/raid1/www/Hosts/bankrupt/TCR_Public/230202.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, February 2, 2023, Vol. 27, No. 32
Headlines
476 GATES REALTY: Case Summary & 20 Largest Unsecured Creditors
772 & 720 HOLDING: Court OKs Deal on Cash Collateral Access
AD1 URBAN: Court OKs Interim Cash Collateral Access
AD1 URBAN: Feb. 6 Deadline Set for Panel Questionnaires
AFTERSHOCK COMICS: Gets OK to Hire Levene as Bankruptcy Counsel
AFTERSHOCK COMICS: Has Deal on Cash Collateral Access
AGEX THERAPEUTICS: Borrows $500K Under Secured Note Line of Credit
ALAN R. LAYTON: Gets OK to Hire T.R. Flournoy & Co. as Accountant
ALPHATEC HOLDINGS: L-5 Healthcare Reports 12.42% Equity Stake
AP ACQUISITION: Case Summary & 30 Largest Unsecured Creditors
ARUZE GAMING: Case Summary & 20 Largest Unsecured Creditors
ATLAS INTERMEDIATE: GI Partners Deal No Impact on Moody's B3 CFR
AULT ALLIANCE: Files Certificate of Elimination of Preferred Stock
AYALA PHARMACEUTICALS: Changes Fiscal Year End to December 31
AYALA PHARMACEUTICALS: Delays Filing of Annual Report
BED BATH & BEYOND: Raises 'Going Concern' Doubt
BORREGO COMMUNITY: Court Addresses Objection to Bid Procedures
BOTTLES 4 CASH: Seeks to Hire Gleichenhaus as Legal Counsel
BOWLERO CORP: Moody's Raises CFR to B1, Outlook Remains Stable
BREAKFORM RESIDENTIAL: Seeks $1.5MM DIP Loan from Poco Bay
BUFFALO STATION: Seeks Cash Collateral Access
BUFFALO STATION: Trustee Taps Edge Realty as Real Estate Broker
BVM CORAL: Bid to Use Cash Collateral Denied as Moot
CANOO INC: Appoints Ken Manget as Chief Financial Officer
CHARTER COMMUNICATIONS: Moody's Rates New Senior Notes 'B1'
CMR REAL ESTATE: Seeks to Hire Thomas Loepp as Eviction Attorney
COLUMBIA ASTHMA: Case Summary & 20 Largest Unsecured Creditors
CONFLUENT HEALTH: Moody's Rates New $125MM 1st Lien Term Loan 'B3'
CONFLUENT HEALTH: S&P Rates New $125MM First-Lien Term Loan 'B-'
COOPER-STANDARD AUTOMOTIVE: Moody's Affirms 'Caa2' CFR
DARALI INC: Case Summary & 17 Unsecured Creditors
DEL MONTE: New $100MM Incremental Loan No Impact on Moody's B2 CFR
DGS REALTY: Seeks to Continue Using Cash Collateral Thru April 30
DIVERSIFIED HEALTHCARE: Moody's Cuts CFR & Unsecured Notes to Caa3
DOT DOT SMILE: Has Deal on Cash Collateral Access
DRY MORE COMPANY: Gets OK to Hire Baker & Associates as Counsel
ECOARK HOLDINGS: Ault Cuts Secondary Offering of Shares by $3.5MM
EQUISEK INC: Seeks to Hire Madoff & Khoury as Bankruptcy Counsel
FARMERS COOPERATIVE: Court OKs Cash Collateral Access Thru Feb 21
FELIX QUIROZ, JR: Trustee Selling Midland Property for $79.2K
FELIX QUIROZ, JR: Trustee Sells Midland Lot 003 to Stine for $78K
FR FLOW CONTROL: S&P Alters Outlook to Stable, Affirms 'B-' ICR
FROZEN WHEELS: Court OKs Cash Collateral Access Thru March 31
GENESIS GLOBAL: Files Chapter 11 Plan With Toggle Structure
GEORGE D GROUP: Affiliate Seeks to Hire Riggi Law Firm as Counsel
GOLDEN KEY: Seeks to Hire YVS Law as Bankruptcy Counsel
GUNTHER CHARTERS: Seeks to Hire Frost & Associates as Counsel
HALL AT THE YARD: Court OKs Interim Cash Collateral Access
HEIRBNB LLC: Unsecured Creditors to Split $74K in Subchapter V Plan
HORIZON GLOBAL: Chief Accounting Officer to Quit Feb. 8
HUNTER DOUGLAS: Moody's Alters Outlook on 'B1' CFR to Negative
INDICOR LLC: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
INNERLINE ENGINEERING: Seeks Cash Collateral Access Thru June 30
INVACARE CORPORATION: Case Summary & 30 Top Unsecured Creditors
JOYCARE THERAPY: Cash Infusion from PHLLC to Fund Plan
JUMBA LLC: Sale of 2 Alvarado Lots Free and Clear of Liens Approved
KAREN W. HALL: Proposes to Sell Stock to Pay Off Ameritrade Loan
KAREN W. HALL: W.T. Holland Buying New Church Property for $295K
KEVIN G. SAUNDERS: Case Summary & 20 Largest Unsecured Creditors
KNOW LABS: Makes Changes to Executive Leadership Team
L.C. CONSTRUCTION: Case Summary & Nine Unsecured Creditors
LECLAIRRYAN PLLC: Deadline to File IOLTA Claims Set for Feb. 28
LITTLE WASHINGTON: Updates Unsecured Claims Pay Details
LOCUST STREET: Seeks to Hire Gleichenhaus as Legal Counsel
LONGRUN P.B.C: Case Summary & 20 Largest Unsecured Creditors
M&M DEVELOPMENT: Case Summary & Five Unsecured Creditors
MARTIN MIDSTREAM: Moody's Puts 'Caa1' CFR on Review for Upgrade
MELI MELO: Seeks Approval to Hire Berger as Bankruptcy Counsel
MEND CORRECTIONAL: Hires Integrated as Financial Consultant
MERCURITY FINTECH: Board Scraps ADR Ratio Change
MICHAEL M. PAISLEY: Online Auction of Assets via Aumann Approved
MOHEGAN TRIBAL: Moody's Rates $502MM Unsec. Notes 'Caa3'
MONTGOMERY REALTY: Court OKs Interim Cash Collateral Access
NAKED JUICE: Moody's Cuts CFR to B3 & First Lien Term Loan to B2
NASSAU PHARMACY: Seeks to Hire Killeen Arace & Quinn as Accountant
NEW YORK INN: Court OKs Interim Cash Collateral Access
NORDSTROM INC: S&P Alters Outlook to Negative, Affirms 'BB+' ICR
NOVA WILDCAT: Seeks $48MM DIP Loan from PNC Bank
NXT ENERGY: Closes $1.9 Million Private Placement Financing
OLAPLEX INC: S&P Alters Outlook to Negative, Affirms 'B+' ICR
PALACE CAFE: Property Sale Proceeds to Fund Plan Payments
PIPELINE HEALTH: Taps Deloitte Tax as Tax Service Provider
PODS LLC: Moody's Rates New $100MM First Lien Term Loan 'B2'
PODS LLC: S&P Assigns 'B' Rating on $100MM First-Lien Term Loan
PROFESSIONAL BUSINESS: Voluntary Chapter 11 Case Summary
PROPERTY HOLDERS: Gets OK to Hire Keller Williams as Realtor
QUORUM HEALTH: Moody's Cuts CFR to 'Ca', Outlook Negative
R.W. DAVIDSON: Wins Cash Collateral Access on Final Basis
RAND PARENT: Moody's Assigns First Time 'Ba1' Corp. Family Rating
RAYMOND LIVESTOCK: Seeks to Hire Debt Doctors as Legal Counsel
REALMARK PARKING: Seeks to Hire McHale PA as Financial Advisor
RESOURCE CONVERTING: $35K Cash Sale of Malpractice Claim Approved
REVERE POWER: Moody's Lowers Rating on Sr. Secured Loans to B2
ROCKLEY PHOTONICS: Court OKs Interim Cash Collateral Access
ROOSEVELT INN: Plan Disclosures Inadequate, Alpha Says
RWDY INC: Gets OK to Employ Ayres as Bankruptcy Counsel
RWDY INC: Gets OK to Hire Postlethwaite & Netterville as Accountant
SHEFA LLC: Voluntary Chapter 11 Case Summary
SHURWEST LLC: Litigation Trustee Gets OK to Hire Legal Counsel
SOUTH PARK: Seeks to Hire Gregory K. Stern as Bankruptcy Counsel
SPARKS ELECTRIC: Seeks Cash Collateral Access
SPRING MOUNTAIN: Seeks Approval to Hire Enotrias as Appraiser
TEDESCHI & SONS: Court OKs Cash Collateral Access Thru Sept 8
TENTRR INC: Court OKs $500,000 DIP Loan from SL Ventures
TESSEMAE'S LLC: Case Summary & 20 Largest Unsecured Creditors
TOP HOME CARE: Taps Steidl and Steinberg as Bankruptcy Counsel
TRINITY LEGACY: Taps Galvanize Law Group as Special Counsel
UNCLE DAN'S TIRE: Seeks Cash Collateral Access Thru June 30
VECTOR GROUP: Moody's Affirms B2 CFR & Alters Outlook to Positive
VIRTUSA HOLDCO: Moody's Raises CFR to 'B2', Outlook Stable
YI LLC: Moody's Affirms 'B3' Corp. Family Rating, Outlook Stable
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
476 GATES REALTY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: 476 Gates Realty LLC
476 Gates Avenue
Brooklyn, NY 11216
Business Description: The Debtor is engaged in activities related
to real estate. The Debtor is the fee
simple owner of a property located at 476
Gates Avenue, Brooklyn, New York valued at
$4.1 million.
Chapter 11 Petition Date: February 1, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-40351
Judge: Hon. Jil Mazer-Marino
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
Email: mfrankel@bfklaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Theordore Feldheim as member.
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/WUYQE3Y/476_Gates_Realty_LLC__nyebke-23-40351__0001.0.pdf?mcid=tGE4TAMA
772 & 720 HOLDING: Court OKs Deal on Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
authorized 772 & 720 Holding LLC to use cash collateral on an
interim basis in accordance with its agreement with Fairview
Investment Fund V, LPC.
As previously reported by the Troubled Company Reporter, Fairview
holds valid, binding, and perfected liens on and security
interests in all of the Collateral.
Fairview asserted that as of September 9, 2022, the indebtedness
owed under the Loan Documents was $10.347 million, consisting of
principal in the amount $7.286 million, and accrued regular and
default interest totaling $3.061 million, and per diem interest was
continuing to accrue in the amount of $2,834 for each day
thereafter.
The Court said the terms of the Interim Order, including the
recitals, will remain in full force and effect except as modified
by the Second Interim Order.
The Debtor is permitted to use cash collateral in accordance with
the budget, with a 10% variance, through February 15, 2023.
The Debtor will cure all of the defaults under the Interim Order as
outlined in Fairview's notice of default dated January 6, 2023 by
doing the following:
a. tender payment of the adequate protection payments to
Fairview totaling $90,000, that were due on November 5, 2022,
December 5, 2022, and January 5, 2023, provided that some or all of
such amounts may be paid from the cash turned over by the Receiver
to the Debtor's counsel as described in Paragraph 5 of the Interim
Order, by no later than January 11, 2023;
b. provide Fairview with the Rolling 13-Week Cash Flow
Statements for each of the four week periods from November 15,
2022, through December 31, 2023, by no later than January 11, 2023,
and provide the 13-Week Cash Flow Statements for the period from
January 1, 2023 through January 11, 2023, by no later than January
16, 2023;
c. provide Fairview and the Property Manager with a report
showing the rent collected from the Property's tenants for the
months of October, November, December 2022, and January 2023, by no
later than January 13, 2023, with such report to break out the
amounts collected by month for each unit and any security deposit
held by the Debtor for such unit;
d. coordinate an introduction of the Property Manager to the
tenants of the property (to the extent the tenants are available)
by visiting the Property with the Property Manager on two
additional occasions: once during regular business hours and once
after business hours, by no later than January 20, 2023;
e. provide to the Property Manager a signed copy of the
Property Manager's form letter introducing the Property Manager to
each tenant by no later than January 16, 2023;
f. provide to the Property Manager the keys and passcodes to
the Property by no later than January 16, 2023;
g. provide to the Property Manager the contact information for
the Property's HOA board by no later than January 12, 2023; and
h. provide to the Property Manager the email and telephone
numbers for the tenants by no later than January 12, 2023.
The Debtor's failure to do any of the above will constitute a
"Termination Event" under the Interim Order without the need for
further notice and opportunity to cure.
The final hearing on the matter is set for February 15 at 10 a.m.
A copy of the order is available at https://bit.ly/3jj8wgn from
PacerMonitor.com.
About 772 & 720 Holding
772 & 720 Holding LLC is a Single Asset Real Estate (as defined in
11 U.S.C. Sec. 101(51B)).
772 & 720 Holding LLC filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42435) on Sept.
30, 2022. In the petition filed by Bao Zhi Liu, as managing member,
the Debtor reported between $10 million and $50 million in both
assets and liabilities.
Judge Jil Mazer-Marino oversees the case.
The Debtor is represented by Kirby Aisner & Curley, LLP.
AD1 URBAN: Court OKs Interim Cash Collateral Access
---------------------------------------------------
AD1 Urban Palm Bay, LLC and affiliates sought and obtained entry of
an order from the U.S. Bankruptcy Court for the District of
Delaware to use cash collateral on an interim basis in accordance
with the budget.
The Debtors require the use of cash collateral to continue to
operate their businesses in the ordinary course and maintain their
property.
HPS Investment Partners, LLC made a loan to Debtors AD1 LBV1, LLC;
AD1 Celebration Hotels, LLC; AD1 Daytona Hotels, LLC; AD1 PB
Airport Hotels, LLC; AD1 SW Property Holdings, LLC; AD1 Urban Palm
Pay Place, LLC; and AD1 Urban Palm Bay, LLC pursuant to a loan
agreement dated December 10, 2021.
As of the Petition Date, the outstanding principal amount under the
Loan Documents is approximately $165 million, plus accrued and
accruing interest, charges, fees, costs, and expenses.
Beginning in September 2022, the Lender began to be inconsistent on
providing access to cash for certain necessary expenses, which
created a strain on the Debtors' operations.
By October 2022, the interest reserve account established to cover
operating cash flow shortfalls was depleted and the Borrowers'
operating cash flows were insufficient to pay all of the Borrowers'
operating expenses and the monthly debt service due under the Loan
Agreement.
As a result, on November 2, 2022, the Lender declared that certain
Events of Default had occurred under the Loan Documents and were
continuing.
The Lender exercised its rights under Deposit Account Control
Agreements and the Debtors became unable to utilize the funds
received into their Customer Deposit Accounts without explicit
approval from the Lender. In addition, the Lender began to accrue
interest on the outstanding principal balance of the Prepetition
Loan at the default rate starting November 1, 2022.
On November 14, 2022, the Borrowers, the Lender, and Mr. Berman
executed an agreement, pursuant to which the parties thereto made
acknowledgements, including that as of such date the outstanding
principal amount of the Prepetition Loan, including all accrued and
unpaid interest, was $164.977 million and the events of default
under the Loan Documents had occurred and were continuing, and to
set forth certain procedures for on-going negotiations.
On November 23, 2022, the Lender sent the Borrowers a letter
attaching a proposal dated November 17, laying out a list of
requirements that it sought in exchange for entering into a
modification of the Prepetition Loan. The Lender offered a short
term forbearance through January 31, 2023, provided that the
Borrowers (a) immediately retained Fulcrum Hospitality, a
third-party hotel asset management firm, (b) fund $15 million to
the Prepetition Loan’s Interest Reserve Account on or before
January 31, 2023, (c) purchase an interest rate cap no later than
December 15, 2022, and (d) agree to a "deed-in-a-box" structure by
December 15, 2022, whereby the deeds to the Properties would be
transferred to a title company selected by the Lender and placed in
escrow. In the event the Borrowers failed to perform any of the
foregoing before January 31, the Deeds would immediately transfer
to the Lender.
The Debtors sought to work consensually with the Lender in good
faith, including providing a $1.5 million payment on short notice
to the IR Account during their negotiations.
As adequate protection of the Lender's interests in the Prepetition
Collateral against any diminution in Value of such interests,
pursuant to sections 361 and 363(e) of the Bankruptcy Code, the
Lender is granted replacement security interests and liens on any
and all of the Debtors' and their estates' property, whether now
owned or in existence on the Petition Date or thereafter acquired
or existing and wherever located, to the same extent, scope,
priority, validity and enforceability that the Lender's prepetition
security interests and liens had with respect to the cash
collateral that is used by the Debtors.
To the extent of any Diminution in Value of the interests of the
Lender in the Prepetition Collateral, the Lender is granted an
allowed superpriority administrative expense claim pursuant to
sections 503(b), 507(a), and 507(b) of the Bankruptcy Code, which
Adequate Protection Superpriority Claim will be payable from any
and all prepetition and postpetition property of the Debtors and
the proceeds thereof.
The Debtors are authorized to use cash collateral until the earlier
of:
(a) February 28, 2023 (unless such date is extended by the
written consent of the Lender) or
(b) five business days after receipt of written notice of an
Event of Default.
These events constitute an "Event of Default":
(a) The closing of a sale of a material portion of the assets
of the Debtors;
(b) The effective date of a plan of reorganization;
(c) The entry of any order appointing a trustee or examiner
with expanded powers in the Chapter 11 Cases;
(d) The entry of an order converting or dismissing the Chapter
11 Cases;
(e) The failure by the Debtors to perform, in any material
respect, any of the terms, provisions, conditions, covenants or
obligations under the Interim Order;
(f) A negative variance of 20% or more from the "Total
Disbursements" in the Budget tested every week on a cumulative
rolling four-week basis; provided, that in any rolling four-week
period that "Total Disbursements" are less, and/or total cash
receipts are more, than the budgeted amount for such period, the
amount by which "Total Disbursements" are less and/or total cash
receipts are more may be carried forward and added to the
subsequent period; provided further, that "Total Disbursements"
will include disbursements made by the Debtors other than
professional fees and expenses related to administration of these
Chapter 11 Cases; or
(g) The reversal, vacatur, or material modification of the
Interim Order.
A further hearing on the matter is set for February 16 at 9 a.m.
A copy of the motion is available at https://bit.ly/3XEHmzp from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/3wAB4Vr from
PacerMonitor.com.
About AD1 Urban Palm Bay, LLC
AD1 Urban Palm Bay, LLC and affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10074) on January 22, 2023. In the petition signed by Alex
Fridzon, as responsible fiduciary, the Debtor disclosed up to $50
million in both assets and liabilities.
Judge Karen B. Owens oversees the case.
Ian J. Bambrick, Esq., at Faegre Drinker Biddle and Reath LLP,
represents the Debtor as counsel.
AD1 URBAN: Feb. 6 Deadline Set for Panel Questionnaires
-------------------------------------------------------
The United States Trustee is soliciting members for committee of
unsecured creditors in the bankruptcy case of AD1 Urban Palm Bay,
LLC, et al.
If a party wishes to be considered for membership on any official
committee that is appointed, it must complete a questionnaire
available at https://bit.ly/3DxOXYF and return by email it to
Benjamin A. Hackman -- Benjamin.A.Hackman@usdoj.gov -- at the
Office of the United States Trustee so that it is received no later
than 4:00 p.m., on Feb. 6, 2023.
If the U.S. Trustee receives sufficient creditor interest in the
solicitation, it may schedule a meeting or telephone conference for
the purpose of forming a committee.
About AD1 Urban
AD1 Urban Palm Bay, LLC and its affiliates own and operate eight,
either newly constructed or renovated, hotels throughout Florida
that are under the "flags" of the IHG, Marriot, Hilton, and Hyatt
brands.
AD1 Urban Palm Bay and 12 affiliates filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. D. Del. Lead
Case No. 23-10074) on Jan. 22, 2023.
The Debtors' unaudited financial statements as of Nov. 30, 2022,
reflect assets with a book value totaling $204,853,088 and
liabilities totaling $186,411,881.
The Hon. Karen B. Owens oversees the case.
The Debtors tapped Faegre Drinker Biddle & Reath LLP as counsel and
Robert Douglas as agent and broker.
AFTERSHOCK COMICS: Gets OK to Hire Levene as Bankruptcy Counsel
---------------------------------------------------------------
Aftershock Comics, LLC and Rive Gauche Television received approval
from the U.S. Bankruptcy Court for the Central District of
California to employ Levene, Neale, Bender, Yoo & Brill, LLP to
serve as legal counsel in their Chapter 11 cases.
The firm's services include:
(a) advising the Debtors regarding the requirements of the
bankruptcy court, Bankruptcy Code, Bankruptcy Rules and the Office
of the U.S. Trustee;
(b) advising the Debtors with regard to certain rights and
remedies of their bankruptcy estate and the rights, claims and
interests of creditors;
(c) representing the Debtors in any proceeding or hearing in
the bankruptcy court involving the estate unless the Debtors are
represented by special counsel;
(d) conducting examinations of witnesses, claimants or adverse
parties and representing the Debtors in adversary proceedings
except to the extent that such proceedings are in an area outside
of the firm's expertise or which are beyond the firm's staffing
capabilities;
(e) assisting the Debtors in the preparation of legal papers;
(f) assisting in seeking approval to get debtor-in-possession
financing and use cash collateral;
(g) assisting the Debtors in the negotiation, formulation,
preparation and confirmation of a plan of reorganization; and
(h) other necessary legal services.
Levene will be paid at the rate of $350 to $650 per hour for
attorneys and $250 per hour for paraprofessionals, and will be
reimbursed for out-of-pocket expenses incurred.
The firm received from the Debtors a retainer of $50,000.
David Neale, Esq., a partner at Levene, disclosed in a court filing
that his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
David L. Neale, Esq.
Jeffrey S. Kwong, Esq.
Levene, Neale, Bender, Yoo & Brill, LLP
2818 La Cienega Avenue
Los Angeles, CA 90034
Tel: (310) 229-1234
Fax: (310) 229-1244
Email: dln@lnbyg.com
jsk@lnbyg.com
About Aftershock Comics
AfterShock Comics, LLC -- https://Aftershockcomics.com -- is an
American comic book publisher launched in 2015. The company is
based in Sherman Oaks, Calif.
AfterShock Comics and affiliate Rive Gauche Television filed
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. Lead C.D. Calif. Case No. 22-11456) on Dec. 19, 2022. At
the time of the filing, AfterShock Comics reported $10 million to
$50 million in both assets and liabilities while Rive Gauche
reported $50 million to $100 million in assets and $10 million to
$50 million in liabilities.
Judge Martin R. Barash oversees the cases.
The Debtors are represented by Levene, Neale, Bender, Yoo &
Golubchik LLP.
The U.S. Trustee for Region 16 appointed two separate committees to
represent unsecured creditors in the Chapter 11 cases of AfterShock
Comics, LLC and Rive Gauche Television.
AFTERSHOCK COMICS: Has Deal on Cash Collateral Access
-----------------------------------------------------
Aftershock Comics, LLC and Rive Gauche Television and Access Road
Capital, LLC advised the U.S. Bankruptcy Court for the Central
District of California, San Fernando Division, that they have
reached an agreement regarding the Debtors' use of cash collateral
and now desire to memorialize the terms of this agreement into an
agreed order.
The Debtors originally borrowed money from the Lender in March 2020
in the principal amount of $11.090 million. The Debtors are jointly
and severally liable to repay the Loan. The Lender asserts the
Loan is secured by all, or substantially all, of the Debtors'
assets. As of the Petition Date, the Senior Secured Lender claims
that the amount due from the Debtors under the Loan Documents was
$15.651 million.
The parties agree that the Debtors may use cash collateral through
March 17, 2023, which will be limited to the amounts and times set
forth on the budgets, with a 15% variance.
As adequate protection, the Senior Secured Lender will be granted a
security interest in and lien upon all of the Debtors' presently
owned and hereafter-acquired property, assets and rights.
The security interests and liens will be valid, perfected,
enforceable and effective as of the Petition Date without any
further action by the Debtors, and the Senior Secured Lender.
The Senior Secured Lender will receive superpriority administrative
expense claims against the Debtors' estates under section 507(b) of
the Bankruptcy Code to the extent of any diminution in the Senior
Secured Lender's collateral after the Petition Date resulting from
the Debtors' use of cash collateral.
A hearing on the matter is set for February 15, 2023 at 10 a.m.
A copy of the stipulation is available at https://bit.ly/3RjMDtX
from PacerMonitor.com.
About AfterShock Comics
AfterShock Comics, LLC -- https://Aftershockcomics.com -- is an
American comic book publisher launched in 2015. The company is
based in Sherman Oaks, Calif. AfterShock Comics and affiliate Rive
Gauche Television filed petitions for relief under Chapter 11 of
the Bankruptcy Code (Bankr. Lead C.D. Calif. Case No. 22-11456) on
Dec. 19, 2022.
Judge Martin R. Barash oversees the cases.
At the time of filing, AfterShock Comics reported $10 million to
$50 million in both assets and liabilities while Rive Gauche
reported $50 million to $100 million in assets and $10 million to
$50 million in liabilities.
The Debtors are represented by David L. Neale, Esq., at Levene,
Neale, Bender, Yoo & Golubchik L.L.P.
The U.S. Trustee for Region 16 appointed two separate committees to
represent unsecured creditors in the Chapter 11 cases of AfterShock
Comics, LLC and Rive Gauche Television.
AGEX THERAPEUTICS: Borrows $500K Under Secured Note Line of Credit
------------------------------------------------------------------
AgeX Therapeutics, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission it borrowed the remaining
$500,000 under the Secured Convertible Promissory Note dated as of
Feb. 14, 2022 with Juvenescence Limited. AgeX has now borrowed the
maximum principal amount of $13,160,000 under the Secured Note line
of credit. The outstanding principal balance of the Secured Note
will become due and payable on Feb. 14, 2024.
In lieu of accrued interest, AgeX will pay Juvenescence an
Origination Fee in an amount equal to 4% of the amount each draw of
loan funds, which will accrue as each draw is funded, and an
additional 4% of all the total amount of funds drawn that will
accrue following the end of the 12 month period during which funds
may be drawn from the line of credit. The Origination Fee will
become due and payable on the Repayment Date or in a pro rata
amount with any prepayment, in whole or in part of the outstanding
principal balance of the Secured Note.
The outstanding principal balance and other amounts due on the
Secured Note may become immediately due and payable prior to the
Repayment Date if an Event of Default as defined in the Secured
Note occurs. Events of Default under the Secured Note include: (a)
AgeX fails to pay any principal amount payable by it in the manner
and at the time provided under and in accordance with the Secured
Note, (b) AgeX fails to pay any other amount payable by it in the
manner and at the time provided under and in accordance with the
Secured Note or the Security Agreement or any other agreement
executed in connection with the Secured Note and the failure is not
remedied within three business days; (c) AgeX fails to perform any
of its covenants or obligations or fail to satisfy any of the
conditions under the Secured Note or any other Loan Document and,
such failure (if capable of remedy) remains unremedied to the
satisfaction of Juvenescence (in its sole discretion) for 10
business days after the earlier of (i) notice requiring its remedy
has been given by Juvenescence to AgeX and (ii) actual knowledge of
the failure by senior officers of AgeX; (d) if any indebtedness of
AgeX in excess of $100,000 becomes due and payable, or a breach or
other circumstance arises thereunder such that Juvenescence is
entitled to declare such indebtedness due and payable, prior to its
due date, or any indebtedness of AgeX in excess of $25,000 is not
paid on its due date; (e) AgeX stops payment of its debts generally
or ceases or threatens to cease to carry on its business or is
unable to pay its debts as they fall due or is deemed by a court of
competent jurisdiction to be unable to pay its debts as they fall
due, or enters into any arrangements with its creditors generally;
(f) if (i) an involuntary proceeding (other than a proceeding
instituted by Juvenescence or an affiliate of Juvenescence) shall
be commenced or an involuntary petition shall be filed seeking
liquidation, reorganization or other relief in respect of AgeX and
any subsidiary, or of all or a substantial part of its assets,
under any federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) an
involuntary appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for AgeX or a
subsidiary or for a substantial part of its assets occurs (other
than in a proceeding instituted by Juvenescence or an affiliate of
Juvenescence), and, in any such case, such proceeding shall
continue undismissed and unstayed for 60 consecutive days without
having been dismissed, bonded or discharged or an order of relief
is entered in any such proceeding; (g) it becomes unlawful for AgeX
to perform all or any of its obligations under the Secured Note or
any authorization, approval, consent, license, exemption, filing,
registration or other requirement of any governmental, judicial or
public body or authority necessary to enable AgeX to comply with
its obligations under the Secured Note or to carry on its business
is not obtained or, having been obtained, is modified in a manner
that precludes AgeX or its subsidiaries from conducting their
business in any material respect, or is revoked, suspended,
withdrawn or withheld or fails to remain in full force and effect;
(h) the issuance or levy of any judgment, writ, warrant of
attachment or execution or similar process against all or any
material part of the property or assets of AgeX or a subsidiary if
such process is not released, vacated or fully bonded within 60
calendar days after its issue or levy; (i) any injunction, order,
judgment or decision of any court is entered or issued which, in
the opinion of Juvenescence, materially and adversely affects, or
is reasonably likely so to affect, the ability of AgeX or a
subsidiary to carry on its business or to pay amounts owed to
Juvenescence under the Secured Note; (j) AgeX, whether in a single
transaction or a series of related transactions, sells, leases,
licenses, consigns, transfers or otherwise disposes of any material
portion of its assets (with any such disposition with respect to
any asset or assets with a fair value of at least $250,000 being
deemed material), other than (i) certain permitted investments (ii)
sales, transfers and dispositions of inventory in the ordinary
course of business, (iii) any termination of a lease of real or
personal property that is not necessary in the ordinary course of
the AgeX's business, could not reasonably be expected to have a
material adverse effect and does not result from AgeX’s
default, and (iv) any sale, lease, license, consignment, transfer
or other disposition of assets that are no longer necessary in the
ordinary course of business or which has been approved in writing
by Juvenescence; (k) any of the following shall occur: (i) the
security and/or liens created by the Security Agreement or any
other Loan Document shall at any time cease to constitute valid and
perfected security and/or liens on any material portion of the
collateral intended to be covered thereby; (ii) except for
expiration in accordance with its terms, the Security Agreement or
any other Loan Document pursuant to which a lien is granted by AgeX
in favor of Juvenescence shall for whatever reason be terminated or
shall cease to be in full force and effect; (iii) the
enforceability of the Security Agreement or any other Loan Document
pursuant to which a lien is granted by AgeX in favor of
Juvenescence shall be contested by AgeX or a subsidiary, (iv) AgeX
shall assert that its obligations under the Secured Note or any
other Loan Document shall be invalid or unenforceable, or (v) a
loss, theft, damage or destruction occurs with respect to a
material portion of the collateral; (l) there is any change in the
financial condition of AgeX and its subsidiaries which, in the
opinion of Juvenescence, materially and adversely affects, or is
reasonably likely so to affect, the ability of AgeX to perform any
of its obligations under the Secured Note; and (m) any
representation, warranty or statement made, repeated or deemed made
or repeated by AgeX in the Secured Note, or pursuant to the Loan
Documents, is incomplete, untrue, incorrect or misleading in any
material respect when made, repeated or deemed made.
In connection with AgeX's Jan. 25, 2023 draw of loan funds under
the Secured Note, AgeX will issue to Juvenescence upon approval for
listing by the NYSE American warrants to purchase 340,136 shares of
AgeX common stock at an exercise price of $0.735 per share.
About Agex Therapeutics
Headquartered in Alameda, California, AgeX Therapeutics, Inc. is a
biotechnology company focused on the development and
commercialization of novel therapeutics targeting human aging and
degenerative diseases.
The Company reported a net loss of $8.68 million for the year ended
Dec. 31, 2021, a net loss of $10.97 million for the year ended Dec.
31, 2020, and a net loss of $12.38 million for the year ended Dec.
31, 2019. As of Sept. 30, 2022, the Company had $2.01 million in
total assets, $17.16 million in total liabilities, and a total
stockholders' deficit of $15.15 million.
San Francisco, California-based WithumSmith+Brown, PC, the
Company's auditor since 2017, issued a "going concern"
qualification in its report dated March 29, 2022, citing that the
Company has had recurring losses and negative operating cash flows
since inception, an accumulated deficit at Dec. 31, 2021, and
insufficient cash and cash equivalents and loan proceeds at Dec.
31, 2021 to fund operations for twelve months from the date of
issuance. All of these matters raise substantial doubt about the
Company's ability to continue as a going concern.
ALAN R. LAYTON: Gets OK to Hire T.R. Flournoy & Co. as Accountant
-----------------------------------------------------------------
Alan R. Layton, DDS received approval from the U.S. Bankruptcy
Court for the District of Western District of Texas to employ T.R.
Flournoy & Co., LLC as its accountant.
The Debtor requires an accountant to prepare income tax returns and
assist with accounting requirements.
The firm will be paid at its hourly rate of $225 and will be
reimbursed for out-of-pocket expenses incurred.
Tom Flournoy, a partner at T.R. Flournoy & Co., 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:
Tom Flournoy
T.R. Flournoy & Co., LLC
12011 Huebner Rd. Suite 100
San Antonio, TX 8230
Tel: (210) 696-6046
About Alan R. Layton DDS
Alan R. Layton, DDS filed a Chapter 11 bankruptcy petition (Bankr.
W.D. Texas Case No. 22-51325) on Nov. 28, 2022, with as much as $1
million in both assets and liabilities. Langley & Banack, Inc. and
T.R. Flournoy & Co., LLC serve as the Debtor's legal counsel and
accountant, respectively.
ALPHATEC HOLDINGS: L-5 Healthcare Reports 12.42% Equity Stake
-------------------------------------------------------------
In an amended Schedule 13D filed with the Securities and Exchange
Commission, these entities reported beneficial ownership of shares
of common stock of Alphatec Holdings, Inc. as of Jan. 25, 2023:
Shares Percent
Beneficially of
Reporting Person Owned Class
L-5 Healthcare Partners, LLC 13,343,865 12.42%
Paul Segal 13,682,690 12.74%
The aggregate percentage of Common Stock reported owned by each
person is based upon 105,058,324 shares of Common Stock outstanding
as of Oct. 27, 2022, which is the total number of shares of Common
Stock outstanding as reported in the Issuer's Quarterly Report on
Form 10-Q filed with the SEC on Nov. 3, 2022.
L-5 directly holds 10,997,833 shares of Common Stock reported in
this Schedule 13D and 2,346,032 shares of Common Stock that will be
issuable following the exercise of the Warrants held by L-5. As a
result of his relationship with L-5, Paul Segal may be deemed the
beneficial owner of all such shares of Common Stock. Mr. Segal,
however, disclaims beneficial ownership of such shares, except to
the extent of his indirect pecuniary interest therein. MR. Segal
also directly holds 338,825 shares of Common Stock reported in this
Schedule 13D.
On Jan. 25, 2023, L-5 received 1,467,487 shares of Common Stock on
a cashless exercise of warrants to purchase 2,000,000 shares of
Common Stock. The Issuer withheld 532,513 shares of Common Stock
underlying the warrants for payment of the exercise price, using
the VWAP on Jan. 24, 2023 of approximately $13.14, pursuant to the
terms of the Warrants.
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1350653/000089914023000059/l012623a.htm
About Alphatec Holdings
Alphatec Holdings, Inc. (ATEC) (www.atecspine.com), through its
wholly-owned subsidiaries, Alphatec Spine, Inc. and SafeOp
Surgical, Inc., is a medical device company dedicated to
revolutionizing the approach to spine surgery through clinical
distinction. ATEC architects and commercializes approach-based
technology that integrates seamlessly with the SafeOp Neural
InformatiX System to provide real-time, objective nerve information
that can enhance the safety and reproducibility of spine surgery.
Alphatec reported a net loss of $144.33 million for the year ended
Dec. 31, 2021, a net loss of $78.99 million for the year ended Dec.
31, 2020, a net loss of $57 million for the year ended Dec. 31,
2019, and a net loss of $28.97 million for the year ended Dec. 31,
2018.
As of Sept. 30, 2022, the Company had $516.28 million in total
assets, $125.48 million in total current liabilities, $348.32
million in long-term debt, $26.95 million in operating lease
liabilities (less current portion), $14.48 million in other
long-term liabilities, $23.60 million in redeemable preferred
stock, and a total stockholders' deficit of $22.57 million.
AP ACQUISITION: Case Summary & 30 Largest Unsecured Creditors
-------------------------------------------------------------
Thirteen affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
AP Acquisition Company Clark LLC 23-90053
Auto Plus Auto Parts; Auto Plus;
Standard Auto; Almeda Standard Auto
Parts Inc.; Galveston Standard Auto Parts
Inc.; NASA Standard Auto Parts Inc.;
Texas City Standard Auto Parts Inc.;
Dickinson Standard Auto Parts Inc.;
Pearland Standard Auto Parts Inc.;
Texas City Standard Auto Parts
2500 West Center Street
Houston TX 77007
IEH Auto Parts Holding LLC 23-90054
112 Town Park Drive NW
Suite 300
Kennesaw GA 30144
Auto Plus Auto Sales LLC 23-90055
AP Acquisition Company New York LLC 23-90056
IEH Auto Parts LLC 23-90057
IEH Auto Parts Puerto Rico, Inc. 23-90058
IEH BA LLC 23-90059
AP Acquisition Company Gordon LLC 23-90060
AP Acquisition Company Washington LLC 23-90061
AP Acquisition Company Massachusetts LLC 23-90062
AP Acquisition Company Missouri LLC 23-90063
AP Acquisition Company North Carolina LLC 23-90064
IEH AIM LLC 23-90065
Business Description: Auto Plus is an automotive aftermarket parts
distributor offering an extensive selections
of premium brand name parts.
Chapter 11 Petition Date: January 31, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Debtors' Counsel: Veronica A. Polnick, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston Texas 77010
Tel: (713) 752-4200
Email: vpolnick@jw.com
Estimated Assets
(on a consolidated basis): $100 million to $500 million
Estimated Liabilities
(on a consolidated basis): $100 million to $500 million
The petitions were signed by John Michael Neyrey as chief executive
officer.
Full-text copies of two of the Debtors' petitions are available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/DW57F3Q/AP_Acquisition_Company_Clark_LLC__txsbke-23-90053__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/DTF2TOY/IEH_Auto_Parts_Holding_LLC__txsbke-23-90054__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Federal-Mogul Corporation Anco $20,563,185
5050 Kingsley, Retail Lockbox
1MOC1N
Cincinnati, OH 45227
Michael Duffy, Director of AR
Tel: 248-914-6925
Email: michael.duffy@driv.com
2. Mann + Hummel $16,307,257
Purolator Filters LLC
Plot No. 231/1 Stage 3rd Phase
Peenya Industrial Area
Bengaluru, India 860 058
Ajay Tikare,
Senior Associate Accounts
Receivable
Tel: 26-3297-2555
Email: Ajay.tikare@mann-hummel.com
3. Gates Corporation $9,090,466
1144 Fifteenth Street, Suite 1400
Denver, CO 80202
Natalie Maxwell, Accounts Manager
Tel: 303-744-5134
Email: Natalie.maxwell@gates.com
4. Warren Distribution $7,272,904
950 S. 10th Street, Suite 300
Omaha, NE 68108
Brett Bartling, Credit Manager
Tel: 402-977-5840
Email: Brett.bartling@highlinewarren.com
5. Standard Motor Products Inc. $6,118,573
37-18 Northern Blvd. 6th Floor
Long Island, NY 11101
Darcey Keene, Director,
Corporate Credit & Collections
Tel: 972-316-8110
Email: Darcey.keene@4s.com
6. Monroe Auto Equipment Co. $4,336,511
5050 Kingsley
Retail Lockbox 1MOC1N
Cincinnati, OH 4227
Michael Duffy, Director of AR
Tel: 248-914-6925
Email: Michael.duffy@driv.com
7. Walker Manufacturing Company $4,018,554
5050 Kingsley
Retail Lockbox 1MOC1N
Cincinnati, OH 4227
Michael Duffy, Director of AR
Tel: 248-914-6925
Email: Michael.duffy@driv.com
8. Ford Motion Company $4,006,411
Dept. CH 14147
Palatine, IL 60055-4147
Sunil Kumar, Global Receivables
Email: Ssunilk2@ford.com
9. Axalta Coatings Systems LLC $3,584,162
50 Applied Bank Blvd. Suite 300
Glen Mills, PA 19342
Ryann Direnzo, Credit Analyst
Email: Ryann.direnzo@axalta.com
10. YBM Industries CO Limited $3,455,800
707-713 Nathan Rd.
Mongkok, LKN, China
Alice
Tel: 86-21-803-44208
Email: Sales20@ybmindustries.com
11. Dorman Products Inc. $3,510,859
3400 E. Walnut Street
Colmar, PA 18915
Lauren Scott, AR Coordinator
Email: rgarequests@dormanproducts.com
12. Transworld Accurate $3,086,515
Brake LTD
600 Territorial Dr. Unit D
Bolingbrook, IL 60440
Jun Zou
Tel: 630-226-1889 ext. 2
Email: junzou@accuratebrake.com
13. Four Season Division of $2,417,422
Standard Motor Products
37-18 Northern Blvd. 6th Floor
Long Island, NY 11101
Darcey Keene, Director, Corporate
Credit & Collections
Tel: 972-316-8110
Email: Darcey.keene@4s.com
14. Continental Battery Systems $2,157,090
8585 N. Stemmons Fwy. South Tower, 6th
Floor Suite 600
Dallas, TX 75247
Brian Chesnut, Corporate Controller
Email: bchesnut@gocbs.com
15. IAP Dura International $1,999,317
11 Distribution Blvd. Suite A
Edison, NJ 08817-6005
Lisa Hurff, Credit Manager
Tel: 732-510-4747
Email: lhurff@duragoparts.com
16. Highline-Warren LLC $1,988,647
950 S. 10th St. Suite 300
Omaha, NE 68108
Brett Bartling, Credit Manager
Tel: 402-977-5840
Email: Brett.barling@highlinewarren.com
17. Wilmar Corporation $1,590,724
20413 59th PL South Suite 160
Kent, WA 98032
18. 3M $1,534,661
3M Center 225-5S-14
St. Paul, MN 5514
Jacque Derocker-Lenihan, US
Operations Representative
19. Trico Products $1,517,039
127 Public Square Suite 5300
Cleveland, OH 44114
Maks Chernyavsky, Director of Finance
20. Delphi Automotive Systems $925,824
22654 Network P
Chicago, IL 60673-1226
c/o JP Morgan Chase
21. CRS Automotive Parts Inc. $925,286
83 Carrington Lane
Uxbridge, MA 0156
Ashwini Angira, AR/AP
Email: ashwiniz@aol.com
22. Agility Auto Parts Inc. $896,700
3000 E. Pioneer Parkway, Suite 160
Arlington, TX 76010
Jeff Marquis, Director of Sales
Email: jmarquis@apdius.com
Tel: 412-257-5288
23. Curt Manufacturing Inc. $866,479
BIN 88006
Milwaukee, WI 53288-006
Ginger Olson, Accounts Receivable
Supervisor
Tel: 715-471-6912
Email: Ginger.olson@curtgroup.com
24. Denso Sales of $821,319
California Inc.
3900 Via Oro Avenue
Long Beach, CA 90810
Shekhar Chethikattil,
Manager Credit
& Financial Services
25. Sopus Products-Shell/ $815,324
Pennzoil
P.O. Box 7247-6236
Philadelphia, PA 19170-6236
Zen-Mary Tatac
Tel: 832-337-1388
Email: Zen-mary.tatac@shell.com
26. Northern Battery $812,251
8585 N. Stemmons Fwy South Tower
6th Floor Suite 600
Dallas, TX 75247
Brian Chesnut, Corporate Controller
Email: bchesnut@gocbs.com
27. Old World Industries LLC $651,176
3100 Sanders Road, Suite 400
Northbrook, IL 60062
ennifer Murray, Credit Manager
Tel: 847-559-2235
Email: jmurray@owi.com
28. Warren Oil Company Inc. $626,366
950 S. 10th St. Suite 300
Omaha, NE 68108
Brett Bartling, Credit Manager
Tel: 402-977-5840
Email: Brett.bartling@highlinewarren.com
29. Interstate Batteries $613,638
12770 Merit Drive, Suite 1000
Dallas, TX 75251
Duran Pfeiffer
Tel: 618-203-9438
Email: Duran.pfeiffer@ibsa.com
30. NGK Spark Plugs (USA) Inc. $585,995
46929 Magellan Drive
Wixom, MI 48393
Rabia Alleik, AR Coordinator/Cash
Application Specialist
Tel: 248-926-6044
Email: raalleik@ngksparkplugs.com
ARUZE GAMING: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Aruze Gaming America, Inc.
6900 S. Decatur Blvd., Ste. 100
Las Vegas, NV 89118
Business Description: Aruze designs, develops and manufactures
gaming machines.
Chapter 11 Petition Date: February 1, 2023
Court: United States Bankruptcy Court
District of Nevada
Case No.: 23-10356
Judge: Hon. August B. Landis
Debtor's Counsel: Matthew C. Zirzow, Esq.
LARSON & ZIRZOW, LLC
850 E. Bonneville Ave.
Las Vegas, NV 89101
Tel: 702-382-1170
Email: mzirzow@lzlawnv.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Yugo Kinoshita as chief executive
officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/R2OI52A/ARUZE_GAMING_AMERICA_INC__nvbke-23-10356__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Bartlit Beck LLP Judgment $27,365,120
c/o Kemp Jones LLP
Attn: J. Randall Jones, Esq.
3800 Howard Hughes
Parkway, 17th Flr.
