/raid1/www/Hosts/bankrupt/TCR_Public/230213.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, February 13, 2023, Vol. 27, No. 43
Headlines
112 CEDAR SWAMP: Secured Party Sets March 13 Auction
129 N WALNUT: May Use $35,000 of Cash Collateral Thru March 20
270 BERGER: Amends US Bank & Real Time Secured Claims Pay Details
2M RESEARCH: Files Subchapter V Case to Fend Off Receiver
702 VERMONT: Unsecured Claims, If Any, to be Paid in Full
A CAB SERIES: Ongoing Operations to Fund Plan Payments
AADVANTAGE LOYALTY: Fitch Affirms BB Rating on $10BB Financing
ACCELERATED HEALTH: $875M Bank Debt Trades at 34% Discount
ACHAOGEN INC: Lost Chapter 11 Sales Claims Can Proceed
ACPRODUCTS HOLDINGS: $1.40B Bank Debt Trades at 17% Discount
AEARO TECHNOLOGIES: Senators Say 3M Maneuver Abuses Bankruptcy Law
AEARO TECHNOLOGIES: Veterans With Hearing Loss Want Case Dismissed
AKOUSTIS TECHNOLOGIES: Posts $11.2 Million Net Loss in 2nd Quarter
ALL DAY ACQUISITIONCO: $200M Bank Debt Trades at 90% Discount
AMCP CLEAN: $250M Bank Debt Trades at 18% Discount
AMERICAN AIRLINES: Fitch Alters Outlook on 'B-' IDR to Positive
AMYNTA AGENCY: Moody's Rates New $1BB 1st Lien Term Loan 'B2'
ARUZE GAMING: Files for Chapter 11 Bankruptcy Protection
ASP LS ACQUISITION: $1.38B Bank Debt Trades at 16% Discount
ASURION LLC: First Trust Fund II Marks $1.6M Loan at 23% Off
ASURION LLC: First Trust High Yield Marks $6.9M Loan at 23% Off
AUDACY CAPITAL: $770M Bank Debt Trades at 30% Discount
AVAYA HOLDINGS: American Century No Longer Owns Common Shares
AVAYA INC: $800M Bank Debt Trades at 73% Discount
AVEANNA HEALTHCARE: First Trust Fund II Marks Loan at 23% Off
BAUSCH HEALTH: $2.50B Bank Debt Trades at 25% Discount
BEAM & COMPANY: Case Summary & 14 Unsecured Creditors
BED BATH & BEYOND: Ex-Workers Report Severance Pay Delays
BED BATH & BEYOND: Regains Compliance With Nasdaq Listing Rule
BIONIK LABORATORIES: Incurs $1.1 Million Net Loss in Third Quarter
BLINK CHARGING: Plans to Sell Up to $75 Million Worth of Shares
BUKACEK FITNESS: Creditors to Get Proceeds From Liquidation
BURNS ASSET: Amends Class 2 and 3 Claims Pay Details
C & L DINERS: Unsecureds Will Get 41.78% of Claims in 3 Years
CELSIUS NETWORK: Committee Taps Selendy Gay Elsberg as Co-Counsel
CHECKOUT HOLDING: $150M Bank Debt Trades at 75% Discount
CITIUS PHARMACEUTICALS: All 3 Proposals Passed at Annual Meeting
COLOUROZ INVESTMENT 2: $677M Bank Debt Trades at 30% Discount
CONNECTICUT RESTORATION: Taps The Hamilton Group as Auctioneer
CONSOLIDATED COMMUNICATIONS: Moody's Lowers CFR to 'B3'
CONVERGEONE HOLDINGS: $275M Bank Debt Trades at 57% Discount
CORE SCIENTIFIC: Asks Court OK to Swap 27,000 Rigs to Pay Debt
CORNERSTONE CHEMICAL: S&P Places 'B-' ICR on CreditWatch Negative
CUENTAS INC: To Raise $5 Million Through Equity Offering
CYXTERA DC: $100M Bank Debt Trades at 15% Discount
DA LUGO INVESTMENT: Seeks to Tap Smith Thompson as Special Counsel
DARALI INC: Funeral Home Starts Subchapter V Case
DEL SOL DELIVERYS: Case Summary & 18 Unsecured Creditors
DGS REALTY: Fine-Tunes Plan Documents
DIEBOLD NIXDORF: $475M Bank Debt Trades at 31% Discount
DIEBOLD NIXDORF: CEO Octavio Marquez Elected Chairman
DIEBOLD NIXDORF: EUR415M Bank Debt Trades at 35% Discount
DIOCESE OF NORWICH: 142 Sexual Assault Victims' Names Published
DUNBAR PLAZA: Files Amendment to Combined Disclosure and Plan
E QUALCOM: Unsecured Creditors Will Get 10% of Claims in 60 Months
EQUINOX HOLDINGS: $1.02B Bank Debt Trades at 19% Discount
EQUINOX HOLDINGS: $150M Bank Debt Trades at 20% Discount
FMC CLINIC: Case Summary & 20 Largest Unsecured Creditors
FRANKLIN SQUARE: Moody's Affirms Ba1 CFR & Alters Outlook to Stable
FTX GROUP: Sam Bankman-Fried Wins Texas Securities Ruling
FTX GROUP: SBF Hoped for Foreign Leniency to Delay Bankruptcy
FTX GROUP: UST Says Law Requires Independent Examiner
GAUCHO GROUP: Extends Notes Maturity to Feb. 28
GENESISCARE USA: $350M Bank Debt Trades at 68% Discount
GENESISCARE USA: EUR500M Bank Debt Trades at 68% Discount
GIGA-TRONICS INC: Agrees to Terminate Regazzi as Employee, Officer
GIRARDI & KEESE: Criminal Charges Blasts California State Bar
GLOBAL MEDICAL: First Trust Fund II Marks $1.9M Loan at 21% Off
GROWLIFE INC: Sells $125K Promissory Note to Fourth Man
GTT REMAINCO: $418.3M Bank Debt Trades at 13% Discount
HLMC TITLE: Trustee Taps Thompson Coburn as Estate Tax Counsel
INDEPENDENT PET: $9.5MM New Money DIP Loan From Acquiom OK'd
INSTANT BRANDS: $450M Bank Debt Trades at 56% Discount
IRB HOLDING: Moody's Rates New $1.75BB Sr. Secured Term Loan 'B2'
JACOBS ENTERTAINMENT: Moody's Gives B2 Rating on New $100MM Notes
JACOBS ENTERTAINMENT: S&P Affirms 'B' ICR on Strong Performance
JAGUAR HEALTH: Agrees to Terminate License Deal With SynWorld
JAGUAR HEALTH: Regains Compliance With Nasdaq's Bid Price Rule
JUST BELIEVE: Asset Sale Proceeds to Fund Plan Payments
KEYS MEDICAL STAFFING: Wins Cash Collateral Access Thru Feb 2023
KINGS RIVER: Claims Will be Paid From Future Earnings
KNB HOLDINGS: S&P Downgrades ICR to 'D' on Bankruptcy Filing
KURNCZ FARMS: Reaches Settlement with PNL; Files Amended Plan
LASHER CONSTRUCTION: Unsecureds to Split $12K over 12 Quarters
LIFESCAN GLOBAL: $275M Bank Debt Trades at 34% Discount
LIMETREE BAY: Moody's Cuts Rating on Sr. Secured Term Loan to Caa2
LIVEONE INC: Holders Swap $21.2M Notes for New Series A Shares
LOGMEIN INC: First Trust Fund II Marks $4.8M Loan at 36% Off
LOGMEIN INC: First Trust High Yield Marks $5.8M Loan at 36% Off
MAD ENGINE: $275M Bank Debt Trades at 20% Discount
MAJOSTAN CORP: 3-Story Building Owner Seeks Chapter 11
MARLIN KRIDER: Ongoing Operations to Fund Plan Payments
MARTIN MIDSTREAM: Moody's Ups CFR to B3 & Alters Outlook to Stable
MERCURITY FINTECH: Issues $9 Million Unsecured Promissory Note
MIRROR TRADING: Chapter 15 Case Summary
MONARCH PCM: Asset Sale and Avoidance Proceeds to Fund Plan
MUSCLE MAKER: Appoints Two New Directors
MUSCLE MAKER: Unit Crosses $200M Revenue Milestone in First 3 Mos
NAKED JUICE: $450M Bank Debt Trades at 23% Discount
NATIONAL MENTOR: First Trust Fund II Marks $4,100 Loan at 29% Off
NATIONAL MENTOR: First Trust Fund II Marks $62,000 Loan at 29% Off
NATIONAL MENTOR: First Trust Fund II Marks $77,000 Loan at 29% Off
NATIONAL MENTOR: First Trust High Yield Marks Loan at 29% Off
NATIONAL MENTOR: First Trust High Yield's $148,000 Loan at 29% Off
NB HOTELS: Amends Plan to Include Secured Noteholder Claims
NEW CONSTELLIS: $150M Bank Debt Trades at 53% Discount
NOBLE HEALTH: Case Summary & 20 Largest Unsecured Creditors
NORMANDIE LOFTS: Seeks Chapter 11 Bankruptcy Protection
NORWICH DIOCESAN: Feb. 15 Hearing on Bid to End Solicitation Period
OMNIQ CORP: Registers 952,500 Shares for Possible Resale
PARLEE CYCLES: Court OKs Interim Cash Collateral Access
PG&E CORP: Moody's Alters Outlook on 'Ba2' CFR to Positive
PLOURDE SAND & GRAVEL: Seeks Chapter 11 Bankruptcy
PUG LLC: EUR452M Bank Debt Trades at 26% Discount
QUANERY SYSTEMS: Reaps $3.15 Million in Reopened Auction
QUORUM HEALTH: $732M Bank Debt Trades at 31% Discount
RB SIGMA: Amends Unsecureds & Franco Teriaco Secured Claims Pay
REPLIMUNE GROUP: $200M Bank Debt Trades at 19% Discount
REVLON INC: Target Corp. Has Plan Disclosure Objections
RICHMOND HOSPITALITY: Hearing on Exclusivity Bid Set for Feb. 15
ROCK SPLITTERS: Wins Cash Collateral Access Thru March 23
ROYAL CARIBBEAN: Moody's Affirms 'B2' CFR, Outlook Stable
SEARS HOMETOWN: Spars with Transform Entities Over Agreements
SERTA SIMMONS: $851M Bank Debt Trades at 44% Discount
SHEFA LLC: Files for Chapter 11; Southfield Seeks Conversion
SHERRITT INTERNATIONAL: DBRS Confirms B Issuer Rating
SOUTH BAY PROPERTY: Hits Chapter 11 Bankruptcy Protection
SPEEDY O'HARE: Unsecured Creditors to Split $30K in Plan
ST. CHARLES MEMORY: Court OKs Interim Cash Collateral Access
STANDARD BUILDING: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
STONEMOR INC: Moody's Withdraws 'B3' Corporate Family Rating
TECHNICAL COMMUNICATIONS: Raises 'Going Concern' Doubt
TELESAT LLC: $1.91B Bank Debt Trades at 44% Discount
TEXSTAR COUNTRY: Unsecureds to Get Share of GUC Pool in Plan
TGP HOLDINGS: First Trust Fund II Marks $677,000 Loan at 20% Off
TRANSCENDIA HOLDINGS: $295M Bank Debt Trades at 30% Discount
TRANSDIGM INC: Moody's Rates New Senior Secured Term Loan 'Ba3'
TRIUMPH GROUP: Issues Notice to Warrant Holders
TRUCK HERO: First Trust Fund II Marks $519,000 Loan at 16% Off
UNLIMITED DEVELOPMENT: Hits Chapter 11 Bankruptcy Protection
VENUS CONCEPT: Chief Operating Officer Steps Down
VENUS CONCEPT: Has Plan to Reduce Global Workforce by 18%
VERISTAR TN: Unsecureds to Get Share of Income for 3 Years
VISTAGEN THERAPEUTICS: Posts $9.8 Million Net Loss in 3rd Quarter
VOYAGER DIGITAL: Seeks to Disallow Alameda's Claims
WESTBANK HOLDINGS: Fannie Mae Amends Liquidating Plan
WEWORK INC: David Tolley Appointed to Board of Directors
WOMEN'S CARE: Moody's Affirms B3 CFR & Alters Outlook to Negative
WR GRACE: Fitch Gives 'BB+' Rating on New $300M Sr. Secured Notes
WW INTERNATIONAL: To Slash Jobs, Forecasts Restructuring Charges
WYNN RESORTS: Moody's Rates New $600MM Senior Unsecured Notes 'B2'
WYNN RESORTS: S&P Rates New $600MM Senior Unsecured Notes 'B+'
ZAYO GROUP: First Trust Fund II Marks $751,000 Loan at 22% Off
ZAYO GROUP: First Trust High Yield Marks $61,000 Loan at 25% Off
ZENERNET LLC: Files for Chapter 7 Liquidation
[*] Jan. 2023 Y/Y New Bankruptcy Filings Rose Across Main Chapters
[^] BOND PRICING: For the Week from February 6 to 10, 2023
*********
112 CEDAR SWAMP: Secured Party Sets March 13 Auction
----------------------------------------------------
In accordance with the applicable provisions of the Uniform
Commercial Code, Owemanco Mortgage NY Limited Partnership ("secured
party") will offer for sale at public auction all member and other
equity interests in and to 112 Cedar Swamp Road LLC ("collateral"),
which owns and operates the real property located at 112 Cedar
Swamp Road, Jericho, New York 11753.
The public auction will be held on March 13, 2023, at 2:30 p.m.
(EST) at the office of Lawrence & Walsh PC located at 215 Hilton
Avenue, Hempstead, New York 11550 with an option to participate
virtually via these Zoom meeting link: https://bitl.ly/CedarUCC,
Access Code: 85699738295, Password: 768386, Call-in number: +1
646-931-3860 (US).
In order to obtain a copy of the terms of sale and information
regarding bidding instructions, interested parties must contact
counsel for secured party:
Lawrence & Wlash, P.C.
c/o Eric P. Wainer, Esq.
215 Hilton Avenue
Hempstead, New York 11550
Tel: (516) 538-2400
Email: epw@lawfirmonline.com
The collateral will be sold to the highest qualified bidder;
provided, however, that secured party reserves the right to cancel
the sale in its entirety, or to adjourn the sale to a future date.
The sale will be conducted by Matthew D. Mannion of Mannion
Auctions LLC.
This sale is being held to enforce secured party's rights in the
collateral as a result of indebtedness owed to secured party,
following 112 Cedar Swamp Road LLC's defaults under the applicable
loan documents. The collateral will be sold in a single block, and
there is no warranty or representations relating to title,
possession, quiet enjoyment, marchantability, fitness, or the like
in this disposition. Secured party reserves the right for itself
and any assignee to bid and to become the purchaser at the sale.
129 N WALNUT: May Use $35,000 of Cash Collateral Thru March 20
--------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York
authorized 129 N Walnut Street LLC to use cash collateral on an
interim basis in accordance with the budget through March 20,
2023.
The Debtor is permitted to pay post-petition expenses of up to
$35,000 and only pay actual and necessary expenses of its operation
as set forth in the budget.
To the extent of the diminution in the value of any interest it has
in rents, Basis Multifamily Finance I LLC, is granted a first
priority lien on (i) all property acquired by the Debtor after the
filing of the case and any proceeds thereof, and (ii) any of the
Debtor's assets not already subject to Basis' alleged security
interest and any proceeds thereof -- in addition to any existing
liens it may hold on the Property and the Rents or otherwise.
As further adequate protection, the Debtor pay Basis $27,954 on
February 28, which may be paid from the Rents. Basis will be
granted an allowed superpriority administrative expense claim,
pursuant to Section 507(b) of the Bankruptcy Code, with priority
over all administrative expense claims and unsecured claims against
the Debtor, to the extent of the diminution of its alleged interest
in the value of the Rents.
Basis will not have any lien on any avoidance actions under
subchapter 5 of the Bankruptcy Code. Any substitute lien or
adequate protection claim granted will be subordinate to (i)
payment of United States Trustee's fees pursuant to 28 U.S.C. Sec.
1930 (a)(6) plus interest at the statutory rate for any fees not
paid in a timely manner, and any fees payable to the Clerk of the
Bankruptcy Court; and (ii) reasonable fees and expenses of a
Chapter 7 trustee allowable pursuant to 11 U.S.C. section 726 (b)
in an amount not to exceed $10,000.
A copy of the order is available at https://bit.ly/3DZdq9j from
PacerMonitor.com.
About 129 N Walnut Street LLC
129 N Walnut Street LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.Y. Case No. 22-42104) on
September 2, 2022. In the petition signed by Samuel Rosenbaum,
managing member, the Debtor disclosed up to $10 million in both
assets and liabilities.
129 N Walnut Street LLC owns a 41-unit apartment building in 129 N
Walnut Street LLC. The Property is currently fully occupied. The
Property is the Debtor's sole tangible asset. The Debtor's sole
source of revenue are the rents paid by tenants at the Property.
Judge Elizabeth S. Stong oversees the case.
The Law Offices of Isaac Nutovic is the Debtor's counsel.
270 BERGER: Amends US Bank & Real Time Secured Claims Pay Details
-----------------------------------------------------------------
270 Berger Real Estate, LLC, submitted a Second Modified Disclosure
Statement describing Chapter 11 Plan dated February 6, 2023.
This is a plan of reorganization that provides for payments to
secured creditors, in order of priority, up to the value of the
Debtor's sole real property asset. The Effective Date of the
proposed Plan is 30 days after entry of an Order of the Bankruptcy
Court confirming the Plan.
Class 1 consists of the Secured Claim of US Bank Trust National
Association ("US Bank") in the amount of $258,137.42 secured by
first mortgage on real property owned by Debtor commonly known as
308 Case Road, Lakewood, New Jersey. The Debtor proposes to cure
prepetition arrears by making 60 monthly payments on this claim in
the amount of $3,522.14. This figure includes the monthly base
mortgage payment as well as the cure payment at 4% interest
pursuant to the US Bank proof of claim.
The Debtor values collateral at $420,000. The holder of the Claim
in this Class shall retain its prepetition lien, and all rights of
the holder of the Claim in this Class, to the extent not
inconsistent with the Plan shall remain as set forth in the
prepetition loan documents and as provided by applicable
non-bankruptcy law. In the event of default the Debtor shall market
and sell the property within 9 months.
Class 2 consists of the Secured Claim of Real Time Resolutions
("RTR") secured by second mortgage on real property owned by Debtor
commonly known as 308 Case Road, Lakewood, New Jersey filed as
Claim number 2 on the Claims Register of the Court in the total
amount of $222,341.24 which, pursuant to section 506(a) of the
Bankruptcy Code, is limited to the value in the collateral securing
its Secured Claim. The secured claim of this creditor is subject to
the first mortgage held by US Bank and shall be bifurcated in to
secured and unsecured pursuant to 11 U.S.C. § 506(a) and (d), its
lien partially avoided, and the mortgage partially unsecured.
The secured portion of this claim is in the amount of $161,862.58
and the Debtor proposes to make monthly payments of $2,825.85 to
pay off the balance of the secured portion of the mortgage secured
portion of the mortgage at 4.75% interest pursuant to the RTR proof
of claim. The balance of the claim of this creditor is $60,478.66
and is treated as unsecured and included in Class 3. The holder of
the Claim in this Class shall retain its prepetition lien, and all
rights of the holder of the Claim in this Class, to the extent not
inconsistent with the Plan shall remain as set forth in the
prepetition loan documents and as provided by applicable
non-bankruptcy law.
Class 3 consists of General unsecured claims in the amount of
$60,478.66. The Claims in this Class shall receive nothing as the
Debtor's assets do not support payments of any kind.
The managing member of the Debtor, Joseph Plotzker, has pledged to
fund the plan through capital contributions. For the past 17 years,
Mr. Plotzker has been employed as an assistant professor teaching
higher education at the Yeshiva Ateret Torah located at 1750 East
4th Street, Brooklyn, NY 11223. In the event of default, the Debtor
shall market and sell the Property within 9 months.
A full-text copy of the Second Modified Disclosure Statement dated
Feb. 6, 2023, is available at https://bit.ly/3XrK8qG from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Timothy P. Neumann, Esq.
Geoffrey Neumann, Esq.
BROEGE, NEUMANN, FISCHER & SHAVER, LLC
25 Abe Voorhees Drive
Manasquan, New Jersey 08736
Tel: (732) 223-8484
Email: timtothy.neumann25@gmail.com
Email: geoff.neumann@gmail.com
About 270 Berger
270 Berger Real Estate, LLC, is an New Jersey Limited Liability
Company whose primary asset is real property located at 308 Case
Road, Lakewood, New Jersey 08701.
270 Berger Real Estate filed a bankruptcy Chapter 11 petition
(Bankr. D.N.J. Case No. 22-15665) on July 17, 2022. The Debtor is
represented by Timothy P. Neumann, Esq. of BROEGE, NEUMANN, FISCHER
& SHAVER LLC.
2M RESEARCH: Files Subchapter V Case to Fend Off Receiver
---------------------------------------------------------
2M Research Services LLC filed for chapter 11 protection in the
Northern District of Texas. The Debtor elected on its voluntary
petition to proceed under Subchapter V of chapter 11 of the
Bankruptcy Code.
Marcus E. Martin is the sole member and manager of 2M Research
Services LLC. Martin founded 2M Research in 2011 as a Texas
limited liability company. The core service areas of 2M Research
are (a) technical assistance, (b) policy evaluation and research,
and (c) health information technology and advanced analytics.
In 2013, 2M Research was awarded its first prime contract with an
agency of the United States. Since that date, 2M Research has
executed and managed more than 150 prime contracts with agencies of
the United States. Currently, 2M Research is performing services
under 14 agency contracts and expects to be awarded 14 contracts in
the immediate future.
2M Research estimates that its gross income from the current 14
contracts is $4,800,000 per year.
2M Research entered into a secured loan transaction with Pragmatic
Financial LLC pursuant to which Pragmatic lent 2M Research $3.8
million and bearing interest at 35% per year (the "Pragmatic
Loan"). Martin executed a guaranty of the Pragmatic Loan. The
payment schedule for the loan provided for interest only and then a
balloon principal payment. The Debtor was unable to make the
principal payment when it became due. Pragmatic sued 2M Research
Services LLC and Martin in the case styled Pragmatic Financial LLC
v. 2M Research LLC and Marcus E. Martin, Case No. 348-330937-21 in
the 348th District Court of Tarrant County, Texas and obtained a
default judgment in the amount of approximately $5,360,800. At the
time the answer in the Pragmatic Lawsuit was due and for a number
of months thereafter, Martin was unable to work because he
contracted and was recovering from a severe COVID 19 infection.
Accordingly, 2M Research missed the deadlines for reconsideration
and appeal of the default judgment in the Pragmatic Lawsuit.
On Jan. 27, 2023, the State Court in the Pragmatic Lawsuit
conducted a hearing and entered an order appointing a receiver for
both 2M Research and Dr. Marcus. The receiver paid his bond but
failed to file an oath before the bankruptcy petitions of 2M
Research and Dr. Marcus were filed.
In addition to the Pragmatic loan, 2M Research has secured debt
through other lenders totaling $311,000, secured federal tax debt
of $5,171,038, and unsecured debt totaling $603,000.
The petition states that funds will be available to unsecured
creditors.
About 2M Research Services
2M Research Services LLC is a minority-owned research and advisory
firm founded in 2011 focused on providing federal, state, and local
government agencies; commercial clients; and nonprofit
organizations with objective and rigorous research, program
evaluation, and policy analysis consulting services.
2M Research Services LLC filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. N.D. Tex.
Case No. 23-40271) on Jan. 30, 2023. In the petition filed by
Marcus Martin, as manager and member, the Debtor reported assets
and liabilities between $1 million and $10 million.
The owner and founder, Marcus E Martin, also commenced his own
Chapter 11 case (Bankr. N.D. Tex. Case No. 23-40272) on Jan. 30,
2023.
The Debtors are represented by:
Martin Averill, Esq.
Roquemore Skierski PLC
1305 Grayhawk Drive
Mansfield, TX 76063
Tel: 972-325-6591
Email: filing@roqski.com
702 VERMONT: Unsecured Claims, If Any, to be Paid in Full
---------------------------------------------------------
702 Vermont Inc., filed with the U.S. Bankruptcy Court for the
Eastern District of New York a Disclosure Statement in connection
with the accompanying Chapter 11 Plan of Reorganization.
The Debtor owns a single-family residential building (the
"Property") at 702 Vermont Street Brooklyn, New York. The Property
is encumbered by a first mortgage with original loan amount of
$399,000.
Before the filing of the Chapter 11 case, the Borrower became
delinquent with respect to its first mortgage obligations due to
the unauthorized takeover of his property by Occupy Wall Street
protesters. The rental income from the property was to pay for the
mortgage.
The borrower tried to but was unable to evict Occupy Wall Street
protesters and his income was insufficient for him to pay the
operating expenses of the building. It was at this time the
Borrower reached out to investors about purchasing the property and
agreed to work with the prospective owner on a settlement. Over the
course of the next several years all illegal tenants were evicted
either by Debtor or the previous owner.
The Debtor's decision to seek Chapter 11 relief was necessitated by
a foreclosure action commenced by MTGLQ INVESTORS, L.P., after the
Borrower defaulted on its loan obligations to MTGLQ and the bank
did not inform the Debtor of its acceptance or rejection of the
Debtor's offer to settle after proof submission of all required
documents as well as proof of funds.
Class 2 consists of the First Mortgage held by MTGLQ INVESTORS,
L.P. The Class 2 Mortgage Claim of MTGLQ will be resolved by either
of the two following options:
Settlement
* The Debtor and MTGLQ will enter into a settlement agreement to
discharge the debt in full.
* The Debtor' principal shall utilize his resources to settle
the debt.
* All notification periods and grace periods set forth in the
original loan documents shall remain effective under this agreement
until a settlement is reached.
* No later than 10 days after entry of the Confirmation Order,
the. Debtor shall: execute such documents as MTGLQ shall reasonably
request concerning the terms of this settlement, if this option is
agreed to by lender.
* A settlement shall also include termination of the foreclosure
action associated with this matter.
Class 3 consists of Allowed Unsecured Claims. The allowed Class 3
claims of unsecured creditors, if any, shall be paid in full within
60 days after the Effective Date of the Plan.
Class 4 consists of the equity membership interests in the Debtor.
Class 4 Equity Interest shall not be affected by the Plan and the
Class 4 interest holder shall continue to retain his equity
interest in the Reorganized Debtor following Confirmation of the
Plan. The continued retention of equity in the Reorganized Debtor
by the Class 4 interest holder is permissible by virtue of his New
Value Contribution.
Funding for the Plan payments shall come from the injection of such
new value contributions by or on behalf of Debtor's principal as
may be necessary to fund any payments under the plan.
A full-text copy of the Disclosure Statement dated February 7, 2023
is available at https://bit.ly/3lwWbWE from PacerMonitor.com at no
charge.
Counsel to the Debtor:
LAW OFFICES OF STACEY SIMON REEVES
Stacey Simon Reeves, Esq.
3220 Fairfield Avenue #7A
Bronx, New York 10463
About 702 Vermont
702 Vermont Inc. owns a single-family residential building (the
"Property") at 702 Vermont Street Brooklyn, New York. The Debtor
filed Chapter 11 Petition (Bankr. E.D.N.Y. Case No. 22-42458) on
October 4, 2022. The Debtor is represented by Stacey Simon Reeves,
Esq. of LAW OFFICE OF STACEY SIMON REEVES.
A CAB SERIES: Ongoing Operations to Fund Plan Payments
------------------------------------------------------
A Cab, Series L.L.C, f/k/a A Cab, LLC, filed with the U.S.
Bankruptcy Court for the District of Nevada a Plan of
Reorganization for Small Business dated February 6, 2023.
The Debtor is a Nevada series limited liability company and
operates as a taxicab service in the Las Vegas area.
Since 2012, the Debtor has been a party to class action litigation
pending in the Eighth Judicial District Court, Clark County, Nevada
(the "Nevada State Court"), styled as Murray, et al. v. A Cab,
Series L.L.C., Case No. A-12-669926-C (the "Murray Case"), which
originally involved claims by 890 former taxi drivers
(collectively, the "Murray Plaintiffs") for alleged violation of
the Nevada Minimum Wage Act under the Constitution of the State of
Nevada.
The Debtor's bankruptcy filing stayed the Murray Case, and various
other litigations involving the Debtor by operation of the
automatic stay in § 362 of the Bankruptcy Code. The Murray
Plaintiffs have also separately asserted that they allegedly have
an alter ego claim against Mr. Nady, and apparently in aid of
collection of the same sums, however, the Debtor asserts that such
claim, if such a claim even exists, which is itself disputed,
became property of the bankruptcy estate upon the filing of the
Debtor's Chapter 11 Case.
The purpose of this bankruptcy case is to preserve the Debtor's
business, and to allow it to continue operating in the ordinary
course, and without the danger of an immediate enforcement of the
Murray Plaintiffs' claims and/or receiver appointment that could
shut down or have substantially deleterious effects on its
operations, which will allow it to restructure its debts, maintain
its drivers' jobs, and preserve value for the benefit of all
creditors and parties in interest.
The Debtor's financial projections show that it will have projected
disposable income of a total of $900,000 over the next 5 years. The
final Plan payment is expected to be paid by March 2028, assuming
the Plan is confirmed and goes effective in April 2023.
This Plan of Reorganization under chapter 11 of the Bankruptcy Code
proposes to pay the Debtor's creditors from cash flow from ongoing
and future operations.
This Plan also provides for the payment in full of Allowed
administrative and priority claims.
Class 4 consists of Non-Priority General Unsecured Creditors. Each
holder of an Allowed general unsecured, non-priority claim shall
receive its pro rata share of various payments, as follows:
* Disposable Income Payment. Such Allowed claims shall first be
paid the aggregate sum of $900,000, or such greater amount as the
Court may require at the confirmation hearing pursuant to §§ 1190
and 1191 of the Bankruptcy Code, by receiving its pro rata share of
the following sums: (a) Year 1: $39,000 per quarter; (b) Year 2:
$42,000 per quarter; (c) Year 3: $45,000 per quarter; (d) Year 4:
$48,000 per quarter; and Year 5: $51,000 per quarter. The foregoing
quarterly payments shall commence by June 15, 2023, and continue
each September 15, December 15, March 15, and June 15 thereafter
for a period of 60 months.
* Greenberg Trust Account Monies. Such Allowed claims will also
be paid their pro rata share of all funds held in the attorney
trust account of Leon Greenberg, P.C., which are believed to be in
the total sum of $303,694.54, if recovered.
* ERTC Monies. Such Allowed claims will also be paid their pro
rata share of all monies the Debtor actually receives from its
ERTC, which it estimates will be approximately $570,905, if and
when received, and which the Debtor expects to receive sometime in
2023.
* Payment Procedures.
-- Pending Allowance. Because the claims of the Murray
Plaintiffs and their counsel, Leon Greenberg, P.C., are presently
Disputed Claims within the meaning of Section 5.01 because of the
pendency of the Murray Appeal, any funds potentially payable to
them shall remain undistributed, and thus in or subject to the
Disputed Claims Reserve, and without any distributions thereon,
unless until such claims are Allowed by Final Order.
-- If Murray Plaintiffs Prevail. If the claims of the Murray
Plaintiffs and/or their counsel do become Allowed pursuant to Final
Order, then counsel for the Debtor and the Murray Plaintiffs shall
confer regarding the appropriate distribution of all funds to be
made available pursuant to this Plan. If the parties are able to
agree, then they shall submit a written joint stipulation to that
effect, including the proposed distributions to the Court for
entry. If the parties are unable to agree after conferring for at
least 15 business days, then the Debtor shall file a motion seeking
to approve the proposed distributions of such funds from the
Bankruptcy Court by filing a motion for approval thereof, which may
be opposed.
-- If Murray Plaintiffs Do Not Prevail. If the claims of the
Murray Plaintiffs and/or their counsel are disallowed by Final
Order, including without limitation, as a result of a reversal on
appeal in the Murray Appeal, or other related proceedings
thereafter, then all funds held in the Leon Greenberg, P.C. trust
account, and in the Disputed Claims Reserve shall be released back
to the Debtor, and without further order of the Court, and the
Murray Plaintiffs and Leon Greenberg, P.C. shall receive no
distribution.
Class 5 consists of Equity Security Holders of the Debtor. The
Holders of Class 5 Equity Interests shall retain their Equity
Interests, subject to the terms and conditions of this Plan. Class
5 is unimpaired and is deemed to accept the Plan.
This Plan will be funded through cash flow generated from future
operations of the Debtor's business, inclusive of TLC's operations
as well, and inclusive of all specific cells of them, which are all
deemed substantively consolidated herein solely for purposes of
calculating the required amount of disposable income required to be
paid pursuant §§ 1190 and 1191 of the Bankruptcy Code, and for
making distributions under this Plan, but for no other purpose.
Additionally, the Plan will be funded from the amounts currently
being held in the trust accounts of Leon Greenberg, P.C. as
specified herein, as well as the Debtor's anticipated receipt of
its ERTC funds.
A full-text copy of the Plan of Reorganization dated February 6,
2023 is available at https://bit.ly/40RoWxd from PacerMonitor.com
at no charge.
Attorneys for Debtor:
Matthew C. Zirzow, Esq.
Zachariah Larson, Esq.
Larson & Zirzow, LLC
850 E. Bonneville Ave.
Las Vegas, NE 89101
Telephone: (702) 382-1170
Facsimile: (702) 382-1169
Email: mzirzow@lzlawnv.com
zlarson@lzlawnv.com
About A CAB Series
A CAB Series LLC -- https://www.acablv.com/ -- offers cab services
in Las Vegas, Nevada.
A CAB Series LLC filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Nev. Case No.
22-14361) on Dec. 12, 2022. In the petition filed by Creighton J.
Nady, as manager, the Debtor reported assets and liabilities
between $1 million and $10 million.
The Debtor is represented by Matthew C. Zirzow, Esq. at Larson &
Zirzow, LLC.
AADVANTAGE LOYALTY: Fitch Affirms BB Rating on $10BB Financing
--------------------------------------------------------------
Fitch Ratings has affirmed the 'BB' ratings on the $10 billion in
financing co-issued by AAdvantage Loyalty IP Ltd. (AAdvantage IP)
and American Airlines, Inc. (American) and revised the Rating
Outlook to Positive from Stable. The Outlook change reflects the
linkage to the corporate and change in Outlook on American
Airlines, which was revised to Positive from Stable on Feb. 6,
2023.
AAdvantage IP is a special purpose vehicle (SPV) incorporated under
the laws of the Cayman Islands for the purpose of this transaction.
AAdvantage IP is an indirect wholly owned subsidiary of American
Airlines.
Entity/Debt Rating Prior
----------- ------ -----
AAdvantage
Loyalty IP Ltd.
Senior Secured
Class A Notes
00253XAA9 LT BB Affirmed BB
Senior Secured
Class B Notes
00253XAB7 LT BB Affirmed BB
Senior Secured
Term Loan
02376CBJ3 LT BB Affirmed BB
TRANSACTION SUMMARY
The transaction is backed by license-payment obligations from
American and cash flow generated by the AAdvantage Loyalty program.
As part of the financing structure, the intellectual property (IP)
assets associated with the AAdvantage loyalty program and
AAdvantage agreements, including co-branded agreement with
Citibank, N.A. and Barclays Bank Delaware, related to AAdvantage
program are transferred to the bankruptcy-remote IP SPV, AAdvantage
IP. AAdvantage IP grants a worldwide license to American and its
subsidiaries to use the IP to operate the loyalty program.
In return, the licensee, American, will pay a monthly license fee
equivalent to all the cash collections generated by the sale of
miles to American as governed through an intercompany agreement.
Additionally, certain third-party agreements will be assigned to
AAdvantage IP and payment for the purchase of AAdvantage miles from
certain third parties will be remitted directly to a collection
account held at Wilmington Trust, National Association in the name
of AAdvantage IP. These third-party agreements include the co-brand
agreements with Citi and Barclays, the two largest third-party
partners of AAdvantage.
The debt facilities are guaranteed, on a joint and several basis,
by the parent, American Airlines Group Inc., and certain
subsidiaries of the parent, American, namely AAdvantage Holdings 1,
Ltd. (HoldCo 1) and AAdvantage Holdings 2, Ltd (HoldCo 2). The
issuers also grant additional security to the lenders/bondholders,
including a first-priority-perfected security interest in cash
flows from the AAdvantage program, a pledge of all rights under
contracts/agreements related to the AAdvantage program, and a
pledge of the transaction accounts (including the collection,
payment and reserve accounts) and a pledge over the equity
interests in AAdvantage IP, HoldCo1 and HoldCo2.
Fitch's rating addresses timely payment of interest and principal
by the final legal maturity date.
KEY RATING DRIVERS
Credit Quality of American: Cash flows backing the transaction will
primarily come from payment obligations from American under the
licensing agreement related to IP owned by the IP SPV and cash
flows received from third-party partners related to miles issued to
the card holders. Therefore, the Issuer Default Rating (IDR) of
American acts as the starting point for the analysis. American is
rated 'B-'/Positive by Fitch. The Positive Outlook reflects
American's progress in deleveraging its balance sheet and likely
improved profitability in 2023 for U.S. airlines based on a
supportive supply and demand environment.
Performance Risk and GCA Score: Timely payment on the debt
facilities depends on the ongoing performance of the licensee,
American. American's going concern assessment (GCA) score of '2'
acts as a cap for the transaction rating. The GCA score provides an
indication of the likelihood that American continues to operate in
the event of default and Chapter 11 bankruptcy. The GCA score of
'2' allows for a four-notch rating differential depending on
American's IDR and the issuance's default rating.
Strategic Nature of Assets (Likelihood of License Agreement
Affirmation): The affirmation factor, which measures the likelihood
that American would view this obligation as strategic and would
affirm the license in the event of a Chapter 11 bankruptcy, is
considered high by Fitch. The strategic importance of the IP assets
to American's operations, coupled with the structural incentives in
place, supports this assessment. The assessment of 'high' allows
the transaction to obtain up to a four-notch uplift from American's
current IDR of 'B-'/Positive.
Fitch expects the $10 billion program to be approximately 20% of
American's total liabilities, which allows the maximum notching
differentiation between the transaction rating and the IDR of
American. However, while the company's extensive deleveraging
targets over the next three years are a credit positive for
American's IDR, this may cause the 20% level to increase depending
on the timing of deleveraging and the program's amortization. If
the 20% level is expected to be higher over the long-run, this will
begin to constrain Fitch's notching differential between the
company's IDR and the program rating.
Furthermore, in its debt service coverage ratio (DSCR)
calculations, Fitch considers the rebound from the low air-traffic
levels caused by the coronavirus outbreak to be 96% for its base
case by YE 2023. Reported cash flows have exceeded initial
expectations and continue to recover closer to 2019 levels. The
DSCR during the amortization period, years three through eight, is
expected to average approximately 3.5x with an estimated DSCR of
2.6x at peak payment in July 2023. Fitch ran an interest rate
sensitivity on the 3mL, which yielded DSCRs of greater than 2.0x at
the peak payment date, reflecting that the transaction can
withstand stresses to LIBOR or the benchmark rate.
Asset Isolation and Legal Structure: Fitch assesses the legal
protections present in the U.S. bankruptcy code, as well as the
structural features incorporated into the transaction. In addition
to having the IP assets and the AAdvantage agreements legally
conveyed, lenders/bondholders have a first-perfected security
interest in the contractual obligations due from American and
third-party partners. The legal structure incentivizes American to
continue to make payments on the license. Creditors would also
benefit from other structural features, including potential
liquidated damages and a three-month interest liquidity reserve.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
The rating is sensitive to changes in the credit quality of
American Airlines, Inc., which acts as licensee under the IP
license agreement. Any change in IDR can lead to a change on the
rating. Additionally, a reassessment of the GCA score and the
affirmation factor from high to medium will lead to a change in the
ratings. Finally, it is important to highlight that continued
deleveraging is a credit positive for the company's IDR; however,
this may narrow the rating differential between the transaction's
rating and the company's IDR as the ratio of the transaction's debt
to total liabilities will continue to increase.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
Fitch does not anticipate developments with a high likelihood of
triggering an upgrade. If American's IDR is upgraded, Fitch will
consider whether the same uplift could be maintained or if it
should be further tempered in accordance with criteria.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
ACCELERATED HEALTH: $875M Bank Debt Trades at 34% Discount
----------------------------------------------------------
Participations in a syndicated loan under which Accelerated Health
Systems LLC is a borrower were trading in the secondary market
around 65.6 cents-on-the-dollar during the week ended Friday,
February 10, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $875 million facility is a Term loan that is scheduled to
mature on February 15, 2029. The amount is fully drawn and
outstanding.
Accelerated Health Systems, LLC provides healthcare services. The
Company offers athletic training, physical therapy, occupational
therapy, and fitness services to affiliations including high
schools, colleges, and many professional sports teams.
ACHAOGEN INC: Lost Chapter 11 Sales Claims Can Proceed
------------------------------------------------------
A Delaware bankruptcy judge will allow bankrupt biopharmaceutical
company Achaogen Inc. to go forward with claims that an CIPLA USA,
INC., interfered with its attempt to auction off two of its
antibiotics even though it didn't yet have a binding sales
contract.
In EDWARD E. NEIGER, as Trustee of the Achaogen Plan Trust,
Plaintiff, v. CIPLA USA, INC., Defendant, Adv. Pro. No. 21-50479,
In re Achaogen, Inc. (Bankr. D. Del. Case No. 19-10844), the
Plaintiff commenced this adversary proceeding against Cipla to
recover losses it claims resulted from Cipla's wrongful conduct in
the sale process. The 10-count Complaint alleges the following
claims:
* Count I: breach of contract;
* Count II: breach of oral contract;
* Count III: breach of contract- bad faith;
* Count IV: tortious interference with contract;
* Count V: tortious interference with business relations;
* Count VI: tortious interference with prospective economic
advantage;
* Count VII: breach of contract;
* Count VIII: promissory estoppel;
* Count IX: breach of implied covenant of good faith and fair
dealing; and
* Count X: contempt for willful violation of court orders.
In broad brush, the Complaint alleges that Cipla willingly
participated in a court-approved sale process. The Plaintiff
claims that Cipla acted unreasonably and without justification when
it backed out of its obligations both as the back-up bidder for the
China Assets and successful bidder for C-Scape. The Complaint
further alleges that, as a result of Cipla's deliberate efforts to
frustrate the sale process, the Debtor has lost substantial value.
Defendant Cipla USA, Inc. filed a motion to dismiss Counts IV, V,
VI, VIII, IX and X of the Complaint in this adversary proceeding.
Bankruptcy Judge Brendan Linehan Shannon ruled that Cipla's Motion
is GRANTED, in part, with respect to Count IV, which will be
dismissed without prejudice, and Cipla's Motion is DENIED with
respect to Count V, VI, VIII, IX and X.
Background
Achaogen was a pharmaceutical company that developed and
commercialized drugs to fight drug-resistant bacterial infections,
known as "superbugs." By April 2019, the Debtor had developed two
anti-infective drugs: Plazomicin, which received approval in June
2018 by the Food and Drug Administration, and C-Scape, which was in
the FDA Phase I approval process as of April 2019. These two drugs
were the Debtor's primary anticipated source of revenue while the
company was operational. The Debtor invested significant efforts
and financial resources into the development of Plazomicin.
After the FDA approved Plazomicin for commercial use, the Debtor's
business failed to generate anticipated sales volume, leading to a
liquidity crisis.
On April 15, 2019, the Debtor filed a voluntary petition for relief
under Chapter 11 of the Bankruptcy Code in this Court. The stated
purpose of the bankruptcy filing was to sell the Debtor's assets
pursuant to Bankruptcy Code Sec. 363.
On May 1, 2019, the Court entered a bidding procedures order
authorizing the Debtor to market its assets and to solicit bids for
the purchase of both Plazomicin and C-Scape.
On June 3, 2019, the Debtor commenced an auction for the Plazomicin
asset. The Plazomicin asset was split into two separate components
for bidding purposes: (1) the rights to Plazomicin in the greater
China region (the "China Assets") and the global rights to
Plazomicin in the rest of the world, excluding China (the "Global
Rights"). The Global Rights to Plazomicin included related
patents, trademarks, domain names, contracts, government approvals
and certain other related assets and to assume certain liabilities
of Achaogen. The Complaint alleges that all parties to the auction
understood that the buyer of the Global Assets would be expected to
enter into a licensing arrangement with the buyer of the China
Assets.
At the conclusion of the June 3 Auction, Cipla was declared the
successful bidder for the Global Rights, and Qilu Antibiotics
Pharmaceutical Co. Ltd. was declared the successful bidder for the
China Assets. Additionally, Cipla was designated the back-up
bidder for the China Assets. Shortly thereafter, Cipla and
Achaogen entered into an asset purchase agreement for the Global
Rights, subject to the Debtor's right and obligation to license the
China Assets to Qilu (the "Cipla Plazomicin Sale Agreement").
On June 12, 2019, the Debtor conducted a separate auction for the
C-Scape asset. At the conclusion of that auction, Cipla was
declared the successful bidder for C-Scape. Ultimately, the Debtor
entered into the following agreements with Cipla: (a) the Cipla
Plazomicin Sale Agreement, and (b) an asset purchase agreement
dated June 20, 2019 for the C-Scape asset (the "Cipla C-Scape Sale
Agreement," and collectively with the Cipla Plazomicin Sale
Agreement, the "Cipla Sale Agreements").
The Complaint alleges that the Debtor, Cipla and Qilu attempted to
negotiate the terms of the license for the China Assets. The
Debtor served as a facilitator of discussions between Cipla and
Qilu regarding a license agreement for Qilu, with the goal of
closing both the Cipla Sale Agreements and Qilu License Agreement
at or about the same time.
After a draft of the license agreement was circulated to Cipla, the
Plaintiff alleges that Cipla did not provide comments or otherwise
engage in a timely manner. Cipla ultimately provided extensive
changes to the draft that, according to the Plaintiff, "greatly
deviated from the draft provided by [the Debtor] and have
drastically taken back what was offered for sale by the [Debtor]."
Several weeks after the auctions, Qilu informed the Debtor of its
decision to end negotiations and walk away from its bid for the
China Assets due to the difficulties Cipla was creating in the
negotiations over the Qilu License Agreement.
The Complaint alleges that Qilu reported to the Debtor that it
believed Cipla had not been acting in good faith, and Qilu
identified its incurred and anticipated costs in connection with
the negotiations as the primary factors for abandoning its
obligation to purchase the China Assets.
After learning of Qilu's decision to walk away, the Debtor informed
Cipla that it would have to consummate the purchase of the China
Assets based on its designation as the back-up bidder at the June 3
Auction. As the back-up bidder, the Bidding Procedures and the
Cipla Sale Order required Cipla to step into Qilu's shoes after
Qilu elected not to follow through on its bid. On July 31, 2019,
Cipla informed the Debtor that it would not be fulfilling its
obligation to purchase the China Assets as the back-up bidder.
The Complaint alleges that Cipla delayed negotiations with Qilu to
search for a buyer willing to pay an amount above Cipla's bid and,
after causing Qilu to withdraw its bid, the Plaintiff alleges that
Cipla intended to sell the China Assets to a third-party at a
profit.
However, the Complaint claims that Cipla's search did not yield the
intended result.
The Plaintiff alleges that by late July 2019, the Debtor started to
receive mixed signals from Cipla regarding its willingness to close
the C-Scape transaction. In addition to the delays in negotiating
the language of a proposed sale order for Plazomicin, Cipla failed
to consummate the C-Scape Sale Agreement as the successful bidder.
After both Qilu and Cipla failed to fulfill their obligations to
purchase C-Scape and the China Assets, the Debtor undertook efforts
to find an alternate purchaser. Prior to confirmation, the Debtor
was able to find an alternate buyer for the China Assets for an
amount far less than the consideration offered by Cipla as the
back-up bidder. That sale closed on January 9, 2020. The Debtor
has been unable to find a buyer for C-Scape and the Complaint
alleges that the value of C-Scape has plummeted.
On May 29, 2020, the Court approved and entered an order confirming
the Debtor's first amended joint plan of liquidation. Pursuant to
the Plan and Confirmation Order, the assets of the Debtor
immediately vested in the Achaogen Plan Trust and the Plaintiff was
appointed as Plan Trustee.
The Plaintiff has commenced this adversary proceeding against Cipla
to recover losses it claims resulted from Cipla's wrongful conduct
in the sale process.
Claims Move Forward
Counts IV, V, and VI alleges three related claims for tortious
interference against Cipla. With respect to Cipla's alleged
interference with the sale of the China Assets in Count IV, the
Court finds that in the absence of a court order, the acceptance of
a winning bid at auction does not result in an enforceable contract
for purposes of establishing a requisite element of tortious
interference with a contract. With respect to the Plaintiff's
claims for tortious interference with business relations (Count V)
and tortious interference with prospective economic advantage
(Count VI), the Complaint alleges that Cipla wrongfully and
deliberately interfered with the Debtor's business relations with
Qilu, and but for that interference, Qilu and the Debtor would have
closed the transaction for the China Assets. The Court finds that
Plaintiff has pled allegations in Count V and Count VI sufficient
to survive Cipla's motion.
In Count VIII, the Plaintiff asserts a promissory estoppel claim
due to Cipla's alleged failure to close on the Cipla C-Scape Sale
Agreement. The Complaint alleges that Achaogen detrimentally
relied on Cipla's statement that it would close the Cipla C-Scape
Sale Agreement. The Court finds that the Complaint's Count VIII
provides sufficient allegations to overcome the Motion to Dismiss.
In Count IX, which asserts Breach of Implied Covenant of Good
Faith, the Court concludes that the Plaintiff's factual allegations
for Count IX are sufficient at this stage to raise the right to
relief above the speculative level. Cipla argues that the covenant
of good faith and fair dealing cannot be alleged when the contract
grants explicit termination rights to Cipla and the question, as
asserted in the breach of contract claims, is whether Cipla was
justified in exercising those rights. The Plaintiff asserts that
the Complaint plausibly alleges that Cipla acted unreasonably and
arbitrarily regarding the overarching purpose of the agreement when
interfering with the Qilu license agreement negotiations, in
failing to close as back-up bidder on the China Assets, or by
intentionally delaying and making false promises regarding the
C-Scape purchase agreement.
In Count X, Plaintiff seeks compensatory damages and an award of
exemplary or punitive damages for willfully violating the Court
orders. Cipla argues that Count X should be dismissed, arguing
that the Third Circuit has held that Bankruptcy Code Sec. 105 does
not create a private cause of action for civil contempt. The
Plaintiffs contend that other bankruptcy courts in this district
have considered civil contempt claims in adversary proceedings.
The Court agrees that a contempt claim may be pursued before the
bankruptcy court in an adversary proceeding.
About Achaogen Inc.
South San Francisco, California-based Achaogen, Inc. --
http://www.achaogen.com/-- is a biopharmaceutical company focused
on the discovery, development, and commercialization of innovative
antibacterial treatments against multi-drug resistant
gram-negative
infections.
Achaogen sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Lead Case No. 19-10844) on April 25, 2019. In the
petition signed by CEO Blake Wise, the Debtor disclosed assets of
$91.61 million and liabilities of $119.96 million as of Jan. 31,
2019.
The case is assigned to Judge Brendan Linehan Shannon.
The Debtor tapped Hogan Lovells US LLP as its bankruptcy counsel;
Morris, Nichols, Arsht & Tunnell LLP as co-counsel; Meru LLC as
financial advisor; Cassel Salpeter & Co., LLC as investment banker;
and Kurtzman Carson Consultants LLC as claims, noticing and
solicitation agent.
Andrew Vara, acting U.S. trustee for Region 3, appointed a
committee of unsecured creditors on April 23, 2019. The committee
retained Akin Gump Strauss Hauer & Feld LLP and Klehr Harrison
Harvey Branzburg LLP as its legal counsel, and Province, Inc., as
its financial advisor.
* * *
On May 29, 2020, the Court approved and entered an order confirming
the Debtor's first amended joint plan of liquidation. Pursuant to
the Plan and Confirmation Order, the assets of the Debtor
immediately vested in the Achaogen Plan Trust and EDWARD E. NEIGER
was appointed as Plan Trustee.
ACPRODUCTS HOLDINGS: $1.40B Bank Debt Trades at 17% Discount
------------------------------------------------------------
Participations in a syndicated loan under which ACProducts Holdings
Inc is a borrower were trading in the secondary market around 83.5
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $1.40 billion facility is a Term loan that is scheduled to
mature on May 17, 2028. The amount is fully drawn and
outstanding.
ACProducts Holdings, Inc. manufactures cabinets. The Company offers
single and multi-family home builders, distributors, home centers,
cabinetry, and other related products..
AEARO TECHNOLOGIES: Senators Say 3M Maneuver Abuses Bankruptcy Law
------------------------------------------------------------------
U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate
Judiciary Committee, led a group of Senate and House Democratic
colleagues in submitting an amicus brief in a bankruptcy case
before the Seventh Circuit Court of Appeals, in support of 231,000
military veterans who are seeking restitution from 3M and its
subsidiary Aearo Technologies for allegedly manufacturing defective
earplugs.
The company and its subsidiary attempted a complex maneuver similar
to the infamous "Texas Two-Step" to dodge the veterans' lawsuits,
but a bankruptcy court rejected this attempted evasion and 3M and
its subsidiary appealed to the Seventh Circuit. The Court's
decision in this case will have wide-reaching implications for
consumers who have been harmed by dangerous products.
In the brief, Senator Durbin and his colleagues write that Congress
did not intend for wealthy and powerful corporations to use the
bankruptcy system to short-circuit civil litigation against them.
They argue instead that the Bankruptcy Code was designed to provide
individuals and companies with a fresh start following financial
calamity, and that allowing wealthy corporations like 3M and
Johnson & Johnson to exploit loopholes to evade accountability
"would corrupt the fundamental purpose of the bankruptcy system
itself."
The Members further contend that: "3M's attempt to force [a stay
of litigation] through its free-form, atextual gloss on the Code's
provisions would give any giant corporation a roadmap to avoid
virtually any mass tort liability by obtaining a bankruptcy-like
absolution without providing bankruptcy-required protections for
creditors. That was not the result that Congress intended . . .
and it is not a result that this Court should permit."
Durbin was joined by U.S. Senators Sheldon Whitehouse (D-RI),
Richard Blumenthal (D-CT), Tammy Baldwin (D-WI), Elizabeth Warren
(D-MA), and Tammy Duckworth (D-IL), and U.S. Representatives
Jerrold Nadler (D-NY-12) and David Cicilline (D-RI-01).
Read the full amicus brief at
https://www.judiciary.senate.gov/imo/media/doc/2023.02.01%20-%20Aearo%20amicus%20-%20FINAL_removed%20(1).pdf
The amicus brief builds on Durbin's efforts to close loopholes in
the bankruptcy system that are exploited by wealthy and powerful
corporations. Earlier, Durbin applauded an appellate court ruling
in the Johnson & Johnson baby powder case, which rejected the
bankruptcy filing by a J&J shell company. Last year, he spoke on
the Senate floor and in a subcommittee hearing on this issue.
Durbin also has cosponsored the Nondebtor Release Prohibition Act
of 2021, which would prevent the use of the "Texas Two-Step" and
other cynical maneuvers to exploit bankruptcy law.
About Aearo Technologies
Aearo Technologies -- https://earglobal.com/en -- is a 3M company
that designs, manufactures, and sells personal protection
equipment. The Company offers prescription and non-prescription
safety eye wear, face shields, hard hats, and respirators. Aearo
serves customers worldwide.
To address claims related to the Combat Arms Earplugs Version 2,
Aearo Technologies LLC and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case
No. 22-02890) on July 26, 2022. In the petition filed by John R.
Castellano, as authorized signatory, Aearo Technologies estimated
assets and liabilities between $1 billion and $10 billion each.
3M is not a debtor in the Chapter 11 cases. 3M has committed $1
billion to fund a trust allocated for Combat Arms claims.
