/raid1/www/Hosts/bankrupt/TCR_Public/230216.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, February 16, 2023, Vol. 27, No. 46
Headlines
1716 R STREET: Seeks to Hire ONE Street and Berkadia as Realtors
2 MARINES AND A TRUCK: Case Summary & 20 Top Unsecured Creditors
839 E MINORKA: Expects Sale Plan to Pay 100% to Creditors
8TH AVENUE FOOD: Prospect Capital Marks $32M Loan at 18% Off
ADOLE GROUP: Voluntary Chapter 11 Case Summary
ALCARAZ CATERING: Has Deal on Cash Collateral Access
ARSENAL INTERMEDIATE: Seeks to Hire Young Conaway as Counsel
AVAYA HOLDINGS: Delays Quarterly Report on Form 10-Q for Review
AVENTIS SYSTEMS: Hits Chapter 11 Bankruptcy Protection
AVENTIV TECHNOLOGY: Prospect Capital Marks $50M Loan at 16% Off
AVENTIV TECHNOLOGY: Prospect Capital Marks $9.6M Loan at 23% Off
BED BATH & BEYOND: Investors Pledge $1-Bil. to Prevent Bankruptcy
BELK INC: Moody's Lowers CFR to 'Caa3' & Alters Outlook to Stable
BELNICK LLC: Prospect Capital Marks $90.2M Loan at 82% Off
BIG VILLAGE: Files Chapter 11, To Pursue Sales
BOY SCOUTS: Insurers Prep Up Abuse Settlement Plan Appeal
BRIGHT MOUNTAIN: W. Kip Speyer Remains as Chairman
CAA HOLDINGS: S&P Upgrades ICR to 'B+', Outlook Stable
CASA CBW: Court OKs Interim Cash Collateral Access
CASH CLOUD: Follows Backer Genesis Global in Chapter 11
CELSIUS NETWORK: Borrowers Want Crypto Collateral Returned
CHARTER NEXT: Moody's Lowers Rating on First Lien Loans to 'B3'
CINEWORLD PLC: Multiple Buyers Approach Regal
CNX RESOURCES: Incurs $142 Million Net Loss in 2022
CONUMA RESOURCES: Moody's Cuts CFR to Caa2 & Secured Notes to Caa1
CREATIVE ARTISTS: Moody's Rates New $1.6BB First Lien Loans 'B2'
CURO GROUP: Prospect Capital Marks $47M Loan at 53% Off
DANNY & CORIE: Court OKs Interim Cash Collateral Access
DARALI INC: Lender Seeks to Prohibit Cash Collateral Access
DELPHI BEHAVIORAL: In Chapter 11 to Sell, Wind Down Facilities
DIEBOLD NIXDORF: Commences Exchange Offer for 8.50% Notes Due 2024
DIEBOLD NIXDORF: Jeffrey Rutherford to Quit as Executive VP, CFO
DIEBOLD NIXDORF: Posts $152 Million Net Loss in Fourth Quarter
DIOCESE OF ROCKVILLE: Committee Fine-Tunes Payoff Plan
DOT DOT SMILE: Unsecureds be Paid in Full w/o Interest
ENGINE GROUP: Prospect Capital Marks $3.5M Loan at 77% Off
ENGINEERED MACHINERY: Incremental Loan No Impact on Moody's B2 CFR
FB DEBT FINANCING: $690 Million Bid Okayed by Bankruptcy Judge
FLUOROTEK USA: Unsecureds Owed $584K to Get Cash Remaining
FR BR HOLDINGS: S&P Downgraded To 'CCC' on Liquidity Pressure
FTX GROUP: Advisors, Lawyers Have Already Billed $20M
GIRARDI & KEESE: Ex-CFO Pleads Not Guilty for Helping Client Theft
GOODYEAR TIRE: S&P Alters Outlook to Negative, Affirms 'BB-' ICR
IGLESIAS DIOS: Claims to be Paid From Tithe and Sale of Land
K&N PARENT: Prospect Capital Marks $3.5M Loan at 95% Off
K&N PARENT: S&P Downgrades ICR to 'D' on Distressed Transaction
KEVIN G. SAUNDERS: Court OKs Interim Cash Collateral Access
KJMN PROPERTIES: Voluntary Chapter 11 Case Summary
LEVINSON & SANTORO: Seeks Cash Collateral Access
MATRIX HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B-' ICR
METROHAVANA TOWN: $2.73-Mil. Sale to Fon-On to Fund Plan
MONTGOMERY REALTY: Wins Interim Cash Collateral Access
NABORS INDUSTRIES: Incurs $307.2 Million Net Loss in 2022
NEOVASC INC: Schedules Special Meeting for March 6
NGL ENERGY: Posts $59 Million Net Income in Third Quarter
NMG HOLDING: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
NORTHERN LIGHT: Moody's Affirms 'Ba1' Revenue Bond Rating
NORTHWEST BANCORPORATION: Trustee & AmeriNational Files Joint Plan
OVERLOOK ROAD: Unsecureds Likely to Recover 100% From Sale Plan
PACIFIC WORLD: Prospect Capital Marks $56.7M Loan at 22% Off
PEABODY ENERGY: S&P Upgrades ICR to 'B', Outlook Positive
PIEDMONT DRAGWAY: Case Summary & 11 Unsecured Creditors
PLAYPOWER INC: Prospect Capital Marks $5.8M Loan at 22% Off
PLOURDE SAND: Seeks Access to $431,600 of Cash Collateral
POCONO MOUNTAIN: Court Confirms Reorganization Plan
POLAR WINDOW: CCAA Stay Extended Until May 5, 2023
POUGHKEEPSIE, NY: Moody's Confirms 'Ba1' Issuer & GOLT Ratings
REDSTONE HOLDCO: Prospect Capital Marks $50M Loan at 23% Off
RESEARCH NOW: Prospect Capital Marks $50M Loan at 21% Off
ROSIE'S LLC: March 16 Hearing on Disclosure Statement
SAVESOLAR CORP: Court OKs Cash Collateral Access Thru March 3
SEDGWICK CLAIMS: Moody's Rates New $3.5BB 1st Lien Term Loan 'B2'
SENECAL CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors
SHUTTERFLY LLC: Prospect Capital Marks $20.09M Loan at 29% Off
SOTERA HEALTH: Moody's Confirms 'B1' CFR & Alters Outlook to Stable
SOTERA HEALTH: New Term Loan Upsize No Impact on Moody's 'B1' CFR
STIMWAVE TECHNOLOGIES: Unsecureds Unimpaired in Toggle Treatment
STONE CLINICAL: Court Confirms Reorganization Plan
THREE ARROWS: Founders Start Crypto Bankruptcy Claims Exchange
TIMES SQUARE: To Seek Plan Confirmation on March 16
TURNER OAKWOOD: Says Sale Plan to Pay Creditors in Full
USES CORP: Prospect Capital Marks $62.7M Loan at 71% Off
VANTAGE DRILLING: To Redeem $180M Outstanding Notes on March 6
VENUS IN PERPETUUM: Voluntary Chapter 11 Case Summary
VMR CONTRACTORS: Court OKs Cash Collateral Access Thru Feb 27
W&T OFFSHORE: S&P Upgrades ICR to 'B-', Outlook Stable
WALL VENTURES: Amends Unsecured Claims Pay Details
WILLIAM HOLDINGS: Has Deal on Cash Collateral Access
WORLD WIDE TECHNOLOGY: Moody's Assigns First Time 'Ba2' CFR
WORLD WIDE TECHNOLOGY: S&P Assigns 'BB' ICR, Outlook Stablez
YAK ACCESS: Moody's Lowers CFR & First Lien Loans to 'Ca'
[^] Recent Small-Dollar & Individual Chapter 11 Filings
*********
1716 R STREET: Seeks to Hire ONE Street and Berkadia as Realtors
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1716 R Street Flats LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the District of Columbia to employ ONE
Street Commercial Properties and Berkadia Real Estate Advisors LLC
as realtors.
The realtors will render these professional services:
(a) market the Debtors' property;
(b) meet with prospective purchasers;
(c) draft sales contracts;
(d) provide advice on the value of the property; and
(e) perform any other service which may be reasonably
necessary to consummate a sale of the property.
ONE Street and Berkadia will receive a commission of 5 percent and
4 percent of the gross purchase price of any approved sale of the
property, respectively, subject to court approval. The realtors
would split the commission with any agent for a buyer.
Kevin Brandes, a director at ONE Street Commercial Properties, and
Robert Meehling, a senior managing director at Berkadia Real Estate
Advisors, disclosed in court filings that their firms are
"disinterested persons" as that term is defined in Section 101(14)
of the Bankruptcy Code.
The firms can be reached through:
Kevin Brandes
ONE Street Commercial Properties
5021 Wilson Ln.
Bethesda, MD 20814
Telephone: (301) 941-7162
Email: info@onestreet.one
- and -
Robert Meehling
Berkadia Real Estate Advisors LLC
4445 Willard Avenue, Suite 1200
Chevy Chase, MD 20815
Telephone: (301) 202-3550
Facsimile: (301) 656-2451
About 1716 R Street Flats
1716 R Street Flats LLC and affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.D.C. Lead Case No.
23-00017) on Jan. 16, 2023. In the petition signed by Richard
Cunningham, managing member, 1716 R Street Flats disclosed up to $1
million in assets and up to $10 million in liabilities.
Judge Elizabeth L. Gunn oversees the cases.
Justin P. Fasano, Esq., at McNamee Hosea, PA, represents the
Debtors as legal counsel.
2 MARINES AND A TRUCK: Case Summary & 20 Top Unsecured Creditors
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Debtor: 2 Marines and a Truck, Inc.
DBA Two Marines Moving
4700 Eisenhower Ave., Suite A6
Alexandria, VA 22304-4806
Business Description: The Debtor provides moving services to
residents around the entire Washington D.C.
Metro area. Services include local moving,
long distance moving, packing, and storage.
Chapter 11 Petition Date: February 15, 2023
Court: United States Bankruptcy Court
Eastern District of Virginia
Case No.: 23-10237
Debtor's Counsel: Steven B. Ramsdell, Esq.
TYLER, BARTL & RAMSDELL, PLC
300 N. Washington St.
Suite 310
Alexandria, VA 22314
Tel: (703) 549-5000
Fax: (703) 549-5011
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Nicholas E. Baucom as CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/LOLW2OI/2_Marines_and_a_Truck_Inc__vaebke-23-10237__0001.0.pdf?mcid=tGE4TAMA
839 E MINORKA: Expects Sale Plan to Pay 100% to Creditors
---------------------------------------------------------
839 E Minorka Partners, LLC, submitted a Third Amended Disclosure
Statement describing Chapter 11 Plan dated February 12, 2023.
A Trustee's Deed Upon Sale was recorded on June 2, 2022 listing KMS
Enterprises, LLC as the purchaser of the Property following a
purported trustee's sale of the Property. As the purported
trustee's sale occurred following the filing of the Petition in
this matter, the Trustee's Deed Upon Sale is void as a matter of
law.
The Plan, however, seeks an order from the Court retroactively
applying the automatic stay and establishing that the Trustee's
Deed Upon Sale valid so that the Property may be sold free and
clear of all claims, liens, encumbrances and/or adverse interests
(including any claims for successor liability or similar theories
of liability), except for those interests and encumbrances
disclosed in the Plan.
In addition to Secured Creditor, the only other known lienholder is
the City of Tucson, acting though the Community Services
Department, which holds 2 statutory liens for payments made to the
previous owner of the property from the Housing Rehab Perpetual
Loan Fund. The 2 statutory liens with the City of Tucson's
interests and encumbrances are to remain on the Property following
the sale of the Property.
Debtor filed its Section 363 motion for approval of the sale of the
Property. Through the Plan, the Debtor seeks to the sale of the
Property for $122,500.00. On approval of the Plan, the Debtor will
be selling the building and land to Norbert Lawson for a purchase
price of $122,500.00.
The sale will pay KMS Enterprises, LLC in full in the amount of
$120,594.88. According to a payoff statement provided by the
substitute trustee under Bank of America's deed of trust, as of the
Filing Date, the outstanding balance of Bank of America's claim of
$118,566.89 was paid in full at the time of the Trustee's Sale.
Debtor will be selling the building and land to the Norbert Lawson,
so it will not be operating after the sale. The sale will pay all
claims in full with the exception of the claims for the City of
Tucson. The City of Tucson is willing to waive the two liens on the
condition that the Debtor record a deed of restriction against the
Property. Therefore, there are no future income and expense
projections to be filed at this time.
Class 2 consists of the Secured Claim of the Bank of America on the
Property in the amount of $118,566.89. Bank of America will not
receive any payment from the sale of the Property as it was paid in
full before the confirmation of the plan under the trustee's sale
on May 24, 2022. As such, it will receive no disbursements under
the plan.
Class 3 consists of the Claim of the City of Tucson. The City of
Tucson holds 2 statutory liens for payments made to the previous
owner of the property from the Housing Rehab Perpetual Loan Fund in
the total amount of $20,989.40. It is secured by a lien on the
Property. The 2 statutory liens with the City of Tucson's interests
and encumbrances to remain on the Property following the sale of
the Property to Norbert Lawson.
Class 4 consists of the Claim of KMS Enterprises, LLC. As the
trustee's sale occurred following the filing of the Petition in
this matter, the Trustee's Deed Upon Sale is void as a matter of
law. The Plan, however, seeks an order from the Court retroactively
applying the automatic stay and establishing that the Trustee's
Deed Upon Sale to be valid so that the Property may be sold free
and clear of all claims, liens, encumbrances and/or adverse
interests, except for those interests and encumbrances disclosed in
the Plan. On approval of the Plan, the Property will be transferred
to the Debtor and immediately sold to Norbert Lawson for a purchase
price of $122,500. The sale proceeds will be used to pay KMS
Enterprises, LLC in full in the amount of $120,595.
The Debtor's Plan will be funded by its sale of the Property. With
the $122,500 purchase price, Debtor anticipates that the sale
proceeds will allow the Debtor to pay 100% of its debts in full.
Accordingly, Debtor believes that the sale of the Property to Buyer
is appropriate and in the best interest of the bankruptcy estate.
A full-text copy of the Third Amended Disclosure Statement dated
February 12, 2023 is available at https://bit.ly/3xlYqib from
PacerMonitor.com at no charge.
Attorney for the Debtor:
Bryan W. Goodman, Esq.
GOODMAN & GOODMAN, PLC
7473 E. Tanque Verde Rd
Tucson, AZ 85715
Telephone: 520-886-5631
E-mail: bwg@goodmanadvisor.com
About 839 E Minorka Partners
839 E Minorka Partners, LLC, is a single asset real estate company
whose sole member is Community Partners in Housing, an Arizona
Non-Profit. The company's sole asset is the building and land
located at 839 E. Minorka Road, Tucson, Arizona 85706.
The Property is subject to a deed of trust in favor of Bank of
America, which secures payment under a promissory note dated
December 30, 2005 in the original principal amount of $93,571. The
Note was in default for failure to pay the outstanding balance due
on maturity, and a trustee's sale was set for May 24, 2022.
To stop the trustee's sale, 839 E Minorka Partners filed a Chapter
11 bankruptcy petition (Bankr. D. Ariz. Case No. 22-bk-03299) on
May 24, 2022. The Debtor is represented by GOODMAN & GOODMAN, PLC.
8TH AVENUE FOOD: Prospect Capital Marks $32M Loan at 18% Off
------------------------------------------------------------
Prospect Capital Corporation has marked its $32,133,000 loan
extended to 8th Avenue Food & Provisions, Inc. to market at
$26,376,000 or 82% of the outstanding amount, as of December 31,
2022, according to a disclosure contained in Prospect Capital's
Form 10-Q for the quarterly period ended December 31, 2022, filed
with the Securities and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a Second Lien Term Loan to 8th
Avenue Food & Provisions, Inc. The loan accrues interest at a rate
of 12.13% (1ML+ 7.75%) per annum. The loan matures on October 1,
2026.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
8th Avenue Food & Provisions, Inc. provides food catering services.
The Company supplies organic and conventional peanut and other nut
butters, baking nuts, raisins, other dried fruit, and trail mixes
to leading grocery retailers, top food service distributors, and
industrial bakeries.
ADOLE GROUP: Voluntary Chapter 11 Case Summary
----------------------------------------------
Debtor: Adole Group, LLC
d/b/a The Melva Inn
68 W 120th Street
New York, NY 10027
Business Description: Adole is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
The Debtor is the owner in fee simple title
of a property located at 68 W 120th Street
New York, NY valued at $2.89 million.
Chapter 11 Petition Date: February 15, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-10222
Debtor's Counsel: Jjais Forde, Esq.
LAW OFFICES OF JJAIS A. FORDE, PLLC
814 W Merrick Road
Valley Stream, NY 11580-4829
Tel: 516-350-8325
Email: bankruptcy@fordelawoffices.com
Total Assets: $2,905,200
Total Liabilities: $1,735,749
The petition was signed by Cheryl A. Smith, MD, as managing
member.
The Debtor filed an empty list of its 20 largest unsecured
creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/4Z3XAFY/Adole_Group_LLC__nysbke-23-10222__0001.0.pdf?mcid=tGE4TAMA
ALCARAZ CATERING: Has Deal on Cash Collateral Access
----------------------------------------------------
Alcaraz Catering, Inc. and its creditors, Prime Alliance Bank and
United States Small Business Administration, advised the U.S.
Bankruptcy Court for the Central District of California, Northern
Division, that they have reached an agreement regarding the
Debtor's use of cash collateral and now desire to memorialize the
terms of this agreement into an agreed order.
As previously reported by the Troubled Company Reporter, the Debtor
obtained a loan from Prime for business purposes. The Loan is
evidenced by:
1. The Promissory Note dated February 8, 2012, in the original
maximum principal amount of $1,994,500;
2. The Business Loan Agreement dated February 8, 2012;
3. The Deed of Trust, in favor of Prime, dated February 8,
2012, encumbering real property located at 2958 Sturgis Road,
Oxnard, California, recorded on February 14, 2012 in the Official
Records of Ventura County as Document No. 20120214-00024370-0;
4. The Assignment of Rents, in favor of Prime, dated February
8, 2012, recorded on February 14, 2012 in the Official Records of
Ventura County as Document No. 20120214-00024371-0; and
5. Other related Loan Documents.
The Debtor acknowledges that, as of the Petition Date, the
outstanding indebtedness owed to Prime pursuant to the Loan is
$2,218,991, including without limitation outstanding principal of
$1,571,985.
The parties agree that the Debtor may use cash collateral to pay
ordinary and necessary operating expenses in accordance with the
budget.
The Debtor will timely pay the Smal Business Administration and
Prime their respective adequate protection payments.
The SBA and Prime will be granted replacement liens in the Debtor's
assets for the use of cash collateral to the same extent, validity
and priority as their respective pre-petition liens. The
replacement liens are deemed duly perfected and recorded under all
applicable laws without the needs for any notices or filings.
A copy of the stipulation is available at https://bit.ly/3I5G1Lt
from PacerMonitor.com.
About Alcaraz Catering
Alcaraz Catering Inc. is a catering company. Alcaraz Catering filed
a petition for relief under Subchapter V of Chapter 11 of the
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-10622) on August 13,
2022. In the petition filed by Antonio Alcaraz, as president, the
Debtor reported assets and liabilities between $1 million and $10
million each.
Susan K. Seflin has been appointed as Subchapter V trustee.
The Law Offices of Kenneth H.J. Henjum is the Debtor's counsel.
ARSENAL INTERMEDIATE: Seeks to Hire Young Conaway as Counsel
------------------------------------------------------------
Arsenal Intermediate Holdings, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to
employ Young Conaway Stargatt & Taylor, LLP as their counsel.
Young Conaway will render these legal services:
(a) advise the Debtors with respect to their powers and
duties;
(b) prepare legal papers;
(c) appear in court and at any meeting with the U.S. Trustee
and any meeting of creditors at any given time;
(d) perform various services in connection with the
administration of the Chapter 11 cases; and
(e) perform all other services assigned by the Debtors.
Young Conaway received a total retainer of $175,000 in connection
with the planning and preparation of documents and its proposed
post-petition representation of the Debtors.
The hourly rates of Young Conaway's counsel and staff are as
follows:
Sean M. Beach $1,070
Elizabeth S. Justison $720
S. Alexander Faris $600
Shella Borovinskaya $505
Brenda Walters, Paralegal $365
In addition, the firm will seek reimbursement for expenses
incurred.
Sean Beach, Esq., a partner at Young Conaway Stargatt & Taylor,
disclosed in a court filing that the firm is a "disinterested
person" as defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Sean M. Beach, Esq.
Elizabeth S. Justison, Esq.
S. Alexander Faris, Esq.
Shella Borovinskaya, Esq.
Young Conaway Stargatt & Taylor, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
Facsimile: (302) 571-1256
E-mail: sbeach@ycst.com
ejustison@ycst.com
afaris@ycst.com
sborovinskaya@ycst.com
About Arsenal Intermediate Holdings
Arsenal Intermediate Holdings, LLC was founded in 2006 as an
independent captive management and alternative-risk manager. It
provides broad customer solutions in risk management for captive
insurance companies and various other insurance entities through
its office location in Alabama.
Arsenal Intermediate Holdings and its affiliates filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. D. Del. Case No. 23-10097) on Jan. 26, 2023, listing up to
$500,000 in assets and up to $10 million in liabilities. Michael
Wyse, chief restructuring officer, signed the petition.
Judge Craig T. Goldblatt oversees the cases.
The Debtors tapped Young Conaway Stargatt & Taylor, LLP as legal
counsel; Polsinelli PC as special regulatory counsel; and Wyse
Advisors LLC to provide chief restructuring officer and additional
personnel. Kroll Restructuring Administration LLC is the Debtors'
administrative advisor.
AVAYA HOLDINGS: Delays Quarterly Report on Form 10-Q for Review
---------------------------------------------------------------
Avaya Holdings Corp. is unable to file, without unreasonable effort
and expense, its Quarterly Report on Form 10-Q for the quarterly
period ended Dec. 31, 2022.
As previously disclosed in the Company's NT 10-Q filed with the
U.S. Securities & Exchange Commission on Aug. 9, 2022 and the
Company's NT 10-K filed with the SEC on Nov. 30, 2022, the audit
committee of the Company's board of directors commenced an internal
investigation to review, among other things, the circumstances
surrounding the Company's financial results for the quarter ended
June 30, 2022. The Audit Committee's investigation into the
Company's financial results for the quarter ended June 30, 2022
remains on-going.
Following the Company's notification to the SEC of the Audit
Committee's investigation, as noted in the Company's Q3 NT 10-Q,
the Company has been fully cooperating with the SEC's
investigation, which the Company expects to remain on-going for
some time.
As previously disclosed in a Form 8-K filed on Nov. 30, 2022, the
Company determined that material weaknesses existed in its Internal
Control Over Financial Reporting and that disclosure controls and
procedures were not effective as of Sept. 30, 2021, which continues
to be the case. The Company is assessing a potential material
weakness related to designing and maintaining an effective control
environment and to the setting of an appropriate "tone at the top."
Management is actively engaged in taking steps necessary to
remediate the control deficiencies that constituted the material
weaknesses discussed above. The Company is committed to
transforming its culture to embrace transparency and open
communication and the following personnel changes have occurred:
-- On July 28, 2022, Avaya removed James M. Chirico, Jr. as
chief executive officer and appointed Alan Masarek as new chief
executive officer, effective Aug. 1, 2022;
-- It was determined that Stephen Spears would step down from
his role as chief revenue officer on Oct. 18, 2022 and departed
the Company effective Nov. 1, 2022;
-- Kieran McGrath, stepped down as chief financial officer,
effective Nov. 9, 2022, and retired from the Company, effective
Dec. 1, 2022; and
-- Avaya appointed Rebecca A. Roof as interim chief financial
officer, effective Nov. 9, 2022.
There may be additional material weaknesses identified in the
Company's ICFR.
The Company is also continuing to complete its assessment of the
impairment charges related to the Company's long-lived assets as
well as its intangible assets, including the Avaya Trade Name and
the goodwill related to the Company's Services reporting unit for
each period for which the Company has yet to file a periodic
report. As disclosed in Q3 NT 10-Q, the Company expects to record a
goodwill impairment charge of approximately $1,175 million to
$1,471 million and an impairment charge of approximately $97
million to $333 million for its indefinite-lived intangible asset,
the Avaya Trade Name.
As a result of the foregoing and other closing activities, the
Company requires additional time to complete its review of its
financial statements and other disclosures as of and for the
applicable periods ended June 30, 2022, Sept. 30, 2022 and Dec. 31,
2022, and to complete its closing processes and controls, and is
unable to file its Quarterly Report on Form 10-Q for the period
ended December 31, 2022 on or prior to the prescribed due date of
Feb. 9, 2023. The Company does not currently anticipate that it
will be able to file that Form 10-Q on or before the fifth calendar
day following the Feb. 9, 2023 prescribed filing date as a result
of the circumstances described above. The Company will seek to
resolve these issues as soon as practicable and plans to file the
Form 10-Q as soon as possible.
As previously disclosed, each of the Company's term loan facility
and ABL facility contains a covenant that requires the Company's
(or Avaya Inc.'s) audited financial statements be provided to the
applicable lenders on or before Dec. 29, 2022, which audited
financial statements shall be audited by an independent registered
public accounting firm of recognized national standing whose
opinion shall not be qualified as to the scope of audit or as to
the status of the audit entity and its consolidated subsidiaries as
a going concern (other than an exception with respect to a current
maturity date of any indebtedness or any actual or prospective
default of a financial maintenance covenant). Such audited
financial statements have not, as of this date, been delivered to
the applicable lenders. The Company has 30 days to cure a failure
to deliver such compliant financial statements after receipt of
written notice from the administrative agent of the applicable
facility. As of the date of this notification, the Company has not
received such notice. The Company continues to have constructive
dialogue with its creditors about the parameters of restructuring
the Company's capital structure, which may likely be effectuated in
the near-term and take the form of an in-court restructuring for
the Company and its domestic subsidiaries.
The Company expects to report a significant decline in revenue as
well as significant impairment charges related to its intangible
assets, and consequently, will report a significant decrease in
operating income and a significant increase in net loss, for the
quarter ended Dec. 31, 2022 as compared to the quarter ended Dec.
31, 2021. It is expected that preliminary unaudited revenues for
the quarter ended Dec. 31, 2022 are in the range of $418 to $423
million. However, the Company is unable to provide reasonable
estimates of gross profit, operating income and net loss or the
amount of the impairment charges at this time as the Company
continues to focus on completing the Audit Committee investigation
noted above and has not completed its financial close process and
controls for the applicable period.
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 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.
AVENTIS SYSTEMS: Hits Chapter 11 Bankruptcy Protection
------------------------------------------------------
Aventis Systems Inc. filed for chapter 11 protection in the
Northern District of Georgia.
ThDebtor is a Georgia corporation, with its principal place of
business located at 200 Galleria Parkway, Suite 250, Atlanta, GA,
30339, as well as a warehouse located at 189 Cobb Parkway N., Suite
B7, Marietta, GA 30062.
The Debtor offers custom IT solutions to build & operate complete
physical & virtual infrastructures. The comprehensive solutions
include high-quality refurbished & new hardware, system &
application software, and an array of in-depth managed services
including infrastructure consultation, cloud hosting & migration,
virtualization deployment, data & disaster recovery, security
consultation, hardware relocation, and equipment buyback. Debtor
also sells hardware & software via various on-line platforms.
The Debtor filed motions to pay prepetition employee wages and
claims of critical vendors.
According to court filings, Aventis Systems Inc. estimates between
$10 million and $50 million in debt owed to 50 to 99 creditors.
The petition states that funds will be available to unsecured
creditors.
About Aventis Systems
Aventis Systems, Inc., offers custom IT solutions to build and
operate complete physical and virtual infrastructures.
Aventis Systems sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-51162) on Feb. 6,
2023. In the petition signed by Hessam Lamei, CEO, the Debtor
disclosed up to $50 million in assets and up to $10 million in
liabilities.
Anna Humnicky, Esq., at Small Herrin, LLP, is the Debtor's legal
counsel.
AVENTIV TECHNOLOGY: Prospect Capital Marks $50M Loan at 16% Off
---------------------------------------------------------------
Prospect Capital Corporation has marked its $50,662,000 loan
extended to Aventiv Technologies, LLC to market at $42,740,000 or
84% of the outstanding amount, as of December 31, 2022, according
to a disclosure contained in the Prospect CC’s Form 10-Q for the
quarterly period ended December 31, 2022, filed with the
Securities and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a Second Lien Term Loan to
Aventiv Technologies, LLC. The loan accrues interest at a rate of
12.66% (3ML+ 8.25%) per annum. The loan matures on November 1,
2025.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
Aventiv Technologies is a diversified technology company that
provides innovative solutions to customers in the corrections and
Securus Technologies and All Paid, leading providers of innovative
products and services.
AVENTIV TECHNOLOGY: Prospect Capital Marks $9.6M Loan at 23% Off
----------------------------------------------------------------
Prospect Capital Corporation has marked its $9,645,000 loan
extended to Aventiv Technologies, LLC to market at $7,388,000 or
77% of the outstanding amount, as of December 31, 2022, according
to a disclosure contained in Prospect Capital's Form 10-Q for the
quarterly period ended December 31, 2022, filed with the Securities
and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a First Lien Term Loan to
Aventiv Technologies, LLC. The loan accrues interest at a rate of
9.23% (3ML+ 4.50%) per annum. The loan matures on November 01,
2024.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
Aventiv Technologies is a diversified technology company that
provides innovative solutions to customers in the corrections and
Securus Technologies and All Paid, leading providers of innovative
products and services.
BED BATH & BEYOND: Investors Pledge $1-Bil. to Prevent Bankruptcy
-----------------------------------------------------------------
Bloomberg News reports that Bed Bath & Beyond Inc. has lined up
investors for an 11th-hour cash infusion that would allow it to
stave off a bankruptcy filing, according to people with knowledge
of the matter.
The retailer, which has been preparing for a Chapter 11 filing
after lenders declared it in default last month, plans to issue
convertible preferred securities and warrants, it said in a Feb. 6
statement, in a deal that would ultimately raise more than $1
billion.
The company has gathered orders from institutional investors that
would cover the full offering, said the people, who asked not to be
identified because the details are private. A significant chunk of
the orders are coming from one anchor investor, said one of the
people, who wouldn't;'t identify the investors.
The company would raise $225 million immediately through the sale
of convertible preferred shares and common equity warrants. The
fresh cash would allow the company to cure a default on an
asset-based loan and make overdue debt payments that it missed this
month.
The company could raise another $800 million over time through the
execution of the warrants it issues.
In a statement, a Bed Bath & Beyond spokeswoman said the company
"provided a detailed disclosure earlier today and will not be
commenting further due to regulatory requirements."
Earlier this February 2023, Bed Bath & Beyond said net sales
plummeted 33% in its fiscal third quarter, as the retailer
struggles to stay afloat. Digital sales also fell 33%.
Unimpressed with move by BBBY investors
One analyst covering the stock said new investments won't save the
retailer. In a research note, Wedbush Securities analyst Seth
Basham said Bed Bath & Beyond shares will soon be worthless,
calling the equity financing a "last gasp" before the company
eventually files for bankruptcy protection.
Even if Bed Bath & Beyond completes the transactions, "the
additional capital provides the company with just a few more
quarters of room to turn around its operations," Basham wrote. He
cut his price target on Bed Bath & Beyond to $0 from $1 and
reiterated his underperform rating on the stock. Basham didn't
immediately respond to a request for further comment. Last January
2023, KeyBanc Capital Markets said Bed Bath & Beyond shares were
only worth a dime.
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. 31, 2023, S&P Global Ratings lowered
its issuer credit rating on Bed Bath & Beyond Inc. (BBBY) to 'D'
from 'CC'. The downgrade follows BBBY's announcement that it
received a notice of acceleration and default interest from
stemming from its failure to prepay an overadvance and comply with
a financial covenant.
In November 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 12 months.
BELK INC: Moody's Lowers CFR to 'Caa3' & Alters Outlook to Stable
-----------------------------------------------------------------
Moody's Investors Service downgraded Belk, Inc.'s ratings,
including its corporate family rating to Caa3 from Caa2;
probability of default rating to Caa3-PD from Caa2-PD, its first
lien first out term loan ("FLFO") to Caa3 from Caa1 and first lien
second out term loan ("FLSO") to C from Caa3. The first lien credit
facility, which comprises the FLFO and the FLSO, is secured by a
first-priority lien on all assets and has a second priority lien on
the collateral securing its asset based revolving credit facility
("ABL"), largely its inventory. The FLFO is priority in payment to
the FLSO. The ratings outlook is changed to stable from negative.
The downgrade reflects governance considerations particularly
Belk's unsustainable capital structure that increases the
likelihood of default as its already high interest burden continues
to increase given the rising interest rate environment. The
downgrade also reflects Belk's weak credit metrics with
EBIT/interest of 0.2x and debt/EBITDA of approximately 12x and weak
liquidity. Lastly, the Caa3 CFR considers Belk's continued private
equity ownership with Sycamore Partners ("Sycamore") controlling
ownership.
Downgrades:
Issuer: Belk, Inc.
Corporate Family Rating, Downgraded to Caa3 from
Caa2
Probability of Default Rating, Downgraded to Caa3-PD
from Caa2-PD
Senior Secured 1st Lien Term Loan, First-Out,
Downgraded to Caa3 (LGD3) from Caa1 (LGD3)
Senior Secured 1st Lien Term Loan, Second-Out,
Downgraded to C (LGD6) from Caa3 (LGD4)
Outlook Actions:
Issuer: Belk, Inc.
Outlook, Changed To Stable From Negative
RATINGS RATIONALE
Belk.'s Caa3 CFR reflects its unsustainably high debt load as well
as its higher interest burden given rising interest rates.
Although Moody's expects moderate operating improvement in 2023,
operating income is expected to remain well below historical
levels, as consumers pull back on discretionary spending which will
constrain any earnings benefit from declining product and supply
chain costs. The company has weak liquidity with $83 million of
cash and $267 million available on its ABL facility as of October
29, 2022. Although the company's capital commitments of $225
million from Sycamore Partners ("Sycamore"), KKR and Blackstone
Credit enabled the company to return to more normalized terms with
its vendors, the company has been unable to improve its financial
performance significantly since emerging from bankruptcy. Belk's
debt/EBITDA of 12x remains unsustainably high and leaves the
company vulnerable to any potential future shocks with limited
access to additional sources of capital. Its asset based revolver
matures in August 2024 with its remaining capital structure due in
2025. The company remains private equity controlled. The company's
modest scale and regional profile with a concentration in the
southeastern US region and modest scale in the challenged US
department store sector also is a constraint. Belk's stores have a
significant concentration in three states (North Carolina, Georgia,
and South Carolina).
The stable outlook reflects that Belk's nearest debt maturity is
not until August 2024 and that the ratings adequately reflect the
likelihood of a default and estimated recovery levels.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded to the extent Belk's sales and operating
profitability were to consistently grow, recovery expectations
improved, liquidity became adequate and its capital structure was
refinanced at par.
Ratings could be downgraded if expectations for Belk's family
recovery rate deteriorates further, liquidity weakens, or the
likelihood of a default increase for any reason.
Headquartered in Charlotte, North Carolina, Belk, Inc. operates 290
stores in 16 states primarily in Southeastern states. The company
generated revenue of approximately $3.1 billion during the LTM
period ending October 29, 2022. The company was acquired by
Sycamore Partners in a transaction valued at approximately $3
billion in December 2015 and emerged from Chapter 11 proceedings on
February 25, 2021 with Sycamore maintaining a controlling stake.
The principal methodology used in these ratings was Retail
published in November 2021.
BELNICK LLC: Prospect Capital Marks $90.2M Loan at 82% Off
----------------------------------------------------------
Prospect Capital Corporation has marked its $90,250,000 loan
extended to Belnick, LLC to market at $15,850,000 or 18% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Prospect Capital's Form 10-Q for the
quarterly period ended December 31, 2022, filed with the Securities
and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a First Lien Term Loan to
Belnick, LLC. The loan accrues interest at a rate of 12.23% (3ML+
7.50%) per annum. The loan matures on January 20, 2027.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
Belnick, LLC, doing business as BizChair.com, retails commercial
and residential furniture online. The Company offers chairs,
industrial seating, stools, chair mats, and other furniture.
BIG VILLAGE: Files Chapter 11, To Pursue Sales
----------------------------------------------
Global advertising, data and tech conglomerate Big Village Holding
LLC and 10 affiliates opened a Chapter 11 in Delaware late
Wednesday, February 8, 2023, with nearly $100 million in secured
debt and trade liabilities.
The Debtors simultaneously announced that they have secured
purchasers for their Agency, Insights, as well as the managed
services platform of their EMX business line. Big Village has
executed asset purchase agreements to sell the Agency and Insights
business lines to Refuel Agency, and a second agreement to sell the
managed services business of EMX to a publicly traded strategic
buyer.
Both of the sales will be effectuated through a coordinated chapter
11 bankruptcy process filed in Delaware and supported by Big
Village’s senior secured lending group.
Concurrent with the chapter 11 filing, Big Village filed a series
of "first day motions" that, when approved, will ensure minimal
operational impact to Big Village and the EMX managed services
business. Both sales will be subject to higher or better offers and
final approval by the bankruptcy court.
About Big Village Holding
Big Village Holding LLC and its affiliates are a global
advertising, technology, and data company with operations in the
United States, European Union, and Australia. They deliver their
advertising and digital content across multiple media channels and
online platforms, and facilitate the implementation of targeted,
data-driven advertising strategies which encompass all of the
technology and intelligence necessary to execute global advertising
campaigns.
Big Village Holding LLC and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 23-10174) on February 8, 2023. In the petition signed by Kasha
Cacy, global chief executive officer, the Debtors disclosed up to
$50 million in assets and up to $100 million in liabilities.
Judge Craig T. Goldblatt oversees the case.
