/raid1/www/Hosts/bankrupt/TCR_Public/230313.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Monday, March 13, 2023, Vol. 27, No. 71
Headlines
225 BOWERY LLC: Seeks to Hire Young Conaway as Co-Counsel
2M RESEARCH SERVICES: Taps Roquemore Skierski as Bankruptcy Counsel
5280 AURARIA: Wins Final OK on Cash Collateral Access
86-55 GRAND REALTY: Voluntary Chapter 11 Case Summary
ACC AUTO 2022-A: Moody's Lowers Rating on Class D Notes to B3
ACJK INC: Seeks Cash Collateral Access
AFTERSHOCK COMICS: Taps Exceptional Leaders as Financial Advisor
AGAVE AZUL: Taps The Law Offices of Michael J. Harker as Counsel
AGEX THERAPEUTICS: Juvenescence Ltd Has 75.6% Stake as of Feb. 15
AGILITI INC: S&P Affirms 'B+' Issuer Credit Rating, Outlook Pos.
AKORN PHARMACEUTICALS: Closes All Sites After No Buyer Found
ARU PHARMA: Files for Chapter 11 for Wind-Down
ARUZE GAMING: Seeks to Hire Larson & Zirzow as Legal Counsel
ARUZE GAMING: Taps Armory Securities as Investment Banker
ATLANTIC & PACIFIC: Bid to Dismiss Michele Brown's Appeal Granted
AVENTIS SYSTEMS: Court OKs Cash Collateral Access
AVENTIS SYSTEMS: Taps Gardner Groff & Greenwald as Special Counsel
AVENTIS SYSTEMS: Taps Nichols Cauley & Associates as Accountant
B&B BUILDERS: Case Summary & Four Unsecured Creditors
BARFIELD CONTRACTING: Taps BransonLaw as Bankruptcy Counsel
BARTECH GROUP: Court OKs Cash Collateral Access Thru March 31
BED BATH & BEYOND: Raises $135 Million More for Turnaround
BELLA RESTAURANT: Seeks to Hire Penachio Malara as Legal Counsel
BELTWAY PLAZA: Court OKs Cash Collateral Access Thru March 20
BENNU ENTERPRISES: Continued Operations to Fund Plan
BERNSOHN & FETNER: Taps Cullen and Dykman as Special Counsel
BJ SERVICES: Court Dismissed Keystone's Counterclaims
BLANK LABEL: Case Summary & Largest Unsecured Creditors
BREAKFORM RESIDENTIAL: Seeks to Hire Sherwood Partners, Appoint CRO
BREAKFORM RESIDENTIAL: Taps Greenspoon Marder as Legal Counsel
BREITBURN OPERATING: Temporary Injunction Order Reversed on Appeal
BRIDGER STEEL: Files for Chapter 11 Bankruptcy With $17M in Debt
BSPV-PLANO LLC: Asset Sale Proceeds to Fund Bond Trustee's Plan
CAESARS ENTERTAINMENT: S&P Upgrades ICR to 'B+', Outlook Stable
CANO HEALTH: Moody's Cuts CFR to Caa3, Outlook Stable
CELSIUS NETWORK: Begins Customer Withdrawals After Getting Court OK
CHASE CUSTOM HOMES: Taps Bernstein Shur Sawyer & Nelson as Counsel
COMMUNITY HEALTH: S&P Upgrades ICR to 'CCC+', Outlook Negative
COMMUNITY HOME: Trustee Taps National Loan as Loan Sale Consultant
CORE SCIENTIFIC: Committee Taps Gray Reed as Conflicts Counsel
CORE SCIENTIFIC: Parties Partly Agree to Equity Committee
CORIZON HEALTH: Rogers' Claims vs. Dixon and Centurion Dismissed
CRED INC: Court Rejects Third-Party Assignment Claims Procedures
CT TECHNOLOGIES: Moody's Alters Outlook on 'B3' CFR to Negative
CWI CHEROKEE: Case Summary & 20 Largest Unsecured Creditors
DEALER PRODUCTS: Taps Pathfinder Group as Sales Agent
DECORSTANDARD CORP: Seeks Cash Collateral Access
DEI VITAE: Taps Michael Bowers of Middleswarth as CRO
DIAMOND (BC) BV: Moody's Puts 'B2' CFR Under Review for Downgrade
DIAMOND (BC) BV: S&P Places 'B' ICR on Watch Neg. on Olympus Deal
DIGITAL AEROLUS: Voluntary Chapter 11 Case Summary
DIJ GROUP: Case Summary & Six Unsecured Creditors
DOHENY EQUITIES: Voluntary Chapter 11 Case Summary
DUNBAR PARTNERS: Taps Jeffrey Zwick & Associates as Special Counsel
DUNBAR PARTNERS: Taps Leech Tishman Robinson Brog as Counsel
EL PESCADOR: Case Summary & 20 Largest Unsecured Creditors
EMERALD GRANDE: Seeks to Hire CBRE as Real Estate Broker
EMERGENT FIDELITY: FTX Fights BlockFi's Bid to Toss Chapter 11 Case
ENDO INTERNATIONAL: Reaches Deal With Key Creditors on Plan
F.R. ALEMAN: Court OKs Cash Collateral Access Thru April 19
FEILITECH US: Seeks to Hire Cozen O'Connor as Lead Counsel
FEILITECH US: Seeks to Hire Jones Walker as Co-Counsel
FGV FRESNO LP: Seeks to Hire Goe Forsythe & Hodges as Counsel
FLYWHEEL SPORTS: Starr's Bid to Dismiss Trustee's Complaint Denied
FOPCO INC: McElrath's Motion for Stay Pending Appeal Denied
FOURTEEN DAVISON: Seeks Approval to Hire Berger as Legal Counsel
FOX SUBACUTE: Wins Cash Collateral Access Thru May 6
FTAI AVIATION: Fitch Puts BB- LongTerm IDR on Rating Watch Negative
FTAI AVIATION: Moody's Gives B1(hyb) Rating to New Preferred Shares
FTX GROUP: Alameda Sues Grayscale Over Redemptions, Trust Fees
FTX GROUP: Massive Asset Shortfall Emerges in Chapter 11 Probe
FTX GROUP: Silvergate Bank Wants Customers Suits Kept Separate
FUSION PM HOLDINGS: 2d Cir. Upholds Bankruptcy Plan Interpretation
GARCIA GRAIN: Wins Cash Collateral Access Thru April 7
GFL ENVIRONMENTAL: Moody's Alters Outlook on 'B1' CFR to Positive
GIGAMONSTER NETWORKS: Committee Taps Faegre as Legal Counsel
GIGAMONSTER NETWORKS: Panel Taps M3 Advisory as Financial Advisor
GIRARDI & KEESE: Judge Enters 2nd Not Guilty Plea for Tom Girardi
GOLDEN KEY GROUP: Committee Taps Whiteford Taylor as Legal Counsel
GRADE A HOME: Wins Cash Collateral Access Thru March 21
GULF COAST TRANS: Files Emergency Bid to Use Cash Collateral
HAIRY DEALINGS: Files Emergency Bid to Use Cash Collateral
HARRIS PHARMACEUTICAL: Trustee Hires Accounting Consultant
HI-POINT CONSTRUCTION: Gets OK to Hire Winegarden as Legal Counsel
HI-POINT CONSTRUCTION: Taps CMM & Associates as Financial Advisor
HIE HOLDINGS: Trustee Taps Finders Keepers as Auctioneer
HIGHLAND CAPITAL: Denial of Dugaboy's Motion to Compel Affirmed
HOLDINGS MANAGEMENT: Starts Subchapter V Bankruptcy Case
HOT'Z POWER: Files Emergency Bid to Use Cash Collateral
HYSTER-YALE MATERIALS: S&P Affirms 'B-' ICR, Outlook Stable
IMPRIVATA INC: Fitch Alters Outlook on 'B' LongTerm IDR to Negative
INDEPENDENT PET: $9.5MM New Money DIP Loan Wins Final OK
INDUSTRIAL SCREW: Taps Hayward PLLC as Bankruptcy Counsel
INSECTARIUM AND BUTTERFLY: Voluntary Chapter 11 Case Summary
INVACARE CORPORATION: Seeks to Hire Kirkland & Ellis as Counsel
INW MANUFACTURING: Moody's Cuts CFR to 'Caa3', Outlook Negative
IRREGULAR MIKES: Gets OK to Hire Gabriel Del Virginia as Counsel
ISLAND INDUSTRIES: Motion to Dismiss Sigma's Complaint Granted
JESS HALL'S SERENDIPITY: Seeks to Hire Rosen Systems as Auctioneer
JIVANA LLC: Taps Law Office of Richard M. McGill as Counsel
KEY DIGITAL: Seeks Cash Collateral Access
L&L WINGS: Move to Dismiss Appealed Case Granted
LIGHTNING TECHNOLOGIES: PALIoT Enjoined From Using Trade Secrets
LOS ARMANDOS: Voluntary Chapter 11 Case Summary
LOYALTY VENTURES: Case Summary & Nine Unsecured Creditors
LUXE SPACES: Has Final OK on Cash Collateral Access
M.A.R. DESIGNS: Taps Francisco J. Rodriguez as Litigation Counsel
MADERA COMMUNITY: Case Summary & 20 Largest Unsecured Creditors
MAXAR TECHNOLOGIES: Moody's Alters Outlook on B2 CFR to Negative
MEND CORRECTIONAL: Move to Stay Jama's Suit Granted in Part
MICROSTRATEGY INC: Group One Trading Ceases to Own Class A Shares
MINESEN COMPANY: Parties' Appeals of Decision on Assumption Denied
MYLIFE.COM INC: Seeks to Hire BPM LLP as Accountant
NAVARRO PECAN: Taps Brad Walker of Riverbend as CRO
NB LOFT VUE: Trustee Taps Ryan LLC as Property Tax Consultant
NESV ICE: Court Estimates Claims, Rules on Certain Plan Objections
NOVA WILDCAT: Gets Court Approval to Sell All Assets
NOVA WILDCAT: Gets Tentative Okay for Sale, DIP Loan
OFFICE PROPERTIES: Moody's Cuts CFR & Unsecured Bond Rating to Ba2
OLYMPUS WATER: S&P Places 'B-' ICR on Watch Dev. on Diversey Deal
PACKABLE HOLDINGS: Court OKs Deal on Cash Collateral Access
PARTY CITY HOLDCO: $150MM DIP Loan from Ankura Wins Final OK
PEARL INC: Seeks to Hire The De Leo Law Firm as Legal Counsel
PERFORMANCE FOOD: S&P Alters Outlook to Pos., Affirms 'BB-' ICR
PERFORMANCE POWERSPORTS: Committee Taps Cole Schotz as Counsel
PERFORMANCE POWERSPORTS: Panel Taps Accordion as Financial Advisor
PHASE ONE SERVICES: Cash Collateral Access OK'd Thru March 23
POINT BUCKLER: Case Summary & Seven Unsecured Creditors
PUERTO RICO: PREPA Bankruptcy Fight Could Upend Muni Market
PUREGANIC LLC: Wins Interim Cash Collateral Access
PWM PROPERTY: Reaches West Madison Mortgage Loan Settlement
R.R. DONNELLEY: Moody's Rates New $1.25BB Secured Term Loan 'B1'
R.R. DONNELLEY: S&P Rates New $1.25BB Term Loan Rated 'B'
RACKSPACE TECHNOLOGY: Lenders Hire Legal Counsel as Preventive Move
RACOLE EXTENSIONS: Hires Frost & Associates LLC as Counsel
RENAISSANCE HOLDING: Moody's Rates Extended $145MM Revolver 'B2'
RENNASENTIENT INC: Court OKs Interim Cash Collateral Access
REPUBLIC METALS: Levine Has No Ownership in Precious Metals Deposit
ROCKLEY PHOTONICS: Fine-Tunes Plan Documents
RODA LLC: Seeks to Hire Thomas L Strong CPA as Accountant
RV DOCTOR: Case Summary & 12 Unsecured Creditors
RYZE RENEWABLES: Case Summary & 11 Unsecured Creditors
SBA COMMUNICATIONS: Moody's Ups CFR to Ba2 & Unsecured Debt to Ba3
SCHARN INDUSTRIES: Seeks Cash Collateral Access
SERTA SIMMONS: Class 6B Unsecureds to Recover Up to 3.3%
SERTA SIMMONS: Wins Final OK of $125MM DIP Loan from Eclipse
SIGNATURE BANK: FDIC Appointed as Receiver
SILICON VALLEY BANK: FDIC Appointed as Receiver
SILLY AXE CAFE: Seeks to Hire Goldberg Simpson as Legal Counsel
SOLER & SOLER: Case Summary & 10 Unsecured Creditors
STARKCORP INC: Case Summary & 12 Unsecured Creditors
SWS SERVICES: Files Emergency Bid to Use Cash Collateral
SYLVAMO CORP: Moody's Alters Outlook on 'Ba2' CFR to Positive
TGPC PROPERTIES LLC: Gets OK to Hire Carel Marbry as Bookkeeper
TOP HOME CARE: Taps The Office of Keith B. Bittel as Accountant
TUESDAY MORNING: To Close Last Store in Long Island
TURNER OAKWOOD: Taps Ellen Nightingale of Biathrow as Broker
TURNER OAKWOOD: Wins Interim Cash Collateral Access
VESTAVIA HILLS: Taps Hall Booth Smith as Special Litigation Counsel
VISTAGEN THERAPEUTICS: Registers 12.4M Shares for Possible Resale
VOA INC: Case Summary & 20 Largest Unsecured Creditors
VOIP-PAL.COM INC: Robert Mitchell Has 5.9% Stake as of Feb. 10
VOYAGER DIGITAL: Judge Wiles Won't Let SEC to Fine Advisers
VOYAGER DIGITAL: Wins Approval of Plan, Sale to Binance.US
WILLOW LAKE: Taps Gold, Weems, Bruser, Sues & Rundell as Counsel
[*] 4 Retailers That Sought Bankruptcy Protection in 2023
[*] Commercial Chapter 11 Filings Rose 83% in Feb. 2023 Y/Y
[*] February 2023 U.S. Total Bankruptcy Filings Rose 18%
[^] BOND PRICING: For the Week from March 6 to 10, 2023
*********
225 BOWERY LLC: Seeks to Hire Young Conaway as Co-Counsel
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225 Bowery, LLC seeks approval from the U.S. Bankruptcy Court for
the District of Delaware to employ Young Conaway Stargatt & Taylor,
LLP as co-counsel with Alston & Bird, LLP.
Young's services include:
a. providing legal advice with respect to the Debtor's powers
and duties in the continued operation of its business, management
of its properties, and the potential sale of its assets or
restructuring of its debt;
b. preparing documents in connection with the restructuring of
the Debtor's debt as permitted by the Bankruptcy Code and
confirmation of a Chapter 11 plan and approval of a disclosure
statement, if applicable;
c. preparing legal papers;
d. appearing in court; and
e. other necessary legal services, including representing the
Debtor in any litigation that may arise as a result of its
restructuring.
The firm will be paid at these rates:
Michael R. Nestor $1,240 per hour
Matthew B. Lunn $1,025 per hour
Ryan M. Bartley $890 per hour
Joshua B. Brooks $505 per hour
Debbie Laskin, Paralegal $365 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received a retainer from the Debtor in the amount of
$50,000.
Ryan Bartley, Esq., a partner at Young, disclosed in a court filing
that his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Ryan M. Bartley, Esq.
Michael R. Nestor, Esq.
Matthew B. Lunn, Esq.
Joshua B. Brooks, Esq.
Young Conaway Stargatt& Taylor, LLP
Rodney Square
1000 North King Street
Wilmington, DE 19801
Tel: (302) 571-6600
Fax: (302) 571-1253
Email: rbartley@ycst.com
mnestor@ycst.com
mlunn@ycst.com
jbrooks@ycst.com
About 225 Bowery
225 Bowery, LLC is a New York-based company operating in the
traveler accommodation industry.
225 Bowery sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Case No. 23-10094) on Jan. 24,
2023. In the petition signed by its chief restructuring officer,
Nat Wasserstein, the Debtor reported $50 million to $100 million in
both assets and liabilities.
Judge Brendan L. Shannon oversees the case.
Alston & Bird LLP and Young Conaway Stargatt and Taylor, LLP
represent the Debtor as legal counsel while Nat Wasserstein of
Lindenwood Associates, LLC serves as the Debtor's chief
restructuring officer.
Bank Hapoalim B.M., as lender, is represented by Scott S. Balber,
Esq., at Herbert Smith Freehills New York, LLP.
2M RESEARCH SERVICES: Taps Roquemore Skierski as Bankruptcy Counsel
-------------------------------------------------------------------
2M Research Services, LLC seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to employ Roquemore
Skierski, PLLC as its bankruptcy counsel.
The firm's services include:
a. advising and consulting on the conduct of the Debtor's
bankruptcy case, including all of the legal and administrative
requirements of operating in Chapter 11;
b. attending meetings and negotiating with representatives of
creditors and other parties in interest;
c. taking all necessary actions to protect and preserve the
estate on behalf of the Debtors, including prosecuting actions on
the Debtors' behalf, defending any action commenced against the
Debtors, and representing the Debtors in negotiations concerning
litigation in which the Debtors are involved, including objections
to claims filed against the estates;
d. preparing legal documents;
e. representing the Debtors in connection with obtaining
post-petition financing, if any;
f. advising the Debtors in connection with any potential sale of
estate assets;
g. analyzing and, as appropriate, challenging the validity of
liens against assets of the estate;
h. appearing before the bankruptcy court and any other court;
i. formulating, drafting and seeking confirmation of a Chapter
11 plan and all documents related thereto; and
j. all other necessary legal services.
Roquemore Skierski will be paid at these rates:
Kelvin Roquemore, Partner $425 per hour
Martin Averill, Of Counsel $425 per hour
Adrian S. Baer, Of Counsel $425 per hour
Ashley Burk, Paralegal $175 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Kelvin Roquemore, Esq., a partner at Roquemore Skierski, disclosed
in a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Kelvin Roquemore, Esq.
Martin Averill, Esq.
Adrian S. Baer, Esq.
Roquemore Skierski, PLLC
13155 Noel Road, Suite 900
Dallas, TX 75240
Tel: (972) 564-8860
Email: kelvin@roqski.com
martin@roqski.com
ardie@roqski.com
About 2M Research Services
2M Research Services, LLC, a company in Mansfield, Texas, sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
N.D. Texas Case No. 23-40271) on Jan. 30, 2023. In the petition
signed by Marcus Martin, manager and member, the Debtor disclosed
up to $10 million in both assets and liabilities.
Judge Mark X. Mullin oversees the case.
Roquemore Skierski, PLLC represents the Debtor as legal counsel.
5280 AURARIA: Wins Final OK on Cash Collateral Access
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The U.S. Bankruptcy Court for the District of Colorado authorized
5280 Auraria, LLC to use cash collateral on a final basis in
accordance with the budget, through March 31, 2023.
The Court said the Debtor may only use cash collateral in
accordance with the interim budget, with a 15% variance.
The Debtor will provide DB Auraria, LLC and Auraria Stub, LLC on or
before the 10th day of the following month, an accounting for the
prior month of all revenue, cash expenditures and collections, with
a comparison to budget, in substantially the same form as that
provided by the Receiver on September 6, 2022. The Debtor will
continue to file monthly operating reports with the same type of
information provided in prior reports.
The Debtor's right to use cash collateral will terminate on the
upon of any of these events -- provided DB Auraria, LLC or Auraria
Stub, LLC, as the case may be, provides three business days'
written notice of an alleged Termination Event:
a. 120 days from the date of entry of the Order;
b. The failure by the Debtor to deliver to DB Auraria, LLC and
Auraria Stub, LLC, and to otherwise comply with, any of the
reporting or other information required to be delivered pursuant to
this Final Order when due or any such documents or other
information shall contain a material misrepresentation; subject to
a cure period of three business days after the Debtor receives
written notice from DB Auraria, LLC or Auraria Stub, LLC of
insufficient reporting;
c. The closing date of any sale of substantially all of the
Debtor's assets;
d. The failure by the Debtor to observe or perform any of its
obligations or the other terms or provisions contained herein,
including the use of cash collateral in any manner not permitted by
or otherwise inconsistent with the Budget (subject to any permitted
variance) or agreed to by the Parties;
e. The Court will have entered an order dismissing the Chapter
11 Case;
f. The Court will have entered an order converting the Chapter
11 Case to a case under chapter 7 of the Bankruptcy Code; and
g. The Court will have entered an order authorizing the
appointment or election of a trustee or examiner with expanded
powers or any other representative with expanded powers relating to
the operation of the businesses in the Chapter 11 Case.
A copy of the order is available at https://bit.ly/3JjgSP9 from
PacerMonitor.com.
About 5280 Auraria
5280 Auraria, LLC, owns Auraria Student Lofts, a high-rise building
in downtown Denver aimed at providing housing for college students.
5280 Auraria's sole member and manager is Nelson Partners, LLC, a
Utah limited liability company. The individual principal is
Patrick Nelson.
5280 Auraria sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Colo. Case No. 22-12059) on June 9,
2022. In the petition filed by Patrick Nelson, as managing member,
the Debtor listed between $50 million and $100 million in both
assets and liabilities.
Judge Kimberley H. Tyson oversees the case.
Michael J. Pankow, Esq., at Brownstein Hyatt Farber Schreck, LLP is
the Debtor's counsel.
86-55 GRAND REALTY: Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: 86-55 Grand Realty Inc.
133-33 Sanford Avenue, #3G
Flushing NY 11355
Business Description: The Debtor is engaged in providing real
estate related services.
Chapter 11 Petition Date: March 8, 2023
Court: United States Bankruptcy Court
Eastern District of New York
Case No.: 23-40781
Judge: Hon. Nancy Hershey Lord
Debtor's Counsel: William Zou, Esq.
BILL ZOU & ASSOCIATES PLLC
136-20 38 Avenue, Suite 10D
Flushing NY 11354
Tel: 718-661-9562
Email: xfzou@aol.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Tu Kang Yang as CEO.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/DG5ZE5Q/86-55_Grand_Realty_Inc__nyebke-23-40781__0001.0.pdf?mcid=tGE4TAMA
ACC AUTO 2022-A: Moody's Lowers Rating on Class D Notes to B3
-------------------------------------------------------------
Moody's Investors Service has confirmed the rating of one note, and
downgraded three notes from three asset-backed securitizations
backed by non-prime retail automobile loan contracts originated and
serviced by multiple parties.
The complete rating actions are as follows:
Issuer: ACC Auto Trust 2022-A
Class D Notes, Downgraded to B3 (sf); previously on Dec 15, 2022 B2
(sf) Placed Under Review for Possible Downgrade
Issuer: American Credit Acceptance Receivables Trust 2022-2
Class D Asset Backed Notes, Confirmed at Baa3 (sf); previously on
Dec 15, 2022 Baa3 (sf) Placed Under Review for Possible Downgrade
Issuer: U.S. Auto Funding Trust 2022-1
Class C Notes, Downgraded to Ba2 (sf); previously on Dec 15, 2022
Ba1 (sf) Placed Under Review for Possible Downgrade
Class E Notes, Downgraded to Caa2 (sf); previously on Dec 15, 2022
B3 (sf) Placed Under Review for Possible Downgrade
RATINGS RATIONALE
The rating action reflects recent performance of the underlying
pools and Moody's updated loss expectations on the pools. Over the
past several months, the underlying pools have experienced rising
borrower defaults driven by high inflation and declining borrower
excess savings, as well as lower recoveries driven by softening
used vehicle prices. Non-prime auto loans are more susceptible to
these unusual macro conditions due to the relatively weak credit
quality of the underlying obligors.
