/raid1/www/Hosts/bankrupt/TCR_Public/230112.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, January 12, 2023, Vol. 27, No. 11
Headlines
106 WEBSTER: Voluntary Chapter 11 Case Summary
11680 ROYAL: Unsecureds Owed $283K Unimpaired in Plan
243 FOOD LLC: Taps Weinberg Gross & Pergament as Legal Counsel
307 ASSETS: Property Sale Proceeds to Fund Plan Payments
AAD CAPITAL: Court OKs Affiliate's Deal on Cash Collateral Access
AGILE THERAPEUTICS: Provides Update on 2022 Twirla Performance
AIP RD BUYER: Moody's Rates New $200MM Sr. Secured Term Loan 'B2'
AIP RD BUYER: S&P Affirms 'B' ICR on Acquisition-Related Financing
AMERICAN VIRTUAL: Case Summary & 20 Largest Unsecured Creditors
AMERICANN INC: Reports Fiscal Year-End, Quarterly Financial Results
ANASTASIA PARENT: Fidelity Fund Marks $37.6M Loan at 25% Off
APPALACHIAN VALLEY TRANSPORT: Has Final OK on Cash Collateral Use
ASP LS ACQUISITION: Fidelity Fund Marks $2.9M Loan at 32% Off
BERTUCCI'S RESTAURANTS: U.S. Trustee Appoints Creditors' Committee
BOSTON SCIENTIFIC: Egan-Jones Retains BB+ Sr. Unsecured Ratings
BSPV-PLANO LLC: Hearing on Exclusivity Bid Set for Jan. 24
BSPV-PLANO LLC: Taps Spire Consulting Group as Expert Consultant
BUFFALO STATION: Seeks to Hire Joyce W. Lindauer as Legal Counsel
BW NHHC HOLDCO: Moody's Affirms Caa3 CFR & Downgrades PDR to D-PD
C&L DINERS: Court OKs Cash Collateral Access Thru Feb 17
CINEMA SQUARE: Court OKs Deal on Cash Collateral Access
CLEARWATER COLLECTION: Creditors to Get Proceeds From Liquidation
CONSOLIDATED COMMUNICATIONS: Fidelity Fund Marks $16.6M Loan at 17%
CORE SCIENTIFIC: U.S. Trustee Appoints Creditors' Committee
CORELOGIC INC: Fidelity Fund Marks $45.9M Loan at 27% Off
CROCS INC: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
CUMULUS MEDIA: Moody's Lowers CFR to B3 & Alters Outlook to Stable
CUREPOINT LLC: Trustee Taps Radiology Oncology Systems as Appraiser
CYTODYN INC: Incurs $26.5 Million Net Loss in Second Quarter
DCL CORP: CCAA Stay Period Extended to March 17
DOMINARI HOLDINGS: Appoints Christopher Devall as COO
DW TRUMP INC: Taps Law Office of Barry D. Haberman as Counsel
EMPIRE TODAY: Fidelity Fund Marks $15.4M Loan at 26% Off
EMPLOY BRIDGE: Fidelity Fund Marks $31.3M Loan at 15% Off
EMPLOYEE LOAN: Court OKs Interim Cash Collateral Access
EYEPOINT PHARMACEUTICALS: Dr. Jay Duker Promoted to President
FRANKIE'S COMICS: Taps Stevens Martin Vaughn & Tadych as Counsel
GIGA-TRONICS INC: Signs Note Exchange Agreement With Ault Alliance
GIRARDI & KEESE: Prosecutors Oppose Bail for CFO
GREELY LAND: Has Deal on Cash Collateral Access Thru Jan 31
HAN JOE RO: Court Confirms Amended Chapter 11 Plan
HARLAND CLARKE: Fidelity Fund Marks $1.8M Loan at 30% Off
HEIRBNB LLC: TAPS Lefkovitz & Lefkovitz as Legal Counsel
HINTONS5 LLC: Feb. 7 Plan Confirmation Hearing Set
HOUGHTON MIFFLIN: Moody's Puts 'B3' CFR on Review for Downgrade
INNOVATE CORP: Regains Compliance With NYSE Bid Price Requirement
JAMES AND JAN: Case Summary & Three Unsecured Creditors
JEFFERIES FINANCE: Moody's Alters Outlook on 'Ba3' CFR to Stable
KABBAGE INC: Amended Plan Removes Toggle Feature
KC CULINARTE: Moody's Withdraws 'B3' CFR Following Debt Repayment
KNOWLTON DEVELOPMENT: Fitch Affirms B- LongTerm IDRs, Outlook Pos.
KOPIN CORP: EVP for Display Operations Resigns
KOPIN CORP: To Partially Spinout OLED Development Unit
LBM ACQUISITION: Fidelity Fund Marks $9.5M Loan at 15% Off
LEADING LIFE: Seeks to Hire Ferguson as Legal Counsel
LEADING LIFE: Seeks to Hire Joseph Pegnia of GlassRatner as CRO
LINDERIAN COMPANY: Amends Unsecureds & IRS Secured Claims Pay
LTL MANAGEMENT: Exclusivity Period Extended to Feb. 15
MILLION DOLLAR SMILE: Court OKs Cash Collateral Access Thru Jan 19
MOHEGAN TRIBAL: Hanwha Funds US$40M First Tranche to Inspire
MONTROSE MULTIFAMILY: Cash Collateral Access Thru April 3 OK'd
MORNINGSIDE MINISTRIES: Fitch Alters Outlook on 'BB+' IDR to Neg.
MYLIFE.COM INC: Exclusivity Period Extended to June 29
NAT'L ASSOC. OF TELEVISION: Unsecureds Will Get 5.938% of Claims
NEWAGE INC: Unsecureds to Recover 0% to 100% in Liquidating Plan
NEXTPLAY TECHNOLOGIES: Effects 1-for-20 Reverse Stock Split
NGV GLOBAL GROUP: Gets OK to Tap Forshey & Prostok as Legal Counsel
NGV GLOBAL: Court OKs Cash Collateral Access Thru Feb 13
NXT ENERGY: Grants 2.1M Incentive Stock Options to Employees, D&Os
ORIGINCLEAR INC: Unit Signs LOI to Merge With Fortune Rise
PARAMOUNT RESTYLING: Files Emergency Bid to Use Cash Collateral
PHI GROUP: Signs Deal to Manage $1BB Investment
POWER TEAM: Fidelity Fund Marks $13.3M Loan at 18% Off
PRESSURE BIOSCIENCES: Two Proposals Approved at Special Meeting
QHC FACILITIES: Unsecureds Will Get 12% to 16% in Liquidating Plan
QUANERGY SYSTEMS: Files Payout Plan, Sets Jan. 25 Auction
RED PLANET: Fidelity Fund Marks $14M Loan at 40% Off
RELMADA THERAPEUTICS: Paul Kelly to Serve as CEO Special Advisor
REVERSE MORTGAGE: Gets OK to Hire FTI, Appoint CRO
RL ENTERPRISES: Unsecureds Will Get 3% of Claims in 3 Years
RPJ HOSPITALITY: Voluntary Chapter 11 Case Summary
RUBRYC THERAPEUTICS: Unsecureds Owed $18M Get 3.4% to 31.5%
SAMN LLC: Continued Operations to Fund Plan Payments
SAVVA HOLDINGS: Case Summary & Four Unsecured Creditors
SECURUS TECHNOLOGIES: Fidelity Fund Marks $30.4M Loan at 28% Off
SELECT MEDICAL: Moody's Affirms B1 CFR & Alters Outlook to Negative
SIGNAL PARENT: Fidelity Fund Marks $19.5M Loan at 32% Off
SP STAR: Court OKs Deal on Cash Collateral Access
STONE CLINICAL: Unsecureds Impaired in Committee-Backed Plan
SUMMER AVE: Wins Cash Collateral Access Thru March 2
TAMG REALTY: Files for Chapter 11 then Seeks Dismissal
TRANSOCEAN TITAN: Moody's Rates New $500MM Sr. Secured Notes 'B2'
TURNER OAKWOOD: Court OKs Interim Cash Collateral Access
VENTURE GLOBAL: Moody's Rates $1BB Secured Notes Offering 'Ba2'
VENTURE GLOBAL: S&P Assigns 'BB+' Rating on New $1BB Bond
VENUS CONCEPT: Former CEO to Get $1 Million in Separation Pay
VOYAGER DIGITAL: Alameda Challenges Bankruptcy Plan Over $75M Loan
W&T OFFSHORE: Moody's Puts 'Caa1' CFR Under Review for Upgrade
WASTEQUIP LLC: S&P Alters Outlook to Positive, Affirms 'CCC+' ICR
WEBER-STEPHEN: Fidelity Fund Marks $5.7M Loan at 17% Off
WEWORK INC: Issues $250M Senior Secured Notes to Softbank
WH INTERMEDIATE: Moody's Affirms 'B2' CFR, Outlook Remains Stable
WIN WASTE: S&P Lowers ICR to 'B' on Higher-Than-Expected Leverage
ZAYO GROUP: Fidelity Fund Marks $21.6M Loan at 17% Off
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
106 WEBSTER: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: 106 Webster LLC
53 State Street, Suite 500
Boston, MA 02109
Business Description: The Debtor is part of the residential
building construction industry.
Chapter 11 Petition Date: January 11, 2023
Court: United States Bankruptcy Court
District of Massachussetts
Case No.: 23-10029
Judge: Hon. Christopher J. Panos
Debtor's Counsel: Gary W. Cruickshank, Esq.
GARY W. CRUICKSHANK
21 Custom House Street
Suite 920
Boston, MA 02110
Tel: 617-330-1960
Email: gwc@cruickshank-law.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Jaime Melissa Cooper 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/IPEDYRI/106_Webster_LLC__mabke-23-10029__0001.0.pdf?mcid=tGE4TAMA
11680 ROYAL: Unsecureds Owed $283K Unimpaired in Plan
-----------------------------------------------------
11680 Royal Ridge Mob1 SPE, LLC, submitted a Plan of Reorganization
and a corresponding Disclosure Statement.
The Debtor has worked diligently since the Petition Date to comply
with all of the requirements of being a Debtor in Possession, as
well as to run the Business and to pursue a refinance of the
Property. The Debtor has now secured a refinance, which will allow
the Debtor to pay its creditors in full and emerge from bankruptcy
successfully.
The Plan provides for the payment in full of all secured, priority,
and general unsecured claims (except for the claims of the Honan
Entities) and retention of equity interests in the Debtor.
The Debtor estimates, based on its schedules and proofs of claims
that have been filed, that there will be approximately $283,107 in
allowed general unsecured claims, excluding the Honan Entities.
The Debtor proposes to pay General Unsecured Claims with
post-petition interest in full on the Effective Date.
Under the Plan, Class 3 General Unsecured Claims are unimpaired and
deemed to accept the Plan.
The cash distributions contemplated by the Plan shall be funded by
cash generated from the refinance of the Property.
Attorneys for the Debtor:
Elizabeth Childers, Esq.
William A. Rountree, Esq.
Will Geer, Esq.
Benjamin R. Keck, Esq.
ROUNTREE LEITMAN KLEIN & GEER, LLC
Century Plaza I, 2987 Clairmont Road, Suite 350
Atlanta, GA 30329
Tel: (404) 584-1238
E-mail: wrountree@rlklglaw.com
wgeer@rlklglaw.com
echilders@rlkglaw.com
A copy of the Disclosure Statement dated Dec. 30, 2022, is
available at https://bit.ly/3WWtOOR from PacerMonitor.com.
About 11680 Royal Ridge MOB1 SPE
11680 Royal Ridge MOB1 SPE, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-57946) on
Oct. 3, 2022. In the petition signed by Scott C Honan, designated
manager, the Debtor disclosed up to $50 million in both assets and
liabilities.
Will Geer, Esq., at Rountree, Leitman, Klein & Geer, LLC, is the
Debtor's counsel.
Attorneys for lenders RGA Reinsurance Company and RGA Real Estate
Holdings LLC:
Frank W. DeBorde, Esq.
Talia B. Wagner, Esq.
MORRIS, MANNING & MARTIN, LLP
3343 Peachtree Road, N.E., Suite 1600
Atlanta, GA 30326
Tel: (404) 233-7000
E-mail: fwd@mmmlaw.com
twagner@mmmlaw.com
243 FOOD LLC: Taps Weinberg Gross & Pergament as Legal Counsel
--------------------------------------------------------------
243 Food, LLC seeks approval from the U.S. Bankruptcy Court for the
Eastern District of New York to employ Weinberg, Gross & Pergament,
LLP as its legal counsel.
The firm's services include:
(a) providing legal advice with respect to the powers and
duties of th Debtor in the continued management of its business and
property;
(b) representing the Debtor before the bankruptcy court and at
all hearings on matters pertaining to its affairs;
(c) advising and assisting the Debtor in the preparation and
negotiation of a plan of reorganization with its creditors; and
(d) other necessary legal services.
The firm will be paid at these rates:
Partners $625 per hour
Senior Associates $525 to $575 per hour
Associates $475 per hour
Paralegals $120 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Marc Pergament, Esq., a partner at Weinberg, 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:
Marc A. Pergament, Esq.
Weinberg Gross & Pergament, LLP
400 Garden City Plaza, Suite 403
Garden City, NY 11530
Telephone: (516) 877-2424
Facsimile: (516) 877-2460
Email: mpergament@wgplaw.com
About 243 Food
243 Food, LLC operates a retail supermarket in Rosedale, N.Y.
243 Food sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. E.D.N.Y. Case No. 22-42912) on Nov. 22, 2022. In the
petition signed by its manager, Mazen A. Dayem, the Debtor
disclosed up to $10 million in both assets and liabilities.
Judge Elizabeth S. Stong oversees the case.
Marc A. Pergament, Esq., at Weinberg, Gross & Pergament, LLP is the
Debtor's legal counsel.
307 ASSETS: Property Sale Proceeds to Fund Plan Payments
--------------------------------------------------------
307 Assets LLC filed with the U.S. Bankruptcy Court for the
Southern District of New York a Disclosure Statement describing
Chapter 11 Plan dated January 9, 2023.
The Debtor is the owner of the real property at 307-309 Sixth
Avenue, New York, New York 10022 (the "Property"). The value of the
Property, as estimated by the Debtor in its Chapter 11 schedules is
$14,500,000.
307-309 Sixth Avenue LLC (the "First Mortgagee") holds a judgment
of foreclosure and sale entered on June 6, 2022 in an action
entitled 307-309 Sixth Avenue LLC v. 307 Assets LLC; et al. in the
Supreme Court of the State of New York, New York County, Index No.:
850138/2020 (the "Foreclosure Judgment"). The total amount due
under the Foreclosure Judgment as of the January 9, 2023 filing
date is $15,077,472.
Sei Insieme LLC (the "Second Mortgagee") asserts a second mortgage
in the amount of $7,500,000. The Property is also subject unpaid
New York City real estate tax and other liens in the amount of
approximately $83,366.
This case was primarily filed to effectuate an orderly sale of the
Property with marketing pursuant to a Chapter 11 plan to ensure a
fair recovery for all parties in interest, including the Second
Mortgagee.
Class 1 consists of the claim of the New York City liens. Claims
total approximately $83,366. Payment in full in Cash of Allowed
Amount on the Effective Date, plus interest at the applicable
statutory rate as it accrues from the Petition Date through the
date of payment.
Class 2 consists of the claim of First Mortgagee. Claim totals
$15,077,472. Payment of available Cash up to Allowed Amount of
Class 2 Claim, after payment of Administrative Expenses, priority
tax Claims, Class 1 Claims and Class 4 Claims. If the Property Sale
Proceeds are insufficient to pay the Claim in full, the deficiency
amount shall be treated as a Class 5 Claim.
Class 3 consists of claim of Second Mortgagee. Claim totals
approximately $7,500,000 as of the filing date. Payment of
available Cash up to Allowed Amount of the Class 3 Claim, after
payment of Administrative Expenses, priority tax Claims, Class 1
Claims, Class 2 Claims and Class 4 Claims. If the Property Sale
Proceeds are insufficient to pay the Claim in full, the deficiency
amount shall be treated as a Class 5 Claim.
Class 5 consists of General Unsecured Claims. Claims total
approximately $38,500. Payment of available Cash up to Allowed
Amount of Class 5 Claims, after payment of Administrative Expenses,
priority tax Claims, Class 1, 2, 3, and 4 Claims. This Class is
Impaired and entitled to vote to accept or reject the Plan.
Class 6 consists of Interests Holders. Payment of available cash
after payment of Administration Claims, unclassified priority tax
Claims, and Class 1, 2, 3, 4 and 5 Claims.
Payments under the Plan will be paid either from the Property sale
proceeds. Prior to or on the Effective Date, the Property shall be
sold to Purchaser free and clear of all Liens, Claims, and
encumbrances, with any such Liens, Claims, and encumbrances to
attach to the Property Sale Proceeds, and disbursed in accordance
with the provisions of this Plan.
A full-text copy of the Disclosure Statement dated January 9, 2023
is available at https://bit.ly/3k9essj from PacerMonitor.com at no
charge.
Debtor's Counsel:
Mark Frankel, Esq.
BACKENROTH FRANKEL & KRINSKY, LLP
800 Third Avenue
New York, NY 10022
Tel: (212) 593-1100
Fax: (212) 644-0544
E-mail: mfrankel@bfklaw.com
About 307 Assets
307 Assets LLC is a Single Asset Real Estate as defined in 11
U.S.C. Section 101(51B). The company is the fee simple owner of a
property located at 307 Sixth Avenue New York, NY 10014 valued at
$14.5 million.
The Debtor filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y.
Case No. 23-10027) on Jan. 9, 2023. In the petition signed by
David Goldwasser, chief restructuring officer, the Debtor disclosed
$14,500,000 in assets and $22,699,338 in liabilities. The Hon.
James L. Garrity Jr. oversees the case. BACKENROTH FRANKEL &
KRINSKY, LLP, led by Mark Frankel, is the Debtor's counsel.
AAD CAPITAL: Court OKs Affiliate's Deal on Cash Collateral Access
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Atlanta Division, authorized Market Street Shreveport LLC, a
subsidiary of AAD Capital Partners, LLC, to use cash collateral on
an interim basis in accordance with its agreement with Arena
Limited SPV LLC.
The Court said the Termination Date under the Stipulated Order, and
the Debtor's authority to use cash collateral in accordance with
the Stipulated Order, is extended from January 31 through and
including February 24, 2023.
As previously reported by the Troubled Company Reporter,
immediately following the filing of its chapter 11 petition, the
Debtor requested that Arena Limited consider a consensual
stipulation that would permit the Debtor to use Arena's alleged
cash collateral to, inter alia, fund the upkeep of the Standard
Lofts. On November 28, 2022, the Stipulated Order became a final
order.
The Stipulated Order authorized the Debtor to use cash collateral
through a "Termination Date" of January 31, 2023.
Pursuant to Paragraph 14 of the Stipulated Order, the Termination
Date may be reasonably extended by agreement of the Debtor and
Arena. On January 5, 2023, the Debtor and Arena executed a written
Stipulation to extend the Termination Date from January 31 through
and including February 24.
These events constitute an "Event of Default":
(a) The Debtor's breach of any provision, term or condition of
the Order, including without limitation the Debtor's failure to pay
its Indebtedness to Arena in full by February 24, 2023, or any
extension of that date, failure to timely provide the financial
information, reports, comply with the Budget or provide any other
reasonable information requested by Arena; or
(b) The conversion or dismissal of the Debtor's Chapter 11
case.
The Adequate Protection Payments will continue to be paid to Arena
through the Termination Date as extended.
A copy of the order is available at https://bit.ly/3itSkIz from
PacerMonitor.com.
About AAD Capital Partners
AAD Capital Partners LLC, doing business as Peachtree Battle
Business Services, is a domestic limited liability company.
AAD Capital Partners LLC filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-58223) on
Oct. 12, 2022. In the petition filed by Edward Chen, as managing
member and owner, the Debtor reported assets and liabilities
between $10 million and $50 million.
The Debtor is represented by Ashley Reynolds Ray of Scroggins &
Williamson, P.C.
Judge James R. Sacca oversees the case.
Arena Limited SPV, LLC, as secured creditor is represented by Eric
W. Anderson, Esq. at Parker Hudson Rainer & Dobbs, LLP and R.
Joseph Naus, Esq. at Wiener, Weiss & Madison, a Professional
Corporation.
AGILE THERAPEUTICS: Provides Update on 2022 Twirla Performance
--------------------------------------------------------------
Agile Therapeutics, Inc. provided an update on Twirla for 2022 and
its commercial plan for 2023.
2022 Twirla Factory Sales
* Twirla factory sales for the fourth quarter 2022 are expected
to be approximately 43,200 total cycles, a 30% increase from the
33,282 total cycles reported for the third quarter 2022. The
approximately 43,200 total cycles would represent an all-time high
for single-quarter factory sales.
* Twirla factory sales for the full year 2022 are expected to be
approximately 113,600 total cycles, a 232% increase from the 34,227
total cycles reported for the full year 2021.
"Our first commercial product, Twirla, demonstrated accelerated
growth in the second half of 2022 and now we are excited to enter
2023 with strong growth momentum," said Agile Therapeutics'
Chairman and chief executive officer Al Altomari. "We expect to
see that trend continue throughout 2023, even as we plan to hold
our operating expenses at levels similar to the second half of
2022."
2023 Commercial Plan
The Company's commercial plan for 2023 is designed to continue
growing demand for Twirla in both the retail and non-retail
channels in key states that have large markets for contraceptives
and potentially strong reimbursement coverage for Twirla. To
accomplish this growth on the retail side, the Company intends to
focus on increasing its footprint in telemedicine through its
collaboration with Nurx, which has a patient network of more than 1
million patients, and targeted marketing in Key States to increase
depth of prescribing. In the non-retail channel, the Company plans
to continue to focus on growth through the reach of the Afaxys
customer network, which includes Planned Parenthood and student
health centers. The Company also believes it will start to see
increased growth in the retail channel as physicians who gain
clinical experience with Twirla in the Planned Parenthood setting
and then prescribe Twirla in their other practices. The Company is
also actively pursuing business development opportunities focused
on adding commercial products to the Company's women's health
franchise.
* 2023 Net Revenue
Based on its commercial plan for 2023, the Company expects
increased revenue contributions from the Twirla business in 2023
and full year net revenue to be in the range of $25-$30 million.
The Company plans to maintain operating expenses at similar levels
to the second half of 2022.
Mr. Altomari stated, "the entire organization remains focused on
achieving our key goals of growing Twirla, generating positive cash
flow, and pursuing opportunities to build our business. We believe
we have built a capable commercial infrastructure, proven the
ability to consistently grow our first commercial product over the
past challenging year, managed our operating expenses in a targeted
way, and laid the foundation for building a broader women's health
business. We think that these qualities make us an attractive
commercial partner. Based on our current business plan, we expect
that adding an additional commercial product to our portfolio would
reduce the time required to generate positive cash flow and
accelerate our growth as a company. We are actively pursuing these
types of opportunities."
About Agile Therapeutics
Agile Therapeutics, Inc. is a women's healthcare company dedicated
to fulfilling the unmet health needs of today's women. The
Company's product and product candidates are designed to provide
women with contraceptive options that offer freedom from taking a
daily pill, without committing to a longer-acting method. Its
initial product, Twirla, (levonorgestrel and ethinyl estradiol), a
transdermal system, is a non-daily prescription contraceptive.
Agile reported a net loss of $74.89 million for the year ended Dec.
31, 2021, a net loss of $51.85 million for the year ended Dec. 31,
2020, and a net loss of $18.61 million for the year ended Dec. 31,
2019. As of Sept. 30, 2022, the Company had $18.46 million in
total assets, $12.20 million in total liabilities, and $6.26
million in total stockholders' equity.
Iselin, New Jersey-based Ernst & Young LLP, the Company's auditor
since 2010, issued a "going concern" qualification in its report
dated March 30, 2022, citing that the Company has generated losses
since inception, used substantial cash in operations, anticipates
it will continue to incur net losses for the foreseeable future,
requires additional capital to fund its operating needs and has
stated that substantial doubt exists about the Company's ability to
continue as a going concern.
AIP RD BUYER: Moody's Rates New $200MM Sr. Secured Term Loan 'B2'
-----------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to AIP RD Buyer
Corp.'s (dba RelaDyne) proposed $200 million non-fungible
incremental senior secured term loan. The B2 Corporate Family
Rating, B2-PD Probability of Default Rating and B2 rating on the
existing senior secured first lien term loan remains unchanged. The
outlook remains stable.
Proceeds from the term loan add-on will be used to fund the two
strategic tuck-in acquisitions, reduce existing borrowings under
the ABL facility and pay fees and expenses.
The assigned rating is subject to no material changes in the terms
and review of the final documentation.
"The incremental debt on the balance sheet moderately increases
leverage on a pro forma basis, though it is more than offset by
strategic acquisitions that adds scale and enhances the company's
geographic footprint," said Domenick R. Fumai, Vice President and
lead analyst for AIP RD Buyer Corp.
Assignments:
Issuer: AIP RD Buyer Corp.
Senior Secured 1st Lien Term Loan, Assigned B2 (LGD4)
RATINGS RATIONALE
Although the acquisitions increase gross debt on the balance sheet,
Moody's views the incremental debt as manageable given RelaDyne's
solid operating performance, recent Take 5 contract award and
strategic rationale for the transactions. Pro forma leverage
increases moderately to mid-6x from roughly 6.0x as of September
30, 2022. Moreover, the acquisitions further expand the company's
geographical footprint. RelaDyne is acquiring a significant
distributor of lubricants, fuel and automotive supplies serving
international markets that have an attractive growth potential
compared to the more mature US market. Positively, the company
RelaDyne is acquiring has greater exposure to lubricants, which
typically command higher margins than oil & gas, and has a majority
of its sales from commercial business that tends to be stickier
than retail accounts. While there are a number of strategic
benefits to the acquisition, Moody's believes there are some risks
associated with expanding outside the US, including economic,
political and regulatory risks. Nonetheless, these risks are likely
to be lessened as key senior management will remain in place under
an employment agreement that runs through the next several years.
The other company RelaDyne is acquiring is a distributor of private
label and branded lubricants, diesel exhaust fluids (DEF) and
provides industrial services. The acquisition gives RelaDyne
presence in an area in the US where it has no existing operations.
The additional distribution centers increase route density and
provide the opportunity to improve efficiency and margins. The
addition also complements the company's private label offering,
specifically in DEF, as well as its service portfolio.
The B2 CFR reflects the company's position as the leading domestic
distributor of lubricants, fuels, chemicals and other products, a
strong and experienced management team, and a good track record of
assimilating acquisitions under a centralized ERP platform. Free
cash flow is projected to be positive and benefits from the
capex-lite model, tax assets that reduce cash taxes and
expectations that the company will not distribute dividends to its
private equity sponsor, American Industrial Partners (AIP).
Positive free cash flow generation is expected to support the
company's M&A efforts and ability to delever. Other strengths
include barriers to entry stemming from the unique national
footprint, preferred supplier status among key lubricant and fuel
suppliers, and heavy exposure to recurring MRO applications which
provide more reliable sales.
Offsetting factors in the credit profile include modest gross and
EBITDA margins, indicative of the distribution industry, and high
balance sheet leverage and the risk that financial leverage remains
elevated as a result of M&A objectives in the highly fragmented
distribution industry. Supplier concentration is also a risk in the
credit as the top 5 lubricant suppliers account for the majority of
supplied lubricant volumes. RelaDyne is the largest domestic
distributor of lubricants and a leader in fuel and reliability
solutions, serving approximately 31,700 customers across three core
end markets: commercial, automotive and industrial.
RelaDyne distributes over 2,000 lubricant products, including major
brands supplied by Shell, Chevron, Phillips66, Valvoline and Summit
as well as DuraMAX and Drydene, which is the company's own family
of private label branded products. The segment also distributes
fuels, chemicals and other products. Reliability Services provides
turbo flushing, in-line filtration, chemical cleaning and other
services to all three sectors with an empahasis on the industrial
sector.
LIQUIDITY
RelaDyne's liquidity is adequate. Cash balances are modest at
roughly $16 million but are likely to grow with free cash flow,
excluding future cash use for bolt-on acquisitions. The asset-based
revolving credit facility, which was upsized to $275 million from
$150 million, provides additional liquidity and a portion of the
proceeds from the term loan add-on are expected to be applied
towards reducing the outstanding balance. The ABL contains a
springing minimum fixed charge coverage ratio test, triggered when
specified excess availability is less than 10%, with a covenant of
1.00x and no step-downs. The term loans do not contain financial
covenants.
STRUCTURAL CONSIDERATIONS
The B2 rating assigned to the proposed $200 million term loan
add-on and existing $565 million term loan are commensurate with
the B2 CFR given the preponderance of secured debt in the capital
structure. The debt capital structure is also comprised of a $275
million ABL credit facility and an unrated $165 million second lien
term loan.
ESG CONSIDERATIONS
AIP RD Buyer Corp.'s (dba RelaDyne) ESG credit impact score is
highly negative (CIS-4) and reflects moderately negative
environmental risks (E-3), moderately negative social risks (S-3)
and highly negative governance risks (G-4).
Environmental risks (E-3) are moderately negative due to carbon
transition risks. However, these risks are mitigated because of the
RelaDyne's distribution model and the capability to partner with
vendors and customers to reduce their carbon emissions and
footprint. The company has minimal estimated environmental
liability-related expenditures and does not expect to incur any
significant future capital expenditures related to environmental
matters.
RelaDyne's social risks are moderately negative (S-3) due to lower
health and safety risks because of the nature of the products
distributed and the lack of material exposure directly to the
consumer.
Governance risks are highly negative (G-4) due to the risks
associated with private equity ownership, which include a limited
number of independent directors on the board, reduced financial
disclosure requirements as a private company and more aggressive
financial policies including higher leverage compared to most
public companies.
The stable outlook assumes the company maintains its margins and
can grow its distribution footprint through acquisitions without
stressing the balance sheet above initial adjusted financial
leverage of 6.0x for a sustained period.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's would consider upgrading the ratings if the pace and scale
of acquisitions contribute to EBITDA without increasing debt and
facilitates leverage improvement to below 4.5x and retained cash
flow-to-debt (RCF/Debt) above 15%, both on a sustained basis.
Moody's would consider a downgrade if gross adjusted leverage rises
to the mid 6x range and stays there or retained cash flow-to-debt
(RCF/Debt) falls below 5%, or if margins, free cash flow or
liquidity significantly weaken.
Headquartered in Cincinnati, Ohio RelaDyne distributes lubricants,
fuel and chemicals as well as providing equipment reliability
services serving the automotive, commercial and industrial markets.
By estimated FY 2022 estimated gross profit breakdown, lubricants
represent about 50%, fuel 21%, chemicals and coolants 10%,
reliability services 9% and other 10%. Revenues for the last twelve
months ending June 30, 2022, were $2.5 billion on a pro forma basis
for acquisitions in the period.
The principal methodology used in this rating was Distribution &
Supply Chain Services Industry published in June 2018.
AIP RD BUYER: S&P Affirms 'B' ICR on Acquisition-Related Financing
------------------------------------------------------------------
S&P Global Ratings affirmed all its ratings on AIP RD Buyer Corp.
(RelaDyne), including its 'B' issuer credit rating and 'B'
issue-level rating on its first-lien secured facility.
The stable outlook reflects S&P's view that the company's pro forma
leverage will decline to the high-5x area in 2023 with free
operating cash flow (FOCF) to debt slightly under 5% as operating
performance improves from volume growth.
Leverage remains elevated from the incremental term loan.
S&P said, "We forecast the $200 million additional debt will keep
leverage above 6x on a pro forma basis for the 12 months ended in
September 2022 despite improved operating performance. RelaDyne has
an acquisitive growth strategy that leads to EBITDA accretion but
limits meaningful debt paydown. We forecast the company will
continue to pursue strategic acquisitions as it aims to improve its
geographic reach, which could likely result in incremental debt.
Sponsor ownership further constrains our view on financial policy
as the financial sponsor may opt to pay debt-funded dividends."
RelaDyne's operating performance has improved due to volume growth
and client wins.
It has continued a resurgence after the height of the COVID-19
pandemic because of increased volumes and a favorable network of
distribution centers. S&P forecasts it will sustain momentum with
double-digit percent revenue growth in 2023 from contract wins,
price adjustments, and acquisitions.
An acquisitive growth strategy poses integration risks.
RelaDyne has made 26 acquisitions as of the AIP leveraged buyout,
which should enable it to drive national account growth and
increase share-of-wallet gains. While the company has had success
integrating acquisitions, this growth strategy poses risks
especially with slowing macroeconomic conditions, cyclical end
markets, and higher input costs from volatile oil prices. As a
result, we think EBITDA accretion may not be as meaningful as the
company anticipates.
RelaDyne has a narrow product focus in the highly fragmented and
competitive lubricant and fuel distribution industry.
Factors supporting credit quality include good supplier and
customer relationships, geographical diversity and a leading
position in a fragmented market that provides moderate barriers to
entry and makes RelaDyne the supplier of choice for large
industrial and commercial clients. S&P also views the recurring and
consumable nature of its products as drivers to its performance
forecast.
The stable outlook reflects S&P's view that RelaDyne's pro forma
leverage will decline to the high-5x area in 2023 from above 6x in
2022, with FOCF to debt slightly under 5% as operating performance
improves and the company manages its working capital.
S&P could lower its rating if the company's operating performance
weakens such that we project leverage to remain above 6x, and FOCF
to debt stays below 5%. This would be most likely due to:
-- Greater competition in its end markets;
-- Rising interest rates that affect borrowing costs and larger
than expected working capital outflows;
-- Challenges integrating its acquisitions; or
-- A spike in oil prices with limited ability to pass along
increases.
ESG credit indicators: E-2, S-2, G-3
Governance is a moderately negative consideration, as it is for
most rated entities owned by private-equity sponsors. S&P believes
the company's highly leveraged financial risk profile points to
corporate decision-making that prioritizes the interests of
controlling owners. This also reflects private-equity sponsors'
generally finite holding periods and focus on maximizing
shareholder returns.
AMERICAN VIRTUAL: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: American Virtual Cloud Technologies, Inc.
1720 Peachtree Road, Suite 629
Atlanta, GA 30309
Business Description: The Debtors offer cloud-based business
communication services to customers looking
to transition business-critical services,
phone services and other business
applications to the cloud. The Debtors'
"Kandy" product is one of the largest pure-
play providers of unified communications as
a service (UCaaS), communications platform
as a service (CPaaS), and Microsoft Teams
Direct Routing as a Service (DRaaS) for
blue-chip enterprise customers such as
AT&T, IBM/Kyndryl, and Etisalat. Kandy
enables service providers, enterprises,
software vendors, systems integrators,
partners, and developers to enrich their
applications and services with real-time
contextual communications, providing a more
engaging user experience.
Chapter 11 Petition Date: January 11, 2023
Court: United States Bankruptcy Court
District of Delaware
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
American Virtual Cloud Technologies, Inc. 23-10020
AVCtechnologies USA, Inc. 23-10021
Kandy Communications LLC 23-10022
Judge: Hon. Mary F. Walrath
Debtors' Counsel: Patrick J. Reilley, Esq.
COLE SCHOTZ P.C.
500 Delaware Avenue, Suite 1410
Wilmington, DE 19801
Tel: (302) 652-3131
Fax: (302) 652-3117
Email: preilley@coleschotz.com
- and -
Michael D. Sirota, Esq.
David M. Bass, Esq.
Michael Trentin, Esq.
Court Plaza North
25 Main Street
Hackensack, NJ 07601
Tel: 201-489-3000
Fax: 201-489-1536
Email: msirota@coleschotz.com
dbass@coleschotz.com
mtrentin@coleschotz.com
Debtors'
Restructuring
Advisor &
Financial
Advisor: SOLIC CAPITAL ADVISORS, LLC
and
SOLIC CAPITAL, LLC
Debtors'
Investment
Banker: NORTHLAND SECURITIES
Debtors'
Notice,
Claims,
Solicitation,
Administrative,
and Balloting
Agent: KROLL RESTRUCTURING ADMINISTRATION LLC
Total Assets as of Sept. 30, 2022: $31,122,000
Total Debts as of Sept. 30, 2022: $13,641,000
The petitions were signed by Kevin J. Keough as chief executive
officer.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/WFQTZLI/American_Virtual_Cloud_Technologies__debke-23-10020__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/YV53GXA/AVCtechnologies_USA_Inc__debke-23-10021__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/Y6XPN2Q/Kandy_Communications_LLC__debke-23-10022__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Orion Innovation AG Service Vendor $2,355,141
Attn: Jeffrey Robinson & & Noteholder
Igor Piruyan
Suurstoffi 37
Rotkreuz 6343
Switzerland
EMAIL: jeffrey.r@orioninc.com;
ip@orioninc.com
2. Ribbon Communications Service Vendor & $1,539,919
Operating Company Inc. Settlement
Attn: Patrick Macken Agreement
4 Technology Park Dr.
Westford, MA 01886
Tel: 877‐412‐8867
Email: pmacken@rbbn.com
3. Ernst & Young LLP Unpaid $902,054
Attn: Alex Zuluaga Professional
200 Plaza Drive Fees
Secaucus, NJ 07094
Tel: 203‐240‐3119
Fax: 201‐872‐2642
Email: alex.zuluaga@ey.com
4. QXIP BV Service Vendor $146,658
Attn: Anton Chernenko
Postbus 67077
Amsterdam, North Holland
Netherlands
Email: anton@qxip.net
5. Five9 Inc. Service Vendor $102,445
Attn: General Counsel
4000 Executive Parkway
#400
San Ramon, CA 94583
Tel: 925‐201‐2000
Fax: 925‐469‐0598
Email: billing@five9.com
6. Intelepeer Cloud Service Vendor $49,687
Communications LLC
Attn: Legal
177 Bovet Rd, Suite 400
San Mateo, CA 94402
Tel: 877‐336‐9171
Email: contracts@intelepeer.com
7. Vidyo Inc. Service Vendor $25,000
Attn: General Counsel
433 Hackensack Avenue
7th Floor
Hackensack, NJ 07601
Tel: 201‐289‐8597
Email: ron.singh@enghouse.com
8. Calian Corp Service Provider $18,154
Attn: Richard Wedel
840 W. Sam Houston Pkwy N.
Suite 420
Houston, TX 77024
Email: richard.wedel@calian.com
9. Radisys Corporation Service Vendor $16,768
Attn: Lisa Walker & Al Balasco
8900 NE Walker Road, Suite 130
Hillsboro, OR 97006
Tel: 503‐615‐1100
Fax: 503‐615‐1115
Email: lisa.walker@radisys.com;
al.balasco@radisys.com
10. Equinix Inc. Service and $13,035
Attn: Matthew M Monaco Space Provider
One Lagoon Dr. Vendor
Redwood City, CA 94065
Tel: 650‐598‐6000
Email: remittance‐amer‐na@equinix.com
11. Praecipio Consulting LLC Service Vendor $11,924
Attn: Mike Faster, President
1057 Cochrane Rd.
Ste 160 PMB 1017
Morgan Hill, CA 95037
Email: office@coyotecreek.com
12. Penguin Strategies Service Vendor $10,500
Attn: Ayelet Zak
360 S. Kiely Blvd
Suite 250
San Jose, CA 95129
Email: ayelet@penguinstrategies.com
13. Smartystreets LLC Service Vendor $10,000
Attn: Jonathan Oliver, President
2335 S State St.
Suite 300
Provo, UT 84604
Tel: 877‐216‐8883
Fax: 801‐228‐2406
Email: support@smartystreets.com
14. Delinea Inc. Service Vendor $7,665
Attn: Trevor Sieburgh
1101 17th Street, N.W.
Suite 1200
Washington, DC 20036
Tel: 202‐802 9399
Fax: 202‐315‐3315
Email: trevor.sieburgh@thycotic.com
15. Intrado Life & Safety Inc. Service Vendor $7,245
Attn: Beth Meek
11808 Miracle Hills Drive
Omaha, NE 68154
Tel: 402‐963‐1200
Fax: 402‐963‐1600
Email: legalnotices.lifesafety@intrado.com
16. Alien Licensing GMBH Service Vendor $7,194
Attn: Rafael Torreblanca
Banhhofstrasse 32
Zug 6300
Switzerland
Email: rafael.torreblanca@acrobits.net
17. Synoptek LLC Service Vendor $5,294
Attn: Vanessa Novak, Corporate
Counse
412 E Parkcenter Blvd
Suite 300
Boise, ID 83706
Tel: 208‐422‐9100
Fax: 208‐472‐7778
Email: vnovakK@synoptek.com
18. Calian Ltd. Temp Agency $4,584
Attn: Adam Smith
770 Palladium Drive
4th Floor
Kanata, ON K2V 1C8
Canada
Tel: 613‐599‐8600
Fax: 613‐599‐8650
Email: a.smith@calian.com
19. Innovatia Inc. Service Vendor $2,462
Attn: Tara Foster
One Germain Street
Atrium Suites
Saint John, NB NB E2L 4V1
Canada
Tel: 506‐640‐4000
Fax: 506‐640‐4422
Email: tara.foster@innovatia.net
20. ESI Hosted Services LLC Service Vendor $788
Attn: Eric Suder, President
3701 E. Plano Parkway
Plano, TX 75074‐1806
Tel: 972‐422‐9700
Fax: 972‐422‐9705
Email: schocholaty@esi‐estech.com
AMERICANN INC: Reports Fiscal Year-End, Quarterly Financial Results
-------------------------------------------------------------------
AmeriCann Inc. released financial and operational results for its
fiscal year and quarter ending September 2022.
"Our focus on cost efficiency has produced some of the strongest
adjusted operating EBITDA margins in the industry," said CFO Ben
Barton. "We look forward to investing the cash flow we are
generating to further expand operations at the Massachusetts
Cannabis Center and to produce even better financial results for
shareholders."
Financial Overview
The Company achieved four consecutive quarters of increased
operating revenue, culminating in record net income for the quarter
ending September 2022. Revenue from operations increased
approximately 44% for the year ended September 2022 relative to the
year ended September 2021, an increase of $899,268.
AmeriCann's adjusted annual EBITDA grew to $1,465,987, a 160%
increase from the prior year.
The increase in financial performance is attributable to greater
revenue received from products produced and manufactured at
Building 1, the Company's initial building at its Massachusetts
Cannabis Center development in Freetown, Massachusetts.
Building 1 is a 30,000-square-foot cultivation greenhouse and
processing facility that utilizes AmeriCann's proprietary "Cannopy"
cultivation system. Building 1 is fully occupied by Bask Inc., an
existing Massachusetts licensed vertically integrated cannabis
operator.
AmeriCann receives base rent and a revenue participation fee of 15%
of all gross monthly sales of cannabis, cannabis-infused products
and non-cannabis products produced at the Massachusetts Cannabis
Center. As operations commenced and accelerated at Building 1,
AmeriCann established many milestones for its financial
performance.
AmeriCann commenced operations at its Massachusetts Cannabis Center
in 2019, and, since then, the Company has generated more quarterly
revenue each quarter than the same quarter the prior year.