The Debtors tapped Young Conaway Stargatt and Taylor, LLP as legal
counsel, Kroll Restructuring Administration, LLC as claims and
noticing agent and administrative advisor, Portage Point Partners,
LLC as restructuring advisor, and Stephens, Inc. as investment
banker.
BNP Paribas, as administrative agent under the Debtors' prepetition
credit agreement, is represented by Mayer Brown LLP's Brian Trust
and Scott Zemser; and Potter Anderson & Corroon LLP's L. Katherine
Good.
BOY SCOUTS: Insurers Prep Up Abuse Settlement Plan Appeal
---------------------------------------------------------
Becky Yerak of The Wall Street Journal reports that a group of
insurers fighting the Boy Scouts of America's bankruptcy
reorganization plan wants to capitalize on a recent court ruling
rejecting Johnson & Johnson's use of chapter 11 to freeze 40,000
lawsuits linking its talc products to cancer.
Allianz Global Risks US Insurance Co. and Liberty Mutual Insurance
Co. are among the carriers scheduled to appear Thursday, February
9, 2023, in the U.S. District Court in Wilmington, Del., to argue
against a bankruptcy court's 2022 approval of the Boy Scouts
chapter 11 plan, which would settle sex abuse claims.
About Boy Scouts of America
The Boy Scouts of America -- https://www.scouting.org/ -- is a
federally chartered non-profit corporation under title 36 of the
United States Code. Founded in 1910 and chartered by an act of
Congress in 1916, the BSA's mission is to train youth in
responsible citizenship, character development, and self-reliance
through participation in a wide range of outdoor activities,
educational programs, and, at older age levels, career-oriented
programs in partnership with community organizations. Its national
headquarters is located in Irving, Texas.
The Boy Scouts of America and affiliate Delaware BSA, LLC, sought
Chapter 11 protection (Bankr. D. Del. Lead Case No. 20-10343) on
Feb. 18, 2020, to deal with sexual abuse claims.
Boy Scouts of America was estimated to have $1 billion to $10
billion in assets and at least $500 million in liabilities as of
the bankruptcy filing.
The Debtors have tapped Sidley Austin LLP as their bankruptcy
counsel, Morris, Nichols, Arsht & Tunnell LLP as Delaware counsel,
and Alvarez & Marsal North America, LLC, as financial advisor.
Omni Agent Solutions is the claims agent.
The U.S. Trustee for Region 3 appointed a tort claimants' committee
and an unsecured creditors' committee on March 5, 2020. The tort
claimants' committee is represented by Pachulski Stang Ziehl &
Jones, LLP, while the unsecured creditors' committee is represented
by Kramer Levin Naftalis & Frankel, LLP.
BRIGHT MOUNTAIN: W. Kip Speyer Remains as Chairman
--------------------------------------------------
Bright Mountain Media, Inc. and W. Kip Speyer memorialized Mr.
Speyer's continued service as Chairman of the Board of Directors.
Also, the Company and Mr. Speyer memorialized the expiration date
for Mr. Speyer's employment agreement with the Company as April 1,
2023.
About Bright Mountain
Based in Boca Raton, Fla., Bright Mountain Media, Inc. --
www.brightmountainmedia.com -- is engaged in operating a
proprietary, end-to-end digital media and advertising services
platform designed to connect brand advertisers with
demographically-targeted consumers -- both large audiences and more
granular segments -- across digital, social and connected
television publishing formats. The Company defines "end-to-end" as
its process for taking ad buying from beginning to end, delivering
a complete functional solution, usually without requiring any
involvement from a third party.
Bright Mountain reported a net loss of $12 million for the year
ended Dec. 31, 2021, a net loss of $72.71 million for the year
ended Dec. 31, 2020, a net loss of $4.17 million for the year ended
Dec. 31, 2019, and a net loss of $5.22 million for the year ended
Dec. 31, 2018. As of Sept. 30, 2022, the Company had $30.28
million in total assets, $41.80 million in total liabilities, and a
total shareholders' deficit of $11.52 million.
East Brunswick, New Jersey-based WithumSmith+Brown, PC, the
Company's auditor since 2021, issued a "going concern"
qualification in its report dated June 10, 2022, citing that the
Company has suffered recurring losses from operations and has a net
capital deficiency that raise substantial doubt about its ability
to continue as a going concern.
CAA HOLDINGS: S&P Upgrades ICR to 'B+', Outlook Stable
------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S.-based
talent agency CAA Holdings LLC to 'B+ from 'B'. S&P assigned its
'B+' issue-level rating to the proposed revolver and term loan. The
recovery rating on this debt is '3'.
The stable outlook reflects S&P's expectation that CAA will
organically increase revenue across its talent representation
platform and manage its cost base such that it maintains EBITDA
margins in the mid-20% area or higher and keeps leverage well below
5.5x.
S&P said, "We expect CAA' s leverage will improve to the 5x area in
2023 and mid-4x area in 2024 due to favorable operating trends and
acquisition integration. The company's fiscal 2022 financial
results represent another year of strong performance across all
business lines, improving EBITDA generation, and healthy cash
flows. The talent agency business continues to benefit from secular
demand across all its business lines: motion pictures, television,
music, and sports. In addition, CAA has quickly integrated the
businesses it acquired over the past year, ICM Partners and Brand
Management. In fact, the company has exceeded our expectations for
cost management, and we expect its EBITDA margins will be in the
26%-27% range over the next two years. As a result of improved
EBITDA generation and a stable base of reported debt we believe
leverage will decline materially through 2024 to the mid-4x area.
This path of leverage reduction is well below our 5.5x upgrade
threshold for the 'B' rating."
The proposed refinancing is leverage neutral and will simplify
CAA's debt structure. CAA, through its borrower subsidiary Creative
Artist Agency LLC, is proposing to opportunistically refinance its
senior secured term loan borrowed by its restricted subsidiaries
under its credit agreement. The company plans to borrow a $125
million senior secured revolving credit facility (undrawn) and a
$1.55 billion senior secured term loan. These facilities are pari
passu and will be guaranteed by CAA Holdings LLC. Proceeds from the
refinancing will be used to retire the company's existing senior
secured debt totaling $1.55 billion. This is a leverage-neutral
transaction. It will benefit the company by extending debt
maturities to 2027 for the revolver and 2028 for the term loan. It
will also simplify the debt structure under one tranche of funded
debt for the restricted subsidiaries. S&P said, "We have assigned
the proposed senior secured debt a 'B+' issue-level rating and '3'
recovery rating, which reflects a rounded estimate of 60% recovery
for senior secured lenders in a hypothetical default scenario.
Additionally, our recovery analysis excludes the unrated revolver
and term loan borrowed by unrestricted subsidiaries."
CAA's revenues continue to benefit from strong secular trends in
the talent representation industry. S&P said, "As a leading U.S.
talent agency we expect CAA to continue to see strong demand for
the talent its agents represent in motion pictures, TV, music, and
sports. Film and TV revenue prospects will remain strong due to
demand for premium Hollywood talent. Much of this demand is
supported by clients hoping to increase the volume of available
content on their respective streaming platforms (Netflix, Disney+,
Warner Bros. Discovery, Paramount, etc.). Over the past year, the
market has reset its expectations for the growth of content
investments made by these streaming services. We believe
expectations for this demand have moderated somewhat. However,
premium Hollywood talent, such as that represented by CAA, will
remain in demand due to studios prioritizing high-profile talent
and fewer productions over a high-volume, lower-quality approach.
The music and sports representation business will also experience
good revenue prospects over the next several years driven by
secular growth in live event volumes after the pandemic, elevated
ticket prices, and sponsorship and endorsement opportunities. We
believe CAA's multiple talent representation verticals provide some
diversity of revenues and will continue to benefit from the
increasing secular demand for content across the entertainment
industry. Importantly, we view this growth as well-diversified on a
client concentration risk basis because no client accounts for more
than 1% of its total revenue."
Nevertheless, the business's revenues and earnings have limited
geographic and industry diversity because most of its operations
come from the U.S. entertainment industry. Due to changing consumer
preferences and the media industry's dependence on customers'
discretionary spending habits, revenues may be subject to periodic
volatility. In addition, the media landscape is evolving through
the proliferation and maturation of streaming and
direct-to-consumer media consumption. S&P expects CAA's talent to
benefit from these trends broadly. However, there could be modest
volatility in how revenues are collected due to changes in the
structure and timing of payment collection for talent remuneration
and the reduction of traditional packaging arrangements as a source
of revenues for CAA.
As a result, S&P expects consolidated revenues for CAA's restricted
subsidiaries will reach $1.55 billion in fiscal 2023 and over $1.6
billion in fiscal 2024.
EBITDA margins will improve to the 26%-27% range over the next two
years due to cost controls and acquisition integration. As CAA has
recovered from the pandemic the company has improved its ability to
control its cost base and manage its primary source of operating
expense, compensation. The company's actions have included
severance programs, reorganization efforts, and selective hiring
initiatives to support future growth prospects. In addition the
company has reset the compensation structure of acquired talent
agents it acquired in its purchase of ICM Partners. S&P Said, "The
company has exceeded our expectations on the timing and quantum of
these cost controls, and we expect that it will maintain a higher
level of run-rate profitability over the next two years while still
investing for growth in its various revenue streams. As a result we
expect S&P Global Ratings-adjusted EBITDA margins will be reach
around 26% in fiscal 2023 and 27% in 2024."
S&P said, "We believe the company's financial policy could include
additional acquisitions under its financial sponsor. CAA is
majority owned by its financial sponsor TPG, and we view its
financial policy as aggressive. We believe it is likely that this
sponsor will continue to pursue the maximization of CAA's
enterprise value by acquisitions of various size over the next
several years. In our view, a large acquisition of a U.S. talent
agency is unlikely due to the increased regulatory scrutiny that
CAA experienced with its acquisition of ICM. However, the company
could still pursue smaller acquisitions on an domestic or
international basis. These acquisitions could be partially
debt-funded such that leverage remains elevated. In addition, the
company has used debt in the past to fund distributions to its
sponsor and fund strategic investments in talent retention by
providing partial unit buybacks to its employee unitholders. In our
view, the possibility of these leveraging debt transactions under
the guidance of CAA's financial sponsor is a limiting factor of
credit quality because it may slow deleveraging.
"The stable outlook reflects our expectation that CAA will
organically increase revenue across its talent representation
platform and manage its cost base such that EBITDA margins are
maintained in the mid-20% area or higher and leverage remains well
below 5.5x."
S&P could lower its rating on CAA if it expects its S&P Global
Ratings-adjusted leverage to exceed 5.5x. This could be caused by:
-- Major contract losses through industry competition or
reputation damage;
-- Dramatic changes in the pace of TV, film, or live event
productions supported by talent that CAA represents;
-- Increased regulatory oversight that limits its revenue or
profitability; or
-- Substantial debt incurrence to support acquisition or
shareholder rewards.
S&P could raise its rating on CAA if:
-- Its adjusted leverage declines and remains at or below the
mid-4.0x area, supported by positive industry growth trends,
including increased content creation that drives strong revenue
growth; and
-- S&P expects the company and its sponsor's financial policy, and
leverage tolerance will keep leverage at these levels inclusive of
acquisition or shareholder-rewarding activities.
ESG credit indicators: E-2, S-2, G-3
CASA CBW: Court OKs Interim Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the District of Arizona authorized
Casa CBW, LLC to use cash collateral on an interim basis in
accordance with the budget, through February 28, 2023.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to maintain its business
operations and to reorganize.
The cash collateral may be subject to a security interest by
certain of the Debtor's creditors, in particular, Rapid Finance,
the Small Business Administration and Funding Metrics.
The Debtor is permitted to use its inventory, deposit accounts,
cash, other cash equivalents, and other assets that may be
considered cash collateral, for the purpose of maintaining its
business operations and paying its operating expenses.
A final hearing on the matter is set for February 28, 2023 at 2
p.m.
A copy of the order is available at https://bit.ly/3KbUnMW from
PacerMonitor.com.
About Casa CBW, LLC
Casa CBW, LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Ariz. Case No. 23-00711) on February 6,
2023. In the petition signed by Kyle Schwab, its manager, the
Debtor disclosed up to $100,000 in assets and up to $1 million in
liabilities.
Judge Scott H. Gan oversees the case.
German Yusufov, Esq., at Yusufov Law Firm PLLC, represents the
Debtor as legal counsel.
CASH CLOUD: Follows Backer Genesis Global in Chapter 11
-------------------------------------------------------
Cash Cloud Inc., the operator of Coin Cloud digital currency
automatic teller machines in the United States and Brazil, filed
for Chapter 11 bankruptcy in U.S. Bankruptcy Court for the District
of Nevada.
Jonathan Randles of The Wall Street Journal reports that Coin Cloud
followed its primary financial backer Genesis Global Holdco LLC
into bankruptcy, the latest in a string of failures in the
interlaced world of digital currency.
Coin Cloud said in papers filed Feb. 7, 2023, in the U.S.
Bankruptcy Court in Las Vegas that it hopes to secure new financing
or sell the business in chapter 11 after sustaining significant
losses over the last two years. Privately-held Coin Cloud said it
owes more than $116 million in loans.
"We are announcing today that our company has filed for Chapter 11
reorganization," Coin Cloud founder, CEO and president Chris
McAlary said in a statement provided to Cointelegraph on Feb. 8.
"This decision will allow us to rework our debt, protect the
interests of our creditors, and emerge as a stronger, more
financially stable company."
Mr. McAlary said that Coin Cloud "remained operational for our
go-forward hosts and customers," had the support of its largest
creditors, and was still "optimistic about the future of the
cryptocurrency industry and our role in building it."
Coin Telegraph notes that Cash Cloud's biggest creditor is Genesis
Global Capital, a subsidiary business of Digital Currency Group’s
bankrupt lending arm. It has an unsecured claim of over $108
million from Genesis, far outstripping the next largest claimant,
which is owed over $8 million.
Citing unnamed sources, Bloomberg reported on Nov. 22 that Coin
Cloud had received an unsecured loan of around $100 million from
Genesis and was at that time in talks with it seeking "additional
capital" to help it restructure a debt of about $125 million.
Genesis was already under financial pressure, and it is not clear
that Coin Cloud received additional credit from it at that time.
Coin Telegraph recounts that Coin Cloud was a pioneer in its field,
having been active since at least 2014. Coin Cloud stated in a
blog post in January 2022 that it had over 1,100 ATMs at the time
and said it was "at a pivotal time in the company's hyper-growth."
The cryptocurrency ATM industry experienced a sharp downturn in the
second half of 2022. In addition, cryptocurrency has been
incorporated into existing ATMs in places, competing with
purpose-built crypto ATMs.
Coin Cloud claims on its website that it has more than 5,000 ATMs
that handle over 40 cryptocurrencies. Coin Cloud was ranked second
worldwide by number of ATMs when it had 4,826 machines, nearly all
of which were located in the United States.
In his statement, McAlary said that the team had "made drastic cost
cuts to respond to market challenges in order to maintain the
company's profitability."
Its related entities, including those in Brazil, are not undergoing
corporate restructuring and are operating as normal, he added.
About Cash Cloud
Cash Cloud, doing business as Coin Cloud, operates automated teller
machines for buying and selling Bitcoin, Ethereum, Dogecoin, and
40+ other digital currencies with cash, card and more.
Coin Cloud Inc. sought relief under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 23-10423) on Feb. 7, 2023.
In the petition filed by Chris McAlary, as president, the Debtor
reported assets between $50 million and $100 million and estimated
liabilities between $100 million and $500 million.
The case is overseen by Honorable Bankruptcy Judge Mike K.
Nakagawa.
The Debtor tapped FOX ROTHSCHILD LLP as counsel, and PROVINCE, LLC,
as financial advisor. STRETTO is the claims agent.
CELSIUS NETWORK: Borrowers Want Crypto Collateral Returned
----------------------------------------------------------
In Ad Hoc Group of Borrowers, Plaintiff, v. Celsius Network LLC, et
al., Adv. Pro. No. 23-01007, In re Celsius Network LLC, et al.
(Bankr. S.D.N.Y. Lead Case No. 22-10964), the plaintiff filed a
complaint asking the Bankruptcy Court to enter a judgment declaring
that:
a. borrowers' cryptocurrency posted as collateral with Celsius
is not property of the estate, it should be returned to the
Borrowers;
b. the Debtors should be compelled to provide an accounting and
turnover the Collateral;
c. the Loan Agreements are consumer credit transactions under
the Truth in Lending Act and are entitled to the protection
afforded to such transactions under section 363(o) of title 11 of
the United States Code;
d. the Debtors engaged in deceptive trade practices;
e. the Debtors committed consumer fraud;
f. the Debtors violated consumer finance laws, licensing
requirements and/or governmental regulations which render the Loans
void and unenforceable;
g. the Debtors committed fraud in the inducement and/or made
certain misrepresentations to the Borrowers which render the Loans
void and unenforceable;
h. the Debtors breached the Loan Agreements; and/or
i. the Debtors have been unjustly enriched by the Collateral.
Prior to the Petition Date, the Debtors offered a series of crypto
currency programs, including an "earn" account and a "borrow"
account. Each account was governed by certain agreements
(collectively, the "Account Agreements"). With respect to the
borrow program, a Celsius customer could become a "borrower" by
entering into an agreement with Celsius (a "Loan Agreement")
pursuant to
which she/he would receive either fiat currency or stablecoins in
exchange for posting his/her cryptocurrency as collateral with
Celsius (the "Collateral"). When a loan was issued (the "Loans"),
Celsius provided the borrower with a Truth in Lending Act Statement
("TILA Statement") which detailed the cost of the loan (principal
and interest payments to be made) under the terms of the loan.
Once the Loans were repaid, the Debtors were obligated under the
Loan Agreement to release the Collateral to the Borrower.
The Borrowers note that unlike the Earn program, the Loan Agreement
did not transfer title to the cryptocurrency to Celsius. This was
explained on Feb. 10, 2020 by Aliza Landes, then Vice President of
Retail Lending, who described taking a retail loan as "you're not
going into debt, you're just borrowing against something you own."
Celsius Network AMA -- Ask Aliza Anything!, YouTube (February 10,
2020), https://www.youtube.com/watch?v=RIfECR1Ghhk
"The Collateral is not property of the Debtors' estates. The Loan
Agreements did not transfer title to Celsius. Rather, under the
Loan Agreement, the Borrowers consented to Celsius's use of the
Collateral during the loan period. The Debtors repeatedly
represented that the Collateral was the property of the Borrower,"
the Borrowers Committee says in court filings.
Attorneys for Ad Hoc Group of Borrowers:
McCARTER & ENGLISH, LLP
David J. Adler
E-mail: dadler@mccarter.com
825 8th Avenue
Worldwide Plaza
New York, New York 10019
Telephone: (212) 609-6847
Facsimile: (212) 609-6921
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.
CHARTER NEXT: Moody's Lowers Rating on First Lien Loans to 'B3'
---------------------------------------------------------------
Moody's Investors Service affirmed Charter Next Generation, Inc.'s
("CNG") B3 corporate family rating and B3-PD Probability of Default
Rating. Moody's also downgraded the first lien senior secured
credit facility, including the revolving credit facility, the term
loan and proposed $250 million fungible add-on to the term loan, to
B3 from B2. The outlook remains stable.
CNG is issuing the proposed add-on to its first lien senior secured
term loan to pay down a part of its existing $500 million unsecured
payment-in-kind (PIK) toggle notes due 2028.
"The downgrade of the senior secured debt reflects a reduced amount
of the unsecured PIK toggle notes, which provided loss absorption
to the senior secured debt," said Motoki Yanase, VP - Senior Credit
Officer at Moody's.
"After the proposed add-on to the first lien term loan and the
partial repayment of unsecured PIK toggle notes, senior secured
debt will account for the preponderance of CNG's total debt, which
aligns the rating of the senior secured debt to the CFR," added
Yanase.
Affirmations:
Issuer: Charter Next Generation, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Downgrades:
Issuer: Charter Next Generation, Inc.
Senior Secured 1st Lien Revolving Credit Facility,
Downgraded to B3 (LGD3) from B2 (LGD3)
Senior Secured 1st Lien Term Loan, Downgraded to
B3 (LGD3) from B2 (LGD3)
Outlook Actions:
Issuer: Charter Next Generation, Inc.
Outlook, Remains Stable
RATINGS RATIONALE
The affirmation of the B3 CFR reflects Moody's expectation that
CNG's leverage will improve to below 6.5x and fall within the range
assumed for the CFR in the next 12-18 months with lower growth in
profit during 2023 relative to the historical levels. Moody's
expects that sales to consumer and industrial end markets will
trend softer in the first half of 2023 relative to their historical
levels and pick up in the second half of 2023. With modest volume
growth relative to the past several years and a decline in pricing
due to deflationary resin prices, Moody's forecasts sales growth
for full year in 2023 will likely remain single-digit, much less
than 38% in 2021 and 12% in 2022.
At the same time, Moody's expects CNG to maintain positive free
cash flow, supported by its high margin products. Positive free
cash flow will support the company's debt service.
CNG's credit strengths include high exposure to relatively stable
end markets, such as food, consumer and healthcare. Most of CNG's
products are engineered films for which the company continues to
invest in R&D. CNG also has many blue-chip customers, which adds
stability to its revenue.
These strengths are counterbalanced by CNG's credit weaknesses,
including volatile input costs, primarily resins, and a lag in cost
pass-through, which could strain its profit, similar to other
plastic packaging manufacturers. Also, about 10-15% of the
company's sales are directed to industrial end users, which are
more volatile relative to the other end markets.
The stable rating outlook reflects Moody's expectation of a steady
improvement in CNG's credit metrics for the next 12-18 months,
backed by its high profitability and positive free cash flow
generation.
CNG's good liquidity is supported by its free cash flow generation
and nearly full availability under the $100 million cash revolver
as of September 2022. CNG also has an $140 million account
receivable securitization facility, $50 million of which will be
utilized in February 2023 to pay down a part of the senior
unsecured PIK toggle notes. The next debt maturity is the account
receivable securitization facility that expires in August 2025,
followed by the cash flow revolver expiring in December 2025.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if CNG fails to improve its credit
metrics, or there is a deterioration in its liquidity or the
competitive environment. Additionally, acquisitions that alter the
company's business and operating profile, significant debt-financed
acquisitions or shareholder distributions may also prompt a
downgrade. Specifically, the ratings could be downgraded if
debt/EBITDA is above 6.5x, EBITDA/interest expense is below 2.5x or
free cash flow/debt is below 1.0%.
The ratings could be upgraded if CNG sustainably improves its
credit metrics within the context of stability in the competitive
environment and the maintenance of good liquidity. The company
would also need to adequately maintain its asset base to support
its high margins and adopt more conservative financial policies.
Specifically, the ratings could be upgraded if debt/EBITDA is below
5.75x, EBITDA/interest expense is above 3.5x and free cash
flow/debt is above 4.0%.
The principal methodology used in these ratings was Packaging
Manufacturers: Metal, Glass and Plastic Containers published in
December 2021.
Headquartered in Chicago, Illinois, Charter Next Generation, Inc.
(CNG) is a producer of specialty films primarily for food,
consumer, industrial and healthcare customers. Revenue for the 12
months that ended September 2022 was about $1.5 billion.
Since July 2021, CNG is majority-owned by KKR & Co. Inc. and
Leonard Green & Partners, L.P. as equal co-owners of the business
and a wholly owned subsidiary of the Abu Dhabi Investment Authority
as a minority owner.
CINEWORLD PLC: Multiple Buyers Approach Regal
---------------------------------------------
Etan Vlessing of The Hollywood Reporter reports that exhibition
giant Cineworld, which filed for Chapter 11 protection in the U.S.,
has told a virtual status conference that the company and its
creditors are moving toward a court-directed settlement of the
bankruptcy process.
On Wednesday, February 7, 2023, Joshua Sussberg, a lawyer for
U.K.-based Cineworld, owner of the Regal Entertainment Group, told
Judge Marvin Isgur of the U.S. Bankruptcy Court in Houston that the
broad terms of a Chapter 11 stand-alone plan of reorganization had
been reached, but that negotiations on a final deal and terms were
ongoing.
"We of course do not have commitments for the financing or the
equity. We have agreement on the terms. But suffice it to say,
we're going to proceed in earnest and negotiate this underlying
plan," Sussberg said ahead of a Feb. 21, 2023 court date set for
the next stage of the Chapter 11 process and possible resolution.
An ad hoc consortium of legacy lenders for Cineworld provided
around $2 billion in debtor-in-possession (DIP) financing for the
bankruptcy process, and the lenders are working with the embattled
cinema chain on a possible debt-for-equity exchange that the Texas
court must approve.
Michael Messersmith of Arnold & Porter Kaye, acting for an ad hoc
group of term lenders, told the court that "a significant amount of
progress" had been made in negotiations with Cineworld.
Messersmith said the legacy lenders, which represent around 35
equity funds, had sustained losses as they were required to step up
and rescue Cineworld.
"That requires us again to insert additional funds, and that
requires diligence on the company, and on the relationships they
have with the industry and basically all the diligence that would
go into a typical M&A transaction," he told the court as talks on a
possible Chapter 11 stand-alone plan continue.
Messersmith also told the court that while one option to resolve
the Chapter 11 process included "ownership of this enterprise" via
a debt-for-equity transaction, a possible sales process for
Cineworld was also moving ahead on parallel tracks.
As part of indications of interest to the debtors from possible
suitors, Messersmith said potential bidders had already reached out
to gauge the willingness of lenders to finance any acquisition.
But he said those discussions had been directed to Cineworld's
legal counsel, PJT Partners, as financial advisors.
Mr. Sussberg told Judge Isgur that multiple industry players had
expressed interest in acquiring Cineworld. "And those parties come
in all different shapes and sizes, with all different types of
proposals. And we're going to consider all of them in close
coordination with our board, our independent directors and
ultimately our lenders," he added.
Mr. Sussberg noted the Cineworld's legacy lenders are also in
effect a bidder for the company as they negotiate a possible
debt-for-equity exchange agreement. A question mark was also raised
during the virtual court hearing over whether the current Cineworld
senior management team will lead any reorganized company in the
wake of a Chapter 11 resolution.
"This management team is committed to helping transition in any
circumstance, whether it's a third party sale or a lender led
restructuring and we will negotiate and present to your honor the
details of that plan," Sussberg told the court judge.
The court hearing struck a comic tone after earlier in his
presentation Sussberg had pointed to strong box office from Avatar:
The Way of Water helping sustain Cineworld through the bankruptcy
process, only to be followed by Judge Isgur indicating he hadn't
heard of the James Cameron tentpole.
"If you want me to scare everybody, I had no idea what Avatar is,
but I appreciate the power point," the court judge announced. When
told he might view the Avatar sequel in a local Regal cinema this
weekend, Judge Isgur said he was barred from buying a cinema ticket
from a Cineworld venue while the bankruptcy case was ongoing.
About Cineworld Group
London-based Cineworld Group PLC was founded in 1995 and is the
world's second-largest cinema chain. Cineworld operates 751 sites
with 9,000 screens in 10 countries, including the Cineworld and
Picturehouse screens in the UK and Ireland, Yes Planet in Israel,
and Regal Cinemas in the United States.
According to The Guardian, the Griedinger family, including Mooky's
brother and deputy chief executive, Israel, have struggled to
maintain control of the ailing business but have been forced to
reduce their stake from 28% in recent years. Cineworld's top five
investors include the Chinese Jangho Group at 13.8%, Polaris
Capital Management (7.82%), Aberdeen Standard Investments (4.98%)
and Aviva Investors (4.88%).
The London-listed Cineworld, which has run up debt of more than
$4.8 billion after losses soared during the pandemic, is pinning
its hopes on a meatier slate of movies in 2022 to bounce back from
a two-year lull.
Cineworld Group plc and 104 affiliates sought Chapter 11 protection
(Bankr. S.D. Texas Lead Case No. 22-90168) on Sept. 7, 2022,
estimating more than $1 billion in assets and debt. Judge Marvin
Isgur oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP and Jackson Walker, LLP as
bankruptcy counsels; PJT Partners, LP as investment banker;
AlixPartners, LLP as restructuring advisor; and Ernst & Young, LLP
as tax services provider. Kroll Restructuring Administration, LLC
is the claims agent.
The U.S. Trustee for Region 7 appointed an official committee of
unsecured creditors in the Debtors' Chapter 11 cases on Sept. 23,
2022. The committee tapped Weil, Gotshal & Manges, LLP and
Pachulski Stang Ziehl & Jones, LLP as legal counsels; FTI
Consulting, Inc. as financial advisor; and Perella Weinberg
Partners, LP as investment banker.
CNX RESOURCES: Incurs $142 Million Net Loss in 2022
---------------------------------------------------
CNX Resources Corporation has filed with the Securities and
Exchange Commission its Annual Report on Form 10-K disclosing a net
loss of $142.08 million on $1.26 billion of total revenue and other
operating income for the year ended Dec. 31, 2022, compared to a
net loss of $498.64 million on $756.79 million of total revenue and
other operating income for the year ended Dec. 31, 2021. CNX
reported a net loss of $428.74 million for the year ended Dec. 31,
2020.
As of Dec. 31, 2022, the Company had $8.51 billion in total assets,
$5.56 billion in total liabilities, and $2.95 billion in total
stockholders' equity.
CNX stated, "CNX generally has satisfied its working capital
requirements and funded its capital expenditures and debt service
obligations with cash generated from operations and proceeds from
borrowings. CNX currently believes that cash generated from
operations, asset sales and the Company's borrowing capacity will
be sufficient to meet the Company's working capital requirements,
anticipated capital expenditures (other than major acquisitions),
scheduled debt payments, anticipated dividend payments, if any, and
to provide required letters of credit for the current fiscal year.
Nevertheless, the ability of CNX to satisfy its working capital
requirements, to service its debt obligations, to fund planned
capital expenditures, or to pay dividends will depend upon future
operating performance, which will be affected by prevailing
economic conditions in the natural gas industry and other financial
and business factors, some of which are beyond CNX's control.
"From time to time, CNX is required to post financial assurances to
satisfy contractual and other requirements generated in the normal
course of business. Some of these assurances are posted to comply
with federal, state or other government agencies' statutes and
regulations. CNX sometimes uses letters of credit to satisfy these
requirements and these letters of credit reduce the Company's
borrowing facility capacity.
"CNX continuously reviews its liquidity and capital resources. If
market conditions were to change, for instance due to a significant
decline in commodity prices and our revenue was reduced
significantly or operating costs were to increase significantly,
our cash flows and liquidity could be reduced.
"As of December 31, 2022, CNX was in compliance with all of its
debt covenants. After considering the potential effect of a
significant decline in commodity prices, CNX currently expects to
remain in compliance with its debt covenants.
"CNX frequently evaluates potential acquisitions. CNX has
historically funded acquisitions with cash generated from
operations and a variety of other sources, depending on the size of
the transaction, including debt and equity financing. There can be
no assurance that additional capital resources, including debt and
equity financing, will be available to CNX on terms which CNX finds
acceptable, or at all."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1070412/000107041223000015/cnx-20221231.htm
About CNX Resources
CNX Resources Corporation is an independent natural gas
development, production, and midstream company, with operations
centered in the major shale formations of the Appalachian basin.
CONUMA RESOURCES: Moody's Cuts CFR to Caa2 & Secured Notes to Caa1
------------------------------------------------------------------
Moody's Investors Service downgraded Conuma Resources Limited's
corporate family rating to Caa2 from Caa1, its probability of
default rating to Caa2-PD from Caa1-PD and its senior secured notes
rating to Caa1 from B3. The outlook remains negative.
"The downgrade of Conuma's ratings and negative outlook reflects
the company's very near term maturities, particularly its notes due
in May 2023 and potential refinancing challenges" said Jamie
Koutsoukis, Moody's analyst.
Downgrades:
Issuer: Conuma Resources Limited
Corporate Family Rating, Downgraded to Caa2 from Caa1
Probability of Default Rating, Downgraded to Caa2-PD
from Caa1-PD
Senior Secured Regular Bond/Debenture, Downgraded to
Caa1 (LGD3) from B3 (LGD3)
Outlook Actions:
Issuer: Conuma Resources Limited
Outlook, Remains Negative
RATINGS RATIONALE
Conuma's Caa2 CFR is constrained by: 1) weak liquidity because of
near term refinancing risk; 2) material free cash flow sensitivity
to price (about $40 million per $10 change in met coal price
expected in 2023); 3) little financial flexibility because of
aggressive financial management (specifically dividends last drawn
in 2019) together with operational underperformance; 4) execution
risk of increasing production from 3.6 million tonnes back to above
4 million tonnes in 2023 and new pit development (Quinette
acquisition); and 5) a relatively small production base (3.6
million tonnes in 2022, over 4 million tonnes expected in 2023) of
one product (met coal) at three mines in one local jurisdiction.
The rating benefits from: 1) a favorable mining jurisdiction
(Canada); and 2) its location near rail and port infrastructure,
allowing it to easily sell on the seaborne market.
The senior secured debt is rated Caa1, one notch above the Caa2 CFR
reflecting the priority ranking of the senior secured notes,
relative to its unsecured obligations. Conuma's financial
performance has materially improved in 2022 when compared to 2021
because of higher realized prices and increased production, however
the company does not have sufficient funds to address its upcoming
maturities and will need to refinance.
Conuma has weak liquidity because of its $157.5 million debt
maturity due May 2023. It has cash at year end of $53 million. Its
undrawn $22.5 million revolver matures in March 2023 (unrated) and
because of the near term maturity of the facility Moody's do not
view it as a source of liquidity. In October 2020 Conuma closed a
$88 milion (CAD120 million) credit facility (the Large Employer
Emergency Financing Facility "LEEFF Facility") with Canada
Enterprise Emergency Funding Corporation, a federal government
agency. Currently $71 million (CAD96 million) remains outstanding
and is due 2025.
The negative outlook reflects that Conuma will need to address its
material liquidity issues, which primarily relate to refinancing
its notes due May 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be downgraded if the company is expected to
default.
The ratings could be upgraded if Conuma refinances its May 2023
debt maturity and has sufficient liquidity to meet its capital
spending and financial obligations related to its LEEFF facility
and purchase of the Quinette mine.
The principal methodology used in these ratings was Mining
published in October 2021.
Conuma Resources Limited is a producer and exporter of premium
seaborne metallurgical coal from the Peace River Coalfield in
British Columbia. The company produces premium hard coking coal
(HCC), mid-vol metallurgical coal and ultra low-vol pulverized coal
injection (PCI).
CREATIVE ARTISTS: Moody's Rates New $1.6BB First Lien Loans 'B2'
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Creative Artists
Agency, LLC's (CAA) new credit facility (including a $125 million
senior secured first lien revolving credit facility and $1,550
million senior secured first lien term loan B). The B2 corporate
family rating and all other ratings remain unchanged. The stable
outlook remains unchanged.
This refinancing will extend CAA's debt maturity profile for the
revolver to 2027 and the term loan B to 2028. CAA is also likely to
consider an upsize of the $125 million revolver. The transaction is
leverage neutral (4.8x as of Q3 2022 including Moody's standard
adjustments) as the amount of outstanding debt will be relatively
unchanged. CAA will continue to benefit from a good liquidity
position due to access to an undrawn revolver as well as
approximately $410 million of cash on the balance sheet pro forma
for the transaction. The ratings on the existing term loans and
revolver will be withdrawn after completion of the transaction.
Assignments:
Issuer: Creative Artists Agency, LLC
Senior Secured 1st Lien Multi Currency Revolving
Credit Facility, Assigned B2 (LGD3)
Senior Secured 1st Lien Term Loan B, Assigned B2 (LGD3)
RATINGS RATIONALE
CAA's B2 CFR reflects the relatively high leverage level and
Moody's expectation that operating results will improve modestly in
2023 following a rapid recovery from the pandemic. CAA derives
strength from its size and diversified operations in client
representation with leading positions in motion pictures,
television, music, publishing, and sports and includes television
packaging rights, commercial endorsements, and other business
services. A substantial amount of CAA's costs are variable and
contractual revenue streams will continue to be a recurring source
of revenue and cash flow. A potential strike by the Writers Guild
of America could increase volatility in operating performance
depending on the length of time that scripted content production is
disrupted, but CAA's diversified operations, flexible cost
structure, and contractual revenue streams would limit the overall
impact on the company's results.
CAA will continue to benefit from the increasing value of original
content worldwide given the ongoing demand for content from
traditional media companies and streaming services, but Moody's
expects the pace of growth to moderate from existing levels.
Concert related revenue is a modest portion of CAA's total
revenues, but will likely continue to contribute to growth through
2024 given the strong demand for live entertainment. Sports related
revenues benefit from largely contractual revenue streams and will
likely expand further as athletes' compensation and sports advisory
services continue to rise due to strong demand for sporting events.
Moody's expects CAA will continue to evaluate additional purchases
to further increase its scale, geographic footprint, and the range
of services offered.
ESG CONSIDERATIONS
CAA's ESG Credit Impact Score is highly-negative (CIS-4) driven by
the company's exposure to governance risks (G-4) due to the
company's relatively aggressive financial policy. CAA has completed
numerous acquisitions and issued additional debt on several
occasions during the past few years including almost $400 million
of debt to buy back employee equity in 2019 and the purchase of
International Creative Management LLC (ICM) in 2022. Moody's
expects CAA will consider additional acquisitions going forward.
However, TPG Capital L.P. and other investors contributed almost
$250 million in additional equity since July 2021 to help fund
acquisitions which has offset the impact on leverage levels. CAA is
a privately owned company.
Moody's expects CAA's liquidity will be good as a result of
approximately $410 million of pro forma cash balance and access to
an undrawn ($23 million of L/Cs outstanding) $125 million revolver
due 2027 following the transaction. Moody's projects CAA will
generate good operating cash flow, but it will be seasonal and a
portion of the cash flow will be used to make distributions to
membership holders. Capex will increase modestly in 2023 as CAA
completes the buildout of new office space. CAA's cash flow will
continue to be supported by contractual revenue streams. Cash on
the balance sheet and free cash flow is likely to be used for
acquisitions or distributions to membership holders and equity
investors.