The ratings confirmation for American Credit Acceptance Receivables
Trust 2022-2 (ACAR 2022-2) Class D notes reflects the steadying
loss rates on the underlying pool and increasing credit enhancement
for the tranche. Hard credit enhancement for the Class D notes has
increased to 26.9% in February 2023 compared to 24.5% in November
2022. Credit enhancement levels in this transaction benefit from
recent actions by the servicer to waive the 4.00% servicing fee
since December 2022.
In Moody's analysis, Moody's considered up to a 15% increase in
remaining expected losses on the underlying pools to evaluate the
resiliency of the ratings amid the uncertainty surrounding the
pools' performance. The affected tranches are subordinate notes
that have lower credit enhancement available to protect them,
making them more vulnerable to any increase in defaults relative to
the senior tranches in the deals, which have greater credit
protections. Moody's also factored in individual transaction
specifics such as changes in credit enhancement available for the
notes, including overcollateralization, subordination, excess
spread, and reserve funds. In certain cases, credit enhancement has
been aided by sponsor support including optional repurchases of
defaulted receivables as in the case of ACC Auto Trust 2022-A and
waiving of servicing fees as in the case of ACAR 2022-2. The
increase in expected loss reflects the increased volatility caused
by weakened macroeconomic conditions, which negatively affects the
consumer credit performance, especially with non-prime obligors.
Moody's lifetime cumulative net loss expectations are noted below
for the transaction pools. The loss expectations reflect updated
performance trends on the underlying pools. The lifetime cumulative
net loss expectations are higher than the expectations at closing,
reflecting rising borrower defaults driven by high inflation and
declining borrower excess savings, as well as lower recoveries
driven by softening used vehicle prices.
ACC Auto Trust 2022-A: 25.00%
American Credit Acceptance Receivables Trust 2022-2: 33.00%
U.S. Auto Funding Trust 2022-1: 37.00%
PRINCIPAL METHODOLOGY
The principal methodology used in these ratings was "Moody's Global
Approach to Rating Auto Loan- and Lease-Backed ABS" published in
November 2022.
Factors that would lead to an upgrade or downgrade of the ratings:
Up
Levels of credit protection that are greater than necessary to
protect investors against current expectations of loss could lead
to an upgrade of the ratings. Losses could decline from Moody's
original expectations as a result of a lower number of obligor
defaults or greater recoveries from the value of the vehicles
securing the obligors promise of payment. The US job market and the
market for used vehicles are also primary drivers of the
transaction's performance. Other reasons for better-than-expected
performance include changes in servicing practices to maximize
collections on the loans or refinancing opportunities that result
in a prepayment of the loan.
Down
Levels of credit protection that are insufficient to protect
investors against current expectations of loss could lead to a
downgrade of the ratings. Losses could increase from Moody's
original expectations as a result of a higher number of obligor
defaults or a deterioration in the value of the vehicles securing
the obligors promise of payment. The US job market and the market
for used vehicles are also primary drivers of the transaction's
performance. Other reasons for worse-than-expected performance
include poor servicing, error on the part of transaction parties,
lack of transactional governance and fraud.
ACJK INC: Seeks Cash Collateral Access
--------------------------------------
ACJK, Inc. asks the U.S. Bankruptcy Court for the Southern District
of Illinois for authority to use cash collateral.
The Debtor ceased business operations immediately prior to filing
the bankruptcy petition and now holds inventory and customer files
in a secure location pending liquidation.
The Debtor is incurring costs and fees for storage, utilities,
insurance, and security services required to preserve and protect
the inventory and customer files.
The Debtor is also incurring costs and fees for legal services
required in these Chapter 11 proceedings, subject to court
approval.
The U.S. Small Business Administration, Cardinal Health 110, LLC,
FC Marketplace, and Rapid Financial Services, LLC assert liens
against the Debtor's cash collateral.
On March 6, 2023, Cardinal Health 110, LLC consented to the use of
cash collateral in response to the Debtor's request. However, it
has yet to receive responses from the other three creditors.
A copy of the motion is available at https://bit.ly/3msmmxZ from
PacerMonitor.com.
About ACJK Inc.
ACJK Inc. d/b/a Medicap Pharmacy is a local pharmacy that offers
services such as immunizations, medication therapy management,
multi-dose packaging, medication synchronization, important health
screenings, and expert care. On the Web:
https://granitecity.medicap.com/
ACJK Inc. filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D. Ill. Case No. 23-30045) on January 30,
2023. In the petition filed by Mark Allen, as manager, the Debtor
reported assets and liabilities between $1 million and $10 million
each.
The case is overseen by Honorable Bankruptcy Judge Laura K.
Grandy.
The Debtor is represented by Michael J Benson, Esq., at A
Bankruptcy Law Firm, LLC.
AFTERSHOCK COMICS: Taps Exceptional Leaders as Financial Advisor
----------------------------------------------------------------
Aftershock Comics, LLC and its affiliates seek approval from the
U.S. Bankruptcy Court for the Central District of California to
employ Exceptional Leaders International as their financial
advisor.
The Debtors require a financial advisor to:
(1) act as an extension of the management team;
(2) serve as a principal point person as to the Debtors'
outreach and coordinate with respect to financing entities seeking
to support the Debtors during bankruptcy;
(3) analyze refinancing and investment transaction options
available to the Debtors;
(4) counsel the Debtors as to strategy and tactics for effecting
a potential refinancing and investment transaction;
(5) advise the Debtors as to structure and form of a possible
transaction, including the form of any agreements related thereto;
(6) assist the Debtors in obtaining appropriate information and
in preparing due diligence presentations related to a potential
refinancing and investment transaction;
(7) introduce the Debtors to strategic partners and financiers,
as may be appropriate;
(8) assist in negotiations related to a potential refinancing
and investment transaction, as may be appropriate;
(9) coordinate with the Debtors' legal counsel regarding matters
related to the closing of a potential refinancing and investment
transaction; and
(10) render such other financial advisory and consulting services
as may from time to time be agreed upon by the Debtors and the
firm.
The firm will be paid between $250 and $1,000 per hour.
Stuart Rekant, a partner at Exceptional Leaders International,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Lars Fuller
Exceptional Leaders International
One Boston Place, Suite 2600
Boston, MA 02108
Tel: (617) 933-7260
About Aftershock Comics
AfterShock Comics, LLC -- https://Aftershockcomics.com -- is an
American comic book publisher launched in 2015. The company is
based in Sherman Oaks, Calif.
AfterShock Comics and affiliate Rive Gauche Television filed
petitions for relief under Chapter 11 of the Bankruptcy Code
(Bankr. Lead C.D. Calif. Case No. 22-11456) on Dec. 19, 2022. At
the time of the filing, AfterShock Comics reported $10 million to
$50 million in both assets and liabilities while Rive Gauche
reported $50 million to $100 million in assets and $10 million to
$50 million in liabilities.
Judge Martin R. Barash oversees the cases.
Levene, Neale, Bender, Yoo & Golubchik, LLP and Exceptional Leaders
International serve as the Debtors' legal counsel and financial
advisor, respectively.
The U.S. Trustee for Region 16 appointed two separate committees to
represent unsecured creditors in the Chapter 11 cases of AfterShock
Comics, LLC and Rive Gauche Television. Both committees are
represented by Sklar Kirsh, LLP.
AGAVE AZUL: Taps The Law Offices of Michael J. Harker as Counsel
----------------------------------------------------------------
Agave Azul Acquisition Group Holdings, LLC seeks approval from the
U.S. Bankruptcy Court for the District of Nevada to employ The Law
Offices of Michael J. Harker as counsel.
The firm's services include:
a. advising the Debtor of the rights and remedies of the
estate with respect to its assets and with respect to the secured,
priority and general claims of creditors;
b. advising and representing the Debtor in connection with
financial and business matters, including the sale of any assets;
c. advising and representing the Debtor in connection with the
investigation of potential causes of action against persons or
entities, including, avoidance actions and the litigation thereof
if warranted;
d. representing the Debtor in any proceeding or hearing in the
bankruptcy court, and in any action in other courts in which the
rights of the estate may be litigated or affected;
e. conducting examinations of witnesses, claimants, or adverse
parties, and preparing reports and legal documents;
f. advising and representing the Debtor in the negotiation,
formulation, and drafting of any plan of reorganization and
disclosure statement;
g. advising and representing the Debtor in the performance of
its duties and exercise of its powers under U.S. bankruptcy laws
and the U.S. Trustee Guidelines; and
h. other necessary legal services in connection with the
Debtor's Chapter 11 case.
The firm will be paid at these rates:
Attorneys $425 per hour
Associates $275 per hour
Paraprofessionals $175 per hour
In addition, the firm will be reimbursed for its out-of-pocket
expenses.
The retainer fee is $15,000.
Michael Harker, Esq., a partner at The Law Offices of Michael J.
Harker, disclosed in a court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Michael J. Harker, Esq.
The Law Offices of Michael J. Harker
2901 El Camino Ave., Suite 200
Las Vegas, NV 89101
Tel: (702) 248-3000
Email: Mharker@harkerlawfirm.com
About Agave Azul Acquisition Group Holdings
Agave Azul Acquisition Group Holdings, LLC, a Las Vegas-based
company, filed its voluntary petition for Chapter 11 protection
(Bankr. D. Nev. Case No. 23-10238) on Jan. 26, 2023, with $1
million to $10 million in both assets and liabilities. Michael
Evers, manager of Agave, signed the petition.
Judge August B. Landis oversees the case.
The Law Offices of Michael J. Harker serves as the Debtor's
bankruptcy counsel.
AGEX THERAPEUTICS: Juvenescence Ltd Has 75.6% Stake as of Feb. 15
-----------------------------------------------------------------
Juvenescence Limited disclosed in a Schedule 13D/A filed with the
Securities and Exchange Commission that as of Feb. 15, 2023, it
beneficially owns 66,652,153 shares of common stock of AGEX
Therapeutics, Inc. This aggregate amount represents approximately
75.6% of the Issuer's outstanding common stock, based upon
37,947,152 shares outstanding as of Nov. 7, 2022, as reported on
the Issuer's Quarterly Report filed on Form 10-Q on Nov. 10, 2022,
and giving effect to the exercise of the Warrants and conversion of
amounts outstanding under the A&R Secured Note, New Facility and
the Loan Agreement (and assuming the Amendment Caps do not apply).
A full-text copy of the regulatory filing is available for free
at:
https://www.sec.gov/Archives/edgar/data/1708599/000110465923023039/tm237185d1_sc13da.htm
About Agex Therapeutics
Headquartered in Alameda, California, AgeX Therapeutics, Inc. is a
biotechnology company focused on the development and
commercialization of novel therapeutics targeting human aging and
degenerative diseases.
The Company reported a net loss of $8.68 million for the year ended
Dec. 31, 2021, a net loss of $10.97 million for the year ended Dec.
31, 2020, and a net loss of $12.38 million for the year ended Dec.
31, 2019. As of Sept. 30, 2022, the Company had $2.01 million in
total assets, $17.16 million in total liabilities, and a total
stockholders' deficit of $15.15 million.
San Francisco, California-based WithumSmith+Brown, PC, the
Company's auditor since 2017, issued a "going concern"
qualification in its report dated March 29, 2022, citing that the
Company has had recurring losses and negative operating cash flows
since inception, an accumulated deficit at Dec. 31, 2021, and
insufficient cash and cash equivalents and loan proceeds at Dec.
31, 2021 to fund operations for twelve months from the date of
issuance. All of these matters raise substantial doubt about the
Company's ability to continue as a going concern.
AGILITI INC: S&P Affirms 'B+' Issuer Credit Rating, Outlook Pos.
----------------------------------------------------------------
S&P Global Ratings affirmed its 'B+' issuer credit rating on health
care technology management and services provider Agiliti Inc. At
the same time, S&P assigned its 'B+' issue-level ratings to its
proposed revolver and first-lien term loan, with a recovery rating
of '3' (rounded estimate: 60%).
S&P's positive outlook on Agiliti reflects its expectation of 2023
revenue growth at about 4%-5% with some EBITDA margin decline and
S&P Global Ratings-adjusted leverage below 4x.
S&P said, "Our rating affirmation and positive outlook reflect that
Agililti's revenue will increase in the mid-single-digit percents
but that EBITDA will be flat, leading to S&P Global
Ratings-adjusted leverage just below 4x in 2023. We expect a
revenue increase on organic growth in equipment solutions and
clinical engineering services with new contract wins and the
ramp-up of recent acquisitions. We expect growth to be partially
offset by the decline in on-site managed services, lower pricing on
government contract renewals, and equipment rental use lower than
before the COVID-19 pandemic. We expect 2023 EBITDA margins to
decline about 50-100 basis points due to lower volume after the
worst of the pandemic and lower-priced government contract for
ongoing maintenance tasks. We expect Agiliti to generate reported
EBITDA well beyond its fixed charges, which include interest
expense of about $75 million, annual debt repayment of about $11
million, working capital outflow of $20 million-$30 million, and
capital expenditure (capex) of $85 million-$95 million. Adjusted
leverage should remain below 4x, helped by roughly $100 million of
debt reduction in 2022."
Agiliti maintains a leading market position in the outsourced
medical equipment and services sector and generally healthy
customer demand, although the potential for insourcing remains a
risk. Agiliti provides outsourced medical equipment and services to
health care facilities, including equipment and service staff to
deal with supplemental and peak needs. S&P said, "We believe there
is demand for its services as health care facilities address the
capital-intensive nature of their businesses and the government
intends to manage and maintain a normalized device stockpile
post-COVID-19. Insourcing remains a key risk, as providers could
choose to manage their own equipment needs. We also view
competitive pressure as a risk, indicated by Memorial Hermann
Health Systems' switch to a competitor in 2020. Despite this risk,
we believe Agiliti's ability to manage most equipment items and
simplify a facility's service needs encourages its customers to
outsource. Its diverse customer base also mitigates this risk."
S&P said, "We expect Agiliti to generate $70 million-$75 million of
reported free operating cash flow (FOCF) in 2023 and maintain ample
liquidity. This will be meaningful, albeit lower than in 2022,
equating to about 7%-8% of adjusted debt. The decline is primarily
due to increases in interest expenses (interest rate swap expires
end of May 2023), capex, and cash taxes. Agiliti had cash balances
of about $5 million and $222 million availability on its $250
million revolving credit facility as of the end of 2022. We assume
the proposed revolver upsize to $300 million will also provide
additional liquidity.
"Our positive outlook on Agiliti reflects our expectation of 2023
revenue growth at about 4%-5% with 50-100 basis points of EBITDA
margin decline and S&P Global Ratings-adjusted leverage below 4x."
S&P could revise the outlook to stable if leverage remains above 4x
on a sustained basis. This could occur due to:
-- An operational setback;
-- Loss of customer contracts; or
-- A large, unexpected debt-funded acquisition or shareholder
returns.
S&P could raise the rating on Agiliti if it maintains:
-- Solid revenue growth;
-- Stable EBITDA margin in the high-20% area;
-- FOCF to debt above 20%; and
-- Adjusted debt to EBITDA below 4x.
ESG credit indicators: E-2, S-2, G-3
S&P said, "Governance factors are a moderately negative
consideration in our credit rating analysis of Agiliti. Our
assessment of the company's financial risk profile as aggressive
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 the
generally finite holding periods and a focus on maximizing
shareholder returns."
AKORN PHARMACEUTICALS: Closes All Sites After No Buyer Found
------------------------------------------------------------
Amy Baxter of Health Exec reports that Akorn Pharmaceuticals is
closing all U.S. sites and laying off its entire workforce after
failing to find a potential buyer for the company.
Akorn, which develops, manufactures and markets specialty
pharmaceuticals, including prescription, consumer health and animal
health products, put itself up for sale in 2022, but never received
an appropriate bid that would address its outstanding liabilities,
according to a letter announcing the shut down and layoffs by Akorn
President and CEO Douglas Boothe.
The letter, which was published by the Herald-Review, announced
Akorn will file for chapter 7 bankruptcy. As part of that filing,
the company shut down all operations and lay off all employees,
effective Thursday, February 23, 2023.
"I truly regret that these actions have become necessary," Boothe
wrote in the letter to employees. "This is a shock. It will take
some time to absorb the news and what it means to you and your
colleagues."
Employees were also given a packet with resource information amid
the layoffs. The layoffs are permanent, Boothe wrote.
With Akorn shutting down, there are fears that the albuterol
shortage in the United States could get worse, The Washington Post
reported. One of Akorn's facilities manufactured liquid albuterol,
used by hospitals for nebulizers, and the shutdown leaves only one
remaining domestic supplier of the medication, the Post said.
Akorn has been struggling for the past few years, after filing
voluntary chapter 11 bankruptcy in 2020 as it attempted to sell
itself to resolve debt issues with lenders. The company also
previously had a potential $4.3 billion acquisition deal with
Fresenius, but the deal fell through. Plus, Akorn agreed to pay
$7.9 million to resolve allegations that it caused the submission
of false claims to Medicare Part D, in violation of the False
Claims Act, for three generic drugs that were no longer eligible
for Medicare coverage last 2022.
About Akorn, Inc.
Akorn, Inc. (Nasdaq: AKRX) -- http://www.akorn.com/-- is a
specialty pharmaceutical company that develops, manufactures, and
markets generic and branded prescription pharmaceuticals, branded
as well as private-label over-the-counter consumer health products,
and animal health pharmaceuticals. Akorn is headquartered in Lake
Forest, Illinois, and maintains a global manufacturing presence,
with pharmaceutical manufacturing facilities located in Illinois,
New Jersey, New York, Switzerland, and India.
Akorn, Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-11178) on May 20, 2020.
As of March 31, 2020, the Debtors disclosed total assets of
$1,032,275,000 and total liabilities of $1,051,769,000.
Previously, the cases were assigned to Judge John T. Dorsey, but
Judge Karen B. Owens now oversees the Debtors' case. The Debtors
tapped Kirkland & Ellis LLP and Kirkland & Ellis International LLP
as their general bankruptcy counsel. Richards, Layton & Finger,
P.A., is the Debtors' local counsel. AlixPartners, LLP, serves as
the Debtors' restructuring advisor, and PJT Partners LP is the
financial advisor and investment banker. Kurtzman Carson
Consultants, LLC, is the notice and claims agent.
ARU PHARMA: Files for Chapter 11 for Wind-Down
----------------------------------------------
Aru Pharma Inc. filed for chapter 11 protection in the Southern
District of New York to complete a wind-down of the business.
The Debtor is a registered wholesaler-repacker of drugs and/or
devices duly licensed by the state of New York. Aru Pharma
acquires drugs in bulk then separate, count, bottle, package and
label them, and then resell them to retailers such as pharmacy.
Aru Pharma has an address of 7 Wingate Place, Yonkers, New York
10705.
The business was founded by Arumungan Jayakumar, a successful
businessman who owned multiple pharmacies. Rajamal Jayakumar,
Arumungan's widow and sole heir, is acting president. Lalithapriya
Jayakumar, Arumungan's daughter, is currently managing the business
and is the vice president.
The Jayakumars have agreed that the Debtor could not continue
operations after Arumungan's passing. The Debtor has filed for
Chapter 11 bankruptcy to obtain the ability to liquidate the
Debtor's assets and distribute the proceeds to creditors.
According to court filings, the Debtor entered into a lease for the
premises located at 696 Locust Street, Mount Vermont, NY 10552 with
Britbran Corporation. The Debtor then engaged in constructing the
build-out necessary to meet the stringent requirements for
operation of a wholesaling-repacking facility. But after the
facility was completed, the roof of the premises collapsed and
caused severe damage. The Debtor believes that the collapse was
caused by the landrold's and its contractor's negligence. The
Debtor filed a $2 million lawsuit in the Westchester County Supreme
Court against Britbran Corp. and J. Salvatore Contracting Company.
As the Debtor was unable to conduct its chosen business due to the
roof collapse, the Debtor attempted to make ends meet by operating
as a wholesale distributor of pharmaceutical products from India.
Unfortunately, it is alleged that Ezricare Brand Artificial Tears
Lubricant Eye Drops (one of the items distributed by the Debtor)
was tainted and caused injury or death due to several individuals.
The Debtor, rendered unable to conduct its business as either a
wholesaler-prepacker of drugs or as a distributor, determined to
file the instant Chapter 11 petition to allow it to liquidate its
operations and distribute the proceeds of said liquidation to
creditors.
The petition states that funds will be available to unsecured
creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
March 30, 2023, at 01:00 PM at Office of UST (TELECONFERENCE ONLY)
- CHAPTER 11s.
About Aru Pharma Inc.
Aru Pharma Inc. is a manufacturer of drugs and pharmaceuticals.
Aru Pharma Inc. filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22157) on February 27,
2023. In the petition filed by Rajammal Jayakumar, proposed
executrix of the Estate of Arumugan Jayakumar, the Debtor reported
total assets of $109,091 and total liabilities of $1,409,828.
Honorable Bankruptcy Judge Sean H. Lane oversees the case.
The Debtor is represented by:
Michael G. Mc Auliffe, Esq.
THE LAW OFFICE OF MICHAEL G. MC AULIFFE
68 South Service Road
Suite 100
Melville, NY 11747
Tel: 516-927-8413
Fax: 516-927-8414
Email: mgmlaw@optonline.net
ARUZE GAMING: Seeks to Hire Larson & Zirzow as Legal Counsel
------------------------------------------------------------
Aruze Gaming America, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Nevada to employ Larson & Zirzow, LLC as
counsel.
The Debtor requires legal counsel to:
(a) prepare reports and other legal papers in connection with
the administration of the Debtor's bankruptcy estate;
(b) take all actions in connection with a plan of reorganization
and related documents and such further actions as may be required
in connection with the administration of the estate;
(c) take all necessary actions to protect and preserve the
Debtor's estate, including the negotiation of disputes in which the
Debtor is involved, and the preparation of objections to claims
filed against the estate; and
(d) perform all other necessary legal services to prosecute the
Debtor's bankruptcy case.
The hourly rates of the firm's counsel and staff are as follows:
Matthew C. Zirzow, Attorney $650 per hour
Patricia Huelsman, Paralegal $275 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
Prior to the petition date, the firm was paid the amount of
$14,520.50. The firm currently holds a balance of $185,479.50 in
its trust account.
Matthew Zirzow, Esq., an attorney at Larson & Zirzow, disclosed in
a court filing that his firm is a "disinterested person" as that
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Matthew C. Zirzow, Esq.
Zachariah Larson, Esq.
Larson & Zirzow, LLC
850 E. Bonneville Ave.
Las Vegas, NE 89101
Telephone: (702) 382-1170
Facsimile: (702) 382-1169
Email: mzirzow@lzlawnv.com
zlarson@lzlawnv.com
About Aruze Gaming America
Las Vegas-based Aruze Gaming America, Inc. designs, develops and
manufactures gaming machines.
Aruze Gaming America sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 23-10356) on Feb. 1, 2023.
In the petition signed by its chief executive officer, Yugo
Kinoshita, the Debtor disclosed up to $10 million in assets and up
to $50 million in liabilities.
The bankruptcy filing is a part of Aruze's efforts to seek
financial restructuring in the wake of a recent garnishment
judgment against Aruze resulting from a separate judgment against
Aruze's shareholder.
Judge August B. Landis oversees the case.
Matthew C. Zirzow, Esq., at Larson & Zirzow, LLC is the Debtor's
legal counsel.
ARUZE GAMING: Taps Armory Securities as Investment Banker
---------------------------------------------------------
Aruze Gaming America, Inc. seeks approval from the U.S. Bankruptcy
Court for the District of Nevada to employ Armory Securities, LLC
as investment banker.