Highlights for the Fiscal Year Ended Sept. 30, 2022
* Accelerating revenue, net income and adjusted operating EBITDA
driven by the performance of the Company's Massachusetts Cannabis
Center.
* Revenue increased 44% year-over-year to $2,927,819.
* Adjusted EBITDA grew by $903,553 year-over-year to $1,465,987,
a 160% increase.
* Annual gross margins were 98.5%.
* Adjusted operating EBITDA margins were 50.1% for the year.
Highlights for the Quarter Ended Sept. 30, 2022
* Quarterly revenue increased 10% year-over-year to $811,774.
* The Company's quarterly net income increased by 307% to
$172,810.
* Adjusted operating EBITDA grew by $82,025 sequentially
year-over-year to $469,476.
* Adjusted operating EBITDA margins were 57.8% for the quarter.
* Quarterly gross margins were 98.5%.
* Seven consecutive quarters of positive Adjusted EBITDA.
Additional Management Commentary
"AmeriCann's financial performance and strong cash flow reflect the
strength of our operations," stated President Tim Keogh. "The fact
that we have achieved multiple consecutive quarters of positive net
income with just the initial phase at our Massachusetts Cannabis
Center having been completed is an excellent indicator of future
financial success for the Company."
AmeriCann is in the final design phase of the expansion of its MCC
development in Freetown, Massachusetts. The Company has secured
provisional cultivation and manufacturing licenses for the MCC.
The next phase of the Massachusetts Cannabis Center calls for up to
60,000 square feet of extraction, manufacturing and distribution
infrastructure and approximately 160,000 square feet of additional
cannabis cultivation infrastructure.
Market Information
* In addition to increased cultivation productivity in the
state-of-the-art greenhouse, the manufacturing of cannabis-infused
products has increased dramatically in Building 1.
* Manufactured infused products produced at Building 1 have
achieved success as some of the bestselling cannabis brands in
Massachusetts in their respective categories.
* For the first 10 months of 2022, the revenue from the
Massachusetts cannabis market was $1.46 billion, which was 9.7%
greater than the first 10 months of 2021. The annualized revenue
estimate based on the first 10 months of 2022 is approximately
$1.75 billion. Experts believe the market will exceed $1.8 billion
annually.
* The sale of cannabis in Massachusetts has exceeded $3.7
billion in legal cannabis since adult-use sales commenced in late
2018.
* AmeriCann released a video highlighting the high-tech,
sustainable designs at the Massachusetts Cannabis Center and
Building 1, which can be found HERE.
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.
Americann, Inc. reported a net loss of $173,244 for the year ended
Sept. 30, 2022, compared to a net loss of $862,893 for the year
ended Sept. 30, 2021. 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.
ANASTASIA PARENT: Fidelity Fund Marks $37.6M Loan at 25% Off
------------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $37,605,000 loan extended to Anastasia Parent LLC to
market at $28,245,000 or 75% of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries a 7.4241% interest (3 month U.S. LIBOR + 3.750%)
to Anastasia Parent LLC. The loan is scheduled to mature on August
10, 2025
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Anastasia Parent, LLC is the parent company of Anastasia Beverly
Hills, Inc., a prestige cosmetics brand that focuses on eyebrow
shaping products.
APPALACHIAN VALLEY TRANSPORT: Has Final OK on Cash Collateral Use
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Newnan Division, authorized Appalachian Valley Transport, Inc. and
its debtor-affiliates to use cash collateral on a final basis, in
accordance with the budget.
The Debtor requires access to cash collateral to fund critical
operations.
As previously reported by the Troubled Company Reporter, Stearns
Bank, N.A. and the U.S. Small Business Administration assert liens
on the Debtor's cash collateral. Stearns is in first priority
position regarding any alleged cash collateral according to the
oldest UCC-1 Financing Statement.
As adequate protection, the lenders are granted a valid and
properly-perfected replacement lien in post-petition collateral of
the same kind, extent, and priority as the liens existing
pre-petition except that the Adequate Protection Lien will not
extend to the proceeds of any avoidance actions received by the
Debtor or the estate pursuant to chapter 5 of the Bankruptcy Code.
A copy of the order is available at https://bit.ly/3XjhclL from
PacerMonitor.com.
About Appalachian Valley Transport, Inc.
Appalachian Valley Transport, Inc. provides express delivery
services. The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr.. N.D. Ga. Case No. 22-11359) on December 7,
2022. In the petition signed by Gina Hobbs-Wood, CEO, the Debtor
disclosed up to $100,000 in assets and up to $10 million in
liabilities.
Judge Paul Baisier oversees the case.
Paul Baisier, Esq., at Rountree, Leitman, Klein & Geer, LLC, is the
Debtor's legal counsel.
ASP LS ACQUISITION: Fidelity Fund Marks $2.9M Loan at 32% Off
-------------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $2,965,000 loan extended to ASP LS Acquisition Corp
to market at $2,016,000, or 68% of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a second lien term loan that
carries a 10.3769% interest (1 month U.S. LIBOR + 7.500%) to ASP
LS Acquisition Corp. The loan is scheduled to mature on May 07,
2029
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
ASP LS Acquisition Corp. was formed to effectuate the acquisition
of LaserShip, Inc. by the private equity firm American Securities.
BERTUCCI'S RESTAURANTS: U.S. Trustee Appoints Creditors' Committee
------------------------------------------------------------------
The U.S. Trustee for Region 21 appointed an official committee to
represent unsecured creditors in the Chapter 11 case of Bertucci's
Restaurants, LLC.
The committee members are:
1. NCR Corporation
c/o Ashley Thompson, Law Department
864 Spring Street, NE
Atlanta, GA 30308
Telephone No.: (770) 212-5034
Email: ashley.thompson@ncr.com
2. Springfield Square Central, LP
c/o Robert Langer
1001 Baltimore Pike
Springfield, PA 19064
Telephone No.: (610) 328-1700
Email: rlanger@nrcdelco.com
3. Simon Property Group, Inc.
c/o Ronald M. Tucker, VP and Bankruptcy Counsel
225 West Washington Street
Indianapolis, IN 46204
Telephone No.: (317) 263-2346
Email: rtucker@simon.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 Bertucci's Restaurants
Bertucci's Restaurants LLC -- https://www.bertuccis.com –- doing
business as Bertucci's Brick Oven Pizza & Pasta, is an American
chain of restaurants offering pizza and Italian food. The company
is based in Orlando, Fla.
Bertucci's Restaurants filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-04313) on Dec.
5, 2022. In the petition filed by Jeffrey C. Sirolly, secretary,
the Debtor reported assets between $10 million and $50 million and
liabilities between $50 million and $100 million.
R. Scott Shuker, Esq., at Shuker & Dorris, PA serves as the
Debtor's counsel.
BOSTON SCIENTIFIC: Egan-Jones Retains BB+ Sr. Unsecured Ratings
---------------------------------------------------------------
Egan-Jones Ratings Company on December 29, 2022, maintained its
'BB+' foreign currency and local currency senior unsecured ratings
on debt issued by Boston Scientific Corporation.
Headquartered in Marlborough, Massachusetts, Boston Scientific
Corporation ("BSC"), incorporated in Delaware, is a biomedical/
biotechnology engineering firm and multinational manufacturer of
medical devices used in interventional medical specialties,
including interventional radiology, interventional cardiology,
peripheral interventions, neuromodulation, neurovascular
intervention, electrophysiology, cardiac surgery, vascular surgery,
endoscopy, oncology, urology and gynecology.
BSPV-PLANO LLC: Hearing on Exclusivity Bid Set for Jan. 24
----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Texas is set
to hold a hearing on Jan. 24 to consider the motion by The
Huntington National Bank to terminate the period during which
BSPV-Plano, LLC can keep exclusive control of its Chapter 11 case.
Huntington, as bond trustee, wants the exclusivity period
terminated so it can put forward its own bankruptcy plan. The bank
argued BSPV-Plano cannot propose a feasible plan without its owners
investing at least $15 million for the company's residential
construction project in Plano, Texas, which is the bank's primary
collateral.
BSPV-Plano had earlier asked the court to give the company until
Feb. 28 to remain in control of its bankruptcy. The court will
consider the company's extension request at the Jan. 24 hearing.
About BSPV-Plano LLC
BSPV-Plano, LLC, a company in Plano, Texas, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Texas Case No.
22-40276) on March 1, 2022, listing up to $100 million in both
assets and liabilities. Richard Shaw, manager, signed the
petition.
Judge Brenda T. Rhoades oversees the case.
Munsch Hardt Kopf and Harr, PC, Grant Thornton, LLP and American
Global of Texas, LLC serve as the Debtor's legal counsel, financial
advisor and insurance consultant, respectively.
BSPV-PLANO LLC: Taps Spire Consulting Group as Expert Consultant
----------------------------------------------------------------
BSPV-Plano, LLC seeks approval from the U.S. Bankruptcy Court for
the Eastern District of Texas to employ Spire Consulting Group,
LLC.
The firm will serve as the Debtor's construction litigation
consulting expert and, on request, as testifying expert to assist
its litigation counsel in resolving construction-related claims and
disputes, including the adversary proceeding (Case No. 22-04055)
filed by CJ Project Management, Inc., a former subcontractor for
the Debtor's residential construction project in Plano, Texas..
The firm will be paid at these rates:
Principal $450 per hour
Director $450 per hour
Associate Principal $375 per hour
Managing Consultant $300 per hour
Senior Consultant $250 per hour
Consultant $200 per hour
Associate Consultant $175 per hour
Administrative $90 per hour
Chris Caddel, a partner at Spire Consulting Group, disclosed in a
court filing that the firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Chris Caddel
Spire Consulting Group, LLC
114 West 7th Street, Suite 1300
Austin, TX 78701
Tel: (512) 641-3688
About BSPV-Plano LLC
BSPV-Plano, LLC, a company in Plano, Texas, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Texas Case No.
22-40276) on March 1, 2022, with $50 million to $100 million in
both assets and liabilities. Richard Shaw, manager, signed the
petition.
At the time of the filing, BSPV-Plano was developing a 31.5-acre,
"55+" Independent Senior Luxury Apartment Community with 318 units
of apartment inventory that is known and branded as "The Bridgemoor
at Plano," and located at 1109 Park Vista Road, Plano, Texas.
Judge Brenda T. Rhoades oversees the case.
Munsch Hardt Kopf and Harr, PC, Grant Thornton, LLP and American
Global of Texas, LLC serve as the Debtor's legal counsel, financial
advisor and insurance consultant, respectively.
BUFFALO STATION: Seeks to Hire Joyce W. Lindauer as Legal Counsel
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Buffalo Station, LLC and its affiliates seek approval from the U.S.
Bankruptcy Court for the Northern District of Texas to employ Joyce
W. Lindauer Attorney, PLLC to handle their Chapter 11 bankruptcy
cases.
The firm will be paid at these rates:
Joyce W. Lindauer, Esq. $450 per hour
Austin Taylor, Associate $275 per hour
Sydney Ollar, Associate Attorney $250 per hour
Larry Boyd, Law Clerk $195 per hour
Dian Gwinnup, Paralegal $195 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Joyce Lindauer, Esq., the owner of the firm, disclosed in a court
filing that the firm is a "disinterested person" as defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Joyce W. Lindauer, Esq.
Joyce W. Lindauer Attorney, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
Email: joyce@joycelindauer.com
About Buffalo Station
Buffalo Station, LLC -- https://buffalostationapts.com/ -- doing
business as Winchester, is primarily engaged in renting and leasing
real estate properties. The company is based in Burleson, Texas.
Buffalo Station, LLC and four affiliates filed petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Lead
Case No. 22-42943) on Dec. 5, 2022. The affiliates are Premier 82,
LLC, Remington Station, LLC, Ventura Heights, LLC, and Windsor at
82nd for Pinewood, LLC.
In the petition filed by its managing member, Bo Fontana, Buffalo
Station reported $1 million to $10 million in both assets and
liabilities.
Judge Edward L. Morris oversees the cases.
The Debtors are represented by Joyce W. Lindauer Attorney, PLLC.
BW NHHC HOLDCO: Moody's Affirms Caa3 CFR & Downgrades PDR to D-PD
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Moody's Investors Service downgraded BW NHHC Holdco, Inc.'s (dba
Elara Caring or "Elara") Probability of Default Rating to D-PD from
Caa3-PD and affirmed the Caa3 Corporate Family Rating following the
closing of the company's debt capital restructuring. Moody's
downgraded the PDR to D-PD as the rating agency considers the
restructuring transaction to be a distressed exchange. In a few
business days, Moody's will upgrade Elara Caring's PDR to Caa3-PD,
consistent with the probability of default expectation embedded in
the Caa3 CFR. Moody's assigned B3 ratings to Elara Caring's new
senior secured revolving credit facility and super senior secured
first-out term loan. The rating agency also assigned a Ca rating to
the new super senior secured second-out term loan and a C rating to
the new super senior secured third-out term loan. In addition,
Moody's downgraded the senior secured second lien term loan rating
to C from Ca. The outlook remains stable.
The rating action follows the December 21, 2022 out-of-court debt
recapitalization transaction where Elara Caring issued new super
senior first-out, second-out, third-out term loans, along with a
new revolving credit facility. In the transaction, holders of the
first lien senior secured term loan ($630 million outstanding,
maturing May 2025) exchanged into a new $631 million super senior
second-out term loan which matures in January 2026. The 1.5 lien
term loan holders ($231 million outstanding, not rated, maturing
November 2025) exchanged for a new $238 million super senior
third-out term loan which matures in November 2026. Moody's
considers this transaction to be a distressed exchange, which is a
default under the rating agency's definition. In addition, the $75
million first lien senior secured revolving credit facility
(undrawn at the time of transaction close) was replaced by a new
$50 million revolving credit facility. The Caa2 ratings on the
former first lien term loan and revolving credit facility were
unchanged and will be withdrawn.
Governance risk is a consideration in the rating action given that
the debt recapitalization transaction is considered a distressed
exchange and therefore a default. Elara Caring has a history of
completing distressed debt exchanges which has negative
implications for creditors as it relates to financial strategy and
risk management.
Downgrades:
Issuer: BW NHHC Holdco, Inc.
Probability of Default Rating, Downgraded to D-PD from Caa3-PD
Senior Secured 2nd Lien Term Loan, Downgraded to C (LGD6) from Ca
(LGD6)
Affirmations:
Issuer: BW NHHC Holdco, Inc.
Corporate Family Rating, Affirmed Caa3
Assignments:
Issuer: BW NHHC Holdco, Inc.
Backed Senior Secured Revolving Credit Facility, Assigned B3
(LGD2)
Backed Senior Secured First-Out Term Loan, Assigned B3 (LGD2)
Backed Senior Secured Second-Out Term Loan, Assigned Ca (LGD4)
Backed Senior Secured Third-Out Term Loan, Assigned C (LGD6)
Outlook Actions:
Issuer: BW NHHC Holdco, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Elara Caring's Caa3 CFR reflects the company's very high financial
leverage and weak liquidity position. Moody's calculates Elara
Caring's pro forma adjusted debt-to-EBITDA at approximately 18
times. Further, increasing debt balances due to the payment-in-kind
(PIK) interest will make it increasingly challenging for the
company to reduce leverage over time. The rating is also
constrained by the company's high exposure to Medicare and Medicaid
and longer-term risks associated with changes to the way that the
government pays for post-acute and in-home services.
The rating is supported by a good long-term demand outlook for the
company's services for at-home care, driven by aging demographics
and patient preference for care at home. Government payors and
private insurance companies are continuously looking for ways to
manage patients in their home, which is the lower cost of care
setting. Further, the industry benefits from very low capital
requirements.
Moody's views Elara Caring's liquidity as weak over the next 12
months. The company's pro forma cash balance was approximately $121
million, of which $50 million is held in escrow for permitted
acquisitions. However, Moody's expects Elara's cash balance to
decline through 2023, as cash interest expense on the company's
debt remains high. Further, the company's new $50 million revolving
credit facility, which expires in October 2025, will be restricted
by approximately $19 million due to letters of credit. Pro forma
for the debt recapitalization transaction, the revolver remains
undrawn. Elara Caring will be subject to a consolidated first and
second lien leverage ratio of no more than 17.26 times through June
30, 2024. Moody's expects Elara Caring to maintain adequate cushion
under this covenant.
The B3 ratings on Elara Caring's $50 million revolving credit
facility and approximately $125 million super senior first out term
loan reflect their first priority position with respect to the $631
million super senior second out term loan (rated Ca), $238 million
super senior third out term loan (rated C), the fourth-out term
loan (not rated), the fifth-out term loan (not rated), the $114
million sixth-out term loan (not rated) and the $10 million second
lien term loan (rated C). The Ca rating on the new super senior
second out term loan, as well as the C rating on the new super
senior third out term loan and existing second lien term loan
reflect the very weak expected recovery in a default scenario.
The stable outlook reflects Moody's view that Elara Caring's
financial leverage will remain very high over the next 12 to 18
months increasing the probability of default.
ESG considerations are material to Elara Caring's credit profile,
reflected in the Credit Impact Score of CIS-5, Very Highly
Negative. Elara Caring faces very highly negative governance risk
exposures, reflected in the G-5 score. Elara Caring has a history
of completing distressed debt exchange transactions that have
negative implications for creditors. Elara Caring exhibits an
aggressive financial policy, with very high financial leverage and
private equity sponsor ownership. The company has had a poor track
record of integration, execution and cash flow management since the
merger. The Company has changed its management team to address some
of these challenges but has not seen much progress in part due to
challenges outside of their control related to the pandemic and
labor pressures. In addition, Elara Caring has highly negative
exposures to social risks, reflected in the S-4 score. Social risks
are primarily associated with the company's exposure to
reimbursement changes. Home health is subject to rising social and
regulatory risk as government and other payors seek ways to reduce
overall healthcare costs in the U.S. The company is also exposed to
wage inflation, particularly as it must maintain a large workforce
of both skilled and unskilled labor.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Elara Caring substantially improves
operating performance and materially reduces leverage to a more
sustainable level. The company would need to resolve its
operational issues and see consistent earnings growth return. A
material improvement in liquidity could also lead to an upgrade.
The ratings could be downgraded if Elara Caring experiences further
operating or cash flow disruption. Material negative changes to
Medicare and/or Medicaid reimbursement could result in a downgrade.
Further rising likelihood of debt impairment could also lead to a
rating downgrade.
Elara Caring provides skilled home health, personal care and
hospice services, primarily to Medicare and Medicaid patients. The
company has revenue of about $928 million as of September 30, 2022.
The company is privately owned by Blue Wolf Capital Partners LLC
and Kelso & Company.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
C&L DINERS: Court OKs Cash Collateral Access Thru Feb 17
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The U.S. Bankruptcy Court for the District of Connecticut,
Bridgeport Division, authorized C & L Diners, LLC and its
debtor-affiliates to use cash collateral on an interim basis in
accordance with the budget, with a 20% variance, through February
17, 2023.
Specifically, the Debtors are permitted to use cash in their bank
account and cash generated by their operation on the terms and
conditions set forth in the Third Interim Order.
As adequate protection, the Secured Creditors, namely McLane
Foodservice Distribution, Inc., Stearns Bank, Pawnee Leasing
Company and Merlin Business Bank, are granted replacement security
interests in and liens upon all post-petition inventory and
accounts receivable acquired by the Debtors that replaces any
pre-petition inventory and accounts receivable that was consumed or
used post-petition.
The Debtor, as additional adequate protection, will maintain an
inventory in an amount equal to 1.1x the value at cost of the food
and beverage inventory that existed as of the Petition Date.
The Adequate Protection Liens granted to the Secured Creditors will
be in the same rank, extent and priority as such Secured Creditor
possessed in the Debtors' cash collateral that existed on the
Petition Date.
A continued hearing on the matter is set for February 14 at 3 p.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3GX7TC3 from PacerMonitor.com.
The budget provides for total cash paid out, on a weekly basis, as
follows:
$101,340 for the week ending January 11, 2023;
$43,040 for the week ending January 18, 2023;
$140,606 for the week ending January 25, 2023;
$80,232 for the week ending February 1, 2023;
$140,232 for the week ending February 8, 2023; and
$80,326 for the week ending February 15, 2023.
About C & L Diners, LLC
C & L Diners, LLC and affiliates sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. D. Conn. Lead Case No.
22-50599) on November 8, 2022. In the petition filed by Herman Li,
operating member, the Debtors disclosed up to $10 million in both
assets and liabilities.
Judge Julie A. Manning oversees the case.
Ira S. Greene, Esq. and Tara L. Trifon, Esq., at Locke Lord LLP,
represent the Debtors as legal counsel.
CINEMA SQUARE: Court OKs Deal on Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Northern Division, authorized Cinema Square, LLC to use cash
collateral in accordance with its agreement with the U.S.
government, on behalf of its agency, the U.S. Small Business
Administration.
As previously reported by the Troubled Company Reporter, the
parties agreed that on June 16, 2020, the Debtor executed a Small
Business Administration Note, pursuant to which the Debtor obtained
a loan in the amount of $150,000.
As evidenced by a Security Agreement executed on June 16, 2020 and
a validly recorded UCC-1 filing on June 27, 2020 as Filing Number
20-7795084648, the SBA Loan is secured by all tangible and
intangible personal property.
The SBA's interest in cash collateral is junior to the interest of
secured creditor WILMINGTON TRUST, National Association, As
Trustee, for the benefit of the Holders of COMM 2016-DC2 Mortgage
Trust Commercial Mortgage Pass Through Certificates, Series
2016-DC2.
The SBA consented to the Debtor's use of cash collateral. The
Debtor represented to the SBA it will make no additional or
unauthorized use of the cash collateral retroactive from the SBA
Loan date until entry of an Order Confirming the Debtor's First
Amended Plan of Reorganization or April 30, 2023, whichever occurs
earlier, for ordinary and necessary expenses as set forth in the
projections.
The Debtor's use of cash collateral may be renewed upon subsequent
stipulation with SBA or by order of the Court.
As adequate protection, the SBA will receive a replacement lien to
the extent that the automatic stay, pursuant to 11 U.S.C. section
362, as well as the use, sale, lease or grant results in a decrease
in the value of the SBA's interest in the Personal Property
Collateral on a post-petition basis. The replacement lien is valid,
perfected and enforceable and will not be subject to dispute,
avoidance, or subordination, except that it is and will remain
subordinate to the lien of the Wilmington Trust in the cash
collateral and this replacement lien need not be subject to
additional recording. The SBA is authorized to file a certified
copy of the cash collateral order and any other necessary and
related documents to further perfect its lien.
The SBA's claim under the Loan will be allowed as a claim for
$150,000, plus all accrued interest through the filing of the
case.
The parties agree that as and for additional adequate protection,
the Debtor will not propose any Plan of Reorganization that pays
SBA less than $731 per month on account of its claim.
A copy of the order is available at https://bit.ly/3XkbkrQ from
PacerMonitor.com.
About Cinema Square, LLC
Cinema Square, LLC owns a small shopping center located at 6917 El
Camino Real, Atascadero, CA 93422. There are several tenants, the
primary tenant is a movie theater, the Galaxy Theater.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 21-10634) on June 14,
2021. In the petition signed by Jeffrey C. Nelson, president, the
Debtor disclosed up to $50 million in assets and up to $10 million
in liabilities.
Judge Deborah J. Saltzman oversees the case.
William C. Beall, Esq., at Beall & Burkhardt, APC is the Debtor's
counsel.
CLEARWATER COLLECTION: Creditors to Get Proceeds From Liquidation
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Clearwater Collection 15, LLC, and Clearwater Plainfield 15, LLC,
filed with the U.S. Bankruptcy Court for the District of Colorado a
Disclosure Statement to accompany their Joint Plan of Liquidation
dated January 9, 2023.
Collection is an 82.52% owner of a shopping center located at 21688
Highway 19 N, Clearwater, FL 33765 (the "Shopping Center").
Plainfield 15, LLC is the other owner of the Shopping Center.
The Debtors elected to file bankruptcy because: (a) there was a
strong belief that equity existed in the Shopping Center sufficient
to satisfy the Lender's claim in full, pay any other creditors and
make a distribution to equity/the investors; (b) the sale process
undertaken by the Florida Receiver was not disclosed; and (c) the
Debtors felt in the dark about the true amount owed to the Lender.
The Florida Receiver and the Debtors entered into an Agreement for
the Sale and Purchase of Property (the "APA") with Drew Street
Property LLC (an entity related to the Philadelphia Phillies and
hereinafter referred to as the "Buyer") with respect to the
Shopping Center. The purchase price is $22,500,000.
The Sale Closed on November 10, 2022. After the sale, and at the
time of the filing of this Disclosure Statement, there remains an
going was a reconciliation of the closing statement and certain
accounts. It is anticipated the proceeds from the sale that belong
to the Debtors will soon be turnover to the bankruptcy estates. In
order to effectuate the transfer, motions will soon be filed
seeking Court approval to turnover the proceeds from the Florida
Receiver to the bankruptcy estates.
The Debtors shall remain Debtors-in-Possession until the Effective
Date of the Plan, at which point the Liquidating Trustee shall be
appointed to liquidate the Liquidating Trust Assets in accordance
with the Trust Agreement. The Liquidating Trustee will then
distribute the proceeds of the Liquidating Trust Assets in
accordance with the Trust Agreement. The proceeds of the
Liquidating Trust Assets will be used to satisfy Administrative
Claims and then Classes 1, 2, 3, A, B, and C claims on a Pro Rata
basis.
The Trust Agreement calls for the Liquidating Trustee to: (i)
administer, hold, and liquidate the Liquidating Trust Assets,
including Causes of Action (including Avoidance Actions); (ii)
administer, investigate, prosecute, settle or abandon all
Liquidating Trust Assets in the name of, and for the benefit of,
the Estate of Collection and the Estate of Plainfield, subject to
the limitations set forth in the Plan; (iii) after payment of the
expenses incurred in the liquidation of the Liquidating Trust
Assets, distribute surplus amounts recovered therefrom to in
accordance with the Plan; (iv) close the Chapter 11 Cases in
accordance with the Bankruptcy Code and Bankruptcy Rules; and (vi)
object to Claims.
The Plan provides for the creation of a liquidating trust to
liquidate the Debtor's remaining assets, object to Claims and
commence litigation.
Class 2 consists of those general unsecured creditors of Collection
who hold Allowed Claims. Holders of Class 2 Allowed Claims shall
share on a Pro Rata basis in 82.52% of the monies deposited the
Creditor Account after the satisfaction of Administrative Claims,
Tax Claims and Classes 1 and A Allowed Claims.
Class B consists of those general unsecured creditors of Plainfield
who hold Allowed Claims. Holders of Class B Allowed Claims shall
share on a Pro Rata basis in 19.48% of the monies deposited the
Creditor Account after the satisfaction of Administrative Claims,
Tax Claims and Class 1 and A Allowed Claims.
Class 3 consists of the interest holders of Collection. Members of
Class 3 shall share on a Pro Rata basis in 82.52% of the monies
deposited the Creditor Account after the satisfaction of
Administrative Claims, Tax Claims and Classes 1, 2, A and B Allowed
Claims.
Class C consists of the interest holders of Plainfield. Members of
Class C shall share on a Pro Rata basis in 19.48% of the monies
deposited the Creditor Account after the satisfaction of
Administrative Claims, Tax Claims and Classes 1, 2, A and B Allowed
Claims.
The Debtors believe that the Plan, as proposed, is feasible. The
overall feasibility of the Plan is premised upon the restructuring
of the Debtors' debts. The Debtors will fund the Plan through the
liquidation of the Liquidating Trust Assets by the Liquidating
Trustee in accordance with the Liquidating Trust Agreement. The
Liquidating Trustee shall be Thomas Kim.
A full-text copy of the Disclosure Statement dated January 9, 2023
is available at https://bit.ly/3istpFi from PacerMonitor.com at no
charge.
Counsel to the Debtors:
WADSWORTH GARBER WARNER AND CONRARDY, P.C.
Aaron A. Garber, Esq.
2580 W Main Street, Suite 200
Littleton, CO 80120
Telephone: 303-296-1999
Fax: 303-296-7600
Email: agarber@wgwc-law.com
About Clearwater Collection 15
Clearwater Collection 15, LLC and Clearwater Plainfield 15, LLC are
owners of a shopping center located at 21688 Highway 19 N,
Clearwater, Fla.
The Debtors sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. D. Colo. Case No. 22-11320) on April 18, 2022, listing
as much as $50 million in both assets and liabilities. Gary Dragul,
president, signed the petitions.
Judge Joseph G. Rosania Jr. oversees the cases.
The Debtors tapped Wadsworth Garber Warner Conrardy, PC as
bankruptcy counsel; Perlman, Bajandas, Yevoli & Albright, PL as
litigation counsel; and Harper Hofer & Associates, LLC as
accountants.
CONSOLIDATED COMMUNICATIONS: Fidelity Fund Marks $16.6M Loan at 17%
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Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $16,633,000 loan extended to Consolidated
Communications, Inc to market at $13,852,000 or 83% of the
outstanding amount, as of October 31, 2022, according to a
disclosure contained in the Fidelity Fund's Form N-CSR for the
fiscal year ended October 31, 2022, filed with the Securities and
Exchange Commission on December 21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries a 7.25% interest (1 month U.S. LIBOR + 3.500%) to
Consolidated Communications, Inc. The loan is scheduled to mature
on October 2, 2027.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Consolidated Communications, Inc. is a broadband and business
communications provider offering a wide range of communications
solutions to consumer, commercial and carrier customers across a
23-state service area and an advanced fiber network spanning more
than 45,000 fiber route miles. The company maintains headquarters
in Mattoon, Ill.
CORE SCIENTIFIC: U.S. Trustee Appoints Creditors' Committee
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The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Chapter 11 cases of Core
Scientific, Inc. and its affiliates.
The committee members are:
1. Dalton Utilities
c/o Matthew R. Brooks
Troutman Pepper Hamilton Sanders, LLP
600 Peachtree Street NE, Suite 3000
Atlanta, GA 30308
2. Sphere 3D Corp.
10 Glenville St.
Greenwich, CT 06831
3. BRF Finance Co., LLC
299 Park Ave. 21st Floor
New York, NY 10171
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 Core Scientific
Core Scientific, Inc. (NASDAQ: CORZ) is the largest U.S.
publicly-traded Bitcoin mining company in computing power. Core
Scientific, which was formed following a business combination in
July 2021 with blank check company XPDI, is a large-scale operator
of dedicated, purpose-built facilities for digital asset mining
colocation services and a provider of blockchain infrastructure,
software solutions and services. Core mines Bitcoin, Ethereum and
other digital assets for third-party hosting customers and for its
own account at its six fully operational data centers in North
Carolina (2), Georgia (2), North Dakota (1) and Kentucky (1). Core
was formed following a business combination in July 2021 with XPDI,
a blank check company.
In July 2022, one of the Company's largest customers, Celsius
Mining LLC, filed for Chapter 11 bankruptcy in New York.
With low Bitcoin prices depressing mining revenue to a record low,
Core Scientific first warned in October 2022 that it may have to
file for bankruptcy if the company can't find more funding to repay
its debt that amounts to over $1 billion. Core Scientific did not
make payments that came due in late October and early November 2022
with respect to several of its equipment and other financings,
including its two bridge promissory notes.
Core Scientific Inc. and its affiliates filed petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead
Case No. 22-90340) on Dec. 21, 2022. As of Sept. 30, 2022, Core
Scientific had total assets of US$1.4 billion and total liabilities
of US$1.3 billion.
Judge David R. Jones oversees the cases.
The Debtors hired Weil, Gotshal & Manges, LLP as legal counsel; PJT
Partners, LP as investment banker; and AlixPartners, LLP as
financial advisor. Stretto is the claims agent.
A group of Core Scientific convertible bondholders is working with
restructuring lawyers at Paul Hastings.
CORELOGIC INC: Fidelity Fund Marks $45.9M Loan at 27% Off
---------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $45,991,000 loan extended to CoreLogic, Inc. to
market at $33,390,000 or 73% of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries a 7.3125% interest (1 month U.S. LIBOR + 3.500%)
to Core Logic, Inc. The loan is scheduled to mature on June 2,
2028.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
CoreLogic, Inc. provides consumer, financial and property
information, analytics and services. The Company combines public,
contributory and proprietary data to develop predictive decision
analytics, as well as offers mortgage and automotive credit
reporting, property tax, valuation, flood determination, and
geospatial analytics and services.
CROCS INC: S&P Alters Outlook to Stable, Affirms 'BB-' ICR
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S&P Global Ratings affirmed its 'BB-' issuer credit rating on
U.S-based footwear company Crocs Inc. and revised its outlook to
stable from negative.
S&P said, "At the same time, we affirmed our 'BB-' issue-level
rating on the company's $2 billion senior secured term loan B and
'B' issue-level rating on the senior unsecured notes. The recovery
ratings remain at '3' and '6', respectively.
"The stable outlook reflects our expectation that over the next
year the company will continue to grow its topline driven by volume
growth while managing cost headwinds, such that S&P Global
Ratings-adjusted leverage stays in the low-to-mid-2x area.
"The outlook revision to stable from negative reflects our
expectation that Crocs' revenue and EBITDA will continue to grow
despite a challenging macroenvironment.
"While we continue to view the company's key clog category to be a
niche segment, we believe Crocs will continue to grow its revenue
and EBITDA given the continuation of the casualization of consumer
wardrobes. Nevertheless, under the current challenging macro
conditions, higher inflationary pressures have dented household
affordability and consumers may cut back on discretionary spending,
which could constrain demand for Crocs and HeyDude's products. We
have not seen customers pulling back so far based on recent
operating performance, but this could change in 2023 as our S&P
Global economists are forecasting a mild recession. Additionally,
both brands are subject to potential volatility from rapidly
evolving consumer preferences and global fashion trends which could
affect demand.
"We expect the company to continue to grow its topline driven by
continued strong demand in both U.S. and international markets, but
at a slower pace given our S&P Global economists' forecast for a
mild recession in 2023. Despite our forecast for EBITDA margins to
contract from inflationary headwinds, we forecast adjusted leverage
to further improve to the mid-2x area by the end of 2022 and in the
low-to-mid-2x area by the end of 2023."
Operating performance has remained steady since the
transformational acquisition of HeyDude in February 2022.
S&P said, "The company's operating performance is generally in line
with our expectations with pro forma adjusted leverage in the
high-2x area for the last 12 months ended Sept 30, 2022. Consumer
demand for both Crocs and HeyDude brands remained strong in 2022
with sales for both brands growing double-digits. The Crocs brand
continues to gain share from other casual wearing footwear such as
Skechers and Vans. HeyDude is also showing strong momentum as Crocs
has put in its planned investment in branding and marketing to
increase HeyDude's consumer reach and brand equity. The company
leveraged its experience to scale HeyDude by expanding its
distribution and customer reach. The integration of HeyDude is
largely done with the back-end accounting and finance function
fully integrated, and Crocs is putting in a new ERP system for
HeyDude with capex increases to $150 million to $170 million for
supply chain investment to support growth. We expect the company to
fully integrate HeyDude but there could be risks associated with
the ERP system implementation.
"The company prioritized debt reduction following the HeyDude
acquisition, but we expect it to resume share repurchases in second
half of 2023."
The company is committed to debt reduction following the HeyDude
acquisition. It repaid its revolver borrowing and made prepayment
to its term loan B by using excess cash flow. The company has
suspended share repurchases until it gets to its public gross
leverage target of 2x, which it expects to reach by middle of 2023.
The company has grown revenues and EBITDA over the last few years,
but has also been aggressively adding debt. Historically, it raised
debt to fund several accelerated share repurchases totaling $1
billion in 2021. S&P said, "Therefore, we believe the company is
likely to resume share repurchase in the second half of 2023 once
it reaches it leverage target in mid-2023. We have baked in $200
million of annual share repurchases in our forecast and believe it
will remain within the bounds of its financial policy. If leverage
rises above 3x for debt-funded share repurchases, we could view it
as a shift toward more aggressive financial policies and it would
weigh negatively on the ratings."
The stable outlook reflects S&P's expectation that over the next
year the company will continue to grow its topline driven by volume
growth while managing cost headwinds, such that adjusted leverage
stays in the low-to-mid-2x area.
S&P could lower its ratings if the company's profitability drops
substantially or its cash flow weakens materially, causing its
leverage to be sustained above 3x. This could occur if:
-- Consumer trends or macroeconomic conditions worsen such that
its products fall out of favor with consumers, or spending on
discretionary footwear declines;
-- Intense competition in the footwear industry and rapidly
changing fashion trends that cause Crocs to lose a significant
number of customers to its competitors; or
-- The company's financial policy becomes more aggressive such
that it undertakes large debt-financed acquisition or share
repurchase.
While S&P considers an upgrade unlikely over the next 12 months, it
could raise its ratings if the company successfully diversifies
into other categories, managing its high growth and profitability
while maintaining leverage in the low-to-mid 2x area. This could
occur if:
-- Both brands continue to gain market share, and the business
shows continued momentum and meaningfully outperform S&P's
expectation.
-- The company demonstrates a more conservative financial policy
and committed to maintain leverage in the low-to-mid 2x even after
incorporating debt-financed acquisitions and share repurchases.
ESG credit indicators: E-2, S-2, G-2
CUMULUS MEDIA: Moody's Lowers CFR to B3 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service downgraded Cumulus Media New Holdings
Inc.'s Corporate Family Rating, senior secured term loan, and
senior secured notes ratings to B3 from B2. The outlook was changed
to stable from negative.
The ratings downgrade reflects the impact of high inflation and
recessionary pressures on radio advertising demand which will cause
Cumulus's leverage levels (6.2x as of Q3 2022 excluding Moody's
standard lease adjustment) to increase in 2023. A portion of the
impact on leverage from lower EBITDA will be offset by continued
debt repayment. Moody's expects free cash flow (FCF) will continue
to be positive and that Cumulus's liquidity position will remain
adequate as a result of $118 million of cash on the balance sheet
and access to a $100 million ABL facility (not rated by Moody's) as
of Q3 2022. There are no near term debt maturities as the secured
term loan and note mature in 2026. Cumulus's Speculative Grade
Liquidity (SGL) rating is unchanged at SGL-3.
A summary of the actions are as follows:
Downgrades:
Issuer: Cumulus Media New Holdings Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Senior Secured Term Loan, Downgraded to B3 (LGD3) from B2 (LGD4)
Senior Secured 1st Lien Regular Bond/Debenture, Downgraded to B3
(LGD3) from B2 (LGD4)
Outlook Actions:
Issuer: Cumulus Media New Holdings Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Cumulus's B3 CFR reflects the high leverage level and Moody's
expectation that leverage will increase toward the 7x range in 2023
(excluding Moody's standard lease adjustment) due to the
recessionary pressures on radio advertising demand. The radio
industry is also being negatively affected by the shift of
advertising dollars to digital mobile and social media as well as
heightened competition for listeners from a number of digital music
providers. Secular pressures and the cyclical nature of radio
advertising demand have the potential to exert substantial pressure
on EBITDA performance.
Cumulus benefits from its position as the third largest radio
broadcaster in the US with market positions in 86 markets,
ownership of the Westwood One network which provides syndicated
radio programming, digital businesses (including podcasting,
streaming, and digital marketing services), and live events. The
company maintains a geographically diversified footprint with
strong market clusters in most of the areas it operates which
enhances its competitive position. The format offering of music,
news, and sports as well as live events and digital growth
initiatives will continue to provide support to performance.
Cumulus also has a strong track record of using asset sale proceeds
and FCF to repay debt which Moody's expects to continue in 2023.
ESG CONSIDERATIONS
Cumulus's ESG Credit Impact Score is highly-negative (CIS-4) driven
by the company's exposure to governance risks (G-4) and social
risks (S-4). Cumulus's leverage is at high levels, although asset
proceeds and FCF have consistently been used to pay down debt. A
significant percentage of the Cumulus's revenue and profitability
are generated from radio broadcasting which faces risk from social
and demographical trends as competition for listeners from digital
music services has increased and advertising dollars have shifted
to digital and social media advertising. Cumulus is a public
company that emerged from bankruptcy in 2018.
The SGL-3 for Cumulus reflects adequate liquidity with $118 million
of cash on the balance sheet and access to a $100 million ABL
facility ($5 million of L/Cs outstanding) as of Q3 2022 (not rated
by Moody's). The ABL facility's maturity was extended to June 2027,
but is subject to a springing maturity date 90 days ahead of the
maturity of the term loan or secured note if more than $35 million
is outstanding. Through Q3 2022, Cumulus spent $29 million in share
repurchases including a $25 million equity tender offer in June
2022, but the company has not paid a dividend since emerging from
bankruptcy. Capex was $26 million as of LTM Q3 2022 and the company
is likely to spend $30 million in FY 2022. Free cash flow as a
percentage of debt was 7% LTM Q3 2022, but the ratio will decline
modestly in 2023 as a result of lower profitability from a weak
economy. Moody's expects that the US economy will likely contract
during some quarters in 2023. Cumulus has no near term debt
maturities as the secured term loan and note mature in 2026.
Cumulus's term loan is covenant lite. Moody's expects Cumulus will
remain in compliance with the 1x fixed charge coverage ratio
covenant for the ABL revolver that is applicable when average
excess availability of the facility is less than the greater of
12.5% of the total facility or $10 million.
The stable outlook reflects Moody's view that Cumulus will
experience negative pressure on operating performance in the near
term due to recessionary pressures on radio advertising demand. The
lack of political advertising spend in a non-election year and
difficult comparisons in Q1 2023 due to termination of the WynnBET
partnership in 2022 will also weigh on results. Cost reduction
efforts, growth in digital revenues, and continued debt repayment
is likely to offset a portion of the impact of lower radio
advertising revenue on leverage. Overall, Moody's projects
Cumulus's leverage will increase toward the 7x range in 2023
(excluding Moody's standard lease adjustment), before declining in
2024 as economic growth improves.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects Cumulus's leverage
to decline to the low 5x range, as calculated by Moody's, with
positive organic revenue growth and stable EBITDA margins. A good
liquidity profile with FCF-to-Debt of 5% or more and no near term
debt maturities would also be required.
The ratings could be downgraded if Moody's expects Cumulus's
leverage to be sustained above 7x due to underperformance, audience
and advertising revenue migration to competing media platforms, or
ongoing economic weakness. Negative FCF or a weakened liquidity
profile could also lead to a downgrade.
Headquartered in Atlanta, GA, Cumulus Media New Holdings Inc. is
the third largest radio broadcaster in the U.S. with 405 stations
in 86 markets, a nationwide network serving more than 9,500
broadcast affiliates, and numerous digital channels. In addition,
Cumulus has several digital businesses (including podcasting,
streaming, and marketing services), and live events. Cumulus
emerged from Chapter 11 bankruptcy protection in June 2018. The
company reported $955 million in net revenue during the LTM period
ending in Q3 2022.
The principal methodology used in these ratings was Media published
in June 2021.