The first lien term loan is covenant lite. The revolver is subject
to a springing senior secured first lien net leverage covenant of
7.5x when greater than 35% of the revolver is drawn. Moody's
expects CAA will remain well within compliance with the financial
covenant going forward.
The stable outlook incorporates Moody's expectation of revenue and
EBITDA growth in the mid-single digits in 2023 aided by synergies
from recent acquisitions. While Moody's expects continued positive
media spending growth overall, recessionary pressures on the
economy and a possible strike by the Writers Guild of America could
elevate volatility in operating performance in 2023. Moody's
expects financial policy decisions will be an important driver of
leverage levels going forward. CAA's debt to EBITDA ratio as
calculated by the company is below their target leverage range
which may limit the potential for a further decrease in leverage.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if CAA's leverage declined to the low
4x range on a sustained basis and free cash flow as a percentage of
debt is maintained in the mid to high single percent range. Good
organic growth and confidence that the private equity sponsor would
pursue a financial policy in line with a higher rating would also
be required.
The ratings could be downgraded if CAA's leverage was sustained
above 6.5x due to additional debt issue or poor operating
performance. A weakened liquidity position could also lead to a
downgrade.
Creative Artists Agency, LLC (CAA) is a global talent
representation agency with leading positions in motion pictures,
television, music, publishing, and sports and includes television
packaging rights, commercial endorsements, and other business
services. TPG Capital L.P. has a significant ownership position in
the company.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CURO GROUP: Prospect Capital Marks $47M Loan at 53% Off
-------------------------------------------------------
Prospect Capital Corporation has marked its $47,000,000 loan
extended to CURO Group Holdings Corp. to market at $22,024,000 or
47% of the outstanding amount, as of December 31, 2022, according
to a disclosure contained in the Prospect CC’s Form 10-Q for the
quarterly period ended December 31, 2022, filed with the
Securities and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a First Lien Term Loan to Curo
Group Holdings Corp. The loan accrues interest at a rate of 7.5%
per annum. The loan matures on August 01, 2028.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
CURO Group Holdings Corp., a diversified consumer finance company,
provides consumer finance to a range of underbanked consumers in
the United States, Canada and the United Kingdom. The company was
formerly known as Speedy Group Holdings Corp. and changed its name
to CURO Group Holdings Corp. in May 2016. CURO Group Holdings Corp.
was founded in 1997 and is headquartered in Wichita, Kansas.
DANNY & CORIE: Court OKs Interim Cash Collateral Access
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Danny & Corie Enterprises, Inc. to use
cash collateral on an interim basis in accordance with the budget.
The Debtor is permitted to use cash collateral to pay its normal
operating expenses including, but not limited to, payroll,
supplies, payroll taxes, and insurance.
As adequate protection, the United States, Alarm Connections and
FinWise Bank are granted replacement liens encumbering all property
of the Debtor's estate acquired or generated after the petition
date to the same extent, validity, and priority to which their
liens attached before the petition.
The prepetition liens and the Replacement Liens will be subject and
subordinate to payment of a carve-out. The "Carve-Out" means: (a)
statutory fees required to be paid pursuant to 28 U.S.C. section
1930(a)(6) plus interest at the statutory rate pursuant to 31
U.S.C. section 3717; (b) the reasonable fees and expenses incurred
by a trustee under section 726(b); and (c) the aggregate amount of
any fees and expenses of any estate professionals, but only to the
extent such fees and expenses have been approved by the Court.
A final hearing on the matter is set for February 27, 2023 at 9:30
a.m.
A copy of the order is available at https://bit.ly/3EbmDvo from
PacerMonitor.com.
About Danny & Corie Enterprises, Inc.
Danny & Corie Enterprises, Inc. is a residential and commercial
security company with systems and active monitoring, automation
networking and access control.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-30487) on February
10, 2023. In the petition signed by John Daniel Cannon, president,
the Debtor disclosed up to $50,000 in assets and up to $500,000 in
liabilities.
Judge Christopher Lopez oversees the case.
Margaret M. McClure, Esq., at the Law Office of Margaret M.
McClure, is the Debtor's legal counsel.
DARALI INC: Lender Seeks to Prohibit Cash Collateral Access
-----------------------------------------------------------
Commercial State Bank asks the U.S. Bankruptcy Court for the
District of Nebraska to prohibit Darali Inc. from using its cash
collateral.
CSB is the holder of a promissory note executed by the Debtor on
October 25, 2018, in the principal amount of $1.120 million and
referenced as Loan No. 700332.
To secure its obligations under Note 700332, the Debtor executed a
Deed of Trust on October 25, 2018, which was filed in the Register
of Deeds for Douglas County, Nebraska, as Instrument 2018085957 on
October 29, 2018, granting CSB a lien on the Debtor's real estate
located in Omaha, NE commonly known as: (i) 6303 Binney Street,
Omaha, NE 68104; (ii) 6307 Binney Street, Omaha, NE 68104; (iii)
2910 N. 63rd Street, Omaha, NE 68104; (iv) 6302 Maple Street,
Omaha, NE 68104; and (v) 6310 Maple Street, Omaha, NE 68104.
To further secure its obligations under Note 700332, the Debtor
executed an Assignment of Rents dated October 25, 2018, which was
filed in the Register of Deeds for Douglas County, Nebraska, as
Instrument 2018085958 assigning the rents and profits generated by
the Debtor.
The Debtor also executed the Commercial Security Agreement, dated
October 25, 2018, and associated with Loan No. 700332 granting CSB
a lien in all or substantially all of the Debtor's assets. To
perfects the liens granted to CSB by Debtor under the 700332 SA,
CSB filed: (i) a UCC-1 financing statement with the Nebraska
Secretary of State central filing office as Filing No.
9818073446-3; and (ii) a UCC-1 financing statement with the
Nebraska Secretary of State central filing office as Filing No.
9818073462-7.
CSB is the holder of a Promissory Note executed by the Debtor dated
December 31, 2019, in the principal amount of $75,000 and
referenced as Loan No. 700480.
To secure its obligations under Note 700480, the Debtor executed
and delivered to CSB a Commercial Security Agreement, dated
December 31, 2019, granting CSB a lien in all or substantially all
of the CSB Collateral. In addition, the obligations owed under Note
700480 are also secured by the DOT, the AOR, and the 700332 SA.
The Debtor defaulted on its obligations under the Loan Documents
by, without limitation, failing to pay:
a. the indebtedness secured by the Loan Documents for at least
the past six months;
b. certain personal property taxes owed to Douglas County,
Nebraska, resulting in a possible super-priority lien on the
Debtor's personal property;
c. real estate taxes for 2021 totaling $20,994 with taking
into account interest, resulting in a possible super-priority lien
on the Property; and
d. certain federal trust taxes resulting in the filing of
federal tax liens on the Debtor's assets.
As a result of the ongoing defaults under the Loan Documents, CSB
declared the entire indebtedness owed by the Debtor to CSB
immediately due and owing and commenced foreclosure proceedings
that were to culminate in a non-judicial foreclosure of assets
originally scheduled for January 31, 2023.
As of January 30, 2023, the Debtor owes CSB not less than $1.217
million. The Debtor has not made a voluntary payment to CSB since
July 2022.
The Debtor is operating and is both acquiring and spending cash
collateral at this time. Nevertheless, as of the date of the
Motion, the Debtor (i) has not sought and obtained Court permission
to spend the cash collateral of CSB; (ii) has not contacted CSB to
discuss the use or cash collateral and adequate protection for the
use thereof; and (iii) does not have CSB's consent to use the cash
collateral.
A copy of the motion is available at https://bit.ly/3xrRwYO from
PacerMonitor.com.
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 the Honorable Bankruptcy Judge Thomas L.
Saladino.
Donald L. Swanson has been appointed as Subchapter V trustee.
The Debtor is represented by Patrick Patino, Esq., at Patino King
LLC.
DELPHI BEHAVIORAL: In Chapter 11 to Sell, Wind Down Facilities
--------------------------------------------------------------
Delphi Behavioral Health Group LLC filed for chapter 11 protection
in the Southern District of Florida.
Headquartered in Fort Lauderdale, Florida, the Company operated 12
clinical facilities and 2 recovery residences prior to the Petition
Date, throughout California, Florida, Maryland, Massachusetts and
New Jersey.
A wind down of the Company's patient care operations in Florida,
California and Maryland was completed on or about January 31, 2023,
with all patients successfully discharged or transferred to other
programming. The Company's operations involving one facility in
Massachusetts and two facilities in New Jersey will be the subject
of a proposed Section 363 sale during the Chapter 11 cases and the
remaining operations in New Jersey will be wound down by, on or
about February 28, 2023.
Currently, the Companies employ 423 employees, of which 327 are
full-time, 27 are part time, and 69 work on a per diem basis. Of
the 423 employees, 288 are hourly employees and 135 are salaried
employees.
Prepetition Capital Structure
In October of 2017, The Halifax Group, LLC, a private equity firm,
became the equity sponsor of, and provided management consulting
services for, "legacy Delphi," meaning, in substantive part, the
Company's business operations prior to its acquisition of
operations known as the "Summit" entities in April of 2018. At the
same time, Brightwood Loan Services, LLC, as administrative agent
on behalf of a consortium of onshore and offshore lenders
(collectively, the "Secured Lenders"), made loans under a credit
agreement dated Oct. 3, 2017 to borrower Delphi Intermediate
Healthco, LLC and Delphi Health Holdings, LLC ("old Holdco") to
facilitate the leveraged buyout of legacy Delphi by Halifax.
In April of 2018, Halifax sought to finance the expansion of the
Company's
footprint into Massachusetts, New Jersey and Pennsylvania and made
an additional equity investment, along with the Secured Lenders
lending additional funds, for the Company's acquisition of the
Summit entities.
Following defaults under the 2017 Credit Agreement, however, and as
part of a comprehensive restructuring of the Company's balance
sheet, Halifax surrendered its equity interests in the Company to
the Secured Lenders in April 2020 pursuant to a Restructuring
Agreement (the "2020 Restructuring"). At that point, the
outstanding amounts owed to the Secured Lenders had grown to over
$110 million. In conjunction with the 2020 Restructuring, the
Secured Lenders consummated a debt/equity swap by contributing debt
in the amount of $90 million that was due and payable under the
2017 Credit Agreement in exchange for 100% of the direct and
indirect membership interests of the Company.
The remaining balance of the debt due to the Secured Lenders in the
amount of $26.5 million was allocated over two credit agreements.
The first credit agreement dated April 8, 2020, was between
Brightwood, as Administrative Agent, and borrower DR Parent, LLC
for term loans in the aggregate principal amount of $12.5 million
(the "Holdco Prepetition Credit Agreement"). The second credit
agreement dated April 8, 2020, was between Brightwood, as
Administrative Agent, and borrower DR Sub, LLC, which borrower
obligations were assumed by Delphi Intermediate Healthco, LLC, for
term loans in the aggregate principal amount of $14 million
("Senior Prepetition Credit Agreement"). DR Sub, LLC and the 31
Debtor subsidiaries are guarantors under the Senior Prepetition
Credit Agreement and, other than certain excluded assets, the
obligations of the Secured Lenders under the Senior Prepetition
Credit Agreement are secured by liens on all present and future
assets and properties of the Debtor borrower and guarantors,
whether real or personal or tangible or intangible.
In August 2021, the Company notified Brightwood of an immediate
need for funding to support continued operations. Since then, the
parties have entered into eight amendments to the Senior
Prepetition Credit Agreement, pursuant to which Brightwood, in its
capacity as administrative agent, made Protective Advances to the
Company, which were participated out to certain Senior Secured
Lenders, to fund continued operations and to assist the Company
while it explored strategic restructuring alternatives, including a
sale of the Company's assets. On the Petition Date, the aggregate
outstanding principal amount of obligations due by the Debtors to
Brightwood, for the benefit of the Senior Secured Lenders, under
the Holdco Prepetition Credit Agreement and the Senior Prepetition
Credit Agreement totals $49.5 million, not including interest, fees
and costs.
As of the Petition Date, the Debtors owe $1 million in taxes and
$3.1 million in general unsecured debt to creditors, comprised of
(i) $465,000 owed to non-insider landlords, (ii) $1 million which
may be claimed by landlords owned by one or more former insiders,
and (iii) approximately $1.8 million owed to trade creditors.
Events Leading to the Chapter 11 Cases
Following the 2017 leveraged buyout, the Company began experiencing
financial difficulties, as net income after payment of expenses and
debt service was modest. That delicate balance was deeply disturbed
when payors began reducing reimbursements rates starting on January
1, 2018, for inpatient and outpatient services rendered by out of
network providers like the Company ("Rate Compression"),
particularly at the Florida facilities. While the Summit
Acquisition increased cash flow and improved liquidity, it was not
enough to offset the negative impact that Rate Compression had on
the revenue stream. The Company was overleveraged and unable to
service the Secured Lenders’ debt.
In an effort to combat lower payments by insurance companies for
out of network services to clients, the Company sought to convert
to more of an in network-based model. While it was able to secure
more favorable in network contracts with major payors, the Company
was unsuccessful in increasing client admissions and the number of
days clients remained in treatment in order to offset the
differential between out of network reimbursements and in network
reimbursements. In 2020, the Company ceased operations of a
laboratory it had purchased as part of the Summit Entities
acquisition (QBR Diagnostics, LLC) because reimbursements for
testing declined and payors were increasingly demanding that
providers use payors' preferred laboratories.
The onset of COVID also exacerbated the Company's financial
difficulties,
particularly for its California and Florida facilities, which
historically had higher client populations due to their appeal to
clients as destination treatment programs. Since the California and
Florida facilities were much more dependent on clients traveling
from out of state to attend programming, the census at those
facilities significantly decreased when COVID prompted the
cessation of travel and complicated the consistency and degree of
in person treatment.
Additionally, the Company struggled to recruit and retain skilled
employees at the corporate level (admissions and business
development employees) and at the clinical level (nurses) due to
fierce competition in the industry. The Company was simply unable
to match bonuses and salaries offered by its competitors to
corporate and clinical employees due to losses in revenue equating
to hundreds of thousands of dollars each month, notwithstanding the
additional advances made available under the Senior Prepetition
Credit Agreement.
For the past couple of years, certain of the Secured Lenders,
including
Brightwood, have continued to fund losses through a succession of
three Chief Executive Officers, the last of who resigned in
January, effective on February 4, 2023. The Company's net income
for 2020 totaled $71.7 million, net income for 2021 was negative
$4.5 million and net income for 2022 (through November 2022)11 was
approximately negative $18.5 million.
Objective in Chapter 11 Cases
The primary goal of these Chapter 11 Cases is to consummate a sale
of the assets and facilities of the Debtors whose businesses are
going to be operated post-sale, including ((i) SBH Haverhill, LLC,
d/b/a Serenity at Summit New England; (ii) Union Fresh Start, LLC,
d/b/a Serenity at Summit; and (iii) Summit Behavioral Health
Limited Liability Company, d/b/a/ Summit Behavioral Health
Princeton Junction (collectively, the "Selling Debtors")), which
will maximize the value of the Debtors' estates for the benefit of
their constituents and preserve a viable business that will
continue to employ individuals, maintain contracts with vendors and
service providers, and provide services and continued care to
clients and patients.
In order to facilitate a sale process and the orderly
administration of these Chapter 11 Cases, a subset of the Senior
Secured Lenders (collectively, the "DIP Lenders") have agreed to
provide debtor-in-possession financing and Brightwood, in its
capacity as Administrative Agent under the Senior Prepetition
Credit Agreement, intends to submit a stalking horse credit bid for
the purchase of the assets of the Selling Debtors, subject to
higher and better bids pursuant to a Section 363 sale process and
bidding procedures to be approved by the Court. Thereafter, as
will be set forth in the Debtors' plan of liquidation, a
liquidating trust will be established, and a liquidating trustee
will be appointed, to administer any remaining assets of the
Debtors.
Absent Brightwood's agreement to serve as the stalking-horse
bidder, and the DIP Lenders' agreement to provide
debtor-in-possession financing in conjunction with the Senior
Secured Lenders' consent to use cash collateral to fund the sale
process and working capital needs pending a sale, the Debtors would
have been forced to cease all operations, lay off their remaining
employees, and terminate all of their operations and employees.
Without the relief requested in the First Day Filings, and later,
in the bidding procedures and the sale motions, immediate
liquidation likely remains the Debtors only viable option. The bid
procedures motion that the Debtors are filing concurrently herewith
seeks the approval of the Court to set a bid deadline for
interested parties to submit bids to purchase any of the other
remaining assets of the Debtors that are not Purchased Assets
included in the Stalking Horse Bid Agreement.
The First Day Filings will permit the Debtors to preserve and
maximize some of their enterprise value during the proposed sale
process for the benefit of their employees, clients, patients,
secured creditors, vendors, and other creditors and parties in
interest. The Debtors' immediate objective is to stabilize their
operations, preserve liquidity, and to minimize any adverse effects
that these Chapter 11 Cases might otherwise have on their estates
by obtaining the relief requested in the First Day Filings and to
work with interested parties to obtain a sale of their business for
the highest and best offer for the benefit of stakeholders.
About Delphi Behavioral Health Group
Delphi Behavioral Health Group, LLC and several affiliated entities
sought protection under Chapter 11 of the U.S. Bankruptcy Code
(Bankr. S.D. Fla. Lead Case No. 23-10945) on Feb. 6, 2023. In the
petition signed by Edward A. Phillips, interim chief executive
officer, the Debtors disclosed up to $10 million in assets and up
to $10 million in liabilities.
Delphi Behavioral Health Group provides a range of inpatient and
outpatient behavioral healthcare services in the substance use
disorder, addiction and mental health treatment space.
Headquartered in Fort Lauderdale, Florida, Delphi and its
affiliates operated 12 clinical facilities and two recovery
residences prior to the Petition Date, throughout California,
Florida, Maryland, Massachusetts and New Jersey. The levels of
care provided at the clinical facilities range from inpatient and
residential to outpatient (partial hospitalization), intensive
outpatient programming and outpatient programming.
Judge Peter D. Russin oversees the case.
The Debtors tapped Berger Singerman LLP as legal counsel, Getzler
Henrich and Associates as restructuring services provider, and Epiq
Corporate Restructuring, LLC as notice and claims agent.
Brightwood Loan Services, LLC, the Administrative Agent for the
Prepetition Lenders and the Administrative Agent for the DIP
Lenders, is represented by:
Roger Schwartz, Esq.
Pete Montori, Esq.
Robert Nussbaum, Esq.
King & Spalding LLP
1185 Avenue of the Americas, 34th Floor
New York, NY 10036
E-mail: rschwartz@kslaw.com
PMontoni@kslaw.com
rnussbaum@kslaw.com
DIEBOLD NIXDORF: Commences Exchange Offer for 8.50% Notes Due 2024
------------------------------------------------------------------
Diebold Nixdorf, Incorporated announced it has commenced a public
exchange offer with respect to the Company's outstanding 8.50%
Senior Notes due 2024 (144A CUSIP: 253651AA1; REG S CUSIP:
U25316AA5; Registered CUSIP: 253651AC7), issued pursuant to the
Indenture, dated as of April 19, 2016.
The Company is offering to exchange any and all of the 2024 Senior
Notes for units consisting of (i) new 8.50%/12.50% Senior Secured
PIK Toggle Notes due 2026 to be issued by the Company and (ii)
warrants to purchase common shares, par value $1.25 per share, of
the Company.
The terms and conditions of the Exchange Offer are described in the
preliminary prospectus, dated Feb. 10, 2023. The completion of the
Exchange Offer is subject to the conditions described in the
Exchange Offer documents, which include, among others, the
effectiveness of the Registration Statement. The Exchange Offer is
not conditioned upon any minimum amount of 2024 Senior Notes being
tendered. Subject to applicable law, the Company may waive certain
other conditions applicable to the Exchange Offer or extend,
terminate or otherwise amend the Exchange Offer in its sole
discretion.
A registration statement on Form S-4 relating to the New Securities
to be issued in the Exchange Offer has been filed with the
Securities and Exchange Commission but has not yet become
effective. The New Securities being offered in the Exchange Offer
may not be sold nor may offers to exchange be accepted prior to the
time that the Registration Statement related to the Exchange Offer
becomes effective. If and when issued, the New Securities will be
registered under the Securities Act of 1933, as amended.
The Exchange Offer will expire at 5:00 p.m., New York City time, on
March 24, 2023, unless earlier terminated or extended by the
Company. Any 2024 Senior Notes tendered may be withdrawn at any
time prior to 5:00 p.m., New York City time, on March 24, 2023, but
not thereafter.
The following sets forth the Exchange Offer Consideration, Early
Participation Premium and Total Offer Consideration (each as
defined in the Registration Statement) for the 2024 Senior Notes.
Existing Securities: 2024 Senior Notes
(144A CUSIP No. 253651AA1
Reg S CUSIP No. U25316AA5
Registered CUSIP No. 253651AC7)
Maturity Date: April 15, 2024
Aggregate
Principal Amount
Outstanding: $72,112,000
Exchange Offer
Consideration: $950 principal amount of New Units representing
$950 principal amount of New Notes
and the Unit Warrant Number of New Warrants
Early
Participation
Premium: $50 principal amount of New Units representing
$50 principal amount of New Notes
and the Unit Warrant Number of New Warrants
Total Offer
Consideration: $1,000 principal amount of New Units representing
$1,000 principal amount of New Notes
and the Unit Warrant Number of New Warrants
For each $1,000 in principal amount of the 2024 Senior Notes
validly tendered and accepted in accordance with the terms of the
Registration Statement at or prior to 5:00 p.m., New York City
time, on March 3, 2023, the Holders will receive, on the settlement
date, which the Company currently expects to be the third business
day following the Expiration Time, the Total Exchange Consideration
as set forth in the table above, which includes the Early
Participation Premium as set forth in the table above, for all such
2024 Senior Notes that are accepted. Holders who validly tender
their 2024 Senior Notes after the Early Delivery Time but at or
prior to the Expiration Time and do not validly withdraw such 2024
Senior Notes will not be eligible to receive the Early
Participation Premium and, accordingly, will be eligible to
receive, on the Settlement Date, only the Exchange Offer
Consideration as set forth in the table above, for all such 2024
Senior Notes that are accepted.
The 2024 Senior Notes may be tendered and accepted only in
denominations of $2,000 principal amount and integral multiples of
$1,000 in excess thereof. The Units and, as component parts of the
Units, the New Notes will be issued in minimum denominations of
$2,000 principal amount and integral multiples of $1.00 principal
amount in excess thereof.
On Dec. 29, 2022, the Company completed a private exchange offer
with respect to the 2024 Senior Notes, on substantially the same
terms as this Exchange Offer, pursuant to which the Company
accepted $327,888,000 in aggregate principal amount of the 2024
Senior Notes (representing 81.97% of the aggregate principal amount
then outstanding of the 2024 Senior Notes) tendered for exchange
and issued $333,616,814 in aggregate principal amount of units
consisting of $333,616,814 in aggregate principal amount of
8.50%/12.50% Senior Secured PIK Toggle Notes due 2026 and
15,813,847 warrants to purchase up to 15,813,847 Common Shares (as
it may adjusted from time to time). The number of Private Warrants
will be reduced and reallocated on a pro rata basis to give effect
to this Exchange Offer, as described in the Registration Statement.
The terms of the New Notes and the Private Notes are identical in
all material respects, although they will not be fungible for U.S.
federal income tax purposes and the New Notes will have a separate
CUSIP number and ISIN from the Private Notes, as described in the
Registration Statement. The purpose of this Exchange Offer is to
exchange the remaining 2024 Senior Notes held by Holders for New
Units upon the terms and subject to the conditions set forth in the
Registration Statement.
J.P. Morgan Securities LLC will act as sole Dealer Manager for the
Exchange Offer. D.F. King & Co., Inc. will act as the Information
and Exchange Agent for the Exchange Offer. Holders with questions
regarding the terms and conditions of the Exchange Offer may
contact J.P. Morgan Securities LLC at (866) 834-4666 (toll-free) or
(212) 834-4087 (collect). D.F. King & Co., Inc. will act as the
Information and Exchange Agent for the Exchange Offer. Requests
for copies of the prospectus and related materials may be directed
to J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions,
Attn: Prospectus Department, 1155 Long Island Avenue, Edgewood, NY
11717, or by telephone: 1-866-803-9204 or D.F. King & Co., Inc. at
(866) 388-7535 (U.S. toll free), +1(212) 269-5550 (collect), or
diebold@dfking.com (email).
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: Jeffrey Rutherford to Quit as Executive VP, CFO
----------------------------------------------------------------
Diebold Nixdorf, Incorporated announced that, effective Feb. 28,
2023, Jeffrey Rutherford will be departing as the Company's
executive vice president, chief financial officer. James Barna,
age 43, the Company's current senior vice president and treasurer
since September 2021, has been appointed to succeed Mr. Rutherford
as executive vice president, chief financial officer upon Mr.
Rutherford's departure. Mr. Barna previously served as vice
president and chief accounting officer of the Company from
September 2019 to September 2021. Prior to joining the Company,
Mr. Barna served as chief accounting officer and controller at
Ferro Corporation.
In connection with his appointment to the role, the Company and Mr.
Barna agreed to an offer letter, dated Feb. 7, 2023, pursuant to
which Mr. Barna will receive an annual base salary of $500,000 and
will be eligible for annual incentive awards and long-term
incentive plan awards. For 2023, the Board of Directors of the
Company set Mr. Barna's initial annual cash incentive award target
at $500,000, which represents 100% of his base salary. Any payout
under this incentive award shall be determined by the Board based
on the achievement of certain performance goals. In addition, Mr.
Barna will be eligible to participate in the Company's long-term
incentive program in the amount of $625,000, which represents 125%
of his base salary. Future long-term grants may be awarded in
accordance with the Company's existing programs and practices.
Mr. Barna will be entitled to participate as a Grade 85 executive
in the Company's Senior Leadership Severance Plan, as amended and
restated effective Nov. 7, 2018, which makes severance benefits
available to participating executives who are involuntarily
terminated without "cause" or who resign from employment due to
"good reason" (each as defined in the SLSP), in each case, separate
from a change in control and subject to a general release of claims
and acknowledgement of the executive's confidentiality,
non-competition and other applicable obligations. Mr. Barna is
also eligible to participate in the Company's Change in Control
program and accordingly entered into an Employee Agreement with
terms commensurate with similarly situated executives.
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: Posts $152 Million Net Loss in Fourth Quarter
--------------------------------------------------------------
Diebold Nixdorf, Incorporated reported a net loss of $152 million
on $968.8 million of total net sales for the quarter ended Dec. 31,
2022, compared to a net loss of $37.6 million on $1.06 billion of
total net sales for the quarter ended Dec. 31, 2021.
For the year ended Dec. 31, 2022, the Company reported a net loss
of $585.6 million on $3.46 billion of total net sales compared to a
net loss of $78.1 million on $3.90 billion of total net sales for
the year ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $3.06 billion in total assets,
$1.60 billion in total current liabilities, $2.58 billion in
long-term debt, $245.4 million in long-term liabilities, and a
total deficit of $1.37 billion.
Octavio Marquez, Diebold Nixdorf chairman, president and chief
executive officer, said: "From key customer wins to important
milestones that are improving our operational rigor, the steps we
took in 2022 to position our company for a stronger future will be
a springboard for our success. Last year, we spent significant
efforts on improving operations and completing our refinancing
transaction. We ended 2022 on a positive note, finishing the year
with a record-high backlog as our Banking and Retail solutions
continue to generate solid demand."
Marquez continued, "As we look at 2023, we are well-positioned for
success with a strong order pipeline and a straightforward focus:
converting our backlog into revenue. Closing the TSA was an
important milestone that provides us with the capital we need to
normalize our operations, meet supplier commitments and fully
execute on our value-generating operating model. Now, our focus is
solely back on the business. Executing our model will also allow
us to start the important work of deleveraging the business,
generating free cash flow and continuing to evaluate strategic
opportunities to enhance shareholder value."
A full-text copy of the press release is available for free at:
https://www.sec.gov/Archives/edgar/data/28823/000115752323000223/a53308419ex99_1.htm
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.
DIOCESE OF ROCKVILLE: Committee Fine-Tunes Payoff Plan
------------------------------------------------------
The Official Committee of Unsecured Creditors of The Roman Catholic
Diocese of Rockville Centre filed a First Amended Chapter 11 Plan
of Reorganization and a corresponding Disclosure Statement.
The Committee Plan provides the means for settling and paying all
Claims asserted against the Debtor and to enable the Diocese to
emerge from bankruptcy. The Committee Plan consists of three
alternatives, the Full Settlement Alternative, the Partial
Settlement Alternative, and the Litigation Alternative. The Full
and Partial Settlement Alternatives provide an opportunity for
certain of the Debtor's non-debtor affiliates, the Non-Debtor
Affiliates, and certain of the Insurers to participate in the
Committee Plan and to resolve their liability with respect to the
Abuse Claims.
However, unless meaningful compensation from the Non-Debtor
Affiliates is provided, the Committee Plan does not grant releases
to them, and, if confirmed, the Abuse Claimants can pursue their
Abuse Claims against the Non-Debtor Affiliates liable for such
abuse. The Committee Plan is in the best interests of, and
provides the highest and most expeditious recoveries to, all
parties including Abuse Claimants who hold Claims against the
Debtor.
Under the Plan, holders of Class 5 General Unsecured Claims will
receive(i) Cash equal to the unpaid part of such Allowed General
Unsecured Claim; (ii) reinstatement of such claim to be paid in the
ordinary course of business of the Reorganized Debtor; (iii) such
other treatment such that it will not be impaired under section
1124 of the Bankruptcy Code; or (iv) such other less favorable
treatment as to which the Debtor or the Reorganized Debtor and the
Holder of such Allowed General Unsecured Claim shall have agreed
upon in writing. If a General Unsecured Claim is unliquidated and
was subject to existing litigation pending in state or federal
court before the Petition Date, if the Diocese does not object to
such Claim before the Claims Objection Deadline, then following the
Claims Objection Deadline, such litigation shall no longer be
stayed and such litigation may be continued against the Diocese as
the Reorganized Debtor and such litigation shall continue as the
same existed on the Petition Date. Creditors will recover 100% of
their claims. Class 5 is unimpaired.
On the Confirmation Date, the Trust shall be established under the
Trust Documents and the Future Abuse Claims Trust shall be
established under the Future Abuse Claims Trust Documents.
The Trust will be funded:
* On the Effective Date the Diocese, by wire transfer, will pay
or deliver to the Trust [$41 million] and, further, the Diocese
shall transfer, assign or otherwise deliver the assets identified
in Sections 12.2 – 12.4 to the Trust. The Participating Parties
by wire transfer, will pay or deliver to the Trust their agreed
upon amount.
* Under the Full or Partial Settlement Alternatives, the
Settling Insurers shall pay the trust under any applicable
settlement agreements.
* On the Effective Date, with no further act by any party, the
Diocese and the Committee will be deemed to have assigned to the
Trustee and the Trust all Avoidance Rights (not otherwise released,
time-barred, compromised, enjoined or discharged under the
Committee Plan).
* Under the Litigation Only Alternative, on the Effective Date,
with no further act by any party, the Diocese and the Participating
Parties shall be deemed to have assigned the Insurance Claims and
the proceeds of such Insurance Claims to the Trust and such
assignment shall immediately be deemed effective. On the Effective
Date, the Trust will be empowered to receive assignment of
Litigation Awards and to take all steps necessary to pursue
recovery from Non-Settling Insurers.
* Under the Partial Settlement Alternative, on the Effective
Date, with no further act by any party, the Diocese and the
Participating Parties shall be deemed to have assigned the
Insurance Claims, except the Arrowood Insurance Claims, and the
proceeds of such Insurance Claims to the Trust and such assignment
shall immediately be deemed effective. On the Effective Date, the
Trust will be empowered to receive assignment of Litigation Awards
and to take all steps necessary to pursue recovery from
Non-Settling Insurers.
* The Trust shall transfer 6% of the Non-Insurance Trust Assets
to the Future Abuse Claims Trust.
Counsel for the Official Committee of Unsecured Creditors:
James I. Stang, Esq.
Ilan D. Scharf, Esq.
Iain Nasatir, Esq.
Karen Dine, Esq.
Brittany M. Michael, Esq.
PACHULSKI STANG ZIEHL & JONES LLP
780 Third Avenue, 36th Floor
New York, NY 10017-2024
Tel: (212) 561-7700
Fax: (212) 561-7777
E-mail: jstang@pszjlaw.com
- and -
Timothy W. Burns, Esq.
Jesse J. Bair, Esq.
BURNS BAIR LLP
10 E. Doty St., Suite 600
Madison, WI 53703
Tel: 608-286-2808
A copy of the Disclosure Statement dated Feb. 3, 2023, is available
at https://bit.ly/3YkkuoA from Epiq11, the claims agent.
About The Roman Catholic Diocese
of Rockville Centre, New York
The Roman Catholic Diocese of Rockville Centre, New York, is the
seat of the Roman Catholic Church on Long Island. The Diocese has
been under the leadership of Bishop John O. Barres since February
2017. The State of New York established the Diocese as a religious
corporation in 1958. The Diocese is one of eight Catholic dioceses
in New York, including the Archdiocese of New York. The Diocese's
total Catholic population is approximately 1.4 million, roughly
half of Long Island's total population of 3.0 million. The Diocese
is the eighth largest diocese in the United States when measured by
the number of baptized Catholics.
The Roman Catholic Diocese of Rockville Centre, New York, filed a
Chapter 11 petition (Bankr. S.D.N.Y. Case No. 20-12345) on Sept.
30, 2020, listing as much as $500 million in both assets and
liabilities. Judge Martin Glenn oversees the case.
The Diocese tapped Jones Day as legal counsel, Alvarez & Marsal
North America, LLC, as restructuring advisor, and Sitrick and
Company, Inc., as communications consultant. Epiq Corporate
Restructuring, LLC is the claims agent.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors in the Diocese's Chapter 11 case. The committee
tapped Pachulski Stang Ziehl & Jones, LLP and Ruskin Moscou
Faltischek, PC as its bankruptcy counsel and special real estate
counsel, respectively.
Robert E. Gerber, the legal representative for future claimants of
the Diocese, is represented by the law firm of Joseph Hage
Aaronson, LLC.
DOT DOT SMILE: Unsecureds be Paid in Full w/o Interest
------------------------------------------------------
Dot Dot Smile, LLC, submitted a Second Amended Subchapter V Chapter
11 Plan.
DDS is the party proposing this Plan, which is a reorganizing plan
that proposes to pay all allowed claims over a 5-year period,
without interest, except certain priority tax claims that will
receive interest as set forth herein.
Since the Debtor is transitioning to an on-line business model, its
assets principal asset consists of its inventory. The current
market value of the Debtor's inventory is $4,000,000 (if sold in
the ordinary course of the Debtor's business). The Debtor
estimates that the value of its website is $5,000 and estimates
that the value of its trade name Dot Dot Smile, LLC to be
$100,000.
Under the Plan, Class 10 General Unsecured Claims total $1,816,198.
Payment in full, with no interest on pro rata basis after payment
of classes 1 through 9, per the payment schedule set forth in
section VI herein. No interest will be paid on these claims.
Class 10 is impaired.
The Plan will be funded by the ongoing business operations of DDS
as follows:
Administrative Claims: June 15, 2023 (est): $120,000 - $138,000
Plan Payment 1: Dec. 15, 2023: $100,000
Plan Payment 2: Dec. 15, 2024: $150,000
Plan Payment 3: Dec. 15, 2025: $200,000
Plan Payment 4: Dec. 15, 2026: $250,000
Plan Payment 5: Dec. 15, 2027: $300,000
(plus any amounts necessary to
pay all allowed claims in full).
The Plan confirmation hearing will be held on April 4, 2023 at 1:30
p.m. in Courtroom 304, 3420 Twelfth St., Riverside, California.
The status conference hearing will be held on April 4, 2023 at 1:30
p.m. in Courtroom 304, 3420 Twelfth St., Riverside, California.
Attorneys for the Subchapter V Debtor:
Jeffrey S. Shinbrot, Esq.
JEFFREY S. SHINBROT, APLC
15260 Ventura Blvd., Suite 120
Sherman Oaks, CA 91403
Tel: (310) 659-5444
Fax: (310) 878-8304
E-mail: jeffrey@shinbrotfirm.com
A copy of the Chapter 11 Plan dated Feb. 3, 2023, is available at
https://bit.ly/3HD5J9V from PacerMonitor.com.
About Dot Dot Smile
Dot Dot Smile, LLC, is a wholesaler of children's clothing.
Dot Dot Smile filed a petition for relief under Subchapter V of
Chapter 11 of the U.S. Bankruptcy Code (Bankr. C.D. Cal. Case No.
22-13361) on Sept. 3, 2022. In the petition filed by CEO Jeffrey
Eugene Thompson, the Debtor disclosed $4,478,922 in assets and
$5,638,742 in liabilities.
Judge Wayne E. Johnson oversees the case.
Jeffrey S. Shinbrot, APLC, is the Debtor's counsel.
ENGINE GROUP: Prospect Capital Marks $3.5M Loan at 77% Off
----------------------------------------------------------
Prospect Capital Corporation has marked its $3,546,000 loan
extended to Engine Group, Inc. to market at $810,000 or 23% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Prospect Capital's Form 10-Q for the
quarterly period ended December 31, 2022, filed with the Securities
and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a First Lien Term Loan to
Engine Group, Inc. The loan accrues interest at a rate of 9.16%
(3ML+ 4.75%) per annum. The loan matures on November 11, 2023.
The loan is on non-accrual status as of the reporting date.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
Headquartered in New York, NY, Engine Group, Inc. is a privately
held marketing services and communications firm with a focus on
digital capabilities providing a full range of data-driven and
technology-enabled insights to a variety of leading and boutique
brands operating in diverse end markets.