Las Vegas, NV 89169
2. PDS Gaming - Machines and $1,600,171
Nevada, Inc. Equipment
Attn: Peter Cleary, COO Purchased
871 Grier Drive, Ste. B1
Las Vegas, NV 89119
3. Gaming Laboratories $946,922
International
Attn: Managing Member
PO Box 783151
Philadelphia, PA
4. Holland & Hart, LLP Services $685,560
Attn: Managing Member
555 17th Street, Ste. 3200
Denver, CO 80202
5. Klarquist Sparkman, LLP Services $392,020
Attn: Managing Member
121 SW Salmon St.,
Ste. 1600
Portland, OR 97204
6. Aon Risk Insurance Insurance $313,246
Services West, Inc.
Attn: Managing Member
P.O. Box 849832
Los Angeles, CA 90084
7. Ingenuity Gaming iGaming $215,400
Software Limited
Attn: Managing Member
2nd Flr., St. Mary's Court
20 Hill Street, Douglas
IM1 IEU Isle of Man
8. RSM US LLP Services $202,106
Attn: Managing Member
10845 Griffith Peak
Dr., Ste. 450
Las Vegas, NV 89135
9. Beltway Business Rent $103,309
Park Warehouse
No.9, LL
c/o Majestic Beltway
Whse Buildings II
Attn: Rodman Martin, Resident Agent
4050 W. Sunset Rd., Ste. H
Las Vegas, NV 89118
10. TransAct Technologies Inventory-Parts $84,200
Incorporated
Attn: Managing Member
6700 Paradise Rd.
Las Vegas, NV 89119
11. EIP US LLP Services $78,824
Attn: Managing Member
DTC Quadrant/
Penthouse 4
Greenwood Village,
CO 80111
12. JCM American Inventory-Parts $75,266
Corporation
Attn: Managing Member
P.O. Box 511600
Los Angeles, CA
90051-8155
13. PDS Gaming Corporation Inventory - FG $55,777
Attn: Managing Member Machines
871 Grier Dr., Ste. B1
Las Vegas, NV 89119
14. Epiq Systems Godo Kaisha Services $54,867
Attn: Managing Member
11-5 NIbancho, 5th Floor
Tokyo
15. Continent 8 LLC iGaming $43,623
Attn: Managing Member
4900 N. Ocean Blvd.,
Ste. 319
Lauderdale by the
Sea, FL 33308-2937
16. Ayano Hara Nishimura Services $37,219
Attn: Managing Member
98-351 Koauka Loop, C-603
17. Veritext LLC Services $36,832
Attn: Managing Member
260 W. Mt. Pleasant Ave.
Livingston, NJ 07039
18. Derse, Inc. Rent $34,256
Attn: Managing Member
3800 West Canal Street
Milwaukee, WI 53208
19. Sugimura & Services $33,492
Partners/Koji
Attn: Managing Member
Primary Common
Gate W. Tower
36th Flr
Kaskumigaseki 3-2-1
Chiyda-ku, Tokyo
100-0013
20. Katz & Katz, LLC Rent $30,849
Attn: Brian Katz,
Resident Agent
9237 White Tail Dr.
Las Vegas, NV 89134
ATLAS INTERMEDIATE: GI Partners Deal No Impact on Moody's B3 CFR
----------------------------------------------------------------
Moody's Investors Service said that Atlas Intermediate Holdings
LLC's announcement that it signed a definitive merger agreement to
be acquired by GI Partners has no immediate impact to Atlas' stable
outlook and ratings, including the B3 corporate family rating and
B3 senior secured first lien credit facility rating. Atlas, which
is a Texas-based provider of testing, inspection, and engineering
services, and GI Partners have not disclosed material
considerations such as sources of financing, the company's
post-merger capitalization and organizational structure.
Under the terms of the agreement, Atlas shareholders will receive
$12.25 in cash per share of Atlas' common stock in a transaction
valued at approximately $1.05 billion, including the assumption of
$513 million of Atlas' net debt obligations as of September 30,
2022. The transaction would result in Atlas transitioning from a
public company to a private company. The closing of the deal is
subject to customary conditions, including regulatory clearance and
Atlas shareholder approvals. Affiliates of Bernhard Capital
Partners, which own approximately 43% of Atlas' common stock,
entered into a voting agreement in support of the transaction. The
transaction is expected to close in the second quarter of calendar
2023.
Atlas Technical Consultants Inc. (NASDAQ: ATCX), the indirect
parent of Atlas Intermediate Holdings LLC, headquartered in Austin,
Texas, is a leading provider of testing, inspection, and
engineering services for large scale infrastructure programs in the
transportation, commercial, water, government, education,
environmental, and industrial markets. Reported revenue for the
twelve months ended September 30, 2022 were $599 million.
AULT ALLIANCE: Files Certificate of Elimination of Preferred Stock
-------------------------------------------------------------------
Ault Alliance, Inc. filed a Certificate of Elimination on Jan. 23,
2023, with the Secretary of State of the State of Delaware with
respect to the Company's Series C convertible redeemable preferred
stock which, effective upon filing, eliminated from the Company's
Certificate of Incorporation, as amended, all matters set forth in
the amended and restated Certificate of Designations for the Series
C Preferred Stock.
About Ault Alliance Inc.
Ault Alliance, Inc. (formerly, BitNile Holdings, Inc.) is a
diversified holding company pursuing growth by acquiring
undervalued businesses and disruptive technologies with a global
impact. Through its wholly and majority-owned subsidiaries and
strategic investments, Ault Alliance owns and operates a data
center at which it mines Bitcoin and provides mission-critical
products that support a diverse range of industries, including oil
exploration, crane services, defense/aerospace, industrial,
automotive, medical/biopharma, consumer electronics, hotel
operations and textiles. In addition, Ault Alliance extends credit
to select entrepreneurial businesses through a licensed lending
subsidiary. Ault Alliance's headquarters are located at 11411
Southern Highlands Parkway, Suite 240, Las Vegas, NV 89141;
www.Ault.com.
BitNile reported a net loss of $23.97 million for the year ended
Dec. 31, 2021, a net loss of $32.73 million for the year ended Dec.
31, 2020, a net loss of $32.94 million for the year ended Dec. 31,
2019, and a net loss of $32.98 million for the year ended Dec. 31,
2018. As of Sept. 30, 2022, the Company had $610.90 million in
total assets, $155.03 million in total liabilities, $117.11 million
in redeemable noncontrolling interests in equity of subsidiaries,
and $338.76 million in total stockholders' equity.
AYALA PHARMACEUTICALS: Changes Fiscal Year End to December 31
-------------------------------------------------------------
The Board of Directors of Ayala Pharmaceuticals, Inc. determined
that a fiscal year ending on December 31 would better reflect the
business cycle of the Company. As a result of that determination,
the Board voted on Jan. 26 to change its fiscal year end from
October 31 to December 31. December 31 is also the fiscal year end
of Old Ayala, Inc., the accounting acquirer in the Company's
recently completed reverse merger transaction.
Following this change, the date of the Company's next fiscal year
end will be Dec. 31, 2023. Consequently, the Company will file a
transition report on Form 10-Q for the period from Nov. 1, 2022 to
Dec. 31, 2022.
About Ayala Pharmaceuticals
Formerly known as Advaxis, Inc., Ayala Pharmaceuticals, Inc. is a
clinical-stage oncology company focused on developing and
commercializing small molecule therapeutics for patients suffering
from rare and aggressive cancers, primarily in genetically defined
patient populations.
Ayala Pharmaceuticals reported a net loss of $17.86 million for the
year ended Oct. 31, 2021, a net loss of $26.47 million for the year
ended Oct. 31, 2020, a net loss of $16.61 million for the year
ended Oct. 31, 2019, and a net loss of $66.51 million for the year
ended Oct. 31, 2018. As of July 31, 2022, the Company had $30.10
million in total assets, $1.91 million in total liabilities, and
$28.19 million in total stockholders' equity.
AYALA PHARMACEUTICALS: Delays Filing of Annual Report
-----------------------------------------------------
Ayala Pharmaceuticals, Inc. has filed a Form 12b-25 with the
Securities and Exchange Commission with respect to the delay in the
filing of its Annual Report on Form 10-K for the year ended Oct.
31, 2022.
Ayala Pharmaceuticals said management is in the process of
finalizing the operating results of the Company's year ended Oct.
31, 2022. The information could not be assembled and analyzed
without unreasonable effort and expense to the Registrant. The
Form 10-K will be filed as soon as practicable and within the 15
day extension period.
For the year ended Oct. 31, 2022 as compared to the year ended Oct.
31, 2021, the Company expects to report that:
-- revenue was reduced from approximately $3.2 million to
approximately $0.3 million, as the Company had revenue from royalty
payments in 2021 that were not repeated in 2022;
-- research and development expenses declined to $7.6 million
from $10.6 million and general and administrative expenses declined
to $8.9 million from $11.5 million.
As a result of these changes, the Company expects to report income
available to common stockholders for the year ended Oct. 31, 2022
of approximately $(15.4) million, as compared to $(17.9) million
for the year ended October 31, 2021. Income available to common
stockholders for the period may be increased by an income tax
benefit of up to approximately $4.7 million if the Company
completes the sale of certain New Jersey net operating losses prior
to the issuance of the 10-K, regarding which it is awaiting further
information but cannot make any assurances as to when or if such
sale will occur.
About Ayala Pharmaceuticals
Formerly known as Advaxis, Inc., Ayala Pharmaceuticals, Inc. is a
clinical-stage oncology company focused on developing and
commercializing small molecule therapeutics for patients suffering
from rare and aggressive cancers, primarily in genetically defined
patient populations.
Ayala Pharmaceuticals reported a net loss of $17.86 million for the
year ended Oct. 31, 2021, a net loss of $26.47 million for the year
ended Oct. 31, 2020, a net loss of $16.61 million for the year
ended Oct. 31, 2019, and a net loss of $66.51 million for the year
ended Oct. 31, 2018. As of July 31, 2022, the Company had $30.10
million in total assets, $1.91 million in total liabilities, and
$28.19 million in total stockholders' equity.
BED BATH & BEYOND: Raises 'Going Concern' Doubt
-----------------------------------------------
Bed Bath & Beyond Inc. said in its Quarterly Report on Form 10-Q
filed with the Securities and Exchange Commission that based on
recurring losses from operations and negative cash flows from
operations for the nine months ended Nov. 26, 2022 as well as
current cash and liquidity projections, the Company has concluded
that there is substantial doubt about the Company's ability to
continue as a going concern for the next 12 months.
The Company's net cash used in operating activities was $307.6
million and $890.0 million for the three and nine months ended
Nov. 26, 2022. Cash, cash equivalents and restricted cash were
$225.7 million as of Nov. 26, 2022. On or around Jan. 13, 2023,
certain events of default were triggered under the Company's Credit
Facilities as a result of the Company's failure to prepay an
overadvance and satisfy a financial covenant, among other things.
As a result of the continuance of such events of default, on
Jan. 25, 2023, the administrative agent under the Amended Credit
Agreement notified the Company that (i) the principal amount of all
outstanding loans under the Credit Facilities, together with
accrued interest thereon, the FILO Applicable Premium and all fees
(including, for the avoidance of doubt, any break funding payments)
and other obligations of the Company accrued under the Amended
Credit Agreement, are due and payable immediately, (ii) the Company
is required, effective immediately, to cash collateralize letter of
credit obligations under the Credit Facilities, and (iii) effective
as of Jan. 25, 2023, all outstanding loans and obligations under
the Credit Facilities shall bear interest at an additional default
rate of 2% per annum. As a result of these events of default, the
Company classified its outstanding borrowings under its asset-based
revolving credit facility and its FILO Facility as current in the
consolidated balance sheet as of Nov. 26, 2022. The Company's
outstanding borrowings under its ABL Facility and FILO Facility
were $550.0 million and $375.0 million, respectively, as of Nov.
26, 2022. In addition, the Company had $186.2 million in letters
of credit outstanding under its ABL Facility as of November 26,
2022. The Company also had $1.030 billion in senior notes
(excluding deferred financing costs) outstanding as of Nov. 26,
2022.
The Company stated, "At this time, the Company does not have
sufficient resources to repay the amounts under the Credit
Facilities and this will lead the Company to consider all strategic
alternatives, including restructuring its debt under the U.S.
Bankruptcy Code. The Company is undertaking a number of actions in
order to improve its financial position and stabilize its results
of operations including but not limited to, cost cutting, lowering
capital expenditures, and reducing its store footprint including
related distribution centers. In addition, the Company will
continue to seek reductions in rental obligations with landlords in
its determination of the appropriate footprint, seek additional
debt or equity capital, reduce or delay the Company's business
activities and strategic initiatives, or sell assets. These
measures may not be successful."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/886158/000088615823000026/bbby-20221126.htm
About Bed Bath & Beyond
Bed Bath & Beyond Inc., together with its subsidiaries, is an
omnichannel retailer selling a wide assortment of merchandise in
the Home, Baby, Beauty & Wellness markets and operate under the
names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face
Values. The Company also operates Decorist, an online interior
design platform that provides personalized home design services.
The Company reported a net loss of $559.62 million for the fiscal
year ended Feb. 26, 2022, a net loss of $150.77 million for the
year ended Feb. 27, 2021, and a net loss of $613.82 million for the
year ended Feb. 29, 2020. As of Aug. 27, 2022, the Company had
$4.66 billion in total assets, $5.24 billion in total liabilities,
and a total shareholders' deficit of $577.65 million.
As of Nov. 26, 2022, the Company had $4.40 billion in total assets,
$5.20 billion in total liabilities, and a total shareholders'
deficit of $798.64 million.
* * *
As reported by the TCR on Jan. 11, 2023, S&P Global Ratings raised
its issuer credit rating on Union, N.J.-based specialty home
retailer Bed Bath & Beyond Inc. (BBBY) to 'CC' from 'SD' (selective
default). S&P said, "The 'CC' rating and negative outlook on BBBY
reflects our view that while not actively in default, the company
is highly vulnerable and a distressed transaction or broader
restructuring is a virtual certainty based on its deteriorating
liquidity position, challenging operating conditions, and the
looming maturities of its outstanding 2024 notes."
As reported by the TCR on Nov. 28, 2022, Moody's Investors Service
retained Bed Bath's corporate family rating at Ca and the outlook
remains stable. According to Moody's, Bed Bath & Beyond's Ca
corporate family rating reflects the very high likelihood of
further defaults over the next twelve months.
BORREGO COMMUNITY: Court Addresses Objection to Bid Procedures
--------------------------------------------------------------
Judge Laura S. Taylor of the U.S. Bankruptcy Court for the Southern
District of California entered an Order addressing Dr. Sarah
Rogers' objection to Borrego Community Health Foundation's bidding
procedures in connection with the sale of substantially all
assets.
A hearing on the Motion is set for Feb. 22, 2023, at 2:00 p.m.
Dr. Rogers, an interested community member of Borrego Springs and
member of the Borrego Cares Committee, filed an "Objection to
Auction/sale" of the Debtor's assets. The filing raises a number of
procedural issues.
First, to the extent Dr. Rogers objects to the auction procedures,
her objection is untimely; objections to that relief were due on
Nov. 18, 2022, and the Court granted the Debtor's motion approving
the auction procedures at the Dec. 7, 2022, hearing.
The Court does not intend to treat the objection as a motion for
reconsideration as it neither directly requests this relief not
does it specify a basis for this relief. If Dr. Rogers seeks such
relief, she can file a more specific motion with appropriate
support.
Second, to the extent Movant objects to the sale of assets pursuant
to the approved procedures, the objection is premature. Any sale of
assets must be approved by the Court at a future date. But the
Debtor has not yet filed a motion to approve a sale of some or all
of its assets.
Third, to the extent Movant requests affirmative injunctive or
declaratory relief, she cannot seek such relief through an
objection or even a motion. She needs to file an adversary
proceeding.
And in the case of any of the foregoing, Dr. Rogers should address
her standing to bring such a motion, initiate such an adversary
proceeding, or object to the sale or sale procedures. The Court
isn't making a decision on standing at this time, but it sees
issues in this regard. And, as standing concerns raise issues that
go to the Court's jurisdiction, it has to raise them.
Without prejudice to any final determination on Dr. Roger's
standing, the Court will treat this filing as an objection to the
Debtor's anticipated motion to approve the sale of its assets and
will hear it at the time of the hearing on a motion seeking sale
approval. The Court currently anticipates such a hearing will occur
on Feb. 22, 2023, at 2:00 p.m., but that date may change.
The Debtor may reply to Dr. Roger's filing as such an objection and
may do so at the time it is required to reply to other objections
to its sale motion in accordance with the requirements of the Local
Rules of Bankruptcy Procedure.
About Borrego Community Health Foundation
Borrego Community Health Foundation offers, among other services,
comprehensive primary care, pediatric care, urgent care, behavioral
health services, dental services, specialty care, transgender
health, women's health, prenatal care, veteran's health, and
chiropractic services. Borrego Community is a non-profit public
charity, tax-exempt under section 501(c)(3) of the Internal Revenue
Code. The Foundation, as of Sept. 12, 2022, had 24 brick-and-mortar
sites including administrative sites, two pharmacies and six mobile
units covering a service area consisting of a 250-mile corridor on
the eastern side of San Diego and Riverside Counties, Calif.
Borrego Community Health Foundation sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. S.D. Calif. Case No.
22-02384) on Sept. 12, 2022, with between $50 million and $100
million in assets and liabilities. Isaac Lee, chief restructuring
officer, signed the petition.
Judge Laura S. Taylor oversees the case.
The Debtor tapped Tania M. Moyron, Esq., at Dentons US, LLP as
bankruptcy counsel and Hooper Lundy & Bookman, P.C. as special
counsel. Kurtzman Carson Consultants, LLC is the Debtor's claims
and noticing agent.
Jacob Nathan Rubin, the patient care ombudsman appointed in the
Debtor's case, tapped Levene Neale Bender Yoo & Golubchik, LLP as
bankruptcy counsel and Dr. Tim Stacy DNP, ACNP-BC as consultant.
BOTTLES 4 CASH: Seeks to Hire Gleichenhaus as Legal Counsel
-----------------------------------------------------------
Bottles 4 Cash, LLC seeks approval from the U.S. Bankruptcy Court
for the Western District of New York to hire Gleichenhaus, Marchese
& Weishaar, P.C. as its bankruptcy counsel.
The Debtor requires legal counsel to:
(a) give advice with respect to the Debtor's powers and duties
in the continued operation of its business and in the management of
its assets;
(b) take necessary action to avoid liens against the Debtor's
property, remove restraints against the property and such other
actions to remove any encumbrances of liens which are avoidable,
which were placed against the property of the Debtor prior to its
bankruptcy filing, and at a time when the Debtor was insolvent;
(c) take necessary action to enjoin and stay until final
decree any attempts by secured creditors to enforce liens upon
property of the Debtor in which the Debtor has substantial equity;
(d) represent the Debtor in any proceedings which may be
instituted in this court by creditors or other parties during the
course of this proceeding;
(e) prepare legal papers;
(f) perform all other legal services.
The firm will charge these hourly fees:
Michael A. Weishaar, Esq. $375
Scott Bogucki, Esq. $375
Other Attorneys $350
Paralegals $100
The firm received a retainer in the amount of $5,000.
As disclosed in court filings, Gleichenhaus is a "disinterested
person" within the meaning of Bankruptcy Code Section 101(14).
The firm can be reached through:
Michael A. Weishaar, Esq.
Gleichenhaus, Marchese & Weishaar, P.C.
43 Court Street 930 Convention Tower
Buffalo, NY 14202
Phone: 716-845-6446
Email: rbg_gmf@hotmail.com
About Bottles 4 Cash
Bottles 4 Cash, LLC sought protection for relief under Chapter 11
of the Bankruptcy Code (Bankr. W.D.N.Y. Case No. 23-10010) on Jan.
9, 2023, with $100,001 to $500,000 in both assets and liabilities.
Judge Carl L. Bucki oversees the case.
Robert B. Gleichenhaus, Esq., at Gleichenhaus, Marchese & Weishaar,
P.C. represents the Debtor as counsel.
BOWLERO CORP: Moody's Raises CFR to B1, Outlook Remains Stable
--------------------------------------------------------------
Moody's Investors Service upgraded Bowlero Corp.'s ratings
including its Corporate Family Rating to B1 from B2 and the
Probability of Default Rating to B1-PD from B2-PD. Moody's also
upgraded to B1 from B2 the rating on the senior secured revolver
issued by Bowlero's subsidiary, Kingpin Intermediate Holdings, LLC
(Kingpin). Concurrently, Moody's assigned a B1 rating to the new
first lien senior secured term loan B issued by Kingpin. Bowlero's
SGL-2 speculative grade liquidity (SGL) rating is unchanged. The
outlook is stable.
The proposed transaction involves upsizing the existing revolver
due December 2026 to $200 million from $165 million as well as a
newly amended $900 million first lien term loan B due February
2028. Net proceeds from the new term loan will be used primarily to
repay Bowlero's existing first lien term loan and the outstanding
balance on the revolver. The B2 rating on the existing term loan
due 2024 will be withdrawn after repayment.
The upgrade of the CFR to B1 reflects the extension of Bowlero's
debt maturity profile as well as Moody's expectation for continued
good operating performance and leverage reduction over the next 12
to 18 months. Bowlero's debt-to-EBITDA leverage has declined
rapidly over the last year to about 4.8x (pro forma for the
transaction and including Moody's standard adjustments) as of the
first quarter of the June 2023 fiscal year due to a strong recovery
in operating performance from the pandemic. Both revenue and
earnings have significantly surpassed the pre-pandemic levels. The
improvement was driven by pent up consumer demand, revenue and cost
saving initiatives as well as center renovations and new locations.
Moody's expects investments and acquisitions will continue to
support operating performance going forward and support a further
decline in leverage in fiscal 2023 to below 4.5x. The SGL-2
liquidity rating reflects Moody's expectation for good liquidity
supported by about $113 million of cash pro forma for the
refinancing, access to a newly upsized $200 million revolver that
will be undrawn after the refinancing, and free cash flow in the
range of $50 million over the next 12 months.
Upgrades:
Issuer: Bowlero Corp.
- Corporate Family Rating, Upgraded to B1
from B2
- Probability of Default Rating, Upgraded to
B1-PD from B2-PD
Issuer: Kingpin Intermediate Holdings, LLC
- Backed Senior Secured 1st Lien Revolving
Credit Facility, Upgraded to B1 (LGD3) from
B2 (LGD3)
Assignments:
Issuer: Kingpin Intermediate Holdings, LLC
- Backed Senior Secured 1st Lien Term Loan,
Assigned B1 (LGD3)
Outlook Actions:
Issuer: Bowlero Corp.
Outlook, Remains Stable
Issuer: Kingpin Intermediate Holdings, LLC
Outlook, Remains Stable
RATINGS RATIONALE
Bowlero's B1 CFR reflects its moderately high leverage (4.8x
debt-to-EBITDA pro forma for the transaction including Moody's
lease adjustments) that Moody's expects will decline to below 4.5x
by the fiscal year ended June 2023 driven by continued earnings
growth. Operating performance will continue to be driven by revenue
and cost saving initiatives as well as center renovations and new
locations. In recent periods, costs have increased due to higher
staffing levels, but revenue is likely to benefit in the next few
quarters from more fully staffed centers that will lead to higher
revenue and profitability. Revenue opportunities, expansion
activity, and consumer substitution for less expensive
entertainment offerings are likely to offset the recessionary
pressures that may impact overall consumer discretionary spending
in 2023. Bowlero's 2.7x gross debt to covenant EBITDA leverage is
below its target leverage level, indicating leverage on this basis
is unlikely to move lower. Because Bowlero's covenant EBITDA
includes credit for some expenses and improvements that Moody's
does not add back, realization of such performance initiatives will
contribute to a reduction in Moody's projected leverage. Per center
performance has increased significantly from pre-pandemic levels.
Moody's believes this is in part attributable to improved operating
efficiency and the company's focus on upgrading the facilities and
services to improve yield. There is nevertheless risk that per
center performance is being boosted by elevated demand related to
shifts in consumer behavior that may be temporary because of
pandemic influences and extraordinary stimulus. Bowling is a mature
sport and significant competition for leisure entertainment
spending could also weaken center volumes. Moody's assumes in the
ratings that the company's operating strategies are able to sustain
per center performance near current levels.
Despite its acquisitive nature, Bowlero has demonstrated a good
track record of integrating acquisitions. Bowlero has realized
substantial cost savings over the past several years while
increasing revenue, and Moody's projects the company will achieve
additional revenue and expense reductions at recently acquired
locations. Bowlero has been successful increasing the number of
higher margin, casual bowlers who are likely to spend more than
traditional league bowlers. The company has also demonstrated good
discipline with its discount policy, while raising prices and
growing its group event business. Bowlero benefits from good
geographic diversity and size (326 centers ending December 2022)
that will help mitigate the impact of any regional economic
declines.
ESG CONSIDERATIONS
Bowlero's ESG Credit Impact Score is highly-negative (CIS-4) driven
by the company's exposure to governance risks (G-4). The company
has pursued an aggressive financial policy historically and will
continue to pursue additional acquisitions, but Moody's expects
Bowlero to maintain leverage levels at the more moderate levels
achieved since going public in December 2021. Operating cash flow
is likely to be used for renovations, new builds, acquisitions, or
stock buybacks. While Bowlero is a public company, the CEO and
Atairos Group, Inc. have significant ownership positions and the
CEO has voting control through a dual class structure.
Bowlero's SGL-2 reflects Moody's expectation that the company will
have good liquidity over the next 12 months, with approximately
$113 million of cash and access to the upsized and undrawn $200
million revolving credit facility due December 2026 pro forma for
the transaction as of October 2, 2022. Capital spending was
curtailed to $43 million in FY 2021 to preserve liquidity during
the pandemic, but has increased to $147 million for the 12 months
ended October 2, 2022 as Bowlero has ramped up the renovation of
existing centers. Moody's expects Bowlero will use operating cash
flow ($182 million LTM October 2, 2022) for capex, acquisitions and
stock buybacks. Free cash flow was $35 million during the same
period and Moody's expects it will increase to a $50 million range
over the next 12 months.
The term loan B is covenant lite and the revolver is subject to a
springing first lien leverage ratio covenant of 6x when greater
than 35% of the facility is drawn. Moody's expects Bowlero will
remain well within compliance of the financial covenant over the
next twelve months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectations that Bowlero's
EBITDA growth will continue to be supported by center renovations,
new locations, higher prices, and better revenue opportunities as
staffing levels have improved. Moody's also assumes that
debt-to-EBITDA leverage will decline to below 4.5x in the fiscal
year ended 2023 with free cash flow as a percentage of debt in the
low single digits.
The ratings could be upgraded with continued strong operating
performance that leads to debt-to-EBITDA leverage sustained below
3.5x (including Moody's standard adjustments) along with
maintenance of very good liquidity. A financial policy consistent
with the higher rating, including funding renovations and
acquisitions within internally generated cash flow would also be
required.
The ratings could be downgraded if operating performance
deteriorates from a decrease in volume, higher costs or other
factors that weaken per center performance. An inability or
unwillingness to reduce and sustain debt-to-EBITDA leverage below
4.5x (including Moody's standard adjustments) or a decline in
Bowlero's liquidity could also lead to a downgrade.
Bowlero Corp. (fka Bowlmor AMF Corp.) is the largest bowling center
operator in the US with additional locations in Canada and Mexico.
The company completed a De-SPAC transaction in December 2021 after
the merger with ISOS Acquisition Corporation and trades under the
ticker symbol BOWL. Bowlero was created following the acquisition
of AMF by Strike Holdings LLC (Bowlmor) in 2013. The company
acquired 85 bowling centers from Brunswick Corporation in 2014. In
2021, Bowlero acquired Bowl America for $44.6 million. The combined
company operates bowling centers under the AMF, Bowlero, and
Bowlmor brands. Bowlero is a publicly traded company, but Atairos
Group, Inc. holds a substantial ownership position. Revenue during
the LTM ending October 2, 2022 was approximately $961 million.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
BREAKFORM RESIDENTIAL: Seeks $1.5MM DIP Loan from Poco Bay
----------------------------------------------------------
Breakform Residential Fund I, LP asks the U.S. Bankruptcy Court for
the Central District of California, Los Angeles Division, to use
cash collateral and obtain postpetition financing.
The Debtor seeks to obtain senior secured post-petition financing
in an aggregate amount of up to $1.5 million from Poco Bay Company
pursuant to the terms of the Debtor-In-Possession Credit Agreement,
dated as of January 31, 2023, by and between the Debtor and the DIP
Lender.
Breakform seeks to tap up to $520,000 from the DIP Facility under
an Interim Order.
The DIP Facility matures on June 1, 2023, if a Plan of
Reorganization is not confirmed prior to the date.
The Debtor agrees that failure to materially comply with these
milestone covenants will constitute an Event of Default, unless any
of the conditions have been waived or modified by the DIP Lender,
in their sole discretion:
(i) On Tuesday of each week (or such other day as may be
agreed upon by the Parties), the Debtor will make available
representatives reasonably acceptable to the DIP Lender for a
telephone/video conference call with the DIP Lender and their
respective agents, advisors and/or representatives to discuss the
cash flows and operations of the Debtor's business and the Project,
and such other matters as are relevant or are reasonably requested
by the DIP Lender;
(ii) No later than 14 calendar days after the Petition Date,
the Debtor will have filed with the Bankruptcy Court (i) a plan of
reorganization consistent with the RSA; (ii) a proposed disclosure
statement in support of the plan, unless the Disclosure Statement
is not necessary as the case is pending under Subchapter V of
Chapter 11; and (iii) the motion seeking approval of the Disclosure
Statement (if required) and solicitation materials relating to the
Plan;
(iii) No later than 35 calendar days after the Petition Date,
the Bankruptcy Court will have entered (A) the Final Order, and (B)
the order approving the assumption of that certain Restructuring
Support Agreement, dated as of November 16, 2022, by and between
the Debtor, the DIP Lender and the other parties to the RSA;
(iv) No later than 90 calendar days after the Petition Date,
the Bankruptcy Court will have entered an order confirming the
Plan, which order will be reasonably acceptable in form and
substance to the DIP Lender; and
(v) The Plan effective date will occur and the Restructuring
will be implemented within 30 days after entry of the Confirmation
Order.
During 2022, the person in control of the Debtor and its general
partner (Ridaa Murad) asserted that the Debtor and the Projects
were tremendously hampered by COVID-19 related shutdowns,
construction delays, supply chain delays and delays in planning,
permitting and inspections. All stakeholders in the Debtor
recognized that the Debtor lacked necessary liquidity and its
ability to satisfy its debt and provide for a recovery by its
non-controlling equity holders (limited partners) was in jeopardy
if action was not promptly taken to address the Debtor's liquidity
crisis and the need to protect the Debtor's investments in the
entities that own the Projects and the underlying properties. As a
result, negotiations commenced between the Debtor and Mr. Murad and
the significant stakeholders of the Debtor, culminating in a
Restructuring Support Agreement and Chapter 11 Plan Term Sheet.
The Debtor has an immediate and critical need to obtain
post-petition financing under the DIP Facility and to use cash
collateral to obtain funds to cover the operational, capital and
administrative needs of the Projects and the Chapter 11 Case, to
the extent set forth under the budget.
There is a prospect the sale of one of the SFR Properties may close
shortly prior to or shortly after the filing of the case. Should
that occur, the Debtor will eventually receive the net proceeds of
the sale, after payment of all debts at the non-debtor property
owning entity level. The proceeds of this sale could eliminate or
substantially reduce the need for the Debtor to access the full
amount of the DIP Facility.
As adequate protection, the Debtor seeks to provide the DIP Lender
with security interests, liens, and superpriority claims (including
a superpriority administrative claim pursuant to section 364(c)(1)
of the Bankruptcy Code, liens pursuant to sections 364(c)(2) and
364(c)(3), and 364(d) of the Bankruptcy Code to the DIP Lender to
secure all obligations of the Debtor under and with respect to the
DIP Facility.
A hearing on the matter is set for February 7, 2023 at 2 p.m.
A copy of the motion and the Debtor's budget is available at
https://bit.ly/3X25Qla from PacerMonitor.com.
The Debtor projects $520,000 in total cash receipts and $509,186 in
total cash disbursements for one month.
About Breakform Residential Fund I, LP
Breakform Residential Fund I, LP is engaged in activities related
to real estate. The Debtor sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10504) on
January 30, 2023. In the petition signed by Andrew De Camara, chief
restructuring officer, the Debtor disclosed up to $10 million in
both assets and liabilities.
Mark Horoupian, Esq., at Greenspoon Marder LLP, represents the
Debtor as legal counsel.
BUFFALO STATION: Seeks Cash Collateral Access
---------------------------------------------
David Wallace, the Chapter 11 Trustee of Buffalo Station, LLC and
its debtor-affiliates, asks the U.S. Bankruptcy Court for the
Northern District of Texas, Fort Worth Division, for authority to
use cash collateral and provide adequate protection.
The Trustee requires the use of cash collateral to operate the
Estates' businesses.
The Trustee intends to sell each of the Debtors' apartment
complexes, if possible, in a reasonable period of time, which
necessitates certain preparations for sale, including maintaining
the properties' physical state and occupancy rates. This requires
expenditures on management, staffing, utilities, regular
maintenance, and other costs of operation.
While the Lenders are currently having appraisals conducted with
respect to the Debtors' properties, the Trustee's current
understanding is that there is an equity cushion.
The Debtors were indebted to Revere Tactical Opportunities REIT,
LLC, successor-in-interest to Revere Tactical Opportunities TRS,
LLC under prepetition credit facilities.
As adequate protection for the use of cash collateral, the Lender
will be granted:
(a) automatic perfected Replacement Liens on all Rental
Proceeds, accounts, and receivables related to the use or occupancy
of the Real Property; and
(b) Superpriority Claims under sections 361(2), 363(c)(2),
503(b)(1), 507(a)(2), and 507(b) of the Bankruptcy Code.
The Replacement Liens will not attach to any Chapter 5 causes of
action under the Bankruptcy Code. The Replacement Liens and the
Superpriority Claims are granted solely to the extent that the
Trustee's or Estate's use of cash collateral results in a
diminution in value of the Prepetition Facility Collateral securing
the Prepetition Facility Obligations. Additionally, the Trustee
will make monthly Payments to the Lender in an amount to be
allocated equally among the Debtors, the first Payment being due on
or before March 1, 2023, and each subsequent Payment being due on
the first day of every month thereafter.
A copy of the motion is available at https://bit.ly/3XVhEqn from
PacerMonitor.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 and four affiliates filed petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex. 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.
David Wallace, the Chapter 11 trustee appointed in the Debtors'
cases, is represented by Ross, Smith & Binford, PC.
BUFFALO STATION: Trustee Taps Edge Realty as Real Estate Broker
---------------------------------------------------------------
David Wallace, Chapter 11 trustee for Buffalo Station, LLC and its
affiliates, seeks approval from the U.S. Bankruptcy Court for the
Northern District of Texas to employ Edge Realty Capital Markets,
LLC as his real estate broker.
The trustee requires a real estate broker to sell the Debtors' real
properties, which include five apartment complexes in Elk City and
Lawton, Okla.
The broker will receive a commission equal to 3 percent of the sale
price of the property.
As disclosed in court filings, Edge Realty is a "disinterested
person" within the meaning of Bankruptcy Code Section 101(14).
The firm can be reached through:
Mart Martindale
Edge Realty Capital Markets, LLC
5950 Berkshire Lane, Suite 700
Dallas, TX 75225
Phone: (214) 545-6900
Email: mmartindale@edge-cm.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 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.
David Wallace, the Chapter 11 trustee appointed in the Debtors'
cases, is represented by Ross, Smith & Binford, PC.
BVM CORAL: Bid to Use Cash Collateral Denied as Moot
----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, denied as moot the motion to use cash collateral filed by
BVM Coral Landing LLC for the reasons set forth on the record at
hearing. A copy of the order is available at
https://bit.ly/40i0wgc from PacerMonitor.com.
As previously reported by the Troubled Company Reporter, the Debtor
sought authority to use cash collateral in the regular course of
business and in order to pay its expenses so that it may continue
to operate as a going concern.
Creditor CPIF Lending LLC is seeking dismissal of the case. A
hearing on the matter has been continued to Feb. 27, 2023, at 3:30
p.m.
The Court has denied confirmation of the Debtor's Chapter 11 Plan
as Moot and the Debtor's Third Motion to Extend its Exclusivity
Periods.
CPIF Lending and U.S. Bank National Assoc objected to the Debtor's
Third Motion to Extend Exclusivity Period.
About BVM Coral Landing, LLC
BVM Coral Landing, LLC operates a 58-bed/49-unit assisted living
and memory care facility known as Coral Landing located at 2820 Old
Moultrie Road in St. Augustine, Florida since 2014.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 22-00346) on January 28,
2022. In the petition signed by John Bartle, president, the Debtor
disclosed up to $10 million in assets and up to $50 million in
liabilities.
The Honorable Michael G. Williamson has been assigned to the case.
Alberto F. Gomez, Jr., Esq. at Johnson, Pope, Bokor, Ruppel, and
Burns, LLP is the Debtor's counsel.
* * *
Judge Williamson has entered an order consolidating Coral Landing's
case with that of BVM The Bridges, LLC, (Bankr. M.D. Fla. Case No.
22-00345) with The Bridges' as lead case.
CANOO INC: Appoints Ken Manget as Chief Financial Officer
---------------------------------------------------------
Canoo Inc. has named Ken Manget as chief financial officer,
reporting directly to Canoo Chairman and CEO, Tony Aquila. Mr.
Manget will be responsible for Capital Markets, Investor Relations,
Accounting & Financial Reporting. Ramesh Murthy, who served as
interim CFO, will continue in his role as senior vice president,
finance and chief accounting officer.
"We are pleased to appoint Ken to Canoo's executive management
team. We have worked together for many years, starting at Ontario
Teachers' Pension Plan including as a consultant to AFV Partners,"
said Tony Aquila, Chairman and CEO at Canoo. "I'd like to thank
Ramesh for his hard work in the interim CFO role. As we now move
to the go to market phase, he will focus his attention on his SVP
and Chief Accounting Officer duties."
Manget has many years of financial industry experience on the buy
and sell side, including running a multi-billion global equity
investment strategy at Ontario Teachers’ Pension Plan, and having
originated and closed several billion of equity, debt and
structured finance transactions while at BMO Capital Markets.
In connection with his appointment as chief financial officer of
the Company, Mr. Manget entered into an offer of employment letter,
dated as of Jan. 26, 2023, with the Company. Pursuant to the Offer
Letter, Mr. Manget will be entitled to receive (a) an annual base
salary of $490,000, (b) an annual target bonus opportunity of 100%
of base salary, subject to a maximum bonus opportunity of 200% of
base salary, (c) a relocation allowance of $150,000, which amount
must be repaid by Mr. Manget in the event his employment with the
Company or its subsidiaries terminates prior to the first
anniversary of the date he relocates to the Dallas-Fort Worth
metropolitan area in Texas, and (d) a time-based restricted stock
unit award equal to 1,500,000 shares of the Company's common stock
on the applicable grant date, which award will vest based on the
Company's standard time-vesting schedule. In the event of Mr.
Manget's termination by the Company or its subsidiaries without
"cause", he will be entitled to receive 12 months of (i) base
salary, (ii) continued vesting of the RSU Award, and (iii)
continued healthcare benefits. The Company and Mr. Manget
anticipate entering into an employment agreement that will
supersede the Offer Letter and cover the terms of his employment in
greater detail.
About Canoo
Torrance, California-based Canoo -- www.canoo.com -- is a mobility
technology company with a mission to bring electric vehicles to
everyone and provide connected services that improve the vehicle
ownership experience. The Company is developing a technology
platform that it believes will enable the Company to rapidly
innovate and bring new products, addressing multiple use cases, to
market faster than its competition and at lower cost.
Canoo reported a net loss and comprehensive loss of $346.77 million
in 2021 following a net loss and comprehensive loss of $86.69
million in 2020. For the nine months ended Sept. 30, 2022, the
Company reported a net loss and comprehensive loss of $407.46
million. As of Sept. 30, 2022, the Company had $444.78 million in
total assets, $216.91 million in total liabilities, and $227.87
million in total stockholders' equity.
"We require substantial additional capital to develop our EVs and
services and fund our operations for the foreseeable future. We
will also require capital to identify and commit resources to
investigate new areas of demand. Until we can generate sufficient
revenue from vehicle sales, we are financing our operations through
access to private and public equity offerings and debt financings.
Management believes substantial doubt exists about the Company's
ability to continue as a going concern for twelve months from the
date of issuance of the financial statements included in this
Quarterly Report on Form 10-Q," Canoo stated in its Form 10-Q filed
with the Securities and Exchange Commission on Nov. 9, 2022.
CHARTER COMMUNICATIONS: Moody's Rates New Senior Notes 'B1'
-----------------------------------------------------------
Moody's Investors Service assigned a B1 rating to new Senior Notes,
to be issued at Charter Communications, Inc.'s (Charter or the
Company) wholly owned subsidiary CCO Holdings, LLC, and CCO
Holdings Capital Corp. Charter's Ba2 Corporate Family Rating,
Ba2-PD Probability of Default Rating, and all instrument ratings
are unaffected by the proposed Transaction. The stable outlook and
SGL-1 speculative grade liquidity are unchanged.
Assignments:
Issuer: CCO Holdings, LLC
Senior Unsecured Regular Bond/Debenture, Assigned B1 (LGD5)
Moody's expects the transaction to be credit neutral. Interest cost
will be marginally higher on the new notes than the company's March
2023 maturities, but the maturity profile is improved. Charter
intends to use the net proceeds from the financing for general
corporate purposes, to repay certain indebtedness, share and unit
repurchases and to pay related fees and expenses. Moody's expects
the transaction to be essentially leverage neutral (net of
repayment) and will not materially change the credit profile or the
proportional mix of secured and unsecured debt, or the resultant
creditor claim priorities in the capital structure. The terms and
conditions of the newly issued obligation are expected to be
materially the same as existing obligations of the same class.
RATINGS RATIONALE
Charter Communications, Inc.'s (Charter or the Company) credit
profile is supported by its substantial scale and share of the
cable industry and superior, high-speed network with fiber-
broadband competitors overlapping in only portions of its
footprint. Charter is the second largest cable company in the
United States, serving approximately 32.2 million customers
(internet, video and voice, excluding enterprise) and about 5.3
million mobile lines across 41 states, generating approximately $54
billion in revenue (in 2022). Sustained broadband demand drives
growth and profitability, providing an operating hedge to the
secular decline in video and wireline voice services. Additionally,
government subsidized new builds in unserved or underserved markets
will further support growth. The business model is also highly
predictable, with a diversified footprint and customer base and
largely recurring revenue. Liquidity is very good, supported by
free cash flows (FCF) close to $5.5 billion (Moody's adjusted,
2022), that while expected to fall below $5 billion by 2024,
continues to provide significant financial flexibility.
The credit profile is constrained by governance risk, including a
financial policy that targets a net leverage ratio of 4.0-4.5x,
managed near the top end of Moody's tolerance (near 4.75x, Moody's
adjusted gross debt to EBITDA), with most free cash flow and debt
issuance used for share repurchases. The Company generally sizes
debt issuance to maintain pace with EBITDA growth, driving already
high absolute debt levels (over $98.9 billion, Moody's adjusted at
year end 2022), ever higher (to over $100 billion over the next
12-18 months). Charter is challenged by, and exposed to, secular
pressure in its wireline voice and video services, evidenced by the
sustained loss of customers due to competition and unfavorable
changes in media consumption, driving penetration rates lower.
Moody's also views broadband wireless technology as a potential
threat to a portion of the Company's wireline broadband business
over the medium term. To manage the risk, and participate in the
opportunity, Charter is ramping its own wireless services as a
mobile virtual network operator (MVNO). While the wireless service
has experienced rapid growth and is driving the top-line, its
currently producing negative free cash flows and Moody's expect the
run-rate economics - at scale - will be less profitable than most
of its existing services. Capital intensity has also increased
significantly (with capex expected to rise to low 20% of revenue)
to expand and upgrade the network in response to competitive
pressure.
The SGL-1 liquidity rating reflects very good liquidity with strong
free cash flow, $4 billion available under its $5.5 billion
revolving credit facility (at year end 2022), and comfortable
headroom under financial covenants.
Moody's rates the senior secured 1st lien credit facilities and
senior secured 1st lien notes at Charter Communications Operating,
LLC, Time Warner Cable LLC, and Time Warner Cable Enterprises LLC
Ba1 (LGD3), one notch above the Ba2 CFR. Secured lenders benefit
from junior capital provided by the senior unsecured notes issued
at CCO Holdings, LLC and CCO Holdings Capital Corp (which have no
guarantees), the most junior claims and rated B1 (LGD5), with
contractual and structural subordination to all other obligations.
Instrument ratings reflect the Ba2-PD probability of default rating
with a mix of secured and unsecured debt, which Moody's expect will
result in an average rate of recovery of approximately 50% in a
distressed scenario.
The Company's ESG Credit Impact Score is CIS-4, highly negative.
The CIS score primarily reflects the company's highly negative
governance risk driven by financial strategy and risk management
policies including moderate leverage, distribution of most all cash
flow to shareholders, and somewhat concentrated ownership. Social
risks are also moderately negative, reflecting risks in customer
relations and human capital. Environmental risks are
neutral-to-low, having little effect (positive or negative) on the
CIS score.
The stable outlook reflects Moody's expectation that debt will rise
to over $100 billion, and revenues and EBITDA will rise to
approximately $55 and $22-$23 billion, respectively by the end of
2023. Moody's project EBITDA margins will exceed 40%, producing
average annual FCF of $4.5-$5 billion.