CUREPOINT LLC: Trustee Taps Radiology Oncology Systems as Appraiser
-------------------------------------------------------------------
David Wender, the Chapter 11 trustee for Curepoint, LLC, seeks
approval from the U.S. Bankruptcy Court for the Northern District
of Georgia to employ Radiology Oncology Systems, Inc. to conduct an
appraisal of the company's equipment.
Radiology Oncology Systems will be paid a one-time fee of $3,800.
As disclosed in court filings, Radiology Oncology Systems is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached at:
Michael Teague
Radiology Oncology Systems, Inc.
5465 Morehouse Dr., Suite 250
San Diego, CA 92121
Tel: (858) 454-8100
Fax: (858) 454-8555
Email: Michael@OncologySystems.com
About Curepoint LLC
Curepoint, LLC -- https://www.curepointcancer.com/ -- provides
radiation treatment for cancer patients at its facility in Dublin,
Ga.
Curepoint filed a petition for Chapter 11 protection (Bankr. N.D.
Ga. Case No. 22-56501) on Aug. 19, 2022, with between $1 million
and $10 million in both assets and liabilities. Phillip Miles,
designated officer, signed the petition.
Judge Paul Baisier oversees the case.
Will B. Geer, Esq., at Rountree, Leitman, Klein & Geer, LLC is the
Debtor's counsel.
David A. Wender was appointed as the Chapter 11 trustee in the
Debtor's case. The trustee tapped Eversheds Sutherland (US), LLP as
counsel and SOLIC Capital Advisors, LLC and SOLIC Capital, LLC as
investment banker.
CYTODYN INC: Incurs $26.5 Million Net Loss in Second Quarter
------------------------------------------------------------
CytoDyn Inc. filed with the Securities and Exchange Commission its
Quarterly Report on Form 10-Q disclosing a net loss of $26.49
million on zero revenue for the three months ended Nov. 30, 2022,
compared to a net loss of $40.08 million on $225,000 of revenue for
the three months ended Nov. 30, 2021.
For the six months ended Nov. 30, 2022, the Company reported a net
loss of $47.48 million on $0 of revenue compared to a net loss of
$85.41 million on $266,000 of revenue for the six months ended Nov.
30, 2021.
As of Nov. 30, 2022, the Company had $7.07 million in total assets,
$123.04 million in total liabilities, and a total stockholders'
deficit of $115.97 million.
As of Nov. 30, 2022, the Company had a total of approximately $2.6
million in cash and restricted cash and approximately $122.7
million in short-term liabilities.
CytoDyn stated, "We expect to continue to incur operating losses
and require a significant amount of capital in the future as we
continue to develop and seek approval to commercialize leronlimab.
Despite the Company's negative working capital position, vendor
relations remain relatively accommodative, and we do not currently
anticipate significant delays in our business initiatives schedule
due to liquidity constraints. We cannot be certain, however, that
future funding will be available to us when needed on terms that
are acceptable to us, or at all. We sell securities and incur debt
when the terms of such arrangements are deemed acceptable to both
parties under then current circumstances and as necessary to fund
our current and projected cash needs."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001175680/000155837023000163/cydy-20221130x10q.htm
About CytoDyn Inc.
Headquartered in Vancouver, Washington, CytoDyn Inc. --
http://www.cytodyn.com-- is a clinical-stage biotechnology company
focused on the development and commercialization of leronlimab, an
investigational humanized IgG4 monoclonal antibody (mAb) that is
designed to bind to C-C chemokine receptor type 5 (CCR5), a protein
on the surface of certain immune system cells that is believed to
play a role in numerous disease processes. CytoDyn is studying
leronlimab in multiple therapeutic areas, including infectious
disease, cancer, and autoimmune conditions.
Cytodyn reported a net loss of $210.82 million for the year ended
May 31, 2022, compared to a net loss of $176.47 million for the
year ended May 31, 2021. As of Aug. 31, 2022, the Company had
$28.39 million in total assets, $122.71 million in total
liabilities, and a total stockholders' deficit of $94.31 million.
San Jose, California-based Macias Gini & O'Connell LLP, the
Company's auditor since 2022, issued a "going concern"
qualification in its report dated Aug. 15, 2022, citing that the
Company incurred a net loss of approximately $210,820,000 for the
year ended May 31, 2022 and has an accumulated deficit of
approximately $766,131,000 through May 31, 2022, which raises
substantial doubt about its ability to continue as a going concern.
DCL CORP: CCAA Stay Period Extended to March 17
-----------------------------------------------
DCL Corporation commenced court-supervised restructuring
proceedings under the Companies' Creditors Arrangement Act, as
amended (the "CCAA") by obtaining an order ("Initial Order") from
the Ontario Superior Court of Justice (Commercial List), which,
among other things, provides for a stay of proceedings until Dec.
30, 2022. The Stay Period may be extended by the Court from time
to time. Also pursuant to the Initial Order, Alvarez & Marsal
Canada Inc. was appointed as monitor ("Monitor") of the business
and financial affairs of the Company.
On Dec. 29, 2022, the Court granted an order ("Amended and Restated
Initial Order"), among other things, to extend the Stay Period
until and including March 17, 2023.
According to court filings, as a result of heavy inflation in the
global economy and the consistent pressures of increasing input
costs, the Company's business of manufacturing pigments for
coatings, plastics and inks is facing serious financial challenges.
Its capital structure has placed substantial strain on its
business. DCL Corporation is a company to which the CCAA applies
and has claims in excess of $5 million.
The Company said it requires relief under the CCAA to stabilize its
business, obtain needed financing and implement a going concern
sale of its business. The Company added it is of the view that
seeking protection under the CCAA is in the best interests of the
broad cross section of its stakeholders including creditors,
employees, pensioners, suppliers, and customers.
A copy of the Initial Order and all materials filed in these
proceedings may be obtained at the Monitor’s website at
https://www.alvarezandmarsal.com/DCLCanada or on request from the
Monitor by calling 1-844-692- 6255 or by emailing
DCLCanada@alvarezandmarsal.com. Certain of DCL Canada's U.S. based
affiliates ("DCL U.S.") filed voluntary petitions for relief under
Chapter 11 ("Chapter 11 Proceedings") of the U.S. Bankruptcy Code
in the United States Bankruptcy Court for the District of Delaware
on Dec. 20, 2022.
For further information regarding the Chapter 11 Proceedings please
visit the Chapter 11 website at https://cases.ra.kroll.com/DCL.
Pursuant to the Initial Order, during the Stay Period, all persons
having oral or written agreements with the Company or statutory or
regulatory mandates for the supply of goods and/or services are
restrained until further Order of the Court from discontinuing,
altering, interfering with or terminating the supply of such goods
or services as may be required by the Company, provided that the
normal prices or charges for all such goods or services received
after the date of the Initial Order are paid by DCL Canada in
accordance with normal payment practices of the Company or such
other terms as may be agreed upon by the supplier or service
provider and the Company and the Monitor, or as may be ordered by
the Court.
During the Stay Period, all parties are prohibited from commencing
or continuing legal action against the Company and all rights and
remedies of any party against or in respect of the Company or its
assets are stayed and suspended except with the written consent of
the Company and the Monitor or leave of the Court.
If you have any questions regarding the foregoing or require
further information, please consult the Monitor’s website at
https://www.alvarezandmarsal.com/DCLCanada or should you wish to
speak to a representative of the Monitor, please contact the
Monitor at 1-844-692-6255 or by emailing
DCLCanada@alvarezandmarsal.com.
Canadian Counsel for DCL Corporation:
Blake Cassels & Gradon LLP
199 Bay Street
Suite 4000, Commerce Court West
Toronto, ON M5L 1A9
Linc Rogers
Tel: 416-863-4168
Email: linc.rogers@blakes.com
Milly Chow
Tel: 416-863-2594
Email: milly.chow@blakes.com
Alexia Parente
Tel: 416-863-2417
Fax: 416-863-2653
Email: alexia.parente@blakes.com
US Counsel for the DCL US entities:
King & Spalding LLP
1180 Peachtree Street NE, Suite 1600
Atlanta, GA 30309
Sarah Borders
Tel: 404-572-3596
Email: sborders@kslaw.com
Jeff Dutson
Tel: 404-572-2803
Email: jdutson@kslaw.com
Michael Handler
Tel: 212-556-2286
Email: mhandler@kslaw.com
Delaware Counsel to the DCL US entities:
Richards Layton & Finger PA
920 N. King Street
Wilmington, DE 19801
Mark Collins
Tel: 302-651-7531
Email: collins@rlf.com
Amanda Steele
Tel: 302-651-7838
Email: steele@rlf.com
Alvarez & Marsal, CCAA Monitor:
Alvarez & Marsal Canada Inc
Royal Bank Plaza, South Tower
200 Bay Street, Suite 2900
P.O. Box 22
Toronto, ON M5J 2J1
Josh Nevsky
Tel: 416-847-5161
Email: jnevsky@alvarezandmarsal.com
Stephen Ferguson
Tel: 416-847-5162
Email: sferguson@alvarezandmarsal.com
Stephen Moore
Tel: 416-847-5167
Email: smoore@alvarezandmarsal.com
Counsel to CCAA Monitor:
Osler Hoskin Harcourt LLP
100 King Street West
1 First Canadian Place, Suite 6200
P.O. Box 50
Toronto, ON M5X 1B8
Marc Wasserman
Tel: 416-862-4908
Email: mwasserman@osler.com
Martino Calvaruso
Tel: 416-862-6665
Email: mcalvaruso@osler.com
Tiffany Sun
Tel: 416-862-4932
Email: tsun@osler.com
Financial Advisor to DCL Corporation:
Otterbourg PC
230 Park Avenue
New York, NY 10169
David W. Morse
Tel: 212-905-3641
Email: dmorse@otterbourg.com
Daniel Fiorillo
Tel: 212-905-3616
Email: dfiorillo@otterbourg.com
Chad Simon
Tel: 212-905-3656
Email: csimon@otterbourg.com
Investment Banker to DCL Corporation:
TM Capital
641 Lexington Avenue
New York, NY 10022
Anthony Giorgio
Tel: 212-809-1428
Email: agiorgio@tmcapital.com
Tabb Neblett
Tel: 404-995-6249
Email: tneblett@tmcapital.com
About DCL Corp
DCL Corporation -- https://www.pigments.com/ -- is part of an
integrated business with the DCL Group. The DCL Group operates six
manufacturing facilities throughout Canada, the U.S., the
Netherlands and United Kingdom. The DCL Group supplies pigments
and dispersions to customers in the coatings, plastics and digital
printing markets.
About DCL Holdings USA
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.
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.
DOMINARI HOLDINGS: Appoints Christopher Devall as COO
-----------------------------------------------------
Christopher Devall was appointed as the chief operating officer of
Dominari Holdings Inc., effective Jan. 1, 2023, as disclosed in a
Form 8-K filed with the Securities and Exchange Commission.
Mr. Devall, 40, has served as the vice president of Operations of
the Company since July 1, 2022, and was a member of its advisory
board from April 2022 to June 2022. Mr. Devall served as senior
operations department head in the Department of Defense from
February 2019 to June 2022, and as a senior operations department
manager from April 2016 to January 2019. He is a retired military
veteran and received his Masters of Business Administration from
the University of Virginia Darden School of Business and holds a
B.S. in Strategic Studies and Defense Analysis from Norwich
University. Mr. Devall has no family relationship with any of the
executive officers or directors of the Company. There are no
arrangements or understandings between Mr. Devall and any other
person pursuant to which he was appointed as an officer of the
Company.
In accordance with the terms of Mr. Devall's Employment Agreement
with the Company, dated as of July 1, 2022, and which is for a term
of five years, Mr. Devall was employed by the Company as the vice
president of Operations. Under the provisions of the Employment
Agreement, Mr. Devall was to become chief operating officer of the
Company on July 1, 2024, but the Company and Mr. Devall entered
into an Amendment to the Employment Agreement, dated as of Jan. 1,
2023, pursuant to which his appointment as chief operating officer
of the Company was accelerated to Jan. 1, 2023, and his base salary
was increased to $350,000 per year, as of Jan. 1, 2023.
Pursuant to the terms of the Amended Employment Agreement, Mr.
Devall's base salary is $350,000 per year, subject to regular
annual review, payable in accordance with the standard payroll
practices of the Company, and subject to all withholdings and
deductions, as required by law. In addition to the payment of base
salary, Mr. Devall received a signing bonus in the form of a
restricted stock grant of 8,068 shares of the Company's common
stock, which was fully vested on Jan. 1, 2023. The Amended
Employment Agreement also provides for a grant of restricted stock
to Mr. Devall with a value of $1,000,000, on the later of July 1,
2022, or such date as there are a sufficient number of shares of
common stock reserved under any of the Company's equity incentive
plans for the awarding of such shares of restricted stock. This
restricted stock award has not yet been granted. Upon grant, the
award will vest in equal amounts over a period of 12 consecutive
calendar quarters, subject to certain rights of acceleration upon a
change of control and as otherwise provided in the Amended
Employment Agreement. Mr. Devall is also entitled to an annual
bonus, as determined by the Company's Compensation Committee, based
on certain performance criteria, provided that such annual bonus
will not be less than $50,000. Annual bonuses and all stock-based
compensation are subject to certain clawback rights as provided in
the Amended Employment Agreement.
Mr. Devall is also entitled to the payment or reimbursement of up
to $10,000 per month for reasonable out-of-pocket expenses.
Pursuant to the terms of the Employment Agreement, Mr. Devall is
also provided with all health and other benefits provided by the
Company to its senior executive employees.
The Amended Employment Agreement also provides for customary events
of termination of employment and provides that in the event of
termination as a result of Mr. Devall's death or disability, Mr.
Devall is entitled to severance consisting of (i) 12 months of his
then current base salary, payable in a lump sum, less withholding
of applicable taxes, within 30 days of the date of termination;
(ii) if he elects continuation coverage for group health coverage
pursuant to COBRA, then for a period of 12 months following the
termination of Mr. Devall's employment the Company will pay such
amount of the COBRA premiums so that Mr. Devall is only required to
pay the portion of the premiums that active employees are required
to pay; and (iii) payment on a pro-rated basis of any annual bonus
or other payments earned in connection with any bonus plan to which
Mr. Devall was a participant as of the date of death or disability.
In the event of termination of Mr. Devall's employment (i) as a
result of the non-renewal of the Amended Employment Agreement by
the Company at the end of the then current term, (ii) by Mr. Devall
for Good Reason (as such term is defined in the Amended Employment
Agreement), (iii) by the Company, without cause, or (iv) by Mr.
Devall, in the event of a change in control, then Mr. Devall is
entitled to the same severance as provided above. Additionally, if
termination is by Mr. Devall for Good Reason or by the Company,
without cause, then all equity grants held by Mr. Devall will
immediately vest.
About Dominari Holdings Inc.
Dominari Holdings Inc. (f/k/a Aikido Pharma Inc.) until recently
was focused primarily on the development of a diverse portfolio of
small-molecule anticancer and antiviral therapeutics and related
patent technology. In September 2022, the Company agreed to
acquire a registered broker-dealer and transition its primary
business operations to fintech and financial services. Upon the
final closing of this acquisition, the Company's fintech and
financial services business will be operated through its
subsidiary, Dominari Financial Inc. The Company continues to
develop its therapeutics and related patent technology, as well as
other ventures, through its subsidiary, Aikido Labs, LLC.
Aikido reported a net loss of $7.17 million for the year ended Dec.
31, 2021, compared to a net loss of $12.34 million for the year
ended Dec. 31, 2020, and a net loss of $4.18 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $84.45
million in total assets, $2.60 million in total liabilities, and
$81.85 million in total stockholders' equity.
DW TRUMP INC: Taps Law Office of Barry D. Haberman as Counsel
-------------------------------------------------------------
DW Trump, Inc. seeks approval from the U.S. Bankruptcy Court for
the Southern District of New York to employ The Law Office of Barry
D. Haberman as counsel.
The firm's services include:
a. advising the Debtor with respect to its powers and duties
in the continued management and operation of its business and
property;
b. advising and consulting with the Debtor on the conduct of
its Chapter 11 case, including all of the legal and administrative
requirements of operating in Chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties in interest;
d. taking all necessary actions to protect and preserve the
Debtor's estate, including prosecuting actions on the Debtor's
behalf, defending any action commenced against the Debtor, and
representing the Debtor in negotiations concerning litigation in
which it is involved, including objections to claims filed against
the estate;
e. preparing pleadings;
f. representing the Debtor in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
g. advising the Debtor in connection with any potential sale
of its assets;
h. appearing before the bankruptcy court and any appellate
courts;
i. advising the Debtor regarding tax matters;
j. negotiating, preparing and seeking approval of a disclosure
statement and confirmation of a Chapter 11 plan; and
k. other necessary legal services.
The firm will be paid at these rates:
Attorneys $275 to $425 per hour
Legal Assistants $60 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Barry Haberman, Esq., a partner at The Law Office of Barry D.
Haberman, disclosed in a court filing that the firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Barry D. Haberman, Esq.
The Law Office of Barry D. Haberman
254 South Main Street, #404
New City, NY 10956
Tel: (845) 638-4294
Email: bdhlaw@aol.com
About DW Trump
DW Trump, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 22-22628) on Aug. 18,
2022, with $1 million to $10 million in both assets and
liabilities. Ephriam Weismandl, DW Trump treasurer, signed the
petition.
Judge Sean H. Lane oversees the case.
The Debtor is represented by Barry D. Haberman, Esq., at The Law
Office of Barry D. Haberman.
EMPIRE TODAY: Fidelity Fund Marks $15.4M Loan at 26% Off
--------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $15,436,000 loan extended to Empire Today, LLC to
market at $11,346,000, or 74% of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries an 8.3003% interest (1 month U.S. LIBOR + 5.000%)
to Empire Today. The loan is scheduled to mature on April 1, 2028.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Headquartered in Northlake, Ill., Empire Today, LLC is a specialty
retailer of carpet, hard floor, and window treatments. The company
offers shop-at-home sales in the largest metropolitan markets in
the U.S.
EMPLOY BRIDGE: Fidelity Fund Marks $31.3M Loan at 15% Off
---------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $31,358,000 loan extended to Employ Bridge LLC to
market at $26,749,000 or 85% of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries an 8.4241% interest (1 month U.S. LIBOR + 4.750%)
to Employ Bridge LLC. The loan is scheduled to mature on July 19,
2028.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Employbridge, LLC operates as an industrial staffing company. The
Company offers temporary associates in manufacturing, logistics,
warehousing, and contact centers.
EMPLOYEE LOAN: Court OKs Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
authorized Employee Loan Solutions, LLC to use cash collateral on
an interim basis in accordance with a budget through Jan. 20 and
its agreement with Sunrise Banks, National Association.
The Debtor is permitted to use cash collateral to pay post-petition
expenses in accordance with the budget.
As adequate protection, Sunrise is granted a postpetition
replacement lien to the full value of its existing collateral.
Sunrise's Postpetition Lien will encumber all assets acquired by
the Debtor postpetition which would have been encumbered by
Sunrise's liens and security interests if the Debtor had not filed
bankruptcy. The Postpetition Lien will be in addition to all
security interests, and liens existing in favor of Sunrise.
The Postpetition Lien will be in the same priority, validity, and
enforceability as any prepetition lien securing the claim of
Sunrise in the same type of assets.
During the term of the Stipulation, the Debtor agreed to use its
best efforts to permit the Sunrise access to the Debtor's proposed
investment banker, Impact Capital, including best efforts for
scheduling meetings between Sunrise and Impact Capital on January
10, 2023, and January 17, 2023 -- or such other dates that are
mutually acceptable to Sunrise and Impact Capital -- during which
Impact Capital will provide updates to Sunrise with respect to its
efforts to market the Debtor's business for sale.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3GW5irX from PacerMonitor.com.
The Debtor projects $23,824 in total expenses through Jan. 20.
About Employee Loan Solutions, LLC
Employee Loan Solutions, LLC is a wholly owned subsidiary of Emp
Loan Holdings Inc. Employee Loan Solutions markets and services a
web-based employee benefit platform called TrueConnect a
trademarked brand since 2016. TrueConnect is an employee financial
wellness benefit offered at no cost or financial risk to
employers.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Cal. Case No. 22-03210) on December
16, 2022. In the petition signed by Douglas Farry, CEO, the Debtor
disclosed $38,144,499 in assets and $7,613,600 in liabilities.
Judge Christopher B. Latham oversees the case.
Caroline R. Djang, Esq., at Buchalter, is the Debtor's legal
counsel.
EYEPOINT PHARMACEUTICALS: Dr. Jay Duker Promoted to President
-------------------------------------------------------------
EyePoint Pharmaceuticals, Inc. announced that Jay S. Duker, M.D.,
who has served as the company's chief operating officer since
November 2021, has been promoted to the additional role of
President. In addition to continuing to oversee his duties as COO,
in his expanded role, Dr. Duker will also oversee regulatory
affairs.
"Jay has been a tremendous asset to our team since he joined as
COO, and we look forward to continuing to benefit from his strong
leadership in his additional role as President. Jay has helped to
strengthen our organization in the past year, as we made
significant progress across our pipeline of exciting and innovative
ocular products, including reporting positive data for our Phase 1
DAVIO trial in wet AMD and the initiation of two Phase 2 trials for
EYP-1901," said Nancy Lurker, CEO of EyePoint Pharmaceuticals.
"It has been a privilege working with the talented team at EyePoint
on our mission to bring innovative ocular therapies to patients
with serious eye disorders. I am excited to expand my role in the
company, as we advance the clinical trials of our sustained release
anti-VEGF, EYP-1901, which acts through a unique mechanism of
action. We hope that EYP-1901 proves to be a safe, effective, and
well tolerated six-month treatment option for patients with wet AMD
and a potential nine-month treatment for those with
non-proliferative diabetic retinopathy," said Dr. Duker.
Prior to serving as chief operating officer at EyePoint, Dr. Duker
held earlier roles at EyePoint as chief strategic scientific
officer on a part-time basis beginning in 2020, after having served
as an independent member of EyePoint's Board of Directors since
2016. Previously, Dr. Duker was the Director of the New England Eye
Center and Chair of Ophthalmology at Tufts Medical Center and the
Tufts University School of Medicine. Dr. Duker also co-founded
several start-ups, including Hemera Biosciences, a gene therapy
company that developed an anti-complement treatment for dry macular
degeneration, which was acquired by Janssen in 2020. In addition,
Dr. Duker is currently the Chair of the Board of Sesen Bio, a
publicly traded clinical stage biopharmaceutical company. He has
published more than 300 journal articles related to ophthalmology
and is co-author of Yanoff and Duker's Ophthalmology, a
best-selling ophthalmic textbook. Dr. Duker received an A.B. from
Harvard University and an M.D. from the Jefferson Medical College
of Thomas Jefferson University.
Dr. Duker is entitled to receive an annual base salary of $581,000,
subject to increase from time to time. In addition, Dr. Duker is
eligible to receive an annual cash bonus, which is based on the
achievement of individual and corporate performance objectives,
calculated as a percentage of his annual base salary, and which
will be determined by the Board, in its sole discretion. Dr.
Duker's target annual bonus is 55% of his annual base salary.
Pursuant to the Duker Employment Agreement Amendment, subsequent to
the Duker Start Date on dates to be determined by the Compensation
Committee of the Board, the Company will grant Dr. Duker, subject
to the Company's adoption and stockholder approval of a new equity
incentive plan, (a) an option to purchase 85,000 shares of the
Company's common stock with 25% of the shares underlying the
options vesting on the first anniversary of the applicable grant
date followed by ratable monthly vesting through the fourth
anniversary of the applicable grant date, and (b) 45,000 restricted
stock units with 33% of the shares underlying the restricted stock
units vesting 12 months following the applicable grant date, 33% of
the shares underlying the restricted stock units vesting 24 months
following the applicable grant date and 33% of the shares
underlying the restricted stock units vesting 30 months following
the applicable grant date.
About EyePoint Pharmaceuticals
EyePoint Pharmaceuticals, Inc., formerly pSivida Corp. --
http://www.eyepointpharma.com-- headquartered in Watertown, MA,
is a specialty biopharmaceutical company committed to developing
and commercializing innovative ophthalmic products in indications
with high unmet medical need to help improve the lives of patients
with serious eye disorders. The Company currently has two
commercial products: DEXYCU, the first approved intraocular product
for the treatment of postoperative inflammation, and YUTIQ, a
three-year treatment of chronic non-infectious uveitis affecting
the posterior segment of the eye.
EyePoint reported a net loss of $58.42 million for the year ended
Dec. 31, 2021, a net loss of $45.39 million for the year ended
Dec. 31, 2020, a net loss of $56.79 million for the year ended Dec.
31, 2019, and a net loss of $53.17 million for the year ended
June 30, 2018. As of Sept. 30, 2022, the Company had $220.49
million in total assets, $84.14 million in total liabilities, and
$136.35 million in total stockholders' equity.
FRANKIE'S COMICS: Taps Stevens Martin Vaughn & Tadych as Counsel
----------------------------------------------------------------
Frankie's Comics, LLC received approval from the U.S. Bankruptcy
Court for the Eastern District of North Carolina to employ Stevens
Martin Vaughn & Tadych, PLLC to handle its Chapter 11 case.
Stevens will be paid at these rates:
William P. Janvier $490 per hour
Kathleen O'Malley $290 per hour
Law Clerks and Paralegals $145 per hour
The firm received a retainer of $10,000 from the Debtor.
Kathleen O'Malley, Esq., a partner at Stevens, disclosed in a court
filing that her firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Kathleen O'Malley, Esq.
Stevens Martin Vaughn & Tadych, PLLC
6300 Creedmoor Rd., Suite 170-370
Raleigh, NC 27612
Telephone: (919) 582-2300
Email: komalley@smvt.com
About Frankie's Comics
Frankie's Comics, LLC, a comic bookstore in Apex, N.C., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
E.D.N.C. Case No. 22-02892) on Dec. 14, 2022. In the petition
signed by its owner and manager, Kevin Fields, the Debtor disclosed
up to $10 million in both assets and liabilities.
Judge Joseph N. Callaway oversees the case.
Stevens Martin Vaughn & Tadych, PLLC represents the Debtor as legal
counsel.
GIGA-TRONICS INC: Signs Note Exchange Agreement With Ault Alliance
------------------------------------------------------------------
Giga-tronics Incorporated on Dec. 31, 2022 entered into an Exchange
Agreement with Ault Alliance, Inc., (formerly known as BitNile
Holdings, Inc.), to exchange the Senior Secured Convertible
Promissory Note due Feb. 14, 2023 in the principal face amount of
$4,250,000 dated Sept. 8, 2022 and any accrued interest thereon for
a promissory note in the principal amount of $4,382,740 due Dec.
31, 2024.
The Exchange Note bears interest at 10% per annum. The Exchange
Note is, at the option of Ault, convertible into the Company's
common stock at a conversion price equal to the lesser of (i) $0.78
per share, or (ii) the VWAP Price (as defined in the Exchange Note)
on such date less a 20% discount to such VWAP Price, but in no
event less than $0.25 per share. In addition, all principal and
outstanding interest under the Exchange Note will automatically
convert to the Company's common stock upon (i) the consummation of
a public offering of securities in which the Company receives net
proceeds (net of underwriters' discounts and selling commissions)
of at least $25 million, in which case the conversion price shall
be the price at which the Common Stock is sold to the public,
provided, however, that no underwriters' discounts or selling
commissions shall be imposed on such conversion, (ii) the
consummation of a private or public offering of shares of Common
Stock that is not a Qualified Public Offering but that results in
the net proceeds (net of underwriters' discounts and selling
commissions) to the Company of at least $5 million, in which case
the conversion price shall be the price at which Common Stock is
sold in such Non-Qualified Offering less a 25% discount or (iii)
Dec. 31, 2024, in which case the conversion price shall be the VWAP
Price less a 25% discount to such VWAP Price.
The Company's obligations under the Exchange Agreement and the
Exchange Note are secured by a lien on all of the assets of the
Company and its wholly owned subsidiaries pursuant to the Security
Agreement dated Dec. 31, 2022, by and among the Company, its two of
its wholly-owned subsidiaries, Microsource, Inc. and Gresham
Holdings, Inc. (formerly Gresham Worldwide, Inc.), and Ault.
On the Closing Date, the Company also entered into a Securities
Purchase Agreement by and between the Company and Ault Lending,
LLC, a California company, whereby the Company issued Ault Lending
a 10% Senior Secured Convertible Promissory Note in the principal
amount of $6,750,000 and five-year warrants to purchase 2,000,000
shares of the Company's common stock. The Warrants are exercisable
for five years from Dec. 31, 2022, at an exercise price of $0.01,
subject to certain adjustments. In connection with the issuance of
the Secured Note, as of the Closing Date, Ault Lending agreed to
surrender for cancellation a term note dated Nov. 12, 2021, in the
principal face amount $1,300,000 previously issued by the Company
to Ault Lending, including accrued but unpaid interest thereon in
the amount of $123,123. In addition, on the Closing Date advances
previously made by Ault Lending to the Company in the aggregate
amount of $4,067,469 were rolled into the Secured Note. Pursuant
to the Purchase Agreement, as additional consideration for the
issuance of the Secured Note, Ault Lending agreed to provide the
Company an additional $1,259,407 no later than May 31, 2023.
The voluntary conversion and automatic conversion price of the
Secured Note are similar to the conversion price of the Exchange
Note.
With a limited exception, the Senior Secured Note contains a most
favored nations provision with respect to future financings of the
Company.
With limited exceptions, the Company also agreed to certain
negative covenants that will require the prior approval of the
holder of the Secured Note to incur indebtedness (other than
permitted indebtedness), enter into variable rate transactions,
incur indebtedness for borrowed money, purchase money indebtedness
or lease obligations that would be required to be capitalized on a
balance sheet prepared in accordance with U.S. Generally Accepted
Accounting Principles, or guaranty the obligations of any other
person, in an aggregate amount at any time outstanding in excess of
$1,000,000 in any individual transaction or $2,500,000 in the
aggregate. The Company's obligations under the Purchase Agreement
and the Secured Note are secured by a lien on all of the assets of
the Company and its wholly owned subsidiaries pursuant to a
Security Agreement, dated Dec. 31, 2022 by and among the Company,
its wholly-owned subsidiaries, Microsource, Inc. and Gresham
Worldwide, Inc. and Ault Lending and Ault.
Pursuant to the Purchase Agreement, the Company and two of its
wholly-owned subsidiaries, Microsource, Inc. and Gresham Holdings,
Inc., entered into a Guaranty Agreement, dated Dec. 31, 2022 with
Ault Lending. Each such subsidiary guaranteed to Ault Lending the
payment of the Secured Note.
In connection with the issuance of the Exchange Note and the
Secured Note, the Company granted Ault and Ault Lending certain
mandatory and piggy back registration rights pursuant to two
registration rights agreements.
On Jan. 3, 2023, the Company, Ault and Ault Lending entered into a
letter agreement whereby the parties agree that notwithstanding any
obligations in any of the foregoing transaction documents the
Company shall not be required to reserve more than 150% of the
shares issuable under the Exchange Note and the Secured Note using
$0.78 per share (subject to adjustment for stock splits, stock
dividends or combinations) plus reservation of one share for each
outstanding share issuable under the warrants (subject to
adjustment for stock splits, stock dividends or combinations).
About Giga-tronics Inc.
Headquartered in Dublin, California, Giga-Tronics Inc. is a
publicly held company, traded on the OTCQB Capital Market under the
symbol "GIGA". Giga-tronics -- http://www.gigatronics.com--
produces RADAR filters and Microwave Integrated Components for use
in military defense applications as well as sophisticated RADAR and
Electronic Warfare (RADAR/EW) test products primarily used in
electronic warfare test & emulation applications.
Giga-Tronics reported a net loss of $2.72 million for the year
ended March 26, 2022, compared to a net loss of $393,000 for the
year ended March 27, 2021. As of March 26, 2022, the Company had
$8.06 million in total assets, $4.33 million in total liabilities,
and $3.73 million in total shareholders' equity.
San Ramon, California-based Armanino LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated June 24, 2022, citing that the Company's significant
recurring losses and accumulated deficit raise substantial doubt
about its ability to continue as a going concern.
GIRARDI & KEESE: Prosecutors Oppose Bail for CFO
------------------------------------------------
David McAfee of Bloomberg Law reports that federal prosecutors told
a California federal judge that former Girardi Keese chief
financial officer Christopher Kamon is a flight risk who should be
denied bail in the criminal case charging him with a $10 million
scheme to steal from the now-defunct law firm, .
Attorneys from the U.S. Attorney's Office for the Central District
of California argued in a Jan. 3 brief that Kamon's bid to escape
detention should be denied in part because he liquidated his assets
and fled to the Bahamas after the firm collapsed. Kamon made his
second appearance in California federal court a week ago.
In the government's opposition to Kamon's motion to lift a
court-ordered detention, prosecutors argue that Kamon "presents a
serious risk of flight that cannot be allayed by his proffered bond
package." The package includes a $2.4 million Bahamian property and
a $250,000 unsecured appearance bond, according to court records.
The government also noted that millions of "illicit proceeds"
remain unaccounted for.
"This money, traceable to defendant's schemes, remains outstanding
in whole part due to defendant's continuous transfers of these
funds, including up until the day before he was arrested," the
government wrote in its Tuesday filing.
Prior to his appearances in California court, Kamon was on a
cross-country transfer. He had been held without bail on a warrant
in Los Angeles since November when he was arrested at the
Baltimore-Washington International Airport. Kamon is accused of
stealing more than $10 million through a lucrative "side fraud"
that funded numerous new cars, several high-end homes in California
and the Bahamas, and an escort on his personal payroll whom he paid
$20,000 per month.
Kamon is represented by Skadden Arps Slate Meagher and Flom LLP.
The case is USA v. Kamon, C.D. Cal., No. 2:22-mj-04385-DUTY,
1/3/23.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese.
It served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter 7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
Telephone: (310) 640-1200
GREELY LAND: Has Deal on Cash Collateral Access Thru Jan 31
-----------------------------------------------------------
Greeley Land, LLC and creditors Pathfinder 501, LLC and Pathfinder
Crismon, LLC advised the U.S. Bankruptcy Court for the District of
Colorado they have reached an agreement regarding the Debtor's use
of cash collateral and now desire to memorialize the terms of this
agreement into an agreed order.
The parties agreed the Debtor may use cash collateral to continue
operating its student housing complex in accordance with a budget,
with a 15% variance, through January 31, 2023.
Now that the receivership involving the Debtor is winding down and
the receiver is turning over the Debtor's property to the Debtor,
the Debtor says it must use the rents and receipts paid by
residents at its property (i.e., the Cash Collateral) to pay the
operating and management expenses to run the Property for the
benefit of its residents and to cover costs incurred in
preservation of the Property.
Pathfinder 501 asserts a senior security interest in all of the
Debtor's assets pursuant to a Deed of Trust, Assignment of Rents,
and Security Agreement:
a. The Debtor, as borrower, entered into a Loan Agreement with
Citizens Community Bank, a division of Glacier Bank. Under the Loan
Agreement, the Original Lender agreed to loan the Debtor $8.6
million.
b. The Loan was made and evidenced by a promissory note from
the Debtor, as obligor, to the Original Lender, as holder, dated
January 31, 2020 for $8.6 million, which was later amended by a
Change in Terms Agreement dated February 14, 2022.
c. The Loan and Promissory Note were secured by a deed of
trust, dated January 31, 2020, which was recorded in the records of
the Weld County Clerk and Recorder on February 3, 2020, at
Reception No. 4563463.
d. The Debtor assigned and granted a security interest in and
to the rents of the Property to the Original Lender, which was
recorded in the records of the Weld County Clerk and Recorder on
February 3, 2020 at Reception No. 4563464.
e. The Debtor and the Original Lender entered into a
Commercial Security Agreement in which the Debtor granted a
security interest in all of its furniture, fixtures, equipment, and
other collateral to the Original Lender.
f. On April 15, 2022, the Original Lender assigned all of its
right, title, and interest with respect to the Promissory Note, the
Deed of Trust, Assignment of Rents, Security Agreement, and
Guaranties to Pathfinder 501 through an Assignment of Loan
Documents.
Crismon also asserts an interest in the cash collateral that is
junior to 501's interest pursuant to a Deed of Trust, Assignment of
Rents, and Security Agreement:
a. On September 9, 2021, the Debtor and Crismon entered into a
Loan Agreement in which Crismon agreed to loan the Debtor $3
million, which was evidenced by a promissory note.
b. The Crismon Loan and Crismon Note were secured by a deed of
trust secured by a Deed of Trust, Assignment of Rents and Leases,
Security Agreement, and Fixture Filing on the Real Property dated
September 9, 2021, which was recorded in the records of the Weld
County Clerk and Recorder on September 10, 2021, at Reception No.
4755240.
The Loan matured on November 1, 2021. On October 20, 2022,
Pathfinder filed a Complaint and Verified Ex Parte Motion for Order
Appointing Receiver in the District Court for Weld County, Case No.
2022CV30788.
On October 24, 2022, the State Court appointed Randel Lewis of
Foundation, Ltd. as Receiver. The Receiver did not take possession
of the Property and instead managed the Debtor's cash, working with
the Debtor's property management team. Specifically, the Receiver
did not replace the Debtor's employees so the Debtor has continued
to use its same property management company.
Crismon sought to foreclose on the Property. In accordance with
Colorado law, the foreclosure sale date was set for December 14,
2022 at 10:00 a.m. Before the foreclosure sale, the Debtor filed
for protection under chapter 11 of the Bankruptcy Code and
initiated the bankruptcy case.
The Receiver was not in possession of the Property on the Petition
Date, but he was (and remains) in possession of the Debtor's cash.
On December 19, 2022, the Debtor filed a Motion to Compel Turnover
of Property by the Receiver. There were no objections to the
motion.
The Debtor is in discussions with the Receiver regarding turnover
of the Debtor's cash. At this time, the Receiver has stopped paying
operating expenses and the payment of operating expenses will be
the Debtor's responsibility once the Receiver transfers the
Debtor's cash back to the Debtor.
A copy of the motion is available at https://bit.ly/3vSN5Wb from
PacerMonitor.com.
About Greeley Land, LLC
Greeley Land, LLC, an apartment building operator, filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. D. Colo. Case No. 22-14864) on Dec. 13, 2022, with $10
million to $50 million in both assets and liabilities.
Judge Michael E. Romero presides over the case.
Michael J. Pankow, Esq., and Amalia Y. Sax-Bolder, Esq., at
Brownstein Hyatt Farber Schreck, LLP are the Debtor's bankruptcy
attorneys.
HAN JOE RO: Court Confirms Amended Chapter 11 Plan
--------------------------------------------------
Judge Mary Jo Heston has entered an order approving and confirming
the Modified Amended Chapter 11 Plan of Reorganization of Han Joe
Ro, LLC.
Any objections to the Plan that have not been withdrawn, waived, or
settled are overruled on the merits in their entirety.
Within 5 Business Days after entry of the Plan Confirmation Order,
Bush Kornfeld LLP shall deposit the Avoidance Claims Settlement
Funds with the Plan Administrator to be deposited into a segregated
bank account on behalf of the Estate, in which such funds shall be
held pending occurrence of the Effective Date; provided, however,
that in the event this Confirmation Order has been stayed,
reversed, or otherwise modified in any material respect that is
inconsistent with the Plan prior to the Effective Date, the
Avoidance Claims Settlement Funds shall be returned to Bush
Kornfeld LLP within 5 Business Days after the entry of such order
staying, reversing, or otherwise modifying the Confirmation Order
in any material respect in relation to the Avoidance Claims
Settlement Funds or the proposed distribution thereof under Section
9.6 of the Plan.
The Debtor shall fund distributions under the Plan with the
Avoidance Claims Settlement Funds or cash on hand, as applicable
under the terms of the Plan.
All Classes are impaired under the Plan, but not all classes of
claims under the Plan returned a Ballot. As the Pre-Confirmation
Report evidences, Classes 1, 3, and 4 each voted in favor of the
Plan, and no Class voted to reject the Plan. At the Confirmation
Hearing, counsel for the Holder of Class 2 Claims stated on the
record that the SBA supports confirmation of the Plan. While the
Plan does not satisfy the requirements of Section 1129(a)(8) of the
Bankruptcy Code because at least one Impaired Class has not voted
to accept the Plan, the Plan has the universal support of all
classes in the Chapter 11 case. The Plan is therefore confirmable
because it satisfies Sections 1129(a)(10) and 1191(b) of the
Bankruptcy Code.
The Plan provides for payment in full on the Effective Date to
Holders of General Unsecured Claims as well as certain Effective
Date payments to Holders of Class 1 and Class 2 Claims. The Plan
further provides that Holders of Class 1 and Class 2 Claims shall
be entitled to relief from stay upon the Effective Date and,
accordingly, such liquidation is proposed in the Plan. Based on the
evidence proffered or adduced at or prior to the Confirmation
Hearing and in the Pre-Confirmation Brief and Plan, the Debtor has
sufficient funds available as of the Effective Date to pay all
Claims and expenses that are required to be paid on the Effective
Date under the Plan (including Administrative Claims, Professional
Fee Claims, Priority Tax Claims, and General Unsecured Claims), and
to capitalize the Reorganized Debtor with sufficient funds to
maintain its operations in the ordinary course of business.
Accordingly, the Plan is feasible and satisfies the requirements of
section 1129(a)(11) of the Bankruptcy Code.
Attorneys for the Debtor:
Thomas A. Buford, Esq.
Richard B. Keeton, Esq.
BUSH KORNFELD LLP
About Han Joe Ro, LLC
Han Joe Ro, LLC is owned and operated by Cham Joe Ro and her
husband, In Kook Ro. Han Joe Ro operates two adjacent properties
which share one parking lot. Until recently, both properties were
operated as hotel franchises.
The OYO Hotel Tumwater, located at 1600 74th Avenue SW, Tumwater,
WA 98501, is a 59-room limited service hotel constructed in 1999
and situated on a 1.81-acre site. Beginning in September 2020, the
OYO Hotel contracted with Thurston County for temporary use of the
entire facility as a COVID-19 recovery center. That contract
terminated on February 28, 2022, and the property has resumed its
normal operations as the OYO Hotel.
Formerly the Comfort Inn Conference Center Tumwater, the adjacent
premises located at 1620 74th Avenue SW, Tumwater, WA 98501 is a
58-room hotel property with conference facilities constructed in
2001 and situated on a 2.14-acre lot. The franchise agreement with
Choice Hotels was terminated at the end of February 2022. On March
1, 2022, the Leased Hotel entered into a lease with the State of
Washington, Department of Health, which initially ran through the
end of 2022 but was amended to run through April 30, 2027, and may
be renegotiated for an additional five years.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. W.D. Wash. Case No. 22-40597) on May 12,
2022. In the petition signed by Eric Camm, chief restructuring
officer, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Mary Jo Heston oversees the case.
Richard B. Keeton, Esq., at Bush Kornfeld LLP, is the Debtor's
counsel.