ENGINEERED MACHINERY: Incremental Loan No Impact on Moody's B2 CFR
------------------------------------------------------------------
Moody's Investors Service said that Engineered Machinery Holdings,
Inc.'s ("Duravant") $130 million incremental first lien term loan
issuance will have no impact on the company's existing ratings,
including the B2 Corporate Family Rating, B1 rating on the senior
secured first lien credit facilities, and Caa1 rating on the senior
secured second lien term loan or the stable outlook.
Duravant plans to use the proceeds from the term loan to repay
revolver borrowings on its $235 million revolving credit facility
and pay related fees and expenses. The revolver had $126 million of
borrowings as of December 31, 2022. These borrowings were used
primarily to fund the most recent acquisitions of Marelec Food
Technologies and Multiscan Technologies. Moody's views this
leverage-neutral transaction as being credit positive, because it
will improve the company's liquidity by increasing revolver
availability. The acquisitions were nevertheless leveraging and
terming out the revolver indicates the company expects to operate
with a higher debt level.
Duravant's pro forma adjusted debt/EBITDA is 7.6x at the end of
December 2022. This high financial leverage reflects the company's
acquisitive appetite that results in chronically high debt levels
and prevents long-run deleveraging from earnings growth.
Nevertheless, the company continues to benefit from steady demand
levels across most business segments. Moody's believes the
increasing macroeconomic headwinds will constrain deleveraging in
2023, but the company will generate positive free cash flow that
will augment its already good liquidity. The company will have full
availability under its $235 million revolving credit facility post
this transaction and had $76 million of cash at the end of December
2022.
Engineered Machinery Holdings, Inc. is the indirect parent of
Duravant LLC. Headquartered in Downers Grove, Illinois, Duravant
designs and assembles packaging, material handling and food
processing equipment for a number of industries, including food and
beverage, consumer products, e-commerce and distribution, retail,
and agriculture and produce. Duravant is owned by affiliates of
Warburg Pincus, LLC. Revenue for fiscal 2022 was $1.2 billion.
FB DEBT FINANCING: $690 Million Bid Okayed by Bankruptcy Judge
--------------------------------------------------------------
Rick Archer of Law360 reports that a Delaware bankruptcy judge
Wednesday, February 8, 2023, gave cosmetic brand developer FB Debt
Financing Guarantor the go-ahead to put its assets on the block
with a $690 million stalking horse bid, except for the assets being
sold to end a contract dispute with singer Ariana Grande.
FB Acquisition LLC, an entity organized and controlled by the
Lenders, is serving as stalking horse bidder for the assets.
Jefferies Finance LLC, in its capacity as DIP Agent and Controlling
Collateral Agent, formed the stalking horse purchaser for the
purpose of credit bidding the Debtors' prepetition obligations and
DIP obligations to acquire the assets. Absent higher and better
offers, the stalking horse bidder will acquire the assets in
exchange of a credit bid in an amount equal to $690,000,000.
Under the Court-approved Bid Procedures, a party that desires to
make a bid must submit a bid by March 2, 2023 at 5:00 p.m. (ET).
If the Debtors timely receive one or more qualifying bids other
than the Stalking Horse APA, then the Debtors shall conduct the
auction on March 8, 2023 at 11:00 a.m. (ET), at the offices of
Ropes & Gray LLP, 1211 6th Avenue, New York, NY 10036, or
virtually. The sale hearing shall be held in this Court on March
21, 2023 at 1:00 p.m. (ET).
About FB Debt Financing Guarantor
FB Debt Financing Guarantor, LLC, formerly known as Morphe Debt
Financing Guarantor, LLC, is a builder of beauty brands anchored in
innovative and high-quality products, marketing and operations.
Its multi-branded and multi-category portfolio includes Morphe,
Morphe 2, Jaclyn Cosmetics, and Born Dreamer. The company's
products are sold through top beauty retailers worldwide, including
Ulta Beauty, Sephora, Mecca, Douglas, Selfridges, and Target.
FB Debt and its affiliates sought protection under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10025) on
Jan 11, 2023.
In the petition signed by their chief restructuring officer,
Stephen Marotta, the Debtors disclosed $500 million to $1 billion
in both assets and liabilities.
The Debtors tapped Ropes & Gray, LLP as general bankruptcy counsel;
Bayard, P.A. as Delaware counsel; Configure Partners, LLC, as
investment banker; and Ankura Consulting Group, LLC, as
restructuring advisor. Kroll Restructuring Administration, LLC, is
the Debtors' claims, noticing and solicitation agent and
administrative advisor.
FLUOROTEK USA: Unsecureds Owed $584K to Get Cash Remaining
----------------------------------------------------------
Fluorotek USA, Inc., submitted First Amended Disclosure Statement
with respect to the Chapter 11 Plan.
The Plan provides for the orderly payment of Allowed Claims from
the Debtor's cash on hand in its DIP bank account in the
approximate amount of $45,155.00, and through cash proceeds from
the proposed sale of the Office Furniture to Jeff Breitkreutz for
$3,000.00. The Debtor will pay in full all Allowed Administrative
Claims on the Effective Date, and provide a pro rata distribution
of the remaining cash proceeds to general unsecured creditors with
Allowed Claims. The Debtor will cease to exist after the Effective
Date as a Florida corporation.
Under the Plan, Class 1 General Unsecured Claims total $584,412.85.
Any Unsecured Claims that are not Allowed as of the Effective Date
shall be deemed Disallowed in full, and this Plan and the
Confirmation Order shall be deemed a Final Order disallowing any
such claim. Each holder of an Allowed Unsecured Claim will receive
a distribution equal to the Holder's Pro Rata Share in the balance
of Cash remaining in the Debtor's debtor-in-possession bank
accounts and any net proceeds from the sale of the Office Furniture
after full payment of the Priority Claim of the Internal Revenue
Service and any Administrative Claims in accordance with the
provisions of the Plan. Class 1 is impaired.
Pursuant to section 1128 of the Bankruptcy Code, The Bankruptcy
Court has scheduled a hearing to consider confirmation of the Plan
on March 28, 2023, at 2:30 p.m. Eastern Time, in the United States
Bankruptcy Court for the Middle District of Florida, West Palm
Beach Division. The Bankruptcy Court has directed that objections,
if any, to confirmation of the Plan be filed and served on or
before March 14, 2023, in the manner described in Section VI.B
below under the caption, "Confirmation Hearing."
Ballot must be received no later than 5:00 p.m. Eastern Time on
March 14, 2023.
Counsel for the Debtor:
Jonathan M. Sykes, Esq.
Michael A. Nardella, Esq.
NARDELLA & NARDELLA, PLLC
135 W. Central Blvd., Suite 300
Orlando, FL 32801
Tel: (407) 966-2680
Fax: (407) 966-2681
A copy of the Disclosure Statement dated Feb. 3, 2023, is available
at https://bit.ly/3juwSUv from PacerMonitor.com.
About Fluorotek USA
Fluorotek USA, Inc., a Riveria Beach, Fla.-based manufacturer of
rubber products, filed its voluntary Chapter 11 petition (Bankr.
S.D. Fla. Case No. 21-16236) on June 25, 2021, listing $4,171,101
in assets and $7,061,033 in liabilities. David J. Helbi, chief
operating officer, signed the petition.
Judge Mindy A. Mora oversees the case.
Nardella & Nardella, PLLC and John F. Costello C.P.A. P.A. serve as
the Debtor's legal counsel and accountant, respectively.
FR BR HOLDINGS: S&P Downgraded To 'CCC' on Liquidity Pressure
-------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on FR BR
Holdings LLC (FR BR) to 'CCC' from 'CCC+'. At the same time, S&P
lowered the issue-level rating on the senior secured term loan to
'CCC' from 'CCC+'. The '3' recovery rating remains unchanged.
The ratings remain on CreditWatch with developing implications to
reflect the uncertainty around the timing of the refinancing of its
term loan B.
The downgrade reflects S&P's expectation that FR BR may face
difficulties in refinancing its upcoming maturity on its $460
million term loan B.
S&P said, "We continue to expect an elevated adjusted debt to
EBITDA of about 8.5x-9.0x in 2023 due to the reduced distributions
from its investee company, Blue Racer Midstream. We also forecast
the company will have limited cushion to its financial covenant and
expect its interest coverage to be about 1.2x-1.3x in 2023. The
elevated financial measures could limit the company's ability to
successfully refinance its upcoming debt maturity at satisfactory
terms. As of Sept. 30, 2022, the company had approximately $2
million of cash on hand. In our view, if FR BR does not seek an
extension or refinancing, it will not have sufficient liquidity to
repay its term loan without external capital support. We believe
the company depends on favorable market conditions to refinance the
upcoming maturity at satisfactory terms and view the timing of any
transaction as uncertain at this time.
"The CreditWatch developing implication reflects the uncertainty of
the timing of FR BR's refinancing of its term loan B due Dec. 14,
2023. We could lower the rating if FR BR fails to refinance the
loan within six months of maturity. Alternatively, if FR BR
improves its liquidity by completing a refinancing transaction, we
could consider a multiple-notch upgrade, up to 'B-'."
ESG credit indicators: E-3, S-2, G-2
FTX GROUP: Advisors, Lawyers Have Already Billed $20M
-----------------------------------------------------
Rohan Goswami and MacKenzie Sigalos of CNBC report that the lawyers
and advisors of FTX Group have billed about $20 million for 51 days
of work in the company's bankruptcy case.
FTX's top bankruptcy, legal and financial advisors have billed the
company more than $19.6 million in fees for work done in 2022,
according to Tuesday, Feb. 7, 2023, bankruptcy court filings. More
than $10 million of that was for work done in November 2022 as Sam
Bankman-Fried's crypto empire entered bankruptcy protection in
Delaware.
The firms will initially only be paid a little over $15.5 million,
or 80% of the value of their work, under a court-ordered interim
compensation plan.
The law firms that billed FTX are Sullivan & Cromwell, Landis Rath
& Cobb, and Quinn Emanuel Urquhart & Sullivan. Professional advisor
Alvarez & Marsal and financial advisor AlixPartners also billed the
company.
Some of the work the firms billed for involved taking meetings with
other companies that also were billing FTX for their time or
corresponding with former and current executives, including
Caroline Ellison, the former CEO of Bankman-Fried's hedge fund,
Alameda Research.
Landis Rath & Cobb and Sullivan & Cromwell, FTX's primary legal
firms, billed the company a combined $10.7 million for more than
8,400 hours of work. Landis Rath & Cobb billed $1.16 million for
work done between Nov. 11 and Nov. 30.
Sullivan & Cromwell, a target for both lawmakers and Bankman-Fried
over the firm's pre-petition work with FTX, sought more than $9.5
million in compensation for over 6,500 billable hours in the period
between November 12 and November 30, 2022. Roughly half of those
billable hours, totaling more than $4.8 million, were for the work
of partners, who typically charge the highest hourly rate.
Sullivan & Cromwell assigned more than two dozen partners to FTX's
case, according to the filings. Jim Bromley, a partner at Sullivan
& Cromwell and a lead attorney on the case, billed over 178 hours
for the weeks between Nov. 12 and November 30, 2023.
The legal filings offer a glimpse into the ferocious work advisors
have done to untangle FTX’s complex web of accounts and slipshod
accounting standards. Sullivan & Cromwell lawyers spent over 1,900
hours in November alone on work related to analyzing and recovering
FTX's global asset base, according to the filings.
Alvarez & Marsal, an advisory firm, billed $1.9 million for over
2,300 hours of work on "business operations," meeting with lawyers
and FTX executives, analyzing FTX's holdings using blockchain
explorers, and reviewing "cybersecurity scenarios." Those
operations included multiple hours in November 2022 corresponding
with and calling Ellison, more than five hours in a single day
imaging iPad files and other electronic devices, and a first-day
hearing conference call that lasted 2 1/2 hours.
Quinn Emanuel, which billed over $1.5 million for work done in
November and December, assigned more than a dozen lawyers to the
case, nine of whom were partners. One of those partners, Sascha
Rand, billed over $13,000 for a single day's work in November,
corresponding and reviewing first-day issues. Another Quinn lawyer
filed for over $17,000 on a "non-working travel" day trip beginning
Nov. 21 and returning on November 22, 2023.
AlixPartners, a financial consulting firm, billed $1.1 million for
work done over the course of a little more than a month, from
November 28 to December 31, 2022.
FTX's advisors aren't entitled to their full fees yet. Under an
interim compensation order, professional advisors are paid 80% of
their filed fees, provided that no objection is filed. Full
compensation for legal and advisor fees will not occur until a
final fee application is filed, whenever FTX’s bankruptcy saga
concludes.
That doesn't mean that advisors won't get their due, however. A
2019 Federal Reserve study said professional and consulting fees in
the Lehman Brothers' bankruptcy saga totaled more than $2.56
billion.
Lawyers for Sullivan & Cromwell did $40,000 worth of work just to
appear in FTX's first bankruptcy hearing on November 22, 2022,
based on court filings of hours billed and hourly rates.
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.
GIRARDI & KEESE: Ex-CFO Pleads Not Guilty for Helping Client Theft
------------------------------------------------------------------
Reuters reports that Christopher Kamon, the former chief financial
officer of defunct law firm Girardi Keese, pleaded not guilty to
charges in Chicago federal court that he misappropriated more than
$3 million in client funds that were owed to the families of
victims of a 2018 airline crash.
U.S. Magistrate Judge Jeffrey Cummings denied bail for Kamon, 43.
Kamon is already in federal custody on wire fraud charges in a
separate criminal case for allegedly embezzling $10 million from
Girardi Keese, which was run by now-disbarred California attorney
Tom Girardi before it collapsed in late 2020. Kamon has also
pleaded not guilty in that case.
His arraignment stems from charges filed in early February accusing
him, Girardi, and David Lira, Girardi's son-in-law who also worked
at the firm, of eight counts of wire fraud and four counts of
criminal contempt of court.
Corey Rubenstein, a Chicago assistant U.S. attorney, said at the
arraignment that Kamon faces up to 20 years in prison if convicted
on all wire fraud counts. There are no maximum sentences for the
contempt of court charges, he said.
Chicago prosecutors said Girardi, Kamon and Lira took client funds
owed to families of the victims of the 2018 Boeing 737 MAX Lion Air
Flight 610 crash in Indonesia. The crash killed all 189 onboard.
Lira is set to be arraigned Feb. 10, while Girardi will be
arraigned on March 3. Damon Cheronis, an attorney representing
Lira, has said his client is innocent and will plead not guilty.
Attorneys for Girardi have not yet appeared in the Chicago case.
On Feb. 6, U.S. Magistrate Judge Karen Stevenson in Los Angeles
entered a not guilty plea for Girardi on separate federal charges
for allegedly embezzling $15 million from his law firm's clients
over a nine-year period.
Kamon, who was also charged with five counts of embezzlement with
Girardi in that case, also pleaded not guilty. Stevenson ordered
his detention to continue, finding him to be a flight risk.
Girardi's bail was set at $250,000.
Girardi's Los Angeles public defenders said on Wednesday that a
California judge had determined nearly two years ago that Girardi
was unable to care for himself or his finances due to "a major
neurocognitive disorder." A psychiatrist said Girardi suffers from
Alzheimer's disease.
The case is USA v. Girardi, et al., U.S. District Court for the
Northern District of Illinois, 1:23-cr-00054
For USA: Corey Rubenstein and Emily Vermylen, of the U.S.
attorney's office
For Christopher Kamon: Allen Lanstra, Jack DiCanio, Matthew Tako
and William Ridgway, of Skadden, Arps, Slate, Meagher & Flom
For David Lira: Damon Cheronis and Ryan Levitt, of Cheronis,
Parente & Levitt
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
GOODYEAR TIRE: S&P Alters Outlook to Negative, Affirms 'BB-' ICR
----------------------------------------------------------------
S&P Global Ratings revised its outlook on Goodyear Tire & Rubber
Co. (Goodyear) to negative from stable. S&P also affirmed its 'BB-'
issuer credit rating on the company. In addition, S&P affirmed the
'BB-' issue-level ratings on its unsecured debt.
The negative outlook indicates that S&P could lower the rating if
Goodyear did not sustainably improve its FOCF to debt above 5%
while maintaining debt to EBITDA below 5x.
S&P said, “The negative outlook reflects our expectation that
credit metrics will remain weaker than previously expected and the
risk that they could weaken further should consumer demand for the
Goodyear's products materially fall over the next 12 months.
Goodyear's fourth-quarter performance was significantly weaker,
primarily in Europe. The replacement market was especially weak
(down 13.7% for Goodyear in Europe) and margins fell significantly
due to a worse mix (less high-margin winter tires), higher input
costs (especially energy), and higher unabsorbed overhead costs.
The lower margins combined with a greater-than-expected working
capital investment which we attribute to lower European sales
volumes led to significantly negative free cash flow in 2022 of
over $500 million. While leverage of 4.2x at the end of 2022
remains within our expectations for the current rating, FOCF to
debt remained below 5% for both 2021 and 2022, which is a downside
trigger for the rating. For 2023, we expect debt to EBITDA to be
about 4.5x and FOCF to debt should improve to 3%-5% as working
capital investments reverse to some degree.
"While FOCF should improve in 2023, the level of recovery will
depend on end markets, which are expected to weaken this year.In
Europe, we expect margins and consumer demand to remain weak, but
margins should improve there in the second half as summer tire
inventories are tighter and the company is starting to implement
some price increases to offset inflationary costs. In addition, the
company has announced restructuring actions in Europe that should
reduce costs longer term. In the Americas, margins have held up
well as the consumer and employment remain quite strong in the
U.S., but the Federal Reserve is likely to continue to increase
interest rates, and we expect a recession this year. This could
lead to lower volumes and a weaker mix of tires in the Americas. In
addition, pricing is already weakening in the tier 2 tire segment
due to a large number of Asian tires entering the market in 2022 as
ocean shipping rates fell from very high levels. While lower-priced
tier 2 tires are not a big part of Goodyear's volumes, there could
be trade-downs from tier 1 to tier 2 and more tires arriving into
the U.S. if demand remains weak in other geographic areas.
Offsetting the expected weak macro environment to some degree, raw
material costs are falling, original equipment (OE) volumes are
slowly increasing, and the company should get the full benefit of
synergies with Cooper Tire this year ($250 million). We believe
that Goodyear is unlikely to maintain pricing in a weakening
consumer environment. Taking all these headwinds and tailwinds into
account, we now forecast margins to fall about 1% this year, but
recover in 2024."
Goodyear remains well positioned, with significant market share
globally in premium tires and a strong pipeline of new products.
Over the past couple of years, Goodyear recovered market share in
North America and until recently, in Europe. The Cooper acquisition
strengthened Goodyear's position in North America, expanded its
presence in China, and enhanced its mid-tier product offerings. S&P
also thinks that Goodyear has a strong portfolio of new products
for electric vehicles where heavier weights from the batteries
create different engineering requirements to reduce wear and tear
and increase performance.
While Goodyear has cut capital spending to reduce cash burn and
maintain its leverage, the lower spending could potentially hurt
its market share longer term.In 2022, the company reduced its
planned capital spending of up to $1.4 billion to $1.06 billion and
in 2023, the company plans to spend about $1 billion. S&P thinks
this is prudent but wonder if this may put the company at a
disadvantage longer term compared with peers like Michelin and
Bridgestone that have higher margins, less debt, and stronger
FOCF.
S&P said, "The negative outlook indicates that we could lower the
rating if Goodyear did not sustainably improve its FOCF to debt
above 5% while maintaining debt to EBITDA below 5x.
"We could lower our rating if Goodyear's debt-to-EBITDA ratio
sustainably increased above 5x or if its FOCF-to-debt ratio
remained below 5%. This could occur if volumes and margins remained
weak or deteriorated further due to weaker global demand for
tires.
"We could consider revising the outlook back to stable if we came
to believe that the company would be able to more consistently
generate an FOCF-to-debt ratio of at least 5% and maintain a
debt-to-EBITDA metric of less than 5x on a sustained basis. This
could occur if the company were able to increase margins in Europe,
maintain margins in the Americas, and manage its inventory levels
to reduce working capital investments."
ESG credit indicators: E2, S2, G2
S&P said, "ESG factors have an overall neutral influence on our
rating analysis on The Goodyear Tire & Rubber Co. While tire
production produces higher CO2 emissions relative to most other
parts of car manufacturing, current regulation has not yet
introduced costs that have a significant detrimental impact on
credit metrics or the rating. For the next couple of years, we
expect capex directed toward pollution control facilities and
occupational safety and health projects to be less than 5% of the
total capex. Further, it sells more than 75% of its tires in the
replacement market, and we view tires as a necessary component of
the vehicle, regardless of the type of engine propelling the
vehicle. Social and governance credit factors have no material
influence on our rating analysis."
IGLESIAS DIOS: Claims to be Paid From Tithe and Sale of Land
------------------------------------------------------------
Iglesias Dios Es Amor, Inc., submitted an Amended Disclosure
Statement for its Chapter 11 Plan dated Jan. 31, 2023.
The Debtor seeks to accomplish payment under the Plan by using the
funds receive from tithe and activities in the church. Also, the
Debtor is proposing to sell two plots of lands: a piece of land
located at Lomas de Trujillo Alto, VBC-57, Lot 3, Trujillo Alto,
Puerto Rico; and another piece of land located at Lomas de Trujillo
Alto, VBC-57, Lot 40-A, Bloq 1, Trujillo Alto.
The Plan treats general unsecured claims as follows:
* Class 3 consists of creditor CRIM which will be paid in 60
monthly intervals at $116.65 per month with an interest rate of
4.25%. Payment will begin on July 1, 2028. The total payout will be
$6,998.71. Class 3 is impaired.
* Class 4 consists of creditor Xerox which will be paid in 60
monthly intervals at $116.65 per month with an interest rate of
4.25%. Payment will begin on July 1, 2028. The total payout will be
$5,002.98. Class 4 is impaired.
The Plan will be paid by the tithe received from the congregation
of the Church and activities made at the Church. Also, debtor
proposes to sell two piece of land that are vacant to complete
payment to the plan.
The Debtor's counsel:
Gerardo Santiago Puig
Doral Bank Plaza, Ste 801, 33 Resolucion Street
San Juan, PR 00920
Tel: (787) 777-8000
E-mail: gsantiagopuig@gmail.com
A copy of the Amended Disclosure Statement dated Feb. 3, 2023, is
available at https://bit.ly/3HDveaY from PacerMonitor.com.
About Iglesias Dios Es Amor
Iglesias Dios Es Amor, Inc., is a corporation that administer a
Church in the municipality of Trujillo Alto. It has been in this
business since June 29, 1977. Mr. Elias Reyes Ortiz is the
president of the corporation.
Since Hurricane Maria, the members of the assembly has been
significantly reduced, causing the debtor to default on a mortgage
loan with Cooperativa de Ahorro (COOPACA). Coopaca filed a
mortgage foreclosure case against the debtor corporation and a
judgment was entered.
Due to the advanced stage of the foreclosure, Iglesias Dios Es
Amor, Inc., filed its voluntary petition for relief under Chapter
11 of the U.S. Bankruptcy Code (Bankr. D.P.R. Case No. 21-03508) on
Nov. 29, 2021, with as much as $1 million in both assets and
liabilities. Elias Reyes Ortiz, president, signed the petition.
Judge Edward A. Godoy oversees the case.
The Debtor tapped Gerardo L. Santiago Puig, Esq., at Santiago Puig
Law Offices as legal counsel and Juan C. Pomales Torres as
accountant.
K&N PARENT: Prospect Capital Marks $3.5M Loan at 95% Off
--------------------------------------------------------
Prospect Capital Corporation has marked its $25,887,000 loan
extended to K&N Parent, Inc to market at $1,320,000 or 5% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Prospect Capital's Form 10-Q for the
quarterly period ended December 31, 2022, filed with the Securities
and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a Second Lien Term Loan to K&N
Parent, Inc. The loan accrues interest at a rate of 13.48%
(3ML+ 8.75%) per annum. The loan matures on October 21, 2024.
The loan is on non-accrual status as of the reporting date.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
K&N Parent, Inc. operates as a designer and manufacturer of
performance automotive aftermarket products. The Company offers air
filters, intakes, oil filters, cabins, and accessories.
K&N PARENT: S&P Downgrades ICR to 'D' on Distressed Transaction
---------------------------------------------------------------
S&P Global Ratings lowered its issuer credit rating on .S.–based
K&N Parent Inc. to 'D' from 'CCC-'. S&P also lowered the
issue-level rating on the first-lien debt to 'D' from 'CCC-' and
lowered the issue-level rating on the second-lien debt to 'D' from
'C'.
S&P said, "The downgrade follows the completion of a debt
restructuring we view as distressed. The restructuring resulted in
the pro rata equitization of the first-lien debt (which includes
the $40 million revolving credit facility due 2023, $240 million
term loan due 2023, and $9 million payment-in-kind note due 2023)
for 96% of pro forma equity, exchange of the $287 million
outstanding first-lien debt into a new $113 million term loan, full
equitization of all $133 million second-lien (including the $100
million term loan due 2024 and $25 million second-lien
payment-in-kind note due 2024) and unsecured debt for 4% of pro
forma equity, and issuance of a new money $60 million priority term
loan.
"We view the transaction on the first-lien debt as tantamount to
default because debtholders were primed by the new money priority
term loan and received less than originally promised by extending
some maturities to 2027 and turning some debt to perpetual common
equity without adequate compensation. Similarly, we view the
transaction on the second-lien debt as tantamount to default
because we view the exchange for 4% equity as insufficient
compensation for canceling debt claims. K&N used proceeds from the
new money $60 million priority term loan to repay the $15 million
bridge facility, transaction fees, and other expenses, and inject
$31 million of liquidity onto the balance sheet.
"We expect to reevaluate our issuer credit rating and issue-level
ratings on K&N over the next few days. We will likely raise our
issuer credit rating to the 'CCC' category from 'D'. The
restructuring extended the maturities on all debt obligations,
repaid the bridge loan maturity, and injected some liquidity onto
the balance sheet. However, we believe the weak macroeconomic
environment will continue to pressure earnings and rising interest
rates will drain liquidity."
K&N designs, manufactures, and markets high performance air
filters, air intakes, oil filters, and other aftermarket products
for cars, trucks, and motorcycles. The company was founded in 1964
by two motorcycle racing enthusiasts. In 2021, the company
generated revenues of more than $220 million.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Environmental factors have an overall neutral influence
on our credit rating analysis. While many of its products, like air
and oil filters, are dependent on the internal combustion engine,
it sells its parts in the aftermarket, the demand for its products
primarily stems from enthusiasts, and we expect it will take many
years for the car park to materially shift toward fully electric
vehicles, particularly in North America.
"Governance is a moderately negative consideration. Our highly
leveraged assessment of the company's financial risk profile
reflects its corporate decision-making that prioritizes the
interests of its controlling owners, which is in line with our view
of most rated entities owned by private-equity sponsors. Our
assessment also reflects private-equity owners' generally finite
holding periods and focus on maximizing shareholder returns."
KEVIN G. SAUNDERS: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Texas, San
Antonio Division, authorized Kevin G. Saunders Photography, Inc. to
use cash collateral on an interim basis in accordance with the
budget, with a 25% variance.
As previously reported by the Troubled Company Reporter, it is
critical for the Debtor to have access to its cash and other
business property to continue operating in the ordinary course of
business, and pay normal operating expenses.
The Debtor was originally formed in October 2007, and has been
conducting its business operations for more than 15 years. In 2016,
the Debtor invested in a business plan for color portraits from
Bradford Rowley, who had a "platinum group" that he built up to
collectively help studios build big sales organizations.
The Debtor set up kgsmasterpieceportraits.com and built up a direct
mail partnership studio with staff. It was a lower price point than
the Debtor's signature work, but more of the work would
theoretically be delegated so Kevin G. Saunders, the Debtor's
president, could focus on international work.
In 2019, the Debtor capitalized heavily to build a second studio in
San Antonio, separating the "Signature" and "Masterpiece" business
lines. However, COVID-19 occurred in 2020 and the Debtor had to
close the studio and layoff the staff. Thereafter, Mr. Saunders
came to the conclusion that a remote studio was necessary because
the high-end nature of product being marketed required him to
travel to customers, rather than expect them to travel to the
studio in San Antonio.
The Debtor financed the acquisition of this equipment, which is
essential to the operation of the business on a national and
international level. The Debtor also obtained an SBA EIDL
disaster-relief loan in 2020 which assisted in keeping the business
afloat; however, sales have not returned to pre-COVID levels as of
the filing of the case.
The Debtor owns no real property. Its primary assets consist of
certain photography and studio equipment, much of which is financed
through lease to purchase agreements. As of the petition date, the
Debtor had no accounts receivable. In fact, the Debtor's business
model requires payment in full prior to the commencement of
services. However, as of the Petition Date, the Debtor had $13,300
in cash and funds on deposit, and an undeposited check in the
amount of $20,504 for services to be rendered for a customer. The
Debtor's office furniture and equipment is valued at $19,000 with
the Bexar Appraisal District, although many of the items are fully
depreciated. The Debtor does not own any vehicles.
The Debtor's primary secured lender is the U.S. Small Business
Association which loaned the Debtor $331,000 through an EIDL
disaster relief loan in 2021. The SBA is believed to maintain first
lien status on all the Debtor's assets which fully encumbers those
assets.
Based upon current estimates, total unsecured and undersecured
creditors' debt in the case will likely amount to between $900,000
and $1.1 million.
As adequate protection, all parties with an interest in cash
collateral are granted a replacement lien to the same extent,
priority and validity as their pre-petition liens.
A final hearing on the matter is set for March 6, 2023 at 2 p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3YPWH0f from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$28,895 for February 2023;
$29,045 for March 2023; and
$29,045 for April 2023.
About Kevin G. Saunders Photography, Inc.
Kevin G. Saunders Photography, Inc. is in the business of
commercial photography. The Debtor sought protection under Chapter
11 of the U.S. Bankruptcy Code (Bankr. W.D. Tex. Case No. 23-50100)
on February 1, 2023. In the petition signed by Kevin G. Saunders,
its president, the Debtor disclosed up to $100,000 in assets and up
to $10 million in liabilities.
Judge Craig A. Gargotta oversees the case.
The Law Office of H. Anthony Hervol is the Debtor's legal counsel.
KJMN PROPERTIES: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: KJMN Properties, LLC
4680 Meritage Ct.
Gilroy, CA 95020
Chapter 11 Petition Date: February 15, 2023
Court: United States Bankruptcy Court
Northern District of California
Case No.: 23-50160
Judge: Hon. Stephen L. Johnson
Debtor's Counsel: E. Vincent Wood, Esq.
THE LAW OFFICES OF E. VINCENT WOOD
2950 Buskirk Ave., #300
Walnut Creek, CA 94597
Tel: (925) 278-6680
Fax: (925) 955-1655
Email: vince@woodbk.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kim Narog as managing member.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/ACFPLBQ/KJMN_Properties_LLC__canbke-23-50160__0001.0.pdf?mcid=tGE4TAMA
LEVINSON & SANTORO: Seeks Cash Collateral Access
------------------------------------------------
Levinson & Santoro Electric Corp. asks the U.S. Bankruptcy Court
for the Eastern District of New York for authority to use cash
collateral and provide adequate protection.
The Debtor requires the use of cash collateral to continue the
operation of its business and to preserve the value of its estate
during the course of the Chapter 11 case.
Like so many other companies, the Debtor suffered financial
setbacks as the result of the COVID-19 shutdowns and continuing
delays in the construction industry.
Its client, New York City School Construction Authority, has been
especially slow to pay, even on "approved" requisitions. The Debtor
is awaiting payment on requisitions going back as far as December
2020. The Debtor has essentially been forced to finance the SCA's
projects without recourse for collection of monies due and owing
for a significant period of time.
The Debtor desires to utilize the bankruptcy process to complete
the remaining six SCA projects and collect accounts receivable to
pay the Debtor's creditors and propose a plan of reorganization
that it is in the best interests of its creditors and affords them
the greatest recovery possible.
There are two creditors that assert a "blanket lien" on all of the
Debtor's assets, Signature Bank and US Small Business
Administration.
On October 1, 2019, the Debtor obtained credit in the amount of
$1.5 million from Signature and issued a promissory note therefor.
On December 13, 2019, the Debtor and Signature entered into a
Continuing General Security Agreement, which secured the
obligations due under the Signature Note by granting a blanket lien
on the Debtor's assets in favor of Signature.
On January 15, 2020, a UCC-1 Financing Statement was filed by
Signature thereby perfecting its lien on the Debtor's assets
pursuant to the Signature Security Agreement.
On February 6, 2023, Signature filed a proof of claim in the amount
of $1,629,257.
On January 27, 2022, pursuant to the CARES Act, the Debtor entered
into a loan agreement and promissory note in the original principal
amount of $1.9 million plus accrued interest at a rate of 3.75% per
annum.
To secure the obligations due under the SBA Loan, on January 27,
2022, the Debtor and the SBA entered into a security agreement that
granted a blanket lien on the Debtor's assets in favor of SBA.
On February 25, 2022, a UCC-1 Financing Statement was filed by the
SBA thereby perfecting its lien on the Debtor's assets pursuant to
the SBA Security Agreement.
The SBA Loan Documents require the Debtor to make monthly
installments of principal and interest in the amount of $9,783,
beginning on February 14, 2024. As such, the SBA Loan is currently
in deferment status.
On December 13, 2022, the SBA filed a proof of claim in the amount
of $1,951,925.
As adequate protection for the use of cash collateral, the Debtor
will grant Signature and the SBA replacement liens in all of the
Debtor's post-petition assets and proceeds.
A hearing on the matter is set for March 14, 2023 at 3:30 p.m.
A copy of the motion is available at https://bit.ly/3YPrlXx from
PacerMonitor.com.
About Levinson & Santoro Electric Corp.
Levinson & Santoro Electric Corp. is a New York-based provider of
electrical work and services.
Levinson & Santoro filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
22-42814) on Nov. 9, 2022, with between $50,000 and $100,000 in
assets and between $1 million and $10 million in liabilities. Fred
Levinson, president of Levinson & Santoro, signed the petition.
Judge Nancy Hershey Lord presides over the case.
Dawn Kirby, Esq., at Kirby Aisner & Curley, LLP, represents the
Debtor as counsel.
MATRIX HOLDINGS: S&P Alters Outlook to Negative, Affirms 'B-' ICR
-----------------------------------------------------------------
S&P Global Ratings revised the outlook to negative from stable and
affirmed all ratings, including the 'B-' issuer credit rating on
U.S. telecommunications analytical solutions provider Matrix
Holdings Inc. (doing business as Mobileum).
The negative outlook reflects the risk that S&P could lower the
ratings over the next 12 months if the company continues to
generate negative FOCF in 2023 such that it views the capital
structure as unsustainable longer-term.
S&P said, "We expect S&P Global Ratings-adjusted leverage for
Mobileum to remain elevated through 2023. The company has not
reduced leverage as quickly as we initially expected following its
March 2022 financing transaction. Mobileum was unable to meet
EBITDA growth expectations in 2022, driven by lower-than-expected
top-line growth, partially due to foreign currency exchange rates,
as well as weaker margins because of higher staffing levels. While
we expect it will be able to improve margins through cost-cutting
initiatives, we believe leverage will remain elevated over the next
12 months.
"FOCF is likely to be negative over the next 12 months. Mobileum
has faced difficulty collecting on its accounts receivable
balances, leading to a substantial working capital use over the
past 12 months. While it has taken actions to improve collections
that have yielded strong initial results, we still expect working
capital to be a use of cash in 2023. While the company has interest
rate hedges in place that cap the secured overnight funding rate
base rate at 3%, we still expect a slight increase in interest
expense for 2023. As a result of these factors, we expect the
company will record a FOCF deficit of about negative $10 million
during the year.
"Still, our base case forecast assumes solid EBITDA growth through
2023, which provides support for the rating. We project
cost-cutting actions will drive EBITDA growth and margin expansion.
Coupled with mid-single-digit percent revenue growth over the next
two years, we expect leverage to decline to the 9x area by the end
of 2023 from over 10x at the end of 2022. However, we believe there
is some execution risk associated with these cost actions,
including potential disruptions in customer or supplier
relationships stemming from headcount reductions.
"The negative outlook reflects the risk that we could lower the
ratings over the next 12 months if the company continues to
generate negative FOCF in 2023 such that we view the capital
structure as unsustainable longer term."
S&P could lower the rating if:
-- Competition in the industry heightens, such that Mobileum loses
market share;
-- FOCF is worse than our current expectations over the next 12
months such that we view the capital structure as unsustainable;
or
-- The company experiences liquidity pressures.
S&P could revise the outlook to stable if the company can:
-- Produce sustainable positive free cash flow, and
-- Generate organic revenue growth in the mid-single digit percent
area.
ESG credit indicators: E2, S2, G3
S&P said, "Governance is a moderately negative consideration. Our
assessment of the company's financial risk profile as highly
leveraged reflects corporate decision-making that prioritizes the
interests of controlling owners, in line with our view of most
rated entities owned by private-equity sponsors. Our assessment
also reflects their generally finite holding periods and a focus on
maximizing shareholder returns."
METROHAVANA TOWN: $2.73-Mil. Sale to Fon-On to Fund Plan
--------------------------------------------------------
Metrohavana Town Homes, LLC, submitted a First Amended Chapter 11
Plan of Reorganization and a corresponding Disclosure Statement.
The Debtor is the fee simple owner of the real property located at
850 SW 14 Avenue, Miami, FL 33135 (the "MetroHavana Property"). The
Property is a 6-unit building operated as a rental building, which
also goes by the name "Villas Beny Moré" a name chosen to
accompany the aesthetics and culture of the property's geographic
location, "Little Havana" (for background and context, Beny Moré
was a renown Cuban singer). The Debtor, as developer and owner,
constructed the building after purchase. The improvements are
well-maintained and in good condition with no significant deferred
maintenance items noted.