The firm's services include:
a. Restructuring Services.
i. provide financial advice and assistance to the Debtor in
developing and seeking approval of a restructuring plan, which may
be a plan under Chapter 11 of the Bankruptcy Code or otherwise;
ii. provide financial advice and assistance to the Debtor in
structuring any new securities to be issued under the plan;
iii. assist the Debtor or participate in negotiations with
entities or groups affected by the plan; and
iv. if requested by the Debtor, participate in hearings before
the bankruptcy court with respect to the matters upon which Armory
has provided advice, including, as relevant, coordinating with the
Debtor's counsel with respect to testimony in connection
therewith.
b. Financing Services.
i. provide financial advice and assistance to the Debtor in
structuring and effecting a financing, and identify potential
investors;
ii. if Armory and the Debtor deem it advisable, assist the
Debtor in developing and preparing a memorandum to be used in
soliciting potential investors; and
iii. if requested by the Debtor, contact or assist the Debtor
or participate in negotiations with potential investors.
c. Sale Service.
i. provide financial advice and assistance to the Debtor in
connection with a sale, identify potential acquirors and, at the
Debtor's request, contact such potential acquirors;
ii. assist the Debtor in preparing a memorandum to be used in
soliciting potential acquirors;
iii. assist the Debtor or participate in negotiations with
potential acquirors.
The firm will be paid as follows:
a. Initial Fee: An initial fee of $50,000 due upon signing the
Engagement Agreement.
b. Monthly Fees: Monthly advisory fees of $50,000 payable
beginning March 23, 2023.
c. Restructuring Fee: If at any time during the term of the
engagement or within the eighteen full months following the
termination of this engagement, (x) any restructuring is
consummated or (y)(l) an agreement in principle, definitive
agreement or plan to effect a restructuring is entered into and (2)
concurrently therewith or at any time thereafter, any restructuring
is consummated, Armory shall be entitled to receive a transaction
fee, contingent upon the consummation of a restructuring and
payable at the closing thereof, equal to 2 percent of the sum of
(i) the aggregate principal amount of the Debtor's funded
indebtedness (including accrued and unpaid interest) outstanding
immediately prior to the consummation of the restructuring, (ii)
the liquidation preference of the Debtor's preferred stock
(including any accrued and unpaid dividends) outstanding
immediately prior to the consummation of the restructuring and
(iii) the face value of any other obligations, in the case of
clauses (i) and (ii), restructured or recapitalized (including
without limitation, through any exchange, conversion, cancellation,
forgiveness, retirement or material modification or amendment to
the terms, conditions or covenants thereof). The restructuring
transaction fee shall be earned and payable upon the confirmation
of a Chapter 11 plan of reorganization.
d. Sale Fee: If at any time during the fee period, (x) any sale
is consummated. or (y)(l) an agreement in principle or definitive
agreement to effect a sale is entered into, and (2) concurrently
therewith or at any time thereafter (including following the
expiration of the fee period) any sale is consummated, Armory shall
be entitled to receive a sale transaction fee contingent upon the
consummation of a sale and payable at the closing thereof, which
shall be equal to 2 percent of the transaction value.
e. Financing Fee: If at any time during the fee period, the
Debtor (x) consummates any financing or (y)(l) the Debtor receives
and accepts written commitments for one or more financings (the
execution by a potential financing source and the Debtor of a
commitment letter or securities purchase agreement or other
definitive documentation shall be deemed to be the receipt and
acceptance of such written commitment) and (2) concurrently
therewith or at any time thereafter (including following the
expiration of the fee period) any financing is consummated, the
Debtor will pay to Armory on the closing date of any such
financing, 2 percent of the aggregate gross proceeds of any
financing.
Steven Sadek, managing director at Armory Securities, disclosed in
a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Steven Sadek
Armory Securities, LLC
1230 Rosecrans Avenue, Suite 660
Manhattan Beach, CA 90266
Telephone: (310) 220-6400
Facsimile: (310) 798-6277
Email: ssadek@armorysecurities.com
About Aruze Gaming America
Las Vegas-based Aruze Gaming America, Inc. designs, develops and
manufactures gaming machines.
Aruze Gaming America sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Nev. Case No. 23-10356) on Feb. 1, 2023.
In the petition signed by its chief executive officer, Yugo
Kinoshita, the Debtor disclosed up to $10 million in assets and up
to $50 million in liabilities.
The bankruptcy filing is a part of Aruze's efforts to seek
financial restructuring in the wake of a recent garnishment
judgment against Aruze resulting from a separate judgment against
Aruze's shareholder.
Judge August B. Landis oversees the case.
The Debtor tapped Matthew C. Zirzow, Esq., at Larson &Zirzow, LLC
as legal counsel and Armory Securities, LLC as investment banker.
ATLANTIC & PACIFIC: Bid to Dismiss Michele Brown's Appeal Granted
-----------------------------------------------------------------
District Judge Vincent L. Briccetti for the Southern District of
New York grants The Great Atlantic & Pacific Tea Company, Inc.'s
motion to dismiss the appealed case In Re: The Great Atlantic &
Pacific Tea Company, Inc., Debtor. Michele Brown, Appellant, v. The
Great Atlantic & Pacific Tea Company, Inc., Appellee, Case No. 22
CV 4117 (VB), (S.D.N.Y.).
Michele Brown appeals from an Aug. 20, 2018 order of the U.S.
Bankruptcy Court for the Southern District of New York, which
denied Brown's motion to reconsider or vacate an order expunging
personal injury claims filed by Brown in The Great Atlantic &
Pacific Tea Company, Inc.'s second Chapter 11 bankruptcy
proceeding.
In its motion to dismiss, A&P argues that Brown's notice of appeal
was untimely filed, which deprives the Court of subject matter
jurisdiction over the Second Appeal.
The Court agrees with A&P. Brown filed her Second Appeal on May 3,
2022, more than three years after the deadline under Rule
8002(a)(1). Moreover, Brown does not contend, and the record does
not reflect, that her time to appeal was tolled or extended by a
timely filed motion. Although Brown filed several letters asking
the Bankruptcy Court to reconsider the Reconsideration Order, which
could be construed as motions for reconsideration under Rule 9024,
those letters were filed between January and March 2019 -- months
after the fourteen-day deadline under Rule 8002(b)(1)(D) had
expired. Accordingly, the Court lacks jurisdiction over the Second
Appeal and must dismiss it.
A&P asks the Court to impose sanctions under Rule 8020 and seeks
"at a minimum" reasonable attorney's fees incurred in connection
with the Second Appeal.
This appeal is plainly frivolous, as the Court told Brown at the
initial conference. First, Brown's appeal is untimely. Second,
Brown has failed to articulate any substantive basis for reversing
the Reconsideration Order or the underlying order expunging her
claims. And after a thorough review of the record, the Court
concludes this appeal was "brought without the slightest chance of
success." Indeed, the record suggests Brown may be pursuing this
appeal with the improper purpose of harassing A&P to pay her
medical bills. In any event, it is clear Brown will not stop trying
to collect on her discharged claims unless she is sanctioned -- and
perhaps not even then.
At the initial case conference, the Court informed Brown that her
appeal was frivolous and warned her that the Court "will . . .
impose financial sanctions on you for pursuing a frivolous
litigation" if the Court believed it was "necessary and
appropriate" to do so.
Accordingly, the Court will impose sanctions against Brown,
however, because Brown is proceeding pro se and in forma pauperis,
the Court only awards A&P its reasonable attorney's fees incurred
in defending this appeal, in an amount to be determined after A&P
submits documentation supporting its request.
A full-text copy of the OPINION AND ORDER dated Feb. 28, 2023 is
available at https://tinyurl.com/y9tdanh7 from Leagle.com.
About The Great Atlantic &
Pacific Tea Company
Based in Montvale, New Jersey, The Great Atlantic & Pacific Tea
Company, Inc., and its affiliates are one of the nation's oldest
leading supermarket and food retailers, operating approximately 300
supermarkets, beer, wine, and liquor stores, combination food and
drug stores, and limited assortment food stores across six
Northeastern states. The primary retail operations consist of
supermarkets operated under a variety of well-known trade names, or
"banners," including A&P, Waldbaum's, SuperFresh, Pathmark, Food
Basics, The Food Emporium, Best Cellars, and A&P Liquors.
Then with 429 stores, A&P and its affiliates filed Chapter 11
petitions (Bankr. S.D.N.Y. Case No. 10-24549) on Dec. 12, 2010, and
in 2012 emerged from Chapter 11 bankruptcy as a privately held
company with 320 supermarkets.
On July 19, 2015, with 300 stores, A&P and 20 affiliated debtors
each filed a Chapter 11 petition (Bankr. S.D.N.Y. Case No.
15-23007) after reaching deals for the going concern sales of 120
stores. As of Feb. 28, 2015, the Debtors reported total assets of
$1.6 billion and liabilities of $2.3 billion. Judge Robert D. Drain
of the U.S. Bankruptcy Court for the Southern District of New York
presides over the 2015 cases.
The Debtors tapped Weil, Gotshal & Manges LLP as counsel, Evercore
Group L.L.C., as investment banker, FTI Consulting, Inc., as
financial advisor, Hilco Real Estate, LLC, as real estate advisor,
and Prime Clerk LLC, as claims and noticing agent.
AVENTIS SYSTEMS: Court OKs Cash Collateral Access
-------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Georgia,
Atlanta Division, authorized Aventis Systems, Inc. to use cash
collateral in accordance with the budget, with a 10% variance,
through August 31, 2023.
The Debtor requires the use of cash collateral to meet its ordinary
operating expenses and to continue its business operations.
In addition to United Community Bank, the Debtor's traditional,
primary secured lender, the Debtor has borrowed from a variety of
sources to obtain inventory to sell to its customers, related to
which said lenders may have a lien on the Debtor's cash collateral
and have recorded UCC Financing Statements: Funding Circle/FC
Marketplace, LLC, Amazon Capital Services, Inc., UCB, PayPal/Swift
Financial, LLC, Ouiby Inc. d/b/a Kickfurther, First Citizens Bank &
Trust Company d/b/a CIT, and 8fig, Inc.
Further, the Debtor signed documents with several merchant cash
advance companies, which have recorded UCC-1s: Fox Capital Group,
Inc., Cedar Advance, LLC, Skyinance, Inc., Diverse Capital, LLC,
and Zahav Asset Management, LLC. Fox was the first MCA to record a
UCC-1 and it was recorded after FC, Amazon, UCB and PayPal.
Two UCC-1s were recorded on February 15, 2022 (after Cedar/before
Skyinance), and July 21, 2022 (after Kingdom Kapital/before Diverse
Capital), via CT Corporation as representative of other entities.
Based on the dates of recording, the Debtor is unsure of which
creditor these UCC-1s relate. The Debtor requested the identify of
the creditors from CT Corporation but has not received a response
from CT Corporation to date.
As adequate protection, the Secured Parties are granted valid,
attached, choate, enforceable, perfected, and continuing security
interests in, and liens upon all post-petition assets of the Debtor
of the same character and type, to the same nature, extent, and
validity as the items and encumbrances of the Secured Parties
attached to the Debtors' assets pre-petition.
The Secured Parties' security interests in, and liens upon, the
PostPetition Collateral will have the same validity as existed
between the Secured Parties, the Debtor, and all other creditors or
claimants against the Debtor's estate on the Petition Date.
As additional adequate protection to ACS and UCB, and in accordance
with the Budget, the Debtor will make these adequate protection
payments:
a) ACS will receive monthly payments of $174,894, which ACS
will be entitled to deduct from the Debtor's Seller Account on an
ongoing basis in accordance with the Order and until the loan due
to ACS is satisfied in full; and
b) UCB will receive accrued unpaid interest, approximately
$25,000 per month, on or before March 27, 2023, and each month
thereafter in accordance with the Budget.
The Secured Parties will hold allowed administrative claims under
11 U.S.C. section 507(b) with respect to the adequate protection
obligations of the Debtor to the extent that the replacement liens
on Post-Petition Collateral do not adequately protect the
diminution in value of the interests of Secured Parties in their
prepetition collateral.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3ZPAC2p from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$2,077,638 for March 2023;
$2,103,303 for April 2023; and
$2,131,989 for May 2023.
About Aventis Systems, Inc.
Aventis Systems, Inc. offers custom IT solutions to build and
operate complete physical and virtual infrastructures. The
comprehensive solutions include refurbished and new hardware,
system and application software, and an array of in-depth managed
services including infrastructure consultation, cloud hosting and
migration, virtualization deployment, data and disaster recovery,
security consultation, hardware relocation, and equipment buyback.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Ga. Case No. 23-51162) on February 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.
Judge Lisa Ritchey Craig oversees the case.
Anna Humnicky, Esq., at Small Herrin, LLP, represents the Debtor as
legal counsel.
AVENTIS SYSTEMS: Taps Gardner Groff & Greenwald as Special Counsel
------------------------------------------------------------------
Aventis Systems, Inc. and Cortavo, Inc. received approval from the
U.S. Bankruptcy Court for the Northern District of Georgia to
employ Gardner Groff & Greenwald, PC to assist with intellectual
property matters.
The firm will be paid at these rates:
John W. Greenwald $530 per hour
Daniel Hong $335 per hour
Paralegals $150-$200 per hour
As disclosed in court filings, Gardner Groff & Greenwald neither
holds nor represents any interests adverse to the Debtors or their
estates.
The firm can be reached through:
John W. Greenwald, Esq.
Gardner Groff & Greenwald, LLP
1640 Powers Ferry Road, Building 4, Suite 200
Governor's Ridge
Marietta, GA 30067
Phone: 770-984-2300
Email: jgreenwald@gardnergroff.com
About Aventis Systems
Aventis Systems, Inc., a company in Atlanta, offers custom IT
solutions to build and operate complete physical and virtual
infrastructures. The comprehensive solutions include refurbished
and new hardware, system and application software, and an array of
in-depth managed services including infrastructure consultation,
cloud hosting and migration, virtualization deployment, data and
disaster recovery, security consultation, hardware relocation, and
equipment buyback.
Aventis Systems and affiliate, Cortavo, Inc., sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Lead
Case No. 23-51162) on Feb. 6, 2023. In the petition signed by its
chief executive officer, Hessam Lamei, Aventis Systems disclosed up
to $50 million in assets and up to $10 million in liabilities.
Judge Lisa Ritchey Craig oversees the cases.
The Debtors tapped Anna Humnicky, Esq., at Small Herrin, LLP as
legal counsel and Nichols, Cauley & Associates, LLC as accountant.
AVENTIS SYSTEMS: Taps Nichols Cauley & Associates as Accountant
---------------------------------------------------------------
Aventis Systems, Inc. and Cortavo, Inc. received approval from the
U.S. Bankruptcy Court for the Northern District of Georgia to
employ Nichols, Cauley & Associates, LLC as accountant.
The Debtors require an accountant to:
(a) prepare and file 2022 federal and state tax returns;
(b) provide bookkeeping services assisting the Debtors with
reconciliations from 2023 forward and monthly operating reports
required in their Chapter 11 cases; and
(c) other accounting work as requested by the Debtors.
The firm will be paid at these rates:
Keith A. Daniel $350 per hour
Denise O'Connell $350 per hour
Keith C. Masters $110 per hour
Cassia Maglott $110 per hour
As disclosed in court filings, Nichols, Cauley & Associates is a
disinterested person as that term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Denise O'Connell, CPA
Nichols, Cauley & Associates LLC
1825 Barrett Lakes Boulevard NW, Suite 200
Kennesaw, GA 30144
Phone: 770-422-0598
Fax: 678-214-2355
Email: Kennesaw@nicholscauley.com
About Aventis Systems
Aventis Systems, Inc., a company in Atlanta, offers custom IT
solutions to build and operate complete physical and virtual
infrastructures. The comprehensive solutions include refurbished
and new hardware, system and application software, and an array of
in-depth managed services including infrastructure consultation,
cloud hosting and migration, virtualization deployment, data and
disaster recovery, security consultation, hardware relocation, and
equipment buyback.
Aventis Systems and affiliate, Cortavo, Inc., sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. N.D. Ga. Lead
Case No. 23-51162) on Feb. 6, 2023. In the petition signed by its
chief executive officer, Hessam Lamei, Aventis Systems disclosed up
to $50 million in assets and up to $10 million in liabilities.
Judge Lisa Ritchey Craig oversees the cases.
The Debtors tapped Anna Humnicky, Esq., at Small Herrin, LLP as
legal counsel and Nichols, Cauley & Associates, LLC as accountant.
B&B BUILDERS: Case Summary & Four Unsecured Creditors
-----------------------------------------------------
Debtor: B&B Builders & Investors, LLC
385 Charles Fisher Road
Opelousas, LA 70570
Chapter 11 Petition Date: March 9, 2023
Court: United States Bankruptcy Court
Western District of Louisiana
Case No.: 23-50155
Judge: Hon. John W. Kolwe
Debtor's Counsel: Tom St. Germain, Esq.
WEINSTEIN & ST. GERMAIN
1103 West University Ave
Lafayette, LA 70506
Tel: (337) 235-4001
Estimated Assets: $500,000 to $1 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by James W. Bellard as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's four unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/WHAVCCI/BB_Builders__Investors_LLC__lawbke-23-50155__0001.0.pdf?mcid=tGE4TAMA
BARFIELD CONTRACTING: Taps BransonLaw as Bankruptcy Counsel
-----------------------------------------------------------
Barfield Contracting & Associates, Inc. seeks approval from the
U.S. Bankruptcy Court for the Middle District of Florida to employ
BransonLaw, PLLC as bankruptcy counsel.
The Debtor requires legal counsel to:
a. prosecute and defend any causes of action on behalf of the
Debtor, and prepare legal papers;
b. assist in the formulation of a Chapter 11 plan of
reorganization; and
c. provide all other services of a legal nature.
The hourly rates charged by BransonLaw's attorneys and paralegals
range from $495 to $200.
In addition, the firm will seek reimbursement for out-of-pocket
expenses incurred.
Prior to the petition date, the Debtor paid the firm an advance fee
of $10,279.50 for post-petition services and expenses, and the
filing fee of $1,738.
Jeffrey Ainsworth, Esq., an attorney at BransonLaw, disclosed in a
court filing that his firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Jeffrey S. Ainsworth, Esq.
BransonLaw, PLLC
1501 E. Concord St.
Orlando, FL 32803
Telephone: (407) 894-6834
Facsimile: (407) 894-8559
Email: jeff@bransonlaw.com
About Barfield Contracting & Associates
Barfield Contracting & Associates, Inc. filed a Chapter 11
bankruptcy petition (Bankr. M.D. Fla. Case No. 23-00396) on Feb. 1,
2023, with as much as $1 million in both assets and liabilities.
Judge Grace E. Robson oversees the case.
The Debtor is represented by Jeffrey S. Ainsworth, Esq., at
BransonLaw, PLLC.
BARTECH GROUP: Court OKs Cash Collateral Access Thru March 31
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Illinois,
Eastern Division, authorized the BarTech Group of Illinois, Inc. to
use cash collateral on a further interim basis through March 31,
2023, substantially in accordance with the budget.
BarTech is authorized to continue using cash collateral to pay all
expenses the Debtor incurred in the operation of their ongoing
business post-petition -- or if incurred pre-petition, those
expenditures authorized by a specific Order of the Court -- pending
the final hearing on the Motion.
A further hearing on the matter is set for March 29 at 10 a.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3ZvTX8Z from PacerMonitor.com.
The Debtor projects total cash out, on a weekly basis, as follows:
$89,410 for the week ending March 3, 2023;
$138,360 for the week ending March 10, 2023;
$184,654 for the week ending March 17, 2023;
$159,410 for the week ending March 24, 2023; and
$155,712 for the week ending March 31, 2023.
About The BarTech Group of Illinois Inc.
The BarTech Group of Illinois Inc. -- https://www.bartechgroup.biz
-- is an MBE and DBE certified electrical construction contractor.
The BarTech Group of Illinois Inc. filed a petition for relief
under Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr.
N.D. Ill. Case No. 22-10945) on Sept. 23, 2022. In the petition
filed by Dwayne Barlow, as president, the Debtor reported assets
between $500,000 and $1 million and estimated liabilities between
$1 million and $10 million.
William B. Avellone has been appointed as Subchapter V trustee.
Judge Timothy A. Barnes oversees the case.
Alan L. Braunstein, Esq., at Riemer Braunstein LLP is the Debtor's
counsel. Ringold Financial Management Services, Inc., is the
financial advisor.
BED BATH & BEYOND: Raises $135 Million More for Turnaround
----------------------------------------------------------
Bed Bath & Beyond Inc. (Nasdaq: BBBY) on March 8, 2023, announced
the receipt of approximately $135 million in gross proceeds, for a
cumulative total of $360 million through March 7th, 2023, upon
exercise of preferred stock warrants issued in its previously
announced public equity offering. As a reminder, on February 7,
2023, the Company completed an underwritten public offering which
raised initial gross proceeds of $225 million and enabled the
Company to receive up to an additional $800 million. The Company
has used proceeds received to date to repay outstanding revolving
loans, creating additional liquidity opportunities to support
business operating activities.
Sue Gove, President & CEO of Bed Bath & Beyond Inc. said, "Over the
past month, we have been rebuilding our financial and operational
positioning to execute our customer-focused turnaround plans.
Since closing our equity financing last month, we have engaged with
suppliers to improve our inventory positioning and we have
continued to optimize our brick-and-mortar footprint through store
closures to align with customer preference. Additionally, as
announced last week, we paid the outstanding interest due on all
Senior Notes, which has been acknowledged by key constituents such
as credit agencies. We continue to work with determination and
diligence to fulfill both our near- and long-term goals of
maximizing prospects for all stakeholders."
In connection with the foregoing, the Company entered into a waiver
and amendment to its Credit Agreement.
About Bed Bath & Beyond
Bed Bath & Beyond Inc., together with its subsidiaries, is an
omnichannel retailer selling a wide assortment of merchandise in
the Home, Baby, Beauty & Wellness markets and operate under the
names Bed Bath & Beyond, buybuy BABY, and Harmon, Harmon Face
Values. The Company also operates Decorist, an online interior
design platform that provides personalized home design services.
The Company reported a net loss of $559.62 million for the fiscal
year ended Feb. 26, 2022, a net loss of $150.77 million for the
year ended Feb. 27, 2021, and a net loss of $613.82 million for the
year ended Feb. 29, 2020. As of Nov. 26, 2022, the Company had
$4.40 billion in total assets, $5.20 billion in total liabilities,
and a total shareholders' deficit of $798.64 million.
* * *
As reported by the TCR on Jan. 11, 2023, S&P Global Ratings raised
its issuer credit rating on Union, N.J.-based specialty home
retailer Bed Bath & Beyond Inc. (BBBY) to 'CC' from 'SD' (selective
default). S&P said, "The 'CC' rating and negative outlook on BBBY
reflects our view that while not actively in default, the company
is highly vulnerable and a distressed transaction or broader
restructuring is a virtual certainty based on its deteriorating
liquidity position, challenging operating conditions, and the
looming maturities of its outstanding 2024 notes."
As reported by the TCR on Nov. 28, 2022, Moody's Investors Service
retained Bed Bath's corporate family rating at Ca and the outlook
remains stable. According to Moody's, Bed Bath & Beyond's Ca
corporate family rating reflects the very high likelihood of
further defaults over the next twelve months.
BELLA RESTAURANT: Seeks to Hire Penachio Malara as Legal Counsel
----------------------------------------------------------------
Bella Restaurant & Bar, Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of New York to employ
Penachio Malara, LLP to serve as legal counsel in its Chapter 11
case.
The firm's services include:
(a) assisting the Debtor in administering its bankruptcy
proceeding, preparing operating reports and complying with
applicable law and rules;
(b) reviewing and resolving claims which should be
disallowed;
(c) assisting in the sale of the Debtor's apartment units;
and
(d) assisting in reorganizing and confirming a Chapter 11 plan
or implementing an alternative exit strategy.
