@gmail.com
18. Getty Leasing Inc. Landlord $56,568
Two Jerico Plaza
Wing C, Suite 110
Jerico, NY 11753-1681
Tel: (516) 478-5400
Email: jolsen@gettyrealty.com
19. Brinks Capital Inc. Smart Safe $47,521
1801 Bayberry Court, Suite 400
Richmond, VA 23226
20. Honorbuilt LLC Technology $45,898
2010 Avalon Parkway
Suite 400
McDonough, GA 30253
Tel: (404) 952-2610
Email: billing@honorbuilt.com
21. Shrepp LLC Landlord $45,192
4521 Mixed Willow Place
Chantilly, VA 20151
Contact: Karthikeyan Murugesan
Email: karthik@apprc.com
22. Omega Kappa LLC Landlord $43,886
4206 Aberfoil Avenue
Oakland, CA 94605
Email: loriekiser@earthlink.net
23. Mobile Mini Inc. Maintenance $42,849
P.O. Box 650882
Dallas, TX 75265-0882
Tel: (800) 456-1751
Email: billingres@mobilemini.com
24. Trilogy Realty LLC Landlord $42,371
1305 Boardman Canfield Road
Suite 2
Boardman, OH 44512
Email: jsabjr@aol.com
tomsking.ach@issvc.com
25. FNW Realty Corp. Landlord $41,940
1251 58th Street
Brooklyn, NY 11219
Contact: Zelda Mehl
Email: zeldamehl@gmail.com
26. NADG NN BK VA LP Landlord $41,594
3131 McKinney Avenue
Suite L10
Dallas, TX 75204
Tel: (469) 906-7300
Email: dline@nadg.com
27. Federal Realty Partners LP Landlord $41,508
P.O. Box 8500
Lockbox 9320
c/o Federal Realty Kingstowne
Philadelphia, PA 19178-9320
Tel: (301) 988.8100
Email: pbackup@federalrealty.com
28. Huber Management Corp. Landlord $41,037
7333 Paragon Road
Suite 150
Dayton, OH 45459
Email: penny@hubermanagementcorp.com
julia@hubermanagementcorp.com
29. Ellen K. Cronfel Landlord $40,439
725 Parkview Circle
Elk Grove Village, IL 60007-3330
Email: ecronfel@comcast.net
30. Hunter Mechanical LLC Maintenance $39,130
226 Salters Creek Road
Hampton, VA 23661
VOIP-PAL.COM INC: Posts $3.7 Million Loss in FY Ended Sept. 30
--------------------------------------------------------------
VoIP-Pal.Com Inc. reported a loss and comprehensive loss of $3.69
million for the year ended Sept. 30, 2022, compared to a loss and
comprehensive loss of $2.16 million for the year ended Sept. 30,
2021.
As of Sept. 30, 2022, the Company had $675,806 in total assets,
$158,613 in total liabilities, and $517,193 in stockholders'
equity.
Vancouver, Canada-based Davidson & Company LLP, the Company's
auditor since 2015, issued a "going concern" qualification in its
report dated Dec. 23, 2022, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
VoiP-Pal stated, "The ability of the Company to continue operations
as a going concern is dependent upon raising additional working
capital, settling outstanding debts and generating profitable
operations. These material uncertainties raise substantial doubt
about the Company's ability to continue as a going concern. Should
the going concern assumption not continue to be appropriate,
further adjustments to carrying values of assets and liabilities
may be required. There can be no assurance that capital will be
available as necessary to meet these continued developments and
operating costs or, if the capital is available, that it will be on
terms acceptable to the Company. The issuances of additional stock
by the Company may result in a significant dilution in the equity
interests of its current shareholders. Obtaining commercial loans,
assuming those loans would be available, will increase the
Company's liabilities and future cash commitments. If the Company
is unable to obtain financing in the amounts and on terms deemed
acceptable, its business and future success may be adversely
affected."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1410738/000149315222036629/form10-k.htm
About VOIP-PAL.com
Since March 2004, VOIP-PAL.com has developed technology and patents
related to Voice-over-Internet Protocol (VoIP) processes. All
business activities prior to March 2004 have been abandoned and
written off to deficit. The Company operates in one reportable
segment being the acquisition and development of VoIP-related
intellectual property including patents and technology.
WEBER INC: Unit Amends Credit Agreement With Bank of America
------------------------------------------------------------
Weber-Stephen Products LLC, a Delaware limited liability company, a
subsidiary of Weber Inc., entered into an amendment to that certain
Credit Agreement dated as of Oct. 30, 2020 by and among
Weber-Stephen, as borrower, Weber-Stephen Products Belgium BV, as
euro borrower, the lenders party thereto and Bank of America, N.A.
as an issuing bank, as swingline lender and as administrative
agent.