Class 4 for General Unsecured Claim has been included as NOVIC LLC
retains a General Unsecured Claim for a mortgage deficiency. As a
cross-collateralized loan, the amount of NOVIC LLC's unsecured
claim is unknown as treatment for related collateral (as outlined
in the Disclosure Statement) has not been completed, and as such,
the Debtor is unsure what amount of NOVIC LLC's claim will be
reduced by said treatment. The Debtor will remain in communication
with NOVIC LLC to further determine their allocation.
The means necessary for the execution of this Plan is the payment
of all allowed claims. The sources of the funding for the payment
of all allowed claims, originally, were to be from the Debtor's
refinance of the Metrohavana property or from the Debtor's sale of
the MetroHavana property. The Debtor's attempts to procure
financing in the last 6 months have been unsuccessful, primarily
due to the rise in interest rates, as such, Debtor intends to focus
on its last viable option, which is the sale of the subject
property.
The Debtor, through Cedano Realty Advisors, LLC, marketed the
Metrohavana property in the following ways: social media marketing,
"CRM contact list blast," "agent/broker contact list blast," flyer
print outs, community publications, CCMI membership/broker
contacts, and direct investor contacts. As a result of said
efforts by its real estate agent, the Debtor received various
competing offers:
(1) First Offer: The first offer was for a $2,730,000.00
purchase price, with a deposit in the amount of $150,000, $5,000 of
which is to be made to the escrow agent within three days after
effective date of the contract, and $100,000 to be paid within
three days after completion of the Due Diligence Period, at which
time the potential purchaser's deposit becomes non-refundable,
barring any default of the contract by the Debtor. The Inspection
Period proposed is 30 days. It is a cash offer, and has a proposed
closing date of April 14, 2023. It is a proposed IRC Section 1031
like-kind tax-deferred exchange, through which the potential
purchaser is purchasing a like-kind property or business, in this
case the Metrohavana property, with funds originating from the sale
of a similar property or business, with the purpose of deferring
tax on the gain of the previously sold business or property.
(2) Second Offer: The second offer was for a $2,844,808 purchase
price through an IRS Section 170 Bargain Sale, which consists of a
combination of cash and a tax deduction, as the subject property
would be sold to a 501(c)(3) organization. The Debtor would then
be able to use the difference between appraised value and cash
received as a tax deduction through a charitable contribution. The
proposed breakdown of such a bargain sale from the potential
purchaser of the second offer was as follows: $2,150,000 cash
amount, with an estimated tax deduction of $1,238,602, with
projected tax savings estimated at $458,283, and a total estimated
cash benefit of $2,608,283, all of which add up to the total
$2,844,808 proposed by the potential purchaser. The deposit
proposed was for a total of $50,000, with a $25,000 initial deposit
to be paid within three business days after receipt of initial due
diligence materials, plus a $25,000 additional deposit to be paid
within three business days of either the waiver of due diligence or
expiration of due diligence period.
After consideration and discussion with counsel for all affected
creditors and the US Trustee's Office, the Debtor has entered into
contract with prospective buyer, Fon-On, Inc. ("the Purchaser"),
for the purchase price offer in the amount of $2,730,000, listed
above as the First Offer. The prospective buyer corporation is
owned by a Miami local, Kwok-Cheng Wong, who had previously owned a
Chinese restaurant in the area of Little Havana and who is looking
to re-invest in that same area. The Debtor's decision to enter
into contract with the Purchaser was due to the actual cash amount
of this offer being more than the second offer. A tax deduction,
as proposed in the second offer through a Section 170 Bargain Sale,
although adding proposed value to the Debtor via tax deduction,
leaves less in cash towards creditors. For these reasons, the
offer by the Purchaser Fon-On was chosen by the Debtor as the best
option at the moment.
A motion to approve the sale has been filed with the Court. Through
the proposed sale, Creditor, 850 Southwest 14th Avenue –
10215686, LLC, as first position claimant, has an estimated
percentage recovery of 100%; while Creditor, NOVIC, LLC, as second
position claimant, has an estimated percentage recovery of 20% to
30%. NOVIC, LLC's claim at this time is disputed by the Debtor as,
first and foremost, it retains its right to collect on any
deficiency left of its claim, after the proposed sale, through its
cross-collateralized asset at 32 Bryan Court, Crystal Lake, IL
60014, and, additionally, NOVIC, LLC entered into agreement with
the Debtor via related case Grovehaus, LLC (22-10036-LMI) that
limits its release amount to $225,000. In the event that the
proposed sale of the Metrohavana property is not closed by May 1,
2023, each respective lienholder can proceed to exercise their
respective state law rights and remedies as to the MetroHavana
property.
Counsel for the Debtor:
Christina Vilaboa-Abel, Esq.
Vanessa Angulo, Esq.
CAVA LAW, LLC
1390 South Dixie Highway, Suite 1107
Coral Gables, FL 33146
Telephone: (786) 675-6830
Email: christina@cavalegal.com
vanessa@cavalegal.com
A copy of the First Amended Disclosure Statement dated Feb. 3,
2023, is available at https://bit.ly/40sIasV from
PacerMonitor.com.
About Metrohavana Town Homes
MetroHavana Town Homes, LLC, a Miami-based company, sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
S.D. Fla. Case No. 22-11349) on Feb. 18, 2022, with up to $10
million in both assets and liabilities. Kelly Beam, owner of
MetroHavana Town Homes, signed the petition.
Judge Laurel M. Isicoff oversees the case.
Christina Vilaboa-Abel, Esq., at Cava Law, LLC is the Debtor's
counsel.
MONTGOMERY REALTY: Wins Interim Cash Collateral Access
------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of California,
Oakland Division, authorized Montgomery Realty Group, LLC to use
cash collateral on an interim basis to fund certain expenses.
The Court said Jo-Ann Stores has suspended the payment of rent, and
the existence of material cash collateral will be dependent on a
resumption in the payment of rent by Jo-Ann Stores.
As previously reported by the Troubled Company Reporter, the Debtor
requires the use of cash collateral to fund the operating expenses
of its property, which is a portion of a shopping center consisting
generally of large "big box" retailers on the periphery of the
Center, facing a central parking lot.
In 2018, the Debtor refinanced the Property and obtained mortgage
financing for the Property from Cathay Bank, with the mortgage to
mature in November 2023. Cathay Bank is the Debtor's sole secured
creditor holding a perfected security interest in the Debtor's
Property and its rental income, providing it with cash collateral
rights. During the months pre-petition, Cathay took actions which
had the effect of leading tenants to withhold their rent.
As adequate protection, Cathay is granted a replacement lien
against its post-petition assets. The Replacement Lien will be
perfected and enforceable without the need for Cathay Bank or the
Debtor to take any further action, but it will be subject to
further Court orders. The Replacement Lien will have the same
nature, extent, validity and priority, and be subject to the same
defenses and offsetting claims, if any, as Cathay Bank's
prepetition lien.
A continued hearing on the matter is set for March 1, 2023 at 10:30
a.m.
A copy of the order is available at https://bit.ly/40WyNSB from
PacerMonitor.com.
About Montgomery Realty Group, LLC
Montgomery Realty Group, LLC is the owner of the commercial real
property located at 1675 Willow Pass Road, Concord, California.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Cal. Case No. 22-41290) on December
20, 2022. In the petition signed by Raj Maniar, manager, the Debtor
disclosed up to $50 million in both assets and liabilities.
Judge William J. Lafferty, III oversees the case.
Michael St. James, Esq., at St. James Law, P.C, is the Debtor's
legal counsel.
NABORS INDUSTRIES: Incurs $307.2 Million Net Loss in 2022
---------------------------------------------------------
Nabors Industries Ltd. has filed with the Securities and Exchange
Commission its Annual Report on Form 10-K disclosing a net loss of
$307.22 million on $2.66 billion of total revenues and other income
for the year ended Dec. 31, 2022, compared to $543.69 million on
$2.02 billion of total revenues and other income for the year ended
Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $4.73 billion in total assets,
$3.51 billion in total liabilities, $678.60 million in redeemable
noncontrolling interest in subsidiary, and $536.79 million in total
equity.
Nabors stated, "As of the date of this report, we were in
compliance with all covenants under the 2022 Credit Agreement. If
we fail to perform our obligations under the covenants, the
revolving credit commitments under the 2022 Credit Agreement could
be terminated, and any outstanding borrowings under the facilities
could be declared immediately due and payable. If necessary, we
have the ability to manage our covenant compliance by taking
certain actions including reductions in discretionary capital or
other types of controllable expenditures, monetization of assets,
amending or renegotiating the revolving credit agreement, accessing
capital markets through a variety of alternative methods, or any
combination of these alternatives. We expect to remain in
compliance with all covenants under the 2022 Credit Agreement
during the twelve month period following the date of this report
based on our current operational and financial projections.
However, we can make no assurance of continued compliance if our
current projections or material underlying assumptions prove to be
incorrect. If we fail to comply with the covenants, the revolving
credit commitment could be terminated, and any outstanding
borrowings under the facility could be declared immediately due and
payable."
A full-text copy of the Form 10-K is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1163739/000155837023001064/nbr-20221231x10k.htm
About Nabors
Nabors Industries Ltd. (NYSE: NBR) owns and operates land-based
drilling rig fleets and provides offshore platform rigs in the
United States and several international markets. Nabors also
provides directional drilling services, tubular services,
performance software, and innovative technologies for its own rig
fleet and those of third parties.
Nabors reported a net loss of $762.85 million for the year ended
Dec. 31, 2020, a net loss of $680.51 million for the year ended
Dec. 31, 2019, a net loss of $612.73 million for the year ended
Dec. 31, 2018, and a net loss of $540.63 million for the year ended
Dec. 31, 2017. As of March 31, 2022, the Company had $4.86 billion
in total assets, $3.50 billion in total liabilities, $677.83
million in redeemable noncontrolling interest in subsidiary, and
$680.73 million in total equity.
* * *
In November 2021, Fitch Ratings affirmed Nabors Industries, Ltd.'s
and Nabors Industries, Inc.'s (collectively, Nabors) Issuer Default
Ratings (IDRs) at 'CCC+'.
NEOVASC INC: Schedules Special Meeting for March 6
--------------------------------------------------
Neovasc Inc. notified its shareholders that a special meeting of
the holders of common shares of the Corporation will be held at 595
Burrard Street, Suite 2600, Vancouver British Columbia, on March 6,
2023 at 10:00 a.m. (Vancouver time) for the following purposes:
(a) to consider, pursuant to an interim order of the Supreme
Court of British Columbia dated Feb. 3, 2023, as the same may be
amended and, if deemed advisable, to pass, with or without
variation, a special resolution of Shareholders substantially in
the form attached as Appendix "B" to the management information
circular dated Feb. 3, 2023 accompanying this notice of meeting, to
approve an arrangement under Section 192 of the Canada Business
Corporations Act involving the Corporation and Shockwave Medical,
Inc., as more particularly described in the Circular; and
(b) to transact such other business as may properly come before
the Meeting or any adjournment or postponement thereof.
The board of directors of the Corporation, after consultation with
its financial advisors and outside legal counsel and the unanimous
recommendation of the Special Committee of the Board, unanimously
determined that the Arrangement is in the best interests of the
Corporation and is fair to the Shareholders and the Board
unanimously recommends that the Shareholders vote FOR the
Arrangement Resolution. Registered Shareholders of record as of
5:00 p.m. (Vancouver time) on Feb. 3, 2023, will be entitled to
receive notice of, and to vote at, the Meeting and any adjournments
or postponements thereof.
Each Registered Shareholder whose name is entered on the securities
register of the Corporation at the close of business on the Record
Date is entitled to one vote for each Share registered in his, her
or its name. The Circular, form of proxy and letter of transmittal
accompany this Notice of Meeting. Reference is made to the
Circular for details of the matters to be considered at the
Meeting. Initially capitalized terms used but not otherwise defined
herein have the meanings ascribed thereto in the Circular.
To ensure shareholders' representation at the Meeting, the Company
urged shareholders to return the enclosed proxy, whether or not
they plan to personally attend the Meeting. Sending their proxy
will not prevent them from voting in person at the Meeting. All
proxies completed by Registered Shareholders must be returned to
the Corporation by March 2, 2023 by:
(a) completing, dating and signing the enclosed form of proxy
and returning it to the Corporation's transfer agent, Computershare
Trust Company of Canada, by fax within North America at
1-866-249-7775, outside North America at (416) 263-9524, or by mail
to the 8th Floor, 100 University Avenue, Toronto, Ontario, M5J 2Y1
or by hand delivery at 3rd Floor, 510 Burrard Street, Vancouver,
British Columbia, V6C 3B9;
(b) using a touch-tone phone to transmit voting choices to a
toll-free number. Registered Shareholders must follow the
instructions of the voice response system and refer to the enclosed
proxy form for the toll-free number, the holder's account number
and the proxy access number; or
(c) logging on to Computershare's website at
www.investorvote.com. Registered Shareholders must follow the
instructions that appear on the screen and refer to the enclosed
proxy form for the holder's voting control number;
in all cases ensuring that the proxy is received at least 48 hours
(excluding Saturdays, Sundays and holidays) before the Meeting or
the adjournment thereof at which the proxy is to be used.
Non-Registered Shareholders who receive these materials through
their broker or other Intermediary should complete and send the
form of proxy or voting instruction form in accordance with the
instructions provided by their broker or Intermediary. To be
effective, a proxy must be received by Computershare Trust Company
of Canada by not later than 10:00 a.m. (Vancouver time) on March 2,
2023 or, in the event the Meeting is adjourned or postponed, not
less than two days, Saturdays, Sundays and holidays excepted, prior
to the time of any reconvened or postponed Meeting. The time limit
for deposit of proxies may, with the prior written consent of the
Purchaser, be waived or extended by the chair of the Meeting at his
or her discretion, without notice.
Registered Shareholders as at the close of business on the Record
Date have a right to dissent in respect of the Arrangement
Resolution and, if the Arrangement becomes effective, to be paid
the fair value of their Shares. This right is described in the
Circular. Pursuant to section 190 of the CBCA, as modified by the
Plan of Arrangement, the Interim Order and any other order of the
Court, a Registered Shareholder who wishes to dissent must (i) send
a written notice of objection to the Arrangement Resolution to
Neovasc c/o Blake, Cassels & Graydon LLP, 595 Burrard St #2600,
Vancouver BC V7X 1L3, Attention: Alexandra Luchenko, or by email to
alexandra.luchenko@blakes.com by no later than 10:00 a.m.
(Vancouver time) on March 1, 2023 (or 10:00 a.m. (Vancouver time)
on the business day which is two business days immediately
preceding the date of the Meeting (as it may be adjourned or
postponed from time to time)); and (ii) must otherwise comply
strictly with the dissent procedures described in the Circular.
Failure to comply strictly with the dissent procedures may result
in the loss or unavailability of the right to dissent.
For questions or more information with regard to the procedures for
voting or completing your transmittal documentation, please contact
Computershare, the Transfer Agent and Depositary for the
Arrangement, toll-free, at 1-866-249-7775.
About Neovasc Inc.
Neovasc -- www.neovasc.com -- is a specialty medical device company
that develops, manufactures and markets products for the rapidly
growing cardiovascular marketplace. The Company develops minimally
invasive transcatheter mitral valve replacement technologies, and
minimally invasive devices for the treatment of refractory angina.
Its products include the Neovasc Reducer, for the treatment of
refractory angina, which is not currently commercially available in
the United States (2 U.S. patients have been treated under
Compassionate Use) and has been commercially available in Europe
since 2015, and Tiara, for the transcatheter treatment of mitral
valve disease, which is currently under clinical investigation in
the United States, Canada, Israel and Europe.
Neovasc reported a net loss of $24.89 million for the year ended
Dec. 31, 2021, following a net loss of $28.70 million for the year
ended Dec. 31, 2020. As of Sept. 30, 2022, the Company had
US$44.57 million in total assets, US$16.51 million in total
liabilities, and US$28.06 million in total equity.
Vancouver, Canada-based Grant Thornton LLP, the Company's auditor
since 2002, issued a "going concern" qualification in its report
dated March 9, 2022, citing that the Company incurred a
comprehensive loss of $25.2 million during the year ended Dec. 31,
2021. These conditions, along with other matters, raise
substantial doubt about the Company's ability to continue as a
going concern as at Dec. 31, 2021.
NGL ENERGY: Posts $59 Million Net Income in Third Quarter
---------------------------------------------------------
NGL Energy Partners LP has filed with the Securities and Exchange
Commission its Quarterly Report on Form 10-Q disclosing a net
income of $58.98 million on $2.14 billion of total revenues for the
three months ended Dec. 31, 2022, compared to a net loss of $18.98
million on $2.17 billion of total revenues for the three months
ended Dec. 31, 2021.
For the nine months ended Dec. 31, 2022, the Company reported a net
income of $85.69 million on $6.64 billion of total revenues
compared to a net loss of $154.69 million on $5.41 billion of total
revenues for the nine months ended Dec. 31, 2021.
As of Dec. 31, 2022, the Company had $5.91 billion in total assets,
$1.48 billion in total current liabilities, $2.92 billion in
long-term debt, $53.52 million in operating lease obligations,
$103.38 million in other noncurrent liabilities, $551.10 million in
class D preferred units, and $800.33 million in total equity.
NGL Energy stated, "Our principal sources of liquidity and capital
resource requirements are cash flows from our operations,
borrowings under our asset-based revolving credit facility ("ABL
Facility"), debt issuances and the issuance of common and preferred
units. We expect our primary cash outflows to be related to
capital expenditures, interest and repayment of debt maturities.
"We believe that our anticipated cash flows from operations and the
borrowing capacity under our ABL Facility will be sufficient to
meet our liquidity needs, including the repayment of the 2023
Notes. Our borrowing needs vary during the year due in part to the
seasonal nature of certain businesses within our Liquids Logistics
segment. Our greatest working capital borrowing needs generally
occur during the period of June through December, when we are
building our natural gas liquids inventories in anticipation of the
butane blending and heating seasons. Our working capital borrowing
needs generally decline during the period of January through March,
when the cash inflows from our Liquids Logistics segment are the
greatest. In addition, our working capital borrowing needs vary
with changes in commodity prices."
A full-text copy of the Form 10-Q is available for free at:
https://www.sec.gov/ix?doc=/Archives/edgar/data/1504461/000150446123000010/ngl-20221231.htm
About NGL Energy
NGL Energy Partners LP is a diversified midstream energy
partnership that transports, treats, recycles and disposes of
produced water generated as part of the energy production process
as well as transports, stores, markets and provides other logistics
services for crude oil and liquid hydrocarbons. Originally formed
in September 2010, the Company is a Delaware master limited
partnership and its business is currently organized into the
following three segments: (a) Water Solutions segment; (b) Crude
Oil Logistics segment; and (c) Liquids Logistics segment.
NGL Energy reported a net loss of $184.10 million for the year
ended March 31, 2022, a net loss of $639.19 million for the year
ended March 31, 2021, and a net loss of $398.78 million for the
year ended March 31, 2020.
* * *
As reported by the TCR on Nov. 25, 2022, S&P Global Ratings lowered
its issuer credit rating (ICR) on NGL Energy Partners L.P. (NGL) to
'CCC+' from 'B-'. S&P said, "The downgrade reflects our
expectation that although NGL has sufficient cash flow to pay down
the $400 million of 2023 senior unsecured notes before they mature,
liquidity is tight."
NMG HOLDING: Moody's Affirms 'B3' CFR & Alters Outlook to Positive
------------------------------------------------------------------
Moody's Investors Service changed NMG Holding Company, Inc.'s (dba
"Neiman Marcus") outlook to positive from stable. At the same
time, Moody's affirmed Neiman Marcus' ratings including its B3
corporate family rating, its B3-PD probability of default rating
and the Caa1 rating on its senior secured notes.
The affirmations and change in outlook to positive reflect Neiman
Marcus' improvement in operating performance and credit metrics
since its emergence from bankruptcy in September 2020. Despite an
anticipated pullback in luxury demand, Moody's expects Neiman
Marcus' credit metrics to remain solid. Moody's also views Neiman
Marcus' very good liquidity and its post-emergence capital
structure that has no maturities until its asset based revolving
credit facility (ABL) expires in September 2024 as integral to
supporting its investment in future growth.
Affirmations:
Issuer: NMG Holding Company, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured Regular Bond/Debenture, Affirmed Caa1 (LGD4)
Outlook Actions:
Issuer: NMG Holding Company, Inc.
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
Neiman Marcus' B3 corporate family rating reflects Moody's
expectation of elevated pressure on its credit profile despite
post-bankruptcy improvements in profitability as consumers scale
back purchases due to a more difficult macroeconomic environment.
As a result of a projected pullback in luxury demand, Moody's
projects credit metrics to moderately weaken to EBITA/interest of
approximately 1.8x and debt/EBITDA of 3.7x at the end of July 2024
from 2.3x and 3.2x (respectively) for the LTM ended October 2022.
The company will need to continue to invest in retaining top
customers and attracting a younger demographic which may prove
challenging as competition increases, particularly as the brands
offered through Neiman Marcus increase their direct to consumer
efforts. Although its core higher income demographic customer
typically has the means to spend, participation remains dependent
on the customer's desire to purchase. The risk remains that it
could also increase leverage further as its former lenders seek to
divest their current ownership of the company. Nonetheless, Neiman
Marcus benefits from very good liquidity as is evidenced by $194
million of cash on hand and $882 million available on its undrawn
ABL facility as of October 29, 2022. Significant business
investment is expected to continue utilize cash as proceeds from
Farfetch Limited's $200 million equity investment in April 2022 are
used to fund further development in the company's digital platform
and the company adds additional service to its stores.
The positive outlook reflects Neiman Marcus' improvement in
operational execution and very good liquidity which will allow it
to strengthen and maintain credit metrics reflective of a higher
rating. The outlook also reflects Neiman's conservative financial
strategy since its emergence from bankruptcy.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be downgraded if Neiman Marcus' sales and operating
performance becomes inconsistent. Quantitatively, ratings could be
downgraded if debt/EBITDA was sustained above 6.0x, EBITA/interest
was sustained below 1.2x or if its liquidity profile deteriorates.
Any additional debt incurrence or shareholder friendly activities
would be viewed negatively.
Ratings could be upgraded if sales and operating performance
continues to consistently improve, liquidity remains very good, and
financial strategies support debt/EBITDA sustained below 4.0x and
EBITA/interest is sustained above 1.75x.
Headquartered in Dallas, Texas, NMG Holding Company, Inc. operates
36 Neiman Marcus stores, 2 Bergdorf Goodman stores as well as an
online and catalog presence. Total revenue was $4.6 billion for the
LTM period ended October 29, 2022. The company's equity owners
include PIMCO, Davidson Kempner, Sixth Street and JP Morgan Asset
Management.
The principal methodology used in these ratings was Retail
published in November 2021.
NORTHERN LIGHT: Moody's Affirms 'Ba1' Revenue Bond Rating
---------------------------------------------------------
Moody's Investors Service affirmed Northern Light Health's (NLH)
(ME) Ba1 revenue bond rating. The outlook was revised to negative
from positive. NLH had approximately $523 million of debt
outstanding at fiscal yearend 2022.
RATINGS RATIONALE
The Ba1 affirmation reflects Moody's expectations that NLH's very
substantial operating and financial strategies, many of which have
already been executed, will drive positive cashflow in fiscal 2023
and stabilize liquidity following material and unexpected losses in
fiscal 2022. Significant strategies to structurally reduce costs,
such as a large outsourcing services agreement and the
consolidation of services into a new Portland hospital, combined
with ongoing turnaround initiatives, will support durable
improvement. Also, the sale of its lab business, sizable FEMA
grants, and the debt financing of capital projects will help
stabilize liquidity, albeit at lower levels than previously
expected. The system's dominant market position over a broad
geography will limit competitive challenges. Despite the potential
for these initiatives to translate into measurable strengthening in
2023, the change in the outlook to negative from positive reflects
headwinds to achieving targeted improvement given the magnitude of
cashflow and cash losses in fiscal 2022, which resulted in the
failure to meet the minimum debt service coverage covenant and
required the hiring of a consultant. While declining, labor costs
will continue to be difficult to manage, particularly in NLH's
rural locations and amid union negotiations at the flagship later
this year. Also, staffing shortages will constrain the system's
ability to accommodate patient demand and volumes, which are well
below pre-pandemic levels.
RATING OUTLOOK
The negative outlook reflects the risk of a second year (FYE 2023)
of a covenant breach, which could be an event of default and
potentially allow acceleration, and challenges to achieving the FY
2023 cashflow budget as well as maintaining and eventually growing
liquidity. The greatest challenge will be continuing to reduce
labor costs while maintaining staff to meet volume demands.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Improvement in operating cashflow margin to around
the fiscal 2021 level
-- Meaningful growth in days cash on hand
-- Improvement in leverage metrics
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Increased risk of covenant breach and/or acceleration
-- Inability to achieve expected 2-3% operating
cashflow margin in fiscal 2023 and a credible plan
for further improvement in fiscal 2024
-- Inability to stabilize and begin to improve
liquidity without the benefit of bank line draws
-- Increase in leverage
LEGAL SECURITY
The bonds are secured by a pledge of gross receipts of the
obligated group (represents virtually all system revenue) as well
as a mortgage lien on facilities. Mayo Hospital and several small
subsidiaries are not part of the obligated group.
PROFILE
Northern Light Health is comprised of 10 hospitals located across
Maine, including the flagship Eastern Maine Medical Center located
in Bangor. The system employs a large number of physicians and has
the largest geographic footprint in the state.
METHODOLOGY
The principal methodology used in these ratings was Not-For-Profit
Healthcare published in December 2018.
NORTHWEST BANCORPORATION: Trustee & AmeriNational Files Joint Plan
------------------------------------------------------------------
Catherine Steege, Chapter 11 Trustee of Northwest Bancorporation of
Illinois, Inc., and AmeriNational Community Services, LLC
("AmeriNat", together with the Trustee, the "Plan Proponents")
submitted a Disclosure Statement for Joint Chapter 11 Plan of
Reorganization for the Debtor dated February 13, 2023.
The Debtor is a bank holding company incorporated under the laws of
the state of Delaware.
Following her appointment, the Trustee engaged in discussions with
the members of the Committee. The Committee members were: (i) OSP
Value Fund, L.P., (ii) HoldCo Opportunities Fund, L.P. and (iii)
The Bank of New York Mellon Trust Company, N.A., Indenture Trustee
for the Junior TruPs. OSP and HoldCo held 100% of the Debtor's
Junior TruPs. The Plan classifies the TruPs into two classes: the
Senior TruPs and the Junior TruPs. The Junior TruPs right to
payment is contractually subordinated to the Senior TruPs.
As a result of the discussions between the Trustee and the
Committee, AmeriNat, which is affiliated with OSP, acquired all of
the Debtor's Junior TruPs from OSP and HoldCo and agreed to sponsor
this Plan with the Trustee on the terms set forth herein.
AmeriNat's acquisition of all of the Junior TruPs resulted in the
U.S. Trustee disbanding the Committee on November 17, 2022.
In summary, the Plan provides for AmeriNat to receive: (a) 100% of
the common stock of the Reorganized Debtor; and (b) Junior TruPs in
a reduced amount which will be repaid in accordance with the terms
of the Junior TruPs Indentures. The Debtor will reinstate the
Senior TruPs and recapitalize the interest that has accrued through
the Petition Date. Repayment of the Senior TruPs will be made
pursuant to the terms of the Senior TruPs Indenture. Administrative
Claims, Professional Fee Claims, U.S. Trustee Fees, Priority Tax
Claims, Other Priority Claims, and Allowed Unsecured Claims, if
any, will be paid in full on the Effective Date from the proceeds
of an Exit Facility to be furnished by an affiliate of AmeriNat.
The Interests of the Debtor's existing shareholders will be
cancelled.
AmeriNat's ability to acquire 100% of the ownership of the Debtor
is dependent upon the approval of the Illinois Department of
Financial and Professional Regulation, the Federal Reserve Bank of
Chicago, and the Board of Governors of the Federal Reserve System
(the "Regulators"). AmeriNat has begun the process of seeking such
approval and the Plan will not become effective until all required
approvals are received. The Plan refers to this proposed
transaction as the "Reorganization Transaction."
In the event that AmeriNat is unable to obtain the necessary
approvals, the Trustee will commence an auction to find a buyer for
the Debtor's interests in First Bank. Any buyer selected through
such an auction would also be required to obtain the approval of
the Regulators. The Plan refers to this alternative as the "Sale
Transaction."
Class 2 consists of all General Unsecured Claims. One Unsecured
Claim was filed in a liquidated amount of $26,371.15. This Claim
has not been Allowed. Holders of Class 2 Claims are impaired.
Except to the extent that a Holder of a Class 2 Claim agrees to
less favorable treatment, each Holder of a Class 2 Claim shall
receive, in full and final satisfaction, settlement, release, and
discharge of and in exchange for, such Holder's Allowed Claim in
Class 2:
* Reorganization Transaction: If a Reorganization Transaction
is consummated, on the Effective Date, each Holder of an Allowed
Class 2 Claim shall receive payment in full in Cash from the
Reorganized Debtor as soon as reasonably practicable after the
latest of: (a) the Effective Date, or (b) if a Disputed Claim, the
date the Class 2 Claim becomes an Allowed Class 2 Claim.
* Sale Transaction: If a Sale Transaction is consummated on
the Effective Date, each Holder of an Allowed Class 2 Claim shall
receive its Pro Rata share of the Net Sales Proceeds. For purposes
of calculating the Pro Rata share of each Class 2 Claim, if the
available Net Sales Proceeds are not sufficient to pay the Allowed
amount of all Class 2, Class 3, and Class 4 Claims in full, the Pro
Rata share will be determined by including the Allowed amount of
all Class 2, Class 3, and Class 4 Claims in the denominator.
Class 3 consists of all Senior TruPS Claims. The Senior TruPS
Claims shall be Allowed in an amount of $1,105,841.73. Except to
the extent that a Holder of an Allowed Claim in Class 3 agrees to a
less favorable treatment, each Holder of a Class 3 Claim shall
receive, in full and final satisfaction, settlement, release, and
discharge of and in exchange for, such Holder's Allowed Claim in
Class 3:
* Reorganization Transaction: If a Reorganization Transaction
is consummated, on the Effective Date, all of the Debtor's
outstanding obligations on account of Allowed Senior TruPS Claims
under the applicable TruPS Documents shall be reinstated, with all
accrued and unpaid interest owed on account of the Allowed Senior
TruPS Claims through the Petition Date recapitalized as principal
which will be deemed to constitute a waiver or cure of any and all
preexisting defaults. The Reorganized Debtor will repay each Class
3 Claim as recapitalized in accordance with and pursuant to the
terms of the applicable TruPS Documents.
* Sale Transaction: If a Sale Transaction is consummated, on
the Effective Date, each Holder of an Allowed Class 3 Claim shall
receive its Pro Rata share of Net Sales Proceeds. For purposes of
calculating the Pro Rata share of each Class 3 Claim, if the
available Net Sales Proceeds are not sufficient to pay the Allowed
amount of all Class 2, Class 3, and Class 4 Claims in full, the Pro
Rata share will be determined by including the Allowed amount of
all Class 2, Class 3, and Class 4 Claims in the denominator. All
distributions to which an Allowed Class 4 Claim Holder is entitled
shall be received by the Class 3 Claim Holder until the Class 3
Claims are satisfied in full.
Class 4 consists of all Junior TruPS Claims against the Debtor. The
Junior TruPS Claims shall be Allowed in an amount of $18,034,909.02
consisting of an Allowed Capital Securities Claims of
$17,493,462.14 and an Allowed Common Securities Claims of
$541,446.88. The Holder of the Junior TruPS Capital Securities
Claims shall receive, in full and final satisfaction, settlement,
release, and discharge of and in exchange for, such Holder's
Allowed Claim in Class 4:
* Reorganization Transaction: If a Reorganization Transaction
is consummated, on the Effective Date, the Holder of the Allowed
Junior TruPs Capital Securities Claims will receive on account of
such Allowed Junior TruPs Capital Securities Claims: (a) 100% of
the Reorganized Common Stock in the Reorganized Debtor; and (b)
reinstatement of the Allowed Junior TruPs Capital Securities Claims
in the amount of $9,660,000.00 under the applicable TruPs Documents
(the Restated Class 4 Capital Securities Claim), which will be
deemed to constitute a waiver or cure of any and all preexisting
defaults. The Reorganized Debtor will repay each Allowed Restated
Class 4 Capital Securities Claim in accordance with and pursuant to
the terms of the applicable TruPS Documents. For the avoidance of
doubt, the Restated Class 4 Capital Securities Claims remain
subordinate to the Class 3 Claims. The Reorganized Debtor and
AmeriNat retain the right to adjust the amount of the Allowed
Junior TruPS Capital Securities Claims allocated to the Restated
Class 4 Capital Securities Claim as needed to receive approval from
the Regulators for AmeriNat and the Exit Lender to be the owner of
the Reorganized Common Stock. The Junior TruPS Common Securities
Claim will pass through unimpaired and be held by the Reorganized
Debtor with its ultimate disposition consistent with the terms of
the applicable TruPS Documents.
* Sale Transaction: If a Sale Transaction is consummated, on
the Effective Date, each Holder of an Allowed Class 4 Claim shall
receive its Pro Rata share of Net Sales Proceeds. For purposes of
calculating the pro rata share of each Class 4 Claim, if the
available Net Sales Proceeds are not sufficient to pay the Allowed
amount of all Class 2, Class 3, and Class 4 Claims in full, the Pro
Rata share will be determined by including the Allowed amount of
all Class 2, Class 3, and Class 4 Claims in the denominator. All
distributions to which Class 4 Claim Holder is entitled shall be
received by the Class 3 Claim Holder until the Class 3 Claims are
satisfied in full. After the Class 3 Claims are satisfied in full,
remaining pro rata distributions will be received by the Holder of
the Junior TruPS Capital Securities Claim until the Junior TruPS
Capital Securities Claims are satisfied in full, then all remaining
pro rata distributions shall be received by the Holder of the
Junior TruPS Common Securities Claim.
Class 5 consists of all Interests in the Debtor.
* Reorganization Transaction: If a Reorganization Transaction
is consummated, on the Effective Date, all Interests in the Debtor
shall be deemed cancelled as of the Effective Date. There shall be
no Distribution to any Holders of Interests on account of such
Interests.
* Sale Transaction: If a Sale Transaction is consummated, on
the Effective Date, each Holder of an Allowed Class 5 Interest
shall receive its Pro Rata share of Net Sales Proceeds remaining
after payment in full of the Allowed amount of all Unclassified
Claims, and Class 1, 2, 3, and 4 Claims.
Reorganization Transaction
AmeriNat, which is the Holder of all Class 4 Claims, proposes to
acquire 100% of the equity of the Reorganized Debtor by converting
a portion of its Class 4 Claims into new common stock of the
Reorganized Debtor. The Exit Lender will also provide an Exit
Facility to the Reorganized Debtor, which in turn will be
distributed to the Trustee, in an amount sufficient to allow the
Trustee to pay all Effective Date Distributions in full. The
Effective Date of the Plan is conditioned, upon other things,
AmeriNat and the Exit Lender receiving approval from the Regulators
to be the owner of the Reorganized Common Stock and lender to the
Reorganized Debtor. In the event that AmeriNat or the Exit Lender
is unable to obtain the necessary approvals from the Regulators,
then the Trustee will implement the Sale Transaction. The Effective
Date of the Plan will occur on the first Business Day following
receipt of necessary approvals from the Regulators.
Sale Transaction
In the event that the applicable Regulators do not approve AmeriNat
as the holder of the Reorganized Common Stock or the Exit Lender as
the lender to the Reorganized Debtor, the Trustee shall, subject to
Bankruptcy Court approval, retain an investment banker to market
the Reorganized Debtor's assets and shall petition the Court to
conduct a sale of such assets free and clear of any liens, claims,
encumbrances, and interests to the highest and best bidder pursuant
to Section 363 of the Bankruptcy Code. The Effective Date of the
Plan shall occur on the date that such Sale Transaction is closed,
and the Trustee completes the Distribution of the Net Sales
Proceeds.
A full-text copy of the Disclosure Statement dated February 13,
2023 is available at https://bit.ly/3RZieBe from PacerMonitor.com
at no charge.
Counsel for Chapter 11 Trustee:
Catherine L. Steege
Landon S. Raiford
William A. Williams
Jenner & Block, LLP
353 North Clark Street
Chicago, IL 60654
Telephone: (312) 923-2952
Email: csteege@jenner.com
Counsel for AmeriNational Community:
Jay Jaffe
Elizabeth Little
FAEGRE DRINKER BIDDLE & REATH LLP
300 N. Meridian Street
Indianapolis, Indiana 46204
(317) 569-9600
Email: jay.jaffe@faegredrinker.com
elizabeth.little@faegredrinker.com
About Northwest Bancorporation of Illinois
Northwest Bancorporation of Illinois, Inc., is a bank holding
company incorporated under the laws of the state of Delaware.
Northwest Bancorporation filed its voluntary petition for Chapter
11 protection (Bankr. N.D. Ill. Case No. 21-08123) on July 2, 2021,
listing as much as $50 million in both assets and liabilities.
Judge Carol A. Doyle oversees the case.
The Debtor tapped Taft Stettinius & Hollister, LLP as legal counsel
and Janney Montgomery Scott, LLC, as financial advisor and
investment banker.
The U.S. Trustee for Region 11 appointed an official committee of
unsecured creditors on Aug. 4, 2021. The committee is represented
by Jeffrey D. Sternklar, LLC and SmithAmundsen, LLC.
Catherine Steege is the Chapter 11 trustee appointed in the
Debtor's case. Jenner & Block, LLP, serves as the trustee's legal
counsel.
OVERLOOK ROAD: Unsecureds Likely to Recover 100% From Sale Plan
---------------------------------------------------------------
The Overlook Road Los Gatos Development, LLC, submitted a First
Amended Combined Plan of Reorganization and Tentatively Approved
First Amended Disclosure Statement dated Feb. 3, 2023.