The firm intends to bill the Debtor at the following rates:
Anne Penachio, Esq. $495 per hour
Francis Malara, Esq. $400 per hour
Paralegal $225 per hour
In addition, the firm will seek reimbursement for its out-of-pocket
expenses.
The firm received a retainer in the amount of $5,000.
Anne Penachio, Esq., a partner at Penachio Malara, disclosed in a
court filing that her firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Anne Penachio, Esq.
Penachio Malara, LLP
245 Main Street-Suite 450
White Plains, NY 10601
Phone: (914) 946-2889
Email: frank@pmlawllp.com
About Bella Restaurant & Bar
Bella Restaurant & Bar, Inc., doing business as Savor Ristorante &
Bar, filed a Chapter 11 bankruptcy petition (Bankr. S.D.N.Y. Case
No. 23-35110) on Feb. 16, 2023, with as much as $1 million in both
assets and liabilities.
Judge Cecelia G. Morris oversees the case.
The Debtor is represented by Anne Penachio, Esq., at Penachio
Malara, LLP.
BELTWAY PLAZA: Court OKs Cash Collateral Access Thru March 20
-------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Maryland, Greenbelt
Division, authorized Beltway Plaza Investment, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance, through March 20, 2023.
The Debtor requires the use of cash collateral to meet its
obligations and preserve its business as a going concern.
The Debtor is currently indebted to Freedom Bank of Virginia under
a $5.705 million commercial term loan. As of the Petition Date,
the Debtor owed Freedom Bank $6.248 million. As collateral for the
Prepetition Indebtedness, the Lender holds a perfect security
interest in and lien upon the Property, all leases and pre-petition
and post-petition rents derived from the Property, and various
personal property of the Debtor relating to the Property.
As adequate protection, the Lender is granted a first-priority
post-petition security interest and lien in, to and against (i) all
pre-petition and post-petition leases and rents of the Debtor, (ii)
the DIP Operating Account and all rents of the Debtor deposited
therein, and (iii) all other assets of the Debtor described in the
Prepetition Loan Documents which are or have been acquired,
generated or received by the Debtor subsequent to the Petition Date
and all products and proceeds thereof.
The liens and security interests granted hereby, including the
Adequate Protection Liens, will become and are duly perfected
without the necessity for the execution, filing or recording of
financing statements, security agreements and other documents which
might otherwise be required pursuant to applicable non-bankruptcy
law for the creation or perfection of such liens and security
interests.
With 10 days from the date of the Order, the Debtor will obtain
hazard, fire and casualty insurance on the Property in the amount
of at least $7 million which lists the Lender as mortgagee insured
and the United States Trustee as additional notice party under the
insurance policy.
A final hearing on the matter is set for March 20 at 3 p.m.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3LjbMnp from PacerMonitor.com.
The Debtor projects $28,435 in total expenses.
About Beltway Plaza Investment, LLC
Beltway Plaza Investment, LLC is the owner of an eight story 65,010
sq. ft. commercial office building located at 4710 Auth Place,
Suite 140, Suitland, Maryland 20746. Beltway Plaza Investment has
approximately 20 commercial tenants and is incorporated in the
state of Maryland, but its charter is currently forfeited for
failure to file personal property returns. Efforts to reinstate its
charter are in process.
Beltway Plaza Investment sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Md. Case No. 23-11094) on February
20, 2023. In the petition signed by Ho Chong Suh, authorized
member, the Debtor disclosed up to $50 million in assets and up to
$10 million in liabilities.
Judge Lori S. Simpson oversees the case.
Craig M. Palik, Esq., at McNamee Hosea, P.A., represents the Debtor
as legal counsel.
BENNU ENTERPRISES: Continued Operations to Fund Plan
----------------------------------------------------
Bennu Enterprises, LLC, filed with the U.S. Bankruptcy Court for
the Eastern District of Texas a Plan of Reorganization dated March
7, 2023.
The Debtor operates a towing company in Denton Texas. The Debtor
financed its two tow trucks from Point Bank ("Bank").
As a result of a dispute between the parties, Bank sued the Debtor
and obtained an ex parte Pre-Judgment Writ of Sequestration. The
Debtor's vehicles were then sequestered by the Denton County
constable. Apparently, the constable turned the sequestered
vehicles over to the Bank and the Bank, in turn, delivered the
vehicles to a third party.
Once the bankruptcy was filed the Debtor demanded return of the
vehicles. After the Court entered an Order to return the vehicles
to the Debtor, the Debtor went to retrieve the vehicles only to
find the vehicles had been complete destroyed by the actions of the
Bank or the third party representative and were inoperable. The
Debtor has been attempting to get the vehicles in working order but
has not been able to do so. The Debtor intends to bring an action
for damages against the Bank.
The Debtor filed this case on December 6, 2022 and has been unable
resume operations. The debtor intends to complete the repairs on
the vehicles to get back in operation. It is anticipated that after
confirmation, the Debtor will continue in business. Based upon the
projections, the Debtor believes it can service the debt to the
creditors.
Class 6 consists of Allowed Unsecured Claims. All unsecured
creditors shall share pro rata in the unsecured creditors pool. The
Debtor shall make monthly payments commencing 30 days after the
Effective Date of $500 into the unsecured creditors' pool. The
amount represents the Debtor's disposable income as that terms is
defined in 11 U.S.C. § 1191(d). The Debtor shall make
distributions to the Class 6 creditors every 90 days commencing 90
days after the first payment into the unsecured creditors pool. The
Debtor shall make 36 payments into the unsecured creditors pool.
The Class 6 creditors are impaired.
The allowed unsecured claims total $36,000.
Class 7 consists of Current Owner. The current owner will receive
no payments under the Plan, however, she will be allowed to retain
her ownership in the Debtor. Class 7 Claimants are not impaired
under the Plan.
Debtor anticipates the continued operations of the business to fund
the Plan.
A full-text copy of the Plan of Reorganization dated March 7, 2023
is available at https://bit.ly/3mMvA8l from PacerMonitor.com at no
charge.
Proposed Attorneys for the Debtor:
Eric A. Liepins, Esq.
Eric A. Liepins, PC
12770 Coit Road, Suite 850
Dallas, TX 75251
Telephone: (972) 991-5591
Facsimile: (972) 991-5788
Email: eric@ealpc.com
About Bennu Enterprises
Bennu Enterprises, LLC, operates a towing company in Denton Texas.
Bennu Enterprises sought protection for relief under Chapter of the
Bankruptcy Code (Bankr. E.D. Tex. Case No. 22-41704) on Dec. 6,
2022, listing $50,001 to $100,000 in both assets and liabilities.
Eric A. Liepins, P.C., is the Debtor's counsel.
BERNSOHN & FETNER: Taps Cullen and Dykman as Special Counsel
------------------------------------------------------------
Bernsohn & Fetner, LLC received approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ Cullen and
Dykman, LLP as special litigation counsel.
The firm will provide legal services to the Debtor in connection
with the resolution of the Debtor's claims against MG Dolphin, LLC
and LG Blessed, LLC arising out of work performed on the
construction project at 152-154 East 78th St. Townhouse.
The firm will be paid at an hourly rate not to exceed $540 per
hour, and a cap based on the Debtor's recovery on account of the
Townhouse project claim, as follows:
(i) In the event the proceeds of the claim range from $0 to
$200,000, Cullen and Dykman's fees shall be capped at $50,000;
(ii) In the event the proceeds of the claim exceed $200,000 but
are less than $1 million, Cullen and Dykman's fees shall be capped
at $75,000;
(iii) In the event the proceeds of the claim are greater than or
equal to $1 million, there shall be no cap on the firm's fees.
Elizabeth Aboulafia, Esq., a partner at Cullen and Dykman,
disclosed in a court filing that her firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Elizabeth Aboulafia, Esq.
Cullen and Dykman, LLP
100 Quentin Roosevelt Blvd.
Garden City, NY 11530
Tel: (516) 357-3700
Fax: (516) 357-3792
Email: EAboulafia@cullenllp.com
About Bernsohn & Fetner
Bernsohn & Fetner, LLC -- http://www.bfbuilding.com/-- is a
full-service construction management and general contracting firm
dedicated to residential, corporate, and retail construction. It
also offers maintenance service for major New York buildings. The
company was founded in 2003 by Steven Fetner and Randall Bernsohn.
Bernsohn & Fetner sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 17-23707) on Nov. 7,
2017, with $1.735 million in assets and $920,000 in liabilities.
Steven Fetner, managing member, signed the petition.
The Hon. Robert D. Drain is the presiding judge.
The Debtor tapped Mayerson and Hartheimer, PLLC as bankruptcy
counsel; Cullen and Dykman, LLP as special litigation counsel; and
Vernon Consulting, Inc. as financial advisor and accountant.
BJ SERVICES: Court Dismissed Keystone's Counterclaims
-----------------------------------------------------
In the adversary proceeding entitled In Re: BJ Services, LLC, et
al., Chapter 11, Debtors. GACP Finance Co., LLC, Plaintiff, v.
Keystone Oilfield Fabrication LLC, et al., Defendants, Case No.
20-33627, Adversary No. 22-3107, (Bankr. S.D. Tex.), Bankruptcy
Judge Marvin Isgur for the Southern District of Texas dismisses
Keystone Oilfield Fabrication LLC' counterclaims.
GACP Finance Co., LLC filed claims against Keystone Oilfield
Fabrication LLC for Keystone's refusal to relinquish equipment to
which GACP believes it is entitled and over which Keystone claims a
garageman's lien. Keystone filed counterclaims and GACP moved to
dismiss.
The Court dismisses Keystone's counterclaims for (a) a declaratory
judgment that GACP abandoned property, (b) quantum meruit, and (c)
unjust enrichment. And the Court permits Keystone to amend the
quantum meruit and unjust enrichment counterclaims, except as to
the declaratory judgment of abandonment.
The Court dismisses Keystone's alternative request for a
declaratory judgment because Keystone presents only the naked
assertion that "GACP has abandoned the [sic] its claim to the
Equipment. . ." -- which runs contrary to the Lift Stay Order in
which the Court permitted GACP to recover its collateral pursuant
to GACP's motion filed Aug. 6, 2020 to lift the automatic stay.
Indeed, Keystone's bare assertion to the contrary is insufficient
to allow for amendments on this issue.
GACP argues that Keystone's quantum meruit counterclaim should be
dismissed because Keystone has not pled specific facts that show
that Keystone's care for the equipment was taken for GACP's benefit
(instead of BJ Services' benefit) or that GACP had reasonable
notice that Keystone expected to be compensated by GACP. Keystone
maintains that GACP had notice of Keystone's expectation to be paid
for caring for the equipment because the Lift Stay Order directs
GACP to pay all costs and expenses incurred in connection with its
collateral after the Lift Stay Order was entered. However, the Lift
Stay Order does not mention Keystone, nor does it specify equipment
in any party's care.
The Court reasons that if Keystone seeks to hold GACP liable under
a theory of quantum meruit, GACP must have been notified that
Keystone expected payment from GACP. Keystone does not allege facts
showing that GACP had such notice. The Court finds that Keystone
provides no facts to support the contention that GACP was on notice
of Keystone's expectation of compensation from GACP. The Court,
therefore, finds that Keystone does not state a valid claim for
quantum meruit.
GACP further argues that Keystone fails to plead specific facts
sufficient to allege that GACP obtained a benefit by fraud, duress,
or the taking of an undue advantage. Keystone claims that "GACP
knowingly allowed its Equipment to sit for over a year and has
unduly taken advantage of Keystone, its facilities, and its
resources in caring for and storing the Equipment."
While it may seem unfair that GACP should obtain the benefit of the
cared-for equipment without paying for Keystone's care, the Court
finds that Keystone has not pled specific facts showing that GACP
obtained a benefit by taking an undue advantage. As such, the Court
concludes that Keystone does not state a valid claim for unjust
enrichment.
A full-text copy of the Memorandum Opinion dated March 1, 2023 is
available at https://tinyurl.com/4p7dusmt from Leagle.com.
About BJ Services
BJ Services, LLC -- https://www.bjservices.com/ -- provides
hydraulic fracturing and cementing services to upstream oil and gas
companies engaged in the exploration and production of North
American oil and natural gas resources. Based in Tomball, Texas,
BJ Services operates in every major basin throughout U.S. and
Canada.
BJ Services and its affiliates sought protection under Chapter 11
of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No. 20-33627)
on July 20, 2020. At the time of the filing, the Debtors disclosed
assets of between $500 million and $1 billion and liabilities of
the same range. Judge Marvin Isgur oversees the cases.
The Debtors have tapped Kirkland & Ellis, LLP, Kirkland & Ellis
International, LLP and Gray Reed & McGraw LLP as their legal
counsel, PJT Partners LP as investment banker, Ankura Consulting
Group, LLC, as restructuring advisor, PricewaterhouseCoopers LLP as
tax consultant, and Donlin, Recano & Company, Inc., as claims
agent.
The Debtors have also tapped a number of professionals to assist in
the marketing and sale of their assets.
The Office of the U.S. Trustee appointed a committee of unsecured
creditors on July 28, 2020. The committee is represented by Squire
Patton Boggs (US), LLP.
BLANK LABEL: Case Summary & Largest Unsecured Creditors
-------------------------------------------------------
Three affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Blank Label Group, Inc. 23-10286
36 Bromfield Street
204
Boston, MA 02108
BlackLapel Custom Clothiers, Inc. 23-10287
Ratio Clothing, LLC 23-10288
Business Description: Blank Label is an online custom shirt-maker
that designs classic, custom-made menswear
and delivers it to clients with a fit
guarantee.
Chapter 11 Petition Date: March 8, 2023
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. John T. Dorsey
Debtors' Counsel: Joseph C. Barsalona II, Esq.
PASHMAN STEIN WALDER HAYDEN, P.C.
1007 North Orange Street, 4th Floor, Suite 183
Wilmington, DE 19801-1242
Tel: (302) 592-6496
(302) 592-6497
Email: jbarsalona@pashmanstein.com
- and -
Richard C. Solow, Esq.
The Woolworth Building
233 Broadway, Suite 820
New York, New York 10279
Email: rsolow@pashmanstein.com
Blank Label Group's
Estimated Assets: $500,000 to $1 million
Blank Label Group's
Estimated Liabilities: $1 million to $10 million
BlackLapel Custom's
Estimated Assets: $100,000 to $500,000
BlackLapel Custom's
Estimated Liabilities: $1 million to $10 million
Ratio Clothing's
Estimated Assets: $100,000 to $500,000
Ratio Clothing's
Estimated Liabilities: $1 million to $10 million
The petitions were signed by Fan Bi as managing chairman.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/6CLAVSQ/Blank_Label_Group_Inc__debke-23-10286__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/CWWSIXA/BlackLapel_Custom_Clothiers_Inc__debke-23-10287__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/CQKEDOY/Ratio_Clothing_LLC__debke-23-10288__0001.0.pdf?mcid=tGE4TAMA
List of Blank Label Group's Three Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. SBA EIDL Loan $500,000
U.S. Small Business Administration
Office of Disaster Assistance
14925 Kingsport Rd
Fort Worth, TX 76155-2243
Email: DisasterCustomerService@sba.gov
2. Bank Prov Loan $214,988
5 Market Street
Amesbury, MA 01913
Attn: Kendra Finch
Email: kfinch@bankprov.com;
Attn: Amber Gomes
Email: agomes@bankprov.com
3. Ramp Financial Trade Debt $57,601
71 5th Avenue
6th Floor
New York, New York 10003
Email: mmcanally@ramp.com
BlackLapel Custom's Seven Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. BooposWarehouse LLC Trade Debt $460,000
114 NW 25 th Street
Miami, FL 33127
Email: juanignacio.garcia@boopos.com
2. Jeeves Inc. Trade Debt $274,725
2035 Sunset Lake Rd.
Suite-B2
Newark, DE 19702
Email: jens@tryjeeves.com
3. OnDeck Trade Debt $125,000
4700 W. Daybreak Pkwy, Suite 200
South Jordan, UT 84009
Attn: Cinthia Malik
Email: cmalik@ondeck.com
4. BOC Capital Corp. Loan $124,218
85 South Oxford St. 2nd Floor
Brooklyn, NY 11217
Email: ppp@bocnet.org
5. Ramp Financial Trade Debt $33,341
71 5th Avenue
6th Floor
New York, New York 10003
Email: mmcanally@ramp.com
6. Derek Tian Obligations Unliquidated
Law Office of Heidi Drivdahl, PLC Under Merger
6947 Coal Creek Pkwy SE, #329 Agreement
Newcastle, WA 98059
Email: derek.tian@gmail.com
7. Warren Liao Obligations Unliquidated
Law Office of Heidi Drivdahl, PLC Under Merger
6947 Coal Creek Pkwy SE, #329 Agreement
Newcastle, WA 98059
Email: : warrenjliao@gmail.com
Ratio Clothing's Unsecured Creditor:
Entity Nature of Claim Claim Amount
SBA EIDL Loan $198,735
U.S. Small Business Administration
Office of Disaster Assistance
14925 Kingsport Rd
Fort Worth, TX 76155-2243
Email: DisasterCustomerService@sba.gov
BREAKFORM RESIDENTIAL: Seeks to Hire Sherwood Partners, Appoint CRO
-------------------------------------------------------------------
Breakform Residential Fund I, LP seeks approval from the U.S.
Bankruptcy Court for the Central District of California to hire
Sherwood Partners, Inc. to provide interim services and designate
Andrew De Camara as chief restructuring officer.
The firm's services include:
1. pre-bankruptcy planning, including but not limited to,
advising on the preparation of first day motions, communication
plans and cash management procedures;
2. development of cash collateral budgets;
3. pre-bankruptcy negotiations with the Debtor's secured
lenders or debtor-in-possession financing lender to seek consent to
cash collateral carve-out and arrange for appropriate DIP financing
as necessary;
4. assistance in the preparation for a motion to assume the
RSA;
5. assistance with options or strategies to deal with critical
vendors;
6. analysis of executory contracts and assist in the
preparation of any motions to assume key contracts;
7. review of Debtor business plan and financial forecast;
8. establishment of a special purpose entity to serve as the
new general partner as required by the RSA.
9. preparation of schedules and statement of financial
affairs, monthly operating reports, and other reporting
requirements;
10. assistance in cash management, including closure of
pre-bankruptcy accounts, books and records, and opening
post-petition accounts and books and records;
11. preparation of budget to actual cash variance reports, and
updates to budget as appropriate;
12. assumption of day-to-day operations of the Debtor;
13. representation of the Debtor in any proceeding or hearing
before the bankruptcy court, the Office of the U.S. Trustee or
otherwise in this Chapter 11 case;
14. working with the Debtor's bankruptcy counsel in connection
with any transactions outside of the ordinary course of business,
including but not limited to, any efforts to sell or liquidate some
or all of the Debtor's assets;
15. working with the Debtor's bankruptcy counsel to negotiate,
formulate and prepare a plan of reorganization in a manner
consistent with the RSA and the plan term sheet;
16. managing claims analysis and resolution process;
17. facilitation of document production for diligence requests,
as needed;
18. facilitation of review of Debtor's prior books and records
by limited partners;
19. providing expert testimony and related analysis in
connection with any contested matter or adversary proceeding in the
case;
20. overseeing preservation, maintenance, completion, marketing
and sale of the Debtor's projects to the extent necessary; and
21. other services that may be appropriate in connection with
Mr. De Camara's role as CRO.
Mr. De Camara's hourly rate is $615. Additional personnel will be
billed at hourly rates between $400 and $595.
Sherwood received a retainer in the amount of $85,000.
Mr. De Camara, senior managing director at Sherwood, disclosed in a
court filing that his firm is a "disinterested person" as that term
is defined by section 101(14) of the Bankruptcy Code.
The CRO can be reached at:
Andrew De Camara
Sherwood Partners Inc.
Freedom Circle, Suite 560
Santa Clara, CA 95054
Phone: 650-454-8001
Fax: 650-454-8040
Email: info@sherwoodpartners.com
About Breakform Residential Fund I
Breakform Residential Fund I, LP is a Los Angeles-based limited
partnership engaged in activities related to real estate.
Breakform sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Calif. Case No. 23-10504) on Jan. 30, 2023. In
the petition signed by its chief restructuring officer, Andrew De
Camara, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Julia W. Brand oversees the case.
Mark Horoupian, Esq., at Greenspoon Marder, LLP is the Debtor's
legal counsel while Andrew De Camara, senior managing director at
Sherwood Partners, Inc., serves as the Debtor's chief restructuring
officer.
BREAKFORM RESIDENTIAL: Taps Greenspoon Marder as Legal Counsel
--------------------------------------------------------------
Breakform Residential Fund I, LP seeks approval from the U.S.
Bankruptcy Court for the Central District of California to employ
Greenspoon Marder, LLP as its bankruptcy counsel.
The firm's services include:
(a) preparing bankruptcy schedules and statement of affairs,
(b) complying with the U.S. Trustee requirements, including
Chapter 11 initial reporting requirements and document requests;
(c) representing the Debtor at the initial interview with the
Office of the U.S. Trustee, and at the Section 341(a) meeting of
creditors;
(d) negotiating with secured creditors and addressing issues
relating to secured debt, cash collateral usage and the
debtor-in-possession loan;
(e) examining claims of creditors to determine their
validity;
(f) employing necessary professionals to assist the Debtor in
its Chapter 11 case;
(g) advising the Debtor on legal issues, including the use,
sale, or lease of property of the estate, use of cash collateral,
post-petition financing, relief from the automatic stay, special
treatment of creditors, payment of pre-bankruptcy obligations, the
rejection or assumption of leases, and related matters;
(h) negotiating with creditors holding secured and unsecured
claims;
(i) providing various "first day" motions designed, among
other things, to facilitate the smooth administration of the
Debtor's case and minimize disruption relating to the commencement
of this case;
(j) preparing and presenting a plan of reorganization and
disclosure statement;
(k) objecting to claims as may be appropriate;
(l) reviewing, analyzing, providing legal research, and
preparing documents, correspondence, and other communications with
regard to the foregoing matters;
(m) commencing and prosecuting avoidance actions and other
adversary proceedings;
(n) ensuring the Debtor's compliance with the Bankruptcy Code,
the Federal Rules of Bankruptcy Procedure, the Local Bankruptcy
Rules, the requirements and guidelines of the United States
Trustee, and any orders of this court; and
(o) in general, acting as counsel on behalf of the Debtor in
all bankruptcy law and related matters, which may arise in the
course of this case.
Greenspoon's standard rates range from $475 to $750 per hour for
attorneys and $250 for paraprofessionals.
The firm will charge these hourly fees:
Mark S. Horoupian, Esq. $695
Steven F. Werth, Esq, $610
Steve Burnell,Esq. $475
Paraprofessionals $250
As disclosed in court filings, Greenspoon is a disinterested person
as that term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Mark Horoupian, Esq.
Greenspoon Marder, LLP
333 S. Grand Ave., Suite 3400
Los Angeles, CA 90071
Tel: (213) 626-2311
Fax: (954) 771-9264
Email: mark.horoupian@gmlaw.com
About Breakform Residential Fund I
Breakform Residential Fund I, LP is a Los Angeles-based limited
partnership engaged in activities related to real estate.
Breakform sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. C.D. Calif. Case No. 23-10504) on Jan. 30, 2023. In
the petition signed by its chief restructuring officer, Andrew De
Camara, the Debtor disclosed up to $10 million in both assets and
liabilities.
Judge Julia W. Brand oversees the case.
Mark Horoupian, Esq., at Greenspoon Marder, LLP is the Debtor's
legal counsel while Andrew De Camara, senior managing director at
Sherwood Partners, Inc., serves as the Debtor's chief restructuring
officer.