Key assumptions include capex to revenue rising to the low 20% and
borrowing costs rising near 5%. Moody's expect video and voice
subscribers to fall by at least mid to high single digit percent
respectively, and data subscribers to rise by low single digit
percent. Moody's expect leverage to remain near Moody's 4.75x
tolerance, and free cash flow to debt to fall to 4%-5%. Moody's
expect liquidity to remain very good.
Note: all figures are Moody's adjusted, over the next 12-18 months
unless otherwise noted.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Moody's could consider an upgrade if:
- Leverage (Moody's adjusted debt/EBITDA) is sustained below
4.25x, and
- Free cash flow-to-debt (Moody's adjusted) is sustained above 5%
An upgrade could also be conditional on maintaining very good
liquidity, a more conservative financial policy, and stable
operating performance.
Moody's could consider a downgrade if:
- Leverage (Moody's adjusted debt/EBITDA) is sustained above
4.75x, or
- Free cash flow-to-debt (Moody's adjusted) is sustained below
low single digit percent
Moody's could also consider a negative rating action if liquidity
deteriorated, financial policy implied higher credit risk, or if
there were unfavorable and sustained trends in operating
performance or the business model.
The principal methodology used in this rating was Pay TV published
in October 2021.
Charter Communications, Inc., headquartered in Stamford,
Connecticut, provides video, data, phone, and wireless services.
Across its footprint, which spans 41 states, Charter serves 32.2
million customers (internet, video and voice, excluding enterprise)
and about 5.3 million mobile lines, making it the second-largest
U.S. cable operator. The company sells its services under the
Spectrum brand. Revenue for the year ended December 31, 2022 was
approximately $54 billion. Charter is a public company with the
largest shareholders Liberty Broadband Corporation (unrated) and
the Advance/Newhouse family.
CMR REAL ESTATE: Seeks to Hire Thomas Loepp as Eviction Attorney
----------------------------------------------------------------
CMR Real Estate Investments, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Ohio to employ Thomas
Loepp, Esq., an attorney practicing in Stow, Ohio.
The Debtor requires an eviction attorney to file and serve
complaints and related documents in eviction proceedings and appear
at court hearings.
The attorney will be paid a flat fee of $300 per eviction.
Mr. Loepp disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
Mr. Loepp holds office at:
Thomas Loepp, Esq.
3580 Darrow Rd.
Stow, OH 44224
Tel: (330) 688-0560
Email: tom@attorneyloepp.com
About CMR Real Estate Investments
CMR Real Estate Investments, LLC, a ompany in Akron, Ohio, filed a
petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code (Bankr. N.D. Ohio Case No. 22-51057) on Sept. 7,
2022, with $1 million to $10 million in both assets and
liabilities. M. Colette Gibbons has been appointed as Subchapter V
trustee.
Judge Alan M. Koschik oversees the case.
The Debtor tapped Richard H. Nemeth, Esq., at Nemeth & Associates,
LLC as bankruptcy attorney; Thomas Loepp, Esq., as eviction
attorney; and VanBaker Properties, LLC as property manager.
COLUMBIA ASTHMA: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Columbia Asthma & Allergy Clinic I, PC
f/k/a Columbia Asthma and Allergy Clinic, LLC
f/k/a Columbia Asthma and Allergy Clinic, Inc.
10599 Wilshire Blvd., #401D
Los Angeles, CA 90024
Business Description: The Debtor has been providing breakthrough
customized approaches to treating asthma and
allergy, including desentization treatments
for shrimp and nut allergies.
Chapter 11 Petition Date:
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-10579
Judge: Hon. Vincent P. Zurzolo
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
Total Assets: $370,723
Total Liabilities: $6,903,223
The petition was signed by Sanjeev Jain, MD, chief executive
officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/RBRKSQY/Columbia_Asthma__allergy_Clinic__cacbke-23-10579__0001.0.pdf?mcid=tGE4TAMA
CONFLUENT HEALTH: Moody's Rates New $125MM 1st Lien Term Loan 'B3'
------------------------------------------------------------------
Moody's Investors Service assigned a B3 rating to Confluent Health,
LLC's proposed $125 million incremental senior secured first lien
term loan due November 2028. There are no changes to Confluent's
existing ratings including the B3 Corporate Family Rating, the
B3-PD Probability of Default Rating and B3 ratings on the senior
secured first lien credit facilities including the revolving credit
facility, existing first lien term loan, and delayed draw first
lien term loan. The outlook remains stable.
Confluent expects to close an acquisition of a large outpatient
physical therapy platform in the coming weeks. Confluent will use
the $125 million incremental first lien term loan, $61 million from
the existing first lien delayed draw term loan and equity
(including new equity from the sponsor and rollover equity) to fund
this acquisition along with Confluent's existing LOI Pipeline, as
well as pay holdbacks from prior M&A and related transaction fees
and expenses.
The planned acquisitions add scale and improve Confluent'
geographic and product diversification. That said, there is
integration risk as Confluent continues to operate amidst a weaker
operating environment given ongoing labor pressures. Pro forma the
transactions, leverage remains high with adjusted debt/EBITDA
approximately 7.3x for the twelve months ending September 30, 2022.
Moody's expects leverage to decline, but to remain above 6.5x over
the next 12 to 18 months.
Assignments:
Issuer: Confluent Health, LLC
Backed Senior Secured 1st Lien Term Loan, Assigned B3 (LGD3)
RATINGS RATIONALE
Confluent's B3 Corporate Family Rating reflects its elevated
leverage at 7.3x (LTM September 30, 2022 pro forma for the
transaction) on a Moody's adjusted basis, and integration risk
related to the company's ongoing acquisition strategy. This risk is
amplified by the tight labor market. Moody's expects that staffing
pressures facing the industry combined with additional acquisitions
will challenge the company's ability to materially reduce leverage
in the next 12 to 18 months. The rating also reflects the
relatively low barriers to entry in the physical therapy business.
There is also risk of market oversaturation given the rapid
expansion of Confluent and many of its competitors.
The rating is supported by Confluent's track record of organic
growth, good profit margins, low working capital requirements, and
low capital expenditure needs. Moody's expects that the demand for
physical therapy will continue to grow given it is relatively
low-cost and as an alternative to more expensive treatments or
opioid pain management.
In its stable outlook, Moody's expects Confluent's leverage to
decline, but remain above 6.5x over the next 12-18 months. Moody's
also expects the company will continue to successfully execute its
growth strategy while maintaining adequate liquidity.
Moody's considers Confluent to have adequate liquidity. The company
has historically generated positive free cash flow, though limited
by growth and acquisition spending. Moody's expects annual free
cash flow of $15 million in 2023. Liquidity is supported by the
company's approximately $10 million of cash and $68 million of
availability on the revolving credit facility pro forma pending
acquisitions at September 30, 2022. A substantial portion of
Confluent's debt is hedged through at least February 2024, thus
reducing the company's exposure to rising interest rates.
ESG CONSIDERATIONS
Confluent Health's credit impact score is highly negative (CIS-4),
reflecting its highly negative exposure to social risks (S-4) in
providing physical therapy services amid rising concerns around the
access and affordability of healthcare services. The company is
exposed to both labor pressures and wage inflation given its large
workforce of physical therapists. Additionally, the company relies
on Medicare and Medicaid for a portion of reimbursement. Any
reimbursement changes will directly impact revenue and
profitability. Exposure to governance considerations is also highly
negative (G-4); this reflects aggressive financial policy,
including high financial leverage and a history of debt-funded new
clinic openings and clinic acquisitions under private equity
ownership.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be downgraded if the company's liquidity weakens or
if the company fails to effectively manage its rapid growth.
Further, if the company's operating performance deteriorates, or it
pursues more aggressive financial policies, the ratings could be
downgraded.
An upgrade is possible if Confluent materially increases its size
and scale and demonstrates stable organic growth at the same time
it effectively executes on its expansion strategy. Additionally,
adjusted debt/EBITDA sustained below 5.5 times and improved
liquidity could support an upgrade.
Confluent Health, LLC, headquartered in Louisville, Kentucky, is a
provider of physical rehabilitation services which includes
outpatient physical therapy, workplace injury prevention
programming, and advanced education courses and degrees for
physical therapists and occupational therapists. The company owned
and/or operated approximately 550 clinics as of September 30 and
generated revenues of approximately $450 million over the last
twelve months. The company's financial sponsor is Partners Group, a
Swiss based private equity firm with a regional headquarters in
Denver, CO.
The principal methodology used in this rating was Business and
Consumer Services published in November 2021.
CONFLUENT HEALTH: S&P Rates New $125MM First-Lien Term Loan 'B-'
----------------------------------------------------------------
S&P Global Ratings assigned its 'B-' issue-level rating and '4'
recovery rating to Confluent Health LLC's proposed $125 million
incremental first-lien term loan due 2028. The '4' recovery rating
indicates its expectation for average (30%-50%; rounded estimate:
45%) recovery in the event of a payment default.
The company plans to use the proceeds from the proposed term loan,
along with a $61 million draw on its delayed draw term loan (DDTL),
$70 million of equity from Partners Group, and $25 million of
rollover equity, to fund pending acquisitions under LOI, earn-outs
for previous acquisitions, and to pay transaction-related
expenses.
All of S&P's existing ratings on Confluent Health are unchanged.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- Confluent Health's proposed capital structure will comprise a
$100 million revolver due 2026 (undrawn at close), a $465 million
first-lien term loan due 2028, a $100 million DDTL (which S&P
assumes is fully drawn), and a $125 million incremental first-lien
term loan due 2028.
-- S&P's simulated default scenario contemplates a default
occurring in 2025 due to significant reimbursement cuts or an
inability to manage costs.
-- S&P assumes the revolver will be 85% drawn at default.
-- Given the demand for physical therapy services, we believe
-- Confluent would remain a viable business even after a payment
default.
-- S&P values the company on a going-concern basis using a 5.0x
multiple of its estimated emergence EBITDA.
S&P said, "We understand that most, if not all, of the minority
equity shareholders of the non-wholly owned subsidiaries have
consented to allow these subsidiaries to guarantee--and their
assets to secure--Confluent's debt. Thus, we assume substantially
all the company's assets will secure the first-lien debt and all
its recovery value will fully benefit lenders in the event of a
payment default and insolvency proceeding."
Simulated default assumptions
-- Simulated year of default: 2025
-- EBITDA at emergence: $78 million
-- EBITDA multiple: 5.0x
Simplified waterfall
-- Net enterprise valuation (after 5% administrative costs): $373
million
-- Valuation split (obligors/nonobligors): 100%/0%
-- Collateral value available to first-lien creditors: $373
million
-- Secured first-lien debt: $790 billion
--Recovery expectations: 30%-50% (rounded estimate: 45%)
Note: All debt amounts include six months of prepetition interest.
COOPER-STANDARD AUTOMOTIVE: Moody's Affirms 'Caa2' CFR
------------------------------------------------------
Moody's Investors Service affirmed Cooper-Standard Automotive
Inc.'s corporate family rating at Caa2 and the Probability of
Default Rating at Caa2-PD, which is appended with the /LD
designation to indicate a limited default stemming from the
recently completed debt exchange. The /LD will be removed after
three business days. At the same time, Moody's assigned a B3
rating to new senior secured first lien notes maturing 2027 and a
Caa3 rating to new secured third lien notes maturing 2027.
Additionally, the Ca rating on the non-tendered senior unsecured
notes maturing 2026 was affirmed. The outlook was changed to
stable from negative. Finally, the Speculative Grade Liquidity
Rating was unchanged at SGL-4.
The rating actions follow Cooper-Standard's execution of a recent
refinancing of its capital structure. The transaction was
initiated by an exchange for the $400 million Senior Unsecured
Notes due 2026 for $357 million of new secured notes maturing 2027.
Moody's considers this debt exchange/refinancing as a distressed
exchange, which is an event of default under Moody's definition.
Additionally, for the roughly $43 million of 2026 unsecured notes
that were not tendered for the new secured notes, all covenants
were stripped and they are further subordinated with the additional
layer of more senior debt. Concurrently, Cooper-Standard issued
$580 million of new senior secured notes maturing 2027 to holders
of the $400 million Senior Unsecured Notes due 2026. Proceeds were
used to fully repay the Term Loan due 2023 and the Secured Notes
due 2024. Ratings on these instruments are not impacted at this
time but will be withdrawn at a later date.
The affirmation of the Caa2 CFR and change in outlook to stable
reflects Moody's expectation for continued weak operating results
within an increasingly challenging macroeconomic environment.
Lingering supply chain issues, primarily due to semiconductor and
parts shortages, are easing but continue to disrupt automotive
original equipment manufacturer (OEM) production runs. Moody's
expects that higher new vehicle volumes in 2023 will drive stronger
earnings following a very weak 2022. Steady progress on cost
recoveries with customers and falling inventory levels will also
help ease the burden on still negative free cash flow.
However, ongoing friction from higher labor and energy costs will
continue to constrain margin improvement.
Further, the refinancing alleviates near-term debt maturity
concerns and a potential liquidity strain, but total debt
outstanding is essentially unchanged. Moody's expectation for
negative free cash flow and the likely use of the PIK toggle option
on the new debt instruments make meaningful de-levering unlikely
over the next couple of years.
Governance considerations were a factor in this rating action as
the debt restructuring has negative implications for creditors as
it relates to financial strategy and risk management.
Accordingly, Moody's changed Cooper-Standard's Credit Impact Score
to CIS-5 from CIS-4, driven by the change in the Governance Issuer
Profile Score to G-5 from G-4. Despite the refinancing and debt
exchange, financial leverage remains very high considering the
inherent cyclicality in the automotive industry.
Additionally, Moody's believes that even the newly implemented
capital structure will be untenable if the company employs the PIK
option, cannot improve its weak margins and generate positive free
cash flow.
Assignments:
Issuer: Cooper-Standard Automotive Inc.
Senior Secured First Lien Notes, Assigned B3 (LGD2)
Senior Secured Third Lien Notes, Assigned Caa3 (LGD4)
Affirmations:
Issuer: Cooper-Standard Automotive Inc.
Corporate Family Rating, Affirmed Caa2
Probability of Default Rating, Affirmed Caa2-PD /LD (/LD
appended)
Senior Unsecured Regular Bond/Debenture, Affirmed Ca, to (LGD6)
from (LGD5)
Outlook Actions:
Issuer: Cooper-Standard Automotive Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Cooper-Standard's ratings reflect very high leverage, weak returns
and Moody's expectation for negative free cash flow. Margin
erosion over the past several years highlights operating
inefficiencies on lower, and uneven, vehicle production volumes as
well as increasingly competitive end markets. Favorably, the
company maintains solid market positions in sealing systems, fuel
and brake delivery systems and fluid transfer systems where demand
fundamentals are largely drivetrain agnostic. A product mix skewed
towards SUVs/CUVs and light trucks, including content on top
selling vehicle platforms, helps mitigate the competitive, highly
fragmented nature in core end markets.
The stable outlook reflects Moody's expectation that the steady
recovery of automotive industry production will continue through
most, if not all, of 2023 with supply chain disruptions gradually
easing over the course of the year. The stable outlook also
anticipates that operating efficiencies will modestly boost
returns.
Cooper-Standard's SGL-4 Speculative Grade Liquidity Rating
indicates weak liquidity with Moody's expectation for cash in the
$100 million range and prolonged negative free cash flow. The $180
million asset-based lending facility (ABL) expiring March 2025
remains undrawn and should provide borrowing availability in the
$150 million range over the next twelve months, with availability
limited in part by financial covenant restrictions that Moody's
expects to persist through 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be lowered with continued margin erosion and/or
accelerated cash burn, further straining overall liquidity.
Indications that the revised capital structure is unsustainable
could also lead to negative rating actions. Conversely, the
ratings could be upgraded with evidence of improving operating
efficiencies leading to stronger returns and significant progress
towards generating positive free cash flow, considering that the
PIK options on the secured debt fall away in two years.
The principal methodology used in these ratings was Automotive
Suppliers published in May 2021.
Cooper-Standard Automotive Inc. is a global automotive supplier of
sealing and trim, fuel and brake delivery systems and fluid
transfer systems. Revenue for the twelve months ended September
30, 2022 was approximately $2.5 billion.
DARALI INC: Case Summary & 17 Unsecured Creditors
-------------------------------------------------
Debtor: Darali, Inc.
6302 Maple Street
Omaha, NE 68104
Chapter 11 Petition Date: January 30, 2023
Court: United States Bankruptcy Court
District of Nebraska
Case No.: 23-80062
Judge: Hon. Thomas L. Saladino
Debtor's Counsel: Patrick Patino, Esq.
PATINO KING LLC
13815 FNB Parkway Suite 440
Omaha NE 68154
Tel: (402) 401-4050
Email: patrick@patinoking.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Mindy Allen, president and chief
restructuring officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 17 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/JPDSYRY/DARALI_Inc__nebke-23-80062__0001.0.pdf?mcid=tGE4TAMA
DEL MONTE: New $100MM Incremental Loan No Impact on Moody's B2 CFR
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Moody's Investors Service said that Del Monte Foods, Inc.'s
ratings, including the B3 senior secured and B2 Corporate Family
Rating, are unchanged following the announcement of the company's
proposed $100 million incremental first lien term loan. The rating
outlook remains unchanged at stable.
The proposed add-on is to be fungible with the company's existing
$600 million senior secured term loan issued in February 2022 and
maturing in May 2029. The proceeds are primarily to be used for a
partial repayment of the outstanding balance on the ABL revolver
(unrated) expiring September 2027. The balance on the revolving
facility is currently elevated at $532.2 million, as the company
utilized the facility to fund the acquisition of Kitchen Basics in
August 2022 and significant working capital investment.
The refinancing improves liquidity by increasing revolver
availability and extending the maturity profile. However, revolver
borrowings have increased meaningfully to fund the Kitchen Basics
acquisition and free cash flow deficits, raising debt and leverage,
a credit negative.
Moody's expects Del Monte's earnings to increase in the fiscal year
ending April 2024 through the realization of ongoing cost savings
and restructuring initiatives. In addition, Moody's expects
earnings to be supported by organic revenue growth in the low
single digit range as Del Monte's products are outperforming the
category, particularly vegetables and fruit, due to distribution
gains, innovation, and strong supply chain performance, while
competitors are more challenged on supply.
RATINGS RATIONALE
Del Monte's B2 CFR reflects the company's relatively volatile free
cash flow from inventory swings, weak long-term category
fundamentals in U.S. canned fruit and vegetables, and execution
risk related to the company's ability to manage inflationary
headwinds over the next 12 to 18 months. The company's ratings are
supported by the strength of the Del Monte(TM) brand, which holds
leading shares in core shelf stable fruits and vegetables, and
strong execution on restructuring initiatives that have improved
the margin profile of the business. Del Monte is targeting to
reduce debt-to-EBITDA leverage (based on the company's definition,
in which total debt reflects average ABL draw over the LTM period)
to 3.0x long term from approximately 5.3x anticipated as of October
2022 pro forma for the close of the proposed refinancing.
Debt-to-EBITDA leverage (incorporating Moody's adjustments) has
increased to 4.8x as of October 2022 from 4.3x in October 2021
because of Kitchen Basics acquisition and elevated revolver
borrowings to support inventory growth. Moody's believes at least a
partial unwind of excess inventory will be used to repay revolver
borrowings and reduce leverage. The ratings are also supported by a
history of significant liquidity support provided by the parent
company, Del Monte Pacific Ltd ("DMPL"). Moody's expects such
support will continue in periods of earnings weakness, but that the
company's improved operating performance and free cash flow will
reduce the need for DMPL's seasonal cash flow support.
The stable outlook reflects Moody's view that Del Monte will
sustain debt-to-EBITDA below 5.5x, even as favorable pandemic
effects abate, and will begin generating positive free cash flow in
the fiscal year ended May 2024.
Del Monte Foods, Inc. (headquartered in Walnut Creek, California)
is a manufacturer and marketer of branded and private label food
products for the U.S. and South American retail market. Its brands
include Del Monte(TM) in shelf stable fruits, vegetables and
tomatoes; Contadina(TM) in tomato-based products; College Inn(TM)
in broth products; and S&W(TM) in shelf stable fruit, vegetable and
tomato products. The company generates annual sales of
approximately $1.7 billion (pro forma Kitchen Basics acquisition).
Del Monte Foods, Inc. is a wholly owned subsidiary of Del Monte
Foods Holdings Limited, which is in turn approximately 94% owned by
DMPL. DMPL is publicly traded on the Philippine and Singapore stock
exchanges. DMPL is 71%-owned by NutriAsia Pacific Ltd and Bluebell
Group Holdings Limited, which are beneficially-owned by the Campos
family of the Philippines. Public investors and Lee Pineapple Group
(a pineapple supplier in Malaysia) hold the remaining 29% stake.
DGS REALTY: Seeks to Continue Using Cash Collateral Thru April 30
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DGS Realty, LLC asks the U.S. Bankruptcy Court for the District of
New Hampshire for authority to continue using cash collateral and
provide adequate protection to PHH Mortgage Services through April
30, 2023.
PHH Mortgage Services, as servicer for U.S. Bank National Trust
Association, as Trustee for Lehman Brothers Small Balance
Commercial Mortgage Pass-Through Certificates, Series 2006-3, is
the cash collateral lien holder of the Debtor.
PHH Mortgage holds or claims to hold:
-- a blanket first priority mortgage of record on the real
estate at 74 Regional Drive, and 72 Regional Drive, both in
Concord, New Hampshire; and
-- a collateral assignment of the rents thereof.
The PHH Mortgage First Priority Mortgage and Rent Assignment secure
the payment of $2,078,589, which is evidenced by a promissory note
in the original principal amount of $862,500.
The Debtor proposes not to spend or use more than $10,192 per month
during the period between March 1 and April 30, 2023, without the
written consent of the secured lender, as appropriate.
The cash collateral will be used solely and exclusively for the
purpose of paying the mortgage and taxes of the Debtor in the
ordinary course of business to the extent provided for in the
Budget and such other costs and expenses as may be authorized in
writing by the Secured Lender, as appropriate.
The Debtor will provide PHH Mortgage with adequate protection for
any loss or diminution in value of the cash collateral securing
their claims to the extent such claims qualify as secured claims
under Bankruptcy Code Section 506 pending the further Court order
or orders.
PHH Mortgage is being paid $6,750 per month plus real estate tax
escrow in the amount of $3,066 each month as adequate protection
payments beginning on February 1, 2023, and on the same date of
each month thereafter during the Use Term. These are the Debtor's
normal monthly payments.
The Proposed Order includes a "winding down" proviso under which
the Court reserves the right to enter such further orders as may be
necessary regarding the use of cash collateral to provide for
payment of any administrative claims for wage and trade creditors
who have supplied goods or services to the Debtor during the period
of operation under the order (and any stipulation) which remain
unpaid at the time of termination of authorized cash collateral
usage, and which goods or services have created additional
collateral for the secured claimant.
A hearing on the matter is set for February 22, 2023 at 11 a.m.
A copy of the motion is available at https://bit.ly/3HSVHD3 from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3HGOxBE from
PacerMonitor.com.
The Debtor projects $98,892 in total income and $10,192 in total
expenses for March 2023 and $99,076 in total income and $10,441 in
total expenses for April 2023.
About DGS Realty
Based in Concord, New Hampshire, DGS Realty, LLC, is a real estate
limited liability company. DGS Realty owns a 3-1/2 acre parcel of
land with three buildings on the property, known as 74 Regional
Drive, Concord, New Hampshire. There is an additional parcel of
land which is an unbuildable parcel of land, "a gully", which abuts
the larger property, known as 72 Regional Drive, Concord, New
Hampshire. DGS Realty also owns these parcels.
Formed around May 10, 2017, DGS Realty is owned by David H. Booth,
Manager, Stephen W. Booth, and Gregory A. Booth, each having a 1/3
interest. The company is an affiliate of Walter H. Booth Clause 4
Trust, which sought bankruptcy protection (Bankr. D.N.H. Case No.
16-11598) on Nov. 16, 2016.
DGS Realty filed a Chapter 11 petition (Bankr. D.N.H. Case No.
18-10024) on Jan. 11, 2018. In the petition signed by David H.
Booth, the Manager, the Debtor estimated assets and debts between
$1 million and $10 million. Representing the Debtor is Eleanor Wm
Dahar, Esq., at Victor W. Dahar Professional Association.
DIVERSIFIED HEALTHCARE: Moody's Cuts CFR & Unsecured Notes to Caa3
------------------------------------------------------------------
Moody's Investors Service downgraded the ratings of Diversified
Healthcare Trust ("DHC") including its corporate family rating to
Caa3 from B3, its guaranteed senior unsecured notes to Caa3 from
B3, and its senior unsecured notes to Ca from Caa1. The speculative
grade liquidity (SGL) rating was maintained at SGL-4. The rating
outlook remains negative.
The ratings downgrades reflect DHC's weak liquidity and refinancing
risk as the REIT faces the maturity of its revolver and $250
million unsecured bonds in 2024. DHC suffered substantial cash
flow declines in its senior housing operating portfolio over the
past few years, which has raised Net Debt/EBITDA to very high
levels and the timing and prospects for turning around this
business remains uncertain. The REIT also retains limited
financial flexibility until it is able to resume compliance with
certain incurrence covenants in its bonds and credit facility.
Given all of these factors as well as the challenging capital
market conditions, the downgrade reflects the risk that DHC will
pursue a transaction that Moody's considers to be a distressed
exchange. The REIT's high leverage also raises concerns about
financial policy and governance.
Downgrades:
Issuer: Diversified Healthcare Trust
Corporate Family Rating, Downgraded to Caa3 from B3
Backed Senior Unsecured Regular Bond/Debenture, Downgraded to Caa3
from B3
Senior Unsecured Regular Bond/Debenture, Downgraded to Ca from
Caa1
Outlook Actions:
Issuer: Diversified Healthcare Trust
Outlook, Remains Negative
RATINGS RATIONALE
DHC's Caa3 CFR reflects weak cash flows related to the healthcare
REIT's senior housing operating business. The senior housing
operating business, 61% of gross book real estate, experienced
steep cash flow declines over the course of the coronavirus
pandemic, driven by falling occupancy and rising expenses,
particularly labor. NOI has improved in recent quarters, but the
trajectory of recovery remains slow and labor costs remain a
significant challenge for margins. DHC's recent transition of a
large portion of its senior housing assets from Five Star to new
managers potentially improves their growth outlook but execution
risks remain as leverage remains high with Net Debt/EBITDA of 15.8x
for 3Q22.
DHC's ratings also consider governance risks associated with its
financial policy given its very high leverage and inability to
comply with certain incurrence covenants in its bonds and bank
facility. In 2021, the REIT executed an amendment that converted
its revolver to a secured facility in exchange for a waiver on
certain covenants through 4Q22 among other terms. DHC's ability to
regain compliance remains uncertain and risk remains that the REIT
will need to negotiate another amendment with its bank group.
DHC benefits from portfolio diversification that includes stable
income from medical office buildings (MOBs) and life science
assets. The REIT also has a sizable unencumbered asset pool,
although the size and quality has diminished with recent joint
venture transactions that reduced its ownership stakes in some of
the highest quality buildings in its portfolio. These transactions
did provide the REIT with liquidity and help it to reduce debt
levels.
DHC's SGL-4 rating reflects refinancing risks and its limited
financial flexibility until it is able to comply with incurrence
covenants within its bonds and bank facility. The REIT drew down
the full amount available on its secured credit facility in early
2021 and maintains a large cash balance. The REIT had about $800
million of cash as of 3Q22. Moody's expects cash will be used to
repay debt and fund cap ex, as the REIT is working to redevelop
some MOB/life science assets and reposition its senior living
portfolio. DHC has a large unencumbered portfolio but the size and
quality of this pool has diminished in recent years as it has
executed JVs with some of its highest quality assets in order to
raise capital. DHC used some of its cash balance for a mandated
$114 million repayment on its revolver in January 2023 as total
capacity was reduced at this time and it has another $16 million of
secured debt coming due this year. In 2024, DHC will need to
address a $250 million bond maturity and refinance its revolver.
DHC's negative outlook reflects its weak cash flows, high Net
Debt/EBITDA and limited financial flexibility as long as it remains
unable to comply with certain bond and bank facility incurrence
covenants.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
DHC's ratings could be downgraded should the REIT's liquidity
weaken further or if it fails to address the refinancing risks well
in advance of maturities. Ratings could also be downgraded if the
company pursues a transaction that Moody's considers to be a
distressed exchange and hence a default under Moody's definition.
DHC's ratings could be upgraded if the REIT were to resume
compliance and maintain cushion with all bank and bond covenants,
as well as improving its liquidity position. Refinancing its
secured revolver with an unsecured facility and generating positive
NOI growth from all business segments on a sustained basis would
also support an upgrade.
Diversified Healthcare Trust is a real estate investment trust, or
REIT, which owns senior living communities, medical office and life
science buildings and wellness centers throughout the United
States. DHC is managed by the operating subsidiary of The RMR Group
Inc. (Nasdaq: RMR), an alternative asset management company that is
headquartered in Newton, MA.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
DOT DOT SMILE: Has Deal on Cash Collateral Access
-------------------------------------------------
Dot Dot Smile, LLC and EBF Holdings, LLC advised the U.S.
Bankruptcy Court for the Central District of California, Riverside
Division, that 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.
EBF was the sole claimant that made an appearance at the emergency
hearings on cash collateral and asserts interests in the Debtor's
past (if any) and future accounts receivables.
EBF asserts the Debtor sold and assigned a portion of its
Receivables to EBF prior to the bankruptcy filing.
The Debtor disputes the nature, extent and validity of EBF's
interests in the Receivables.
The parties agree that the Debtor may use all cash and cash
equivalents on hand and hereafter received, on an interim basis, to
pay ordinary and necessary operating expenses in accordance with
the Budget, with a 15% variance, through the hearing date on
confirmation of the Debtor's chapter 11 plan on April 4, 2023, or
the continued hearing on use of cash collateral that will be set by
the Court.
To the extent EBF is determined to be a secured creditor with a
lien on the Receivables, EBF will have a perfected post-petition
lien against cash collateral to the same extent and with the same
validity and priority as the prepetition lien, without the need to
file or execute any document as may otherwise be required under
applicable non-bankruptcy law.
The Debtor will make an adequate protection payment in the amount
of $4,500 to EBF on or before February 15, 2023, and another
payment in the amount of $4,500 on or before March 15, 2023.
All funds paid to EBF in accordance with the agreement will reduce
EBF's claim(s) against the Debtor.
A copy of the stipulation is available at https://bit.ly/3kTrtXi
from PacerMonitor.com.
About Dot Dot Smile, LLC
Dot Dot Smile, LLC is a wholesaler of children's clothing. The
Debtor sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Cal. Case No. 22-13361) on September 3, 2022. In
the petition filed by CEO Jeffrey Eugene Thompson, the Debtor
disclosed $4,478,922 in assets and $5,638,742 in liabilities.
Judge Wayne E. Johnson oversees the case.
Jeffrey S. Shinbrot, APLC, is the Debtor's counsel.
DRY MORE COMPANY: Gets OK to Hire Baker & Associates as Counsel
---------------------------------------------------------------
Dry More Company received approval from the U.S. Bankruptcy Court
for the Southern District of Texas to employ Baker & Associates as
its legal counsel.
The firm's services include:
(a) analyzing the financial situation and rendering advice and
assistance to the Debtor;
(b) advising the Debtor with respect to its duties;
(c) preparing and filing schedules of assets and liabilities,
statements of affairs and legal papers;
(d) representing the Debtor at the first meeting of
creditors;
(e) representing the Debtor in all proceedings before the
bankruptcy court and in any other judicial or administrative
proceeding where its rights may be litigated or otherwise
affected;
(f) preparing and filing a disclosure statement, if required,
and Chapter 11 plan of reorganization; and
(g) assisting the Debtor in any matters relating to or arising
out of its Chapter 11 case.
The Debtor will compensate Baker & Associates in accordance with
its normal billing practice and will reimburse for its necessary
disbursement and expenses.
The firm received a retainer of $11,738 from the Debtor.
Reese Baker, Esq., an attorney at Baker & Associates, disclosed in
a court filing that the firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Reese W. Baker, Esq.
Baker & Associates
950 Echo Lane, Ste. 300
Houston, TX 770024
Telephone: (713) 869-9200
Facsimile: (713) 869-9100
Email: courtdocs@bakerassociates.net
About Dry More Company
Dry More Company is a water damage restoration services in Houston,
Texas.
Dry More Company sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Texas Case No. 22-33532) on Nov. 30,
2022, with up to $500,000 in assets and up to $10 million in
liabilities. Jessica Lykins, president of Dry More Company, signed
the petition.
Judge Christopher M. Lopez oversees the case.
Reese W. Baker, Esq., at Baker & Associates, is the Debtor's
counsel.
ECOARK HOLDINGS: Ault Cuts Secondary Offering of Shares by $3.5MM
-----------------------------------------------------------------
Ecoark Holdings, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission it entered into an agreement
with Ault Lending, LLC, a subsidiary of Ault Alliance, Inc. f/k/a
BitNile Holdings, Inc., pursuant to which Ault agreed to reduce its
secondary offering of shares of its Common Stock issuable upon
conversion of the Series A Convertible Redeemable Preferred Stock
that Ault holds, which secondary offering is registered pursuant to
a prospectus supplement filed on June 9, 2022 under the Company's
Registration Statement on Form S-3 (File No. 333-249532), by
$3,500,000.
About Ecoark Holdings
Rogers, Arkansas-based Ecoark Holdings, Inc., is a diversified
holding company incorporated in 2007. Through Ecoark's
wholly-owned subsidiaries, the Company has subsidiaries focused on
three areas: (i) oil and gas, including exploration, production and
drilling operations on approximately 30,000 cumulative acres of
active mineral leases in Texas, Louisiana, and Mississippi and
transportation services, (ii) Bitcoin mining, and (iii)
post-harvest shelf-life and freshness food management technology.
The Company also had operations providing financial services until
June 17, 2022 when it sold Trend Discovery Holdings LLC to a third
party.
Ecoark reported a net loss of $10.55 million for the year ended
March 31, 2022, a net loss of $20.89 million for the year ended
March 31, 2021, a net loss of $12.14 million for the year ended
March 31, 2020, and a net loss of $13.65 million for the year
ended
March 31, 2019. As of Sept. 30, 2022, the Company had $46.62
million in total assets, $9.32 million in total liabilities, $9.21
million in series A convertible redeemable preferred stock, and
$28.08 million in total stockholders' equity.
EQUISEK INC: Seeks to Hire Madoff & Khoury as Bankruptcy Counsel
----------------------------------------------------------------
Equisek, Inc. seeks approval from the U.S. Bankruptcy Court for
District of Massachusetts to hire Madoff & Khoury, LLP to serve as
legal counsel in its Chapter 11 case.
The firm will be paid at these rates:
Partner $415 per hour
Associate $315 per hour
Paralegals $160 per hour
Administrative Staff $160 per hour
The firm received a retainer in the amount of $21,717.
David Madoff, Esq., the firm's partner who will be providing the
services, disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
David B. Madoff, Esq.
Steffani M. Pelton, Esq.
Madoff & Khoury, LLP
124 Washington Street
Foxboro, MA 02035
Phone: 508-543-0040
Email: madoff@mandkllp.com
About Equisek Inc.
Equisek, Inc. specializes in daily, weekly and monthly rentals of
computer and audio visual technology. The company is based in
Marlborough, Mass.
Equisek filed its voluntary petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. D. Mass. Case No. 23-40048) on Jan. 20,
2023, with $432,840 in assets and $1,066,463 in liabilities. Ralph
Tirro, president of Equisek, signed the petition.
David B. Madoff, Esq., at Madoff & Khoury, LLP represents the
Debtor as legal counsel.
FARMERS COOPERATIVE: Court OKs Cash Collateral Access Thru Feb 21
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Missouri,
Eastern Division, authorized Farmers Cooperative Association #301
to use cash collateral on an interim basis for payment of
post-petition expenses only, through February 21, 2023.
The Debtor's only secured creditor is First State Community Bank.
As of the Petition Date, the Debtor was indebted to the Lender
under these promissory notes:
a. Promissory Note dated February 1, 2016 in the principal
amount of $475,000 plus interest and other charges from Borrower
payable to First State Community Bank designated by Loan Number
33045795. The approximate outstanding balance of the Term Note is
$322,808; and
b. Promissory Note with an approximate outstanding balance of
$200,741 plus interest and other charges from Borrower payable to
First State Community Bank designated by Loan Number 33081389. The
LOC Note has matured.
The approximate total Pre-Petition Indebtedness on the Petition
Date was $544,840.
As adequate protection, the Lender will receive (i) valid and
perfected, security interests in, and liens on all of the right,
title, and interest of the Debtor in, to and under all present and
after-acquired property of the Debtor of any nature whatsoever, to
the extent Lender held pre-petition liens in that property prior to
the Petition Date, including cash derived from Lender collateral;
provided that Post-Petition Collateral will expressly exclude (a)
causes of action arising under sections 544, 545, 547, 548, 550,
and 553 of the Bankruptcy Code and proceeds generated therefrom;
(ii) payment of the contract monthly payment of $2,881 on the Term
Note beginning with the January 2023 payment; (iii) payment of the
contract monthly of $861 on the LOC Note; and (iv) a monthly sweep
of any excess cash over $10,000 held by the Debtor beginning for
the period December 16, 2022 through January 16, 2023 and monthly
on those numerical days thereafter.
These events constitute an "Event of Default":
(1) The entry of an order (i) converting the Debtor's case to
a case under Chapter 7 of the Code, (ii) dismissing the Debtor's
case under § 1112 of the Code, (iii) granting Lender relief from
the automatic stay, or (iv) that specifically terminates the
Order.
(2) The Debtor's violation of any other term of this Order,
including but not limited to the failure to make adequate
protection payments to the Lender or provide insurance.
A hearing on the matter is set for February 21, 2023 at 2 p.m.
A copy of the order is available at https://bit.ly/40dfeF7 from
PacerMonitor.com.
About Farmers Cooperative Association #301
Farmers Cooperative Association #301 is a local feed cooperative
that offers its customers full lines of feed, minerals, lime, and
fertilizers.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Mo. Case No. 22-43908) on December 16,
2022. In the petition signed by Bill Manion, president, the Debtor
disclosed up to $10 million in assets ad up to $1 million in
liabilities.
Judge Bonnie L. Clair oversees the case.
Spencer Desai, Esq., at the Desai Law Firm, is the Debtor's legal
counsel.
FELIX QUIROZ, JR: Trustee Selling Midland Property for $79.2K
-------------------------------------------------------------
Brad W. Odell, the Trustee of the estate of Felix Quiroz, Jr., and
Maria E. Quiroz, asks the U.S. Bankruptcy Court for the Western
District of Texas to authorize his private sale of all the estate's
right, title, and interest in the real property legally described
as Lot 005, Blk 002, Addn El Montecito Estates, 4700 N. County Rd.
1154, Midland, Midland County, Texas, to Carlos Francisco Perez
Gonzalez for $79,200 in accordance with the Unimproved Property
Contract.
If no timely response is filed within 21 days from the date of
service, the relief sought may be granted without a hearing being
held.
The Debtors own the Property.
The Trustee intends to sell at private sale the Property free and
clear of all mortgages, encumbrances, and liens, for the sum of
$79,200 to the Buyer in accordance with the Contract.
The sale will be subject to normal closing costs as set forth in
the Contract and the payment to the Broker, The Doss Team, LP, its
5% commission.
The closing is currently anticipated to occur on Feb. 8, 2023. The
Contract has been delivered to West Texas Abstract, and the Buyer
has deposited the earnest money of $1,000 with the title company.
Upon closing, the Trustee will deliver to Mr. Gonzales good and
marketable title to the real property by evidence of a General
Warranty Deed.
On Sept. 7, 2022, the Court entered its Order Granting Motion to
Change Terms of Cash Collateral Order. Pursuant to the Order, the
Trustee proposes the following distribution of sales proceeds from
the sale of the Property, after payment of normal and customary
closing costs including the realtor's 5% commission.
Midland County Appraisal District ("MCAD") holds a tax lien against
the Property in the amount of $625.03. Midland County ("MCO") and
Midland County Utility District ("MCUD") hold tax liens against the
Property in the aggregate amount of $99.13. Upon the closing of the
sale, the balance owing to MCAD, MCO, and MCUD will be paid in
full.
The U.S. Department of Treasury, Internal Revenue Service ("IRS")
also holds a lien against the Property which is the subject of the
sale. The IRS will receive $40,000 from the sale of the Property.
Stewart Title Co. holds a lien against the Property which is the
subject of the sale. Stewart Title will receive $5,000 from the
sale of the Property.
Caterpillar Financial Services Corp. holds a lien against the
Property which is the subject of the sale. The sale of this
property is not more than $90,000, so Caterpillar will not receive
any sales proceeds.
After payment of these secured claims, the balance of the sales
proceeds will be distributed as follows: $5,000 to Bud Kirk to be
held in his trust account; and $1,250 to Brad W. Odell, Subchapter
V Trustee, to be held in his trust account.
The Debtors shall not be entitled to any funds from the sale
because they will already be receiving sufficient funds from a
prior sale in the month of February.
All proceeds remaining over and above these payments shall be
deposited into an account held by the Trustee in the name of the
bankruptcy estate of the Debtors at the Trustee's bank, Axos Bank.
The Trustee asks authority from the Court to sell the Property free
and clear of the liens, encumbrances, or interests which exist
against the Property. He likewise seeks authority to distribute the
sales proceeds from the Property in accordance with the Order and
as set forth.
Therefore, the Trustee requests that he'd allowed to sell the
Property free and clear of any and all liens, encumbrances, or
interests with the liens against such Property to attach to the
proceeds and to be distributed in accordance with the Order, the
request made therein, and all other orders of the Court.
Felix Quiroz, Jr. and Maria E. Quiroz sought Chapter 11 protection
(Bankr. W.D. Tex. Case No. 22-70058) on May 6, 2022. The Debtors
tapped E.P. Bud Kirk, Esq., as counsel.
FELIX QUIROZ, JR: Trustee Sells Midland Lot 003 to Stine for $78K
-----------------------------------------------------------------
Brad W. Odell, the Trustee of the estate of Felix Quiroz, Jr., and
Maria E. Quiroz, asks the U.S. Bankruptcy Court for the Western
District of Texas to authorize his private sale of all the estate's
right, title and interest in the real property legally described as
Lot 003, Blk 003, Addn: El Montecito Estates, 3704 E. County Road
57, Midland, Midland County, Texas, to Greg Stine for $78,000 in
accordance with the Unimproved Property Contract.
If no timely response is filed within 21 days from the date of
service, the relief sought may be granted without a hearing being
held.
The Debtors own the Property.
The Trustee intends to sell at private sale the Property free and
clear of all mortgages, encumbrances and liens, for the sum of
$78,000 to the Buyer in accordance with the Contract.
The sale will be subject to normal closing costs as set forth in
the Contract and the payment to the Broker, The Doss Team, LP, its
5% commission.
The closing is currently anticipated to occur on or before March 2,
2023. The Contract has been delivered to West Texas Abstract, and
the buyer has deposited the earnest money of $1,000 with the title
company.
Upon closing, the Trustee will deliver to Mr. Stine good and
marketable title to the real property by evidence of a General
Warranty Deed.
On Sept. 7, 2022, the Court entered its Order Granting Motion to
Change Terms of Cash Collateral Order. Pursuant to the Order, the
Trustee proposes the following distribution of sales proceeds from
the sale of the Property, after payment of normal and customary
closing costs including the realtor's 5% commission.
Midland County Appraisal District ("MCAD") holds a tax lien against
the Property in the amount of $621.72. Midland County ("MCO") and
Midland County Utility District ("MCUD") hold tax liens against the
Property in the aggregate amount of $99.45. Upon the closing of the
sale the balance owing to MCAD, MCO, and MCUD will be paid in full.
The U.S. Department of Treasury, Internal Revenue Service ("IRS")
also holds a lien against the Property which is the subject of the
sale. The IRS will receive $40,000 from the sale of the Property.
Stewart Title Co. holds a lien against the Property which is the
subject of the sale. Stewart Title will receive $5,000 from the
sale of the Property.
Caterpillar Financial Services Corp. holds a lien against the
Property which is the subject of the sale. The sale of the property
is not more than $90,000, so Caterpillar will not receive any sales
proceeds.
After payment of these secured claims, the balance of the sales
proceeds will be distributed as follows: $5,000 to Bud Kirk to be
held in his trust account; $1,250 to Brad W. Odell, Subchapter V
Trustee, to be held in his trust account; and $3,250 to the Debtors
for use pursuant to the Order.
All proceeds remaining over and above these payments shall be
deposited into an account held by the Trustee in the name of the
bankruptcy estate of the Debtors at the Trustee's bank, Axos Bank.
The Trustee asks authority from the Court to sell the Property free
and clear of the liens, encumbrances, or interests which exist
against the Property. He likewise seeks authority to distribute the
sales proceeds from the Property in accordance with the Order and
as set forth.
Therefore, the Trustee requests that he'd allowed to sell the
Property free and clear of any and all liens, encumbrances or
interests with the liens against such Property to attach to the
proceeds and to be distributed in accordance with the Order, the
request made therein, and all other orders of the Court.
Felix Quiroz, Jr. and Maria E. Quiroz sought Chapter 11 protection
(Bankr. W.D. Tex. Case No. 22-70058) on May 6, 2022. The Debtors
tapped E.P. Bud Kirk, Esq., as counsel.
FR FLOW CONTROL: S&P Alters Outlook to Stable, Affirms 'B-' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook to stable from positive and
affirmed its 'B-' issuer credit rating on FR Flow Control Midco
Ltd. (FR Flow Control). S&P also affirmed its 'B-' issue-level
rating on FR Flow Control CB LLC's senior secured credit
facilities. The recovery rating on the senior secured credit
facilities (rounded estimate: 50%) remains '3'.