The general unsecured creditors will receive a pro rata portion of
sale proceeds of Debtor's real property ("Overlook"), likely to
result in a 100% recovery of allowed claims, in one lump sum
payment, occurring in or about July 2023. Taxes and other priority
claims would be paid in full, as shown in Part 3.
Under the Plan, Class 2(a) General Unsecured Claims (including
allowed claims of creditors whose executory contracts or unexpired
leases are being rejected under this Plan) will be paid as follows:
creditors will receive a pro-rata share of a fund totaling $37,634,
created by Debtor's payment of a single lump sum payment from the
proceeds of the sale of the Property. Pro-rata means the entire
amount of the fund divided by the entire amount owed to creditors
with allowed claims in this class. Creditors in this class may not
take any collection action against Debtor so long as Debtor is not
in material default under the Plan (defined in Part 6(c)). This
class is impaired and is entitled to vote on confirmation of the
Plan.
Class 2(b) Equity Claims consisting of claims of James McClenahan
and Ali Abiani is unimpaired and is not entitled to vote on
confirmation of the Plan.
Funding to complete the Overlook project will be provided by
McClenahan and/or Eagle Home Loans, Inc. Eagle Home Loans, Inc. has
been operating as a lending company for approximately 30 years.
Mr. McClenahan owns 100% of Eagle Home Loans, Inc., and is a 90%
owner of the Debtor. Although Eagle Home Loan, Inc. provides loans
as a business, no loans are being provided to Debtor. Mr.
McClenahan is merely making a capital contribution through his
company.
A total of $352,000 cash was pledge by Eagle Home Loans, Inc., to
finish the construction improvements on the Property. To date,
$165,000 has been provided and spent. The cash contribution needed
to fund the remaining construction of $188,907 will be made as a
capital contribution to the Debtor. Such funds will be used only
for the sole purpose of completing the
construction project as provided in Exhibit 7. This cash
contribution will not be considered a loan and will not change the
ownership percentage of the Debtor.
MFA Construction will perform all tasks with the exception of
insulation and sprinklers. MFA has a glass, welding, and mill shop
which will allow for the manufacture of cabinets, vanities,
interior/exterior railings, as well as all glass and mirror
preparation for installation. The craftmanship of MFA will allow
for large savings and assist greatly in costing and scheduling.
A copy of the Plan of Reorganization and Tentatively Approved First
Amended Disclosure Statement dated Feb. 3, 2023, is available at
https://bit.ly/3l3SOpH from PacerMonitor.com.
About The Overlook Road Los Gatos
The Overlook Road Los Gatos Development LLC is a Single Asset Real
Estate (as defined in 11 U.S.C. Sec. 101(51B)).
The Overlook Road Los Gatos Development sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Cal. Case No.
22-50557) on June 29, 2022, listing up to $50,000 in assets and up
to $10 million in liabilities. Saul Flores, managing member,
signed the petition.
Stanley A. Zlotoff, Esq., at Stanley A. Zlotoff, A Professional
Corporation, is the Debtor's legal counsel.
PACIFIC WORLD: Prospect Capital Marks $56.7M Loan at 22% Off
------------------------------------------------------------
Prospect Capital Corporation has marked its $56,731,000 loan
extended to Pacific World Corporation to market at $44,351,000 or
78% of the outstanding amount, as of December 31, 2022, according
to a disclosure contained in Prospect Capital's Form 10-Q for the
quarterly period ended December 31, 2022, filed with the Securities
and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a First Lien Term Loan A to
Pacific World Corporation. The loan accrues interest at a rate of
9.63% (Payment In Kind, 1ML+ 5.25%) per annum. The loan matures on
September 26, 2025.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
Pacific World Corporation supplies proprietary nail and beauty care
products to the food, drug, mass and value retail channels
worldwide.
PEABODY ENERGY: S&P Upgrades ICR to 'B', Outlook Positive
---------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on Peabody
Energy Corp. to 'B' from 'B-'.
At the same time, S&P raised its issue-level rating on the
company's letter of credit (LOC) revolving facility to 'BB-' from
'B' and revised the associated recovery rating to '1' from '2'. S&P
has withdrawn all ratings on the rest of Peabody's secured debt
following full repayment.
S&P said, "The positive outlook reflects our expectation that
Peabody will continue generating substantial cash flows to fund its
capital allocation strategy of pre-funding its asset retirement
obligations (ARO), which would further reduce adjusted debt and
thereby provide the company with flexibility to reinstate
shareholder returns after a three-year pause.
"We expect adjusted leverage below 1x in 2023 and a more resilient
balance sheet following the full repayment of all secured debt in
the capital structure. As of Dec. 31, 2022, Peabody had repaid
close to $1.1 billion of secured debt using windfall cash flows
leading us to project adjusted debt of about $1.0 billion and
adjusted leverage below 1.0x for Peabody's fiscal 2022, which
compares favorably with adjusted debt and leverage of $1.92 billion
and 2.7x, respectively, at the end of 2021. Our adjusted debt of
about $1 billion includes $320 million convertible notes and about
$680 million of adjustments related to AROs, leases, pensions, and
postretirement obligations. We expect Peabody could keep adjusted
leverage below 1x in 2023 even with our expectation of a 25%-30%
contraction in EBITDA based on our assumption of a moderation in
coal prices. With relatively lower projected adjusted debt, the
company now has a more resilient balance sheet with cushion in its
credit metrics to absorb market downturns and volatility associated
with coal. The credit cushion and balance sheet resiliency could be
further amplified if Peabody follows through with its intention to
fully fund its AROs in 2023.
"We expect Peabody would sustain the strong FOCF generation
momentum in 2023, albeit with some moderation. Peabody is likely to
end fiscal 2022 with FOCF of $1.0 billion-$1.3 billion, which would
be about a 400% increase over the past fiscal year. This is due to
unexpectedly strong demand for thermal coal and overall higher
price realizations in all operating segments as they recovered from
pandemic lows. We expect FOCF to decline by about 20% to $800
million-$950 million in 2023 based on our assumption of lower price
realizations, especially in the seaborne thermal and metallurgical
(met) coal segments where Peabody is most exposed to spot pricing,
partially offset by strong committed and priced positions in the
Powder River Basin segment. Our expectation of the FOCF decline in
2023 is also based on increased capital expenditure (capex) of $300
million-$350 million in 2023, which would be about $90 million-$140
million higher than our fiscal 2022 projection. The increased capex
is because of investments in the redevelopment of the North
Goonyella mine, which would increase Peabody's premium met coal
generation capacity in 2026. The robust FOCF generation would
further improve liquidity, positioning the company well to deliver
on its capital allocation plans, which include fully funding its
ARO and reinstating shareholder returns.
"We maintain our negative assessment of Peabody's financial policy
despite our expectation of full repayment of its secured debt.
Until 2021, Peabody had a history of prioritizing shareholder
returns over debt reduction, which led to a weak balance sheet with
no cushion to absorb market downturns. The current trajectory of
debt reduction is spurred by provisions in the credit and surety
agreements following the distressed exchanges that restricted
shareholder returns and made voluntary debt repayments the most
reasonable use of cash. Hence, the company is yet to establish a
track record of undertaking credit support measures beyond
provisions of credit and surety agreements. In November 2022,
Peabody declared its intention to continue with its balance-sheet
optimization by establishing an ARO funding mechanism for final
reclamation expenditures and reduce other debtlike legacy
obligations. Although we consider these moves as credit supportive
measures, the company is yet to execute on them. As a result, our
assessment of Peabody's financial policy remains negative, leading
to a final rating that is one notch lower than indicated in our
criteria by the combination of the company's business and financial
risk profiles.
"The positive outlook reflects our expectation that Peabody will
continue to generate substantial cash flows from its operations
based on strong contracted positions in 2023 to fund its capital
allocation strategy. This includes fully funding its ARO, which
would further lower its adjusted debt, and investing in organic
projects including the redevelopment of the North Goonyella mine.
We also anticipate that Peabody's strong cash balance will provide
the company with the flexibility to reinstate shareholder returns
while holding adjusted leverage below 1x over the next 12 months.
"We could raise our rating on Peabody in the next 12 months if it
continues to prioritize debt reduction as a primary use of FOCF. In
such a scenario, we would expect at least a $500 million reduction
in adjusted debt and leverage well below 1x. In addition, we would
also expect clear and consistent messaging on the company's
financial policy including its leverage targets, shareholder
returns framework, and management's commitment to maintaining its
leverage targets.
"We could revise the outlook to stable in the next 12 months if
Peabody does not maintain financial discipline and reverses course
on its current capital allocation skewed toward debt reduction. We
could also revise our outlook to stable if the company's credit
metrics deteriorate such that we expect adjusted leverage to trend
toward 3x."
ESG credit indicators: E-5, S-3, G-2
PIEDMONT DRAGWAY: Case Summary & 11 Unsecured Creditors
-------------------------------------------------------
Debtor: Piedmont Dragway of NC LLC
6750 Holts Store Rd.
Julian, NC 27283
Chapter 11 Petition Date: February 15, 2023
Court: United States Bankruptcy Court
Eastern District of North Carolina
Case No.: 23-00422
Judge: Hon. Joseph N. Callaway
Debtor's Counsel: William P. Janvier, Esq.
STEVENS MARTIN VAUGHN & TADYCH, PLLC
6300 Creedmoor Road Suite 170-370
Raleigh, NC 27612
Tel: (919) 582-2300
Tel: (919) 794-8082
Email: wjanvier@smvt.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Ron Senecal as member manager.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 11 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/5EBZUNA/Piedmont_Dragway_of_NC_LLC__ncebke-23-00422__0001.0.pdf?mcid=tGE4TAMA
PLAYPOWER INC: Prospect Capital Marks $5.8M Loan at 22% Off
-----------------------------------------------------------
Prospect Capital Corporation has marked its $5,824,000 loan
extended to PlayPower, Inc. to market at $4,560,000 or 78% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Prospect Capital's Form 10-Q for the
quarterly period ended December 31, 2022, filed with the Securities
and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a First Lien Term Loan to Play
Power, Inc. The loan accrues interest at a rate of 12.00% (3M SOFR+
7.50%) per annum. The loan matures on May 10, 2026.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
PlayPower, Inc. based in Huntersville, North Carolina, primarily
manufactures commercial playground equipment used in parks and
schools throughout North America and Europe.
PLOURDE SAND: Seeks Access to $431,600 of Cash Collateral
---------------------------------------------------------
Plourde Sand & Gravel Co., Inc. asks the U.S. Bankruptcy Court for
the District of New Hampshire for authority to use cash collateral
and provide adequate protection.
The Debtor requires the use of cash collateral up to the maximum
amount of $431,648 to pay the costs and expenses provided for in
the Budget for the period beginning on March 1, 2023 and ending on
May 31, 2023.
The Debtor seeks to provide the Internal Revenue Service and
Greenlake Investments with the following adequate protection for
any loss or diminution in value of the cash collateral securing
their claims to the extent such claims qualify as secured claims:
(1) The Debtor will make the following monthly adequate
protection payments on or before the last day of each month during
the Use Term: (a) $21,157 to the Internal Revenue Service; and (b)
$5,000 to Greenlake Investment.
(2) The Debtor will grant all Potential Record Lienholders
that hold or claim to hold valid, binding, enforceable and
automatically perfected liens on the Debtor's post-petition
property of the same kinds, types and description in, to and on
which a Potential Record Lienholder held valid and enforceable,
perfected liens on the Petition Date, each of which will have and
enjoy the same priority as such liens had under applicable state
law on the Petition Date, if any. The Record Cash Collateral Liens
held by the other Potential Cash Collateral Record Lienholder
confer any value on them.
The Budget shows the Debtor will be able to pay the costs and
expenses incurred in the ordinary course of business during the Use
Term if the Debtor has the ability to spend up to the Maximum
Amount.
A copy of the Debtor's motion is available at
https://bit.ly/41avjMz from PacerMonitor.com.
About Plourde Sand & Gravel Co., Inc.
Plourde Sand & Gravel Co., Inc. owns eight properties located in
New Hampshire having an aggregate total value of $5.34 million. In
the petition signed by Daniel O. Plourde, sole shareholder and vice
president, the Debtor disclosed $9,192,623 in assets and $8,072,411
in liabilities.
William S. Gannon PLC, is the Debtor's legal counsel.
POCONO MOUNTAIN: Court Confirms Reorganization Plan
---------------------------------------------------
Judge Mark J. Conway has entered an order confirming the First
Amended Plan of Reorganization of Pocono Mountain Lake Forest
Community Assn, Inc.
The Plan has been accepted in writing by the creditors whose claims
were impaired.
The provisions of Chapter 11 of the Bankruptcy Code have been
complied with, in that the Plan has been proposed in good faith and
not by any means forbidden by law.
Key classes of claims will be treated as follows under the Plan:
* Class 2 All Allowed Claims Secured by Real Property (Mortgage
and Judgment Liens): Class 2 is impaired. The first mortgage debt
of Dime Bank shall be paid pursuant to the terms and conditions of
the stipulation entered into by and between Dime Bank and the
Debtor and approved by the Court. The Judgment lien debt of Kevin
Hardy will paid in three equal annual installments commencing on
the second anniversary of the Effective Date from the Unsecured
Creditors Fund.
* Class 3 All Allowed Unsecured Priority Claims (IRS): Class 3
is impaired. Each holder of a Class 3 Claim (approximately $0.00)
will be paid 100% of its allowed claim in three equal installments
commencing on the second anniversary of the Effective Date from the
Unsecured Creditors Fund. Class 3 Creditors shall be deemed to
have waived any and all interest, late charges, penalties,
attorneys' fees and court costs of any kind. The proof of claim
filed by the IRS is based upon estimates for unfiled returns. The
Debtor believes that once returns are prepared and filed, no amount
will be due the IRS.
* Class 4 All Timely Allowed General Unsecured Claims Who Elect
to Accept 50% of the Allowed Amount of Their Claims in Full and
Final Satisfaction of the Their Claims at Time of Confirmation:
Class 4 is impaired. Each holder of a Class 4 Claim (approximately
$15,000) will be paid 50% of its allowed claim in full and final
satisfaction of its claim on the Effective Date.
* Class 5 All Timely Allowed General Unsecured Claims: Class 5
is impaired. Each holder of a Class 5 Claim (approximately
$45,000) will be paid 100% of its allowed claim in three equal
annual installments commencing on the second anniversary of the
Effective Date from the Unsecured Creditors Fund. Class 5 Creditors
shall be deemed to have waived any and all interest, late charges,
penalties, attorneys' fees and court costs of any kind.
* Class 6 All Untimely Filed Allowed General Unsecured Claims:
Class 6 is impaired. Each holder of a Class 5 Claim (approximately
$0.00) will be paid 25% in full and final satisfaction of their
allowed claim on the fifth anniversary of the effective date of the
plan from the Unsecured Creditors Fund. Class 5 Creditors shall be
deemed to have waived any and all interest, late charges,
penalties, attorneys' fees and court costs of any kind.
A copy of the Amended Plan filed Jan. 6, 2023, is available at
PacerMonitor.com at https://tinyurl.com/yc3zv6um
About Pocono Mountain Lake Forest
Community Association
Pocono Mountain Lake Forest Community Assn, Inc., is a non-profit
property owners association in the Poconos.
Pocono Mountain Lake Forest Community Assn, Inc., as a small
business, filed a petition for Chapter 11 protection (Bankr. M.D.
Pa. Case No. 22-01084) on June 10, 2022, listing up to $1 million
in assets and up to $500,000 in liabilities. Judge Mark J. Conway
oversees the case.
John J. Martin, Esq., at the Law Offices of John J. Martin, serves
as the Debtor's legal counsel.
POLAR WINDOW: CCAA Stay Extended Until May 5, 2023
--------------------------------------------------
Polar Window of Canada Ltd., Accurate Dorwin (2020) Inc., Glass 8
Inc., National Interiors (2021) Inc., 12986647 Canada Ltd. (O/A
Allsco Windows & Doors), 12986591 Canada Ltd. (O/A Alweather
Windows & Doors), Polar Holdings Ltd., 10064720 Manitoba Ltd., and
12986914 Canada Ltd. ("Companies") filed an application in the
Court of King's Bench in Manitoba ("Court") and commenced Court
supervised restructuring proceedings under the Companies' Creditors
Arrangement Act, as amended ("CCAA").
The Court granted an order ("Initial Order"), which, among other
things, provided for a stay of proceedings ("Stay Period") which
prohibited all parties from commencing or continuing any legal
action against the Companies, and all rights and remedies of any
party against or in respect of the Companies or their assets were
stayed and suspended except with the written consent of the
Companies and the Monitor, or leave of the Court.
As a term of the Initial Order, Deloitte Restructuring Inc. was
appointed as Monitor in the CCAA proceedings to oversee the
operations of the Applicants during the restructuring.
On Feb. 14, 2023, by way of an Amended and Restated Initial Order,
the Court extended the Stay Period to May 5, 2023. At this
time, there is no formal process in place for creditors to submit a
proof of claim. Further information will be posted if, and when,
such a claims process is determined to be necessary.
A copy of the Initial Order is posted on Deloitte Restructuring
Inc.'s website at www.insolvencies.deloitte.ca/en-ca/AccurateGroup
If you would like to receive a notice of all further proceedings in
relation to this matter, please complete the Demand for Notice and
send the Demand for Notice by electronic mail (email) or facsimile
to each of the following persons:
1. Accurate Group
c/o MLT Aikins LLP
Attn: JJ Burnell
Anjali Sandhu
Fax: (204)957-0840
Email: JBurnell@mltaikins.com
ASandhu@mltaikins.com
2. Deloitte Restructuring Inc.
c/o McDougall Gauley LLP
Attn: Ian Sutherland
Craig Frith
Fax: (306)652-1323
Email: isutherland@mcdougallgauley.com
cfrith@mcdougallgauley.com
Counsel for the Companies:
MLT Aikins LLP
360 Main Street, Suite 3000
Winnipeg, MB R3C 4G1
Fax: 204-957-0840
J.J. Burnell
Tel: 204-957-4663
Email: jburnell@mltaikins.com
Anjali Sandhu
Tel: 204-957-4760
Email: asandhu@mltaikins.com
Monitor can be reached at:
Deloitte Restructuring Inc.
Suite 2300 - 360 Main Street
Winnipeg, MB R3C 3Z3
Fax: (204)-947-2689
Brent Warga
Tel: 204-944-3611
Email: bwarga@deloitte.ca
John Fritz
Tel: 204-942-0051
Email: jofritz@deloitte.ca
Counsel for the Monitor:
McDougall Gauley LLP
Attn: Ian Sutherland
500-616 Main Street
Saskatoon, SK S7H 0J6
Tel: 306-652-5417
Fax: 306-652-1323
Email: isutherland@mcdougallgauley.com
Polar Window of Canada Ltd. -- https://polarwindows.com/ -- designs
and manufactures building products. The Company offers windows and
doors. Polar Windows serves customers in Canada.
POUGHKEEPSIE, NY: Moody's Confirms 'Ba1' Issuer & GOLT Ratings
--------------------------------------------------------------
Moody's Investors Service has confirmed the City of Poughkeepsie,
NY's Ba1 issuer and general obligation limited tax (GOLT) ratings.
The outlook has been revised to stable from ratings under review.
This concludes the review for direction uncertain that was
initiated on January 30, 2023 due to lack of audited fiscal 2020
financial information. Audited fiscal 2020 and unaudited fiscal
2021 information has been received, which Moody's believe is
sufficient to maintain Moody's ratings.
RATINGS RATIONALE
The Ba1 issuer rating reflects the city's weak financial position.
Although the city has made material strides in improving its
operations and governance, its financial position remains weak as
the negative general fund balance position accumulated in previous
years is still being dealt with. Favorably, total governmental fund
balance is positive and the city is continuing to take action to
reduce the negative general fund position. Management's endeavors
are aided by a recent uptick in development which is causing tax
base, and revenue expansion.
The ongoing pandemic has had only a modest impact on the city.
While sales taxes took a large hit before rebounding, the city's
conservative budgeting and stable property taxes have largely
blunted the financial impact of the pandemic.
The Ba1 rating on the city's GOLT bonds is at the same level as the
issuer rating because the city has pledged its faith, credit and
taxing authority for repayment of the bonds.
RATING OUTLOOK
The stable outlook reflects Moody's expectations that, despite
ongoing improvements, it will take continued effort to restore
financial health.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS
-- Significant and sustained improvement in reserves and
liquidity
-- Improved resident wealth and income
-- Decreased leverage
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS
-- Material declines in reserves and liquidity
-- Reduced resident wealth and income or economic growth
-- Increased leverage absent commensurate revenue growth
LEGAL SECURITY
Payment of principal and interest on the city's general obligation
bonds are backed by the city's faith and credit supported by the
city's authority to levy such ad valorem property taxes as may be
necessary to pay the bonds, as limited by New York State's
legislative cap on property taxes (Chapter 97 (Part A) of the Laws
of the State of New York, 2011).
PROFILE
The City of Poughkeepsie is the county seat of Dutchess County (Aa2
stable) and is located on the Hudson River, approximately 70 miles
north of New York City. The city encompasses a land area of 4.9
square miles and has approximately 30,400 residents and provides
standard municipal services such as public safety and public works
including roads, and utilities.
METHODOLOGY
The principal methodology used in these ratings was US Cities and
Counties Methodology published in November 2022.
REDSTONE HOLDCO: Prospect Capital Marks $50M Loan at 23% Off
------------------------------------------------------------
Prospect Capital Corporation has marked its $50,000,000 loan
extended to Redstone Holdco to market at $38,644,000 or 77% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Prospect Capital's Form 10-Q for the
quarterly period ended December 31, 2022, filed with the Securities
and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a Second Lien Term Loan to
Redstone Holdco. The loan accrues interest at a rate of 12.11%
(3ML+ 7.75%) per annum. The loan matures on April 27, 2029.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
Redstone Holdco 2 LP and Redstone Buyer LLC were formed as part of
the buyout of the RSA Security business from Dell Inc.
RESEARCH NOW: Prospect Capital Marks $50M Loan at 21% Off
---------------------------------------------------------
Prospect Capital Corporation has marked its $50,000,000 loan
extended to Research Now Group, Inc. & Survey Sampling
International LLC to market at $39,610,000 or 79% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Prospect Capital's Form 10-Q for the
quarterly period ended December 31, 2022, filed with the
Securities and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a Second Lien Term Loan to
Research Now Group, Inc. & Survey Sampling International LLC. The
loan accrues interest at a rate of 12.84% (6ML+ 9.50%) per annum.
The loan matures on December 20, 2025.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
Research Now Group, Inc., based in Plano, TX, and Survey Sampling
International, LLC, based in Shelton, CT, provide data collection
services through online mobile, and offline surveys used by market
research firms, consulting firms, and corporate customers.
ROSIE'S LLC: March 16 Hearing on Disclosure Statement
-----------------------------------------------------
Judge Thomas B. McNamara will conveee a hearing to consider the
adequacy of and to approve the Disclosure Statement of Rosie's, LLC
pursuant to 11 U.S.C. Sec. 1125 on Thursday, March 16, 2023, at
2:30 p.m., in Courtroom E, United States Bankruptcy Court for the
District of Colorado, United States Custom House, 721 19th Street,
Denver, Colorado.
Objections to the Disclosure Statement must be filed and served not
less than 14 days prior to the Hearing.
About Rosie's LLC
Rosie's, LLC, a Sterling, Colo.-based company engaged in renting
and leasing real estate properties, filed a voluntary petition for
Chapter 11 protection (Bankr. D. Colo. Case No. 21-14259) on Aug.
16, 2021, listing as much as $50 million in both assets and
liabilities. David W. Lebsock, the Debtor's manager, signed the
petition.
Judge Thomas B. Mcnamara oversees the case.
The Debtor is represented by Kutner Brinen Dickey Riley, P.C.
SAVESOLAR CORP: Court OKs Cash Collateral Access Thru March 3
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Columbia authorized
Savesolar Corporation, Inc. and Savesolar Alpha Holdco LLC to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
The Debtor's authority to use cash collateral will terminate on the
earliest to occur of:
(i) March 3, 2023, unless such date is extended conscnsually
by Leyline in writing or a further extension of authority is
granted by the Court;
(ii) the dismissal of the chapter 11 cases or conversion to a
case under chapter 7 of the Bankruptcy Code, except to the extent
that the Court has entered a further interim or final order
authorizing the Debtors' continued use of cash collateral beyond
the Termination Date.
The Debtor is directed not use in excess of $140,408 of Leyline's
cash collateral.
As adequate protection, Leyline, Amalgamated, and/or other
creditors holding liens or security interests in cash collateral
are granted additional and replacement valid, binding, enforceable,
non-avoidable, and automatically perfected post-petition security
interests in and liens on.
The liens and interests of Leyline and other holders of liens or
security interests in Post-petition Collateral will be in the same
priority as their liens and security interests in cash collateral,
and will be subject to all claims and defenses of the Debtors and
other secured creditors.
A final hearing on the matter is set for March 3, 2023 at 10 a.m.
About SaveSolar Corporation
SaveSolar Corporation is a solar energy company in Washington, D.C.
SaveSolar sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D.D.C. Case No. 23-00045) on February 2, 2023. In the
petition signed by Karl Unterlechner, its president, the Debtor
disclosed up to $10 million in both assets and liabilities.
Judge Elizabeth L. Gunn oversees the case.
Bradford F. Englander, Esq., at Whiteford, Taylor, and Preston LLP,
is the Debtor's legal counsel.
SEDGWICK CLAIMS: Moody's Rates New $3.5BB 1st Lien Term Loan 'B2'
-----------------------------------------------------------------
Moody's Investors Service has assigned a B2 rating to a $3.5
billion senior secured first-lien term loan due in 2028 being
issued by Sedgwick Claims Management Services, Inc. (Sedgwick,
corporate family rating B3). Sedgwick will use the net proceeds
from the offering to amend and extend its three existing senior
secured terms loans (total of $3.451 billion outstanding due in
2025-26) into a single term loan. The rating outlook for Sedgwick
is unchanged at stable.
RATINGS RATIONALE
According to Moody's, Sedgwick's ratings reflect its position as
the largest US based third party administrator (TPA) of workers'
compensation and other property and casualty claims by revenue,
along with its diverse client base, broad product and geographic
spread, and strong historical organic revenue growth. As a service
provider to corporations, insurance companies and governmental
entities, Sedgwick benefits from long-term contracts, recurring
earnings, relatively high switching costs for clients, and a
somewhat variable cost structure. These strengths are tempered by
Sedgwick's high financial leverage, modest interest coverage, and
relatively weak free-cash-flow-to debt ratio.
Sedgwick reported revenue of $3.2 billion for the first nine months
of 2022, up 10% versus the same period in 2021, reflecting healthy
organic revenue growth as well as several small acquisitions.
Sedgwick has maintained relatively steady EBITDA margins in the
mid-to-high teens.
Moody's estimates that Sedgwick has a pro forma debt-to-EBITDA
ratio of around 7x, (EBITDA - capex) coverage of interest of
1.2x-1.6x, and a free-cash-flow-to-debt ratio in the low single
digits. These metrics include the rating agency's adjustments for
operating leases, pensions, run-rate earnings from acquisitions,
and certain non-recurring items.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The following factors could lead to an upgrade of Sedgwick's
ratings: (1) debt-to-EBITDA ratio below 6x, (2) (EBITDA - capex)
coverage of interest exceeding 2x, and (3) free-cash-flow-to-debt
ratio exceeding 4%.
The following factors could lead to a downgrade of Sedgwick's
ratings: (1) debt-to-EBITDA ratio above 7.5x, (2) (EBITDA - capex)
coverage of interest below 1.2x, or (3) free-cash-flow-to-debt
ratio below 2%.
Moody's has assigned the following rating:
-- $3.5 billion backed senior secured first-lien
term loan maturing in February 2028 at B2 (LGD3).
The rating outlook for Sedgwick is unchanged at stable.
The principal methodology used in this rating was Insurance Brokers
and Service Companies published in June 2018.
Sedgwick is a leading global provider of customized, fully
integrated claims management solutions to corporations, public
entities and insurance carriers, with over 30,000 colleagues
located across 80 countries. Sedgwick generated revenue of
approximately $4.2 billion for the 12 months through September
2022.
SENECAL CONSTRUCTION: Case Summary & 20 Top Unsecured Creditors
---------------------------------------------------------------
Debtor: Senecal Construction Co., Inc.
4435 Fern Glen Dr. Suite B
Burlington, NC 27215
Business Description: Senecal Construction provides complete
management services for New Home
Construction, Home Renovations & Additions,
and Commercial Construction Projects.
Chapter 11 Petition Date: February 15, 2023
Court: United States Bankruptcy Court
Eastern District of North Carolina
Case No.: 23-00421
Judge: Hon. Joseph N. Callaway
Debtor's Counsel: William P. Janvier, Esq.
STEVENS MARTIN VAUGHN & TADYCH, PLLC
6300 Creedmoor Road Suite 170-370
Raleigh, NC 27612
Tel: (919) 582-2300
Tel: (919) 794-8082
Email: wjanvier@smvt.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Roland E. Senecal, Jr., as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 20 largest unsecured creditors is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/4LLSRZA/Senecal_Construction_Co_Inc__ncebke-23-00421__0001.0.pdf?mcid=tGE4TAMA
SHUTTERFLY LLC: Prospect Capital Marks $20.09M Loan at 29% Off
--------------------------------------------------------------
Prospect Capital Corporation has marked its $20,090,000 loan
extended to Shutterfly, LLC to market at $14,209,000 or 71% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in the Prospect's Form 10-Q for the quarterly
period ended December 31, 2022, filed with the Securities and
Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a 2021 Refinancing First Lien
Term Loan B to Shutterfly, LLC. The loan accrues interest at a rate
of 9.38% (1ML+ 5.00%) per annum. The loan matures on September 25,
2026.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
Shutterfly, LLC is an American photography, photography products,
and image sharing company, headquartered in Redwood City,
California.
SOTERA HEALTH: Moody's Confirms 'B1' CFR & Alters Outlook to Stable
-------------------------------------------------------------------
Moody's Investors Service confirmed Sotera Health Holdings, LLC's
B1 Corporate Family Rating, B1-PD Probability of Default Rating and
the B1 rating of the company's senior secured first lien credit
facilities. In addition, Moody's assigned a B1 rating to the
proposed $425mm senior secured first lien term loan. The outlook
was revised to stable from rating under review. Moody's also
upgraded the company's Speculative Grade Liquidity (SGL) rating to
SGL-1 from SGL-3.
This action concludes the rating review that was initiated on
January 11, 2023.
The confirmation of Sotera Health's ratings reflects Moody's view
that the company will be able to fully meet its obligations under
the proposed settlement. Moody's estimates that the company's pro
forma financial leverage will rise to approximately 5.3 times due
to add-on term loan but will remain below 5.5 times in the next
12-18 months. Moody's does not expect a direct impact of this
settlement on Sotera Health's business operations.
The upgrade of the SGL rating reflects a material improvement of
the company's liquidity as a result of the proposed term loan
add-on transaction. Sotera Health intends to use the additional
funds, along with internal cash, to pay down borrowings on its
revolver and to pay the proposed $408mm settlement. Moody's expects
Sotera Health to have very good liquidity supported by $100-$150
million in annual free cash flow and $181 million in cash
(post-transaction) in addition to full availability under the
company's $347 million revolver when the proposed incremental debt
financing transaction closes.
The outlook is stable. Moody's expects Sotera Health to continue to
grow its business in the next 12-18 months and maintain leverage
below 5.5 times. With very good liquidity profile, the company is
able to address the proposed settlement and its associated
liabilities.
Governance risk considerations are material to the rating action.
The company's proposed settlement, which is a part of the company's
financial strategy and risk management (a governance
consideration), will reduce the uncertainty surrounding potential
cash outflows related to Willowbrook, Illinois lawsuits.
Confirmations:
Issuer: Sotera Health Holdings, LLC
Corporate Family Rating, Confirmed at B1
Probability of Default Rating, Confirmed at B1-PD
Senior Secured 1st Lien Revolving Credit Facility, Confirmed at B1
(LGD3)
Senior Secured 1st Lien Term Loan B, Confirmed at B1 (LGD3)
Upgrades:
Issuer: Sotera Health Holdings, LLC
Speculative Grade Liquidity Rating, Upgraded to SGL-1 from SGL-3
Assignments:
Issuer: Sotera Health Holdings, LLC
Senior Secured 1st Lien Term Loan B1, Assigned B1 (LGD3)
Issuer: Sotera Health Holdings, LLC
Outlook, Changed To Stable From Rating Under Review
RATINGS RATIONALE
Sotera Health's B1 rating reflects its moderately high leverage and
exposure to the device sterilization industry and the significant
environmental risks arising from the handling of toxic gases in its
manufacturing process. Sotera Health has a concentrated supply
chain with limited providers of key chemicals. Moody's estimates
that the company's pro forma financial leverage, including the
proposed $425 million in additional debt, will rise to
approximately 5.3 times from approximately 4.4 times at the end of
September 2022 and will remain below 5.5x in the next 12-18
months.
Sotera Health's CFR is supported by its leading position in the
contract sterilization outsourcing market, no meaningful customer
concentrations, a global footprint and significant barriers to
entry and meaningful customer switching costs. The company is
reducing its reliance on device sterilization through acquisitions
into new categories, such as the lab services sector. The company's
rating also reflects solid business performance, consistent
positive free cash flow, moderately high financial leverage and
very good liquidity. It also reflects stable long-term demand for
the company's services and high barriers to entry in the highly
regulated medical device sterilization business.
Sotera Health's revolving credit facility and term loans are rated
B1, at the same level as the company's corporate family rating
reflecting the fact that they comprise substantially all debt in
the company's capital structure.
ESG considerations are material to the company's rating given the
substantial implications for the environment and public health and
safety. Sotera Health's ESG credit impact score is highly negative
(CIS-4), reflecting very highly negative exposure to social
considerations related to responsible production and highly
negative environmental considerations related to waste and
pollution. Sotera Health has highly negative credit exposure to
environmental considerations (E-4). The company has elevated risks
related to waste and pollution as it uses radioactive materials and
highly toxic chemicals to sterilize certain types of medical
devices. These activities are subject to extensive regulation in
the US by the Food and Drug Administration and the Environmental
Protection Agency. Sotera Health has very highly negative credit
exposure to social considerations (S-5). The main risk is the
company's very highly negative exposure to responsible production.
The company is subject to personal injury and related tort lawsuits
alleging various injuries caused by low-level environmental
exposure to Ethylene Oxide emissions from its sterilization
facilities. The company is currently a defendant in a number of
individual lawsuits, which have not been classified as class action
lawsuits in Illinois and Georgia.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Factors that could lead to a downgrade include negative
developments with the company's legal exposure including delays or
adverse changes to the proposed settlement with Willowbrook
Illinois plaintiffs. The rating could also be downgraded if the
company's liquidity weakens, financial policies become more
aggressive or if legal and environmental risks increase
substantially. Quantitively, ratings could be downgraded if
debt/EBITDA was sustained above 5.5 times.
Factors that could lead to an upgrade include balanced financial
policies and continued growth in the business scale and revenues.
The company would also need to keep costs related to legal and
environmental risks well contained. An upgrade will require clarity
on the most likely outcome for the pending lawsuits.
Quantitatively, ratings could be upgraded if debt/EBITDA is
sustained below 4.5 times.
Sotera Health Holdings, LLC, headquartered near Cleveland, OH, is a
leading fully integrated provider of mission-critical health
sciences, lab services and sterilization solutions for the
healthcare industry. Sotera Health Holdings, LLC offers services in
sterilization, lab and testing and gamma technologies. The company
generated approximately $993 million in revenues in the twelve
months that ended September 2022. Sotera Health Holdings, LLC
parent -- Sotera Health Company -- is publicly traded however
private equity firms Warburg Pincus International LLC and GTCR LLC
continue to hold approximately 62% of the outstanding shares.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
SOTERA HEALTH: New Term Loan Upsize No Impact on Moody's 'B1' CFR
-----------------------------------------------------------------
Moody's Investors Services said that Sotera Health Holdings, LLC's
announced proposed term loan upsize to $500 million from $425
million to fund the proposed $408 million litigation settlement
will moderately increase financial leverage. The upsizing does not
affect Sotera Health's B1 Corporate Family Rating or the stable
outlook.
STIMWAVE TECHNOLOGIES: Unsecureds Unimpaired in Toggle Treatment
----------------------------------------------------------------
Stimwave Technologies Incorporated, et al., submitted a Disclosure
Statement for the First Amended Joint Plan of Liquidation.