Kirkland & Ellis LLP is serving as legal counsel and AlixPartners
LLP is serving as restructuring advisor to Aearo Technologies. Ice
Miller LLP, is serving as bankruptcy co-counsel to the Debtors.
Kroll is the claims agent.
PJT Partners is serving as financial advisor and White & Case LLP
is serving as legal counsel to 3M.
AEARO TECHNOLOGIES: Veterans With Hearing Loss Want Case Dismissed
------------------------------------------------------------------
The Official Committee of Unsecured Creditors for Tort Claimants
– Related to Use of Combat Arms Version 2 Earplugs (the "CAE
Committee"), the estate fiduciary for creditors injured by the
Combat Arms Earplugs Version 2 ("CAEv2"), and over two hundred
thousand CAEv2 claimants -- veterans, active-duty service members,
civilian contractors, and consumers -- represented by various law
firms filed a joint motion to dismiss the Chapter 11 cases of Aearo
Technologies LLC, et al.
The Tort Claimants note that the Debtors operate an approximately
$100 million business sitting inside of a $35 billion conglomerate,
and Aearo's Chapter 11 filing was modeled after Johnson & Johnson
unit's doomed bid to send unit LTL Management to bankruptcy
protection.
From the first day of this bankruptcy, the Debtors have touted
their Funding Agreement with 3M Company as the cornerstone of these
chapter 11 cases. This Funding Agreement, in turn, was directly
modeled on a similar agreement between Johnson & Johnson and its
wholly-owned subsidiary, LTL Management LLC. Under that agreement,
the subsidiary has a funding backstop, not unlike an ATM disguised
as a contract, that it can draw on to pay liabilities without any
disruption to its business or threat to its financial viability.
"The decision in LTL -- reversing the lower court rulings on which
the Debtors so heavily rely and remanding with instructions to
dismiss LTL's bankruptcy -- knocks the props out from under these
cases and requires their dismissal. Judge Ambro's opinion in LTL
explains why a solvent subsidiary's uncapped, non-recourse funding
commitment from its solvent parent company forecloses invocation of
the Bankruptcy Code's extraordinary protections – even though the
subsidiary has been named as a defendant in substantial tort
litigation," the Tort Claimants tell the Court.
The Tort Claimants note that, just as in LTL, the Debtors were not
in any financial distress when they invoked the Bankruptcy Court's
jurisdiction. As of the petition date, 3M was and always had been
the singular focus of CAEv2 litigation; the Debtors had paid not
one dollar of liability or expense. Their current and future
obligations to CAEv2 creditors were 100% backstopped by 3M under
the Funding Agreement, and no other circumstances necessitated
reorganization. Like the debtor in LTL, the Debtors here entered
bankruptcy "highly solvent with access to cash to meet comfortably
[their] liabilities as they [come] due for the foreseeable future,"
including by virtue of the "funding backstop" provided by their
parent company.
"While the Debtors invoke bankruptcy to (under)estimate the
totality of all CAEv2 claims, as of the petition date, the Debtors
had not paid a single penny in CAEv2 litigation expense or
liability; the 16 adverse bellwether verdicts had all been appealed
(and were bonded by 3M alone); even if the verdicts are affirmed
and (in a change of status quo) collected from the Debtors, the
Debtors had a near $1 billion receivable from 3M sufficient to pay
them in full; and the Debtors were under zero operational and
financial pressure
as a result of the litigation. In short, just like LTL, the
Debtors' bankruptcy filing was made without any immediate financial
distress, thereby raising all of the concerns of a premature filing
against which the Third Circuit cautioned in LTL," the Tort
Claimants said in court filings.
About Aearo Technologies
Aearo Technologies -- https://earglobal.com/ -- is a 3M company
that designs, manufactures, and sells personal protection
equipment. The Company offers prescription and non-prescription
safety eye wear, face shields, hard hats, and respirators. Aearo
serves customers worldwide.
To address claims related to the Combat Arms Earplugs Version 2,
Aearo Technologies LLC and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Ind. Lead Case
No. 22-02890) on July 26, 2022. In the petition filed by John R.
Castellano, as authorized signatory, Aearo Technologies estimated
assets and liabilities between $1 billion and $10 billion each.
3M is not a debtor in the Chapter 11 cases. 3M has committed $1
billion to fund a trust allocated for Combat Arms claims.
Kirkland & Ellis LLP is serving as legal counsel and AlixPartners
LLP is serving as restructuring advisor to Aearo Technologies. Ice
Miller LLP, is serving as bankruptcy co-counsel to the Debtors.
Kroll is the claims agent.
PJT Partners is serving as financial advisor, and White & Case LLP
is serving as legal counsel to 3M.
AKOUSTIS TECHNOLOGIES: Posts $11.2 Million Net Loss in 2nd Quarter
------------------------------------------------------------------
Akoustis Technologies, Inc. has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing
a net loss of $11.15 million on $5.86 million of revenue for the
three months ended Dec. 31, 2022, compared to a net loss of $15.24
million on $3.67 million of revenue for the three months ended Dec.
31, 2021.
For the six months ended Dec. 31, 2022, the Company reported a net
loss of $30.25 million on $11.43 million of revenue compared to a
net loss of $28.09 million on $5.54 million of revenue for the same
period in 2021.
As of Dec. 31, 2022, the Company had $132.26 million in total
assets, $53.18 million in total liabilities, and $79.08 million in
total stockholders' equity.
Akoustis said, "The Company has incurred losses and negative cash
flow from operations since inception. Our operations thus far have
been funded primarily with sales of equity and debt securities, as
well as contract research and government grants, foundry services
and engineering services. We expect our operating expenditures to
continue to increase to support future growth of our manufacturing
capabilities and expansion of our product offerings, as well as an
increase in research and development and headcount costs to support
this growth. We believe we currently have sufficient resources to
fund operations and planned investments for at least the next
twelve months. However, until we are able to generate sufficient
cash flow from operations to achieve and maintain profitability and
meet our obligations as they come due, we may need to raise
additional capital to support our business. In June 2022, we
completed an offering of convertible notes resulting in net
proceeds to the Company of $43.7 million. In January 2023, we
completed a public offering of our common stock raising $32.0
million in net proceeds. Also in January 2023, approximately $14
million in cash was paid to the sellers in the GDSI acquisition as
mentioned in Footnote 18. Additionally, the Company estimates that
approximately $5.0 million of additional cash is needed to complete
construction in progress assets that are currently not in service.
We also have access to an at-the-market offering program pursuant
to which we may sell up to $50 million of Common Stock. As of the
date of this Quarterly Report, the Company had sold $2.0 million of
Common Stock under such at-the-market offering program and
previously announced that it was suspending sales under the
at-the-market offering program. If, in the future, the Company
determines to resume sales under the at-the-market offering
program, it intends to notify investors by the filing of a Current
Report on Form 8-K or other public announcement."
Management Commentary
Jeff Shealy, founder and CEO of Akoustis, stated, "Akoustis was
able to achieve another quarter of record revenue and continued
unit growth in the second quarter of fiscal 2023 despite persistent
macro challenges. Our growth is driven largely by production ramps
of our patented XBAW RF filter solutions to multiple customers
across our diverse end markets, including Wi-Fi 6 and Wi-Fi 6E,
infrastructure, timing control, automotive and other markets. I am
also pleased to report that with the recent qualification of our
wafer-level-packages, we have now entered the 5G mobile device
market having recently received our first high-volume XBAW order
from a tier-1 customer."
Mr. Shealy added, "As Akoustis manufactures its XBAW semiconductor
chips exclusively in Upstate New York, USA, we believe we are an
attractive candidate to receive funding from the recently passed
CHIPS and Science Act of 2022. Such funding could position
Akoustis to expand manufacturing to deliver billions of XBAW RF
filter chips annually and enable the Company to service both tier-1
and tier-2 mobile companies for 5G smartphones, as well as other
end markets, including 5G networks, high-frequency Wi-Fi devices,
and other high-volume wireless markets."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001584754/000121390023008709/f10q1222_akoustistech.htm
About Akoustis Technologies
Headquartered in Huntersville, NC, Akoustis Technologies, Inc. is
focused on developing, designing, and manufacturing innovative RF
filter products for the mobile wireless device industry, including
for products such as smartphones and tablets, cellular
infrastructure equipment, and WiFi premise equipment.
Akoustis reported a net loss of $59.19 million for the year ended
June 30, 2022, a net loss of $44.15 million for the year ended June
30, 2021, a net loss of $36.14 million for the year ended June 30,
2020, and a net loss of $29.25 million for the year ended June 30,
2019. As of Sept. 30, 2022, the Company had $144.66 million in
total assets, $57.97 million in total liabilities, and $86.68
million in total stockholders' equity.
ALL DAY ACQUISITIONCO: $200M Bank Debt Trades at 90% Discount
-------------------------------------------------------------
Participations in a syndicated loan under which All Day
AcquisitionCo LLC is a borrower were trading in the secondary
market around 10.2 cents-on-the-dollar during the week ended
Friday, February 10, 2023, according to Bloomberg's Evaluated
Pricing service data.
The $200 million facility is a Term loan that is scheduled to
mature on December 29, 2025. The amount is fully drawn and
outstanding.
All Day AcquisitionCo LLC does business as Reorganized 24 Hour
Fitness Worldwide Inc., an operator of fitness centers in the US.
AMCP CLEAN: $250M Bank Debt Trades at 18% Discount
--------------------------------------------------
Participations in a syndicated loan under which AMCP Clean
Acquisition Co LLC is a borrower were trading in the secondary
market around 81.6 cents-on-the-dollar during the week ended
Friday, February 10, 2023, according to Bloomberg's Evaluated
Pricing service data.
The $250million facility is a Term loan that is scheduled to mature
on July 10, 2025. The amount is fully drawn and outstanding.
AMCP Retail Acquisition Corporation was founded in 2012. The
Company's line of business includes the retail sale of men's and
boy's ready-to-wear clothing and accessories.
AMERICAN AIRLINES: Fitch Alters Outlook on 'B-' IDR to Positive
---------------------------------------------------------------
Fitch Ratings has revised American Airlines' Rating Outlook to
Positive from Stable and affirmed its Issuer Default Rating at
'B-'. Fitch has also affirmed American's senior secured debt at
'B'/'RR3', which applies to the company's proposed term loan B,
which will partly refinance its existing 2013 facility that is set
to mature in 2025.
The Positive Outlook reflects the company's progress towards
de-leveraging its balance sheet and a supportive supply/demand
environment that is likely to produce improved profitability in
2023. Modest capital spending provide American with capacity to
execute its de-leveraging plans. American may warrant a higher
rating in the next 6-12 months absent weaker-than expected results
potentially driven by macroeconomic factors.
American's 'B-' rating reflects its leveraged balance sheet. The
company ended the year with a total adjusted debt balance of
roughly $42 billion and adjusted debt/EBITDAR above7x. American's
debt burden is partly offset by a solid liquidity balance. The 'B-'
rating also reflects an uncertain operating environment in 2023
driven by macroeconomic weakness and widespread cost pressures.
KEY RATING DRIVERS
De-leveraging Progress: As operating conditions have improved over
the past year, Fitch now believes that American has a solid
line-of-sight towards its de-leveraging goal of reducing total debt
by $15 billion by YE 2025. American ended the year with $43 billion
in total adjusted debt, down from a peak of over $48 billion in
2021. Fitch expects that number to drop to the low-to-mid $30
billion range by YE 2025. The company remains committed to
addressing its balance sheet, as shown by pre-paying the term loan
that was scheduled to mature in 2023.
American's 2025 debt tower remains a concern, however, Fitch
believes that the company will have sufficient cash flow and
attractive collateral such that refinancing risks are manageable.
American's planned refinancing partially alleviates the 2025
refinancing risk, reducing scheduled principal payments from $9.3
billion to $7.6 billion. Adjusted debt/EBITDAR remains high for the
rating at YE 2022, but Fitch expects leverage to drop to around
4.5x by YE 2024.
Improving Financial Flexibility: Fitch views American's financial
flexibility as improving as it pays down debt and frees up
previously encumbered collateral. American reports that the
prepayment of its $1.2 billion 2023 maturity has increased its
first lien borrowing capacity to over $10 billion. Fitch expects
borrowing capacity to increase further as aircraft debt and the
company's loyalty program financings amortize.
Healthy Demand Outlook for 2023: Solid fourth quarter results from
American and other carriers along with early reports around booking
trends have provided confidence in an improving operating
environment for this year. All of the U.S. network carriers
reported bookings ahead of 2019 levels on recent earnings calls.
Demand resilience likely points to an increased priority in
consumer spending on experiences over goods coming out of the
pandemic, which may hold up despite a weaker macroeconomic
environment.
Growth is likely to be supported by yoy increases in international
and business demand, both of which were depressed during the first
half of 2022. Meanwhile, supply growth is set to remain muted this
year due to ongoing pilot shortages and delivery delays from the
aircraft OEM's, which Fitch believes will support a favorable
pricing environment and offset rising operating costs.
Capital Spending and Cash Flow: Limited capex spending over the
next few years will aid American's efforts to start paying down
debt. Aircraft deliveries are manageable in 2023 and 2024, as
American largely completed its fleet renewal program prior to the
pandemic. The company has guided to full year aircraft capital
spending of only $1.5 billion in 2023, levels that are
significantly lower than its main peers who have heavier delivery
schedules.
Deliveries are scheduled to increase in 2024 with American set to
take more 737 MAXs and 787s, but total capital spending is expected
to remain manageable. Fitch expects American to be FCF positive in
2023 and 2024, marking a significant turn, as the company generated
negative FCF several years prior to the pandemic due to heavy
capital spending.
Rising Operating Costs: Rising operating costs, particularly
related to wage inflation, will remain a headwind in 2023. However,
Fitch expects costs to be offset by higher fares and increased
operating efficiencies as the airlines move back towards normalized
levels of utilization. Pilot wages are set to move materially
higher. For instance, Delta Air Lines has a tentative agreement
with its pilots and Spirit Airlines' pilots recently ratified a new
contract both of which include wage increases of over 30%. It is
likely that American and United will follow with similar deals.
Once fully realized, these agreements amount to low-to-mid-single
digit headwinds towards the carriers' unit costs. Despite rising
labor rates, American is guiding to full year unit costs that are
up in the low single digits as some of the operating inefficiencies
experienced in 2022 recede. Fitch is cautious regarding unit cost
guidance since improvements are dependent on growing capacity,
which is at risk in a potential recession. Nevertheless, Fitch
expects cost pressures to be manageable and operating profits to
improve in 2023, while remaining modestly below 2019 levels.
Lower Jet Fuel May Provide Relief: Crude oil prices receded in the
fourth quarter of 2022 from levels sustained above $100/barrel
through much of 2022. While prices are up recently and are still
high by historical standards, they have yet to reach 2022 peaks.
Fitch's base case incorporates jet fuel at around $3.30 gallon on
average through 2023 down from $3.54 in 2022, which would represent
roughly $1 billion in lower costs. Jet fuel prices are a potential
offsetting factor in a weaker macro environment as softened demand
may drive fuel prices down, balancing the potential top-line
softness.
DERIVATION SUMMARY
American is rated lower than its major network competitors, Delta
Air Lines (BB+/Negative) and United Airlines, Inc. (B+/Negative),
primarily due to the company's historically more aggressive
financial policies and higher debt balance. American's debt balance
increased substantially in the years prior to the pandemic as it
spent heavily on fleet renewal and share repurchases. As such,
American's adjusted leverage metrics are at the high end of its
peer group. American's leveraged balance sheet is offset by its
healthy cash balance and deleveraging prospects over the next 2-3
years. American's ratings may converge towards United's over time
as American has greater de-leveraging capacity over Fitch's rating
horizon.
KEY ASSUMPTIONS
Fitch's base case assumes:
- Continued modest traffic growth in 2023 as travel rebounds from
pandemic lows. Fitch's expectations incorporate a modest economic
recession in the U.S. in 2023.
- Unit revenues remaining relatively flat through the forecast
period reflecting potential weakness in demand from a slower
macroeconomic environment, offset by constrained seat supply.
- Jet Fuel prices averaging around $3.30/gallon in 2023 and
moderating slightly thereafter.
- Non fuel unit costs remaining roughly flat in 2023.
- Capital spending in line with the company's public forecasts.
Secured Debt Ratings: American's proposed term loan will primarily
be secured by its South American slots, gates, and routes (SGR)
portfolio. SGRs are intangible assets that are inherently difficult
to value, but Fitch views the collateral as strategically important
to American. Fitch believes that American would most likely
restructure as a going concern (GC) in a potential bankruptcy
scenario and the company is unlikely to give up this pool of slots
gates and routes given its strong competitive position in the
region.
The 'B'/'RR3' rating is derived via Fitch's recovery analysis which
assumes that American would be reorganized as a GC in bankruptcy
rather than liquidated. Fitch has assumed a 10% administrative
claim. The GC EBITDA estimate reflects Fitch's view of a
sustainable, post-reorganization EBITDA level, which is the basis
for the enterprise valuation calculation. Fitch uses a GC EBITDA
estimate of $5.5 billion and a 5.0x multiple, generating an
estimated GC enterprise value (EV) of $25 billion after an
estimated 10% in administrative claims. Fitch views its GC EBITDA
assumption as conservative as it remains below levels generated in
2014, the first year after American last exited bankruptcy, but it
incorporates potential structural changes to the industry such as
higher operating costs and/or depressed demand that would
potentially drive a restructuring. These assumptions lead to an
estimated recovery for senior secured positions in the 51%-70%
(RR3) range and poor recovery prospects (RR6) for unsecured
positions.
Fitch believes that recovery may improve to the 'RR2' range over
time potentially leading to an upgrade on the senior secured debt
as American progresses through its debt reduction initiatives.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Continued progress towards American's stated goal to reduce debt
by $15 billion through 2025, bringing adjusted debt/EBITDAR below
5x;
- EBITDAR/Gross interest+rent sustained around 2x;
- Sustained neutral FCF or higher;
- Reduction in secured debt of $2 billion-$3 billion or more may
drive an upgrade to American's senior secured debt ratings to
'RR2'.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- EBITDAR/Gross interest+rent below 1.25x;
- Total liquidity falling toward or below $8 billion;
- Inability to raise new capital in the event that liquidity
becomes strained.
LIQUIDITY AND DEBT STRUCTURE
Solid Liquidity: As of Dec. 31, 2022, American held $11.8 billion
in total liquidity, consisting of $8.5 billion liquid short-term
investments $440 million in cash and cash equivalents, and full
availability on its $2.8 billion aggregate revolving credit
facilities (but excluding short-term revolving facilities).
American's liquidity remains well above its pre-pandemic target of
$7 billion, and provides significant cushion against near-term
market weakness. The company has publicly stated a medium-term
liquidity target of $10 billion-$12 billion. Fitch expects American
to gradually reduce its total liquidity balance over the longer
term as it makes progress towards its de-leveraging goals.
Scheduled debt principal payments are manageable in 2023 and 2024
and largely consist of scheduled amortization. American prepaid its
$1.25 billion term loan facility that was scheduled to mature in
December 2023, reducing scheduled principal payments to roughly
$3.3 billion this year.
American faces a maturity tower in 2025, when scheduled principal
payments spike to $9.3 billion. The planned refinancing addresses a
portion of the 2025 maturity tower. Fitch believes that the
remaining 2025 risk is addressable given that the SGR collateral
underlying certain maturities has proven to be readily financeable
in the past, providing the company with refinancing options. A
portion of the maturity wall will be addressed via improving FCF
driven by an improving operating environment and American's limited
capital spending. Fitch also expects American's base of
unencumbered assets to grow over the next two years, and expects
its borrowing capacity to grow as the company's loyalty program
debt begins to amortize, providing the company with options to
address the maturity tower.
ISSUER PROFILE
American Airlines Group was formed out of the merger between
American Airlines and US Airways in December of 2013, and
represents the world's second largest airline by available seat
miles.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
American Airlines
Group, Inc. LT IDR B- Affirmed B-
senior unsecured LT CCC Affirmed RR6 CCC
American Airlines,
Inc. LT IDR B- Affirmed B-
senior secured LT B Affirmed RR3 B
AMYNTA AGENCY: Moody's Rates New $1BB 1st Lien Term Loan 'B2'
-------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to a $1,040
million senior secured first-lien term loan due 2028 being issued
by Amynta Agency Borrower, Inc. (Amynta, corporate family rating
B3). Amynta will use the net proceeds from the offering to repay
its existing first-lien term loan. Moody's also assigned a B2
rating to Amynta's new $110 million senior secured first-lien
revolving credit facility due 2027, which is expected to replace
the company's existing (undrawn) credit facility. The rating
outlook for Amynta is unchanged at stable.
RATINGS RATIONALE
According to Moody's, Amynta's ratings reflect its growing managing
general agency (MGA) business and specialty risk services
operations, as well as its good market presence in US warranty
products, particularly vehicle service contracts. The company has
increased revenues both organically and through acquisitions over
the past several years, while improving EBITDA margins. Amynta
continues to focus on controlling costs, streamlining systems and
enhancing data and analytics capabilities. The company provides a
wide range of coverages and services to the insurance and warranty
markets.
These strengths are offset by the company's high debt load, modest
interest coverage and low free-cash-flow-to-debt ratio. Other
credit challenges include the company's limited size and the still
high, but declining, concentration of its insurance placements with
AmTrust Financial Services, Inc. Amynta also faces a challenging
operating environment in its warranty business, which continues to
be affected by supply chain issues for autos, higher interest rates
and the slowing US economy.
On January 9, 2023, Amynta announced the acquisition of Ambridge
Group (Ambridge), the managing general underwriting operations of
Brit Ltd., a subsidiary of Fairfax Financial Holdings Limited, for
$400 million. The acquisition is subject to regulatory approvals
and is expected to close in the second quarter of 2023. Ambridge
will significantly increase Amynta's MGA business, providing a
broad portfolio of transactional and specialty casualty products as
well as cyber and professional liability while also providing
Amynta with a platform to expand into the excess & surplus lines
market.
Giving effect to the proposed refinancing and proforma for the
Ambridge acquisition, Moody's estimates that Amynta's pro forma
debt-to-EBITDA ratio is around 7.5x, with (EBITDA - capex) coverage
of interest between 1.5x- 2x and a free-cash-flow-to-debt ratio in
the low-single digits. These metrics incorporate Moody's standard
accounting adjustments for operating leases, contingent earnout
obligations, run-rate EBITDA from completed acquisitions, and
certain non-recurring costs and other items.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The following factors could lead to an upgrade of Amynta's ratings:
debt-to-EBITDA ratio below 6x; (EBITDA - capex) coverage of
interest exceeding 2x; free-cash-flow-to-debt ratio exceeding 5%;
and ability to place business with a range of carriers and reduce
the concentration with AmTrust.
The following factors could lead to a downgrade of Amynta's
ratings: debt-to-EBITDA ratio above 7.5x; (EBITDA-capex) coverage
of interest below 1.2x; free-cash-flow-to-debt ratio below 2%.
Moody's has assigned the following ratings:
- $1,040 million senior secured first-lien term loan B maturing in
February 2028 at B2 (LGD3).
- $110 million senior secured first-lien revolver credit facility
maturing in November 2027 at B2 (LGD3).
The rating outlook for Amynta is unchanged at stable.
The principal methodology used in these ratings was Insurance
Brokers and Service Companies published in June 2018.
Based in New York City, Amynta Group is an insurance services
company operating through three segments including managing general
agencies, warranty including coverages for autos and other consumer
products as well as specialty risk services. Amynta serves leading
insurance carriers, wholesalers, retail agencies, auto dealers,
among others throughout the US and Canada. The company generated
total GAAP revenue of over $1.1 billion during the 12 months ended
September 30, 2022. Private equity sponsor Madison Dearborn
Partners owns a 95% equity interest in Amynta, while management and
employees own a 5% stake.
ARUZE GAMING: Files for Chapter 11 Bankruptcy Protection
--------------------------------------------------------
YogoNet reports that gaming solutions developer Aruze Gaming
announced Wednesday, February 1, 2023, it has filed a voluntary
petition under Chapter 11 of the Bankruptcy Code in the United
States Bankruptcy Court for the State of Nevada. The move comes
amid efforts to seek financial restructuring in the wake of a
recent garnishment judgment against Aruze, resulting from a
separate judgment against Aruze's shareholder.
The company assured it intends to continue operating normally and
utilize Chapter 11 protections to provide for "orderly
consideration" of the relative rights of Aruze’s creditors,
customers and employees.
Global CEO Yugo Kinoshita explained the filing is “a critical
business strategy" the business was forced to make due to external
factors outside of the company's control. "We fully understand the
implications associated with this action, but we believe this is
the best way for Aruze to maintain the overall health of our
business," he stated
"This restructuring has no reflection on the health of Aruze. We're
proud of the advances we have made to establish Aruze as a casino
mainstay. We are highly confident this action will protect our
brand, our legacy and our suite of games. As we progress through
this process, we are assured that Aruze will emerge as an even
stronger company," he added.
The Japan-based company, which maintains its US headquarters in
Nevada, could be angling for a corporate reorganization that would
have to be approved by creditors. According to US Courts, a case
filed under Chapter 11 is frequently referred to as a
"reorganization bankruptcy."
In these cases, the debtor remains "in possession", has the powers
and duties of a trustee, may continue to operate its business and
may, with court approval, borrow new money. A plan of
reorganization is proposed, creditors whose rights are affected may
vote on the plan, and it may be confirmed by the court should it
get the required votes and satisfy certain legal requirements.
A case filed under Chapter 11 is significantly different from
Chapter 7, which is mostly pursued by heavily indebted companies
that face ongoing concerns. In most ocassions, creditors see little
to no hope for redemption, and the firms liquidate their assets to
pay off some of its obligations.
The electronic gaming devices manufacturer has also recently
confirmed that the US branch president Robert Ziems is stepping
down from his role, leaving Kinoshita in charge of Ziems'
day-to-day responsibilities until a replacement is found. The
transition takes effect on March 1, 2023.
About Aruze Gaming America
Aruze Gaming America designs, develops and manufactures gaming
machines.
Aruze Gaming America sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 23-10356) on Feb. 1, 2023.
In the petition filed by Yugo Kinoshita, as chief executive
officer, the Debtor reports estimated assets and liabilities $10
million and $50 million each.
The case is overseen by Honorable Bankruptcy Judge August B.
Landis.
The Debtor is represented by:
Matthew C. Zirzow, Esq.
LARSON & ZIRZOW, LLC
850 E. Bonneville Ave.
Las Vegas, NV 89101
Tel: 702-382-1170
Email: mzirzow@lzlawnv.com
ASP LS ACQUISITION: $1.38B Bank Debt Trades at 16% Discount
-----------------------------------------------------------
Participations in a syndicated loan under which ASP LS Acquisition
Corp is a borrower were trading in the secondary market around 83.6
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $1.38 billion facility is a Term loan that is scheduled to
mature on May 7, 2028. The amount is fully drawn and outstanding.
ASP LS Acquisition Corp. was formed to effectuate the acquisition
of Laser Ship, Inc. by the private equity firm American Securities
LLC.
ASURION LLC: First Trust Fund II Marks $1.6M Loan at 23% Off
------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$1,698,479 loan extended to Asurion LLC to market at $1,306,130 or
77% of the outstanding amount, as of November 30, 2022, according
to a disclosure contained in the First Trust fund's Form N-CSRS for
the six months ended November 30, 2022, filed with the Securities
and Exchange Commission on February 2, 2023.
First Trust SFRIFII is a participant in a New B-8 Term Loan to
Asurion LLC. The loan accrues interest at a rate of 9.32% (1 Mo.
LIBOR + 5.25%, 0.00% Floor) per annum. The loan matures on January
31, 2028.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
Asurion, LLC provides wireless handset insurance services. The
Company offers replacement of lost, stolen, damaged, and
malfunctioning devices, as well as roadside assistance programs,
technical support, mobile security devices, and electronics
protection.
ASURION LLC: First Trust High Yield Marks $6.9M Loan at 23% Off
---------------------------------------------------------------
First Trust High Yield Opportunities 2027 Term Fund has marked its
$6,925,457 loan extended to Asurion LLC to market at $5,325,676 or
77% of the outstanding amount, as of November 30, 2022, according
to a disclosure contained in the First Trust fund's Form N-CSRS for
the six months ended November 30, 2022, filed with the Securities
and Exchange Commission on February 2, 2023.
First Trust HYTFO2027 is a participant in a Second Lien Term Loan
B-3 to Asurion LLC. The loan accrues interest at a rate of 9.32% (1
Mo. LIBOR + 5.25%, 0.00% Floor) per annum. The loan matures on
January 31, 2028.
First Trust HYOTF2027 is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
June 25, 2020, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FTHY on the New York Stock
Exchange.
Asurion, LLC provides wireless handset insurance services. The
Company offers replacement of lost, stolen, damaged, and
malfunctioning devices, as well as roadside assistance programs,
technical support, mobile security devices, and electronics
protection.
AUDACY CAPITAL: $770M Bank Debt Trades at 30% Discount
------------------------------------------------------
Participations in a syndicated loan under which Audacy Capital Corp
is a borrower were trading in the secondary market around 69.6
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $770 million facility is a Term loan that is scheduled to
mature on November 17, 2024. About $630.5 million of the loan is
withdrawn and outstanding.
Audacy Capital Corp. owns and operates radio stations. The Company
focuses on sports, news, and music and entertainment. Audacy
Capital produces, co-produces, and co-promotes events across
markets, including concerts, multi-day musical festivals, speaker
series, trade shows, and sports-related events.
AVAYA HOLDINGS: American Century No Longer Owns Common Shares
-------------------------------------------------------------
American Century Investment Management, Inc., American Century
Companies, Inc., and Stowers Institute for Medical Research
disclosed in an amended Schedule 13G filed with the Securities and
Exchange Commission that as of Dec. 31, 2022, they have ceased to
be the beneficial owners of shares of common stock of Avaya
Holdings Corp. A full-text copy of the regulatory filing is
available for free at:
https://www.sec.gov/Archives/edgar/data/1418100/000005238823000059/avayaholdings13g-a1.htm
About Avaya Holdings
Avaya Holdings Corp. offers digital communications products,
solutions and services for businesses of all sizes delivering its
technology predominantly through software and services. Avaya is
shaping what's next for the future of work, with innovation and
partnerships that deliver game-changing business benefits. Its
cloud communications solutions and multi-cloud application
ecosystem power personalized, intelligent, and effortless customer
and employee experiences to help achieve strategic ambitions and
desired outcomes.
Avaya reported a net loss of $13 million for the year ended Sept.
30, 2021, a net loss of $680 million for the year ended Sept. 30,
2020, and a net loss of $671 million for the year ended Sept. 30,
2019.
* * *
As reported by the TCR on Dec. 20, 2022, S&P Global Ratings lowered
its issuer credit rating on Avaya Holdings Corp. to 'CC' from
'CCC-'. S&P said, "We think Avaya, lacking alternative options to
strengthen its balance sheet, is very likely to pursue a debt
restructuring, which we consider tantamount to, or filing for,
bankruptcy protection."
In August 2022, Moody's Investors Service downgraded the Corporate
Family Rating of Avaya Holdings Corp. to Caa2 from B3. Moody's
said Avaya's Caa2 CFR reflects the Company's unsustainably high
financial leverage, sustained cash burn, and increased near term
performance challenges that may worsen substantially as customers
reassess Avaya's financial standing.
AVAYA INC: $800M Bank Debt Trades at 73% Discount
-------------------------------------------------
Participations in a syndicated loan under which Avaya Inc is a
borrower were trading in the secondary market around 26.9
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $800 million facility is a Term loan that is scheduled to
mature on December 15, 2027. The amount is fully drawn and
outstanding.
Avaya Inc. provides communication software and services. The
Company offers unified communications, as well as contact centers,
cloud, and collaboration services.
AVEANNA HEALTHCARE: First Trust Fund II Marks Loan at 23% Off
-------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$771,968 loan extended to Aveanna Healthcare LLC to market at
$592,485 or 77% of the outstanding amount, as of November 30, 2022,
according to a disclosure contained in the First Trust Fund's Form
N-CSRS for the six months ended November 30, 2022, filed with the
Securities and Exchange Commission on February 2, 2023.
First Trust SFRIFII is a participant in a Term Loan B to Aveanna
Healthcare LLC. The loan accrues interest at a rate of 7.77% (1 Mo.
LIBOR + 3.75%, 0.50% Floor) per annum. The loan matures on July 15,
2028.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
Aveanna Healthcare LLC provides health care services. The Company
offers pediatric skilled nursing, therapy, autism, enteral
nutrition, and adult services.
BAUSCH HEALTH: $2.50B Bank Debt Trades at 25% Discount
------------------------------------------------------
Participations in a syndicated loan under which Bausch Health Cos
Inc is a borrower were trading in the secondary market around 75.1
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $2.50 billion facility is a Term loan that is scheduled to
mature on February 1, 2027. About $2.44 billion of the loan is
withdrawn and outstanding.
Bausch Health Companies Inc develops drugs for unmet medical needs
in central nervous system disorders, eye health and
gastrointestinal diseases, as well as contact lenses, intra ocular
lenses, ophthalmic surgical Bausch equipment, and aesthetic
devices.
BEAM & COMPANY: Case Summary & 14 Unsecured Creditors
-----------------------------------------------------
Debtor: Beam & Company, Inc.
221 M Street
Fresno, CA 93721
Business Description: The Debtor is a full service general
contractor focusing on commercial real
estate remodels.
Chapter 11 Petition Date: February 10, 2023
Court: United States Bankruptcy Court
Eastern District of California
Case No.: 23-10244
Judge: Hon. Rene Lastreto II
Debtor's Counsel: Peter Fear, Esq.
FEAR WADDELL, P.C.
7650 N. Palm Avenue Suite 101
Fresno, CA 93711
Tel: (559) 436-6575
Email: pfear@fearlaw.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Brandon Cooper as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 14 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/UXK7UHI/Beam__Company_Inc__caebke-23-10244__0001.0.pdf?mcid=tGE4TAMA
BED BATH & BEYOND: Ex-Workers Report Severance Pay Delays
---------------------------------------------------------
Jeannette Neumann of Bloomberg News reports that former Bed Bath &
Beyond Inc. employees say they haven't been paid promised
severance, the latest sign of the worsening financial squeeze at
the home-goods retailer.
Some former employees received an email on January 26, 2023, from
the human resources department that read, in part: "We are reaching
out to you to inform you that there has been a delay with your
payment," according to copies viewed by Bloomberg News. "We
recognize the challenges this may cause and appreciate your
patience as we work to provide an update."
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 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.
BED BATH & BEYOND: Regains Compliance With Nasdaq Listing Rule
--------------------------------------------------------------
Bed Bath & Beyond Inc. received formal notice of full compliance
from the Listing Qualifications Staff of The Nasdaq Stock Market
LLC.
The notice indicated that, based on the Jan. 26, 2023 filing of the
Company's Form 10-Q for the period ended Nov. 26, 2022, it
fulfilled the periodic filing requirement set forth in Nasdaq
Listing Rule 5250(c)(1).
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 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.
BIONIK LABORATORIES: Incurs $1.1 Million Net Loss in Third Quarter
------------------------------------------------------------------
Bionik Laboratories Corp. has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss of $1.07 million on $575,054 of net revenues for the three
months ended Dec. 31, 2022, compared to a net loss of $6.98 million
on $183,262 of net revenues for the three months ended Dec. 31,
2021.
For the nine months ended Dec. 31, 2022, the Company reported a net
loss of $3.59 million on $1.30 million of net revenues compared to
a net loss of $8.70 million on $1.08 million of net revenues for
the nine months ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $3.68 million in total assets,
$4.21 million in total liabilities, and a total stockholders'
deficit of $521,906.
Bionik stated, "We have funded operations through the issuance of
capital stock, loans, grants, and investment tax credits and
forgivable loans received from the U.S. and Canada governments. We
require cash to pay our operating expenses, including research and
development activities, fund working capital needs and make capital
expenditures. At December 31, 2022, our cash and cash equivalents
were $0.7 million. Our cash and cash equivalents are predominantly
cash in operating accounts.
"Based on our current burn rate, we need to raise additional
capital to fund operations, hire necessary employees we lost as a
result of COVID-19 related furloughs and other terminations, and
meet expected future liquidity requirements. We are continuously
in discussions to raise additional capital, which may include or be
a combination of convertible or term loans and equity which, if
successful, will enable us to continue operations based on our
current burn rate, for the next 12 months; however, we cannot give
any assurance at this time that we will successfully raise all or
some of such capital or any other capital.
"There can be no assurance that necessary debt or equity financing
will be available, or will be available on terms acceptable to us,
in which case we may be unable to meet our obligations or fully
implement our business plan, if at all. These conditions raise
substantial doubt about the Company's ability to continue as a
going concern."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001508381/000141057823000074/bnkl-20221231x10q.htm
About BIONIK Laboratories
Bionik Laboratories Corp. -- http://www.BIONIKlabs.com-- is a
robotics company focused on providing rehabilitation and mobility
solutions to individuals with neurological and mobility challenges
from hospital to home. The Company has a portfolio of products
focused on upper and lower extremity rehabilitation for stroke and
other mobility-impaired patients, including three products on the
market and three products in varying stages of development.
Bionik reported a net loss and comprehensive loss of $10.41 million
for the year ended March 31, 2022, compared to a net loss and
comprehensive loss of $13.62 million for the year ended March 31,
2021. As of Sept. 30, 2022, the Company had $3.83 million in total
assets, $3.31 million in total liabilities, and $523,018 in total
stockholders' equity.
Toronto, Canada-based MNP LLP, the Company's auditor since 2015,
issued a "going concern" qualification in its report dated June 9,
2022, citing that the Company has experienced losses and has a
working capital deficiency and an accumulated deficit. These
conditions, along with other matters, raise substantial doubt about
Company's ability to continue as a going concern.
BLINK CHARGING: Plans to Sell Up to $75 Million Worth of Shares
---------------------------------------------------------------
Blink Charging Co. announced it intends to offer and sell up to $75
million of shares of its common stock in an underwritten registered
public offering. All shares of common stock to be sold in the
proposed offering will be offered by the Company. In connection
with the offering, the Company also intends to grant the
underwriter a 30-day option to purchase up to an additional 15% of
the shares of common stock sold in the offering. The proposed
offering is subject to market and other conditions, and there can
be no assurance as to whether or when the offering may be completed
or as to the actual size or terms of the offering.
Blink intends to use the net proceeds from the proposed offering to
fund EV charging station deployments, to finance the costs of
acquiring or investing in competitive and complementary businesses,
products and technologies as a part of its growth strategy, and for
working capital and other general corporate purposes.
Barclays is acting as the lead book-running manager for the
proposed offering.
The proposed offering is being made pursuant to an effective shelf
registration statement on Form S-3ASR (File No. 333-251919),
including a base prospectus, filed with the U.S. Securities and
Exchange Commission on Jan. 6, 2021. This offering will be made
only by means of a prospectus supplement and the accompanying base
prospectus which forms a part of the effective shelf registration
statement.
A preliminary prospectus supplement and accompanying prospectus
relating to and describing the terms of the proposed offering have
been filed with the SEC and may be obtained by visiting the SEC's
website at www.sec.gov or by contacting Barclays Capital Inc., c/o
Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood,
NY 11717, telephone: (888) 603-5847, or by emailing
barclaysprospectus@broadridge.com. The final terms of the proposed
offering will be disclosed in a final prospectus supplement to be
filed with the SEC.
About Blink Charging
Based in Miami Beach, Florida, Blink Charging Co. (OTC: CCGID)
f/k/a Car Charging Group Inc. -- http://www.CarCharging.com-- is
an owner and operator of electric vehicle (EV) charging equipment
and has sold or deployed over 66,000 chargers, many of which are
networked EV charging stations, enabling EV drivers to easily
charge at any of Blink's charging locations worldwide. Blink's
principal line of products and services is its nationwide Blink EV
charging networks and Blink EV charging equipment, also known as
electric vehicle supply equipment ("EVSE"), and other EV related
services, and the products and services of recent acquisitions,
including SemaConnect, EB Charging, Blue Corner and BlueLA.
Blink Charging reported a net loss of $55.12 million for the year
ended Dec. 31, 2021, a net loss of $17.85 million for the year
ended Dec. 31, 2020, a net loss of $9.65 million for the year ended
Dec. 31, 2019, and a net loss of $3.42 million for the year ended
Dec. 31, 2018. As of Sept. 30, 2022, the Company had $360.92
million in total assets, $91.43 million in total liabilities, and
$269.49 million in total stockholders' equity.
BUKACEK FITNESS: Creditors to Get Proceeds From Liquidation
-----------------------------------------------------------
Bukacek Fitness, Inc., filed with the U.S. Bankruptcy Court for the
District of Nebraska a Chapter 11 Plan of Liquidation dated
February 6, 2023.
Debtor owns an operate, as a franchisee, a SPENGA gym, a
portmanteau for Spin + Strength + Yoga. Spenga is a boutique group
class-based gym that combines multiple disciplines in every work
out.
As with millions of businesses throughout the United States in the
past three years, the COVID-19 epidemic has taken its toll on
Debtor's operations. Yet, Debtor has remained. However, Debtor's
current financial condition coupled with a multiyear crippling
pandemic, is no longer sustainable. In an effort to maintain
operations and reduce debt, Debtor, after having weighed a number
of alternatives, made the decision to file this instant case.
However, after reviewing ongoing operations during the course of
this Chapter 11 Case, the Debtor has determined, after due inquiry
and analysis, that ongoing operations are no longer viable. As
such, Debtor has determined that a controlled liquidation of assets
is in the best interests of Debtor and its estate.
Spirit of Texas Bank n/k/a Simmons First National Corp.
("Simmons"), an Arkansas based banking corporation, is Debtor’s
primary lender. The bulk of the funds acquired from Simmons were
used to acquire and build out Debtor's location at the Shoppes of
Legacy, 16920 Wright Plaza, Ste. 126, Omaha, NE 68130.
Class 1 consists of the Claim of Spirit of Texas Bank n/k/a Simmons
First National Corp. Pursuant to Rule 3002 and 3003, Simmons was
required to file a proof of claim by the Claims Bar Date but has
failed to do so. The Class 1 Secured Claim of Simmons shall be
treated as wholly undersecured and any Lien possessed by Simmons in
any Assets of Debtor shall be extinguished and not retained under
this Plan, and, pursuant to, without limitation, 11 U.S.C. §506
and Rule 3012, shall be treated as a Class 3 Unsecured Claim.
Class 2 consists of the Claim of Navitas Credit Corporation.
Navitas filed a proof of claim (the Navitas Proof of Claim) in the
Bankruptcy Case with the Face Amount of $133,578.67, of which only
$90,000.00 is secured by a first position Lien and/or Security
Interest in certain of Debtor's assets (the "Class 2 Secured
Claim"). The Class 2 Secured Claim of Navitas shall be paid from
the liquidation of Debtor's Assets covered by the Lien or Security
Interest of Navitas. Any unsecured or under-secured portion of the
Allowed Class Two Claim following the liquidation of Debtor's
Assets shall be treated as an Allowed Class Three Claim.
Class 3 consists of Allowed Unsecured Claims. Each holder of an
Allowed Class 3 Claim will be paid its Pro Rata share from the
Claims Distribution Fund.
Class 4 consists of Equity Holders. Holders of Equity Security
Interests in Debtor shall retain their Interests in Debtor under
this Plan. All other Interests shall be canceled.
This Plan is funded by Debtor, in part, from the proceeds realized
from the liquidation of Debtor's remaining assets. Debtor will
retain a third-party liquidator to conduct the liquidation sale.
The net proceeds from the liquidation sale shall be distributed in
accordance with the priority scheme established by the Bankruptcy
Code and this Plan.
Upon the Effective Date, Debtor shall establish the Claims
Distribution Fund, an interest bearing account to be established at
a financial institution insured by the FDIC. Upon the Effective
Date, Debtor shall contribute remaining cash, not encumbered by any
Liens, into the Claims Distribution Fund. In addition, Debtor will
contribute Causes of Action Recoveries, less the cost of the
collection thereof, and less any Secured Claim(s) thereon, into the
Claims Distribution Fund as funds become available.
Holders of Allowed Class Three Claims shall be paid Pro Rata on
account of their Claims from the Claims Distribution Fund. Such
payments shall be made on a quarterly basis when funds are
available.
A full-text copy of the Liquidating Plan dated February 6, 2023 is
available at https://bit.ly/3RTmPVR from PacerMonitor.com at no
charge.
Counsel for Debtor:
Patrick R. Turner, Esq.
Turner Legal Group, LLC
139 S. 144th Street, Suite 665
Omaha, NE 68010
Telephone: (402) 690-3675
Email: pturner@turnerlegalomaha.com
About Bukacek Fitness
Bukacek Fitness Inc. owns and operates, as a franchisee, a SPENGA
gym, a portmanteau for Spin + Strength + Yoga. Spenga is a boutique
group class-based gym that combines multiple disciplines in every
work out including spinning bikes, weight training, and yoga led by
highly trained instructors.
Bukacek Fitness Inc. sought bankruptcy protection under Subchapter
V of Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No.
22-80333) on May 1, 2022. In the petition filed by Blake Bukacek,
Bukacek Fitness estimated assets between 100,000 and $500,000 and
estimated liabilities between $500,000 and $1 million. Patrick
Raymond Turner, of Turner Legal Group, LLC, is the Debtor's
counsel.
BURNS ASSET: Amends Class 2 and 3 Claims Pay Details
----------------------------------------------------
Burns Asset Management, Inc., submitted a Second Disclosure
Statement describing Plan of Reorganization dated February 7,
2023.
In December of 2020, the Debtor filed its first Chapter 11
proceeding. The purpose of the case was to analyze the debt against
the property and restructure it in a way that the Debtor could
afford to make these payments from ongoing rent.
The Debtor also have many concerns about the validity of the lien
creditors' claims. Although the lien creditors' claims were
disputed, all failed to file claims. However, the plan as proposed
by the Debtor did not provide a vehicle for the Debtor to set aside
these liens through the plan or further litigation. Therefore, the
Debtor ultimately dismissed this early case and refiled the current
bankruptcy proceeding.
The Debtor commenced the current case on August 4, 2022. Since the
filing, Mr. Burns has been working on repairs and improvements to
the properties to increase rent and rentability. He has also
secured solid employment outside of the business with which he can
provide capital funds as needed for operations. To date, only one
of the lien creditors have filed their claims.
The Debtor's plan proposes to address valid claims and, through the
use of special counsel, evaluate and pursue litigation against the
disallowed claims in order to strip off invalid liens. The Debtor
submits that this will provide a more feasible plan to pay its
allowed claims.
Under the Debtor's proposed Plan, there is a full payment of the
value of the allowed secured debt, priority unsecured debt, as well
as full payment to unsecured debts. The Debtor is unaware of the
existence of any unsecured debts.
Class 2 consists of a deed of trust against the Debtor's real
property located at 839 Barringer Drive in favor of New Rez, LLC.
The Debtor was not a party to the original note and holds no
liability to this debt other than what is determined to be the lien
amount owing. The Debtor estimated this claim in its schedules in
the amount of $190,571.13 and disputes this claim in its entirety.
On November 29, 2022, the lender filed its proof of claim in the
amount of $172,816.93.
It is the Debtor's intent to have special counsel evaluate this
claim and recommend a course of action regarding the claim. The
creditor shall receive the allowed claim amount as its principal
balance under the Plan. The Debtor will make monthly payments of
principal and interest to this class on the 10th of each month
beginning the later of the 1st month following the Effective Date
or the 1st month following the allowance of the claim. The payments
shall be calculated by amortizing the allowed claim over 30 years
at interest per annum at the contract rate, with a final balloon
payment of the remaining principal amount due 10 years from the
Effective Date. The Debtor shall also be required to keep taxes and
insurance current on the property.
Class 3 consists of a deeds of trust against the Debtor's real
property presumably held by the following:
* US Bank National Association (alleged holder of the deed of
trust pledging 6913 Glendower Road);
* Select Portfolio Servicing, Inc. (alleged holder of the deed
of trust pledging a first lien position on 1129 Karial Court);
* Select Portfolio Servicing, Inc. (alleged holder of the deed
of trust pledging a second lien position on 1129 Karial Court);
* Select Portfolio Servicing, Inc. (alleged holder of the deed
of trust pledging a second lien position on 829 Barringer Drive).
The Debtor disputes each of these claims and put the lender on
notice of this position through its schedules and by providing
notice under local rules. The lenders have failed to file a claim
prior to the bar date. Therefore, the creditor shall not have an
allowed claim in this bankruptcy proceeding or be addressed through
the Plan.
The Debtor will fund the Plan through monthly income from rental
property. The Monthly Reports filed to date in this proceeding
support the Debtor's assumptions regarding the payment of classes.
In addition, the Debtor has identified special counsel to evaluate
the disallowed claims of Class 3. Special counsel will review and
identified any issues with the enforcement of these instruments and
will pursue adversary proceedings in support of the Debtor and
execution of this Plan.
A full-text copy of the Second Disclosure Statement dated February
7, 2023 is available at https://bit.ly/3JYxzjx from
PacerMonitor.com at no charge.
Attorney for the Debtor:
J.M. Cook, Esq.
J.M. Cook, P.A.
5886 Faringdon Place, Suite 100
Raleigh, NC 27609
Tel: (919) 675-2411
Fax: (919) 882-1719
E-mail: J.M.Cook@jmcookesq.com
About Burns Asset Management
Burns Asset Management, which owns certain properties, first filed
a voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D.N.C. Case No. 20-03888) on Dec. 14, 2020. The
court entered an order confirming its Chapter 11 plan in September
2021. The Debtor subsequently missed monthly payments to secured
creditor Deutsche Bank National Trust Company. In July 2022, the
Debtor consented to the U.S. Trustee's motion for dismissal of the
case.
Burns Asset Management sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-01721) on Aug. 5,
2022, listing as much as $1 million in both assets and liabilities.
James Burns, president of Burns Asset Management, signed the
petition.
Judge Joseph N. Callaway oversees the case.
J.M. Cook, Esq., at J.M. Cook, P.A. is the Debtor's legal counsel.
C & L DINERS: Unsecureds Will Get 41.78% of Claims in 3 Years
-------------------------------------------------------------
C & L Hartford, LLC, a Debtor Affiliate of C & L Diners, LLC, filed
with the U.S. Bankruptcy Court for the District of Connecticut a
Plan of Reorganization under Subchapter V dated February 6, 2023.
The Debtor is a Delaware limited liability company that owns and
operates one Family Dining 24 hours Denny's franchised restaurant
located in Hartford, Connecticut (Denny's # 8810). The Debtor's
primary source of revenue is derived from the day-to-day business
operations of the restaurant.
The managing member of the Debtor is Herman Li ("Mr. Li"). Danny
Chu was a manager; however, prior to the Petition Date, Mr. Chu
passed away. Mr. Chu's estate is not a manager of the Debtor but is
an interest holder. Additionally, Mr. Li is the managing member of
the jointly administered cases of C & L Diners, LLC and Pacific
Restaurants, LLC (collectively with the Debtor, the "Franchise
Restaurants").
The reason the Debtor filed its voluntary chapter 11 petition is
the same reason that other franchise food restaurants in the casual
dining space have had to file. It is a mixture of shutdowns related
to COVID, increases in food and labor costs and the fact that
consumers are not visiting casual dining restaurants in them
current economic environment.
The Debtor has provided financial projections which indicates that
the Debtor will have projected disposable income of $213,816.00 for
the payment term. The financial projections are based on historical
data, current performance, and the management's experience. The
Debtor projects a pro rata distribution starting in January 2024 of
41.78%. If payments commence on the projected Effective Date of
June 2023, disposable income is estimated as $163,400.00 with a
projected pro rata distribution of 32%. The delay increases the
distribution amount.
The Plan is Filed under Subchapter V of Chapter 11 of the
Bankruptcy Code and proposes to pay Effective Date payments and
holders of allowed claims pursuant to Plan provisions from: (i) the
Employee Retention Tax Credit for the 2021 year in the amount of
$74,925.90 which is a refund of $71,012.04 plus interest received
in two quarterly payments; and (ii) the Debtor's cash flow from
future operations. The Employee Retention Tax Credit has been
applied for and approved; however, the funds have been released
from the Internal Revenue.
Class 5 consists of Allowed General Unsecured Claims allowed under
Section 502 of the Bankruptcy Code. Quarterly at the end of the
first full quarter 6 months after the Effective Date of the Plan
for the subsequent eleven (11) quarters for a total of 3 years of
payments. The allowed unsecured claims total $511,738.20. This
Class will receive a distribution of 41.78% of their allowed
claims. The holders of Class 5 Allowed General Unsecured Claims are
Impaired.
Class 6 consists of Interests. The managing member of the Debtor is
Herman Li and he shall continue to be the managing member of the
Post-Effective Date Debtor. Class 6 Interests Holders are
unimpaired and are conclusively presumed to have accepted the Plan
and are not entitled to vote to accept or reject the Plan.
A full-text copy of the Plan of Reorganization dated February 6,
2023 is available at https://bit.ly/3xdnNCu from PacerMonitor.com
at no charge.
The Debtors' attorneys:
Ira S. Greene, Esq.
Locke Lord LLP
601 Poydras Street, Suite 2660
New Orleans, LA 70130
Phone: 504-558-5100
Fax: 504-558-5200
Email: ira.greene@lockelord.com
- and -
Alan H. Katz, Esq.
Brookfield Place
200 Vesey Street, 20th Floor
New York, NY 10281
Tel: (212) 415-8905
Fax: (212) 812-8380
- and -
Douglas S. Draper, Esq.
Heller, Draper & Horn, LLC
650 Poydras Street, Suite 2500
New Orleans, LA 70130
Phone: (504) 299-3300
Email: ddraper@hellerdraper.com
About C & L Diners
C & L Diners, LLC, and affiliates sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D. Conn. Lead Case No.
22-50599) on Nov. 8, 2022. In the petition filed by Herman Li,
operating member, the Debtors disclosed up to $10 million in both
assets and liabilities.
Judge Julie A. Manning oversees the case.
Ira S. Greene, Esq. and Tara L. Trifon, Esq., at Locke Lord LLP,
serve as the Debtors' legal counsel.
CELSIUS NETWORK: Committee Taps Selendy Gay Elsberg as Co-Counsel
-----------------------------------------------------------------
The official committee of unsecured creditors of Celsius Network,
LLC and its affiliates seeks approval from the U.S. Bankruptcy
Court for the Southern District of New York to hire Selendy Gay
Elsberg, PLLC as co-counsel with White & Case, LLP.
Selendy Gay Elsberg will charge these hourly fees:
Partners $1,435 to $2,060
Associates $775 to $1,320
Law Clerks $685
Paraprofessionals $510 to $570
As disclosed in court filings, Selendy Gay Elsberg is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Selendy
Gay Elsberg disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm has not represented the committee in the 12 months
pre-petition; and
-- Selendy Gay Elsberg is preparing and finalizing a
prospective budget and staffing plan.
The firm can be reached through:
Jennifer M. Selendy, Esq.
Selendy Gay Elsberg, PLLC
1290 Avenue of the Americas
New York, NY 10104
Phone: 212 390 9003
Email: jselendy@selendygay.com
About Celsius Network
Celsius Network LLC -- http://www.celsius.network/-- is a
financial services company that generates revenue through
cryptocurrency trading, lending, and borrowing, as well as by
engaging in proprietary trading.
Celsius helps over a million customers worldwide to find the path
towards financial independence through a compounding yield service
and instant low-cost loans accessible via a web and mobile app.
Celsius has a blockchain-based fee-free platform where membership
provides access to curated financial services that are not
available through traditional financial institutions.
The Celsius Wallet claims to be one of the only online crypto
wallets designed to allow members to use coins as collateral to get
a loan in dollars, and in the future, to lend their crypto to earn
interest on deposited coins (when they're lent out).
Crypto lenders such as Celsius boomed during the COVID-19 pandemic,
drawing depositors with high interest rates and easy access to
loans rarely offered by traditional banks. But the lenders'
business model came under scrutiny after a sharp sell-off in the
crypto market spurred by the collapse of major tokens terraUSD and
luna in May 2022.