HARLAND CLARKE: Fidelity Fund Marks $1.8M Loan at 30% Off
---------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $1,828,000 loan extended to Harland Clarke Holdings
Corp to market at $1,277,000, or 70% of the outstanding amount, as
of October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B seventh lien term
loan that carries an 8.4241% interest (3 months U.S. LIBOR +
4.750%) to Harland Clarke Holdings Corp. The loan is scheduled to
mature on November 3, 2023.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Harland Clarke Holdings Corp., headquartered in San Antonio, Texas,
is a provider of check and checks related products, direct
marketing services and customized business and home office products
to financial services, retail and software providers as well as
consumers and small businesses.
HEIRBNB LLC: TAPS Lefkovitz & Lefkovitz as Legal Counsel
--------------------------------------------------------
Heirbnb, LLC seeks approval from the U.S. Bankruptcy Court for the
Middle District of Tennessee to employ Lefkovitz & Lefkovitz, PLLC
as counsel.
The firm's services include:
(a) advising the Debtor regarding its rights, duties and
powers;
(b) preparing and filing statements of financial affairs and
bankruptcy schedules, Chapter 11 plans and other documents;
(c) representing the Debtor at all hearings, meetings of
creditors, conferences, trials, and any other proceedings related
to its Chapter 11 case; and
(d) other necessary legal services.
The firm will be paid at these rates:
Steven L. Leftkovitz $555 per hour
Associates $350 per hour
Paralegals $125 per hour
In addition, the firm will receive reimbursement for its
out-of-pocket expenses.
The retainer is $8,262.
Steven Leftkovitz, Esq., a partner at Lefkovitz & Lefkovitz,
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:
Steven L. Leftkovitz, Esq.
Lefkovitz & Lefkovitz, PLLC
908 Harpeth Valley Place
Nashville, TN 37219
Tel: (615) 256-8300
Fax: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About Heirbnb LLC
Heirbnb, LLC, a company in Hendersonville, Tenn., sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Tenn.
Case No. 22-04015) on Dec. 14, 2022, with $2,525 in assets and
$1,099,032 in liabilities. Kate Carson, owner, signed the petition.
Judge Charles M. Walker oversees the case.
Steven L. Lefkovitz, Esq., at Lefkovitz and Lefkovitz is the
Debtor's legal counsel.
HINTONS5 LLC: Feb. 7 Plan Confirmation Hearing Set
--------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
will convene a hearing on Feb. 7, 2023 at 9:00 A.M. at 355 Main
Street, Poughkeepsie, New York, before the Honorable Cecelia G.
Morris, to consider (i) the granting of an order approving the
Disclosure Statement of Hintons5, LLC as containing "adequate
information" in accordance with Section 1125(a) of the Bankruptcy
Code, and (ii) confirmation of the Debtor's Plan.
Jan. 27, 2023, is fixed as the last day for filing written
acceptances or rejections of the debtor's Plan and the date by
which written objections to confirmation of said Plan must be filed
with the Court.
Jan. 13, 2023, is fixed as the last day for filing and noticing
applications for allowances and the hearing on all such
applications is set for February 7, 2023 at 9:00 a.m.
About Hintons5 LLC
Hintons5 LLC, a Middletown, N.Y.-based single asset real estate
corporation, sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Case No. 20-35871) on Aug. 20, 2020. At the
time of the filing, the Debtor disclosed between $500,001 and $1
million in both assets and liabilities. The Debtor tapped Genova &
Malin as bankruptcy counsel and McCabe & Mack LLP as special
counsel.
HOUGHTON MIFFLIN: Moody's Puts 'B3' CFR on Review for Downgrade
---------------------------------------------------------------
Moody's Investors Service placed Houghton Mifflin Harcourt
Company's (HMH) credit ratings, including its B3 corporate family
rating, on review for downgrade. The outlook was revised to ratings
under review from stable.
The rating actions follow the company's announcement [1] that it
had signed a definitive agreement to acquire NWEA, a provider of
academic assessments for pre-K-12 students, for an undisclosed
amount. No further details are available at this time in regard to
the updated capital structure. HMH expects to close the acquisition
within a 90-day period, subject to customary closing conditions.
The rating actions are prompted by governance considerations
including uncertainties surrounding the funding of the proposed
acquisition of NWEA and its impact on HMH 's capital structure,
liquidity, profitability, operational flexibility and business
profile. Assuming a material portion of the acquisition is funded
with debt, a material increase in leverage and deterioration in
credit metrics is possible at closing. The rating review also
reflects execution risks associated with the acquisition, including
the integration of a non-for-profit organization with a distinct
business model into HMH.
On Review for Downgrade:
Issuer: Houghton Mifflin Harcourt Company
Corporate Family Rating, Placed on Review for Downgrade, currently
B3
Probability of Default Rating, Placed on Review for Downgrade,
currently B3-PD
Senior Secured Bank Credit Facility, Placed on Review for
Downgrade, currently B2 (LGD3)
Outlook Actions:
Issuer: Houghton Mifflin Harcourt Company
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
Moody's review will focus on the impact of the acquisition on the
company's final capital structure, leverage and free cash flow
generation of the combined entity, integration risk, liquidity
needed to integrate the acquisition, potential synergies as well as
mitigants to execution risk. Instrument ratings could also change
depending on the final mix of debt in the company's capital
structure. If the transaction is financed in a balanced manner with
a material equity component and the company commits to deleveraging
such that Moody's expects the company to maintain leverage below
Moody's downgrade guidance for the B3 rating of 6.5x over the near
term along with positive free cash flow and adequate interest
coverage, a confirmation of the B3 CFR is possible.
HMH's current B3 CFR on review for downgrade reflects the company's
high leverage, exposure to a highly cyclical K-12 core educational
market and intense competition. The company's business is subject
to pronounced seasonality in school spending. HMH has a good market
position within K-12 educational publishing but is dependent for
most of its revenue on state and local budgets. HMH's rating
continues to garner support from its good market position within
K-12 educational publishing, a broad portfolio of educational
publishing products, a customer footprint that extends to 90% of
schools in the US, established relationships with customers, and a
well-known brand. Moody's expect that HMH's already implemented
cost structure improvements and an on-going shift to digital will
result in a business model with significantly reduced earnings
volatility. The on-going shift towards greater focus on Extensions
and continuous incremental product investment will likely provide
for reduced cash flow volatility and reduce reliance on highly
cyclical core educational materials adoptions, but there are
operational and investment risks associated with this move as well.
Moody's anticipates that competition will remain intense,
particularly in the more discretionary Extensions market.
The principal methodology used in these ratings was Media published
in June 2021.
Headquartered in Boston, MA, Houghton Mifflin Harcourt Publishers
Inc. is one of the three largest US education solutions providers
focusing on the K-12 market. HMH has been owned by a private equity
firm Veritas Capital since 2022. The company expects to generate
annualized billing in the $1.1-$1.103 billion range in 2022.
INNOVATE CORP: Regains Compliance With NYSE Bid Price Requirement
-----------------------------------------------------------------
Innovate Corp. said it received a written notice from the New York
Stock Exchange that for the 30 trading days ending Dec. 30, 2022,
the average closing price of the Common Stock was above the $1.00
minimum requirement, and the Company is in compliance with Section
802.01C.
On Oct. 27, 2022, Innovate received a written notice from NYSE that
it was not in compliance with the continued listing standard set
forth in Section 802.01C of the NYSE's Listed Company Manual, as
the average closing price of the Company's common stock was less
than $1.00 per share over a consecutive 30 trading-day period.
About Innovate
New York-based INNOVATE -- www.innovatecorp.com -- is a diversified
holding company that has a portfolio of subsidiaries in a variety
of operating segments. The Company seeks to grow these businesses
so that they can generate long-term sustainable free cash flow and
attractive returns in order to maximize value for all stakeholders.
As of Dec. 31, 2021, the Company's three operating platforms or
reportable segments, based on management's organization of the
enterprise, are Infrastructure, Life Sciences and Spectrum, plus
its Other segment, which includes businesses that do not meet the
separately reportable segment thresholds.
INNOVATE reported a net loss of $236.2 million in 2021 following a
net loss of $102.1 million in 2020. As of Sept. 30, 2022, the
Company had $1.16 billion in total assets, $1.19 billion in total
liabilities, $62.9 million in total temporary equity, and a total
stockholders' deficit of $91.5 million.
* * *
As reported by the TCR on Oct. 31, 2022, Moody's Investors Service
downgraded INNOVATE Corp.'s corporate family rating to Caa1 from
B3. "The downgrade reflects weakness in INNOVATE's credit metrics
- at the holding company level as well as on a consolidated basis
which Moody's expect will continue for the next 12-18 months,
combined with tight liquidity," said Sandeep Sama, Moody's vice
president, senior analyst and lead analyst for INNOVATE.
JAMES AND JAN: Case Summary & Three Unsecured Creditors
-------------------------------------------------------
Debtor: James and Jan, LLC
14820 Mulholland Drive
Los Angeles, CA 90077
Chapter 11 Petition Date: January 11, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-10155
Debtor's Counsel: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Boulevard 6th Floor
Beverly Hills, CA 90212
Tel: (310) 271-6223
Fax: (310) 271-9805
Email: michael.berger@bankruptcypower.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert H. Bisno as authorized agent.
A full-text copy of the petition containing, among other items, a
list of the Debtor's three unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/MZTUQBA/James_and_Jan_LLC__cacbke-23-10155__0001.0.pdf?mcid=tGE4TAMA
JEFFERIES FINANCE: Moody's Alters Outlook on 'Ba3' CFR to Stable
----------------------------------------------------------------
Moody's Investors Service has affirmed Jefferies Finance LLC's
(JFIN) Ba3 corporate family rating and its other ratings. Moody's
has also changed JFIN's outlook to stable from positive.
Affirmations:
Issuer: Jefferies Finance LLC
Corporate Family Rating, Affirmed Ba3
Senior Secured Revolving Credit Facility, Affirmed Ba1
Senior Unsecured Regular Bond/Debenture, Affirmed B1
Outlook Actions:
Issuer: Jefferies Finance LLC
Outlook, Changed To Stable From Positive
RATINGS RATIONALE
Moody's said its affirmation of JFIN's Ba3 CFR reflects the firm's
established franchise as an underwriter of leveraged loans, solid
capitalization and prudent liquidity management. Since it was
formed in 2004, JFIN has demonstrated its ability to underwrite and
manage leveraged loan risks through multiple cycles.
JFIN's Ba3 CFR also incorporates the benefits of its affiliation
with its owners: Jefferies Financial Group Inc. (JFG, rated Baa2,
stable for senior debt) and Massachusetts Mutual Life Insurance
Company (rated Aa3, stable for insurance financial strength). JFIN
also benefits from its more recent strategic investing and
financing relationship with Sumitomo Mitsui Financial Group, Inc.
(SMFG, rated A1, stable for senior debt). 50%-owner JFG originates
many of JFIN's underwriting commitments, 50%-owner Mass Mutual
provides stable ownership, and SMFG is a subordinated bondholder
and an important source of liquidity for JFIN's underwriting
activities.
The affirmations of the B1 rating on JFIN's senior unsecured notes
and the Ba1 rating on JFIN's senior secured revolver reflects each
instrument's priority and volume within JFIN's capital structure.
The change in JFIN's outlook to stable from positive reflects the
firm's weak performance in 2022 amid the ongoing challenging
conditions within the leveraged finance market and broadly for G-20
economies. Moody's expects JFIN to sustain its creditworthiness
during this challenging environment, given its long-standing
underwriting and credit disciplines, reserve build for syndication
and credit risks during 2022, emphasis on first lien exposures with
lower losses given default, and role as an important platform for
its owners and strategic partners to participate in the leveraged
finance market.
Moody's expects economic growth in G-20 countries to decelerate to
1.3% in 2023, driven by a recession in Europe and slower growth in
the US. In 2023, Moody's anticipates issuance of leveraged loans to
be driven by refinancing needs, which will be limited in the first
half but increase as the year progresses. Moody's expects the
global speculative-grade default rate to nearly double over the
next 12 months to 4.3%, compared with 2.3% in September 2022,
modestly exceeding the long-term average of 4.1%. Rising interest
rates will create significant pressure especially for highly
levered private equity-owned companies. The deterioration of such
firms' credit quality increases their vulnerability to uncertain
access to capital, although some have accumulated liquidity and
limited debt maturities over the next one to two years.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
JFIN's ratings could be upgraded if the firm navigates the current
downturn in leveraged finance successfully with only modest credit
losses relative to capitalization, while preserving its franchise
to benefit when the cycle recovers. Changes in the priority and
magnitude of capital structure tranches may lead to changes of
instrument ratings.
JFIN's ratings could be downgraded should its liquidity position
significantly deteriorate or if it suffers a material operational
failure. A deterioration in the asset quality of JFIN's portfolio
or incurring substantial losses in underwriting commitments during
2023 could also lead to a downgrade. Changes in the priority and
magnitude of capital structure tranches may lead to changes of
instrument ratings.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
KABBAGE INC: Amended Plan Removes Toggle Feature
------------------------------------------------
Kabbage, Inc. d/b/a Kservicing, et al., submitted an Amended Joint
Chapter 11 Plan of Liquidation and a corresponding Amended
Disclosure Statement.
The Debtors originally filed a proposed chapter 11 plan on the
Petition Date Commencement Date that provided two options for
implementation, depending on their ability to negotiate the
consensual use of cash collateral with the Federal Reserve Bank of
San Francisco (the "Reserve Bank") and a successful settlement with
Customers Bank (CB). Given the Debtors' ability to secure
liquidity through (a) successful negotiations with the Reserve Bank
for the use of cash collateral for general corporate purposes,
including to service loans and pay related fees and expenses
associated with the administration of the Chapter 11 Cases and (b)
CB through the settlement agreement and partial resolution of the
CB Dispute, the Debtors filed a proposed amended chapter 11 Plan
that removes the toggle mechanism for implementation and provides
that the Debtors will pursue a "funded transaction" and continue to
operate its Loan Portfolio during the Chapter 11 cases. The
proposed Plan is the Debtors' best option for mitigating potential
disruption to PPP borrowers and to maximize the value of its
estates.
KServicing has been and will continue to service all Pledged PPPLF
Loans, all CRB PPP Loans, and all CB PPP Loans in the ordinary
course and in accordance with the Program Agreements, CRB
Agreements and CB Agreements—including the Settlement and Release
Agreement dated October 27, 2022 between Kabbage, Inc. d/b/a/
KServicing and Customers Bank, respectively, until the Effective
Date.
KServicing shall (i) use commercially reasonable efforts to assist
the Reserve Bank, and/or Partner Banks to transfer servicing
obligations to a third-party loan servicer to be selected with the
Reserve Bank's CRB's and CB's consent and direction, respectively,
by a date to be mutually agreed but not later than the Effective
Date of the Plan, or (ii) at its sole discretion, offer the Reserve
Bank, CRB, and/or CB, continued servicing through a date to
certain. Any fees, costs, or expenses associated with any transfer
of servicing obligations shall be borne by the Reserve Bank, CRB,
or CB, respectively. For the avoidance of doubt, with respect to
the Reserve Bank, unless otherwise agreed by the Reserve Bank, such
servicing transfer shall only pertain to such Pledged PPPLF Loans
that, as of the date of the transfer, shall not have been fully
forgiven or guarantee repurchased by the SBA or fully repaid by the
borrower; provided, that with respect to any loan files relating to
non-transferred Pledged PPPLF Loans, the Reserve Bank shall at its
option, transfer the loan servicing files to an alternate servicer
or otherwise maintain the loan servicing files.
The Debtors' priority is to transfer the Debtors' servicing
obligations and believe that transfer of the servicing obligations
is the best path forward, but to protect the underlying borrowers,
to the extent necessary and possible, the Debtors may, in their
sole discretion, offer continued post-Effective Date servicing PPP
Loans at the cost of the Reserve Bank, CRB, and/or CB, as
applicable.
Prior to the transfer of the PPP servicing obligations to
third-party loan servicer(s), the Debtors intend to work with AmEx
to grant the third-party servicers access to the AmEx Platform, or
will work with the third-party servicer(s) such that requisite data
is provided and an alternative platform is lined-up for use.
Further, the Debtors intend to inform any third-party servicer(s)
of ongoing document retention obligations for underlying loan
records pursuant to the SBA guidelines as described in section II.D
of this Disclosure Statement. Given the nature of the Debtors'
business, a transfer of the loan servicing obligations may require
governmental or third party approvals. The Debtors intend to work
with applicable governmental or third parties to secured any
necessary approvals.
Prior to the Effective Date, if in its sole discretion, the Debtors
offer Post-Effective Date PPP Servicing, the Reserve Bank, CRB,
and/or CB shall provide the Wind Down Estate with amounts necessary
to allow for the continued servicing of the respective parties' PPP
loans; provided that, for the avoidance of doubt, to the extent the
servicing costs, fees, or expenses are not provided to the Debtors
prior to the Effective Date, the Debtors shall not provide any
Post-Effective Date servicing for the respective party. In the
event the Debtors offer Post-Effective Date PPP servicing, the
Debtors will require continued access to certain contracts,
including among other things, the AmEx TSA. The Debtors intend to
work with counterparties to applicable contracts, to secure any
necessary approvals.
On or before the Effective Date:
* KServicing shall transfer its servicing obligations with
respect to KS Direct PPP Loans to a thirdparty servicer or
effectuate a sale of the KS Direct PPP Loans whereby they may
consummate all transactions as are necessary to consummate a sale
of the KS Direct PPP Loans, including engaging in a marketing and
sale process to identify a purchaser and begin negotiations and
implementation of such sale; provided, that, if the Debtors, in
their sole discretion provide Post-Effective Date PPP Servicing,
KServicing may continue servicing its obligations with respect to
KS Direct PPP Loans.
* the GUC Pool shall be funded in the aggregate amount of no less
than the GUC Pool Amount; for the avoidance of doubt, the Wind Down
Officer shall be responsible for making distributions to holders of
Allowed General Unsecured Claims;
* the Wind Down Estate shall be funded in accordance with the
Wind Down Budget for the (i) Wind Down process and (ii) any
Post-Effective Date PPP Servicing, as applicable, and be funded
with the Wind Down Amount; provided that any amounts on account of
continued servicing of Pledged PPPLF Loans, CRB PPP Loans, or CB
PPP Loans, as applicable, shall be funded by the payment of
applicable Post-Effective Date Servicing Costs;
* any remaining assets and any Causes of Action of the Debtors'
Estates shall transfer to the Wind Down Estate automatically and
without further action of the Bankruptcy Court; and
* the Debtors or the Wind Down Estate, as applicable, may
effectuate a Legacy Loan Sale, subject to consultation with the
Reserve Bank; provided, that, if the Wind Down Estate, in its sole
discretion provides Post-Effective Date PPP Servicing, KServicing
may continue servicing its obligations with respect to the Legacy
Loans. The Debtors or the Wind Down Estate, as applicable, shall
consummate all other transactions as are necessary to consummate
the Legacy Loan Sale. To commence the Legacy Loan Sale, on or prior
to the Effective Date, the Debtors or the Wind Down Estate, as
applicable, may engage in a marketing and sale process to identify
a purchaser and begin negotiation and implementation of the Legacy
Loan Sale, subject to consultation with the Reserve Bank.
At the conclusion of the Wind Down (i) any residual amounts
remaining in the Wind Down Budget (other than amounts on account of
Post-Effective Date Servicing Costs) shall be transferred to the
GUC Pool, and for the avoidance of doubt, shall first be used to
make distributions to holders of GUC Pool Class A Interests, unless
the Reserve Bank Claims have been indefeasibly paid in full as of
such date and (ii) any residual amounts remaining on account of
Post-Effective Date Servicing Costs, shall be distributed pro rata
to the Reserve Bank, CRB, and CB, as applicable and proportionate
to each party's Post-Effective Date Servicing Costs.
Under the Plan, Class 4 General Unsecured Claims total $30,950,000
to $102,981,000. The estimated range of the amount of Allowed
General Unsecured Claims does not include any Allowed amounts on
account of Claims that may be filed by the DOJ, FTC and/or SBA,
because, as of the date hereof, the deadline for Governmental Units
to file Proofs of Claims has not yet passed. The estimated range
reflects, among other things, that the ultimate Allowed amount, if
any, of Disputed Claims cannot be estimated with any degree of
certainty. Each holder of an Allowed General Unsecured Claim will
receive its pro rata share of the GUC Pool Class B Interests. At
this time, it is anticipated that the primary source of recovery
for Allowed General Unsecured Claims, following the payment of the
Reserve Bank Claims in full and final satisfaction, will be any
proceeds that may be recovered on account of any Causes of Action.
As previously noted, the amount of any such proceeds is unknown at
this time and cannot be estimated with any degree of certainty.
Therefore, the recovery percentage is listed as "To Be Determined."
Class 4 is impaired.
"GUC Pool" means, the cash pool established pursuant to this Plan,
(a) on the Effective Date, in the amount of the GUC Pool Amount,
(b) after the Effective Date but prior to the conclusion of the
Wind Down, all Cash minus a reasonable amount of Cash determined by
the Wind Down Officer, subject to the consent of the Reserve Bank
needed to fund the administration of the Wind Down Estate, and (c)
at the conclusion of the Wind Down, any residual amounts remaining
in the Wind Down. "GUC Pool Amount" means, as of the Effective
Date, an amount equal to the amount of any remaining Net Cash
Proceeds.
The Debtors and the Wind Down Officer, as applicable, shall fund
Distributions under the Plan with the Net Cash Proceeds, the
proceeds from the sale of any or all Legacy Loans, proceeds from
the sale of any or all KS Direct PPP Loans, and any other non-Cash
assets of the Debtors that may become Cash, including proceeds from
the Estate Causes of Action. In addition to the foregoing, the
Allowed Reserve Bank Claims shall also be paid from proceeds of the
PPPLF Collateral.
After the Effective Date, pursuant to the Plan, the Wind Down
Officer shall effectuate the Wind Down according to the Wind Down
Budget without any further approval by the Bankruptcy Court and
free of any restrictions of the Bankruptcy Code or Bankruptcy
Rules, provided, that, the Wind Down Officer shall not effectuate
the Wind Down in a manner inconsistent with any express
requirements of the Wind Down Agreement, including with respect to
any consent or consultation rights of the Reserve Bank, the United
States Department of Justice, Small Business Administration, and
CRB. The Wind Down (as determined for federal income tax purposes)
shall occur in an expeditious but orderly manner after the
Effective Date.
The voting deadline to accept or reject the plan is 4:00 p.m.,
prevailing eastern time, on Feb. 21, 2023, unless extended by the
Debtors. The record date for determining which holders of claims
may vote on the plan is Jan. 19, 2023.
Attorneys for the Debtors:
Ray C. Schrock, P.C., Esq.
Candace M. Arthur, Esq.
Natasha S. Hwangpo, Esq.
Chase A. Bentley, Esq.
WEIL, GOTSHAL & MANGES LLP
767 Fifth Avenue
New York, NY 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
- and -
Daniel J. DeFranceschi, Esq.
Amanda R. Steele, Esq.
Zachary I. Shapiro, Esq.
Matthew P. Milana, Esq.
RICHARDS, LAYTON & FINGER, P.A.
One Rodney Square, 920 N. King Street
Wilmington, DE 19801
Telephone: (302) 651-7700
Facsimile: (302) 651-7701
A copy of the Disclosure Statement dated Dec. 30, 2022, is
available at https://bit.ly/3jBPmSu from Omni Agent Solutions, the
claims agent.
About Kabbage Inc. d/b/a KServicing
Founded in 2010 and headquartered in Atlanta, Ga., Legacy Kabbage,
a predecessor of Kabbage Inc. (doing business as KServicing) --
http://www.kservicing.com/-- was one of the leading fintech
providers of working capital to small businesses for over a decade.
Legacy Kabbage began as a proprietary online lending platform for
small businesses, providing loan services to over 250,000 American
small businesses, many of which were businesses that struggled to
receive adequate funding through traditional banking institutions.
From 2020-2021, the company provided and facilitated necessary
funding to small business owners through PPP loans during the
COVID-19 pandemic. The company's existing technology infrastructure
spearheaded its PPP work, which led to a total of $7 billion in
loans being originated by the company.
The origination and servicing of PPP Loans and small business loans
to eligible borrowers was critical during a time of unprecedented
health and economic uncertainty brought about by the COVID-19
pandemic. On Aug. 16, 2020, much of the company's business was sold
to American Express Travel Related Services Company, Inc. As a
result of the merger, KServicing now operates in a limited capacity
as (i) a servicer and subservicer of PPP Loans, (ii) a software
services provider for lenders of PPP Loans, and (iii) a servicer of
a minor portfolio of non-PPP small business loans.
To implement the wind down of their businesses, on Oct. 3, 2022,
Kabbage, Inc. d/b/a KServicing and certain of its affiliates each
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. D. Del. Lead Case No.
22-10951). Judge Craig T. Goldblatt oversees the cases.
Kabbage Inc. estimated $500 million to $1 billion in assets and
debt as of the bankruptcy filing.
The Debtors tapped Weil, Gotshal & Manges, LLP as general counsel;
Richards, Layton & Finger, PA as local counsel; AlixPartners, LLC
as financial advisor; KPMG International Limited as fraud review
services provider; Jones Day, LLP as government investigations
counsel; and Marc Sullivan, managing director at Phoenix Executive
Services, LLC, as chief financial officer. Omni Agent Solutions,
Inc. is the Debtors' claims agent and administrative advisor.
Greenberg Traurig, LLP serves as counsel to the Debtors' board of
directors.
KC CULINARTE: Moody's Withdraws 'B3' CFR Following Debt Repayment
-----------------------------------------------------------------
Moody's Investors Service has withdrawn KC Culinarte Intermediate,
LLC's ("Kettle Cuisine") ratings including the B3 Corporate Family
Rating, the B3-PD Probability of Default Rating, and the B2 rating
on the company's first-lien senior secured debt. The rating action
follows Kettle Cuisine's full repayment of its previously rated
senior secured debt.
Withdrawals:
Issuer: KC Culinarte Intermediate, LLC
Corporate Family Rating, Withdrawn , previously rated B3
Probability of Default Rating, Withdrawn , previously rated B3-PD
Senior Secured 1st Lien Term Loan, Withdrawn , previously rated B2
(LGD3)
Senior Secured 1st Lien Rev Credit Facility, Withdrawn ,
previously rated B2 (LGD3)
Outlook Actions:
Issuer: KC Culinarte Intermediate, LLC
Outlook, Changed To Rating Withdrawn From Stable
RATINGS RATIONALE
Moody's has withdrawn the ratings because Kettle Cuisine's debt
previously rated by Moody's has been fully repaid. On November 21,
2022, Nestle and L Catterton announced that they are forming a
partnership that is bringing together Freshly and Kettle Cuisine. L
Catterton will be the majority owner, with Nestle holding a
minority stake.
Headquartered in Lynn, Massachusetts, Kettle Cuisine is a leading
fresh prepared foods company specializing in high quality soups,
sauces, and side dishes sold throughout North America. Primarily
through acquisitions, Kettle has expanded its offerings to include
all natural, high quality sauce foundations, and sous vide
entrées. Kettle Cuisine supplies an array of retailers, national
restaurant chains, and food service establishments such as
independent restaurants and cafes, hotels, banquet halls,
convention centers, cruise ships, stadiums, and meal kit companies.
KC Culinarte Intermediate, LLC was formed in 2018 through the
merger of Kettle Cuisine LLC and Bonewerks Culinarte ("Bonewerks")
and was acquired in 2018 by affiliates of Kainos Capital, a private
equity investment firm exclusively focused on the food and consumer
sector.
KNOWLTON DEVELOPMENT: Fitch Affirms B- LongTerm IDRs, Outlook Pos.
------------------------------------------------------------------
Fitch Ratings has affirmed Knowlton Development Corporation,
Inc.'s, KDC US Holdings, Inc. and kdc/one Development Corporation,
Inc.'s. Long-Term Issuer Default Ratings (IDRs) at 'B-' and has
affirmed all debt ratings at 'B'/'RR3'. The Rating Outlooks have
been revised to Positive from Stable.
KDC's 'B-' IDR reflects its status as a global leader in custom
formulation, packaging and manufacturing solutions for beauty,
personal care and home care brands, supported by a diverse product
portfolio and long-term customer relationships.
The Positive Outlook reflects adjusted leverage in the mid-6x
range, strong liquidity, and Fitch's expectation for modestly
positive free cash flow. Increased confidence in continued organic
EBITDA growth and a commitment to sustaining leverage below 7x
would likely lead to positive ratings momentum. The Rating Outlook
could be stabilized if EBITDA declines due to a pullback in
discretionary consumer spending or operational missteps, or if the
company pursues material debt financed acquisitions, such that debt
to EBITDA is sustained above 7x.
KEY RATING DRIVERS
Defensible Competitive Advantage: KDC is one of the largest players
in the market for outsourced custom formulation, packaging and
manufacturing solutions for beauty, personal care and home care
brands with revenue of over $2.7 billion. KDC's business model of
partnering with its customers to create innovative products and
rapidly bringing them to market fosters entrenched relationships
and high customer switching costs. Significant investments in R&D
and technology and a breadth of product expertise enables KDC to
provide global turnkey solutions that solidify its competitive
advantage.
KDC has expanded from operating a single factory in Canada in 2002
to operating 25 manufacturing facilities worldwide. Within the
beauty and personal care segment, the company's customers range
from indie brands to giants in consumer-packaged goods, providing a
natural hedge to rapidly changing industry dynamics. Customer
concentration is moderate with the company serving over 700
customers worldwide across over 1,000 brands.
Acquisitions Support Growth but Elevate Leverage: KDC has acquired
10 companies since 2019 and has grown pro-forma revenues from $1
billion to over $2.7 billion over that time. KDC's acquisition
strategy supplements organic growth by adding capabilities in
adjacent new markets to enable the company to capitalize on
cross-selling opportunities in its customer base. Its most recent
acquisition of Aerofil in March 2022 added to KDC's aerosol and
liquid filling capabilities, complementing its portfolio of
customers and adding significant technical expertise.
Going forward, Fitch anticipates the company will continue to
pursue bolt-on acquisitions to grow its capabilities that support
cross-selling and synergy opportunities for the business.
KDC's highly acquisitive strategy has resulted in elevated leverage
-- though equity contributions from sponsors, including the most
recent strategic investment by KKR -- have helped keep adjusted
leverage in the mid-6x range in fiscal 2023. Fitch expects KDC to
continue its acquisitive strategy within the context of sustaining
gross debt/EBITDA below 7x, which could require equity
contributions.
Stable End Markets Mitigates Inventory Variability: KDC benefits
from operating in end markets where demand is relatively stable,
even during recessionary conditions. Fitch estimates that personal
care sales remained flat to positive during the global financial
crisis as the sector benefits from low price points and due to the
everyday use nature of health and beauty products. The company's
flexible manufacturing base allows it to redirect capacity from
segments of weak demand to areas of strength.
However, KDC has experienced variability in customer orders in the
first half of fiscal 2023, which has weighed on revenue growth.
Despite large investments in growth initiatives over the past year,
organic revenue growth is around 4% so far in fiscal 2023, largely
due to price increases. KDC's customers have been seeking to align
inventory levels with consumer demand and strive to exit the
holiday season with minimal inventory. Fitch expects this dynamic
will result in continued low organic growth for the rest of fiscal
2023, in the low-single-digit percent range, with similar growth
expected longer term.
Fitch-calculated EBITDA margins in fiscal 2023 have been similar to
margins in fiscal 2022, but lower than the margins generated
pre-pandemic. Margins are supported by the dissipation of
pandemic-related costs and lower direct labor costs, but are offset
by higher material costs due to inflation and the delay in passing
through pricing, as well as lower demand in higher-margin specialty
items which are more discretionary. A continued pullback in
discretionary consumer spending resulting from a recession would
likely keep EBITDA margins below historical levels into fiscal
2024, and drive flattish to modestly positive organic EBITDA
growth.
Improving Free Cash Flow and Strong Liquidity: KDC's liquidity as
of Oct. 31, 2022 exceeded $400 million. KDC sharply increased capex
over the past two years to support the company's organic growth
initiatives and new contract wins. This has resulted in
significantly negative free cash flow in fiscal 2021 and fiscal
2022, though equity contributions have mitigated the impact on
liquidity. Fitch expects capex to decline meaningfully in fiscal
2023 compared to fiscal 2022 levels, driving modestly positive free
cash flow in fiscal 2023 and fiscal 2024.
Parent Subsidiary Linkage: Fitch's analysis includes a weak
parent/strong subsidiary approach between the parent and its
subsidiaries kdc/one Development Corp. Inc. and KDC US Holdings,
Inc. Fitch assesses the quality of the overall linkages as high
which results in an equalization of IDRs across the corporate
structure.
DERIVATION SUMMARY
KDC's 'B-' IDR reflects KDC's status as a global leader in custom
formulation, packaging and manufacturing solutions for beauty,
personal care and home care brands, supported by a diverse product
portfolio and long-term customer relationships.
The Positive Outlook reflects adjusted leverage in the mid-6x
range, strong liquidity following the recent strategic investment
by KKR, as well as Fitch's expectation for modestly positive free
cash flow.
KDC's rating is similar to Sizzling Platter (B-/Stable). Sizzling
Platter, LLC's 'B-' rating reflects the company's position as a
leading franchisee in the Little Caesars, Jamba and Wingstop
quick-serve restaurant chains; its high adjusted leverage in the 7x
area, and its reliance on Little Caesars for around 65% of its
revenue. The rating also considers recent strong same store sales
(SSS) growth and resilient operating performance despite high
inflation. Fitch expects FCF to be low as the company uses cash
flow to invest in new restaurants, but liquidity remains adequate.
KDC's rating is below those of other rated consumer product
companies such as ACCO Brands Corporation (BB/Stable), Central
Garden & Pet Company (BB/Stable) and Mattel (BB+/Stable).
ACCO's 'BB'/Stable rating reflects the company's historically
consistent FCF and reasonable gross leverage, which trended around
3x prior to operating challenges in 2020 due to the pandemic. The
ratings are constrained by secular challenges in the office
products industry and channel shifts within the company's customer
mix. ACCO's earnings have been pressured by supply chain
challenges, inflation and a stronger dollar, which could lift
leverage into the low 4x range in 2022, above Fitch's negative
sensitivity. While Fitch expects margin recovery combined with debt
paydown to drive leverage back below 4x in 2023, a prolonged
downturn could be negative for the rating.
Central Garden & Pet Company's 'BB'/Stable rating reflects the
company's strong market positions within the pet and lawn & garden
segments, ample liquidity including robust FCF and moderate
leverage, offset by limited scale with EBITDA in the low-to-mid
$300 million range. Over time, Fitch expects the company to manage
gross debt/EBITDA within its targeted range of 3.0x to 3.5x, though
leverage could reach the high-3x area in fiscal 2023 (ended
September 2023) given the challenging operating environment. A
longer and/or deeper economic slowdown that resulted in leverage
exceeding 4x for an extended period would be a rating concern.
Mattel, Inc.'s 'BB+'/Positive rating reflects Mattel's meaningfully
improved credit metrics achieved through better than expected
execution on both the top and bottom line as well as discretionary
debt paydown. The Positive Outlook reflects Fitch's view that
improved competitive positioning, cost cuts and debt reduction
could result in post-pandemic credit metrics and an operational
profile supportive of an investment-grade rating over time.
KEY ASSUMPTIONS
Key Assumptions Within the Rating Case for the Issuer:
- Organic revenue growth in the low-single-digit percent range in
fiscal 2023 driven by price increases but offset by lower shipments
in certain products. KDC has experienced variability in orders as
customers seek to reduce inventory levels, which has weighed on
revenue growth thus far in fiscal 2023. Combined with the revenues
acquired from the Aerofil acquisition, Fitch expects low-teens
percent total revenue growth in fiscal 2023. Beyond fiscal 2023,
Fitch expects low single digit percent organic revenue growth
which, supplemented with acquisitions, could lead to total revenue
growth in the high single digit to low double digit percent range.
- Fitch-calculated EBITDA margins remaining stable in fiscal 2023,
supported by the dissipation of pandemic-related costs and lower
direct labor costs, but offset by higher material costs due to
inflation and a delay in passing through pricing, as well as a
pullback in higher-margin specialty items which are more
discretionary. Beyond fiscal 2023, Fitch expects EBITDA margins to
remain in this range.
- Capex declining meaningfully in fiscal 2023 compared to fiscal
2022 as the company completes a period of elevated capex related to
the construction of new facility. Fitch expects the capex decline
to drive modestly positive free cash flow beginning in fiscal
2023.
- Gross debt-to-EBITDA remaining in the mid-6x range in fiscal
2023. Fitch expects KDC to remain acquisitive within the context of
sustaining gross debt-to-EBITDA below 7x.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- A positive rating action would be considered if KDC's operating
trajectory meets Fitch's expectations, with business investments
along with acquisitions leading to continued revenue and EBITDA
growth, sustained positive FCF, and a commitment to or demonstrated
record of maintaining debt/EBITDA under 7x.
- The Outlook could be stabilized if EBITDA declines due to a
pullback in discretionary consumer spending or operational
missteps, or if the company pursues material debt financed
acquisitions, such that debt to EBITDA is sustained above 7x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- A negative rating action would be considered if a pullback in
discretionary consumer spending leads to top-line weakness or
EBITDA declines, or if an acceleration of the company's acquisition
strategy or any debt-financed transaction such as special
shareholder distributions results in sustained debt/EBITDA over 8x,
leading to concerns around the viability of the company's capital
structure.
LIQUIDITY AND DEBT STRUCTURE
Liquidity Remains Strong: KDC's liquidity as of Oct. 31, 2022
exceeded $400 million. The revolver balancer of $355 million will
mature in November 2025, while an addition $60 million will mature
in December 2023.
The outstanding revolver balance was reduced significantly after
KKR's equity investment in kdc/one in March 2022. Fitch believes
the revolver will remain largely undrawn. Fitch expects FCF to turn
modestly positive in fiscal 2023 and fiscal 2024.
ISSUER PROFILE
KDC is a global leader in custom formulation and manufacturing
solutions for beauty, personal care and home care brands. It
provides services from product ideation and formulation to design,
packaging and manufacturing. KDC serves over 700 customers globally
across over 1,000 brands.
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
----------- ------ -------- -----
KDC US Holdings,
Inc. LT IDR B- Affirmed B-
senior secured LT B Affirmed RR3 B
kdc/one
Development
Corporation,
Inc. LT IDR B- Affirmed B-
senior secured LT B Affirmed RR3 B
Knowlton
Development
Corporation,
Inc. LT IDR B- Affirmed B-
KOPIN CORP: EVP for Display Operations Resigns
----------------------------------------------
Dr. Boryeu Tsaur, Kopin Corporation's executive vice
president-Display Operations, resigned from his position with the
Company, as disclosed in a Form 8-K filed with the Securities and
Exchange Commission.
About Kopin
Kopin Corporation -- http://www.kopin.com-- is a developer and
provider of high-resolution microdisplays, microdisplay
subassemblies and related components for defense, enterprise,
industrial, and consumer products. Its products are used for
soldier, avionic, armored vehicle and training & simulation defense
applications; industrial, public safety and medical headsets; 3D
optical inspection systems; and consumer augmented reality and
virtual reality wearable headsets systems.
Kopin reported a net loss of $13.47 million for the year ended Dec.
25, 2021, a net loss of $4.53 million for the year ended Dec. 26,
2020, and a net loss of $29.37 million for the year ended Dec. 28,
2019. As of Sept. 24, 2022, the Company had $49.48 million in
total assets, $19.27 million in total liabilities, and $30.21
million in total stockholders' equity.
KOPIN CORP: To Partially Spinout OLED Development Unit
------------------------------------------------------
Kopin Corporation said it has entered in a Technology License
Agreement with Lightning Silicon Technology, Inc., a California
company. Lightning Silicon is a company formed by Dr. John C.C.
Fan, Kopin's Chairman of Board, and former chief executive officer,
to develop and supply advanced organic light emitting diode (OLED)
microdisplays for the consumer augmented reality (AR) and virtual
reality (VR) markets.
"This Agreement is part of our plan to restore profitability to
Kopin by focusing our resources on new and existing defense,
industrial and consumer applications which are in line with our
strategic plan," said Mr. Michael Murray, Kopin's chief executive
officer. "The agreement allows Kopin to reduce personnel,
development and operational costs associated with OLED development,
while continuing to both serve our core markets with all
microdisplay technologies and participate in the consumer market
upside, as it matures. In addition to the employees moving to
Lightning Silicon, we also reduced headcount in our other product
lines due in part to our operational improvement strategies
providing increased efficiencies. As a result of the transactions
above Kopin's annualized payroll expense, excluding severance and
similar benefits, are expected to decrease by approximately 20%
since December 31, 2022," said Mr. Murray.
Under the terms of the Agreement, Lightning Silicon will receive a
license to certain Kopin intellectual property to develop,
manufacture and sell OLED technologies for use in the consumer
market. Kopin will receive an equity interest in Lightning Silicon
and royalties from the sale of products related to the licenses.
Kopin retains the ability and rights to develop, manufacture and
sell OLED displays and complete optical solutions that include
microdisplays to its core base in the defense and enterprise
markets, as well as value added Consumer applications. The Company
believes Kopin is the only provider that can offer fully integrated
optical solutions with OLED, LCD, LCOS and micro-LED microdisplay
technology, enabling it to provide the right technology for the
application.
"Consumer AR and VR products are projected to be a
multi-billion-dollar markets," Said Dr. John C.C. Fan, Kopin's
Chairman of the Board of Directors. "Lightning Silicon was founded
to focus on further research and development of additional advanced
OLED Displays and optics and lower cost manufacturing capabilities
which will require additional investment and the establishment of
low-cost production partnerships. To this end, Lightning Silicon
is forming a close partnership with Lakeside Lightning
Semiconductor Co. Ltd. based in Jiangsu, China who recently held a
ground-breaking ceremony on a new 12" OLED fab to bring these
advanced OLED microdisplays to market at high volume and low cost.
The new 12" facility, together with Lakeside's existing 8" wafer
fab, is expected to provide large-volume, low-cost manufacturing
capability to support AR and VR market demands," said Dr. Fan.
About Kopin
Kopin Corporation -- http://www.kopin.com-- is a developer and
provider of high-resolution microdisplays, microdisplay
subassemblies and related components for defense, enterprise,
industrial, and consumer products. Its products are used for
soldier, avionic, armored vehicle and training & simulation defense
applications; industrial, public safety and medical headsets; 3D
optical inspection systems; and consumer augmented reality and
virtual reality wearable headsets systems.
Kopin reported a net loss of $13.47 million for the year ended Dec.
25, 2021, a net loss of $4.53 million for the year ended Dec. 26,
2020, and a net loss of $29.37 million for the year ended Dec. 28,
2019. As of Sept. 24, 2022, the Company had $49.48 million in
total assets, $19.27 million in total liabilities, and $30.21
million in total stockholders' equity.