BREITBURN OPERATING: Temporary Injunction Order Reversed on Appeal
------------------------------------------------------------------
Justice Randy Wilson of the Fourteenth District of Texas Courts of
Appeals dismisses the appealed case captioned as Breitburn
Operating, LP, Successor-In-Interest To QRE Operating, LLC;
Breitburn Management Company, LLC; Breitburn Energy Partners, LP;
QR Energy, LP; AND Maverick Natural Resources, LLC, Appellants, v.
Roger D. Parsons, in his Capacity as Trustee of the LL& E Royalty
Trust, Appellee, Case No. 14-21-00310-CV, (Tex. App.).
In this oil and gas case, the Appellants, Breitburn Operating LP
and its affiliates, challenge two interlocutory orders of the trial
court -- an order compelling them to deposit the entire remaining
balance of the Wells Fargo Account, in the amount of at least $13.4
million, into the court's registry and an order granting a
temporary injunction prohibiting the Breitburn Parties from
closing, liquidating, or depleting the Wells Fargo Account to a
balance below $13.4 million, or otherwise withdrawing or
transferring any of the $13.4 million from the Wells Fargo Account.
The Breitburn Parties timely perfected an interlocutory appeal from
each of the two orders. In a separate original proceeding -- Cause
Number 14-21-00337-CV, this Court granted mandamus relief and
directed the trial court to vacate the Deposit Order. Because the
challenged order has been vacated by the trial court and not
replaced with another order, the Court holds that the Breitburn
Parties' appeal is moot to the extent that they appeal from the
Deposit Order.
In the Temporary Injunction Order, the trial court made the
following findings as to the "probable right to the relief sought"
element: "Parsons has established a probable right to relief on his
claims against the [Breitburn Parties] for breach of [the Breitburn
Parties'] duty to make monthly overriding royalty payments
(calculated net of certain expenses) as required by the Jay Field
Conveyances. In particular, the Court finds that Parsons has
established a probable right that $13,356,193 of the funds in the
[Wells Fargo Account] represent accrued but unpaid royalties that
Parsons is entitled to receive under the Conveyances."
The Breitburn Parties argue that the trial court abused its
discretion in finding that Parsons had a probable right to the
relief he sought. The Partnership has two partners: (1) the Trust,
a non-managing general partner; and (2) Conoco, the managing
general partner. Parsons is the trustee of the Trust. The Breitburn
Parties contend that Parsons and the Trust lack capacity to pursue
claims for alleged breaches of the Conveyances. Instead, the
Breitburn Parties assert that only the Partnership, which is the
assignee under the Conveyances, has capacity to sue for any alleged
breaches of the Conveyances or for any proceeds from the Jay
Field.
The Court concludes that the trial court abused its discretion in
(1) finding that Parsons has a probable right to the relief he
seeks, (2) finding that Parsons has a probable right to relief on
his claims for breach of the Breitburn Parties' alleged duty to
make monthly overriding royalty payments as required by the
Conveyances, (3) finding that Parsons has a probable right to
receive royalties under the Conveyances, and (4) in granting
Parsons's application for a temporary injunction. Because the trial
court abused its discretion, the Court reverses the Temporary
Injunction Order and renders judgment denying Parsons' application
for a temporary injunction.
A full-text copy of the Memorandum Opinion dated Feb. 28, 2023 is
available at https://tinyurl.com/bdfu8ck7 from Leagle.com.
About Breitburn Energy
Breitburn Energy Partners LP is engaged in the acquisition,
exploitation and development of oil and natural gas properties,
Midstream Assets, and a combination of ethane, propane, butane and
natural gasoline that when removed from natural gas become liquid
under various levels of higher pressure and lower temperature, in
the United States. Operations are conducted through Breitburn
Parent's wholly-owned subsidiary, Breitburn Operating LP, and
BOLP's general partner, Breitburn Operating GP LLC.
Breitburn Energy Partners LP and 21 of its affiliates filed
voluntary petitions for relief under Chapter 11 of the Bankruptcy
Code (Bankr. S.D.N.Y. Lead Case No. 16-11390) on May 15, 2016. In
the petitions signed by James G. Jackson, executive vice president
and CFO, Breitburn disclosed assets of $4.71 billion and
liabilities of $3.41 billion.
The Debtors tapped Ray C Schrock, Esq., and Stephen Karotkin, Esq.,
at Weil Gotshal & Manges LLP, as bankruptcy counsel. The Debtors
hired Steven J. Reisman, Esq., and Cindi M. Giglio, Esq., at
Curtis, Mallet-Prevost, Colt & Mosle LLP as their conflicts
counsel. The Debtors tapped Alvarez & Marsal North America, LLC,
as financial advisor; Lazard Freres & Co. LLC as investment banker;
and Prime Clerk LLC as claims and noticing agent.
An Official Committee of Unsecured Creditors been formed in the
case. The Creditors Committee retained Milbank, Tweed, Hadley &
McCloy LLP as counsel.
A Statutory Committee of Equity Security Holders was also formed in
the case. The Equity Committee is currently composed of seven
individual holders. The Equity Committee retained Proskauer Rose
LLP as counsel.
BRIDGER STEEL: Files for Chapter 11 Bankruptcy With $17M in Debt
----------------------------------------------------------------
Bridger Steel Inc. filed for chapter 11 protection in the District
of Montana.
Bridger Steel disclosed $10,297,588 in assets against $17,319,510
in liabilities in its schedules. The petition states that funds
will be available to unsecured creditors.
A meeting of creditors under 11 U.S.C. Section 341(a) is slated for
March 30, 2023, at 10:00 AM at Telephonic 341 Meeting - Chapter 11.
Proofs of claim are due by June 28, 2023.
About Bridger Steel
Bridger Steel Inc. --
https://www.bridgersteel.com/about/bridger-steel -- is a
manufacturer of metal panel systems for roofing, siding & wall,
interior, and fencing applications.
Bridger Steel Inc. filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. D. Mon. Case No. 23-20019) on February
25, 2023. In the petition filed by Dennis L. Johnson, as president,
the Debtor reported assets between $1 million and $10 million and
liabilities between $10 million and $50 million.
The Honorable Bankruptcy Judge Benjamin P. Hursh oversees the
case.
The Debtor is represented by:
James A. Patten, Esq.
PATTEN PETERMAN BEKKEDAHL & GREEN
2817 2nd Avenue N, St 300
Billings, MT 59101
Tel: 406-252-8500
Email: apatten@ppbglaw.com
BSPV-PLANO LLC: Asset Sale Proceeds to Fund Bond Trustee's Plan
---------------------------------------------------------------
The Huntington National Bank, not individually but as trustee for
the bonds (the "Bond Trustee"), the senior secured creditor of the
Debtor BSPV-Plano, LLC, filed with the U.S. Bankruptcy Court for
the Eastern District of Texas a Disclosure Statement for the Plan
of Liquidation dated March 7, 2023.
The Debtor is a Texas limited liability company that is owned by
SEMA Investments, LLC, RP Shaw Investments LLC and Spectrum Housing
Corporation.
The Debtor was formed in May 2018 to acquire, own, develop, and
operate a 31.5 acre, "55+" Independent Senior Luxury Apartment
Community with 318 units of apartment inventory, that is known and
branded as "The Bridgemoor at Plano," and located at 1109 Park
Vista Road in Plano, Texas (the "Project").
The Plan contemplates a sale of the Debtor's assets and the
resolution of all outstanding Claims against and Interests in the
Debtor. Specifically, through the Plan, the Debtor's primary
assets, i.e., the Bridgemoor at Plano real estate development, will
be sold through a sale process which contemplates the marketing and
sale of those assets at auction. The Plan will distribute proceeds
from the sale and create a Liquidation Trust to pursue certain
causes of action, wind down the Debtor's Estate, and make
Distributions to holders of Allowed Claims.
The Plan is a sale plan that the Bond Trustee believes will
ultimately maximize value for all the Holders of Claims against,
and Equity Interests in, the Debtor. The Debtor has estimated that
the current market value of the Project is sufficient to pay all
claims against it in full. The Bond Trustee believes that the best
way to maximize that value is to sell the Project through a
structured sale process, overseen by the Bankruptcy Court. The Sale
Transaction contemplated by the Plan is designed to expose the
Project to the open market though a marketing and auction process
that, in the opinion of the Bond Trustee and its professionals,
will result in the realization of the market value of the Project.
The remaining assets of the Estate not sold through the Sale
Transaction will be transferred to a Liquidation Trust to be
liquidated for the benefit of the holders of the Liquidation Trust
Interests. The Liquidation Trustee will prosecute and liquidate the
Liquidation Trust Assets, with the proceeds from such liquidation
distributed on a Pro Rata basis to Holders of the Liquidation Trust
Interests, pursuant to the terms and conditions of the Plan and the
Litigation Trust Agreement.
The Plan provides for an orderly and efficient sale of the Debtor's
Assets for the benefit of all the Creditors of the Estate. After a
careful review of current operations and liquidity of the Debtor,
prospects of it continuing as an ongoing business, and estimated
recoveries to creditors in alternative scenarios, the Bond Trustee
has concluded that the Plan would maximize recoveries to the
Debtor's stakeholders by effectuating the Sale Transaction of the
Project and distribution of the proceeds thereof pursuant to the
priority scheme of the Bankruptcy Code. In addition, the Plan
provides for payment in full of all Allowed Unsecured Claims in
Class 5, through a carve-out from the payments otherwise due to the
Bond Claims if the Net Sale Proceeds are insufficient to pay the
Allowed Unsecured Claims in full.
The Plan will be funded using the Debtor's cash on hand on the
Effective Date, the revenues being generated by the Debtor's
operations from the Effective Date until the Closing Date and the
Net Sale Proceeds generated by the sale of the Project. The Plan
proposes to pay all Allowed Claims on or after the Effective Date,
at which time the Liquidation Trustee will be in possession of the
Net Sale Proceeds, which are estimated to be sufficient to pay all
Allowed Claims in full.
Class 5 consists of all Allowed General Unsecured Claims against
the Debtor. If the Debtor is solvent on the Confirmation Date, the
Class 5 Claims shall be entitled to accrue interest at the Default
Rate from the Petition Date to the Confirmation Date. Provided that
all Class 1, 2, 3, 4 and Administrative Expense Claims and Priority
Claims have been paid in full, the Class 5 Claims shall be paid, on
a Pro Rata basis along with the Class 6 Claims, from the Net Sale
Proceeds or other remaining Assets of the Debtor. If the Net Sale
Proceeds generated by the Project are sufficient to pay the Allowed
Claims in Classes 1-5 and the Allowed Administrative Expenses
Claims in full, or in the event that there is a Refinancing as
provided for under Article II hereof, the Class 5 claimants shall
be entitled to payment of accrued interest on their claims from the
Petition Date to the Effective Date at their respective Default
Rates. Such interest shall be added to the Class 5 claims and paid
on the Effective Date. If the Net Sale Proceeds are insufficient to
pay all Allowed Class 1-5 Claims in full, then the balance of any
unpaid Allowed Class 5 Claims shall be paid from monies otherwise
payable to the Class 2 claimants under the Plan.
The Class 5 claimants will receive Liquidation Trust Interests on
the Effective Date in the amount of their Pro Rata share of the
claims in Class 5 that remain unpaid following distributions of the
Net Sale Proceeds and all other liquid assets of the Debtor not
otherwise transferred to the Liquidation Trust. If any portion of
the Class 5 Claims are paid from monies otherwise due to the Class
2 Claimants, then the Class 2 Claimants shall receive the
Liquidation Trust Interests. Each Class 5 Claim is impaired, and
Holders of each Class 5 Claim are entitled to vote to accept or
reject the Plan.
Class 7 consists of the Equity Interests in the Debtor. The
Debtor's Equity Interest Holders shall receive no payments or
retain any Interest in the Debtor or the Liquidation Trust, under
the Plan unless and until all Allowed Claims in Classes 1 through 6
have been paid in full, with all accrued interest thereon as
provided for under the Plan. If all Class 5 and Class 6 Claims have
been satisfied, any remaining Assets of the Debtor and the
Liquidation Trust Interests shall revert to the Holders of Class 7
claims on a Pro Rata basis. Each Class 7 Claim is Impaired under
the Plan.
The Plan will implement the Sale Transaction, pursuant to the Bid
Procedures, through which the Project and substantially all of the
Debtor's assets will be sold to a Purchaser. The Net Sale Proceeds
shall be transferred to the Liquidation Trustee on the Closing Date
and distributed by the Liquidation Trustee pursuant to the Plan on
the Effective Date. The remaining assets of the Estate shall be
transferred to a Liquidation Trust on the Effective Date to be
liquidated for the benefit of holders of the Liquidation Trust
Interests.
The Plan will also establish a Liquidation Trust, into which all
assets of the Debtor not purchased through the Sale Transaction,
including Retained Causes of Action, will be transferred. The
Liquidation Trustee will prosecute and liquidate the Litigation
Trust Assets, with the proceeds from such liquidation distributed
on a Pro Rata basis to Holders of Allowed General Unsecured Claims,
Deficiency Claims and/or Equity Interests of the Debtor, pursuant
to the terms and conditions of the Plan and the Liquidation Trust
Agreement.
A full-text copy of the Disclosure Statement dated March 7, 2023 is
available at https://bit.ly/40hffr5 from PacerMonitor.com at no
charge.
Counsel for the Bond Trustee:
ROSS, SMITH & BINFORD, PC
Judith W. Ross, Esq.
Frances A. Smith, Esq.
700 N. Pearl Street, Suite 1610
Dallas, Texas 75201
Telephone: 214-377-7879
Facsimile: 214-377-9409
EMAIL: JUDITH.ROSS@RSBFIRM.COM
EMAIL: FRANCES.SMITH@RSBFIRM.COM
GREENBERG TRAURIG, LLP
Kevin J. Walsh, Esq.
Colleen A. Murphy, Esq.
Charles W. Azano, Esq.
Christopher Marks, Esq.
One International Place, Suite 2000
Boston, Massachusetts 02110
Telephone: (617) 310-6000
Facsimile: (617) 310-6001
Email: KEVIN.WALSH@GTLAW.COM
COLLEEN.MURPHY@GTLAW.COM
CHIP.AZANO@GTLAW.COM
CHRIS.MARKS@GTLAW.COM
About BSPV-Plano LLC
BSPV-Plano, LLC, a company in Plano, Texas, sought protection under
Chapter 11 of the Bankruptcy Code (Bankr. E.D. Texas Case No.
22-40276) on March 1, 2022, listing up to $100 million in both
assets and liabilities. Richard Shaw, manager, signed the
petition.
Judge Brenda T. Rhoades oversees the case.
Munsch Hardt Kopf and Harr, PC, Grant Thornton, LLP and American
Global of Texas, LLC serve as the Debtor's legal counsel, financial
advisor and insurance consultant, respectively.
The Debtor filed its proposed Chapter 11 plan of reorganization on
Dec. 31, 2022.
CAESARS ENTERTAINMENT: S&P Upgrades ICR to 'B+', Outlook Stable
---------------------------------------------------------------
S&P Global Ratings raised its issuer credit rating on U.S. gaming
operator Caesars Entertainment Inc. to 'B+' from 'B'. At the same
time, S&P raised the issue-level ratings on Caesars' secured debt
to 'B+' from 'B', in line with its upgrade of Caesars, and placed
the ratings on CreditWatch with positive implications. S&P also
placed its 'B' issue-level ratings on its unsecured debt on
CreditWatch with negative implications.
The stable outlook reflects S&P's forecast for adjusted leverage to
improve to around 6x in 2023 primarily because a reversal in
digital losses and ongoing recovery in convention and group
business in Las Vegas is likely to drive significant EBITDA growth.
This is likely to provide the company sufficient flexibility to
navigate potential operating volatility from a likely 2023
recession.
The upgrade to 'B+' reflects an expectation for improved leverage
in 2023 because of reduced digital losses. Caesars' digital segment
has been a drag on EBITDA over the past 18 months because of
significant investments to enter new markets and promotional and
marketing spending to attract customers as digital sports betting
launches accelerated across a number of states. Notwithstanding,
Caesars has materially reduced digital's drag on EBITDA in recent
quarters as it scales up digital revenue in new states to cover
fixed costs in the business and leverages player loyalty data to
more efficiently target its marketing efforts to customers,
supporting customer retention and allowing Caesars to maintain
market share. S&P said, "Additionally, we expect Caesars' customer
acquisition costs, advertising and promotional spending will be
lower as there are fewer states that are scheduled to launch
digital sports betting in 2023 compared to 2021 and 2022. Over the
past three quarters (second-fourth quarters 2022), EBITDA losses
from the digital segment totaled $112 million compared to $1
billion in the previous three quarters (third quarter 2021 to first
quarter 2022). We expect the digital segment to be at least neutral
to EBITDA positive in 2023 absent any significant change to the
schedule of states that are expected to approve online sports
betting within the next 12 months. This compares to a $666 million
loss in 2022. This sizable swing in EBITDA and cash flow will
materially reduce 2023 leverage. Furthermore, we believe
incremental investments that Caesars plans to make to improve its
icasino offering will further increase digital revenues and support
improved profitability in this segment. As a result, we forecast
adjusted leverage will improve to around 6x in 2023 from 7.9x in
2022. (Our measure of adjusted leverage includes EBITDA losses in
the digital segment, Caesars' financing obligations as reported on
its balance sheet, and the consolidation of CBAC Borrower LLC) The
company recently said it expects digital to be an EBITDA
contributor in 2023, ahead of its previous expectation for digital
to turn EBITDA positive by football season 2023. Notwithstanding,
we continue to view online sports betting and igaming as highly
competitive and believe operators will continue to compete
aggressively for market share particularly as new states approve
online gaming."
Investments in its regional portfolio and convention and group
recovery in Las Vegas will partly offset inflationary pressures.
Caesars has been able to sustain margins consistently above
pre-pandemic levels despite the return of a more normal competitive
environment, including the resumption of operations of alternative
entertainment options and the elimination of pandemic operating
restrictions. S&P said, "We believe inflationary pressures on
operating costs and consumer discretionary spending could result in
some margin moderation in 2023. However, Caesars' substantial
casino margin improvement through 2022 because of cost synergies
from the merger and operating efficiencies implemented during the
pandemic provide it capacity to withstand some moderation and
remain much higher than pre-pandemic levels. Additionally, Caesars
stands to benefit from a number of capital investments across its
regional portfolio, which are scheduled to be completed in 2023,
including the completion of the construction of temporary casinos
in Virginia and Nebraska, renovations, and expansions. In addition
to these capital investments, the company will also benefit from
ongoing recovery in group and convention in Las Vegas that will
likely support margin. We forecast Caesars' casino EBITDA will
increase 4%-6% in 2023."
Despite rising macroeconomic risks that could impede discretionary
spending and pose risks to Caesar's cash flow, convention and group
visitation recovery in Las Vegas may be an offset. Rising prices
and interest rates are eating away at household purchasing power.
S&P forecasts a 0.1% contraction for 2023 as the economy falls into
a shallow and short recession this year. S&P can't rule out an even
harder landing if the U.S. Federal Reserve becomes more aggressive
with rate hikes to quell inflation. Although the shift in spending
to experiences from products may continue for a while longer, the
surge in leisure spending in Las Vegas and good regional gaming
revenue may begin to slow if consumers' willingness to spend on
travel and entertainment in 2023 is hit by reduced accumulated
savings, ongoing high inflation, and higher unemployment.
Acceleration in convention and group business in Las Vegas in 2023
could partly replace a moderation in leisure demand, but a
weakening macroeconomic environment could slow the pace of recovery
if corporate travel budgets fall.
While destination markets such as Las Vegas tend to be more
volatile in a downturn than regional gaming markets, continued
group and convention recovery, expanded group and convention
capacity from the opening of the Caesars FORUM (2020) and the Las
Vegas Convention Center expansion (2021), the return of
international travel, the core gaming demographic (55+ age group),
and investment in new attractions including the opening of
Allegiant Stadium (2020) and the MSG Sphere (slated to open in
2023) should continue to support recovery in visitation. Caesars
indicated that its group and convention business is currently above
2019 levels driven by strong average daily rates (ADRs), higher
room nights, and higher banquet revenues. In addition, supply
growth in the market is relatively modest, and much lower than in
2008-2010. As a result, S&P expects the impacts of a shallow
recession on Las Vegas would be less dramatic than during the
financial crisis.
Moreover, the first quarter of 2023 will be an easy comparison with
the first quarter of 2022 due to the negative impact the omicron
variant of the COVID-19 virus had on travel and hotel demand in Las
Vegas, especially the group and convention segment and CES held
every January. CES drew about 44,000 attendees in 2022 and event
organizers estimate attendance rose to 115,000 this year,
approximately 33% below 2020. A favorable event calendar in 2023
should also help. The market will benefit this year from the return
of CONEXPO-CON/AGG, a construction trade show held every three
years that attracted just under 130,000 in March 2017, as well as
Formula 1's Las Vegas Grand Prix auto race in November 2023.
Caesars' geographic diversity may lessen the impact of a recession
on its performance. S&P believes Caesars' diversified portfolio of
gaming assets (about 40% of its brick-and-mortar revenues are
generated in Las Vegas and about 60% are generated in regional
markets) can help mitigate some potential EBITDA volatility caused
by economic downturns or event risks. If gaming customers have less
discretionary dollars available to spend, they may stay closer to
home and visit a regional casino instead of Las Vegas. This partly
explains why regional casinos have historically exhibited less
revenue volatility in a downturn than destination markets. Caesars'
presence in the majority of regional gaming markets allows them to
benefit from this shift in spending.
S&P said, "The stable outlook reflects our forecast for adjusted
leverage to improve to around 6x in 2023 primarily because a
reversal of digital losses drives significant EBITDA growth and
continued recovery in convention and group business in Las Vegas
supports further cash flow recovery. This should provide the
company sufficient flexibility to navigate potential operating
volatility from a likely 2023 recession.
"We could lower the ratings if we expect the company to sustain
adjusted leverage above 7.0x. This could occur if operating
performance materially underperforms our base case forecast because
a recession leads the consumer to significantly pull back
discretionary spending or if the company were to engage in
materially leveraging acquisitions.
"We could raise our rating on Caesars if we expect lease-adjusted
leverage can be maintained below 6x. This could occur if the
company outperforms our base case forecast or completes a large
asset sale and used the proceeds for debt reduction. In both cases,
before raising the rating, we would have to be more certain Caesars
could sustain leverage below 6x incorporating operating volatility,
leveraging acquisitions, or heightened investment spend."
ESG credit indicators: E-2, S-3, G-2
S&P said, "Social factors are a moderately negative consideration
in our credit rating analysis of Caesars. Although the COVID-19
pandemic severely affected Caesars's cash flow because of property
closures, operating and capacity restrictions, travel restrictions,
a slower recovery in conventions and group meetings and limited
international visitation to Las Vegas, the company's revenue and
cash flow has recovered strongly. This is supported by strong
leisure demand for Las Vegas and regional gaming. Nevertheless,
while we view the pandemic as a rare and extreme disruption that is
unlikely to recur at the same magnitude, health and safety scares
are an ongoing risk factor. Other factors include regulatory risks,
as Caesars is subject to high regulation across the jurisdictions
where it operates."
CANO HEALTH: Moody's Cuts CFR to Caa3, Outlook Stable
-----------------------------------------------------
Moody's Investors Service downgraded the ratings of Cano Health,
LLC including the Corporate Family Rating to Caa3 from Caa1, and
the Probability of Default Rating to Caa3-PD from Caa1-PD.