New Jersey-based Celsius froze withdrawals in June 2022, citing
"extreme" market conditions, cutting off access to savings for
individual investors and sending tremors through the crypto
market.
The list of major crypto firms that have filed for bankruptcy
protection in 2022 now includes Celsius Network, Three Arrows
Capital and Voyager Digital.
Celsius Network, LLC and its subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No.22-10964) on July 14, 2022. In the petition filed by CEO Alex
Mashinsky, the Debtors estimated assets and liabilities between $1
billion and $10 billion.
The Debtors tapped Kirkland & Ellis, LLP and Kirkland & Ellis
International, LLP as bankrupty counsels; Fischer (FBC & Co.) as
special counsel; Centerview Partners, LLC as investment banker; and
Alvarez & Marsal North America, LLC as financial advisor. Stretto
is the claims agent and administrative advisor.
On July 27, 2022, the U.S. Trustee appointed an official committee
of unsecured creditors. The committee tapped White & Case, LLP as
its bankruptcy counsel; Elementus Inc. as its blockchain forensics
advisor; M3 Advisory Partners, LP as its financial advisor; and
Perella Weinberg Partners, LP as its investment banker.
Shoba Pillay, Esq., is the examiner appointed in the Debtors'
Chapter 11 cases. Jenner & Block, LLP and Huron Consulting
Services, LLC serve as the examiner's legal counsel and financial
advisor, respectively.
CHECKOUT HOLDING: $150M Bank Debt Trades at 75% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Checkout Holding
Corp is a borrower were trading in the secondary market around 24.9
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $150 million facility is a Payment-In-Kind Term loan that is
scheduled to mature on August 15, 2023. The amount is fully drawn
and outstanding.
Checkout Holding Corp. operates as a holding company. The Company,
through its subsidiaries, provides market consulting services.
CITIUS PHARMACEUTICALS: All 3 Proposals Passed at Annual Meeting
----------------------------------------------------------------
Citius Pharmaceuticals, Inc. held its 2023 annual meeting of
stockholders on Feb. 7, 2023, at which the stockholders elected
Myron Holubiak, Leonard Mazur, Suren Dutia, Carol Webb, Howard
Safir, Dr. Eugene Holuka, and Dennis M. McGrath to serve on the
Company's Board of Directors for a one-year term expiring at the
annual meeting of stockholders to be held in 2024 and until their
successors are duly elected and qualified.
The Company's stockholders also approved the Citius
Pharmaceuticals, Inc. 2023 Omnibus Stock Incentive Plan and
ratified the selection of Wolf & Company, P.C. as the Company's
independent registered public accounting firm for the fiscal year
ending Sept. 30, 2023.
About Citius
Headquartered in Cranford, NJ, Citius Pharmaceuticals, Inc. --
http://www.citiuspharma.com-- is a specialty pharmaceutical
company dedicated to the development and commercialization of
critical care products targeting unmet needs with a focus on
anti-infectives, cancer care and unique prescription products.
Citius reported a net loss of $33.64 million for the year ended
Sept. 30, 2022, a net loss of $23.05 million for the year ended
Sept. 30, 2021, a net loss of $17.55 million for the year ended
Sept. 30, 2020, a net loss of $15.56 million for the year ended
Sept. 30, 2019, a net loss of $12.54 million for the year ended
Sept. 30, 2018, and a net loss of $10.38 million for the year
ended
Sept. 30, 2017. As of Sept. 30, 2022, the Company had $114 million
in total assets, $10.57 million in total liabilities, and $103.43
million in total equity.
COLOUROZ INVESTMENT 2: $677M Bank Debt Trades at 30% Discount
-------------------------------------------------------------
Participations in a syndicated loan under which ColourOZ Investment
2 LLC is a borrower were trading in the secondary market around
69.7 cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $677.5 million facility is a Term loan that is scheduled to
mature on September 7, 2023. The amount is fully drawn and
outstanding.
ColourOZ Investment 2 LLC provides industrial paint products.
CONNECTICUT RESTORATION: Taps The Hamilton Group as Auctioneer
--------------------------------------------------------------
Connecticut Restoration Specialist, LLC seeks approval from the
U.S. Bankruptcy Court for the District of Connecticut to employ The
Hamilton Group, LLC as its auctioneer for the purpose of selling
its vehicles.
The auctioneer's estimated fees and expenses are as follows:
Facebook Target Marketing $900
Postcard/Mailing $500
Inspection, Cleaning & Checkout
15 hours at $25/ per hour $375
Auctionzip Ads $150
Bidspotter Listing Fee $350
Bidspotter Final Value Fee
at 3 percent TBD
Bond $425
------
$2,700
As disclosed in court filings, Hamilton is disinterested as that
term is defined by Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael J. Knutsen
The Hamilton Group, LLC
16 Killingworth Turnpike
Clinton, CT 06413
Office: 860-552-4609
Email: info@hamilton-grp.com
About Connecticut Restoration Specialist
Connecticut Restoration Specialist, LLC filed a petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. D. Conn. Case No.
22-20823) on Nov. 22, 2022, with up to $10 million in both assets
and liabilities. Bret W. Hallenbeck, member, signed the petition.
Judge James J. Tancredi oversees the case.
Gregory F. Arcaro, Esq., at Grafstein & Arcaro, LLC and Bottaro
Morrill & Co, LLC serve as the Debtor's legal counsel and
accountant, respectively.
CONSOLIDATED COMMUNICATIONS: Moody's Lowers CFR to 'B3'
-------------------------------------------------------
Moody's Investors Service downgraded the corporate family rating of
Consolidated Communications, Inc. to B3 from B2 and its probability
of default rating to B3-PD from B2-PD. The first lien credit
facility, consisting of a $250 million revolver and approximately
$1 billion of outstanding term loans, was downgraded to B3 from B2.
Moody's also downgraded the company's $1.15 billion of senior
secured notes to B3 from B2. The company's speculative grade
liquidity rating was downgraded to SGL-3 from SGL-2, reflecting
adequate liquidity. The rating outlook is stable.
The downgrade is the result of a reduction in Consolidated's EBITDA
and margins following the transformative sale of its long-held
wireless partnership assets, which provided steady annual cash
dividends including about $43 million in 2021. Moody's included
these cash dividends from the company's five limited wireless
partnership interests in its calculation of EBITDA, which
contributed to lower debt leverage (Moody's adjusted) in the past.
In Moody's view, the company realized a relatively high valuation
of $490 million in the September 2022 sale of its wireless
partnerships which boosted available liquidity to support continued
network upgrade investments, but this also resulted in lower
EBITDA. Moody's expects Consolidated's debt leverage (Moody's
adjusted) will now be around 7.2x at year-end 2023, before falling
to a still elevated level around 6.3x at year-end 2024. Given the
company's need for superior execution to sustain market share
growth to drive EBITDA higher, this elevated debt leverage (Moody's
adjusted) represents an increase in financial risk that was no
longer supportive of the company's prior ratings. The downgrade
also reflects the abrupt departure from the company's prior
financial strategy and risk management governance practices with
its sale of its wireless partnership interests, which had
historically been defined as core to Consolidated's business model.
This strategy pivot indicates a greater tolerance for debt leverage
(Moody's adjusted) by the company, at least over the intermediate
term, that compounds existing execution challenges offsetting
legacy wireline revenue contraction.
Downgrades:
Issuer: Consolidated Communications, Inc.
Corporate Family Rating, Downgraded to B3 from B2
Probability of Default Rating, Downgraded to B3-PD from B2-PD
Speculative Grade Liquidity Rating, Downgraded to SGL-3 from
SGL-2
Senior Secured First Lien Bank Credit Facility, Downgraded to
B3 (LGD4) from B2 (LGD3)
Senior Secured First Lien Global Notes, Downgraded to B3 (LGD4)
from B2 (LGD3)
Outlook Actions:
Issuer: Consolidated Communications, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
Consolidated's B3 corporate family rating reflects its elevated
debt leverage (Moody's adjusted), dwindling liquidity over the next
two years due to continued high capital intensity and limited
cushion for error on its fiber passings and market share growth
execution. The company faces growing urgency to accelerate EBITDA
growth quickly to provide greater visibility into a potential
deleveraging pace in 2024. The company's difficulties stabilizing
negative legacy revenue trends and growing EBITDA has resulted in
Consolidated's debt leverage (Moody's adjusted) trends diverging
from Moody's prior expectations for greater stability in debt
leverage metrics. Moody's now expects the company's debt leverage
(Moody's adjusted) to be in excess of 7x at year-end 2023 and
remain elevated for longer thereafter. Solid operational execution
will be necessary for continued market share advances, and this
will increasingly be tied to highly productive sales and marketing
efforts, a compelling value proposition differentiation relative to
competitors, disciplined cost management and adept capital
allocation targeting mainly in the company's northern New England
footprint. Moody's estimates the company's continued sizable
capital investments will deplete all balance sheet cash by year-end
2024 with some revolver access necessary in the second half of
2024.
As many of Consolidated's earlier buildout cohorts enter year three
of their network upgrades in 2023, the ability to continue the pace
of market share gains will be crucially tested. A positive credit
trajectory path may prove incrementally more difficult than during
earlier growth stages when pent-up customer wins from incumbent
cable competitors more quickly boosted fiber broadband customer
growth. Moody's recognizes Consolidated's solid buildout progress
to date with 38% of its 2.6 million total premise passings (pro
forma for the sale of its Kansas City wireline assets in December
2022) being fiber now and capable of delivering gigabit-plus speeds
to existing and potential new customers. Converting existing DSL
customers and winning competitors' subscribers through
success-based efforts are key to driving solid consumer broadband
revenue growth over the next two years and offsetting continued
traditional voice access line losses within its high margin legacy
telecom segment, the erosion of network access revenue and
formidable competition from cable and wireless operators.
Consolidated further benefits from diversified operations across
carrier, commercial and consumer end markets across a 22-state
service area, as well as an advanced 57,000-plus fiber-route mile
backbone network that has more stable revenue prospects than
copper-based local exchange carrier competitors across many rural
areas and metro communities in its footprint.
Moody's views Consolidated's liquidity as adequate, as reflected by
its SGL-3 speculative grade liquidity rating. As of September 30,
2022, Consolidated had $462 million of cash and cash equivalents,
reflecting $490 million of proceeds from the September 13, 2022
closing date of its sale of five wireless partnership interests.
Including $82 million of gross proceeds from the December 1, 2022
closing of its Kansas City assets sale and based on Moody's cash
deficit assumptions for the fourth quarter of 2022, pro forma
balance sheet cash is expected to be slightly north of $400 million
for the period ending December 31, 2022. Under its recently
extended $250 million revolving credit facility (now maturing in
October 2027), Consolidated had full availability as of September
30, 2022 and is estimated to also have full availability as of
December 31, 2022. The company faces no debt maturities until
October 2027, when its revolver and term loans mature. Moody's
expectations for continued sizable capital spending in 2023 and
2024 will result in negative free cash flow of around $250 million
and $150 million in 2023 and 2024, respectively. While the company
can control the pace of its buildout and the size of its liquidity
cushion, Moody's believes high capital spending remains critical to
driving EBITDA higher and ensuring a stable credit profile. As
such, Moody's expects balance sheet cash to decrease steadily
through year-end 2024 and that revolver draws will be necessary in
the second half of 2024. Under the company's network upgrade plans,
reported capital investing as a percentage of revenue has expanded
from the historic teens area to the 40% or higher area. Moody's
believes success-based investing will comprise a growing portion of
this investing in upcoming years as new fiber broadband customer
growth will necessitate fiber lateral drops from the curb to
customer premises. Moody's also notes that the company is currently
benefiting from the PIK option under its 9% Series A preferred
stock which had a liquidation preference of $456 million on
September 30, 2022. The PIK option now ends in October 2027 and
preferred holders can gain an additional two board seats if the
dividend is not paid in cash in full for any of two dividend
periods; such cash payment failure over two dividend periods also
raises the dividend to 11% from 9%. While the company's objective
is to refinance this preferred stock via debt capital markets at
some point in the future, the growing size of this instrument
relative to existing debt could constrain Consolidated's future
balance sheet and financial flexibility. Without the PIK option
currently, a cash dividend obligation would be meaningfully
negative in its impact on financial flexibility as well.
The company is subject quarterly to a first lien net leverage test
under its credit agreement of 6.35x through June 30, 2025 when the
$250 million revolver is more than 35% drawn; there is one
step-down to 5.85x after June 30, 2025 which persists over the
remaining life of the credit agreement. Letters of credit (LCs)
under the revolver are capped at $100 million but LCs associated
with the company's business activity tied to the FCC's Rural
Digital Opportunity Fund (RDOF) will not constitute draws under
this 35% draw ratio definition. RDOF LCs are also expected be less
than $10 million annually. Moody's expects the company to remain
within its compliance requirements over the next 12 months.
Moody's rates the company's first lien senior secured credit
facility and first lien senior secured notes, B3, in line with the
company's B3 CFR. The first lien senior secured credit facility
consists of a $250 million revolver due October 2027 and
approximately $1 billion of aggregate outstanding term loans due
October 2027. The remainder of the company's secured debt is
comprised of $1.15 billion of first lien senior secured notes due
2028. First lien lenders benefit from a pledge of stock and
security in assets of all subsidiaries, with the exception of
Consolidated Communications of Illinois and its majority-owned
subsidiary, East Texas Fiber Line Incorporated.
While governance was a factor in this rating downgrade,
Consolidated's ESG Credit Impact Score remains at CIS-4 (Highly
Negative). The score reflects neutral-to-low environmental risk,
moderately negative social risk and highly negative governance
risk. The company's Governance Score also remains at G-4 (Highly
Negative), reflecting Consolidated's highly negative risk from
governance practices, which includes an aggressive financial policy
and heightened execution challenges achieving steady and sustained
fiber broadband customer net adds and market share growth while
offsetting continued wireline revenue contraction pressure in
certain end markets. The company's sponsor is expected to exercise
sizable control with its common share stake of 35%, and this is
viewed as a moderately negative risk. Any potential future equity
support from the sponsor will very likely be predicated on
Consolidated's execution success and operational progress over the
intermediate term.
The stable outlook assumes steady competitive market share
expansion from past and ongoing network investments and reflects
the company's ability to drive sufficient consumer fiber broadband
customer growth in 2023 such that overall revenue and EBITDA growth
in 2024 is positive. The stable outlook is also dependent on a
sustained pace of debt leverage (Moody's adjusted) reduction
towards 6.0x beginning in 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Given the company's current competitive positioning, network
upgrade execution risks and speculative capital spending, upward
pressure is limited but could develop should Consolidated's Moody's
adjusted debt/EBITDA decrease to below 5x on a sustainable basis on
the back of a successful implementation of the company's strategy
to increase penetration across its existing footprint and grow
EBITDA. An upgrade would also require the company to maintain a
good liquidity profile.
Downward pressure on the company's rating could arise if: 1)
Moody's adjusted debt/EBITDA remains above 6x on a sustained basis,
2) overall execution of its fiber passings growth strategy slows or
yields mixed operating results below budgeted expectations, 3) the
company's liquidity deteriorates, 4) the company pursues share
buybacks, or 5) there is deterioration of the company's market
position irrespective of its credit metrics.
The principal methodology used in these ratings was
Telecommunications Service Providers published in September 2022.
Consolidated Communications, Inc. is a broadband and business
communications provider offering a wide range of communications
solutions to consumer, commercial and carrier customers across a
22-state service area and an advanced fiber network spanning more
than 57,000 fiber route miles. Private equity firm Searchlight
Capital Partners, L.P. held a 34% stake in the company's public
common shares. The company maintains headquarters in Mattoon, IL
and generated $1.2 billion in revenue for the last 12 months ended
September 30, 2022.
CONVERGEONE HOLDINGS: $275M Bank Debt Trades at 57% Discount
------------------------------------------------------------
Participations in a syndicated loan under which ConvergeOne
Holdings Inc is a borrower were trading in the secondary market
around 42.9 cents-on-the-dollar during the week ended Friday,
February 10, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $275 million facility is a Term loan that is scheduled to
mature on January 4, 2027. The amount is fully drawn and
outstanding.
The ConvergeOne Holdings, Inc. operates as a holding company. The
Company, through its subsidiaries, provides managed cloud, cyber
security, enterprises networking, data center, application and
software development, security infrastructure, and hosted
collaboration solutions.
CORE SCIENTIFIC: Asks Court OK to Swap 27,000 Rigs to Pay Debt
--------------------------------------------------------------
Bankrupt cryptocurrency mining enterprise Core Scientific Inc. is
asking a Texas bankruptcy judge to approve a deal that would give
27,000 computer mining rigs to a lender owed $38 million in
exchange for canceling the company's debt.
Debtor Core Scientific Operating Company (f/k/a Core Scientific,
Inc.) and NYDIG ABL LLC (f/k/a Arctos Credit, LLC), a Delaware
limited liability company ("NYDIG"), are party to that certain
Master Equipment Finance Agreement, dated as of Oct. 27, 2020 (the
"MEFA").
As of Dec. 21, 2022, Core owed NYDIG $38.6 million of principal
under the Loan Documents, plus certain interest, fees, expenses and
other obligations (the "NYDIG Debt"). Approximately 27,403
application-specific integrated circuit mining rigs serve as
collateral for the NYDIG Debt under the Loan Documents (the "ASICs
Collateral").
The Debtors have reached an agreement with NYDIG for the Debtors to
transfer to NYDIG all of the ASICs Collateral in exchange for the
full extinguishment of the NYDIG Debt and other related releases
(the "ASICs Transfer").
The transfer of the ASICs Collateral in exchange for the full
extinguishment of the NYDIG Debt will bring substantial benefits to
the Debtors and their estates because (i) the ASICs Collateral is
no longer necessary for the Debtors' current operations and future
business plans and (ii) the principal of the NYDIG Debt exceeds the
value the ASICs Collateral.
About Core Scientific
Core Scientific, Inc. (NASDAQ: CORZ) is the largest U.S.
publicly-traded Bitcoin mining company in computing power. Core
Scientific, which was formed following a business combination in
July 2021 with blank check company XPDI, is a large-scale operator
of dedicated, purpose-built facilities for digital asset mining
colocation services and a provider of blockchain infrastructure,
software solutions and services. Core mines Bitcoin, Ethereum and
other digital assets for third-party hosting customers and for its
own account at its six fully operational data centers in North
Carolina (2), Georgia (2), North Dakota (1) and Kentucky (1). Core
was formed following a business combination in July 2021 with XPDI,
a blank check company.
In July 2022, one of the Company's largest customers, Celsius
Mining LLC, filed for Chapter 11 bankruptcy in New York.
With low Bitcoin prices depressing mining revenue to a record low,
Core Scientific first warned in October 2022 that it may have to
file for bankruptcy if the company can't find more funding to repay
its debt that amounts to over $1 billion. Core Scientific did not
make payments that came due in late October and early November 2022
with respect to several of its equipment and other financings,
including its two bridge promissory notes.
Core Scientific Inc. and its affiliates filed petitions for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 22-90340) on Dec. 21, 2022. As of Sept. 30, 2022, Core
Scientific had total assets of US$1.4 billion and total liabilities
of US$1.3 billion.
Judge David R. Jones oversees the cases.
The Debtors hired Weil, Gotshal & Manges, LLP as legal counsel; PJT
Partners, LP as investment banker; and AlixPartners, LLP as
financial advisor. Stretto is the claims agent.
A group of Core Scientific convertible bondholders is working with
restructuring lawyers at Paul Hastings.
CORNERSTONE CHEMICAL: S&P Places 'B-' ICR on CreditWatch Negative
-----------------------------------------------------------------
S&P Global Ratings placed its ratings, including its 'B-' issuer
credit rating, on CreditWatch with negative implications.
S&P could view this as a distressed debt restructuring if the
noteholders do not receive sufficient compensation; that is, less
value than the original promise.
S&P said, "We note the company has indicated that beneficial owners
of notes representing 92% of the principal outstanding have entered
into a transaction support agreement. The minimum consent threshold
is 75%. However, the terms indicate that late-consenting
noteholders will be subject to a 5% haircut to their original
investment while nonconsenting noteholders will have the security
on the existing notes removed and will be primed by the other debt
in the capital structure. If noteholders receive less than the
original promised value of the instrument, then we would lower our
issuer credit rating to 'SD' (selective default) and lower the
ratings on any outstanding nonconsented notes to 'D'. We believe
the par amount of the nonconsenting noteholders, if any, will be
small. However, if the holders of all or substantially all of the
secured notes consent to the indenture amendment on or before Feb.
14, 2023, then we would not view this transaction as a distressed
exchange."
The compensation provided to consenting noteholders is adequate in
S&P's view.
Following the completion of the par-for-par exchange offer, the
interest rate on the exchanged notes will accrue at 8.25%--150
basis points above the prior coupon of 6.75%--and noteholders will
also receive an additional 2.0% of PIK interest. Although there is
no consent fee being paid to the noteholders, S&P views the higher
interest rate as sufficient compensation to extend the maturity of
the debt by three years to Aug. 15, 2027, and to eliminate many of
the covenants under the indenture.
Cornerstone's debt leverage is not onerous and S&P expects cash
flow generation to improve this year.
S&P said, "An important consideration in our view of the exchange
offer is that the debt leverage of the company is not onerous, nor
do we believe that the capital structure is unsustainable. As of
Sept. 30, 2022, Cornerstone had $556 million of reported debt. We
add back adjustments pertaining to debt-like obligations such as
leases, asset retirement obligations, and preferred stock of $81
million in aggregate, which results in adjusted debt figure of $635
million. Relative to what we see as Cornerstone's EBITDA generation
capability ($90 million to $120 million in a typical year absent
hurricanes, unplanned plant outages, and volatile price-cost
swings), we do not believe this level of debt leverage is onerous.
Typically, distressed companies exhibit leverage ratios that are
well-above our anticipated peak leverage, in contrast to the mid-7x
area that we see Cornerstone operating in this year. Working
capital investment in 2023 should not be as heavy of a use of cash,
as last year the company needed to replenish inventories following
the low levels experienced coming out of the pandemic and Hurricane
Ida. Lower capital spending, with fewer plant turnarounds this
year, could also support Cornerstone's cash flow generation.
Proceeds from the $25 million new sponsor loan will support
liquidity, but the transaction does not reduce total debt.
S&P said, "We believe Cornerstone will use the proceeds from the
new sponsor loan (subordinated in right of payment to the new
secured notes) to repay borrowings on its ABL, increasing the
availability under the line to almost $57 million and supporting
the company's adequate liquidity. The sponsor loan is split into
two tranches: a $15 million litigation settlement tranche accruing
at a PIK rate of 15%; and a $10 million new money tranche accruing
at a cash interest rate of 5% and a PIK interest rate of 10%. We
note the company received dock allision proceeds of $15 million,
which it could have used to pay down the ABL; instead, Cornerstone
is transferring the $15 million to the sponsor via dividend, then
the sponsor is lending the $15 million back to the company via the
litigation-settlement tranche. While it's likely the company will
use all $25 million of the sponsor loan proceeds to ABL reduction,
Cornerstone's total debt balance is unaffected.
"The CreditWatch placement reflects an at least one-in-two
probability that we could lower our ratings on Cornerstone within
the next three months if a significant portion of noteholders do
not consent to the exchange offer and receive less than the
original promised value of their investment. In this case, we would
lower our issuer credit rating by multiple notches to 'SD' and
lower the issue-level ratings on the nonconsented notes to 'D'. We
could also lower our ratings on the company if the proposed offer
does not go ahead, which would increase the refinancing risk at the
company.
"In contrast, if all or substantially all of the noteholders
receive value equal to that promised in the original securities or
adequate compensation in our view, then we could affirm our issuer
credit rating at 'B-.' This scenario would entail us viewing
Cornerstone as capable of effectively navigating macro-related
challenges via good operational execution, maintaining adequate
liquidity, and maintaining appropriate credit measures for the
rating. Examples of these would be an adjusted debt-to-EBITDA ratio
that is within the 6x-8x area and an EBITDA to interest coverage
ratio within the 1.3x-1.8x area."
ESG credit indicators: E-3; S-2; G-3
S&P said, "Environmental factors are a moderately negative
consideration in our credit rating analysis of Cornerstone Chemical
Co., as primarily a commodity chemical producer of acrylonitrile,
melamine, and sulfuric acid. The asset-intensive nature of
commodity chemical production lends itself to scrutiny and
regulations related to carbon dioxide emissions, waste, and
pollution. Governance is moderately negative consideration. We view
financial sponsor-owned companies with highly leveraged financial
risk profiles as demonstrating corporate decision-making that
prioritizes the interests of the controlling owners, typically with
finite holding periods and a focus on maximizing shareholder
returns."
CUENTAS INC: To Raise $5 Million Through Equity Offering
--------------------------------------------------------
Cuentas Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission it entered into a Securities Purchase Agreement
with an institutional investor for the purpose of raising
approximately $5 million in gross proceeds for the Company.
Pursuant to the terms of the Purchase Agreement, the Company agreed
to sell, in a registered direct offering, an aggregate of (i)
2,123,478 shares of the Company's common stock and (ii)
pre-warrants to purchase up to 1,664,401 shares of Common Stock
and, in a concurrent private placement, warrants to purchase
3,787,879 shares of Common Stock. The combined purchase price per
Share and Purchase Warrant is $1.32 and the combined purchase price
per Pre-Funded Warrant and Purchase Warrant of $1.3199.
The Pre-Funded Warrants were sold, in lieu of shares of Common
Stock, to any Investor whose purchase of shares of Common Stock in
the Registered Offering would otherwise result in such Investor,
together with its affiliates and certain related parties,
beneficially owning more than 4.99% (or, at such Investor's option
upon issuance, 9.99%) of the Company's outstanding Common Stock
immediately following the consummation of the Registered Offering.
Each Pre-Funded Warrant represents the right to purchase one share
of Common Stock at an exercise price of $0.0001 per share. The
Pre-Funded Warrants are exercisable immediately and may be
exercised at any time until the Pre-Funded Warrants are exercised
in full.
The Purchase Warrants will be exercisable on the six-month
anniversary of the issuance date and will expire five and one-half
years following the date of issuance at an exercise price of $1.335
per share.
The closing of the sales of these securities under the Purchase
Agreement is subject to satisfaction of customary closing
conditions.
H.C. Wainwright & Co., LLC is acting as exclusive placement agent
for the offering pursuant to an engagement agreement between the
Company and Wainwright dated as of Dec. 13, 2022. As compensation
for such placement agent services, the Company has agreed to pay
Wainwright an aggregate cash fee equal to 7.0% of the gross
proceeds received by the Company from the offering, plus a
management fee equal to 1.0% of the gross proceeds received by the
Company from the offerings, a non-accountable expense of $65,000
and $15,950 for clearing expenses. The Company has also agreed to
issue to Wainwright or its designees warrants to purchase 265,152
shares of Common Stock. The PA Warrants have a term of five years
from the commencement of sales in the offering, and have an
exercise price of $1.782 per share.
The net proceeds to the Company from the registered direct offering
and concurrent private placement, after deducting the Placement
Agent's fees and expenses and the Company's offering expenses are
expected to be approximately $4.3 million. The Company intends to
use the net proceeds from the transactions for general corporate
purposes and working capital.
The Shares, Pre-Funded Warrants and Pre-Funded Warrant Shares (but
not the Purchase Warrants, PA Warrants or the Purchase Warrant
Shares or PA Warrant Shares) were offered and sold by the Company
pursuant to a prospectus supplement which was filed with the
Securities and Exchange Commission, in connection with a takedown
from the Company's effective shelf registration statement on Form
S-3, which was initially filed with the SEC on Feb. 14, 2022 and
subsequently declared effective on Sept. 22, 2022 (File No.
333-262727).
About Cuentas
Headquartered in Miami, Florida, Cuentas, Inc. --
http://www.cuentas.com-- currently focuses on the business of
using proprietary fintech technology to provide e-banking and
e-commerce services for delivering mobile banking, prepaid debit
and digital content services to the unbanked, underbanked and
underserved Latino, Hispanic and immigrant communities. The
Company's proprietary software platform enables Cuentas to offer
comprehensive financial services and robust functionality that is
absent from other Mobile Apps through the use of its Prepaid Debit
Mastercard/General-Purpose Reloadable cards.
Cuentas reported a net loss attributable to the company of $10.73
million for the year ended Dec. 31, 2021, a net loss attributable
to the company of $8.10 million for the year ended Dec. 31, 2020, a
net loss attributable to the company of $1.32 million for the year
ended Dec. 31, 2019, and a net loss of $3.56 million for the year
ended Dec. 31, 2018. As of Sept. 30, 2022, the Company had $7.41
million in total assets, $2.81 million in total liabilities, and
$4.60 million in total stockholders' equity.
CYXTERA DC: $100M Bank Debt Trades at 15% Discount
--------------------------------------------------
Participations in a syndicated loan under which Cyxtera DC Holdings
Inc is a borrower were trading in the secondary market around 84.7
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $100 million facility is a Term loan that is scheduled to
mature on May 1, 2024. About $97.5 million of the loan is withdrawn
and outstanding.
Cyxtera DC Holdings, Inc. provides data center services.
DA LUGO INVESTMENT: Seeks to Tap Smith Thompson as Special Counsel
------------------------------------------------------------------
Da Lugo Investment LLC seeks approval from the U.S. Bankruptcy
Court for the Middle District of Florida to employ Smith Thompson
Law as its special counsel.
The firm will perform legal services concerning the Debtor's
dispute with its insurer, Mt. Hawley Insurance Company.
The firm will be compensated as follows:
a. 33.3 percent of the total recovery (including any
attorney's fees paid by the opposing party or;
b. any attorney's fees paid by the persons, firms,
corporations, or parties liable as a result of settlement,
arbitration, or court award.
Smith Thompson does not hold nor represent any interest adverse to
the Debtor or its estate, as disclosed in the court filings.
The firm can be reached through:
Joshua S. Smith, Esq.
Smith Thompson Law
4725 N. Lois Avenue
Tampa, FL 33614
Tel: 813-254-1800
Email: info@smiththompsonlaw.com
About Da Lugo Investment LLC
Da Lugo Investment LLC, doing business as Oasis Sports Lounge,
filed a Chapter 11 bankruptcy petition (Bankr. M.D. Fla. Case No.
22-bk-03542), listing as much as $500,000 in both assets and
liabilities. Judge Roberta A. Colton oversees the case.
Buddy D. Ford, P.A. is the Debtor's legal counsel.
DARALI INC: Funeral Home Starts Subchapter V Case
-------------------------------------------------
DARALI Inc. filed for chapter 11 protection in the District of
Nebraska. The Debtor elected on its voluntary petition to proceed
under Subchapter V of chapter 11 of the Bankruptcy Code.
DARALI is doing business as Kremer Funeral Home at 6302 Maple
Street, Omaha, NE 68104.
According to court filings, DARALI Inc. estimates between $1
million and $10 million in debt owed to 1 to 49 creditors. The
petition states that funds will not be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
March 1, 2023, at 10:00 AM BY PHONE.
Proofs of claim are due by April 10, 2023.
About DARALI Inc.
DARALI Inc., doing business as Kremer Funeral Home, provides
funeral and cremation services.
DARALI Inc. filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. D. Neb. Case No.
23-80062) on Jan. 30, 2022. In the petition filed by Mindy Allen,
president and chief restructuring officer, the Debtor reported
assets and liabilities between $1 million and $10 million each.
The case is overseen by Honorable Bankruptcy Judge Thomas L.
Saladino.
Donald L. Swanson has been appointed as Subchapter V trustee.
The Debtor is represented by:
Patrick Patino, Esq.
Patino King LLC
6302 Maple Street
Omaha, NE 68104
Tel: (402) 401-4050
Email: patrick@patinoking.com
DEL SOL DELIVERYS: Case Summary & 18 Unsecured Creditors
--------------------------------------------------------
Debtor: Del Sol Deliverys, LLC
20770 US Hwy. 281, Suite 108
San Antonio TX 78259
Chapter 11 Petition Date: February 10, 2023
Court: United States Bankruptcy Court
Western District of Texas
Case No.: 23-50147
Judge: Hon. Craig A. Gargotta
Debtor's Counsel: William R. Davis, Jr., Esq.
LANGLEY & BANACK, INC.
745 E Mulberry Ave.
Suite 700
San Antonio, TX 78212
Tel: (210) 736-6600
Fax: (210) 735-6889
Email: wrdavis@langleybanack.com
Total Assets: $260,047
Total Liabilities: $1,082,588
The petition was signed by Ariel Alvarez Diaz as manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 18 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/LINJF6A/Del_Sol_Deliverys_LLC__txwbke-23-50147__0001.0.pdf?mcid=tGE4TAMA
DGS REALTY: Fine-Tunes Plan Documents
-------------------------------------
DGS Realty, LLC, submitted a Second Amended Disclosure Statement in
connection with the Debtor's Second Amended Plan of Reorganization
dated Feb. 6, 2023.
The Debtor believes that based on its assets and projected income,
this is a feasible Disclosure Statement and the Debtor will be able
to sustain the terms of this Disclosure Statement.
This Disclosure Statement under Chapter 11 of the Code proposes to
address claims of creditors and the proposed sale of the Debtor's
real estate. The Plan provides for 2 classes of secured claims, 1
class of unsecured claims and one class of taxes. Class 5 unsecured
holders will receive payment in full within 30 days of
confirmation.
After filing its Petition and schedules, the Debtor, via its
Manager, David Booth, and Member Stephen Booth, cooperated with the
U.S. Trustee in its initial debtor interview held on February 1,
2022. As the Debtor explained in those meetings, its plan to
reorganize centered on attempting to refinance the mortgage with
PHH which held the mortgage on the Concord, NH property.
Since that time, the Debtor has attempted to find a private lender
or an institutional lender to refinance the PHH mortgage. The
outstanding balance of the PHH mortgage is $1,900,000.00. The five
lenders the Debtor approached would only lend up to $1,200,000.00
or $1,300,000.00 to the Debtor. Refinancing at $1,300,000.00 would
not satisfy the PHH mortgage and each lender required a first
position on the Debtor's Concord, NH real estate as security for
its mortgage.
The quarterly fees due the US Trustee (Class 1) will be paid in
accordance with 11 U.S.C. Section 1129(a)(12). The quarterly fees
due the US Trustee will be dependent upon the outcome of the sale
transaction and at a minimum will be estimated to be $250.00 For
this reason, the fee to be paid to the US Trustee in Class 1 states
TBD. The unsecured creditors (Class 5) will be paid in full within
30 days of confirmation.
The claims of the City of Concord (Class 2) and the claim of PHH
Mortgage (Class 3) and the claim of the SBA (Class 4) will be paid
at the time of the closing on the sale of Transformer Services,
Inc. (TSI) and the Debtor's real estate.
The Debtor believes that the fair market value of the real estate
is $1,900,000.00 as listed on its bankruptcy petition. This
property has 1 mortgage encumbrances against it. The secured
creditor PHH is described in Class 2 Secured Creditor. The Debtor
does not own any other assets or real estate.
Like in the prior iteration of the Plan, Unsecured Claims are those
claims of the general unsecured creditors, totaling approximately
$437.50. The Debtor anticipates paying these unsecured creditors
in full as they are utility payments to creditors. The Debtor
anticipates paying these unsecured creditors within 30 days after
confirmation.
Upon confirmation, the monthly rent payable to the Debtor will
remain at $10,000 a month. In the event confirmation occurs after
Feb. 1, 2023, the monthly rent payable to the Debtor will increase
to $10,376. The increase in rent from TSI to the Debtor is due to
the commencement of repayment of the SBA loan effective February 1,
2023.
Until the TSI business and the Debtor's real estate are sold, the
Debtor will continue to pay PHH its monthly mortgage payment and
tax escrow and will continue to pay the SBA monthly loan payment of
$376 starting February 1, 2023. The Debtor is seeking obtained
authority from the Court to employ Everingham & Kerr, Inc. as the
broker to sell the real estate and the business TSI which will
allow the Debtor to pay the PHH mortgage in full and the real
estate taxes in full from the sale proceeds.
A full-text copy of the Second Amended Disclosure Statement dated
February 6, 2023 is available at https://bit.ly/3XkLZNV from
PacerMonitor.com at no charge.
Counsel for the Debtor:
Eleanor Wm. Dahar, Esq.
VICTOR W. DAHAR, P.A.
20 Merrimack Street
Manchester, NH 03101
Tel: (603) 622-6595
About DGS Realty
Based in Concord, New Hampshire, DGS Realty, LLC, is a real estate
limited liability company. Formed around May 10, 2017, the company
is owned by David H. Booth, Manager, Stephen W. Booth, and Gregory
A. Booth, each having a 1/3 interest.
DGS Realty filed a Chapter 11 petition (Bankr. D.N.H. Case No.
22-10028) on January 24, 2022. In the petition signed by David H.
Booth, the manager, the Debtor estimated assets and debts between
$1 million and $10 million.
Judge Bruce A. Harwood oversees the case.
Representing the Debtor as counsel is Eleanor Wm Dahar, Esq., at
Victor W. Dahar Professional Association.
DIEBOLD NIXDORF: $475M Bank Debt Trades at 31% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Diebold Nixdorf Inc
is a borrower were trading in the secondary market around 69.4
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $475million facility is a Term loan that is scheduled to mature
on November 6, 2023. About $376.8 million of the loan is withdrawn
and outstanding.
Diebold Nixdorf, Incorporated provides automatic teller machines,
financial, and point of sale (POS) services.
DIEBOLD NIXDORF: CEO Octavio Marquez Elected Chairman
-----------------------------------------------------
Diebold Nixdorf announced that Octavio Marquez, president and chief
executive officer, was elected chair of the Company's Board of
Directors, effective Feb. 2, 2023. Marquez was appointed as
Diebold Nixdorf president and CEO on March 11, 2022. Over the past
year, he successfully led Diebold Nixdorf through streamlining the
company's operating model, bringing improved operational efficiency
and cost savings, as well as leading the company through its
recently closed refinancing transaction. The Board determined that
combining the roles of CEO, president and chairman under one leader
enhances the alignment between ongoing strategic and operational
matters, including focus on deleveraging and evaluating strategic
opportunities to deliver value to shareholders. Independent
director Arthur Anton, previously chair of the company's Finance
Committee and former CEO of Swagelok Inc., a global manufacturing
company, was appointed as lead independent director of the Board.
Gary Greenfield, who joined the Board in 2014 and has served as
non-executive chairman since 2018, led the Diebold Nixdorf Board of
Directors during a number of transformational developments,
including the delivery of essential services and solutions to
global financial institutions and retailers during the COVID-19
pandemic. He will not stand for re-election as a director at the
Company's annual shareholder meeting in 2023. Greenfield stated,
"Diebold Nixdorf plays an essential role in the global economy for
financial institutions and retailers, and it was a great honor to
serve as director over the past nine years. The company and the
Board will be very well served by Octavio, Art and their fellow
directors. I will continue to cheer for Diebold Nixdorf as a
shareholder, and I look forward to watching the company's success
in the marketplace and around the world in the coming years."
The Board also appointed Marjorie L. Bowen and Emanuel R. "Manny"
Pearlman as directors of the company effective immediately. The
Board anticipates reducing the overall size of the Board at the
upcoming annual shareholders' meeting. As previously announced,
Bowen and Pearlman bring substantial expertise and experience
leading and guiding public and private companies, and will enhance
the Board's work as the company moves forward.
About Diebold Nixdorf
Diebold Nixdorf, Incorporated -- www.DieboldNixdorf.com --
automates, digitizes and transforms the way people bank and shop.
As a partner to the majority of the world's top 100 financial
institutions and top 25 global retailers, the Company's integrated
solutions connect digital and physical channels conveniently,
securely and efficiently for millions of consumers each day. The
Company has a presence in more than 100 countries with
approximately 22,000 employees worldwide.
Diebold Nixdorf reported a net loss of $78.1 million for the year
ended Dec. 31, 2021, a net loss of $267.8 million for the year
ended Dec. 31, 2020, and a net loss of $344.6 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $2.91
billion in total assets, $3.90 billion in total current
liabilities, $89.3 million in pensions, post-retirement and other
benefits, $114.8 million in deferred income taxes, $120.1 million
in other liabilities, and a total deficit of $1.32 billion.
* * *
As reported by the TCR on Jan. 11, 2023, S&P Global Ratings raised
its issuer credit rating on U.S.-based ATM and point-of-sale
provider Diebold Nixdorf Inc. to 'CCC+' from 'SD'. S&P said, "The
positive outlook reflects our expectation that the company's
increased backlog, price increases and cost-cutting efforts coupled
with supply chain efficiencies will materially improve EBITDA
margins and reduce leverage toward the mid-8x area by the end of
2023. We also expect this will improve prospects for growing free
cash flow generation to support FOCF to debt in the
low-single-digit percent area over the next 12 months."
Early this month, Moody's Investors Service affirmed Diebold
Nixdorf, Inc.'s corporate family rating of Caa2 following the
closing of the Company's debt capital restructuring.
DIEBOLD NIXDORF: EUR415M Bank Debt Trades at 35% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Diebold Nixdorf Inc
is a borrower were trading in the secondary market around 65.3
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The EUR415 million facility is a Term loan that is scheduled to
mature on November 6, 2023. About EUR325.3 million of the loan is
withdrawn and outstanding.
Diebold Nixdorf, Incorporated provides automatic teller machines,
financial, and point of sale (POS) services.
DIOCESE OF NORWICH: 142 Sexual Assault Victims' Names Published
---------------------------------------------------------------
Joe Wojtas of The Day reports that the bankruptcy firm that
represents the Diocese of Norwich on Thursday, February 2, 2023,
published the names and addresses of 142 clergy sexual assault
victims in a federal court document that was publicly available
online.
The document filing by Epiq Corporate Restructuring of New York
City means that the names were available for about 21 hours even
though all but one of the victims had been assured their names
would not be released and the federal bankruptcy judge handling the
case had ordered they remain anonymous.
The 142 people allege they were sexually assaulted by priests and
other members of diocese and are seeking compensation in the
diocese's ongoing bankruptcy proceeding.
"This is just a horrible, horrible thing,' said New London attorney
Kelly Reardon, who represents 25 of the victims. "These people had
already been victimized. They don't need their names published now.
Someone is going to have to be held accountable for this."
Reardon said that for many victims, few people know they were
sexually assaulted.
"In many instance my clients have never told anyone but me," she
said.
Marci Hamilton, the CEO of Child USA and a University of
Pennsylvania professor who studies the clergy abuse issue, has
testified before a General Assembly study committee that people
sexually assaulted by priests do not tell anyone what happened to
them until age 52, on average.
On Friday, February 3, 2023, night lead diocesan bankruoptcy
attorney Louis DeLucia issued the following statement:
"In association with the bankruptcy filings, earlier today we
learned of a clerical error on the part of Epiq Corporate
Restructuring, which resulted in the names of some abuse survivors
being published. The Diocese, in collaboration with the Committee
representing the Diocese's creditors, including abuse survivors,
promptly filed a motion with the Bankruptcy Court to remove the
names that were published in error, and seal the record to protect
the identity of the survivors. Any person who might have accessed
the names should immediately destroy the list and not publish the
names, because, pursuant to Orders entered by the Bankruptcy Court,
such information is to be kept confidential," he wrote.
Reardon said all but one of the 142 victims had checked a box on
their claim form that said they wanted their identities not be made
public.
On Friday, February 3, 2023, morning a court filing shows that
Judge James Tancredi had signed an order sealing the document
containing the names for "good and compelling cause." The document
also been removed from the online case website.
It is unknown, though, how many people accessed, downloaded or
copied the document, before it was removed.
One victim, who has never spoken publicly about his assault,
contacted The Day early Friday morning and said he discovered his
name and address had been listed while he was reviewing the latest
court filings on Thursday. He had taken a screenshot of the filing
which he shared with The Day.
When that victim contacted Reardon about 7:30 a.m, she said she
immediately called the other attorneys in the case, who alerted the
bankruptcy court.
"They were equally appalled and took steps to get the document
removed," she said.
The time stamp on the document showed it was filed about noon on
Thursday, February 2, 2023. It was removed about 9 a.m. Friday
morning.
While the court removed it within 90 minutes after Reardon learned
of the posting, she pointed out it "was publicly available since
noon yesterday."
Reardon said she expected Tancredi would hold an emergency hearing
to discuss the issue and that she expected the court to take action
for what she called a "significant breach."
Tancredi and Epiq did not respond to a request for comment on
Friday. Attorneys Stephen Kindseth and Eric Henzy, who represent
the committee of victims, declined to comment Friday, February 3,
2023.
The diocese filed for bankruptcy in 2021 as it faced more than 60
lawsuits filed by men who say they were sexually assaulted as boys
by Christian Brothers, staff and students at the diocese-run Mount
Saint John Academy, a residential school for troubled boys in Deep
River, from 1990 to 2002. Since the bankruptcy filing, 82
additional people, whose sexual assault allegations involved not
only the school, but diocesan churches, have filed claims in the
bankruptcy case.
Since the diocese filed for bankruptcy, it has negotiated with its
insurance company, parishes, the committee representing victims and
creditors and other entities to create a fund to compensate the
victims. The diocese filed a plan last month that says it has $29
million to distribute to creditors, including the victims, who will
have to vote on the plan. Part of the $29 million will come from
the sale of St. Bernard School in Montville.
About The Norwich Roman Catholic
Diocesan Corporation
The Norwich Roman Catholic Diocesan Corporation is a nonprofit
corporation that gives endowments to parishes, schools, and other
organizations in the Diocese of Norwich, a Latin Church
ecclesiastical territory or diocese of the Catholic Church in
Connecticut and a small part of New York.
The Norwich Roman Catholic Diocesan Corporation sought Chapter 11
protection (Bankr. D. Conn. 2:21-bk-20687) on July 15, 2021. The
Debtor estimated $10 million to $50 million in assets against
liabilities of more than $50 million. Judge James J. Tancredi
oversees the case.
The Debtor tapped Ice Miller, LLP as bankruptcy counsel and
Robinson & Cole, LLP as Connecticut counsel. Epiq Corporate
Restructuring, LLC is the claims and noticing agent.
DUNBAR PLAZA: Files Amendment to Combined Disclosure and Plan
-------------------------------------------------------------
Dunbar Plaza, Inc., submitted a Third Amended Combined Disclosure
Statement and Liquidation Plan dated February 7, 2023.
The hotel property was sold for 1,800,000 and Putnam County Bank
received the net proceeds from the sale of the 10th Street property
except for the $150,000 amount which was held back. The $150,000
represented the value of the personal property which was sold as a
part of the transaction. Putnam County Bank failed to properly
perfect its lien on the personal property.
All monies to be distributed will be distributed to the two classes
of unsecured creditors – Class I and Class II. Class I will
receive $150,000 and Class II will receive $75,309 less
administrative expense. This represents all that can be paid if the
case were converted to a Chapter 7, there would be additional
administrative expenses of a Chapter 7 Trustee.
The Amended Combined Disclosure Statement and Plan does not alter
the proposed treatment for unsecured creditors:
* Class UC-1 Unsecured creditors other than Putnam County Bank
are identified on the exhibit attached and designated as Class I.
Those creditors will share, pro rata, the sum of $150,000. Creditor
claims in Class I total the sum of $269,284. Payments in this class
represent the balance of the monies held by the Debtor. This class
exists because the Putnam County Bank claim has been subordinated
to the $150,000 holdback.
* Class UC-II represents the balance of distributions to be made
to unsecured creditors after payment of the $150,000 sum as
identified in Class I. This class does include a distribution to
Putnam County Bank. The total amount available for payment to
creditors in this class is $75,309. Class II represents a pro rata
payment to Putnam County Bank because its secured claim on personal
property was not properly perfected.
After the filing of this Disclosure Statement, the Debtor realized
that it owned two lots at Dunbar Avenue, Dunbar, West Virginia,
being utilized as a billboard site. The Debtor recently received
offers to purchase the billboard. The Debtor initially filed an
application to sell the property and because of other potential
bidders, an amended application was submitted and the Court will
schedule a hearing to consider upset bids. The billboard is located
close to the I-64 Dunbar, South Charleston, bridge but the property
can only be utilized for advertising purposes because it is located
in a flood plain.
Carl Junior Higginbotham, the owner of the Debtor, passed on
September 10, 2022. His estate has been probated at the Office of
the Clerk of the Fiduciary Supervisor of Kanawha County, West
Virginia, and his nephew, Curt Higginbotham, is the Executor. Mr.
Higginbotham will sign off on the Deed and any other documents
necessary to complete the administration of this case. Proceeds
from the sale of the billboard will be available to pay quarterly
fees owed to the U.S. Trustee and the balance will be made
available for creditors in Class II.
A copy of the Third Amended Combined Disclosure Statement and
Liquidation Plan dated February 7, 2023, is available at
https://bit.ly/3jKHE9n from PacerMonitor.com.
Attorney for the Debtor:
Joseph W. Caldwell, Esq.
CALDWELL & RIFFEE, PLLC
P.O. Box 4427
Charleston, WV 25364
E-mail: jcaldwell@caldwellandriffee.com
About Dunbar Plaza
Dunbar, W.Va.-based Dunbar Plaza, Inc., filed a petition for
Chapter 11 protection (Bankr. S.D. W.Va. Case No. 21-20221) on
Sept. 23, 2021, with as much as $10 million in both assets and
liabilities. Carl Higginbotham, president of Dunbar Plaza, signed
the petition.
Judge B. Mckay Mignault oversees the case.
Joseph W. Caldwell, Esq., at Caldwell & Riffee, PLLC is the
Debtor's lead bankruptcy counsel. Matthew M. Johnson, Esq., a
practicing attorney in Charleston, W.Va., serves as Mr. Caldwell's
co-counsel.
E QUALCOM: Unsecured Creditors Will Get 10% of Claims in 60 Months
------------------------------------------------------------------
E Qualcom, Corp. submitted a First Amended Plan of Reorganization
dated February 6, 2023.
This Plan of Reorganization proposes to pay creditors of the Debtor
from cash flow from operations and from rental income.
The President of the Debtor, Luis Navia, has agreed to forego
salary during the term of the Plan, with the Debtor paying his car
expenses and insurance. Further, Mr. Navia shall personally
guaranty $60,000.00 in funds needed by the Debtor for cash flow or
to make any Plan payments that the Debtor is unable to timely pay.
This personal guaranty will assure the creditors of the feasibility
of the Plan through a significant initial period of the Plan.
The Debtor's ability to pay the Plan payments is supported by the
attached Twelve-Month Projections. The projections are based on
past and current actual earnings as well as work in progress.
Class 1 consists of the Secured Claim of Eric and Barbara Castro.
The Secured portion of the Castros' claim has been fixed by
agreement at $820,000.00 and will be paid in 12 equal monthly
payments based on a 30-year amortization at the Till interest rate
of 9.5%, with a balloon payment in month 13. The remaining portion
of the Castros' claim will be included in Class 4 General Unsecured
Creditors.
Class 3 consists of the Lien Claim of the City of Weston. POC #7
filed by the City of Weston has been withdrawn. POC 8-2 This lien
was recorded after the Castro mortgage and is deemed unsecured for
purposes of this Plan and shall be included as part of Class 4
General Unsecured Creditors. The Debtor has objected to POC 9-2.
The Debtor shall pay the priority claim of $238.00 on the effective
date and any remaining balance of the claim as determined by the
Court shall be included as part of Class 4 General Unsecured
Creditor.
Class 4 consists of the Claim of Broward County. The Debtor shall
pay the past due taxes as described in POC 1 in 60 equal monthly
payments beginning on the Effective Date and shall pay ongoing real
estate taxes in full as they accrue.
Class 5 consists of General Unsecured Creditors. Class 5 Claimants
include Weston ($33,492); Castro ($250,294); GCC ($134,437.58);
Elen Crd. ($10,000); and Home Dep ($5,500). All unsecured claims
allowed under §502 of the Code will be paid 10% of the allowed
claim in 60 equal monthly payments with no interest beginning 30
days after the effective date of the Plan or the date on which such
claim is allowed by a final nonappealable order.
Class 6 consists of Equity Security Holders of the Debtor. The
shareholders of the Debtor shall retain their interests in the
Debtor property of the estate. Blueridge International Overseas,
Inc., an unsecured creditor, has agreed to accept equity in the
Debtor in full satisfaction of its claim.
The payments required under the Plan will be made from the Debtor's
business operations and rental income, supported by a personal
guaranty from the Principal, Luis Navia.
A full-text copy of the First Amended Plan dated February 6, 2023
is available at https://bit.ly/3jPNy98 from PacerMonitor.com at no
charge.
Attorney for Debtor:
David W. Langley, Esq.
8551 W. Sunrise Boulevard, Suite 303
Plantation, FL 33322
Tel: (954) 356-0450
Fax: (954) 356-0451
Email: dave@flalawyer.com
About E Qualcom, Corp.
E Qualcom, Corp. filed a petition for relief under Subchapter V of
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Fla. Case No.
22-15957) on Aug. 1, 2022. In the petition filed by Luis Navia, as
officer, the Debtor reported assets between $1 million and $10
million and liabilities between $1 million and $10 million.
Aleida Martinez-Molina has been appointed as Subchapter V trustee.
David W. Langley, Attorney At Law, is the Debtor's counsel.
EQUINOX HOLDINGS: $1.02B Bank Debt Trades at 19% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Equinox Holdings
Inc is a borrower were trading in the secondary market around 80.7
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $1.02 billion facility is a Term loan that is scheduled to
mature on March 8, 2024. The amount is fully drawn and
outstanding.
Equinox Holdings Inc., through its subsidiaries, provides fitness
services such as yoga classes and studio cycling.
EQUINOX HOLDINGS: $150M Bank Debt Trades at 20% Discount
--------------------------------------------------------
Participations in a syndicated loan under which Equinox Holdings
Inc is a borrower were trading in the secondary market around 80.5
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $150 million facility is a Term loan that is scheduled to
mature on March 8, 2024. The amount is fully drawn and
outstanding.
Equinox Holdings Inc., through its subsidiaries, provides fitness
services such as yoga classes and studio cycling.
FMC CLINIC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: FMC Clinic LLC
850 S Hospital Dr.
Fulton, MO 65251
Business Description: FMC Clinic is engaged in activities related
to real estate. The Debtor has equitable
interest in a property located at 850 S
Hospital Dr Fulton, MO, 65251 valued at $7.9
million.
Chapter 11 Petition Date: February 10, 2023
Court: United States Bankruptcy Court
Western District of Missouri
Case No.: 23-20052
Debtor's Counsel: Ronald Weiss, Esq.
BERMAN DELEVE KUCHAN AND CHAPMAN
1100 Main St Suite 2850
Kansas City, MO 64105
Tel: (816) 471-5900
Email: rweiss@bdkc.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Zev M. Reisman as general
manager/corporate secretary.
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/YSZTY6Q/FMC_Clinic_LLC__mowbke-23-20052__0001.0.pdf?mcid=tGE4TAMA
FRANKLIN SQUARE: Moody's Affirms Ba1 CFR & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service has affirmed Franklin Square Holdings,
L.P.'s ("FSH") Corporate Family Rating of Ba1 and Probability of
Default Rating of Ba1-PD. Moody's has also affirmed FSJV Holdco,
LLC's ("FSJV") Ba1 senior secured bank credit facilities ratings.
The outlook was changed to stable from negative.
Summary of the rating actions:
Affirmations:
Issuer: Franklin Square Holdings, L.P.
Corporate Family Rating, Affirmed Ba1
Probability of Default Rating, Affirmed Ba1-PD
Issuer: FSJV Holdco, LLC
Backed Senior Secured Revolving Credit Facility, Affirmed Ba1
Backed Senior Secured Term Loan B, Affirmed Ba1
Outlook Actions:
Issuer: Franklin Square Holdings, L.P.
Outlook, Changed To Stable From Negative
The change in outlook to stable from negative reflects improvements
in FSH's leverage and profitability supported by fundraising gains
and the roll-off of the FSK fee waiver and the expected benefits
from the company's recently announced acquisition of Portfolio
Advisors ("PA"), a $38 billion institutional-oriented alternative
asset manager, which will include increased scale as well as
improved asset class, client type and geographic diversification.