LBM ACQUISITION: Fidelity Fund Marks $9.5M Loan at 15% Off
----------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $9,542,000 loan extended to LBM Acquisition LLC to
market at $8,142,000 or 85% of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries a 7.1207% interest (1 month U.S. LIBOR + 3.750%)
to LBM Acquisition LLC. The loan is scheduled to mature on December
18, 2027.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
LBM Acquisition, LLC (dba US LBM), headquartered in Buffalo Grove,
Illinois, is a North American distributor of building materials.
Bain Capital Private Equity, LP, through its affiliates, is the
owner of US LBM.
LEADING LIFE: Seeks to Hire Ferguson as Legal Counsel
-----------------------------------------------------
Leading Life Senior Living, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of Texas to employ
Ferguson Braswell Fraser Kubasta, P.C. as its legal counsel.
The firm's services include:
(a) advising the Debtor of its rights, powers, and duties
under the Bankruptcy Code;
(b) performing all legal services that may be necessary in the
administration of the Debtor's Chapter 11 case and business;
(c) advising the Debtor concerning, and assisting in, the
negotiation and documentation of financing agreements and debt
restructuring;
(d) reviewing the nature and validity of agreements relating
to the Debtor's interests in property and advising the Debtor of
its corresponding rights and obligations;
(e) advising the Debtor concerning preference, avoidance,
recovery or other actions that it may take to collect and to
recover property for the benefit of the estate and its creditors
whether or not arising under Chapter 5 of the Bankruptcy Code;
(f) preparing legal documents and reviewing all financial
reports to be filed in the bankruptcy case;
(g) advising the Debtor concerning, and preparing responses
to, applications, motions, complaints, pleadings, notices and other
papers that may be filed and served in its bankruptcy case;
(h) counseling the Debtor in connection with the formulation,
negotiation and promulgation of a plan of reorganization and
related documents;
(i) working with and coordinating efforts among other
professionals to guide their efforts in the overall framework of
the Debtor's reorganization;
(j) working with professionals retained by other parties in
interest in the bankruptcy case to structure a consensual plan of
reorganization or other resolution for the Debtor; and
(k) other necessary legal services.
The firm will be paid at these rates:
Rachael L. Smiley, Esq. $500 per hour
Alex Campbell, Esq. $485 per hour
Kevin E. Barnett, Esq. $425 per hour
Ferguson received $100,000 as a retainer from the Debtor.
Ms. Smiley disclosed in a court filing that her firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Rachael L. Smiley, Esq.
Alex Campbell, Esq.
Kevin E. Barnett, Esq.
Ferguson Braswell Fraser Kubasta, P.C.
2500 Dallas Parkway, Suite 600
Plano, TX 75093
Phone: 972-378-9111
Fax: 972-378-9115
Email: rsmiley@fbfk.law
acampbell@fbfk.law
kbarnett@fbfk.law
About Leading Life Senior Living
Leading Life Senior Living, Inc. is a not-for-profit Texas
corporation that owns two memory care facilities in Oklahoma. The
facilities were purchased in 2017 by the Debtor from Edmond Memory
Care, LLC and Southwest Oklahoma City, LLC. The Edmond facility was
opened in 2014 and has 42 beds. The Oklahoma City facility was
opened in 2015 and has 44 beds.
Leading Life Senior Living sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 22-42784) on
Nov. 18, 2022. In the petition signed by its chief restructuring
officer, Joseph V. Pegnia, the Debtor disclosed $10 million to $50
million in assets and $10 million to $50 million in liabilities.
Judge Mark X. Mullins oversees the case.
Ferguson, Braswell, Fraser, Kubasta, P.C. and GlassRatner Capital &
Advisory Group, LLC, doing business as B. Riley Advisory Services,
serve as the Debtor's legal counsel and restructuring advisor,
respectively. Joseph V. Pegnia, managing director at GlassRatner,
is the Debtor's chief restructuring officer. Omni Agent Solutions
is the claims agent.
LEADING LIFE: Seeks to Hire Joseph Pegnia of GlassRatner as CRO
---------------------------------------------------------------
Leading Life Senior Living, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of Texas to employ
GlassRatner Capital & Advisory Group, LLC and designate Joseph
Pegnia, the firm's managing director, as chief restructuring
officer.
The Debtor requires a restructuring advisor to:
a. assist in all aspects of the Debtor's business activities and
operations, including budgeting, cash management and financial
management;
b. assist the Debtor in communications and negotiations with
lenders, tax agencies and other governmental authorities or agents,
vendors, landlords, and other stakeholders;
c. hire and terminate employees of the Debtor;
d. review daily operating activity, purchases and expenses;
e. evaluate liquidity options including restructuring,
refinancing, reorganizing or a sale of the Debtor's assets;
f. cause the Debtor to exercise its rights under any
agreements;
g. act as the Debtor's representative in court hearings as
appropriate;
h. review the Debtor's historical and projected financial
information, including operating results, capital structure and
funding mechanics;
i. assist the Debtor in developing financial projections and a
liquidity projection model to help assess capital needs;
j. identify and assess potential restructuring alternatives for
the Debtor;
k. attend hearings, provide information and analyses for
inclusion in bankruptcy court filings and testimony related
thereto;
l. support negotiations with creditors and other constituents;
m. operate the Debtor's business during its bankruptcy;
n. supervise the preparation of monthly financial reports and
other financial reporting required by the Office of the U.S.
Trustee;
o. coordinate all activities in connection with any refinancing,
capital raising and sale process for the Debtor;
p. if so directed by the Board of Directors, develop and
implement plans to sell the Debtor's assets, including preparing a
confidential information memorandum and due diligence materials,
soliciting offers, and supporting the Debtor's legal counsel with
documenting the sale;
q. negotiate terms of debtor-in-possession financing, if
necessary;
r. pursue litigation and claims the estate may have and act as
the "responsible party" for all corporate decisions;
s. work with the Debtor and its professionals to maximize the
value of the estate; and
t. other necessary services.
GlassRatner will be paid at these rates:
Senior Managing Directors $495 to $725 per hour
Managing Directors $375 to $600 per hour
Directors $375 to $450 per hour
Sr. Associates/Associate Directors $325 to $385 per hour
Mr. Pegnia 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:
Joseph V. Pegnia
GlassRatner Capital & Advisory Group, LLC
d/b/a B. Riley Advisory Services
3445 Peachtree Road Suite 1225
Atlanta, GA 30326
Tel: (470) 346-6833
Fax: (404) 483-8422
Email: jpegnia@brileyfin.com
About Leading Life Senior Living
Leading Life Senior Living, Inc. is a not-for-profit Texas
corporation that owns two memory care facilities in Oklahoma. The
facilities were purchased in 2017 by the Debtor from Edmond Memory
Care, LLC and Southwest Oklahoma City, LLC. The Edmond facility was
opened in 2014 and has 42 beds. The Oklahoma City facility was
opened in 2015 and has 44 beds.
Leading Life Senior Living sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 22-42784) on
Nov. 18, 2022. In the petition signed by its chief restructuring
officer, Joseph V. Pegnia, the Debtor disclosed $10 million to $50
million in assets and $10 million to $50 million in liabilities.
Judge Mark X. Mullins oversees the case.
Ferguson, Braswell, Fraser, Kubasta, P.C. and GlassRatner Capital &
Advisory Group, LLC, doing business as B. Riley Advisory Services,
serve as the Debtor's legal counsel and restructuring advisor,
respectively. Joseph V. Pegnia, managing director at GlassRatner,
is the Debtor's chief restructuring officer. Omni Agent Solutions
is the claims agent.
LINDERIAN COMPANY: Amends Unsecureds & IRS Secured Claims Pay
-------------------------------------------------------------
The Linderian Company, Ltd., submitted a Modified Second Amended
Chapter 11 Plan of Reorganization under Subchapter V dated January
9, 2023.
Under the Plan, the Debtor will transfer operations to a new
third-party operator and the facility within which the Debtor
operates shall be transferred pursuant to a new lease and
ultimately an asset purchase agreement to a new owner.
This two-phase transaction will allow the Debtor to distribute the
highest recovery to its creditors with insurance refunds and ERTCs
applied for postpetition, as well as from existing cash flow and
post-closing revenue to be collected from pre-closing receivables.
The third-party operator shall continue to employee the Debtor's
current employees and the Debtor's President shall continue as an
employee in an administrative role and as Plan Agent with monthly
reporting requirements.
The contemplated structure of this transactions is intended to
create a smooth transition of the business to ensure no disruption
to the high-quality healthcare currently being provided to the
patients residing at the Debtor's skilled nursing home facility.
On November 2, 2022, the Bankruptcy Court entered the Agreed Order
Granting Motion of Shefa Healthcare, LLC For Relief From the
Automatic Stay and Authorizing Change of Ownership Process (the
"OTA Agreed Order") authorizing and directing the Debtor to
negotiate, execute, deliver, and perform under any applicable
operations transfer agreement (transfer, assignment, or termination
of the Lease, or other transition document or instrument, and to
take all other actions reasonable necessary or appropriate to carry
out the orderly transfer of operations of the Facility under
applicable non-bankruptcy law (including participation in the State
of Texas and federal CHOW processes.
The OTA Agreed Order further contemplates Shefa may enter into a
lease or purchase and sale agreement of the Facility with the City
of Ennis, Live Oak or a similarly situated private party. for a
purchase or lease from Shefa of the real estate, furniture,
fixtures, and tangible personal property currently leased by Summer
Meadows, as well as a transfer of the operations from the Debtor to
Live Oak. This transaction, in essence, would transfer operations
of Summer Meadows away from the Debtor and into the hands of Live
Oak.
More specifically, The City of Ennis (the "Purchaser") is party to
the Purchase and Sale Agreement with Shefa (as amended,
supplemented or otherwise modified, the "Purchase Agreement"), by
and among Purchaser and the Landlord, pursuant to which, among
other things, Purchaser is under contract to purchase substantially
all of the assets of the Facility, and has contracted with Live Oak
to manage and operate the SNF. It is anticipated that the closing
of the Purchase Agreement will occur within 30 days of the
Effective Date. The Facility is currently leased by Landlord to the
City of Ennis, Texas, and City of Ennis.
The transaction will facilitate an orderly and efficient transition
relating to the operation of the Facility, while leaving all
pre-Closing receivables in the possession of the Debtor, reduce the
administrative claim of Shefa, mitigate the rejection claim of
Shefa and solve the licensing issue in order that the Debtor may
continue to collect and distribute proceeds to satisfy the claims
of its professionals and other administrative claims, and make
payments toward its other obligations to priority, secured and
unsecured creditors in a timely manner.
The Plan proposes to pay creditors with cash on hand, cash flow
from operations and future income from all pre-Closing receivables
of the Debtor, to include all revenue, receivables and collections
therefrom; all refunds and credits to which it is entitled,
including its Employee Retention Tax Credit to be remitted by the
IRS, whenever received. This Plan shall provide distributions only
to Allowed Claims; nothing within this Plan shall provide for the
Allowance of any Claim.
Class 1 consists of the Secured Tax Claim of the IRS. Each holder
of an Allowed Secured Claim will be treated in a separate class and
shall receive, as soon as practicable after the Effective Date (or,
if later, the Allowance Date), the following treatment on account
of its Allowed Secured Claim. The Allowed Class 1 Secured Tax Claim
of the IRS shall receive, in full satisfaction of such Claim,
regular installment payments, payable in regular monthly Cash
installments to begin 30 days after the Effective Date.
Class 4 consists of General Unsecured Claims. Linderian will pay
each Allowed General Unsecured Claim under Class 4a pro rata
distributions in the Allowed Amounts of such Claims, after
satisfaction of the Debtor's other claims with higher priority are
paid in full. Upon completion of the Payment Schedule, and if
Linderian holds excess funds available for distribution, Linderian
may make pro rata distributions on behalf of Allowed General
Unsecured Claims under Class 4.
Class 5 consists of General Unsecured Guaranteed Claims. Holders of
General Unsecured Factor Claims are substantially similar and shall
have their Claims classified in Class 5. Allowed General Unsecured
Factor Claims in Class 5, if Allowed, shall be treated as follows
in full satisfaction of any and all Claims. Upon completion of the
Payment Schedule for classes 1 through 4, and in the event that
Linderian holds excess funds available for distribution, Linderian
may then make pro rata distributions on behalf of Allowed General
Unsecured Claims under Class 5.
A full-text copy of the Modified Second Amended Subchapter V Plan
dated January 9, 2023, is available at https://bit.ly/3iBZdrj from
PacerMonitor.com at no charge.
Counsel for Debtor:
Stephanie D. Curtis
Texas State Bar No. 05286800
Christopher J. Harbin
Texas State Bar. No. 24083134
CURTIS | LAW PC
901 Main Street, Suite 6515
Dallas, Texas 75202
Telephone: 214.752.2222
Facsimile: 214.752.0709
Email: scurtis@curtislaw.net
charbin@curtislaw.net
About The Linderian Company
The Linderian Company, Ltd. operates a nursing care facility in
Longview, Texas.
Linderian Company sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Texas Case No. 22-60024) on Jan. 19,
2022. In the petition signed by Greg Sechrist, managing partner,
the Debtor disclosed up to $1 million in assets and up to $10
million in liabilities.
Judge Joshua P. Searcy oversees the case.
Mark A. Castillo, Esq., at Curtis Castillo, PC and BKD, LLP serve
as the Debtor's legal counsel and accountant, respectively.
LTL MANAGEMENT: Exclusivity Period Extended to Feb. 15
------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey extended
the time LTL Management, LLC can keep exclusive control of its
Chapter 11 case, giving the company until Feb. 15 to file a
bankruptcy plan and until April 17 to solicit votes on that plan.
Originally, the company was due to file a plan by Jan. 19 and
solicit acceptances by March 20.
The court extended the exclusivity periods after it adjourned to
Feb. 14 the hearing on the motion filed by LTL Management to extend
its exclusive right to file a plan and the motion filed by the
official talc claimants' committee to terminate such right.
About LTL Management
LTL Management, LLC, is a subsidiary of Johnson & Johnson (J&J),
which was formed to manage and defend thousands of talc-related
claims and oversee the operations of Royalty A&M. Royalty A&M owns
a portfolio of royalty revenue streams, including royalty revenue
streams based on third-party sales of LACTAID, MYLANTA/MYLICON and
ROGAINE products.
LTL Management filed a petition for Chapter 11 protection (Bankr.
W.D.N.C. Case No. 21-30589) on Oct. 14, 2021. The case was
transferred to New Jersey (Bankr. D.N.J. Case No. 21-30589) on Nov.
16, 2021. The Hon. Michael B. Kaplan is the case judge. At the
time of the filing, the Debtor was estimated to have $1 billion to
$10 billion in both assets and liabilities.
The Debtor tapped Jones Day and Rayburn Cooper & Durham, P.A., as
bankruptcy counsel; King & Spalding, LLP and Shook, Hardy & Bacon
LLP as special counsel; McCarter & English, LLP as litigation
consultant; Bates White, LLC as financial consultant; and
AlixPartners, LLP as restructuring advisor. Epiq Corporate
Restructuring, LLC, is the claims agent.
An official committee of talc claimants was formed in the Debtor's
Chapter 11 case on Nov. 9, 2021. On Dec. 24, 2021, the U.S.
Trustee for Regions 3 and 9 reconstituted the talc claimants'
committee and appointed two separate committees: (i) the official
committee of talc claimants I, which represents ovarian cancer
claimants, and (ii) the official committee of talc claimants II,
which represents mesothelioma claimants.
The official committee of talc claimants I tapped Genova Burns LLC,
Brown Rudnick LLP, Otterbourg PC and Parkins Lee & Rubio LLP as its
legal counsel. Meanwhile, the official committee of talc claimants
II is represented by the law firms of Cooley LLP, Bailey Glasser
LLP, Waldrep Wall Babcock & Bailey PLLC, Massey & Gail LLP, and
Sherman Silverstein Kohl Rose & Podolsky P.A.
About Johnson & Johnson
Johnson & Johnson is an American multinational corporation founded
in 1886 that develops medical devices, pharmaceuticals, and
consumer packaged goods. It is the world's largest and most broadly
based healthcare company.
Johnson & Johnson is headquartered in New Brunswick, New Jersey,
the consumer division being located in Skillman, New Jersey. The
corporation includes some 250 subsidiary companies with operations
in 60 countries and products sold in over 175 countries.
The corporation had worldwide sales of $82.6 billion in 2020.
MILLION DOLLAR SMILE: Court OKs Cash Collateral Access Thru Jan 19
------------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of California
authorized Million Dollar Smile, LLC to use cash collateral on a
final basis through January 19, 2023.
The Court held that, if no party files an objection to the use of
cash collateral by January 17 at 12 noon, Pacific time, then the
Debtor is authorized to use cash collateral through February 8.
The Debtor requires the use of cash collateral to operate its
business and avoid harm to the estate.
J.P. Morgan Chase Bank likely holds the senior lien and likely is
fully secured and followed by First Corporate Solutions,
representative for an undisclosed entity, and it may be partially
secured.
As adequate protection, the Secured Creditors are granted
replacement lien in all post-petition assets of the Debtor, other
than avoidance power actions and recoveries.
The replacement lien granted will have the same validity, extent
and priority (and will be subject to the same defenses) as the
Secured Creditors' liens held in prepetition collateral.
A further hearing on the matter is set for January 19 at 9:30 a.m.
A final hearing will be held on February 8, at 2 p.m.
A copy of the motion is available at https://bit.ly/3W5AsBD from
PacerMonitor.com.
About Million Dollar Smile, LLC
Million Dollar Smile, LLC offers oral hygiene and beauty products.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Cal. Case No. 23-00001) on January 2,
2023. In the petition signed by Angelo De Simone, managing member,
the Debtor disclosed up to $500,000 in assets and up to $10 million
in liabilities.
Judge Margaret Mann oversees the case.
Steven R. Fox, Esq., at The Fox Law Corporation, Inc., is the
Debtor's legal counsel.
MOHEGAN TRIBAL: Hanwha Funds US$40M First Tranche to Inspire
------------------------------------------------------------
In connection with the development by Inspire Integrated Resort
Co., Ltd., an indirect wholly-owned subsidiary of the Mohegan
Tribal Gaming Authority, of the INSPIRE Entertainment Resort, an
integrated entertainment resort project involving the construction
of a casino, hotels, family park and other amenities on a project
site situated in the IBC (international business center)-III region
owned by, and located adjacent to, the Incheon International
Airport on Yeongjong Island in Incheon, South Korea, the Company
previously announced certain financing for the Project, which
financing included a commitment by the general contractor, Hanwha
Corporation, to make a subordinated investment in the form of the
issuance by Inspire of non-registered, non-guaranteed junior
convertible bonds, in the amount of 100.0 billion Korean won
(approximately $80 million U.S. dollar equivalent as of Dec. 30,
2022), the first tranche of 50.0 billion Korean won (approximately
$40 million U.S. dollar equivalent as of Dec. 30, 2022) of which
was to be funded on or before Dec. 30, 2022.
In this connection, on Dec. 27, 2022, Inspire and Hanwha executed a
Junior Convertible Bonds Subscription Agreement outlining the terms
and conditions of the Convertible Bonds and the CB Funding, and on
Dec. 30, 2022, Hanwha funded the CB First Tranche to Inspire.
Under the CB Subscription Agreement, the second tranche in the
amount of 50.0 billion Korean won must be funded on or before March
30, 2023.
The Convertible Bonds bear interest at a fixed coupon rate equal to
5.5% per annum and mature on Dec. 30, 2032. Interest is payable at
the Coupon Rate every three months, with the first interest payment
date commencing on the date that is three months after the funding
of each respective tranche. At maturity, Inspire is required to
pay a redemption amount equal to a yield-to-maturity rate of 10.0%
per annum, compounding annually, applicable to the principal amount
of any Convertible Bonds then outstanding, less the amount of
interest paid at the Coupon Rate on such principal as of the
maturity date.
Commencing on the 36-month anniversary of the respective issue date
of the Convertible Bonds, Inspire may pay prior to maturity an
amount not to exceed 70% of the aggregate face value of the
Convertible Bonds at a redemption price equal to 100% of the
principal amount of the Convertible Bonds redeemed, plus an amount
equal to the YTM Amount.
Commencing on the 60-month anniversary of the respective issue date
of the Convertible Bonds, Hanwha is entitled to require Inspire to
prepay before maturity all or part of the outstanding principal at
a redemption price equal to 100% of the principal amount of the
Convertible Bonds redeemed, plus accrued and unpaid interest at the
Coupon Rate, if any.
In addition, commencing on the 60-month anniversary of the
respective issue date of the Convertible Bonds, Hanwha shall have
the right to convert the Convertible Bonds into common shares of
Inspire, not to exceed 5.0% of the total number of outstanding
shares of Inspire, at an initial conversion price equal to 99,960
Korean won per share. The Conversion Price is subject to
adjustment from time to time upon certain events as further
described in the CB Subscription Agreement.
All obligations of Inspire are secured, on a class 3 beneficiary
basis, by liens on substantially all assets of, and the equity
interests in, Inspire as of the execution date or acquired
thereafter and certain assets related thereto, in each case,
subject to certain exceptions and limitations. The Convertible
Bonds are junior in priority to borrowings under Inspire's senior
credit facilities, and no amounts other than interest may be paid
to Hanwha under the CB Subscription Agreement until Inspire has
repaid any and all amounts due to the senior lenders under the
senior credit facilities unless otherwise agreed by the senior
lenders. Accordingly, Hanwha may not, among other things,
accelerate payment of the Convertible Bonds or foreclose on any
security prior to the Senior Facility Repayment.
About Mohegan Gaming
Mohegan Tribal Gaming Authority d/b/a Mohegan Gaming &
Entertainment is a master developer and operator of premier global
integrated entertainment resorts, including Mohegan Sun in
Uncasville, Connecticut, Inspire in Incheon, South Korea and
Niagara Casinos in Niagara, Canada. MGE is owner, developer,
and/or manager of integrated entertainment resorts throughout the
United States, including Connecticut, New Jersey, Washington,
Pennsylvania, Louisiana, as well as Northern Asia and Niagara
Falls, Canada, and coming soon pending regulatory approval, Las
Vegas, Nevada. MGE is owner and operator of Connecticut Sun, a
professional basketball team in the WNBA and New England Black
Wolves, a professional lacrosse team in the National Lacrosse
League. For more information on MGE and its properties, visit
www.mohegangaming.com.
Mohegan Gaming reported net income of $75.20 million for the year
ended Sept. 30, 2022, net income of $7.35 million for the year
ended Sept. 30, 2021, a net loss of $162.02 million for the year
ended Sept. 30, 2020, and a net loss of $2.37 million for the year
ended Sept. 30, 2019. As of Sept. 30, 2022, the Company had $3.05
billion in total assets, $3.26 billion in total liabilities, and a
total capital of ($213.9 million).
* * *
This concludes the Troubled Company Reporter's coverage of Mohegan
Gaming until facts and circumstances, if any, emerge that
demonstrate financial or operational strain or difficulty at a
level sufficient to warrant renewed coverage.
MONTROSE MULTIFAMILY: Cash Collateral Access Thru April 3 OK'd
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Montrose Multifamily Members, LLC and
its debtor-affiliates to use cash collateral on a final basis in
accordance with the budget, with a 15% variance.
The Debtors require the use of cash collateral in which DLP Capital
Servicing LLC may assert an interest, in order to continue ordinary
course business operations and maintain the value of their
bankruptcy estate. DLP is the servicer for lender DLP Lending
Fund, LLC, DLP Housing Loans, LLC, DLP Income & Growth Fund LLC,
and its related entities.
The Lender and the Debtors entered into agreements prior to the
Petition Date, including but not limited to: the parties' Notes,
Loan and Security Agreements, and Deeds of Trust, Assignment of
Leases and Rents, Fixture Filing and Security Agreements.
As of September 30, 2022, the principal amount of the Debtors'
indebtedness to DLP Capital under the Loan Agreements is at least
$35.177 million. DLP Capital asserts the Pre-Petition Indebtedness
also includes accrued but unpaid interest and fees, costs and all
other amounts (including attorneys' and other professional fees
that are chargeable to the Debtors) due and owing under the Loan
Agreements.
As adequate protection, DLP Capital is granted valid, binding,
enforceable, and automatically perfected replacement security
interests in, and liens upon all of the Debtor's assets.
To the extent of Diminution of Value, if any, of their respective
interests in the cash collateral, and subject to the Carve-Out, DLP
Capital is granted, in addition to claims under section 503(b) of
the Bankruptcy Code, an allowed superpriority administrative
expense claim against each Debtor and its respective estate
pursuant to the fullest extent provided for in section 507(b) of
the Bankruptcy Code.
As partial adequate protection in accordance with Section 363(e) of
the Bankruptcy Code, the Debtors will pay DLP Capital, on a monthly
basis, the amounts set forth in the Budget. Adequate Protection
Payments to DLP Capital will be made on or before the 13th day of
each month.
The Replacement Liens and security interests are deemed perfected
without the need for any action normally required under state law
to perfect such liens and interests.
The "Carve-Out" means quarterly fees required to the United States
Trustee pursuant to 28 U.S.C. section 1930(a)(6) and any fees
payable to the Clerk of the Bankruptcy Court. All liens and claims
of the DLP Capital, regardless of their nature or priority, will be
subject to the Carve-Out.
Unless further extended by written agreement of the Debtors and DLP
Capital, the Debtors' right to use cash collateral will expire on
the earliest to occur of: (i) 11:59 p.m. CDT on April 3, 2023, or
(ii) the occurrence of a Termination Event that is not otherwise
waived in writing by DLP Capital.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3QwJyGo from PacerMonitor.com.
The Debtor projects $198,327 in total income and $223,620 in total
operating expenses for January 2023.
About Montrose Multifamily Members, LLC
Montrose Multifamily Members, LLC owns and manages 14 multifamily
apartment complexes in the Montrose neighborhood of Houston,
Texas.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 22-90323) on October 4,
2022. In the petition signed by Christopher Bran, managing partner,
the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge David R. Jones oversees the case.
Susan Tran Adams, Esq., at Tran Singh, LLP, is the Debtor's
counsel.
Attorneys for DLP Capital LLC, as servicer for DLP Lending Fund,
LLC, DLP Housing Loans, LLC, DLP Income & Growth Fund, LLC, are
Lloyd Andrew Lim, Esq., Rachel Thompson Kubanda, Esq., and James
Eric Lockridge, Esq. at Kean Miller LLP.
MORNINGSIDE MINISTRIES: Fitch Alters Outlook on 'BB+' IDR to Neg.
-----------------------------------------------------------------
Fitch Ratings has affirmed the series 2022 and 2020A bonds issued
by the New Hope Cultural Education Facilities Finance Corporation
on behalf of Morningside Ministries and Subsidiary (TX)
(Morningside).
Fitch has also affirmed Morningside's Issuer Default Rating (IDR)
at 'BB+'.
The Rating Outlook has been revised to Negative from Stable.
Entity/Debt Rating Prior
----------- ------ -----
Morningside
Ministries and
Subsidiary (TX) LT IDR BB+ Affirmed BB+
Morningside
Ministries and
Subsidiary (TX)
/General
Revenues/1 LT LT BB+ Affirmed BB+
SECURITY
The bonds are secured by a pledge of all revenues, first mortgage
on all assets and a debt service reserve fund.
ANALYTICAL CONCLUSION
The Negative Outlook incorporates the potential for a new debt
issuance during the outlook period for a healthcare repositioning
on the Meadows campus (including the construction of new skilled
nursing units and repurposing of an assisted living wing for new
assisted living, memory care and short-term rehab units) and the
first phase of an 86-unit independent living apartment expansion on
Morningside's Menger Springs campus. Management expects a large
portion of the construction costs for the new skilled nursing units
on the Meadows campus, if undertaken, to be covered by fundraising.
Morningside has very limited debt capacity at the 'BB+' rating
level and a material debt issuance would likely result in a rating
downgrade.
The affirmation of the 'BB+' rating reflects Morningside's improved
census across service lines that helped produce adequate
profitability through the interim period (nine-months ended Sept.
30, 2022).
KEY RATING DRIVERS
Revenue Defensibility: 'bbb'
Improved Occupancy, Adequate Overall Demand
Morningside operates two life plan communities (LPCs): Menger
Springs and the Meadows. Occupancy at Menger Springs has been
strong, averaging 96% through the interim period in the independent
living units (ILU). Occupancy at the Meadows' ILUs had historically
been consistently below 90%, but has materially improved in recent
quarters, resulting in a 92% average through the interim period.
Fitch believes Morningside's overall demand indicators are solid
and should support adequate census levels over the longer term in
the ILUs. The weighted average entrance fees at Menger Springs are
in line with local home values in the market area and rate
increases in monthly service fees at both Menger Springs and the
Meadows campuses occur regularly, supporting the midrange
assessment. Healthcare census has been flat yoy, but this is
largely due to the fact that management has been strategically
reducing assisted living and skilled nursing census at the Meadows
campus to prepare for a potential consolidation of healthcare
services.
The combined market assessment for the Meadows and Menger Springs
is midrange, reflecting greater competition in the San Antonio
market (the Meadows) balanced against the dearth of competition 30
miles away in Boerne, TX (Menger Springs). Similarly, Menger
Springs residents exhibit relatively high average income and home
values in its primary market versus the Meadows with lower income
levels and home values. Population growth is favorable in both
communities.
Operating Risk: 'bb'
Weak Profitability
Morningside's 'bb' operating risk assessment reflects weak
profitability and elevated capex requirements and adequate
capital-related metrics. Though the organization's profitability
has been generally on budget in 2022, Fitch view's Morningside's
operating ratio, net operating margin (NOM) and NOM-adjusted of
102.7%, 8.4% and 13.7% through the interim period as unfavorable,
especially given the prevalence of rental/fee-for-service residence
agreements that should provide for stronger core operating
profitability. If Morningside is able to maintain current census
levels, profitability should incrementally improve in 2023, as 7%
rate increases are budgeted for independent living.
Fitch's assessment of Morningside's operating risk is constrained
to some degree by its relatively high exposure to Medicaid, which
has accounted for about 32% of Morningside's skilled nursing net
revenues for the past five years. Healthcare revenue consistently
makes up about a third of all of Morningside's revenue. Fitch notes
that management is developing strategies to align its Medicaid
admissions with its charitable revenue to mitigate the downward
pressure on operating risk.
Morningside's capital spending has averaged only 61% of
depreciation over the past five years, resulting in an average age
of plant that has risen from 11.7 years as of fiscal 2017 to 16.5
years as of Sept. 30, 2022. Management is planning for a potential
healthcare repositioning on the Meadows campus and an independent
living expansion project on the Menger Springs campus, which would
cause future spending to significantly increase over the coming
years. Morningside's capital-related metrics have been midrange
with revenue-only maximum annual debt service (MADS) coverage
averaging 1.5x and MADS averaging 11.4% of revenue over the past
five years. Debt to net available averaged 10.2x over the last five
years and was 12.4x through the interim period, indicating limited
additional debt capacity at the current rating level.
Financial Profile: 'bb'
Stable Financial Profile
Fitch expects Morningside will maintain a financial profile that is
consistent with the 'bb' assessment even during the economic and
financial volatility assumed in Fitch's stress case scenario,
within the context of Morningside's 'bbb' revenue defensibility and
'bb' operating risk assessments. MADS coverage has been consistent
with the 'bb' assessment, averaging 1.6x over the past five years,
which incorporates favorable 2.3x coverage in fiscal 2021 resulting
from $3.1 million in net assets released from restrictions for
operations.
Morningside's liquidity has been pressured in 2022 by weak core
operating profitability and $6.8 million in unrealized investment
losses. This has resulted in unrestricted cash and investments
dropping from $35.9 million as of fiscal year-end 2021 to $26.2
million as of Sept. 30, 2022, which equates to 43.5% cash to
adjusted debt. Morningside's 276 days cash on hand as of Sept. 30
2022 (according to Fitch's calculations) is neutral to the
assessment of Morningside's financial profile. Fitch's base case
scenario incorporates a gradual improvement of profitability with
operating ratios declining to below 100% over the next few years.
The base case also assumes additional debt for Morningside's
strategic projects, the receipt of initial entrance fees from the
new Menger Springs campus ILUs and approximately $10 million in
philanthropic support for the repositioning project.
The stress case assumes an economic stress (to reflect both
operating and investment portfolio volatility). The investment
portfolio stress is specific to Morningside's asset allocation.
Morningside's financial profile remains consistent with a 'bb'
financial profile, but the cash-to-adjusted debt of roughly 30% in
the outer years of the stress case points to the potential for a
lower rating if management decides to move forward with its
strategic projects, especially given the liquidity declines of the
past year.
Asymmetric Additional Risk Considerations
Apart from the high reliance on Medicaid as discussed in Operating
Risks, no asymmetric risk considerations were relevant to the
rating determination.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Weakening of operating performance or debt issuance that leads to
a decline in liquidity approaching 25% cash to adjusted debt;
- Decline in profitability such that operating ratios exceed 105%
consistently;
- Softening of ILU demand such that combined ILU occupancy falls
below 88% with expectations to be sustained at that level.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Given Morningside's expected healthcare repositioning at the
Meadows and Menger Spring's ILU expansion projects, a rating
upgrade is considered unlikely over the Outlook period.
CREDIT PROFILE
Morningside operates two senior living communities in the greater
San Antonio, TX metropolitan area, subsequent to the 2018 closure
of its Chandler Estate campus. Menger Springs is a retirement
community consisting of 93 rental ILUs, 40 entrance fee ILU
cottages, 68 entrance fee ILUs in the Overlook Expansion, 48
assisted living units (ALUs), 42 memory care units and 40 skilled
nursing facility (SNF) beds located in Boerne, TX. The Meadows
includes 144 rental ILUs, 44 ALUs and 100 SNF beds (down from 170
beds in 2019) and is located in San Antonio, TX.
Morningside closed its Chandler Estate campus effective Feb. 28,
2018 after a sustained period of low occupancy and operating
losses. Residents were relocated to the Meadows and Menger Springs,
as well as to other campuses. In December 2019, Morningside
transferred the Chandler Estate assets and $8 million in cash to
Morningside Senior Living (MSL). MSL is not a member of the OG and
is not obligated under the series 2020 and 2022 bonds. Management
does not expect to make any additional transfers outside of the
obligated group. The Chandler Estate was redeveloped in 2021 into
an exclusively IL community and does not provide security for the
payment of the series 2020 and series 2022 bonds.
The large majority of residents are on rental/fee for service
contracts, but ILU residents that have entrance fee contracts are
typically 90% refundable agreements with a limited amount of health
care services. In 2020, Morningside began only offering
non-refundable and 50% refundable contracts. While Fitch views the
resulting lower entrance fee refund liability as favorable, the
reduced interim cash flows and balance sheet softening cause some
concern. Morningside deposited $3.55 million into a coverage
support fund designed to allow Morningside to continue to meet its
coverage covenant requirements while undergoing this contract
conversion.
Morningside also operates a home care service, mmCare LLC. In
fiscal 2021 (Dec. 31 YE), Morningside had total operating revenue
of $36.9 million.
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.
MYLIFE.COM INC: Exclusivity Period Extended to June 29
------------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California
extended the time Mylife.com Inc. can keep exclusive control of its
Chapter 11 case, giving the company until June 29 to file a
bankruptcy plan and until Aug. 28 to solicit votes on that plan.
Originally, the company was due to file a plan by Dec. 31 last year
and solicit acceptances by March 1.
The extension will facilitate any anticipated claims analysis and
potential objections or estimation motions that will extend beyond
the initial 120-day exclusivity period, according to the company's
attorney, Leslie Cohen, Esq., at Leslie Cohen Law, PC.
About Mylife.com Inc.
Mylife.com Inc. is an American information brokerage firm founded
by Jeffrey Tinsley in 2002 as Reunion.com.
On Sept. 2, 2022, Mylife.com Inc., doing business as Reunion.com
Inc., filed for Chapter 11 protection (C.D. Calif. Case No.
22-14858), with $500,000 to $1 million in assets and $10 million to
$50 million in liabilities. Jeffrey Tinsley, chief executive
officer of Mylife.com, signed the petition.
Judge Ernest M. Robles oversees the case.
The Debtor is represented by Leslie Cohen Law, PC.
NAT'L ASSOC. OF TELEVISION: Unsecureds Will Get 5.938% of Claims
----------------------------------------------------------------
National Association of Television Program Executives, Inc. filed
with the U.S. Bankruptcy Court for the Central District of
California a Plan of Liquidation for Small Business dated January
9, 2023.
The Debtor is a non-profit global content association and
professional membership organization dedicated to shaping the
future of content through global marketplaces and conferences,
screenings, awards, and networking events.
The Debtor sold substiantially all of its assets through a Court
approved sale. This Plan incorporates the $150,000 cash payment
which will be transferred to the Debtor upon entry of the sale
order, and accounts for the liabilities being assumed by the buyer
which will no longer be liabilities for the estate upon entry of
the sale order.
This is a liquidating plan, where in the Debtor will be disbursing
all funds on hand as of the Effective Date to creditors and ceasing
all operations. The Plan Proponent has provided projected financial
information for the life of the plan. These projections are based
on the Debtor's funds on hand, including the $150,000 which it will
receive upon entry of the sale order.
Pursuant to the projections, the Debtors anticipate having a total
of $347,975 in cash on hand as of the effective date. A total of
$347,975 will be paid to creditors under the Plan as follows:
$50,000 estimated to administrative legal creditors, estimated
$5,000 in Subchapter V fees, $63,468.59 to priority unsecured
creditors, and $229,506 to general unsecured creditors).
Non-priority unsecured creditors holding allowed claims will
receive distributions, which the proponent of this Plan has valued
at 5.938% of each allowed claim. This Plan also provides for the
payment of administrative and priority unsecured claims.
Class 1 consists of Priority claims. Class 1 claims are unimpaired,
receiving 100% of their claims.
Class 3 consists of all non-priority unsecured claims. Total
estimated amount of allowed Class 3 general unsecured claims is
$3,864,935.52. Class 3 claims are impaired, and will be paid their
pro rata share of the funds remaining in the estate after payment
of administrative, sub V trustee and priority unsecured claims,
estimated to be $229,506.41. Payment will be made on the Effective
Date, resulting in a payout of an estimated 5.938% of their
claims.
The Plan will be funded from funds on hand with the Debtor on the
Effective Date. The Debtor estimates that it will have $347,975 in
cash on hand, including the $150,000 cash payment from the sale of
its assets.
The Debtor intends to serve as the Disbursing Agent under the Plan,
unless otherwise ordered by the Court.
A full-text copy of the Liquidating Plan dated January 9, 2023 is
available at https://bit.ly/3X2qgv7 from PacerMonitor.com at no
charge.
Debtor's Counsel:
Leslie A. Cohen, Esq.
Leslie Cohen Law, PC
506 Santa Monica Blvd., Suite 200
Santa Monica, CA 90401
Tel.: (310) 394-5900
Fax: (310) 394-9280
Email: leslie@lesliecohenlaw.com
About National Association of Television
Program Executives
The National Association of Television Program Executives (NATPE)
is a professional association of television and emerging media
executives established in 1963.
NATPE sought protection for relief under Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Calif. Case No. 22-11181) on Oct. 11,
2022, with up to $50,000 in assets and up to $1 million in
liabilities. Judge Martin R. Barash oversees the case.
Leslie A Cohen, Esq., at Leslie Cohen Law, PC serves as the
Debtor's counsel.
NEWAGE INC: Unsecureds to Recover 0% to 100% in Liquidating Plan
----------------------------------------------------------------
Newage, Inc., et al., submitted a Second Amended Proposed Combined
Disclosure Statement and Joint Chapter 11 Plan of Liquidation.
In the ordinary course of business, the Debtors incur trade debt
with numerous vendors in connection with their operations, as well
as royalty payments, and similar obligations. The Debtors believe
that as of the Petition Date their unsecured debt on account of
prepetition goods and services provided to the Debtors totaled
approximately $16 million in the aggregate, exclusive of
intercompany debt.
The Debtors sought to establish certain procedures with respect to
a competitive sale and marketing process for their assets in a way
that would maximize value for all stakeholders in the Chapter 11
Cases. Pursuant to the Proposed Bid Procedures, the Debtors
requested the approval of DIP Financing LLC as the stalking horse
bidder, with a purchase price consisting of: (i) a credit bid of
the full outstanding amounts owed it under the EWB Credit Facility;
(ii) a credit bid of the full amount of the DIP Facility; (iii) the
payment of all cure costs of assumed and assigned contracts and
leases; and (iv) the assumption of certain liabilities as set forth
in the Asset Purchase Agreement dated as of Aug. 30, 2022.
On Sept. 21, 2022, the Bankruptcy Court entered an order approving
the Bid Procedures. Additionally, at the hearing on the Sale
Motion, the Debtors, the Committee, and DIP Financing LLC agreed on
the record that DIP Financing shall (if necessary) make a cash
payment to the Debtors for the sole purpose of funding a
post-confirmation trust (the "Liquidation Trust") so that remaining
property in the Debtors' Estates, along with any necessary
"true-up" payments, to be made by DIP Financing, provide the
Liquidation Trust a cash balance of no less than $1,500,000 for the
benefit of general unsecured creditors after payment of allowed
administrative expenses and priority claims (the "GUC
Settlement").
No qualified bids, aside from the Stalking Horse Bid, were received
by the Debtors. Accordingly, on October 6, 2022, the Debtors filed
a notice cancelling the auction and designating DIP Financing as
the successful bidder.
On Oct. 13, 2022, the Debtors and DIP Financing amended the Asset
Purchase Agreement to provide for the sale of the equity in
Holdings rather than its assets, for the benefit of Holdings'
creditors and to streamline certain licensing requirements for DIP
Financing in China. While the equity in Holdings was sold to DIP
Financing, the equity interests in Morinda, which were owned 100%
by Holdings prior to the Sale, were excluded from the Sale. Only
Morinda's assets were sold as part of the Sale. As such, Lawrence
Perkins still remains the Chief Restructuring Officer of Morinda
and remains authorized to act on Morinda's behalf.
On Oct. 17, 2022, the Bankruptcy Court entered an order approving
the sale of substantially all of NewAge's, Ariix's, and Morinda's
assets and Holding's equity to DIP Financing. Since the sale
closed, the Debtors have continued to work towards reconciling
various accounting issues with DIP Financing that may affect
creditors' recovery. Specifically, after the Sale closed, DIP
Financing retained certain cash held in the Debtors' bank accounts
while the parties have attempted to work through the reconciliation
process. At this time, the Debtors and DIP Financing have been
unable to resolve these accounting issues. If the parties are
unable to reach an agreement regarding this dispute court
intervention may be necessary.
NewAge is the parent company of two wholly-owned, non-debtor
subsidiaries, NABC, Inc. and NABC Properties, LLC (the "NABC
Entities"), which operated together as a direct store distribution
business providing beverages, snacks and other products to grocers,
big box retailers and convenience stores (the "DSD Business"). The
DSD Business operates in Colorado.