The stable outlook reflects S&P's expectation that S&P Global
Ratings-adjusted leverage will improve to the 6x area during the
next 12 months, with earnings growth driven primarily by
realization of operational initiatives and improving operating
leverage.
S&P said, "We expect FR Flow Control's pro forma S&P Global
Ratings-adjusted leverage will be in the low-7x area at year-end
2022, weaker than we previously forecast, amid a challenging
operating environment and following the company's modestly
leveraging acquisition of TMP in April 2022. We forecast total
revenue growth in the mid-teens percentage area in 2022, primarily
driven by the acquisition of TMP and growth in the aftermarket
business, partially offset by an adverse impact from a
strengthening U.S. dollar. Although the company's gross margins
have somewhat contracted due to cost inflation, this pressure is
being offset by lower costs related to restructuring and selling,
general, and administration (SG&A) costs, along with realization of
cost-savings from the company's One Trillium reorganization
initiative. Consequently, we forecast S&P Global Ratings-adjusted
EBITDA margins to remain nearly flat in 2022 compared to the
previous year.
"Continued earnings growth will support deleveraging in 2023,
leading to year-end leverage in the 6x area. We expect moderate
growth in S&P Global Ratings-adjusted EBITDA in 2023, driven by
revenue growth and margin improvement, along with full-year
contribution from TMP. The company generates revenue from several
end-markets, many of which we expect will remain resilient in 2023
under our base case forecast. For instance, the nuclear power and
waste markets should be relatively stable, and oil and gas markets
should benefit from supportive commodity prices. We also expect an
uplift in revenue and margins from progress on the company's
ongoing operational efforts at its U.S. Pumps facility, which
recently reached break-even profitability and which we believe will
reach run-rate performance in the second half of 2023. We note that
FR Flow Control's scale and S&P Global Ratings-adjusted EBITDA
margins are lower than that of its 'B' rated, capital goods peers.
In total, we expect improved operating leverage and further
realization of cost-savings initiatives to support a modest
improvement in S&P Global Ratings-adjusted EBITDA margin by 50-100
basis points (bps) in 2023.
"We believe cost inflation and supply chain challenges will lead
the company to report negative FOCF for 2022. However, we expect
these factors will ease in 2023. The company's FOCF, net of
interest costs, was negative in 2022 (an outflow of $26 million on
a reported basis through Sept. 30, 2022) due to elevated inventory
levels resulting from cost inflation and supply chain issues, along
with adverse movements in foreign exchange rates--most notably the
euro and pound sterling. In 2023, we expect FOCF to improve to
about breakeven, primarily due to higher earnings and lower working
capital needs amid a slight easing in supply chain challenges.
"The stable outlook reflects our expectation that S&P Global
Ratings-adjusted leverage will decline to the 6x area within the
next 12 months, with earnings growth driven primarily by
operational initiatives and improving operating leverage.
"We could lower our rating if the company experiences a
deterioration in liquidity or leverage such that we view the
capital structure as unsustainable."
This could happen, for example due to:
-- A sizeable decline in S&P Global Ratings-adjusted EBITDA, for
example, if lower demand amid a broader economic slowdown hurts the
original equipment business;
-- Significantly negative FOCF, for instance, due to persistently
elevated working-capital needs; or
-- Large debt-funded acquisitions or shareholder returns, in
particular during periods of weak operating performance.
S&P could raise its rating if:
-- The company's leverage declines to well below 6.0x and S&P
expects it to remain at such a level, even when including the
possibility of debt-funded acquisitions or shareholder returns;
and
-- The company generates consistently positive FOCF.
ESG Credit Indicators: E-3, S-2, G-3
FROZEN WHEELS: Court OKs Cash Collateral Access Thru March 31
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Miami Division, authorized Frozen Wheels, LLC to use cash
collateral on an interim basis in accordance with the budget,
through March 31, 2023.
The Court said all creditors that claim a lien against the cash
collateral will retain their liens to the same extent, validity,
and priority as existed pre-petition.
As previously reported by the Troubled Company reporter, the
creditors that may claim an interest in the Debtor's cash
collateral are:
a. 501 NE 183 LLC;
b. American Express;
c. Corporation Service Company;
d. Day to Day Imports, Inc.
e. Enrico Machado;
f. Enzek LLC;
g. IberiaBank;
h. NewCo Capital Group;
i. Servino Di Mariana; and
j. Sunshine Terminal 8 Corp.
The Creditors are granted a perfected post-petition lien against
postpetition collateral to the same extent and with the same
validity and priority as its pre-petition lien, which Replacement
Liens will be properly perfected, valid and enforceable liens
without any further action by Debtor or the Creditors.
The Secured Parties' liens granted pursuant to the terms of the
Interim Order will be at all times subject and junior to all unpaid
fees due to the Office of the United States Trustee pursuant to 28
U.S.C. section 1930; and all unpaid fees required to be paid to the
Clerk of the Bankruptcy Court. The Debtor is authorized to pay fees
due to the Office of the United States Trustee pursuant to 28
U.S.C. section 1930.
If and to the extent the adequate protection of the interests of
the Creditors in the prepetition collateral granted pursuant to the
Order proves insufficient, then the Creditors will have an allowed
claim under Code section 507(b), in the amount of any such
insufficiency, with priority over: (1) all costs and expenses of
administration of the case that are incurred under any provision of
the Code; and (2) the claims of any other party in interest under
section 507(b).
A further hearing on the matter is set for March 28, 2023 at 9:30
p.m.
A copy of the order is available at https://bit.ly/3XQUBwY from
PacerMonitor.com.
About Frozen Wheels
Miami-based Frozen Wheels, LLC filed its voluntary petition for
Chapter 11 protection (Bankr. S.D. Fla. Case No. 22-18638) on Nov.
7, 2022, with up to $50,000 in assets and $10 million to $50
million in liabilities. Isaac Halwani, manager, signed the
petition.
Judge Robert A. Mark oversees the case.
Glenn D. Moses, Esq., at Genovese Joblove & Battista, P.A. serves
as the Debtor's legal counsel.
GENESIS GLOBAL: Files Chapter 11 Plan With Toggle Structure
-----------------------------------------------------------
Genesis Global Holdco, LLC, et al., filed a proposed Joint Chapter
11 Plan of Reorganization without an explanatory Disclosure
Statement.
The Debtors say that the Plan provides a roadmap and framework for
continued discussions among the Debtors and their major
stakeholders with a goal of achieving a transparent, efficient and
consensual restructuring.
The Debtors have showed a term sheet setting forth certain key
terms of a proposed plan of reorganization and a related timeline,
which can be adjusted based on the results of their discussions
with the Ad Hoc Groups, the DCG Entities and other stakeholders.
According to the Term Sheet, the Restructuring will be consummated
through the filing of voluntary proceedings by GGH, GGC and GAP
under chapter 11 of title 11 of the United States Code in the
United States Bankruptcy Court for the Southern District of New
York that contemplate the following dual path "toggle structure":
(1) Sales Transaction: The Debtors will engage in a marketing
and sale process to monetize the Company's assets or otherwise
raise capital, with the proceeds of one or more such transactions
being
used to pay the Debtors' creditors on a pro rata basis in
accordance with the allocated value of the transactions; and/or
(2) Equitization: In the event that the Sales Transaction does
not result in the sale of all or substantially all of the Company's
assets, the Debtors' creditors will receive, among other things, a
pro rata share of equity interests in Reorganized GGH based on the
allocated value of the Debtors (the "Equitization").
Under the Plan, holders of general unsecured claims against the
Debtors will receive a combination of (i) available cash and other
assets, (ii) equity interests in Holdco and (iii) trust units
entitling holders to receive their pro rata shares of the proceeds
from certain causes of action and other claims of the Debtors,
including proceeds from the DCG Note, the DCG Loans, avoidance
actions against various parties and other claims against the DCG
Entities and Gemini, in each case to be set forth in the Plan. The
assets contributed to the trust will be the subject of ongoing
discussions and negotiations with the Debtors' stakeholders.
To maximize the value of such recoveries, the Debtors intend to
seek court approval to conduct a competitive marketing and sales
process to sell their assets or otherwise raise capital during
these Chapter 11 Cases. If the marketing and sales process does
not result in the sale of all or substantially all of the Debtors'
assets, the holders of general unsecured claims will receive 100%
of the equity interests in Holdco, subject to dilution for a
management incentive plan and perhaps other equity grants or awards
of options or warrants, which in turn will own any unsold assets.
The Plan is intended to provide a transparent path to a confirmable
plan of reorganization even if the Debtors are not able to reach a
global resolution with the DCG Entities and the Ad Hoc Groups. In
the event that a consensual resolution is reached, the Plan can be
amended to reflect such resolution.
The discussions among the advisors to GGC, the DCG Entities and the
Ad Hoc Groups are continuing even as the Chapter 11 cases are being
commenced. The Debtors will continue trying to broker an agreement
in principle among a core group of stakeholders prior to the first
day hearing and look forward to reporting on any progress to the
Court as soon as possible. To the extent that an agreement is not
reached imminently, the Debtors intend to seek the appointment of a
mediator, but the Debtors are hopeful that a deal can be reached
without the assistance of a mediator
The Debtors will seek to consummate the Restructuring in accordance
with the following timeline (subject to court availability and
extensions at the Debtors' discretion):
a) No later than Jan. 19, 2023, the Debtors shall file chapter
11 petitions with the Bankruptcy Court.
b) On the Petition Date, the Debtors will file all necessary
first day motions and related evidentiary support.
c) No later than the earlier of (i) the second day hearing and
(ii) 15 days after the Petition Date, the Debtors will file a
motion to approve the procedures governing the sale and marketing
process for the sale of the Company's assets.
d) No later than 45 days after the Petition Date, Cleary Gottlieb
Steen & Hamilton LLP shall publish a report summarizing the results
of the investigation (the "Investigation") of prepetition
transactions with the DCG Parties and other matters, including the
Debtors' and DCG's communications with respect to the $1.1 billion
DCG Note. The published version of this report may be redacted;
unredacted versions may be shared on an advisors’ eyes only basis
with creditor advisors who have signed non-disclosure agreements
with the Company.
e) No later than 60 days after the Petition Date, the Debtors
will file the disclosure statement in connection with a proposed
chapter 11 plan.
f) No later than 75 calendar days after the Petition Date, the
Court shall have held a hearing and entered an order approving the
Disclosure Statement.
g) No later than 75 calendar days after the Petition Date, the
Debtors shall have selected a stalking horse bidder, if any, for
the Sales Transaction, in whole or in part.
h) The bid deadline for qualified bids in respect of the Sales
Transaction shall be no later than 85 calendar days after the
Petition Date.
i) If the Debtors receive more than one qualified bid on or prior
to the Bid Deadline, no later than 90 calendar days after the
Petition Date, the Debtors shall hold an auction in respect of the
Sales Transaction and select one or more successful bids.
j) If the Debtors have selected one or more successful bids in
respect of the Sales Transaction, no later than 100 calendar days
after the Petition Date, the Debtors will seek to schedule a
Bankruptcy Court hearing to consider approval of the Sales
Transaction and entry of an order approving the sale of the
Debtors' assets to the successful bidder(s).
k) No later than 105 calendar days after the Petition Date, the
Bankruptcy Court shall have held a hearing and entered an order
confirming the Plan.
l) No later than 120 calendar days after the Petition Date, the
Plan shall become effective.
A copy of the Joint Chapter 11 Plan dated Jan. 20, 2023, is
available at https://bit.ly/3D5l69G from PacerMonitor.com.
About Genesis Global
Genesis Global Holdco, LLC, through its subsidiaries, and Global
Trading, Inc., provide lending and borrowing, spot trading,
derivatives and custody services for digital assets and fiat
currency.
Genesis Global Capital, LLC (GGC) and Genesis Asia Pacific PTE.
LTD. (GAP) provide lending and borrowing, spot trading, derivatives
and custody services for digital assets and fiat currency.
Genesis Global Holdco, LLC owns 100% of GGC and GAP.
On Jan. 19, 2023, Genesis Global Holdco, LLC, GGC and GAP each
filed a voluntary petition for relief under Chapter 11 of the
United States Bankruptcy Code (Bankr. S.D.N.Y). The cases are
pending before the Honorable Sean H. Lane, and the Debtors have
requested joint administration of the cases under Case No.
23-10063.
Genesis Holdco is a sister company of Genesis Global Trading, Inc.
("GGT") and 100% owned by Digital Currency Group, Inc. ("DCG").
GGT, DCG and certain of the Holdco subsidiaries are not included in
the Chapter 11 filings. The non-debtor subsidiaries include,
without limitation, Genesis UK Holdco Limited, Genesis Global
Assets, LLC, Genesis Asia (Hong Kong) Limited, Genesis Bermuda
Holdco Limited, Genesis Custody Limited ("GCL"), GGC International
Limited ("GGCI"), GGA International Limited, Genesis Global Markets
Limited, GSB 2022 II LLC, GSB 2022 III LLC and GSB 2022 I LLC.
The Debtors tapped Cleary Gottlieb Steen & Hamilton LLP as counsel;
Alvarez & Marsal Holdings, LLC, as financial advisor; and Moelis &
Company LLC as investment banker. Kroll Restructuring
Administration is the claims agent.
GEORGE D GROUP: Affiliate Seeks to Hire Riggi Law Firm as Counsel
-----------------------------------------------------------------
Brothers Pizza 5, LLC an affiliate of George D Group, LLC, seeks
approval from the U.S. Bankruptcy Court for the District of Nevada
to employ Riggi Law Firm as its counsel.
The Debtor requires legal counsel to:
a. institute, prosecute or defend any contested matters
arising out of this bankruptcy proceeding in which the Debtor may
be a party;
b. assist in the recovery and obtaining necessary court
approval for recovery and liquidation of estate assets, and assist
in protecting and preserving those assets where necessary;
c. assist in determining the priorities and status of claims
and in filing objections thereto where necessary;
d. assist in the preparation of a Chapter 11 plan;
e. perform all other legal services for the Debtor.
The firm will be paid at these rates:
Partners $450 per hour
Associates $195 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtor a retainer in the amount of
$5,000.
David Riggi, Esq., a partner at Riggi Law Firm, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
David A. Riggi, Esq.
Riggi Law Firm
5550 Painted Mirage Rd. Suite 320
Las Vegas, NV 89149
Tel: (702) 463-7777
Fax: (888) 306-7157
Email: RiggiLaw@gmail.com
About George D Group
George D Group, LLC, owner and operator of a pizza restaurant,
filed a Chapter 11 bankruptcy petition (Bankr. D. Nev. Case No.
22-13044) on Aug. 25, 2022, with up to $500,000 in assets and up to
$1 million in liabilities. The case is jointly administered with
the Chapter 11 cases filed by George D Groups's affiliates,
including V&H Pizza 1, LLC, Brothers Pizza 5, LLC and TBD
Restaurants, LLC. Case No. 22-13044 is the lead case.
Judge August B. Landis oversees the cases.
David A. Riggi, Esq., at the Riggi Law Firm serves as the Debtors'
legal counsel.
GOLDEN KEY: Seeks to Hire YVS Law as Bankruptcy Counsel
-------------------------------------------------------
Golden Key Group, LLC seeks approval from the U.S. Bankruptcy Court
for the District of Maryland to hire YVS Law, LLC as its legal
counsel.
The firm's services include:
(a) advising the Debtor of its rights, powers and duties;
(b) advising the Debtor concerning, and assisting in the
negotiation and documentation of, financing agreements, debt
restructurings, cash collateral arrangements and related
transactions;
(c) representing the Debtor in defense of any proceedings
instituted to reclaim property or to obtain relief from the
automatic stay under Section 362(a) of the Bankruptcy Code;
(d) representing the Debtor in any proceedings instituted with
respect to the Debtor's use of cash collateral;
(e) reviewing the nature and validity of liens asserted
against the property of the Debtor and advising the Debtor
concerning the enforceability of such liens;
(f) advising the Debtor concerning the actions that it might
take to collect and to recover property for the benefit of its
estate;
(g) preparing legal documents and reviewing financial
reports;
(h) advising the Debtor concerning, and preparing responses
to, legal papers that may be filed and served in its Chapter 11
case;
(i) counseling the Debtor in connection with the formulation,
negotiation and promulgation of a plan of reorganization or
liquidation and related documents; and
(j) other legal services.
The firm will charge these hourly fees:
Members $515 - $575
Counsel/Senior Counsel $425 - $570
Associates $300 - $375
Paralegals $195 - $260
Law Clerks $150 - $170
YVS Law holds $31,160.90 as a retainer.
Paul Sweeney, Esq., the firm's attorney who will be providing the
services, disclosed in a court filing that he is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
Paul Sweeney, Esq.
YVS Law, LLC
11825 West Market Place, 2nd Floor
Fulton, MD 20759
Tel: 410-571-2780
Fax: 410-571-2798
Email: psweeney@yvslaw.com
About Golden Key Group
Golden Key Group, LLC is a professional services firm dedicated to
helping federal and commercial clients solve today's strategic,
organizational and operational challenges while addressing their
future needs. Founded in 2002, Golden Key Group's solution
offerings include Human Capital Management Support, Human Resources
Operations, Employee Training and Leadership Development,
Professional Consulting Services, Program Management Office,
Acquisition and Category Management, Analytics and Information
Technology, Executive Search Services, and Select Solutions. The
company is based in Landover, Md.
Golden Key Group filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 23-10414)
on Jan. 20, 2023, with 1 million to $10 million in assets and $10
million to $50 million in liabilities. Gretchen McCracken, Golden
Key Group's chief executive officer and managing member, signed the
petition.
Judge Maria Ellena Chavez-Ruark oversees the case.
Paul Sweeney, Esq., at YVS Law, LLC represents the Debtor as
counsel.
GUNTHER CHARTERS: Seeks to Hire Frost & Associates as Counsel
-------------------------------------------------------------
Gunther Charters, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Maryland to hire Frost & Associates, LLC
as its bankruptcy counsel.
The Debtor requires legal counsel to:
a. assist in the preparation of bankruptcy schedules and
financial statements;
b. provide the Debtor with legal advice with respect to its
powers and duties pursuant to the Bankruptcy Code;
c. prepare legal papers;
d. assist in analyses and representations with respect to
lawsuits, which the Debtor are or may be party to;
e. negotiate, prepare, file and seek approval of a plan of
reorganization;
f. represent the Debtor at the meetings of creditors, hearings
and other proceedings; and
g. perform other legal services.
The hourly rates charged by the firm's attorneys range from $425 to
$645. Paralegals, legal assistants and law clerks charge between
$100 and $265 per hour.
The attorneys who are expected to handle the case are:
Daniel Staeven $545 per hour
Bradford Kirby $395 per hour
Rebecca Sheppard $585 per hour
Glen Frost $645 per hour
The Debtor paid Frost & Associates an advance retainer of $25,000.
As disclosed in court filings, Frost & Associates is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Daniel Alan Staeven, Esq.
Frost & Associates, LLC
839 Bestgate Rd. Ste. 400
Annapolis, MD 21401
Phone: 410-497-5947
Email: daniel.staeven@frosttaxlaw.com
About Gunther Charters
Since 1985, Gunther Charters, Inc. has been providing motor coach
transportation services, specializing in a variety of professional
transportation services. Based in Harmans, Md., Gunther Charters
provides corporate and business transportation, convention shuttle
service, airport transfers, military reunion tours, school groups,
group charters, and tour operator transportation services.
Gunther Charters filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 23-10416)
on Jan. 20, 2023, with $9,677,008 in assets and $13,495,288 in
liabilities. Martin Gunther, president of Gunther Charters, signed
the petition.
Daniel Alan Staeven, Esq., at Frost & Associates, LLC represents
the Debtor as counsel
HALL AT THE YARD: Court OKs Interim Cash Collateral Access
----------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida, Tampa
Division, authorized The Hall at the Yard, LLC to use cash
collateral on an interim basis pending a final hearing set for
March 2, 2023 at 11 a.m.
The Debtor is permitted to use cash collateral in accordance with
the budget, with a 10% variance.
As previously reported by the Troubled Company Reporter, the
Debtor's secured obligations are comprised of (a) Newtek Small
Business Finance, LLC; (b) merchant cash advance lenders; (c)
Kabbage, Inc.; (d) and Ivanhoe Place Propco, LLC.
Newtek is owed approximately $4.2 million based on a loan made to
the Debtor in January of 2020 and guaranteed by the Small Business
Administration. Newtek may assert a lien on the Debtor's accounts
receivable.
Kabbage is owed approximately $359,000 based on a PPP loan made to
the Debtor, which is likely unsecured.
Ivanhoe is the landlord which asserts a security interest in the
Debtor's furniture, fixtures, and equipment.
With respect to MCA lenders, the Debtor believes these creditors
may assert liens on and security interests in accounts receivable:
Approximate Balance
Creditor as of Petition Date
-------- -------------------
The Avanza Group, LLC $135,000
Cobalt Funding Solutions $150,000
Delta Bridge Funding, LLC, $181,055
servicer for CloudFund
Green Capital Funding, LLC $44,000
G and G Funding Group, LLC Undetermined
Premium Merchant Funding 26, LLC $50,000.
Reef Funding Group $44,000
Vivian Capital Group, LLC $150,000
World Global Fund $50,000
Zahav Asset Management, LLC $97,000
As adequate protection with respect to Newtek's and the MCA
lenders' interests in the cash collateral, Newtek and the MCA
lenders are granted a replacement lien in and upon all of the
categories and types of collateral in which they held a security
interest and lien as of the Petition Date to the same extent,
validity and priority that they held as of the Petition Date.
The Debtor will maintain insurance coverage for the collateral in
accordance with the obligations under the loan and security
documents.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3JNLEk3 from PacerMonitor.com.
The Debtor projects total cash paid out, on a daily basis, as
follows:
$53,379 for February 1, 2023;
$30,530 for February 2, 2023; and
$2,500 for February 3, 2023.
About The Hall at the Yard, LLC
The Hall at the Yard, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00250) on
January 24, 2023. In the petition signed by Jamal Wilson, manager,
the Debtor disclosed up to $1 million in assets and up to $10
million in liabilities.
Judge Catherine Peek McEwen oversees the case.
Edward J. Peterson, Esq., at Stichter, Riedel, Blain and Postler,
P.A., represents the Debtor as counsel.
HEIRBNB LLC: Unsecured Creditors to Split $74K in Subchapter V Plan
-------------------------------------------------------------------
Heirbnb, LLC submitted a First Amended Plan of Reorganization for
Small Business under Subchapter V dated January 24, 2023.
The Debtor has had 2 Airbnb properties for several years, and
expects to continue have them for the foreseeable future. This plan
is based on the Debtor having 2 AirBNB properties.
This Plan of Reorganization proposes to pay the creditors of the
Debtor from future income of the Debtor.
Non-priority unsecured creditors holding allowed claims, if any,
will receive pro rata distributions from the ongoing cash flow of
the Debtor.
Class 2 shall consist of the claim of Small Business Administration
to the extent allowed as a secured claim. SBA has an allowed first
position secured claim generally described as a blanket lien on the
Debtor's business assets. The amount of the claim as of the date of
the filing of the Petition is estimated at $687,506.63. On the
Effective Date following Confirmation of this Plan, the Debtor
shall value the claim at $2,525.01, at 7.5% interest rate and at a
monthly payment in the amount of $50.60 per month for a period of
60 months.
Class 3 shall consist of all unsecured claims that are not entitled
to priority and not expressly included in the definition of any
other class. The claims in this class shall be paid a pro-rate
distribution of $74,280.00 commencing on the Effective Date of the
plan, payable at the rate of $1,238.00 per month, until the total
amount specified herein has been paid.
Class 4 shall consist of the interests of the individual Debtor in
property of the estate. The Debtor will retain all ownership rights
in property of the estate.
The Debtor anticipates the funds to meet the plan payments shall
come from the daily operations of the Debtor's AirBNB business.
A full-text copy of the First Amended Plan dated January 24, 2023
is available at https://bit.ly/3XHYXq9 from PacerMonitor.com at no
charge.
Attorney for Debtor:
Steven L. Lefkovitz, Esq.
908 Harpeth Valley Place
Nashville, Tennessee 37221
Phone: (615) 256-8300
Fax: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About Heirbnb LLC
Heirbnb, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 22-04015) on Dec. 14,
2022. In the petition signed by Kate Carson, owner, the Debtor
disclosed $2,525 in assets and $1,099,032 in liabilities. Judge
Charles M. Walker oversees the case. Steven L. Lefkovitz, Esq., at
Lefkovitz and Lefkovitz, is the Debtor's legal counsel.
HORIZON GLOBAL: Chief Accounting Officer to Quit Feb. 8
-------------------------------------------------------
Matthew J. Meyer, currently chief accounting officer of Horizon
Global Corporation, notified the Company that he will be resigning
his position, effective Feb. 8, 2023, to pursue another
opportunity, according to the Company's Form 8-K filed with the
Securities and Exchange Commission. Jian James Zhou will assume
the role of principal accounting officer of the Company effective
Feb. 8, 2023.
The Board expressed its thanks to Mr. Meyer for his many
significant contributions to the Company.
About Horizon Global
Horizon Global Corporation -- http://www.horizonglobal.com-- is a
designer, manufacturer, and distributor of a wide variety of
custom-engineered towing, trailering, cargo management and other
related accessory products in North America, Australia and Europe.
The Company serves OEMs, retailers, dealer networks and the end
consumer.
Horizon Global reported a net loss of $33.12 million for the 12
months ended Dec. 31, 2021, compared to a net loss of $37.98
million for the 12 months ended Dec. 31, 2020. As of Sept. 30,
2022, the Company had $410.05 million in total assets, $525.72
million in total liabilities, and a total shareholders' deficit of
$115.67 million.
HUNTER DOUGLAS: Moody's Alters Outlook on 'B1' CFR to Negative
--------------------------------------------------------------
Moody's Investors Service affirmed Hunter Douglas Inc.'s ratings
including its Corporate Family Rating at B1, its Probability of
Default Rating at B1-PD, and the B1 ratings on the company's first
lien credit facilities. The first lien facility consists of a $750
million first lien revolver due 2027, a $3,500 million original
principal amount first lien term loan due 2029, and a EUR1,000
million original principal amount first lien term loan due 2029.
Moody's changed the outlook to negative from stable.
"The outlook change to negative reflects that the meaningful demand
headwinds affecting discretionary products including window
coverings will pressure Hunter Douglas' earnings and cash flows
over the next 12-18 months," said Oliver Alcantara, AVP-Analyst at
Moody's. "Hunter Douglas' very good liquidity with over $600
million of unrestricted cash provides good financial flexibility to
navigate a challenging operating environment and supports the B1
CFR."
Moody's estimates Hunter Douglas' debt/EBITDA leverage is high at
4.9x for the last twelve months (LTM) period ending September 30,
2022. Persistently high inflation is pressuring consumer
discretionary spending and weaker housing market trends due to
rising borrowing costs is negatively impacting demand for the
company's products. Moody's estimates Hunter Douglas' debt/EBITDA
leverage will increase to around 5.3x at fiscal year end December
2022. Moody's changed the outlook to negative because Moody's
expects these demand pressures to persist into 2023, pressuring
earnings, cash flows, and credit metrics. The negative outlook also
reflects uncertainty regarding the level of sustainable demand
following a meaningful surge in Hunter Douglas' sales and EBITDA
during the pandemic.
The ratings affirmation reflects that Hunter Douglas' very good
liquidity provides the company the financial flexibility to support
business investments amid demand headwinds. Liquidity is supported
by an unrestricted cash balance of $622 million and an undrawn $750
million revolver. Moody's anticipates that benefits from Hunter
Douglas' expected run rate cost savings initiatives of $100 million
will help to somewhat offset earnings headwinds in 2023. In
addition, the healthy cash balance provides the flexibility to fund
growth investments, including acquisitions, that could help to
offset the anticipated earnings decline. The affirmation also
reflects Moody's expectation that Hunter Douglas will generate more
than $200 million of free cash flow in 2023.
Affirmations:
Issuer: Hunter Douglas Inc.
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Senior Secured First Lien Term Loan B1, Affirmed B1 to (LGD4) from
(LGD3)
Senior Secured First Lien Term Loan B2, Affirmed B1 to (LGD4) from
(LGD3)
Senior Secured First Lien Multi Currency Revolving Credit
Facility, Affirmed B1 to (LGD4) from (LGD3)
Outlook Actions:
Issuer: Hunter Douglas Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Hunter Douglas' B1 CFR broadly reflects the company's leading
market position and good brand recognition in the global window
coverings industry. The company benefits from good channel
diversification, and good geographic reach with a strong presence
in the US and Europe. Hunter Douglas' revenue scale at around $4.5
billion is large relative to similarly rated consumer durables
companies, and its good EBITDA margin supports good free cash flow
generation that Moody's projects will exceed $200 million in 2023.
The EBITDA margin nevertheless lags industry peers given its
decentralized business operations and the company will focus on
streamlining costs to improve margins. Hunter Douglas' very good
liquidity is supported by its healthy unrestricted cash balance of
$622 million and an undrawn $750 million revolver as of September
30, 2022. The sizable liquidity provides financial flexibility to
sustain investment and debt service amid a challenging operating
environment and supports the ratings.
Hunter Douglas' credit profile also reflects its narrow product
focus and exposure to cyclical downturns given the discretionary
nature of its products with demand largely driven by the cyclical
housing market. Moody's anticipates some of the elevated consumer
spending on home products including window coverings to shift
toward other spending as the effects of the coronavirus moderate.
This creates uncertainty regarding the sustainable level of demand
and earnings. The company's financial leverage is high with
debt/EBITDA at 4.9x for the last twelve months (LTM) ending
September 30, 2022. Inflationary pressures and weakening
macro-economic conditions will negatively impact demand for the
company's products and pressure earnings over the next 12-18
months. The benefits from the company's cost savings initiatives
and lower input costs will somewhat offset these pressures. Moody's
projects that debt/EBITDA leverage will increase to 5.4x over the
next 12-18 months. Growth investments including acquisitions funded
with excess cash could expand the earnings base and also help
offset the anticipated earnings decline. Hunter Douglas is exposed
to foreign currency volatility given its meaningful revenue outside
the US.
Hunter Douglas' ESG credit impact score is highly negative (CIS-4),
mainly driven by the company's highly negative exposure to
governance risks reflecting its concentrated ownership and
aggressive financial strategy under majority ownership by financial
sponsors 3G. Hunter Douglas is moderately negatively exposed to
environmental and social risks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if the company reports stable or
growing organic revenue performance along with EBITDA margin
expansion, such that debt/EBITDA is below 4.5x and free cash
flow/debt is maintained in a mid to high single digit percentage. A
ratings upgrade would also require the company to execute the cost
savings strategy without impairing the company's culture of
innovation or good operating execution, maintain at least good
liquidity, and exhibit balanced financial policies that support
credit metrics at the above levels.
The ratings could be downgraded if the company's earnings or free
cash flow deteriorate, EBITDA margin meaningfully contracts, or
debt/EBITDA is sustained above 5.5x. Ratings could also be
downgraded if liquidity deteriorates, or the company completes a
sizable debt-financed acquisition or shareholder distribution.
The principal methodology used in these ratings was Consumer
Durables published in September 2021.
Hunter Douglas is the world's leading manufacturer of custom window
coverings and a major manufacturer of architectural products. The
company markets and sells its products globally in more than 100
countries via direct to consumer channel, a dealer network, and
retailers. Moody's estimates the company's reported revenue for the
last twelve months period ending September 30, 2022 at around $4.5
billion. Following the February 2022 $7.1 billion buyout
transaction, 3G Capital owns 75% of the company, with the
Sonnenberg family holding a 25% ownership stake.
INDICOR LLC: S&P Assigns 'B' Issuer Credit Rating, Outlook Stable
-----------------------------------------------------------------
S&P Global Ratings assigned its 'B' issuer credit rating to Indicor
LLC (Indicor). S&P also assigned its 'B' issue-level rating and '3'
recovery rating to the company's proposed first-lien debt.
The stable outlook reflects S&P's view that the company will
continue demonstrating solid operating performance and generating
positive free operating cash flow (FOCF), enabling it to reduce its
S&P Global Ratings'-adjusted debt to EBITDA toward the low- to
mid-6x area during the next 12 months.
Clayton Dubilier & Rice (CD&R) has acquired a majority stake in
Indicor LLC (Indicor), the former industrial products business of
Roper Technologies Inc. Roper will maintain a minority stake in the
company.
S&P said, "Our view of Indicor incorporates the company's positions
in niche markets, moderate scale, good diversity, and strong
aftermarket presence. With more than $1 billion of expected
revenues in 2022, Indicor's business offerings consist of a
portfolio of 15 independently operated brands within the material
preparation and testing, sensors and controls, and flow control
markets. A majority of these brands hold top positions within the
niche and highly fragmented markets they serve. Most of the
products the company offers are highly engineered and considered
mission critical to their customers, creating moderate barriers to
entry and relatively high switching costs. As a result, the company
benefits from a sizable portion of its sales being generated from
aftermarket and replacement demand, leading to a stronger margin
profile than that of other similar rated capital goods peers. While
the company has made efforts to diversify its end markets, it
remains exposed to oil and gas, automotive, agricultural, and
energy, which tend to exhibit a higher degree of cyclicality during
a downturn. Furthermore, while we would consider Indicor's scale
and scope of operations as greater than most other sponsored owned
peers, it is still relatively limited compared to that of the
larger capital goods sector. With more than 50% of revenues
generated from outside the U.S. and less than 10% from its top 10
customers, we view its geographic diversity and customer
concentration as a key strength."
Elevated backlog, favorable demand dynamics, and a relatively
resilient margin profile should provide countermeasures against a
looming recession. For the period ended Sept. 30, 2022, Indicor
generated last- 12-month (LTM) sales growth of close to 13% as a
result of strong order volumes and price realization across all of
its businesses. The company also improved its operating margins,
with its fixed costs leverage providing a benefit to offset weaker
gross margins from rapidly rising costs and supply chain
disruptions during the first half of the year. While these
headwinds remain, there has been signs of significant easing across
the capital goods sector and broader economic environment. However,
given the Federal Reserve's efforts to curb inflation, S&P Global
Ratings now expects a shallow recession in 2023 with a full-year
GDP decline of 0.1%. S&P said, "Despite this, we believe Indicor is
in a good position to weather a downturn given its elevated backlog
and relatively recession-resistant business model. During prior
periods of economic turbulence, the company increased its cash flow
conversion through the release of inventory and lower capital
requirements. Though a longer, more protractive recession could
pressure earnings should the industrial sectors curb capital
spending or the oil and gas markets become volatile. As a result,
we anticipate 2023 revenue growth in the low-single-digit area with
a potential pullback on demand in the second half of the year.
Given Indicor's strong track record of maintaining price
realization, we expect the company will continue to grow its margin
profile in 2023, although one-time costs associated with the spin
will partially offset organic expansion."
The company's leverage will likely remain elevated for the next
several years. As a result of the spin off from Roper, Indicor
expects to issue about $2.1 billion in total debt. S&P said, "While
we expect the company to continue demonstrating its ability to
maintain a strong margin profile in the high-20% area, leverage
will likely be elevated in the high-6x area when the transaction
closes. We anticipate a modest level of deleveraging during the
next 12-24 months as the company recognizes higher margins from its
cost optimization and the roll off of one-time transaction costs.
However, we anticipate the company will support a relatively more
aggressive acquisition strategy to better position itself with
other large players in the markets that it serves. In addition, our
assessment of the company's financial risk incorporates its
financial sponsor ownership and the potential that leverage could
remain high. Specifically, while we do not expect CD&R to pursue
dividends at this time, we expect the company could
opportunistically pursue debt-funded acquisitions that will likely
keep leverage high."
S&P said, "In our view, the company will generate positive FOCF and
maintain adequate liquidity and covenant headroom for the next 12
months. We expect the company will generate FOCF of about $200
million in 2022 driven by strong earnings from operations and
relatively low capital requirements. However, supply chain and
inflationary pressures throughout the year are likely to have an
impact on working capital as inventory and receivable balances
remain elevated. In 2023 we anticipate an even higher margin
profile, although this will be offset by nearly a full year of
material interest expense from the the added debt load. Indicor
should be able to improve its working capital position over the
next several quarters as supply chain pressures abate even further,
partially offsetting the lower cash from operating income. As a
result, we expect FOCF generation to be in the $100 million-$150
million range going forward. With about $75 million of cash on the
balance sheet and nearly full availability on its $300 million
revolving credit facility (RCF) post close, Indicor should have
ample liquidity and covenant headroom to manage its operating needs
during the next 12 months, even when taking into consideration
higher working capital needs.
"The stable outlook reflects our view the company will continue
demonstrating solid operating performance while remaining diligent
in managing supply chain issues and recessionary pressures. While
leverage will be elevated at the onset of the transaction, we
expect the company to recognize various cost savings from operating
under new management enabling it to reduce its S&P Global
Ratings'-adjusted debt to EBITDA toward the low- to mid-6x area
during the next 12 months."
S&P could lower its rating on Indicor if:
-- The company experiences a significant reduction in its
aftermarket sales or additional supply chain and pricing issues
causing it to sustain leverage above 7x with limited to no
prospects for improvement. This could also happen if the company
incurs additional costs related to the spinoff and is unable to
recognize the expected cost savings; or
-- It adopts a more aggressive financial policy that includes
large debt-financed acquisition and/or sizeable shareholder
rewards.
Although unlikely over the next 12 months given the added debt
load, S&P could raise its rating on Indicor if:
-- Stronger-than-expected operating performance reduces its
leverage below 5x while maintaining adequate liquidity and positive
cash flow generation; and
-- It demonstrates financial policies that would allow it to
sustain this reduced level of leverage.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of Indicor, as is the
case for most rated entities owned by private-equity sponsors. We
believe the company's highly leveraged financial risk profile
points to corporate decision-making that prioritizes the interests
of the controlling owners. This also reflects the generally finite
holding periods and a focus on maximizing shareholder returns."
INNERLINE ENGINEERING: Seeks Cash Collateral Access Thru June 30
----------------------------------------------------------------
Innerline Engineering, Inc. asks the U.S. Bankruptcy Court for the
Central District of California, Riverside Division, for authority
to use cash collateral on an interim basis for the period from
March 1 to June 30, 2023.
The Debtor requires the use of cash collateral to pay ordinary and
necessary operating expenses.
The creditors with liens on the cash collateral are HOP Capital,
Danny Song, Dig Vac, LLC, APS Environmental Inc., U.S. Small
Business Administration, Herc Rentals, Inc., and the Internal
Revenue Service.
Prepetition, the Debtor entered into a merchant cash agreement with
HOP Capital. The debt purports to arise from an agreement wherein
the Debtor "sold" "future receivable" to the lender, but the Debtor
is investigating whether the agreement is a loan in disguise or in
fact true merchant cash agreement.
Danny Song holds a judgment lien, which was recorded on November
19, 2019. He is unrelated to the Debtor or its insiders.
Dig Vac holds a judgment against the Debtor, which was recorded on
April 2, 2019.
APS holds a judgment against the Debtor, which was recorded on
April 2, 2019.
Prepetition, on May 10, 2020, the Debtor executed an SBA 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. The SBA Loan has an annual
rate of interest of 3.75% and may be prepaid at any time without
notice of penalty.
Herc Rentals holds a judgment against the Debtor, which was
recorded on November 16, 2020.
The IRS asserts that it holds a claim of approximately $282,700 for
the Debtor's employment tax liabilities for the periods ending
March 31, 2017, through December 31, 2017, that is secured by
lien(s) against all of the Debtor's right, title and interest to
property pursuant to 26 U.S.C. section 6321, including but not
limited to, cash collateral.
Inner Asset, LLC filed its Proof of Claim No. 25 on August 22,
2022, asserting a security interest in all of the Debtor's assets
in the amount of approximately $1,252,024.
The Debtor believes the Secured Creditors are adequately protected
by the continued and uninterrupted operation of the business.
Notwithstanding, the Debtor will continue to make adequate
protection payments to HOP Capital, Danny Song, SBA and the IRS
during the period.
The Debtor will give the Secured Creditors a replacement lien to
the extent 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 Secured Creditors' interest in the cash collateral
on a postpetition basis retroactive to the Petition Date. The
Debtor believes 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 will continue to make adequate protection payments as
follows:
Creditor Amount
-------- ------
HOP Capital $3,000
Danny Song $1,000
SBA $731
IRS $5,207
A further hearing on the matter is set for February 21, 2023 at 1
p.m.
A copy of the motion and the Debtor's budget for the period from
March to June, 2023 is available at https://bit.ly/3kSmGoV from
PacerMonitor.com.
The budget provides for total operating expenses, on a monthly
basis as follows:
$132,988 for March 2023;
$115,743 for April 2023;
$115,743 for May 2023; and
$141,845 for June 2023.
About Innerline Engineering
Corona, Cal.-based Innerline Engineering, Inc. --
http://www.innerlineengineering.com/-- offers a variety of
services to municipalities, utility owners, industrial facilities
and commercial property owners for the maintenance of their
underground utilities.
Innerline Engineering filed a petition for Chapter 11 protection
(Bankr. C.D. Cal. Case No. 21-14305) on Aug. 9, 2021, listing as
much as $10 million in both assets and liabilities. Thomas J.C.
Yeh, chief financial officer, signed the petition.
Judge Wayne E. Johnson oversees the case.
Resnik Hayes Moradi LLP serves as the Debtor's bankruptcy counsel.
INVACARE CORPORATION: Case Summary & 30 Top Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Invacare Corporation
1 Invacare Way
Elyria OH 44035
Business Description: Invacare is engaged in the manufacturing
of home medical devices. It also
provides clinical solutions for post-acute
care, rehab, homecare, and respiratory
markets.
Chapter 11
Petition Date: January 31, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ ---------
Invacare Corporation (Lead Debtor) 23-90068
Freedom Designs, Inc. 23-90067
Adaptive Switch Laboratories, Inc. 23-90066
Debtors'
Bankruptcy
Counsel: Ryan Blaine Bennett, P.C.
Yusuf Salloum, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
300 North LaSalle Street
Chicago, Illinois 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: ryan.bennett@kirkland.com
yusuf.salloum@kirkland.com
- and -
Erica D. Clark, Esq.
KIRKLAND & ELLIS LLP
KIRKLAND & ELLIS INTERNATIONAL LLP
601 Lexington Avenue
New York, New York 10022
Tel: (212) 446-4800
Fax: (212) 446-4900
Email: erica.clark@kirkland.com
Debtors'
Bankruptcy
Co-Counsel: Shawn M. Riley, Esq.
David A. Agay, Esq.
Nicholas M. Miller, Esq.
Maria G. Carr, Esq.
MCDONALD HOPKINS LLC
600 Superior Avenue, E., Suite 2100
Cleveland, OH 44114
Tel: (216) 348-5400
Fax: (216) 348-5474
Email: sriley@mcdonaldhopkins.com
dagay@mcdonaldhopkins.com
nmiller@mcdonaldhopkins.com
mcarr@mcdonaldhopkins.com
Debtors'
Local
Bankruptcy
Counsel: Matthew D. Cavenaugh, Esq.
Jennifer F. Wertz, Esq.
J. Machir Stull, Esq.
Victoria N. Argeroplos, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Tel: (713) 752-4200
Fax: (713) 752-4221
Email: mcavenaugh@jw.com
jwertz@jw.com
mstull@jw.com
vargeroplos@jw.com
Debtors'
Restructuring
Advisor: HURON CONSULTING GROUP
Debtors'
Financial
Advisor &
Investment
Banker: MILLER BUCKFIRE & CO.