RATINGS RATIONALE
FSH's Ba1 corporate family rating is supported by the company's
strong recurring revenue base, healthy pretax income margins,
declining leverage trends and positive shareholder equity base.
These credit strengths are balanced by integration uncertainty
arising from the transaction, as well as increasing exposure to
illiquid, opaque private investments geared towards retail
investors which exposes it to greater reputational and asset
valuation risks.
Since 2021, FSH's AUM, revenue and pre-tax income has grown
steadily and led to organic deleveraging – debt/EBITDA ratio has
declined from 5.3x to 3.7x. FSH has also ended its fee-waiver
payments of $15mm per quarter, leading to an expected increase in
forward EBITDA. Combined with these organic credit improvements,
the acquisition is expected to result in a lower leverage of
multiple of 3.5x pro-forma.
This business combination increases the firm's scale and will
result in greater business diversification and distribution
capabilities as PA manages a broad range of primary, secondary and
direct and co-investment strategies across private equity, private
credit and private real estate asset classes, and has a global,
institutional client base across North America, Europe and Asia.
At the same time, the acquisition will entail integration
uncertainties, introduce a greater portion of lower-margin advisory
business alongside traditional fee-paying commingled strategies,
and increase the firm's exposure to illiquid, opaque private
investments with greater valuation risks. The acquisition will be
predominantly funded by equity which will partially mitigate these
risks and is expected to align the interests of both firms. The
transaction is expected to close in the first half of 2023.
FSH's stable outlook reflects Moody's expectations that EBITDA
generation will remain steady due to the long-duration nature of
the firm's investments and the high fees with favorable fee
structures that the firm earns on its core products. The firm's
integration with PA will increase scale, geographic and business
diversification.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's said factors that could lead to an upgrade include:
1) Debt/EBITDA sustained below 2.5x;
2) Successful integration with PA where strategic benefits of
acquisition are fully realized; and
3) pre-tax margins above 25% on a consistent basis.
Moody's said factors that could lead to a downgrade include:
1) Debt/EBITDA sustained over 4.5x;
2) pre-tax income margins fall below 15% on a consistent basis;
3) implementation of regulations that curtail demand for
alternatives in retail channels.
4) incidents of reputational risk or material deficiencies in the
valuations of private investment assets.
Founded in 2007, Franklin Square Holdings, L.P. has developed niche
alternative investments offerings and distribution capacity focused
on private debt and liquid credit strategies for individual
investors. Franklin Square Holdings, L.P. is the largest manager of
business development company (BDC) assets through FS/KKR Advisor,
LLC, which serves as the investment adviser to a BDC with
approximately $19.5 billion in assets under management as of
September 30, 2022. As of September 30, 2022, Franklin Square
Holdings, L.P. had approximately $35.1 billion in AUM.
The principal methodology used in these ratings was Asset Managers
Methodology published in November 2019.
FTX GROUP: Sam Bankman-Fried Wins Texas Securities Ruling
---------------------------------------------------------
Madlin Mekelburg of Bloomberg News reports that embattled FTX
founder Sam Bankman-Fried has staved off a case alleging he broke
Texas securities laws, after a judge ruled that the state regulator
lacks jurisdiction to act against him.
The ruling came in a case brought by the Texas State Securities
Board claiming Bankman-Fried offered unregistered securities
through FTX's yield-bearing cryptocurrency accounts and that he now
owes refunds to Texas investors.
Administrative Law Judge Sarah Starnes canceled a Feb. 2, 2023
hearing at which Bankman-Fried had been ordered to testify and has
given the securities agency until March 1, 2023 to file an amended
complaint.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: SBF Hoped for Foreign Leniency to Delay Bankruptcy
-------------------------------------------------------------
Savannah Forits of Crypto News reports that the founder of
disgraced crypto exchange FTX Sam Bankman-Fried (SBF), has once
again come under serious criticism. According to the U.S. Justice
Department in a Wall Street Journal report, SBF attempted to stall
bankruptcy proceedings through leniency from foreign regulators.
The idea was to transfer crypto assets from his exchange platform
to international regulators.
More Details On FTX Founder
Sam Bankman-Fried, the founder of the cryptocurrency exchange FTX,
is facing multiple lawsuits and bankruptcy claims due to the
financial crisis of FTX. But instead of addressing these claims
head-on, the report cited that he has been actively seeking
leniency from foreign regulators to buy time and avoid bankruptcy
proceedings.
Meanwhile, the report also stated that SBF has been leveraging his
extensive network of contacts within the cryptocurrency industry to
influence regulators in various countries. These efforts aim to
obtain favorable treatment and stall the bankruptcy proceedings.
FTX has denied these allegations, stating that the company is
committed to following all applicable laws and regulations in every
jurisdiction in which it operates. The company has also stressed
that it has a strong track record of compliance and has never been
found to have violated any laws or regulations.
Despite FTX's denial, the accusations against SBF and the company
continue to attract widespread attention and criticism. Some
industry experts predict this could have significant consequences
for the cryptocurrency industry, including increased regulation and
inspection.
The accusations against SBF have caused outrage in the financial
community. Many call for stricter regulations and increased
accountability for cryptocurrency exchanges and their founders.
Some have even called for SBF to be held accountable for his
actions and for the FTX exchange to be closed down.
Need For Higher Security In The Crypto Space
Despite the success of the crypto space, it has been subject to
criticism, particularly around the recent accusations of the FTX
founder, SBF.
As the sector continues to grow, many call for more regulations on
projects, exchanges, and their founders to hold the same standards
as traditional financial institutions. Also, they should ensure
that efforts to evade the law are not tolerated.
Currently, there are many regulations around the world regarding
crypto activities. But the FTX incident has raised more concerns
over the security of the crypto space, with many arguing that more
needs to be done to protect users from malicious actors.
According to users on Twitter, the first is to increase the
security measures in place for crypto exchanges and wallets to
improve security. Also, a regulatory body should set and enforce
standards to ensure that malicious actors cannot operate without
consequences.
Moreover, the allegations against SBF and FTX have highlighted the
need for greater transparency and accountability within the
cryptocurrency industry. This involves regular auditing and
testing systems, having strict Know Your Customer (KYC) and
Anti-Money Laundering (AML) procedures to detect and prevent
illicit activities.
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: UST Says Law Requires Independent Examiner
-----------------------------------------------------
Andrew R. Vara, U.S. Trustee for Region 3 and 9, insists that
appointing an examiner in the Chapter 11 cases of FTX Trading,
Ltd., et al., is mandated as a matter of law and in the best
interest of creditors.
The Debtors (led by new CEO John J. Ray III), the Official
Committee of Unsecured Creditors, and the Joint Provisional
Liquidators of FTX Digital Markets Ltd. (the "JPLs") objected to
the Examiner Motion. Responses of the Debtors and the Committee
were labeled objections, whereas the JPLs' response was titled a
Limited Objection and Response.
The U.S. Trustee notes that the Objectors do not challenge the
necessity of an investigation of the events leading up to the
Debtors' chapter 11 filing. As the Committee states in its
objection, "[t]these Chapter 11 Cases, all agree, require a
thorough investigation into a variety of issues, including 'the
substantial and serious allegations of fraud, dishonesty,
incompetence, misconduct, and mismanagement by the Debtors, the
circumstances surrounding the Debtors' collapse, the apparent
conversion of exchange customers' property, and whether colorable
claims and causes of action exist to remedy losses.'"
The issue in dispute is who should investigate. The U.S. Trustee
asserts that an independent examiner must investigate because that
is what the Bankruptcy Code requires. In contrast, the Debtors and
the Committee argue that the Code does not mandate the appointment
of an examiner and that they -- the Debtors and the Committee --
should conduct the investigation.
"Examiners have an important role in the Bankruptcy system. Both
in high-profile large bankruptcy cases -- like Enron, WorldCom, and
Lehman Brothers -- and in smaller cases examiners have exposed
misconduct and helped bankruptcy estates maximize recoveries for
creditors. By statute, examiners are objective and
non-adversarial. They can investigate debtors' acts, conduct,
assets, liabilities, financial condition, business operations, and
any other matter relevant to the case. 11 U.S.C. Secs. 1106(a)(3),
1106(b). Examiners often produce tangible benefits for creditors by
identifying causes of action and other assets that can yield
significant recoveries for the creditor body. And relevant to this
case -- the subject of so much public attention and interest --
examiners also file public reports of the result of their
investigation, which benefit the court and all parties in interest
while also enhancing the integrity of the bankruptcy system by
exposing misconduct and fostering public confidence that the system
is operating efficiently and fairly," the U.S. Trustee says in
court filings.
"In these cases, an examiner is mandated as a matter of law under
section 1104(c)(2) of the Bankruptcy Code because a court "shall"
order appointment of an examiner where "the debtor's fixed,
liquidated, unsecured debts, other than debts for goods, services,
or taxes, or owing to an insider, exceed $5,000,000." The Debtors
and the other parties objecting to the Motion have stipulated that
the $5 million threshold of section 1104(c)(2) is satisfied for the
following three Debtors: West Realm Shires Inc.; FTX Trading Ltd.;
and Alameda Research LLC. As to the other Debtors, the Objectors
do not admit that the $5 million threshold has been met because
they are not currently in a position to make that determination.
But they have informed the U.S. Trustee that they are not
contesting the Motion on the basis that the $5 million threshold of
section 1104(c)(2) has not been met for those Debtors. It is also
uncontested that all other requirements of section 1104(c)(2) of
the Bankruptcy Code have been met: (i) the U.S. Trustee has
requested the appointment of an examiner; (ii) no trustee has been
appointed in the case; and (iii) no chapter 11 plan has been
confirmed."
About FTX Group
FTX is the world's second-largest cryptocurrency firm. FTX is a
cryptocurrency exchange built by traders, for traders. FTX offers
innovative products including industry-first derivatives, options,
volatility products and leveraged tokens.
Then CEO and co-founder Sam Bankman-Fried said Nov. 10, 2022, that
FTX paused customer withdrawals after it was hit with roughly $5
billion worth of withdrawal requests.
Faced with liquidity issues, FTX on Nov. 9 struck a deal to sell
itself to its giant rival Binance, but Binance walked away from the
deal amid reports on FTX regarding mishandled customer funds and
alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims
agent, maintaining the page
https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
GAUCHO GROUP: Extends Notes Maturity to Feb. 28
-----------------------------------------------
Gaucho Group Holdings, Inc. and certain investors have entered into
a fifth letter agreement pursuant to which the parties agreed to
extend the Maturity Date of certain senior secured convertible
notes from Feb. 9 to Feb. 28, 2023, according to a Form 8-K filed
with the Securities and Exchange Commission.
The Conversion Amount and all outstanding Amortization Amounts and
Amortization Redemption Amounts (as defined in the Notes) shall be
due and payable in full on the Maturity Date or such earlier date
as any such amount shall become due and payable pursuant to the
other terms of the Note and/or the Letter Agreement #5.
Gaucho Group and the investors entered into that Securities
Purchase Agreement, dated as of Nov. 3, 2021 pursuant to which the
Company issued to the investors certain senior secured convertible
notes.
About Gaucho Group
Headquartered in New York, NY, Gaucho Group Holdings, Inc. --
http://www.algodongroup.com-- was incorporated on April 5, 1999.
Effective Oct. 1, 2018, the Company changed its name from Algodon
Wines & Luxury Development, Inc. to Algodon Group, Inc., and
effective March 11, 2019, the Company changed its name from Algodon
Group, Inc. to Gaucho Group Holdings, Inc. Through its
wholly owned subsidiaries, GGH invests in, develops and operates
real estate projects in Argentina. GGH operates a hotel, golf and
tennis resort, vineyard and producing winery in addition to
developing residential lots located near the resort. In 2016, GGH
formed a new subsidiary and in 2018, established an e-commerce
platform for the manufacture and sale of high-end fashion and
accessories. The activities in Argentina are conducted through its
operating entities: InvestProperty Group, LLC, Algodon Global
Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties
II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its
wines in Europe through its United Kingdom entity, Algodon Europe,
LTD.
Gaucho Group reported a net loss of $2.39 million for the year
ended Dec. 31, 2021, a net loss of $5.78 million for the year ended
Dec. 31, 2020, and a net loss of $6.96 million for the year ended
Dec. 31, 2019. As of Sept. 30, 2022, the Company had $25.39
million in total assets, $6.86 million in total liabilities, and
$18.53 million in total stockholders' equity.
GENESISCARE USA: $350M Bank Debt Trades at 68% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Genesiscare USA
Holdings Inc is a borrower were trading in the secondary market
around 32.3 cents-on-the-dollar during the week ended Friday,
February 10, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $350 million facility is a Term loan that is scheduled to
mature on May 17, 2027. The amount is fully drawn and
outstanding.
Genesiscare USA Holdings Inc operates as a holding company. The
Company, through its subsidiaries, provides breast and colorectal
surgery, gynecology, pathology, pulmonology, radiology, urology,
radiation therapy, and other cancer treatments.
GENESISCARE USA: EUR500M Bank Debt Trades at 68% Discount
---------------------------------------------------------
Participations in a syndicated loan under which Genesiscare USA
Holdings Inc is a borrower were trading in the secondary market
around 32.1 cents-on-the-dollar during the week ended Friday,
February 10, 2023, according to Bloomberg's Evaluated Pricing
service data.
The EUR500 million facility is a Term loan that is scheduled to
mature on May 17, 2027. The amount is fully drawn and
outstanding.
Genesiscare USA Holdings Inc operates as a holding company. The
Company, through its subsidiaries, provides breast and colorectal
surgery, gynecology, pathology, pulmonology, radiology, urology,
radiation therapy, and other cancer treatments.
GIGA-TRONICS INC: Agrees to Terminate Regazzi as Employee, Officer
------------------------------------------------------------------
Giga-Tronics Incorporated disclosed in a Form 8-K filed with the
Securities and Exchange Commission it entered into a Termination
and Release Agreement with John Regazzi, in which Mr. Regazzi
resigned as a full-time employee and officer of the Company and its
subsidiaries, effective immediately. Mr. Regazzi remains a
director of the Company.
Pursuant to the Agreement, the Company has paid or agreed to pay
Mr. Regazzi:
(i) $17,500 in unpaid expenses;
(ii) $82,266 in unpaid deferred salary;
(iii) $100,000 in an unpaid bonus related to the acquisition of
Gresham Worldwide, Inc. payable in essentially equal installments
over an 18-month commencing in January 2024;
(iv) $325,000 in retirement compensation payable over an
18-month period commencing in January 2024; and
(v) COBRA reimbursement until such time as the Employee can
transition to Medicare. Mr. Regazzi is remaining as a part-time
employee through June 30, 2025 at a rate of $125 per hour and will
be paid the $36,000 he is owed for paid time-off over the next 12
months.
About Giga-tronics Inc.
Headquartered in Dublin, California, Giga-Tronics Inc. is a
publicly held company, traded on the OTCQB Capital Market under
the
symbol "GIGA". Giga-tronics -- http://www.gigatronics.com--
manufactures specialized electronic equipment for use in both
military test and airborne operational applications. The Company's
operations consist of two business segments, those of its wholly
owned subsidiary, Microsource Inc., and those of its Giga-tronics
Division. The Company's Microsource segment designs and
manufactures custom microwave products for military airborne
applications while the Giga-tronics Division designs and
manufactures real time solutions for RADAR/EW test applications.
Giga-Tronics reported a net loss of $2.72 million for the year
ended March 26, 2022, compared to a net loss of $393,000 for the
year ended March 27, 2021. As of Sept. 30, 2022, the Company had
$48.26 million in total assets, $25.31 million in total
liabilities, and $22.96 million in total stockholders' equity.
San Ramon, California-based Armanino LLP, the Company's auditor
since 2018, issued a "going concern" qualification in its report
dated June 24, 2022, citing that the Company's significant
recurring losses and accumulated deficit raise substantial doubt
about its ability to continue as a going concern.
GIRARDI & KEESE: Criminal Charges Blasts California State Bar
-------------------------------------------------------------
Joyce E. Cutler of Bloomberg Law reports that the dual criminal
indictments of disgraced attorney Thomas Girardi and Girardi Keese
employees is the latest blast to the California State Bar's
years-long failure to discipline the celebrated plaintiffs' lawyers
despite a slew of complaints, bar watchers said.
An indictment in Los Angeles federal court made public Wednesday,
February 1, 2023, alleges five counts of wire fraud, claiming that
Girardi and former chief financial officer Christopher Kamon
together defrauded clients out of more than $15 million over a
decade. An indictment in federal court in Chicago alleges 12
criminal counts—eight wire fraud and four criminal contempt
counts—against Girardi and former partner David Lira, who is
Girardi's son-in-law. Kamon also was named in the Chicago case.
Jay Edelson, who was local counsel for Girardi in Chicago
litigation over the 2018 crash of a Boeing Co.-built Lion Air 737
Max and is suing Girardi Keese and principals for fraud and
racketeering, said his firm had faith in federal prosecutors.
"This is certainly a bad day for plaintiff's lawyers who are doing
unethical things and a horrible day for the California Bar,"
Edelson said in an email Wednesday. "One wonders how the Bar can
have any credibility going forward in the face of their misconduct
spanning decades and their failure to hold people accountable even
now."
The State Bar of California regulates more than 288,000 attorneys,
including some 195,000 active lawyers, and makes disciplinary
recommendations to the California Supreme Court, which has the
ultimate authority to mete out punishment. The California
Legislature has oversight for the bar and lawyers under the state
Business & Professions Code.
The California Bar received 136 complaints about Girardi between
August 10, 1982, and Dec. 17, 2020, when the firm and the man were
forced into bankruptcy. The bar since then received 69 complaints,
nearly 60 of which alleged client trust account violations,
documents the bar released after settling a Los Angeles Times
lawsuit.
Need to Step Up
Ruben Duran, California Bar Board of Trustees chair, in a statement
said the criminal charges "are further evidence of the seriousness
of the abuse and malfeasance that ultimately led to Mr. Girardi's
disbarment."
Lira's profile page on the bar's website now has a consumer alert
about the criminal charges. A final conviction on the felony
charges could result in his disbarment.
"Furthermore, the State Bar of California has taken steps, and will
take more in the future, to ensure that attorney misconduct of this
magnitude never occurs again," Duran said, adding that the bar "is
committed to continued reform of our regulatory and disciplinary
duties to address these serious issues."
State Senate Judiciary Chairman Thomas Umberg (D) had a different
message: "Once again this highlights the need for us to step up to
protect those harmed by California lawyers."
Umberg's proposed legislation (SB 42) to require lawyers report to
the bar another attorney for professional misconduct that raises a
substantial question as to their honesty, trustworthiness, or
fitness as an attorney.
Carol Langford, a University of San Francisco law adjunct professor
specializing in ethics, in an email asked why prosecutors aren’t
"going after Bar personnel who failed to supervise their employees
and who had to have seen all the complaints (as they conduct audits
every year)?"
Nothing in the criminal cases "restore confidence in the
profession," said Robert Hillman, a University of California Davis
law professor and legal ethics authority. "To the contrary, this
illustrates how bad things can get when there is a bad seed in the
profession."
The indictments reinforce "how the Bar was asleep at the switch.
More than 200 complaints, and this still happened?"
The cases are United States v. Girardi, N.D. Ill., No. 23-cr-54,
2/1/23 and United States v. Girardi, C.D. Cal., No. 2:23-cr-00047,
indictment 1/31/23.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It
served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter
7
trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
Telephone: (310) 640-1200
GLOBAL MEDICAL: First Trust Fund II Marks $1.9M Loan at 21% Off
---------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$1,990,294 loan extended to Global Medical Response, Inc to market
at $1,573,328 or 79% of the outstanding amount, as of November 30,
2022, according to a disclosure contained in the First Trust fund's
Form N-CSRS for the six months ended November 30, 2022, filed with
the Securities and Exchange Commission on February 2, 2023.
First Trust SFRIFII is a participant in a 2021 Refinancing Term
Loan to Global Medical Response, Inc. The loan accrues interest at
a rate of 8.09% (1 Mo. LIBOR + 4.25%, 1.00% Floor) per annum. The
loan matures on October 2, 2025.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
Global Medical Response, Inc provides air, ground, specialty and
residential fire services, and managed medical transportation
through its wholly owned subsidiaries, Air Medical Group Holdings
LLC and AMR Holdco, Inc.
GROWLIFE INC: Sells $125K Promissory Note to Fourth Man
-------------------------------------------------------
Growlife, Inc. disclosed in a Form 8-K filed with the Securities
and Exchange Commission it entered into a Securities Purchase
Agreement with Fourth Man LLC, pursuant to which the Company sold
the Investor a convertible Promissory Note in the principal
aggregate amount of $125,000, which carries an original issue
discount in the amount of $21,250.00, plus $10,762.50 in
transaction fees accordingly the Company received proceeds of
$$92,987.50 of the purchase price.
Additionally the Purchase Agreement and the Note require the
Company to pay interest on the unpaid Principal Amount at the rate
of 10% per annum (with the understanding that the first twelve
months of interest (equal to $12,500.00) shall be guaranteed and
earned in full as of the Issue Date). The Note is due and payable,
in full, as of the maturity date, which is 12 months from the Issue
Date. The Note may not be prepaid or repaid in whole or in part
and the Investor has the right, at any time on or following the
Issue Date, to convert all or any portion of the outstanding and
unpaid Principal Amount and interest into fully paid and
non-assessable shares of the Company's common stock. The per share
conversion price into which Principal Amount and interest under the
Note is $0.035 per share, subject to adjustment as provided in the
Note. The Investor is entitled to deduct $1,750.00 from the
conversion amount in each conversion to cover its fees associated
with each conversion. Conversions are subject to adjustment for
any stock dividend, stock split, stock combination, rights
offerings, reclassification, or similar transaction that
proportionately decreases or increases the common stock. The Note
provides for standard and customary events of default such as
failing to timely make payments under the Note when due, the
failure of the Company to timely comply with the Securities
Exchange Act of 1934, as amended, reporting requirements and the
failure to maintain a listing on the OTC Markets. The Note also
contains customary positive and negative covenants. Additionally,
the Note may not be converted into shares of our common stock if
such conversion would result in the Investor, or its affiliates
owning an aggregate of more than 4.99% of the then outstanding
shares of the Company's common stock.
In addition to the Note, the Company issued the Investor Common
Stock Purchase Warrants granting the Investor the right to purchase
up to 625,000 shares of common stock of the Company at an exercise
price of $0.08 per share for a period of five years. Additionally,
the Investor has the right to exercise the Warrants on a cashless
basis if the trade price of a share of common stock of the Company
exceeds the exercise price. If the Company issues shares or any
securities convertible into shares at an effective price per share
lower than the exercise price of the Warrants, the exercise price
of the Warrants shall be reduced to such lower price, subject to
customary exceptions. The Investor may not exercise the Warrants
if such exercise would result in the Investor, together with any
affiliates, beneficially owning in excess of 4.9% of the Company's
outstanding common stock immediately after giving effect to such
exercise.
Pursuant to the terms of the Piggy-Back Registration Rights, the
Company granted the Investor piggyback registration rights on any
such shares covered by the Note and the Warrant.
About GrowLife
Founded in 2012, GrowLife, Inc. (PHOT)--
http://www.shopgrowlife.com-- is the owner of Bridgetown
Mushrooms, acting as its parent Company. Founded in 2018 in
Portland Oregon, Bridgetown Mushrooms grows a variety of functional
and gourmet mushrooms which are in turn sold through multiple
commercial and consumer sales channels. The company also develops
and markets mushroom based products nationwide as well as
manufactures and sells Mycology supplies to meet the demand for
commercial mushroom farmers across the United States.
GrowLife reported a net loss of $5.47 million for the year ended
Dec. 31, 2021, compared to a net loss of $6.38 million for the year
ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had $2.71
million in total assets, $9.97 million in total current
liabilities, $59,057 in total long-term liabilities, and a total
stockholders' deficit of $7.33 million.
Irvine, Calif.-based Macias Gini & O'Connell LLP, the Company's
auditor since 2021, issued a "going concern" qualification in its
report dated May 16, 2022, citing that the Company has suffered
recurring losses from operations, incurred negative cash flows from
operating activities, and has an accumulated deficit that raise
substantial doubt about its ability to continue as a going concern.
GTT REMAINCO: $418.3M Bank Debt Trades at 13% Discount
------------------------------------------------------
Participations in a syndicated loan under which GTT RemainCo LLC is
a borrower were trading in the secondary market around 87.5
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $418.3 million facility is a Payment-In-Kind Term loan that is
scheduled to mature on December 30, 2027. The amount is fully
drawn and outstanding.
GTT RemainCo LLC is an affiliate of GTT Communications, Inc.,
formerly Global Telecom and Technology, a multinational
telecommunications and internet service provider company with
headquarters in McLean, Virginia, and incorporated in Delaware.
HLMC TITLE: Trustee Taps Thompson Coburn as Estate Tax Counsel
--------------------------------------------------------------
Matthew Brash, in his capacity as the Subchapter V Trustee of HLMC
Title Services, Inc., seeks approval from the U.S. Bankruptcy Court
for the Northern District of Illinois to employ Thompson Coburn as
his real estate tax attorneys to protest certain real estate
taxes.
The firm will appeal the new real estate taxes.
Thompson Coburn's rates for matters related to these tax appeals
are as follows:
-- 25 percent at the Cook County Assessor and Cook County Board
of Review;
-- 33.33 percent at the Property Tax Appeal Board and Circuit
Court of Cook County;
-- 33.33 percent for Certificates of Error,
Thompson Coburn is a "disinterested person" as that term is defined
in Section 101(14) of the Bankruptcy Code, according to court
filings.
The firm can be reached through:
Frederick Richards, Esq.
Thompson Coburn
55 East Monroe, Suite 3700
Chicago, IL 60603
Phone: 312 346 7500
Fax: 312 580 2201 fax
Email: frichards@thompsoncoburn.com
About HLMC Title Services
HMLC Title Services, Inc. was organized as an Illinois corporation
in 2012. HMLC operates from 1147 W. 175th Homewood, Ill. It owns a
real property located at 17532-42 Dixie Highway, Homewood, where it
operates a strip mall.
HMLC sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. N.D. Ill. Case No. 22-02518) on March 4, 2022. In the
petition signed by Rajei J. Haddad, president, the Debtor disclosed
up to $50,000 in assets and up to $1 million in liabilities.
Judge Deborah L. Thorne oversees the case.
David R. Herzog, Esq., at the Law Office of David R. Herzog, LLC is
the Debtor's counsel.
INDEPENDENT PET: $9.5MM New Money DIP Loan From Acquiom OK'd
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Independent Pet Partners Holdings, LLC and its debtor-affiliates to
use cash collateral and obtain postpetition financing, on an
interim basis.
Members of the Debtors' pre-bankruptcy lending syndicate have
committed to provide New Money Loans in an aggregate principal
amount not to exceed $9.557 million, consisting of:
(1) upon entry of the Interim Order, the Initial New Money
Draw in an aggregate principal amount of up to $5.263 million
representing the Interim "New Money DIP Loans; and
(2) upon entry of the Final Order, an additional draw in an
aggregate principal amount that will not, when combined with all
Interim New Money DIP Loans advanced prior to such date, exceed
$9.557 million in aggregate principal amount, representing the
Final New Money DIP Loans.
Certain prepetition loan obligations will be rolled up into the DIP
facility. Specifically, a superpriority term loan facility in the
principal amount of up to $17.700 million, of which (x) $5.263
million will be deemed funded on the date of the Interim Draw, and
(y) an additional $12.437 million will be deemed funded, subject to
the entry of and the terms of the Final Order.
The DIP facility matures April 16, 2023.
Acquiom Agency Services, LLC serves as administrative and
collateral agent under the DIP Facility. CION Investment
Corporation, Main Street Capital Corporation, MCS Income Fund,
Inc., Newstone Capital Partners III, L.P, Newstone Capital Partners
III-A, L.P. and Newstone Capital Partners III-B, L.P. are the DIP
Lenders.
Acquiom serves as administrative and collateral agent under a
Prepetition Priming Facility. As of the Petition Date, each of the
Debtors was liable to the Prepetition Priming Secured Parties in
respect of the Prepetition Priming Loans in the aggregate principal
amount of not less than $9.157 million.
Acquiom also is the successor to CIT Bank, N.A., as administrative
and collateral agent, under the prepetition revolving credit
facility. As of the Petition Date, each of the Debtors was liable
to the Prepetition ABL Secured Parties in the aggregate principal
amount of not less than $17.471 million.
Certain of the Debtors are also borrowers under a prepetition
Delayed Draw Term Loan Facility with Wilmington Trust, National
Association, as administrative and collateral agent. As of the
Petition Date, each of the Debtors was liable to the Prepetition
DDTL Secured Parties in the aggregate principal amount of not less
than $84 million.
The Debtors are required to comply with these milestones:
(a) These Chapter 11 Cases will have been filed on February 5,
2023;
(b) The Debtors will have filed the Bid Procedures Motion on
or prior to the date that is one Business Day after the Petition
Date;
(c) The Bankruptcy Court will have entered the Interim DIP
Order on or prior to the date that is three Business Days after the
Petition Date;
(d) The Bankruptcy Court will have entered the Bid Procedures
Order on or prior to February 24, which is 19 days after the
Petition Date;
(e) The Debtors will have filed a motion for entry of the
Store Closing Sales on or prior to the date that is one Business
Day after the Petition Date;
(f) The Bankruptcy Court will have entered the interim Store
Closing Sales Order on or prior to the date that is three Business
Days after the Petition Date;
(g) The Bankruptcy Court will have entered the final Store
Closing Sales Order on or prior to March 12, which is 35 days after
the Petition Date;
(h) The consummation of the Store Closing Sales will have
occurred in accordance with the Store Closing Sales Order on or
prior to March 7, which is 30 days after the Petition Date;
(i) The Bankruptcy Court will have entered the Final DIP Order
on or prior to March 12, which is 35 days after the Petition Date;
(j) The Bankruptcy Court will have entered a Sale Order on or
prior to April 1, which is 55 days after the Petition Date; and
(k) The consummation of a Sale will have occurred on or prior
to April 16, which is 70 days after the Petition Date.
The Debtors' failure to comply with these milestones will
constitute an Event of Default.
As adequate protection, the Secured Parties under the prepetition
credit facilities are granted additional and replacement, valid,
binding, enforceable, non-avoidable, and effective and
automatically perfected postpetition security interests in and
liens.
As further adequate protection, the Adequate Protection Claims will
be allowed superpriority administrative expense claims in each of
the Chapter 11 Cases.
A final hearing on the matter is set for March 3, 2023 at 10 a.m.
A copy of the order is available at https://bit.ly/3YkHvbB from
PacerMonitor.com.
About Independent Pet Partners Holdings, LLC
Independent Pet Partners Holdings, LLC and various affiliated
entities sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 23-10153) on February 5, 2023.
In the petition signed by Stephen Coulombe, co-chief restructuring
officer, the Debtor disclosed up to $500 million in both assets and
liabilities.
Independent Pet Partners offers a one-stop pet experience with
healthy, high-quality food products and treats and a range of pet
services, including grooming, self-wash, pet parent education, and
veterinary services. The Debtors also sell goods through their
e-commerce platform with each of the Debtors' banners having its
own standalone website. As of the Petition Date, the Debtors
operated under four unique regional banners: Chuck and Don's,
Kriser's Natural Pet, Loyal Companion, and Natural Pawz.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped McDonald Hopkins, LLC as general counsel, Young
Conaway Stargatt and Taylor, LLP as co-counsel, Berkeley Research
Group, LLC as co-chief restructuring officer, Houlihan Lokey
Capital, Inc. as financial advisor and investment banker, and Omni
Agent Solutions as notice, claims, and balloting agent.
CION Investment Corporation; Main Street Capital Corporation; MCS
Income Fund, Inc.; Newstone Capital Partners III, L.P; Newstone
Capital Partners III-A, L.P.; and Newstone Capital Partners III-B,
L.P., as DIP Lenders and Prepetition Lenders, are represented by
Dechert LLP.
Co-counsel to the DIP Lenders and Prepetition Lenders is Richards,
Layton & Finger, P.A.
Acquiom Agency Services, LLC, as administrative and collateral
agent under the DIP facility and as Prepetition ABL Agent, and
Prepetition Priming Agent, is represented by Paul Hastings, LLP.
Wilmington Trust, National Association, as Prepetition DDTL Agent,
is represented by Arnold & Porter Kaye Scholer LLP.
INSTANT BRANDS: $450M Bank Debt Trades at 56% Discount
------------------------------------------------------
Participations in a syndicated loan under which Instant Brands
Holdings Inc is a borrower were trading in the secondary market
around 44.3 cents-on-the-dollar during the week ended Friday,
February 10, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $450 million facility is a Term loan that is scheduled to
mature on April 12, 2028. About $399.5 million of the loan is
withdrawn and outstanding.
Instant Brands Holdings Inc. designs, manufactures and markets
kitchen products. The Company offers bakeware, dinnerware, kitchen,
and household tools for storage and cutlery.
IRB HOLDING: Moody's Rates New $1.75BB Sr. Secured Term Loan 'B2'
-----------------------------------------------------------------
Moody's Investors Service assigned B2 ratings to IRB Holding
Corp.'s proposed $1.75 billion senior secured term loan B3 due 2027
and extended senior secured revolving credit facility due 2027.
All other ratings are unchanged, including its B2 corporate family
rating, B2-PD probability of default rating, B2 ratings on its
existing senior secured credit facilities and B2 rating on its
senior secured notes. The outlook is negative.
Proceeds from the proposed senior secured term loan and proposed
new Series 2023-1 Class A-1 Dunkin' VFN (unrated), will be used to
refinance IRB's $2.5 billion senior secured term loan due 2025 and
pay related costs, fees and expenses. The assigned ratings are
subject to review of final documentation. The transaction is
leverage neutral on a consolidated basis and will extend IRB's
maturity profile.
Assignments:
Issuer: IRB Holding Corp.
Backed Sr Sec Term Loan B3, Assigned B2 (LGD3)
Backed Sr Sec Revolving Credit Facility, Assigned B2 (LGD3)
RATINGS RATIONALE
IRB's B2 CFR reflects governance risks including its private equity
ownership and aggressive financial policy characterized by very
high leverage as a result of a series of debt-financed acquisitions
and a shareholder return. For the LTM period ended October, 2022,
Moody's debt/EBITDA was well over 9.5 times while EBITA/interest
expense was 1.6 times. However, the B2 CFR reflects that material
improvement in credit metrics is expected in 2023 through both
earnings growth and a focus on debt reduction. Also considered are
ongoing integration risks related to the 2020 acquisition of
Dunkin' brands and the continued challenges related to labor,
supply chain and product inflation that are pressuring
profitability. IRB benefits from its market position as one of the
largest restaurant operators in the US based on number of
restaurants with material scale, a diverse portfolio of
well-recognized national brands and an off-premise franchised
focused business model that will enable it to operate through
drive-thrus, delivery and curbside pickup. IRB's credit profile is
also supported by its very good liquidity, including balance sheet
cash, expected positive free cash flow and ample excess revolver
availability.
The negative outlook reflects IRB's weaker than expected
performance over the past several quarters, very high financial
leverage and risk that the increasingly difficult operating
environment could challenge IRB's ability to substantially improve
credit metrics to levels needed to maintain the B2 rating over the
next 12-18 months.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
IRB's ratings could be downgraded in the event the company fails to
make substantial progress in improving its credit metrics through
both earnings growth and debt reduction over the next 12-18 months.
Specific metrics include Moody's debt/EBITDA not improving toward 7
times, EBITA/interest falling below 1.5 times, or free cash flow to
debt remaining below 4%. A deterioration in liquidity could also
result in a downgrade.
Given the company's very high leverage, a higher rating over the
intermediate term is unlikely. However, the ratings could be
upgraded with a successful integration of Dunkin' and sustained
organic improvement in operating performance along with a more
moderate financial policy that resulted in a sustained
strengthening of credit metrics, with debt/EBITDA approaching 5.25
times and EBITA/interest of over 2.0 times. A higher rating would
also require very good liquidity.
IRB Holding Corp. is the parent holding company of Arby's
Restaurant Group, Inc., Buffalo Wild Wings, Inc., Sonic, Jimmy
John's LLC, Dunkin' and Baskin-Robbins. Revenue (excluding
advertising revenues) was approximately $5.9 billion for the twelve
month period ended October 2022. IRB's systemwide sales are $31
billion, and over 32,000 restaurant locations operate under its
brand names. IRB is a subsidiary of Mavericks, Inc., a wholly owned
subsidiary of Inspire Brands, Inc. ("Inspire"), which is owned by
Roark Capital.
The principal methodology used in these ratings was Restaurants
published in August 2021.
JACOBS ENTERTAINMENT: Moody's Gives B2 Rating on New $100MM Notes
-----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Jacobs
Entertainment, Inc.'s proposed $100 million notes. The company's B2
Corporate Family Rating, B2-PD Probability of Default Rating, B2
rated $500 million senior unsecured notes due 2029, and stable
outlook remain unchanged.
Proceeds from the proposed $100 million of senior unsecured notes
will be used to finance further remodeling and improvements, phase
II development, at the company's Sands Regency property, as well as
pay related transaction fees and expenses.
While the incremental debt increases leverage on a pro-forma LTM
basis as of September 30, 2022, the company will benefit from the
next phase of renovations at the Sands Regency property once
completed, which is expected in 2024. Moody's believes the company
has the capacity to withstand an increase in debt from the proposed
notes offering, and also has cushion to withstand a partial
reversal of the margin gains, should such pressure arise over time.
Free cash flow will be weak in 2023 and 2024 because capital
spending is elevated to fund the renovations at the company's Sands
Regency property, but this development capital is being prefunded
with this note offering, providing ample liquidity for the
company.
Assignments:
Issuer: Jacobs Entertainment, Inc.
Gtd Senior Unsecured Global Notes, Assigned B2 (LGD4)
RATINGS RATIONALE
Jacobs' credit profile (B2 stable) reflects its high leverage for
the size of the company, the company's relatively small scale in
terms of revenue relative to peers, exposure to cyclical
discretionary consumer spending, and high earnings concentration
with nearly 80% of EBITDA coming from two markets, Colorado and
Louisiana. The rating is supported by the good market position of
Jacobs' revenue generating assets within its operating regions,
certain barriers to entry in the Louisiana market due to laws that
limit the locations of new direct truck stop operators -- this
provides Jacobs with a certain level of earnings stability -- and
regional growth in the Reno, NV market where the company owns two
land-based casinos. The company's good liquidity also supports the
rating, with access to an $80 million revolver that is expected to
remain undrawn.
The stable outlook considers the sustained performance of the
company, with solid time line performance as compared to
pre-pandemic levels. Some potential for margin give back in 2023 is
possible. The stable outlook also incorporates the company's good
liquidity.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if there is a decline in EBITDA
performance from factors such as volume pressures or higher
operating costs, liquidity deteriorates, or debt-to-EBITDA is
sustained over 5.5x. Acquisitions or shareholder distributions that
increase leverage could also lead to a downgrade.
Ratings could be upgraded if the company generates consistent and
comfortably positive free cash flow, revenue is growing,
debt-to-EBITDA is sustained below 4.0x, and the company adheres to
financial policies that maintain low leverage.
The principal methodology used in these ratings was Gaming
published in June 2021.
Jacobs Entertainment, Inc. is a privately held company that does
not disclose financial information publicly. The company owns and
operates gaming facilities located in Colorado, Nevada and
Louisiana. The company owns six land-based casinos: The Lodge
Casino and the Gilpin Casino, both in Black Hawk, CO; the Sands
Regency and the Gold Dust West Casino in Reno, NV; the Gold Dust
West Carson City in Carson City, NV and the Gold Dust West-Elko in
Elko, NV. Jacobs also owns and operates 26 video poker truck stop
facilities in Louisiana. Additionally, the company has operations
in Cleveland, Ohio that include an aquarium, parking, a 4,700 seat
covered outdoor amphitheater, and a dinner cruise and entertainment
ship. The company is a wholly-owned subsidiary of Jacobs
Investments, Inc. (JII). Jeffrey P. Jacobs, the Chief Executive
Officer and his family trusts own 100% of JII's outstanding Class A
and Class B shares. Revenue for the last 12 months ended September
2022 was approximately $491 million.
JACOBS ENTERTAINMENT: S&P Affirms 'B' ICR on Strong Performance
---------------------------------------------------------------
S&P Global Ratings affirmed all ratings, including the 'B' issuer
credit rating on affirmed all ratings, including the 'B' issuer
credit rating. At the same time, S&P assigned its 'B' issue-level
rating and '4' recovery rating to the proposed notes.
The stable outlook reflects S&P's forecast for S&P Global
Ratings-adjusted leverage of 5.5x-6x through 2024, which will
provide some cushion to our 6.5x downgrade threshold and to absorb
modest underperformance or higher development spending.
At the same time, S&P assigned its 'B' issue-level rating and '4'
recovery rating to the proposed notes.
The stable outlook reflects S&P's forecast for S&P Global
Ratings-adjusted leverage of 5.5x-6x through 2024, which will
provide some cushion to our 6.5x downgrade threshold and to absorb
modest underperformance or higher development spending.
Jacob's strong 2022 performance exceeded S&P's previous forecast
and provides sufficient cushion to absorb the proposed debt
financing within the rating.
S&P said, "We forecast Jacobs will maintain S&P Global
Ratings-adjusted leverage of 5.5x-6x through 2024, which will
provide some cushion relative to our 6.5x downgrade threshold. Our
forecast incorporates the leveraging impact of the proposed debt
issuance and our assumption that Jacobs' EBITDA will decline year
over year in 2023, primarily because of a decrease in its margin.
Higher wage pressures and a low-single-digit percent decline in
revenue, factoring in macroeconomic headwinds, will affect margin.
Because Jacobs significantly outperformed our 2022 EBITDA forecast,
we believe the company ended the year with S&P Global
Ratings-adjusted leverage in the mid-4x area. Based on preliminary
fourth-quarter estimates, we estimate Jacobs' 2022 EBITDA was down
low- to mid-single-digit percent compared to our prior forecast of
20%-25% decrease. As a result, we believe it has sufficient
capacity to absorb the proposed $100 million of incremental debt
and our assumed EBITDA decline while maintaining S&P Global
Ratings-adjusted leverage of 5.5x-6x.
"We forecast Jacobs' EBITDA will decline 5%-15% in 2023 because we
believe there is high likelihood of a recession and higher
unemployment in 2023, in addition to elevated inflation, which
could reduce regional gaming consumers' discretionary income.
Additionally, the Louisiana market has benefited from additional
construction workers working on Hurricane Ida reconstruction, which
we expect to subside in 2023. We also assume expenses, particularly
labor, will increase in 2023. Nevertheless, we assume Jacobs will
maintain most of the cost efficiencies it achieved over the
COVID-19 pandemic."
S&P believes Jacobs' redevelopment of its Sands Regency property
will provide it with incremental cash flow over time.
The company expects to complete the first phase in the second
quarter and is embarking on a second phase to expand the casino and
add additional resort amenities. The $130 million first phase
includes upgrading hotel rooms, adding new slot machines and
tables, refreshing and adding food and beverage amenities, and
parking. Jacobs plans to use proceeds from this proposed financing,
in addition to operating cash flow, to fund the $120 million second
redevelopment phase. It includes an expanded casino to accommodate
the number of hotel rooms, another food and beverage offering, and
additional resort amenities. S&P does not expect meaningful EBITDA
contribution from the Sands property until 2025 when the
redevelopment is complete and the property is no longer affected by
construction disruption.
Once complete, we assume these projects will increase visitation
and EBITDA at both of its Reno properties beginning in 2025. S&P
also believes the improvements to the quality of its casinos and
their surrounding neighborhoods could help Jacobs better capitalize
on Reno's increased gaming revenue, which has been supported by the
city's steady population increases and investments in the area to
support job creation. Still, S&P assumes the company's casinos
remain second-tier properties in the highly competitive Reno market
with three Caesars Entertainment Inc.-owned properties. Caesars has
greater resources for marketing.
S&P expects its Colorado and Louisiana properties will continue to
be the leading contributors to its cash flow.
S&P said, "We assume the performance of Jacobs' Black Hawk, Colo.,
properties, which account for just under 40% of its property-level
EBITDA, remain largely stable over time. We do not anticipate
further material changes in their operating environment following a
gaming and amenity expansion at the competing Monarch Casino
Resort. Further, we believe gross gaming revenue in Black Hawk will
remain above pre-pandemic levels. This follows the mid-2021
implementation of Colorado's Amendment 77, which removed the $100
bet limit and permitted a greater variety of games in the market.
Although we expect a modest decline in the company's Louisiana
properties EBITDA this year, they will likely continue to be a
significant contributor. Jacobs has a leading position in the
Louisiana truck stop market, which benefits from some barriers to
entry given the limitations to eligible locations.
"The stable outlook on Jacobs reflects our forecast for S&P Global
Ratings-adjusted leverage of 5.5x-6x through 2024, which will
provide some cushion relative to our downgrade threshold to absorb
modest underperformance or modestly higher development spending
than our base-case assumptions."
S&P could lower its rating on Jacobs if S&P expects it to sustain
S&P Global Ratings-adjusted leverage of more than 6.5x. This could
occur if:
-- EBITDA is 10%-15% lower than we forecast; or
-- It undertakes higher-than-assumed debt-funded development
spending.
S&P said, "It is unlikely we will raise our rating on Jacobs over
the next two years given our forecast for S&P Global
Ratings-adjusted leverage in the 5.5x-6x range. Nevertheless, we
could do so if we expect the company to sustain S&P Global
Ratings-adjusted leverage below 5x."
ESG credit indicators: E-2, S-3, G-3
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis of Jacobs as reflected in revenue
declines during the pandemic. Despite impaired revenue and cash
flow in 2020 from casino closures and subsequent operating and
capacity restrictions, regional casino operators such as Jacobs
Entertainment recovered strongly. Nonetheless, while we view the
pandemic as a rare and extreme disruption unlikely to recur at the
same magnitude, safety and health scares are an ongoing risk. Other
social factors include regulatory risks, as Jacobs is subject to
high regulation across its various markets. Governance factors are
also a moderately negative consideration because of Jacobs'
controlling ownership that has a track record of high leverage to
support project spending and acquisitions."
JAGUAR HEALTH: Agrees to Terminate License Deal With SynWorld
-------------------------------------------------------------
Jaguar Health, Inc. and SynWorld Technologies Corporation announced
that the two companies have mutually agreed to terminate the
exclusive license and services agreement executed in June 2022 for
the treatment of diarrhea in dogs in the China market with Jaguar's
Canalevia (crofelemer delayed-release tablets) prescription drug
product effective Jan. 31, 2023.
"Given Jaguar's sharp strategic focus in 2023 on human drug
development -- specifically on our Phase 3 pivotal OnTarget trial
of crofelemer for our core follow-on indication of prophylaxis of
cancer therapy-related diarrhea (CTD) and our crofelemer
development efforts for the rare disease indications of short bowel
syndrome (SBS) and congenital diarrheal disorders (CDD) -- we and
SynWorld have agreed that it makes sense to terminate the Canalevia
Agreement at this time," said Lisa Conte, Jaguar's founder,
president, and CEO. "Jaguar is concentrating on two late-stage
clinical events in the next approximately 6 months that we expect
to be transformational in terms of value creation and recognition
for the Company. We expect enrollment in the OnTarget trial to
complete in the second quarter of 2023. Our second prioritized
clinical program centers around the investigator-initiated
proof-of-concept trial of crofelemer for SBS and CDD with
intestinal failure."
"Jaguar and SynWorld are fully aligned on our mutual decision to
terminate the Canalevia Agreement, because Jaguar is understandably
wholly focused on its core drug development milestones on the human
front at this time," said Tao Wang, SynWorld's general manager and
a long-term shareholder of restricted Jaguar stock. "Jaguar and
SynWorld may jointly revisit possible opportunities in the future
with regard to the potential consumer demand in China for
Canalevia, keeping in consideration the impact that the
geopolitical climate could have on the operating environment in
this regulated animal health market."
On the effective date of termination of the Canalevia Agreement,
all licenses granted to SynWorld by Jaguar under the Canalevia
Agreement were revoked and the rights granted thereunder reverted
back to Jaguar.
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar Health reported a net loss and comprehensive loss of $52.60
for the year ended Dec. 31, 2021, a net loss and comprehensive loss
of $33.81 million for the year ended Dec. 31, 2020, a net loss and
comprehensive loss of $38.54 million for the year ended Dec. 31,
2019, and a net loss of $32.15 million for the year ended Dec. 31,
2018. As of Sept. 30, 2022, the Company had $51.28 million in
total assets, $47.69 million in total liabilities, and $3.60
million in total stockholders' equity.
Larkspur, California-based RBSM, LLP, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
March 11, 2022, citing that the Company has an accumulated deficit,
recurring losses, and expects continuing future losses. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
JAGUAR HEALTH: Regains Compliance With Nasdaq's Bid Price Rule
--------------------------------------------------------------
Jaguar Health, Inc. announced it received formal notice from The
Nasdaq Stock Market LLC that Jaguar has regained compliance with
Nasdaq's minimum bid price requirement.
"We are very happy that Jaguar has regained compliance with
Nasdaq," said Lisa Conte, Jaguar's president and CEO, "and we are
concentrating on two late-stage clinical events in the next
approximately 6 months that we expect to be transformational in
terms of value creation and recognition for the Company. We expect
enrollment in the OnTarget trial to complete in the second quarter
of 2023. Our second prioritized clinical program centers around
the investigator-initiated proof-of-concept trial of crofelemer for
short bowel syndrome (SBS) and congenital diarrheal disorders (CDD)
with intestinal failure."
About Jaguar Health
Jaguar Health, Inc. -- http://www.jaguar.health-- is a commercial
stage pharmaceuticals company focused on developing novel,
sustainably derived gastrointestinal products on a global basis.
The Company's wholly owned subsidiary, Napo Pharmaceuticals, Inc.,
focuses on developing and commercializing proprietary human
gastrointestinal pharmaceuticals for the global marketplace from
plants used traditionally in rainforest areas. Its Mytesi
(crofelemer) product is approved by the U.S. FDA for the
symptomatic relief of noninfectious diarrhea in adults with
HIV/AIDS on antiretroviral therapy.
Jaguar Health reported a net loss and comprehensive loss of $52.60
for the year ended Dec. 31, 2021, a net loss and comprehensive loss
of $33.81 million for the year ended Dec. 31, 2020, a net loss and
comprehensive loss of $38.54 million for the year ended Dec. 31,
2019, and a net loss of $32.15 million for the year ended Dec. 31,
2018. As of Sept. 30, 2022, the Company had $51.28 million in
total assets, $47.69 million in total liabilities, and $3.60
million in total stockholders' equity.
Larkspur, California-based RBSM, LLP, the Company's auditor since
2021, issued a "going concern" qualification in its report dated
March 11, 2022, citing that the Company has an accumulated deficit,
recurring losses, and expects continuing future losses. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern.
JUST BELIEVE: Asset Sale Proceeds to Fund Plan Payments
-------------------------------------------------------
Just Believe Recovery Center of Port Saint Lucie, LLC and Just
Believe Recovery Center, LLC filed with the U.S. Bankruptcy Court
for the Southern District of Florida an Amended Joint Disclosure
Statement describing Liquidating Plan dated February 5, 2023.
Just Believe Recovery Center of Port Saint Lucie, LLC is a
substance abuse treatment recovery center. Just Believe Recovery
Center, LLC leases office space for the Just Believe Recovery
Center of Port St. Lucie administrative offices.
The Debtor's primary facility is located in Port St. Lucie,
Florida. Just Believe Recovery Center of Port St. Lucie, LLC owns
real property located at 699 Airoso Boulevard, Port St. Lucie,
Florida and Just Believe Recovery Center, LLC owns real property
located at 4030 NE Indian River Drive, Jensen Beach, Florida. Texas
Capital Bank has a blanket lien on both properties.
The Debtor's financial issues began during the COVID pandemic when
potential patients were unable to travel to and from their home
state to receive residential treatment services due to the travel
ban imposed throughout the country. The Debtor was forced to incur
several Merchant Cash Advances to continue to meet its outstanding
obligations. Once the Debtor was able to restart operations, it
found that it was unable to meet its debt obligations. The Debtor
then filed this case in an attempt to reorganize its debt.
During the course of this case, the Debtor determined that even
with a reorganization, it would be unable to survive. The Debtor
employed a business broker who specializes in this field with the
hope of locating a buyer. The Debtor then entered into a contract
to sell the business real property and personal property located at
699 Airoso Boulevard, Port St. Lucie, Florida and filed a Motion to
Approve Sale Contract with Medicorum Acquisition Fund, LLC (the
"Sale Motion").
The Motion was approved by this Court on a hearing on November 1,
2022 and by way of the Order Granting Just Believe Recovery Center
of Port Saint Lucie, LLC's Emergency Motion to Approve Sale
Contract with Medicorum Acquisition Fund LLC.
As set forth in the Sale Motion, there are two separate contracts:
(i) the sale of the real property located at 699 Airoso Boulevard,
Port St. Lucie, Florida 34983 for $5,000,000.00 and the sale of the
business assets for $400,000.00, with a $5,000.00 down payment and
a Promissory Note for $395,000.00 to be paid at 5% interest in
monthly payments over 18 months. These loan payments will be first
used satisfy any unpaid pre-confirmation administrative expenses
and then to fund Class 5, the unsecured creditor class.
Post-confirmation administrative expenses incurred by counsel for
the Debtor to bring the case to closure shall also be paid from
this loan payment.
Subject to any objections sustained by the Court, amounts due to
Secured Creditors shall be paid to those creditors directly upon
Closing ("Allowed Secured Claims"). Also at Closing, subject to any
objections sustained by the Court, all Priority Unsecured Claims
paid in full as set forth in each Creditor's Proof of Claim,
("Allowed Priority Claims"). Debtor shall have no further operation
upon Closing of the transaction.
Class Six consists of General Unsecured Creditors. The General
Unsecured claims include all other allowed claims of Unsecured
Creditors, subject to any Objections that have been or will be
filed and sustained by the Court. The undisputed general unsecured
claims shall receive a pro rata distribution from the net proceeds
of the sale over a period of 18 months beginning 120 days after
Closing. These claims are impaired.
Class Seven consists of Equity Holders. There shall be no
distribution to the equity holders of the Debtors under the
confirmed Plan and no dividends to this class of claimants. This
claim is impaired.
Debtor's primary assets shall be liquidated and there shall be no
further operations.
The creditors will be paid from the sale of the assets contemplated
in the Debtor's Emergency Motion to Approve Sale Contract with
Medicorum Acquisition Fund, LLC. The Debtor submits that there will
be sufficient net sales proceeds to make all distributions to
Classes 1-4, as well as a pro rata distribution to Class 5 as
reflected in the Disclosure Statement.
A full-text copy of the Amended Joint Disclosure Statement dated
February 5, 2023 is available at https://bit.ly/3IdyoUx from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Craig I. Kelley, Esq.
Dana Kaplan, Esq.
Kelley Fulton Kaplan & Eller, P.L.
1665 Palm Beach Lakes Blvd. Suite 1000
West Palm Beach, FL 33401
Tel: (561) 491-1200
Fax: (561) 684-3773
Email: craig@kelleylawoffice.com
About Just Believe Recovery Center
Just Believe Recovery Center of Port Saint Lucie --
https://justbelieverecoverycenter.com/ -- is a drug and alcohol
addiction rehabilitation and detox facility with locations in
Florida and Pennsylvania.
Just Believe Recovery Center of Port Saint Lucie sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Fla. Case
No. 22-15739) on July 27, 2022, listing up to $50,000 in assets and
up to $10 million in liabilities. Its affiliate, Just Believe
Recovery Center, LLC filed for Chapter 11 protection (Bankr. S.D.
Fla. Case No. 22-16046) on Aug. 4, 2022, listing up to $50,000 in
assets and up to $10 million in liabilities. The cases are jointly
administered under Case No. 22-15739.
Judge Mindy A. Mora oversees the cases.
Kelley Fulton Kaplan & Eller, P.L., is the Debtors' legal counsel.