On Nov. 11, 2022, the Debtors filed a motion for approval of the
sale of the DSD Business to Legacy Distribution Group, LLC, with a
purchase price of $4,500,000, subject to net working capital
adjustments as further described in the asset purchase agreement
attached to the DSD Sale Motion. The DSD Sale Motion also sought
to assume and assign one of NewAge's commercial leases to Legacy,
located at 18245 East 40th Avenue, Aurora, Colorado 80011. On
November 23, 2022, the Bankruptcy Court entered an order approving
the sale, and on Dec. 12, 2022, the sale closed.
At present, the remaining assets that will be used for distribution
to creditors consist of (i) the Liquidation Trust with an initial
principal amount of at least $1,500,000; (ii) causes of action
against certain of the Debtors' officers and directors in the
Kwikclick Lawsuit, which are being assigned to the Liquidation
Trust, and of which there may or may not be up to $35,000,000.00 of
D&O insurance coverage available; (iii) all other Causes of Action,
all of which causes of action are specifically preserved and
assigned to the Liquidation Trust; and (iv) any remaining Cash on
hand. As illustrated in the Liquidation Analysis attached as
Appendix C, the Debtors project that there will be approximately
$1,500,000.00 of net distributable assets to the Liquidation Trust,
in addition to claim recoveries which amounts are currently
undetermined.
The Debtors have no accurate way to value the Kwikclick Lawsuit and
any other potential causes of action. The actual net distributable
assets may be materially different from the Debtors' estimates.
General unsecured claims will be treated as follows:
* Class 2A General Unsecured Claims Against NewAge (Liquidation
Trust Class) totaling $279,142, Class 2B General Unsecured Claims
Against Morinda (Liquidation Trust Class) totaling $14,808,711, and
Class 2C General Unsecured Claims Against Ariix (Liquidation Trust
Class) totaling $942,263. Each holder of an Allowed Class 2 Claim
will receive its Pro Rata Share of an interest in the Liquidation
Trust Assets. A holder of an Allowed General Unsecured Claim
greater than the Convenience Claim Threshold may opt to reduce its
claim to the Convenience Claim Threshold to participate in Class 3;
however, a holder making such election will be forever barred and
waives its right to receive a Distribution for the waived amount.
Class 2 is impaired and will recover 0% to 100% of their claims.
* Class 3A General Unsecured Claims Against NewAge
(Administrative Convenience Class) totaling $6,104, Class 3B
General Unsecured Claims Against Morinda (Administrative
Convenience Class) totaling $211,642, and Class 3C General
Unsecured Claims Against Ariix (Administrative Convenience Class)
totaling $31,694. Each holder of an Allowed Class 3 Claim will
receive a Distribution within 30 days of the Effective Date equal
to 50% of its Allowed General Unsecured Claim unless the amount
deposited in the GUC Administrative Convenience Account is not
sufficient to allow for this percentage distribution, in which case
the holders of an Allowed Class 3 Claim will receive their Pro Rata
Share, which will be less than 50% of each Allowed General
Unsecured Claim. The Distributions made to holders of Allowed Class
3 Claims will be made by the Liquidation Trustee from the GUC
Administrative Convenience Account. Class 3 is impaired and will
recover 0% to 100% of their claims.
Counsel for the Debtors:
Annette Jarvis, Esq.
Michael F. Thomson, Esq.
Carson Heninger, Esq.
GREENBERG TRAURIG, LLP
222 S. Main Street, Suite 1730
Salt Lake City, UT 84101
Telephone: (801) 478-6900
Facsimile: (801) 303-7397
E-mail: JarvisA@gtlaw.com
ThomsonM@gtlaw.com
Carson.Heninger@gtlaw.com
- and -
Alison Elko Franklin, Esq.
GREENBERG TRAURIG, LLP
3333 Piedmont Road, NE, Suite 2500
Atlanta, GA 30305
Telephone: (678) 553-2100
Facsimile: (678) 553-2212
E-mail: Alison.Franklin@gtlaw.com
- and -
Anthony W. Clark, Esq.
Dennis A. Meloro, Esq.
GREENBERG TRAURIG, LLP
222 Delaware Avenue, Suite 1600
Wilmington, DE 19801
Telephone: (302) 661-7000
Facsimile: (302) 661-7360
E-mail: Anthony.Clark@gtlaw.com
Dennis.Meloro@gtlaw.com
A copy of the Combined Disclosure Statement and Joint Chapter 11
Plan of Liquidation dated Dec. 30, 2022, is available at
https://bit.ly/3Ciaeoz from PacerMonitor.com.
About NewAge Inc.
NewAge Inc. (Nasdaq: NBEV) -- http://www.NewAgeGroup.com/-- a
Utah-based company, commercializes a portfolio of organic and
healthy products worldwide primarily through a direct-to-consumer
(D2C) route to market distribution system across more than 50
countries. The company competes in three major category platforms
including health and wellness, inner and outer beauty, and
nutritional performance and weight management.
NewAge Inc. and certain of its subsidiaries, Ariix LLC, Morinda
Holdings, Inc., and Morinda, Inc., sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No.
22-10819) on August 30, 2022.
NewAge reported total assets of $310,902,000 against total
liabilities of $149,447,000 as of the bankruptcy filing.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Greenberg Traurig, LLP as bankruptcy counsel and
SierraConstellation Partners, LLC as financial advisor. Houlihan
Lokey Capital, Inc. conducted the pre-bankruptcy marketing process
for the Debtors. Stretto is the claims agent.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on Sept. 14,
2022. Cole Schotz P.C. and Dundon Advisers LLC serve as the
committee's legal counsel and financial advisor, respectively.
NEXTPLAY TECHNOLOGIES: Effects 1-for-20 Reverse Stock Split
------------------------------------------------------------
NextPlay Technologies, Inc. has declared a 1-for-20 reverse stock
split of the Company's common stock. The reverse stock split
became effective on Jan. 6, 2023 at 12:01 a.m. Pacific Time. The
company's common stock began trading on a split-adjusted basis when
the markets opened on Jan. 6, 2023, under the current Nasdaq
trading symbol "NXTP".
The reverse stock split is primarily intended to bring the Company
into compliance with the minimum bid price requirements for
maintaining NextPlay's listing on the Nasdaq Capital Market. The
new CUSIP number following the reverse split will be 65344G 201.
As a result of the reverse stock split, every 20 shares of the
Company's common stock issued and outstanding will be automatically
reclassified into one new share of common stock. Proportionate
adjustments will be made to the conversion and exercise prices and
the number of shares underlying the Company's outstanding warrants,
equity awards and options, and the number of shares reserved under
the Company's equity incentive plan. The reverse stock split will
not affect par value of the common stock and does not affect the
Company's authorized preferred stock, of which no shares are
outstanding.
Prior to the reverse stock split, there were 118,445,979 shares
issued and outstanding and will adjust to approximately 5,922,299
shares of common stock issued and outstanding following the reverse
stock split. Any fractional shares of common stock resulting from
the reverse stock split will be rounded up to the nearest whole
share and no stockholders will receive cash in lieu of fractional
shares. The reverse stock split will affect all stockholders
uniformly and will not alter any stockholder's percentage interest
in the company, except to the extent that the reverse stock split
would result in a stockholder owning slightly more common shares as
a result of the rounding up to the next whole share for each
fractional share.
The Company's transfer agent, Colonial Stock Transfer, is acting as
the exchange agent for the reverse stock split. CST will provide
instructions to stockholders of record regarding the exchange of
stock certificates. Stockholders who hold their shares in
brokerage accounts or "street name" are not required to take any
action to effect the exchange of their shares.
About NextPlay Technologies
NextPlay Technologies, Inc. (formerly known as Monaker Group Inc.)
-- nextplaytechnologies.com -- is a technology solutions company
offering games, in-game advertising, crypto-banking, connected TV
and travel booking services to consumers and corporations within a
growing worldwide digital ecosystem. NextPlay's engaging products
and services utilize innovative AdTech, Artificial Intelligence and
Fintech solutions to leverage the strengths and channels of its
existing and acquired technologies.
NextPlay reported a net loss of $40.41 million for the year ended
Feb. 28, 2022, compared to a net loss of $1.63 million for the
period from March 6, 2020 to February 28, 2021. As of Aug. 31,
2022, the Company had $101.47 million in total assets, $52.93
million in total liabilities, and $48.54 million in total
stockholders' equity.
Sugar Land, Texas-based TPS Thayer, LLC, the Company's auditor
since 2020, issued a "going concern" qualification in its report
dated June 17, 2022, citing that the Company has suffered recurring
losses from operations and has stockholders' deficit that raise
substantial doubt about its ability to continue as a going concern.
NGV GLOBAL GROUP: Gets OK to Tap Forshey & Prostok as Legal Counsel
-------------------------------------------------------------------
NGV Global Group, Inc. and its affiliates received approval from
the U.S. Bankruptcy Court for the Northern District of Texas to
employ Forshey & Prostok, LLP as their legal counsel.
The firm's services include:
(a) advising the Debtors of their rights, powers and duties in
the continued operation and management of their business and
assets;
(b) advising the Debtors concerning, and assisting in the
negotiation and documentation of, agreements, debt restructurings,
and related transactions;
(c) reviewing the nature and validity of liens asserted
against the property of the Debtors and advising them concerning
the enforceability of such liens;
(d) advising the Debtors concerning the actions that they
might take to collect and to recover property for the benefit of
their estate;
(e) preparing legal papers;
(f) advising the Debtors concerning, and preparing responses
to, legal papers that may be filed and served in their Chapter 11
cases;
(g) counseling the Debtors in connection with the formulation,
negotiation and promulgation of a plan of reorganization and
related documents;
(h) other necessary legal services.
The firm will be paid at these rates:
Jeff P. Prostok $725 per hour
Lynda L. Lankford $525 per hour
Emily Chou $525 per hour
Dylan T.F. Ross $325 per hour
Other Firm Attorneys $325 to $675 per hour
Paralegals / Legal Assistants $175 to $225 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer is $100,000.
Jeff Prostok, Esq., a partner at Forshey & Prostok, 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:
Jeff P. Prostok, Esq.
Forshey & Prostok, LLP
777 Main St., Suite 1550
Ft. Worth, TX 76102
Telephone: (817) 877-8855
Facsimile: (817) 877-4151
Email: jprostok@forsheyprostok.com
About NGV Global Group
NGV Global Group, Inc. is a global technology company that designs,
manufactures, distributes and supports natural gas operated medium
and heavy-duty commercial vehicles sold worldwide. It manufactures
natural gas engines, fuel storage units and fueling systems for
application in its own products and for sale to third party
companies interested in the conversion of trucks and buses to
operate on natural gas completely (dedicated) or in conjunction
(duel-fuel) with diesel fuel.
NGV Global Group also owns and operates a gas transportation
company, which is registered with the U.S. Department of
Transportation (DOT) allowing it to safely transport multiple
substances across the U.S. including: CNG, LNG, Hydrogen, Oxygen,
Nitrogen and other hazardous materials and gases.
On Nov. 17, 2022, NGV Global Group and its affiliates sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
N.D. Texas Lead Case No. 22-42780). In the petition signed by its
chief executive officer, Farroukh Zaidi, NGV Global Group disclosed
up to $50 million in assets and up to $100,000 in liabilities.
Judge Mark X. Mullin oversees the cases.
Jeff P. Prostok, Esq., at Forshey Prostok, LLP is the Debtors'
counsel.
NGV GLOBAL: Court OKs Cash Collateral Access Thru Feb 13
--------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized NGV Global Group, Inc. and its
debtor-affiliates to use cash collateral on a final basis in
accordance with the budget, with a 10% variance, through February
13, 2022.
The Debtors require the use of cash collateral to continue the
operation of their businesses.
As adequate protection to FirstCapital Bank of Texas, N.A. for the
Debtors' use of cash collateral, the Lender is granted a
replacement lien in the Debtors' assets that serve as collateral
under the Lender's applicable loan documents, in the same order of
priority that existed as of the Petition Date.
As additional partial adequate protection for the Debtors' use of
cash collateral, to the extent of any diminution in value and a
failure of the other adequate protection provided by the Order, the
Lender will have an allowed superpriority administrative expense
claim in the cases and any successor case or cases as provided in
and to the fullest extent allowed by Sections 503(b) and 507(b) of
the Bankruptcy Code.
As additional partial adequate protection for the Debtors' use of
cash collateral, Lender will be entitled to receive insurance
proceeds in the approximate amount of $64,000 for fire damage to a
2016 Freightliner Cascadia tractor which was included in Lender's
Prepetition Collateral, and the Lender will apply such insurance
proceeds to the FCB Prepetition Indebtedness associated with the
Third FCB Note.
The Replacement Lien and Superpriority Claim are subject and
subordinate to a carve-out of funds for all fees required to be
paid to the Clerk of the Bankruptcy Court and to the Office of the
United States Trustee pursuant to 28 U.S.C. Section 1930(a) and all
fees and expenses of the Debtors' professionals to the extent
provided in the Budget and allowed by Order of the Bankruptcy
Court.
The Replacement Liens are valid, perfected, enforceable and
effective as of the Petition Date without the need for any further
action by the Debtors or the Lender, or the necessity of execution
or filing of any instruments or agreements.
The Debtors agree to use their best efforts to seek Court approval
to sell, on or before March 31, 2023, approximately 328 120-gallon
LNG tanks owned by NGS that serve as collateral for NGS's
obligations to Lender, and to pay the net proceeds of such sale
(after payment of ad valorem taxes and costs of sale) to the Lender
towards satisfaction of such obligations.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3Gyefqe from PacerMonitor.com.
The budget provides for total operating costs, on a weekly basis,
as follows:
$479,266 for the week ending January 13, 2023;
$514,103 for the week ending January 20, 2023;
$430,105 for the week ending January 27, 2023;
$341,499 for the week ending February 3, 2023; and
$437,174 for the week ending February 10, 2023.
About NGV Global Group
NGV Global Group is a global technology company that designs,
manufactures, distributes and supports natural gas operated medium
and heavy-duty commercial vehicles sold worldwide. The Company
manufactures natural gas engines, fuel storage units and fueling
systems for application in its own products and for sale to third
party companies interested in the conversion of trucks and buses to
operate on natural gas completely (dedicated) or in conjunction
(duel-fuel) with diesel fuel.
The Company also owns and operates a gas transportation company
which is registered with the US Department of Transportation (DOT)
allowing the Company to safely transport multiple substances across
the U.S. including: CNG, LNG, Hydrogen, Oxygen, Nitrogen and other
hazardous materials and gases.
NGV Global Group, Inc. and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Tex. Lead Case
No. 22-42780) on November 17, 2022. In the petition signed by
Farroukh Zaidi, chief executive officer, the Debtor disclosed up to
$50 million in assets and up to $100,000 in liabilities.
Judge Edward L. Morris oversees the case.
Jeff P. Prostok, Esq., at Forshey Prostok, LLP, is the Debtor's
counsel.
NXT ENERGY: Grants 2.1M Incentive Stock Options to Employees, D&Os
------------------------------------------------------------------
NXT Energy Solutions Inc. announced on Jan. 6 the grant of
2,050,000 incentive stock options at a price of $0.216 to
employees, officers and directors. The incentive stock options
will vest upon receipt of cash for SFD services performed: 1/3 upon
collection of US$6.5 million, 1/3 upon the collection of the next
US$7.0 million and the final 1/3 upon collection of an additional
US$7.5 million. The vesting milestones have been set to be
consistent with the Company's near-term expectations for growth of
the business and are intended to retain and incentivize NXT's
dedicated and highly qualified team to achieve these targets.
About NXT Energy
NXT Energy Solutions Inc. is a Calgary-based technology company
whose proprietary SFD survey system utilizes quantum-scale sensors
to detect gravity field perturbations in an airborne survey method
which can be used both onshore and offshore to remotely identify
areas with exploration potential for traps and reservoirs. The SFD
survey system enables the Company's clients to focus their
hydrocarbon exploration decisions concerning land commitments, data
acquisition expenditures and prospect prioritization on areas with
the greatest potential. SFD is environmentally friendly and
unaffected by ground security issues or difficult terrain and is
the registered trademark of NXT Energy Solutions Inc. NXT Energy
Solutions provides its clients with an effective and reliable
method to reduce time, costs, and risks related to exploration.
NXT Energy reported a net loss and comprehensive loss of C$3.12
million for the year ended Dec. 31, 2021, compared to a net loss
and comprehensive loss of $6.03 million for the year ended Dec. 31,
2020. As of June 30, 2022, the Company had C$17.96 million in
total assets, C$3.35 million in total liabilities, and C$14.61
million in shareholders' equity.
Calgary, Canada-based KPMG LLP, the Company's auditor since 2006,
issued a "going concern" qualification in its report dated March
31, 2022, citing that the Company's current and forecasted cash and
cash equivalents and short-term investments position are not
expected to be sufficient to meet its obligations that raises
substantial doubt about its ability to continue as a going concern.
ORIGINCLEAR INC: Unit Signs LOI to Merge With Fortune Rise
----------------------------------------------------------
OriginClear Inc. and Fortune Rise Acquisition Corporation announced
that OriginClear's subsidiary, Water On Demand, Inc., has executed
a Letter of Intent with FLRA, a Delaware special purpose
acquisition corporation, under which FLRA proposes to acquire all
the outstanding securities of Water on Demand based on certain
material financial and business terms and conditions being met.
The LOI is not binding on the parties and is intended solely to
guide good-faith negotiations toward definitive agreements.
The parties will work together in good faith with their respective
advisors to agree on a structure for the business combination that
is most expedient to the consummation of the acquisition. Pursuant
to the LOI, it is proposed that FLRA will acquire 100% of the
outstanding equity securities of WODI, including all shares of
common stock, preferred stock, outstanding options and warrants.
In return, WODI equity holders will receive shares of common stock
of FLRA and any outstanding options and warrants will be assumed by
FLRA in accordance with their terms.
Subject to meeting NASDAQ quantitative and qualitative listing
requirements, upon the closing of the business combination, the
newly-combined entity will trade publicly on Nasdaq under a new
trading symbol.
The precise structure of the business combination, including the
proportion of stock and/or cash consideration paid to the WODI
equity holders, will be negotiated to meet the needs of all parties
including management of WODI and key equity holders.
Recently, Water On Demand announced that it closed the acquisition
of the equity interests of Fortune Rise Sponsor, LLC, a Delaware
limited liability company, which is the sponsor of FRLA.
FRLA 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.
FRLA 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. FRLA will not generate any
operating revenues until after the completion of its initial
business combination, at the earliest. To date, FRLA'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.
PARAMOUNT RESTYLING: Files Emergency Bid to Use Cash Collateral
---------------------------------------------------------------
Paramount Restyling Automotive Inc. and Warner Science Applications
ask the U.S. Bankruptcy Court for the Central District of
California, Riverside Division, for authority to, among other
things, use cash collateral on an interim basis and provide
adequate protection.
The Debtors seek to use cash collateral in accordance with the
budget, with a 20% variance, to pay various expenses essential to
the Debtors' operations.
Like many companies, the Debtors suffered a downturn in business
due to the COVID-19 pandemic. The Debtors' business was also
affected by global supply chain issues and large increases in
shipping costs due to the fact that the Products are manufactured
in, and shipped from China. The Debtors were unable to pay
creditors as their claims became due. In order to obtain a
breathing spell from demands for immediate payment by creditors and
suppliers, to afford themselves an opportunity for a revival of the
demand for the Products and potential cost reductions, and to
pursue a successful reorganization, the Debtors decided to file for
Chapter 11 protection.
The Debtors believes that as the COVID-19 related downturn in
business and supply chain and cost issues subside, they will be
able to rebuild their sales and businesses and emerge as viable
enterprises, which will allow the Debtors to maximize the return to
creditors.
The Debtors also seek to maintain and modify certain elements of
their cash management system.
Paramount has two secured creditors: (1) GemCap, which is owed
approximately $2,396,515, and (2) the US Small Business
Administration, which is owed approximately $502,924.
Warner has two secured creditors: (1) Amazon, which is owed
approximately $806,790 and (2) GemCap, which is owed approximately
$2,396,515 and which claim is co-extensive with GemCap's claim
against Paramount as a co-obligor.
There are also approximately $287,483 of non-insider, general
unsecured claims against Paramount.
In addition to equity cushions and continued operations, the
Debtors will provide the Secured Creditors with further adequate
protection by (a) granting the Secured Creditors replacement liens
on, and security interests in, the assets of the Debtors' estates,
with the same extent, validity, and priority as the Secured
Creditors' prepetition liens on pre-petition collateral and all
post-petition proceeds obtained by the Debtors from the
pre-petition collateral.
The Debtors will continue to make regular payments to GemCap and
the SBA.
A copy of the motion is available at https://bit.ly/3Qybeul from
PacerMonitor.com.
About Paramount Restyling Automotive Inc.
Paramount Restyling Automotive Inc. is a manufacturer of automotive
parts, accessories, and tires.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10069) on January 9,
2023. In the petition signed by Samson Yang, vice president and
authorized signatory, the Debtor disclosed up to $10 million in
both assets and liabilities.
David L. Neale, Esq., at Levene, Neale, Bender, Yoo & Golubchik,
LLP, represents the Debtor as legal counsel.
PHI GROUP: Signs Deal to Manage $1BB Investment
-----------------------------------------------
PHI Group, Inc. disclosed in a Form 8-K filed with the Securities
and Exchange Commission that the Company, as investment manager,
signed a Financial Management Agreement/Contract on Nov. 3, 2022,
with an international ultra-high-net-worth investor group to manage
an investment amount of US$1,000,000,000 on behalf of the group for
investment in select transactions and projects to be selected,
advised and managed by the Investment Manager for a period of 10
years.
According to the Agreement, the Investment Manager will be entitled
to 15% of the Investment Amount for its own investment and
benefits. In addition, the sharing of profits and dividends from
the investment results of 80% of the Investment Amount will be
determined by the two parties in a subsequent agreement.
About PHI Group
Headquartered in Irvine, California, PHI Group, Inc.
(www.phiglobal.com) primarily focuses on advancing PHILUX Global
Funds, a group of Luxembourg bank funds organized as "Reserved
Alternative Investment Fund", and building the Asia Diamond
Exchange in Vietnam. The Company also engages in mergers and
acquisitions and invests in select industries and special
situations that may substantially enhance shareholder value.
PHI Group reported a net loss of $6.55 million for the year ended
June 30, 2021, a net loss of $1.32 million for the year ended June
30, 2020, and a net loss of $2.93 million for the year ended June
30, 2019. As of March 31, 2022, the Company had $5.29 million in
total assets, $6.24 million in total liabilities, and a total
stockholders' deficit of $946,420.
Bangalore, India-based M.S. Madhava Rao, the Company's auditor,
issued a "going concern" qualification in its report dated Nov. 7,
2021, citing that the Company has an accumulated deficit of
$50,563,530 and had a negative cash flow from operations amounting
to $79,446 for the year ended June 30, 2021. These factors raise
substantial doubt about the Company's ability to continue as a
going concern.
POWER TEAM: Fidelity Fund Marks $13.3M Loan at 18% Off
------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $13,329,000 loan extended to Power Team Services LLC
to market at $10,886,000 or 82% of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries a 7.1741% interest (1 month U.S. LIBOR + 3.500%)
to Power Team Services LLC. The loan is scheduled to mature on
March 6, 2025.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Headquartered in Atlanta, Georgia, PowerTeam is a domestically
focused natural gas distribution, transmission and electric
services company for natural gas and electric utilities and
midstream operators offering a wide array of services that help
maintain and upgrade their infrastructure and operate more
efficiently and reliably.
PRESSURE BIOSCIENCES: Two Proposals Approved at Special Meeting
---------------------------------------------------------------
Pressure BioSciences, Inc. held a special meeting in lieu of the
annual meeting of stockholders at which the stockholders:
(1) elected Vito J. Mangiardi and Kevin A. Pollack as Class II
directors to hold office until the 2025 Annual Meeting of
Stockholders; and
(2) ratified the appointment of MaloneBailey LLP as the Company's
independent auditor for fiscal year 2022.
About Pressure Biosciences
South Easton, Mass.-based, Pressure Biosciences Inc. --
http://www.pressurebiosciences.com-- develops and sells
innovative, broadly enabling, high pressure-based platform
technologies and related consumables for the worldwide life
sciences, agriculture, food and beverage, and other key
industries.
Pressure Biosciences reported a net loss of $20.15 million for the
year ended Dec. 31, 2021, compared to a net loss of $16.01 million
for the year ended Dec. 31, 2020. As of Sept. 30, 2022, the
Company had $2.84 million in total assets, $32.61 million in total
liabilities, and a total stockholders' deficit of $29.77 million.
Houston, Texas-based MaloneBailey, LLP, the Company's auditor since
2015, issued a "going concern" qualification in its report dated
April 4, 2022, citing that the Company has a working capital
deficit, has incurred recurring net losses and negative cash flows
from operations. These conditions raise substantial doubt about
its ability to continue as a going concern.
QHC FACILITIES: Unsecureds Will Get 12% to 16% in Liquidating Plan
------------------------------------------------------------------
QHC Facilities, et al., and the Official Committee of Unsecured
Creditors filed with the U.S. Bankruptcy Court for the Southern
District of Iowa a Disclosure Statement with respect to Joint Plan
of Liquidation dated January 9, 2023.
QHC Facilities was formed in 2008 to acquire the business
operations and assets of Quality Healthcare Specialists ("QHS") in
May 2011. QHC was headquartered in Clive, Iowa and employed
approximately 300 people.
Altogether, QHC operated 8 skilled nursing facilities (the "Skilled
Nursing Facilities") and 2 assisted living facilities (the
"Assisted Living Facilities") comprising nearly 750 licensed
beds/units across Iowa. QHC offered the following suite of
services: (i) skilled nursing, (ii) restorative nursing, (iii)
respite care, (iv) physical therapy, (v) long term care, (vi)
occupational therapy, (vii) hospice care, (viii) dementia care,
(ix) Alzheimer's care, and (x) rehabilitation therapy.
On September 23, 2022, the Debtors filed a new sale motion seeking
authority, among other things, to sell substantially all assets of
the Debtors to Blue Care (the "New Sale Motion"). The Court entered
a final order approving the sale to Blue Care in accordance with
the asset purchase agreement dated as of March 25, 2022 ("APA"),
the First Amendment to the APA dated September 9, 2022 ("First
Amendment"), and the Second Amendment to the APA, dated October 7,
2022 ("Second Amendment,") (the APA together with the First and
Second Amendment and any and all schedules, exhibits, and ancillary
documents related thereto, shall be referred to herein collectively
as the "Blue Care APA").
Pursuant to the Blue Care APA, Blue Care purchased the assets for
$4.5 million, provided a $2 million dollar note to the Debtors,
assumed the Assumed Liabilities, including but not limited to the
following: (i) all amounts under the Management Agreement, the Cure
Amounts (as defined in the Blue Care APA) (subject to certain
exceptions), (iii) pre-closing insurance policies, (iv) Accrued PTO
(as defined in the Blue Care APA), (v) payment in lieu of QAAF. The
sale to Blue Care closed on November 14, 2022.
The Plan constitutes a liquidating chapter 11 plan for the Debtors.
The Plan provides for the substantive consolidation of the Debtors'
Assets and liabilities for purposes of the Plan, including all
distributions hereunder. The Plan contemplates the creation of a
Liquidation Trust, which will be administered by the Liquidation
Trustee.
The Liquidation Trustee will, among other things, liquidate the
Debtors' remaining Assets, evaluate, pursue or settle potential
Causes of Action, as appropriate, review the universe of Claims in
these Chapter 11 Cases, fix the Allowed amount of those Claims, and
then make distributions to the Liquidation Trust Beneficiaries.
Once the Liquidation Trustee liquidates all Assets, fixes all
Claims, and conveys all distributions, the Liquidation Trustee will
dissolve the Liquidation Trust pursuant to the terms of the Plan.
Class 4 consists of General Unsecured Claims. The holder of an
Allowed General Unsecured Claim shall receive, in full and complete
settlement, satisfaction and discharge of such Allowed Claim, (i)
on the First Distribution Date, after full satisfaction of Allowed
Administrative Expense Claims, Allowed Priority Tax Claims, Allowed
Other Priority Claims, Allowed Secured Tax Claims, and Allowed
Other Secured Claims, its Pro Rata Share of Available Cash, and
(ii) on each Subsequent Distribution Date, and the Final
Distribution Date, its Pro Rata Share of Available Cash; provided,
however, that the aggregate distributions received pursuant to the
Plan shall not exceed the amount of Allowed General Unsecured
Claims plus, if applicable, Post-petition Interest thereon.
General Unsecured Claims asserted against the Estates totaled
approximately $11 - $15 million, based upon the Schedules and
Statements and the proofs of claim filed by the proof of claim bar
date. This Class will receive a distribution of 12%-16% of their
allowed claims. Class 4 is impaired by the Plan.
Class 6 consists of Claims of any Debtor against another Debtor. On
the Effective Date, all Intercompany Claims shall be extinguished.
Holders of Intercompany Claims will receive no distributions under
the Plan. Class 6 is impaired by the Plan.
Class 7 consists of equity interests in any of the Debtors. On the
Effective Date, all Equity Interests shall be extinguished and
cancelled. Holders of Equity Interests will receive no
distributions or other recovery under the Plan. Class 7 is impaired
by the Plan.
The Plan will be funded by the orderly liquidation of all remaining
property of the Estate (including recoveries from Causes of Action)
as well as from amounts received under the Blue Care APA and Blue
Care Sale Order. Distributions will be made from the Liquidating
Trust after the Effective Date or as soon as reasonably practicable
after the Effective Date under the terms of the Plan and the
Liquidation Trust Agreement.
A full-text copy of the Disclosure Statement dated January 9, 2023
is available at https://bit.ly/3Gzw5co from PacerMonitor.com at no
charge.
Co-Counsel to the Debtors:
Jeffrey D. Goetz, Esq.
Krystal R. Mikkilineni, Esq.
Bradshaw Fowler Proctor & Fairgrave P.C.
801 Grand Avenue, Suite 3700
Des Moines, IA 50309-8004
Phone: 515-246-5817
Fax: 515-246-5808
Email: goetz.jeffrey@bradshawlaw.com
mikkilineni.krystal@bradshawlaw.com
- and -
Krystal R. Mikkilineni, Esq.
Dentons Davis Brown, P.C.
The Davis Brown Tower
215 10th Street, Suite 1300
Des Moines, IA, 50309
Phone: +1 515 288 2500
Fax: +1 515 243 0654
Counsel to the Official Committee of Unsecured Creditors:
Francis J. Lawall, Esq.
Troutman Pepper Hamilton Sander LLP
3000 Two Logan Square
Philadelphia, PA 19103-2799
Tel: (215) 981-4481
Fax: (215) 689-4693
Email: Francis.lawall@troutman.com
- and -
Robert C. Gainer, Esq.
Cutler Law Firm, P.C.
1307 50th St.
Wes Des Moines, IA 50266
Tel: (512) 223-6600
Fax: 515-223-6787
About QHC Facilities
Clive, Iowa-based QHC Facilities, LLC, operates eight skilled
nursing facilities. The facilities include Crestview Acres in
Marion as well as in Tama, Madison, Humboldt, Jackson, Webster and
Polk counties and two assisted living centers. Collectively, the
facilities have a maximum capacity of more than 700 residents. The
company employs roughly 300 full-time and part-time workers.
QHC Facilities and its affiliates filed petitions for Chapter 11
protection (Bankr. S.D. Iowa Lead Case No. 21-01643) on Dec. 29,
2021. The affiliates are QHC Management LLC, QHC Mitchellville LLC,
QHC Crestridge LLC, QHC Humboldt North LLC, QHC Winterset North
LLC, QHC Madison Square LLC, QHC Humboldt South LLC, QHC Villa
Cottages LLC, QHC Fort Dodge Villa LLC, and QHC Crestview Acres
Inc.
QHC Facilities reported $1 million in assets and $26.3 million in
liabilities as of the bankruptcy filing.
Judge Anita L. Shodeen oversees the cases.
Bradshaw Fowler Proctor & Fairgrave, PC and Dentons Davis Brown,
P.C. are the Debtors' bankruptcy counsels. Newmark Real Estate of
Dallas, LLC, and Gibbins Advisors, LLC, serve as the Debtors'
investment banker and restructuring advisor, respectively.
The U.S. Trustee for Region 12 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases. Troutman
Pepper Hamilton Sanders, LLP and Cutler Law Firm, P.C. serve as the
committee's lead bankruptcy counsel and local counsel,
respectively.
QUANERGY SYSTEMS: Files Payout Plan, Sets Jan. 25 Auction
---------------------------------------------------------
Quanergy Systems, Inc., filed a Chapter 11 Plan that provides for
the disposition of the assets and the Distribution of the proceeds
in accordance with the priorities and requirements of the
Bankruptcy Code.
The Plan provides for the appointment of a Plan Administrator as a
means to implement the Plan. The Plan Administrator shall be
empowered to, among other things, administer and liquidate all
Assets, object to and settle Claims and prosecute Retained Causes
of Action in accordance with the Plan. The Plan also provides for
Distributions to Holders of Allowed Claims, including
Administrative Claims, Professional Fee Claims, Priority Tax
Claims, Secured Claims, Priority Non-Tax Claims and General
Unsecured Claims. In addition, the Plan cancels all Interests in
the Debtor, and provides for the dissolution and wind-up of the
affairs of the Deb
According to the Disclosure Statement, the material terms of the
Plan are:
* All Allowed Administrative Claims, Allowed Professional Fee
Claims, Allowed Priority Tax Claims, Allowed Secured Claims, and
Allowed Priority Non-Tax Claims will be paid or otherwise satisfied
in full as required by the Bankruptcy Code and provided for in the
Plan, unless otherwise agreed to by the Holders of such Claims and
the Post-Effective Date Debtor.
* Holders of Allowed General Unsecured Claims will receive their
Pro Rata share of the General Unsecured Claim Distribution, unless
less favorable treatment is otherwise agreed to by the Holders of
such Claims and the Post-Effective Date Debtor.
* Holders of Allowed Subordinated Claims will receive their Pro
Rata share of the Subordinated Claim Distribution, unless less
favorable treatment is otherwise agreed to by the Holders of such
Claims and the Post-Effective Date Debtor; provided, however, that
if there is no Distribution to Holders of Allowed Subordinated
Claims, then each Holder of an Allowed Subordinated Claim shall not
be entitled to any Distribution or recovery on account of such
Claims.
* As of the Effective Date, all Interests of any kind will be
cancelled, and the Holders of Allowed Interests will receive their
Pro Rata share of the Interest Distribution, unless less favorable
treatment is otherwise agreed to by the Holders of such Interests
and the Post-Effective Date Debtor; provided, however, that if
Holders of Allowed General Unsecured Claims receive less than 100%
recovery (including all accrued but unpaid postpetition interest)
or all wind-down costs of the Chapter 11 Case are not satisfied,
then each Holder of an Allowed Interest shall not be entitled to
any Distribution or recovery on account of such Interest.
In the ordinary course of business, the Debtor incurs unsecured
indebtedness to various suppliers, trade vendors, landlords,
utility providers, and service providers, among others. In
addition, the Debtor incurred obligations related to unsecured
promissory notes to professionals in connection the Business
Combination that remain unpaid. As of the Petition Date, the
Debtor's estimated outstanding unsecured indebtedness, including
trade payables, is approximately $25 million.
The Debtor commenced a Chapter 11 case to implement a
value-maximizing (or the series of sales) of all or substantially
all of the assets. On Dec. 13, 2022, the Debtor filed a motion
seeking, inter alia, (i) approval of the Bidding Procedures in
connection with the Sale and (ii) authorization to designate the
Stalking Horse, subject to a final order of the Bankruptcy Court.
On December 21, 2022, the Court approved the Bidding Procedures.
To capitalize on the opportunity to market the assets without the
burden of significant operating expenses and expand the buyer
universe to parties that were not a strategic fit prepetition, the
Debtor determined that it was necessary to consummate the sale
process on an expeditious timeline. In connection therewith, the
Debtor and its advisors continue to market the assets on a
postpetition basis in accordance with the Bankruptcy Court-approved
Bidding Procedures. The Bidding Procedures contemplate the
following key dates:
* Jan. 23, 2023, at 10:00 a.m. (ET) will be the Bid Deadline.
* Jan. 24, 2023, at 4:00 p.m. (ET) will be the Deadline for the
Debtor to notify Potential Bidders of whether their Bids are
Qualified Bids.
* Jan. 25, 2023, starting at 10:00 a.m. (ET) will be the Auction
(if necessary).
* Jan. 25, 2023, at 4:00 p.m. (ET) will be the Deadline to file
and serve Notice of Successful Bidder.
* Jan. 26, 2023, at 4:00 p.m. (ET) will be the Deadline to
object to (i) conduct of the Auction, (ii) the proposed Sale to the
Successful Bidder, and (iii) ability of the Successful Bidder to
provide adequate assurance of future performance, or the proposed
form of adequate assurance of future performance.
* Jan. 27, 2023, at 10:00 a.m. (ET) will be the Sale Hearing.
* On or prior to Feb. 3, 2023 will be the Closing.
Since the Petition Date, the Debtor and its investment banker
Raymond James reached out to a total of 132 potential buyers. As
of the date of the Disclosure Statement, the Debtor has received
inbound inquiries from 12 additional parties that are interested in
learning more about the sale process and more than 30 parties have
been responsive and are evaluating the opportunity to take part in
the Debtor's postpetition Sale Process and have not declined the
opportunity.
Under the Plan, Class 3 General Unsecured Claims will receive its
pro rata share of the General Unsecured Claim Distribution, or such
other less favorable treatment as to which such Holder and the
Post-Effective Date Debtor shall have agreed upon in writing.
Class 3 is impaired, and therefore Holders of General Unsecured
Claims are entitled to vote on the Plan.
The deadline to vote to accept or reject the plan is 4:00 p.m.
(Prevailing Eastern Time) on February 24, 2023. The hearing to
consider confirmation of the plan has been scheduled for March 3,
2023 at [__]. (Prevailing Eastern Time). Objections to
confirmation of the Plan must be filed (i) on or before February
24, 2023 at 4:00 p.m. (Prevailing Eastern Time).
Proposed Co-Counsel to the Debtor:
Sean M. Beach, Esq.
Shane M. Reil, Esq.
Catherine C. Lyons, Esq.
Heather P. Smillie, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square, 1000 N. King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
E-mail: sbeach@ycst.com
sreil@ycst.com
clyons@ycst.com
hsmillie@ycst.com
- and -
Cullen Drescher Speckhart, Esq.
Michael A. Klein, Esq.
Lauren A. Reichardt, Esq.
COOLEY LLP
55 Hudson Yards
New York, NY 10001
Telephone: (212) 479-6000
Facsimile: (212) 479-6275
E-mail: cspeckhart@cooley.com
mklein@cooley.com
lreichardt@cooley.com
A copy of the Disclosure Statement dated Dec. 30, 2022, is
available at https://bit.ly/3Z71hrN from PacerMonitor.com.
About Quanergy Systems
Quanergy Systems, Inc., designs, develops and markets Light
Detection and Ranging (LiDAR) sensors and 3D perception software
solutions that enable intelligent, real-time detection, tracking
and classification of objects such as people and vehicles in
mission-critical markets such as security, smart cities and
industrial automation. The company is based in Sunnyvale, Calif.
Quanergy Systems sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Delaware Case No. 22-11305) on Dec. 13,
2022, with $10 million to $50 million in both assets and
liabilities. Larry Perkins, chief restructuring officer of
Quanergy Systems, signed the petition.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Cooley,
LLP as legal counsels; SierraConstellation Partners as
restructuring advisor; FTI Consulting, Inc. as financial Advisor;
and Raymond James Financial, Inc. as investment Banker. Bankruptcy
Management Solutions, Inc., doing business as Stretto, Inc. is the
claims, noticing and solicitation agent.
RED PLANET: Fidelity Fund Marks $14M Loan at 40% Off
----------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $14,025,000 loan extended to Red Planet Borrower LLC
to market at $8,375,000 or 60% of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries a 7.5039% interest (1 month U.S. LIBOR + 3.750%)
to Red Planet Borrower LLC. The loan is scheduled to mature on
September 30, 2028.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Red Planet Borrower, LLC (dba Liftoff), headquartered in Redwood
City, Calif., is an independent mobile app marketing and
advertising platform. The company was formed in September 2021
through the combination of Liftoff Mobile, Inc. and Vungle Inc.,
both portfolio holdings of Blackstone Inc., which retains majority
ownership of the combined entity.
RELMADA THERAPEUTICS: Paul Kelly to Serve as CEO Special Advisor
----------------------------------------------------------------
Relmada Therapeutics, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission it entered into an Advisory
Agreement on Jan. 1 with Paul Kelly, who is a director of the
Company, pursuant to which Mr. Kelly will act as special advisor to
the chief executive officer of the Company, providing advice and
services including strategy formation, operational and research and
development advice, developing internal and external corporate
opportunities, identifying potential acquisition candidates,
partnership opportunities and/or divestitures, assisting in due
diligence and financial analysis to evaluate selected
opportunities, providing advice regarding structuring and
negotiation of potential transactions, providing advice regarding
the integration process following potential transactions, and
supporting key relationships with investment banks and other
financial advisors. The Company will pay Mr. Kelly for these
services $32,000 monthly in advance and will reimburse him for
certain pre-approved expenses. The agreement has a term of one
year, with automatic renewal for consecutive one-year terms unless
either party provides the other party written notice of his or its
intention to not to renew the agreement at least 30 days prior to
the end of the initial or renewal term. The agreement may be
terminated early: by either party upon 30 days' prior written
notice; for an uncured breach by the other party; and by the
Company for "cause" as defined in the agreement. The agreement
contains a provision for indemnification of the Company by Mr.
Kelly on customary terms.
The Board of Directors of the Company has determined that as a
result of entering into the Advisory Agreement, Paul Kelly will no
longer be considered an "independent" director within the meaning
of Section 10A or Section 10C of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder, or
within the meaning of the corporate governance rules of The Nasdaq
Stock Market. As a result, Mr. Kelly will no longer chair or serve
on the Compensation Committee of the Board of Directors or serve on
the Audit Committee of the Board of Directors. Effective Jan. 1,
2023, the Board of Directors appointed Charles J. Casamento
chairman of the Compensation Committee of the Board.
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.
REVERSE MORTGAGE: Gets OK to Hire FTI, Appoint CRO
--------------------------------------------------
Reverse Mortgage Investment Trust, Inc. and its affiliates received
approval from the U.S. Bankruptcy Court for the District of
Delaware to employ FTI Consulting, Inc. and designate Tanya
Meerovich, the firm's senior managing director, as their chief
restructuring officer.
The Debtors require a restructuring advisor to:
(a) assist in the management of all aspects of the Debtors'
operations;
(b) evaluate cash and liquidity requirements;
(c) work with the Debtors' management to preserve and maximize
cash availability while preserving value in the business;
(d) assist in the evaluation of strategic alternatives;
(e) assist in the preparation of reports;
(f) assist the Debtors' management in responding to requests
from, and negotiation with, investors, lenders, creditors, any
official committees and other stakeholders;
(g) assist in the Debtors' strategic communications with
employees, vendors and other stakeholders, as needed;
(h) direct the efforts of external professionals, consultants
and advisors in connection with liquidation initiatives; and
(i) perform other services that may be requested by the
Debtors.