Concurrently, Moody's downgraded the ratings of Cano's First Lien
Senior Secured Credit Facilities to Caa2 from Caa1 and the ratings
of the Senior Unsecured Notes to Ca from Caa3. Moody's also
assigned a Caa2 rating to Cano's new $150 million senior secured
term loan. The rating outlook remains stable. There was no action
to the Speculative Grade Liquidity Rating, which remains SGL-4.
The ratings downgrade reflects Moody's view that Cano's capital
structure is becoming increasingly unsustainable and the
probability of a default, by way of a distressed exchange is high.
Cano has experienced a significant erosion in operating performance
and profitability in 2022 which Moody's expects will continue
throughout 2023 and 2024. Despite the cash added to the balance
sheet and repayment of the revolver using the new $150 million
first lien term loan, Moody's forecasts Cano will continue to have
negative free cash flow. As a result, Cano will need to draw on the
revolver to continue to fund its operations given higher than
expected operating expenses, which are driven by a faster pace of
membership growth including a larger percentage of patients with
higher acuities and higher expected utilization for those new
members. Moody's expects the company to continue to have high
leverage and is weakly positioned to absorb any unexpected
operating setbacks in light of the company's cash burn and poor
performance.
Governance risk considerations are material to the rating action.
Governance risk factors related to financial strategy, risk
management, credibility and track record are elevated because
financial leverage has been persistently high following Cano's very
aggressive debt-funded growth strategy that has more than doubled
membership in two years and is contributing to the downgrade.
Additionally, Cano has revised down its EBITDA guidance multiple
times in 2022 and incurred a large goodwill impairment charge. The
company has the option to PIK its interest for the new $150 million
term loan. While the option will help liquidity, it will continue
to add debt and increase leverage overall.
The stable outlook reflects Moody's view that the default
probability is high and appropriately captured at the current
rating level.
Downgrades:
Issuer: Cano Health, LLC
Corporate Family Rating, Downgraded to Caa3 from Caa1
Probability of Default Rating, Downgraded to Caa3-PD from Caa1-PD
Senior Secured 1st Lien Revolving Credit Facility, Downgraded to
Caa2 (LGD2) from Caa1 (LGD3)
Senior Secured 1st Lien Term Loan, Downgraded to Caa2 (LGD2) from
Caa1 (LGD3)
Senior Secured 1st Lien Delayed Drawn Term Loan, Downgraded to
Caa2 (LGD2) from Caa1 (LGD3)
Senior Unsecured Notes, Downgraded to Ca (LGD5) from Caa3 (LGD6)
Assignments:
Issuer: Cano Health, LLC
Backed Senior Secured 1st Lien Term Loan, Assigned Caa2 (LGD2)
Outlook Actions:
Issuer: Cano Health, LLC
Outlook, Remains Stable
RATINGS RATIONALE
The Caa3 CFR is constrained by Cano's very high financial leverage,
that will continue to increase with its new $150 million PIK loan,
moderate scale, and Moody's anticipated cash burn in 2023. Moody's
Adjusted debt/EBITDA for the last twelve months ending December 31,
2022, pro forma for the new term loan has increased to over 20
times. Moody's anticipates that Cano will need to draw on the
revolver for its operational needs in 2023. Further, leverage will
be impacted by ongoing margin compression related to newer higher
acuity patients that require more care at the onset. The CFR is
constrained by significant geographic concentration in Florida.
Further, Cano's high reliance on Humana for about 40% of its
members reflects material customer concentration risk.
Moody's expects these exposures to remain high over the next 12-18
months, but to moderate over time as Cano enters new states and
expands its relationships with other Medicare Advantage plan
providers. An inherent challenge within Cano's business model is
that it requires the company to aggressively manage the cost of
patient care and other expenses, given that it earns revenues on a
capitated basis from Medicare Advantage plan providers. The
company's ambitious plans for growth has resulted in new members
with higher acuity, which is negatively impacting the company's
profitability.
The Caa3 CFR is supported by the company's focus on treating
patients with Medicare Advantage health insurance plans in a
cost-effective manner. Moody's expects enrollment of retirees in
Medicare Advantage plans to continue outstripping that of Medicare
fee-for-service plans by a wide margin. This represents a
significant opportunity for good performing, value-based providers
that can offer low costs to payers.
The Caa2 rating on the first lien senior secured credit facilities
is rated one notch higher than the Caa3 Corporate Family Rating,
because they benefit from the loss absorption provided by the $300
million of senior unsecured notes. The Ca rating on the senior
unsecured notes is one notch below the CFR, reflects their junior
position relative to the significant amount of senior secured debt
in the capital structure.
The stable outlook reflects Moody's view that the default
probability is high and appropriately captured at the current
rating level.
Cano's liquidity rating is SGL-4 reflecting Moody's expectation
that Cano will continue to burn cash in 2023. Despite the recent
cash infusion from the new term loan and lower capital expenditures
requirements due to a slow down on growth of new facilities, rising
interest rates will continue to constrain cash. Cano has a maximum
first lien net leverage covenant with step-downs over time. The
revolver was repaid with the new term loan, but Moody's expects the
company to draw on the revolver but to maintain an adequate
cushion.
ESG considerations are material to Cano's credit profile, reflected
in the Credit Impact Score of CIS–5 very highly negative. Credit
exposure to governance risk considerations is very highly negative
(G-5). Governance risk exposures are influenced by the company's
aggressive financial policies and unreliable track record of
execution as the company has revised down its EBITDA guidance.
Credit exposure to environmental risks considerations is highly
negative (E-4) due to the company's high exposure to physical
climate risk as Cano has roughly 90% concentration in Florida which
makes the company susceptible to hurricanes and other extreme
weather conditions. Credit exposure to social risks considerations
is very highly negative (S-5). Cano is almost entirely reliant on
government payors, including Medicare and Medicare Advantage, which
may face longer-term budgetary pressures. As a healthcare service
provider, Cano is also exposed to labor pressures and human capital
constraints.
The new credit facility is expected to provide covenant flexibility
that if utilized could negatively impact creditors. Notable terms
include the following:
Until the new $150 million term loan has been repaid in full, the
Company may not incur any additional first lien senior secured debt
( i.e. pari passu debt). Any future debt financing must be junior
lien or unsecured.
The credit agreement does not permit the designation of
unrestricted subsidiaries, preventing collateral "leakage" to
unrestricted subsidiaries.
Non-wholly-owned subsidiaries are not required to provide
guarantees; sales of guarantor stock could jeopardize guarantees
subject to protective provisions which only permit guarantee
releases subject to an arm's length sale of capital stock to a bona
fide third party purchaser.
The credit agreement provides some limitations on up-tiering
transactions, including the requirement that each lender directly
and adversely affected consents in writing to any waiver, amendment
or modification that subordinates the obligations (or any portion
thereof) or the liens on the collateral securing the obligations
(or any portion thereof), to any other indebtedness. The above are
proposed terms and the final terms of the credit agreement may be
materially different.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Ratings could be upgraded if Cano substantially improves operating
performance and materially reduces leverage to a more sustainable
level. Cano will also need to demonstrate a track record of
effectively managing its aggressive growth strategy. A material
improvement in liquidity could also lead to an upgrade.
The ratings could be downgraded if Cano experiences further
operating or cash flow disruption. Further rising likelihood of
debt impairment would also lead to a rating downgrade.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Cano Health, LLC medical centers and affiliates provide primary
care health services to more than 310,000 members across 9 states
and Puerto Rico with a focus on Medicare Advantage members. The
company has 172 owned medical centers with approximately 400
employed providers and 1,500 affiliated providers. Cano's FYE 2022
revenue was approximately $2.7 billion. Cano is publicly traded on
the NYSE under ticker "CANO". ITC Rumba, LLC (InTandem Capital
Partners) maintains about 34% equity stake.
CELSIUS NETWORK: Begins Customer Withdrawals After Getting Court OK
-------------------------------------------------------------------
Gabrielle Saulsbery of Banking Dive reports that customers of
bankrupt cryptocurrency lender Celsius can withdraw their assets
from the platform for the first time since June, the company
announced Thursday, March 2, 2023.
The news, which applies to certain custody accounts, follows a
January court order authorizing Celsius to process withdrawals.
Affected assets include "pure custody" assets not in any earn or
borrow accounts, and "transferred custody" assets moved from earn
or borrow accounts at least 90 days prior to the firm's
bankruptcy.
Earn accounts allowed customers to deposit crypto on the Celsius
platform in return for up to 18% interest annually, while borrow
accounts allowed users to borrow money from Celsius against their
own collateralized crypto assets.
The court order limits withdrawals from eligible accounts to 94% of
their contents. Additionally, customers who previously transferred
funds from an earn or borrow account to a custody account can
withdraw 72.5% of their funds, up to a maximum of $7,575.
Hoboken, New Jersey-based Celsius filed for bankruptcy in July
2022. Customers assets have been locked from withdrawal since June,
and the company owes its 1.7 million customers approximately $4.7
billion. Celsius was one of the first major crypto companies to
file for bankruptcy following the Terra/Luna crash, and its former
CEO Alex Mashinsky is in hot water as the subject of a suit by New
York Attorney General Letitia James, who alleges that he defrauded
hundreds of thousands of investors out of billions of dollars.
The suit, filed in New York Supreme Court in January, alleges
Mashinsky misrepresented his exchange's safety to attract billions
of dollars in digital assets from investors. As Celsius hemorrhaged
money from risky investments, Mashinsky hid the exchange's
financial condition from those investors, James said at the time.
Celsius was acquired last month by NovaWulf Digital Management, a
digital asset investment company based in New York City. Celsius
attorney Ross Kwasteniet said at a bankruptcy court hearing that
the deal should allow the firm to exit Chapter 11 and begin the
process of returning assets to customers in June, according to
Reuters.
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 bankruptcy 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.
CHASE CUSTOM HOMES: Taps Bernstein Shur Sawyer & Nelson as Counsel
------------------------------------------------------------------
Chase Custom Homes & Finance, Inc. seeks approval from the U.S.
Bankruptcy Court for the District of Maine to employ Bernstein Shur
Sawyer & Nelson, P.A. as its legal counsel.
The firm's services include:
(a) advising the Debtor with regard to the requirements of the
bankruptcy court, Bankruptcy Code, Bankruptcy Rules, Local Rules,
and the Office of the United States Trustee, as they pertain to the
Debtor;
(b) advising the Debtor with regard to certain rights and
remedies of the bankruptcy estates and rights, claims, and
interests of creditors and bringing such claims as the Debtor, in
its business judgment, decide to pursue;
(c) representing the Debtor in any proceeding or hearing in
the bankruptcy court involving the estates;
(d) conducting examinations of witnesses, claimants, or
adverse parties, and representing the Debtor in any adversary
proceeding (except to the extent that any such adversary proceeding
is in an area outside of the firm's expertise);
(e) reviewing and analyzing various claims of the Debtor's
creditors and treatment of such claims, and preparing, filing or
prosecuting any objections thereto or initiating appropriate
proceedings regarding leases or contracts to be rejected or
assumed;
(f) preparing legal papers;
(g) assisting the Debtor in the analysis, formulation,
negotiation and preparation of all necessary documentation relating
to the sale of its assets;
(h) assisting the Debtor in the negotiation, formulation,
preparation and confirmation of a plan of reorganization; and
(i) performing other necessary legal services.
The firm's hourly rates are as follows:
D. Sam Anderson, Attorney (Shareholder) $485
Adam R. Prescott, Attorney (Shareholder) $395
Letson Douglass Boots, Attorney (Associate) $305
Christine Mastrogiorgio, Paraprofessional $210
Karla Quirk, Paraprofessional $210
As disclosed in court filings, Bernstein is a "disinterested
person" as that phrase is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
D. Sam Anderson, Esq.
Bernstein, Shur, Sawyer & Nelson, P.A.
100 Middle Street
P.O. Box 9729
Portland, ME 04104-5029
Tel: (207) 774-1200
Fax: (207) 774-1127
Email: sanderson@bernsteinshur.com
About Chase Custom Homes & Finance
Chase Custom Homes & Finance Inc. -- https://cchfi.com --
specializes in new home construction, home renovations &
remodeling
in Portland, Maine.
Chase Custom Homes & Finance filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Maine Case No.
23-20032) on Feb. 16, 2023. In the petition filed by Terina Chase
as authorized party, the Debtor reported between $10 million and
$50 million in both assets and liabilities.
The Debtor tapped Bernstein Shur Sawyer & Nelson as legal counsel;
Purdy, Powers & Company, P.A. as accountant; and Windsor
Associates, LLC as financial advisor..
The U.S. Trustee for Region 1 appointed an official committee to
represent unsecured creditors in the Debtor's Chapter 11 case.
COMMUNITY HEALTH: S&P Upgrades ICR to 'CCC+', Outlook Negative
--------------------------------------------------------------
S&P Global Ratings raised its rating on Community Health Systems
Inc. to 'CCC+' from 'SD' (selective default), and raised its
ratings on the secured junior priority notes to 'CCC-' from 'D'. At
the same time, S&P lowered its ratings on the senior secured debt
to 'B-' from 'B' and its ratings on the senior unsecured debt to
'CCC-' from 'CCC'.
The outlook is negative, reflecting the potential risk of further
distressed exchanges over the next year.
S&P said, "We believe Community Health's capital structure is
currently unsustainable. The company remains highly leveraged at an
S&P Global Ratings-adjusted 8.1x, and the company has not
established a track record of sustained positive free cash flow
generation. While we expect positive cash flow in 2023, it is
unclear whether the company can sustainably grow it over the next
few years to a level where it can absorb any potential increase in
its interest burden from its next refinancing cycle, which begins
in 2026.
"The negative outlook reflects the risk of further distressed
exchanges over the 12 months. We believe there is a heightened risk
that Community Health may complete more below par debt repurchases
over the next 12 months that we would deem as distressed. While the
debt traded up recently, it is still at levels we consider
distressed. Although we project operating performance and
discretionary cash flow generation will improve, Community Health
remains highly levered, and management may use cash flows and
proceeds from planned divestitures to repurchase debt at a
discount. The company has already repurchased debt at a discount in
both the third and fourth quarters of 2022, and we will likely view
any further open market repurchases as tantamount to an offer
because we will no longer view these repurchases as anonymous.
"We expect performance and free cash flows to improve in 2023.
Labor challenges and inflationary pressures will likely moderate in
2023 but remain headwinds. The use of expensive temporary staffing
has been declining steadily through 2022, and we believe it will
decline further in 2023. However, we project labor costs will
remained elevated and increase 5% this year, which is lower than
2022 but still higher than normal. Still, we expect EBITDA margins
to grow to 13%-13.4% over the next two years, up from 12.5% in
2022, as the company further builds its higher acuity service
lines. We also project that free cash flows will turn positive in
2023."
Community Health continues to aggressively rationalize of its
portfolio. It cut its hospital count down to 79 facilities at
present from 194 in 2015. The company recently announced it has
agreed to sell its two North Carolina hospitals for roughly $320
million, closing later this year. The proceeds, along with expected
improving free cash flows, gives the company increased flexibility
to accelerate deleveraging and pursue potential acquisitions.
The negative outlook reflects the potential that Community Health
may pursue further debt repurchases at below par that we deem as a
distressed exchange, leading to a downgrade. The company's adjusted
leverage remains high at 8.1x, and it has not sustainably generated
free cash flows in the past couple of years.
S&P would lower the ratings on Community Health if the company
conducts further debt repurchases that it deems as distressed
exchanges.
S&P could revise the outlook to stable if Community Health
demonstrates it can sustainably generate positive discretionary
cash flows and it believes there is less potential for a distressed
exchange.
ESG credit indicators: E-2, G-2, S-2
COMMUNITY HOME: Trustee Taps National Loan as Loan Sale Consultant
------------------------------------------------------------------
Kristina Johnson, Chapter 11 trustee for Community Home Financial
Services, Inc., seeks approval from the U.S. Bankruptcy Court for
the Southern District of Mississippi to employ National Loan
Exchange, Inc. as loan sale consultant.
The firm's services include:
(i) providing the trustee with a seller survey to gather
information regarding the Debtor's consumer loan assets;
(ii) create data stratifications;
(iii) review all information provided by the trustee related to
the assets to assess marketability and options to obtain optimal
value;
(iii) provide market pricing estimates on each pool of assets
segments based on market evaluation;
(iv) market the assets to potential bidders to make commercially
reasonable efforts to refer to the trustee at least three potential
bidders, not including any stalking horse bidder the trustee may
announce that the firm reasonably believes are qualified to bid and
purchase the assets; and
(v) provide additional consultation services the trustee and the
firm agree to in writing, including any services which may assist
the trustee with normal and reasonable closing activities of the
assets.
The firm will be paid a flat fee of $25,000.
Tom Ludwig, a partner at National Loan Exchange, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Tom Ludwig
National Loan Exchange, Inc.
10 Sunset Hills Professional Centre
Edwardsville, IL 62034
Tel: (800) 264-3683
About Community Home Financial Services
Community Home Financial Services, Inc. is a specialty finance
company providing contractors with financing for their customers.
It operated from one central location providing financing through
its dealer network throughout 25 states, Alabama, Delaware, and
Tennessee. On December 23, 2013, Community Home Financial changed
its principal place of business to Panama.
Community Home Financial filed a Chapter 11 petition (Bankr. S.D.
Miss. Case No. 12-01703) on May 23, 2012, with $44.9 million in
total assets and $30.3 million in total liabilities. William D.
Dickson, president of Community Home Financial, signed the
petition.
Judge Edward Ellington presides over the case.
The Debtor was first represented by Roy H. Liddell, Esq., and
Jonathan Bissette, Esq., at Wells, Marble, & Hurst, PPLC as Chapter
11 counsel. Wells Marble was terminated Nov. 13, 2013.
The Debtor later engaged Derek A. Henderson, Esq., in Jackson,
Mississippi. In 2013, the Debtor sought to employ David Mullin,
Esq., at Mullin Hoard & Brown LLP, as special counsel.
On Jan. 9, 2014, Kristina M. Johnson was appointed as Chapter 11
trustee for the Debtor. Jones Walker LLP served as counsel to the
trustee, while Stephen Smith, C.P.A., acted as accountant.
CORE SCIENTIFIC: Committee Taps Gray Reed as Conflicts Counsel
--------------------------------------------------------------
The official committee of unsecured creditors of Core Scientific,
Inc. and its affiliates received approval from the U.S. Bankruptcy
Court for the Southern District of Texas to employ Gray Reed as its
conflicts counsel.
The firm's services include investigating claims against BRF
Finance Co., LLC and its affiliates, and all other services
assigned by the committee to the firm as conflicts counsel.
Gray Reed will be paid at these rates:
Jason S. Brookner, Partner $955 per hour
Lydia R. Webb, Partner $690 per hour
Russell E. Jumper, Partner $625 per hour
London England, Associate $525 per hour
Veronica Salazar, Paralegal $310 per hour
Jason Brookner, Esq., a partner at Gray Reed, disclosed in a court
filing that his firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Gary
Reed disclosed that:
-- it has not agreed to any variations from, or alternatives
to, its standard or customary billing arrangements for this
engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firm has not represented the committee in the 12 months
prepetition; and
-- it expects to develop a prospective budget and staffing
plan to reasonably comply with the U.S. Trustee's request for
information and additional disclosures, to which Gray Reed reserves
all rights.
The firm can be reached through:
Jason S. Brookner, Esq,
Gray Reed
1601 Elm Street, Suite 4600
Dallas, TX 75201
Phone: 214-954-4135
Fax: 214-953-1332
Email: jbrookner@grayreed.com
About Core Scientific
Core Scientific, Inc. (OTCMKTS: CORZQ) is the largest U.S.
publicly-traded Bitcoin mining company in computing power. Core
Scientific, which was formed following a business combination in
July 2021 with blank check company XPDI, is a large-scale operator
of dedicated, purpose-built facilities for digital asset mining
colocation services and a provider of blockchain infrastructure,
software solutions and services. Core mines Bitcoin, Ethereum and
other digital assets for third-party hosting customers and for its
own account at its six fully operational data centers in North
Carolina (2), Georgia (2), North Dakota (1) and Kentucky (1). Core
was formed following a business combination in July 2021 with XPDI,
a blank check company.
In July 2022, one of the Company's largest customers, Celsius
Mining LLC, filed for Chapter 11 bankruptcy in New York. With low
Bitcoin prices depressing mining revenue to a record low, Core
Scientific first warned in October 2022 that it may have to file
for bankruptcy if the company can't find more funding to repay its
debt that amounts to over $1 billion. Core Scientific did not make
payments that came due in late October and early November 2022 with
respect to several of its equipment and other financings, including
its two bridge promissory notes.
Core Scientific and its affiliates filed petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
22-90341) on Dec. 21, 2022. As of Sept. 30, 2022, Core Scientific
had total assets of US$1.4 billion and total liabilities of US$1.3
billion.
Judge David R. Jones oversees the cases.
The Debtors hired Weil, Gotshal & Manges, LLP as legal counsel; PJT
Partners, LP as investment banker; and AlixPartners, LLP as
financial advisor. Stretto is the claims agent.
A group of Core Scientific convertible bondholders is working with
restructuring lawyers at Paul Hastings.
B. Riley Commercial Capital, LLC, as administrative agent under the
Replacement DIP facility, is represented by Choate, Hall & Stewart,
LLP.
On Jan. 9, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent unsecured creditors in the
Debtors'
Chapter 11 cases. The committee tapped Willkie Farr & Gallagher,
LLP as legal counsel and Ducera Partners, LLC as investment banker.
CORE SCIENTIFIC: Parties Partly Agree to Equity Committee
---------------------------------------------------------
Vince Sullivan of Law360 reports that parties in the Chapter 11
case of cryptocurrency mining operation Core Scientific told a
Texas bankruptcy judge Friday, March 3, 2023, they have agreed to a
framework suggested by the court for the appointment of an official
equity holders committee, but said details still needed to be
ironed out.
The Ad Hoc Noteholder Group had filed a motion for entry of an
order appointing an Official Committee of Equity Security Holders.
The Equity Holders sought to reverse the decision by the Office of
the United States Trustee that rejected the Equity Group's request
for an official equity committee in the Chapter 11 cases.
At the March 1 hearing, following comments made by the Bankruptcy
Court relating to the Motion, the Debtors, the Unsecured Creditors
Committee, the Ad Hoc Equity Group. B. Riley, in its capacity as
DIP Lender, and the Ad Hoc Noteholder Group agreed to adjourn to
March 3, 2023 to consider the Bankruptcy Court's proposal; and
following good faith and arm's length negotiations, the Debtors
have agreed to the appointment of an official committee of equity
security holders.
According to a proposed order, the fees and expenses of the
Official Equity Committee, inclusive of any fees and expenses of
any legal and financial advisors to the Official Equity Committee,
shall be limited to $4,750,000 (the "EC Fee Cap").
The EC Fee Cap can be increased with approval of the Bankruptcy
Court, upon notice to the Debtors, the UCC, the Ad Hoc Noteholder
Group, B. Riley, the U.S. Trustee, and other parties-interest, and
a hearing.
The allowance of fees and expenses incurred by the Official Equity
Committee and any advisors retained by the Official Equity
Committee shall be subject to the review of the Bankruptcy Court
with the limitations and standards of review set forth by the
Bankruptcy Court on the record at the Hearing, in addition to being
in compliance with sections 328, 330, and 331 of the Bankruptcy
Code (as applicable) and applicable provisions of the Bankruptcy
Rules, Local Rules, and any other applicable procedures and orders
of the Bankruptcy Court.
The scope of the Official Equity Committee's appointment (and any
fees or expenses incurred by the Official Equity Committee and its
advisors) shall be limited to (a) valuation and (b) negotiations,
in each case related to determining the terms of confirmation of a
chapter 11 reorganization plan.