The Plan provides for (i) either (a) the establishment of a
Liquidating Trust, to the extent that Class 3 (General Unsecured
Claims) may not be paid in full, and the appointment of a
Liquidating Trustee who will have all powers and authorities set
forth in the Plan, or (b) the designation of a Plan Administrator
who will have all powers and authorities set forth in the Plan, to
the extent the Debtors and the Committee jointly elect to treat
Class 3 as an Unimpaired Class and File and serve the Notice of
Class 3 Unimpairment Toggle, thereby exercising the "Class 3
Unimpairment Toggle," and (ii) the distribution on the Effective
Date (or as soon as reasonably practicable thereafter) of Cash to
the Holders of Allowed Administrative Claims and Allowed Other
Priority Claims in an amount equal to the Allowed amount of such
Claims, (iii) the treatment of Holders of Allowed Priority Tax
Claims in accordance with the terms set forth in section
1129(a)(9)(C) of the Bankruptcy Code, (iv) with respect to Allowed
Other Secured Claims (if any), at the option of the Debtors, either
(a) the distribution on the Effective Date (or as soon as
reasonably practicable thereafter) of Cash to the Holder of such
Allowed Other Secured Claim in an amount equal to the Allowed
amount of such Allowed Other Secured Claim, (b) satisfaction of
such Allowed Other Secured Claim by delivery of the collateral
securing such Allowed Other Secured Claim and payment of any
interest required to be paid under section 506(b) of the Bankruptcy
Code, or (c) such other recovery necessary to satisfy section 1129
of the Bankruptcy Code, (v) the distribution on the Effective Date
(or as soon as reasonably practicable thereafter) to the Holders of
Allowed General Unsecured Claims of either (a) in the event the
Class 3 Unimpairment Toggle is not exercised, each Holder's Pro
Rata share of the Class A Liquidating Trust Interests, which
entitle such Holder to distributions from the Liquidating Trust as
set forth in the Plan and Liquidating Trust Agreement, or (b) in
the event the Class 3 Unimpairment Toggle is exercised, Cash in the
amount of such Allowed General Unsecured Claim (plus interest
thereon accrued from the Petition Date through the date of such
distribution, calculated using the Federal Judgment Rate), (vi) the
distribution on the Effective Date (or as soon as reasonably
practicable thereafter) to the Holders of Allowed Existing Series E
Preferred Interests of either (a) in the event the Class 3
Unimpairment Toggle is not exercised, each Holder's Pro Rata share
of the Class B Liquidating Trust Interests, which entitle such
Holder to distributions from the Liquidating Trust as set forth in
the Plan and Liquidating Trust Agreement, or (b) in the event the
Class 3 Unimpairment Toggle is exercised, the distribution to the
Holders of Allowed Existing Series E Preferred Interests of their
Pro Rata Share of any Net Distributable Assets, and (vii) such
other recoveries necessary to satisfy section 1129 of the
Bankruptcy Code as set forth in the Plan.
The Plan is premised upon the deemed consolidation of the Debtors
for all purposes related to the Plan, including voting,
confirmation, distributions, and Claim determinations.
In the event the Class 3 Unimpairment Toggle is not exercised, on
or before the Effective Date, the Liquidating Trust shall be
established to administer certain post-Effective Date
responsibilities under the Plan. The Liquidating Trust will be
governed by the provisions of the Plan, the Confirmation Order, and
a Liquidating Trust Agreement, which will be included in the Plan
Supplement. The Liquidating Trust shall consist of the Liquidating
Trust Assets (which include, among other things, all remaining
assets of the Debtors following payment of (or establishment of
appropriate reserves for) all Allowed Administrative Claims,
Allowed Priority Claims, Allowed Professional Fee Claims, Allowed
Other Priority Claims, and Allowed Other Secured Claims). On the
Effective Date, the Debtors shall transfer all of the Liquidating
Trust Assets then held by the Debtors to the Liquidating Trust free
and clear of all liens, claims, and encumbrances, except to the
extent otherwise provided herein. A Liquidating Trustee and a
Liquidating Trust Oversight Committee shall each be appointed by
the Debtors and the Committee to oversee the Liquidating Trust.
In the event the Class 3 Unimpairment Toggle is exercised, the
Debtors will designate a Plan Administrator to administer certain
post-Effective Date responsibilities under the Plan. The Plan
Administrator will be disclosed in the Plan Supplement, which the
Debtors will file no later than seven days prior to the Plan
Objection Deadline (as set forth in the Disclosure Statement
Order).
Pursuant to the Plan, in the event the Class 3 Unimpairment Toggle
is not exercised, there shall be two classes of Liquidating Trust
Interests in the Liquidating Trust. On the Effective Date: (i) each
Holder of an Allowed General Unsecured Claim shall, by operation of
the Plan, receive its Pro Rata share of the Class A Liquidating
Trust Interests, and (ii) each Holder of an Allowed Existing Series
E Preferred Interest shall, by operation of the Plan, receive its
Pro Rata share of the Class B Liquidating Trust Interests. The
Class A Liquidating Trust Interests will in all events be senior in
priority to the Class B Liquidating Trust Interests, and in no
event will holders of Class B Liquidating Trust Interests be
entitled to payment from, or distributions of, Liquidating Trust
Assets unless and until all holders of Allowed Class A Liquidating
Trust Interests have received from the Liquidating Trust Cash
distributions equal to the amount of such Holder's Allowed General
Unsecured Claim (plus interest thereon accrued from the Petition
Date through the date of such payment, calculated using the Federal
Judgment Rate).
Liquidating Trust Interests shall be reserved for Holders of
Disputed Claims and Interests and issued by the Liquidating Trust
to, and held by the Liquidating Trustee in, the Disputed Claims
Reserve pending allowance or disallowance of such Claims or
Interests. No other entity shall have any interest, legal,
beneficial or otherwise, in the Liquidating Trust Assets upon the
assignment and transfer of such assets to the Liquidating Trust.
Liquidating Trust Interests shall be uncertificated, and holders of
Liquidating Trust Interests, in such capacity, shall have no voting
rights with respect to such interests.
The Plan also provides for the establishment of (i) an
Administrative/ Priority Claims Reserve Account, (ii) an Other
Secured Claims Reserve Account, and (iii) a Professional Fee Escrow
Account, in each case, pursuant to the terms of the Plan. In the
event the Class 3 Unimpairment Toggle is exercised, the Plan also
provides for the establishment of (i) a General Unsecured Claims
Reserve Account, and (ii) a Plan Administration Account, to be
maintained by the Plan Administrator. All such accounts shall be
funded on or prior to the Effective Date in the estimated amount of
claims for which each account is established and administered by
the Plan Administrator or the Liquidating Trustee, as applicable,
on and after the Effective Date.
Under the Plan, Class 3 General Unsecured Claims will recover 100%
of their claims. Holders of Allowed Claims in Class 3 are entitled
to vote to accept or reject the Plan; provided, however, that if
the Class 3 Unimpairment Toggle is exercised, Class 3 will be
Unimpaired, Holders of Allowed Claims in Class 3 will be
conclusively presumed to have accepted the Plan. Class 3 is
impaired under the Plan:
* Default Treatment: In the event the Class 3 Unimpairment
Toggle is not exercised, each Holder of an Allowed Class 3 Claim
shall receive its Pro Rata share of the Class A Liquidating Trust
Interests in accordance with Article IV.C.3 of the Plan on account
of such Holder's General Unsecured Claim(s) against the Debtors,
which shall entitle such Holder to distributions from the
Liquidating Trust as and to the extent set forth in the Plan and
Liquidating Trust Agreement. Such Class A Liquidating Trust
Interests will in all events be senior in priority to the Class B
Liquidating Trust Interests, and in no event will holders of Class
B Liquidating Trust Interests be entitled to payment from, or
distributions of, Liquidating Trust Assets unless and until all
holders of Allowed Class A Liquidating Trust Interests have
received from the Liquidating Trust Cash distributions equal to the
amount of such Holder's Allowed General Unsecured Claim (plus
interest thereon accrued from the Petition Date through the date of
such payment, calculated using the Federal Judgment Rate).
* Toggle Treatment: In the event the Class 3 Unimpairment Toggle
is exercised, except to the extent that a Holder of an Allowed
General Unsecured Claim agrees to a less favorable treatment of its
Allowed General Unsecured Claim, in full and final satisfaction of
and in exchange for each Allowed General Unsecured Claim, each such
Holder shall receive payment in full in Cash of the amount of such
Holder's Allowed General Unsecured Claim (plus interest thereon
accrued from the Petition Date through the date of such payment,
calculated using the Federal Judgment Rate) either: (i) on the
Effective Date, or as soon as reasonably practicable thereafter or
(ii) if the General Unsecured Claim is not Allowed as of the
Effective Date, no later than 14 days after the date on which such
General Unsecured Claim is Allowed by Final Order, or as soon as
reasonably practicable thereafter.
Counsel to the Debtors:
Robert A. Klyman, Esq.
Michael G. Farag, Esq.
GIBSON, DUNN & CRUTCHER LLP
333 South Grand Avenue
Los Angeles, CA 90071-3197
Tel: (213) 229-7000
Fax: (213) 229-7520
E-mail: rklyman@gibsondunn.com
mfarag@gibsondunn.com
- and -
Matthew J. Williams, Esq.
200 Park Avenue
New York, NY 10166-0193
Tel: (212) 351-4000
Fax: (212) 351-4035
E-mail: mjwilliams@gibsondunn.com
- and -
Michael R. Nestor, Esq.
Andrew L. Magaziner, Esq.
Elizabeth S. Justison, Esq.
Jared W. Kochenash, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square, 1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
E-mail: mnestor@ycst.com
amagaziner@ycst.com
ejustison@ycst.com
jkochenash@ycst.com
A copy of the Disclosure Statement dated Feb. 3, 2023, is available
at https://bit.ly/3lcqamh from PacerMonitor.com.
About Stimwave
Stimwave Technologies Incorporated and Stimwave LLC manufacture,
distribute, and provide ongoing support for implantable, minimally
invasive neurostimulators, which are used as a treatment for
chronic intractable pain.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. LeaD Case No. 22-10541) on June 15,
2022. In the petition signed by Aure Bruneau, as manager, the
Debtors disclosed up to $100 million in assets and up to $50
million in liabilities.
Young Conaway Stargatt and Taylor, LLP and Gibson, Dunn and
Crutcher LLP serve as the Debtors' legal counsel.
The Debtors also tapped Honigman LLP and Jones Day as special
counsel; Riverson RTS, LLC as financial advisor; and GLC Advisors
and Co., LLC and GLCA Securities, LLC as investment bankers. Kroll
Restructuring Administration is the Debtors' administrative advisor
and notice, claims, solicitation and balloting agent.
On July 6, 2022, the U.S. Trustee for Region 3 appointed an
official committee of unsecured creditors in these cases. Culhane
Meadows, PLLC and Province, LLC serve as the committee's legal
counsel and financial advisor, respectively.
STONE CLINICAL: Court Confirms Reorganization Plan
--------------------------------------------------
Judge Meredith S. Grabill has entered an order confirming the
Amended Plan of Reorganization of Stone Clinical Laboratories,
LLC.
That the Debtor shall timely pay to the United States Trustee any
and all post-confirmation quarterly fees, as required by 28 U.S.C.
Sec. 1930(a)(6), including all fees due upon the transfer of the
property of the estate to the Liquidating Trust.
As reflected in the Second Amended Certification of Tabulation of
Ballots, pursuant to 11 U.S.C. Sections 1124 and 1126: Classes 1,
2, 3, 5, 6, and 8 are impaired by the Plan. Therefore, holders of
such claims were entitled to vote on the Plan. Class 7, holders of
interests are also impaired. 11 U.S.C. section 1126(g). Classes 4
and 9 no longer exist. Classes 5, 7, and 8 voted to reject the
Plan. Classes 3 and 6 voted to accept the Plan.
The Plan designates classes 1, 2, 3, 5, 6 and 8 as impaired within
the meaning of section 1124 of the Bankruptcy Code. The Plan
specifies the treatment of claims and existing equity interests in
such classes. The Plan, therefore, satisfies s 1123(a)(3).
In accordance with section 1123(b)(5), the Plan modifies the rights
of holders of claims and interests in Classes 1, 2, 3, 5, 6, and 8.
Accordingly, the Plan is consistent with s 1123(b)(5).
As is set forth in the Ballot Tabulation, Classes 3 and 6 have
affirmatively voted to accept the Plan. As such, section 1129(a)(8)
is satisfied with respect to those classes of claims.
Notwithstanding the votes of Classes 5, 7, and 8 to reject, the
Plan my nevertheless be confirmed because the Plan otherwise
satisfies all elements of section 1129(a) and satisfies section
1129(b) of the Bankruptcy Code with respect to those classes
because the Plan does not discriminate unfairly and is fair and
equitable.
Amended Plan
Stone Clinical Laboratories, LLC and the Official Committee of
Unsecured Creditors submitted an Amended Plan of Reorganization
dated Jan. 14, 2023.
Under the confirmed Plan, Class 6 consists of all General Unsecured
Claims and all Claims arising from the rejection of any executory
contract against the Debtor. The Deficiency Claims of Classes 1 (if
any Class 1 Claim exists), 2 and 3 creditors, if any, will be paid
pro rata with the Class 6 creditors (and potentially the Class 5
and 8 creditors) out of the Cash Fund until such Claims are paid in
full. Class 6 is impaired.
Cash Fund shall mean the fund created for the payments set forth in
this Plan created from the sale of the Debtor's Assets, the cash on
hand on the Effective Date, the Debtor's accounts, and the
recoveries from Causes of Action.
Attorneys for the Official Committee of Unsecured Creditors:
Michael D. Rubenstein, Esq.
LISKOW & LEWIS, APLC
1001 Fannin Street, Suite 1800
Houston, TX 77002
Telephone: (713) 651-2953
Fax: (713) 651-2908
E-mail: mdrubenstein@liskow.com
Attorneys for Stone Clinical Laboratories LLC:
Douglas S. Draper, Esq.
HELLER, DRAPER & HORN, L.L.C.
650 Poydras Street, Suite 2500
New Orleans, LA 70130
Telephone: (504) 299-3300
Fax: (504) 299-3399
E-mail: ddraper@hellerdraper.com
A copy of the Amended Plan of Reorganization dated Feb. 3, 2023, is
available at https://bit.ly/3DGTlEw from PacerMonitor.com.
About STONE Clinical Laboratories
STONE Clinical Laboratories, LLC is a full-service clinical
reference laboratory that specializes in preventative and molecular
diagnostics testing. The company is based in New Orleans, La.
On July 15, 2021, Whale Capital, L.P., Hologic, Inc. and Woman's
Hospital Foundation filed an involuntary Chapter 11 petition
against the Debtor. On Jan. 10, 2022, the court entered the order
for relief, thereby, commencing the Chapter 11 case (Bankr. E.D.
La. Case No. 21-10923). The petitioning creditors are represented
by The Derbes Law Firm LLC, Jaffe Raitt Heuer & Weiss P.C., and The
McCarthy Law Firm.
Judge Meredith S. Grabill presides over the case.
Heller, Draper & Horn, LLC and Gordian Seaport Advisors, LLC serve
as the Debtor's legal counsel and investment banker, respectively.
David Asbach, acting U.S. Trustee for Region 5, appointed an
official committee of unsecured creditors on Feb. 3, 2022. The
committee is represented by Liskow & Lewis, APLC.
THREE ARROWS: Founders Start Crypto Bankruptcy Claims Exchange
--------------------------------------------------------------
Fredrik Vold of Crypto News reports that Su Zhu and Kyle Davies,
the two founders of now-bankrupt crypto hedge fund Three Arrows
Capital, have launched a new platform for trading in crypto-related
bankruptcy claims.
Writing on Twitter, former Three Arrows Capital (3AC) CEO Su Zhu
announced that the new trading platform, named Open Exchange, has
already opened its waitlist for interested users who want to put
their claims up for sale.
According to the tweet from Open Exchange that was shared by Zhu,
the new platform will become the world's first marketplace for such
trading. The tweet added that the goal after the claims marketplace
is up and running will be for it also to become "the world's most
radically transparent [centralized exchange]."
"We were not perfect"
In his Twitter thread, Su Zhu took the opportunity to reflect on
the past few months. He called it "a dark period," and added "we
were not perfect in how we handled the fallout, but we were
determined to do all we could."
As his reason for creating the new marketplace, the 3AC co-founder
said he and Davies felt they had to "build something that takes all
the pain/lessons & uses it to advance crypto."
He went on to admit that the collapse of the crypto exchange FTX
created an opportunity for a new exchange with "a great trading UI"
to come along and said creditor claims from FTX and other failed
crypto firms are likely to flow to the new marketplace.
"We spoke to creditors about several plans. And everyone we talked
with thought this one was the wisest way to use our existing
resources, all the painful lessons, and wish contribute to crypto,"
he added.
About Three Arrows Capital
Three Arrows Capital Ltd. was an investment firm engaged in
short-term opportunities trading, and is heavily invested in
cryptocurrency, funded through borrowings. As of April 2022, the
Debtor was reported to have over $3 billion of assets under its
management.
Three Arrows Capital Ltd. was incorporated as a business company
under the laws of the British Virgin Islands. Its sole shareholder
owning all of its "management shares" is Three Arrows Capital Pte.
Ltd., which previously operated as a regulated fund manager in
Singapore until 2021, when it shifted its domicile to the BVI, as
part of a global corporate plan to relocate operations to Dubai.
The Debtor borrowed digital and fiat currency from multiple lenders
to fund its cryptocurrency investments. After cryptocurrency lost
99% of its value, and then prices of other cryptocurrencies had
rapid declines, the Debtor reportedly defaulted on its
obligations.
On June 24, 2022, one of the Debtor's many creditors -- DRB Panama
Inc. -- filed an application to appoint joint provisional
liquidators -- and thereafter, full Liquidators -- in the Eastern
Caribbean Supreme Court in the High Court of Justice (Commercial
Division) located in BVI. The application was assigned claim number
VIHCOM2022/0117.
Subsequently, on June 27, 2022, the Debtor filed its own
application for the appointment of joint liquidators before the BVI
Commercial Court.
On June 29, 2022, the Honorable Mr. Justice Jack of the BVI
Commercial Court appointed Russell Crumpler and Christopher Farmer
of Teneo (BVI) Limited as joint liquidators of Three Arrows Capital
Ltd.
TIMES SQUARE: To Seek Plan Confirmation on March 16
---------------------------------------------------
Judge John P. Mastando III has entered an order approving the
Disclosure Statement of Times Square JV LLC, et al.
The following dates are established (subject to modification as
necessary) with respect to the solicitation of votes to accept, and
voting on, the Plan:
* Feb. 7, 2023, as the deadline for distributing Solicitation
Packages, including Ballots, to Holders of Claims entitled to vote
to accept or reject the Plan.
* 5 business days after entry of the Disclosure Statement Order
as the last date by which the Debtors will submit the Confirmation
Hearing Notice for publication in a format modified for
publication.
* 7 days prior to the Voting Deadline as the deadline by which
the Debtors must file the Plan Supplement.
* March 9, 2023, at 4:00 p.m. (ET) as the deadline by which all
Ballots must be properly executed, completed, and delivered so that
they are actually received by Stretto, Inc.
The following dates are established (subject to modification as
needed) with respect to filing objections to the Plan and
confirming the Plan:
* March 9, 2023, at 4:00 p.m. (ET) as the deadline by which
objections to the Plan must be filed with the Court and served so
as to be actually received by the appropriate notice parties.
* March 14, 2023, at 4:00 p.m. (ET) as the date by which the
report tabulating the voting on the Plan must be filed with the
Court.
* March 13, 2023, at 4:00 p.m. (ET) as the deadline by which the
Debtors must file their brief in support of Confirmation of the
Plan and deadline by which replies to objections to the Plan must
be filed with the Court.
* March 16, 2023, at 9:30 a.m. (ET), or as soon thereafter as
the Debtors may be heard, as the date for the hearing at which the
Court will consider Confirmation of the Plan.
Toggle Plan
Times Square JV LLC, CPTS Hotel Lessee LLC, 1601 Broadway Holding
LLC and 1601 Broadway Owner LLC filed an Amended Plan of
Reorganization and a corresponding Disclosure Statement.
In weighing their options and ultimately determining to pursue a
chapter 11 filing, the Debtors engaged with certain entities with
interests in the Premises to formulate a consensus regarding the
terms of the Debtors' restructuring. The Debtors entered into a
restructuring support agreement (the "RSA") with Vornado Capital
Partners, L.P., Vornado Capital Partners Parallel, L.P. and Argent
(collectively, the "RSA Parties"), attached hereto as Exhibit 3.
Importantly, the RSA provides a path to a restructuring, through
the Plan, which outlines the pursuit of the sale of the Premises
and related rights (via the Plan or under section 363 of the
Bankruptcy Code) or an equitization of the Mortgage Lender's
secured debt.
After extensive discussions, on December 28, 2022, the RSA Parties
executed the RSA regarding the material terms of a chapter 11
filing that would conclude in a sale transaction or restructuring.
The RSA Parties have agreed to support the restructuring
transactions set forth in the Chapter 11 Plan. Among other things,
the Mortgage Lender agreed to permit the Debtors to use cash
collateral on a consensual basis and to provide post-petition
financing to enable the Debtors to implement their restructuring
process through confirmation of the Chapter 11 Plan, including to
commence a marketing process for the sale of all or substantially
all of the Debtors' assets through the Chapter 11 Plan or
separately under section 363 of the Bankruptcy Code.
The RSA provides that all parties thereto will use commercially
reasonable efforts to take such steps as are necessary or
appropriate to implement or support the Plan, and the related
restructuring transactions, as applicable, and includes a variety
of other commitments from the parties, including that 1605 Broadway
LLC (in such capacity, the "DIP Lender") shall provide DIP
financing in the amount of up to $10,000,000, subject to the
Bankruptcy Court's entry of an order approving such DIP financing
(the "DIP Order").
The Plan provides for either (a) an equitization restructuring (the
"Equitization Restructuring") through which the Mortgage Lender
would receive, among other things, 100% of the equity of the
reorganized Debtors on account of the DIP Facility and a portion of
the prepetition mortgage loan debt or (b) a sale transaction (the
"Sale Transaction") through which all, or substantially all, of the
Debtors' assets would be sold and proceeds generated therefrom
would be distributed to the Debtors' creditors in accordance with
the Plan. The Plan incorporates a "toggle" structure whereby the
Debtors concurrently pursue both the Equitization Restructuring and
Sale Transaction on parallel paths. After conclusion of the
marketing process and bid deadline with respect to the Sale
Transaction, the Debtors in consultation with the Consultation
Parties20 will make a determination as to which option will
maximize value for the Debtors' estates, and therefore should be
consummated (such election between the Equitization Restructuring
and the Sale Transaction, the "Transaction Election") prior to the
Plan objection deadline with the Plan Supplement.
Under the Plan, Class 5a, 5b, 5c Other Unsecured Claims will be
treated as follows:
Class 5a Treatment: Each Holder of an Allowed Other Unsecured Claim
against TSJV shall receive, on account of such Allowed Claim,
(x) if a Payout Event occurs, its Pro Rata Share (together with
Holders of Class 4a Claims) of Net Sale Proceeds at TSJV, or
(y) If a Payout Event does not occur, Holders of Other Unsecured
Claims against TSJV shall not receive any distribution on account
of such Other Unsecured Claim and all such Other Unsecured Claims
shall be cancelled and discharged.
Class 5b Treatment: Each Holder of an Allowed Other Unsecured Claim
against CPTS shall receive, on account of such Allowed Claim,
(x) if a Payout Event occurs, its Pro Rata Share (together with
Holders of Class 4b claims) of Net Sale Proceeds at CPTS; or
(y) If a Payout Event does not occur, Holders of Other Unsecured
Claims against CPTS shall not receive any distribution on account
of such Other Unsecured Claim and all such Other Unsecured Claims
shall be cancelled and discharged.
Class 5c Treatment: Each Holder of an Allowed Other Unsecured Claim
against the 1601 Broadway Entities shall receive, on account of
such Allowed Claim,
(x) if a Payout Event occurs, its Pro Rata Share (together with
Holders of Class 4c claims) of Net Sale Proceeds at the applicable
1601 Broadway Entity; or
(y) If a Payout Event does not occur, Holders of Other Unsecured
Claims against the 1601 Broadway Entities shall not receive any
distribution on account of such Other Unsecured Claim and all such
Other Unsecured Claims shall be cancelled and discharged.
If a Payout Event occurs, the Successful Bid (or Successful
Bidders, as applicable) shall transfer to the Debtors pursuant to
the Bidding Procedures the Cash necessary to (i) satisfy all claims
of the DIP Lender, (ii) satisfy all claims of the Secured Lenders;
(iii) satisfy any break-up fee or expense reimbursement payable
under the Bidding Procedures Order, (iv) fund the Administrative
Expense and Priority Escrow Account, and (v) fund a wind-down
budget of no more than $1,000,000, each on or before the Effective
Date. Following the payment of distributions to the DIP Lender and
the Secured Lenders on the Effective Date, the Net Sale Proceeds
shall be available for distribution as provided under the Plan.
If a Payout Event does not occur, on the Effective Date, or as soon
as reasonably practicable thereafter, the Reorganized Debtors shall
implement a series of transactions (the "Restructuring
Transactions"), including (a) the exchange of 100% of the DIP
Facility and an equitization of a portion of the Mortgage Loan such
that the amount outstanding under the Mortgage Loan upon completion
of the Restructuring Transactions is no greater than $250,000,000
for a pro rata share of 100% of the Reorganized TSJV Equity
Interests, (b) cancellation of the Interests in TSJV and CPTS, and
(c) entry into the Exit Facility Credit Agreement.
Counsel to the Debtors:
John R. Ashmead, Esq.
Robert J. Gayda, Esq.
Catherine V. LoTempio, Esq.
Andrew J. Matott, Esq.
SEWARD & KISSEL LLP
One Battery Park Plaza
New York, NY 10004
Telephone: (212) 574-1200
Facsimile: (212) 480-8421
A copy of the Order dated Feb. 3, 2022, is available at
https://bit.ly/3jAZn2V from Stretto, the claims agent.
A copy of the Disclosure Statement dated Feb. 3, 2022, is available
at https://bit.ly/3Rxdnac from Stretto, the claims agent.
About Times Square JV
Times Square JV, LLC owns a building located at 1605 Broadway, New
York, in central Times Square (between West 48th and 49th Streets).
The premises is a total of 840,000 square feet and consists, among
other things, of certain hotel space on the 15th through 46th
floors, currently branded as the Crowne Plaza Times Square
Manhattan Hotel; 196,300 square feet of commercial office space,
portions of which are currently leased to three third-party
tenants; 17,800 square feet of ground floor retail space; certain
billboard spaces; and a parking garage.
Debtor TJV leases the premises to affiliate CPTS Hotel Lessee, LLC
pursuant to an Agreement of Lease dated as of Jan. 1, 2017, as
amended. Affiliates 1601 Broadway Owner LLC and 1601 Broadway
Holdings LLC directly or indirectly own or lease certain real
property underlying the premises.
Vornado is the ultimate indirect majority parent of non-debtor CPTS
Mezz Borrower, which is the sole legal and beneficial owner of 100%
of the issued and outstanding limited liability company membership
interests in Debtor CPTS.
On Dec. 28, 2022, Times Square JV LLC, CPTS Hotel Lessee LLC, 1601
Broadway Owner LLC and 1601 Broadway Holdings LLC filed voluntary
petitions for relief under chapter 11 of the Bankruptcy Code
(Bankr. S.D.N.Y. Lead Case No. 22-11715) on Dec. 27, 2022. In the
petition filed by Richard Shinder, as president, treasurer and sole
director, TSJV reported assets and liabilities between $100 million
and $500 million.
Judge John P. Mastando III oversees the cases.
The Debtors tapped Seward & Kissel, LLP as bankruptcy counsel and
Emerald Capital Advisors Corp. as financial advisor. Stretto,
Inc., is the notice, claims and balloting agent and administrative
advisor.
On Jan. 10, 2022, the U.S. Trustee for Region 2 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee is represented by DLA Piper LLP
(US).
TURNER OAKWOOD: Says Sale Plan to Pay Creditors in Full
-------------------------------------------------------
Turner Oakwood Properties, LLC, filed a First Amended Plan.
The Plan of Reorganization filed on Nov. 3, 2022 proposed
restructuring the secured debts and the Debtor continuing to manage
the three properties that it had a 50% ownership interest in. This
Amended Plan proposes to sell the three properties utilizing a real
estate broker, paying creditors in full, and distributing the net
proceeds to the owners of the properties.
The Debtor intends to continue to rent the properties and make
payments to secured creditors while it markets and sells the
properties.
Under the Plan, Class 8 shall consist of the claims of holders of
Unsecured Creditors. The Debtor listed a disputed claim to Fasco
Pumbing, Inc., and does not believe any claims will be filed in
this Class. In addition, any deficiency claims from Classes 4, 5,
and 6 shall be paid in Class 8. The Debtor does not believe that
there will be any deficiency claims. To the extent any Claims are
filed and allowed in this Class, the Claim shall be paid in full
with interest at the federal judgment rate. Allowed Claims will be
paid from the net proceeds of sales of real property within 30 days
of all 3 properties. Class 8 is impaired.
All funds necessary for the implementation of this Plan will be
obtained from funds in possession of the Debtor, generated by the
business of the Debtor, derived from the liquidation of property of
the estate, recovered or preserved as a result of the exercise of
the Debtor's enforcement and/or avoiding powers retained and
authorized under this Plan, or obtained by outside capitalization
which shall be authorized by the Bankruptcy Court if necessary.
Attorneys for the Debtor:
William H. Kroll, Esq.
EVERETT GASKINS HANCOCK LLP
220 Fayetteville Street, Suite 300
P.O. Box 911 Raleigh, NC 27602
Tel: (919) 755-0025
Fax: (919) 755-0009
E-mail: bill@eghlaw.com
A copy of the Disclosure Statement dated Feb. 3, 2023, is available
at https://bit.ly/3jEyuuJ from PacerMonitor.com.
About Turner Oakwood Properties
Turner Oakwood Properties, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-02049) on
September 12, 2022. In the petition signed by Augusta Bernadette
Turner, manager, the Debtor disclosed up to $1 million in both
assets and liabilities.
Judge David M. Warren oversees the case.
William Kroll, Esq., at Everett Gaskins Hancock LLP, is the
Debtor's counsel.
USES CORP: Prospect Capital Marks $62.7M Loan at 71% Off
--------------------------------------------------------
Prospect Capital Corporation has marked its $62,705,000 loan
extended to Uses Corp to market at $18,116,000 or 29% of the
outstanding amount, as of December 31, 2022, according to a
disclosure contained in Prospect Capital's Form 10-Q for the
quarterly period ended December 31, 2022, filed with the Securities
and Exchange Commission on February 8, 2023.
Prospect Capital is a participant in a First Lien Term Loan A to
Uses Corp. The loan accrues interest at a rate of 9% (Payment In
Kind) per annum. The loan matures on July 29, 2024.
The loan is on non-accrual status as of the reporting date.
Prospect Capital is a financial services company that primarily
lends to and invests in middle market privately-held companies.
Prospect is a closed-end investment company incorporated in
Maryland. Prospect has elected to be regulated as a business
development company under the Investment Company Act of 1940. As a
BDC, Prospect has elected to be treated as a regulated investment
company, under Subchapter M of the Internal Revenue Code of 1986.
Prospect was organized on April 13, 2004, and was funded in an
initial public offering completed on July 27, 2004.
USES provides environmental cleaning services.
VANTAGE DRILLING: To Redeem $180M Outstanding Notes on March 6
--------------------------------------------------------------
Vantage Drilling International issued a notice of full conditional
redemption pursuant to the indenture, dated as of Nov. 30, 2018
between the Company, the guarantors listed therein and U.S. Bank
Trust Company, National Association (as successor to U.S. Bank
National Association), as trustee, collateral agent, registrar and
paying agent, governing its 9.250% Senior Secured First Lien Notes
due 2023.
Pursuant to the Notice of Full Conditional Redemption, the Company
gave holders of the Notes notice that, upon the satisfaction of the
Condition Precedent, it intends to redeem all $180,000,000 of its
outstanding Notes on March 6, 2023 at a redemption price equal to
100.0% of the aggregate principal amount of the Notes to be
redeemed, plus accrued and unpaid interest and Additional Amounts
(as defined in the Indenture), if any, to, but not including, the
Redemption Date. The redemption of the Notes is conditioned upon
the receipt by the Company of proceeds from a completed debt
financing in an amount sufficient, in the Company's opinion, to
fund the Redemption Price on the Redemption Date pursuant to the
terms of the Indenture.
About Vantage Drilling International
Vantage Drilling International, a Cayman Islands exempted company,
is an offshore drilling contractor, with a fleet of two
ultra-deepwater drillships, and five premium jackup drilling rigs.
Its primary business is to contract drilling units, related
equipment and work crews primarily on a dayrate basis to drill oil
and natural gas wells globally for major, national and independent
oil and gas companies. The Company also markets, operates and
provides management services in respect of, drilling units owned by
others.
Vantage Drilling reported a net loss of $110.25 million for the
year ended Dec. 31, 2021, compared to a net loss of $276.76 million
for the year ended Dec. 31, 2020. As of June 30, 2022, the Company
had $754.30 million in total assets, $96.69 million in total
current liabilities, $347.68 million in long-term debt, $9.96
million in other long-term liabilities, and $299.97 million in
total equity.
* * *
As reported by the TCR on May 9, 2022, S&P Global Ratings affirmed
its 'CCC' issuer credit rating on Vantage Drilling International.
S&P said the 'CCC' rating reflects the refinancing risk related to
the company's $350 million senior secured notes due November 2023.
VENUS IN PERPETUUM: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Venus In Perpetuum, Inc.
922 Old Post Rd
Bedford, NY 10506-1216
Business Description: The Debtor is a Single Asset Real Estate
as defined in 11 U.S.C. Section 101(51B).
The Debtor is the fee simple owner of
a property located at 922 Old Post Rd,
Bedford, NY, 10506-1216, valued at $1.1
million.
Chapter 11 Petition Date: February 15, 2023
Court: United States Bankruptcy Court
Southern District of New York
Case No.: 23-22128
Debtor's Counsel: H Bruce Bronson, Esq.
BRONSON LAW OFFICE, P.C.
480 Mamaroneck Ave
Harrison, NY 10528-1621
Tel: (877)385-7793
Email: hbbronson@bronsonlaw.net
Total Assets: $1,100,000
Total Liabilities: $1,139,974
The petition was signed by Han Ozdenak as COO.
The Debtor stated it has no creditors holding unsecured claims.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/KZSVM2A/Venus_In_Perpetuum_Inc__nysbke-23-22128__0001.0.pdf?mcid=tGE4TAMA
VMR CONTRACTORS: Court OKs Cash Collateral Access Thru Feb 27
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized VMR Contractors Inc. to use cash
collateral on an interim basis in accordance with the budget,
through February 27, 2023.
The Court held that, to the extent the Debtor's use of cash
collateral under the order diminishes the value of the claimants'
interests in cash collateral as of the Petition Date, the claimants
are granted a post-petition security interest on the same type or
form of collateral that secured the claimants' prepetition claims
as of the Petition Date. The post-petition liens will have the same
priority, validity, and enforceability that existed as of the
Petition Date, without the need to create, file, record, or serve
any financing statements or other documents or take any other
action that state or federal law may require to validate or perfect
the liens.
As previously reported by the Troubled Company Reporter, several
entities may claim an interest in the Debtor's cash collateral.
Those potential claimants are:
1. State of Illinois, which recorded state tax liens on April
28 and June 14, 2022, in the total amount of $32,346.
2. Internal Revenue Service, which recorded federal tax liens
with the Illinois Secretary of State, including a lien November 16,
2016, in the amount of $424,956. Other tax liens also have been
recorded; the IRS has asserted it is owed $819,234. The Debtor
disputes a large portion of this amount, including an obligation
from 2015 of $560,027, which appears to be clearly erroneous
because it is wholly disproportionate to the Debtor's operations.
3. Old National Bank, whose predecessor, Bridgeview Bank
Group, filed on August 1, 2018, a financing statement with the
Illinois Secretary of State as document number 023614561. The
amount owed to Old National is approximately $160,633.
The Debtor will make an adequate protection payment of $2,500 to
the IRS by February 27, 2023. The Debtor will also make an adequate
protection payment of $1,471 to Old National Bank by February 27,
2023.
A further hearing on the matter is set for February 27 at 10 a.m.
A copy of the order is available at https://bit.ly/3RZ1la3 from
PacerMonitor.com.
About VMR Contractors
VMR Contractors is in the business of supplying and installing
rebar for road construction projects. The Debtor sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ill. Case
No. 22-14211) on December 8, 2022. In the petition signed by
Vincent Roberson, its president, the Debtor disclosed up to $1
million in assets and up to $10 million in liabilities.
Judge Benjamin Goldgar oversees the case.
William J. Factor, Esq., at Factor Law, is the Debtor's legal
counsel.
W&T OFFSHORE: S&P Upgrades ICR to 'B-', Outlook Stable
------------------------------------------------------
S&P Global Ratings raised the issuer credit rating on Houston-based
oil and gas exploration and production (E&P) company W&T Offshore
Inc. to 'B-' from 'CCC+' and the senior secured issue rating on the
2026 notes to 'B+' from 'B'. S&P removed all ratings from
CreditWatch, where S&P placed them with positive implications on
Jan. 9, 2023.
The stable outlook reflects the company's improving liquidity and
credit metrics following the redemption of the 9.75% senior secured
notes due 2023, as well as our expectation that the company will
maintain modest financial policies that maintain low debt leverage
and adequate liquidity.
W&T Offshore addressed the approaching maturity of its second-lien
notes due 2023.
On Jan. 27, W&T closed the previously announced offering of $275
million senior secured notes due 2006, and on Feb. 8 redeemed the
remaining $552.5 million of its 9.75% senior secured notes due
2023, using cash on hand and net proceeds from the new 2026 notes.
The successful refinancing alleviated near-term maturity risk and
reduced total debt by about $300 million. Combined with supportive
oil and natural gas prices, S&P now expects financial measures to
improve, such that the company will maintain a leverage ratio of
about 2.0x and funds from operations (FFO) to debt above 35% in
2023 and 2024.
S&P said, "We expect that the company will maintain adequate
liquidity and remain in compliance with its financial covenants
over the next 12 months.
"Under our base-case assumptions, we expect operating cash flow and
cash on hand to support liquidity over the next 12 months. Pro
forma cash on hand of $150 million to $200 million (based on Sept.
30, 2022, cash of $447 million, net of cash used to redeem the 2023
notes, and assuming some free cash flow during the quarter ended
Dec. 31, 2022), should support ongoing operations and modest
acquisitions. W&T also has access to a $100 million ($50 million
borrowing base) reserve based lending facility (RBL) due January
2024, provided by Calculus Lending, which is affiliated with
Chairman and CEO Tracy Krohn. We expect the RBL to be renewed until
W&T can establish a more permanent credit facility. Although the
company has traditionally used cash and borrowings from its RBL to
fund acquisitions, we expect it to refrain from transactions that
would constrain liquidity.