KEYS MEDICAL STAFFING: Wins Cash Collateral Access Thru Feb 2023
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Gainesville Division, authorized Keys Medical Staffing, LLC to use
cash collateral on an interim basis in accordance with the budget,
through the date of the final hearing.
The Debtor requires the use of cash collateral to fund critical
operations.
The Debtor is permitted to pay its independent contractors that are
temporarily staffed at work sites, the amount that is actually
billed by the independent contractors, regardless of the amount
provided for in the Budget for independent contractor
compensation.
All of the Debtor's clients, including SavaSeniorCare
Administrative Services, LLC, are authorized to send funds they are
holding for services already provided directly to the Debtor.
Sava, its affiliates, or any other client that sends funds to the
Debtor in accordance with the Interim Order will not be liable to
either the Debtor or its lender to the extent of the amount of
funds that are actually paid to the Debtor, and any payments by an
Account Debtor will be credited against, and in satisfaction of,
invoices that are undisputed by the Account Debtor.
On June 2, 2020, the Debtor entered into a financing agreement with
ARA, Inc. d/b/a Lone Oak Payroll, a factoring company, and executed
a Conditional Letter of Agreement for Factoring and Payroll
Services. The Debtor asserts the Factoring Agreement is a loan
rather than a true sale of receivables.
SavaSeniorCare is a pre-petition client of the Debtor that, upon
information and belief, owes funds for work performed.
As adequate protection for any diminution in the value of ARA's
interests in the Pre-Petition Collateral resulting from the use of
cash collateral, the Lender is valid, binding, enforceable and
automatically perfected liens on and security interests in (i) all
personal property of the Debtor that is of a kind or nature
described as Collateral in the Factoring Agreement, whether
existing or arising prior to, on or after the Petition Date, and
(ii) all other personal property of the Debtor, wherever located
and whether created, acquired or arising prior to, on or after the
Petition Date.
The Adequate Protection Liens will at all times be senior to the
rights of the Debtor and any successor trustee or estate
representative of the Debtor's estate, and any security interest or
lien upon the Debtor's assets that is avoided or otherwise
preserved for the benefit of the Debtor's estate under Section 551
or any other provision of the Bankruptcy Code will be subordinate
to the Adequate Protection Liens. The Adequate Protection Liens and
all claims, rights, interests, administrative claims and other
protections granted to or for the benefit of the Lender pursuant to
the Order and the Bankruptcy Code will constitute valid,
enforceable, nonavoidable and duly perfected security interests and
liens.
The final hearing on the matter is scheduled for March 2, 2023, at
10:30 a.m.
A copy of the order is available at https://bit.ly/3HNve8x from
PacerMonitor.com.
About Keys Medical Staffing, LLC
Keys Medical Staffing, LLC is a medical staffing company formed by
Dr. Theresa Jones and Dr. Linnie Fletcher in 2016.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 22-20573) on June 28,
2022. In the petition filed by Christy Collins-French, chief
operating officer, the Debtor disclosed up to $10 million in assets
and up to $1 million in liabilities.
Judge James R. Sacca oversees the case.
William Rountree, Esq., at Rountree, Leitman, Klein & Geer, LLC,
serves as the Debtor's counsel.
KINGS RIVER: Claims Will be Paid From Future Earnings
-----------------------------------------------------
Kings River Holdings, Inc., filed with the U.S. Bankruptcy Court
for the Eastern District of Texas a First Amended Chapter 11
Subchapter V Plan dated February 5, 2023.
The Debtor was organized in 2019 for the purpose of acquiring
Liberty Glass & Mirror, an established North Texas business
specializing in the design, manufacture, and installation of
frameless glass products (including mirrors and shower glass) in
commercial and high-end residential settings.
The acquisition was financed through a loan in the amount of
$2,103,800.00 (the "Secured Debt") with Regions Bank ("Regions"),
which retained a lien on substantially all assets of the Debtor.
Further, the owners of the Debtor, Rhett and Lori Yeary (the
"Yearys"), personally guaranteed (the "Guarantees") the Secured
Debt, including pledging certain real property as collateral.
Within days of the acquisition, the COVID-19 pandemic triggered
shutdowns in all the counties where the Debtor operated. However,
even as the business partially recovered and revenues stabilized in
2022, the Debtor was unable to meet debt service on the Secured
Debt. Regions noticed defaults under the loan documents and
accelerated the Secured Debt in August 2022. As a result, the
Debtor filed this Bankruptcy Case on September 23, 2022.
During the Bankruptcy Case, the Debtor has continued to operate its
business and engaged with counsel for Regions and the Subchapter V
Trustee to negotiate the Plan.
The Plan provides a path to confirmation and a successful exit from
Chapter 11 for the Debtor through a reorganization and post
confirmation continuation of the business. The Debtor believes that
the Plan will yield the highest and best return for creditors and
parties-in-interest.
Under the Plan, pursuant to 11 U.S.C. § 1191, the Debtor shall
apply all of the projected disposable income of the Debtor for a
period of 42 months to make payments under the Plan. Pursuant to §
1191(c)(3), the Debtor will be able to make all payments under the
Plan or there is a reasonable likelihood that the Debtor will be
able to make all payments under the Plan.
Class 5 consists of the Regions Bank Deficiency Claim and any other
Unsecured Claim, subject to Allowance as otherwise provided for in
this Plan and all applicable law. Except to the extent that a
Holder of an Allowed Unsecured Claim and the Debtor or the
Reorganized Debtor, as applicable, agree to less favorable
treatment of its Allowed Unsecured Claim, each Holder of an Allowed
Unsecured Claim shall receive, in full and complete satisfaction,
settlement, discharge, and release of, and in exchange for, its
Allowed Unsecured Claim, its Pro Rata share of the Reorganized
Debtor's projected Disposable Income for a period of 42 months
(i.e. the Commitment Period).
The Debtor shall be the disbursing agent for payments to Class 5.
Distributions of Disposable Income shall be made, for each year in
the Commitment period, in annual payments on the anniversary of the
Effective Date and, for the last 6 month period of the Commitment
Period, on the first day of the month following the end of the 42nd
month in the Commitment Period. For the avoidance of doubt and by
way of example only, assuming an Effective Date of March 1, 2023,
then payments shall issue on March 1, 2024, March 1, 2025, and
March 1, 2026, and October 1, 2026. Class 5 is impaired under this
Plan.
Pursuant to Section 1191 of the Bankruptcy Code, equity shall be
unaffected by the Plan.
The Reorganized Debtor will continue to operate with the primary
purpose of conducting its business.
The Debtor anticipates that all distributions made under the Plan
will be funded from future earnings, which will not be less than
100% of the Debtor's Disposable Income for the 42 months following
Confirmation.
A full-text copy of the First Amended Plan dated February 5, 2023
is available at https://bit.ly/3JY68Gx from PacerMonitor.com at no
charge.
Debtor's Counsel:
Thomas D. Berghman, Esq.
MUNSCH HARDT KOPF & HARR, P.C.
500 N. Akard Street, Suite 3800
Dallas, TX 75201-6659
Tel: 214-855-7554
Email: tberghman@munsch.com
About Kings River Holdings
Kings River Holdings, Inc., is a glass/hardware manufacturing and
installation company doing business as Liberty Glass and Mirror.
Kings River provides manufactured glass goods for both residential
and commercial installation.
Kings River Holdings sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D. Tex. Case No. 22-41241) on Sept. 23,
2022. In the petition signed by Rhett Yeary, president, the Debtor
disclosed up to $100,000 in assets and up to $10 million in
liabilities.
Judge Brenda T. Rhodes oversees the case.
Thomas D. Berghman, Esq., at Munsch Hardt Kopf and Harr, PC, is the
Debtor's counsel.
KNB HOLDINGS: S&P Downgrades ICR to 'D' on Bankruptcy Filing
------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on U.S.-based
KNB Holdings Corp. to 'D' from 'CCC-'. S&P also lowered the
issue-level ratings on the company's first-lien term loan to 'D'
from 'CCC-'. The recovery rating remaining unchanged at '4'.
KNB Holdings Corp. filed voluntary petitions for relief under
chapter 11 of the U.S. bankruptcy code on Feb. 8, 2023.
KNB Holdings Corp. filed for bankruptcy to address its sizable debt
maturities, a large portion of which would become current in early
2023. The company's $75 million asset-based loan (ABL) matures in
January 2024 and its approximately $286 million of first-lien term
loans mature in April 2024. KNB Holdings also has approximately $71
million of second-lien term loans due October 2024.
KURNCZ FARMS: Reaches Settlement with PNL; Files Amended Plan
-------------------------------------------------------------
Kurncz Farms, Inc., submitted a Second Amended Combined Disclosure
Statement and Plan of Reorganization dated February 6, 2023.
As of January 1, 2023, Debtor, Marian I. Kurncz, Peter J. Kurncz,
Jr., Lisa S. Kurncz, and Peter J. Kurncz, III (collectively, the
"Borrowers") were indebted to PNL pursuant to the following loans
(the "Loans"):
* The Amended, Restated and Consolidated Term Note effective
July 1, 2018, in the principal amount of $10,269,751.62, as may
have been modified from time to time (the "PNL Note"). As of
January 1, 2023, Debtor owes PNL $10,593,218.66, plus reasonable
attorneys' fees under the PNL Note.2 The $10,593,218.66 includes
the following:
-- $8,725,589.00 in principal
-- $182,773.65 in prior late fees
-- $180,000 in prior flat fees and loan fees
-- $1,504,856.01 in prior accrued default interest
-- The late fees, flat fees and loan fees, the accrued default
interest, and the reasonable attorneys' fees through the Effective
Date, are referred to in this Plan as the "Non-Principal Amounts".
* Borrowers and PNL also entered into an input loan for
$500,000.00, effective May 1, 2021 (the "2021 Input Loan"). As of
January 1, 2023, Debtor owes PNL $83,382.11 under the 2021 Input
Loan.
* Debtor and PNL entered into an amended and restated cattle
lease on October 31, 2019, where PNL leased cattle to Kurncz Farms
("Old Cattle Lease"). The Old Cattle Lease has since been paid in
full.
Additionally, Debtor and PNL also entered into a post-petition
input loan for $600,000.00, effective, May 1, 2022 (the "2022 Input
Loan"). The 2022 Input Loan is secured by the 2022 crops, crop
insurance proceeds, and government payments, as further described
in the Security Agreement dated May 1, 2022. The 2022 Input Loan is
further secured by the Mortgages. As of January 1, 2023, Debtor
owes PNL $114,000.00 under the 2022 Input Loan. Upon paying the
February 28, 2023 and March 31, 2023 loan payments, the 2022 Input
Loan will be paid in full.
Settlement with PNL
PNL and Debtor have agreed to plan terms. These plan terms are not
binding on the Creditors' Committee, the United States Trustee, or
any other interested parties. The payment terms as to PNL. PNL and
the Debtor have further agreed to the following:
* Sale of Real Property. Upon the Effective Date, the Debtor
will cause the Individual Co-Borrowers to list for sale sufficient
real property to pay off the indebtedness owed to the Internal
Revenue Service, which is set forth in proof of claim number 2, as
may be amended.
* The net proceeds from the sale of this real property will be
paid in the following order:
-- Payment in full of the Internal Revenue Service claim
(unsecured and priority) as set forth in Section V(D) of the Plan;
-- Payment of the then outstanding professional fees as
provided for in Section V(C) of the Plan;
-- The remainder, if any, to PNL.
* 2023 Cattle Lease. Upon the Effective Date, Debtor and PNL
will execute a cattle lease (the "2023 Cattle Lease") substantially
on the terms set forth below for lease of the Milking Herd, which
is defined as all cows, including, lactating, dry, and hospital
cows, but does not include calves through breeding age heifers or
bulls. The Milking Herd also includes any new or replacement
Milking Herd cattle acquired by Debtor after the Effective Date and
the offspring of the Milking Herd after they become breeding age
heifers.
* Discount Agreement.
* PNL Note Modification. PNL, Debtor, Peter J. Kurncz, Jr., Lisa
Kurncz, Peter J. Kurncz, III, and the Trustee of the Marion I.
Kurncz Revocable Living Trust, dated February 22, 1985, as amended,
will execute a note amendment, modifying the PNL Note (the "Note
Amendment").
* Sale of Milking Herd. If PNL is not paid in full on or before
September 1, 2027, then Debtor must sell the Milking Herd. Debtor
will have 60 days to sell the Milking Herd.
* Payment in Full of All Amounts Due to PNL. All remaining
indebtedness due to PNL under the PNL Note and the Cattle Lease
Amount under the 2023 Cattle Lease and otherwise must be paid in
full on or before November 1, 2027. Upon Debtor's payment in full
of such indebtedness (the "Full Obligations Payment"), PNL must
discharge its Mortgages and liens on the personal property and
convey the Milking Herd to Debtor free and clear of any liens on
the Milking Herd by PNL, pursuant to a $1.00 option under the 2023
Cattle Lease which option is hereby exercised by the Debtor,
subject to the Full Obligations Payment.
Class 1 consists of PNL Devine, LLC's secured claim as to the PNL
Note, the Note Amendment, the 2021 Input Loan, and the 2023 Cattle
Lease. Monthly Payments of $80,000.00 to be applied in the
following order (as higher priority items are paid off, the funds
are allocated to the next item):
* $15,728.75 per month will be applied to the 2021 Input Loan
until the loan is paid in full.
* Interest on the principal balance of the PNL Note
($8,725,589.00).
* The 2023 Cattle Lease.
* Other costs and fees permitted under the PNL Note. PNL will
inform Debtor's counsel if additional costs and fees are being
added. If the parties cannot agree to the fees and costs added,
they agree to use Robert Wright or another mutually agreeable
mediator to settle the dispute.
* Principal on the PNL Note (as amended).
Distributions will be made from Debtor's operating income.
A full-text copy of the Second Amended Combined Disclosure
Statement and Plan dated February 6, 2023 is available at
https://bit.ly/3JYORgs from PacerMonitor.com at no charge.
Counsel to Debtor:
Susan M. Cook, Esq.
Warner Norcross & Judd, LLP
715 E. Main Street, Suite 110
Midland, MI 48640-5382
Tel: 989-698-3759
Fax: 989-486-6159
Email: smcook@wnj.com
About Kurncz Farms
Based in Saint Johns, Michigan, Kurncz Farms, Inc., Kurncz Farms
was incorporated in 1991 by Peter J. Kurncz, Sr., Marion Kurncz,
Peter J. Kurncz, Jr., and Lisa Kurncz and now operates as a
Michigan corporation. Peter Kurncz, Jr. took over control of the
farming operation in the early 1990s. Kurncz Farms is currently
owned by Lisa Kurncz and Peter J. Kurncz, Jr.
Kurncz Farms's herd now includes over 1666 milking and dry cows and
430 calves through breeding age heifers. Kurncz Farms farms 3,000
acres in Clinton, Shiawassee, and Gratiot counties. The farming
operation also includes growing crops and feed, including beans,
wheat, haylage, corn bushels, and corn silage. The company employs
30 full and part-time associates.
The main farm is located at 4777 Gilson Road, St. Johns, Clinton
County, Michigan. The farm's operations have $8 million to $9
million in annual revenues.
Kurncz Farms sought protection under Chapter 11 of the Bankruptcy
Code (Bankr. W.D. Mich. Case No. 21-02612) on Nov. 30, 2021,
listing as much as $10 million in both assets and liabilities.
Peter J. Kurncz, president of Kurncz Farms, signed the petition.
Susan M. Cook, Esq., at Warner Norcross + Judd, LLP and Barron
Business Consulting serve as the Debtor's legal counsel and
business consultant, respectively.
The U.S. Trustee for Region 17 appointed an official committee of
unsecured creditors in the Debtor's case on Nov. 22, 2021. The
committee is represented by Keller & Almassian, PLC.
LASHER CONSTRUCTION: Unsecureds to Split $12K over 12 Quarters
--------------------------------------------------------------
Lasher Construction LLC filed with the U.S. Bankruptcy Court for
the District of New Jersey a Small Business Plan of Reorganization
dated February 6, 2023.
The Debtor is a construction company, offering services, among
other things, as a general contractor, specifically in the field of
commercial building and construction, in the Tri-State area.
The impact of the Covid-19 Pandemic forced the Debtor to sustain
income losses and could not operate profitably. Furthermore,
various state litigation matters commenced by and against the
Debtor have been a strain on business operations, adding to its
financial woes. However, following the commencement of the
bankruptcy proceeding, the Debtor has settled some of the more
strenuous litigation matters, providing some relief to strained
business operations.
Accordingly, Debtor's significant drop in revenue, coupled with its
continued financial obligations, resulted in the commencement of
Debtor's current bankruptcy. Now the construction and labor
industry has begun to normalize, such that the Debtor believes it
will continue to operate profitably post-bankruptcy.
Class One consists of a Secured Claim held by the U.S. Small
Business Administration ("SBA"). This secured creditor has a
scheduled claim in the secured amount of $448,000.00 resulting from
a small business loan extended to the Debtor and secured by all of
the assets of the Debtor. The Debtor will leave unaltered the
Secured Creditor's contractual, legal, and equitable rights with
respect to its collateral. Debtor shall continue making payments to
the lien holder in accordance with the loan documents executed by
the Debtor.
Class Two consists of a Secured Claim held by the Ally Bank. This
Secured Creditor filed proof of claim No. 4 in the secured amount
of $24,555.12 stemming from automobile financing. The collateral
securing the Secured Creditor's claim is a 2018 Ram 2500,
VIN:3C6UR5GJ8JG1 75569. The Debtor will leave unaltered the Secured
Creditor’s contractual, legal, and equitable rights with respect
to its collateral. Debtors shall continue making payments to the
lien holder in accordance with the financing documents executed by
the Debtor.
Class Three consists of a claim held by Dilworth Paxson LLP. This
creditor filed Proof of Claim No. 9 asserting a secured claim in
the amount of $582,012.06, secured by Setoff Rights stemming from
pending litigation. Pursuant to agreement between Debtor and Class
Three claim holder, the Class Three claim is reduced to the amount
of $100,000.00, and will be classified and treated as a general
unsecured claim in the amount of $100,000.00, to paid together and
in accordance with other General Unsecured Claims (Class 4).
Class Four are holders of General Unsecured Claims, including
allowed deficiency claims of creditors in prior classes and the
claims of Creditors not otherwise classified under the Plan.
Subject to objection of claims in accordance with the Plan, the
Debtor estimates the amount of claims in this class, as scheduled
or filed, to total $952,636.12.
In accordance with Debtor's Three-Year Cash Flow Analysis, the
Debtor has a 3-Year Projected Disposable Income in the amount of
$11,941.60. Commencing on the first day of the fifth month
following the Effective Date of the Plan (the "Initial Payment")
and quarterly thereafter for a total of 12 quarters, the Debtor
shall make payments on a pro rata basis to undisputed, liquidated,
non-contingent claims as scheduled or filed, subject to timely
objection to the validity or extent of each claim holders (the
"Allowed Unsecured Claims") in an amount equal to 1/4 of the annual
projected disposable income in the corresponding year (as projected
in the Cash Flow Analysis).
Class 5 consists of Equity Interest Holders. The ownership
interests of the members in the assets of the Debtor shall not be
altered as a consequence of the Plan.
The plan will be funded from a combination of (i) funds on hand in
the estate at the time of Confirmation; and (ii) net cash flow of
the Reorganized Debtor received during the 36 months of the Plan
beginning on the Effective Date of the Plan, or as set forth in the
Plan.
A full-text copy of the Plan of Reorganization dated February 6,
2023 is available at https://bit.ly/40KvNsm from PacerMonitor.com
at no charge.
Debtor's Counsel:
David Stevens, Esq.
SCURA, WIGFIELD, HEYER, STEVENS & CAMMAROTA LLP
1599 Hamburg Turnpike
Wayne, NJ 07470
Tel: 201-490-4777
E-mail: dstevens@scura.com
About Lasher Construction
Lasher Construction LLC is a privately-held roofing contractor
serving commercial, industrial, and residential customers. Lasher
sought Chapter 11 protection (Bankr. D.N.J. Case No. 22-18853) on
Nov. 8, 2022.
In the petition signed by Dale M. Lasher, managing member, the
Debtor disclosed $134,916 in assets and $1,844,788 in liabilities.
David Stevens, Esq., of SCURA, WIGFIELD, HEYER, STEVENS & CAMMAROTA
LLP, is the Debtor's counsel.
LIFESCAN GLOBAL: $275M Bank Debt Trades at 34% Discount
-------------------------------------------------------
Participations in a syndicated loan under which LifeScan Global
Corp is a borrower were trading in the secondary market around 66.1
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $275 million facility is a Term loan that is scheduled to
mature on October 1, 2025. The amount is fully drawn and
outstanding.
Headquartered in Malvern, PA, LifeScan Global Corporation is a
global manufacturer and distributor of BGM products including
meters, testing strips, lancets, point of care testing systems and
related monitoring software.
LIMETREE BAY: Moody's Cuts Rating on Sr. Secured Term Loan to Caa2
------------------------------------------------------------------
Moody's Investors Service downgraded Limetree Bay Terminals, LLC's
(brand name Ocean Point Terminals) senior secured term loan rating
to Caa2 from Caa1. Around $475.7 million of the senior secured term
loan due February 2024 remained outstanding at the end of January
2023. The outlook is negative.
"Limetree Bay Terminals' rating downgrade reflects increased debt
refinancing risks and elevated risk of default, including from a
distressed exchange," said Kathrin Heitmann, Moody's Analyst.
Downgrades:
Issuer: Limetree Bay Terminals, LLC
Senior Secured Bank Credit Facility, Downgraded to Caa2 from Caa1
Outlook Actions:
Outlook, Remains Negative
RATINGS RATIONALE
Limetree Bay Terminals' Caa2 senior secured rating reflects rising
refinancing risk given the near-term maturity of the term loan in
February 2024 and a higher interest rate environment than at the
time of initial issuance of the term loan in 2017. The rating
action also considers the risk of a default, including a distressed
exchange, if the debt cannot be successfully refinanced at maturity
at the full outstanding amount.
Moody's notes that Limetree Bay Terminals has, at present, failed
to provide an extension of a $50 million letter of credit required
under the amended and restated terminal operating agreement with
the US Virgin Islands Government, which could be deemed a default
under the terminal operating agreement and, if not waived, result
in a default under the credit agreement. However, Moody's expects
that Limetree Bay Terminals will find a solution and avoid a
default under the terminal operating agreement.
While Limetree Bay Terminals has taken successfully steps to
improve its operating performance, reduce operating expenses and
attract new customers to the terminal over the last 12 months,
EBITDA generation remains lackluster and operating cash flow
generation including interest expense was negative in 2022. EBITDA
generation is expected to improve to more than $60 million under
the 2023 budget but unlevered free cash flow will be insufficient
to fully cover annual debt service. Monthly ship visits have
improved in particular in the last quarter of 2022, which is
positive. Improving the terminals' cost structure and
re-contracting capacity to external customers will remain a key
priority.
However, management's steps to restructure the business may not be
enough to execute a refinancing transaction particularly without a
distressed exchange given the very high debt load relative to
operating revenue and operating cash flow generation. Outstanding
senior debt of around $476 million well exceeds expected 2023
operating revenue of $142 million (last twelve months September 30,
2022, operating revenue $105 million).
The term loan foresees currently a covenant holiday until March 31,
2023, and low DSCR covenant thresholds through December 31, 2023.
Liquidity remains limited but adequate. As of January 31, 2023,
Limetree Bay Terminals, had cash of $24.2 million. The company
continues to pay debt service and has a 6-month debt service
reserve fund. Other credit factors include the low operating
complexity of storage terminals, no direct exposure to commodity
price risk, potential additional environmental liabilities, and
substantial capital investments made into the facility since 2017
which supports the plant's asset value (book value of net PP&E
around $770 million on September 30, 2022).
RATING OUTLOOK
The negative outlook reflects refinancing risks and heightened risk
of default (including a distressed exchange) and as debt maturities
approach February 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
WHAT COULD CHANGE THE RATING UP
-- Prospects for a successful refinancing increase
-- DSCR comfortably above 1.0x and positive EBITDA generation
WHAT COULD CHANGE THE RATING DOWN
-- Inability to return to positive EBITDA generation and
DSCR remains below 1.0x
-- Weakening liquidity profile or reduced sponsor support
-- Increased risk of a default (including distressed
exchange) and/or Moody's view on prospected recovery in
an event of default weakens
PROFILE
Limetree Bay Terminals, LLC (brand name Ocean Point Terminals) is a
wholly-owned subsidiary of Limetree Bay Energy, LLC which is owned
by an affiliate of private equity sponsor EIG and a syndicate of
other investors.
The project is a storage terminal and marine facility on around
1,500 acres of land on the south shore St. Croix, US Virgin
Islands.
METHODOLOGY
The principal methodology used in these ratings was Generic Project
Finance Methodology published in January 2022.
LIVEONE INC: Holders Swap $21.2M Notes for New Series A Shares
--------------------------------------------------------------
LiveOne, Inc. disclosed in a Form 8-K filed with the Securities and
Exchange Commission it entered into an exchange agreement with (i)
Harvest Small Cap Partners Master, Ltd. in regard to that certain
8.5% Senior Secured Convertible Note in the aggregate amount of
$10,503,965 issued by the Company on Sept. 15, 2020, as amended on
June 3, 2021 and July 6, 2022, to HSCPM, (ii) Harvest Small Cap
Partners, L.P. in regard to that certain 8.5% Senior Secured
Convertible Note in the aggregate amount of $4,496,035 issued by
the Company on Sept. 15, 2020, as amended on June 3, 2021 and July
6, 2022, to HSCP; and (iii) Trinad Capital Master Fund Ltd., a fund
controlled by Mr. Ellin, the Company's Chief Executive Officer,
Chairman, director and principal stockholder in regard to all
promissory notes in the aggregate principal and interest amount of
$6,177,218 issued by the Company to Trinad Capital.
Pursuant to the Exchange Agreements, the Holders exchanged the
Notes, and with respect to Trinad Capital, together with interest,
due and payable thereon, and relinquished any and all rights
thereunder, for 21,177 shares of the Company's newly designated and
issued Series A Perpetual Convertible Preferred Stock, par value
$0.001 per share, with a stated value of $1,000 per share, having
the terms as set forth in the Company's Certificate of Designation
of Preferences, Rights and Limitations of Series A Perpetual
Convertible Preferred Stock filed by the Company on
Feb. 2, 2023 with the Secretary of State of the State of Delaware.
The Series A Preferred Stock is convertible at any time at a
Holder's option into shares of the Company's common stock, $0.001
par value per share, at a price of $2.10 per share of common stock,
bears a dividend of 12% per annum, is perpetual and has no maturity
date. At the option of the Company, the dividend may be paid
in-kind for the first 12 months after the Effective Date, and
thereafter, the Holders shall have the option to select whether
subsequent dividend payments shall be paid in kind or in cash;
provided, that as long as any Series A Preferred Stock is held by
HSCPM and/or HSCP, Trinad Capital shall receive the dividend solely
in kind. The Series A Preferred Stock shall have no voting rights,
except as set forth in the Certificate of Designation or as
otherwise required by law.
The Company may, at its option, on or before the Mandatory
Redemption Date, purchase up to $5,000,000 in aggregate of the then
outstanding shares of Series A Preferred Stock held by the Harvest
Funds at a cash redemption price per share of Series A Preferred
Stock equal to the Stated Value. The Company shall be required on
or before the 18-month anniversary of the Effective Date, and in
any event if prior to the Mandatory Redemption Date the Company
consummates any financing transaction in which the Company,
directly or indirectly, raises, in aggregate, gross proceeds of
more than $20,000,000 of new capital, to purchase $5,000,000 in
aggregate of the then outstanding shares of Series A Preferred
Stock held by the Harvest Funds at the Redemption Price. If the
Optional Redemption Right is exercised up to the full $5,000,000
amount, the Mandatory Redemption requirement shall be terminated;
provided, that if the Optional Redemption Right is exercised in any
amount less than $5,000,000, the Mandatory Redemption Amount shall
be reduced by the amount that the Optional Redemption Right has
been elected and exercised. Without the prior express consent of
the majority of the votes entitled to be cast by the holders of
Series A Preferred Stock outstanding at the time of such vote, the
Company shall not authorize or issue any additional or other shares
of its capital stock that are (i) of senior rank to the Series A
Preferred Stock or (ii) of pari passu rank to the Series A
Preferred Stock, in each case in respect of the preferences as to
dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Company.
Pursuant to the Exchange Agreements, the Company agreed that at any
time that any of the shares of Series A Preferred Stock issued to
the Harvest Funs are outstanding, (i) to directly or through its
100% owned subsidiaries (as applicable), to own on a fully diluted
basis at least 66% of the total equity and voting rights of any and
all classes of securities of each of the Company's Courtside Group,
Inc. (dba PodcastOne), Slacker, Inc., PPV One, Inc., and LiveXLive
Events, LLC subsidiaries, (ii) not to issue shares of its common
stock or convertible equity securities at a price less than $2.10
per share (subject to certain exceptions), provided, that such
consent shall not be required in connection with any merger,
acquisition or other business combinations of the Company and/or
any of its subsidiaries with any unaffiliated third party, (iii)
not to raise more than an aggregate of $20,000,000 of capital in
one or more offerings, including without limitation, one or more
equity or debt offerings or a combination thereof, on an
accumulated basis commencing after the Effective Date; provided,
that such consent shall not be required for any equity financing of
the Company at a price of $2.25 per share or above, and (iv) if
after the Effective Date the Company distributes any of its assets
or any shares of its common stock or Common Stock Equivalents (as
defined in the Exchange agreements) of any of its subsidiaries pro
rata to the record holders of any class of shares of its common
stock, the Company shall distribute to the Holders its pro rata
portion of any such distribution (calculated on an as-converted
basis with respect to the then outstanding Series A Preferred
Stock) concurrently with the distribution to the then record
holders of any class of its common stock (including an applicable
distribution of shares of PodcastOne's common stock to the Harvest
Funds in connection with the Company's recently announced spin-out
and special dividend of PodcastOne's common stock to the Company's
stockholders of record), in each case without the Majority Holders'
prior written consent. Any breach of the aforementioned covenants
or the terms of the Ellin Letter (as defined below) shall
constitute a material breach, which if uncured, shall result in the
issuance of an aggregate of 56,473 shares of the Company's
restricted common stock to the Holders for each five trading days
(or pro rata thereof) after the date of the breach; provided, that
if such breach is cured within the applicable cure period, no
Default Shares shall be issued.
In consideration for entry into the Exchange Agreements and the
Holders' willingness to forego certain rights to common stock of
the Company previously agreed by the parties, the Company issued to
the Harvest Funds an aggregate of 600,000 shares of its common
stock and to Trinad Capital 200,000 shares of its common stock.
Additionally, the Company issued 25,000 shares of its common stock
to the Harvest Funds as consideration for them previously agreeing
to extend interest payment dates on the HSCPM Note and the HSCP
Note. In connection with and as a condition to the entry of the
Exchange Agreements, pursuant to a letter agreement among the
Company, the Harvest Funds and Mr. Ellin, unless otherwise agreed
to by the Harvest Funds, Mr. Ellin agreed to (i) to serve as the
Company's Chief Executive Officer and (ii) extend the period during
which he cannot dispose of any equity or convertible securities of
the Company owned by him or any entity of which he is the
beneficial owner and not to cease to be the beneficial owner of any
other equity or convertible securities of the Company of which Mr.
Ellin is the beneficial owner (subject to certain exceptions), in
each case until the time that the Harvest Funds no longer own any
shares of the Series A Preferred Stock. The Harvest Shares and the
Series A Preferred Stock were issued, and the shares of common
stock underlying the shares of Series A Preferred Stock, to the
extent applicable, will be issued, to the Holders as restricted
securities in a private placement transaction exempt from the
registration requirements of the Securities Act of 1933, as
amended.
The Company further agreed, on or prior to the date that is 45 days
after the consummation of any Qualified Offering and in any event
no later than July 15, 2023, to prepare and file with the U.S.
Securities and Exchange Commission a Registration Statement on Form
S-3 (or such other form as applicable) covering the resale under
the Securities Act of all the shares of the Company's common stock
underlying the Series A Preferred Stock (including any dividends
paid in kind) issued to the Harvest Funds and the Harvest Shares
and the Extension Shares. The Company shall use its commercially
reasonable best efforts to cause such registration statement to be
declared effective promptly thereafter on or before 60 days after
the filing of such registration statement (or if the SEC issues any
comments with respect to such registration statement, on or before
120 days after the filing of such registration statement).
Extends CEO's Term
Mr. Robert S. Ellin, chief executive officer, entered into
Amendment No. 2 to Mr. Ellin's Employment Agreement, dated as of
Sept. 7, 2017, pursuant to which the term of the Employment
Agreement was extended until Sept. 7, 2023. In addition, effective
as of Jan. 1, 2023, the Company resumed paying the monthly base
salary of Mr. Ellin in cash instead of shares of the Company's
restricted common stock. As previously announced, from August 2021
until Dec. 31, 2022, Mr. Ellin agreed to receive his monthly base
salary in shares of common stock.
About LiveOne
Headquartered in Los Angeles, California, LiveOne, Inc. (NASDAQ:
LVO) (formerly known as LiveXLive Media, Inc.) is a creator-first,
music, entertainment and technology platform focused on delivering
premium experiences and content worldwide through memberships and
live and virtual events.
LiveOne reported a net loss of $43.91 million for the year ended
March 31, 2022, compared to a net loss of $41.82 million for the
year ended March 31, 2021. As of Sept. 30, 2022, the Company had
$66.09 million in total assets, $76.24 million in total
liabilities, and a total stockholders' deficit of $10.15 million.
Los Angeles, California-based BDO USA, LLP, the Company's former
auditor, issued a "going concern" qualification in its report dated
June 29, 2022, citing that the Company has suffered recurring
losses from operations, negative cash flows from operating
activities and has a net capital deficiency that raise substantial
doubt about its ability to continue as a going concern.
LOGMEIN INC: First Trust Fund II Marks $4.8M Loan at 36% Off
------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$4,805,130 loan extended to LogMeIn Inc (GoTo Group, Inc.) to
market at $3,073,265 or 64% of the outstanding amount, as of
November 30, 2022, according to a disclosure contained in First
Trust SFRIFII's Form N-CSRS for the six months ended November 30,
2022, filed with the Securities and Exchange Commission on February
2, 2023.
First Trust SFRIFII is a participant in a Term Loan B to LogMeIn
Inc. The loan accrues interest at a rate of 8.77% (1 Mo. LIBOR +
4.75%, 0.00% Floor) per annum. The loan matures on August 31,
2027.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
LogMeIn Inc is a flexible-work provider of software as a service
and cloud-based remote work tools for collaboration and IT.
LOGMEIN INC: First Trust High Yield Marks $5.8M Loan at 36% Off
---------------------------------------------------------------
First Trust High Yield Opportunities 2027 Term Fund has marked its
$5,858,018 loan extended to LogMeIn Inc (GoTo Group, Inc.) to
market at $3,746,671 or 64% of the outstanding amount, as of
November 30, 2022, according to a disclosure contained in the First
Trust fund's Form N-CSRS for the six months ended November 30,
2022, filed with the Securities and Exchange Commission on February
2, 2023.
First Trust HYOTF2027 is a participant in a Term Loan B to LogMeIn
Inc. The loan accrues interest at a rate of 7.83% (1 Mo. LIBOR +
3.75%, 0.75% Floor) per annum. The loan matures on March 1, 2028.
First Trust HYOTF2027 is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
June 25, 2020, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FTHY on the New York Stock
Exchange.
LogMeIn Inc is a flexible-work provider of software as a service
(SaaS) and cloud-based remote work tools for collaboration and IT.
MAD ENGINE: $275M Bank Debt Trades at 20% Discount
--------------------------------------------------
Participations in a syndicated loan under which Mad Engine Global
LLC is a borrower were trading in the secondary market around 79.9
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $275 million facility is a Term loan that is scheduled to
mature on July 16, 2027. About $266.4 million of the loan is
withdrawn and outstanding.
Mad Engine is engaged in the design, manufacture and wholesale
distribution of licensed and branded apparel to retailers
throughout the United States.
MAJOSTAN CORP: 3-Story Building Owner Seeks Chapter 11
------------------------------------------------------
Majostan Corp. filed for chapter 11 protection in the Eastern
District of New York.
The Debtor disclosed $2,600,000 in assets against $676,282 in
liabilities in its schedules. The Debtor owns a 3-story building
located 23-52 31st Street, Astoria, NY, valued at $2,600,000.
The Debtor's petition states that funds will be available to
unsecured creditors.
A teleconference meeting of creditors under 11 U.S.C. Section
341(a) is slated for March 3, 2023, at 2:00 p.m.
About Majostan Corp.
Majostan Corp. is primarily engaged in renting and leasing real
estate properties. The Debtor owns a 3-story building located
23-52 31st Street, Astoria, NY.
Majostan Corp. filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D.N.Y. Case No. 23-40331) on Jan. 31,
2023. In the petition filed by Andrew Moulinos, as president, the
Debtor reported total assets of $2,600,000 and total liabilities of
$676,282.
Honorable Bankruptcy Judge Elizabeth S. Stong handles the case.
The Debtor is represented by:
Andrew Moulinos, Esq.
LAW OFFICES OF ANDREW MOULINOS
23-52 31st Street
Astoria, NY 11105
Tel: (718) 545-2600
Email: moulinoslaw@cs.com
MARLIN KRIDER: Ongoing Operations to Fund Plan Payments
-------------------------------------------------------
Marlin Krider Land and Timber, Inc., filed with the U.S. Bankruptcy
Court for the Western District of North Carolina a Plan of
Reorganization dated February 7, 2023.
The Debtor is a corporation organized under the law of the State of
North Carolina. The debtor and the debtor's principle has operated
a logging operation for over 50 years.
During the pandemic, the debtor experienced a severe labor
shortage. In early 2021 the debtor agreed to cut a large boundary
of timber that required a significant amount of driving to the
tract and hauling the wood cut to sawmills. The debtor has finished
this job, and has signed a contract to cut a tract of timber closer
to its base of operations. The debtor has also included provisions
in its contract to account for fluctuations in fuel prices.
Having solidified its income streams and cut expenses, the Debtor
is now in a position to propose terms to pay creditors on
manageable, but fair, terms. To that end, the Debtor chose to file
this case on November 9, 2022. Through this Plan, the Debtor
intends to restructure its secured debt and proposes to commit an
amount equal to, or more than, three years of its remaining
disposable income to its unsecured creditors.
Class 1 consists of all Allowed Secured Tax Claims. Each holder of
an Allowed Secured Tax Claim shall be paid the Allowed Amount of
its Allowed Secured Tax Claim, at the option of the Reorganized
Debtor: (a) in full, in Cash, on the Effective Date or as soon as
practicable thereafter; (b) upon such other terms as may be
mutually agreed upon between such holder of an Allowed Secured
Claim and the Reorganized Debtor; or (c) in equal, monthly Cash
payments starting on May 12, 2023, in an aggregate amount equal to
such Allowed Secured Tax Claim, together with interest at such rate
as required by section 511 of the Bankruptcy Code or otherwise as
required by section l129(a)(9)(C) or (D) of the Bankruptcy Code,
such that the full amount of each Allowed Secured Tax Claim is paid
in full within 5 years from the Petition Date.
Class 2 consists of the Allowed General Unsecured Claims. These
Claims shall be treated as unsecured obligations of the Reorganized
Debtor. Allowed General Unsecured Creditors shall be paid a Pro
Rata share of the Reorganized Debtor's projected disposable income
for the years ending in 2023, 2024, and 2025 with payments being
made on or before June 30, 2023, June 30th, 2024, and June 30th,
2025. The total amount to be paid to unsecured creditors is
$9,943.00. Class 2 is impaired by the Plan.
The Plan contemplates that distributions will be funded by ongoing
income from the logging and firewood operation.
The Reorganized Debtor or any distribution agent the Reorganized
Debtor may retain shall make all distributions to the holders of
Allowed Claims and Allowed Interests that are required under this
Plan.
A full-text copy of the Plan of Reorganization dated February 7,
2023 is available at https://bit.ly/3XruAn5 from PacerMonitor.com
at no charge.
Counsel for the Debtor:
Thomas C. Flippin, Esq.
PO Box 429
1435 N Bridge Street
Elkin, NC 28621
About Marlin Krider Land & Timber
Marlin Krider Land and Timber, Inc. has operated a logging
operation. The Debtor filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. W.D.N.C. Case No. 22-50256) on
Nov. 9, 2022, with up to $500,000 in assets and up to $1 million in
liabilities. Cole Hayes has been appointed as Subchapter V
trustee.
Judge Laura T. Beyer oversees the case.
Thomas C. Flippin, Esq., at the Law Offices of Thomas C. Flippin,
is the Debtor's legal counsel.
MARTIN MIDSTREAM: Moody's Ups CFR to B3 & Alters Outlook to Stable
------------------------------------------------------------------
Moody's Investors Service upgraded Martin Midstream Partners L.P.'s
(MMLP) Corporate Family Rating to B3 from Caa1 and affirmed the
Caa1 rating of its $400 million senior secured second lien notes
due 2028. The Speculative Grade Liquidity (SGL) rating remains at
SGL-3. The outlook was changed to stable from rating under review.
This concludes the review initiated on January 30, 2023.
MMLP closed its offering of $400 million 11.5% senior secured
second lien notes due 2028. MMLP used proceeds from the offering
to fund tender offers for its $54 million outstanding senior
secured 1.5 lien notes due 2024 and $291 million senior secured
second lien notes due 2025. Greater than 99% of the 1.5 lien notes
due 2024 and second lien notes due 2025 have been retired through
the tender offer. The company will retire the remaining outstanding
1.5 lien notes due 2024 and second lien notes due 2025 through the
exercise of its redemption rights, at which point ratings on these
instruments will be withdrawn.
Affirmations:
Issuer: Martin Midstream Partners L.P.
Senior Secured 2nd Lien Regular Bond/Debenture, Affirmed Caa1
(LGD4)
Upgrades:
Issuer: Martin Midstream Partners L.P.
Corporate Family Rating, Upgraded to B3 from Caa1
Probability of Default Rating, Upgraded to B3-PD from Caa1-PD
Outlook Actions:
Issuer: Martin Midstream Partners L.P.
Outlook, Changed To Stable From Rating Under Review
RATINGS RATIONALE
MMLP's B3 CFR reflects the company's diversified asset base,
long-standing customer relationships, fee-based EBITDA generation,
and small scale. The company faces volumetric risk, however, the
majority of its EBITDA is generated by fee-based contracts which
provides insulation from direct 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
will maintain adequate liquidity through mid-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 applied 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 the
refinancing transactions and revolver amendment, MMLP is expected
to have $119 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
mid-2024.
MMLP's $400 million 11.5% senior secured second lien notes due in
2028 are rated Caa1, one notch below the CFR, reflecting their
second lien claim to the company's assets. The revolver (unrated)
has a first lien priority claim on assets, ahead of the second lien
notes.
The stable outlook reflects Moody's expectations for the company to
generate free cash flow and reduce debt.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade of MMLP include improved and
more consistent operating performance, debt reduction and sustained
adequate liquidity. Maintenance of leverage below 4.5x and interest
coverage above 2.5x would be supportive of a ratings upgrade.
Factors that could lead to a downgrade of MMLP include interest
coverage falling below 2.0x, increases in debt and a weakening in
liquidity.
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.
MERCURITY FINTECH: Issues $9 Million Unsecured Promissory Note
--------------------------------------------------------------
Mercurity Fintech Holding Inc. announced it has entered into a
Securities Purchase Agreement with a non-U.S. investor. Pursuant
to the SPA dated Jan. 31, 2023, the Company issued the Purchaser an
Unsecured Convertible Promissory Note with a face value of $9
million upon receiving the Proceeds from the Purchaser on Feb. 2,
2023.
After deducting fees and expenses of attorneys, accountants,
consultants, and financial advisors, the Company intends to use net
proceeds from the Note to provide funding for developing Web3 and
blockchain infrastructure, expanding its consulting services, as
well as pursuing a cryptocurrency license from the New York State
Department of Financial Services. However, the Company cannot
provide any assurance on successfully obtaining the "BitLicense"
for the foreseeable future or at all.
The Note shall bear non-compounding interest at a rate per annum
equal to 5% from the date of issuance until repayment of the Note
unless the Purchaser elects to convert the Note into ordinary
shares. If the Purchaser does not elect to convert the Note, then
the outstanding principal amount and all accrued but unpaid
interest on the Note shall be due and payable upon the one-year
anniversary of the Issuance Date of the Note. The Purchaser has
the right to convert the outstanding balance under the Note into
the Company's ordinary shares at a per share price equal to
$0.00172 (the "Conversion Share Price," equivalent to $0.62 per
ADR) according to the terms and conditions of the Note. In
addition, upon conversion of the Note, the Purchaser shall receive
100% warrant coverage equal to the number of Conversion Shares with
the exercise price at the Conversion Share Price.
Furthermore, the SPA and the Note contain customary covenants and
events of default, including instances in which the Note shall
accelerate and the entire principal amount of all accrued but
unpaid interest on this Note shall become due and payable.
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.
MIRROR TRADING: Chapter 15 Case Summary
---------------------------------------
Chapter 15 Debtor: Mirror Trading International (PTY) Ltd.
43 Plein St., Unit 1, Ground Floor
Stellenbosch, Western Ca pe 07600
Republic of South Africa
The Debtor's business: The Debtor purportedly was a fund
manager trading in cryptocurrency,
particularly Bitcoin. Its sole
director and chief executive
officer, Mr. Cornelius Johannes
Steynberg, purportedly the only
person with full control over the
funds invested through it by its
investors/creditors, is strongly
suspected of being the mastem1ind
behind what appears to be a
Ponzi-type investment scheme
utilizing the Debtor as the
vehicle.
Foreign Proceeding: Involuntary liquidation proceeding
under the control or supervision of
the High Court of South Africa,
Western Cape Division, Cape Town,
Republic of South Africa
Chapter 15 Petition Date: February 9, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-11046
Foreign Representative: Chavonnes Badenhorst St Clair Cooper
(One of the Debtor's Liquidator)
Unit 1, Sir Benjamin Promenade,
Oxford Street
Durbanville, Western Cape
Republic of South Africa
Foreign
Representative's
Counsel: Gregory S. Grossman, Esq.
SEQUOR LAW, P.A.
1111 Brickell Ave., Suite 1250
Miami, FL 33131
Tel: (305) 372-8282
Email: ggrossman@sequorlaw.com
Estimated Assets: Unknown
Estimated Debt: Unknown
A full-text copy of the Chapter 15 petition is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/LUEBGYQ/Mirror_Trading_International_PTY__flsbke-23-11046__0001.0.pdf?mcid=tGE4TAMA
MONARCH PCM: Asset Sale and Avoidance Proceeds to Fund Plan
-----------------------------------------------------------
Monarch PCM, LLC, filed with the U.S. Bankruptcy Court for the
Northern District of Texas a Subchapter V Plan of Liquidation dated
February 5, 2023.
The Debtor was created to capture market share in the Over-The
Counter segment of the pharmaceuticals industry through aggressive
investment by its affiliated company, GM Pharmaceuticals, Inc.
Since the Debtor was founded, it relied on continuous cash
infusions by GM to expand its manufacturing as well as its research
and development. Debtor developed and manufactured product lines
which were commercially viable in the market, but it was not
profitable and thus unable to attract outside capital, but for one
outside lender, Susser Bank, which had a lien on substantially all
of the Debtor's assets.
The Debtor filed this bankruptcy case with the primary goal of the
successful sale of Debtor's assets and the continued operation of
the business under new ownership, allowing most or all of Debtor's
employees to keep their jobs. Further, after completion of the
sale, the next step that the Debtor contemplated was to wind-down
in an orderly fashion through a subchapter v plan, collecting the
outstanding debts it itself is owed, and paying its creditors what
it is able to through its plan.
On November 10, 2022, the Court entered the Bidding Procedures
Order, establishing procedures for the auction and sale of
substantially all of the Debtor's assets. The stalking horse bidder
was Acella Holdings, LLC, and no competing bids were submitted
before the bid deadline set in the Bidding Procedures Order, and
thus, no auction was held. The Court held a hearing on the Debtor's
motion to approve the sale on December 16, 2022, and entered an
order authorizing the sale to Acella's assignee, Sovereign
Pharmaceuticals, LLC, on December 19, 2022. The sale to Sovereign
closed on January 3, 2023. Assets retained by the Debtor pursuant
to the sale included all accounts receivable and all causes of
action under chapter 5 of the Bankruptcy Code.
The initial phase of this case was thus successful, as the Debtor
sold substantially all of its assets, but retained significant
potential sources of cash recovery. The non-insider secured lender,
Susser, was paid in full from the sale proceeds, and thus no longer
has any lien on the Debtor's assets or is owed any money by the
estate. A significant secured tax claim of $102,539.38 owed to
Tarrant County, Texas was also paid in full in connection with the
sale.
The Debtor has worked diligently to collect on its accounts
receivable, and during the pendency of this case the Debtor has
successfully collected approximately $1,980,000.00 in monies owed
to it.
The Debtor currently has approximately $204,000.00 in cash on hand.
The cash on hand projects to exceed administrative expenses by
about $35,000.00, which means that the estate will be
administratively solvent with no secured creditors at plan
confirmation. Other than its cash, the Debtor's significant
remaining assets are its accounts receivable and its potential
actions under chapter 5 of the Bankruptcy Code.
The Debtor made approximately $1,225,450.73 in transfers to
creditors in the ninety days prior to its bankruptcy petition, and
after a preliminary analysis of potential defenses by those
creditors, including new value and ordinary course of business, the
Debtor estimates that $200,000.00-$250,000.00 may be recoverable
for distribution to creditors.
Class 4 consists of all unsecured Allowed Claims not otherwise
classified or provided for in other provisions in this Plan.
Allowed Claims in Class 4 will be paid pro-rata from the Fund after
and subject to the payment of Class 1 and Class 3 claims. No
interest shall accrue on any Claims in this Class. Disbursements to
the holders of Allowed Claims in this Class shall be made at such
time as the Disbursing Agent, in its discretion, determines that
distributions to holders of Allowed Claims in Class 4 should be
made.
Equity will receive no distribution under the Plan. Equity will
retain control of the Debtor solely so that it has the authority to
dissolve the Debtor upon completion of all payments under the
Plan.
The Debtor is liquidating under this Plan and will not require
further reorganization. The Debtor believes it will have enough
cash on hand, to pay amounts due on the Effective Date. At current
projections, there are less than $170,000.00 total in expected
administrative and secured claims, against $204,000.00 in cash
remaining with the Debtor, meaning that estate will be
administratively solvent and be able to pay the priority claims on
the Effective Date.
The Liquidating Debtor will make pro rata distributions to the
general unsecured creditors upon the realization of collections on
remaining accounts receivable, and the successful prosecution of
its Avoidance Actions, whether through litigation or negotiated
settlement. The Liquidating Debtor will reserve amounts necessary
to pay for the prosecution of Avoidance Actions, and will otherwise
distribute amounts in the Fund to general unsecured creditors.
A full-text copy of the Subchapter V Liquidating Plan dated
February 5, 2023 is available at https://bit.ly/3RNjAPw from
PacerMonitor.com at no charge.
Attorneys for Debtor:
Mark A. Platt, Esq.
Bryan J. Sisto, Esq.
Joy D. Kleisinger, Esq.
Frost Brown Todd, LLC
2101 Cedar Springs Rd.
Dallas, TX 75201
Telephone: (214) 580-5852
Facsimile: (214) 545-3472
Email: mplatt@fbtlaw.com
bsisto@fbtlaw.com
jkleisinger@fbtlaw.com
About Monarch PCM
Monarch PCM, LLC, is engaged in pharmaceutical and medicine
manufacturing business. The company is based in Fort Worth,
Texas.
Monarch PCM sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Texas Case No. 22-42687) on Nov. 7,
2022. In the petition signed by its chief executive officer and
chief financial officer, Sam P. Rizkal, the Debtor disclosed up to
$10 million in assets and up to $50 million in liabilities.
Judge Mark X. Mullin oversees the case.
Mark A. Platt, Esq., at Frost Brown Todd, LLC, is the Debtor's
legal counsel.
MUSCLE MAKER: Appoints Two New Directors
----------------------------------------
Muscle Maker, Inc. disclosed in a Form 8-K filed with the
Securities and Exchange Commission that on Feb. 2, 2023, it voted
to increase the size of the Board from eight to ten and approved
the appointment of Ms. Hannah Oh and Mr. Ray Shankar to the Board
of Directors effective March 1, 2023.
Since Jan. 1, 2020, the Company and Ms. Oh and Mr. Shankar have not
entered into any transaction nor is there any currently proposed
transaction, in which the Company was or is to be a participant
involving an amount exceeding $120,000, and in which Ms. Oh and Mr.
Shankar had or will have a direct or indirect material interest.
Ms. Oh, age 37, is an experienced agri-food business leader and
certified sustainability professional, with broad experiences and a
proven track record in driving organizational and digital/data
driven transformations; developing commercial strategies and brand
campaigns; and operationalizing integrated business planning and
supply chain strategies. Ms. Oh is an active member of Singapore's
agtech start-up scene, as an investor and advisor to entrepreneurs
and companies in agri-food business, urban farms, and climate tech.
For the past 15 years Ms. Oh has held various roles with Bayer Crop
Science and Monsato Company, which was acquired by Bayer AG,
including Head of Marketing Excellence, Head of Sales and
Operations and Business Intelligence, and Head of Customer
Analytics and Customer Experience among other roles. Ms. Oh
graduated from Macalester College with a B.A. in Economics and
Asian Studies in May 2007.
Mr. Shankar, age 47, has been a Partner since 2019 at Oon & Bazul
LLP, a prominent regional law firm where Mr. Shankar manages the
Private Wealth and Family Office Practice where he routinely
advises ultra-high net worth families on the structuring of their
family offices, tax and immigration incentive applications as well
as legacy planning. Mr. Shankar specializes in advising on the
establishment of family offices, which includes legacy and estate
planning, wills, trusts, family charters/constitutions, tax
efficient structures and succession planning. Prior to joining Oon
& Bazul LLP, Mr. Shankar served as the Managing Director of Ring
City Limited, a group of operating companies in various sectors.
Mr. Shankar received his Bachelor of Laws (LLB) from the National
University of Singapore in 2001.
On Oct. 19, 2022, Muscle Maker formed Sadot LLC, a Delaware limited
liability company and a wholly owned subsidiary of the Company. On
Nov. 14, 2022, the Company, Sadot and Aggia LLC FC, a company
formed under the laws of the United Arab Emirates, entered into a
Services Agreement whereby Sadot engaged Aggia to provide certain
advisory services to Sadot for creating, acquiring and managing
Sadot's business of delivering food farm to table, wholesaling food
and engaging in the purchase and sale of physical food commodities.
The closing date of the Services Agreement was Nov. 16, 2022. The
parties entered into an Addendum 1 to the Services Agreement on
Nov. 17, 2022.
Subject to certain net income thresholds, Aggia has the right to
nominate up to eight directors to the Board of Directors of the
Company, seven of which will meet the independence requirements of
the NASDAQ Capital Market and the Company will take such actions as
reasonably required to name the directors which Aggia has the right
to nominate to the Board. On Dec. 27, 2022, Aggia nominated
Benjamin Petel as the initial Designated Director and the Board
voted to increase the size of the Board from seven to eight and
appointed Mr. Petel as a director of the Company to fill such
vacancy. As of Dec. 31, 2022, Sadot has generated $3.3 million in
net income and, as a result, Aggia was entitled to nominate two
additional board members.
About Muscle Maker
Headquartered in League City, Texas, Muscle Maker, Inc. is the
parent company of "healthier for you" brands delivering food
options to consumers through traditional and non-traditional
locations such as military bases, universities, delivery and
direct
to consumer ready-made meal prep options. Brands include Muscle
Maker Grill restaurants, Pokemoto Hawaiian Poke and SuperFit Foods
meal prep.