The Debtors, the UCC, B. Riley and the Ad Hoc Noteholder Group
shall have the right to request that the Bankruptcy Court disband
the Official Equity Committee.
About Core Scientific
Core Scientific, Inc. (OTCMKTS: CORZQ) is the largest U.S.
publicly-traded Bitcoin mining company in computing power. Core
Scientific, which was formed following a business combination in
July 2021 with blank check company XPDI, is a large-scale operator
of dedicated, purpose-built facilities for digital asset mining
colocation services and a provider of blockchain infrastructure,
software solutions and services. Core mines Bitcoin, Ethereum and
other digital assets for third-party hosting customers and for its
own account at its six fully operational data centers in North
Carolina (2), Georgia (2), North Dakota (1) and Kentucky (1). Core
was formed following a business combination in July 2021 with XPDI,
a blank check company.
In July 2022, one of the Company's largest customers, Celsius
Mining LLC, filed for Chapter 11 bankruptcy in New York. With low
Bitcoin prices depressing mining revenue to a record low, Core
Scientific first warned in October 2022 that it may have to file
for bankruptcy if the company can't find more funding to repay its
debt that amounts to over $1 billion. Core Scientific did not make
payments that came due in late October and early November 2022 with
respect to several of its equipment and other financings, including
its two bridge promissory notes.
Core Scientific and its affiliates filed petitions for relief under
Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case No.
22-90340) on Dec. 21, 2022. As of Sept. 30, 2022, Core Scientific
had total assets of US$1.4 billion and total liabilities of US$1.3
billion.
Judge David R. Jones oversees the cases.
The Debtors hired Weil, Gotshal & Manges, LLP as legal counsel; PJT
Partners, LP as investment banker; and AlixPartners, LLP as
financial advisor. Stretto is the claims agent.
A group of Core Scientific convertible bondholders is working with
restructuring lawyers at Paul Hastings.
On Jan. 9, 2023, the U.S. Trustee for Region 7 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee is represented by Willkie Farr &
Gallagher, LLP.
CORIZON HEALTH: Rogers' Claims vs. Dixon and Centurion Dismissed
----------------------------------------------------------------
In the case styled Joseph Rogers, Plaintiff, v. Centurion of
Florida, LLC, et al., Defendants, Case No. 3:20-cv-725-MMH-MCR,
(M.D. Fla.), District Judge Marcia Morales Howard has dismissed
without prejudice Joseph Rogers' claims against Ricky Dixon,
Secretary of the Florida Department of Corrections, and Centurion
of Florida, LLC.
Meanwhile, the Court will stay and administratively close the case
as to Tehum Care Services, Inc., formerly known as Corizon Health,
Inc. due to its bankruptcy filing. Corizon will file a status
report with the Court on June 21, 2023, and every 120 days
thereafter, reflecting the status of Corizon's bankruptcy
proceedings.
Joseph Rogers, a former inmate of the Florida penal system,
initiated this action. In his second amended complaint, Rogers
names as the Defendants: (1) Ricky Dixon, Secretary of the Florida
Department of Corrections; (2) Centurion of Florida, LLC; and (3)
Corizon Health, Inc. Rogers alleges that the Defendants violated
the Eighth Amendment when they allegedly created and implemented a
cost-saving policy that sanctioned the delay of medically necessary
treatment for Rogers' hepatitis c virus (HCV) infection. Rogers
also contends that the Defendants violated the Americans with
Disabilities Act and the Rehabilitation Act by delaying treatment
for his HCV. As relief, Rogers seeks compensatory and punitive
damages, as well as declaratory and injunctive relief.
The Defendants Dixon and Centurion seek dismissal for Rogers'
failure to exhaust his administrative remedies. It is well settled
that the Prison Litigation Reform Act requires an inmate wishing to
challenge prison conditions to first exhaust all available
administrative remedies before asserting any claim. Hence, the
Court applies the PLRA exhaustion requirement to all of Rogers'
claims.
The Court determines that Rogers had available administrative
remedies that he failed to properly exhaust before filing the
Complaint. The Court finds that "Rogers grieved the denial of HCV
treatment in 2016; however, the Office of the FDOC Secretary
returned his grievance without action because he did not include
his formal grievance as required nor did he provide a valid reason
for bypassing previous levels of review. . . Rogers did not file
any other grievances concerning the denial of HCV treatment before
filing this lawsuit. Therefore, Rogers did not properly exhaust his
administrative remedies where his grievance failed to comply with
Florida Department of Corrections procedural requirements."
Accordingly, the Court finds and concludes that Rogers had
available administrative remedies, and he failed to properly
exhaust the claims against Dixon and Centurion. As such, Rogers'
claims against Dixon and Centurion are dismissed without prejudice.
A full-text copy of the Order dated March 1, 2023 is available at
https://tinyurl.com/a6bn8akv from Leagle.com.
About Tehum Care Services
Tehum Care Services Inc., doing business as Corizon Health Services
Inc., is a privately held prison healthcare contractor in the
United States. It is based in Brentwood, Tenn.
Tehum Care Services filed a petition for relief under Chapter 11 of
the Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-90086) on Feb.
13, 2023. In the petition filed by Russell A. Perry, as chief
restructuring officer, the Debtor reported assets between $1
million and $10 million and liabilities between $10 million and $50
million.
Judge Christopher M. Lopez oversees the case.
The Debtor is represented by Jason S Brookner, Esq., at Gray Reed &
McGraw, LLP.
CRED INC: Court Rejects Third-Party Assignment Claims Procedures
----------------------------------------------------------------
Bankruptcy Judge Craig T. Goldblatt, Feb. 27, 2023, has issued a
Memorandum Opinion pursuant to Local Rule 8003-2, to supplement the
Court's oral ruling to provide the reviewing court further context
with respect to the matter under review.
The Court approved the Debtors' liquidating plan on March 11, 2021,
which became effective on April 19, 2021. Under the plan, the
Debtors' assets were transferred to a Liquidation Trust. The
Trustees of that trust became responsible for (1) liquidating and
administering the assets and (2) taking actions on behalf of the
trust. The plan and trust agreement state expressly that the
Trustees have the responsibility of adjudicating "third-party
claims assigned, purchased, or otherwise transferred to the
Liquidation Trust."
On June 23, 2022, the Trustees filed a motion that sought approval
of "third party claim assignment procedures." The motion sought
authority to increase the allowed claims of those creditors who
agreed to assign their claims by 10%. On July 19, 2022, the Court
denied the motion without prejudice. The Court observed that it was
"certainly implied from the terms of the trust agreement that the
Trust. . . could seek or could obtain assignment of third-party
claims that it could then pursue on behalf of all creditors of the
estate." The difficulty the Court had with the motion, however, was
with "the 10% bump issue." The Court noted that while it would have
been one thing if that had been proposed under a plan of
reorganization on notice to all creditors, "I'm disinclined to say
that I would allow the Trustee to just give a blanket 10% bump to
anybody who assigned their claims to the trust." The Court noted,
however, that this determination "leaves open the issue of
individual negotiations with individual claimants." To the extent
the Trust were to acquire an individual creditor's right to pursue
a third party in a direct negotiation, however, the Court noted
that "I think that's something that can be done."
The Trustees accordingly moved the Court to clarify the July 19,
2022 ruling, seeking a determination that the Trust may acquire
third-party claims and pursue those actions. In a bench ruling, the
Court indicated that it would grant the motion. That ruling was
reduced to an order that was docketed on Feb. 10, 2023.
On Feb. 23, 2023, Uphold HQ, Inc., and Lockton Companies, LLC and
Lockton Companies LLC Pacific Series filed notices of appeal. The
Court's Local Rule 8003-2 provides that "any bankruptcy judge whose
order is the subject of an appeal may file a written opinion that
supports the order being appealed or that supplements any earlier
written opinion or recorded oral bench ruling or opinion." This
Memorandum Opinion is issued, pursuant to that Rule.
The question presented by this motion is quite straightforward. The
Trust is a post-bankruptcy entity. Its original proposal to
increase the allowed claims of creditors who transferred their
direct claims to the trust would have altered the distribution
scheme contemplated by the Bankruptcy Code. That scheme would
certainly have required court approval, and there does not appear
to be any basis for providing that approval -- that request raised
serious questions under the Bankruptcy Code itself.
The Court also raised concerns about the notice procedures
contemplated by the original motion. In the context of third-party
releases under a confirmed plan of reorganization, there is
authority for deeming a party to have consented to give up its
right to pursue a direct cause of action against a third-party on
account on its failure to opt out of such a release under a plan.
The authority for that outside the context of plan confirmation,
however, is far more tenuous (if it exists at all). The Court thus
denied the Trust's original motion seeking approval to acquire
creditors' direct claims in this manner.
A full-text copy of the Memorandum Opinion dated Feb. 27, 2023 is
available at https://tinyurl.com/5n8sxvpy from Leagle.com.
About Cred Inc.
Cred Inc. is a cryptocurrency platform that accepts loans of
cryptocurrency from non-U.S. persons and pays interest on those
loans. Cred -- https://mycred.io/ -- is a global financial services
platform serving customers in over 100 countries. Cred is a
licensed lender and allows some borrowers to earn a yield on
cryptocurrency pledged as collateral.
Cred Inc. and its affiliates sought Chapter 11 protection (Bankr.
D. Del. Lead Case No. 20-12836) on Nov. 7, 2020. Cred was estimated
to have assets of $50 million to $100 million and liabilities of
$100 million to $500 million as of the bankruptcy filing.
Judge John T. Dorsey oversees the cases.
The Debtors tapped Paul Hastings LLP as their bankruptcy counsel,
Cousins Law LLC as local counsel, and MACCO Restructuring Group,
LLC as financial advisor. Donlin, Recano & Company, Inc., is the
claims agent.
The official committee of unsecured creditors in the Debtors'
Chapter 11 cases tapped McDermott Will & Emery LLLP as counsel, and
Dundon Advisers LLC as financial advisor.
Robert Stark is the examiner appointed in the Debtors' cases. Ashby
& Geddes, P.A., and Ankura Consulting Group, LLC, serve as the
examiner's legal counsel and financial advisor, respectively.
CT TECHNOLOGIES: Moody's Alters Outlook on 'B3' CFR to Negative
---------------------------------------------------------------
Moody's Investors Service affirmed CT Technologies Intermediate
Holdings, Inc.'s (dba "Datavant") B3 corporate family rating, B3-PD
probability of default rating and the B3 ratings under its senior
secured bank credit facilities. Concurrently, Moody's changed the
company's outlook to negative from positive. The company is a large
California-based provider of healthcare information services and
technology solutions.
The outlook was changed to negative from positive to reflect the
company's overall liquidity deterioration and increased financial
leverage, which is now much higher than Moody's had previously
anticipated following the merger of Datavant and CIOX Health in
2021.
Affirmations:
Issuer: CT Technologies Intermediate Holdings, Inc.
Corporate Family Rating, Affirmed B3
Probability of Default Rating, Affirmed B3-PD
Senior Secured 1st Lien Bank Credit Facility, Affirmed B3 (LGD3)
Outlook Actions:
Issuer: CT Technologies Intermediate Holdings, Inc.
Outlook, Changed To Negative From Positive
RATINGS RATIONALE
Datavant's B3 corporate family rating reflects its very high
financial leverage with debt to EBITDA of approximately 13x
(Moody's adjusted for the LTM period ended September 2022,
excluding the company's large non-cash stock compensation). The
rating also incorporates the company's narrow business focus
providing medical information exchange management and retrieval
services to US healthcare providers, insurance carriers, life
sciences companies and other health data users. Legal risks
associated with the release of protected health information and
potential changes within the regulatory environment also present
risks to profitability. However, the rating is supported by
Datavant's leading position in managing and sharing information in
the healthcare industry. Moreover, favorable trends such as
value-based healthcare and more complex care and risk models should
enable the company to continue to capture profitable growth
opportunities.
Following the merger with CIOX Health in 2021, the company has been
investing heavily on technology, with the focus of digitizing its
labor-intensive CIOX segment. These investments have contributed to
the company's recent increase in financial leverage and liquidity
deterioration. Moreover, the company has experienced additional
challenges with regards to productivity and increased labor costs
during fiscal year 2022, which have contributed to weakening its
financial position.
The company's liquidity profile has deteriorated substantially
following the CIOX Health merger, evidenced by its diminished free
cash flow generation during fiscal year 2022. Moody's expects
Datavant to maintain adequate liquidity over the next 15 months,
based on estimated healthy cash balances as of December 31, 2022
and Moody's expectation of good availability on the undrawn $50
million revolving credit facility set to expire in December of
2025. Moody's also expects free cash flow to debt to remain in the
low-single-digits for fiscal year 2023 given high capital
expenditure needs. The revolving credit facility will likely be
relied upon intra quarterly to fund high working capital
requirements. There are no financial maintenance covenants,
although the revolver has a springing first lien secured leverage
ratio covenant (set at 7.0x with no step-downs), when the revolver
draw exceeds 35% of the total commitment. Moody's also expects
Datavant to maintain a modest cushion but still in compliance with
the covenant requirement, should it be tested, in 2023. There are
no near-term debt maturities and $7 million of required term loan
amortization payments annually.
The outlook could be changed to stable if the company demonstrates
a material decrease in financial leverage, through EBITDA
expansion, over the next 12 to 18 months.
The first lien facility comprised of a $50 million revolving credit
facility and $670 million senior secured term loan due December
2025 are both rated B3, the same as the CFR, reflecting their
position as the sole debt in the capital structure. The credit
facilities are secured by substantially all assets of Datavant
Group and its domestic subsidiaries. These subsidiaries are
guarantors under the credit agreement.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook indicates that rating upgrades are unlikely
over the next 12-18 months, however, the ratings could be upgraded
if Moody's believes that the company can effectively manage its
growth while maintaining good product and customer diversity.
Additionally, to be upgraded the company would need to improve its
liquidity, evidenced by positive free cash flow to debt in the
mid-to-high single digit percent range, and reduce its leverage
with debt/EBITDA sustained below 5.5 times.
The ratings could be downgraded if the company were to experience
operating disruptions or loss of major contracts. A ratings
downgrade could also occur if the company's liquidity profile were
to erode further, with sustained negative free cash flow and
continued interest coverage deterioration.
Datavant, headquartered in San Francisco, California, is a large
provider of healthcare information services and technology
solutions to hospitals, health systems, physician practices and
authorized recipients of protected health records in the United
States. In September 2021, Datavant completed a merger with Ciox
Health. For the twelve months ended September 30, 2022, the company
generated revenues of approximately $853 million.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
CWI CHEROKEE: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------
Debtor: CWI Cherokee LF LLC
3284 Northside Parkway
Suite 600
Atlanta, GA 30327
Business Description: The Debtor provides waste treatment and
disposal services.
Chapter 11 Petition Date: March 7, 2023
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 23-52262
Debtor's Counsel: John A. Christy, Esq.
SCHREEDER, WHEELER & FLINT, LLP
1100 Peachtree Street NE, Suite 800
Atlanta, GA 30309
Tel: 404-954-9810
Email: jchristy@swfllp.com
Estimated Assets: $10 million to $50 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by CWI Alabama Member, LLC, by Stephen E.
Witmer, its Manager.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/D27JFKI/CWI_Cherokee_LF_LLC__ganbke-23-52262__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Brook T Smith Investment Note $900,000
2307 River Rd., Suite 200
Louisville, KY 40206
Tel: 502-645-9191
2. AJ Equity Capital Advance $300,000
1648 61st Street
Brookly NY 11204
3. Atomic Transport Vendor $160,000
PO Box 2548
Chattanooga TN 80903
Tel: 423-681-2708
4. Brickstone Fund Capital Advance $300,000
5314 16th Ave
Suite 139
Brooklyn NY 11204
5. Bill Cohen Note $300,000
3630 Peachtree Road, Suite 940
Atlanta, Georgia 30326
Tel: 404-231-3414
6. Wes Shafto Note $200,000
1818 Avenue of Americas
Monroe, LA
Tel: 318-388-8915
7. 10 Kings LLC Note $200,000
80 W. Wieuca Road N.E.,
Suite 170
Atlanta, GA 30342
8. Marshall Roberts Note $100,000
80 W. Wieuca Road N.E.,
Suite 170
Atlanta, GA 30342
9. Derek Griffin Note $100,000
80 W. Wieuca Road N.E.,
Suite 170
Atlanta, GA 30342
10. The McPherson Companies, Inc. Vendor $80,000
5051 Cardinal Street
Trussville, AL 35173
Tel: 205-910-1990
11. Evergreen Environmental Vendor $75,000
300 Noble Hill Rd
Attalla AL 35954-0010
Tel: 256-960-7426
12. JLW Contracting LLC Vendor $150,000
2310 Bennett Rd
Jasper AL 35503
Tel: 205-522-3547
13. Denali Vendor $136,900
P.O. Box 740903
Atlanta, GA 30374-0903
14. American Services, LLC Vendor $162,727
2281 Stateline Rd W
Southaven, MS 38671
15. Mid South Septic Vendor $97,452
11284 Gulf Stream Rd
Arlington, TN 38002
16. Tractor and Equipment Vendor $375,000
PO Box 12326
Birmingham, AL 35202
Tel: 866-591-2131
17. Thompson Tractor Vendor $186,000
PO Box 934005
Atlanta, Georgia 31193
Tel: 205-841-8601
18. CDG Engineering Vendor $125,000
PO Box 278
Andalusa AL 36420
Tel: 334-222-9431
19. Republic Services Vendor $90,000
PO Box 677839
Dallas, TX 75267
Tel: 256-327-4458
20. Valicor Environmental Vendor $76,147
Services
Dept 77380
PO Box 77000
Detroit, MI 48287
DEALER PRODUCTS: Taps Pathfinder Group as Sales Agent
-----------------------------------------------------
Dealer Products, Inc. seeks approval from the U.S. Bankruptcy Court
for the Northern District of Texas to employ Penza Capital Corp. as
its sales agent.
The Debtor requires a sales agent to:
a. help the management prepare an executive summary describing
the Debtor and its historical performance and prospects, including
the existing business, management and financial projections;
b. assist the Debtor in compiling a data room of any necessary
and appropriate documents related to the sale;
c. assist the Debtor in developing its list of suitable
potential investors who will be contacted on a discreet and
confidential basis after approval by the Debtor;
d. coordinate the execution of confidentiality agreements for
potential investors wishing to review the information;
e. assist the Debtor in coordinating management visits and
meetings for interested investors and work with the management team
and ownership, and develop appropriate presentations for such
meetings;
f. arrange competitive offers from potential investors;
g. advise and assist the Debtor in structuring and negotiating
sale agreements; and
h. otherwise assist the company and its professionals, as
necessary, through closing on a best-efforts basis.
Upon the closing of a sale transaction, Pathfinder Group will
receive a fee equal to the greater of (i) $45,000 or (ii) 10
percent of the total consideration up to $650,000. For all amounts
over $650,001, the fee will be 5 percent.
As disclosed in court filings, Pathfinder Group is a "disinterested
person" within the meaning of Section 101(14) of the Bankruptcy
Code.
The firm can be reached through:
David Mack
Penza Capital Corp. DBA Pathfinder Group
2015 Orrington Avenue
Evanston, IL 60201
Tel: 847-274-7604
Email: dmack@pathfindergroupllc.com
About Dealer Products
Dealer Products, Inc. -- https://www.dealpro.com -- is a
distributor of motor vehicle supplies and accessories in Texas.
Dealer Products sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. N.D. Texas Case No. 22-41970) on Aug. 29,
2022, with between $1 million and $10 million in both assets and
liabilities. Susan H. Fischer, vice president, signed the
petition.
Judge Edward L. Morris oversees the case.
The Debtor tapped M. Jermaine Watson, Esq., at Cantey Hanger, LLP
as legal counsel and Seaton Hill Partners, LP as financial advisor.
DECORSTANDARD CORP: Seeks Cash Collateral Access
------------------------------------------------
Decorstandard, Corp. asks the U.S. Bankruptcy Court for the
District of New Jersey for authority to use cash collateral, nunc
pro tunc to January 13, 2023, on an interim basis and provide
adequate protection.
The Debtor requires the use of cash collateral to continue to
operate the Debtor's business as a "going concern" and pay the
Debtor's post-petition obligations, as they come due.
Prior to the commencement of the bankruptcy case, and a result of
the issues in supply chain during and after the Covid-19 pandemic,
the Debtor's income decreased substantially, and the Debtor fell
behind on its debts. As a result, the Debtor was unable to pay its
obligations to its main secured creditor Bank of Hope prompting a
lawsuit filed by BOH against the Debtor for default under a
Business Loan Agreement dated June 3, 2021. The Debtor filed for
bankruptcy to stay the pending lawsuit and attempt to reorganize
its debts.
Post-bankruptcy, the Debtor has decreased its expenses, has sought
out new vendors, new products to sell, and has been operating
profitably as demonstrated in the monthly reports filed with the
Court.
The Debtor does not anticipate the value of the Business Assets to
significantly change within the next few months and has no reason
to believe the business income will decrease in the foreseeable
future so long as the Debtor is provided the continued use of cash
generated from operations of the Debtor. Thus, the Debtor believes
the profits from its business will generate sufficient income to
adequately protect the secured parties and pay all necessary
business and administrative expenses during the pendency of the
case.
Bank of Hope, the U.S. Small Business Administration, and TD Bank
N.A. assert an interest in the Debtor's cash collateral.
The Debtor can protect the SBA's security interests by providing
the SBA with replacement liens on the Business Assets; and
maintaining and managing the business as a going concern. The
Budget illustrates there is a positive cash flow which strengthens
the Debtor's operations, secures the Debtor's reorganization
efforts, and protects the SBA's security interest from diminution
in the value of its collateral.
The Debtor can protect the BOH's security interests by (i) making
adequate protection payments of $2,000 per month to BOH in
accordance with the Budget; (ii) providing BOH with replacement
liens on the Business Assets; and iii) maintaining and managing the
business as a going concern.
A copy of the Debtor's motion is available at
https://bit.ly/3l3cVVr from PacerMonitor.com.
About Decorstandard, Corp.
Decorstandard, Corp. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D.N.J. Case No. 23-10321) on January 13,
2023. In the petition signed by Soon Kim, president, the Debtor
disclosed up to $1 million in assets and up to $10 million in
liabilities.
David Stevens, Esq., at Scura Wigfield, Heyer, Stevens & Cammarota
LLP, represents the Debtor as legal counsel.
DEI VITAE: Taps Michael Bowers of Middleswarth as CRO
-----------------------------------------------------
Dei Vitae Enterprises, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of North Carolina to hire Michael
Bowers, a partner at Middleswarth, Bowers & Co., LLP, as its chief
restructuring officer.
Mr. Bowers has agreed to assist the Debtor with bookkeeping,
Chapter 11 plan formulation, schedule preparation and other matters
related to its Chapter 11 case.
Mr. Bowers will charge $300 per hour for his services.
As disclosed in court filings, Mr. Bowers does not have any
connections with the Debtor, creditors or any other party in
interest.
Mr. Bowers can be reached at:
Michael T. Bowers, MBA, CPA
Middleswarth, Bowers & Co. LLP
219 Wilmot Dr
Gastonia, NC 28054
Telephone: (704) 867-2394
Fax: (704) 867-5303
Email: mbowers@mbcpafirm.com
Dei Vitae Enterprises, LLC, a company in Matthews, N.C., filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. W.D.N.C. Case No. 23-30148) on Feb. 28, 2023, with $1
million to $10 million in both assets and liabilities. Susan H.
Burton, a member of Dei Vitae Enterprises, signed the petition.
Judge Laura T. Beyer oversees the case.
John C. Woodman, Esq., at Essex Richards, P.A. and Michael Bowers,
a partner at Middleswarth, Bowers & Co., LLP, serve as the Debtor's
bankruptcy counsel and chief restructuring officer, respectively.