"The stable outlook reflects our expectation that W&T Offshore will
sustain debt to EBITDA of about 2.0x and FFO to debt above 35% over
the next 12 months, while maintaining adequate liquidity. We expect
the company to use its excess free cash flow to support
amortization on its subsidiary term loan and for modest
acquisitions.
"We could take a negative rating action on W&T Offshore if cash
flows are materially weakened from our expectations, such that the
company's FFO to debt ratio deteriorates below 30% or liquidity
materially weakens. This would most likely occur if commodity
prices were to fall below our price deck assumptions for a
sustained period without a compensating reduction in capital
spending, the company is unable to meet expected operational
performance, or it makes a larger-than-anticipated acquisition
without compensating cash flows and external financing.
"Though unlikely in the near term, we could take a positive rating
action on W&T Offshore if the company is able to expand its
production and geographic footprint in line with higher-rated
peers, while maintaining debt to EBITDA below 1.5x and FFO to debt
comfortably above 45%."
ESG credit indicators: E-4, S-2, G-2
S&P said, "Environmental factors are a negative consideration in
our credit rating analysis on W&T Offshore Inc. as the E&P industry
contends with an accelerating energy transition and adoption of
renewable energy sources. We believe falling demand for fossil
fuels will lead to declining profitability and returns for the
industry as it fights to retain and regain investors that seek
higher return investments. As an offshore producer in the Gulf of
Mexico, W&T works with many regulatory entities such as the Bureau
of Safety and Environmental Enforcement (BSEE) to ensure compliance
with environmental and safety standards. We note W&T has not
reported a significant spill over the last three years despite
heightened hurricane activity."
WALL VENTURES: Amends Unsecured Claims Pay Details
--------------------------------------------------
Wall Ventures, Inc., submitted a First Amended Combined Small
Business Chapter 11 Plan of Reorganization and Disclosure Statement
dated February 13, 2023.
Operations have continued under the supervision of Steve Wall and
have been profitable post-petition. While FedEx frequently changes
its subcontractor compensation programs, in its current form the
Debtor expects to remain profitable.
Given the equity in its rolling stock and other operating equipment
the Debtor has continued to make pre-petition regular payments to
its secured creditors and lessors. Under the Plan those payments
will continue, and the Debtor demonstrates feasibility of its Plan
by successfully generating a profit after making such payments.
Cash generated by ongoing operations shall first be used to fund
administrative expenses, including professional and case Trustee
fees and expenses, secured and lease claims, and operating
expenses. The Plan pays priority claims in accordance with the
treatment allowed under the Code. After satisfaction of these
claims, general unsecured creditors shall be paid pro rata out of
all remaining Plan payments.
The Plan shall last for 36 months following the first payment made
under it, which is due within 30 days of the date the Confirmation
Order becomes a Final Order.
Class 3 consists of Allowed General Unsecured Claims, including
Pearl Capital, which claims shall receive a pro rata payment after
satisfaction of the superior class claims treated under the Plan up
to the full amount of the allowed claim of such creditor.
Such claims shall be allowed, settled, compromised, satisfied and
paid by a quarterly distribution of the greater of $17,104 or 100%
of the net profits of the Debtor for the preceding quarter
calculated in accordance with generally accepted accounting
principles, less such priority payments, for 12 quarters following
confirmation of the Plan. Payment of such claims is expressly
subordinate to the payment of priority claims under this Plan.
Class 3 is impaired and is entitled to vote on the Plan.
Debtor shall continue to operate its business in accordance with
the projection of income, expense and cash flow attached hereto,
and shall pay its net after tax cash profit to satisfy creditor
claims.
A full-text copy of the First Amended Combined Plan and Disclosure
Statement dated February 13, 2023 is available at
https://bit.ly/3S8Omm7 from PacerMonitor.com at no charge.
Attorney for Debtor:
KC Cohen, Esq.
KC Cohen, Lawyer, PC
151 N. Delaware St., Ste. 1106
Indianapolis, IN 46204-2573
Telephone: (317) 715-1845
Facsimile: (317) 636-8686
Email: kc@smallbusiness11.com
About Wall Ventures
Wall Ventures, Inc. operates a trucking service that is a specialty
last mile delivery contractor for FedEx. The Debtor filed a Chapter
11 bankruptcy petition (Bankr. S.D. Ind. Case No. 22-03961) on Oct.
4, 2022, with as much as $1 million in both assets and liabilities.
Judge James M. Carr oversees the case. The Debtor is represented
by KC Cohen, Lawyer, PC.
WILLIAM HOLDINGS: Has Deal on Cash Collateral Access
----------------------------------------------------
Howard M. Ehrenberg, the Chapter 11 Trustee of William Holdings,
LLC, advised the U.S. Bankruptcy Court for the Central District of
California, Los Angeles Division, that it has reached an agreement
with Axos Bank regarding the Debtor's use of cash collateral and
the parties now desire to memorialize the terms of this agreement
into an agreed order.
Axos asserts a first priority security interest in the property
located at Ben Avenue, Los Angeles, California and the rents
generated by it.
On February 1, 2023, Axos obtained a court order granting Axos
binding in rem stay relief regarding the Ben Property in the
bankruptcy action.
While Axos now proceeds with its state law remedies with respect to
the Ben Property, the Trustee has requested that Axos permit him to
use the cash collateral generated by the Ben Property for the
payment of certain obligations relating to the Ben Property.
Axos consents to the Trustee's use of the rents generated from the
Ben Property through May 31, 2023, or until the Property is sold by
the Trustee's sale, whichever occurs first, for the payment of
ordinary and necessary expenses as set forth in the budget.
In addition to the expenses set forth in the Budget, for each of
the Properties, the parties agreed that the Trustee may use cash
collateral to pay management expenses relating to that property,
equal to 8% of the gross total of income actually received from
rent, laundry, and parking generated by that property during the
prior month.
Notwithstanding the amount set forth in the loan documents and
without prejudice to Axos' rights to later demand the exact amount
due, to the extent the Trustee possesses rents from the Ben
Property that allow the payments to be made, the Trustee will make
fixed monthly payments of $9,356 to Axos, on or before the 10th of
each month, commencing on February 10, 2023.
A copy of the stipulation is available at https://bit.ly/3lBSM8S
from PacerMonitor.com.
About William Holdings LLC
William Holdings LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. C.D. Cal. Case No. 22-14708) on August 29,
3033. In the petition filed by Kameron Segal, as CEO, the Debtor
reports estimated assets and liabilities between $10 million and
$50 million each.
Judge Deborah J. Saltzman oversees the case.
The Debtor is represented by the Law Offices of Michael Jay
Berger.
WORLD WIDE TECHNOLOGY: Moody's Assigns First Time 'Ba2' CFR
-----------------------------------------------------------
Moody's Investors Service assigned a first time Ba2 Corporate
Family Rating and Ba2-PD Probability of Default Rating to World
Wide Technology Holding Co., LLC (WWT) or (World Wide Technology).
Moody's also assigned a Ba3 instrument rating to the proposed
senior secured first lien term loan. The outlook is stable.
Net proceeds from the term loan will be used to refinance existing
indebtedness, pay associated fees and expenses, finance working
capital needs, and add cash for general corporate purposes.
Assignments:
Issuer: World Wide Technology Holding Co., LLC
Corporate Family Rating, Assigned Ba2
Probability of Default Rating, Assigned Ba2-PD
Senior Secured 1st Lien Term Loan, Assigned Ba3 (LGD5)
Outlook Actions:
Issuer: World Wide Technology Holding Co., LLC
Outlook, Assigned Stable
RATINGS RATIONALE
The Ba2 CFR reflects WWT's scale, growth profile, and low financial
leverage, balanced by inconsistent free cash flow generation due to
low margins and material shareholder distributions. Moody's expects
pro-forma adjusted debt leverage of approximately 2.2x driven by
growth and increased services revenue mix offset by reinvestment in
sales and engineering personnel. The rating also factors in the
potential for WWT to exercise its option to redeem certain
preferred units held by a third-party investor and pursue
acquisitions which could increase leverage over the intermediate
term.
WWT benefits from a leading market position as an information
technology value added reseller to large enterprises and government
clients in the U.S. The company has good customer relationships as
evidenced by the 12-year average tenure of its top 50 clients and
an approximately 85% retention rate, supporting growth and revenue
visibility. WWT is a leading distribution partner of major IT
original equipment manufacturers including Cisco Systems, Inc.
(Cisco) and Dell Technologies, Inc. (Dell), whose products
represented nearly half of revenue. A heavy product mix (95% of
revenue in 2021) constrains WWT's (Moody's adjusted) EBITDA margin,
providing limited financial flexibility, although mitigated by
access to committed sources of external liquidity.
WWT has good liquidity, supported by $119 million of cash at the
close of the transaction, which Moody's expects will be maintained
at approximately $100 million on an ongoing basis. In addition,
WWT has access to an approximate $1.2 Billion ABL working capital
credit facility expiring in June 2024. The facility will be
approximately $91 million drawn pro forma for anticipated repayment
of $633 million in outstanding borrowings at December 31, 2022. The
proposed term loan does not possess negative financial maintenance
covenants. The ABL working capital credit facility has a minimum
tangible net worth and a minimum fixed charge coverage ratio
covenant. Moody's expects WWT will maintain a strong cushion on an
ongoing basis.
The stable ratings outlook reflects Moody's view that enterprise IT
demand will support mid-single digit revenue growth, supported by
double-digit services growth, albeit from a small base. Moody's
also anticipates adjusted EBITDA margins sustained at low single
digit percentage range resulting in leverage of around 2x over the
next year.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The ratings could be upgraded if increased services mix leads to
EBITDA margin expansion to approaching mid-single digit or higher
while maintaining total debt to EBITDA at or below 3x (Moody's
adjusted). The company would also need to maintain a very good
liquidity position and exhibit prudent financial policies to be
considered for an upgrade.
The ratings could be downgraded if WWT does not generate positive
organic revenue growth or if EBITDA growth is insufficient to
maintain consistent positive free cash flow and total debt to
EBITDA exceeds 4x on a sustained basis. WWT could also be
downgraded if market share erodes, liquidity weakens, or the
company shifts to aggressive financial policies.
STRUCTURAL CONSIDERATIONS
The Ba3 rating on WWT's proposed senior secured first lien term
loan due 2030 reflects floor plan financing (averaging
approximately $1.2 billion outstanding over the past three years)
and the ABL working capital line's superior claim position to
certain account receivables, inventory and cash accounts. Moody's
treats a discounted portion of the balance of average trade
payables less the average outstanding floor plan financing balance
as a loss absorbing unsecured claim.
As proposed, the new credit facilities are expected to provide
covenant flexibility that if utilized could negatively impact
creditors. Notable terms include the following:
Incremental debt capacity of up $375 million or 100% of LTM EBITDA,
whichever is greater, plus unlimited amounts subject to a 2.5x net
first lien leverage ratio (if pari passu secured). Amounts up to
the greater of $175 million and 50% of EBITDA may be incurred with
an earlier maturity date than the initial term loan.
The credit agreement permits the transfer of specified assets to
unrestricted subsidiaries up to the carve-out capacities, subject
to "blocker" provisions which provide that no intellectual property
that is material to the business of the company or any of the other
guarantors, or that is otherwise of material value, could be
assigned, transferred, or exclusively licensed or sublicensed to
any unrestricted subsidiary.
Non-wholly owned subsidiaries are not required to provide
guarantees; dividends or transfers resulting in partial ownership
of subsidiary guarantors could jeopardize guarantees, with no
explicit protective provisions limiting such guaranteed releases.
The credit agreement provides some limitations on up-tiering
transactions, including the requirement that 100% of the lenders
consent to any subordination of the lien on a material portion of
the collateral (subject to exceptions to be agreed) and/or the
express subordination of any loan in right of payment to any other
indebtedness.
The proposed terms and the final terms of the credit agreement may
be materially different.
Governance is a key consideration for the ratings. World Wide
Technology's Credit Impact Score is moderately negative, reflecting
moderate environmental and social risks, which are in line with the
distribution and supply chain services sector. The CIS score also
incorporates moderately negative governance risk as a result of
World Wide Technology's financial strategy and controlling
ownership.
World Wide Technology has moderately negative exposure to
environmental risks, including carbon transition risks as a large,
mainly North American IT distributor, solutions provider, and
value-added reseller. The carbon transition risk relates to the
need to move product from point A to point B and the costs
associated with third party providers of delivery transitioning
away from gas and diesel engines. There is some geographic
diversification. However, World Wide Technology is reliant on its
two largest partners, Cisco and Dell, for more than 40% of revenue.
Beyond these two vendors, there is less reliance on any single
program. This revenue diversity reduces risk in a scenario in which
a given program is impacted by an environmental event.
Social risks are moderately negative, primarily related to
potential disruptions from availability of highly skilled labor,
labor standards, wage or benefits demands, and legal issues
associated with its workforce.
Governance risks are moderately negative. World Wide Technology is
majority controlled by chairman and founder Dave Steward. He and
two of his appointees sit on the five-member board. The CEO and
co-founder who has a minority stake also sits on the board. BDT
capital appoints one director. However, the company adheres to a
conservative financial policy characterized by a long-term leverage
target of less than 2x. The company has a long track record since
its founding in 1990 and remains founder controlled and led.
The principal methodology used in these ratings was Distribution &
Supply Chain Services Industry published in June 2018.
Headquartered in St. Louis, MO, World Wide Technology is an IT
value added reseller for enterprises, service providers and
government clients. WWT generated $16.9 billion of revenue in 2022.
The company is majority owned and controlled by co-founder and
chairman David Steward and his family.
WORLD WIDE TECHNOLOGY: S&P Assigns 'BB' ICR, Outlook Stablez
------------------------------------------------------------
S&P Global Ratings assigned a 'BB' issuer credit rating to World
Wide Technology Holding Co. LLC (WWT), a St. Louis-based provider
of information technology supply chain solutions. S&P also assigned
a 'BB' issue-level and '4' recovery rating to the company's
proposed term loan, reflecting its expectation for an average
recovery in the event of a default.
S&P said, "The stable outlook reflects our expectation for steady
mid-single-digit percent revenue and earnings growth, resulting in
S&P Global Ratings-adjusted net leverage in the mid-3x area in 2023
and the low-3x area in 2024 with adequate liquidity despite
intrayear working capital swings.
"We expect WWT will maintain S&P Global Ratings-adjusted net
leverage in the 3.25x-3.5x area, though working capital
fluctuations could cause cash flow and leverage volatility.
"Following the transaction, S&P Global Ratings-adjusted leverage
will measure 3.6x. We expect leverage will steadily decline toward
the low-3x area by year-end 2024 through mid-single-digit percent
revenue and EBITDA expansion. Healthy growth in demand and backlog
will offset modest margin contraction from mix shift and personnel
investments.
"While we forecast healthy earnings growth, cash flow conversion
will be challenged by rising interest costs and ongoing supply
chain constraints that contribute to growth in working capital.
During 2022, a sharp increase in demand coupled with supply chain
logistics challenges forced WWT to draw about $566 million on its
ABL revolving credit facility to fund working capital, increasing
adjusted leverage as defined in the credit agreement about 1.6x.
Our ratings reflect our view that while leverage could increase
above the 3.5x area intrayear to support working capital
investments, such increases are likely to remain temporary.
"We view the large working capital increase in 2022 as primarily
driven by pent-up demand, and that WWT's needs should moderate if
revenue growth decelerates.
"In 2022, the relationship between growth in WWT's revenues and
working capital remained largely consistent with previous years.
This indicates that most of the recent increase in working capital
can be explained by the rapid growth in revenues and customer
demand, with some contribution from supply chain constraints and
the associated reduction in inventory turns. While we expect supply
chain constraints to persist in the near term, the company's
working capital needs will ease as global demand for information
technology (IT) cools. Global IT spend grew 13.7% in 2021, from
3.0% in 2020 due to pent-up demand, resulting in sharp growth in
WWT's revenue and inventory in 2022. We believe global IT spending
growth moderated to about 2.5% in 2022, and WWT's inventory growth
began to slow in late 2022. For 2023, we expect global IT spending
growth of about 3.3% despite macroeconomic weakness, as increasing
cloud and software sales offset pockets of weakness in hardware and
semiconductors. Consequently, we forecast WWT's revenue growth to
normalize toward the mid- to high-single-digit percent area,
resulting in more modest working capital growth as inventory turns
also steadily improve. In our view, the approximately $1 billion in
starting cash and available revolving credit capacity will
adequately support WWT's intrayear needs in 2023."
WWT's significant customer and vendor concentration and
transactional revenue model limit near-term earnings visibility.
The company's top 20 customers account for about 55% of revenues
and its five largest account for about 30%. Long-term contracted
revenues with these customers are minimal. Most volumes are highly
transactional, which reduces visibility into the top-line
contribution of key clients. Contracts require customers to take or
pay for ordered inventory, however no minimum volumes are required.
That said, the remainder of the company's revenues are well
distributed across about 1,200 customers, which supports visibility
to some extent. As of fiscal 2021, about 61% of WWT's total revenue
was concentrated with its top five original equipment manufacturer
partners, with Cisco Systems Inc. (AA-/Stable/A-1+) representing
more than half of that. This concentration could cause earnings
volatility if there is low adoption of new products or longer
refresh cycles. Still, S&P generally views exposure to large,
well-regarded manufacturers such as Cisco or Hewlett Packard
Enterprise Co. (HPE; BBB/Stable/A-2) as favorable.
WWT's largest customers are blue-chip, telecommunication service
providers such as AT&T Inc., multinational enterprises such as
Microsoft Corp., and major government agencies including the U.S.
Department of Defense that are likely to maintain their investment
in support of key technological trends through the business cycle.
These include cloud, cyber security, automation, and digital
transformation. In the event a key customer or vendor relationship
is lost, S&P believes WWT could reduce its cost base to insulate
earnings to some extent because most of its cost of goods sold is
tied to committed inventory purchases and most of its operating
expenses are tied to variable labor expense.
WWT's scale benefits and service breadth provide a competitive
advantage; however, its EBITDA margins lag those of peers.
Its superior scale as compared to Presidio LLC (B/Stable--) and
Ahead DB Holdings LLC (B/Stable/--) by revenue and EBITDA enables
WWT to maximize volume discounts for product resale and improve
market share and status with key industry manufacturers including
Cisco, HPE, Dell Technologies Inc., and NetApp Inc. The company's
geographic diversity and global reach strengthen its capabilities
and reinforce its brand recognition, which should enable it to
expand faster than GDP over time as it taps the large and growing
$1.3 trillion global addressable market for IT spending.
By winning lower-margin product resale business with large,
blue-chip enterprise and global service providers, WWT has
increased its top line to about $17 billion in 2022. That said, its
S&P Global Ratings-adjusted EBITDA margins lag those of value-added
reseller peers and other rated distributors significantly. Other
rated competitors also generally earn a larger share of total
revenues from higher margin services offerings including cloud or
cyber consulting, strategic resourcing, and infrastructure
services. Healthy growth in these offerings should support EBITDA
margins. However, we still expect about 10-20 basis points of
EBITDA margin compression over our forecast horizon due to the
upfront personnel investments required to expand services, as well
as faster growth among lower-margin global enterprise and global
service providers than higher-margin public sector customers.
S&P views WWT's family ownership structure as being associated with
a long-term investment horizon, rather than as a private equity
financial sponsor, which supports its assessment of financial
policy risk.
The company is managed since its 1990 inception by two families,
the Stewards and Kavanaughs, with David Steward serving as chairman
of the board and Jim Kavanaugh as CEO. In 2018, BDT Capital
completed a minority investment in the business through the
ownership of preferred shares. The five-member board includes the
chairman, CEO, and three independent directors. S&P said, "In our
opinion, independent board oversight is an important corporate
governance objective, and research into family-owned companies
suggests that the most valuable businesses are those in which
independent directors balance family board representation. We do
not expect WWT's owners will exit their investment in the near
term."
S&P said, "Historically, the company has maintained a conservative
financial policy and intends to deleverage through EBITDA growth to
the 2x area as defined under the credit agreement. While gross
leverage measures 2.2x, we believe WWT will remain fiscally
conservative in managing its business. Management has indicated
there is limited appetite or potential for transactions that would
raise leverage. Still, we expect our adjusted leverage calculation
will remain about 1.5x higher than WWT's calculation in 2023 due
primarily to our debt adjustments for operating leases, preferred
equity, and its accounts receivable factoring program. WWT has
historically distributed about $100 million-$200 million annually
to shareholders to fund discretionary profit-sharing distributions
and the tax liabilities of its shareholders. We expect the company
will continue to make these payments, delaying improvement in
credit metrics.
"The stable outlook reflects our expectation for steady
mid-single-digit percent revenue and earnings growth, resulting in
S&P Global Ratings-adjusted net leverage in the mid-3x area in 2023
and the low-3x area in 2024 with adequate liquidity despite
intrayear working capital swings."
S&P could lower its rating on WWT if leverage approaches 4x and
remains elevated on a sustained basis. This could occur with:
-- Larger than anticipated reliance on the ABL revolver to fund
working capital growth;
-- A downturn in global IT spending, rapid technological shift,
large customer loss, operational or service related issues, or
increased competition result in sustained EBITDA declines; or
-- The company adopts a more aggressive financial policy by
pursuing large debt-funded acquisitions or shareholder returns.
Although unlikely over the next 12 months, S&P could raise its
rating on WWT if the company:
-- Maintains its track record of high revenue growth, improves its
mix of services revenue, and meaningfully expands its EBITDA
margins; and
-- Commits to a more conservative financial policy, reducing
leverage well below 3x on a sustained basis.
YAK ACCESS: Moody's Lowers CFR & First Lien Loans to 'Ca'
---------------------------------------------------------
Moody's Investors Service downgraded Yak Access, LLC's Corporate
Family Rating to Ca from Caa1, its Probability of Default Rating to
C-PD from Caa1-PD, its first lien credit facilities' ratings -
including its 1st lien Term Loan and its revolving line of credit -
to Ca from B3, and the rating on its 2nd lien Term Loan to C from
Caa3. The rating outlook remains negative.
The downgrades reflect governance considerations, including
financial strategy and risk management, following the company's
announcement that it has entered into a restructuring support
agreement ("RSA") with holders of nearly 78% of its funded debt
obligations and its majority equity holder.
Downgrades:
Issuer: Yak Access, LLC
Corporate Family Rating, Downgraded to Ca from Caa1
Probability of Default Rating, Downgraded to C-PD
from Caa1-PD
Senior Secured First Lien Bank Credit Facility,
Downgraded to Ca (LGD3) from B3 (LGD3)
Senior Secured Second Lien Bank Credit Facility,
Downgraded to C (LGD6) from Caa3 (LGD5)
Outlook Actions:
Issuer: Yak Access, LLC
Outlook, Remains Negative
RATINGS RATIONALE
Yak's Ca CFR reflects very high likelihood of a default given the
proposed RSA, which is expected to be executed through an
out-of-court exchange. Execution of the RSA would be considered an
event of default under Moody's definition. The proposed RSA
includes exchange of existing holders into a combination of new
loans maturing in 2028 and equity, elimination of over $500 million
of debt, new liquidity infusion of $121 million, and placement of a
new revolving credit facility.
Yak's operating performance has deteriorated over the past few
years due to weakness in the midstream pipeline sector which led to
lower mat utilization from project delays and reduced new project
opportunities, along with lower margins on mat sales and fewer new
mat leases.
The negative outlook reflects the likelihood that the RSA will be
completed, which would be considered an event of default under
Moody's definition. The company is not expected to have sufficient
liquidity to run its business without completion of the
transaction.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
A rating upgrade remains unlikely given the proposed transaction.
Ratings could be downgraded if expectations for Yak's family
recovery rate deteriorates further or the company files for
bankruptcy.
Yak Access, LLC, headquartered in East Columbia, Mississippi, is a
specialty equipment leasing and logistics company focused on
temporary access solutions to remote construction sites mostly
serving energy infrastructure repair and development work in North
America.
The principal methodology used in these ratings was Construction
published in September 2021.
[^] Recent Small-Dollar & Individual Chapter 11 Filings
-------------------------------------------------------
In re Michael G Tafoya and Dyanne F Jakos
Bankr. D. Ariz. Case No. 23-00727
Chapter 11 Petition filed February 6, 2023
represented by: Michael Tafoya, Esq.
In re Unique Cabinet Coatings, LLC
Bankr. M.D. Ga. Case No. 23-30061
Chapter 11 Petition filed February 6, 2023
See
https://www.pacermonitor.com/view/TP4EQYY/Unique_Cabinet_Coatings_LLC__gambke-23-30061__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re Robert Adam Baughman
Bankr. M.D. Tenn. Case No. 23-00436
Chapter 11 Petition filed February 6, 2023
represented by: Michael Abelow, Esq.
In re Noah Henderson Stewart
Bankr. M.D. Tenn. Case No. 23-00437
Chapter 11 Petition filed February 6, 2023
In re Cleofas Leal
Bankr. C.D. Cal. Case No. 23-10676
Chapter 11 Petition filed February 7, 2023
represented by: Onyinye Anyama, Esq.
In re William Jacob Miller
Bankr. E.D. Cal. Case No. 23-10224
Chapter 11 Petition filed February 7, 2023
represented by: Peter L. Fear, Esq.
In re Independent Development Group LLC
Bankr. N.D. Ga. Case No. 23-51296
Chapter 11 Petition filed February 7, 2023
See
https://www.pacermonitor.com/view/XR4CPBI/Independent_Development_Group__ganbke-23-51296__0001.0.pdf?mcid=tGE4TAMA
Case Opened
In re R.S. 2010 Properties Co.
Bankr. N.D. Ill. Case No. 23-80135
Chapter 11 Petition filed February 7, 2023
See
https://www.pacermonitor.com/view/Q5RJW3I/RS_2010_Properties_Co__ilnbke-23-80135__0001.0.pdf?mcid=tGE4TAMA
represented by: Howard Peritz, Esq.
THE LAW OFFICES OF HOWARD PERITZ
E-mail: howard@howardperitzlaw.com
In re R & J 2010 Company
Bankr. N.D. Ill. Case No. 23-80136
Chapter 11 Petition filed February 7, 2023
See
https://www.pacermonitor.com/view/2WEMP6Q/R__J_2010_Company__ilnbke-23-80136__0001.0.pdf?mcid=tGE4TAMA
represented by: Howard Peritz, Esq.
THE LAW OFFICES OF HOWARD PERITZ
E-mail: howard@howardperitzlaw.com
In re Bernard Steven Hooks
Bankr. E.D. Mo. Case No. 23-40411
Chapter 11 Petition filed February 7, 2023
In re JRP Capital 31 Mariner Pl, LLC
Bankr. D.N.J. Case No. 23-11018
Chapter 11 Petition filed February 7, 2023
See
https://www.pacermonitor.com/view/AA73VVA/JRP_Capital_31_Mariner_Pl_LLC__njbke-23-11018__0001.0.pdf?mcid=tGE4TAMA
represented by: Robert C. Nisenson, Esq.
ROBERT C. NISENSON, L.L.C.
E-mail: rnisenson@aol.com
In re NACC Disaster Services
Bankr. S.D. Tex. Case No. 23-30458
Chapter 11 Petition filed February 7, 2023
See
https://www.pacermonitor.com/view/F6U67DY/NACC_Disaster_Services__txsbke-23-30458__0001.0.pdf?mcid=tGE4TAMA
represented by: Jack N. Fuerst, Esq.
JACK N. FUERST, ATTORNEY AT LAW
E-mail: jfuerst@sbcglobal.net
In re Becky Joy Ortega
Bankr. S.D. Tex. Case No. 23-30453
Chapter 11 Petition filed February 7, 2023
In re Tommy Dewayne Dobson and Anne Christine Dobson
Bankr. W.D. Va. Case No. 23-60148
Chapter 11 Petition filed February 7, 2023
In re Trades by Taylor LLC
Bankr. N.D. Ala. Case No. 23-80212
Chapter 11 Petition filed February 8, 2023
See
https://www.pacermonitor.com/view/33MGYYI/Trades_by_Taylor_LLC__alnbke-23-80212__0001.0.pdf?mcid=tGE4TAMA
represented by: Stuart M. Maples, Esq.
MAPLES LAW FIRM, PC
E-mail: kpickett@mapleslawfirmpc.com
In re Pacific Islander Beer Company LLC
Bankr. S.D. Cal. Case No. 23-00340
Chapter 11 Petition filed February 8, 2023
See
https://www.pacermonitor.com/view/ITT65NQ/Pacific_Islander_Beer_Company__casbke-23-00340__0001.0.pdf?mcid=tGE4TAMA
represented by: Jeffrey D. Schreiber, Esq.
THE SCHREIBER LAW FIRM
E-mail:
jschreiber@theschreiberlawdfirm.co
In re 2 Elk Services LLC
Bankr. D. Colo. Case No. 23-10430
Chapter 11 Petition filed February 8, 2023
See
https://www.pacermonitor.com/view/4DCNS6I/2_Elk_Services_LLC__cobke-23-10430__0001.0.pdf?mcid=tGE4TAMA
represented by: Stephen Berken, Esq.
BERKEN CLOYES, PC
E-mail: stephenberkenlaw@gmail.com
In re Tavern on LaGrange Corp
Bankr. N.D. Ill. Case No. 23-01687
Chapter 11 Petition filed February 8, 2023
See
https://www.pacermonitor.com/view/7BA4H7I/Tavern_on_LaGrange_Corp__ilnbke-23-01687__0001.0.pdf?mcid=tGE4TAMA
represented by: J. Kevin Benjamin, Esq.
BENJAMIN LEGAL SERVICES
E-mail: attorneys@benjaminlaw.com
In re 3614 36th Ave LLC
Bankr. E.D.N.Y. Case No. 23-40439
Chapter 11 Petition filed February 8, 2023
See
https://www.pacermonitor.com/view/AYPRH7Q/3614_36th_Ave_LLC__nyebke-23-40439__0001.0.pdf?mcid=tGE4TAMA
represented by: Julio E. Portilla, Esq.
LAW OFFICE OF JULIO E. PORTILLA, P.C.
E-mail: jp@julioportillalaw.com
In re New York City, Inc.
Bankr. E.D.N.Y. Case No. 23-70440
Chapter 11 Petition filed February 8, 2023
See
https://www.pacermonitor.com/view/TRRTPFI/New_York_City_Inc__nyebke-23-70440__0001.0.pdf?mcid=tGE4TAMA
Filed Pro Se
In re T.G. Holdings, LLC dba Cannon's Chophouse
Bankr. W.D. Pa. Case No. 23-10061
Chapter 11 Petition filed February 8, 2023
See
https://www.pacermonitor.com/view/XPAHWZY/TG_Holdings_LLC_dba_Cannons_Chophouse__pawbke-23-10061__0001.0.pdf?mcid=tGE4TAMA
represented by: Michael P. Kruszewski, Esq.
QUINN, BUSECK, LEEMHUIS, TOOHEY,
& KROTO, INC.
In re Keith Strange LLC
Bankr. E.D. Ark. Case No. 23-10357
Chapter 11 Petition filed February 9, 2023
See
https://www.pacermonitor.com/view/KUKGRRQ/Keith_Strange_LLC__arebke-23-10357__0001.0.pdf?mcid=tGE4TAMA
represented by: Frank H. Falkner, Esq.
DILKS LAW FIRM
E-mail: frank@dilkslawfirm.com
In re Alfonso Enrique Moncada and Alejandra Beatrice Barrera
Bankr. S.D. Fla. Case No. 23-11074
Chapter 11 Petition filed February 9, 2023
represented by: Stan Riskin, Esq.
In re Federico Luis Arguelles
Bankr. M.D. Ga. Case No. 23-50167
Chapter 11 Petition filed February 9, 2023
In re Allen Dana
Bankr. D. Nev. Case No. 23-10451
Chapter 11 Petition filed February 9, 2023
In re Alex Kolker and Inna Kamlet
Bankr. E.D.N.Y. Case No. 23-40462
Chapter 11 Petition filed February 9, 2023
represented by: Alla Kachan, Esq.
In re Chimichurri Chicken Corp.
Bankr. E.D.N.Y. Case No. 23-40453
Chapter 11 Petition filed February 9, 2023
See
https://www.pacermonitor.com/view/GOPIE2I/Chimichurri_Chicken_Corp__nyebke-23-40453__0001.0.pdf?mcid=tGE4TAMA
represented by: Alla Kachan, Esq.
LAW OFFICES OF ALLA KACHAN, P.C.
E-mail: alla@kachanlaw.com
In re Yuda Matatov
Bankr. E.D.N.Y. Case No. 23-40463
Chapter 11 Petition filed February 9, 2023
represented by: Alla Kachan, Esq.
In re Zvi Ben-Yosef
Bankr. E.D.N.Y. Case No. 23-40451
Chapter 11 Petition filed February 9, 2023
represented by: Alla Kachan, Esq.
In re Karen Lee Roberts
Bankr. N.D. Cal. Case No. 23-40151
Chapter 11 Petition filed February 10, 2023
In re The Commons at Johns Creek Owners Association, Inc.
Bankr. N.D. Ga. Case No. 23-20157
Chapter 11 Petition filed February 10, 2023
See
https://www.pacermonitor.com/view/3V6KVUQ/The_Commons_at_Johns_Creek_Owners__ganbke-23-20157__0001.0.pdf?mcid=tGE4TAMA
represented by: Mathew A. Schuh, Esq.
MATHEW A. SCHUH, P.C.
E-mail: matt@schuhpc.com
In re Jivana, LLC
Bankr. D. Md. Case No. 23-10893
Chapter 11 Petition filed February 10, 2023
See
https://www.pacermonitor.com/view/ADFUEQI/Jivana_LLC__mdbke-23-10893__0001.0.pdf?mcid=tGE4TAMA
represented by: Richard M. McGill, Esq.
LAW OFFICE OF RICHARD M. MCGILL
E-mail: mcgillrm@aol.com
In re Feehan Enterprises, LLC
Bankr. D.N.J. Case No. 23-11108
Chapter 11 Petition filed February 10, 2023
See
https://www.pacermonitor.com/view/CRKDBBA/FEEHAN_ENTERPRISES_LLC__njbke-23-11108__0001.0.pdf?mcid=tGE4TAMA
represented by: Bruce W. Radowitz, Esq.
BRUCE W. RADOWITZ, ESQ. PA
E-mail: bradowitz@comcast.net
In re Mehling Orthopedics LLC
Bankr. D.N.J. Case No. 23-11121
Chapter 11 Petition filed February 10, 2023
See
https://www.pacermonitor.com/view/HUY5JYQ/Mehling_Orthopedics_LLC__njbke-23-11121__0001.0.pdf?mcid=tGE4TAMA
represented by: Melinda D. Middlebrooks, Esq.
MIDDLEBROOKS SHAPIRO, P.C.
E-mail:
middlebrooks@middlebrooksshapiro.com
In re Anointed Security Services Inc.
Bankr. D.P.R. Case No. 23-00365
Chapter 11 Petition filed February 10, 2023
See
https://www.pacermonitor.com/view/MJ3CT3I/ANOINTED_SECURITY_SERVICES_INC__prbke-23-00365__0001.0.pdf?mcid=tGE4TAMA
represented by: Hector J. Figueroa Vincenty, Esq.
HECTOR FIGUEROA VINCENTY ESQ.
In re Rafael Antonio Brito-Arache
Bankr. D.P.R. Case No. 23-00366
Chapter 11 Petition filed February 10, 2023
represented by: Luis Flores Gonzalez, Esq.
In re John Daniel Cannon and Corie Michelle Cannon
Bankr. S.D. Tex. Case No. 23-30488
Chapter 11 Petition filed February 10, 2023
represented by: Margare McClure, Esq.
Email: Margaret@mmmcclurelaw.com
In re Danny & Corie Enterprises, Inc.
Bankr. S.D. Tex. Case No. 23-30487
Chapter 11 Petition filed February 10, 2023
See
https://www.pacermonitor.com/view/IYWVC4I/Danny__Corie_Enterprises_Inc__txsbke-23-30487__0001.0.pdf?mcid=tGE4TAMA
represented by: Margaret M. McClure, Esq.
LAW OFFICE OF MARGARET M. MCCLURE
E-mail: margaret@mmmcclurelaw.com
In re Dennis Sprenger
Bankr. D. Ariz. Case No. 23-00860
Chapter 11 Petition filed February 13, 2023
represented by: Thomas Allen, Esq.
In re Silva Chamanian
Bankr. C.D. Cal. Case No. 23-10779
Chapter 11 Petition filed February 13, 2023
represented by: Juliet Oh, Esq.
In re 1255 LLC
Bankr. S.D. Fla. Case No. 23-11116
Chapter 11 Petition filed February 13, 2023
See
https://www.pacermonitor.com/view/Z5X22QA/1255_LLC__flsbke-23-11116__0001.0.pdf?mcid=tGE4TAMA
represented by: Joel Aresty, Esq.
JOEL M. ARESTY PA
E-mail: aresty@icloud.com
In re Michael Joseph McMahon and Sergei Nikoshchenkov
Bankr. S.D. Fla. Case No. 23-11154
Chapter 11 Petition filed February 13, 2023
represented by: Joel Aresty, Esq.
In re EvoHealth, LLC
Bankr. E.D.N.C. Case No. 23-00396
Chapter 11 Petition filed February 13, 2023
See
https://www.pacermonitor.com/view/CUXB7NY/EvoHealth_LLC__ncebke-23-00396__0001.0.pdf?mcid=tGE4TAMA
represented by: Philip M. Sasser, Esq.
SASSER LAW FIRM
E-mail: travis@sasserbankruptcy.com
In re Eric Jale El Allen
Bankr. W.D. Tex. Case No. 23-50150
Chapter 11 Petition filed February 13, 2023
represented by: Joyce W. Lindauer, Esq.
JOYCE W. LINDAUER ATTORNEY, PLLC
E-mail: joyce@joycelindauer.com
*********
Monday's edition of the TCR delivers a list of indicative prices
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