Muscle Maker reported a net loss of $8.18 million for the year
ended Dec. 31, 2021, a net loss of $10.10 million for the year
ended Dec. 31, 2020, and a net loss of $28.39 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $25.38
million in total assets, $6.45 million in total liabilities, and
$18.93 million in total stockholders' equity.
MUSCLE MAKER: Unit Crosses $200M Revenue Milestone in First 3 Mos
-----------------------------------------------------------------
Muscle Maker, Inc. announced its new wholly owned subsidiary, Sadot
LLC, has crossed the $200 million revenue milestone in its first
three months of operation. Sadot generated $58,517,750 in revenue
in January 2023. Sadot, in its first three months of operation,
has now generated $209,103,394 in total revenue for Muscle Maker,
Inc.
According to the Company, with over $200 million in revenue in only
90 days, the Sadot diversification strategy and its management and
guidance by AGGIA is proving to have a positive impact on Muscle
Maker overall. AGGIA has performed and earned the right to
nominate two additional board members to Muscle Maker upon
exceeding $3.3 million in net income as per the performance metrics
posted in the Nov. 18, 2022 8K filing of the AGGIA service and
operating agreements.
As part of its new diversification strategy, Muscle Maker formed
Sadot LLC with a goal of launching Muscle Maker into a new era of
growth by creating a comprehensive, global food company that
stretches from sustainable farming, agricultural commodity shipping
and trading, distribution, production and ultimately reaches
consumers through our restaurant, franchise and meal prep
companies. Muscle Maker hired AGGIA, an international agriculture
consulting firm, to perform the day-to-day operations of Sadot.
"Our first undertaking for Sadot is focused on agricultural
commodity shipping and trading," said Mike Roper, CEO of Muscle
Maker, Inc. "We hired AGGIA to run the day-to-day operations of
Sadot. AGGIA's experience and relationships in the agricultural
industry have proven critical in the performance of Sadot to date.
As part of our agreement with AGGIA and its key performance
metrics, AGGIA earned the right to nominate 2 additional members to
the Muscle Maker board of directors. Just last week, the company
announced the addition of Hannah Oh and Ray Shankar to the Muscle
Maker board of directors effective March 1, 2023. We are very
excited to bring on key members with knowledge and experience in
international and agricultural businesses."
Sadot signed a service and operating agreement with AGGIA on Nov.
18, 2022. As part of the AGGIA agreements, based on key
performance metrics and subject to shareholder approval, AGGIA can
earn the right to nominate up to 8 additional members to the Muscle
Maker board of directors. As per the AGGIA agreements, AGGIA can
nominate 2 new members upon Sadot achieving $3.3 million in net
income, 2 more members upon Sadot achieving $6.6 million in net
income and a final 3 new members upon Sadot achieving $9.9 million
in net income. AGGIA also will earn shares of Muscle Maker common
stock, based on net income generated, at $1.5625 per share.
About Muscle Maker
Headquartered in League City, Texas, Muscle Maker, Inc. is the
parent company of "healthier for you" brands delivering food
options to consumers through traditional and non-traditional
locations such as military bases, universities, delivery and direct
to consumer ready-made meal prep options. Brands include Muscle
Maker Grill restaurants, Pokemoto Hawaiian Poke and SuperFit Foods
meal prep.
Muscle Maker reported a net loss of $8.18 million for the year
ended Dec. 31, 2021, a net loss of $10.10 million for the year
ended Dec. 31, 2020, and a net loss of $28.39 million for the year
ended Dec. 31, 2019. As of Sept. 30, 2022, the Company had $25.38
million in total assets, $6.45 million in total liabilities, and
$18.93 million in total stockholders' equity.
NAKED JUICE: $450M Bank Debt Trades at 23% Discount
---------------------------------------------------
Participations in a syndicated loan under which Naked Juice LLC is
a borrower were trading in the secondary market around 77.1
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $450 million facility is a Term loan that is scheduled to
mature on January 24, 2030. The amount is fully drawn and
outstanding.
Naked Juice LLC is the entity resulting from a spin-off from
PepsiCo, with PAI Partners owning 61% and Pepsi retaining a 39%
stake. Naked Juice, LLC owns the Tropicana, Naked Juice, KeVita and
other select juice brands.
NATIONAL MENTOR: First Trust Fund II Marks $4,100 Loan at 29% Off
-----------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$4,102 loan extended to Sevita (National Mentor Holdings, Inc.) to
market at $2,898 or 71% of the outstanding amount, as of November
30, 2022, according to a disclosure contained in the First Trust
fund's Form N-CSRS for the six months ended November 30, 2022,
filed with the Securities and Exchange Commission on February 2,
2023.
First Trust SFRIFII is a participant in a Term Loan C to National
Mentor Holdings, Inc. The loan accrues interest at a rate of 7.43%
(3 Mo. LIBOR + 3.75%, 0.75% Floor) per annum. The loan matures on
March 1, 2028.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
National Mentor Holdings, Inc. operates as a holding company. The
Company, through its subsidiaries, provides community-based
services for people with injuries and disabilities.
NATIONAL MENTOR: First Trust Fund II Marks $62,000 Loan at 29% Off
------------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$62,686 loan extended to National Mentor Holdings, Inc to market at
$44,281 or 17% of the outstanding amount, as of November 30, 2022,
according to a disclosure contained in First Trust SFRIFII's Form
N-CSRS for the six months ended November 30, 2022, filed with the
Securities and Exchange Commission on February 2, 2023.
First Trust SFRIFII is a participant in a Term Loan B to National
Mentor Holdings, Inc. The loan accrues interest at a rate of 7.83%
(1 Mo. LIBOR + 3.75%, 0.75% Floor) per annum. The loan matures on
March 1, 2028.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
National Mentor Holdings, Inc. operates as a holding company. The
Company, through its subsidiaries, provides community-based
services for people with injuries and disabilities.
NATIONAL MENTOR: First Trust Fund II Marks $77,000 Loan at 29% Off
------------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$77,454 loan extended to Sevita (National Mentor Holdings, Inc.) to
market at $54,713 or 71% of the outstanding amount, as of November
30, 2022, according to a disclosure contained in the First Trust
fund's Form N-CSRS for the six months ended November 30, 2022,
filed with the Securities and Exchange Commission on February 2,
2023.
First Trust SFRIFII is a participant in a Term Loan B to National
Mentor Holdings, Inc. The loan accrues interest at a rate of 7.43%
(3 Mo. LIBOR + 3.75%, 0.75% Floor) per annum. The loan matures on
March 1, 2028.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
National Mentor Holdings, Inc. operates as a holding company. The
Company, through its subsidiaries, provides community-based
services for people with injuries and disabilities.
NATIONAL MENTOR: First Trust High Yield Marks Loan at 29% Off
-------------------------------------------------------------
First Trust High Yield Opportunities 2027 Term Fund has marked its
$13,918 loan extended to Sevita (National Mentor Holdings, Inc.) to
market at $9,831 or 71% of the outstanding amount, as of November
30, 2022, according to a disclosure contained in the First Trust
fund's Form N-CSRS for the six months ended November 30, 2022,
filed with the Securities and Exchange Commission on February 2,
2023.
First Trust HYOTF2027 is a participant in a Term Loan B to National
Mentor Holdings, Inc. The loan accrues interest at a rate of 7.83%
(1 Mo. LIBOR + 3.75%, 0.75% Floor) per annum. The loan matures on
March 1, 2028.
First Trust HYOTF2027 is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
June 25, 2020, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FTHY on the New York Stock
Exchange.
National Mentor Holdings, Inc. operates as a holding company. The
Company, through its subsidiaries, provides community-based
services for people with injuries and disabilities.
NATIONAL MENTOR: First Trust High Yield's $148,000 Loan at 29% Off
------------------------------------------------------------------
First Trust High Yield Opportunities 2027 Term Fund has marked its
$148,336 loan extended to Sevita (National Mentor Holdings, Inc.)
to market at $104,783 or 71% of the outstanding amount, as of
November 30, 2022, according to a disclosure contained in the First
Trust fund's Form N-CSRS for the six months ended November 30,
2022, filed with the Securities and Exchange Commission on February
2, 2023.
First Trust HYOTF2027 is a participant in a Term Loan B to National
Mentor Holdings, Inc. The loan accrues interest at a rate of 7.83%
(3 Mo. LIBOR + 3.75%, 0.75% Floor) per annum. The loan matures on
March 1, 2028.
First Trust HYOTF2027 is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
June 25, 2020, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FTHY on the New York Stock
Exchange.
National Mentor Holdings, Inc. operates as a holding company. The
Company, through its subsidiaries, provides community-based
services for people with injuries and disabilities.
NB HOTELS: Amends Plan to Include Secured Noteholder Claims
-----------------------------------------------------------
NB Hotels Dallas LLC submitted a First Amended Disclosure Statement
for First Amended Plan of Reorganization dated February 7, 2023.
The Plan is a plan of reorganization. The Debtor is the owner of
the real property and improvements located at 13402 Noel Road,
Dallas, Texas 75240, where the Debtor operates a hotel known as the
Le Meridien Dallas Hotel (the "Hotel").
As of the Petition Date the Debtor owned the Assets. All the
Debtor's property is collateral for the Secured Claim of the
Secured Noteholder. The Debtor believes that in a Chapter 7 case
the trustee would allow the Secured Noteholder to foreclose on its
collateral. The Debtor estimates that in such a foreclosure the
proceeds of sale would be approximately 75% of the Hotel's market
value and 50% of non-cash personal property market value (with the
exception of the vehicles, which the Debtor estimates would be
liquidated for approximately 75% of market value). The Plan is
intended to pay more than would be realized in a forced
liquidation.
This Plan pays all Allowed Secured and Unsecured Claims in full,
with interest.
Class 1 shall consist of the Allowed Secured Claims of the Dallas
County Tax Assessor. Class 1 Claims shall be paid in full on or
before the Effective Date. This Claim is Impaired.
Class 2 consists of Allowed Secured Claims of the Secured
Noteholder. The terms of the treatment of the Allowed Secured Claim
of the Secured Noteholder are described in the Conditional Waiver
Agreement and the Settlement Stipulation. If there are any
inconsistencies or discrepancies between the terms of this Plan and
the Settlement Stipulation, the Conditional Waiver Agreement of the
Loan Documents, the terms of the Settlement Stipulation, the
Conditional Waiver Agreement and the Loan Documents shall control.
A Stipulation of Settlement is entered on January 18, 2023 between
and among NB Hotels, Nadir Badruddin ("Badruddin") and RSS
MSC2019-L2-TX NHD, LLC1 (the "Secured Noteholder") acting by and
through its special servicer Rialto Capital Advisors LLC in its
capacity as special servicer for the Secured Noteholder (the
"Special Servicer") (collectively, the "Parties").
Pursuant to the Settlement Stipulation the Parties hereby agree
that as of September 30, 2022, the total amount due and owing under
the Loan, not including any prepayment premium was $51,985,929.10,
not including legal fees and expenses incurred after August 31,
2022 (the "Secured Noteholder's Claim Amount"). The Parties agree
that as of the date hereof, no prepayment premium is due. The
Parties agree that the prepayment premium provided in the Loan
Documents is valid and allowable, and will be enforceable in the
event of a triggering of any prepayment event under the terms of
the Loan Documents, and no such event has yet occurred.
The Amended Disclosure Statement does not alter the proposed
treatment for unsecured creditors and the equity holder:
* Class 5 shall consist of Allowed Unsecured Claims equal to
or over the amount of $50,000.00, other than the Claims of Class 7
Insiders. Class 5 Claimants shall be paid in full over 84 months
from the Effective Date, with interest accruing from the Effective
Date at the rate of 1% per annum. These Claims will be paid in
equal monthly installments of principal and interest commencing on
the first day of the first month following the Effective Date and
continuing on the first day of each month thereafter for a total of
84 months. Class 5 Claimants shall have the option to agree to
reduce their Allowed Claims to the amount of the Class 6 Small
General Unsecured Claimants by marking the option that will appear
on their Ballots for voting on the Plan. These Claims are
Impaired.
* Class 6 shall consist of Allowed Unsecured Claims under the
amount of $50,000.00, other than the Claims of Class 7 Insiders.
Class 6 Claimants shall be paid in full over 48 months from the
Effective Date, with interest accruing from the Effective Date at
the rate of 1% per annum. These Claims will be paid in equal
monthly installments of principal and interest commencing on the
first day of the first month following the Effective Date and
continuing on the first day of each month thereafter. These Claims
are Impaired.
* Class 8 shall consist of Allowed Equity Interests in the
Debtor. Class 8 Interests shall be retained under the Plan. These
Interests are not Impaired.
This Plan will be substantially consummated by the commencement of
payments. Except as provided in the Settlement Stipulation or
Conditional Waiver Agreement, the Debtor will use its normal
operating income to make payments under the Plan and pay ordinary
operating expenses unless otherwise described in this Plan.
A full-text copy of the First Amended Disclosure Statement dated
February 7, 2023 is available at https://bit.ly/3jVieWr from
PacerMonitor.com at no charge.
Attorneys for the Debtor:
Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
1412 Main Street, Suite 500
Dallas, TX 75202
Telephone: (972) 503-4033
Facsimile: (972) 503-4034
About NB Hotels Dallas LLC
NB Hotels Dallas LLC owns and operates the Le Meridien Hotel Dallas
located at 13402 Noel Road, Dallas, Texas. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
N.D. Tex. Case No. 22-30681) on April 18, 2022. In the petition
signed by Nadir Badruddin, its president, the Debtor disclosed up
to $100 million in both assets and liabilities.
Judge Harlin Dewayne Hale oversees the case.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC is the
Debtor's counsel.
Wells Fargo Bank, National Association as Trustee for Morgan
Stanley Capital Trust 2019-22 for the benefit of the Commercial
Mortgage Pass-Through Certificate Holder, as lender, is represented
by Bruce J. Zabarauskas, Esq., at Holland & Knight LLP.
NEW CONSTELLIS: $150M Bank Debt Trades at 53% Discount
------------------------------------------------------
Participations in a syndicated loan under which New Constellis
Borrower LLC is a borrower were trading in the secondary market
around 46.9 cents-on-the-dollar during the week ended Friday,
February 10, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $150 million facility is a Payment-In-Kind Term loan that is
scheduled to mature on March 27, 2025. The amount is fully drawn
and outstanding.
Headquartered in Herndon, Virginia, New Constellis Borrower LLC is
a provider of essential risk management services, such as security,
training, and global support services to government and commercial
clients throughout the world.
NOBLE HEALTH: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: Noble Health Real Estate LLC
10 South Hospital Drive
20 South Hospital Drive
Fulton, MO 65251
Business Description: Noble Health is engaged in activities
related to real estate. The Debtor
owns a building located at 10
Hospital Dr, Fulton, MO 65251 valued
at $7.9 million.
Chapter 11 Petition Date: February 10, 2023
Court: United States Bankruptcy Court
Western District of Missouri
Case No.: 23-20051
Debtor's Counsel: Ronald Weiss, Esq.
BERMAN DELEVE KUCHAN AND CHAPMAN
1100 Main St Suite 2850
Kansas City, MO 64105
Tel: (816) 471-5900
Email: rweiss@bdkc.com
Total Assets: $7,900,000
Total Liabilities: $4,869,845
The petition was signed by Zev M. Reisman as general manager/
corporate secretary.
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/YBMYMGA/Noble_Health_Real_Estate_LLC__mowbke-23-20051__0001.0.pdf?mcid=tGE4TAMA
NORMANDIE LOFTS: Seeks Chapter 11 Bankruptcy Protection
-------------------------------------------------------
Normandie Lofts KTown LLC filed for chapter 11 protection in the
District of Central California.
According to court filings, Normandie Lofts KTown, a Single Asset
Real Estate, estimates between $10 million and $50 million in debt
owed to 1 to 49 creditors. The petition states that funds will be
available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
March 2, 2023, at 10:00 AM at UST-SVND2, TELEPHONIC MEETING.
CONFERENCE LINE:1-866-820-9498, PARTICIPANT CODE:6468388.
About Normandie Lofts KTown
Normandie Lofts KTown LLC is a Single Asset Real Estate (as defined
in 11 U.S.C. Section 101(51B)).
Normandie Lofts KTown LLC filed a petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No. 23-10125) on
Jan. 30, 2023. In the petition filed by Edward Lorin, as manager,
the Debtor reported assets between $1 million and $10 million and
liabilities between $10 million and $50 million.
The case is overseen by Honorable Bankruptcy Judge Martin R.
Barash.
The Debtor is represented by:
Leslie A Cohen, Esq.
Leslie Cohen Law PC
26050 Mureau Road
Suite 101
Calabasas, CA 91302
NORWICH DIOCESAN: Feb. 15 Hearing on Bid to End Solicitation Period
-------------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Connecticut is set to
hold a hearing on Feb. 15 to consider the official unsecured
creditors' committee's motion to terminate the exclusive period for
Norwich Roman Catholic Diocesan Corp. to solicit votes on its
proposed bankruptcy plan.
The committee had earlier agreed with the Norwich diocese to extend
the solicitation period until March 16 only. On Jan. 17, the
diocese filed its reorganization plan following the expiration of
its plan filing period.
In its motion, the committee asked the court not to allow further
extension of the solicitation period so it can propose its own plan
for the diocese.
The committee said it cannot accept the diocese's plan, which
proposes to create a fund that is "far short of what is necessary
to provide a fair recovery for victims of sexual abuse."
According to the committee, the diocese's plan would create a fund
of approximately $29 million, which net of expenses would result in
an average distribution of just over $200,000 to the 142 sex abuse
victims.
The Norwich diocese opposed the motion, saying the committee's
dissatisfaction with the terms of the plan, including the amounts
of the settlements, is insufficient to establish cause to terminate
its exclusive right.
The motion also drew opposition from an association of parishes in
the Norwich area, saying it is unnecessary since the exclusive
period will terminate as a matter of law on March 16 and the
committee is free to file a competing plan after that date.
About The Norwich Roman Catholic
Diocesan Corporation
The Norwich Roman Catholic Diocesan Corporation is a nonprofit
corporation that gives endowments to parishes, schools, and other
organizations in the Diocese of Norwich, a Latin Church
ecclesiastical territory or diocese of the Catholic Church in
Connecticut and a small part of New York.
The Norwich Roman Catholic Diocesan Corporation sought Chapter 11
protection (Bankr. D. Conn. Case No. 21-20687) on July 15, 2021,
with $10 million to $50 million in assets against liabilities of
more than $50 million. Judge James J. Tancredi oversees the case.
The Debtor tapped Ice Miller, LLP, Robinson & Cole, LLP and Gellert
Scali Busenkell & Brown, LLC as bankruptcy counsel, Connecticut
counsel and special counsel, respectively. Epiq Corporate
Restructuring, LLC is the claims and noticing agent.
On July 29, 2021, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors in the Chapter 11 case.
The committee tapped Zeisler & Zeisler, PC as its legal counsel.
The Debtor filed its proposed Chapter 11 plan of reorganization and
disclosure statement on Jan. 17, 2023.
OMNIQ CORP: Registers 952,500 Shares for Possible Resale
--------------------------------------------------------
Omniq Corp. has filed a Form S-8 registration statement with the
Securities and Exchange Commission for the purpose of filing the
reoffer prospectus that forms a part of this Registration Statement
relating to the registration, reoffer and resale on a continuous or
delayed basis by the persons listed in the Prospectus, of up to
952,500 shares of the Company's common stock, par value $0.001 per
share, acquired or to be acquired by the Selling Stockholders
pursuant to its 2021 Equity Incentive Plan.
The Selling Stockholders may sell the shares of Common Stock, from
time to time, as they may determine through public or private
transactions or through other means at prevailing market prices on
OTCQB, at prices different than prevailing market prices, or at
privately negotiated prices. The Selling Stockholders may sell the
shares of Common Stock directly, or may sell them through brokers
or dealers.
The Company will not receive any of the proceeds from the sale of
these shares of Common Stock by the Selling Stockholders. The
Company has agreed to pay all expenses relating to the registration
of these shares of Common Stock. The Selling Stockholders will pay
any brokerage commissions or similar charges incurred in connection
with the sale of these shares of Common Stock.
The Company's Common Stock is quoted on the Nasdaq Stock Market
under the symbol "OMQS." On Feb. 3, 2023, the last reported sales
price of the Company's Common Stock was $5.40 per share.
A full-text copy of the prospectus is available for free at:
https://www.sec.gov/Archives/edgar/data/278165/000149315223003721/forms-8.htm
About omniQ Corp.
Headquartered in Salt Lake City, Utah, omniQ Corp. (OTCQB: OMQS) --
http://www.omniq.com-- provides computerized and machine vision
image processing solutions that use patented and proprietary AI
technology to deliver data collection, real time surveillance and
monitoring for supply chain management, homeland security, public
safety, traffic and parking management and access control
applications. The technology and services provided by the Company
help clients move people, assets and data safely and securely
through airports, warehouses, schools, national borders, and many
other applications and environments.
Omniq reported a net loss of $13.14 million for the year ended Dec.
31, 2021, a net loss of $11.50 million for the year ended Dec. 31,
2020, and a net loss attributable to the company's common
stockholders $5.31 million. As of Sept. 30, 2022, the Company had
$70.34 million in total assets, $77.91 million in total
liabilities, and a total deficit of $7.56 million.
PARLEE CYCLES: Court OKs Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Eastern Division, authorized Parlee Cycles, Inc. to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance.
The Debtor has three secured creditors asserting liens on
substantially all of its assets, which are Bank Gloucester, Mass
Growth Capital Corp., and the U.S. Small Business Association.
As adequate protection, Bank Gloucester, MGCC and the SBA are
granted continuing replacement liens and security interests to the
same validity, extent and priority that each would have had in the
absence of the bankruptcy filing.
The Debtor will make monthly adequate protection payments on
account of its obligations to Bank Gloucester in the amount of
$7,309, MGCC in the amount of $369 and the SBA in the amount of
$$3,372 in accordance with the terms of the Budget.
A further hearing on the matter is set for March 1, 2023 at 10
a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3RLuBkx from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$33,105 for the week ending February 10, 2023;
$16,735 for the week ending February 17, 2023; and
$55,748 for the week ending February 24, 2023.
About Parlee Cycles, Inc.
Parlee Cycles, Inc. was founded in 2000 by its principal, Bob
Parlee. Parlee Cycles, a manufacturer of high-performance bikes
located in Beverly, Massachusetts, pioneered a unique process to
create the first fully customizable carbon-fiber road racing
frames. Parlee prides itself on leading the industry with
breakthrough designs and innovations to improve the ride quality
and performance of road bicycles.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Banker. D. Mass. Case No. 23-10161) on February 6,
2023. In the petition signed by Robert K. Parlee, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Judge Christopher J. Panos oversees the case.
David B. Madoff, Esq., at Madoff & Khoury LLP, represents the
Debtor as legal counsel.
PG&E CORP: Moody's Alters Outlook on 'Ba2' CFR to Positive
----------------------------------------------------------
Moody's Investors Service affirmed PG&E Corporation (PCG or parent)
and Pacific Gas & Electric Company's (PG&E or utility) ratings and
changed their outlooks to positive from stable. The ratings
affirmation includes PCG's Ba2 Corporate Family Rating, Ba3-PD
Probability of Default Rating and B1 senior secured rating as well
as PG&E's Baa3 senior secured first mortgage bond rating.
All of the debt in PG&E's capital structure is secured on a first
lien basis by substantially all of the utility's real assets and
certain tangible assets. The parent's senior secured debt is
secured by a pledge of the stock in PG&E.
Affirmations:
Issuer: PG&E Corporation
Corporate Family Rating, Affirmed Ba2
Probability of Default Rating, Affirmed Ba3-PD
Senior Secured Bank Credit Facility, Affirmed B1 (LGD5)
Senior Secured Regular Bond/Debenture, Affirmed B1 (LGD5)
Issuer: Pacific Gas & Electric Company
Pref. Stock, Affirmed B1 (LGD5)
Senior Secured First Mortgage Bonds, Affirmed Baa3 (LGD2)
Outlook Actions:
Issuer: PG&E Corporation
Outlook, Changed To Positive From Stable
Issuer: Pacific Gas & Electric Company
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
"PG&E's positive outlook reflects the potential for a higher credit
rating as it continues to invest heavily on wildfire mitigation,
improves its relationship with stakeholders, and establishes a
track record of limiting large, catastrophic wildfires that are
caused by the utility's equipment," said Jeff Cassella, VP –
Senior Credit Officer. "Access to the state's wildfire insurance
fund and the supportive provisions of the AB1054 legislation are
also important factors driving the positive outlook," added
Cassella.
While wildfire risk remains a significant credit consideration,
PG&E has made over $15 billion of wildfire mitigation investments
over the last three years, which have helped the utility
infrastructure to avoid being connected to the ignition of a
catastrophic fire over that period. PG&E's credit worthiness is
dependent on the company's ability to continue to make progress in
addressing wildfire risk and reducing exposure to physical climate
risks more broadly, an important ESG consideration. Importantly,
the financial impact of future wildfire events should be mitigated
by PG&E's ability to attain its annual wildfire safety certificate
from regulators, which will allow the utility to maintain access to
the state's wildfire insurance fund as well as the regulatory cost
recovery provisions outlined by AB1054.
AB1054 improves utility access to liquidity through a $21 billion
fund, enhances a utility's ability to recover wildfire costs from
ratepayers with a more favorable prudency standard that places a
heavier burden of proof on intervenors and caps the cost
disallowance related to wildfire claims to 20% of the utility's
equity in its T&D rate base over a three-year period. PG&E's
liability cap is currently approximately $3 billion.
Since its emergence from bankruptcy in 2020, PCG's mostly new
senior management team, which has been in place for roughly two
years, has made noticeable improvements in the company's position
with key stakeholders including state regulators, political leaders
and customers. For example, last December, the California Public
Utilities Commission (CPUC) passed a unanimous resolution removing
PG&E from an enhanced oversight and enforcement process that it had
been placed under, citing corrective actions taken on the part of
the utility regarding vegetation management practices. Furthermore,
SB 884 was signed into law last September which should provide
legislative support for PG&E's long-term undergrounding plan to
bury 10,000 miles of its power lines in high fire risk areas over
the next approximately 10 years, which would also help to limit the
utility's exposure to wildfires.
Parent company PCG's positive outlook primarily reflects the
positive outlook on of its PG&E utility subsidiary, the key driver
of the overall organization's credit quality. As of September 30,
2022, PCG's holding company debt of about $4.6 billion accounted
for about 9% of consolidated debt and is structurally subordinated
to PG&E's approximately $44.5 billion of utility debt. PG&E's
rating considers its position as a large, fully regulated electric
and gas utility operating solely within California. The regulatory
framework offers several supportive cost recovery mechanisms, like
revenue decoupling, a forward test year and above average rates of
return.
Moody's note that PCG's consolidated credit metrics would typically
reflect a financial profile that would be commensurate with a
higher credit rating. However, financial metrics alone are not
representative of PCG's overall risk profile because of the
elevated wildfire risk as well as political risk and legal
challenges that remain.
For the 12-months ended September 30, 2022, Moody's estimate that
PCG and PG&E's ratios of cash flow from operations pre-working
capital changes (CFO pre-W/C) to debt were about 14% and 16%,
respectively, excluding the impact of securitization debt. Moody's
expect a modest, gradual improvement in their financial profiles
over the next two years, such that PCG's ratio of CFO pre-W/C to
debt should be in the 14-16% range and the utility's ratio of CFO
pre-W/C to debt should be in the 16-18% range. Moody's expect this
improvement to come primarily from increased cash flow generation
due to rate base growth. Moody's also expect holdco debt to
gradually decline as the company plans to pay down $2 billion of
this debt by the end of 2026, which is later than their original
plan of 2023.
Liquidity
PCG's SGL-2 speculative grade liquidity rating reflects a good
liquidity profile supported by relatively stable and predictable
cash flow generation and good availability on external credit
facilities. Going forward, Moody's expect PG&E to continue to
generate negative free cash flow as capital expenditures remain
elevated and the utility continues to invest heavily in wildfire
mitigation and infrastructure hardening. PCG's liquidity is
currently bolstered by the company's inability to distribute common
stock dividends to shareholders until it achieves a specific
earnings target, which Moody's expect will likely occur later this
year.
As of September 30, 2022, PCG had about $262 million of cash and
cash equivalents on its balance sheet which included $107 million
of cash at the utility. PCG had $500 million available on the
parent's $500 million senior secured (stock pledge only) revolving
credit facility, expiring in June 2025. The utility had $1.8
billion available on its $4.4 billion senior secured (all asset
pledge) revolver, expiring in June 2027, which includes a $1.5
billion letter of credit sublimit. The credit facilities have
extension options with lender approval. PG&E also has a $1.5
billion accounts receivable securitization facility that is
scheduled to terminate in September 2024, which had $1.3 billion
outstanding at September 30, 2022.
The credit facilities do not include a material adverse change
clause on each borrowing. The PCG credit facility has two financial
maintenance covenants including a limit on debt to capitalization
of no more than 70%; and, solely to the extent the credit facility
is drawn as of the end of any quarter, a minimum cash coverage
ratio of at least 1.5x prior to the date of the first dividend
declaration and of at least 1.0x thereafter. The PG&E credit
facility only has one financial maintenance covenant which limits
the debt to capitalization ratio to no more than 65%. Both
companies were in compliance with their respective facility
covenants.
The nearest debt maturity at PCG is a $2.7 billion Term Loan B due
June 2025. PG&E's near term maturities include $375 million first
mortgage bonds and a $125 million term loan due this year.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to an upgrade
PCG and PG&E's ratings could be upgraded if the utility continues
to successfully reduce catastrophic wildfire risk and the potential
for related liabilities through its substantial mitigating
investments, adheres to its wildfire mitigation plan as well as to
related state policies and standards, and maintains the required
wildfire safety certificate and access to the wildfire insurance
fund. An upgrade can also occur with a continued strengthening of
the organization's financial profile from improved cash flow
generation and debt reduction, particularly at the parent. PCG is
likely to be upgraded if PG&E is upgraded.
Factors that could lead to a downgrade
A downgrade of PCG or PG&E is unlikely given the positive outlook.
However, their outlooks could be changed to stable or their ratings
downgraded if the utility loses access to the wildfire insurance
fund or fails to maintain its annual wildfire safety certification.
The ratings could be downgraded if wildfire liabilities increase
materially as a result of new fires, or if state regulators do not
successfully implement the provisions of AB 1054. Downward pressure
could also occur if their financial profiles deteriorate such that
PCG's ratio of CFO pre-W/C to debt is sustained below 10% or PG&E's
ratio of CFO pre-W/C to debt is sustained below 13%. PCG is likely
to be downgraded if PG&E is downgraded.
Environmental, Social and Governance (ESG) Considerations
PCG's ESG Credit Impact Score is very highly negative (CIS-5),
where its ESG attributes are considered to be having a discernible
negative impact on the current credit rating. Its score reflects a
combination of very highly negative environmental risks, high
social risks and moderately negative governance risks.
Concurrent with the rating action, Moody's increased PCG's score
for Management Credibility and Track Record to a 3 from a 4 given
the success of the new senior management team in managing wildfire
risk and improving stakeholder relationships. The company's score
for Compliance and Reporting was also raised to a 2 from a 3
following the company's removal from the CPUC's enhanced oversight
process and successful receipt of its wildfire safety certificate.
As a result of these improvements, both PCG and PG&E's governance
issuer profile scores were raised to G-3 (moderately negative) from
G-4 (highly negative).
PG&E Corporation is a regulated utility holding company
headquartered in Oakland, California that conducts essentially all
of its business through Pacific Gas and Electric Company, a
regulated vertically integrated electric and gas utility serving
northern and central California with over 5.5 million electric
customers and 4.5 million natural gas customers. PG&E is regulated
by the California Public Utilities Commission (CPUC) and by the
Federal Energy Regulatory Commission (FERC). As of September 30,
2022, PCG's assets were about $117 billion with total reported debt
of approximately $50.7 billion.
The principal methodology used in these ratings was Regulated
Electric and Gas Utilities published in June 2017.
PLOURDE SAND & GRAVEL: Seeks Chapter 11 Bankruptcy
--------------------------------------------------
Plourde Sand & Gravel Co. Inc. filed for chapter 11 protection in
the District of New Hampshire.
The Debtor on the Petition Date filed motions to use cash
collateral and pay employee wages.
The Debtor disclosed $9,192,624 in assets against $8,072,411 in
liabilities in its schedules. The petition states that funds will
not be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
March 7, 2023 at 10:00 a.m. in Room Telephonically on telephone
conference line: 866-836-3228 (participant passcode: 7434886#).
About Plourde Sand & Gravel
Plourde Sand & Gravel Co. Inc. owns eight properties located in New
Hampshire having an aggregate total value of $5.34 million.
Plourde Sand & Gravel Co. Inc. filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.N.H. Case No. 23-10039)
on January 31, 2023. In the petition filed by Daniel O. Plourde, as
sole shareholder and vice president, the Debtor reported total
assets amounting to $9,192,623 and total liabilities of
$8,072,411.
An affiliate, Red Hat Realty, LLC, sought Chapter 11 protection
(Bankr. D.N.H. Case No. 23-10040) on Jan. 30, 2023.
The Debtor is represented by:
William S. Gannon, Esq.
William S. Gannon PLLC
P.O. Box 220
Suncook, NH 03275
Tel: 603 621-0833
Email: bgannon@gannonlawfirm.com
PUG LLC: EUR452M Bank Debt Trades at 26% Discount
-------------------------------------------------
Participations in a syndicated loan under which Pug LLC is a
borrower were trading in the secondary market around 74
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The EUR452 million facility is a Term loan that is scheduled to
mature on February 13, 2027. The amount is fully drawn and
outstanding.
PUG LLC provides an online marketplace for secondary tickets along
with payment support, logistics, and customer service. It acquired
the StubHub business of eBay Inc.
QUANERY SYSTEMS: Reaps $3.15 Million in Reopened Auction
--------------------------------------------------------
After reopening an auction to consider a late-filed topping bid, 3D
mapping technology firm Quanergy Systems Inc. has agreed to sell
the business to a third party tied to one of its board members.
According to court filings, the Debtor received four qualified bids
for the assets -- two were for only certain assets of the Debtor,
and the other two were for substantially all of the Debtor's
assets. An auction was conducted Jan. 26 but was adjourned to a
later date. Before the auction resumed on Jan. 30, the Debtor
received another bid from a prospective Bidder, which bid was for
substantially all of the Debtor's assets.
At the end of the Jan. 30 auction, the Debtor selected ROLISI, LLC,
as the successful bidder. Quanergy 3D, LLC, was named the
next-highest bidder.
Judge Craig T. Goldblatt approved the sale to ROLISI on Feb. 2,
2023.
ROLISI is a Florida limited liability company. ROLISI currently
has one owner, but a member of the Debtor's Board, Tamer Hassanein,
may become a member of ROLISI prior to or following the Closing
Date, and that therefore, a future member of ROLISI is an "insider"
of the Debtor.
Pursuant to an Asset Purchase Agreement dated as of Feb. 1, 2023,
ROLISI has agreed to acquire the business for a consideration of
$3,150,000 plus the assumption of liabilities, including all cure
costs. The initial offer by the buyer was $1,900,000.
Raymond James & Associates, Inc., the investment banker, conducted
a marketing process for the Debtor's assets.
About Quanergy Systems
Quanergy Systems, Inc., designs, develops and markets Light
Detection and Ranging (LiDAR) sensors and 3D perception software
solutions that enable intelligent, real-time detection, tracking
and classification of objects such as people and vehicles in
mission-critical markets such as security, smart cities and
industrial automation. The company is based in Sunnyvale, Calif.
Quanergy Systems sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. D. Delaware Case No. 22-11305) on Dec. 13,
2022, with $10 million to $50 million in both assets and
liabilities. Larry Perkins, chief restructuring officer of
Quanergy Systems, signed the petition.
The Debtor tapped Young Conaway Stargatt & Taylor, LLP and Cooley,
LLP as bankruptcy counsels; Seward & Kissel, LLP as special
counsel; SierraConstellation Partners as restructuring advisor; FTI
Consulting, Inc. as financial Advisor; and Raymond James Financial,
Inc. as investment Banker. Bankruptcy Management Solutions, Inc.,
doing business as Stretto, Inc., is the claims, noticing and
solicitation agent.
QUORUM HEALTH: $732M Bank Debt Trades at 31% Discount
-----------------------------------------------------
Participations in a syndicated loan under which Quorum Health Corp
is a borrower were trading in the secondary market around 69.2
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $732.2 million facility is a Term loan that is scheduled to
mature on April 29, 2025. About $715.7 million of the loan is
withdrawn and outstanding.
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. The company is majority-owned by
Davidson Kempner and GoldenTree Asset Management.
RB SIGMA: Amends Unsecureds & Franco Teriaco Secured Claims Pay
---------------------------------------------------------------
RB Sigma, LLC, submitted an Amended Plan of Reorganization dated
February 6, 2023.
The Debtor's financial projections show that the Debtor will have
total projected disposable income for the 5-year period of
$3,102,436. The Plan will disburse 100% of the Debtor's actual
Disposable Income for sixty months or until 100% of allowed claims
are paid in full.
The Debtor's actual Disposable Income will be determined on a
monthly basis beginning the first calendar month after the plan is
confirmed, but disbursements of the actual Disposable Income will
be made quarterly beginning with a disbursement on or before the
15th day of the of the calendar month following the calendar
quarter in which the Plan is confirmed. Regardless of the Projected
Disposable Income, the Debtor will only pay the Disposable Income
actually generated from its operations in full satisfaction of all
Claims.
This Plan of Reorganization under chapter 11 of the Bankruptcy Code
proposes to pay creditors of the Debtor from operations in the
ordinary course of business by the Reorganized Debtor.
Creditors holding Allowed Unsecured Claims in Class 3 will receive
distributions which the Debtor has estimated to be 100 cents on the
dollar. This Plan also provides for full payment of administrative
expenses and priority claims.
Class 2 consists of the Allowed Secured Claim of Franco Teriaco.
Franco Teriaco is owed a secured claim of $140,000.00 resulting
from a lawsuit settlement in which the Debtor transferred to Mr.
Teriaco a security interest in the Debtor's inventory. At the time
of filing, the Debtor estimated the value of its finished goods
inventory at $145,695.90 and of its inventory for resale at
$103,427.30. Accordingly, Mr. Teriaco's claim is fully secured. Mr.
Teriaco's Allowed Claim will retain its security interest in the
Debtor's inventory and will be paid in equal quarterly payments
with interest at the rate of 9.5 percent per annum over the 60
month term of the plan. The minimum quarterly payment amount will
be $8,820.78.
Class 3 consists of the Allowed General Unsecured Claims of
Creditors other those in Classes 1, 2, or 3. The Debtor estimates
that there is $1,419,059.85 in claims in this class as of the
Petition Date. These claims will be paid without interest in equal
quarterly payments over sixty months from the Debtor's actual
Disposable Income beginning on the 15th day of the calendar month
following the calendar quarter in which the Plan becomes effective.
The minimum quarterly payment amount will be $70,952.99.
Class 4 consists of the general unsecured claims held by Justin
Bloyd in the amount of $855,951.61 and Cynthia Bloyd in the amount
of $22,843.95. These claims will be paid without interest in
quarterly payments over the life of the plan from the Debtor's
Disposable Income in equal quarterly payments, but only if the
Debtor's Disposable Income at the end of any calendar quarter is
adequate to pay the quarterly payment requirements on all other
claims in full and, in addition, there is a minimum cash excess at
the end of the calendar quarter of 15%.
If the Debtor's actual Disposable Income is not adequate to pay the
quarterly payments on all other claims in full, or if the Debtor's
actual Disposable Income is adequate to pay the quarterly payments
on all other claims in full but there is a cash excess less than
15%, then no disbursement will be made on the claims in this class.
If the Debtor's actual Disposable Income is adequate to pay the
quarterly payments on all other claims in full and there is a cash
excess of at least 15%, then the excess shall be prorated and paid
to the holders of claims in this class.
The Plan will primarily be implemented and funded through the
future business operations of the Reorganized Debtor. The Debtor
intends to pay all allowed claims in full with its actual
Disposable Income from its operations.
A full-text copy of the Amended Plan dated February 6, 2023 is
available at https://bit.ly/3YnL0xY from PacerMonitor.com at no
charge.
About RB Sigma LLC
RB Sigma, LLC -- https://www.rbsigma.com/ -- supplies
mission-critical PPE products, provide six sigma training, and
consult and set up supply chains. It conducts business under the
name RB Medical Supply, LLC.
RB Sigma filed a petition for relief under Subchapter V of Chapter
11 of the Bankruptcy Code (Bankr. N.D. Ohio Case No. 22-12913) on
Sept. 28, 2022, with between $500,000 and $1 million in assets and
between $1 million and $10 million in liabilities. Frederic P.
Schwieg has been appointed as Subchapter V trustee.
Judge Jessica E. Price Smith oversees the case.
The Debtor is represented by Richard H. Nemeth, Esq., at Nemeth &
Associates, LLC.
REPLIMUNE GROUP: $200M Bank Debt Trades at 19% Discount
-------------------------------------------------------
Participations in a syndicated loan under which Replimune Group Inc
is a borrower were trading in the secondary market around 80.9
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $200 million facility is a Delay-Draw Term loan that is
scheduled to mature on October 1, 2027. About $32.1 million of the
loan is withdrawn and outstanding.
Replimune Group, Inc. operates as a clinical-stage bio-technology
company. The Company discovers and develops oncolytic immunotherapy
for the treatment of patients with cancer diseases. Replimune Group
serves customers in the United States.
REVLON INC: Target Corp. Has Plan Disclosure Objections
-------------------------------------------------------
Target Corporation filed an objection to Revlon Inc.'s motion for
approval of the disclosure statement explaining its Chapter 11
Plan.
Based in Minneapolis, Minnesota, Target Corp. is a leading general
merchandise retailer with stores in all 50 U.S. States and the
District of Columbia. Target employs 400,000+ team members and
serves guests at nearly 2,000 stores and online at Target.com.
Target has been and currently is a retailer of products
manufactured and/or distributed by the Debtors, including Revlon,
Inc., Revlon Consumer Products Corporation, and Elizabeth Arden,
Inc. Product liability claims have been asserted against Target
relating to talc or talc-containing products that were manufactured
and/or distributed by the Debtors. At this time, Target is aware
of four product liability claims and expects that more may arise in
the future, although the potential number of claims is unknown to
Target.
Target says the Debtors have an obligation to defend and indemnify
Target for damages, including any adverse award, attorneys' fees,
and costs, relating to the Product Liability Claims. Target has
tendered claims, including their defense and associated attorneys'
fees and costs, to the Debtors relating to the known Product
Liability Claims and holds claims in these cases. (See Claim Nos.
3733, 3796 and 4063, as amended by Claim Nos. 5765, 5767, and
5768.) One of those plaintiffs has filed a claim against the
Debtors in the amount of $5,000,000 (see Claim Nos. 1358 and 1362)
and another has filed a claim against the Debtors in the amount of
"above $250,000" (see Claim Nos. 2157, 2241, and 3767).
Target objects to Revlon's Disclosure Statement because it fails to
provide creditors and the Court with adequate information necessary
to evaluate the Plan on a number of key points. These critical
deficiencies include: insufficient definitions of core defined
terms of the Plan; insufficient clarity on key provisions of the
Plan; inadequate description of the products actually produced by
the Debtors that contain or allegedly contain talc; a failure to
describe the insurance coverage available for talc-related personal
injury claims, including the type and amount of coverage; failure
to describe any of the talc-related personal injury claims
commenced against the Debtors or their insurers to date and any
outcome on those claims; failure to adequately describe estimated
claims that may be brought against the Debtors, the insurance
coverage available to satisfy those claims, and any deficiency
claims that then may be paid from the Talc Personal Injury
Settlement, Other General Unsecured Claims or other applicable
classes of claims; and failure to include adequate supporting
information to evaluate potential distributions to Talc Personal
Injury Claims, Trade Claims and Other General Unsecured Claims.
Unless and until these deficiencies are rectified, Target says the
Court should not approve the Disclosure Statement or authorize
solicitation of votes on the Plan as currently proposed.
Target Corporation's attorneys:
Philip W. Allogramento III
CONNELL FOLEY LLP
875 Third Avenue, 21st Floor
New York, NY 10022
Tel: 212.307.3700
Email: pallogramento@connellfoley.com
- and -
Ryan T. Murphy
James C. Brand
FREDRIKSON & BYRON, P.A.
200 South Sixth Street, Suite 4000
Minneapolis, MN 55402-1425
Tel: (612) 492-7000
E-mail: rmurphy@fredlaw.com
jbrand@fredlaw.com
About Revlon Inc.
Revlon Inc. manufactures, markets and sells an extensive array of
beauty and personal care products worldwide, including color
cosmetics; fragrances; skin care; hair color, hair care and hair
treatments; beauty tools; men's grooming products; antiperspirant
deodorants; and other beauty care products. Today, Revlon's
diversified portfolio of brands is sold in approximately 150
countries around the world in most retail distribution channels,
including prestige, salon, mass, and online.
Since its breakthrough launch of the first opaque nail enamel in
1932, Revlon has provided consumers with high-quality product
innovation, performance and sophisticated glamour. In 2016, Revlon
acquired the iconic Elizabeth Arden company and its portfolio of
brands, including its leading designer, heritage and celebrity
fragrances.
Revlon is among the leading global beauty companies, with some of
the world's most iconic and desired brands and product offerings in
color cosmetics, skin care, hair color, hair care and fragrances
under brands such as Revlon, Revlon Professional, Elizabeth Arden,
Almay, Mitchum, CND, American Crew, Creme of Nature, Cutex, Juicy
Couture, Elizabeth Taylor, Britney Spears, Curve, John Varvatos,
Christina Aguilera and AllSaints.
Revlon sought Chapter 11 protection (Bankr. S.D.N.Y. Case No.
22-10760) on June 15, 2022. Fifty affiliates, including Almay,
Inc, Beautyge Brands USA, Inc., and Elizabeth Arden, Inc., also
sought bankruptcy protection on June 15 and June 16, 2022.
Revlon disclosed total assets of $2,328,093,000 against total
liabilities of $3,689,240,395 as of April 30, 2022.
The Hon. David S. Jones is the case judge.
The Debtors tapped Paul, Weiss, Rifkind, Wharton & Garrison, LLP as
bankruptcy counsel; Mololamken, LLC as special litigation counsel;
PJT Partners, LP as investment banker; KPMG, LLP as tax services
provider; and Alvarez & Marsal North America, LLC as restructuring
advisor. Robert M. Caruso and Matthew Kvarda of Alvarez & Marsal
serve as the Debtors' chief restructuring officer and interim chief
financial officer, respectively. Meanwhile, Kroll Restructuring
Administration, LLC is the Debtors' claims agent and administrative
advisor.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on June 24, 2022. Brown Rudnick, LLP, Province,
LLC and Houlihan Lokey Capital, Inc. serve as the committee's legal
counsel, financial advisor and investment banker, respectively.
RICHMOND HOSPITALITY: Hearing on Exclusivity Bid Set for Feb. 15
----------------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of New York is
set to hold a hearing on Feb. 15 to consider the motion filed by
Richmond Hospitality, LLC to extend the time it can keep exclusive
control of its bankruptcy case.
The motion seeks to extend the company's exclusivity period to file
a Chapter 11 plan to May 13, and solicit votes on the plan to July
12.
The extension is necessary to allow the proposed sale or assignment
of lease related to Richmond's hotel project to further develop,
the company's attorney wrote in his motion.
Moreover, the company has been involved in court proceedings that
need to be resolved. In particular, the court scheduled a hearing
on Feb. 28 to consider the viability of the lease and a hearing on
Feb. 15 to consider the company's objection to the claim of its
lender, Shaughnessy Capital, LLC.
Richmond obtained a loan from Shaughnessy to develop an 80-room
Best Western Vibe hotel in Staten Island.
About Richmond Hospitality
Richmond Hospitality, LLC is a real estate hotel development owner
and operator that was poised to develop an 80-room Best Western
Vibe hotel in Staten Island.
Richmond Hospitality filed its voluntary petition under Chapter 7
of the Bankruptcy Code on March 16, 2022. On May 18, 2022, the
court ordered the conversion of the case to one under Chapter 11
(Bankr. E.D.N.Y. Case No. 22-40507). At the time of the filing, the
Debtor listed $1 million to $10 million in both assets and
liabilities.
Judge Jil Mazer-Marino presides over the case.
Joseph S. Maniscalco, Esq., at LaMonica Herbst & Maniscalco, LLP
and Stuart R. Berg, P.C. serve as the Debtor's bankruptcy counsel
and special litigation counsel, respectively.
ROCK SPLITTERS: Wins Cash Collateral Access Thru March 23
---------------------------------------------------------
The U.S. Bankruptcy Court for the District of Massachusetts,
Central Division, authorized Rock Splitters, Inc. to continue using
cash collateral on a final basis through March 23, 2023.
A further hearing on the Debtor's further use of cash collateral is
set for March 23 at 11 a.m.
As previously reported by the Troubled Company Reporter, the Debtor
owes the Internal Revenue Service approximately $615,000 in
prepetition tax liabilities. The amount is subject to tax liens.
The Debtor owes the Massachusetts Department of Revenue
approximately $82,000 in prepetition tax liabilities of which
approximately $59,000 is asserted to be secured.
Nearly all of the tax debt purported to be owed is for withholding
taxes. The taxes have been personally assessed against the Debtor's
principal and he is on a payment plan with both the MDOR and IRS.
On August 8,2022, a judgment creditor, Huhtala Oil and Templeton
Garage, Inc., seized certain assets of the Debtor including a
truck, a compressor and a drilling machine. Upon the filing of the
bankruptcy case, the assets were released to the Debtor.
The Debtor, through counsel, has been in contact with the MDOR and
has entered into stipulation with the MDOR concerning use of cash
collateral.
The parties agree the Debtor will be permitted to use cash
collateral and MDOR will retain its pre-petition liens and security
interest in post-petition assets to the same perfection, validity,
priority, and extent as pre-petition.
The Debtor has been unable to communicate with the IRS. The Debtor
proposed that the IRS retain its pre-petition liens and security
interest in post-petition assets to the same perfection, validity,
priority, and extent as pre-petition. In addition, the Debtor would
continue to make payments of $278 per week to the IRS and provide
IRS with its monthly operating reports as they are filed and remain
current on all post-petition tax obligation filings and payments.
A copy of the order is available at https://bit.ly/3Xo4LEh from
PacerMonitor.com.
About Rock Splitters
Rock Splitters, Inc. is engaged in the business of blasting,
drilling, and splitting rocks in construction.
The Debtor filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. D. Mass. Case No. 22-40584) on Aug. 10,
2022, listing as much as $1 million in both assets and liabilities.
David Mawhinney serves as Subchapter V trustee.
Judge Elizabeth D. Katz oversees the case.
James O'Connor, Jr., Esq., at Nickless, Phillips and O'Connor
serves as the Debtor's bankruptcy counsel.
ROYAL CARIBBEAN: Moody's Affirms 'B2' CFR, Outlook Stable
---------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Royal Caribbean
Cruises Ltd.'s planned senior guaranteed note issuance and
concurrently upgraded the company's existing senior guaranteed
notes due 2029 to B2 from B3. The company's other existing ratings
were affirmed including its B2 corporate family rating, B2-PD
probability of default rating, Ba3 senior secured rating, and B3
senior unsecured rating. There is no change to the company's
speculative grade liquidity rating of SGL-3. The outlook is
stable.
Royal Caribbean's planned issuance of $700 million of senior
guaranteed notes will be guaranteed by RCI Holdings LLC. This
issuance will contain terms that are essentially the same as the
company's existing $1 billion senior guaranteed notes due 2029. RCI
Holdings LLC, the guarantor of the notes, is a subsidiary of Royal
Caribbean that owns the stock of the seven ship owning subsidiaries
that are part of the guarantee.
The B2 rating – one notch above the existing B3 unsecured rating
– reflects the value in the overall guarantee package which
includes the guarantee from RCI Holdings LLC.
Assignments:
Issuer: Royal Caribbean Cruises Ltd.
Backed Senior Unsecured Regular Bond/Debenture, Assigned B2
(LGD4)
Upgrades:
Issuer: Royal Caribbean Cruises Ltd.
Backed Senior Unsecured Regular Bond/Debenture, Upgraded to B2
(LGD4) from B3 (LGD4)
Affirmations:
Issuer: Royal Caribbean Cruises Ltd.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured Regular Bond/Debenture, Affirmed Ba3 (LGD2)
Senior Unsecured Regular Bond/Debenture, Affirmed B3 (LGD4)
Senior Unsecured Commercial Paper, Affirmed NP
Outlook Actions:
Issuer: Royal Caribbean Cruises Ltd.
Outlook, Remains Stable
RATINGS RATIONALE
Royal Caribbean's B2 corporate family rating is supported by its
adequate liquidity and its solid market position as the second
largest global ocean cruise operator based upon capacity and
revenue. Further support comes from Royal Caribbean's brand
strength and its good diversification by geography, brand, and
market segment. Moody's believes that over the long run, the
favorable value proposition of a cruise vacation, as well as a
group of loyal cruise customers will support a base level of
demand. Royal Caribbean's credit profile is constrained by its weak
credit metrics including debt/EBITDA that will be above 6.5x at the
end of 2023 (includes Moody's standard adjustments). The company's
EBITDA will continue to recover to 2019 levels in 2023 but free
cash flow available for debt reduction will be modest until 2024 at
the earliest. Normal ongoing credit risks include the highly
seasonal and capital intensive nature of cruise companies,
competition with all other vacation options and the exposure to
economic and industry cycles as well as weather related incidents
and geopolitical events.
The stable outlook reflects Royal Caribbean's adequate liquidity
and Moody's forecast that the company will generate positive
earnings leading to debt/EBITDA declining towards 6.5x in 2023.
Royal Caribbean's adequate liquidity is reflected in its good cash
balance and modest availability under its unrated $3 billion
revolving credit facility – total liquidity at December 31, 2022
was $2.9 billion. Total liquidity includes the $700 million
commitment for a 364-day term loan facility. $2.3 billion of the
company's revolving credit facility commitment expires in April
2025, the balance expires in 2024. Moody's forecast that the
company will have sufficient liquidity to repay about $2.6 billion
of maturities due in 2023. The company is subject to a fixed charge
coverage ratio covenant and net debt-to-capital covenant which
Moody's forecast the company will have adequate cushion over the
next 12 months. The company's alternate liquidity options are
limited, including the possible sale of a ship, brand or other
unecumbered asset, with the proceeds required to repay debt.
In accordance with Moody's Loss Given Default for Speculative-Grade
Companies (LGD) Methodology, the Ba3 rating on the company's
secured debt reflects the considerable amount of unsecured debt
(approximately $19 billion) below it in the capital structure. The
B2 rating on the planned, and existing, senior guaranteed notes
reflects the guarantee of RCI Holdings LLC. The B3 rating on the
existing unsecured debt – one notch below the corporate family
rating – reflects its structural subordination to $1.7 billion of
secured debt ahead of it in the capital structure.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if the company's earnings improve to a
level that allows for material debt reduction with debt/EBITDA
maintained below 5.0x with consistent positive free cash flow.
Upward rating pressure would also require good liquidity. Ratings
could be downgraded if liquidity weakened in any way, including due
to slower than anticipated earnings recovery, which could raise
refinancing risk. Ratings could also be downgraded if debt/EBITDA
will remain above 7.0x over the longer term, or if the company
cannot produce positive free cash flow.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Royal Caribbean (operating under the name Royal Caribbean Group) is
a global vacation company that operates three wholly-owned cruise
brands, including Royal Caribbean International, Celebrity Cruises
and Silversea. Net revenue for the trailing 12 months ended
September 30, 2022 was about $5.6 billion.
SEARS HOMETOWN: Spars with Transform Entities Over Agreements
-------------------------------------------------------------
Sears Authorized Hometown Stores, LLC and Sears Hometown Stores,
Inc.
ask the U.S. Bankruptcy Court for the District of Delaware to enter
an order (i) enforcing the automatic stay against Transform SR
Holding Management, LLC and the other related entities, and (ii)
awarding actual damages, including costs and attorneys' fees, for
the Transform Entities' willful violations of the automatic stay.