Debtors'
Claims,
Noticing
& Solicitation
Agent and
Administrative
Advisor: EPIQ CORPORATE RESTRUCTURING, LLC
Invacare's
Estimated Assets: $500 million to $1 billion
Invacare's
Estimated Liabilities: $500 million to $1 billion
Freedom Designs'
Estimated Assets: $1 million to $10 million
Freedom Designs'
Estimated Liabilities: $10 million to $50 million
Adaptive Switch's
Estimated Assets: $1 million to $10 million
Adaptive Switch's
Estimated Liabilities: $10 million to $50 million
The petitions were signed by Kathleen Leneghan as senior vice
president and chief financial officer.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/NQKIANI/Invacare_Corporation__txsbke-23-90068__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/NISTGZY/Adaptive_Switch_Laboratoires_Inc__txsbke-23-90066__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/NU42T7A/Freedom_Designs_Inc__txsbke-23-90067__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Debtors' 30 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Wells Fargo Bank, National Unsecured Notes $73,000,000
Association, As Trustee of
5.000 Series I Convertible
Senior Notes Due 2024
Corporate Trust Services
Attn: Bondholder Communications
600 South Fourth Street
7th Floor
MAC: N9300-070
Minneapolis, MN 55415
Contact: Robert J. Stark
& Bennett S. Silverberg
Email: rstark@brownrudnick.com
bsilverberg@brownrudnick.com
2. Wells Fargo Bank, National Unsecured Notes $70,000,000
Association, As Trustee of
4.250 Convertible Senior
Notes Due 2026
Corporate Trust Services
Attn: Bondholder Communications
600 South Fourth Street,
7th Floor
MAC: N9300-070
Minneapolis, MN 55415
Contact: Robert J. Stark
& Bennett S. Silverberg
Email: rstark@brownrudnick.com;
bsilverberg@brownrudnick.com
3. Wells Fargo Bank, National Unsecured Notes $69,000,000
Association, As Trustee of 5.000
Series II Convertible Senior
Notes Due 2024
Corporate Trust Services
Attn: Bondholder Communications
600 South Fourth Street,
7th Floor
MAC: N9300-070
Minneapolis, MN 55415
Contact: Robert J. Stark
& Bennett S. Silverberg
Email: rstark@brownrudnick.com;
bsilverberg@brownrudnick.com
4. Birlasoft Solutions Inc. Trade Claim $10,080,467
399 Thornall Street
8th Floor
Edison, NJ 08837
Contact: Indu Nangia &
Anand Aboti
Tel: 248-880-4043
Email: indun@birlasoft.com;
anand.aboti@birlasoft.com
5. Kenco Transportation Trade Claim $1,932,294
Management LLC
PO Box 77065
Madison, WI 53707
Contact: Mike McLeland
Tel: 423-643-3407
Email: ivctoc@kencogroup.com
6. Core Health & Fitness LLC Trade Claim $1,332,175
LA 25 North 2nd Rd
Xinglin District
Xiamen 361022
China
Contact: Betty Luo
Tel: 888-678-2476
Email: betty@laxiamen.com
7. Dynamic Controls Ltd Trade Claim $1,205,233
17 Print Place
PO Box 1866
Christchurch 08024
New Zealand
Contact: Simon Rees
Email: srees@dynamiccontrols.com
8. FedEx Trade Claim $1,134,778
PO Box 371461
Pittsburgh, PA 15250
Contact: Larry Puszko
Email: lpuszko@fedex.com
9. Samuel Son & Co Inc. Trade Claim $1,102,296
1400 Red Hollow Rd
Birmingham, AL 35215
Contact: Carol Brown
Tel: 419-247-8600
Email: carol.brown@samuel.com
10. Foam Craft (Future Foam Inc.) Trade Claim $1,101,140
2441 Cypress Way
Fullerton, CA 92831
Contact: Mike Urquhart
Tel: 714-459-9971
Email: murquhart@futurefoam.com
11. Rhenus Logistics China Ltd Trade Claim $1,012,490
Shenzhen Branch 48-F. Shun
Hing Square
5002 Shen Nan Rd East
Shenzhen 518001
China
Contact: Joanna Zou
Email: joanna.zou@cn.rhenus.com
12. Linak Trade Claim $998,531
2200 Stanley Gault Parkway
Louisville, KY 40223
Contact: Chris Sprigler
Tel: 502-318-2127
Email: csprigler@linak-us.com
13. G S E Trading Ltd Trade Claim $845,256
Foshan Guangshun Electrical
Equipment Co Ltd
No. 1 Huabao South Road
Foshan
Guangdong 52800 China
Contact: Natalie Luo
Tel: 011-86-757-88023217
Email: luocanhua@gse.cn
14. XPO Logistics Freight Inc. Trade Claim $836,028
PO Box 70065
Madison, WI 53707
Contact: Mike McCleland
Tel: 423-643-3407
Email: ivctoc@kencogroup.com
15. Precision Medical Trade Claim $814,848
300 Held Drive
Northampton, PA 18067
Contact: Jim Parker
Tel: 610-262-6090
Email: jparker@precisionmedical.com
16. Jiangyin Huashi Medical Trade Claim $746,237
Equipment Co Ltd
Jiangyin Huashi Vehicle Seat Co Ind
No. 8 Huaxi Road
Husashi Town 214421
China
Contact: Shi Ping Hua
Tel: 011-86-51086213731
Email: sph@vip.163.com
17. Changzhou Dade Machine Trade Claim $629,353
Co. Ltd.
No. 51 Kunlun Road New
Industrial Area ChangZhou
Jiangsu 213031
China
Contact: QA: Mr. Jin Yinfeng &
Sales: Coco Jiang
Jinyinfeng@czdade.net;
oco@czdade.net
18. Roller Die & Forming Trade Claim $498,834
4630 C R 209 South
Green Cove Springs, FL 32043
Contact: Kent Houserman
Tel: 904-284-5611
Email: khouserman@rollerdie.com
19. All Pro Freight Systems Inc. Trade Claim $488,663
PO Box 614
Crystal Lake, IL 60039
Contact: Judy Nester
Email: jnester@allprofreight.com
20. CareMed Supply Inc. Trade Claim $469,478
7F, No. 2 Ln. 235
Bao Chiao Rd
Xin Tien Dist
New Taipei City 23145 Taiwan
Contact: James Cocuzza
Tel: 886-2-2917-9808
Email: jcocuzza@priushc.com
21. Ninghai Jianpai Automotive Trade Claim $457,543
Accessory Co Ltd.
Meilin Industry Zone
Ninghai County
Zhejiang Province 315600
China
Contact: Xiangun GE
Tel: 11-0574-65298888
Email: quality@nbjianpai.com
22. Jiangsu Intco Medical Trade Claim $431,519
Products Co Ltd
NO. 77 Yandunshan Road
Dagang Zhenjaing
Jiangsu 212132 China
Contact: Jiang Peng
Email: jingpeng@intco.com
23. Neff Group Distributors Inc. Trade Claim $390,360
9800 Rockside Rd 800
Valley View, OH 44125
Contact: Jeff Luekejoe
Richardson (Mac Valves)
Tel: 440-835-7010
Email: jluecke@neffautomation.com
jrichardson@macvalves.com
24. Gallop Cycle Corp Trade Claim $381,146
2677 El Presidio Street
Carson, CA 90810
Contact: Mark Pikula
Tel: 310-885-4300
Email: marpikula@gallopcorp.com
25. Ernst & Young LLP Professional $374,986
PO Box 640382 Service Claim
Pittsburgh, PA 15264
Email: eycanadainvoiceinquiry@ca.ey.com
26. Custom Engineered Wheels Inc. Trade Claim $373,574
1851 N Fox Farm Rd
Warsaw, IN 46580
Contact: Tiffany Ktichens
Tel: 530-515-5682
Email: tiffany.kitchens@cewmail.com
27. SAP America, Inc. IT Service Claim $366,700
PO Box 734595
STN A
Chicago, IL 60673
Tel: 866-857-2621
Email: financear@sap.com
28. Microsoft Corporation Trade Claim $347,054
One Microsoft Way
Redmond, WA 98052
Contact: Chuck Love
Email: chuck.love@microsoft.com
29. U W L Inc. Trade Claim $330,771
1340 Depot St Suite 103
Cleveland, OH 44116
Contact: Dave Gregson
Email: dave.gregson@shipuwl.com
30. New Prokin International Ltd Trade Claim $330,144
51 Huashixia St
Shenchong Tun
Zhongshan 528437
China
Contact: Double Liu
Tel: 011-86-7608831-6069
Email: double.liu@newprokin.com
JOYCARE THERAPY: Cash Infusion from PHLLC to Fund Plan
------------------------------------------------------
Joycare Therapy, LLC, submitted a Second Amended Plan of
Reorganization for Small Business Under Subpchapter V dated January
26, 2023.
This Plan if confirmed provides the opportunity for Joycare to
restart operations under new ownership, with little to no debt
after confirmation, and to provide very needed and useful services
to children and their parents in the Houston area.
While other companies may be starting similar operations in
Houston, the time within which such companies may start will
probably be much longer into the future. Joycare has the licenses
and ability to re-start operations immediately. Further, this Plan
does provide a return to creditors, including to the general
unsecured creditors in Class 5.
Pediatric Holdings, LLC ("PHLLC"), which is a sophisticated
operator of thirteen PPECC facilities in Florida, has agreed to
fund the Debtor's business during this case and to acquire the
equity of the Debtor pursuant to this Plan. Unless some significant
and currently unknown issues arise during the course of the case,
PHLLC anticipates continuing to operate and assume the equity in
the Debtor.
To allow the immediate re-start of the business during the pendency
of this case, Joycare and PHLLC have entered into a management
agreement (the "Management Agreement") pursuant to which PHLLC has
agreed to fund and manage the operations of the Debtor until
confirmation of this Plan, unless terminated earlier pursuant to
its terms. Although PHLLC will not be providing care to any
patients during the case, the Management Agreement, if authorized
by the Bankruptcy Court, will allow the Debtor to open its doors
again during this Case, and to provide much needed pediatric care
in Houston.
Without the funding from PHLLC and without an infusion of funds
from PHLLC, the Debtor would not be able to operate. Without
funding from PHLLC, the projected disposable income of the Debtor
is zero. There is no projected disposable income of the Debtor
without the funding from PHLLC. The projections indicate that PHLLC
will need to loan up to $255,000 for the operations of the Debtor.
Like in the prior iteration of the Plan, Joycare will fund an
"Unsecured Creditors Payment Pool" to the Subpart V Trust in the
amount of $50,000. Within 5 business days of the later of (1) the
bar date, (2) the Effective Date, or (3) the date by which claims
for rejected executory contracts must file a claim, the Subpart V
Trustee will pay all allowed Class 5 claims a pro rata amount of
the Unsecured Creditors Payment Pool, calculated based on the
aggregate amount of all allowed Class 5 claims.
Under the Management Agreement between Joycare and PHLLC, PHLLC has
agreed to provide funds to the Debtor so that the Debtor may pay
the operational expenses during the term of the Management
Agreement. In addition, pursuant to the terms of this Plan, PHLLC
will provide up to $150,000 to pay the administrative expense
claims and will fund the Unsecured Creditors Payment Pool.
The Debtor, without the new money from PHLLC, would not have funds
to pay any claim other than a minimal amount of the funds owed on
the Class 1 Claim. This plan provides a return to the general
unsecured creditors and other creditors. Without the benefit of the
Management Agreement and agreement of PHLLC to provide funding for
the Debtor, the creditors of Joycare would receive no return (other
than small payments to the Class 1 creditor). Without the funds
from PHLLC, the disposable income of the Debtor is zero.
Nothing in this Plan or an order approving this plan, or related
documents discharges, releases, precludes, or enjoins: (i) any
obligation to the Centers for Medicare & Medicaid Services, Texas
Health and Human Services Commission, or any other Medicaid agency
(each, a "Governmental Unit") that is not a "claim" as defined in
11 U.S.C. § 101(5) ("Claim");(ii) any Claim of a Governmental Unit
arising on or after the Effective Date; (iii) any obligation to a
Governmental Unit under police and regulatory statutes or
regulations that any entity would be subject to as the owner or
operator of property arising after the Effective Date; or (iv) any
liability to a Governmental Unit on the part of any Person other
than the Debtor.
A full-text copy of the Second Amended Plan dated January 26, 2023
is available at https://bit.ly/3YhOmlN from PacerMonitor.com at no
charge.
Debtor's Counsel:
Reese W. Baker, Esq.
BAKER & ASSOCIATES
950 Echo Ln Ste 300
Houston, TX 77024-2824
Email: courtdocs@bakerassociates.net
About Joycare Therapy
Joycare Therapy, LLC is a child health care centre in Houston,
Texas.
Joycare Therapy sought Chapter 11 protection (Bankr. S.D. Tex. Case
No. 22-33581) on Dec. 2, 2022. In the petition signed by Huan Le,
president, the Debtor disclosed $50,000 to $100,000 in assets and
$1 million to $10 million in liabilities. The Hon. Eduardo V.
Rodriguez oversees the case. Reese W. Baker, Esq. of BAKER &
ASSOCIATES is the Debtor's counsel.
JUMBA LLC: Sale of 2 Alvarado Lots Free and Clear of Liens Approved
-------------------------------------------------------------------
Judge Stacy G.C. Jernigan of the U.S. Bankruptcy Court for the
Northern District of Texas entered an Amended Corrected Order
authorizing The Jumba LLC's sale of two lots of approximately 10
acres each, but no more than 11 acres each, surrounding the
existing construction described in open Court as Lots 1 and 3 on
property described as 4240 CR 401-C, Alvarado, Texas 76009, being a
part of the Johnson County Property.
Since Oct. 5, 2022, three of the original six contracts approved by
the Court closed. A fourth contract was ready to close. The listed
closing agent, Priority Title, refused to do any more closings
citing the bankruptcy filing of the Debtor as the reason. That sale
is awaiting confirmation of the builder's authority to sign and be
bound by the home warranty purchased for each buyer at closing.
A cash buyer has entered into a contract with the Debtor for Lot 3,
desiring to close on Dec. 21, 2022; however, both Secure Title and
Republic Title have required a new Court Order as the buyers are
different, their contracts are different, and the closing agent
will be different. The new contracts will be filed under seal once
executed.
The net proceeds will be wired to C&G Realty E, LLC by the new
title companies handling the closings. The Debtor, builder, buyers
and C&G all agreed to proceed with a new title companies, Secure
Title and Republic Title, to close the sales for the homes on Lot 1
and Lot 3 at the reduced net amount.
The sale is free and clear of liens, with the lien of C&G attaching
to the net proceeds in addition to the remaining raw land until the
entire secured claim of C&G is paid.
The Debtor is authorized to proceed with sales of the homes, and
lots described of approximately 10-acres each, but no more than 11
acres each, surrounding the existing construction described in open
Court as Lots 1 and 3 on property described as CR 401-C, Alvarado
TX 76009 being a part of the Johnson County Property, free and
clear of liens, with the C&G lien attaching to the net proceeds in
addition to the remaining raw land until the entire secured claim
of C&G is paid.
The time of the closing of each property the net sales proceeds, in
at least the following sums, shall be remitted by the escrow agent,
out of the Seller's proceeds to C&G as each closing occurs, which
are to be promptly applied to the secured claim of C&G:
a. 4210 CR 401-C, Alvarado, TX, Lot #3
Cash Sale for $496,000
Estimated Net: $480,000
b. 4270 CR 401-C, Alvarado, TX, Lot #1
Estimated Net: $431,814.83
There is no ruling today as to the full amount of the C&G secured
obligation; however, the Debtor has conceded the principal amount
of this obligation was $3,488,001.50 as set forth in Notice to Cure
from C&G admitted as the Debtor's Exhibit J2 prior to remittance
from the houses sold.
The Corrected Order shall remain in full force and effect except as
specifically modified therein.
The Order is immediately effective, and the bankruptcy Rule 6004(h)
Stay is waived.
About Jumba LLC
The Jumba LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 22-31740) on September
23, 2022. In the petition filed by Andrea Vernon, as manager, the
Debtor reported assets between $10 million and $50 million and
liabilities between $1 million and $10 million.
The Debtor is represented by Lyndel Anne Vargas of Cavazos
Hendricks Poirot, P.C.
KAREN W. HALL: Proposes to Sell Stock to Pay Off Ameritrade Loan
----------------------------------------------------------------
Karen W. Hall asks the U.S. Bankruptcy Court for the Middle
District of Florida to authorize her to sell all or substantially
all of her 3,964 shares of Verizon stock / 78 shares of AT&T stock
through Ameritrade.
On Sept. 22, 2022, the Debtor filed her Schedules which identify
(i) the Stock and (ii) a lien on the Stock held by Ameritrade. At
present, the total value of the Stock is estimated to be $90,136.97
and the lien by Ameritrade is estimated to be at $58,715.97.
The Debtor is desirous of selling all or substantially all of the
Stock to first pay off the Ameritrade loan in full, second to pay
administrative claims (such as attorneys' fees), and third to
utilize in her business judgment.
The only creditor with an interest in the Stock is Ameritrade who
will be paid off in full by the sale. The remaining proceeds will
then be utilized to pay down the Debtor's administrative claims
such as her counsel, Jennis Morse Etlinger, and beyond that as she
sees best in her business judgment.
Based on the foregoing, it is in the Debtor's business judgment
that the sale of the Stock to pay Ameritrade and administrative
claimants is a prudent decision and necessary for the maintenance
and preservation of estate property.
Counsel for Debtor:
David S. Jennis, Esq.
Daniel E. Etlinger, Esq.
Jennis Morse Etlinger, Esq.
606 E. Madison Street
Tampa, FL 33602
Telephone: (813) 229-2800
E-Mail: djennis@jennislaw.com
detlinger@jennislaw.com
ecf@jennislaw.com
Karen W. Hall sought Chapter 11 protection (Bankr. M.D. Fla. Case
No. 22-01326) on July 1, 2022. The Debtor tapped David Jennis,
Esq., at Jennis Morse Etlinger as counsel.
KAREN W. HALL: W.T. Holland Buying New Church Property for $295K
----------------------------------------------------------------
Karen W. Hall asks the U.S. Bankruptcy Court for the Middle
District of Florida to authorize her private sale of real property
located at 4401 Shay Lane, in New Church, Virginia 23415, to W.T.
Holland & Sons, Inc., or assigns for $295,000.
On July 29, 2022, MidAtlantic Farm Credit, n/k/a Horizon Farm
Credit ("MAFC"), filed its Proof of Claim 2 asserting a claim of
$162,472.11 secured by the Property.
On Sept. 22, 2022, the Debtor filed her operative Schedules which
identify the Property; and, which identify the Accomack County,
Virginia Tax Collector ("ACTC") and MAFC as having potential
interests in the Property.
On Nov. 14, 2022, ACTC filed its Proof of Claim 12 asserting a
claim of $85,529.33 secured, at least in part, by the Property
(although the Debtor believes the amount actually secured by the
Property is nominal).
On Dec. 16, 2022, the Debtor and the Buyer executed a Real Estate
Purchase Contract ("PSA") for the Property. Given the Buyer's
familiarity with the Property, the Debtor anticipates it will be
the highest and best offer made for the Property.
The material terms to the sale contemplated by the PSA are:
A. Purchase Price: The purchase price is $295,000 of which
the Debtor will utilize her net proceeds to pay allowed
administrative fees and costs.
B. Cash: The purchase price will be financed in cash in full.
C. Free and Clear: The Property is being sold to the Buyer on
a free and clear basis of all liens, claims, encumbrances, and any
other interests other than those identified.
D. Closing: The closing for the Sale shall take place on or
before 60 days from the PSA's effective date Dec. 16, 2022.
8. The Sale is an arm's-length transaction and the Buyer is
not affiliated with the Debtor or Spuddog.
The Debtor believes the private sale of the Property is in the best
interest of the estate and its creditors because it will allow her
to satisfy any secured claims to the Property and fund payment to
administrative expenses.
Furthermore, the Debtor is simultaneously objecting to the claim of
ACTC. She will escrow the full amounts claimed in ACTC's proof of
claim until such time as the Court makes a determination as to the
objection. In addition, her husband, Benny Hall, has signed the PSA
and consents to the Sale and to the Motion. Thus, it is unnecessary
to invoke Section 363(h) as the co-owner to the Property is
consenting to the process. Lastly, Terry Strong and Janice Strong's
life estate interest in the Property will survive closing and
therefore the Debtor is authorized to close on the transaction.
Any additional time and expense that would be incurred if the
Property was publicly sold would not likely enhance the purchase
price to justify the additional cost.
Based on this and her business judgment, the Debtor believes the
purchase price is reasonable and proceeding with the sale of the
Property to the Buyer will maximize the value of the Property for
the benefit of the estate and her creditors.
The Debtor requests that any order of the Court authorizing the
Sale be effective immediately upon its entry, notwithstanding the
contrary provisions of Federal Rule of Bankruptcy Procedure
6004(h). And, she asks that any notice period proscribed by Federal
Rule of Bankruptcy Procedure 2002 be shortened to facilitate the
consideration of her Motion.
Karen W. Hall sought Chapter 11 protection (Bankr. M.D. Fla. Case
No. 22-01326) on July 1, 2022. The Debtor tapped David Jennis,
Esq., at Jennis Morse Etlinger as counsel.
KEVIN G. SAUNDERS: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Kevin G. Saunders Photography, Inc.
107 Blue Star
San Antonio, TX 78204
Business Description: The Debtor is in the business of commercial
photography.
Chapter 11 Petition Date: February 1, 2023
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 23-50100
Judge: Hon. Craig A. Gargotta
Debtor's Counsel: H. Anthony Hervol, Esq.
LAW OFFICE OF H. ANTHONY HERVOL
4414 Centerview Dr., Suite 207
San Antonio, TX 78228
Tel: (210) 522-9500
Fax: (210) 522-0205
Email: hervol@sbcglobal.net
Estimated Assets: $50,000 to $100,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kevin G. Saunders as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/PEPHZNA/Kevin_G_Saunders_Photography_Inc__txwbke-23-50100__0001.0.pdf?mcid=tGE4TAMA
KNOW LABS: Makes Changes to Executive Leadership Team
-----------------------------------------------------
Know Labs, Inc. announced changes to its executive leadership team
to help the Company accelerate the development and delivery of its
non-invasive medical diagnostics technology, Bio-RFIDTM, and better
position Know Labs for long-term growth and shareholder value
creation.
As announced, Ron Erickson, founder and chairman at Know Labs, was
unanimously named chief executive officer by the Company's Board of
Directors. Erickson has been with the Company and its predecessors
for nearly 20 years. He brings 30 years of board, business
development, financial and executive leadership experience across
multiple industries.
Alongside Erickson, Dr. James Anderson continues as Know Labs'
chief medical officer, leading all activities related to clinical
development. Steve Kent continues as Know Labs' chief product
officer, responsible for all initiatives related to product
development. Know Labs' Finance and Intellectual Property
functions continue to be led by Pete Conley, chief financial
officer and SVP, Intellectual Property.
Three changes are being implemented in the executive leadership
team:
Masanori King Takee was promoted to chief technology officer. In
his new role, Takee will continue to lead the Company's software
engineering, artificial intelligence and machine learning
activities. One of his primary goals is to reinforce Know Labs'
competencies in data science, which are critical for refinement of
the Bio-RFID algorithm and delivery of a final product that can be
used for clinical trials and the FDA clearance application. Takee
joined Know Labs in 2018 as one of the company's first employees
and brings 20 years of experience creating software for technology
and healthcare startups. Takee has been a founding team member of
five startups, including Cequint, Dwango and TurboPatent, two of
which remain operational today and three achieved a successful
exit.
Jessica English joins the Know Labs team as chief marketing
officer. She will lead the Company's marketing and communications
efforts in preparation for a commercial launch. English brings
more than 15 years of experience leading brand, marketing and
communications strategy for companies across a full range of life
stages and industries, including Health Technology, SaaS, and
Gaming. Previously, she was the vice president of Brand at Oura, a
leading health wearable technology company, where she created an
identity, position and integrated marketing strategy, in addition
to building the Company's standing in the scientific and research
communities. Before Oura, English led the first brand marketing
efforts for Dropbox and supported the Company's entrance into the
public market. She most recently served as vice president of
Marketing at NZXT, a PC gaming hardware company, leading its
entrance into new product categories and building a competitive
position for the brand.
Leo Trautwein, previously Know Labs' chief marketing officer, is
now chief commercial officer. Trautwein has made significant
contributions to Know Labs across multiple functions in addition to
marketing, such as corporate strategy, operations and regulatory.
In his 25-year multi-disciplinary career, he has served as a
strategy consultant, general manager and P&L leader with companies
including Rivian Automotive during its early prototype and
commercialization stages, as well as Jarden Corporation and Vista
Outdoor, Inc. In his new capacity, Trautwein will work alongside
Erickson on the day-to-day management of Know Labs to ensure the
appropriate initiatives are being executed to bring Bio-RFID
through FDA clearance and commercialization.
"I'm excited for 2023," Erickson said. "These changes to our
leadership team will allow us to accelerate our progress and
collaborate more, while eliminating silos. I have strong trust in
this team and believe each one of them can deliver what we need. I
welcome Jess to the team and congratulate the others for their
contributions and great work performed to date. We are a very
collaborative team working toward a common objective, to transform
the medical diagnostics industry, and I'm confident we can get
there.
"Our most important goal for the year is to have our technology
externally validated. We will achieve this through a heavy focus
on data science and algorithm refinement, clinical development and
trials, and partnerships with leading medical research institutions
for additional data collection and accuracy validation," continued
Erickson.
In addition to these executive changes, Know Labs will continue to
accelerate progress with world-class development partners in data
science, sensor technology and hardware design, as well as bringing
on a Technical and Scientific advisory board.
All executive team members report to Erickson and these changes are
effective immediately.
About Know Labs
Know Labs, Inc. is focused on the development and commercialization
of proprietary biosensor technologies which, when paired with its
AI deep learning platform, are capable of uniquely identifying and
measuring almost any material or analyte using electromagnetic
energy to detect, record, identify and measure the unique
"signature" of said materials or analytes. Know Labs call this its
"Bio-RFID" technology platform, when pertaining to radio and
microwave spectroscopy, and its "ChromaID" technology platform,
when pertaining to optical spectroscopy. The data obtained with
the Company's biosensor technology is analyzed with its trade
secret algorithms which are driven by its AI deep learning
platform.
Know Labs reported a net loss of $20.07 million for the year ended
Sept. 30, 2022, a net loss of $25.36 million for the year ended
Sept. 30, 2021, a net loss of $13.56 million for the year ended
Sept. 30, 2020, and a net loss of $7.61 million for the year ended
Dec. 31, 2019. As of Sept. 30, 2022, the Company had $13.76
million in total assets, $3.81 million in total current
liabilities, $87,118 in total non-current liabilities, and $9.86
million in total stockholders' equity.
L.C. CONSTRUCTION: Case Summary & Nine Unsecured Creditors
----------------------------------------------------------
Debtor: L.C. Construction & Sons, Inc.
14 Manor Ln
Katonah, NY 10536-3150
Chapter 11 Petition Date: February 1, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-35080
Debtor's Counsel: Matthew Cabrera, Esq.
M. CABRERA & ASSOCIATES, PC
2002 Route 17M Ste 12
Goshen, NY 10924-5236
Tel: (845) 531-5474
Email: mcabecf@mcablaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Leonardo Castillo as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's nine unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/5ZR76KA/LC_Construction__Sons_Inc__nysbke-23-35080__0001.0.pdf?mcid=tGE4TAMA
LECLAIRRYAN PLLC: Deadline to File IOLTA Claims Set for Feb. 28
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Virginia set
Feb. 28, 2023, as the deadline for any person asserting in any
IOLTA account funds contained in a certain account at HSBC Bank USA
NA that is designated as IOLTA account ("IOLTA Account") must
submit a claim by (a) certified mail or (b) overnight delivery to:
Paula S. Beran, Esq.
Tavenner & Beran PLC
20 N. 8th Street
Richmond, VA 23219
Email: PBeran@TB-LawFirm.com
The Court approved the motion for entry of an order (i) authorizing
the transfer of funds to another bank account, (ii) establishing
procedures including a bar date to claim an interst in certain
funds held in a segregated account, and (iii) authorizing the
distribution of fund thereafter and memorandum in support thereof
("IOLTA Account Motion) filed by the Chapter 7 trustee, Lynn L.
Tavenner.
On or before five business days from the IOLTA account funds claim
bar date, the trustee, through counsel, will file with the Court a
list of all timely tendered claims in IOLTA account funds. If any
claimant believes it has timely tendered a claim in IOLTA account
funds but the same is not on the list of claim in IOLTA account
funds, claimant shall, on or before five business days from the
filing of the list claims in IOLTA account funds, notify Paula S.
Beran, Esq., at PBeran@TB-LawFirm.com.
About LeClairRyan PLLC
Founded in 1988, LeClairRyan PLLC is a national law firm with 385
attorneys, including 160 shareholders, at its peak. The firm
represented thousands of clients, including individuals and local,
regional, and global businesses.
Following massive defections by its attorneys LeClairRyan, members
of the firm in July 2019 voted to effect a wind-down of the
Debtor's operations.
LeClairRyan PLLC sought Chapter 11 protection (Bankr. E.D. Va. Case
No. 19-bk-34574) on Sept. 3, 2019, to effect the wind-down of its
affairs.
In its Chapter 11 petition, the firm listed a range of 200-999
creditors owed between $10 million and $50 million. The firm claims
assets of $10 million to $50 million.
The Hon. Kevin R Huennekens is the case judge.
Richmond attorneys Tyler Brown and Jason Harbour of Hunton Andrews
Kurth represented LeClairRyan in the case. Protiviti was the
Debtor's financial adviser for the liquidation.
The bankruptcy case was converted to a Chapter 7 liquidation on
Oct. 24, 20219. Lynn L. Tavenner was named a Chapter 7 trustee, and
then Benjamin C. Ackerly, a successor trustee.
The Chapter 7 trustee Ackerly's counsel:
Tyler P. Brown
Hunton Andrews Kurth LLP
Tel: 804-788-8200
E-mail: tpbrown@huntonak.com
LITTLE WASHINGTON: Updates Unsecured Claims Pay Details
-------------------------------------------------------
Little Washington Fabricators, Inc., submitted a Second Amended
Disclosure Statement describing the Plan of Reorganization dated
January 26, 2023.
Since the filing date, the Debtor has continued in the operation of
its business as Debtor-in-possession.
There are 2 Classes of Creditors under the Plan. Class 1 consists
of allowed General Unsecured Claims and Class 2 consists of the
Interest Holder.
Class 1 consists of Allowed Unsecured Claims. Class 1 is impaired.
Class 1 Claims are estimated at $4,893,012.92, though the Debtor
has indicated the number may decrease based upon any right to
setoff the Debtor may have against certain general contractor's
claims. Class 1 Claims will receive a pro rata share of a
guaranteed minimum of $250,000.00 as follows: $50,000.00 on the
effective date of the Plan; $100,000.00 on the first anniversary of
the effective date; and $100,000.00 on the second anniversary of
the effective date.
In addition, Class 1 Claims will receive 50% of the net recovery of
the Stoltzfus Litigation Recovery which amounts shall exclude all
legal fees and costs incurred in the prosecution of the Stoltzfus
Litigation. The Debtor anticipates a minimum distribution of 5%
which could be higher depending on the results of the Stoltzfus
Litigation.
Class 2 consists of the Interest Holder of the Debtor. All current
interests, equity and common stock in the Debtor shall be
extinguished. The Debtor shall issue new interest in the Debtor to
Douglas L. Howe in exchange for the capital contribution of
$50,000.00 on the effective date of the plan.
The capital contribution by Douglas L. Howe shall be used for the
Debtor's first payment to general unsecured creditors. In addition,
upon confirmation of the Plan, Douglas L. Howe has agreed to waive
100% of his claim against the Debtor in the amount of $423,849.00.
The Debtor's Plan shall be funded by (i) the capital contribution
of $50,000.00 from the Debtor's principal, Douglas L. Howe; (ii)
the Debtor's operations and new work obtained by the Debtor; and
(iii) 50% of the Stoltzfus Litigation Recovery.
A full-text copy of the Second Amended Disclosure Statement dated
January 26, 2023 is available at https://bit.ly/3JA7EP1 from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Albert A. Ciardi III, Esq.
Nicole M. Nigrelli, Esq.
Ciardi Ciardi & Astin
1905 Spruce Street
Philadelphia, PA 19103
Tel.: (215) 557-3550
Fax: (215) 557-3551
Email: aciardi@ciardilaw.com
nnigrelli@ ciardilaw.com
About Little Washington Fabricators
Little Washington Fabricators, Inc., a company in Wagontown, Pa.,
filed its voluntary petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Pa. Case No. 22-10695) on March 22,
2022, with as much as $10 million in both assets and liabilities.
Douglas L. Howe, president, signed the petition.
Judge Patricia M. Mayer presides over the case.
The Debtor tapped Albert A. Ciardi III, Esq., at Ciardi Ciardi &
Astin as bankruptcy counsel. Eastburn and Gray, PC, McNees Wallace
& Nurick, LLC and Costigan Law, PLLC serve as special counsels.
LOCUST STREET: Seeks to Hire Gleichenhaus as Legal Counsel
----------------------------------------------------------
Locust Street Laundromat, LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of New York to hire
Gleichenhaus, Marchese & Weishaar, PC as its bankruptcy counsel.
The Debtor requires legal counsel to:
(a) give advice with respect to the Debtor's powers and duties
in the continued operation of its business and in the management of
its assets;
(b) take necessary action to avoid liens against the Debtor's
property, remove restraints against the property and such other
actions to remove any encumbrances of liens which are avoidable,
which were placed against the property of the Debtor prior to its
bankruptcy filing, and at a time when the Debtor was insolvent;
(c) take necessary action to enjoin and stay until final
decree any attempts by secured creditors to enforce liens upon
property of the Debtor in which the Debtor has substantial equity;
(d) represent the Debtor in any proceedings which may be
instituted in this court by creditors or other parties during the
course of this proceeding;
(e) prepare legal papers;
(f) perform all other legal services.
The firm will charge these hourly fees:
Michael A. Weishaar, Esq. $375
Scott Bogucki, Esq. $375
Other Attorneys $350
Paralegals $100
As disclosed in court filings, Gleichenhaus is a "disinterested
person" within the meaning of Bankruptcy Code Section 101(14).
The firm can be reached through:
Michael A. Weishaar, Esq.
Gleichenhaus, Marchese & Weishaar, P.C.
43 Court Street 930 Convention Tower
Buffalo, NY 14202
Phone: 716-845-6446
Email: rbg_gmf@hotmail.com
About Locust Street Laundromat
Locust Street Laundromat, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D.N.Y. Case No.
23-10011) on Jan. 9, 2023, with 100,001 to $500,000 in both assets
and liabilities. Judge Carl L. Bucki oversees the case.
Robert B. Gleichenhaus, Esq., at Gleichenhaus, Marchese & Weishaar,
P.C. represents the Debtor as counsel.
LONGRUN P.B.C: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: LongRun, P.B.C.
d/b/a Longrun, LLC
d/b/a Keto & Co.
375 Concord Ave., Suite 005
Belmont, MA 02478
Chapter 11 Petition Date: February 1, 2023
Court: United States Bankruptcy Court
District of Massachusetts
Case No.: 23-10140
Debtor's Counsel: Steven Weiss, Esq.
SCHATZ, SCHWARTZ AND FENTIN, P.C.
1441 Main Street, Suite 1100
Springfield, MA 01130-1450
Tel: (413) 737-1131
Fax: (413) 736 0375
Email: sweiss@ssfpc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Richard Tieken as president and CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/QC2REBQ/LongRun_PBC__mabke-23-10140__0001.0.pdf?mcid=tGE4TAMA
M&M DEVELOPMENT: Case Summary & Five Unsecured Creditors
--------------------------------------------------------
Debtor: M&M Development, LLC
8629 Park Ave
Bowie, MD 20720-3698
Business Description: M&M Development is primarily engaged in
acting as lessors of buildings used as
residences or dwellings.
Chapter 11 Petition Date: February 1, 2023
Court: United States Bankruptcy Court
District of Maryland
Case No.: 23-10687
Debtor's Counsel: Daniel Staeven, Esq.
FROST LAW
839 Bestgate Rd. Ste. 400
Annapolis, MD 21401
Tel: (410) 497-5947
Email: daniel.staeven@frosttaxlaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Alvin T. Smith as sole member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's five unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/HNPIQZI/MM_Development_LLC__mdbke-23-10687__0001.0.pdf?mcid=tGE4TAMA
MARTIN MIDSTREAM: Moody's Puts 'Caa1' CFR on Review for Upgrade
---------------------------------------------------------------
Moody's Investors Service assigned a Caa1 rating to Martin
Midstream Partners L.P.'s (MMLP) proposed $400 million of senior
secured notes due 2028. Concurrently, Moody's placed MMLP's Caa1
Corporate Family Rating and Caa1-PD Probability of Default Rating
under review for upgrade. The SGL-3 Speculative Grade Liquidity
(SGL) rating is unchanged. The outlook was changed to rating under
review from positive.
MMLP will use proceeds from the $400 million proposed senior
secured second lien notes offering to repay its $54 million
outstanding senior secured 1.5 lien notes due 2024 and $291 million
outstanding senior secured second lien notes due 2025. The company
concurrently entered into an amendment to its senior secured
revolving credit facility that extended the maturity and reduced
the commitment amount.
"MMLP's credit ratings are under review due to the company's
pending refinancing transaction and amended revolving credit
facility, which meaningfully extend its maturity profile, and
Moody's expectation that the decision to exit the butane business
will reduce cash flow volatility," stated Jake Leiby, a Moody's
analyst.
Assignments:
Issuer: Martin Midstream Partners L.P.
Senior Secured 2nd Lien Regular Bond/Debenture, Assigned Caa1
(LGD4)
On Review for Upgrade:
Issuer: Martin Midstream Partners L.P.
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: Martin Midstream Partners L.P.
Outlook, Changed To Rating Under Review From Positive
RATINGS RATIONALE
MMLP's review for upgrade reflects the launch of the senior notes
financing transaction and amended senior secured first lien
revolving credit facility, which extend the debt maturity profile,
and the company's planned exit from the butane business. Based on
the terms of the transaction as proposed, Moody's believes that
MMLP's ratings will likely 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 rating to MMLP's proposed senior secured
second lien notes due 2028.
MMLP benefits from a diversified asset base and long-standing
customer relationships, but its credit profile is tempered by its
small scale. The company faces volumetric risk, however, the
majority of its EBITDA is generated by fee-based contracts which
provides insulation from commodity price risk. MMLP is also
constrained by its concentrated geographic footprint on the Gulf
Coast, however, this regional focus positions the company well to
serve oil refiners which are large customers. Moody's recognizes
the risks inherent in the master limited partnership (MLP) business
model but notes that MMLP pays only a nominal distribution to
limited partners. Moody's expects MMLP's distributions to limited
partners to remain around current levels until the company is able
to sustainably achieve its 3.75x leverage target. The company's
debt is expected to decline in 2023 and 2024 as free cash flow is
used to reduce outstanding borrowings under the senior secured
first lien revolving credit facility, resulting in an improving
leverage profile.
MMLP's SGL-3 rating reflects Moody's expectation that the company
maintain adequate liquidity into 2024 following the completion of
the refinancing transaction. As of December 31, 2022, MMLP had $63
million of available borrowing capacity under its $275 million
senior secured first lien revolving credit facility and less than
$1 million of cash on hand. The company will apply proceeds from
the proposed senior notes offering, borrowings under its amended
$200 million senior secured first lien revolving credit facility,
and internally generated cash flow to repay its outstanding senior
notes and revolver balance. Pro forma for these proposed actions,
MMLP is expected to have $131 million of available borrowing
capacity under its revolver and less than $1 million of cash on
hand. The revolver amendment results in an immediate reduction in
lender commitments to $200 million, from $275 million previously,
and commitments will step down to $175 million in June 2023 and
$150 million in June 2024. The amended revolver is scheduled to
mature in 2027. The revolver's financial covenants include maximum
total leverage of 4.75x through 2024 and 4.5x thereafter, maximum
first lien leverage of 1.5x, and minimum interest coverage of 2.0x.
Moody's expects MMLP to remain in compliance with its revolver
covenants through 2024.
MMLP's approximately $54 million senior secured 1.5 lien notes due
February 2024 are rated Caa1 and the approximately $291 million
senior secured second lien notes due February 2025 are rated Caa2.
The rating on these notes are expected to be withdrawn following
their repayment. The revolver (unrated) has a first lien priority
claim on assets, ahead of both the existing 1.5 lien and second
lien notes and the proposed second lien notes (rated Caa1).
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's review will focus on the credit profile benefits from the
extended maturity profile while maintaining adequate liquidity, as
well as the impact of the company's exit from the butane business,
and will be concluded after the financing transaction is
completed.
MMLP, headquartered in Kilgore, Texas, is a publicly traded master
limited partnership with primary operations in the US Gulf Coast
region. Martin Resource Management Corporation controls Martin
Midstream GP LLC, which is MMLP's general partner, and owns 15.7%
of MMLP's outstanding limited partner units.
The principal methodology used in these ratings was Midstream
Energy published in February 2022.
MELI MELO: Seeks Approval to Hire Berger as Bankruptcy Counsel
--------------------------------------------------------------
Meli Melo Restaurant & Lounge, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of New York to employ
Berger, Fischoff, Shumer, Wexler, Goodman, LLP as its legal
counsel.
The firm's services include:
a. providing the Debtor with legal advice regarding its powers
and duties 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 including
prosecuting and defending litigated matters as they may arise
during its Chapter 11 case;
c. advising and assisting the Debtor in the preparation and
negotiation of a plan of reorganization with its creditors;
d. preparing legal papers; and
e. other necessary legal services.
The firm will be paid at these rates:
Partners $550 to 635 per hour
Associates $400 to 475 per hour
Paralegals $185 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer fee is $10,000.
Heath Berger, Esq., a partner at Berger, 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:
Heath S. Berger, Esq.
Berger, Fischoff, Shumer, Wexler, Goodman, LLP
6901 Jericho Turnpike, Suite 230
Syosset, NY 11791
Tel: (516) 474-1136
Email: hberger@bfslawfirm.com
About Meli Melo Restaurant & Lounge
Meli Melo Restaurant & Lounge, LLC filed a Chapter 11 petition
(Bankr. E.D.N.Y. Case No. 22-73085) on Nov. 4, 2022, with as much
as $1 million in both assets and liabilities. Judge Alan S. Trust
oversees the case.
The Debtor is represented by Heath S. Berger, Esq., at Berger,
Fischoff, Shumer, Wexler, Goodman, LLP.
MEND CORRECTIONAL: Hires Integrated as Financial Consultant
-----------------------------------------------------------
MeND Correctional Care, PLLC received approval from the U.S.
Bankruptcy Court for the District of Minnesota to hire Integrated
Consulting Services, LLC as its financial consultant.
The firm will assist the Debtor in preparing its financial
statement and other reporting requirements.
The firm will be paid at the rate of $200 per hour.
Craig Siiro, a partner at Integrated Consulting Services, 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:
Craig Siiro
Integrated Consulting Services, LLC
4917 W. 93rd Street
Bloomington, MN 55437
Tel: (612) 669-7703
Email: craig.siiro@integrated-consulting.net
About MeND Correctional Care
MEnD Correctional Care, PLLC is a health care services and
management company in Sartell, Minn.
MEnD Correctional Care filed its voluntary petition for Chapter 11
protection (Bankr. D. Minn. Case No. 22-60407) on Nov. 30, 2022,
with up to $50,000 in assets and $1 million to $10 million in
liabilities. Todd Leonard, MD CCHP-P, president and chief medical
officer, signed the petition.
Judge Michael E. Ridgway oversees the case.
Steven B. Nosek, P.A. and Integrated Consulting Services, LLC serve
as the Debtor's legal counsel and financial consultant,
respectively.
MERCURITY FINTECH: Board Scraps ADR Ratio Change
------------------------------------------------
Mercurity Fintech Holding Inc. announced that the Board of
Directors of the Company approved to reverse the decision on the
ADR Ratio Change and maintain the current ADR to ordinary share
ratio at 1-to-360 until the cancellation of the ADR facility.
Previously, the Board approved the proposals of the share
consolidation to the authorized share capital at a ratio of
1-for-400, with the par value of each ordinary share changed to
US$0.004 per ordinary share, a mandatory exchange of all the ADRs
to ordinary shares at the current ADR exchange ratio, and in
connection therewith the Company will simultaneously change the ADR
to ordinary share ratio from one-to-360 to one-to-one. On Jan.27,
the Board approved to reverse the decision on the ADR Ratio Change
because such change will not be necessary for the Company's efforts
on the termination of the ADR facility and Share Consolidation.
In addition, Citibank, N.A., the depositary of the Company's
American Depositary Receipts, distributed to all holders and
beneficial owners of the Company's ADRs a notification regarding
termination of the Deposit Agreement, dated April 13, 2015, as
amended, by and among the Company, the Depositary, and all holders
and beneficial owners of the ADRs. The effective date of the
termination of the Deposit Agreement will be Feb. 28, 2023.
As a result of the Mandatory Exchange and Share Consolidation, ADR
holders should expect to receive nine-tenths (0.9) of one (1) new
ordinary share for every ADR held immediately before the Effective
Date but the opening price of the ordinary share post the Share
Consolidation and Mandatory Exchange should increase by one-ninth
(1/9) of the closing price of the ADRs immediately before the
Effective Date.
Below is a copy of the Termination Notice to the ADR holders:
NOTICE OF TERMINATION OF ADR FACILITY
FOR MERCURITY FINTECH HOLDING INC.
To ALL holders AND BENEFICIAL OWNERS of MERCURITY FINTECH HOLDING
INC. AMERICAN DEPOSITARY SHARES ("ADSs").
DEPOSITARY: CITIBANK, N.A.
COMPANY: MERCURITY FINTECH HOLDING INC., a corporation incorporated
under the laws of the Cayman Islands.
DEPOSITED SECURITIES: Existing fully paid ordinary shares of the
Company.
ADS CUSIP NO: 58936H109.
ADS TICKER: MFH.
NEW SHARE CUSIP NO.: 58936H208.
NEW SHARE TICKER: MFH.
ADS(s) to SHARE(s) RATIO UPON TERMINATION: One (1) ADS to three
hundred sixty (360) existing Shares – see explanation below.
ADS(s) TO SHARE(s) RATIO AFTER SHARE CONSOLIDATION: One (1) ADS to
nine-tenths (0.9) of a new Share - see explanation below.
DEPOSIT AGREEMENT: Deposit Agreement, dated as of April 13, 2015,
as amended by Amendment No. 1 to Deposit Agreement, dated as of
July 31, 2018, as further amended by Amendment No. 2, dated as of
May 19, 2020, and as further amended by Amendment No. 3, dated as
of December 9, 2022, by and among the Company, the Depositary, and
all Holders and Beneficial Owners of ADSs issued thereunder.
TERMINATION DATE: February 28, 2023.
ADS CANCELLATION CUT-OFF TIME: 5:00 PM (New York time) on February
23, 2023.
BOOKS CLOSURE PERIOD: Beginning February 23, 2023 (5:00 PM New York
time) not to be reopened.
Pursuant to Section 6.2 of the Deposit Agreement, the Company has
directed the Depositary to terminate the Deposit Agreement and to
implement a mandatory exchange of Shares for, and mandatory
cancellation of, the ADSs. As a result of the termination of the
Company's American Depositary Receipts facility in accordance with
the Deposit Agreement, upon the Termination Date, holders of ADSs
will have their ADSs automatically cancelled and would be entitled
to receive the corresponding underlying Deposited Securities at a
rate of 360 Shares for each ADS cancelled.
However, the Company has further advised the Depositary that,
immediately following the Mandatory Exchange, the Company will
undertake a consolidation of the Company's Shares at a rate of one
(1) new Share for every 400 existing Shares. As a result of the
Share Consolidation, former ADS holders should expect to receive
nine-tenths (0.9) of a new Share for every one (1) ADS previously
held.