The firm will charge these hourly fees:
Senior Managing Directors and Senior Advisors $1,045 - $1,495
per hour
Directors/Senior Directors/Managing Directors $785 - $1,055
per hour
Consultants/Senior Consultants $435 - $750 per
hour
Administrative/Paraprofessionals $175 - $325 per
hour
In addition, the firm will seek reimbursement for expenses
incurred.
The Debtors paid the firm $3.25 million prior to their bankruptcy
filing.
Ms. Meerovich disclosed in a court filing that her firm is a
"disinterested person" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firm can be reached through:
Tanya Meerovich
FTI Consulting, Inc.
1166 Avenue of the Americas. 15th Floor
New York, NY 10036
Telephone: (212) 247-1010
Email: Tanya.Meerovich@fticonsulting.com
About Reverse Mortgage Investment Trust
Reverse Mortgage Investment Trust, Inc. is an originator and
servicer of reverse mortgage loans.
Reverse Mortgage Investment Trust and affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead
Case No. 22-11225) on Nov. 30, 2022. In the petitions signed by
their chief executive officer, Craig Corn, the Debtors disclosed
$10 billion to $50 billion in both assets and liabilities.
Judge Mary F. Walrath oversees the cases.
The Debtors tapped Sidley Austin LLP as general bankruptcy counsel;
Benesch, Friedlander, Coplan and Aronoff, LLO as local bankruptcy
counsel; FTI Consulting Inc. as financial advisor; and Kroll
Restructuring Administration, LLC as noticing and claims agent.
Leadenhall Capital Partners LLP, as agent to the post-petition
secured lenders, is advised by Latham & Watkins, LLP and Young,
Conaway Stargatt & Taylor, LLP as counsel; BRG as financial
advisor; and Moelis as investment banker.
Texas Capital Bank retained Paul, Weiss, Rifkind, Wharton &
Garrison, LLP as counsel.
Longbridge Financial, LLC retained Weil, Gotshal & Manges, LLP,
Lowenstein Sandler, LLP and Richards, Layton & Finger as counsel;
and Houlihan Lokey, Inc. as financial advisor.
The U.S. Trustee for Region 3 appointed an official committee of
unsecured creditors in the Debtors' cases on Dec. 13, 2022. The
committee is represented by Blank Rome, LLP.
RL ENTERPRISES: Unsecureds Will Get 3% of Claims in 3 Years
-----------------------------------------------------------
RL Enterprises, Inc. filed with the U.S. Bankruptcy Court for the
District of Nevada a Disclosure Statement describing Plan of
Reorganization dated January 9, 2023.
The Debtor owns nine parcels of real estate located in California.
The Debtor is engaged in the business of owning and renting its
properties.
The Debtor was involved in a prior Chapter 11 case and confirmed a
Plan in that case, Case No.17-10271-abl. This current case was
filed primarily because the note on 700 Paularino became due. When
the Debtor arranged for refinancing to pay off this loan, the
Debtor encountered problems with lender and the payoff.
The Debtor holds various loans for its nine properties. Under the
Plan, the rights of Tenants are unimpaired. The Plan proposes to
pay the Lenders, in full (up to the value of their collateral) over
a period of 20 years using the rental income from the Tenants to
pay note rate interest (or prime rate in the case of Superior Loan
Servicing for 12582 Josephine, Unit E, Garden Grove, California
92841), amortized over 40 years and a balloon payment at the end of
20 years obtained through sale or refinancing when the mortgage
markets become more normal.
One creditor, Greg Wilde (holding a second position lien on12582
Josephine, Unit E, Garden Grove, California 92841) will be paid in
full over 3 years. Any Tenants with priority claims for deposits,
if any, will be paid 100% in the normal course of operation. Under
the Plan, with the exception of Greg Wilde, the secured creditors
will be paid over 240 months. The Plan also provides for the 100%
payment of all other administrative claims, including fees payable
to the Office of the United States Trustee, and priority claims
upon confirmation.
All fully secured Creditors holding allowed claims will receive
distributions that the proponent of the Plan has valued at 100
cents on the dollar. Those creditors whose claims are undersecured
will receive distributions of the secured portion of their claims
valued at 100 cents on the dollar, and on their undersecured claims
at approximately 3 cents on the dollar. All unsecured creditors
will receive a distribution of approximately 3 cents on the dollar.
Class 12 consists of the allowed General Unsecured Claims against
the Debtor. Holders of Class 12 Allowed Claims shall be paid,
commencing on the first day of the month after the 6-month
anniversary of the effective date, their pro rata share of
$50,000.00, which shall be paid from the equity infusion of $50,000
made by Debtor's principal, Roman Libonao, as set forth in the
Plan. At the Debtor's Option, Debtor may pre-pay any payment due
without penalty.
Unsecured creditors holding Allowed Claims will receive
distributions under the Plan, which the Debtor has valued at
approximately 3% of each unsecured creditor's Allowed Claim over a
three-year period. These funds will come from the Debtor's
principal, Roman Libonao, who will contribute $50,000.00 to the
Plan. All liens of unsecured creditors shall be stripped upon
confirmation of the Plan. The Plan also provides for the payment of
administrative and priority claims in full on the effective date of
the Plan, or as agreed by the holder of such administrative or
priority claim. The allowed unsecured claims total $1,822,573.00.
If an objection to the Plan is lodged under Section 1129(a)(15) of
the Bankruptcy Code, the Debtor's Payments and distributions under
the Plan will be funded by the Debtor, based upon its (a) projected
monthly rental income (b) proceeds from the sale of real property,
at the Debtor's sole discretion, and (c) contributions by the
Debtor's principal Roman Libonao, as necessary.
A full-text copy of the Disclosure Statement dated January 9, 2023
is available at https://bit.ly/3GVooOT from PacerMonitor.com at no
charge.
Attorneys for Debtor:
Matthew L. Johnson, Esq.
Russell G. Gubler, Esq.
Johnson & Gubler, P.C.
8831 West Sahara Avenue
Las Vegas, NV 89117
Tel: (702) 471-0065
Fax: (702) 471-0075
Email: mjohnson@mjohnsonlaw.com
About RL Enterprises
RL Enterprises, Inc. offers customized training programs that
generate results to improve employee skill sets. The company is
based in Costa Mesa, Calif.
RL Enterprises sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 22-13254) on Sept. 11,
2022, with between $1 million and $10 million in both assets and
liabilities. Roman Libonao, president of RL Enterprises, signed the
petition.
Judge August B. Landis oversees the case.
The Debtor is represented by Matthew L. Johnson, Esq., and Russell
G. Gubler, Esq., at Johnson & Gubler, P.C.
RPJ HOSPITALITY: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: RPJ Hospitality, LLC
338 N Sterling Drive
Lafayette, LA 70501
Chapter 11 Petition Date: January 11, 2023
Court: United States Bankruptcy Court
Western District of Louisiana
Case No.: 23-50023
Judge: Hon. John W. Kolwe
Debtor's Counsel: Tom St. Germain, Esq.
WEINSTEIN & ST. GERMAIN
1103 West University Ave
Lafayette, LA 70506
Tel: (337) 235-4001
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $500,000 to $1 million
The petition was signed by Ravi Daggula as manager.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/R4PQSZY/RPJ_Hospitality_LLC__lawbke-23-50023__0001.0.pdf?mcid=tGE4TAMA
RUBRYC THERAPEUTICS: Unsecureds Owed $18M Get 3.4% to 31.5%
-----------------------------------------------------------
Rubryc Therapeutics, Inc., filed an Amended Chapter 11 Plan of
Liquidation and a corresponding Disclosure Statement.
After the Asset Sale, the Debtor's remaining principal assets are
its cash on hand of approximately $414,972 as of the Petition Date,
security deposits with MBC Biolabs 733 LLC and Excedr amounting to
approximately $218,479, the Debtor's insurance premiums paid in the
amount of $31,937, 102,354 shares of iBio's Common Stock
constituting the Closing Payment and the Contingent Payment of up
to $5,000,000 in the event the Debtor meets both of the required
Milestones pursuant to the APA.
Under the Plan, Class 3 Convenience Class Claims total $30,217.08.
Any unsecured Convenience Claim amounting to $7,500 in the
aggregate or less and greater than $7,500 in aggregate but as to
which its Holder has elected to voluntarily reduce its Claim to
$7,500 by making a Convenience Class Election will be paid in Cash
in an amount equal to 25% of such Allowed Convenience Claim on the
later of the Initial Distribution Date, or the date such
Convenience Claim becomes Allowed. Class 3 is impaired.
Class 4 General Unsecured Claims Class B totaling $18,445,013 will
recover 3.4% to 31.5% of their claims. Class 4 Allowed General
Unsecured Claims will be paid in cash their pro rata share of the
Distributable Cash after payment of the Unclassified Claims,
Classes 1, 2, and 3 Claims. Pro rata means the entire amount of the
Distributable Cash divided by the entire amount owed to Creditors
with Allowed Claims in this Class. Class 4 is impaired.
Except as otherwise provided in the Plan, the Liquidating Debtor
shall be vested with all the assets of the Estate as of the
Effective Date, including all claims and causes of action that
existed prior to, on or after the commencement of the Chapter 11
Case. All Distributable Cash shall be transferred to the Allowed
Claim Reserves and the Disputed Claim Reserves, if any, to be
maintained for the benefit of creditors. Pursuant to the Plan, the
Liquidating Debtor shall be authorized to make distributions to
Holders of Allowed Claims and Interests.
The Distributable Cash and the Allowed Claims Reserves shall be
funded from (i) the remaining Cash the Debtor has on hand as of the
Confirmation Hearing, (ii) recovery from any Avoidance Action,
(iii) the Closing Payment and (iv) potentially the Contingent
Payment from the Asset Sale to iBio in the event that the Debtor
achieves certain milestones (the "Milestones") set forth in the
APA. The Debtor anticipates a recovery of approximately $90,000
from the Avoidance Actions, an amount representing approximately
10% of the estimated transferred amounts. The Closing Payment
consists of the issuance of 102,354 shares of iBio Common Stock,
subject to a lock-up schedule as follows: release of 25% of the
iBio Common Stock at intervals on or about March 15, 2023; June 13,
2023, September 11, 2023 and December 10, 2023. There are two
Milestones the Debtor must meet in order for the Contingent Payment
to realize:
1. Milestone 1: meeting the occurrence of both of the following:
(A) scaling of the RubrYc Discovery Engine to generate hit panels
for at least 7 target campaigns in any 12 -month period (such
12-month period, the "Hit Panel Measurement Period"), and (B) one
or more molecules from at least four of the foregoing hit panels
achieve in vivo proof of concept by no later than 12 months
following the end of the Hit Panel Measurement Period (or, if
earlier, by the Milestone Expiration Date of September 16, 2027).
2. Milestone 2: the date upon which the fifth patient dosed in
the first phase I clinical trial conducted by iBio during the
period between the closing date of the sale and the Milestone
Expiration Date with respect to a molecule discovered using the
RubrYc Discovery Engine, excluding any molecule(s) arising from
EFGRvIII and IBIO-101 programs.
The Debtor will receive $2,500,000 upon completion of each
Milestone for an aggregate Contingent Payment of $5,000,000,
provided that each Milestone is completed prior to September 16,
2027.
The hearing on approval of disclosure statement will be on February
10, 2023 at 10:30 a.m. thru ZoomGov/Teleconference.
Proposed Attorneys for the Debtor in Possession, RubrYc
Therapeutics, Inc.:
Matthew J. Olson, Esq.
DORSEY & WHITNEY LLP
167 Hamilton Avenue, Suite 200
Palo Alto, CA 94301
Telephone: (650) 857-1717
Facsimile: (650) 618-1913
E-mail: olson.matt@dorsey.com
A copy of the Disclosure Statement dated Dec. 30, 2022, is
available at https://bit.ly/3Cjs3U8 from PacerMonitor.com.
About RubrYc Therapeutics
RubrYc Therapeutics, Inc. -- http://www.rubryc.com/-- is a
biotechnology company that integrates chemistry and computation to
decode therapeutically significant protein interfaces,
revolutionizing the discovery of antibody-based drugs. The company
is based in San Carlos, Calif.
RubrYc Therapeutics filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Calif. Case No. 22-30583) on Oct.
27, 2022. In the petition filed by its chief executive officer,
Isaac Bright, M.D., the Debtor reported assets between $1 million
and $10 million and liabilities between $10 million and $50
million.
Judge Dennis Montali oversees the case.
Dorsey & Whitney, LLP and Countsy, an RGP Company serve as the
Debtor's legal counsel and accountant, respectively.
SAMN LLC: Continued Operations to Fund Plan Payments
----------------------------------------------------
Samn, LLC filed with the U.S. Bankruptcy Court for the Southern
District of Texas a Plan of Reorganization under Subchapter V dated
January 9, 2023.
The Debtor is a manager managed Texas limited liability company
formed on November 15, 2013, in the State of Texas. Samn is a
limited liability company that owns and operates a Days Inn Hotel
in Baytown, Texas.
Samn's financial difficulties began in 2020 due to the COVID-19
pandemic. Samn has been able to continue paying its bills. However,
Samn was forced to file for bankruptcy due the amounting cost of
litigation in the 344th Judicial District Court in Chambers County.
Class 1 is comprised of the Allowed Secured Claims held by American
First National Bank and U.S. Small Business Administration. Holders
of Allowed Secured Claims in Class 1 shall retain their liens until
paid in full. In the event of any failure of the Reorganized Debtor
to timely make its required plan payments to Holders of Allowed
Secured Claims in this Class, which shall constitute an event of
default under the Plan as to these Claimants, they shall send a
Notice of Default to the Reorganized Debtor.
Class 2 is comprised of the Allowed Secured Ad Valorem Tax Claims
held by Goose Creek CISD and Chambers County. Holders of Allowed
Secured Claims in Class 2 shall retain their liens until paid in
full. In the event of any failure of the Reorganized Debtor to
timely make its required plan payments to Holders of Allowed
Secured Claims in this Class, which shall constitute an event of
default under the Plan as to these Claimants, they shall send a
Notice of Default to the Reorganized Debtor.
Class 3 is comprised of Allowed General Unsecured Claims against
Samn. Holders of General Unsecured Claims in Class 3 against the
Debtor shall have a threshold amount of $100.00 before any payment
is to be made, save and except the final payment where the full
amount owed to creditor shall be paid in full, according to the
terms of the Plan. In addition to the foregoing, holders of General
Unsecured Claims in Class 3 will be entitled to receive a
distribution, if any, from any successful avoidance actions after
holders of Claims in Class 1 through Class 2 above are paid in
full.
Class 4 is comprised of Allowed Subordinated Claims against Samn.
Effective as of the filing of this Plan, no claims which would
otherwise fall into this class have been identified by the Debtor.
Notwithstanding the foregoing, should a claim arise under this
class, payments to Holders of Allowed Subordinated Claims would,
commencing 60 days after the full and complete satisfaction of
holders of Claims in Class 1 through Class 3, and continuing every
month until the Plan is complete, be paid pro rata from the
Debtor's disposable income. Holders of Subordinated Claims in Class
4 against the Debtor shall have threshold amount of $100.00 before
any payment is to be made, save and except the final payment where
the full amount owed to creditor shall be paid in full, according
to the terms of the Plan.
Class 5 is comprised of Allowed Equity Interests in Samn. Effective
as of the filing of this Plan, no claims which would otherwise fall
into this class have been identified by the Debtor. Notwithstanding
the foregoing, should a claim arise under this class, payments to
Holders of Allowed Equity Interest Holder Claims would, commencing
60 days from the Effective Date and continuing every month
thereafter, be paid pro rata from the Debtor's disposable income.
Holders of Equity Interest Holder Claims in Class 5 against the
Debtor shall have threshold amount of $100.00 before any payment is
to be made, save and except the final payment where the full amount
owed to creditor shall be paid in full, according to the terms of
the Plan.
Payments and distributions under the Plan will be funded from the
continued operations of the Debtor.
A full-text copy of the Plan of Reorganization dated January 9,
2023 is available at https://bit.ly/3ICjmYT from PacerMonitor.com
at no charge.
Debtor's Counsel:
Susan Tran Adams, Esq.
Tran Singh, LLP
2502 La Branch Street
Houston TX 77004
Telephone: (832) 975-7300
Facsimile: (832) 975-7301
Email: stran@ts-llp.com
About Samn LLC
Samn LLC provides geophysical survey services. The Company
specialize in geospatial data solutions such as land and
hydrographic surveying, airborne, mobile, aerial mapping, utility
coordination, and construction phase services.
Samn LLC sought sought protection under Subchapter V of Chapter 11
of the U.S. Bankruptcy Code (Bankr. S.D. Texas Case No. 22-33023)
on Oct. 11, 2022, with between $1 million and $10 million in both
assets and liabilities. Jarrod B. Martin has been appointed as
Subchapter V trustee.
Judge Eduardo V. Rodriguez oversees the case.
Susan Tran Adams, Esq., at Tran Singh LLP serves as the Debtor's
counsel.
SAVVA HOLDINGS: Case Summary & Four Unsecured Creditors
-------------------------------------------------------
Debtor: SAVVA Holdings, Inc.
1559 W 132nd Street
Gardena, CA 90249
Chapter 11 Petition Date: January 10, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-10135
Debtor's Counsel: Michael Jay Berger, Esq.
LAW OFFICES OF MICHAEL JAY BERGER
9454 Wilshire Boulevard, 6th Floor
Beverly Hills, CA 90212
Tel: (310) 271-6223
Fax: (310) 271-9805
Email: michael.berger@bankruptcypower.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nikita Gromyko as chief executive
officer.
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/S5VP4LA/SAVVA_Holdings_Inc__cacbke-23-10135__0001.0.pdf?mcid=tGE4TAMA
SECURUS TECHNOLOGIES: Fidelity Fund Marks $30.4M Loan at 28% Off
----------------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $30,400,000 loan extended to Securus Technologies
Holdings to market at $21,882,000 or 72% of the outstanding amount,
as of October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B term loan that
carries a 12.6647% interest (3 month U.S. LIBOR + 8.250%) to
Securus Technologies Holdings. The loan is scheduled to mature on
November 1, 2025
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Based in Dallas, Texas, Securus Technologies Holdings, Inc. is one
of the largest providers of telecommunication services to
correctional facilities, with a presence in 50 states, Washington
DC, and Canada. Securus is owned and controlled by the private
equity firm Platinum Equity, LLC.
SELECT MEDICAL: Moody's Affirms B1 CFR & Alters Outlook to Negative
-------------------------------------------------------------------
Moody's Investors Service affirmed the ratings of Select Medical
Holdings Corporation ("Select Medical"), including the B1 Corporate
Family Rating and B1-PD Probability of Default Rating. Moody's also
affirmed the ratings of Select Medical Corporation (a wholly owned
subsidiary of Select Medical Holdings Corporation), including the
Ba2 senior secured rating on the term loan and the revolving credit
facility and B3 unsecured rating. The Speculative Grade Liquidity
Rating of SGL-3 (adequate) was upgraded to an SGL-2 (good). The
outlook was revised to negative from stable.
The affirmation of the ratings reflects Moody's view that Select
Medical will continue to face headwinds that will keep leverage
elevated for the next 12-18 months, but should see leverage
improvement as volumes improve and labor pressures subside. Moody's
calculates leverage to be 5.6x as of September 30, 2022,
forecasting leverage to decline to 5.0x by the end of 2023. Moody's
anticipates margins will slowly improve resulting from a lower use
of contract labor in 2023, lower rates for contract labor as well
as improvements in reimbursement from Medicare. Further, Select
Medical has a diverse business profile that should allow it to
offset the critical illness recovery hospital segment which has
been the weaker performing segment.
The negative outlook reflects Moody's expectation that operating
expenses and rising interest will continue to pressure
profitability in the near term. As a result, the company's leverage
will remain elevated for the next 12-18 months given labor
pressures and inflation contributing to margin compression.
Additionally, while Moody's expects Select Medical will be able to
extend its revolving credit facility, there is rising refinancing
risk with the revolver expiring in March 2024.
Social risk considerations are material to the rating action. The
company's reliance on highly specialized clinical labor makes it
vulnerable to worsening supply-demand imbalance of such labor and
the resultant spike in labor costs. Labor pressure contributed to
margin contraction in 2022 and increased leverage that resulted in
the negative outlook.
Upgrades:
Issuer: Select Medical Holdings Corporation
Speculative Grade Liquidity Rating, Upgraded to SGL-2 from SGL-3
Affirmations:
Issuer: Select Medical Holdings Corporation
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Issuer: Select Medical Corporation
Senior Secured Revolving Credit Facility, Affirmed Ba2 (LGD2)
Senior Secured Term Loan B, Affirmed Ba2 (LGD2)
Senior Unsecured Notes, Affirmed B3 (LGD5)
Outlook Actions:
Issuer: Select Medical Corporation
Outlook, Changed To Negative From Stable
Issuer: Select Medical Holdings Corporation
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
The B1 CFR is constrained by Moody's expectation that leverage will
remain elevated but should improve to 5.0x by the end of 2023 as
labor pressures subside. The company's critical illness recovery
hospital (LTCH) and rehabilitation hospital segments, which
comprise about 50% of EBITDA, rely on the Medicare program as a
source of revenue, also face longer-term reimbursement risks. That
said, Medicare reimbursement rate for 2023 will see a 2.3% increase
as compared to a 3% decline in 2022.
Supporting the rating is Select Medical's significant scale, good
business diversity, and leading market positions in each of its
business segments. The company's outpatient rehabilitation and
occupational medicine (Concentra) businesses provide both payor and
geographic diversity, with limited exposure to government payors.
Moody's anticipates that earnings growth over the next 12-18 months
will come from tuck-in acquisitions, the maturation of recently
opened rehabilitation hospitals, and an enhanced referral network.
The credit profile also benefits from Select's solid free cash flow
generation.
The SGL-2 reflects Moody's view that Select's liquidity will be
good over the next 12 months. Note the revolver expires in March of
2024, which is outside the liquidity horizon of 12 months. Failure
to refinance or extend maturities could result in a lower liquidity
rating. At the time of refinancing, Moody's will reassess Select
Medical's SGL rating based on factors including cash flow, revolver
availability and covenant cushion. Select Medical had about $100
million of cash as of September 30, 2022, and about $270 million of
availability on its $650 million revolving credit facility. Rising
interest rates may modestly impact free cash flow but Select
Medical has hedges in place that protect it from paying higher
interest expense. As such, Moody's believes that the company's
operating cash flow will be more than sufficient to cover basic
cash requirements. Further, Select Medical has completed its
repayment of its accelerated Medicare Advance Payments, which will
allow Select Medical to return to positive free cash flow
generation in 2023 and beyond. Moody's anticipates that Select will
maintain good cushion under its financial covenant.
ESG considerations have a highly negative impact on Select
Medical's rating (CIS-4). This reflects Select Medical's highly
negative credit exposure to social risk considerations (S-4) and
governance risk considerations (G-4). As a healthcare provider,
Select Medical is exposed to highly negative social risks that are
inherent in the hospitals sector. As a healthcare services
provider, responsible production, which considers the company's
potential liability related to patient care, is a key risk
consideration. In addition, Select Medical has a highly negative
exposure to human capital, as the company relies on highly
specialized labor to provide its services. The company is also
exposed to changes in reimbursement rates by its payors, which
include government payors, as well as a push towards reducing
overall healthcare costs. Governance risk considerations are highly
negative driven by an aggressive financial strategy that include
share repurchases.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Select Medical sustains
debt/EBITDA below 4.0 times while maintaining sufficient financial
flexibility and diversification that allow the company to absorb
potential future negative regulatory developments at the higher
rating level.
The ratings could be downgraded if liquidity weakens or if Select
Medical experiences adverse developments in Medicare regulations or
reimbursement that result in deterioration in margins or cash flow
coverage metrics. A downgrade could also occur if the company makes
a material debt-funded acquisition or shareholder initiative, or if
debt/EBITDA is sustained above 5.0 times.
Select Medical Corporation, headquartered in Mechanicsburg, PA,
provides long-term acute care services and inpatient acute
rehabilitative care through its critical illness recovery and
rehabilitation hospital segments. Select also provides physical,
occupational, and speech rehabilitation services through its
outpatient rehabilitation segment. As of September 30, 2022, Select
Medical operated 105 critical illness recovery hospitals in 28
states, 31 rehabilitation hospitals in 12 states, and 1,933
outpatient rehabilitation clinics in 39 states and the District of
Columbia. Concentra operated 519 occupational health centers in 41
states. Concentra is a provider of occupational and consumer
healthcare services, including workers' compensation injury care,
physical exams and drug testing for employers, and wellness and
preventative care. Consolidated revenue is approximately $6.3
billion.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
SIGNAL PARENT: Fidelity Fund Marks $19.5M Loan at 32% Off
---------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $19,529,000 loan extended to Signal Parent, Inc to
market at $13,353,000 or 68% of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries a 7.2539% interest (1 month U.S. LIBOR + 3.500%)
to Signal Parent, Inc. The loan is scheduled to mature on April 3,
2028.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Signal Parent, Inc. provides interior design services.
SP STAR: Court OKs Deal on Cash Collateral Access
-------------------------------------------------
The U.S. Bankruptcy Court for the Central District of California,
Los Angeles Division, authorized SP Star Enterprise, Inc., dba
Platinum Showgirls LA, to use cash collateral in accordance with
its agreement with the U.S. Small Business Administration.
As previously reported by the Troubled Company Reporter, the Debtor
on June 25, 2020, executed a U.S. Small Business Administration
Note, pursuant to which the Debtor obtained a $150,000 loan. The
terms of the Note require the Debtor to pay principal and interest
payments of $731 every month beginning 12 months from the date of
the Note over the 30-year term of the SBA Loan, with a maturity
date of June 25, 2050. The SBA Loan has an annual rate of interest
of 3.75% and may be prepaid at any time without notice of penalty.
As evidenced by the Security Agreement executed on June 25, 2020,
and a validly recorded UCC-1 filing on July 4, 2020, as Filing
Number 207802072674, the SBA Loan is secured by all tangible and
intangible personal property.
Based upon the SBA's secured lien against the Personal Property
Collateral, including but not limited to, cash collateral, the
Debtor requested that the SBA permit it to use cash collateral
retroactive to the Petition Date. Pursuant to the Stipulation and
subject to further Court order, the SBA has agreed to permit the
Debtor to use cash collateral.
The Debtor represented to the SBA it will make no additional or
unauthorized use of the cash collateral retroactive from the SBA
Loan date until February 28, 2023, or the entry of an Order
Confirming the Debtor's Plan of Reorganization, whichever occurs
earlier.
As adequate protection, retroactive to the Petition Date, the SBA
will receive a replacement lien on all post-petition revenues of
the Debtor to the same extent, priority and validity that its lien
attached to the cash collateral. The scope of the replacement lien
is limited to the amount (if any) that cash collateral diminishes
post-petition as a result of the Debtor's post-petition use of cash
collateral. The replacement lien is valid, perfected and
enforceable and will not be subject to dispute, avoidance, or
subordination, and this replacement lien need not be subject to
additional recording.
The Debtor also will commence monthly payments of $731 to the SBA
on October 1, 2022, continuing until further Court order or entry
of an Order Confirming the Debtor's Plan of Reorganization,
whichever occurs earlier.
The SBA will be entitled to a super-priority claim over the life of
the Debtor's bankruptcy case, pursuant to 11 U.S.C. section 503(b),
507(a)(2) and 507(b), which claim will be limited to any diminution
in the value of the SBA's collateral, pursuant to the SBA Loan, as
a result of the Debtor's use of cash collateral on a post-petition
basis.
A copy of the order is available at https://bit.ly/3vYoBe5 from
PacerMonitor.com.
About SP Star Enterprise
Located in Los Angeles, California, Platinum Showgirls LA provides
an after-hours hangout with sexy dancers entertaining all night.
SP Star Enterprise Inc., doing business as Platinum Showgirls LA,
filed a petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. C.D. Cal. (Case No. 22-14502) on August 18, 2022. In the
petition filed by Mohan S. Makkar, as president, Debtor disclosed
at least $1 million in liabilities against assets of less than
$100,000.
Judge Deborah J. Saltzman oversees the case.
Gregory Kent Jones has been appointed as Subchapter V trustee.
The Debtor is represented by W. Derek May, Esq., at the Law Office
of W. Derek May.
STONE CLINICAL: Unsecureds Impaired in Committee-Backed Plan
------------------------------------------------------------
STONE Clinical Laboratories LLC and the Official Committee of
Unsecured Creditors filed a an Amended Plan of Reorganization.
Under the Plan, Class 6 consists of all General Unsecured Claims
and all Claims arising from the rejection of any executory contract
against the Debtor. The Deficiency Claims of Classes 1 (if any
Class 1 Claim exists), 2 and 3 creditors, if any, shall be paid pro
rata with the Class 6 creditors (and potentially the Class 5 and 8
creditors) out of the Cash Fund until such Claims are paid in full.
Holders of Claims in Class 6 are impaired and shall be entitled to
accept or reject the Plan.
Cash Fund shall mean the fund created for the payments set forth in
this Plan created from the sale of the Debtor's Assets, the cash on
hand on the Effective Date, the Debtor's accounts, and the
recoveries from Causes of Action.
Upon the Effective Date, the Liquidating Trustee shall be empowered
and authorized to settle or compromise any Cause of Action subject
to approval by Order of the Court after Notice and Hearing. The
Liquidating Trustee shall not seek approval of any (i) a settlement
of any Cause of Action or (ii) resolution of any objection to a
proof of claim in excess of $25,000.00 without the approval of the
Liquidating Trustee Oversight Committee. Notwithstanding the
foregoing, if the Oversight Committee does not approve a
recommended settlement by the Liquidating Trustee, the Liquidating
Trustee shall have the right to seek Bankruptcy Court approval for
the settlement.
Upon the Effective Date, the Liquidating Trustee shall be empowered
and authorized to sell, assign, transfer, abandon, or otherwise
dispose of Estate Assets or assets of the Post-Effective Date
Debtor in accordance with the Plan and without Bankruptcy Court
approval when the Face Amount of the Estate Asset or asset of the
Post-Effective Date Debtor is $25,000.00 or less; provided,
however, that the Liquidating Trustee will, on a quarterly basis,
file a notice with the Bankruptcy Court of all Estate Assets and
assets of the Post-Effective Date Debtor that have been sold,
assigned, transferred, abandoned or otherwise disposed of and
include in the notice (i) the Face Amount of the Estate Asset or
asset of the Post-Effective Date Debtor, and (ii) the amount the
Estate or the Post-Effective Date Debtor received from the
disposition of the Estate Asset or asset of the Post-Effective Date
Debtor.
Bankruptcy Court approval is required for the sale, assignment,
transfer, abandonment, or other disposition of any Estate Asset or
asset of the Post-Effective Date Debtor where the Face Amount of
the Estate Asset or asset of the Post-Effective Date Debtor is more
than $25,000.00; provided, however, that the Liquidating Trustee
shall not request Bankruptcy Court Approval for any such sale,
assignment, transfer, abandonment, or other disposition without the
consent of the Liquidating Trustee Oversight Committee.
Attorneys for the Official Committee of Unsecured Creditors:
Michael D. Rubenstein, Esq.
LISKOW & LEWIS, APLC
1001 Fannin Street, Suite 1800
Houston, TX 77002
Tel: (713) 651-2953
Fax: (713) 651-2908
E-mail: mdrubenstein@liskow.com
Attorneys for Stone Clinical Laboratories LLC:
Douglas S. Draper, Esq.
HELLER, DRAPER & HORN, L.L.C.
650 Poydras Street, Suite 2500
New Orleans, LA 70130
Tel: (504) 299-3300
Fax: (504) 299-3399
E-mail: ddraper@hellerdraper.com
A copy of the Amended Plan of Reorganization dated Dec. 30, 2022,
is available at https://bit.ly/3jGqEAx from PacerMonitor.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.
SUMMER AVE: Wins Cash Collateral Access Thru March 2
----------------------------------------------------
Western Division, authorized Summer Ave LLC to use cash collateral
under the same terms and conditions as the previous order through
March 2, 2023.
As previously reported by the Troubled Company Reporter, the
creditors that claim security interests in the Debtors' properties
are Community Loan Servicing, LLC and Belvidere Capital, LLC.
As adequate protection for any diminution in value as a result of
the Debtor's use of cash collateral, all secured creditors were
granted replacement liens and security interest to the same extent,
validity, and enforceability of their perfected security interests
as of the petition date not subject to avoidance.
A copy of the order is available at https://bit.ly/3QuhNyd from
PacerMonitor.com.
About Summer Ave, LLC
Summer Ave, LLC is a limited liability company that owns commercial
property, consisting of three buildings and two parking lots, each
on a separate parcel, with building addresses of (i) 431-435 White
Street, (ii) 429 White Street and 752 Sumner Avenue, and (iii) 760
Sumner Avenue, Springfield, Massachusetts.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Mass. Case No. 22-30140) on April 28,
2022. In the petition signed by Louis Masaschi, manager, the Debtor
disclosed $778,100 in assets and $4,058,600 in liabilities.
Judge Elizabeth D. Katz oversees the case.
The Law Offices of Louis S. Robin represents the Debtor as
counsel.
TAMG REALTY: Files for Chapter 11 then Seeks Dismissal
------------------------------------------------------
Tamg Realty Inc. filed for chapter 11 protection in the Northern
District of Georgia.
According to court filings, Tamg Realty estimated $1 million to $10
million in debt to 1 to 49 creditors. The petition stated that
funds will not be available to unsecured creditors.
On Jan. 6, 2023 -- just three days after filing for bankruptcy --
the Debtor filed a motion to dismiss its Chapter 11 case. The
Debtor borrowed money from several creditors and found it very
difficult to keep up with payments, prompting the Chapter 11
filing. The Debtor now seeks dismissal of this case because they
have decided to work out the matters directly with creditors.
About Tamg Realty Inc.
Tamg Realty Inc. -- https://www.tamgrealty.com -- offers a wide
range of residences offer for sale in Georgia.
Tamg Realty Inc. filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Ga. Case No. 23-50051) on January
3, 2022. In the petition filed by Tiffany Gray, as owner, the
Debtor reported assets between $500,000 and $1 million and
liabilities between $1 million and $10 million.
The Debtor is represented by:
April Lash, Esq.
The Law Office of April Lash
1290 Spring Street
875 Roswell Rd, Ste C
Smyrna, Ga 30080
TRANSOCEAN TITAN: Moody's Rates New $500MM Sr. Secured Notes 'B2'
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Transocean Titan
Financing Limited's (Titan, a wholly owned indirect subsidiary of
Transocean Inc.) proposed $500 million senior secured notes due
2028 (Titan Notes). Concurrently, Moody's affirmed Transocean
Inc.'s (Transocean) Caa1 Corporate Family Rating, Caa2-PD
Probability of Default Rating, and its various issue ratings. The
SGL-3 Speculative Grade Liquidity Rating is unchanged. The outlook
is stable.
The proceeds from the notes issuance will be used to finance a
portion of the construction expenses for the newbuild 8th
generation, ultra-deepwater drillship Deepwater Titan and for
additional related costs. The Titan Notes will be secured by a
first lien in the Deepwater Titan. The Deepwater Titan is under a
five-year contract with Chevron Corporation (Chevron, Aa2 stable)
that is scheduled to commence in the second quarter of 2023.
Assignments:
Issuer: Transocean Titan Financing Limited
Backed Senior Secured Regular Bond/Debenture, Assigned B2 (LGD2)
Affirmations:
Issuer: Transocean Inc.
Corporate Family Rating, Affirmed Caa1
Probability of Default Rating, Affirmed Caa2-PD
Senior Secured Revolving Credit Facility, Affirmed B1 (LGD1)
Senior Unsecured Regular Bond/Debenture, Affirmed Ca (LGD5)
Backed Senior Unsecured Regular Bond/Debenture, Affirmed Caa3
(LGD4)
Backed Senior Unsecured Regular Bond/Debenture, Affirmed Caa1
(LGD3)
Issuer: Transocean Guardian Limited
Backed Senior Secured Regular Bond/Debenture, Affirmed B2 (LGD2)
Issuer: Transocean Pontus Limited
Backed Senior Secured Regular Bond/Debenture, Affirmed B2 (LGD2)
Issuer: Transocean Poseidon Limited
Backed Senior Secured Regular Bond/Debenture, Affirmed B2 (LGD2)
Issuer: Transocean Sentry Limited
Backed Senior Secured Regular Bond/Debenture, Affirmed B2 (LGD2)
Outlook Actions:
Issuer: Transocean Titan Financing Limited
Outlook, Assigned Stable
Issuer: Transocean Inc.
Outlook, Remains Stable
Issuer: Transocean Guardian Limited
Outlook, Remains Stable
Issuer: Transocean Pontus Limited
Outlook, Remains Stable
Issuer: Transocean Poseidon Limited
Outlook, Remains Stable
Issuer: Transocean Sentry Limited
Outlook, Remains Stable
RATINGS RATIONALE
The new senior secured notes of Titan are rated B2, in line with
the rig-secured notes of other Transocean indirect subsidiaries.
The rating is one notch below the senior secured revolving credit
facility's B1 rating because of the Titan notes' security interest
in only one drillship and the cash flow generated from its
contract, and the potential for any residual claims from these
notes to become subordinated to secured claims at Transocean, which
has provided an unsecured guarantee to these notes.
Transocean's Caa1 CFR reflects the company's high debt leverage,
and Moody's view on overall recovery on the company's debt.
Although Transocean's credit metrics are improving, they still
remain weak, making the company highly reliant on continued
strengthening of offshore drilling fundamentals for its capital
structure to become sustainable. The company's high debt levels and
complex capital structure raise the risk for future transactions
that could be viewed as distressed exchanges, particularly if
industry fundamentals or investor sentiment changes, which is
reflected in the Caa2 PDR.
Transocean benefits from its $8.3 billion revenue backlog and the
company's measures to maintain high levels of revenue efficiency,
reduce operating costs, and enhance operational utilization of its
active rigs. The proposed Titan notes provide an added measure of
liquidity and flexibility, as does the credit agreement Transocean
has with Jurong Shipyard Pte Ltd. ($349 million outstanding as of
Sept. 30, 2022) to cover a portion of the construction costs of the
newbuild Deepwater Atlas, which went into service in October 2022.
While these financing arrangements enhance the company's liquidity,
they also increase the company's debt burden. Transocean has
adequate liquidity to satisfy its near-term maturities, but the
company has substantial refinancing risk for the maturities beyond
2024.
Moody's expects Transocean to maintain adequate liquidity as
reflected in its SGL-3 rating because of its still sizable cash
balance and borrowing availability under its committed credit
facility. As of September 30, 2022, the company had $954 million of
cash, which will be enhanced by proceeds from the proposed Titan
Notes, and nothing borrowed under its senior secured revolving
credit facility maturing in June 2025. The revolver has committed
availability of $774 million through June 2023, when availability
reduces to $600 million.
Moody's expects Transocean to meet its cash needs into 2024 from
its operating cash, cash on hand and revolver borrowings. The
credit agreement contains several financial covenants including
maximum debt to capitalization ratio of 0.60:1.00, minimum
liquidity of $500 million, minimum guarantee coverage ratio of
3.00x and minimum collateral coverage ratio of 2.1x. Moody's
expects that the company will remain in compliance with its
covenant requirements although cushion for compliance will remain
tight. As of September 30, 2022, Transocean had $758 million of
maturities, principal payments and other installments (contractual
interest payments of previously restructured debt) due in 2023 and
an additional $1.2 billion in 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
An upgrade of Transocean's ratings would require the continued
improvement in offshore fundamentals leading to substantially
higher EBITDA, improved liquidity, reduced leverage and refinancing
risk. Interest coverage above 2x could be supportive of an
upgrade.
Transocean's ratings could be downgraded if the company's liquidity
weakens materially, interest coverage drops below 1x, or if
commodity prices weaken significantly resulting in a deterioration
in offshore drilling fundamentals. Ratings could be downgraded if
Moody's view on the company's overall debt recovery or specific
debt instrument recovery is reduced.
Transocean Inc. is a wholly-owned subsidiary of Transocean Ltd., a
leading international offshore drilling contractor operating in
every major offshore producing basin around the world.
The principal methodology used in this rating was Oilfield Services
published in August 2021.
TURNER OAKWOOD: Court OKs Interim Cash Collateral Access
--------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized Turner Oakwood Properties,
LLC to use cash collateral on an interim basis for its
post-petition, necessary and reasonable operating expenses, as
detailed in the January and February 2023 budget, with a 10%
variance.
The Debtor requires access to cash collateral generated by its
operations so it may remain in business.
On October 16, 2006, Celeste Turner and Augusta Turner signed a
promissory note in favor of Wells Fargo Bank, N.A., in the original
principal balance of $248,000. The note is secured by a deed of
trust and assignment of rents recorded in Book 12217, at Page 1868,
of the Wake County Registry, which encumbers 404 E. Edenton Street.
Upon information and belief, SN Servicing is the servicer of the
loan.
On October 26, 2006, Celeste Turner and Augusta Turner signed a
promissory note in favor of Countrywide Bank, N.A., in the original
principal balance of $227,500. The note is secured by a deed of
trust and assignment of rents recorded in Book 12236, at Page 1382,
of the Wake County Registry, which encumbers 6 N. Bloodworth
Street. Shellpoint is the servicer of this loan.
As adequate protection for the Debtor's use of cash collateral, the
Cash Collateral Creditors are granted postpetition replacement
liens on the same assets to which their liens attached
pre-petition, to the same extent, and with the same validity and
priority as existed on the petition date.
These events constitute an "Event of Default":
a. The Debtor will fail to comply with any of the terms or
conditions of the Order;
b. The Debtor will fail to maintain insurance;
c. The Debtor will use cash collateral other than as agreed in
the Order; or
d. Appointment of a trustee or examiner in this proceeding, or
the conversion of the case to a proceeding under Chapter 7 of the
Bankruptcy Code.
A further hearing on the matter is set for February 27 at 12:30
p.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3ZqLGDI from PacerMonitor.com.
The Debtor projects $2,700 in total income and $2,624 in total
expenses for its 404 E. Edenton property.
About Turner Oakwood Properties, LLC
Turner Oakwood Properties, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-02049) on
September 12, 2022. In the petition signed by Augusta Bernadette
Turner, manager, the Debtor disclosed up to $1 million in both
assets and liabilities.
Judge David M. Warren oversees the case.
William Kroll, Esq., at Everett Gaskins Hancock LLP, is the
Debtor's counsel.
VENTURE GLOBAL: Moody's Rates $1BB Secured Notes Offering 'Ba2'
---------------------------------------------------------------
Moody's Investors Service has assigned a Ba2 to Venture Global
Calcasieu Pass, LLC's (Calcasieu Pass) planned $1.0 billion senior
secured note offering. The rating outlook is positive.