Pursuant to the Amendment, the maximum net first lien leverage
ratio covenant of 7.00:1.00 is waived for the fiscal quarters
ending December 31, 2022, and March 31, 2023.
The Waiver will be automatically terminated upon the occurrence of
any Covenant Waiver Termination Event (as defined in the Credit
Agreement to include, among other events, if the Take-Private
Transaction (as defined in the Credit Agreement) does not occur
within a certain period). If the Waiver is terminated,
Weber-Stephen must test the Financial Covenant for the most
recently ended fiscal quarter for which financial statements have
been delivered to the Administrative Agent, subject to its right to
exercise an equity cure as set forth in the Credit Agreement.
If the Waiver is terminated and Weber-Stephen is not in compliance
with the Financial Covenant for the Testing Quarter, in addition to
other rights and remedies of the Revolving Facility Lenders (as
defined in the Credit Agreement) provided for under the Credit
Agreement, Weber-Stephen must pay the Revolving Facility Lenders a
fee in an amount equal to 3.0% per annum in respect of any
outstanding loans under the Revolving Facility (as defined in the
Credit Agreement). The Contingent Fee will continue to be payable
until Weber-Stephen is in compliance with the Financial Covenant
for any two consecutive fiscal quarter period ending on or after
Sept. 30, 2023, at which time the Contingent Fee will terminate
permanently.
From and after the earlier of (a) April 30, 2023 and (b) the date
on which the Specified Equity Contribution (as defined in the
Credit Agreement) is made, Weber-Stephen may not incur any further
borrowings under the Revolving Facility if after giving effect to
any such borrowing, the obligations outstanding under the Revolving
Facility would exceed (x) $250 million or (y) if a Shareholder Loan
Agreement Cure (as defined in the Credit Agreement) has occurred,
$200 million. The Revolver Draw Limitation shall terminate upon
the earlier of (x) one year following the consummation of the
Take-Private Transaction and (y) the date on which Weber-Stephen
demonstrates compliance with the Financial Covenant for any fiscal
quarter ending on or after June 30, 2023.
Each lender under the Revolving Facility that consents to the
Amendment will receive an amendment fee in an amount equal to 0.25%
of the Revolving Facility Commitments (as defined in the Credit
Agreement) held by such lender as of the date of the Amendment.
About Weber
Weber Inc., together with its affiliates, is an outdoor cooking
company in the global outdoor cooking market. The Company's
product portfolio includes traditional charcoal grills, gas grills,
smokers, pellet and electric grills and recently our Weber Connect
technology-enabled grills. Its full range of products are sold in
78 countries.
Weber reported a net loss of $329.98 million for the year ended
Sept. 30, 2022. As of Sept. 30, 2022, the Company had $1.44
billion in total assets, $1.86 billion in total liabilities, and a
total deficit of $411.94 million.
* * *
As reported by the TCR on Dec. 23, 2022, S&P Global Ratings removed
all ratings on U.S.-based Weber Inc. from CreditWatch, where S&P
placed them with negative implications on July 29, 2022. At the
same time, S&P affirmed all of its ratings on the company,
including its 'CCC+' issuer credit rating. The outlook is
negative. S&P said, "The negative outlook reflects our expectation
that the company's operations will continue to be challenged with
uncertain prospects for grill demand in a softening economy and
risk of heightened inventory levels at the end of fiscal 2023.
These factors could keep its capital structure unsustainable
including leverage in the double-digit area."
WILLIAMSBRIDGE-3067: Secured Party to Hold Auction on January 24
----------------------------------------------------------------
Fairbridge Real Estate Investment Trust LLC fka RealFi Real Estate
Investment Trust LLC and Tradex Real Estate Investment Trust LLC
("secured party") will offer for sale at public auction all rights,
title and interests of Williamsbridge-3067 Realty LLC, as pledgor,
in and to the following: (a) 100% of the limited liability
membership interest ("membership interests") in Williamsbridge-3067
Realty LLC; and (b) all other collateral pledged and security
agreement dated as of March 5, 2021 ("pledged agreement"), by
pledgor to secured party, pursuant to which pledgor pledged to
secured party among other things, all of pledgor's rights, title
and interests in, to and under 100% of the limited liability
company membership interests in the Company.
Company's limited liability company membership interests are
encumbered by and subject to, among other things, a first and
second priority security interests held by secured party securing
indebtedness in the approximate outstanding amount of $610,406.79
as of Jan. 27, 2022, with interests, late fees, costs and expenses
accruing therefrom. For current more proximate payoff figure of
the outstanding debt, contact the undersigned.
The public auction will be held on Jan. 24, 2023, at 11:00 a.m.