The Debtors distribute products through approximately 121 "Sears
Hometown Stores," which are locally owned and operated businesses
that offer the largest selection of the trusted names in home
appliances, lawn and garden equipment, and tools.
The Transform Entities provide inventory and critical services to
the Debtors in connection with their operations. Edward S.
Lampert's ESL Investments, Inc. owns 95% of Sears Hometown Stores,
Inc., and a majority of Transform HoldCo, which controls the
Transform Entities.
The Transform Entities and the Debtors are parties to two written
agreements: the Merchandising Agreement, through which the Debtors
purchase merchandise from certain of the Transform Entities, and
the Services Agreement, through which Transform Management provides
a wide array of services critical for the Debtors to operate their
businesses. The parties explicitly agreed that the two agreements
should be considered a single integrated agreement. The
Merchandising Agreement expressly provides for a 180-period of
"Transition Assistance" after termination or expiration. While the
Services Agreement does not expressly repeat the requirement to
provide "Transition Assistance," this fact is not significant,
because the agreements are explicitly integrated, according to the
Debtors.
The Debtors point out that the Transform Entities, however are
taking the legally and practically untenable position that they may
simply stop performing under the Services Agreement as of February
9, 2023, irrespective of the requirement to provide Transition
Assistance after February 8, 2023.
"The Transform Entities' actions amount to an anticipatory
repudiation of the Services Agreement, and therefore are a
violation of the automatic stay. A complete cessation of services
under the Services Agreement would mean the immediate end to the
Debtors' business operations, the conversion of these Chapter 11
Cases to cases under Chapter 7 and the loss of significant value
for the Debtors, their estates, and creditors," the Debtors tell
the Court.
"Additionally, the Transform Entities are improperly trying to
leverage the continued provision of services to compel the Debtors
to dismiss their Adversary Proceeding against the Transform
Entities, which seeks turnover of estate property, damages for
conversion and other relief. This is an improper "coercive" tactic,
and an independent violation of the automatic stay."
Objection
Transform SR LLC, Transform KM, LLC, Transform SR Holdings LLC, and
Transform SR Holding Management LLC, ask the Court to deny the
Debtors' motion in its entirety.
"The situation the Debtors now claim to find themselves in is due
solely to their failure to plan for the fact that the Services
Agreement clearly expires by its own terms on February 1, 20235 --
a fact that the Debtors and their counsel knew or should have known
about and for which they should have prepared. In an effort to save
themselves from their own mistakes, the Debtors both misinterpret
the relevant agreements and misstate the law as to what constitutes
a violation of the automatic stay," the Transform Entities tell the
Court.
"First, the Debtors are wrong about the agreements. The
contractual provisions that the Debtors assert obligate the
Transform Entities to temporarily continue to provide services
under the Services Agreement after the expiration of the term do no
such thing. The language of the relevant provision (the
"Transition Provision") of the Merchandising Agreement clearly and
unambiguously refers to only those services directly related to the
Products and the Merchandising Agreement, and none of the law
relied upon by the Debtors alters this immutable fact," the
Transform Entities aver.
"Moreover, the Debtors' argument that the clear and unambiguous
effect of
the Transition Provision on the Services Agreement (or, more
appropriately, the lack thereof) renders it illusory is complete
nonsense. The only basis for the Debtors to assert that the
provision is illusory is their own lack of prudence and failure to
plan for the expiration of the relevant agreements. There is
nothing that would have prevented the Debtors from performing the
services themselves, or hiring another party to provide them. The
Debtors cannot use their own mistakes and mismanagement to rewrite
the clear language of the relevant contracts."
About Sears Authorized Hometown Stores
Sears Authorized Hometown Stores, LLC distributes products through
approximately 121 "Sears Hometown Stores," which are locally owned
and operated businesses that offer a selection of the trusted names
in home appliances, lawn and garden equipment, and tools.
Sears Authorized Hometown Stores, LLC and Sears Hometown Stores,
Inc. sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. D. Del. Lead Case No. 22-11303) on December 12, 2022.
In the petition signed by Elissa Robertson, CEO, Sears Authorized
Hometown disclosed up to $50 million in assets and up to $100
million in liabilities.
Judge Laurie Selber Silverstein oversees the cases.
Saul Ewing LLP is the Debtors' legal counsel. The Debtors tapped
Gray & Company, LLC as financial advisor and Stretto as claims and
noticing agent.
SERTA SIMMONS: $851M Bank Debt Trades at 44% Discount
-----------------------------------------------------
Participations in a syndicated loan under which Serta Simmons
Bedding LLC is a borrower were trading in the secondary market
around 55.9 cents-on-the-dollar during the week ended Friday,
February 10, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $851 million facility is a Term loan that is scheduled to
mature on August 10, 2023. The amount is fully drawn and
outstanding.
Serta Simmons Bedding, LLC manufactures bedding products. The
Company sells blankets, sheets, bed frames, mattress protectors,
and accessories.
SHEFA LLC: Files for Chapter 11; Southfield Seeks Conversion
------------------------------------------------------------
Shefa LLC filed for chapter 11 protection in the Eastern District
of Michigan.
The Debtor, a Single Asset Real Estate, has filed an application to
employ Colliers International Detroit, LLC, and Robert Haver as
real estate broker.
On the other hand, an interested party, the City of Southfield,
Michigan, immediately filed a motion to convert the case to a
Chapter 7 liquidation.
According to court filings, Shefa LLC estimates between $1 million
and $10 million in total debt owed to 1 to 49 creditors. The
petition states that funds will be available to unsecured
creditors.
About Shefa LLC
Shefa LLC is a Single Asset Real Estate as defined in 11 U.S.C.
Section 101(51B).
Shefa LLC filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. E.D. Mich. Case No. 23-40908) on Feb. 1,
2022. In the petition filed by principal, as manager, the Debtor
reported assets and liabilities between $1 million and $10
million.
The Debtor is represented by:
Robert N. Bassel, Esq.
P.O. Box T
16400 J L Hudson Dr
Southfield, MI 48075
SHERRITT INTERNATIONAL: DBRS Confirms B Issuer Rating
-----------------------------------------------------
DBRS Limited upgraded the Recovery Rating of Sherritt International
Corporation to RR5 from RR6, resulting in the rating on the
Company's Second Lien Notes (the Notes) being upgraded to B (low)
from CCC (high), and confirmed Sherritt's Issuer Rating at B. All
trends are Stable. The confirmation of the Issuer Rating is mainly
due to the support of Sherritt's financial risk profile, which is
within the BB range and continues to improve. The improvement in
the financial risk profile is a consequence of nickel and cobalt
price realizations increasing by 42% and 63%, respectively, in the
last 12 months ended September 30, 2022 (LTM Sep 30 2022) compared
with the last 12 months ended September 30, 2021 (LTM Sep 30 2021).
The rating confirmation is also supported by Sherritt's business
risk profile, which remains in the BB category and accounts for the
Company's (1) relatively long reserve life and (2) favorable
operating cost structure at its nickel operations. DBRS Morningstar
notes that the overlay factors for sovereign risk, other financial
considerations, and ESG considerations were used to temper the
final Issuer Rating.
The upgrade of the Recovery Rating to RR5 is due to Sherritt's
repurchase of $41 million of Notes on June 1, 2022, and a further
repurchase of $88 million of Notes on December 1, 2022, resulting
in a reduction of approximately 35% in the principal amount
currently outstanding on the Notes compared with March 31, 2022.
DBRS Morningstar notes that the Recovery Rating of RR5 results in a
one-notch differential from Sherritt's Issuer Rating of B. The
trends are Stable due to the steady outlook for nickel and cobalt
prices from 2023 to 2025 (based on the Bloomberg consensus as of
November 23, 2022).
On October 13, 2022, Sherritt announced a new five-year agreement,
commencing January 1, 2023, for settling $362 million of
outstanding receivables from its 33%-owned Energas S.A. (Energas)
in Cuba. Under the agreement, the Moa Joint Venture (JV) will
prioritize paying dividends in finished cobalt up to an annual
maximum volume of 2,082 tons (100% basis). Essentially, Energas
will exchange Sherritt's U.S. dollar-denominated debt and trade
payables for a loan denominated in Cuban pesos. The Moa JV will
deliver the Cuban partner's share of Moa's cobalt production, up to
1,041 tons per year for five years, directly to Sherritt, which
then can sell the cobalt, along with its own share from the Moa JV,
for U.S. dollars to international customers. Payments from these
international customers will then flow back to Sherritt, with the
final amount subject to spot market pricing at the time. DBRS
Morningstar notes that the transaction converts a stream of
receivables to a stream of inventory that when sold can amount to a
change in non-cash working capital. This amount would not be
included in DBRS Morningstar's financial risk metrics.
Nevertheless, the Company's liquidity position would improve as a
result of an increase in Sherritt's cash balances.
That said, the Company continues to have significant cash balances
and outstanding unpaid receivables associated with its Cuban
operations. At the end of Q3 2022, Sherritt reported a cash balance
of $137.6 million, including $95.8 million of cash held at the
Company's Power operations in Cuba and USD153.2 million in overdue
Power and Oil and Gas receivables held in Cuba. DBRS Morningstar
notes that during LTM Sep 30 2022 Sherritt received $43.4 million
in dividends from its Moa JV compared with $62.2 million in LTM Sep
30 2021.
The low-risk brownfield expansion at the Moa JV's nickel and cobalt
operations continues to progress. Among the near-term project
milestones is the completion of the final draft of the National
Instrument 43-101 report expected to be completed by the end of Q1
2023. The expansion project is considered relatively
carbon-friendly compared with the riskier and more carbon-intensive
oil and gas development that the Company previously pursued in
Cuba.
DBRS Morningstar notes that a further significant reduction in the
principal amount maturing on the Notes could result in another
positive rating action on the Notes. However, a sustained
suspension of dividends from the Moa JV or a protracted delay and
material cost overruns at the Moa JV expansion project could
trigger a potential negative rating action.
Notes: All figures are in Canadian dollars unless otherwise noted.
SOUTH BAY PROPERTY: Hits Chapter 11 Bankruptcy Protection
---------------------------------------------------------
South Bay Property Homes LLC filed for chapter 11 protection in the
District of Central California.
The Debtor commenced the instant case in good faith, with the
intention to establish a plan of reorganization to timely pay its
creditors in a manner to be overseen by the Court.
The Debtor owns the real property 27009 Sea Vista Drive, Malibu,
California.
The Debtor on the Petition Date filed a motion to extend the
deadline for the Debtor to file its schedules of assets and
liabilities, related schedules and disclosures, and statement of
financial affairs
by 30 days.
In seeking an extension, the Debtor's counsel explains that since
the Petition Date, the Debtor and its proposed counsel have spent
significant time discussing the issues related to the stay of the
foreclosure of the Property, negotiating with secured creditors,
and engaging in analysis of strategy and the initial DIP compliance
including the 7 Day Package for the U.S. Trustee.
According to court filings, South Bay Property Homes estimates
between $1 million and $10 million in debt to 1 to 49 creditors.
The petition states that funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
Feb. 23, 2023 at 10:00 a.m. in Room Telephonically on telephone
conference line: 1-866-820-9498, participant passcode:6468388).
About South Bay Property Homes
South Bay Property Homes LLC is a premier real estate solutions
company.
South Bay Property Homes LLC filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. C.D. Cal. Case No.
23-10061) on Jan. 31, 2023. In the petition filed by Steve Miller,
as manager, the Debtor reported assets and liabilities between $1
million and $10 million.
The Debtor is represented by:
Leslie A Cohen, Esq.
Leslie Cohen Law PC
27009 Sea Vista Drive
Malibu, CA 90265
Tel: 310 394 5900
Fax: 310 394 9280
Email: leslie@lesliecohenlaw.com
jaime@lesliecohenlaw.com
SPEEDY O'HARE: Unsecured Creditors to Split $30K in Plan
--------------------------------------------------------
The Speedy O'Hare Express, Inc., filed with the U.S. Bankruptcy
Court for the Middle District of Tennessee a Chapter 11 Plan dated
February 6, 2023.
The Plan states whether each class of claims or interests is
impaired or unimpaired. The Plan provides the treatment each class
will receive under the Plan.
Class 3-A consists of the Secured claim of Amur Equipment Finance.
This claimant shall receive its contractual payment of $1,225.00
which shall bear interest at the rate of 4.0% per annum. The
payments herein shall continue until this claim is paid in full.
Class 3-B consists of the Secured claim of Ascentium Capital. This
claimant shall receive its contractual payment of $1,500.00 which
shall bear interest at the rate of 6.0% per annum. The payments
herein shall continue until this claim is paid in full.
Class 3-C consists of the Secured claim of MHC Financial Services.
This claimant shall receive payments of $1,026.50 which shall bear
interest at the rate of 6.0% per annum.
Class 3-D consists of the Secured claim of Small Business
Administration. This claimant shall be deemed unsecured and treated
as a Class IV unsecured creditor.
Class 4 consists of General unsecured claims. This claimant shall
receive its contractual payment of $500.00 The payments herein
shall continue until the total amount paid in this class equals
$30,000.00. The allowed unsecured claims total $445,747.00. Monthly
payments shall be made on a pro rata basis based on the value of
each unsecured claim. Any plan payments returned to the Debtor by
unsecured creditors shall become property of the reorganized
Debtor.
Class 5 interest holders will maintain all stock.
The Plan will be funded by the proceeds from operation of the
Debtor's income and sale of the Debtor's trucking business.
A full-text copy of the Chapter 11 Plan dated February 6, 2023 is
available at https://bit.ly/3YJmpU8 from PacerMonitor.com at no
charge.
Counsel to the Debtor:
Steven L. Lefkovitz, Esq.
908 Harpeth Valley Place
Nashville, TN 37221
Phone: (615) 256-8300
Fax: (615) 255-4516
Email: slefkovitz@lefkovitz.com
About The Speedy O'Hare
The Speedy O'Hare Express, Inc. filed Chapter 11 Petition (Bankr.
M.D. Tenn. Case No. 22-03641) on November 9, 2022. The Debtor is
represented by Steven L. Lefkovitz, Esq. of LEFKOVITZ & LEFKOVITZ.
ST. CHARLES MEMORY: Court OKs Interim Cash Collateral Access
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Texas, Fort
Worth Division, authorized St. Charles Memory Care, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 15% variance.
An immediate and critical need exists for the Debtor to use cash
collateral for the continued operation and rehabilitation of its
existing business.
BMO Harris Bank is the Debtor's secured creditor claiming liens on
the Debtor's personal property including rents.
As of the Petition Date, the Secured Lender claims the Debtor owes
approximately $7.506 million in principal with respect of loans
made by the Secured Lender to the Debtor pursuant to, and in
accordance with the pre-petition loan agreement.
As adequate protection, the Secured Lender is granted a
post-petition claim against the Debtor's estate. To secure the
Adequate Protection Claim, the Secured Lender is granted valid,
binding, enforceable, and perfected liens co-extensive with the
Secured Lender's pre-petition liens in the Debtor's assets.
The occurrence of any of the following will constitute a
Termination Event:
(a) The chapter 11 Case is either dismissed or converted to a
case under chapter 7 of the Bankruptcy Code;
(b) A trustee or an examiner with the expanded powers of a
trustee is appointed in the Case;
(c) Without the prior written consent of the Secured Lender,
(i) the Debtor takes any action or ceases operations of its present
businesses or takes any material action (which is inconsistent with
the Budget) for the purpose of effecting the foregoing or (ii) or
there shall occur a dissolution or termination of the existence of
the Debtor or any subsidiary of the Debtor;
(d) Non-compliance or default by the Debtor with any of the
terms and provisions of this Order after a seven-day notice of
default and opportunity to cure the default;
(e) Any other super-priority claim or lien equal or superior
in priority to that granted pursuant to or permitted hereunder
shall be granted except on motion filed with the Court for such
approval; or
(f) The automatic stay of section 362 of the Bankruptcy Code
is lifted so as to allow a the Secured Lender or a third party to
proceed against any asset of the Debtor valued at $75,000 or more.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3lgpiNC from PacerMonitor.com.
The Debtor projects $271,298 in total operating revenue and
$270,730 in total operating expenses.
About St. Charles Memory Care, LLC
St. Charles Memory Care, LLC operates a continuing care retirement
community and assisted living facility for the elderly.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Tex. Case No. 23-40253) on January 27,
2023. In the petition signed by Tracy Bazzell, agent, the Debtor
disclosed up to $10 million in assets and up to $50 million in
liabilities.
Judge Mark X. Mullin oversees the case.
Joyce W. Lindauer, Esq., at Joyce W. Lindauer Attorney, PLLC,
represents the Debtor as legal counsel.
STANDARD BUILDING: Fitch Affirms 'BB' LongTerm IDR, Outlook Stable
------------------------------------------------------------------
Fitch Ratings has affirmed the ratings of Standard Building
Solutions Inc. (Standard), including its Long-Term (LT) Issuer
Default Rating (IDR) at 'BB'. The Rating Outlook is Stable.
Standard's ratings reflect the company's leading market positions
within its business segments, high exposure to relatively
less-cyclical repair and replacement end-markets, robust liquidity
position, and strong EBITDA and FCF generation. Long-term risk
factors include high leverage, volatile raw material costs, the
cyclicality of some of the company's end-markets, and its history
of occasionally-sizable distributions to its parent.
KEY RATING DRIVERS
Leadership Position: Standard is the No. 1 manufacturer of
residential and commercial roofing products in North America, and
the leading manufacturer of flat and pitched roofing systems in
Europe. Fitch believes a leading market position and meaningful
market share often beget pricing power and provide advantages in
terms of shelf-space allocation within distribution channels. This
is reflected in EBITDA margins that are stronger than its
investment-grade building products peers and relatively stable
margins even during periods of inflationary input costs.
Weaker Operating Environment: Fitch forecasts a weaker demand
environment for Standard in 2023 as new residential and residential
repair and remodel activity are projected to decline in the U.S.
and Europe amid an uncertain economic backdrop. Fitch expects
Standard's revenue to decline 7.5%-8.5% in 2023, mainly driven by
volume declines in residential roofing activity and slightly lower
selling prices, offset by modest growth in commercial construction
activity. Fitch's rating case forecast assumes revenue flattens in
2024, which incorporates Fitch's expectation of further weakness in
the U.S. residential new construction offset by an improvement in
re-roofing activity.
Fitch projects EBITDA margin to compress to 18.0%-18.5% in 2023 due
to the impact of operating leverage with a lower topline, in
addition to diminished pricing power in the face of still-elevated
input costs. EBITDA margin is projected to expand modestly in 2024
as input cost pressures tend to alleviate in weaker demand
environments.
Elevated Leverage Levels: EBITDA leverage is projected to end 2022
at 4.2x, down from 4.5x in 2021, due to a combination of EBITDA
growth and modest debt reduction. Fitch expects EBITDA leverage to
increase to about 4.6x in 2023, driven by lower revenue and some
further compression in EBITDA margin, despite FCF allocated to term
loan prepayments. Longer term, Fitch expects Standard to operate
with EBITDA leverage around 4.0x.
Standard Industries Ownership: Standard Industries Inc. is a
privately-held holding company that owns Standard Building
Solutions Inc. and W.R Grace & Co., a specialty chemicals and
materials producer. In September 2021, Standard Industries acquired
Grace, and funded the acquisition, in part, with a $3.1 billion
cash dividend from Standard Building Solutions. Standard funded the
dividend with balance sheet cash and the issuance of a $2.5 billion
senior secured term loan due 2028.
While Fitch does not expect Standard to regularly pay large
dividends to Standard Industries, unique circumstances such as
additional acquisitions by the parent may require the upstream of
meaningful dividends from Standard, which could temporarily weaken
its credit profile.
Diverse Sources of Revenues: Fitch views Standard's end-market
exposure as a credit positive as roofing repair and replacement is
largely nondiscretionary and less volatile than new construction
through the cycle, providing stability to margins and cash flows.
The company's products are sold primarily to the residential and
commercial end-markets in the U.S. and Europe, providing Standard
with exposure to sectors that typically have different cycle times.
Fitch estimates that about 75% of Standard's sales are derived from
repair and replacement-driven demand, with the balance from new
construction activity.
Strong Profitability: Standard's EBITDA margin is strong relative
to investment-grade-rated U.S. building products peers. Despite
some margin compression in 2022 and Fitch's expectation for further
contraction in 2023, Standard's profitability is expected to remain
in-line with or stronger than these peers.
The company also generates strong FCF (cash flow after capex and
dividends), although FCF can at times be erratic depending on
dividend payments to its parent, Standard Industries Inc. Standard
generated FCF in 2018, 2020 and 2021, with an outsized dividend in
2019 that caused FCF to be negative. FCF is projected to be
negative in 2022 due to meaningful working capital investments and
a sizable dividend to parent. FCF margins are expected to be in the
low- to mid-single digits during the forecast period.
Balanced Growth Strategy: Fitch views Standard's growth strategy as
a credit positive since the company balances organic and inorganic
growth. Standard has made both bolt-on and transformational
acquisitions as well as significant capital investments to fuel
organic growth. Fitch expects capex levels to remain elevated in
2023, as the company invests in a number of growth initiatives,
including increasing its manufacturing capacity.
The company began its international expansion in 2016 with the $1.0
billion acquisition of Icopal, a European manufacturer of roofing
and waterproofing products. In 2017, Standard acquired Braas Monier
for $1.1 billion, a manufacturer of pitched roofing products in
Europe, South Africa and parts of Asia, which it combined with
Icopal to create BMI, offering a broader suite of roofing products.
Fitch expects the company to continue to make non-transformative,
bolt-on acquisitions.
DERIVATION SUMMARY
Standard's credit metrics are meaningfully weaker than
low-investment-grade building products peers, including Owens
Corning (BBB/Stable), RPM International, Inc. (BBB-/Stable), and
James Hardie Industries plc (BBB-/Stable). The company has a less
diverse product portfolio than Owens Corning and RPM, but has lower
exposure to more volatile new construction end-markets than these
peers. The company's profitability and cash flow metrics are
in-line with Owens Corning's and stronger than RPM's.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within the Rating Case for the Issuer
Include
- Standard's revenue declines 7.5%-8.5% in 2023 and flattens in
2024 due to lower residential roofing volumes and diminished
ability to implement additional price increases;
- Higher input costs and a lower topline cause EBITDA margins to
contract to 18.0%-18.5% in 2023 and 2024;
- FCF margins of 4.5%-5.0% in 2023 aided by some cash inflow from
working capital reduction;
- FCF applied toward prepayments on senior secured term loan;
- EBITDA leverage of 4.2x at YE2022, 4.6x at YE2023 and 4.3x at
YE2024.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch's expectation that EBITDA leverage will be sustained below
3.8x;
- EBITDA interest coverage sustained above 5.3x.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch's expectation that EBITDA leverage will be sustained above
4.5x or EBITDA net leverage will be sustained above 4.0x;
- EBITDA interest coverage falling below 4.0x;
- Shareholder-friendly capital allocation during a construction
downturn or period of economic distress.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity Position: Standard's liquidity position is
supported by the company's cash on hand, ABL and FCF generating
ability. The company's next maturity is in November 2026 when
EUR800 million of notes come due. As of Oct. 2, 2022, the company
had USD777 million of cash and cash equivalents and about USD609
million of availability under its US650 million ABL which matures
in December 2024.
ISSUER PROFILE
Standard Building Solutions Inc. is one of the largest
manufacturers of residential and commercial roofing in the U.S. and
the leading manufacturer of flat and pitched roofing systems in
Europe. Standard also manufactures waterproofing products,
insulation products, aggregates, specialty construction and other
products. In 2022, the company changed its name to Standard
Building Solutions Inc. from Standard Industries Inc., and parent
Standard Industries Holdings Inc. was renamed Standard Industries
Inc.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Standard Building
Solutions Inc. LT IDR BB Affirmed BB
senior unsecured LT BB Affirmed RR4 BB
senior secured LT BBB- Affirmed RR1 BBB-
senior secured LT BB+ Affirmed RR2 BB+
STONEMOR INC: Moody's Withdraws 'B3' Corporate Family Rating
------------------------------------------------------------
Moody's Investors Service has withdrawn StoneMor Inc.'s ratings,
including its B3 Corporate Family Rating, the B3-PD Probability of
Default Rating, the SGL-2 Speculative Grade Liquidity rating and B3
Senior Secured rating. Prior to the withdrawal, the outlook was
stable.
Withdrawals:
Issuer: StoneMor Inc.
Corporate Family Rating, Withdrawn, previously rated B3
Probability of Default Rating, Withdrawn, previously rated B3-PD
Speculative Grade Liquidity Rating, Withdrawn, previously rated
SGL-2
Gtd Senior Secured Global Notes, Withdrawn, previously rated B3
(LGD3)
Outlook Actions:
Issuer: StoneMor Inc.
Outlook, Changed To Rating Withdrawn From Stable
RATINGS RATIONALE
Moody's has decided to withdraw the ratings for its own business
reasons.
StoneMor, Inc., based in Bensalem, PA and controlled by affiliates
of Axar Capital Management L.P., is a provider of funeral and
cemetery products and services in the United States and Puerto
Rico.
TECHNICAL COMMUNICATIONS: Raises 'Going Concern' Doubt
------------------------------------------------------
Technical Communications Corporation filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q for the
period ended Dec. 24, 2022.
For the quarter ended Dec. 24, 2022, the Company generated a net
loss of $848,600 and for the fiscal years ended Sept. 24, 2022,
Sept. 25, 2021 and Sept. 26, 2020, the Company generated net losses
of $2,331,139, $1,088,386 and $910,650 and, although the Company
generated $631,426 of net income in the fiscal year ended Sept. 28,
2019, the Company suffered recurring losses from operations during
the prior seven year period from fiscal 2012 to fiscal 2018. The
Company has an accumulated deficit of $7,333,706 at Dec. 24, 2022.
The Company said these factors continue to raise substantial doubt
about the Company's ability to continue as a going concern.
"In order to have sufficient capital resources to fund operations,
the Company has been working diligently to secure several large
orders with new and existing customers," Technical Communications
stated. "The receipt of these orders has been significantly
delayed and will continue to be difficult to predict due to the
impact of the COVID-19 pandemic on our customers as a result of
their operations being reduced or shut down. TCC has been able to
maintain its operations during this sustained period of disruption,
but a continuation of the disruption in either our customers'
operations or those of the Company will continue to have a material
adverse impact on sales activity and revenue.
"During fiscal year 2020, the Company was granted a loan from the
SBA in the principal amount of $150,000 pursuant to the Economic
Injury Disaster Loan program. This loan is payable monthly over 30
years at an annual interest rate of 3.75% commencing thirty months
from the date of issuance.
"The Company is working diligently to secure additional capital
through equity or debt arrangements in addition to the recent
funding received from the SBA and Mr. Guild. The Company is
actively working with equity investors as well as debt investors,
such as the SBA and Mr. Guild to secure additional funding,
although we cannot provide assurances we will be able to secure
such new funding, especially in light of the tightening of the
credit markets and continuing volatility of the capital markets as
a result of the coronavirus. Moreover, the Company's common stock
was delisted from the Nasdaq Capital Market effective January 25,
2021; while the common stock is quoted on the OTC Bulletin Board,
the change in listing may have a negative impact on the liquidity
of the stock and the Company's ability to raise capital through
offerings of its equity securities.
"Should the Company be unsuccessful in these efforts, it would be
forced to implement headcount reductions, additional employee
furloughs and/or reduced hours for certain employees, or cease
operations completely."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000096699/000117184323000767/tcco20221231_10q.htm
About Technical Communications
Concord, Massachusetts-based Technical Communications Corporation
-- http://www.tccsecure.com-- specializes in secure communications
systems and customized solutions to protect highly sensitive voice,
data and video transmitted over a wide range of networks, serving
government entities, military agencies, and corporate enterprises.
As of Dec. 24, 2022, the Company had $1.91 million in total assets,
$4.68 million in total liabilities, and a total stockholders'
deficit of $2.77 million.
Westborough, Massachusetts-based Stowe & Degon LLC, Technical
Communications Corporation's auditor since 2019, issued a "going
concern" qualification in its report dated Dec. 22, 2022, citing
that the Company has an accumulated deficit, has suffered
significant net losses and negative cash flows from operations and
has limited working capital that raise substantial doubt about its
ability to continue as a going concern.
TELESAT LLC: $1.91B Bank Debt Trades at 44% Discount
----------------------------------------------------
Participations in a syndicated loan under which Telesat LLC is a
borrower were trading in the secondary market around 55.7
cents-on-the-dollar during the week ended Friday, February 10,
2023, according to Bloomberg's Evaluated Pricing service data.
The $1.91 billion facility is a Term loan that is scheduled to
mature on December 6, 2026. About $1.55 billion of the loan is
withdrawn and outstanding.
Telesat LLC operates as a satellite operator. The Company offers
satellite delivered communications solutions to broadcast, telecom,
corporate, and government customers, as well as provides technical
consultancy services. Telesat serves clients worldwide.
TEXSTAR COUNTRY: Unsecureds to Get Share of GUC Pool in Plan
------------------------------------------------------------
Texstar Country Store, LLC, filed with the U.S. Bankruptcy Court
for the Northern District of Texas a Plan of Reorganization dated
February 6, 2023.
The Debtor operates a country store in Palestine, Texas, offering a
full restaurant menu, convenience items, groceries, and fuel.
On December 11, 2021, there was a building fire due to electrical
equipment malfunction. Despite being insured for such a loss, the
insurance company underpaid the claim by more than $210,000. As
such, the Debtor was compelled to use both its working capital and
additional high-interest debt to complete the reconstruction and
reopen. The Debtor is currently in the process of litigating with
the insurance carrier in an effort to recover the damages it
sustained.
The Plan provides for a reorganization and restructuring of the
Debtor's financial obligations. The Plan provides for a
distribution to Creditors in accordance with the terms of the Plan
from the Debtor over the course of 5 years from the Debtor's
continued business operations.
This Plan provides for the payment of administrative and priority
claims.
Class 3 consists of Allowed Non-priority Unsecured Claims against
Debtor (including Claims arising from the rejection of executory
contracts and/or unexpired leases) other than: (i) Administrative
Claims; (ii) Priority Tax Claims; or (iii) Claims included within
any other Class designated in this Plan. Class 3 shall be deemed to
include those Creditor(s) holding an alleged Secured Claim against
Debtor, for which: (y) no collateral exists to secure the alleged
Secured Claim; and/or (z) liens, security interests, or other
encumbrances that are senior in priority to the alleged Secured
Claim exceed the fair market value of the collateral securing such
alleged Secured Claims as of the Petition Date.
Each holder of an Allowed Unsecured Claim in Class 3 shall be paid
by Reorganized Debtor from an Unsecured Creditor Pool, which pool
shall be funded at the rate of $350 per month. Payments from the
unsecured creditor pool shall be paid quarterly, for a period not
to exceed 5 years (20 quarterly payments) and the first quarterly
payment will be due on the 20th day of the 18th full calendar month
following the last day of the first quarter. Debtor estimates the
aggregate of all Allowed Class 3 Claims is $195,000 based upon
Debtor's review of the Court's claim register, Debtor's bankruptcy
schedules, and anticipated Claim objections.
There is litigation pending between the Debtor and its insurer
relative to a fire claim tendered by the Debtor. In the event the
Reorganized Debtor is successful in that litigation, Reorganized
Debtor shall pay into the Unsecured Creditor Pool the lesser of
100% of the funds actually received by the Reorganized Debtor, or
that sum which is necessary to pay all remaining holders of Allowed
Class 3 Claims in full.
Class 4 consists of the holders of Allowed Interests in the Debtor.
The holder of an Allowed Class 4 Interest shall retain their
interests in the Reorganized Debtor.
The Debtor proposes to implement and consummate this Plan through
the means contemplated by §§ 1123 and 1145(a) of the Bankruptcy
Code.
A full-text copy of the Plan of Reorganization dated February 6,
2023 is available at https://bit.ly/3jPFxB4 from PacerMonitor.com
at no charge.
Attorneys for the Debtor:
Robert T. DeMarco, Esq.
Michael S. Mitchell, Esq.
DeMarco-Mitchell, PLLC
1255 W. 15th Street, 805
Plano, TX 75075
Tel: 972-578-1400
Fax: 972-346-6791
Email: robert@demarcomitchell.com
mike@demarcomitchell.com
About Texstar Country Store
Texstar Country Store, LLC operates a country store in Palestine,
Texas, offering a full restaurant menu, convenience items,
groceries, and fuel. The Debtor sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. N.D. Texas Case No. 22-32114)
on Nov. 8, 2022. In the petition signed by its managing member, Jan
Dombach, the Debtor disclosed up to $500,000 in both assets and
liabilities.
Judge Michelle V. Larson oversees the case.
DeMarco Mitchell, PLLC and Chad T. Wilson Law Firm, PLLC serve as
the Debtor's bankruptcy counsel and special litigation counsel,
respectively.
TGP HOLDINGS: First Trust Fund II Marks $677,000 Loan at 20% Off
----------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$677,143 loan extended to Traeger Grills (TGP Holdings III, LLC) at
$541,972 or 80% of the outstanding amount, as of November 30, 2022,
according to a disclosure contained in the First Trust fund's Form
N-CSRS for the six months ended November 30, 2022, filed with the
Securities and Exchange Commission on February 2, 2023.
First Trust SFRIFII is a participant in a Term Loan B to TGP
Holdings III LLC. The loan accrues interest at a rate of 7.32% (1
Mo. LIBOR + 3.25%, 0.75% Floor) per annum. The loan matures on June
24, 2028.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
Headquartered in Salt Lake City, Utah, Traeger is a designer and
distributor of wood pellet grills, grill accessories and related
consumables.
TRANSCENDIA HOLDINGS: $295M Bank Debt Trades at 30% Discount
------------------------------------------------------------
Participations in a syndicated loan under which Transcendia
Holdings Inc is a borrower were trading in the secondary market
around 70.3 cents-on-the-dollar during the week ended Friday,
February 10, 2023, according to Bloomberg's Evaluated Pricing
service data.
The $295 million facility is a Term loan that is scheduled to
mature on May 30, 2024. The amount is fully drawn and
outstanding.
Transcendia Holdings, Inc. is a provider of engineered specialty
films materials across a range of end-markets. The company
manufactures specialty films by extrusion of resin or converting
film for specific customer applications.
TRANSDIGM INC: Moody's Rates New Senior Secured Term Loan 'Ba3'
---------------------------------------------------------------
Moody's Investors Service assigned Ba3 ratings to TransDigm Inc.
new senior secured term loan and new senior secured notes. All
other ratings, including the B1 Corporate Family Rating and the
B1-PD Probability of Default Rating, are unchanged. Proceeds from
the new debt will be used to refinance existing term E and term F
loans. Ratings on the existing term E and term F loans will be
withdrawn upon close. The outlook is stable.
The following is a summary of the rating actions:
Assignments:
Issuer: TransDigm Inc.
Backed Senior Secured 1st Lien Term Loan I, Assigned Ba3 (LGD3)
Backed Senior Secured Regular Bond/Debenture, Assigned Ba3 (LGD3)
RATINGS RATIONALE
The B1 CFR balances TransDigm's aggressive financial policy defined
by its sustained high funded debt and financial leverage and
recurring substantial distributions to shareholders, against its
strong business profile. TransDigm garners very strong margins from
its sole source provider position across a majority of its products
as well as its proprietary designs reflected in its significant
patent portfolio.
TransDigm's debt-to-EBITDA of around 7.5x as of December 2022 is
high and is an outlier for the B1 rating. That said, Moody's
recognizes the uniqueness of TransDigm's business model that has
enabled the company to maintain its industry-leading margins and
healthy cash generation. Moody's believes that demand in commercial
aerospace markets, after having troughed several quarters ago, will
continue to experience a sustained recovery. This will support a
continued reduction in leverage and Moody's expects TransDigm's
debt-to-EBITDA to revert to historical levels of around 7x by the
end of its current fiscal year (ended September 30, 2023).
The stable outlook reflects Moody's expectations of positive
earnings growth, and a gradual strengthening of credit metrics as
commercial aerospace markets continue to recover.
The SGL-1 speculative grade liquidity rating denotes Moody's
expectations of very good liquidity over the next 12 months. As of
December 31, 2022, cash totaled $3.3 billion. Moody's expects
TransDigm to generate around $0.9 billion in free cash flow during
fiscal 2023 with FCF-to-debt in the mid single-digits. External
liquidity is provided by an undrawn $810 million revolving credit
facility that expires in 2026.
The Ba3 ratings for TransDigm's senior secured term debt and senior
secured bonds are one notch above the CFR. This reflects their
seniority and first lien security interest in substantially all
assets of the company on an aggregate basis. The B3 rating for the
company's senior subordinated notes is two notches below the CFR.
This reflects the subordination of this debt compared to the
aforementioned first lien debt. Both the bank credit facilities and
the subordinated notes are guaranteed by all of TransDigm's
existing and future domestic subsidiaries, as well as the company's
holding company parent TDG.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to a ratings downgrade include weakening
liquidity, free cash flow-to-debt sustained in the low
single-digits or debt-funded dividend distributions, particularly
prior to the business having substantially recovered.
Factors that could lead to an upgrade of the ratings include
debt-to-EBITDA sustained below 5.5x, maintenance of the company's
industry leading margins and a continuation of strong liquidity.
TransDigm Inc., headquartered in Cleveland, Ohio, is a manufacturer
of engineered aerospace components for commercial airlines,
aircraft maintenance facilities, original equipment manufacturers
and various agencies of the US Government. TransDigm Inc. is the
wholly-owned subsidiary of TransDigm Group Incorporated (TDG).
Revenues for the last twelve-month period ending December 31, 2022,
were $5.6 billion.
The principal methodology used in these ratings was Aerospace and
Defense published in October 2021.
TRIUMPH GROUP: Issues Notice to Warrant Holders
-----------------------------------------------
Triumph Group, Inc. issued on Dec. 1, 2022, Warrants to all holders
of TRIUMPH common stock to purchase Common Stock pursuant to a
Warrant Agreement dated as of Dec. 19, 2022.
Each Warrant represents the right to purchase one share of Common
Stock, subject to certain anti-dilution adjustments, at an exercise
price of $12.35 per Warrant, subject to certain anti-dilution
adjustments. Payment for shares of Common Stock on exercise of
Warrants may be in (i) cash or (ii) under certain circumstances,
with certain of TRIUMPH's debt securities, which are called
"Designated Notes."
TRIUMPH, in compliance with section 8.04 of the Warrant Agreement,
notifies Warrant holders that effective March 6, 2023, TRIUMPH's
7.750% Senior Notes due Aug. 15, 2025 shall be the only series of
"Designated Notes" under the Warrant Agreement. As a result of
this designation, TRIUMPH's 7.750% Senior Notes due Aug. 15, 2025
may continue to be used to pay the exercise price of the Warrants.
However, upon the Effective Date, no other series of notes,
including TRIUMPH's 8.875% Senior Secured First Lien Notes due June
1, 2024 or 6.250% Senior Secured Notes due Sept. 15, 2024, will be
accepted by TRIUMPH as payment of the exercise price of the
Warrants.
About Triumph
Headquartered in Berwyn, Pennsylvania, Triumph Group, Inc. --
http://www.triumphgroup.com-- designs, engineers, manufactures,
repairs and overhauls a broad portfolio of aerospace and defense
systems, components and structures. The company serves the global
aviation industry, including original equipment manufacturers and
the full spectrum of military and commercial aircraft operators.
Triumph Group reported a net loss of $42.76 million for the year
ended March 31, 2022, compared to a net loss of $450.91 million for
the year ended March 31, 2021. As of Dec. 31, 2022, the Company
had $1.59 billion in total assets, $370.11 million in total current
liabilities, $1.60 billion in long-term debt (less current
portion), $259.67 million in accrued pension and other
postretirement benefits, $7.44 million in deferred income taxes,
$43.05 million in other noncurrent liabilities, and total
stockholders' deficit of $688.06 million.
* * *
As reported by the TCR on Aug. 18, 2021, Moody's Investors Service
upgraded its ratings for Triumph Group, Inc., including the
company's corporate family rating to Caa2 from Caa3 and Probability
of Default Rating to Caa2-PD from Caa3-PD. The upgrades reflect
Moody's expectations for stronger operating performance that will
result in a gradual improvement in credit metrics through 2023.
In June 2020, S&P Global Ratings lowered its issuer credit rating
on Triumph Group Inc. to 'CCC+' from 'B-'.
TRUCK HERO: First Trust Fund II Marks $519,000 Loan at 16% Off
--------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$519,374 loan extended to Truck Hero, Inc to market at $437,832 or
84% of the outstanding amount, as of November 30, 2022, according
to a disclosure contained in the First Trust Fund's Form N-CSRS for
the six months ended November 30, 2022, filed with the Securities
and Exchange Commission on February 2, 2023.
First Trust SFRIFII is a participant in a Term Loan B to Truck
Hero, Inc. The loan accrues interest at a rate of 7.82% (1 Mo.
LIBOR + 3.75%, 0.75% Floor) per annum. The loan matures on January
31, 2028.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
Truck Hero, Inc. is a vertically integrated manufacturer of branded
aftermarket accessories for trucks (pickup and heavy duty), Jeeps,
sport utility vehicles, crossover utility vehicles and vans
throughout the US and Canada.
UNLIMITED DEVELOPMENT: Hits Chapter 11 Bankruptcy Protection
------------------------------------------------------------
Unlimited Development Corp. filed for chapter 11 protection in the
District of Puerto Rico.
The Debtor's sole asset is a residential apartment located at
Capitolio Plaza, located on the 11th Floor, with 3 bedrooms, in San
Juan, Puerto Rico, valued at $375,000. Secured creditor Cielo
Vivienda LLC is owed $1,200,000.
A telephonic meeting of creditors under 11 U.S.C. Section 341(a) is
slated for March 6, 2023 at 9:150 a.m.
Proofs of claim are due by June 5, 2023.
About Unlimited Development Corp.
Unlimited Development Corp. owns a residential apartment located at
Capitolio Plaza, San Juan, Puerto Rico, valued at $375,000.
Unlimited Development Corp. filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D.P.R. Case No. 23-00253)
on Jan. 31, 2023. In the petition filed by Ismael Crespo, as
president, the Debtor estimated assets between $100,000 and
$500,000 and liabilities between $1 million and $10 million.
The Debtor listed Cielo Vivienda LLC as its only unsecured creditor
holding a claim of $825,000.
The case is overseen by Honorable Bankruptcy Judge Maria De Los
Angeles Gonzalez.
The Debtor is represented by:
Wanda I. Luna Martinez, Esq.
LUNA LAW OFFICES
PO Box 19400
San Juan, PR 00919-4000
Tel: (787) 998-2356
Fax: (787) 200-8837
Email: quiebra@gmail.com
VENUS CONCEPT: Chief Operating Officer Steps Down
-------------------------------------------------
Effective March 6, 2023, Soren Maor Sinay, Venus Concept Inc.'s
chief operating officer, has decided to leave the Company for
personal reasons through mutual agreement with the Company.
On Feb. 6, 2023, Mr. Sinay stepped down from his current role and
will continue his employment with the Company as senior advisor
until March 6, 2023. In connection with the departure, the Company
and Mr. Sinay are finalizing the terms of the latter's separation
from the Company.
On Feb. 6, 2023, William McGrail, the Company's vice president,
Global Regulatory Affairs and Quality Assurance, was appointed to
the position of senior vice president, Technical Operations and
Compliance, a role that includes oversight of the Company's
manufacturing, supply chain and field service operations.
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's aesthetic systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general practitioners
and aesthetic medical spas.
Venus Concept reported a net loss of $22.14 million for the year
ended Dec. 31, 2021, compared to a net loss of $82.82 million for
the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had
$120.63 million in total assets, $110.61 million in total
liabilities, and $10.01 million in total stockholders' equity.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
28, 2022, citing that the Company has reported recurring net losses
and negative cash flows from operations that raises substantial
doubt about its ability to continue as a going concern.
VENUS CONCEPT: Has Plan to Reduce Global Workforce by 18%
---------------------------------------------------------
Venus Concept Inc. announced a restructuring plan, workforce
reduction, management transition and reported preliminary unaudited
revenue results for the three months and twelve months ended Dec.
31, 2022.
"We recently completed the first phase of the comprehensive
strategic review and assessment of the Company outlined on our
third quarter earnings call," said Rajiv De Silva, chief executive
officer of Venus Concept. "The assessment, once completed, will
inform the development of a transformational plan focused on
repositioning Venus Concept to enhance the cash flow profile of the
business and to accelerate the path to long-term, sustainable,
profitability and growth."
Mr. De Silva continued: "This month, the Company will begin the
first phase of the transformational plan by undertaking a series of
restructuring activities designed to improve its operations and
cost structure. Restructuring plan activities will include
discontinuing operations in unprofitable markets, consolidating
functions, eliminating or reducing investments in non-core areas
and prioritizing the allocation of resources to our most promising
growth opportunities. The restructuring plan also includes
targeted reductions in our workforce which, while unfortunate for
those impacted by these difficult strategic decisions, are
necessary to accelerate the process of generating positive,
sustainable, operating cash flow. I am thankful for the service
provided to the Company by those employees impacted by this
workforce reduction. We look forward to providing more detail on
both our transformational plan and our strategic priorities for
2023 on our fourth quarter earnings call on March 27, 2023."
Executive Leadership Transitions:
On Feb. 6, 2023, President & Chief Business Officer, Hemanth
Varghese was appointed to a newly created executive role, president
& chief innovation and business officer. In addition to his
continuing responsibilities as chief business officer, Dr. Varghese
will lead the Company's global research and development activities
including continued development of the Company's novel energy-based
device technologies in Yokneam, Israel and its leading medical
robotics center of excellence located in San Jose, California.
On Feb. 6, 2023, William ("Bill") McGrail, the Company's vice
president, Global Regulatory Affairs and Quality Assurance, was
appointed to a newly created role, senior vice president, Technical
Operations and Compliance. In addition to his current
responsibilities, Mr. McGrail will have oversight over all
technical operations of the Company including manufacturing and
supply chain, regulatory affairs, quality and technical services.
On Feb. 6, 2023, Soren Maor Sinay, the Company's chief operating
officer announced his decision to leave the Company for personal
reasons through mutual agreement with the Company. Mr. Sinay will
continue his employment with the Company in the capacity of a
Senior Advisor until March 6, 2023.
"I want to take this opportunity to thank Maor for his 5 plus years
of service to the Company and wish him well in his future
endeavors," said Mr. De Silva. "I am excited at the appointment of
Hemanth and Bill to their respective new roles. Hemanth has
extensive experience in driving organic and inorganic growth and
his background is ideal for this newly created executive role,
President & Chief Innovation and Business Officer. The creation of
this executive role provides the benefit of enhanced collaboration
across our product development, manufacturing and commercial teams
and is consistent with the Company's continued commitment to
bringing new, innovative products and capabilities to the market,
while achieving a profitable and sustainable growth profile for the
Company going forward. Bill has more than 25 years of experience
in the medical device industry which will be invaluable to the
Company as we continue to improve the efficiency of our technical
operations. As Venus Concept executes our transformational plan it
is imperative that we have the organizational structure, and
experienced leadership, to improve profitability, and ensure
long-term success."
Restructuring Plan and Reduction in Workforce:
On Jan. 27, 2023, the Board of Directors of Venus Concept approved
a restructuring plan to reduce the Company's cost structure and
improve its operational efficiency. The plan includes a reduction
in the Company's employee base by up to 70 employees, which
constitutes a reduction of approximately 18% in the Company's
global workforce as of Dec. 31, 2022. The first phase of the
reduction in workforce impacted employees in Israel and North
America and was completed on Feb. 6, 2023.
In connection with these actions, the Company estimates that it
will incur aggregate pre-tax restructuring charges of $2.0 million
to $2.5 million, a portion of which were recognized in the fourth
quarter of fiscal year 2022 with the balance of the aggregate
pre-tax charges expected to be incurred prior to June 30, 2023.
These charges will be substantially settled in cash and include
consulting expenses, one-time termination charges arising from
severance obligations and other customary employee benefit payments
in connection with a reduction in force. While the Company expects
to begin realizing restructuring plan-related expense savings
immediately, the majority of savings will be realized in the second
half of 2023. The Company expects this restructuring plan to
result in total annual pre-tax savings of $13 million to $15
million beginning in 2024. The Company may incur additional
expenses not currently contemplated due to events associated with
the restructuring plan and reduction in force. The annualized cost
savings are estimates and subject to a number of assumptions, and
actual results may differ materially.
Preliminary Fourth Quarter 2022 Revenue Summary:
Preliminary total GAAP revenue for the three months ended Dec. 31,
2022 is expected to be in the range of $23.5 million to $24.5
million, compared to total GAAP revenue of $32.6 million for the
three months ended Dec. 31, 2021, representing a decrease of 25% to
28% year-over-year and an increase of 9% to 14%
quarter-over-quarter. These preliminary results are consistent
with the Company's expectations and reflect a continued successful
shift to prioritize cash system sales, which represented
approximately 72% of total systems and subscription revenue in the
three months ended Dec. 31, 2022, compared to approximately 59% in
the three months ended Sept. 30, 2022.
Preliminary Fiscal Year 2022 Revenue Summary:
Preliminary total GAAP revenue for the twelve months ended Dec. 31,
2022 is expected to be in the range of $98.7 million to $99.7
million, compared to total GAAP revenue of $105.6 million for the
twelve months ended Dec. 31, 2021, representing a decrease of 6% to
7% year-over-year.
Fourth Quarter 2022 Conference Call Information:
The Company plans to report financial results for the three and
twelve-months ended Dec. 31, 2022 before the market opens on
Monday, March 27, 2023. Management will host a conference call
beginning at 8:00 a.m. Eastern Time to discuss fourth quarter
financial results, recent business developments and the Company's
2023 financial outlook. Those who would like to participate may
dial 877-407-2991 (201-389-0925 for international callers) and
provide access code 13736286. A live webcast of the call will also
be provided on the investor relations section of the Company's
website at ir.venusconcept.com. For those unable to participate, a
replay of the call will be available for two weeks at 877-660-6853
(201-612-7415 for international callers); access code 13736286.
The webcast will be archived at ir.venusconcept.com.
About Venus Concept
Toronto, Ontario-based Venus Concept Inc. is an innovative global
medical technology company that develops, commercializes, and
delivers minimally invasive and non-invasive medical aesthetic and
hair restoration technologies and related practice enhancement
services. The Company's aesthetic systems have been designed on a
cost-effective, proprietary and flexible platform that enables the
Company to expand beyond the aesthetic industry's traditional
markets of dermatology and plastic surgery, and into
non-traditional markets, including family and general practitioners
and aesthetic medical spas.
Venus Concept reported a net loss of $22.14 million for the year
ended Dec. 31, 2021, compared to a net loss of $82.82 million for
the year ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had
$120.63 million in total assets, $110.61 million in total
liabilities, and $10.01 million in total stockholders' equity.
Toronto, Canada-based MNP LLP, the Company's auditor since 2019,
issued a "going concern" qualification in its report dated March
28, 2022, citing that the Company has reported recurring net losses
and negative cash flows from operations that raises substantial
doubt about its ability to continue as a going concern.
VERISTAR TN: Unsecureds to Get Share of Income for 3 Years
----------------------------------------------------------
Veristar, LLC, Veristar TN, LLC, and Veristar Global, LLC,
(collectively, the "Company" or the "Debtors") submitted a Joint
Plan of Reorganization dated February 5, 2023.
The Company provides comprehensive E-Discovery services to
corporate legal departments and law firms including forensic data
collection, data hosting, document review services, and specialized
legal staffing support.
Veristar, LLC, was formed in 2019 in connection with the
acquisition of assets from Franklin Data Ventures, Inc. and
Nexem-Iconic, LLC. Veristar TN, LLC ("VTN") is an affiliate of
Veristar that was formed for the purpose of expanding business into
Tennessee, with a focus on the Nashville metropolitan area.
Veristar Global, LLC d/b/a Veralocity ("VG") is an affiliate of
Veristar that provides professional services to law firms and
corporate legal departments in the areas of case strategies,
mitigation risk, and rapid evidence acquisition and evaluation.
Although the Company's business model has been successful and its
operations are strong and stable, it has faced litigation related
to the Franklin Data acquisition, threatened litigation related to
the Planet Data acquisition, a client dispute inherited from Planet
Data, and unfounded claims by a former employee. The pending and
threatened lawsuits have created significant financial strain and
distraction. These Subchapter V cases were filed to efficiently
address those issues and position the Company for future success.
Class 1 includes administrative expense priority claims that are
not paid in full on the Effective Date. If necessary to obtain
Confirmation of this Plan under section 1191(e) of the Code,
Administrative Claims not paid in full on or before the Effective
Date shall be fully paid over a period not to exceed 3 years
following the Effective Date.
Class 2 consists of all Allowed Priority Claims other than Priority
Tax Claims against the Debtors. Each Person holding a Class 2 Claim
shall be paid the Allowed Amount of such Claim in cash, in full, on
the latest of: (i) the Effective Date; (ii) the date such Claim is
allowed by Final Order; or (iii) the date such payment is due under
applicable law. Each Contested Priority Claim shall become an
Allowed Priority Claim only upon entry of, and only to the extent
such claim is allowed by, a Final Order.
Class 3 consists of all Unsecured Claims against any Debtor. Each
Holder of an Allowed Class 3 Claim shall be paid its Pro Rata
portion of Debtors' Disposable Income in quarterly disbursements
during the Commitment Period, with the first such payment due on
the first day of the month that is at least 90 days after the
Effective Date.
Class 4 includes all equity interests in the Debtors. Membership
interests in and ownership of the Debtors shall remain unaltered.
The Debtors shall use proceeds from operations to pay all required
payments on the Effective Date and all payments due under the Plan
on an on-going basis.
Under the best-case scenario, a forced liquidation would yield an
11% distribution ($447,366 to be distributed Pro Rata to
$4,056,865). In reality, damages that would flow from a forced
liquidation of the Debtors would greatly exceed the liquidation
value of assets, leaving nothing for creditors.
By comparison, the Plan proposes to distribute a total of $466,122,
or approximately 11.5%, to creditors over the 3-year Commitment
Period. Excluding disputed claims, the proposed distribution under
the Plan exceeds 15%.
A full-text copy of the Joint Plan dated February 5, 2023 is
available at https://bit.ly/3JYk0Rm from PacerMonitor.com at no
charge.
Debtors' Counsel:
Robert Gonzales, Esq.
EMERGELAW, PLC
4235 Hillsboro Pike 350
Nashville TN 37215
Tel: 615-815-1535
Email: robert@emerge.law
About Veristar TN
Veristar provides legal services for a range of practice areas and
industries. The Company offers discovery, specialized legal
staffing, and veralocity services. Veristar TN filed Chapter 11
Petition (Bankr. M.D. Tenn. Case No. 23-00412) on February 5,
2023.
Hon. Marian F. Harrison oversees the case. Robert Gonzales, Esq. of
EMERGELAW, PLC is the Debtors' Counsel.
In the petitions signed by Ben Gardner, chief financial officer,
Veristar TN disclosed $117,621 in assets and $0 liabilities.
Veristar, LLC disclosed $1,477,959 in assets and $3,806,865 in
liabilities. Veristar Global disclosed $0 in assets and $250,000 in
liabilities.
VISTAGEN THERAPEUTICS: Posts $9.8 Million Net Loss in 3rd Quarter
-----------------------------------------------------------------
Vistagen Therapeutics, Inc. has filed with the Securities and
Exchange Commission its Quarterly Report on Form 10-Q disclosing a
net loss attributable to common stockholders of $9.76 million on
$179,600 of total revenues for the three months ended Dec. 31,
2022, compared to a net loss attributable to common stockholders of
$10.74 million on $357,900 of total revenues for the three months
ended Dec. 31, 2021.