For further information about the Share Consolidation, please
contact the Company or its New York registrar and transfer agent,
VStock Transfer, LLC, at 212-828-8436 or info@vstocktransfer.com.
In connection with the Mandatory Exchange the following ADS fee
will be payable to the Depositary under the terms of the Deposit
Agreement: 5 cents per ADS cancelled. After effectuating the
Mandatory Exchange, the Depositary shall be discharged from all
obligations under the Deposit Agreement with respect to the ADRs,
the Deposited Securities and the ADSs under the Deposit Agreement.
If you have any questions about the above termination and Mandatory
Exchange, please call Citibank, N.A. at 1-877-248-4237.
Citibank, N.A., as Depositary
About Mercurity
Formerly known as JMU Limited, Mercurity Fintech Holding Inc. is a
digital fintech group powered by blockchain technology. The
Company's primary business scope includes digital asset trading,
asset digitization, cross-border remittance and other services,
providing compliant, professional, and highly efficient digital
financial services to its customers. The Company recently began
to narrow in on Bitcoin mining, digital currency investment and
trading, and other related fields. This shift has enabled the
company to deepen its involvement in all aspects of the blockchain
industry, from production to circulation.
Mercurity reported a net loss of $20.75 million for the year ended
Dec. 31, 2021, a net loss of $1.65 million for the year ended
Dec. 31, 2020, a net loss of $1.22 million for the year ended Dec.
31, 2019, a net loss of $123.24 million for the year ended Dec. 31,
2018, and a net loss of $161.90 million for the year ended Dec. 31,
2017.
MICHAEL M. PAISLEY: Online Auction of Assets via Aumann Approved
----------------------------------------------------------------
Judge Mary P. Gorman of the U.S. Bankruptcy Court for the Central
District of Illinois authorized Michael M. Paisley's online auction
of the following Assets, by his auctioneer, Thomas E. Walsh of
Aumann Auctions, Inc., at the website address of Aumann Auctions,
Inc., or
https://www.aumannauction.com/auction/muscle-cars-motorcycles-pinball-machines-and-jukeboxes-65408/details:
2008 Dodge Challenger, VIN # 2B3LJ74W18H291148
1973 Chevrolet Corvette, VIN # 1Z67K3S403906
1976 Pontiac Trans Am, VIN # 2W87W6N576573
1968 Dodge Charger, VIN # XP29G8G204411
2009 Harley Davidson, VIN # 1HD1FC41594Y641018
1983 Harley Davidson, VIN # 1HD1BFK16DY011999
Honda Shadow Motorcycle, VIN # JH2RC53497M005119
1950s Seeburg Trash Can Juke Box
1970s Bally Pinball Machine Playboy
1970s Bally Pinball Machine
Wurlitzer Rock Ola Jukebox
Bidding for said auction of the Assets commenced on Dec. 28, 2022,
and concluded on Jan. 25, 2023, at 7:00 p.m. or as soon as the
final bidding was recorded on that date.
The request in the Motion to sell the Assets free and clear of any
interest, claims, liens and encumbrances held or claimed by an
entity was denied as unnecessary, as no such Interests have been
identified or are known.
The Debtor was further authorized to execute any and all documents
necessary to sell and transfer the Assets.
The Order authorizing the sale was effective upon entry and the
14-day stay provided by Fed. R. Bankr. P. 6004(h) is waived.
The bankruptcy case is In re: Michael M. Paisley, Case No. 22-70547
(Bankr. C.D. Ill.).
MOHEGAN TRIBAL: Moody's Rates $502MM Unsec. Notes 'Caa3'
--------------------------------------------------------
Moody's Investors Service assigned Caa3 rating to Mohegan Tribal
Gaming Authority ("MTGA") $502.5 million senior unsecured notes due
December 15, 2027 and B1 to MTGA's proposed $262.9 million senior
secured revolving credit facility, which is expected to mature on
November 1, 2025. In the same rating action, Moody's also affirmed
MTGA's existing ratings, including its Caa1 corporate family
rating, Caa1-PD probability of default rating, and Caa3 senior
unsecured debt. MTGA's senior secured 2nd lien debt rating was
upgraded to B3 from Caa1. The SGL-3 speculative grade liquidity
rating remains unchanged.
Additionally, Moody's affirmed MTGA's B1 rating on the company's
existing senior secured revolving credit facility, which will be
withdrawn once the extension is completed. The outlook is stable.
The ratings affirmation and stable outlook reflect Moody's view
that the higher coupon on the exchanged unsecured notes is offset
by MTGA's improved maturity profile and its reduced refinancing
risk. Moody's views the exchange as opportunistic as it comes well
in advance of the October 2024 maturity of the existing notes.
Moreover, the note holders received an above par ratio of $1,052.63
principal amount of new notes for each $1,000.00 principal amount
of old notes and a substantially higher interest rate. However,
Moody's expects MTGA to refinance the new notes if market rates
improve by exercising the new notes' call protection option at par
in the next 18 months.
MTGA completed the exchange of approximately $477.3 million out of
its aggregate $500 million principal amount of 7.875% senior
unsecured notes due 2024 for approximately $502.5 million of new
13.25% senior unsecured notes due 2027. The new notes are
guaranteed on an unsecured, senior basis by all of MTGA's existing
subsidiaries that guarantee the old notes, plus certain future
subsidiaries that guarantee other indebtedness of Mohegan or incur
indebtedness in excess of $25.0 million.
The upgrade of MTGA's senior secured debt rating reflects increased
credit support it receives from the larger Caa3 unsecured notes.
Upgrades:
Issuer: Mohegan Tribal Gaming Authority
Senior Secured Regular Bond/Debenture, Upgraded to B3 (LGD3) from
Caa1 (LGD3)
Assignments:
Issuer: Mohegan Tribal Gaming Authority
Senior Secured Bank Credit Facility, Assigned B1 (LGD1)
Senior Unsecured Regular Bond/Debenture, Assigned Caa3 (LGD5)
Affirmations:
Issuer: Mohegan Tribal Gaming Authority
Corporate Family Rating, Affirmed Caa1
Probability of Default Rating, Affirmed Caa1-PD
Senior Secured Bank Credit Facility, Affirmed B1 (LGD1)
Senior Unsecured Regular Bond/Debenture, Affirmed Caa3 to (LGD5)
from (LGD6)
Outlook Actions:
Issuer: Mohegan Tribal Gaming Authority
Outlook, Remains Stable
RATINGS RATIONALE
Mohegan Tribal Gaming Authority's (MTGA) credit profile (Caa1
stable) reflects its high leverage, earnings concentration in a few
properties with high competition, and exposure to cyclical
volatility. MTGA's debt/EBITDA improved to 6.3x at the end of
fiscal 2022 from 6.71x a year earlier, that level of leverage still
leaves MTGA with a high degree of financial risk. These credit
challenges are mitigated by MTGA's high quality, well-established,
and large amount of gaming and attractive non-gaming amenities
along with its earnings diversification efforts.
The company has streamlined costs during the pandemic. Moody's
expect certain costs such as marketing will increase as competing
forms of entertainment reopen, but the company will remain cost
vigilant to support positive operating cash flow that funds tribal
distributions. Diversification efforts include management and
development fees from unaffiliated casinos in the U.S. along with
MTGA's investment in a resort casino project in South Korea, which
Moody's views as a long-term positive for the company, despite
inherent risks.
The stable outlook considers that MTGA will continue to benefit
from its lower expense structure and good demand trend since
re-opening from the temporary casino closures that took place
during the height of the coronavirus pandemic. The stable outlook
also assumes that competition from other forms of entertainment
will begin to open more fully and will put pressure on revenue
growth and margins throughout calendar 2023. Also, economic
concerns including inflation and its impact on consumer
discretionary income could also pressure revenue and margins.
MTGA's SGL-3 reflects its adequate liquidity. MTGA had about $165
million of unrestricted cash along with a $263 million revolver of
which only about $18 million was outstanding at September 30, 2022.
The revolver expires in April 2024, which is in the process of
being extended approximately 18 months to November 1, 2025. The
company's liquidity also benefits from no material long-term debt
maturities. MTGA's senior secured second lien notes that mature in
February 2026, and senior unsecured notes that mature on December
15, 2027, have no principal repayment requirement prior to its
maturity, other than customary provisions relating to specified
asset sales and changes in control. Moody's also expect MTGA will
maintain adequate compliance with its various maintenance-type
financial covenant requirements related to total leverage, senior
leverage, and minimum fixed charge ratio.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if MTGA generates positive free cash flow
and demonstrates the ability and willingness to achieve and
maintain debt/EBITDA below 6.0x and EBIT/interest expense at or
higher than 1.5x over the longer-term.
Ratings could be downgraded if Moody's anticipate renewed weakness
in MTGA's earnings or cash flow generation because of competition
or reductions in discretionary consumer spending. A deterioration
in liquidity could also lead to a downgrade.
MTGA owns and operates Mohegan Sun, a gaming and entertainment
complex near Uncasville, Connecticut, and Mohegan Pennsylvania, a
gaming and entertainment facility in Plains Township, Pennsylvania.
MTGA also operates the Niagara Resorts in Ontario, Mohegan Casino
Las Vegas and online casino gaming and sports wagering in the State
of Connecticut and the Province of Ontario. MTGA's restricted group
also receives fees for the management of several non-affiliated
casinos. MTGA is owned by the Mohegan Tribe of Indians of
Connecticut, a federally recognized Native American tribe. MTGA
generated net revenue of about $1.6 billion for the latest 12-month
period ended September 30, 2022.
The principal methodology used in these ratings was Gaming
published in June 2021.
MONTGOMERY REALTY: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California,
Oakland Division, authorized Montgomery Realty Group, LLC to use
cash collateral on an interim basis to fund certain expenses.
The Court said Jo-Ann Stores has suspended the payment of rent, and
the existence of material cash collateral will be dependent on a
resumption in the payment of rent by Jo-Ann Stores.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to fund the operating expenses
of its property which is a portion of a shopping center which
consists generally of large "big box" retailers on the periphery of
the Center, facing a central parking lot.
In 2018, the Debtor refinanced the Property and obtained mortgage
financing for the Property from Cathay Bank, with the mortgage to
mature in November 2023. Cathay Bank is the Debtor's sole secured
creditor holding a perfected security interest in the Debtor's
Property and its rental income, providing it with cash collateral
rights. During the months pre-petition, Cathay took actions which
had the effect of leading tenants to withhold their rent.
As adequate protection, Cathay is granted a replacement lien
against its post-petition assets. The Replacement Lien will be
perfected and enforceable without the need for Cathay Bank or the
Debtor to take any further action, but it will be subject to
further Court orders. The Replacement Lien will have the same
nature, extent, validity and priority, and be subject to the same
defenses and offsetting claims, if any, as Cathay Bank's
prepetition lien.
A continued hearing on the matter is set for February 8, 2023 at
10:30 a.m.
A copy of the order is available at https://bit.ly/3XRVLbs from
PacerMonitor.com.
About Montgomery Realty Group, LLC
Montgomery Realty Group, LLC is the owner of the commercial real
property located at 1675 Willow Pass Road, Concord, California.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-41290) on December
20, 2022. In the petition signed by Raj Maniar, manager, the Debtor
disclosed up to $50 million in both assets and liabilities.
Judge William J. Lafferty, III oversees the case.
Michael St. James, Esq., at St. James Law, P.C, is the Debtor's
legal counsel.
NAKED JUICE: Moody's Cuts CFR to B3 & First Lien Term Loan to B2
----------------------------------------------------------------
Moody's Investors Service downgraded Naked Juice LLC's corporate
family rating to B3 from B1, probability of default rating to B3-PD
from B1-PD, senior secured first lien term loan, senior secured
first lien delayed draw term loan and senior secured revolving
credit facility (RCF) ratings to B2 from Ba3, and senior secured
second lien term loan rating to Caa2 from B3. The outlook remains
stable.
The multi-notch downgrade reflects Naked Juice's significantly
weaker operating performance caused by supply chain disruptions and
promotional suspension that resulted in lower market share in the
fresh juice category. This hindered Naked Juice's ability to
improve earnings and achieve the reduced financial leverage that
was necessary to maintain the B1 CFR. The company has reported
making some progress to fix these issues. However Moody's expects
higher costs from promotional marketing and sourcing abroad will
persist over the next 12-18 months. Naked Juice will also need to
rebuild relationships with its customers in order to gain back lost
shelf space and restore market share. The company's ability to
increase profitability will be limited by marketing and promotional
investments as well as inflationary pressure on consumers that will
hinder its ability to take pricing.
Moody's expects Naked Juice's revenues to increase by 5%-7% over
the next 12-18 months as it regains some shelf space at retailers.
However this will come at a cost of increased marketing and
promotional spend in order to regain this market share. EBITA
margin will improve slightly during this period. The ratings
reflect Moody's expectations that debt-to-EBITDA will remain very
high at 7.0x-7.25x over the next 12 to 18 months despite dropping
from approximately 7.5x as of LTM September 2022. Free cash flow
will be negative $50 to $75 million during 2023 as the company
continues to invest in information technology systems and processes
to establish standalone operations. Moody's also expects that the
company will curtail any future acquisitions or shareholder
distributions until it regains market share and decreases financial
leverage. Liquidity will remain adequate and the negative free
cash flow will primarily be funded by $185 million of cash on hand
as of September 2022. The company also has a $350 million unused
senior secured revolving credit facility that provides additional
liquidity and this may also be modestly used to support any cash
needs.
Moody's views the bulk of the company's products as mature and low
growth that can make it challenging to rapidly de-leverage, and
Naked Juice will need to invest in product development, marketing,
and distribution to generate consistent organic revenue and
earnings growth. Products such as orange juice also benefitted from
increased at-home food consumption during the coronavirus, and
Moody's expects a gradual return to offices and away-from-home food
consumption will be a revenue headwind over the next two years.
Cost inflation, including energy, commodities and transportation,
as well as increasing costs to establish stand-alone operations,
will be offset by price increases and cost saving initiatives to
keep margins flat in 2023 with modest margin expansion expected
thereafter.
The following ratings/assessments are affected by the action:
Downgrades:
Issuer: Naked Juice LLC
Corporate Family Rating, Downgraded to B3 from B1
Probability of Default Rating, Downgraded to B3-PD
from B1-PD
GTD Senior Secured 1st Lien Delayed Draw Term Loan,
Downgraded to B2 (LGD3) from Ba3 (LGD3)
GTD Senior Secured 1st Lien Term Loan, Downgraded to
B2 (LGD3) from Ba3 (LGD3)
GTD Senior Secured 1st Lien Multi-Currency
Revolving Credit Facility, Downgraded to B2 (LGD3)
from Ba3 (LGD3)
GTD Senior Secured 2nd Lien Term Loan, Downgraded to
Caa2 (LGD5) from B3 (LGD5)
Outlook Action:
Issuer: Naked Juice LLC
Outlook, Remains Stable
RATINGS RATIONALE
The B3 CFR reflects Naked Juice's mature product category and
operational challenges resulting in lost shelf space with retailers
and thus reduced market share. The company is also facing higher
input costs caused by the constrained supply of oranges due to
weather related events and disease in the US. The company must
also navigate through a weak economic environment as consumers are
negatively impacted by inflation and may trade down to lower priced
private label juices or out of the category. Naked Juice's credit
profile is also constrained by high financial leverage of
approximately 7.5x debt-to-EBITDA as of the 12 months ended
September 2022. Naked Juice's sizable revenue base supported by
recurring demand and well-known brands in key juice categories such
as Tropicana, Naked and KeVita provide a strong platform to
mitigate the operational challenges. As a stand-alone company,
Naked Juice has potential for increased focus on product innovation
with good liquidity, and a solid competitive position with
well-known brands in key fresh juice categories. The retention by
PepsiCo, Inc. (PepsiCo) of a 39% stake in Naked Juice is beneficial
on multiple fronts, including maintenance of pre-existing contracts
and distribution arrangements. Moody's also believes PepsiCo's
ownership position aligns with support for Naked Juice's long-term
operational and financial health despite the lack of any guarantees
from PepsiCo on Naked Juice's debt.
ESG CONSIDERATIONS
Naked Juice's ESG Credit Impact Score is highly negative (CIS-4).
This reflects Moody's view that governance factors are the key
drivers, with an aggressive financial policy and majority ownership
by a financial sponsor. Environmental risks have a moderately
negative impact on the company's rating (E-3) reflecting exposure
to physical climate risks related to reliance on land for crop
production that impacts the price and volume of input costs.
Physical climate risks have increased with recent global
disruptions to orange production including hurricanes and
"greening" of orange crop. Moody's S-3 (moderately negative) score
for social risk is in line with its soft beverage peers, and
reflects moderately negative exposure to customer relations,
demographics and societal trends, and responsible production risks.
This recognizes the substantial efforts necessary to maintain brand
and product awareness, especially given its recent spin-off from
PepsiCo, and invest to adjust product offerings to shifts in
consumer preferences that is contributing to long-term volume
declines in certain products such as high-sugar smoothies and fruit
juices. The company must also manage a complex supply chain
spanning multiple countries to ensure sufficient and consistent
sourcing of raw materials necessary to make its products.
The G-4 (highly negative) score for governance risk recognizes
Naked Juice's majority sponsor owner that Moody's believe leads to
aggressive financial policies including the use of high leverage.
This risk is only partially mitigated by the advantages that
PepsiCo's roughly 39% ownership presents from an operational
perspective and as a partial governor on the level of leverage
utilized in the company.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's expectation that revenue and
EBITDA will recover modestly over the next 12-18 months such that
debt-to-EBITDA leverage will steadily, though potentially slowly,
decline to 7.0x to 7.25x over this time period. Moody's also
assumes in the stable outlook that the company will be able to
regain market share, that liquidity will remain adequate, and that
free cash flow will improve meaningfully in 2024 because operating
expenses and capital investment necessary to transition to a
stand-alone company will moderately substantially.
Ratings could be downgraded if the company's market position
continues to deteriorate, competitive issues or cost pressures
further weaken margins, free cash flow remains negative, or
liquidity deteriorates. Leveraging acquisitions or shareholder
distributions could also lead to a downgrade.
Ratings could be upgraded if the company regains lost market share
without materially increasing costs, and generates consistent
organic revenue growth with a stable to higher EBITDA margin. The
company would also need to maintain good liquidity, a financial
strategy that results in debt/EBITDA consistently below 7x, and
EBITDA minus capex to interest coverage approaching 2x.
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was Soft Beverages
published in September.
COMPANY PROFILE
Naked Juice LLC, headquartered in Chicago, Illinois, sells fresh
juices, teas, sparkling water and ice coffees. The company owns
the Tropicana, Naked Juice, KeVita and other select juice brands.
The company also sells products under licensed brands including
Dole, Tzao and Starbucks. The company was spun off from PepsiCo in
January 2022, with PAI Partners owning 61% and PepsiCo retaining a
39% stake. Revenue for the 12 months ended September 2022 is
approximately $3 billion.
NASSAU PHARMACY: Seeks to Hire Killeen Arace & Quinn as Accountant
------------------------------------------------------------------
Nassau Pharmacy, Inc. seeks approval from the U.S. Bankruptcy Court
for the Northern District of New York to employ Killeen Arace &
Quinn, PC.
The Debtor requires an accountant and bookkeeper to prepare its
ongoing monthly operating reports, periodic tax documents and other
financial documents; and provide bookkeeping services.
The firm will bill $280 per hour for tax preparation and $50 per
hour for bookkeeping services.
As disclosed in court filings, Killeen Arace & Quinn is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Sheri Quinn, CPA
Killeen Arace & Quinn, PC
4 Second Street
Pittsfield, MA 01201
Phone 413-443-7366 Extension 115
Email: sheri@kaqcpa.com
About Nassau Pharmacy
Nassau Pharmacy Inc., a pharmacy in Rensselaer County, N.Y., filed
a Chapter 11 petition (Bankr. N.D.N.Y. Case No. 22-11188) on Dec.
22, 2022, with $1 million in both assets and liabilities.
Judge Robert E. Littlefield, Jr. oversees the case.
The Debtor tapped Michael L. Boyle, Esq., at Boyle Legal, LLC as
bankruptcy counsel; Gleason, Dunn, Walsh & O'Shea as business
counsel; and Killeen Arace & Quinn, PC as accountant and
bookkeeper.
NEW YORK INN: Court OKs Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas,
Dallas Division, authorized New York Inn Inc. to use cash
collateral on an interim basis in accordance with the budget, with
a 15% variance.
The Debtor requires the use of cash collateral to continue the
operation of its business.
Spectra Bank and the U.S. Small Business Administration assert an
interest in the Debtor's cash collateral.
To the extent of any diminution in value in the Pre-Petition
Collateral of the Secured Lenders, the Secured Lenders are granted
valid, binding, enforceable, and perfected liens co-extensive with
the Secured Lenders' pre-petition liens in all currently owned or
hereafter acquired property and assets of the Debtor.
The replacement liens granted to the Secured Lenders are
automatically perfected without the need for filing of a UCC-1
financing statement with the Secretary of State's Office or any
other such act of perfection.
The Debtor is directed to pay to Spectra Bank the amount of $4,000
on or before the 5th of each month, or the amount agreed upon
between the Debtor and Spectra Bank, as adequate protection for use
of cash collateral commencing in the month of February 2023.
A final hearing on the matter is set for February 8 at 9:30 a.m.
A copy of the order and the Debtor's January-February 2023 budget
is available at https://bit.ly/3l0ACxl from PacerMonitor.com.
The Debtor projects $23,500 in total income and $10,687 in total
expenses for the period.
About New York Inn
A group of creditors including AP Interior, Prateek Desai and
Wajattat Ali Khan filed an involuntary Chapter 11 petition against
Arlington, Texas-based New York Inn Inc. (Bankr. N.D. Tex. Case No.
21-30958) on May 21, 2021. The creditors are represented by Bill
Rielly, Esq.
The Debtor owns and operates a hotel located in Arlington, Texas.
After an involuntary bankruptcy petition was filed, the Debtor
consented to an Order for Relief in order to restructure its debts
after suffering reduced revenues from the downturn in the economy
precipitated by the COVID-19 pandemic and also by damage to the
hotel due to the freeze that occurred in February 2021.
Additionally, the Hotel was damaged following the Texas winter
storm in February 2021 and has been closed since that time. The
Debtor is waiting for its property insurance company to release
funds to pay for the necessary repairs so that it can reopen. The
Debtor is commencing legal action to collect on its insurance and
has retained an independent adjuster, a contractor and litigation
counsel all of which it is seeking to employ to move this case
along.
The Debtor has $1.02 million in total assets and $2.35 million in
total liabilities.
Judge Michelle V. Larson oversees the case.
New York Inn tapped Joyce W. Lindauer Attorney, PLLC as bankruptcy
counsel. Katharine Battaia Clark serves as the Subchapter V
Trustee.
Under its Second Amended Plan of Reorganization Under Subchapter V
of Chapter 11, the Debtor will pay Secured Claims and will pay a
10% return to Allowed Unsecured Claims over 36 months.
NORDSTROM INC: S&P Alters Outlook to Negative, Affirms 'BB+' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Seattle-based department
store Nordstrom Inc. to negative from stable and affirmed all its
ratings, including its 'BB+' issuer credit rating.
The negative outlook reflects the risk that S&P could lower its
rating if credit metrics weaken beyond its expectation either due
to performance deterioration or a less-conservative financial
policy than its anticipate.
The negative outlook reflects the weaker-than-expected credit
metrics in 2022 amid a challenging operating environment and the
ongoing underperformance of the company's off-price segment.
Nordstrom reported a holiday net sales decline of 3.5% relative to
the comparable period in 2021 and lowered its operating margin
guidance for the fiscal year 2022 by almost 30%, citing
deteriorating macroeconomic conditions and markdowns to clear
excess inventory. While S&P recognizes the supply chain and post
pandemic demand right sizing challenges across department stores
and other retailers last year, this performance was still
materially below our expectations.
Sales at the company's Nordstrom Rack off-price business have yet
to reach pre-COVID levels as the company announced that net sales
decreased almost 8% during the last holiday season. The Rack has
traditionally focused on serving fashion-forward, brand-oriented
customers, and its performance trends have underperformed those of
its off-price peers for years, partly due to the brand's narrower
customer segment, resulting in lower overall sales and margins.
Nordstrom is now working to optimize its Rack assortment. While it
has previously positioned its Rack stores in the highly competitive
discount space, the company is shifting away from the lower price
point items that have not resonated with Rack customers and
increasing the penetration of premium brands at Nordstrom Rack. In
S&P's view, potential volatility in earnings could stem from the
challenging operating environment and execution risks associated
with the Rack repositioning initiatives.
In addition, the company has experienced several management changes
over the past 12 months with some key roles yet to be filled,
including the Chief Financial Officer and Chief Merchandising
Officer. Amid this and continued weak operational execution, we
have an incrementally worse view of the company's strategic
planning process and its management depth and breadth. As a result,
S&P is revising its management and governance score one category to
fair from satisfactory.
S&P said, "We anticipate leverage to be above 3x for fiscal year
2022 before declining over the next 12 months as improved margins
and higher cash balances should partly offset the soft topline. The
recent soft sales trend along with the more difficult comparisons
from the first half of 2022, which benefited from robust levels of
consumer spending, leads to our forecast for revenue declines in
2023. Thanks to its efforts to right-size its inventory positions,
which are entering 2023 roughly at 2019 levels, we believe the
company's profitability will start to recover later in 2023 due to
less anticipated clearance activity and tighter expense
management.
"This leads to our forecast for FOCF in the $325 million-$375
million range over the next 12 months, from the $460 million we
were expecting late last year. That said, we do expect more than
$500 million of cash on its balance sheet over the next 12 months.
While we don't project leverage to approach the company's 2.5x
target in the next two years, we expect Nordstrom to navigate the
continued macroeconomic uncertainty with expense discipline while
reducing its share repurchase activity.
"We believe department stores are facing mounting competitive
pressures. Apparel purchases are highly discretionary, and we
expect performance will remain vulnerable to economic conditions
such as the recent macroeconomic slowdown. In addition, our
longer-term view is that changing consumer apparel buying habits
will be difficult to navigate, which increases the potential for
operational missteps. Declining physical store traffic, shifting
category preferences, and online price transparency are persistent
longer-term risks for Nordstrom's business. While we continue to
view the company as having leading omni-channel capabilities in its
industry, We think a continued shift to online shopping and
competition from off-price players could continue to pressure
traffic at brick-and-mortar locations and margins.
"The negative outlook reflects the risk that we could lower our
ratings on Nordstrom over the next 12 months if performance
deteriorates beyond our expectation or if the company pursues a
more aggressive financial policy than we anticipate."
S&P could lower its rating on Nordstrom if:
-- A worsening macroeconomic environment or operational misstep
results in persistently weak sales across both the full-line and
off-price segments and adjusted EBITDA margins remain below 10%.
This would indicate Nordstrom's relative competitive position is
deteriorating in S&P's view; or
-- Financial policy becomes more aggressive, with leverage above
3x on a sustained basis.
S&P could revise the outlook to stable if:
-- Operating performance is maintained at least in line with S&P's
forecast, while its prospects improve for growing profitability;
and
-- The company maintains sufficient cash on its balance sheet to
preserve financial flexibility while business conditions remain
uncertain, leading to leverage sustained below 3x.
Environmental, social, and governance (ESG) credit factors for this
change in credit rating/outlook and/or CreditWatch status:
-- Other governance factors
NOVA WILDCAT: Seeks $48MM DIP Loan from PNC Bank
------------------------------------------------
Nova Wildcat Shur-line Holdings, Inc. and its debtor-affiliates ask
the U.S. Bankruptcy Court for the District of Delaware for
authority to use cash collateral and obtain post-petition
financing.
The Debtors seek to obtain up to $48.5 million in post-petition
financing and other financial accommodations in connection with the
debtor-in-possession financing but only up to $10 million during
the Interim Period pursuant to and in accordance with the terms and
conditions of the Debtor-In-Possession Credit Agreement dated as of
January 30, 2023, by and among the Debtors, as borrowers and
guarantors, PNC Bank, National Association, in its capacity as
administrative agent and collateral agent, and the financial
institutions from time to time party thereto, as lenders.
The DIP Facility matures on March 31, 2023.
The Debtors are required the comply with these milestones:
(i) The Debtors will fail to file a motion under section 363
of the Bankruptcy Code seeking authority to conduct a sale of
substantially all of the assets of the Debtors and requesting to
establish bidding procedures for such a Comprehensive Sale on or
before February 1, 2023;
(ii) The Debtors fail to obtain an order of the Bankruptcy
Court authorizing the Debtors to conduce such a Comprehensive Sale
and establishing bidding procedures for such a sale on or before
March 1, 2023;
(iii) The Debtors fail to conduct an auction in accordance with
the Bidding Procedures Order on or before March 20, 2023;
(iv) The Debtors fail to obtain an order of the Bankruptcy
Court to the successful bidder(s) at the Comprehensive Sale Auction
on or before March 24, 2023; or
(v) A Comprehensive Sale is not consummated in accordance with
the Comprehensive Sale Order on or before March 31, 2023.
Nova Wildcat Shur-Line, LLC, World And Main (Cranbury), LLC, and
World And Main (Air), LLC are borrowers under the Pre-Petition
Credit Agreement by and among (a) Nova Wildcat Shur-Line, LLC,
World And Main (Cranbury), LLC, and World And Main (Air), LLC as
Pre-Petition Borrowers, (b) Nova Wildcat Shur-Line Holdings, Inc.,
HBC Holdings LLC, and HBC Chemical LLC, as Pre-Petition Guarantors,
(c) the lenders party thereto from time to time, as Pre-Petition
Lenders, and (d) PNC, as Pre-Petition Agent. Pursuant to the
Pre-Petition Loan Documents, the Pre-Petition Lenders provided Term
Loans, Revolving Loans, outstanding letters of credit and other
financial accommodations to, and for the account of, the
Pre-Petition Borrowers.
As of the Petition Date, the aggregate principal amount of
outstanding Pre-Petition Obligations under the Pre-Petition Secured
Facility was approximately $49.691 million.
The Debtors require the use of cash collateral and DIP Facility to
continue their operations.
The proposed adequate protection provided to the Pre-Petition
Secured Parties comprises the following: (i) Adequate Protection
Liens upon all of the DIP Collateral, subordinate in priority only
to the DIP Liens and any liens to which the DIP Liens are Junior
and to payment in full in cash of the Carve-Out, (ii) allowed
superpriority administrative expense claims as provided for in
Section 507(b) of the Bankruptcy Code with recourse to the DIP
Collateral and subordinate to the payment in full in cash of the
Carve-Out and the DIP Superpriority Claims; (iii) subject to the
Carve-Out, payment of (x) all accrued and unpaid interest and fees
at default rate under the Pre-Petition Credit Agreement and (y) all
reasonable and documented fees, out-of pocket expenses and
disbursements of the Pre-Petition Secured Parties, upon entry of
the Interim Order; (iv) ongoing payment postpetition of the fees,
expenses, and disbursements payable to the Pre-Petition Secured
Parties; and (v) delivery of all required written financial
reporting and other periodic reporting that is required to be
provided to the DIP Agent or the DIP Lenders under the DIP Credit
Agreement.
A copy of the motion is available at https://bit.ly/3RjsUug from
PacerMonitor.com.
About Nova Wildcat Shur-line Holdings, Inc.
Nova Wildcat Shur-line Holdings, Inc. and affilaites sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Del. Case No. 23-10114) on January 29, 2023. In the petition signed
by Mark Rostagno, chief executive officer and director, the Debtor
disclosed up to $50 million in assets and up to $100 million in
liabilities.
Jason D. Angelo, Esq., at Reed Smith, LLP, represents the Debtor as
legal counsel.
NXT ENERGY: Closes $1.9 Million Private Placement Financing
-----------------------------------------------------------
NXT Energy Solutions Inc. announced the closing of its private
placement announced on Dec. 22, 2022 for total net proceeds of
approximately $1,882,195 in connection with the issuance of
9,658,282 common shares for $0.195 per common share. Insiders
purchased a total of 9,178,282 common shares for $1,789,765 (95.0%)
of the Private Placement. All five directors and the Chief
Financial Officer have either participated in the Private
Placement, the 2022 Rights Offering, or have elected to take some
or all of their recent director's fees in the form of options.
Common shares issued as a result of the Private Placement will be
subject to a hold period of four months plus a day from the date of
issuance. In connection with the Offering, $1,170 in cash finder's
fees were paid to qualified parties.
The proceeds from the Private Placement will be used to support
general and administrative costs, which include business
development and marketing activities to transform the existing
pipeline of opportunities into firm contracts.
The securities have not been, and will not be, registered under the
United States Securities Act of 1933, as amended, or any state
securities laws, and accordingly, may not be offered or sold within
the United States except in compliance with the registration
requirements of the 1933 Act and applicable state securities
requirements or pursuant to exemptions therefrom.
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.
OLAPLEX INC: S&P Alters Outlook to Negative, Affirms 'B+' ICR
-------------------------------------------------------------
S&P Global Ratings revised its outlook to negative from stable on
U.S.-based premium hair-care provider Olaplex Inc.
At the same time, we affirmed all our ratings on the company,
including our 'B+' issuer credit rating and 'BB-' issue-level
rating on the senior secured term loan B, based on our base-case
assumption that these allegations will recede. The recovery rating
on the term loan B facility remains unchanged at '2', indicating
our expectation for substantial recovery (70%-90%; rounded
estimate: 70%) in the event of a default.
The negative outlook reflects the potential for a lower rating over
the next 12 months if the company's sales and profitability weaken
materially as a result of the attention, which could cause us to
lower S&P's view of Olaplex's competitive position, or if adjusted
leverage is sustained above 5x.
Olaplex products have recently received notable negative media
attention, including allegations that its products can cause hair
loss and damage, which the company disputes.
S&P said, "The outlook revision reflects increased uncertainty and
the potential for substantial sales and profitability loss due to
negative media attention. While Olaplex has outperformed our
forecasts for 2022 despite its recent revised guidance, we note
that numerous recent social and print media reviews allege its
products can cause hair loss or damage. Given that Olaplex grew
substantially over the past few years due partially to positive
word-of-mouth and social media endorsements, these negative
reviews, especially from social media influencers and stylists,
could hurt its future sales and branding. Further, the company
narrowly focuses on the niche premium hair care space and
differentiates its limited product range with one patented
ingredient, bisamino. Therefore, we believe continued or increased
allegations could damage the Olaplex brand and significantly drop
demand. Management denies that the company's products are harmful
and reiterates that all of its products have been tested
independently in-house and by third parties in laboratories.
"Additionally, the company cited that increased promotional
activity from competitors in its core bond-building space has
weighed on its growth expectations. While our base-case scenario
assumes the company's key patented ingredient will somewhat protect
its revenue base, new competitors could emerge with comparable
innovation and marketing strategies.
"Nevertheless, our rating affirmation expects growth to resume,
albeit at a lower rate, due to new geographic expansions, product
launches, and increased marketing and education investments. We
expect these allegations to be limited and recede. We also assume
the company's premium, high-quality products will still command
substantial pricing power which--coupled with Olaplex's low-cost,
asset-light, outsourced business model--translate into very high
adjusted EBITDA margin and free operating cash flow (FOCF)
exceeding $200 million in 2022. We expect slower revenue growth
compared with its high historical levels due to inventory overhang
at retailers and distributors that will lead to near-term
de-stocking, weaker macroeconomic conditions, and new competition.
However, its entry into new geographies and new products will
partially offset this. We forecast EBITDA margins will remain high
but will decline 500-700 basis points (bps) because of increased
innovation, sales, and marketing investments, and personnel costs
to support Olaplex's local and international expansion plans."
The negative outlook reflects the potential for a lower rating over
the next 12 months if the recent negative media attention weakens
the company's sales and profitability, which could cause us to
lower S&P's view of Olaplex's competitive position, or if adjusted
leverage is sustained above 5x.
S&P could lower the rating over the next 12 months if it
unfavorably reassess our view of Olaplex's business risk or if
adjusted leverage deteriorates and is sustained above 5x, possibly
due to:
-- An outsized negative effect on sales due to unfavorable media
attention;
-- Operating performance materially underperforms S&P's
expectation because of product misses, intense competition from
existing companies or new entrants into the industry, weak
adoption, or unsuccessful expansion into new geographies; or
-- The company adopts more aggressive financial policies,
including debt-financed distributions or large acquisitions.
S&P could revise its outlook to stable if Olaplex:
-- Can successfully navigate the recent negative media attention,
which dissipates over time, and grows revenues organically; and
-- Sustains adjusted leverage below 5x and generates satisfactory
cash flow.
ESG credit indicators: E-2, S-2, G-2
PALACE CAFE: Property Sale Proceeds to Fund Plan Payments
---------------------------------------------------------
Palace Cafe, Inc. filed with the U.S. Bankruptcy Court for the
Western District of Louisiana a Small Business Combined Plan of
Reorganization and Disclosure Statement dated January 26, 2023.
On June 8, 1961, Palace Cafe, Inc. was incorporated under the laws
of Louisiana. For many years the Debtor owned and operated a
popular restaurant in Opelousas, Louisiana under the Doucas family.
The Debtor currently owns 2 commercial properties:
* The Palace Cafe restaurant building is a full commercial
kitchen and restaurant facility located at 135 West Landry Street,
Opelousas, Louisiana. The Palace Cafe is a historical landmark in
downtown Opelousas across from the St. Landry Parish Courthouse. An
appraisal was conducted by Don Leger on March 28, 2022, that placed
a fair market value of the restaurant building at $220,000.00.
* The commercial office building located at 133 West Landry
Street, Opelousas, Louisiana, consists of 630 square feet located
next to the Palace Cafe. Over the years lawyers, city officials and
various merchants have all occupied this building. This building is
currently unoccupied. An appraisal was conducted by Don Leger on
March 28, 2022, that placed a fair market value of the office
building at $53,300.00.
At this time, the Debtor derives no income from the operations or
rents of the restaurant or other commercial property. It is the
intentions of the Debtor to sell and liquidate the restaurant
building located at 135 West Landry Street free and clear of all
liens and encumbrances using the proceeds of any such sale to pay
its creditors. If there are any unpaid claims remaining after the
sale of 135 West Landry Street, then the Debtor will sell and
liquidate the commercial property located at 133 West Landry
Street. It is the intention of the Debtor to pay all allowed
unsecured creditors 100% of such allowed claims.
Class 5 consists of General Unsecured Claims. Creditors in this
Class include Internal Revenue Service ($229.23); and LA Department
of Revenue ($657.73). Holders of Allowed Class 5 General Unsecured
Claims shall receive one or more cash distributions on a pro rata
basis following payments of Allowed Administrative Claims and
Allowed Priority Claims.
The treatment in the Plan is in full and complete satisfaction of
the legal, contractual and equitable rights that each entity
holding an Allowed Claim may have in or against the Debtor or their
interests in property. Unless provided otherwise in this Plan, this
treatment supersedes and replaces any agreements or rights those
entities have in or against the Debtor or their interests in
property. All distributions under this Plan will be tendered to the
entity holding the Allowed Claim in accordance with the terms of
this Plan.
Prior to the date on which the bankruptcy petition was filed,
Michael J. Munro was the 100% owner, managing member and person in
control of the operations of the Debtor. During the pendency of
this case, Michael J. Munro will continue to serve as management of
the Debtor. After the effective date of the order confirming the
plan, Michael J. Munro will maintain the 100% ownership of the
Debtor and continue as the managing member of the Debtor.
The Debtor believes that the sale of the restaurant building
located to 135 West Landry Street, Opelousas, Louisiana will
generate sufficient funds to pay all Allowed Claims 100%. If there
are Allowed Claims remaining unpaid after the sale of 135 West
Landry Street and the disbursement of sales proceeds, then, in that
event, the Debtor will market and sell the commercial building
located at 133 West Landry Street. If there are allowed claims
remaining unpaid after the sale of 133 West Landry Street, then
there will be no further distribution to any creditors under this
Plan.
From the proceeds of any sale, the Debtor will first pay all costs
associated with the sale and transfer of the property and then to
the secured creditors in the order and priority as provided by
applicable law and as those interests appear of record. The
remaining funds shall then be paid to administrative claims and
priority claims in the manner and order provided by applicable law.
Finally, from any remaining sales proceeds the following allowed
unsecured claims shall receive pro rata payments until paid in
full.
A full-text copy of the Combined Plan and Disclosure Statement
dated January 26, 2023 is available at https://bit.ly/3DwdtJx from
PacerMonitor.com at no charge.
Debtor's Counsel:
D. Patrick Keating, Esq.
THE KEATING FIRM, APLC
P.O. BOX 3426
Lafayette, LA 70502
Phone: (337)594-8200
Email: rickkeating@charter.net
About Palace Cafe
Palace Cafe, Inc., sought protection for relief under Chapter 11 of
the Bankruptcy Code (Bankr. W.D. La. Case No. 22-50478) on July 25,
2022, listing $100,001 to $500,000 in both assets and liabilities.
Judge John W. Kolwe oversees the case.
D. Patrick Keating, Esq. at the Keating Firm, APLC represents the
Debtor as counsel.
PIPELINE HEALTH: Taps Deloitte Tax as Tax Service Provider
----------------------------------------------------------
Pipeline Health System, LLC and its affiliates seek approval from
the U.S. Bankruptcy Court for the Southern District of Texas to
employ Deloitte Tax, LLP as tax service provider.
The firm's services include:
a. advising the Debtors as they consult with their legal and
financial advisors on the cash tax effects of restructuring,
bankruptcy and the post-restructuring tax profile, including
transaction costs and plan of reorganization tax costs, and the
cash tax effects of the Chapter 11 filing and emergence
transaction, including obtaining an understanding of the Debtors'
financial advisors' valuation model to consider the tax assumptions
contained therein;
b. advising the Debtors regarding the restructuring and
bankruptcy emergence process from a tax perspective, including
analyzing various structuring alternatives and modification of
debt;
c. advising the Debtors on the cancellation of debt income for
tax purposes under Internal Revenue Code Section 108, including
cancellation of debt income generated from a restructuring,
bankruptcy emergence transaction, or modification of the debt;
d. advising the Debtors on post-restructuring tax attributes
and tax profile;
e. advising the Debtors as to the treatment of post-petition
interest for federal and state income tax purposes, including the
applicability of the interest limitations under IRC Section
163(j);
f. advising the Debtors as to the state and federal income tax
treatment of pre-bankruptcy and post-petition reorganization costs
including restructuring-related professional fees and other costs,
the categorization and analysis of such costs, and the technical
positions related thereto;
g. advising the Debtors with their evaluation and modeling of
the tax effects of liquidating, disposing of assets, merging or
converting entities as part of the restructuring, including the
effects on federal and state tax attributes, state incentives,
apportionment and other tax planning;
h. advising the Debtors on state income tax treatment and
planning for restructuring or bankruptcy provisions in various
jurisdictions including cancellation of indebtedness calculations,
adjustments to tax attributes and limitations on tax attribute
utilization;
i. advising the Debtors on responding to tax notices and
audits from various taxing authorities;
j. assisting the Debtors with identifying potential tax
refunds and advising the Debtors on procedures for tax refunds from
tax authorities;
k. advising the Debtors on income tax return reporting of
restructuring and bankruptcy issues and related matters;
l. as requested by the Debtors and as may be agreed to by
Deloitte Tax, assisting the Debtors with documenting as
appropriate, the tax analysis, development of the Debtors'
opinions, recommendation, observations, and correspondence for any
proposed restructuring alternative tax issue or other tax matter,
which does not include preparation of information for tax provision
or financial reporting purposes;
m. advising the Debtors with non-U.S. tax implications and
structuring alternatives;
n. advising the Debtors with their efforts to calculate tax
basis in the stock of each of the Debtors' subsidiaries or other
equity interests;
o. advising the Debtors with their efforts to calculate tax
basis in assets by entity; and
p. as requested by the Debtors and as may be agreed to by
Deloitte Tax, advising the Debtors regarding other state, federal,
or international income tax questions that may arise in the course
of the engagement.
The firm will be paid at these rates:
Partner/Principal/Managing Director $1,090 per hour
Senior Manager $955 per hour
Manager $815 per hour
Senior $700 per hour
Staff $590 per hour
Elias Tzavelis, a partner at Deloitte Tax, 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:
Elias Tzavelis
Deloitte Tax, LLP
30 Rockefeller Plaza
New York, NY 10112
Tel: (212) 492-4000
Fax: (212) 489-1687
Email: etzavelis@deloitte.com
About Pipeline Health System
Pipeline Health Systems, LLC is an independent, community-focused
healthcare network that offers a wide range of medical services to
the communities it serves, including maternity care, cancer
treatment, behavioral health, rehabilitation, general surgery, and
hospice care. Headquartered in El Segundo, California, Pipeline's
operations include seven safety net hospitals across California,
Texas, and Illinois, with approximately 310 physicians and over
1,150 beds to serve patients, and a company-wide workforce of over
4,200.
Pipeline Health Systems and its affiliates sought Chapter 11
protection (S.D. Texas Lead Case No. 22-90291) on Oct. 2, 2022. In
the petition signed by Andrei Soran, authorized signatory, Pipeline
Health Systems disclosed $500 million to $1 billion in assets and
liabilities.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy
counsel; Jackson Walker, LLP as local bankruptcy counsel; Ankura
Consulting Group, LLC as restructuring advisor; Jefferies, LLC, as
financial advisor and investment banker; and Deloitte Tax, LLP as
tax service provider. Epiq Corporate Restructuring, LLC, is the
claims agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' bankruptcy cases. The committee
tapped Akin Gump Strauss Hauer & Feld, LLP as legal counsel and FTI
Consulting, Inc. as financial advisor.
Susan Nielsen Goodman, the patient care ombudsman appointed in the
Debtors' cases, is represented by Crowe & Dunlevy, P.C.