(New York Time) (i) in person at the top of the front steps of
Bronx County Courthouse that the face of Grand Concourse, located
at 851 Grand Concourse, Bronx, NY 10451; and the sale will be
conducted by Mannion Auctions LLC, Matthew D. Mannion.
In order to participate in the auction, you must contact
auctioneer, via email at mdmannion@jpandr.com or via telephone at
212-267-6698 to receive deposit instructions and terms of sale.
Attorneys for secured party:
Florek & Counsel LLC
Attn: Stephen A. Florek, III, Esq.
2900 Westchester Avenue, Suite 405
Purchase, New York 10577
Tel: (914) 219-4128
Fax: (914) 219-0948
[*] FTI's Corp Restructuring Segment Promotes 35 Professionals
--------------------------------------------------------------
FTI Consulting, Inc., on Jan. 3, 2023, announced the promotion of
35 professionals within the firm's Corporate Finance &
Restructuring segment to Senior Managing Director, effective Jan.
1, 2023.
"Organizations call on FTI Consulting to help them navigate
challenges related to business transformation, transactions and
restructurings, and these professionals have repeatedly risen to
the occasion to deliver value for our clients," said Carlyn Taylor,
Global Co-Leader of the Corporate Finance & Restructuring segment
and the firm's Business Transformation Leader. "I am proud of the
work each of these individuals has accomplished, and I look forward
to working alongside them as they continue to grow as leaders both
within the segment and firmwide."
Michael Eisenband, Global Co-Leader of the Corporate Finance &
Restructuring segment at FTI Consulting, added, "We continue to
invest in and promote talent so we are able to better assist our
clients with their financial, operational and strategic goals.
Congratulations to our newest Senior Managing Directors, whose
dedication to helping clients in times of distress and change
strengthens FTI Consulting's position as a market-leading firm."
The Senior Managing Director promotions in the Corporate Finance &
Restructuring segment include:
Rose Arnold, Digital Science, Baarn
Francesco Bardoni, Transactions, London
Chris Bennett, Turnaround & Restructuring, London
Paul Brown, Business Transformation, London
Dalius Budvytis, FTI Capital Advisors (Investment Banking), Dubai
Shane Campbell, FTI Capital Advisors (Investment Banking), New
York
Oliver Carter, Turnaround & Restructuring, Dubai
Heather DiFiore, Office of the CFO Solutions, Atlanta
Mark Dunec, Real Estate Solutions, Roseland
Justin Eisenband, Telecom, Media & Technology, Miami
Joe Fan, Business Transformation, Shanghai
Ralph Fernando, Digital Science, London
Garazi Goia, Telecom, Media & Technology, London
Paul Harlond, Turnaround & Restructuring, Melbourne
Chas Harvick, Turnaround & Restructuring, Scottsdale
Yana Kamburova, FTI Capital Advisors (Investment Banking),
Johannesburg
Ali Khaki, Turnaround & Restructuring, London
Pratyush Lal, Technology Transformation, Atlanta
Luciano Lindemann, Turnaround & Restructuring, São Paulo
Alistair Mackenzie, Transactions, London
Jen Maki, Transactions, Scottsdale
Brian Martin, Turnaround & Restructuring, Chicago
Antoine Mavel, Transactions, Toronto
Justin McCarty, Transactions, Chicago
Dave Messinger, Financial Services, New York
Tim Müller, Turnaround & Restructuring, Frankfurt
William Pan, Turnaround & Restructuring, Hong Kong
Jodi Porepa, Turnaround & Restructuring, Toronto
Adam Rauch, Turnaround & Restructuring, New York
Anthony Saitta, Real Estate Solutions, Roseland
Daniel Simonetti, Transactions, New York
Patrick Strong, Technology Transformation, Denver
Chris Tennenbaum, Turnaround & Restructuring, Los Angeles
Aaron Terry, Turnaround & Restructuring, Houston
Arnoud van der Lingen, Turnaround & Restructuring, Baarn
About FTI Consulting
FTI Consulting, Inc. (NYSE: FCN) -- http://www.fticonsulting.com/
-- is a global business advisory firm dedicated to helping
organizations manage change, mitigate risk and resolve disputes:
financial, legal, operational, political & regulatory, reputational
and transactional. With more than 7,500 employees located in 31
countries, FTI Consulting professionals work closely with clients
to anticipate, illuminate and overcome complex business challenges
and make the most of opportunities. The Company generated $2.78
billion in revenues during fiscal year 2021. In certain
jurisdictions, FTI Consulting's services are provided through
distinct legal entities that are separately capitalized and
independently managed.
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Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $975 for 6 months delivered via
e-mail. Additional e-mail subscriptions for members of the same
firm for the term of the initial subscription or balance thereof
are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
*** End of Transmission ***