For the nine months ended Dec. 31, 2022, the Company reported a net
loss attributable to common stockholders of $47.02 million on
$(402,900) of total revenues compared to a net loss attributable to
common stockholders of $32.02 million on $1.07 million of total
revenues for the nine months ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $29.71 million in total
assets, $9.03 million in total liabilities, and $20.67 million in
total stockholders' equity. At Dec. 31, 2022, the Company had cash
and cash equivalents of approximately $25.0 million.
"Since our last quarterly update, Vistagen has met several
important business objectives," said Shawn Singh, chief executive
officer of Vistagen. "Our recent acquisition of Pherin
Pharmaceuticals, and now full ownership of PH94B and PH10, puts the
company in a position to significantly enhance the commercial
profile of these two promising pipeline assets. In addition, over
the past two quarters, we advanced core clinical programs in social
anxiety disorder, adjustment disorder and major depressive
disorder. Both PH94B and PH10 have the potential to offer novel,
fast-acting treatment for millions of patients confronting the
effects of debilitating mental health challenges without the side
effects and safety concerns often associated with current
FDA-approved products. We believe Vistagen is now well-positioned
to reach several important milestones during 2023."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0001411685/000185173423000035/vtgn20221231_10q.htm
About VistaGen
Headquartered in San Francisco, California, VistaGen Therapeutics,
Inc. -- http://www.vistagen.com-- is a biopharmaceutical company
committed to developing and commercializing innovative medicines
with the potential to go beyond the current standard of care for
anxiety, depression, and other CNS disorders.
VistaGen reported a net loss and comprehensive loss of $47.76
million for the fiscal year ended March 31, 2022, compared to a net
loss and comprehensive loss of $17.93 million for the fiscal year
ended March 31, 2021. As of Sept. 30, 2022, the Company had $40.70
million in total assets, $11.10 million in total liabilities, and
$29.60 million in total stockholders' equity.
San Francisco, California-based WithumSmith+Brown, PC, the
Company's auditor since 2006, issued a "going concern"
qualification in its report dated June 23, 2022, citing that the
Company has suffered negative cash flows from operations and
recurring losses from operations since inception, resulting in an
accumulated deficit of $267.6 million as of March 31, 2022, that
raise substantial doubt about its ability to continue as going
concern.
VOYAGER DIGITAL: Seeks to Disallow Alameda's Claims
---------------------------------------------------
Bankrupt cryptocurrency platform Voyager Digital Holdings and its
unsecured creditors have told a New York bankruptcy judge that FTX
affiliate Alameda Research is not entitled to a $75 million loan
repayment, saying FTX's conduct has cost Voyager far more than
that.
Voyager Digital Ltd. and its debtor-affiliates filed with the U.S.
Bankruptcy Court for the Southern District of New York an objection
to the Proofs of Claim filed by Alameda Ventures Ltd. designated
Nos. 11206, 11209, and 11213 on the Debtors' claims register, and
any other claims being pursued by Alameda or any of its affiliates
pursuant to Sections 502 and 510(c) of chapter 11 of title 11 of
the U.S. Code and Rule 3007 of the Federal Rules of Bankruptcy
Procedure.
On Oct. 3, 2022, AlamedaFTX filed the Alameda Proofs of Claim
against each of OpCo, HoldCo, and TopCo, claiming that each one was
obligated on the $75 million disbursed under the Alameda Loan
Agreement. And more recently, Alameda has alleged in filed
pleadings that it has an administrative claim against Voyager of
approximately $445 million for crypto loans from OpCo to Alameda
that were repaid during Voyager's chapter 11 proceedings.
Voyager says it will be prepared to show after discovery during
confirmation that Alameda's (i) claim against OpCo should be
disallowed with prejudice, and (ii) remaining claims should be
subordinated to all other creditor claims at each of the Debtors.
"AlamedaFTX founder and former CEO Samuel Bankman-Fried, along with
several executives who have pled guilty to federal felonies,
orchestrated one of the largest financial frauds in history. They
duped investors and lenders into funneling billions of dollars into
their crypto hedge fund, without appropriate controls, governance,
and risk-management procedures. They deceived account holders into
believing their assets would be held in trust and not
rehypothecated, while they freely transferred assets across their
network of companies, and ultimately lost them. And they treated
their customers' assets as their own personal piggy bank. The
historic AlamedaFTX fraud has undermined the integrity of the
cryptocurrency industry and caused epic losses across the sector,"
Voyager's counsel, Joshua A. Sussberg, P.C., of KIRKLAND & ELLIS
LLP, said in court filings.
"Voyager was not spared. As this Court has witnessed, from the
commencement of these chapter 11 cases, AlamedaFTX has engaged in
extensive inequitable conduct: from issuing defamatory press
releases, to circumventing the Court-approved bidding and marketing
process and low-balling bids for Voyager's business. Ultimately,
in September 2022, AlamedaFTX won the Voyager auction under false
pretenses, only to renege two months later when its fraud was
uncovered and the AlamedaFTX enterprise collapsed. AlamedaFTX's
inequitable conduct derailed these chapter 11 cases and has cost
the Debtors and their creditors over $100 million."
Yet, after causing massive, irreparable harm to these estates,
AlamedaFTX still wants to dilute creditors while continuing to
interfere with these chapter 11 cases. In October 2022, Alameda
filed $75 million Proofs of Claim (Nos. 11206, 11209, and 11213)
against each of the three Debtors based on a prepetition loan of
U.S. Dollar Coin that it made to just one of them. AlamedaFTX
somehow asserts that these unsecured Claims should receive equal,
pari passu treatment with the claims of the actual unsecured
creditors whom AlamedaFTX's rampant abuse in these chapter 11 cases
harmed.
"As a matter of fact, law, and equity, AlamedaFTX is entitled to,
and deserves, nothing. To begin, Alameda has no basis for its Proof
of Claim against Voyager Digital, LLC ("OpCo"). OpCo was not a
party to the prepetition Alameda Loan Agreement and did not
guarantee Voyager Digital Holdings, Inc. (TopCo)'s or HoldCo's
obligations thereunder. Alameda's motives in filing this Proof of
Claim are transparent: OpCo holds essentially all of the Debtors'
assets, so Alameda is using litigation in an effort to improve the
(lack of) collateral package for its loan post hoc. That claim is
clearly misplaced. Alameda, as a sophisticated lender, knew that
its loan was deliberately structured to be junior to creditor
claims at OpCo. In fact, the loan was structured as such so that
AlamedaFTX's CEO could appear to be "saving" the crypto industry--
whereas, although no one knew it at the time, AlamedFTX was merely
trying to save itself (the definition of a Ponzi scheme). Based on
the Alameda Loan Agreement’s plain, unambiguous terms, Alameda
has no claim at OpCo, and Proof of Claim No. 11213 must be denied
and expunged," Mr. Sussberg tells the Court.
"In any event, Voyager's Plan appropriately subordinates all three
of the Alameda Proofs of Claim behind all other creditor claims
under 11 U.S.C. Sec. 510(c). Equitable subordination was designed
to address the circumstances here: when a creditor abuses the
chapter 11 bankruptcy process at the expense of other creditors,
this Court is empowered to, and should, subordinate the wrongdoer's
claim, to remediate harm to injured creditors. Subordination is the
least that can be done to begin to mitigate the damage done by
AlamedaFTX, and put Voyager's creditors closer to the recovery
positions they would have held had AlamedaFTX honored and fulfilled
its September 2022 winning bid, or if AlamedaFTX had not been
involved in the Debtors' chapter 11 cases at all, in which case the
Debtors would have accepted a different bid the first time around,
saving material amounts of time and cost in the process. Under no
circumstances should AlamedaFTX receive anything from these chapter
11 estates after all it has done to harm them."
About Voyager Digital Holdings
Based in Toronto, Canada, Voyager Digital Holdings Inc. --
https://www.investvoyager.com/ -- runs a cryptocurrency platform.
Voyager claims to offer a secure way to trade over 100 different
crypto assets using its easy-to-use mobile application. Through its
subsidiary Coinify ApS, Voyager provides crypto payment solutions
for both consumers and merchants around the globe.
Voyager Digital Holdings Inc. and two affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead
Case No. 22-10943) on July 5, 2022. In the petition filed by
Stephen Ehrlich, chief executive officer, the Debtors estimated
assets and liabilities between $1 billion and $10 billion.
Michael E. Wiles oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy
counsel; Berkeley Research Group, LLC as financial advisor; Moelis
& Company as investment banker; Consello Group as strategic
financial advisor; Deloitte Tax, LLP as tax services provider; and
Deloitte & Touche, LLP as accounting advisor. Stretto, Inc. is the
claims agent.
On July 19, 2022, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors in these Chapter 11
cases. The committee tapped McDermott Will & Emery, LLP as
bankruptcy counsel; FTI Consulting, Inc. as financial advisor;
Cassels Brock & Blackwell, LLP as Canadian counsel; and Epiq
Corporate Restructuring, LLC as noticing and information agent.
The committee also tapped the services of Harney Westwood &
Riegels, LP in connection with Three Arrows Capital Ltd.'s
liquidation proceedings in British Virgin Islands.
* * *
Following a auction process, the Debtors in September 2022 selected
the bid submitted by FTX US's West Realm Shires Inc. as the winning
bid for Voyager's assets. But after a series of events, FTX
collapsed in November 2022, before the sale could be completed.
After reopening bidding, Voyager Digital selected U.S. exchange BAM
Trading Services Inc. (doing business as "Binance.US") as the
highest and best bid for its assets. Binance's bid is valued at
$1.022 billion.
WESTBANK HOLDINGS: Fannie Mae Amends Liquidating Plan
------------------------------------------------------
Federal National Mortgage Association, the largest creditor in the
bankruptcy cases of Westbank Holdings, LLC, et al., submitted a
First Amended Disclosure Statement for its Creditor's Plan of
Reorganization dated February 7, 2023.
The Plan is a liquidating plan. It provides for the Distribution of
the proceeds of the sale of the Debtors' Real Property with funds
paid to the secured creditor (Fannie Mae) and a portion of the
funds carved-out to cover sale expenses, administration of the
Bankruptcy Case, and to fund Distributions under the Plan.
The carve-out funds, along with other assets such as insurance
proceeds and any recoveries from pending or future insurance and
litigation claims, shall be deposited into a Liquidating Trust. The
Liquidating Trustee shall make an initial Distribution to holders
of General Unsecured Claims (excluding Fannie Mae) within thirty
days of the Effective Date of the Plan. The Liquidating Trustee
shall make subsequent Distributions to remaining holders of General
Unsecured Claims on a pro rata basis following the liquidation of
the Debtors' Assets.
Class 1 consists of Fannie Mae claims secured by Debtors' real
property and other assets. The Debtors' Real Property shall be sold
at auction and the proceeds applied to the secured indebtedness,
with a portion of the proceeds carved out for payment of expenses
as set forth in the Plan. The proceeds from Insurance Claims, which
constitute Fannie Mae Collateral, shall also be paid to Fannie Mae
unless otherwise agreed by Fannie Mae and the Liquidating Trustee
or otherwise provided in the Plan. The amount of claim in this
Class total $38,310,831.06. This Class will receive a distribution
of 60%-85% of their allowed claims.
Class 2 consists of General Unsecured Claims (excluding tenants).
All Allowed Class 2 Claims shall be paid in full within thirty days
of the Effective Date other than the claims held by (i) Fannie Mae,
(ii) the Sewerage and Water Board (the "SWB"), and (iii) the SBA.
Within thirty days of the Effective Date, the SWB shall receive a
payment of $200,000 as a settlement and compromise of various
claims. In exchange, the SWB's Class 2 Claim shall be reduce by
$500,000. The balance of the SWB's Class 2 Claim, and all of Fannie
Mae's Class 2 Claim, shall be included in a pool for pro rata
distribution (the "Subsequent Distributions") from the proceeds of
Avoidance Actions or other Liquidation Trust Assets that do not
constitute Fannie Mae Collateral.
The allowed unsecured claims total $17 million to $27 million. This
Class will receive a distribution of 100% to all holders of Allowed
Class 3 Claims general unsecured creditors other than Fannie Mae,
the SWB and the SBA; SWB to receive agreed and compromised amount
in the Initial Distribution; balance of Distribution to SWB, and
Distribution to Fannie Mae and SBA, are uncertain.
Class 3 consists of Tenant Unsecured Claims. Each holder of an
Allowed Class 3 Claim (Tenant Unsecured Claim), in full
satisfaction of such claim, shall receive the lesser of $300.00 or
the amount of its Allowed Class 3 Claim within thirty days of the
Effective Date (unless such holder either (i) opts out of this
distribution in lieu of a determination as to the amount of such
tenant's claim or (ii) votes against the Plan), with the balance of
such Allowed Class 3 Claim included in the pool for Subsequent
Distributions under Class 2. The amount of claim in this Class
total $849,624.15.
Class 4 consists of Subordinated Claims. Holders of Subordinated
Claims shall receive pro rata payments from any funds held in the
Liquidating Trust following the payment in full of all Allowed
Class 2 Claims.
On the Effective Date, the Liquidating Trust will be created. The
Liquidating Trust shall be governed by the Liquidating Trust
Agreement, the Plan, and the Confirmation Order. The Liquidating
Trustee, who shall be selected by Fannie Mae and the Chapter 11
Trustee, shall have all of the powers and duties. The Liquidating
Trustee shall owe a fiduciary duty to the Class 2 and Class 3
creditors to maximize their recovery subject to the terms of the
Plan.
Except as specifically set forth in the Plan, holders of Allowed
Claims shall look solely to the Liquidating Trust for the
satisfaction of their Claims. For federal income tax purposes, the
transfer of the identified assets to the Liquidating Trust will be
deemed a transfer to the holders of Allowed Claims (who are the
Liquidating Trust beneficiaries) followed by a deemed transfer by
such beneficiaries to the Liquidating Trust.
A full-text copy of the First Amended Disclosure Statement dated
February 7, 2023 is available at https://bit.ly/3DX3QUv from
PacerMonitor.com at no charge.
Attorneys for Federal National Mortgage Association, d/b/a Fannie
Mae:
Edward H. Arnold, III, Esq.
Katie Dysart, Esq.
Lacey E. Rochester, Esq.
Christopher Vitenas, Esq.
BAKER DONELSON BEARMAN CALDWELL & BERKOWITZ, PC
201 St. Charles Ave., Suite 3600
New Orleans, LA 70170
Telephone: (504) 566-5204
Facsimile: (504) 636-3904
E-mail: harnold@bakerdonelson.com
About Westbank Holdings
Westbank Holdings, LLC is a New Orleans, La.-based company
primarily engaged in renting and leasing real estate properties.
Westbank Holdings and its affiliates filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code (Bankr. E.D. La.
Lead Case No. 22-10082) on Jan. 27, 2022. In its petition, Westbank
Holdings listed as much as $50 million in both assets and
liabilities. Joshua Bruno, manager, signed the petition.
Judge Meredith S. Grabill oversees the cases.
Frederick L. Bunol, Esq., at The Derbes Law Firm, LLC, Alvendia
Kelly & Demarest, LLC and G Rowland CPA & Associates, serve as the
Debtors' bankruptcy counsel, special counsel and accountant,
respectively. Richard W. Cryar, a partner at F M Reed Company, is
the Debtors' chief restructuring officer.
Dwayne M. Murray, the Chapter 11 trustee appointed in the Debtors'
cases, tapped Fishman Haygood, LLP as legal counsel and Patrick J.
Gros, CPA, as accountant.
WEWORK INC: David Tolley Appointed to Board of Directors
--------------------------------------------------------
WeWork Inc. announced that David Tolley, Board Member and former
chief financial officer at Intelsat S.A., has been appointed to the
WeWork Board of Directors, effective Feb. 2, 2023. Mr. Tolley
succeeds Kirthiga Reddy, CEO, Virtualness, and president, Athena
Technology II, who had served on WeWork's Board since February
2020.
David Tolley brings over 25 years of experience creating and
executing strategies that increase corporate valuation, cash flow,
and revenue. He most recently served as chief financial officer at
Intelsat S.A. from 2019 to 2022. Over the course of his career,
Mr. Tolley has also served as chief financial officer of OneWeb,
senior advisor to Stonepeak Infrastructure Partners, and as a vice
president in the Investment Banking Division of Morgan Stanley.
Mr. Tolley was also a private equity partner at Blackstone from
2000 to 2011, where he focused on satellite services, broadcasting
and newspaper strategy and investments. He previously served as a
member of the Board of Directors of ExteNet Systems, Cumulus Media,
Beechcraft, Gold Toe, Freedom Communications, Montecito Broadcast
Group, New Skies Satellites, Centennial Communications and
currently serves on the Board of Directors of Digital Bridge and
KVH Industries. He holds a Master of Business Administration from
Columbia Business School and a Bachelor of Arts in Economics &
History from the University of Michigan.
"As we continue our disciplined and strategic approach to
strengthening our business and balance sheet we welcome David's
partnership and insights to the Board," said Sandeep Mathrani,
WeWork's CEO and Chairman. "I also want to thank Kirthiga for her
partnership over the last three years. She has brought refreshing
insights from her vast experience building high-growth global
businesses which have been of significant benefit to the Board and
the Executive team. I am so grateful for her commitment over the
last three years."
"WeWork has established itself as a resilient industry leader --
redefining how and where people work in an ever-changing
post-pandemic environment," said David Tolley. "I am excited to
partner with WeWork's Board of Directors and the executive team as
they efficiently drive the company to profitability, and position
WeWork for long-term success."
"I joined the Board at the start of the business turnaround as a
passionate believer in the brand, the people and the business.
That belief has only strengthened during my time at WeWork," said
Kirthiga Reddy. "The creativity, dedication and resilience of the
WeWork team has impressed me day in, and day out. As the company
turns the corner to profitability, I take away many lessons on
focus, discipline and a culture-first approach. I am confident
that, with the strong leadership of the Executive team, they can
achieve their goals and deliver the future of flexible work."
About WeWork
New York, NY-based WeWork Inc. (NYSE: WE) -- wework.com -- is a
global flexible workspace provider, serving a membership base of
businesses large and small through its network of 756 locations as
of December 2021.
WeWork reported a net loss of $4.63 billion in 2021, a net loss of
$3.83 billion in 2020, and a net loss of $3.77 billion in 2019. As
of Sept. 30, 2022, WeWork had $18.33 billion in total assets,
$21.09 billion in total liabilities, and a total deficit of $2.74
billion.
WOMEN'S CARE: Moody's Affirms B3 CFR & Alters Outlook to Negative
-----------------------------------------------------------------
Moody's Investors Service affirmed the B3 corporate family rating
and B3-PD probability of default rating of Women's Care Holdings,
Inc. Moody's also affirmed the B2 rating of the company's senior
secured first lien term loan and revolving credit facility and Caa2
rating of the second lien term loan. The outlook was changed to
negative from stable.
"The negative outlook reflects the weaker interest coverage in the
face of higher interest rates, and challenges on costs that has led
to lower EBITDA than Moody's anticipated", said Jason Mercer. "The
affirmation reflects a stable recurring revenue base and adequate
liquidity."
The following rating actions were taken:
Affirmations:
Issuer: Women's Care Holdings, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Backed Senior Secured 1st Lien Bank Credit Facility, Affirmed B2
(LGD3)
Backed Senior Secured 2nd Lien Bank Credit Facility, Affirmed Caa2
(LGD5)
Outlook Actions:
Issuer: Women's Care Holdings, Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Women's Care's B3 corporate family rating is constrained by: (1)
elevated debt to EBITDA of about 7x through 2023 (about 7.5x
estimated as at Dec-22) and weak interest coverage of just over 1x;
(2) small scale with revenue of under $500 million; (3) high
geographic concentration with Florida accounting for around 80% of
revenues; (4) risks inherent to the execution of its active
acquisition growth strategy and private equity ownership; and (5)
social risks including political pressure to address the
affordability of healthcare services, which could impact growth and
profitability. The rating benefits from: (1) a strong market
position in four core metropolitan areas; (2) a recurring patient
base and stable demand characteristics associated with OB/GYN
services; (3) long-term growth prospects supported by the early
stage of consolidation in the fragmented OB/GYN market and the
expansion of ancillary services; and (4) a solid payor profile,
with the majority of revenues sourced from commercial
reimbursements (about 80%).
Women's Care has adequate liquidity. Sources total about $100
million, consisting of unrestricted cash of $35 million and full
availability under a $70 million committed revolving credit
facility (due 2025). Moody's expects about $18 million of negative
free cash flow through to the end of 2023. As well, there is a
mandatory $7 million payment to the promissory note and about $4
million of mandatory debt amortizations, prior to the consideration
of the excess cash flow sweep, which Moody's expect to be minimal.
The secured revolver is subject to a springing first lien net
leverage covenant of 8.15x when more than 35% drawn. The company
would have a comfortable covenant cushion if triggered. The company
has limited capacity to sell assets to raise cash.
Women's Care's first lien facilities ($70 million revolver due 2025
and $360 million term loan due 2028) are rated B2, one notch above
the B3 CFR given higher recovery and priority ranking within the
capital structure. The $120 million second lien term loan due 2029
is rated two notches below the CFR at Caa2, reflecting its
subordination to the first lien debt. The debt is guaranteed by the
holding company Women's Care (Women's Care Investments, Inc.) and
select operating subsidiaries limited to Women's Care Kentucky,
LLC. and Physician Business Services, LLC, which controls all
practice management service agreements, including centralized cash
management for non-guarantor practice subsidiaries.
The negative outlook reflects the company's weakening interest
coverage in a rising rate environment and high financial leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if Women's Care successfully executes
its growth strategy, evidenced by expanded scale and geographic
diversity. A demonstrated track record of positive free cash flow
and sustained Moody's-adjusted debt/EBITDA below 6x would also
support an upgrade.
The ratings could be downgraded if there was a deterioration of
operating performance, weakening liquidity, negative free cash flow
before acquisitions, or interest coverage (EBITA to interest)
falling below 1x.
Headquartered in Tampa, Florida, Women's Care is a provider of a
variety of women's health services, including obstetrics and
gynecology, fertility care and genetic counseling, among others.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
WR GRACE: Fitch Gives 'BB+' Rating on New $300M Sr. Secured Notes
-----------------------------------------------------------------
Fitch Ratings has assigned a Long-Term Rating of 'BB+'/'RR1' to W.
R. Grace Holdings LLC's newly announced $300 million senior secured
notes. Proceeds from the transaction will be used to refinance the
company's existing $300 million senior secured notes due 2024.
KEY RATING DRIVERS
Ongoing Balance Sheet Evolution: Grace's acquisition of Albemarle's
FCS business and Standard Industries' subsequent acquisition of
Grace itself added more than $2.5 billion in debt to the company's
capital structure. While Grace will continue to operate with higher
gross leverage than it did before it was taken private, the company
has the opportunity to improve its cost of capital and debt
structure without materially affecting its operational strategy.
Now that the company has addressed the $300 million 2024 secured
notes maturity, it enjoys solid financial flexibility, with no
significant maturities until 2027. Fitch expects debt reduction to
be a priority as a more stable operating environment allows the
company to generate solid cash flows.
Elevated Cost, Leverage Profile: Leverage remains elevated
following the Albemarle FCS and Standard Industries transactions,
further compounded by rising raw material prices causing a
contraction in margins despite strong demand from a volume
perspective. However, moderating input costs and continued
volumetric stability in 2023 and beyond is likely to drive solid
EBITDA generation and strong, stable FCF generation.
Specialized Chemical Portfolio: Grace's two business segments offer
highly specialized products with high margins and pricing power.
The company has been able to pass through costs to customers, and
the Catalysts Technologies segment has consistently generated
EBITDA margins of around 35%, while the Materials Technologies
business is in the low 20% range. These margins are on the high end
for specialty chemical companies and, while somewhat volatile, are
partially insulated by way of solid pass-through rates. Fitch
believes the company will continue to deploy capital in the medium
term to build out the Materials Technologies segment but that the
near-term priority will remain debt reduction.
Refinery Production Drives Growth: Growth in the Refining
Technologies subsegment, which accounts for just under half of
Grace's revenue, is determined primarily by refinery production
utilization levels. Products in this subsegment have various uses,
including cracking hydrocarbon chains in distilled crude oil to
produce transportation fuels, maximizing propylene production and
converting methanol into petrochemical feeds. These are valuable
inputs to a refinery's operations that support the optimization of
crack spreads. As such, Fitch expects volumes to track refinery
production utilization levels, with high pass-through rates keeping
gross margins relatively stable.
DERIVATION SUMMARY
Grace's EBITDA margins are consistently above 25%, placing the
company firmly within the specialty manufacturer group. The company
is smaller than direct competitor Albemarle, which also produces
lithium and bromine to complement its catalysts. Like NewMarket
Corporation (BBB/Stable), Grace is a leader in a highly specialized
industry but has a greater appetite for debt funded M&A, and Fitch
expects the company will operate with a leverage profile generally
consistent with the 'B+' rating category, generally at or above
5.0x. Aruba Investments, Inc. (B/Stable) possesses a slightly
weaker leverage profile with similarly resilient cash flow
streams.
Like many chemicals peers, Fitch anticipates Grace's growth to
roughly track economic activity. Fitch projects Grace to generate
consistent FCF margins in the mid-single digits over the forecast
period, given low maintenance capex requirements and relatively
stable earnings, which is consistent with Fitch's views on
Newmarket. Fitch projects Albemarle to generate a range of FCF
outcomes throughout the forecast period, given strong lithium
demand offset by committed large-scale capital projects.
KEY ASSUMPTIONS
Fitch's Key Assumptions Within Its Rating Case for the Issuer:
- Raw material inflation drives both revenue increases and margin
compression in 2022-2023;
- EBITDA margins recover from raw material inflationary effects
beginning in the second half of 2023;
- Deleveraging primarily through voluntary term loan prepayments;
- Limited to no upstream dividends to Standard;
- Total debt with equity credit/operating EBITDA peaks in 2022,
falling sharply thereafter as the normalization of raw material
prices and voluntary debt reduction drives leverage to below 5.0x
by 2025.
KEY RECOVERY RATING ASSUMPTIONS
The recovery analysis assumes Grace would be reorganized as a
going-concern (GC) in bankruptcy rather than liquidated. Fitch has
assumed a 10% administrative claim.
Grace's GC EBITDA assumption is based on forecast 2023 EBITDA. The
GC EBITDA estimate reflects Fitch's view of a sustainable,
post-reorganization EBITDA level upon which the valuation of the
company is based. The GC EBITDA depicts a scenario in which severe
headwinds in the company's more commoditized Refining Technologies
business and weak growth in other segments due to slower
macroeconomic activity leads to a severe drop in both EBITDA and
cash generation. The assumption also reflects corrective measures
taken in the reorganization to offset the adverse conditions that
triggered default, such as cost cutting efforts and industry
recovery.
An enterprise value (EV) multiple of 6.5x EBITDA is applied to the
GC EBITDA to calculate a post-reorganization EV. The multiple is
comparable to the range of historical bankruptcy case study exit
multiples for peer companies, which ranged from 5.0x to 8.0x.
Bankruptcies in this space related either to litigation or to deep
cyclical troughs.
The revolving credit facility is assumed to be drawn at 80%.
Fitch's recovery assumptions result in a recovery rating for the
senior secured debt within the 'RR1' range and results in a 'BB+'
rating. The assumptions also result in a recovery rating for the
senior unsecured debt within the 'RR4' range and results in a 'B+'
rating.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Demonstrated commitment to debt reduction coupled with continued
cash generation and earnings stability, leading to total debt with
equity credit/operating EBITDA durably below 4.5x;
- Successful completion of Materials Technologies and Specialty
Catalysts buildout while continuing to strengthen the company's
capital structure.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Operating EBITDA/Interest Paid durably below 2.0x;
- Loss of leading market positions, particularly in the Catalysts
segment, leading to total debt with equity credit/operating EBITDA
durably above 5.5x;
- Reduced ability to pass through costs to customers, leading to
less stable margins and heightened cash flow risk;
- More aggressive than anticipated M&A activity, including
transformative, credit-unfriendly acquisitions, or dividend policy
otherwise incompatible with management's articulated capital
deployment.
LIQUIDITY AND DEBT STRUCTURE
Strong Liquidity: Grace's liquidity position is solid, with full
availability on its $450 million revolving credit facility and a
moderate cash balance. Additionally, Fitch anticipates solid FCF
generation through the medium term. The company faces limited
maturities until 2027.
ISSUER PROFILE
Grace is a specialty chemicals company comprised of Catalyst and
Materials segments. It produces catalysts and related products and
technologies used in petrochemical, refining, and other chemical
manufacturing applications. It also produces specialty materials
used in pharma & consumer, coatings, and chemical process
applications.
Entity/Debt Rating Recovery
----------- ------ --------
W. R. Grace
Holdings LLC
senior secured LT BB+ New Rating RR1
WW INTERNATIONAL: To Slash Jobs, Forecasts Restructuring Charges
----------------------------------------------------------------
WW International, Inc., has committed to a restructuring plan and
anticipates recording charges in the range of $39.0 million to
$46.0 million.
According to a filing with the Securities and Exchange Commission,
WW management in the fourth quarter of fiscal 2022 reviewed the
then-current global business operations of WW International as well
as the different functions and systems supporting those operations
and contrasted them with the Company's strategic priorities and
requirements for fiscal 2023 and beyond.
Based on that review, in December 2022, the Company's management
resolved to centralize its global management of certain functions
and systems, deprioritize and in some cases cease operations for
certain non-strategic business lines, and continue the
rationalization of its real estate portfolio to align with its
future needs. Throughout December 2022 and January 2023,
management developed and continued refining a detailed plan to
achieve these goals.
On Jan. 30, 2023, the Company committed to a restructuring plan
consisting of (i) an organizational restructuring and
rationalization of certain functions and systems to centralize the
Company's management, align resources with strategic business lines
and reduce costs associated with certain functions and systems (the
"Organizational Restructuring") and (ii) the continued
rationalization of its real estate portfolio and resulting
operating lease termination charges and the associated employment
termination costs (the "Real Estate Restructuring," and together
with the Organizational Restructuring, the "2023 Restructuring
Plan").
In connection with the 2023 Restructuring Plan, the Company
anticipates recording restructuring charges which it currently
estimates will range between $39.0 million to $46.0 million in
the aggregate. The Organizational Restructuring will result in the
elimination of certain positions and the termination of employment
for certain employees worldwide.
In connection with the Organizational Restructuring, the Company
anticipates recording charges of approximately $15.0 million to
$18.0 million in the aggregate with respect to employee
termination benefit costs, which are expected to consist primarily
of general and administrative expenses. The majority of these
charges were recorded in the fourth quarter of fiscal 2022 at the
time management resolved to undertake the Organizational
Restructuring.
In connection with the Real Estate Restructuring, the Company
anticipates recording charges of approximately $24.0 million to
$28.0 million in the aggregate consisting of lease termination and
other related costs, the majority of which will be recorded in the
first six months of fiscal 2023. Substantially all of the costs
arising from the 2023 Restructuring Plan are expected to result in
cash expenditures related to separation payments, other employee
termination expenses, and lease termination payments.
The Company expects the 2023 Restructuring Plan to be fully
executed by the end of fiscal 2023.
About WW International
WW International, Inc., provides weight control programs. The
Company offers subscriptions for commitment plans that give their
clients access to meetings and online subscriptions. WW
International also gives their members guidance and access to a
supportive community to help enable them for healthy habits. The
company is based in New York, New York.
WYNN RESORTS: Moody's Rates New $600MM Senior Unsecured Notes 'B2'
------------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Wynn Resorts
Finance LLC's ("WRF" or "Wynn") proposed $600 million senior
unsecured notes. WRF's B1 Corporate Family Rating, B1-PD
Probability of Default rating, and existing Ba1 rated senior
secured revolver and term loan and B2 rated senior unsecured notes
are unchanged. The existing B2 rated senior unsecured notes at Wynn
Macau, Limited ("WML") and Wynn Las Vegas, LLC are unchanged. WML
is a 72.2% owned subsidiary of Wynn Resorts Finance, LLC, which in
turn is a wholly-owned subsidiary of Wynn Resorts, Limited. The
company's speculative-grade liquidity rating of SGL-2 and negative
outlook are unchanged.
Proceeds from the proposed $600 million senior unsecured notes,
along with cash on hand, will be used to refinance WRF's existing
7.75% senior unsecured notes due 2025, as well as pay related fees
and expenses. The refinancing is modest credit positive, pushing
out a portion of the company's 2025 maturities and improving
financial flexibility.
Assignments:
Issuer: Wynn Resorts Finance, LLC
Senior Unsecured Regular Bond/Debenture, Assigned B2 (LGD4)
RATINGS RATIONALE
Wynn Resorts Finance, LLC's (B1 Negative) credit profile reflects
the lingering earnings weakness from efforts to contain the
coronavirus and the slow recovery in Macau visitation and revenue.
The rating is supported by the quality, popularity, and favorable
reputation of the company's resort properties -- a factor that
continues to distinguish Wynn from mostly other gaming operators --
along with the company's well established and very successful track
record of building large, high quality destination resorts. Wynn's
good liquidity and relatively low cost of debt capital also support
the ratings. The B1 Corporate Family Rating also incorporates that
Wynn successfully renewed its Macau concession agreement on terms
that do not materially impair Wynn's credit quality. Key credit
concerns include Wynn's limited diversification despite being one
of the largest U.S. gaming operators in terms of revenue and
exposure to reductions in cyclical discretionary consumer and
business spending. Wynn's revenue and cash flow will remain heavily
concentrated in the Macau gaming market. Moody's also expects that
Wynn will be presented with and pursue other large, high profile,
integrated resort development opportunities around the world, such
as its planned development in the United Arab Emirates. As a
result, there will likely be periods where the company's leverage
increases due to partially debt-financed, future development
projects.
The negative outlook reflects the uncertain duration and recovery
from the coronavirus-related earnings and cash flow pressure, which
is contributing to higher debt and an extended recovery in the
company's very high leverage. Wynn remains vulnerable to travel
disruptions and unfavorable sudden shifts in discretionary consumer
spending and the uncertainty regarding the pace at which consumer
spending at the company's properties will recover.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Ratings could be downgraded if liquidity deteriorates or if Moody's
anticipates Wynn's earnings declines to be deeper or more prolonged
because of actions to contain the spread of the coronavirus or
reductions in discretionary consumer spending. An inability to
reduce debt-to-EBITDA leverage to near 7x could also lead to a
downgrade.
A ratings upgrade is unlikely given the weak, albeit improving,
operating environment in Macau. However, an upgrade would require
casinos to remain open and ramp up closer to normal utilization, a
restoration of sufficient earnings to generate meaningful positive
free cash flow before discretionary development spending. Wynn
would also need to maintain debt/EBITDA on a Moody's adjusted basis
below 6.0x.
The principal methodology used in this rating was Gaming published
in June 2021.
Wynn Resorts Finance, LLC is an indirect wholly-owned subsidiary of
publicly-traded Wynn Resorts, Limited, and holds all of Wynn
Resorts, Limited's ownership interests in Wynn Las Vegas, LLC,
which owns and operates the Wynn Las Vegas integrated resort in Las
Vegas, Nevada (excluding certain leased retail space that is owned
by Wynn Resorts directly), Wynn Asia, and Wynn MA, LLC, which owns
and operates Encore Boston Harbor. The company owns 72% of Wynn
Macau, Limited. Consolidated revenue for the last twelvemonth
period ended September 30, 2022 was approximately $3.8 billion.
WYNN RESORTS: S&P Rates New $600MM Senior Unsecured Notes 'B+'
--------------------------------------------------------------
S&P Global Ratings assigned its 'B+' issue-level rating and '3'
recovery rating to Wynn Resorts Finance LLC's (WRF) proposed $600
million senior unsecured notes. The '3' recovery rating indicates
our expectation of meaningful (50%-70%; rounded estimate: 65%)
recovery for note holders in the event of a payment default. WRF is
a subsidiary of Wynn Resorts Ltd. Wynn intends to use proceeds from
the proposed notes and cash on the balance sheet to repay $500
million of Wynn Las Vegas notes due May 2023, to refinance its $600
million 7.75% WRF unsecured notes due 2025, and to pay debt
breakage costs and transaction fees.
The proposed refinancing is a net positive because it modestly
reduces outstanding debt balances, lowers interest costs and
improves cash flow, and extends Wynn's maturity profile. It also
aligns with our expectation that the company could use a portion of
the proceeds it received from the sale of Encore Boston Harbor real
estate in December 2022 to repay debt.
Wynn reported strong trends at its Macao properties during the
recent Chinese New Year holiday period, which could suggest a more
sustained and accelerated recovery compared to our current base
case assumptions. Nevertheless, it is a relatively short track
record of the market's recovery and despite good trends over the
Chinese New Year holiday and in the following week, our rating
outlook remains negative. The negative outlook reflects continued
stress on Wynn's revenue and cash flow in Macao, our forecast for
negative free operating cash flow in Macao in the first half of
2023, and our expectation that leverage will remain above our 7x
downgrade threshold at least over the next several quarters.
However, if pent-up demand for gaming in Macao from customers in
mainland China supports faster recovery in visitation and spending
than we currently incorporate in our base case forecast and support
Wynn's cash flow in Macao recovering in a sustainable manner that
would reduce and sustain leverage below 7x, we could revise the
outlook to stable.
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P assigned its 'B+' issue-level rating and '3' recovery
rating to WRF's proposed $600 billion senior notes. The '3'
recovery rating indicates our expectation of meaningful (50%-70%;
rounded estimate: 65%) recovery.
-- S&P's issue-level rating on WRF's secured debt remains 'BB'.
The '1' recovery rating indicates its expectation of very high
(90%-100%; rounded estimate: 95%) recovery for lenders in the event
of a default.
-- S&P's issue-level rating on Wynn Las Vegas' debt is unchanged
at 'B+'. The '3' recovery rating indicates its expectation of
meaningful (50%-70%; rounded estimate: 60%) recovery for
noteholders in the event of a default.
-- S&P's simulated default scenario for WRF contemplates a payment
default in 2027 (in line with its average four-year default
assumption for 'B+' rated credits), reflecting some combination of
the following factors: a severe and prolonged global recession that
impairs cash flow across the portfolio of properties, an inability
to refinance its $880 million senior notes maturing in 2027,
increased competitive pressures from other casinos on the Las Vegas
Strip and in the northeast U.S., increased borrowing for potential
large-scale development projects, and reduced ability to distribute
cash out of Wynn Macau.
-- S&P's emergence EBITDA of about $560 million is generated by
WRF's Las Vegas casinos, Encore Boston Harbor, and a modest
dividend from Wynn Macau, and incorporates significant cyclicality
in the Las Vegas market and the high quality of Wynn's assets.
-- WRF's lenders benefit from the inclusion of a pledge of its
share (72%) of future dividends from non-guarantor subsidiary Wynn
Macau. Generally, Wynn Macau is less leveraged than WRF, and S&P
assumes that in its WRF simulated default scenario, Wynn Macau's
cash flow has recovered enough that the entity would be able to pay
a modest level of dividends. As a result, S&P has included this in
its WRF emergence EBITDA.
-- S&P uses a 7.5x emergence multiple to value WRF, 1x higher than
its leisure industry average because of Wynn's very-high-quality
Las Vegas and Massachusetts assets.
-- WRF's $850 million revolving credit facility is 85% drawn at
default.
-- WRF's secured lenders benefit from a security pledge of up to
15% of Wynn Las Vegas's total assets. However, S&P's estimate of
WRF's emergence valuation is sufficient to fully satisfy WRF's
secured debt claims. Therefore, it does not allocate 15% of its
gross enterprise value for Wynn Las Vegas to WRF's secured lenders.
That value is therefore available to WRF's and Wynn Las Vegas'
unsecured creditors.
-- WRF unsecured noteholders benefit from an unsecured guarantee
from Wynn Las Vegas providing them with a pari passu claim against
the Wynn Las Vegas value. Therefore, we allocate our estimate of
Wynn Las Vegas value on a pro rata basis between Wynn Las Vegas
claims and WRF unsecured claims.
-- Because WRF's secured creditors are overcollateralized based on
our emergence valuation, WRF unsecured noteholders would benefit
from excess value after the satisfaction of WRF's secured claims.
Wynn Las Vegas creditors do not benefit from any residual value as
WRF does not guarantee Wynn Las Vegas' debt obligations. Given
this, recovery prospects for WRF unsecured noteholders are higher
than for Wynn Las Vegas unsecured noteholders, which is reflected
in our rounded estimated recovery rates even though the difference
is not enough to result in different unsecured recovery ratings.
Simulated default assumptions
-- Year of default: 2027
-- EBITDA at emergence: About $560 million
-- EBITDA multiple: 7.5x
Simplified waterfall
-- Gross recovery value: $4.2 billion
-- Net recovery value after administrative expenses (5%): $4.0
billion
-- WRF/Wynn Las Vegas valuation split: 37%/63%
-- Value available for WRF secured claims: $1.5 billion
-- Estimated WRF secured claims: $1.4 billion
--Recovery expectation: 90%-100% (rounded estimate: 95%)
-- Residual value available for WRF unsecured claims: $100
million
-- Pro rata share of Wynn Las Vegas value: $850 million
-- Total value available to WRF unsecured claims: $950 million
-- Estimated senior unsecured claims: $1.4 billion
--Recovery expectation: 50%-70% (rounded estimate: 65%)
-- Value available for Wynn Las Vegas senior notes claims: $1.7
billion
-- Estimated Wynn Las Vegas senior notes claims: $2.7 billion
--Recovery expectation: 50%-70% (rounded estimate: 60%)
Note: All debt amounts include six months of prepetition interest.
ESG credit indicators: E-2, S-4, G-3
ZAYO GROUP: First Trust Fund II Marks $751,000 Loan at 22% Off
--------------------------------------------------------------
First Trust Senior Floating Rate Income Fund II has marked its
$751,031 loan extended to Zayo Group Holdings, Inc to market at
$583,506 or 78% of the outstanding amount, as of November 30, 2022,
according to a disclosure contained in the First Trust fund's Form
N-CSRS for the six months ended November 30, 2022, filed with the
Securities and Exchange Commission on February 2, 2023.
First Trust SFRIFII is a participant in an Incremental Term Loan
B-2 to Zayo Group Holdings, Inc. The loan accrues interest at a
rate of 8.34% (1 Mo. SOFR + 4.25%, 0.50% Floor) per annum. The loan
matures on March 9, 2027.
First Trust SFRIFII is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
March 25, 2004, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FCT on the New York Stock
Exchange.
Zayo Group Holdings, Inc., or Zayo Group, is a privately held
company headquartered in Boulder, Colorado, U.S. with European
headquarters in London, England. The company provides
communications infrastructure services, including fiber and
bandwidth connectivity, colocation and cloud infrastructure.
ZAYO GROUP: First Trust High Yield Marks $61,000 Loan at 25% Off
----------------------------------------------------------------
First Trust High Yield Opportunities 2027 Term Fund has marked its
$61,000 loan extended to Zayo Group Holdings, Inc to market at
$45,840 or 75% of the outstanding amount, as of November 30, 2022,
according to a disclosure contained in the First Trust fund's Form
N-CSRS for the six months ended November 30, 2022, filed with the
Securities and Exchange Commission on February 2, 2023.
First Trust HYOTF2027 is a participant in an Initial Dollar Term
Loan to Zayo Group Holdings, Inc. The loan accrues interest at a
rate of 7.07% (1 Mo. LIBOR + 3.00%, 0.00% Floor) per annum. The
loan matures on March 9, 2027.
First Trust HYOTF2027 is a diversified, closed-end management
investment company organized as a Massachusetts business trust on
June 25, 2020, and is registered with the Securities and Exchange
Commission under the Investment Company Act of 1940, as amended.
The Fund trades under the ticker symbol FTHY on the New York Stock
Exchange.
Zayo Group Holdings, Inc., or Zayo Group, is a privately held
company headquartered in Boulder, Colorado, with European
headquarters in London, England. The company provides
communications infrastructure services.
ZENERNET LLC: Files for Chapter 7 Liquidation
---------------------------------------------
Amy Edelen of Phoenix Business Journal Phoenix-based solar energy
firm Zenernet has filed for Chapter 7 bankruptcy following hundreds
of complaints by customers alleging the company has not fulfilled
contractual obligations.
Zenernet LLC filed for bankruptcy on January 13, 2023 in the
Northern District of California. The filing indicates that
Zenernet has between 1,000-5,000 creditors. The company has $2.4
million in assets and property, and $6.5 million in liabilities --
$4.7 million of which is debt from creditors that have claims
secured by property, according to the filing.
Zenernet owes the greatest amount of debt to California-based
Consolidated Electrical Distributors Inc. and the U.S. Small
Business Administration, both of which have a $2 million lien on
the company's property, according to the filing.
Chapter 7 stops creditors from collecting on debt, but requires the
company to sell off assets and property to pay some of its debt.
In January 2023, the Better Business Bureau Serving the Pacific
Southwest concluded an investigation into Zenernet, which provides
solar energy products and installation.
The BBB received nearly 160 complaints from customers about
Zenernet in the past year with a significant amount occurring
between October and December 2022, according to a BBB statement.
Customers alleged that Zenernet left them with unfinished or
inoperable solar projects and did not return phone calls and
messages, while others claimed city inspections failed or were not
completed, according to the BBB.
One customer wrote on BBB's website they paid Zenernet $33,000 to
install a home solar system, but the company didn't finish the
installation and were unable to be reached.
Zenernet CEO John Gerken did not respond to a request for comment.
Gerken founded Zenernet in 2017 with a "small team of solar
veterans who weren't satisfied with the outdated processes and
high-pressure sales tactics they had seen in the industry,"
according to the company's website.
Inc. Magazine named Zenernet among its 5,000 fastest-growing
private companies in 2022, ranking it No. 162 with 3,167% growth
over three years.
The company operated an office at 4340 E Indian School Road, Suite
21-132, which Google has now listed as permanently closed.
Gerken's attorney, Keith Owens of California-based Fox Rothschild,
also did not respond to a request for comment.
Customers affected by Zenernet's closure may contact the Arizona
Registrar of Contractors and the Arizona Attorney General's office
to file a complaint, according to the BBB.
About Zenernet LLC
Zenernet LLC is a Phoenix-based solar energy provider.
Zenernet LLC sought relief under Chapter 7 of the U.S. Bankruptcy
Code (Bankr. N.D. Cal. Case No. 23-bk-40043) on Jan. 13, 2023. In
its petition, the Debtor reports $2.4 million in assets and
property, and $6.5 million in liabilities.
The case is overseen by Honorable Bankruptcy Judge Charles Novack.
The Debtor is represented by:
Keith C. Owens, Esq.
Fox Rothschild LLP
10250 Constellation Blvd., Suite 900
Los Angeles, CA 90067
Tel: 310-598-4150
Fax: 310-556-9828
E-mail: kowens@foxrothschild.com
[*] Jan. 2023 Y/Y New Bankruptcy Filings Rose Across Main Chapters
------------------------------------------------------------------
January 2022 year-over-year new bankruptcy filings increased
across all main chapters in the U.S.
Bankruptcy new filings were up year-over-year across Chapter 7, 11,
13, and 15 in January 2023, according to data provided by Epiq
Bankruptcy, the leading provider of U.S. bankruptcy filing data.
Epiq Bankruptcy is a division of Epiq, a global technology-enabled
services leader to the legal services industry and corporations.
Total commercial filings increased twelve percent to 1,694 in
January 2023 over the 1,508 total filings reported in January 2022.
Commercial Chapter 11 filings increased 70 percent to 257 filings
up from 151 filings recorded one year ago. All subchapter V small
business filings increased 49 percent to 137 in January 2023 from
the 92 filings registered the previous year.
Total U.S. bankruptcy filings in January 2023 were 31,087, up 19
percent from the 26,215 total filings registered in January 2022.
The 29,545 overall individual filings were 20 percent higher in
January 2023 than the 24,703 individual filings recorded last year.
While still below pre-pandemic levels, individual Chapter 13
filings continued to increase in January, as the 13,702 reported
filings were a 32 percent increase over the January 2022 total of
10,346.
"While month-over-month and year-over-year new filings were up for
most chapters, we continue to see a delta between more cases
closing in a month than are being opened, making it inconclusive
whether we've reached a turning point from historic lows in
bankruptcy filings," said Gregg Morin, vice president business
development and revenue for Epiq Bankruptcy. "In January 2023,
8,786 more total cases closed than opened. The two biggest deltas
were Chapter 7s where 4,419 more cases closed than opened and
Chapter 13s where 4,315 more cases closed than opened."
Compared to December 2022, every Chapter new filing except Chapter
12 increased. January 2023's total filings represented a five
percent increase when compared to the 29,640 total filings recorded
in December. Total individual filings for January represented a 6
percent increase from the December 27,911 total, however total
commercial filings did decrease 2 percent from 1,729 in December
2022. Individual Chapter 7 increased 2 percent from 15,471 and
individual Chapter 13 increased 10 percent over December’s
12,393. Total Chapter 11 filings registered a 16 percent increase
from the 365 filings reported the previous month, and total Chapter
11 subchapter 5 by themselves increased 9 percent from the 126
filed in December 2022.
"While still below pre-pandemic totals, bankruptcy filings continue
to increase amid growing debt loads due to inflationary pressures
and reduced availability of low-cost financing," said ABI Executive
Director Amy Quackenboss. "Struggling households and businesses on
shaky economic footing can look to bankruptcy to provide a solid
path toward a financial fresh start."
ABI partners with Epiq Bankruptcy to provide the most current
bankruptcy filing data for analysts, researchers, and members of
the news media. Epiq Bankruptcy is the leading provider of data,
technology, and services for companies operating in the business of
bankruptcy. Its new Bankruptcy Analytics subscription service
provides on-demand access to the industry's most dynamic bankruptcy
data, updated daily. Learn more at
https://bankruptcy.epiqglobal.com/analytics.
[^] BOND PRICING: For the Week from February 6 to 10, 2023
----------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
3M Co MMM 1.750 99.934 2/14/2023
AT&T Inc T 5.759 100.000 2/15/2023
Accelerate Diagnostics AXDX 2.500 91.452 3/15/2023
Air Methods Corp AIRM 8.000 4.591 5/15/2025
Air Methods Corp AIRM 8.000 4.754 5/15/2025
Audacy Capital Corp CBSR 6.500 14.299 5/1/2027
Audacy Capital Corp CBSR 6.750 14.974 3/31/2029
Audacy Capital Corp CBSR 6.750 14.918 3/31/2029
Avaya Inc AVYA 6.125 26.802 9/15/2028
Avaya Inc AVYA 8.000 35.000 12/15/2027
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bed Bath & Beyond Inc BBBY 3.749 28.990 8/1/2024
Celgene Corp CELG 2.750 99.984 2/15/2023
Clovis Oncology Inc CLVS 1.250 8.750 5/1/2025
Clovis Oncology Inc CLVS 4.500 19.875 8/1/2024
Clovis Oncology Inc CLVS 4.500 9.148 8/1/2024
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 3.331 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 9.492 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 6.000 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 9.172 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 2.946 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 1.573 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 9.481 8/15/2026
Diebold Nixdorf Inc DBD 8.500 75.357 4/15/2024
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.250 1/15/2023
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.018 1/15/2023
Energy Conversion
Devices Inc ENER 3.000 7.875 6/15/2013
Energy Transfer LP ET 6.250 94.150 N/A
Envision Healthcare EVHC 8.750 27.036 10/15/2026
Envision Healthcare EVHC 8.750 27.179 10/15/2026
Exela Intermediate
LLC / Exela Finance EXLINT 11.500 10.756 7/15/2026
Exela Intermediate
LLC / Exela Finance EXLINT 11.500 11.036 7/15/2026
GNC Holdings Inc GNC 1.500 0.819 8/15/2020
General Electric Co GE 4.200 85.499 N/A
General Electric Co GE 4.000 99.766 2/15/2023
Goldman Sachs Group GS 4.500 99.972 2/15/2023
Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022
Invacare Corp IVC 4.250 6.000 3/15/2026
Invacare Corp IVC 5.000 6.000 11/15/2024
JPMorgan Chase & Co JPM 5.106 100.000 2/15/2023
Lannett Co Inc LCI 7.750 23.616 4/15/2026
Lannett Co Inc LCI 4.500 20.165 10/1/2026
Lannett Co Inc LCI 7.750 24.795 4/15/2026
Lightning eMotors Inc ZEV 7.500 59.500 5/15/2024
MAI Holdings Inc MAIHLD 9.500 35.364 6/1/2023
MAI Holdings Inc MAIHLD 9.500 35.364 6/1/2023
MAI Holdings Inc MAIHLD 9.500 35.364 6/1/2023
MBIA Insurance Corp MBI 16.129 7.000 1/15/2033
MBIA Insurance Corp MBI 16.052 7.672 1/15/2033
Macquarie
Infrastructure
Holdings LLC MIC 2.000 98.131 10/1/2023
Mashantucket Western
Pequot Tribe MASHTU 7.350 42.000 7/1/2026
Morgan Stanley MS 1.800 74.359 8/27/2036
Morgan Stanley Finance MS 12.100 37.750 11/24/2023
National CineMedia LLC NATCIN 5.750 2.791 8/15/2026
National Rural
Utilities
Cooperative
Finance Corp NRUC 2.700 99.958 2/15/2023
OMX Timber Finance
Investments II LLC OMX 5.540 0.850 1/29/2020
Party City Holdings PRTY 8.750 12.000 2/15/2026
Party City Holdings PRTY 10.130 19.250 7/15/2025
Party City Holdings PRTY 8.750 11.250 2/15/2026
Party City Holdings PRTY 6.625 0.750 8/1/2026
Party City Holdings PRTY 6.625 0.010 8/1/2026
Party City Holdings PRTY 10.130 12.784 7/15/2025
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
RumbleON Inc RMBL 6.750 34.351 1/1/2025
Shift Technologies Inc SFT 4.750 12.500 5/15/2026
TMX Finance LLC /
TitleMax Finance TMXFIN 11.125 92.250 4/1/2023
TMX Finance LLC /
TitleMax Finance TMXFIN 11.125 95.257 4/1/2023
TMX Finance LLC /
TitleMax Finance TMXFIN 11.125 95.257 4/1/2023
Talen Energy Supply TLN 6.500 36.000 6/1/2025
Talen Energy Supply TLN 10.500 35.375 1/15/2026
Talen Energy Supply TLN 7.000 42.000 10/15/2027
Talen Energy Supply TLN 10.500 35.581 1/15/2026
Talen Energy Supply TLN 6.500 36.801 9/15/2024
Talen Energy Supply TLN 6.500 36.801 9/15/2024
Talen Energy Supply TLN 10.500 35.581 1/15/2026
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tricida Inc TCDA 3.500 14.750 5/15/2027
US Renal Care Inc USRENA 10.625 32.962 7/15/2027
US Renal Care Inc USRENA 10.625 32.989 7/15/2027
UpHealth Inc UPH 6.250 31.760 6/15/2026
WeWork Cos Inc WEWORK 7.875 56.273 5/1/2025
WeWork Cos Inc WEWORK 7.875 56.423 5/1/2025
WeWork Cos LLC / WW
Co-Obligor Inc WEWORK 5.000 47.082 7/10/2025
WeWork Cos LLC / WW
Co-Obligor Inc WEWORK 5.000 46.908 7/10/2025
Wesco Aircraft
Holdings Inc WAIR 13.125 8.109 11/15/2027
Wesco Aircraft
Holdings Inc WAIR 8.500 48.250 11/15/2024
Wesco Aircraft
Holdings Inc WAIR 8.500 49.500 11/15/2024
Wesco Aircraft
Holdings Inc WAIR 13.125 8.077 11/15/2027
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
petitions in Acrobat PDF format.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
Monthly Operating Reports are summarized in every Saturday edition
of the TCR.
The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published
by Bankruptcy Creditors Service, Inc., Fairless Hills,
Pennsylvania, USA, and Beard Group, Inc., Philadelphia, Pa., USA.
Randy Antoni, Jhonas Dampog, Marites Claro, Joy Agravante,
Rousel Elaine Tumanda, Joel Anthony G. Lopez, Psyche A. Castillon,
Ivy B. Magdadaro, Carlo Fernandez, Christopher G. Patalinghug, and
Peter A. Chapman, Editors.
Copyright 2023. All rights reserved. ISSN: 1520-9474.
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