PODS LLC: Moody's Rates New $100MM First Lien Term Loan 'B2'
------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to PODS LLC's $100
million non-fungible first lien term loan due 2028. The company's
existing ratings, including its B2 corporate family rating, are
unaffected at this time. The outlook remains stable.
Proceeds from the $100 million incremental term loan are to be used
for general corporate purposes. PODS existing debt includes a $1.3
billion first lien term loan due 2028 and an undrawn $100 million
revolving credit facility expiring 2026.
Moody's expects PODS operating performance to be negatively
affected by challenging macroeconomic conditions in 2023.
Particularly, the sharp slowdown in US housing activity will
curtail the demand for PODS portable storage containers. Moody's
expects PODS revenue to decline at least 10% in 2023 and for
earnings to contract as well.
Following strong demand over the past few years, Moody's believes
PODS has strengthened its credit profile to withstand near-term
headwinds. Moody's expects debt/EBITDA to increase to between 5.0x
- 5.5x in 2023 from a pro forma 4.5x at September 30, 2022. This
level of financial leverage is high, but remains within range for
the current rating.
Assignments:
Issuer: PODS LLC
Senior Secured First Lien Term Loan, Assigned B2 (LGD3)
RATINGS RATIONALE
PODS' ratings reflect its moderate scale and high leverage
reflective of an aggressive financial policy to pursue debt-funded
distributions and acquisitions of franchises. The ratings also
reflect PODS' strong brand recognition and leading niche market
position, a track record of steadily rising earnings and solid
returns and free cash flow.
Moody's believes that fewer home sales and less home remodeling
activity in 2023 will negatively impact container utilization and
reduce earnings from record levels in the prior years. PODS's
business model maintains a high degree of variable costs that could
be flexed as demand wanes. Moody's expects PODS to maintain a
strong EBITDA margin in 2023, although it will likely decrease from
prior years as the company engages in more marketing spend to spur
demand.
Liquidity is expected to remain adequate. The $100 million
incremental term loan bolsters the company's cash position and
supports any near-term volatility in the business. Moody's expects
free cash flow to be about breakeven in 2023 due to lower earnings
and higher interest expense. Moody's notes, however, that PODS can
flex its capex spend, particularly following a high level of
container purchases in 2022. The $100 million revolving credit
facility is expected to remain undrawn with about $75 million in
availability after netting letters of credit.
The stable outlook reflects Moody's expectations that PODS will
navigate through a period of lower demand over the next twelve
months by utilizing its flexible operating model and maintaining
adequate liquidity.
FACTORS THAT COULD LEAD TO A DOWNGRADE OR UPGRADE OF THE RATING
The ratings could be downgraded if EBITDA significantly erodes and
liquidity weakens resulting in reliance on its revolving credit
facility. Debt/EBITDA above 6x either through lower earnings or a
debt-financed dividend or franchise acquisition could result in a
downgrade.
The ratings could be upgraded if debt/EBITDA is expected to be
maintained near 4x and free cash flow-to-debt is consistently above
5%. A stronger liquidity profile along with expectations for a more
conservative financial policy would also be prerequisites for a
higher rating.
The principal methodology used in this rating was Surface
Transportation and Logistics published in December 2021.
PODS LLC (Portable On Demand Storage) is a leader in
consumer-focused containerized moving and storage. The company
offers a full range of services including moving within or between
cities, storage at a customer's site and storage at one of PODS'
warehouses. Revenue for the twelve months ended September 30, 2022
was approximately $1.3 billion.
PODS LLC: S&P Assigns 'B' Rating on $100MM First-Lien Term Loan
---------------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '4'
recovery rating to PODS LLC's (B/Stable/--) $100 million
non-fungible incremental first-lien term loan due 2028. The '4'
recovery rating indicates its expectation for average (30%-50%;
rounded estimate: 35%) recovery in the event of a payment default.
The company intends to use proceeds from the incremental term loan
for general corporate purposes.
S&P's 'B' issuer credit rating on PODS is unchanged and continues
to reflect that, despite some expected weakness in its operating
performance, credit metrics will remain in line for the rating.
S&P's issue-level rating on PODS' original $1.37 billion ($1.34
billion outstanding) first-lien term loan due 2028 remains 'B'. Its
'4' recovery rating (30%-50%; rounded estimate: 35%) is unchanged.
Key analytical factors
-- S&P's 'B' issue-level rating and '4' recovery rating (30%-50%;
rounded estimate: 35%) on the first-lien term loan, revolving
credit facility, and non-fungible incremental term loan reflect our
expectation for average recovery in the event of a payment
default.
-- S&P assume a payment default in 2026 due to a recession that
reduces rental demand, rental rates, and utilization. These
contribute to a significant decline in EBITDA, which eventually
leads PODS to default on its obligations.
-- PODS' market position, strong brand, and customer relationships
make it a viable business. Therefore, S&P expects the company to
reorganize rather than liquidate. It values the company as a going
concern based on an EBITDA multiple approach.
Simulated default assumptions
-- Simulated year of default: 2026
-- EBITDA at emergence: $115 million
-- EBITDA multiple: 5x
Simplified waterfall
-- Net enterprise value (after 5% administrative costs): $542
million
-- Valuation split (obligors/nonobligors): 100%/0%
-- Value available to first-lien debt: $542 million
-- Secured first-lien debt claims (including the incremental term
loan): $1.5 billion
-- Recovery expectations: 30%-50% (rounded estimate: 35%)
All debt amounts include six months of prepetition interest.
ESG credit indicators: E-2, S-2, G-3
PROFESSIONAL BUSINESS: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Professional Business Properties, Inc.
1539 W Olympic Blvd
Montebello, CA 90640
Chapter 11 Petition Date: January 31, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-10557
Judge: Hon. Neil W. Bason
Debtor's Counsel: Onyinye N. Anyama, Esq.
ANYAMA LAW FIRM, APC
18000 Studebaker Road
Suite 325
Cerritos, CA 90703
Tel: (562) 645-4500
Email: info@anyamalaw.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Tony Mavusi as president.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/DJQYKYI/Professional_Business_Properties__cacbke-23-10557__0001.0.pdf?mcid=tGE4TAMA
PROPERTY HOLDERS: Gets OK to Hire Keller Williams as Realtor
------------------------------------------------------------
Property Holders, LTD received approval from the U.S. Bankruptcy
Court for the Northern District of Iowa to employ Keller Williams
Midwest Partners as realtor.
The Debtor requires the services of a realtor in connection with
the sale of its residential properties.
The firm will be paid a commission of 7 percent of the sale price.
Cory Rathas, a partner at Keller, 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:
Cory Rathas
Keller Williams Midwest Partners
2644 Pennsylvania Ave
Dubuque, IA, 52001
Tel: (563) 279-2944
Email: cory@coryrathrealtor.com
About Property Holders
Property Holders, LTD is a company in Cedar Rapids, Iowa, which is
engaged in activities related to real estate.
Property Holders filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. N.D. Iowa Case No. 22-00744) on Nov.
21, 2022. As of Sept. 30, 2022, Property Holders had $2,771,431 in
assets and $2,861,618 in liabilities, according to a petition
signed by Property Holders President Charles A. Davisson.
Judge Thad J. Collins oversees the case.
The Debtor tapped Rush M. Shortley, Esq., as bankruptcy counsel and
Tom Riley Law Firm, PLC as general civil counsel.
QUORUM HEALTH: Moody's Cuts CFR to 'Ca', Outlook Negative
---------------------------------------------------------
Moody's Investors Service downgraded Quorum Health Corporation's
Corporate Family Rating to Ca from Caa1 and its Probability of
Default Rating to Ca-PD from Caa1-PD. Moody's also downgraded the
rating of the company's senior secured term loan to Ca from Caa1.
The outlook is negative.
The downgrade of Quorum Health's ratings reflects Moody's view that
the probability of default is very high and that the recovery rate
for the company's debt will be low. Moody's expects continued
pressure on the company's profitability in the next few quarters.
The company will have to meet the timebound asset sale and debt
prepayment required by the third amendment to its lender credit
agreement. As Quorum Health continues to sell its assets, there is
uncertainty on the realized value of the remaining hospitals to
allow the company to meet its financial obligations. The company's
debt/EBITDA (Moody's adjusted basis) spiked to more than 25 times
at the end of September 2022 from high-6.0 times a year ago. A
large part of the leverage increase was due to extremely weak
earnings in the third and fourth quarters of 2022. The company
experienced declining revenues and a surge in operating expenses in
2022, as it struggled with staff turnover and increased contract
labor costs.
The negative outlook reflects considerable uncertainty associated
with the company's planned asset sale, the timing and realized
value from such sale and its impact on the remaining business.
Governance and social risk considerations are material to the
rating action. Quorum Health has aggressive financial policies
reflected in very high financial leverage and the reliance on asset
sales to meet the company's financial obligations. The company's
reliance on highly specialized clinical labor also makes it
vulnerable to worsening supply-demand imbalance of such labor and
the resultant spike in labor costs. This risk has become more
pronounced after the COVID pandemic, which triggered increased
retirement and a shift from permanent positions to temporary
staffing, especially for nurse professionals.
Downgrades:
Issuer: Quorum Health Corporation
Corporate Family Rating, Downgraded to Ca from Caa1
Probability of Default Rating, Downgraded to Ca-PD from Caa1-PD
Senior Secured Term Loan, Downgraded to Ca (LGD4) from Caa1
(LGD4)
Outlook Actions:
Issuer: Quorum Health Corporation
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Quorum Health's Ca Corporate Family Rating reflects Moody's view
that the company's probability of default is very high over the
near term. Moody's expects that Quorum health will continue to burn
cash in 2023 and it will have to accelerate the sale of its assets
to meet its financial obligations. The credit profile is also
constrained by Quorum's concentration of profits in a few markets
and cash flow volatility created by exposure to state supplemental
Medicaid programs.
The Ca Corporate Family Rating is supported by the availability of
hospital assets that can be sold to generate cash.
Moody's expects Quorum Health's liquidity to remain weak over the
next 12-18 months. The company had $31 million in cash at the end
of September 30, 2022. It had $81.6 million drawn on its $130
million ABL at the end of September 30, 2022. The free cash flow
for the first 9 months of 2022 was negative 65 million. Moody's
expects the cash burn to continue in 2023 and the company will need
to rely on asset sales and/or incremental ABL revolver borrowings
to fund its working capital.
Quorum Health's $130 million ABL facility (not rated) has a first
priority perfected lien on substantially all tangible and
intangible assets, including accounts receivable, cash, deposit
accounts, and intangibles, of the borrower and each guarantor. The
$732 million senior secured term loan ($622 million outstanding in
January 2023) has a first priority lien on substantially all
current and future assets, including personal and real property,
except for the ABL priority collateral, on which it has a second
priority lien. The Ca rating on the term loan is the same as the
Corporate Family Rating, which reflects the size of the ABL not
being material enough to cause a notching in the term loan rating.
Social and governance considerations are material to the company's
rating. Quorum Health's ESG credit impact score is very highly
negative (CIS-5), reflecting aggressive financial strategy
reflected by very high financial leverage and the reliance on asset
sales to meet the company's financial obligations. Quorum Health
has very highly negative credit exposure to governance risk
considerations (G-5). Quorum has had a number of management and
strategy changes within the last few years, which have to date not
shown evidence of being successful. Further, the company has been
unable to demonstrate a consistent track record for meeting its own
financial guidance leading up to its Chapter 11 bankruptcy filing
in April 2020. Quorum Health's highly negative credit risk exposure
to social risk considerations (S-4), mainly reflects risks
associated with responsible production which considers the
company's potential liability related to patient care, as well as
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 subsidies governed by state
legislations, as well as a push towards reducing overall healthcare
costs.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the company defaults on its
financial obligations or estimated recovery further declines.
An upgrade of Quorum Health's ratings is currently unlikely but
could arise if the company improves its operating performance and
liquidity such that Moody's estimates of expected losses for the
company's creditors become higher.
Quorum Health Corporation is an operator and manager of hospitals
and outpatient services in non-urban areas of the US. As of
September 30, 2022, the company operated 21 hospitals in rural and
mid-sized markets in 13 states. Its annual revenues for the 12
months that ended September 30, 2022, were approximately $1.39
billion. The company is majority-owned by Davidson Kempner and
GoldenTree Asset Management.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
R.W. DAVIDSON: Wins Cash Collateral Access on Final Basis
---------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of Kentucky,
Frankfort Division, authorized R.W. Davidson Contracting, LLC to
use cash collateral on a final basis in accordance with the
budget.
The Court ruled that the Order authorizing use of cash collateral
will become final if there is no objection filed within 14 days of
the filing. Until such time, the Debtor will continue to use cash
collateral under the Interim Order entered on January 5, 2023. If
an objection is filed, the Court will set the matter for Hearing.
Each of Round Table Financial; Mulligan Funding; and LG Funding is
granted a replacement lien on and in all property acquired or
generated post-petition by the Debtor and its continued operations
to the same extent and priority and of the same kind and nature as
each such creditor had prior to the Petition Date, provided,
however, that the collateral will not include the Debtor's interest
in any cause of action arising under chapter 5 of the Bankruptcy
Code.
The replacement liens are deemed to be valid and perfected to the
same extent as existed on the Petition Date, without need for the
execution, filing, or recording of any further documents or
instruments otherwise required to be executed or filed under
non-bankruptcy law.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3Rln8Zh from PacerMonitor.com.
The budget provides for total expenses, on a monthly basis, as
follows:
$31,862 for January 2023;
$45,227 for February 2023;
$45,227 for March 2023;
$45,227 for April 2023;
$45,227 for May 2023; and
$45,227 for June 2023.
About R.W. Davidson Contracting, LLC
R.W. Davidson Contracting, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D. Ky. Case No. 22-30304) on
December 30, 2022. In the petition signed by Robert W. Davidson,
president, the Debtor disclosed up to $500,000 in assets and up to
$1 million in liabilities.
Judge Tracey N. Wise oversees the case.
Neil C. Bordy, Esq., at Seiller Waterman LLC, is the Debtor's legal
counsel.
RAND PARENT: Moody's Assigns First Time 'Ba1' Corp. Family Rating
-----------------------------------------------------------------
Moody's Investors Service has assigned a Ba1 corporate family
rating to Rand Parent, LLC and Ba1 ratings to its $800 million
senior secured first lien Term Loan, $800 million senior secured
notes and $300 million senior secured first lien revolving credit
facility. Rand will be the new parent of Atlas Air Worldwide
Holdings, Inc., a global provider of air cargo services, upon the
closing of its acquisition by an investor group led by funds
managed by affiliates of Apollo Global Management, Inc. together
with investment affiliates of J.F Lehman & Company and Hill City
Capital. The outlook is stable.
RATINGS RATIONALE
Moody's assigned a Ba1 corporate family rating to Rand based on the
strong competitive position of Atlas as a leading provider of
outsourced cargo transport services globally, generating operating
and net profitability margins that compare well with peer air cargo
providers and aircraft leasing companies. The rating also considers
the higher debt-to-EBITDA leverage and debt service burden of the
consolidated enterprise that results from the approximately $1
billion net increase in consolidated debt that is being issued to
finance Atlas' buyout. Moody's expects that the company's
debt-to-EBITDA will rise to 3.2x in 2023 from 2.6x annualized as of
September 30, 2022, including the transaction financing. The
company's own expectation is that its net debt-to-pro forma
adjusted EBITDA ratio will measure about 2.4x as of September 30,
2022, including the transaction financing and certain expected cost
savings and other adjustments to its EBITDA (last twelve months).
Moody's expects that Atlas' strong cash flow prospects and
operating efficiencies provide the capacity for the company to
reduce leverage gradually over time.
Credit challenges include Atlas' revenue concentrations with
customers including DHL (owned by Deutsche Post AG, A2, stable),
the US military and Amazon.com, Inc. (A1 stable). This challenge is
partially offset by the strong creditworthiness of these customers,
their long-term need for essential cargo transport services, and
Atlas' strong record of contract renewals. The company also has a
high reliance on secured debt that encumbers all of its most
valuable assets, which constrains its liquidity strength and
flexibility.
After its acquisition by the buyer consortium, Atlas will become a
privately held company and its shares will no longer be listed on
the Nasdaq stock exchange. The company continues to be led by CEO
John Dietrich and the current executive team and will maintain its
global scale of operations. Closing of the Atlas acquisition is
subject to receipt of certain regulatory approvals.
Atlas' operating performance withstood the volatility in the
broader aviation sector that commenced with the onset of the
coronavirus pandemic in early 2020. The company fared better than
lessors of passenger aircraft because air cargo volumes fell less
sharply and recovered more rapidly than passenger volumes in the
airline sector. Additionally, the growing penetration of e-commerce
in global markets has steadily driven cargo transport volumes
higher, leading to increased cargo aircraft needs for dedicated
time-definite networks. Supply-chain disruptions and capacity
constraints in maritime and land freight transport have also
increased demand for the reliable and flexible solutions provided
through dedicated air freight services. Atlas' specialization in
wide-body dedicated freighter aircraft, which account for 86 of its
total fleet of 112 aircraft at 31 December 2022, provides a strong
foundation for operating performance based on strong demand for
this type of capacity and limited supply.
However, Atlas is also exposed to growing competition for transport
of cargo volumes, including from increasing belly capacity in
passenger aircraft as the broader aviation sector recovers, and to
recently slowing global air freight volumes. Additionally, like
competitors, Atlas will contend with rising global economic
challenges and policy developments that affect international trade
volumes and contribute to the overall cyclicality of the sector.
Positively, Atlas has limited exposure to fuel price volatility
because fuel expense is borne by customers in its Aircraft, Crew,
Maintenance and Insurance (ACMI) and Crew, Maintenance and
Insurance (CMI) businesses and due to price-adjustment mechanisms
in its long-term charter business.
The Ba1 rating assigned to Rand's first lien secured term loan,
senior secured notes and revolving credit facility reflect the
priority of the facilities in Rand's capital structure, the strong
collateral coverage provided by aircraft, engines and other assets
pledged to the creditors, as well as the guarantees provided by
certain asset-owning and operating subsidiaries and Rand's parent
Rand Midco, LLC. The rating also recognizes that all of Rand's debt
capital is secured. Aircraft included in the collateral pledge
consist of thirty-one Boeing 747 aircraft, fourteen Boeing 767-300
aircraft and three Boeing 777-F aircraft with a total of average
appraised base-values of approximately $1,576 million. Engines,
flight simulators, parts inventory, and accounts receivable
comprise pledged collateral with an estimated value of $914 million
and equity interests in encumbered aircraft (which have less than
60% loan-to-value) have a company-estimated undiscounted value of
$360 million. An intercreditor agreement will govern the
relationship between the lenders and creditors of the facilities,
which ratably share the collateral pledge. The new facilities are
effectively subordinated to approximately $1,596 million of
pre-existing secured debt that will be rolled into Rand's
consolidated debt at closing. Terms of the secured term loan,
secured notes and secured revolving credit facility include certain
customary covenants and provisions typical of such transactions and
the secured revolving credit facility will include a net senior
secured leverage ratio covenant.
In the event that Rand issues its secured notes prior to the
completion of the Atlas acquisition, which is pending regulatory
approvals, the gross proceeds of the notes will be deposited into
an escrow account pledged to the Trustee and the holders of the
notes.
Rand's assigned ratings factor in the company's governance as part
of Moody's environmental, social and governance (ESG)
considerations; governance was a key driver in assigning the
ratings. Atlas' acquisition results in a reconstitution of the
board of directors and governance structure that has material
implications for the company's credit risk profile. Though Atlas'
acquisition introduces a level of uncertainty surrounding the
extent to which its strategic and financial policies shift under
its new owners, Moody's expects that the new owners will be
supportive of Atlas' deliberative growth strategy and effective
capital and liquidity management.
The stable outlook is based on Moody's expectation that Atlas'
earnings and profitability measures will remain strong, even as
rising competition and economic slowdown dampens the high yields
that the sector has experienced in recent years; that the company's
debt-to-EBITDA leverage, though higher, will average less than
3.5x; and that the company will effectively manage liquidity over
the outlook horizon.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade Rand's rating if: 1) the company maintains a
profitability ratio of net income to average managed assets that
continues to compare well with peers as economic conditions weaken;
2) debt-to-EBITDA is sustainably less than 3.0x; 3) customer
concentrations do not increase and are effectively managed; and 4)
the company maintains strong liquidity coverage of at least 120% of
its debt refinancing and capital expenditure requirements.
Moody's could downgrade Rand's ratings if: 1) the company reports a
material decline in revenues or rise in operating costs that
materially weaken margins; 2) debt-to-EBITDA leverage increases to
more than 3.5x; 3) the company loses a top customer relationship,
undermining revenue expectations and weakening aircraft
utilization; or 4) liquidity coverage deteriorates.
The principal methodology used in these ratings was Finance
Companies Methodology published in November 2019.
RAYMOND LIVESTOCK: Seeks to Hire Debt Doctors as Legal Counsel
--------------------------------------------------------------
Raymond Livestock Hauling, LLC seeks approval from the U.S.
Bankruptcy Court for the Western District of Missouri to hire Debt
Doctors of Missouri, LLC as its legal counsel.
The Debtor requires legal counsel to:
a. give advice with respect to its duties;
b. attend meetings and negotiate with creditors, the Office of
the U.S. Trustee and other concerned parties;
c. prepare reports and legal papers; and
d. perform other legal services in connection with the
Debtor's Chapter 11 case.
The firm will charge $350 per hour for the services of Ted Tinsman,
Esq., the attorney responsible for this case, and $150 per hour for
legal assistants. The firm will also seek reimbursement for
work-related expenses.
The firm received a retainer in the amount of $1.500.
Mr. Tinsman disclosed in a court filing that his firm is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Ted L. Tinsman, Esq.
Debt Doctors of Missouri, LLC
3337 E Ridgeview St.
Springfield, MO 65804
Phone: +1 417-466-3328
Email: ted@debtdoctorslaw.com
About Raymond Livestock Hauling
Raymond Livestock Hauling, LLC sought protection for relief under
Chapter 11 of the Bankruptcy Code (Bankr. W.D. Mo. Case No.
23-60024) on Jan 19, 2023, with $50,001 to $100,000 in assets and
$100,001 to $500,000 in liabilities.
Judge Cynthia A Norton presides over the case.
Ted L. Tinsman, Esq., at Debt Doctors of Missouri, LLC represents
the Debtor as counsel.
REALMARK PARKING: Seeks to Hire McHale PA as Financial Advisor
--------------------------------------------------------------
Realmark Parking Services One, LLC and Realmark Parking Services
Two, LLC seek approval from the U.S. Bankruptcy Court for the
Middle District of Florida to hire McHale, P.A. as their financial
advisor.
The Debtors require a financial advisor to:
a. review, evaluate, and update operations, financial
statements, business plans, financial projections, and other data;
b. advise and assist the Debtors with bankruptcy reporting;
c. advise and assist the Debtors in proposing and negotiating
a consensual Chapter 11 plan; and
d. perform other financial advisory services as requested by
the Debtors.
The firm will be paid at these rates:
J. McHale, CPA $550 per hour
V.Larriva, CPA $330 per hour
K. Klingler, CFE $280 per hour
R. Moloney, CPA $235 per hour
Other staff $80 to $190 per hour
As disclosed in court filings, McHale is disinterested as such term
is defined by Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Gerard A. McHale
McHale, P.A.
1601 Jackson St., Suite 200
Ft. Myers, FL 33901
Phone: (239) 337-0808
Email: jerrym@thereceiver.net
About Realmark Parking Services
Realmark Parking Services One, LLC and Realmark Parking Services
Two, LLC filed voluntary petitions for relief under Chapter 11,
Subchapter V of the Bankruptcy Code (Bankr. M.D. Fla. Lead Case No.
22-01230) on Dec. 12, 2022. Michael C Markham has been appointed as
Subchapter V trustee.
At the time of the filing, Realmark Parking Services One reported
up to $1 million in assets and up to $50,000 in liabilities while
Realmark Parking Services Two reported up to $1 million in assets
and up to $500,000 in liabilities.
Judge Caryl E. Delano presides over the cases.
Amy Denton Mayer, Esq., at Stichter Riedel Blain & Postler, P.A.
and McHale, P.A. serve as the Debtors' legal counsel and financial
advisor, respectively.
RESOURCE CONVERTING: $35K Cash Sale of Malpractice Claim Approved
-----------------------------------------------------------------
Judge Mark X. Mullin of the U.S. Bankruptcy Court for the Northern
District of Texas authorized John Dee Spicer, the Chapter 7 Trustee
of Resource Converting, LLC, to sell the estate's interest in a
claim for a legal malpractice lawsuit -- Resource Converting LLC v.
Bryan S. Witherwax & Witherwax Law, P.C., Case #: LACL150659 (POLK)
in the Iowa District County for Polk County -- to Bryan S.
Witherwax and Witherwax Law, P.C. for the price of $35,000, cash.
The Trustee is authorized to sign any documentation necessary to
effectuate the sale and assignment of the Malpractice Claim.
The bankruptcy case is In re: Resource Converting, LLC, Resource
Converting LLC (Bankr. N.D. Tex.).
REVERE POWER: Moody's Lowers Rating on Sr. Secured Loans to B2
--------------------------------------------------------------
Moody's Investors Service downgraded the rating assigned to Revere
Power, LLC's senior secured credit facilities to B2 from B1. The
credit facilities consist of a $445 million term loan B due 2026, a
$70 million term loan C due 2026 and a $55 million revolving credit
facility due 2024. The rating outlook is negative.
RATINGS RATIONALE
The rating action reflects a decline in projected capacity revenue
in 2023 and 2024 that will negatively impact Revere's financial
performance absent a material improvement in Revere's cash flow
generation from the sale of energy. The rating action also
considers the increased refinancing risk in light of Revere's
ability to only achieve modest debt repayment over the past several
years. Approximately $422 million was outstanding under Revere's
term loan at year-end 2022 compared to $445 million at the March
2019 financial close.
Revere's financial performance has been weak as Moody's calculate
Revere's debt-to-EBITDA at around 9x and its ratio of project cash
flow to debt at around 5% for the twelve months ended September 30,
2022. Moreover, Moody's believe that, in the absence of higher
energy margins, Revere will be challenged to achieve this level of
financial performance in 2023 and 2024 due to a material decline in
capacity prices and associated revenue. Moody's project Revere will
earn approximately $38 million in capacity revenue in 2023 and a
slightly lower amount in 2024 compared to $56 million during the
trailing twelve months ended September 30, 2022 owing to the
decline in capacity prices following annual auctions completed by
ISO New England. Revere's energy margins during the last twelve
months have totaled approximately $42 million (an estimated $48
million for full year 2022) and will need to increase by
approximately $18 million in 2023, all else equal, to maintain
financial metrics at 2022 levels.
In that regard, Moody's understand that Revere has hedged
approximately 25% of its expected output from its Bridgeport Power
combined cycle power station in 2023 at favorable spark spreads
that should provide some year-over-year growth in energy margins.
The remainder of the portfolio is unhedged and therefore
susceptible to power pricing dynamics in New England that are
driven in large part by weather and regional natural gas prices.
This weakened financial performance has raised refinancing risk for
the project. As a point of reference, Revere has historically
generated annual energy margins in a range of $30-50 million and,
even with the previous higher capacity prices, has been unable to
meaningfully reduce debt beyond the 1% annual mandatory
amortization requirement.
LIQUIDITY
Revere's liquidity profile is adequate. Funds available under the
term loan C were used to cash collateralize letters of credit
issued by Revere in the normal course of business, including a
6-month debt service reserve requirement. The cash proceeds from
the term loan C have been deposited into a trustee administered
bank account and is reflected on Revere's balance sheet as
restricted cash. Approximately $37 million was outstanding under
the term loan C as of year-end. Moreover, approximately $3 million
of working capital loans were outstanding and $8 million of letters
of credit had been issued under the revolving credit facility,
resulting in $44 million of revolver availability. The maturity of
the revolver is March 2024 and Moody's anticipate Revere working to
extend the maturity date during 2023 in order to maintain an
adequate liquidity profile.
RATING OUTLOOK
The negative outlook reflects the downward trend in auction
determined capacity prices through mid-2025 relative to current
price levels. Increased energy margin across the portfolio is
needed in order to have a high degree of comfort that annual debt
service can be met with internally generated cash flow.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
In light of the negative outlook, limited prospects exist for the
rating to be upgraded. The outlook could be changed to stable if
stronger wholesale power market dynamics emerge resulting in annual
recurring energy margin exceeding $60 million.
Failure to generate energy margin in excess of historical ranges or
usage of liquidity reserves to meet mandatory debt service would
likely trigger negative rating action.
PROFILE
Revere owns three natural gas-fired power plants in New England:
the 577 MW Bridgeport Energy located in Connecticut, 297 MW
Tiverton Power located in Rhode Island and 269 MW Rumford Power
located in Maine. Revere is wholly-owned by Carlyle Power Partners
II, an affiliate of The Carlyle Group.
The principal methodology used in these ratings was Power
Generation Projects Methodology published in January 2022.
ROCKLEY PHOTONICS: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
Rockley Photonics Holdings Limited sought and obtained entry of an
order from the U.S. Bankruptcy Court for the Southern District of
New York authorizing the use of cash collateral on an interim
basis, in accordance with the budget solely to: (i) permit the
orderly continuation of the operation of the Debtor's business,
(ii) maintain business relationships with customers, vendors, and
suppliers, and (iii) fund expenses of the Chapter 11 Case.
The Debtor requires the use of cash collateral for working capital,
other general corporate purposes of the Debtor and the costs and
expenses of administering the Chapter 11 Case.
Pursuant to the Indenture, dated as of October 25, 2022, between
the Debtor, as issuer, certain subsidiaries of the Debtor, as
guarantors, and Wilmington Savings Fund Society, FSB, as Super
Senior Notes Trustee and collateral agent, the Super Senior
Noteholders purchased from the Debtor convertible senior secured
notes due 2026 which, as of the Petition Date, had an aggregate
principal amount outstanding of approximately $90.65 million.
Pursuant to the Indenture, dated as of May 27, 2022, between the
Debtor, as issuer, the Non-Debtor Prepetition Guarantors, and
Wilmington Savings Fund Society, FSB, as trustee and as collateral
agent, the Existing Noteholders purchased from the Debtor
convertible senior secured notes due 2026 which, as of the Petition
Date, had an aggregate principal amount outstanding of
approximately $29.31 million.
In the weeks leading up to the Debtor's bankruptcy filing, the
Debtor and its advisors conducted extensive arm's-length
negotiations with the Prepetition Noteholders regarding the
liquidity the Debtor may need to utilize during the Chapter 11
case. This resulted in the Prepetition Noteholders' agreement to
allow the Debtor access to $4.4 million of proceeds from the Super
Senior Notes. Those negotiations centered around reaching agreement
regarding the Debtor's consensual use of its cash collateral to
provide the Debtor with the ability to fund all of its potential
liquidity needs during the Chapter 11 case, to ensure the
reorganization moves forward expeditiously and the Debtor has
sufficient liquidity after the Debtor exits the Chapter 11 case. As
a result of these negotiations, the parties agreed on the terms of
the consensual use of cash collateral in accordance with the terms
set out in the proposed Interim Order.
The Plan provides for a comprehensive recapitalization of the
Prepetition Notes Claims, anchored by the Prepetition Noteholders'
commitment to equitize their outstanding debt and fund
approximately $35 million of new money to the Debtor on the
Effective Date, which will substantially deleverage the Debtor's
capital structure, increase liquidity, and is designed to ensure
the future viability of the Company. The Prepetition Noteholders'
commitment is divided between $20 million in Exit Financing --
including the conversion of $5.08 million of Allowed Super Senior
Notes Claims into the Exit Financing -- and the Prepetition
Noteholder Private Placement for the purchase of $20 million of
Reorganized Rockley Equity to increase the Debtor's liquidity.
The Debtor's right to use the cash collateral will terminate in
accordance with the terms of the Interim Order. The Termination
Date will occur on the earliest of (i) 45 days after the Petition
Date if the Final Order is not yet entered; (ii) the Interim Order
ceasing to be in full force and effect for any reason; (iii) the
effective date of any Chapter 11 plan with respect to the Debtor
confirmed by the Court; (iv) the date on which all or substantially
all of the assets of the Debtor are sold in a sale under any
chapter 11 plan or pursuant to section 363 of the Bankruptcy Code;
(v) March 15, 2023; (vi) the Chapter 11 Case being dismissed or
converted to a case under Chapter 7 of the Bankruptcy Code; or
(vii) the occurrence of any of the Termination Event without the
prior written consent of the Prepetition Noteholders.
The Termination Events include:
a. Failure of the Prepetition Loan Parties to (i) comply with
the terms of the Interim Order or Final Order, including the
failure to (x) comply with the Variance Covenant, or (y) have an
Approved Budget, or (z) meet any Milestone; or (ii) comply with any
covenant in the Prepetition Notes Documents (subject to applicable
grace periods);
b. The inaccuracy in any material respect of any
representation of the Prepetition Loan Parties when made or deemed
made; and
c. The Chapter 11 Case being dismissed or converted to a case
under Chapter 7 of the Bankruptcy Code; a Chapter 11 trustee or an
examiner (other than a fee examiner) being appointed with enlarged
powers relating to the operation of the business of the Debtor
(powers beyond those expressly set forth in section 1106(a)(3) and
(4) of the Bankruptcy Code); or there is a change of venue outside
the Second Circuit.
To the extent of any diminution in value of the Prepetition
Collateral, the Debtor has agreed to provide Adequate Protection to
the Prepetition Noteholders, in each case subject to the Carve-Out
for professional fees, U.S. Trustee fees and fees payable to the
clerk of court.
To the extent of, and in an amount equal to, the diminution in
value (if any) of the Super Senior Noteholders' and the Super
Senior Notes Trustee's interests in the Prepetition Collateral from
and after the Petition Date, the Prepetition Trustee, on behalf and
for the benefit of itself, the Super Senior Noteholders, and the
Super Senior Notes Trustee is granted valid, enforceable,
unavoidable, and fully perfected replacement liens and security
interests in all prepetition and post petition assets and property
of the Debtor.
To the extent of, and in an amount equal to, the diminution in
value (if any) of the Existing Noteholders' and the Existing Notes
Trustee's interests in the Prepetition Collateral from and after
the Petition Date, the Prepetition Trustee, on behalf and for the
benefit of itself, the Existing Noteholders, and the Existing Notes
Trustee is granted valid, enforceable, unavoidable, and fully
perfected r replacement liens and security interests in the
Adequate Protection Collateral.
To the extent of, and in an amount equal to, the diminution in
value (if any) of any Super Senior Noteholders' and the Super
Senior Notes Trustee's interests in the Prepetition Collateral from
and after the Petition Date, the Prepetition Trustee, on behalf and
for the benefit of itself, the Super Senior Noteholders and the
Super Senior Notes Trustee, is granted super-priority
administrative expense claims under sections 503 and 507 of the
Bankruptcy Code against the Debtor's estate to the extent that the
Adequate Protection Liens do not adequately protect against the
diminution in value of the Prepetition Collateral.
To the extent of, and in an amount equal to, the diminution in
value (if any) of any Existing Noteholders' and the Existing Notes
Trustee's interests in the Prepetition Collateral from and after
the Petition Date, the Prepetition Trustee, on behalf and for the
benefit of itself, the Existing Noteholders and the Existing Notes
Trustee, is granted super-priority administrative expense claims
under sections 503 and 507 of the Bankruptcy Code against the
Debtor's estate to the extent that the Adequate Protection Liens do
not adequately protect against the diminution in value of the
Prepetition Collateral.
The Cash Collateral Agreement contains these milestones:
a. The Debtor will file a Chapter 11 case on or before January
23, 2023;
b. The Debtor will file the Cayman petition on or before
January 23, 2023,
c. The filing of a plan of reorganization acceptable to the
Prepetition Noteholders in their sole and absolute discretion and a
disclosure statement related thereto to occur on the Petition
Date;
d. First day hearing and confirmation scheduling motion
hearing to occur not later than three days after the Petition Date;
e. Entry of the Interim Order to occur not later than five
days after the Petition Date;
f. Entry of the Final Order to occur not later than 40 days
after the Petition Date;
g. Entry of an order by the Bankruptcy Court approving the
disclosure statement and an Acceptable Plan to occur at a combined
hearing not later than 40 days after the Petition Date;
h. Entry of a final order by the Cayman Court approving the
restructuring transactions outlined in the Acceptable Plan to occur
at a combined hearing not later than 45 days after the Petition
Date; and
i. Occurrence of the Plan Effective Date to occur not later
than 55 days after the Petition Date.
A copy of the motion is available at https://bit.ly/3ktj9gD from
PacerMonitor.com.
A copy of the order is available at https://bit.ly/3RghGGY from
PacerMonitor.com.
About Rockley Photonics Holdings
Rockley Photonics Holdings Limited specializes in the research and
development of integrated silicon photonics chipsets. The Company
has developed a ground-breaking versatile, application specific,
third-generation silicon photonics platform specifically designed
for the optical integration challenges facing numerous mega-trend
markets. The Company has partnered with multiple tier-1 customers
across markets to deliver complex optical systems required for
transformational sensors, communications, and medical product
realization.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. N.Y. Case No. 23-10081) on January 23,
2023. In the petition signed by Richard A. Meier, chief executive
officer, the Debtor disclosed $90,880,000 in total assets and
$120,733,000 in total liabilities.
Judge Lisa G. Beckerman oversees the case.
The Debtor tapped Dania Slim, Esq., at Pillsbury Winthrop Shaw
Pittman, LLP as legal counsel, Walkers Law Firm as Cayman Islands
counsel, Jefferies LLC as investment banker, Alvarez and Marsal,
LLC as financial advisor, and Kroll, LLC as notice, claims and
balloting agent.
ROOSEVELT INN: Plan Disclosures Inadequate, Alpha Says
------------------------------------------------------
Alpha Centurion Security, Inc., asserts an objection to the
Disclosure Statement With Respect To Plan Of Reorganization
Proposed By Roosevelt Inn, LLC and Roosevelt Motor Inn, Inc. Alpha
joins in the objections of Samsung Fire & Marine Insurance Co., LTD
(U.S. Branch) to the Disclosure Statement and other similarly
styled joinders and objections.
According to Alpha, the Disclosure Statement fails to contain
adequate information as required pursuant to 11 U.S.C. Sec. 1125
and should not be approved without further revision and
disclosures:
* As set forth at length in the Objections, the Debtors have
failed to file with the Disclosure Statement the Trust Distribution
Procedures and Settlement Trust Documents, which have the potential
to alter substantially the rights of creditors and other parties in
interest in the above-captioned cases, including Alpha.
* Additionally, the Disclosure Statement fails to provide any
basis for channeling claims against non-debtor parties, including
UVFS Management Company, LLC and Yagna Patel, and granting broad
third-party releases by holders of Tort Claims (including Alpha) in
favor of non-debtor Protected Parties. The deficiencies preclude
the approval of the Disclosure Statement by this Court. The
impermissible channeling injunction and non-consensual third-party
release renders the Plan non-confirmable.
Attorneys for Alpha Centurion Security, Inc.:
Julie M. Murphy, Esq.
Penelope Cilluffo, Esq.
STRADLEY RONON STEVENS & YOUNG LLP
2005 Commerce Square, Suite 2600
Philadelphia, PA 19103
Tel: (215) 564-8000
E-mail: jmmurphy@stradley.com
pcilluffo@stradley.com
Attorney for Defendant, Alpha Centurion Security, Inc.:
Jacqueline Promislo, Esq.
COZEN O'CONNOR
One Liberty Place
1650 Market Street, Suite 2800
Philadelphia, PA 19107
Tel: (215) 665-2108
Fax: (215) 665-2013
E-mail: jpromislo@cozen.com
Attorneys for Alpha-Centurion Security, Inc.:
Thomas P. Wagner, Esq.
Robert W. Stanko, Esq.
Melanie J. Foreman, Esq.
MARSHALL DENNEHEY WARNER COLEMAN & GOGGIN
2000 Market Street, Suite 2300,
Philadelphia, PA 19103
Tel: (215) 575-2694
E-mail: MJFOREMAN@MDWCG.COM
About Roosevelt Inn
Roosevelt Inn, LLC is a Philadelphia-based company that operates in
the traveler accommodation industry.
Roosevelt Inn and its affiliate, Roosevelt Motor Inn, Inc., filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. Pa. Lead Case No. 21-11697) on June 16, 2021,
listing as much as $10 million in both assets and liabilities.
Anthony Uzzo, manager, signed the petitions.
Judge Ashely M. Chan presides over the cases.
The Debtors tapped Karalis, PC as bankruptcy counsel; Asterion,
Inc. as financial advisor; A. Uzzo & Company, CPA's PC as
bookkeeper; and Blank Rome, LLP and Reed Smith, LLP as special
counsel.
RWDY INC: Gets OK to Employ Ayres as Bankruptcy Counsel
-------------------------------------------------------
RWDY, Inc. received approval from the U.S. Bankruptcy Court for the
Western District of Louisiana to employ Ayres, Shelton, Williams,
Benson & Paine LLC as its legal counsel.
The Debtor requires legal counsel to:
a. give advice as to the Debtor's rights, duties and powers;
b. prepare and file all necessary statements, bankruptcy
schedules and other documents;
c. negotiate and prepare a plan of reorganization for the
Debtor;
d. represent the Debtor at all hearings, meetings of
creditors, conferences, trials and other proceedings in its Chapter
11 case; and
e. perform such legal services as may be necessary in
connection with the bankruptcy case.
Ayres will be paid at these rates:
Robert W. Raley, Esq. $350 per hour
Curtis R. Shelton, Esq. $350 per hour
Rebecca Harden, Paralegal $80 per hour
Stephanie Parker, Paralegal $80 per hour
The firm received in trust a security retainer in the amount of
$100,000.
Robert Raley, Esq., a partner at Ayres, 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:
Robert W. Raley, Esq.
Ayres, Shelton, Williams, Benson & Paine, LLC
333 Texas St,
Shreveport, LA 71101
Tel: (318) 227-3500
Email: bankruptcy@robertraleylaw.com
About RWDY Inc.
RWDY Inc. -- https://www.rwdyinc.com/ -- is an oil and energy
company based out of 1302 Dekort St, Copperas Cove, Texas.
RWDY filed a petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. La. Case No. 22-11308) on Dec. 21, 2022, with $10
million to $50 million in both assets and liabilities. Mark Allen,
RWDY manager, signed the petition.
Judge John S. Hodge oversees the case.
The Debtor tapped Robert W. Raley, Esq., at Ayres, Shelton,
Williams, Benson & Paine, LLC as legal counsel, and Postlethwaite &
Netterville, APAC as accountant.
RWDY INC: Gets OK to Hire Postlethwaite & Netterville as Accountant
-------------------------------------------------------------------
RWDY, Inc. received approval from the U.S. Bankruptcy Court for the
Western District of Louisiana to employ Postlethwaite &
Netterville, APAC as its accountant.
The firm's services include:
-- auditing services, including the examination of the Debtor's
financial statements;
-- preparation of accounting statements and monthly accountings
to the bankruptcy court and the ceditors' committee;
-- preparation of cash flow forecast;
-- preparation of a plan of reorganization;
-- preparation of tax returns;
-- preparation of bankruptcy schedules, statements of financial
affairs, and any other filings required in the Debtor's bankruptcy
case; and
-- other accounting services that the Debtor may require.
Postlethwaite will be paid at these rates:
Directors $350 per hour
Associate Directors $250 per hour
Managers $185 per hour
Seniors $150 per hour
Staffs $125 per hour
Trent Millican, a partner at Postlethwaite, 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 through:
Trent Millican, CPA
Postlethwaite & Netterville, APAC
8550 United Plaza Blvd., Ste. 1001
Baton Rouge, LA 70809
Tel: (225) 922-4600
Fax: (225) 922-4611
About RWDY Inc.
RWDY Inc. -- https://www.rwdyinc.com/ -- is an oil and energy
company based out of 1302 Dekort St, Copperas Cove, Texas.
RWDY filed a petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. La. Case No. 22-11308) on Dec. 21, 2022, with $10
million to $50 million in both assets and liabilities. Mark Allen,
RWDY manager, signed the petition.
Judge John S. Hodge oversees the case.
The Debtor tapped Robert W. Raley, Esq., at Ayres, Shelton,
Williams, Benson & Paine, LLC as legal counsel, and Postlethwaite &
Netterville, APAC as accountant.
SHEFA LLC: Voluntary Chapter 11 Case Summary
--------------------------------------------
Debtor: Shefa, LLC
16400 J L Hudson Dr
Southfield, MI 48075
Business Description: Shefa is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: January 31, 2023
Court: United States Bankruptcy Court
Eastern District of Michigan
Case No.: 23-40908
Debtor's Counsel: Robert N. Bassel, Esq.
Tel: 248-677-1234
Email: bbassel@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Sidney Elhadad as principal.
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/SO5XSYY/Shefa_LLC__miebke-23-40908__0001.0.pdf?mcid=tGE4TAMA
SHURWEST LLC: Litigation Trustee Gets OK to Hire Legal Counsel
--------------------------------------------------------------
Dawn Maguire, the litigation trustee for Shurwest, LLC, received
approval from the U.S. Bankruptcy Court for the District of Arizona
to employ Allen Barnes & Jones, PLC as her legal counsel.
The firm's services include:
a. reviewing the Litigation Trust Agreement and amendments, if
necessary;
b. analyzing potential claims against Quantum Group, USA, LLC,
Element Management Services, LLC and other parties;
c. preparing legal documents;
d. providing litigation services on behalf of the bankruptcy
estate;
e. providing the litigation trustee with legal advice with
respect to any potential settlement of claims brought against third
parties.
Allen Barnes & Jones will be paid at these rates:
Thomas H. Allen, Member $485 per hour
Hilary L. Barnes, Member $475 per hour
Michael A. Jones, Member $485 per hour
Philip J. Giles, Member $400 per hour
David B. Nelson, Associate $325 per hour
Legal Assistants/Law Clerks $185-215 per hour
In addition, the firm will receive reimbursement for its
out-of-pocket expenses.