Proceeds from the note offering will be used to prepay outstanding
borrowings and reduce commitments by a similar amount under
Calcasieu Pass' approximately $2.3 billion senior secured term loan
due August 2026. Calcasieu Pass is a liquified natural gas (LNG)
export facility in Cameron Parish, Louisiana. The nameplate
capacity of the export facility is 10 million metric tonnes per
annum (MTPA).
RATINGS RATIONALE
The Ba2 rating acknowledges that the export facility is producing
liquified natural gas from each of its 18 liquefaction trains and
construction is substantially complete. While more than 90
commissioning cargoes have been loaded, significant remaining work
related to commissioning, carryover completions, rectification
work, warranty work and reliability testing continues. Calcasieu
Pass expects to achieve the Commercial Operation Date (COD) in the
second half of 2023. Calcasieu Pass' Ba2 rating also considers the
fixed capacity type payments under 20-year, take-or-pay Sale
Purchase Agreements (SPA) with six separate creditworthy customers
on a free on board basis. Deliveries under the SPAs commence upon
Calcasieu Pass achieving COD. The rating, however, reflects a
degree of uncertainty around the start of the SPAs as well as
Calcasieu Pass' ability to manage the facility, including the
commercial aspect of procuring natural gas as operating activities
grow in scale and complexity.
Fixed capacity payments under the SPAs provide significant and
predictable future recurring cash flows that compare favorably to
anticipated annual operating and financing costs. The weighted
average rating of such foundation SPA customers is Baa1 and the
contracted volumes under the 20-year foundation contracts represent
85% of Calcasieu Pass' nameplate capacity. When fully operating
under the SPAs, Moody's expect Calcasieu Pass to generate annual
recurring EBITDA in excess of $800 million, cash from operations to
adjusted debt at approximately 14% and debt-to-EBITDA in a range of
6-7 times under its long-term contractual arrangements.
RATING OUTLOOK
The positive outlook reflects an expectation for continued
successful progress toward reaching COD.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Continued sound procurement activities and operating performance
combined with a clear sight towards the commencement of deliveries
under the foundation SPAs could trigger an upgrade.
Material delays in achieving COD, challenges in procuring the
associated levels of natural gas or a material negative outcome
could trigger rating pressure.
Calcasieu Pass is primarily engaged in the natural gas liquefaction
and export-related businesses, and is constructing and will own and
operate an LNG export facility consisting of 18 midscale, modular
liquefaction trains, with an expected aggregate nameplate capacity
of 10.0 MTPA of LNG and permitted liquefaction capacity of 12.0
MTPA.
The principal methodology used in this rating was Generic Project
Finance Methodology published in January 2022.
VENTURE GLOBAL: S&P Assigns 'BB+' Rating on New $1BB Bond
---------------------------------------------------------
S&P Global Ratings assigned its 'BB+' issue-level rating and
positive outlook to Venture Global Calcasieu Pass LLC's (VGCP)
proposed $1 billion bond issuance maturing in 2030. The recovery
rating is '2' (75% rounded estimate). This issuance will repay an
equivalent amount of the project's bank facility net of fees and
expenses associated with the transaction.
VENUS CONCEPT: Former CEO to Get $1 Million in Separation Pay
-------------------------------------------------------------
Venus Concept Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that Domenic Serafino, the
Company's former chief executive officer and member of the Board of
Directors, and Venus Concept Canada Corp. have entered into a
Minutes of Settlement Agreement, pursuant to which, Mr. Serafino is
entitled to receive, in connection with his separation, (i) a
combined maximum total of US$700,000 by Oct. 15, 2023, in
accordance with the payment schedule set forth in the Settlement,
representing 15 months of his regular base salary as at the
Termination Date, (ii) US$363,000 in respect of earned but unpaid
fiscal year 2021 bonus on or before Dec. 31, 2022 and (iii)
outstanding vacation pay for 15 accrued but unused vacation days on
or before Dec. 31, 2022. All payments are subject to applicable
withholdings and deductions. Should Mr. Serafino obtain comparable
employment within the Pay Period, any salary continuance and/or
lump sum payments will automatically cease and Venus will pay to
Mr. Serafino, in a lump sum, 50% of the remaining amount of the
Payment.
In addition, Mr. Serafino's granted and unvested options, including
Restricted Stock Units granted in March 2022, will continue to vest
in the regular course per the vesting schedule of the respective
grant. Once the final tranche of options vests, Mr. Serafino will
have 30 days to exercise any remaining unexercised options. In the
event of a Change of Control (as defined in the Settlement), any
remaining unpaid portion of the Payment will immediately become
payable, and all unvested options shall immediately vest and become
exercisable for 90 days after Mr. Serafino is notified or becomes
aware of the Change of Control. Venus will also contribute
US$5,000 in respect of Mr. Serafino's legal fees, to be paid
directly to his counsel.
The Settlement provides for a general waiver and release of claims
in favor of the Company and its affiliates and other customary
provisions, including non-disclosure and non-disparagement
provisions.
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's aesthetic systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general practitioners
and aesthetic medical spas.
Venus Concept reported a net loss of $22.14 million for the year
ended Dec. 31, 2021, compared to a net loss of $82.82 million for
the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company
had $120.63 million in total assets, $110.61 million in total
liabilities, and $10.01 million in total stockholders' equity.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
28, 2022, citing that the Company has reported recurring net losses
and negative cash flows from operations that raises substantial
doubt about its ability to continue as a going concern.
VOYAGER DIGITAL: Alameda Challenges Bankruptcy Plan Over $75M Loan
------------------------------------------------------------------
James Nani of Bloomberg Law reports that Bankrupt Alameda Research
Ltd. asked a court to reject Voyager Digital Holdings Inc.'s
bankruptcy turnaround proposal because it favors some unsecured
creditors over its own multi-million dollar claims.
The proposed Chapter 11 plan submitted by the bankrupt crypto
trading platform can't be confirmed because it discriminates
against Alameda's claims, the trading firm told the US Bankruptcy
Court for the Southern District of New York on Jan. 3, 2023.
Alameda was co-founded by Sam Bankman-Fried and is associated with
his fallen crypto firm, FTX.
Alameda loaned Voyager $75 million in rescue financing in June
2022, less than two weeks before Voyager filed for bankruptcy.
About Voyager Digital Holdings
Based in Toronto, Canada, Voyager Digital Holdings Inc. --
https://www.investvoyager.com/ -- runs a cryptocurrency platform.
Voyager claims to offer a secure way to trade over 100 different
crypto assets using its easy-to-use mobile application. Through
its subsidiary Coinify ApS, Voyager provides crypto payment
solutions for both consumers and merchants around the globe.
Voyager Digital Holdings Inc. and two affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead
Case No. 22-10943) on July 5, 2022. In the petition filed by
Stephen Ehrlich, chief executive officer, the Debtors estimated
assets and liabilities between $1 billion and $10 billion.
Michael E. Wiles oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy
counsel; Berkeley Research Group, LLC as financial advisor; Moelis
& Company as investment banker; Consello Group as strategic
financial advisor; Deloitte Tax, LLP as tax services provider; and
Deloitte & Touche, LLP as accounting advisor. Stretto, Inc. is the
claims agent.
On July 19, 2022, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors in these Chapter 11
cases. The committee tapped McDermott Will & Emery, LLP as
bankruptcy counsel; FTI Consulting, Inc. as financial advisor;
Cassels Brock & Blackwell, LLP as Canadian counsel; and Epiq
Corporate Restructuring, LLC as noticing and information agent.
The committee also tapped the services of Harney Westwood &
Riegels, LP in connection with Three Arrows Capital Ltd.'s
liquidation proceedings in British Virgin Islands.
W&T OFFSHORE: Moody's Puts 'Caa1' CFR Under Review for Upgrade
--------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to W&T Offshore,
Inc.'s proposed $275 million of senior secured second lien notes
due 2026. Concurrently, Moody's placed W&T's Caa1 Corporate Family
Rating and Caa1-PD Probability of Default Rating under review for
upgrade. The SGL-4 Speculative Grade Liquidity (SGL) rating remains
SGL-4. The outlook was changed to ratings on review from stable.
W&T will use net proceeds from its proposed $275 million notes
offering in conjunction with cash on its balance sheet to repay its
outstanding $552 million senior secured second lien notes due
2023.
"The review of W&T Offshore's ratings reflects the company's
pending refinancing and debt reduction, which extends its debt
maturity profile, and commodity prices that support stronger credit
metrics," commented Jonathan Teitel, a Moody's analyst.
Assignments:
Issuer: W&T Offshore, Inc.
Senior Secured 2nd Lien Global Notes, Assigned Caa1 (LGD4)
On Review for Upgrade:
Issuer: W&T Offshore, Inc.
Corporate Family Rating, Placed on Review for Upgrade, currently
Caa1
Probability of Default Rating, Placed on Review for Upgrade,
currently Caa1-PD
Outlook Actions:
Issuer: W&T Offshore, Inc.
Outlook, Changed To Rating Under Review From Stable
RATINGS RATIONALE
W&T's review for upgrade reflects the launch of the bond
refinancing transaction which would extend the debt maturity
profile and reduce debt upon completion, as well as commodity
prices that support stronger credit metrics. Based on the terms of
the transaction as proposed, Moody's believes that W&T's ratings
will be upgraded to B3 CFR and B3-PD PDR. Based on this and the
company's pro forma capital structure, Moody's assigned a Caa1 to
W&T's proposed senior secured second lien notes due 2026.
The company has a very long history of operating in the US Gulf of
Mexico but modest scale and a concentrated asset base in the
region. W&T has a long proved developed reserve life and Moody's
expects the company could increase proved developed reserves with
only modest capital spending to develop probable reserves. W&T
benefits from proximity to the Gulf Coast and low basis
differentials. Operations in the US Gulf of Mexico carry specific
regulations and are exposed to periodic weather-related
disruptions. However, there are also high barriers to entry. W&T
manages sizable well decommissioning liabilities.
As of September 30, 2022, W&T had $447 million of cash on its
balance sheet. W&T has an undrawn revolver that matures in January
2024 (with a springing maturity to 2023 if the existing notes were
not refinanced), which will reduce liquidity if not extended.
As of September 30, 2022, W&T also had a $157 first lien term loan
due 2028 (unrated) backed by a carve out of Mobile Bay assets.
These assets were moved to wholly-owned special purpose vehicles
that are unrestricted subsidiaries with respect to the proposed
notes. The revolving credit facility has a first lien priority
claim on all of the company's assets, except for the assets held in
the subsidiaries that are pledged to the term loan.
FACTORS THAT COULD LEAD TO AN UPGRADE OR A DOWNGRADE
Moody's review will focus on the credit profile benefits from the
extended debt maturity profile while maintaining adequate liquidity
and will be concluded after the financing transaction is
completed.
W&T, headquartered in Houston, Texas, is a publicly traded
independent exploration and production company operating offshore
in the US Gulf of Mexico.
The principal methodology used in these ratings was Independent
Exploration and Production published in December 2022.
WASTEQUIP LLC: S&P Alters Outlook to Positive, Affirms 'CCC+' ICR
-----------------------------------------------------------------
S&P Global Ratings affirmed all its ratings on Wastequip LLC,
including its 'CCC+' issuer credit rating, and revised the outlook
to positive from negative.
The positive outlook reflects S&P's expectation that higher
volumes, stabilizing supply-chain conditions, and more favorable
working capital dynamics over the next 12 months will generate
FOCF, further improve the company's liquidity position, and ease
refinancing risks.
Wastequip's liquidity position has moderately improved following
its recent maturity extension on its revolving credit facility,
further supported by expected improvement in working-capital
dynamics over the next 12 months. S&P said, "The company recently
extended its revolver maturity, which it had routinely tapped for
intra-year working capital needs, by 18 months to Sept. 20, 2024,
and we believe this extension alleviated an imminent maturity risk.
We expect liquidity will improve further in 2023 due to easing
working-capital needs, primarily driven by lower input costs and
stabilizing supply-chain conditions. Higher costs of steel and
resin during late 2021 and the first half of 2022 drove elevated
working capital needs, and we expect a decline in average input
costs in 2023. We expect chassis deliveries by original equipment
manufacturers (OEMs) to continue recovering, which we believe will
enable the company to lower its inventory in the trucks business.
For its liquidity needs, the company can also tap into both its
payables facility and receivables facility, which it upsized in the
third quarter of 2022. However, we exclude these facilities from
our expected sources of liquidity because we view them as
uncommitted over the next 365 days."
S&P said, "We expect moderate growth in S&P Global Ratings-adjusted
EBITDA and improved working capital over the next 12 months will
lead to positive FOCF generation in 2023. The company generated
good S&P Global Ratings-adjusted EBITDA in the second and third
quarters of 2022, which we expect will continue in 2023, supported
by healthy backlogs in its containers and trucks businesses. Key
EBITDA growth drivers over next 12 months are: improvement in OEM
chassis deliveries after a challenging first half of 2022 and
increased volumes in containers due to pent-up demand following
higher prices in early 2022. Although we expect total revenue to
decline due to lower steel and resin input prices, we expect volume
growth will likely drive moderate growth in S&P Global
Ratings-adjusted EBITDA in 2023. Consequently, we believe Wastequip
will generate positive FOCF in 2023 under our base-case forecast,
supported primarily by earnings growth and lower working-capital
needs and partly offset by higher interest costs.
"The positive outlook reflects our expectation for higher volumes,
stabilizing supply-chain conditions, and more favorable
working-capital dynamics over the next 12 months, which we believe
will generate positive FOCF, further improve the company's
liquidity, and ease refinancing risks."
S&P could raise its rating if:
-- The company demonstrates healthy EBITDA performance by
improving leverage and generating positive FOCF;
-- The company's liquidity improves, for example due to
working-capital needs declining amid a sustained decrease in steel
and resin input costs; and
-- S&P believes the company can address its debt maturities in a
manner that reduces near-term refinancing risk.
While a stable outlook is unlikely, S&P could revise its outlook
back to negative or lower the rating if:
-- The company's liquidity deteriorates--for example, if the
company does not further extend its revolving-credit facility
maturity, which S&P believes would likely entail a broader
capital-structure refinance as the first-lien term loan comes due
March 2025;
-- The company's EBITDA performance declines--for example, due to
demand declining amid a broader economic slowdown or a stalled
recovery in OEM chassis deliveries; or
-- The company continues to generate negative FOCF; or
-- The company faces a heightened default risk , such as not
fulfilling its original promise under its credit agreement.
ESG credit indicators: E-2, S-2, G-3
WEBER-STEPHEN: Fidelity Fund Marks $5.7M Loan at 17% Off
--------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $5,766,000 loan extended to Weber-Stephen Products
LLC to market at $4,786,000 or % of the outstanding amount, as of
October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a Tranche B first lien term
loan that carries a 7.3841% interest (CME Term SOFR 1 Month Index +
4.250%) to Weber-Stephen Products LLC. The loan is scheduled to
mature on October 30,2027.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Headquartered in Palatine, Illinois, Weber-Stephen Products LLC is
a global manufacturer, marketer and distributor of barbecue grills
and accessories.
WEWORK INC: Issues $250M Senior Secured Notes to Softbank
---------------------------------------------------------
WeWork Companies LLC (the "Issuer"), a wholly-owned subsidiary of
WeWork Inc., WW Co-Obligor Inc., a wholly-owned subsidiary of the
Issuer, the guarantors party thereto, and U.S. Bank Trust Company,
National Association, as trustee and collateral agent, entered into
a Senior Secured Notes Indenture on Jan. 3 pursuant to which the
Issuers issued $250 million in aggregate principal amount of Senior
Secured Notes due 2025 to SoftBank Vision Fund II-2 L.P., a limited
partnership established in Jersey and affiliate of SoftBank Group
Corp., a Japanese joint-stock company.
As disclosed in a Form 8-K filed with the Securities and Exchange
Commission, the Notes were sold to SVF II pursuant to the Amended
and Restated Master Senior Secured Notes Note Purchase Agreement,
dated as of Oct. 20, 2021, among the Issuers and SVF II.
The Notes and related Guarantees have not been registered under the
Securities Act of 1933, as amended, and were issued and sold in
reliance on the exemption provided in Section 4(a)(2) of the
Securities Act.
As of Dec. 31, 2022, after giving effect to the issuance of the
Notes, the Company expects its cash, commitments and access to
liquidity to be approximately $1.35 billion, which is in line with
management's expectations.
Interest, Security and Guarantees
Unless earlier redeemed or repurchased, the Notes will mature on
March 15, 2025 and bear interest at a rate of (i) 7.50% per annum
to, but excluding, Feb. 15, 2024, payable semi-annually in cash in
arrears, and (ii) 11.00% per annum from and after Feb. 15, 2024 to,
but excluding, the maturity date of the Notes, payable
semi-annually in the form of PIK Interest.
The Notes are guaranteed fully and unconditionally, and jointly and
severally, on a first lien senior secured basis by each of the
Issuer's wholly-owned restricted subsidiaries that guarantee the
Issuer's obligations under the senior letter of credit facility and
junior letter of credit facility under the Credit Agreement, dated
as of Dec. 27, 2019 (as amended, waived or otherwise modified from
time to time). The Notes and the related Guarantees are senior
secured obligations of the Issuers and the Guarantors.
Redemption
The Issuer may redeem the Notes, in whole or in part, at any time
at a price equal to 100% of the principal amount of the Notes
redeemed, plus accrued and unpaid interest, if any, to, but
excluding, the redemption date. In addition, during the period
from Feb. 15, 2024 to, but excluding, the maturity date of the
Notes, if the aggregate principal amount of Notes issued and
outstanding, together with any PIK Interest that would accrue from
the applicable date of determination to, but excluding, the
maturity date of the Notes exceeds $500 million, the Issuer is
required to repay, prepay, repurchase, redeem, legally defease or
otherwise retire Notes at a price equal to 100% of such Notes in a
sufficient aggregate principal amount such that the aggregate
principal amount of Notes remaining outstanding following such
redemption, together with such PIK Interest, does not exceed $500
million.
Change of Control
If a Change of Control (as defined in the Indenture) occurs, the
Issuer is required to make an offer to purchase all of the Notes at
a purchase price equal to 101% of the principal amount thereof,
plus accrued and unpaid interest, if any, to, but excluding, the
date of such purchase.
Covenants and Events of Default
The terms of the Indenture, among other things, limit the ability
of the Issuer and its restricted subsidiaries to (i) incur or
guarantee additional indebtedness; (ii) create or incur liens;
(iii) declare or pay dividends, redeem stock or make certain
distributions to stockholders; (iv) make certain investments; (v)
consolidate with or merge with or into or wind up into, or sell,
assign, convey, transfer, lease or otherwise dispose of all or
substantially all of the properties and assets of the Issuer and
its restricted subsidiaries; (vi) enter into certain transactions
with affiliates; (vii) sell or transfer certain assets; (viii)
voluntarily prepay, repurchase, redeem or otherwise defease certain
unsecured indebtedness; and (ix) agree to certain restrictions on
the ability of restricted subsidiaries to make certain payments to
the Issuer and other restricted subsidiaries. These covenants are
subject to a number of important conditions, qualifications,
limitations and exceptions that are described in the Indenture.
The Indenture provides for customary events of default (subject in
certain cases to grace and cure periods), including with respect to
payment defaults, failure to pay certain judgments and certain
events of bankruptcy and insolvency. These events of default are
subject to a number of important conditions, qualifications,
limitations and exceptions that are described in the Indenture.
About WeWork
WeWork Inc. (NYSE: WE) is a global flexible workspace provider,
serving a membership base of businesses large and small through its
network of 756 locations as of December 2021. With that global
footprint, the Company has worked to establish itself as the
preeminent brand within the flexible workspace category, by
combining prime locations and unique design with member-first
hospitality and exceptional community experiences.
WeWork reported a net loss of $4.63 billion in 2021, a net loss of
$3.83 billion in 2020, and a net loss of $3.77 billion in 2019. As
of Sept. 30, 2022, WeWork had $18.33 billion in total assets,
$21.09 billion in total liabilities, and a total deficit of $2.74
billion.
* * *
As reported by the TCR on Dec. 7, 2022, Fitch Ratings downgraded
WeWork Companies LLC and WeWork Inc.'s (f/k/a The We Co) Long-Term
Issuer Default Ratings (LT IDRs) to 'CCC' from 'CCC+'.
WH INTERMEDIATE: Moody's Affirms 'B2' CFR, Outlook Remains Stable
-----------------------------------------------------------------
Moody's Investors Service affirmed WH Intermediate, LLC's ("WHP")
ratings, including its B2 corporate family rating, B2-PD
probability of default rating, and B2 ratings on the senior secured
credit facilities issued by WHP's subsidiary, WH Borrower, LLC
("Borrower"), consisting of a $50 million senior secured first lien
revolving credit facility and $450 million senior secured first
lien term loan. At the same time, Moody's assigned a B2 rating to
Borrower's proposed $150 million incremental senior secured first
lien term loan. The outlook remains stable.
Proceeds from the incremental term loan will be used, along with
revolver borrowing and cash, to fund a $235 million investment in
an intellectual property joint venture with apparel retailer
Express, Inc. ("Express", not rated) ) and a $25 million PIPE
investment in Express common stock. Express will contribute the
Express brand to the joint venture. Express will become an
omnichannel retail platform company with a long term licensing
agreement with the intellectual property joint venture, with the
cash earnings of the joint venture distributed among WHP and
Express on a pro rata basis. Express will pre-pay the first year's
guaranteed minimum royalty of $60 million. Following completion of
the transaction, WHP will own approximately 60% of the joint
venture, with Express owning the remaining 40%. In addition, WHP
will also purchase 5.4 million of newly issued Express shares at
$4.60 per share, or around $25 million, representing approximately
7.4% equity ownership in Express. Yehuda Shmidman, WHP's Chairman
and Chief Executive Officer, will be appointed to Express' Board of
directors.
The transaction is expected to close in Express' fourth fiscal
quarter ending January 28, 2023, subject to lender consent,
regulatory approvals and customary closing conditions. Moody's
ratings are subject to review of final documentation.
The affirmation of the B2 CFR reflects the strategic benefits of
the transaction, such as increased brand diversity through the
addition of a apparel retail brand with good brand awareness and
significant international opportunities for expansion. In addition,
WHP's new relationship with Express will provide it with a retail
operating partner with which it can acquire other fashion brands
that have a retail footprint. The affirmation also reflects the
relatively stable and predictable revenue and cash flow streams
derived from the licensed business model, as well as strong profit
margins and base level of earning support in the form of guaranteed
minimum royalties. However, the affirmation also reflects
governance considerations including the acquisitive nature of the
company, private equity ownership and high leverage. The increased
debt load related to the transaction, along with increasing
interest rates, will result in weaker interest coverage over the
near term. Given the difficult global economic environment,
execution risk is high and the ability to drive significant
earnings growth will be challenging. Moody's pro forma debt/EBITDA
is around 5x and EBITA/interest coverage is around 2x. Moody's
expects metrics to improve over the next 12-18 months as the
company integrates recent acquisitions and new license contracts as
well as through potential further acquisitions using balance sheet
cash.
Affirmations:
Issuer: WH Intermediate, LLC
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Issuer: WH Borrower, LLC
Senior Secured 1st Lien Term Loan, Affirmed B2 to (LGD4) from
(LGD3)
Senior Secured 1st Lien Revolving Credit Facility, Affirmed B2 to
(LGD4) from (LGD3)
Assignments:
Issuer: WH Borrower, LLC
Senior Secured 1st Lien Term Loan, Assigned B2 (LGD4)
Outlook Actions:
Issuer: WH Intermediate, LLC
Outlook, Remains Stable
Issuer: WH Borrower, LLC
Outlook, Remains Stable
RATINGS RATIONALE
WHP's B2 CFR considers governance considerations including high pro
forma leverage of around 5x and interest coverage around 2x, and
majority private equity ownership, which will likely result in
leverage remaining high. Also, while many of its brands have a long
operating history, the rating reflects WHP's relatively short track
record having been founded in 2019, as well as integration risks
associated with having completed several material acquisitions in
the past two years and meaningful brand and licensee concentrations
as a percentage of pro forma revenue. The rating is supported by
the relatively stable and predictable revenue and cash flow streams
derived from royalty payments received from licensees, which
include significant guaranteed minimum amounts, with upside from
license overage receipts being accretive to earnings and cash flow
as it leverages the existing cost base. Further, the licensor
business model is asset light with low capital costs, which
typically supports robust operating margins, cash flows, and
interest coverage metrics. Moody's expects WHP to maintain good
liquidity over the next 12 months, supported by balance sheet cash,
positive free cash flow and availability under its $50 million
revolving credit facility due 2026.
The B2 ratings assigned to WH Borrower's senior secured credit
facilities are equal to the B2 CFR, as they comprise the only class
of debt in the consolidated capital structure. The facilities are
secured by a first lien on substantially all assets of WH Borrower
and its wholly-owned domestic subsidiaries, including, pledges of
equity in first-tier non-wholly-owned subsidiaries. The facilities
are guaranteed by WH Borrower, LLC's current and future direct and
indirect domestic wholly-owned subsidiaries, as well as its direct
parent and financial reporting entity, WH Intermediate.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation for modest
deleveraging and improved interest coverage over the next year as
the company anniversaries recent sizable acquisitions and new
license contracts, and through potential further acquisitions using
balance sheet cash.
The ratings could be downgraded if the company experiences weaker
than anticipated operating performance resulting from challenges in
integrating acquired brands, the non-renewal of licenses, or
renewals of its licenses at materially lower revenue streams. More
aggressive in its financial policies or a material deterioration in
liquidity could also result in a downgrade. Specific metrics
include debt-to-EBITDA sustained above 6 times or EBITA-to-interest
sustained below 2.25 times.
A ratings upgrade is unlikely over the near-to-intermediate term
given the company's short track record, small scale, and Moody's
expectation that cash flow will likely support acquisition
activity. Over time, ratings could be upgraded if the company
maintains its operating performance and more conservative financial
policies through a demonstrated willingness to sustain
debt-to-EBITDA below 4.5 times and EBITA-to-interest expense above
3 times.
Headquartered in New York, NY, WHP Global is a brand management
company with a portfolio of brands that include Anne Klein, Joseph
Abboud, Lotto, Toys "R" Us, Babies "R" Us, and Geoffrey® the
Giraffe, among others. The company is majority owned by funds
managed by Oaktree Capital Management, L.P., a global investment
manager specializing in alternative investments, with the remaining
equity owned by management and others. WH Borrower, LLC is the
borrowing entity in the credit group, and WH Intermediate, LLC is
its direct parent, guarantor and financial reporting entity. WHP
Global is privately owned and does not publicly disclose its
financial information. Pro forma annual revenue exceeds $200
million.
The principal methodology used in these ratings was Apparel
published in June 2021.
WIN WASTE: S&P Lowers ICR to 'B' on Higher-Than-Expected Leverage
-----------------------------------------------------------------
S&P Global Ratings lowered its ratings on U.S.-based WIN Waste
Innovation Holdings Inc., including the issuer credit rating to 'B'
from 'B+'. S&P also lowered its senior secured debt rating to 'B'
from 'B+'. The senior secured recovery rating remains unchanged at
'3'.
S&P expects a challenging operating environment will constrain
near-term debt leverage improvement.
The negative outlook reflects a potential for even higher debt
leverage if the company is unable to successfully execute a plan to
strengthen earnings.
Various headwinds have hurt WIN Waste's earnings relative to S&P's
expectations.
S&P said, "We don't anticipate a near-term bounce back in earnings
given our view that challenging operating conditions will likely
continue. Lower volumes in some areas of operations, lower
commodity prices, and one-time expenses are among factors that have
contributed to earnings lower than our previous expectations. Some
of these negative factors appear to be related to a more
challenging operating environment in general, including
inflationary pressures and volatile commodity pricing. Still, we
believe management's attempts to address the situation will
stabilize earnings. Despite recent earnings setbacks we continue to
view the company's operations within the Northeastern U.S. and
Southern Florida markets as a strength given the shrinking landfill
capacity and limits (related to environmental regulations) on
expansion of such capacity."
Working capital requirements increased meaningfully over a period
of several quarters before declining in the third quarter of 2022.
S&P views high working capital utilization as a potential threat to
liquidity and a constraint on any effort to reduce debt leverage.
An increase in capital spending, and acquisition and growth-related
working capital has contributed to negative free cash flow
generation across several quarters.
This trend reversed in the third quarter of 2022, when free cash
flow turned positive. We would view this improvement in free cash
flow as sustainable if the company establishes a track record of
positive free cash flow generation.
Debt leverage is high.
S&P said, "We anticipate the company's S&P Global Ratings'-adjusted
total debt to EBITDA, pro forma for full year EBITDA from
acquisitions, will remain higher than the 5.5x we previously
anticipated. We now expect the ratio will be between 8x and 9x. We
also anticipate the ratio of funds from operations to total debt
will be between 7% and 8% over the next 12 months. In our
estimation of debt leverage we do not add back to EBITDA some
expenses the company characterizes as one-time expenses. We
consider pro forma 12-month EBITDA from acquisitions in 2022. The
acquisitions of businesses has been a contributory factor to the
increase in debt leverage, at least in the near term. We consider
pro forma earnings from these acquisitions in our debt leverage
calculations, but will monitor the company's track record in
generating future synergy benefits from these acquisitions. We do
not expect the company to reduce debt using free cash flow over the
next 12 months. An improvement in earnings is key to strengthening
future debt leverage."
S&P anticipates that liquidity will be adequate over the next 12
months.
There are no near-term debt maturities, which is a credit positive.
The recently increased revolving credit facility is a major source
of funding.
S&P said, "The negative outlook reflects our view that leverage,
pro forma for 12-month EBITDA estimates from acquisitions in 2022,
will remain high and the financial risk profile will remain highly
leveraged. It also reflects our view that the company will maintain
adequate liquidity, along with compliance with covenants and access
to its working capital facility despite challenging free cash
flows. We do not expect a further increase in debt to fund
acquisitions in particular."
S&P could lower ratings over the next few quarters if:
-- Leverage increases so that the ratio of S&P Global
Ratings'-adjusted debt to EBITDA approaches double digits(S&P
adjusted debt to EBITDA greater than 9x) or the ratio of funds from
operations to total debt drops below 6% on a pro forma basis with
no near-term prospects for improvement. S&P believes this could
happen if operating performance suffers further, the company
engages in a more aggressive financial policy than it expects, or
if extraordinary expenses continue.
-- Free operating cash flow is negative over the next few quarters
causing the company to rely on debt to fund operating and other
expenses.
-- S&P anticipates the company might face difficulty in
maintaining liquidity sources greater or equal to uses, or
remaining compliant with its covenant requirement and it doesn't
believe a successful near-term plan to improve liquidity is
likely.
S&P would consider an upgrade over the next 12 months if
-- The company reduces debt leverage to 5x or below, and S&P
believes that such improvement is sustainable. Under this scenario
the company would generate consistent and meaningful free cash
flow.
ESG credit indicators: E-2, S-2, G-2
ZAYO GROUP: Fidelity Fund Marks $21.6M Loan at 17% Off
------------------------------------------------------
Fidelity Advisor Value Fund, a fund of Fidelity Advisor Series I,
has marked its $21,691,000 loan extended to Zayo Group Holdings,
Inc. to market at $17,970,000 or 83% of the outstanding amount, as
of October 31, 2022, according to a disclosure contained in the
Fidelity Fund's Form N-CSR for the fiscal year ended October 31,
2022, filed with the Securities and Exchange Commission on December
21.
Fidelity Advisor Value Fund extended a first lien term loan that
carries a 7.9787% interest (CME Term SOFR 1 Month Index + 4.250%)
to Zayo Group Holdings, Inc. The loan is scheduled to mature on
March 9, 2027.
Fidelity Advisor Value Fund is a fund of Fidelity Advisor Series I,
a Trust that is registered under the Investment Company Act of
1940, as amended, as an open-end management investment company
organized as a Massachusetts business trust. Fidelity Management &
Research Company LLC (FMR) serves as investment manager.
Zayo Group Holdings, Inc., is a privately held company
headquartered in Boulder, Colorado, U.S. with European headquarters
in London, England. The company provides communications
infrastructure services, including fiber and bandwidth
connectivity, colocation and cloud infrastructure.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Techmart Direct LLC
Bankr. N.D. Ga. Case No. 23-50071
Chapter 11 Petition filed January 2, 2023
In re Lakeview Electrical Services, LLC
Bankr. N.D. Ala. Case No. 23-40006
Chapter 11 Petition filed January 3, 2023
See
https://www.pacermonitor.com/view/ZT46WLY/Lakeview_Electrical_Services_LLC__alnbke-23-40006__0001.0.pdf?mcid=tGE4TAMA
represented by: Tameria S. Driskill, Esq.
WILLIAMS DRISKILL HUFFSTUTLER & KING
E-mail: tammy@williamsattorneyatlaw.com
In re Helen Salcedo Austria
Bankr. N.D. Cal. Case No. 23-30003
Chapter 11 Petition filed January 3, 2023
represented by: Arasto Farsad, Esq.
In re Information Technology Executives, Inc.
Bankr. M.D. Fla. Case No. 23-00002
Chapter 11 Petition filed January 3, 2023
See
https://www.pacermonitor.com/view/YX3Q75Q/Information_Technology_Executives__flmbke-23-00002__0001.0.pdf?mcid=tGE4TAMA
represented by: Sean Espenship, Esq.
ESA LAW GROUP, LLC
E-mail: sean@esalawgroup.com
In re The Estate of Melvin C. Drayton
Bankr. N.D. Ga. Case No. 23-50054
Chapter 11 Petition filed January 3, 2023
See
https://www.pacermonitor.com/view/QCRC2GI/The_Estate_of_Melvin_C_Drayton__ganbke-23-50054__0001.0.pdf?mcid=tGE4TAMA
In re Gill R.S. Company d/b/a Elm Street Citgo
Bankr. N.D. Ill. Case No. 23-80002
Chapter 11 Petition filed January 3, 2023
See
https://www.pacermonitor.com/view/IFSTHAA/Gill_RS_Company_dba_Elm_Street__ilnbke-23-80002__0001.0.pdf?mcid=tGE4TAMA
represented by: Howard Peritz, Esq.
THE LAW OFFICES OF HOWARD PERITZ
E-mail: howard@howardperitzlaw.com
In re Bimal Patel and Komal Bimalkmar Patidar
Bankr. S.D. Ind. Case No. 23-00002
Chapter 11 Petition filed January 3, 2023
In re Robert J. Hemsing
Bankr. D.N.J. Case No. 23-10037
Chapter 11 Petition filed January 3, 2023
represented by: David Stevens, Esq.
In re KM Legacy Investments
Bankr. N.D. Tex. Case No. 23-30022
Chapter 11 Petition filed January 3, 2023
See
https://www.pacermonitor.com/view/BFBVM5Y/KM_Legacy_Investments__txnbke-23-30022__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Rollins Development Group, Inc.
Bankr. N.D. Tex. Case No. 23-30025
Chapter 11 Petition filed January 3, 2023
See
https://www.pacermonitor.com/view/SYGVBIY/Rollins_Development_Group_Inc__txnbke-23-30025__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Choudhary K. Alim
Bankr. S.D. Tex. Case No. 23-30037
Chapter 11 Petition filed January 3, 2023
In re Merlinda S. Bojorquez
Bankr. N.D. Cal. Case No. 23-30007
Chapter 11 Petition filed January 4, 2023
In re EdPass NY Inc.
Bankr. M.D. Fla. Case No. 23-00025
Chapter 11 Petition filed January 4, 2023
See
https://www.pacermonitor.com/view/Y3GGFGI/EdPass_NY_Inc__flmbke-23-00025__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Velasquez, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
E-mail: dvelasquez@lathamluna.com
In re 1325, LLC
Bankr. S.D. Fla. Case No. 23-10031
Chapter 11 Petition filed January 4, 2023
See
https://www.pacermonitor.com/view/ZXHA6BQ/1325_LLC__flsbke-23-10031__0001.0.pdf?mcid=tGE4TAMA
represented by: Joel Aresty, Esq.
JOEL M. ARESTY PA
E-mail: aresty@icloud.com
In re James Carl Harrison Jr and Lisa Maddox Harrison
Bankr. N.D. Ga. Case No. 23-50160
Chapter 11 Petition filed January 4, 2023
In re Greggory J. Tahmisian
Bankr. D. Idaho Case No. 23-00002
Chapter 11 Petition filed January 4, 2023
represented by: Matthew Christensen, Esq.
JOHNSON MAY
Email: info@johnsonmaylaw.com
In re Matties Home Daycare LLC
Bankr. N.D. Ill. Case No. 23-00094
Chapter 11 Petition filed January 4, 2023
See
https://www.pacermonitor.com/view/NV53JCQ/Matties_Home_Daycare_LLC__ilnbke-23-00094__0001.0.pdf?mcid=tGE4TAMA
represented by: Penelope N. Bach, Esq.
BACH LAW OFFICES, INC.
E-mail: pnbach@bachoffices.com
In re Joseph John Pomponi
Bankr. N.D. Ind. Case No. 23-20007
Chapter 11 Petition filed January 4, 2023
represented by: Daniel Freeland, Esq.
DANIEL L. FREELAND & ASSOCIATES
In re JFM Hamburg LLC
Bankr. D.N.J. Case No. 23-10057
Chapter 11 Petition filed January 4, 2023
See
https://www.pacermonitor.com/view/W2QVUOI/JFM_Hamburg_LLC__njbke-23-10057__0001.0.pdf?mcid=tGE4TAMA
represented by: John P. Di Iorio, Esq.
SHAPIRO, CROLAND, REISER, APFEL &
DI IORIO, LLP
E-mail: jdiiorio@shapiro-croland.com
In re H&R De Paris Boutique Formal and Bridal Corp
Bankr. E.D.N.Y. Case No. 23-70012
Chapter 11 Petition filed January 4, 2023
See
https://www.pacermonitor.com/view/5UIUXVA/HR_De_Paris_Boutique_Formal_and__nyebke-23-70012__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re MMM Realty LLC
Bankr. E.D. Va. Case No. 23-30015
Chapter 11 Petition filed January 4, 2023
See
https://www.pacermonitor.com/view/GHNZDVA/MMM_Realty_LLC__vaebke-23-30015__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael J. O. Sandler, Esq.
FISHER-SANDLER, LLC
E-mail: sandlerlaw@yahoo.com
In re Kathy Raydean Rodgers
Bankr. N.D. Ga. Case No. 23-50134
Chapter 11 Petition filed January 5, 2023
In re Modern Men Developers LLC
Bankr. N.D. Ill. Case No. 23-00147
Chapter 11 Petition filed January 5, 2023
See
https://www.pacermonitor.com/view/3JOJSGQ/Modern_Men_Developers_LLC__ilnbke-23-00147__0001.0.pdf?mcid=tGE4TAMA
represented by: Penelope N. Bach, Esq.
BACH LAW OFFICES, INC.
E-mail: pnbach@bachoffices.com
In re Mete Basakinci
Bankr. S.D.N.Y. Case No. 23-10016
Chapter 11 Petition filed January 5, 2023
represented by: Jeb Singer, Esq.
In re Remer & Georges-Pierre PLLC
Bankr. S.D. Fla. Case No. 23-10114
Chapter 11 Petition filed January 6, 2023
See
https://www.pacermonitor.com/view/3PM4TGA/Remer__Georges-Pierre_PLLC__flsbke-23-10114__0001.0.pdf?mcid=tGE4TAMA
represented by: Timothy S. Kingcade, Esq.
KINGCADE, GARCIA & MCMAKEN, P.A.
E-mail: scanner@miamibankruptcy.com
In re Victoria Anne Van Dyke
Bankr. E.D.N.Y. Case No. 23-70054
Chapter 11 Petition filed January 6, 2023
represented by: Fred Kantrow, Esq.
In re Yefim Sabler
Bankr. E.D.N.Y. Case No. 23-40044
Chapter 11 Petition filed January 6, 2023
represented by: Alla Kachan, Esq.
In re Jason Adkins
Bankr. M.D. Tenn. Case No. 23-00033
Chapter 11 Petition filed January 6, 2023
represented by: Robert Gonzales, Esq.
In re Pureganic Cafe LLC
Bankr. S.D.N.Y. Case No. 23-22012
Chapter 11 Petition filed January 7, 2023
See
https://www.pacermonitor.com/view/RVFKVMQ/Pureganic_Cafe_LLC__nysbke-23-22012__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert L. Rattet, Esq.
DAVIDOFF HUTCHER & CITRON LLP
E-mail: rlr@dhclegal.com
In re Pureganic LLC
Bankr. S.D.N.Y. Case No. 23-22011
Chapter 11 Petition filed January 7, 2023
See
https://www.pacermonitor.com/view/RPYD2NA/Pureganic_LLC__nysbke-23-22011__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert L. Rattet, Esq.
DAVIDOFF HUTCHER & CITRON LLP
E-mail: rlr@dhclegal.com
In re Beatriz Chica
Bankr. D. Conn. Case No. 23-50026
Chapter 11 Petition filed January 9, 2023
In re Karen D. Davidson
Bankr. N.D. Fla. Case No. 23-30018
Chapter 11 Petition filed January 9, 2023
represented by: Edward Peterson, Esq.
In re Bottles 4 Cash, LLC
Bankr. W.D.N.Y. Case No. 23-10010
Chapter 11 Petition filed January 9, 2023
See
https://www.pacermonitor.com/view/5GCQD6A/Bottles_4_Cash_LLC__nywbke-23-10010__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert B. Gleichenhaus, Esq.
GLEICHENHAUS, MARCHESE & WEISHAAR, P.C.
In re C Perry & Sons Trucking, LLC
Bankr. E.D.N.C. Case No. 23-00054
Chapter 11 Petition filed January 9, 2023
See
https://www.pacermonitor.com/view/KU3KCCY/C_Perry__Sons_Trucking_LLC__ncebke-23-00054__0001.0.pdf?mcid=tGE4TAMA
represented by: John G. Rhyne, Esq.
JOHN G. RHYNE, ATTORNEY AT LAW
E-mail: johnrhyne@johnrhynelaw.com
In re Locust Street Laundromat, LLC
Bankr. W.D.N.Y. Case No. 23-10011
Chapter 11 Petition filed January 9, 2023
See
https://www.pacermonitor.com/view/5LZJUZA/Locust_Street_Laundromat_LLC__nywbke-23-10011__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert B. Gleichenhaus, Esq.
GLEICHENHAUS, MARCHESE & WEISHAAR, P.C.
In re CSB Unlimited, LLC
Bankr. N.D. Tex. Case No. 23-30057
Chapter 11 Petition filed January 9, 2023
See
https://www.pacermonitor.com/view/FCSREZY/CSB_Unlimited_LLC__txnbke-23-30057__0001.0.pdf?mcid=tGE4TAMA
represented by: Kevin S. Wiley, Sr., Esq.
WILEY LAW GROUP, PLLC
E-mail: kwiley@wileylawgroup.com
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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.
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S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
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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
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are $25 each. For subscription information, contact Peter A.
Chapman at 215-945-7000.
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