Thomas Allen, Esq., a partner at Allen Barnes & Jones, PLC,
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:
Thomas H. Allen, Esq.
David B. Nelson, Esq.
Allen Barnes & Jones, PLC
1850 N. Central Ave., Suite 1150
Phoenix, AZ 85004
Tel: (602) 256-6000
Fax: (602) 252-4712
Email: tallen@allenbarneslaw.com
dnelson@allenbarneslaw.com
About Shurwest LLC
Shurwest, LLC is a Scottsdale, Ariz.-based company that specializes
in fixed indexed annuities and life insurance.
Shurwest filed its voluntary petition for Chapter 11 protection
(Bankr. D. Ariz. Case No. 21-06723) on Aug. 31, 2021, with as much
as $10 million in both assets and liabilities. James Maschek,
president, signed the petition.
Judge Daniel P. Collins oversees the case.
The Debtor tapped Isaac D. Rothschild, Esq., at Mesch Clark
Rothschild as bankruptcy counsel, and Wyche, PA and King &
Spalding, LLP and Dentons as special counsels.
On Dec. 22, 2022, the court issued an order confirming the Debtor's
Chapter 11 plan of reorganization. The confirmation order appointed
Dawn M. Maguire, the Debtor's Subchapter V trustee, to serve as
litigation trustee to pursue claims for the benefit of creditors.
SOUTH PARK: Seeks to Hire Gregory K. Stern as Bankruptcy Counsel
----------------------------------------------------------------
South Park Retail, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Illinois to hire Gregory K.
Stern, P.C. as its legal counsel.
The firm's legal services include:
(a) reviewing assets, liabilities, loan documentation,
executory contracts and other relevant documentation;
(b) preparing list of creditors, list of 20 largest unsecured
creditors, schedules and statement of financial affairs;
(c) giving the Debtor legal advice with respect to its powers
and duties in the operation and management of its financial
affairs;
(d) assisting the Debtor in the preparation of schedules,
statement of affairs and other necessary documents;
(e) preparing legal documents;
(f) negotiating with creditors and attending court hearings
and meetings of creditors;
(g) reviewing proofs of claim and soliciting creditors'
acceptances of the Debtor's Chapter 11 plan; and
(h) other legal services.
The attorneys' hourly rates are as follows:
Gregory K. Stern, Esq. $550
Dennis E. Quaid, Esq. $550
Monica C. O'Brien, Esq. $500
Rachel S. Sandler, Esq. $385
The firm received payment of a pre-bankruptcy minimum fee in the
amount of $20,000.
Gregory Stern, P.C. does not represent interests adverse to the
Debtor and its estate in the matters upon which they are to be
engaged, according to court filings.
The attorneys can be reached at:
Gregory K. Stern, Esq.
Dennis E. Quaid, Esq.
Monica C. O'Brien, Esq.
Rachel S. Sandler, Esq.
Gregory K. Stern, P.C.
53 West Jackson Boulevard, Suite 1442
Chicago, IL 60604
Phone: (312) 427-1558
Email: greg@gregstern.com
dquaid3@gmail.com
monica@gregstern.com
rachel@gregstern.com
About South Park Retail
South Park Retail, LLC sought protection for relief under Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ill. Case No. 22-14341) on
Dec. 13, 2022, with $500,001 to $1 million in assets and $100,001
to $500,000 in liabilities.
Judge David D Cleary presides over the case.
Gregory K. Stern, P.C. represents the Debtor as legal counsel.
SPARKS ELECTRIC: Seeks Cash Collateral Access
---------------------------------------------
Sparks Electric, LLC asks the U.S. Bankruptcy Court for the
District of New Jersey for authority to use cash collateral and
provide adequate protection.
The Debtor requires the use of cash collateral to pay its ordinary
and necessary operating expenses.
Prior to the commencement of the bankruptcy case, and a result of
the COVID-19 Pandemic, the Debtor's income decreased substantially,
and the Debtor fell behind on its debts. To maintain operational
during the pandemic, the Debtor began taking out short term, high
interest merchant loans from Apex Funding Source, LLC, Forever
Funding, LLC, and GFE NY, LLC.
The payment for these loans were automatically withdrawn from the
Debtor's operating account, and since the Debtor was not making
enough money to cover the almost weekly payments, the Debtor kept
borrowing from the short-term lenders to payback the loans owed and
cover its operating expenses. Ultimately, the Debtor did not
generate sufficient income to make the loan payments and was forced
to file the bankruptcy in an attempt to reorganize its debts.
The Debtor believes the profits from the Debtor's business will
generate sufficient income to adequate protect the secured parties
and pay all necessary business and administrative expenses during
the pendency of the case.
The Debtor can protect the Secured Creditors' interests by (i)
maintaining property and business insurance (ii) maintaining and
managing the business as a "going concern"; and (iii) by providing
the Secured Creditors with replacement liens on the Business
Assets. The Budget illustrates that there is a positive cash flow
which strengthens the operations of the Debtor, secures the
Debtor's reorganization efforts, and protects the Secured
Creditors' interest from diminution in the value of its collateral.
A hearing on the matter is set for February 21, 2023 at 10 a.m.
A copy of the motion is available at https://bit.ly/3Jr0yMI from
PacerMonitor.com.
About Sparks Electric, LLC
Sparks Electric, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 22-19058) on November 15,
2022. In the petition signed by Manuel Botero, managing member, the
Debtor disclosed up to $500,000 in assets and up to $1 million in
liabilities.
David Stevens, Esq., at Scura Wigfield, Heyer, Stevens & Cammarota
LLP, represents the Debtor as legal counsel.
SPRING MOUNTAIN: Seeks Approval to Hire Enotrias as Appraiser
-------------------------------------------------------------
Spring Mountain Vineyard, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of California to employ
Enotrias, Elite Sommelier Services, a Sausalito-based appraiser.
The Debtor requires an appraisal of the Estate Cabernet Sauvignon
and the Elivette, a Bordeaux Blend, bottled wine inventory. The
Estate Cabernet Sauvignon includes vintages from 1979 up to 2019
while the Elivette includes vintages starting from 1996 up to
2019.
Enotrias will charge a flat rate of $12,000 for preparing the
appraisal. This fee represents the firm's estimate that 25 hours
will be required to complete the appraisal. For additional time
spent, the firm will charge its current hourly rate of $300.
Melissa Smith, principal of Enotrias, disclosed in a court filing
that her firm is a "disinterested person" within the meaning of
Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Melissa L. Smith
Enotrias, Elite Sommelier Services
463 Sherwood Drive #203
Sausalito, CA 94965
Tel: 510-969-9463
Email: melissa@entorias.com
About Spring Mountain Vineyard
Spring Mountain Vineyard, Inc. is a privately-owned estate
comprised of four vineyards. Its beneficial owner is Jacob Safra
who also owns Encyclopaedia Britannica, Inc.
Spring Mountain Vineyard sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. N.D. Calif. Case No. 22-10381) on
Sept. 29, 2022, with $100 million to $500 million in both assets
and liabilities. Constantine S. Yannias, president of Spring
Mountain Vineyard, signed the petition.
Judge Charles Novack oversees the case.
The Debtor tapped Greenspoon Marder, LLP as bankruptcy counsel;
Cohen Tauber Spievack & Wagner PC, Stanzler Law Group, PC, and
Abbott & Kindermann, Inc. as special counsels; and BNP Paribas
Securities Corp. as investment banker. Getzler Henrich &
Associates, LLC and Jigsaw Advisors, LLC provide interim management
services and outside winery operations and management services,
respectively.
TEDESCHI & SONS: Court OKs Cash Collateral Access Thru Sept 8
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Florida
authorized Tedeschi & Sons Inc. to use cash collateral on a final
basis.
The Debtor is authorized to use cash collateral to pay: (a) amounts
expressly authorized by the Court, including payments to the U.S.
Trustee for quarterly fees; (b) the current and necessary expenses
set forth in the budget; and (c) additional amounts as may be
expressly approved in writing by the U.S. Small Business
Administration, which approval will not be unreasonably withheld
within 48 hours of the Debtor's request. The Debtor will be
entitled to prompt court hearings on any disputed proposed
expenditures.
As adequate protection, the SBA will have a perfected post-petition
lien against cash collateral to the same extent and with the same
validity and priority as the pre-petition lien, without the need to
file or execute any documents as may otherwise be required under
applicable nonbankruptcy law.
The Debtor will maintain insurance coverage for its property in
accordance with the obligations under the loan and security
documents with the SBA.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3jfFjD3 from PacerMonitor.com.
The budget provides for total operating expenses, on a monthly
basis, as follows:
$2,358 for June 2023;
$12,115 for July 2023;
$11,918 for August 2023;
$11,112 for September 2023; and
$11,737 for October 2023.
About Tedeschi & Sons
Tedeschi & Sons Inc. -- https://www.tedeschitax.com/ -- is an
expert in all areas of accounting, bookkeeping, consulting,
outsourcing, payroll and business services. It takes care of
clients' tax, accounting and bookkeeping needs.
Tedeschi & Sons filed a petition for relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No.
22-02046) on June 8, 2022, listing up to $50,000 in assets and up
to $500,000 in liabilities. Jerrett M. McConnell has been appointed
as Subchapter V trustee.
Judge Tiffany P. Geyer oversees the case.
Jeffrey S. Ainsworth, Esq., at BransonLaw, PLLC is the Debtor's
counsel.
TENTRR INC: Court OKs $500,000 DIP Loan from SL Ventures
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Tentrr, Inc. to use cash collateral and obtain postpetition
financing on a final basis.
The Debtor is permitted to enter into a $500,000 first-priority
secured, priming, super-priority debtor-in-possession Credit
Agreement, by and among Tentrr, Inc., as borrower, and SL Ventures
III Series V, LLC, as agent and lender and the other lenders party
thereto and to obtain post-petition financing on a first-priority
secured, priming and super-priority basis pursuant to the terms and
conditions thereof, up to a maximum aggregate amount of $500,000 in
Advances on a final basis.
As of the Petition Date, the Debtor was indebted to Decathlon in
the non-contingent liquidated amount of $1.835 million, including
all principal, interest, fees, and other amounts owed under the
Decathlon Loan Documents.
The Debtor requires post-petition financing to operate its
business, maintain the estate's properties, and administer the
Chapter 11 case.
As adequate protection for the use of cash collateral, Decathlon is
granted valid and perfected replacement and additional security
interests in, and liens on all of the Debtor's right, title and
interest in, to and under all DIP Collateral in the amount of any
Diminution in Value.
Decathlon is also granted an allowed administrative claim against
the Debtor's estate under Sections 503(b) and 507(b) of the
Bankruptcy Code to the extent that the Decathlon Adequate
Protection Liens do not adequately protect against any Diminution
in Value.
The Carve-Out means these fees and expenses, up to a maximum of
$75,000:
(a) fees and expenses allowed by the Court of professionals
retained under Sections 327, 328, or 1103 of the Bankruptcy Code,
including those retained by the Debtor, any Committee and any
Chapter 7 trustee appointed upon conversion of the Chapter 11 Case;
and
(b) Court fees, Subchapter V Trustee fees and U.S. Trustee
fees of the Chapter 11 Case; provided, however, that at no time
will the Carve-Out include any professional or other fees or
expenses incurred by any Person, other than the Subchapter V
Trustee, in connection with (i) any investigation (including
discovery proceedings), initiation or prosecution of any claims,
causes of action, adversary proceedings or other litigation against
the Agent or the Lenders, or any of their respective Related
Parties, in each case solely in their capacity as such; (ii) any
challenge to the amount or validity of the Obligations; or (iii)
any challenge or other dispute regarding the extent, validity,
characterization, amount, allowance, payment, perfection or
priority of the DIP Liens or any claim, lien, security interest, or
right granted to the Agent or any Lender pursuant to the DIP
Orders, the DIP Facility, or otherwise asserted by the Agent or any
Lender.
A copy of the order is available at https://bit.ly/3wLMSV6 from
PacerMonitor.com.
About Tentrr Inc.
Tentrr Inc. -- https://www.tentrr.com/ -- offers places to camp in
the U.S. It provides tent camps and fully set up campsites for
camping on private land or state parks.
Tentrr filed a petition for relief under Subchapter V of Chapter 11
of the Bankruptcy Code (Bankr. D. Del. Case No. 23-10000) on Jan.
2, 2023. In the petition filed by its chief executive officer,
Anand Subramanian, the Debtor disclosed between $1 million and $10
million in both assets and liabilities. David M. Klauder has been
appointed as Subchapter V trustee.
Judge Brendan L. Shannon oversees the case.
The Debtor tapped Mayerson and Hartheimer, PLLC as bankruptcy
counsel; The Rosner Law Group LLC as local counsel; and Omni Agent
Solutions, Inc. as notice, claims, solicitation and administrative
agent.
TESSEMAE'S LLC: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Tessemae's LLC
714 South Wolfe Street
P.O. Box No. 38438
Baltimore, MD 21231-7522
Business Description: Tessemae's is a flavor-forward food company
that makes clean-label, organic salad
dressing.
Chapter 11 Petition Date: February 1, 2023
Court: United States Bankruptcy Court
District of Maryland
Case No.: 23-10675
Debtor's Counsel: Gary H. Leibowitz, Esq.
COLE SCHOTZ P.C.
300 E. Lombard Street, Suite 1111
Baltimore, MD 21202
Tel: 410-230-0660
Fax: 410-230-0667
Email: gleibowitz@coleschotz.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Demian Costa as chief strategy officer.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/EGB25MQ/Tessemaes_LLC__mdbke-23-10675__0001.0.pdf?mcid=tGE4TAMA
TOP HOME CARE: Taps Steidl and Steinberg as Bankruptcy Counsel
--------------------------------------------------------------
Top Home Care Agency, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Pennsylvania to hire Steidl and
Steinberg, P.C. to handle its Chapter 11 case.
The hourly rate for Steidl and Steinberg is $350 per hour.
The Debtor paid the firm a retainer of $6,000 and filing fee of
$1,738 prior to its bankruptcy filing.
As disclosed in court filings, Steidl and Steinberg is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Christopher M. Frye, Esq.
Steidl and Steinberg, P.C.
2830 Gulf Tower
707 Grant Street
Pittsburgh, PA 15219
Phone: 412- 391-8000
Email: chris.frye@steidl-steinberg.com
About Top Home Care Agency
Top Home Care Agency, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No.
23-20082) on Jan. 16, 2023, with up to $50,000 in assets and
$500,001 to $1 million in liabilities.
Christopher M. Frye, Esq., at Steidl and Steinberg, P.C. represents
the Debtor as counsel.
TRINITY LEGACY: Taps Galvanize Law Group as Special Counsel
-----------------------------------------------------------
Trinity Legacy Consortium, LLC seeks approval from the U.S.
Bankruptcy Court for the District of New Mexico to employ Galvanize
Law Group, LLC as special counsel.
The Debtor requires legal assistance in a litigation case pending
in the District Court of La Plata County, Colo.
The firm will be paid at the rate of $375 per hour for Jason
Krueger, Esq., $250 per hour for associates, and $150 per hour for
paralegals and law clerks.
Mr. Krueger, a partner at Galvanize Law Group, 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:
Jason D. Krueger, Esq.
Galvanize Law Group, LLC
6145 Broadway Ste. 49
Denver, CO 80202
Tel: (720) 402-1624
Email: jkrueger@galvanize.law
About Trinity Legacy Consortium
Trinity Legacy Consortium, LLC operates a construction and home
building business with locations in Farmington, N.M. and Wallowa,
Ore.
Trinity Legacy Consortium sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D.N.M. Case No. 22-10973) on Dec. 7,
2022. In the petition signed by its managing members, Jan Swift and
Jacob Swift, the Debtor disclosed up to $500,000 in assets and up
to $1 million in liabilities.
Judge Robert H. Jacobvitz oversees the case.
Dennis A. Banning, Esq., at NM Financial Law, P.C. serves as the
Debtor's bankruptcy counsel while Lewis Roca Rothgerber Christie,
LLP and Galvanize Law Group, LLC are the Debtor's special counsels.
UNCLE DAN'S TIRE: Seeks Cash Collateral Access Thru June 30
-----------------------------------------------------------
Uncle Dan's Tire World, Inc. asks the U.S. Bankruptcy Court for the
District of Oregon for authority to use cash collateral up to
$43,000 per month through June 30, 2023, pursuant to the budget and
grant a replacement lien to the U.S. Internal Revenue Service.
The Debtor requires the use of cash collateral to continue
operating its business.
The Debtor's secured creditors are the IRS and CFG Merchant
Solutions. The secured creditors have UCC liens filed on bank
accounts and accounts receivable recorded in the Office of The
Secretary of the State. The lien of the IRS has a balance of
approximately $16,000. Creditor CFG appears to have purchases 15%
of the Debtor's receivables as of the petition date and the lien is
offset by any post-petition money CFG has taken.
As adequate protection, the Secured Creditors will be granted a
security interest and replacement lien, dollar for dollar, in all
of the post-petition accounts and accounts receivables to replace
their security interest and liens in collateral to the extent of
Pre-Petition cash collateral utilized by Debtor during the pendency
of the bankruptcy proceeding. The IRS also has a security interest
in all property owned by the Debtor.
A hearing on the matter is set for February 16, 2023 at 2 p.m.
A copy of the motion and the Debtor's budget is available at
https://bit.ly/409xa3D from PacerMonitor.com.
The Debtor projects total expenses, on a monthly basis, as
follows:
$43,660 for January 2023;
$43,660 for February 2023;
$43,660 for March 2023;
$43,660 for April 2023;
$43,660 for May 2023; and
$43,660 for June 2023.
About Uncle Dan's Tire World, Inc.
Uncle Dan's Tire World, Inc. sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Ore. Case No. 23-30137-thp11)
on January 23, 2023. In the petition signed by Daniel Svihla,
president, the Debtor disclosed up to $100,000 in assets and up to
$500,000 in liabilities.
Ted A. Troutman, Esq., at Troutman Law Firm P.C., is the Debtor's
legal counsel.
VECTOR GROUP: Moody's Affirms B2 CFR & Alters Outlook to Positive
-----------------------------------------------------------------
Moody's Investors Service affirmed Vector Group Ltd.'s B2 Corporate
Family Rating and B2-PD Probability of Default Rating. At the same
time, Moody's affirmed the Ba3 ratings on the company's senior
secured notes due 2029 and affirmed the Caa1 rating on the senior
unsecured notes due 2026. Vector's SGL-1 speculative grade
liquidity rating is unchanged. The outlook was changed to positive
from stable.
The rating affirmation and change in outlook reflects Moody's view
that Vector's increasingly stable cash flow following the reduction
of its dividend, improved market share, and very good liquidity,
position Vector to continue to improve its balance sheet and
operate the business with lower leverage. Moody's expects Vector to
sustain adjusted debt to EBITDA around 4.0x over the next 12 – 18
months which is below the expected leverage level for its rating.
Vector's market share increased to 5.1% for the last twelve months
ending September 2022 up from 4% in 2021 as it captured significant
share vacated by KT&G when it exited the U.S tobacco market at the
end of 2021 and from consumers downtrading into Vector's discount
and deep discount products in response to rising inflation. Moody's
expects Vector to generate $60 to $80 million in annual free cash
flow after dividends. Liquidity is very strong and Moody's sees
balance sheet cash north of $200 million at year-end 2022 after the
4th quarter MSA prepayment. Nevertheless, concerns remain including
the company's dividend which Moody's considers high relative to
cash from operations especially when factoring that the tobacco
industry is in secular decline and faces material regulatory
hurdles that could disrupt Vector's operations including the FDA's
proposed ban of menthol cigarettes and nicotine cap although
Moody's expects both actions to take years to implement and for
them to face significant legal challenges. Further, current market
conditions have favored discount tobacco and Moody's looks towards
continued stability in EBITDA and free cash flow as the economy
improves, as well as a commitment to a somewhat derisked financial
strategy and corporate structure before considering further
positive rating actions.
Affirmations:
Issuer: Vector Group Ltd.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured Regular Bond/Debenture, Affirmed Ba3 to (LGD3) from
(LGD2)
Senior Unsecured Regular Bond/Debenture, Affirmed Caa1 (LGD5)
Outlook Actions:
Issuer: Vector Group Ltd.
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
Vector Group's B2 CFR reflects its relatively small scale compared
to larger U.S. tobacco companies and limited pricing flexibility.
The company participates in the discount and deep discount
cigarette segment of an industry that is highly regulated and is
exposed to very high social risks related to the adverse health
consequences of smoking. Vector's credit profile also reflects its
aggressive financial policy, modest free cash flow and the ongoing
threat of adverse tobacco litigation and regulation. Partially
offsetting these risks is Vector's good track record of increasing
EBITDA and improving share in the US cigarette market.
Additionally, the company holds a cost advantage based on the
beneficial terms provided under the Master Settlement Agreement
("MSA"). Vector also has very good liquidity with a large cash
balance.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The positive outlook reflects Moody's expectation that Vector's
sales and EBITDA will remain stable over the next 12 to 18 months
as the company maintains recent market share gains captured from
the exit of a competitor in the deep discount market. The outlook
also reflects Moody's expectation that debt-to-EBITDA leverage of
around 4.0 will be sustained and that the company will generate
over $50 million of free cash flow and not accelerate shareholder
returns.
An upgrade would require leverage to remain below 4.5x debt to
EBITDA while generating positive free cash flow after dividends.
Additionally, Moody's would need better clarity that litigation and
regulatory risks could be navigated without material detriment to
credit.
The rating could be downgraded if free cash flow and the company's
liquidity position weaken or if the discount cigarette industry
outlook deteriorates resulting in debt to EBITDA sustained above
6.0x.
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE FACTORS
Vector Group Ltd.'s Credit Impact Score is CIS-5 reflecting a very
highly negative ESG impact on the current rating. The score
reflects very high exposure to social risks related to customer
relations and the negative health impact of cigarette smoking, as
well as highly negative demographic and societal trends as
consumers quit smoking. Somewhat offsetting these risks is the
company's good cash flow generation ability though the company
maintains a moderately high risk financial strategy with a large
dividend payout and high leverage.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
Vector Group Ltd., founded in 1980 and headquartered in Miami,
Florida, is a publicly traded holding company engaged primarily in
the manufacturing and marketing of discount cigarettes in the
United States. The company's key cigarette brands include Eagle
20's, Pyramid, Montego, Grand Prix, Liggett Select and Eve. The
company also has a small real estate portfolio. In December 2021,
the company spun off its Douglas Elliman real estate brokerage
business into a stand alone company. Vector generates roughly $887
million in annual revenue as of last-twelve-months ending September
30, 2022 (net of excise taxes).
VIRTUSA HOLDCO: Moody's Raises CFR to 'B2', Outlook Stable
----------------------------------------------------------
Moody's Investors Service upgraded Virtusa HoldCo, Inc.'s (formerly
known as Austin Holdco Inc., "Virtusa") corporate family rating to
B2 from B3, probability of default rating to B2-PD from B3-PD,
senior secured first lien credit facilities, including the $1.2
billion term loan due 2028 and $162.5 million multi-currency
revolver expiring 2026, to B1 from B2 and $350 million senior
unsecured notes due 2028 to Caa1 from Caa2. The outlook remains
stable.
Virtusa is a Massachusetts-based global digital engineering and
information technology outsourcing services provider.
RATINGS RATIONALE
"Strong demand for Virtusa's IT services related to digital
transformation initiatives at its roster of concentrated but
blue-chip customers will support high revenue growth and robust
profit margins over the next 12 to 18 months, enabling improved
credit metrics and liquidity," said Edmond DeForest, Moody's Senior
Vice President.
The upgrade of the CFR to B2 from B3 reflects Moody's anticipation
for Virtusa to maintain at least high single digit rate revenue
growth and EBITDA margins around 17% over the next 12 to 18 months.
Moody's expectation for favorable industry tailwinds from ongoing
digital transformation needs that create strong demand for
information technology (IT) services supporting cloud migrations
supports the high revenue growth rates anticipated. Virtusa grew
revenue at over 20% for the twelve months ended December 31, 2022,
while contract backlog also expanded. Since the February 2021
leveraged buyout, Virtusa has improved its profitability rates
materially. Profitability rates have benefited from the
depreciation of the Indian rupee and Sri Lankan rupee, which are
the basis of most costs, versus the US dollar, an increasing
proportion of higher margin consulting revenue and by shifting
resources to low-cost offshore delivery centers.
All financial metrics cited reflect Moody's standard adjustments.
The B2 CFR is constrained by Virtusa's small revenue scale compared
against larger global firms and other established niche players in
the highly competitive IT industry, high debt to EBITDA expected to
remain around 5.0 times over the next 12 to 18 months and Moody's
anticipation for aggressive financial strategies, especially for
debt-funded equity distributions, due to the company's private
equity sponsor ownership. Virtusa's sector expertise and
established client relationships within the financial services,
communications, media and healthcare verticals support its
competitive position. While demand for IT services will remain
high, the company is exposed to cyclical delays in IT spending
during periods of economic weakness. The COVID-19 downturn
pressured revenue in fiscal 2021 (ended March 2021), but the
pandemic has also accelerated digital transformation spending,
supporting long-term tailwinds.
Moody's has assessed liquidity as very good, reflecting an
unrestricted cash balance around $177 million as of December 31,
2022, free cash flow to debt around 5% expected over the next 12 to
15 months and access to the fully available $162.5 million
revolver. The revolver and term loan feature floating interest
rates based upon a spread above SOFR, exposing the company to
higher interest expense as rates rise. Virtusa has hedged its
exposure to rising interest rates by capping its SOFR rate through
October 2025 for a portion of its secured debt. Access to the
revolver is subject to compliance with a maximum 6.25 times senior
secured first lien net leverage springing covenant when usage
exceeds 35%. Although Moody's does not expect the covenant to be
tested, Moody's anticipates that Virtusa would maintain a wide
compliance cushion should the covenant be tested.
The upgrades of individual instruments ratings are based on the
upgrade of the PDR to B2-PD from B3-PD, as well as a family
recovery of 50% of debt obligations assumed at default.
The upgrade of the senior secured facility ratings to B1 from B2
reflects the B2-PD PDR, their priority position in the debt capital
structure in Moody's hierarchy of claims at default and the loss
absorption provided by the $350 million senior unsecured notes.
The upgrade of the senior unsecured notes to Caa1 from Caa2
reflects the B2-PD PDR and their contractual subordination to the
secured claims.
The stable outlook reflects Moody's expectations for debt to EBITDA
around 5.0 times, EBITA to interest expense above 2.5 times and
free cash flow around 5% of debt, in the absence of leveraging
transactions, over the next 12-18 months. The stable outlook also
anticipates that Virtusa may make periodic, opportunistic,
debt-funded cash distributions to its private equity sponsor
controlled owners, thereby temporarily raising debt to EBITDA to
around 6.0 times and stressing other credit and liquidity metrics.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Moody's expects Virtusa will
sustain debt to EBITDA below 5.0 times, good liquidity and free
cash flow-to-debt of 7% or more.
The ratings could be downgraded if revenue or profitability rates
become pressured due to customer losses, evidencing a weakened
competitive position, Moody's anticipates debt to EBITDA will be
sustained above 6.0 times or liquidity weakens.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Moody's took the following rating actions and made the following
outlook statement:
Issuer: Virtusa HoldCo, Inc.
Corporate Family Rating, Upgraded to B2 from B3
Probability of Default Rating, Upgraded to B2-PD from
B3-PD
Senior Secured 1st Lien Bank Credit Facility, Upgraded
to B1 (LGD3) from B2 (LGD3)
Senior Unsecured Regular Bond/Debenture, Upgraded to
Caa1 (LGD6) from Caa2 (LGD6)
Outlook, Remains Stable
Virtusa, headquartered in Southborough, Massachusetts and
controlled by affiliates of private equity sponsor Barings Private
Equity Asia, is a global digital engineering and information
technology outsourcing services provider with operations in 19
countries. Moody's expects over $2.0 billion of revenue in FY2024
(ends March).
YI LLC: Moody's Affirms 'B3' Corp. Family Rating, Outlook Stable
----------------------------------------------------------------
Moody's Investors Service affirmed YI, LLC's d/b/a Young
Innovations ("Young") ratings, including the B3 Corporate Family
Rating, the B3-PD Probability of Default Rating, and the B2 ratings
on the senior secured first lien bank credit facilities. The
outlook is stable.
The ratings affirmation reflects Moody's expectation that Young
will be able to reduce its high leverage over the next 12-18 months
towards 7.0x while maintaining good liquidity. Moody's expects the
company's revenue and EBITDA to show modest growth in 2023
reflecting further recovery in demand for dental products that were
adversely affected during the COVID-19 pandemic. Meanwhile, Moody's
expect that Young's exposure to operating cost inflation is
moderate and will be offset by pricing and productivity
improvement.
The affirmation of the B3 CFR reflects Moody's view that Young will
maintain a good liquidity profile, with total liquidity (cash and
undrawn credit facilities) of close to $54 million as of September
30, 2022. Liquidity will be supported by positive free cash flow
and modest capex at less than $8 million annually, including
productivity improvement initiatives. Furthermore, Moody's expects
that Young will successfully refinance its 2024 maturities this
year. The company maintains a solid market position across its
portfolio of consumable dental products.
Affirmations:
Issuer: YI, LLC
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured 1st Lien Revolving Credit Facility, Affirmed B2
(LGD3)
Senior Secured 1st Lien Delayed Draw Term Loan, Affirmed B2
(LGD3)
Senior Secured 1st Lien Term Loan, Affirmed B2 (LGD3)
Outlook Actions:
Issuer: YI, LLC
Outlook, Remains Stable
RATINGS RATIONALE
Young's B3 Corporate Family Rating reflects the company's very high
financial leverage, modest size and narrow product focus within the
dental consumables segment. Moody's estimates that the company's
annual revenue for fiscal 2023 will be over $240 million.
Debt/EBITDA was approximately 7.7 times as of September 30, 2022.
The company's CFR is supported by a stable end market and a high
level of recurring revenue with about 90% of sales derived from
consumable products. The company's products are generally used for
routine dental care, such as regular cleaning exams, and are
somewhat less susceptible to an economic downturn.
The stable outlook reflects Moody's expectations that Young will
reduce leverage towards 7x over the next 12-18 months while
maintaining good liquidity.
Moody's expects Young to maintain good liquidity over the next 12
to 18 months. The company had close to $9 million in cash and
access to $45 million on its $50 million revolving credit facility
as of September 30, 2022 following the acquisition of Medical
Purchasing Solutions. Moody's expects the company will continue to
generate modest positive free cash flow, though with some quarter
to quarter volatility due to working capital changes, over the next
12 to 18 months. The revolver has a springing maximum first lien
net leverage ratio of 7.1 times when utilization exceeds 40%.
Moody's does not expect the covenant will be tested however if
tested there would be a good level of headroom. The company's
alternate liquidity options are limited, as the majority of its
assets are pledged under the bank credit facilities. While not
expected, the company has discrete brands and products lines that
could be sold to raise liquidity.
ESG considerations are material to Young's rating. Young's ESG
credit impact score is highly negative (CIS-4) reflecting highly
negative exposure to governance considerations (G-4), in particular
due to the company's aggressive financial policies under private
equity ownership. Young's credit exposure to social risk
considerations is moderately negative (S-3) in line with the
overall exposure of the medical device industry. Medical devices
companies face moderate social risks overall. However, they
regularly encounter elevated elements of social risk including
those associated with responsible production including compliance
with regulatory requirements and potential reputational and
financial impacts from product recalls or related issues. The
company's exposure to environmental considerations is neutral to
low (E-2).
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company increases its scale with
further diversity in its product offering. Quantitatively, ratings
could be upgraded if debt/EBITDA is sustained below 5.5 times while
maintaining good liquidity.
Ratings could be downgraded if the company's liquidity materially
weakens, or if the company fails to refinance its debt maturing in
2024. Ratings could also be downgraded if sales or margins erode,
or free cash flow is negative. Quantitatively, ratings could be
downgraded if Moody's-adjusted EBITA/Interest cover declines below
1.0x.
YI, LLC, d/b/a Young Innovations develops, manufactures and markets
consumable supplies and equipment used for dental care. The
company's product offerings include disposable and metal
prophylaxis (prophy) angles, prophy cups and brushes, dental
micro-applicators, moisture control products, infection control
products, dental hand pieces, endodontic systems, orthodontic
brushes, flavored examination gloves, children's toothbrushes and
children's toothpastes. The company is owned by The Jordan Company,
L.P - a private equity firm. YI, LLC generated revenue of about
$230 million in the twelve months to September 30, 2022.
The principal methodology used in these ratings was Medical
Products and Devices published in October 2021.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Maxim RE LLC
Bankr. E.D.N.Y. Case No. 23-70317
Chapter 11 Petition filed January 17, 2023
See
https://www.pacermonitor.com/view/USCA3AA/Maxim_RE_LLC__nyebke-23-70317__0001.0.pdf?mcid=tGE4TAMA
represented by: Erica Yitzhak, Esq.
THE YITZHAK LAW GROUP
E-mail: erica@etylaw.com
In re Joseph Youshaei
Bankr. C.D. Cal. Case No. 23-10384
Chapter 11 Petition filed January 24, 2023
represented by: Stella Havkin, Esq.
In re Charles Angelucci
Bankr. D. Colo. Case No. 23-10228
Chapter 11 Petition filed January 24, 2023
represented by: Aaron Conrardy, Esq.
WADSWORTH GARBER WARNER CONRARDY, P.C.
E-mail: aconrardy@wgwc-law.com
In re PortaGyn, Inc.
Bankr. M.D. Fla. Case No. 23-00264
Chapter 11 Petition filed January 24, 2023
See
https://www.pacermonitor.com/view/MD54YOA/PortaGyn_Inc__flmbke-23-00264__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Velasquez, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
E-mail: dvelasquez@lathamluna.com
In re Schnell Medical, LLC
Bankr. M.D. Fla. Case No. 23-00263
Chapter 11 Petition filed January 24, 2023
See
https://www.pacermonitor.com/view/AZJGEJQ/Schnell_Medical_LLC__flmbke-23-00263__0001.0.pdf?mcid=tGE4TAMA
represented by: Daniel A. Velasquez, Esq.
LATHAM LUNA EDEN & BEAUDINE LLP
E-mail: dvelasquez@lathamluna.com
In re New Orleans Cremation Service Inc.
Bankr. E.D. La. Case No. 23-10105
Chapter 11 Petition filed January 24, 2023
See
https://www.pacermonitor.com/view/LPCEHKI/New_Orleans_Cremation_Service__laebke-23-10105__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert L. Marrero, Esq.
ROBERT L. MARRERO, L.L.C.
E-mail: office@bobmarrero.com
In re Thomas Kendal Terral and Kahla Dion Hearn Terral
Bankr. W.D. La. Case No. 23-30077
Chapter 11 Petition filed January 24, 2023
represented by: Bradley Drell, Esq.
In re Assadollah Lotfalikhan Zand
Bankr. D. Md. Case No. 23-10476
Chapter 11 Petition filed January 24, 2023
represented by: Erik Soderberg, Esq.
In re 11442 196 Street LLC
Bankr. E.D.N.Y. Case No. 23-40205
Chapter 11 Petition filed January 24, 2023
See
https://www.pacermonitor.com/view/XP565UQ/11442_196_Street_LLC__nyebke-23-40205__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re 5904 Foster Avenue Trust, Lamor Whitehead, Trustee
Bankr. E.D.N.Y. Case No. 23-40211
Chapter 11 Petition filed January 24, 2023
See
https://www.pacermonitor.com/view/XUDLXRA/5904_Foster_Avenue_Trust_Lamor__nyebke-23-40211__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Lexington Gardens 12 LLC
Bankr. E.D.N.Y. Case No. 23-40222
Chapter 11 Petition filed January 24, 2023
See
https://www.pacermonitor.com/view/VC7SWXQ/Lexington_Gardens_12_LLC__nyebke-23-40222__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Irregular Mikes LLC
Bankr. S.D.N.Y. Case No. 23-10084
Chapter 11 Petition filed January 24, 2023
See
https://www.pacermonitor.com/view/BHACF7Y/Irregular_Mikes_LLC__nysbke-23-10084__0001.0.pdf?mcid=tGE4TAMA
represented by: Gabriel Del Virginia, Esq.
LAW OFFICE OF GABRIEL DEL VIRGINIA
E-mail: gabriel.delvirginia@verizon.net
In re Ismael Vargas
Bankr. S.D.N.Y. Case No. 23-22061
Chapter 11 Petition filed January 24, 2023
represented by: H. Bronson, Esq.
In re A&R Chavira, LLC
Bankr. W.D. Tex. Case No. 23-30067
Chapter 11 Petition filed January 24, 2023
See
https://www.pacermonitor.com/view/CRWUVAI/AR_Chavira_LLC__txwbke-23-30067__0001.0.pdf?mcid=tGE4TAMA
represented by: Carlos Miranda, Esq.
MIRANDA & MALDONADO, PC
E-mail: cmiranda@eptxlawyers.com
In re Johnny C. Lawler
Bankr. N.D. Ala. Case No. 23-40078
Chapter 11 Petition filed January 25, 2023
represented by: Robert McWhorter, Jr., Esq.
INZER, HANEY, MCWHORTER, HANEY & SKELTON
Email: rdmcwhorter@bellsouth.net
In re AHP Home Health Care, Inc.
Bankr. M.D. Fla. Case No. 23-00166
Chapter 11 Petition filed January 25, 2023
See
https://www.pacermonitor.com/view/3KQOH4Q/AHP_Home_Health_Care_Inc__flmbke-23-00166__0001.0.pdf?mcid=tGE4TAMA
represented by: Bryan K. Mickler, Esq.
LAW OFFICES OF MICKLER & MICKLER, LLP
E-mail: bkmickler@planlaw.com
In re Brittany's Villa Corp
Bankr. E.D.N.Y. Case No. 23-40231
Chapter 11 Petition filed January 25, 2023
See
https://www.pacermonitor.com/view/YIYQY4I/Brittanys_Villa_Corp__nyebke-23-40231__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Greenheart NY, Inc
Bankr. S.D.N.Y. Case No. 23-10091
Chapter 11 Petition filed January 25, 2023
See
https://www.pacermonitor.com/view/6NO7HOQ/Greenheart_NY_Inc__nysbke-23-10091__0001.0.pdf?mcid=tGE4TAMA
represented by: Kamini Fox, Esq.
KAMINI FOX, PLLC
E-mail: kamini@kfoxlaw.com
In re Eddie W. Saunders
Bankr. N.D. Ohio Case No. 23-10221
Chapter 11 Petition filed January 25, 2023
represented by: Thomas Coffey, Esq.
COFFEY LAW LLC
Email: tcoffey@tcoffeylaw.com
In re Roy MacMillan
Bankr. D. Ore. Case No. 23-30159
Chapter 11 Petition filed January 25, 2023
represented by: SUSSMAN SHANK LLP
In re Kent Wythe Holdco LLC
Bankr. E.D.N.Y. Case No. 23-40271
Chapter 11 Petition filed January 26, 2023
See
https://www.pacermonitor.com/view/3CDNLXQ/Kent_Wythe_Holdco_LLC__nyebke-23-40271__0001.0.pdf?mcid=tGE4TAMA
represented by: Fred B. Ringel, Esq.
LEECH TISHMAN ROBINSON BROG, PLLC
E-mail: fringel@leechtishman.com
In re 222 Westervelt Ave LLC
Bankr. E.D.N.Y. Case No. 23-40260
Chapter 11 Petition filed January 26, 2023
See
https://www.pacermonitor.com/view/2YV3YSY/222_Westervelt_Ave_LLC__nyebke-23-40260__0001.0.pdf?mcid=tGE4TAMA
represented by: Solomon Rosengarten, Esq.
In re The Factory Sports Training Facility, LLC
Bankr. W.D.N.Y. Case No. 23-20040
Chapter 11 Petition filed January 26, 2023
See
https://www.pacermonitor.com/view/RVTRB4Q/The_Factory_Sports_Training_Facility__nywbke-23-20040__0001.0.pdf?mcid=tGE4TAMA
represented by: David H. Ealy, Esq.
CRISTO LAW GROUP LLC
E-mail: dealy@trevettcristo.com
In re Cloud Ventures 1, LLC d/b/a Pipeline Trenchers Group
Bankr. N.D. Tex. Case No. 23-40228
Chapter 11 Petition filed January 26, 2023
See
https://www.pacermonitor.com/view/4XKKO7Q/Cloud_Ventures_1_LLC_dba_Pipeline__txnbke-23-40228__0001.0.pdf?mcid=tGE4TAMA
represented by: Craig D. Davis, Esq.
DAVIS, ERMIS & ROBERTS, P.C.
E-mail: davisdavisandroberts@yahoo.com
In re Ramil Abalkhad and Melina Abalkhad
Bankr. E.D. Cal. Case No. 23-90029
Chapter 11 Petition filed January 27, 2023
represented by: Michael R. Totaro, Esq.
In re Seineyard, Inc.
Bankr. N.D. Fla. Case No. 23-40028
Chapter 11 Petition filed January 27, 2023
See
https://www.pacermonitor.com/view/DDOZSGI/Seineyard_Inc__flnbke-23-40028__0001.0.pdf?mcid=tGE4TAMA
represented by: Byron W. Wright III, Esq.
BRUNER WRIGHT, P.A.
E-mail: twright@brunerwright.com
In re Omaha Beach 3017, LLC (DE)
Bankr. S.D. Fla. Case No. 23-10666
Chapter 11 Petition filed January 27, 2023
See
https://www.pacermonitor.com/view/DQINLJA/Omaha_Beach_3017_LLC_DE__flsbke-23-10666__0001.0.pdf?mcid=tGE4TAMA
represented by: Joel Aresty, Esq.
JOEL M. ARETY PA
E-mail: aresty@icloud.com
In re Owen Campbell
Bankr. N.D. Ga. Case No. 23-50831
Chapter 11 Petition filed January 27, 2023
Case Opened
In re Troy Avery
Bankr. N.D. Ga. Case No. 23-20089
Chapter 11 Petition filed January 27, 2023
represented by: William Rountree, Esq.
In re Lena Marie Lindberg
Bankr. N.D. Ill. Case No. 23-01142
Chapter 11 Petition filed January 27, 2023
represented by: Marvin Miller, Esq.
In re Charles Weldon Deweese and Penny Whitfield Deweese
Bankr. W.D. Ky. Case No. 23-10072
Chapter 11 Petition filed January 27, 2023
represented by: Neil Bordy, Esq.
In re William Luciani
Bankr. E.D.N.Y. Case No. 23-70319
Chapter 11 Petition filed January 27, 2023
represented by: Roy Lester, Esq.
In re Stuart A. Schlesinger
Bankr. S.D.N.Y. Case No. 23-10104
Chapter 11 Petition filed January 27, 2023
represented by: Douglas Pick, Esq.
In re Boulder Canyon, LLC
Bankr. D.S.C. Case No. 23-00258
Chapter 11 Petition filed January 27, 2023
See
https://www.pacermonitor.com/view/F2FNHAI/Boulder_Canyon_LLC__scbke-23-00258__0001.0.pdf?mcid=tGE4TAMA
represented by: Randy A. Skinner, Esq.
SKINNER LAW FIRM, LLC
E-mail: main@skinnerlawfirm.com
In re Dan Ray Kiely
Bankr. D.S.C. Case No. 23-00259
Chapter 11 Petition filed January 27, 2023
represented by: Randy Skinner, Esq.
In re Arici DD LLC
Bankr. E.D. La. Case No. 23-10130
Chapter 11 Petition filed January 29, 2023
See
https://www.pacermonitor.com/view/T3VE2DY/ARICI_DD_LLC__laebke-23-10130__0001.0.pdf?mcid=tGE4TAMA
represented by: Ryan J. Richmond, Esq.
STERNBERG, NACCARI & WHITE, LLC
E-mail: ryan@snw.law
In re Elite Child, Inc.
Bankr. E.D. Va. Case No. 23-70150
Chapter 11 Petition filed January 29, 2023
See
https://www.pacermonitor.com/view/GK4JIKQ/Elite_Child_Inc__vaebke-23-70150__0001.0.pdf?mcid=tGE4TAMA
represented by: Henry W. McLaughlin, Esq.
THE LAW FIRM OF HENRY MCLAUGHLIN, PC
E-mail: henry@mclaughlinvalaw.com
In re Moving Pros LLC
Bankr. D. Ariz. Case No. 23-00571
Chapter 11 Petition filed January 30, 2023
See
https://www.pacermonitor.com/view/SJVFZ5I/MOVING_PROS_LLC__azbke-23-00571__0001.0.pdf?mcid=tGE4TAMA
represented by: Thomas H. Allen, Esq.
ALLEN BARNES & JONES, PLC
E-mail: tallen@allenbarneslaw.com
In re Charles M. Griffis
Bankr. N.D. Cal. Case No. 23-40100
Chapter 11 Petition filed January 30, 2023
In re Mensur Arici
Bankr. E.D. La. Case No. 23-10132
Chapter 11 Petition filed January 30, 2023
represented by: Patrick Garrity, Esq.
In re New Security Investigation and Correctional Consultant, Inc.
Bankr. D.P.R. Case No. 23-00217
Chapter 11 Petition filed January 30, 2023
See
https://www.pacermonitor.com/view/JI7RQCA/NEW_SECURITY_INVESTIGATION_AND__prbke-23-00217__0001.0.pdf?mcid=tGE4TAMA
represented by: Noemi Landrau Rivera, Esq.
LANDRAU RIVERA & ASSOCIATES
E-mail: nlandrau@landraulaw.com
In re Marcus E. Martin
Bankr. N.D. Tex. Case No. 23-40272
Chapter 11 Petition filed January 30, 2023
represented by: Marcey Okafor, Esq.
*********
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