DIAMOND (BC) BV: Moody's Puts 'B2' CFR Under Review for Downgrade
-----------------------------------------------------------------
Moody's Investors Service placed Diamond (BC) B.V.'s (dba Diversey)
B2 corporate family rating, B2 – PD probability of default
rating, Ba3 senior secured bank credit facilities and Caa1 senior
unsecured notes under review for downgrade. The review follows the
announcement by the company that it has entered into a definitive
agreement to be acquired by Solenis (Olympus Water US Holding
Corporation, B3 stable) for an enterprise value of $4.6 billion,
including Diversey's debt. The SGL-2 speculative grade liquidity
rating is unchanged.
The transaction is subject to Diversey shareholder and regulatory
approval and is expected to close in the second half of 2023. Bain
Capital, which owns approximately 73% of Diversey, has agreed to
vote in favor of the transaction. Upon completion of the merger,
Diversey will become a private company. Moody's expect Diversey's
debt to be repaid because of change of control provision in the
existing credit agreement and bond indenture. Moody's would
withdraw the ratings on Diversey debt once it's repaid.
On Review for Downgrade:
Issuer: Diamond (BC) B.V.
Corporate Family Rating, Placed on Review for Downgrade,
currently B2
Probability of Default Rating, Placed on Review for
Downgrade, currently B2-PD
Senior Secured Bank Credit Facility, Placed on Review for
Downgrade, currently Ba3 (LGD3)
Senior Unsecured Regular Bond/Debenture, Placed on Review
for Downgrade, currently Caa1 (LGD5)
Outlook Actions:
Issuer: Diamond (BC) B.V.
Outlook, Changed To Rating Under Review From Positive
RATINGS RATIONALE / FACTORS THAT COULD LEAD TO AN UPGRADE OR
DOWNGRADE OF THE RATINGS
The placement of ratings under review for downgrade reflects the
lack of information regarding the funding of the transaction and
the ultimate capital structure of the combined entity, despite
improving scale and business profiles given the complementary
nature of both businesses both in terms of products and geographic
concentration. Under the terms of the transaction, Bain Capital
will contribute approximately 56% of its existing equity into
Solenis at an implied value per Diversey share of $7.84 and will
sell its remaining shares to Solenis for cash at the same price.
Solenis, which is owned by Platinum Equity Advisors, LLC, will need
to fund cash payment to Bain Capital, other shareholders and
existing debt holders to close the transaction. The companies have
not provided details on how the transaction will be structured, but
Moody's would expect the debt to be repaid.
Headquartered in Fort Mill, South Carolina, Diversey is a global
supplier of cleaning, hygiene, sanitizing products, equipment and
related services to the institutional and industrial cleaning and
sanitation markets. The company generated approximately $2.7
billion of sales in the twelve months ended September 2022.
Diversey is currently a portfolio company of Bain Capital.
Olympus Water US Holding Corporation, operating as Solenis,
produces chemicals used in the manufacturing process for pulp and
paper products, industrial and municipal water treatment, pool and
spa markets. Its products and service help customers improve
operational efficiency, enhance product quality and reduce
environmental impact. In late 2021, Platinum Equity Advisors, LLC
acquired Solenis and combined it with an existing portfolio company
Sigura to form Olympus Water. After acquiring Clearon in 2022, the
company will have pro-forma sales of about $4.4 billion per annum.
The principal methodology used in these ratings was Chemicals
published in June 2022.
DIAMOND (BC) BV: S&P Places 'B' ICR on Watch Neg. on Olympus Deal
-----------------------------------------------------------------
S&P Global Ratings placed all of its ratings on Diversey Holdings
Ltd. (the publicly traded parent of rated issuer Diamond (BC)
B.V.), including its 'B' issuer credit rating and debt ratings, on
CreditWatch with negative implications.
The CreditWatch placement reflects the possibility that S&P could
take a negative rating action on Diversey, pending additional
information regarding the combined entity's post-merger capital
structure.
Diversey announced on March 8, 2023, that it had entered into a
definitive merger agreement with Olympus Water Holdings IV L.P.
(doing business as Solenis). Under the agreement, Solenis will
acquire Diversey in an all-cash transaction valued at approximately
$4.6 billion.
The CreditWatch placement follows the announcement that Olympus
Water Holdings IV LP has obtained equity and debt commitments to
finance the acquisition of Diversey. S&P said, "Based on the
announcement, we expect the transaction will close in the second
half of 2023; however, we expect to have further clarity regarding
plans to fund the transaction and the newly created entity's
proposed capital structure within the next few months. The $4.6
billion purchase price includes about $1.75 billion of net debt (as
of the third quarter 2022), and $2 billion of gross debt, which we
expect will be repaid at transaction close. We expect that Bain
will also roll over a portion of its existing equity ownership in
Diversey to the newly created entity. We placed our 'B' issuer
credit rating on Diversey on CreditWatch with negative implications
to reflect that we may lower our rating on the company depending on
our assessment of the post-merger company's business and capital
structure. Assuming all of Diversey's debt has been repaid at
close, we would then withdraw all ratings on the company."
S&P said, Solenis is currently rated 'B-' and we recently placed
the company's issuer credit rating on CreditWatch with developing
implications. Key areas of focus will be the company's pro forma
financial policies and leverage metrics, as well as its operating
strategy, potential for and ability to achieve relevant synergies,
and integration risks related to the business combination. If,
following the transaction, the credit positive implications from
our improved view of the combined business are not enough to offset
risks from higher leverage metrics, we would most likely lower the
rating on Diversey by one notch, equalizing it with our existing
'B-' rating of Olympus.
"We expect to resolve the CreditWatch placement following the
completion of the transaction, or within the coming months as we
receive additional information regarding the combined entities
capital structure and integration plan. We will monitor any
developments related to the transaction, including the receipt of
necessary regulatory clearances. We expect that credit quality at
the new entity will benefit from greater scale, increased product,
end-market, and geographical diversification, as well as the
potential for meaningful synergy realization. However, we expect
pro forma credit metrics will remain highly leveraged, as they
currently are at both legacy entities (Diversey and Olympus).
Additionally, given the size of the deal, and the potential for
high debt leverage post-transaction, integration risks could have a
negative impact on credit quality."
DIGITAL AEROLUS: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Digital Aerolus, Inc.
11184 Antioch Rd.
Overland Park, KS 66210
Chapter 11 Petition Date: March 10, 2023
Court: United States Bankruptcy Court
District of Kansas
Case No.: 23-20226
Debtor's Counsel: Jill D. Olsen, Esq.
THE OLSEN LAW FIRM, LLC
118 N Conistor Ln. Suite B290
Liberty, MO 64068
Tel: (816) 521-8811
Email: jill@olsenlawkc.com
Total Assets: $407,497
Total Liabilities: $3,790,513
The petition was signed by Sanford Peterson as secretary.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/YRH4CWI/Digital_Aerolus_Inc__ksbke-23-20226__0001.0.pdf?mcid=tGE4TAMA
DIJ GROUP: Case Summary & Six Unsecured Creditors
-------------------------------------------------
Debtor: DIJ Group, Inc.
1300 Lakeview Drive
Romeoville, IL 60446
Business Description: DIJ Group is primarily engaged in furnishing
"over-the-road" trucking services or
trucking services and storage services.
Chapter 11 Petition Date: March 10, 2023
Court: United States Bankruptcy Court
Northern District of Illinois
Case No.: 23-03257
Judge: Hon. Janet S. Baer
Debtor's Counsel: Saulius Modestas, Esq.
MODESTAS LAW OFFICES, P.C.
401 S. Frontage Rd.
Ste. C
Burr Ridge, IL 60527-7115
Tel: 312-251-4460
Fax: 312-277-2586
Email: smodestas@modestaslaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Deividas Rusteika as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's six unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/7UUXDOY/DIJ_Group_Inc__ilnbke-23-03257__0001.0.pdf?mcid=tGE4TAMA
DOHENY EQUITIES: Voluntary Chapter 11 Case Summary
--------------------------------------------------
Debtor: Doheny Equities, LLC
1800 Century Park East Suit 600
Los Angeles, CA 90067
Business Description: The Debtor is the fee simple owner of a real
property located at 3356 Adamsville Avenue,
Calabasas, CA 91302 valued at $5.2 million.
Chapter 11 Petition Date: March 7, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-11296
Judge: Hon. Barry Russell
Debtor's Counsel: Bahram Madaen, Esq.
MADAEN LAW, INC.
316 Olive Ave., Suite 914
Huntington Beach, CA 92648
Tel: 818-908-2618
Fax: 818-908-2619
Email: ssiroos@hotmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Michelle M. Matich as manager.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/GZ3GOXA/DOHENY_EQUITIES_LLC__cacbke-23-11296__0001.0.pdf?mcid=tGE4TAMA
DUNBAR PARTNERS: Taps Jeffrey Zwick & Associates as Special Counsel
-------------------------------------------------------------------
Dunbar Partners BSD, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to hire Jeffrey Zwick &
Associates P.C. as its special real estate counsel.
The firm will represent the Debtor with respect to closing on the
contract of sale and certain amendments between the Debtor and
Dunbar Owner, LLC as seller for the real property and improvements
thereon located at 2802 Frederick Douglass Blvd., New York.
Jeffrey Zwick, Esq., a partner of Jeffrey Zwick & Associates, will
primarily be responsible for performing the services requested by
the Debtor and will bill for his services at a rate of 750 per
hour. Other attorneys who may assist him charge between $500 and
$650 per hour, with paraprofessionals charging between $250 and
$350 per hour.
As disclosed in court filings, Mr. Zwick neither holds nor
represents any interests adverse to Debtor and its estates in
connection with the matters on which he is to be employed.
Mr. Zwick can be reached at:
Jeffrey B. Zwick, Esq.
Jeffrey Zwick & Associates
266 Broadway 4th floor
Brooklyn, NY 11211
Phone: 718-513-2050
Fax: 718-513-2060
Email: jeffrey@jzlegal.com
About Dunbar Partners BSD
Dunbar Partners BSD, LLC is a Brooklyn-based company engaged in
activities related to real estate.
Dunbar Partners BSD filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
23-40575) on Feb. 21, 2023, with $95,500,000 in assets and
$92,395,000 in liabilities. Judge Nancy Hershey Lord oversees the
case.
Fred R. Ringel, Esq., at Leech Tishman Robinson Brog, PLLC and
Jeffrey Zwick & Associates PC serve as the Debtor's bankruptcy
counsel and special real estate counsel, respectively.
DUNBAR PARTNERS: Taps Leech Tishman Robinson Brog as Counsel
------------------------------------------------------------
Dunbar Partners BSD, LLC seeks approval from the U.S. Bankruptcy
Court for the Eastern District of New York to hire Leech Tishman
Robinson Brog, PLLC as its legal counsel.
The firm's services include:
a. providing legal advice with respect to the Debtor's powers
and duties under the Bankruptcy Code in the continued operation of
its business and the management of its property;
b. negotiating, drafting, and pursuing all documentation
necessary in this Chapter 11 case, including, without limitation,
any debtor-in-possession financing arrangements and the disposition
of the Debtor's assets, by sale or otherwise;
c. preparing legal papers;
d. negotiating with creditors of the Debtor, preparing a plan of
reorganization and taking the necessary legal steps to consummate a
plan, including, if necessary, negotiations with respect to
financing a plan;
e. appearing in court;
f. attending meetings and negotiating with representatives of
creditors, the United States Trustee, and other parties in
interest;
g. providing legal advice to the Debtor regarding bankruptcy
law, corporate law, corporate governance, tax, litigation, and
other issues attendant to the Debtor's business operations;
h. taking all necessary actions to protect and preserve the
Debtor's estate including prosecuting actions on the Debtor's
behalf, defending any action commenced against the Debtor, and
representing the Debtor in negotiations concerning litigation in
which the Debtor is involved, including objections to claims filed
against the Debtor's estate; and
i. other legal services.
The firm will be paid at these rates:
Shareholders $500 to $800 per hour
Counsel $495 to $600 per hour
Associates $325 to $475 per hour
Legal Assistants/Paralegals $120 to $250 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtor a retainer of $26,778.
As disclosed in court filings, Leech Tishman Robinson Brog is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Fred Ringel, Esq.
Leech Tishman Robinson Brog, PLLC
875 Third Avenue, 9th Floor
New York, NY 10022
Phone: 212-603-6300
Fax: 212-956-2164
Email: fringel@leechtishman.com
About Dunbar Partners BSD
Dunbar Partners BSD, LLC is a Brooklyn-based company engaged in
activities related to real estate.
Dunbar Partners BSD filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. E.D.N.Y. Case No.
23-40575) on Feb. 21, 2023, with $95,500,000 in assets and
$92,395,000 in liabilities. Judge Nancy Hershey Lord oversees the
case.
Fred R. Ringel, Esq., at Leech Tishman Robinson Brog, PLLC and
Jeffrey Zwick & Associates PC serve as the Debtor's bankruptcy
counsel and special real estate counsel, respectively.
EL PESCADOR: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------
Debtor: El Pescador, Inc.
DBA El Lugar del Mariachi, LLC
17421 South Avalon Blvd.
Ste. A
Carson, CA 90746
Case No.: 23-11293
Chapter 11 Petition Date: March 7, 2023
Court: United States Bankruptcy Court
Central District of California
Judge: Hon. Ernest M. Robles
Debtor's Counsel: Lazaro E. Fernandez, Esq.
LAW OFFICE OF LAZARO E. FERNANDEZ, INC.
3600 Lime St., Ste. 326
Riverside, CA 92501
Tel: 951-684-4474
Fax: 951-684-4625
Email: lef17@pacbell.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Vicente Ortiz 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/7MXOHAY/El_Pescador_Inc__cacbke-23-11293__0001.0.pdf?mcid=tGE4TAMA
EMERALD GRANDE: Seeks to Hire CBRE as Real Estate Broker
--------------------------------------------------------
Emerald Grande, LLC seeks approval from the U.S. Bankruptcy Court
for the Southern District of West Virginia to employ CBRE, Inc. to
market and sell its real estate located at 5760-5790 MacCorkle Ave.
SE, Charleston, W. Va.
The firm will be paid a commission of 5 percent of the gross sales
price.
As disclosed in court filings, CBRE is a "disinterested person" as
the term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Brendan Bash
David Durbin
CBRE, Inc.
301 Grant Street, 40th Floor
Pittsburgh, PA 15219
Tel: (412) 471-9500
Email: Brendan.Bash@cbre.com
david.durbin@cbre.com
About Emerald Grande
Emerald Grande, LLC owns commercial buildings situated on 2.284
acres located at 5760, 5780, and 5790 MacCorkle Ave., SE,
Charleston, W. Va., having an appraised value of $2.97 million.
Emerald Grande filed a petition for Chapter 11 protection (Bankr.
S.D. W. Va. Case No. 22-20189) on Dec. 2, 2022. In the petition
signed by William A. Abruzzino as member of Gold Coast Partners,
LLC, the Debtor disclosed up to $3,009,950 in total assets and
$11,214,745 in total liabilities.
Judge B. McKay Mignault oversees the case.
Joe M. Supple, Esq., at Supple Law Office, PLLC serves as the
Debtor's counsel.
EMERGENT FIDELITY: FTX Fights BlockFi's Bid to Toss Chapter 11 Case
-------------------------------------------------------------------
FTX Group is fighting efforts by efforts by crypto lender BlockFi
Inc. to dismiss the Chapter 11 case of FTX affiliate Emergent
Fidelity Technologies Ltd.
Emergent, the Sam Bankman-Fried's offshore entity holding 55
million shares of Robinhood Markets Inc. belongs in bankruptcy to
sort out myriad competing ownership claims, FTX Trading Ltd. said.
Emergent Fidelity and its roughly $600 million worth of Robinhood
equity, which has been seized by the federal government, needs
Chapter 11 protection "to ensure the fair resolution" of claims
asserted by an entangled group of companies and creditors, FTX said
in a March 2, 2023 court filing.
BlockFi and the FTX Debtors hold claims against each other.
BlockFi lent digital assets to Alameda pursuant to master loan
agreements entered into in 2019, 2020 and 2022.
FTX's Alameda Research, Ltd., claims ownership of the Robinhood
shares. Alameda asserts that it holds significant claims to avoid
the pledges purportedly obtained by BlockFi on the eve of the FTX
Bankruptcy Proceedings. As a result, Alameda either owns
Emergent's primary asset -- the Robinhood shares -- or is the
Emergent Debtor's largest creditor.
"In addition to Alameda, no less than five other parties already
have asserted claims to the Shares in various forums around the
world. There could be many more to come. As a result, Emergent's
chapter 11 case filed before this Court is a proper proceeding to
ensure that the value of the Emergent Debtor’s assets is
maximized for the benefit of all stakeholders, and there is a
single forum and process for resolution of the competing claims,"
FTX said in court filings.
"Contrary to BlockFi’s representations, questions about who owns
the Shares are inextricably tied up in the FTX Debtors' chapter 11
cases, and require a fair and efficient resolution process before
this Court. As the FTX Debtors have argued in their Stay
Enforcement Motion, BlockFi's litigation maneuvers not only have
violated the automatic stay in the FTX Bankruptcy Proceedings, but
also have resulted in inefficient and duplicative litigation across
multiple jurisdictions."
About Emergent Fidelity Technologies
Emergent Fidelity Technologies is a holding company owned by FTX
Group's Sam Bankman-Fried that is based in Antigua and Barbuda.
Emergent Fidelity owns 55 million shares of Robinhood Markets,
Inc., and $20.7 million cash, which are apparently proceeds from
the sale of additional such shares. Emergent is 90% owned by Sam
Bankman-Fried.
Emergent Fidelity Technologies sought relief under Chapter 11 of
the U.S. Bankruptcy Code (Bankr. D. Del. Case No. 23-10149) on Feb.
3, 2023. In its petition, the Debtor reported $500 million to $1
billion in assets and liabilities. The petition was signed by
Angela Barkhouse as Joint Provisional Liquidator of Emergent.
MORGAN, LEWIS & BOCKIUS LLP, led by Jody C. Barillare, is the
Debtor's counsel.
About BlockFi Inc.
BlockFi is building a bridge between digital assets and traditional
financial and wealth management products to advance the overall
digital asset ecosystem for individual and institutional
investors.
BlockFi was founded in 2017 by Zac Prince and Flori Marquez and in
its early days had backing from influential Wall Street investors
like Mike Novogratz and, later on, Valar Ventures, a Peter
Thiel-backed venture fund as well as Winklevoss Capital, among
others. BlockFi made waves in 2019 when it began providing
interest-bearing accounts with returns paid in Bitcoin and Ether,
with its program attracting millions of dollars in deposits right
away.
BlockFi grew during the pandemic years and had offices in New York,
New Jersey, Singapore, Poland and Argentina.
BlockFi worked with FTX US after it took an $80 million hit from
the bad debt of crypto hedge fund Three Arrows Capital, which
imploded after the TerraUSD stablecoin wipeout in May 2022.
BlockFi had significant exposure to the companies founded by former
FTX Chief Executive Officer Sam Bankman-Fried. BlockFi received a
$400 million credit line from FTX US in an agreement that also gave
FTX the option to acquire BlockFi through a bailout orchestrated by
Bankman-Fried over the summer. BlockFi also had collateralized
loans to Alameda Research, the trading firm co-founded by
Bankman-Fried.
BlockFi is the latest crypto firm to seek bankruptcy amid a
prolonged slump in digital asset prices. Lenders Celsius Network
LLC and Voyager Digital Holdings Inc. also filed for court
protection this year. Kirkland & Ellis is also advising Celsius and
Voyager in their separate Chapter 11 cases.
BlockFi Inc. and eight affiliates sought protection under Chapter
11 of the Bankruptcy Code (Bankr. D.N.J. Lead Case No. 22-19361) on
Nov. 28, 2022. In the petitions signed by their chief executive
officer, Zachary Prince, the Debtors reported $1 billion to $10
billion in both assets and liabilities.
Judge Michael B. Kaplan oversees the cases.
The Debtors tapped Kirkland & Ellis and Haynes and Boone, LLP as
general bankruptcy counsels; Walkers (Bermuda) Limited as special
Bermuda counsel; Cole Schotz, P.C., as local counsel; Berkeley
Research Group, LLC as financial advisor; Moelis & Company as
investment banker; and Street Advisory Group, LLC as strategic and
communications advisor. Kroll Restructuring Administration, LLC is
the notice and claims agent.
ENDO INTERNATIONAL: Reaches Deal With Key Creditors on Plan
-----------------------------------------------------------
Endo International Plc lenders have reached a deal in principle
that would provide higher payouts to key creditor groups in return
for their support of the bankrupt opioid manufacturer's
reorganization centered on a more than $6 billion asset sale.
Bloomberg reports that under the deal's terms, Endo's proposed
purchasers will provide a pool of $119 million in cash to private
opioid abuse claimants -- within two years of the sale closing.
The official committee of opioid claimants had previously
complained about receiving $85 million over the course of 10
years.
On Nov. 23, 2022, the Debtors filed their motion seeking approval
of bidding procedures for the sale of substantially all of their
assets and designating an entity formed by an Ad Hoc Group of First
Lien Creditors (the "Ad Hoc 1L Group") as the stalking horse
bidder.
Subsequently, among other parties, the Official Committee of
Unsecured Creditors (the "UCC"), the Official Committee of Opioid
Creditors (the "OCC"), an Ad Hoc Group of Cross-Holders (the "Ad
Hoc Cross-Holder Group"), and the Non-RSA First Lien Group (the
"Non-RSA 1Ls") filed objections (the "Objections") to the Bidding
Procedures Motion. Additionally, the UCC and OCC filed motions in
the Bankruptcy Court to obtain standing to pursue challenges with
respect to the Company's secured creditors' liens (the
"Challenges").
On March 3, 2023, at a hearing before the Bankruptcy Court, the
Company's counsel delivered remarks announcing a resolution in
principle of the Objections and Challenges reached by the Ad Hoc 1L
Group, the UCC, the OCC, the Ad Hoc Cross-Holder Group, and the
Non-RSA 1Ls, and which resolution is supported by the Debtors.
A summary of the remarks from Skadden, Arps, Slate, Meagher & Flom
are as follows:
* The 1L Ad Hoc Group (and its Purchaser) has reached
resolutions in principle with the OCC, UCC, the Crossholder Group
and the Non-RSA 1Ls, all of which are supported by the Debtor and
subject to definitive documentation.
-- First, the UCC deal:
* $60 million of cash
* 4.25% of equity in the Purchaser
-- Premised on $2.5B of net funded debt.
* Litigation Trust, which will include certain claims
(being bought by Purchaser pursuant to PSA) against (i)
non-continuing directors and former officers (as against
insurance), (ii) certain third party advisors, and (iii) certain
additional third parties, including parties to certain prepetition
transactions with the Debtors.
-- Litigation trust will also receive all of the rights
to the Debtors' hundreds of millions of dollars in face amount of
products liability insurance policies providing coverage for
opioid, mesh, and ranitidine claims (among others), pre-2019 D&O
insurance policies, and commercial general liability policies.
-- Trust to be structured in a manner that facilitate
Trust's ability to maximize value of litigation claims and
insurance.
* Investment Right for $160 million of common equity at a
total enterprise value of $5.125 billion (and $2.5 billion net
funded debt) open to non-opioid unsecured creditors who subscribe
no later than 14 days ahead of the sale hearing.
-- Cross-Holder Group and Non-RSA minority 1L group both
support this deal – as part of the deal, any 1L holder that
executes the RSA prior to the Bid Procedures hearing will be
treated the same as those 1Ls that signed prepetition.
* Subject to a fee cap of $15 million for UCC
professionals.
-- Work done prior to April 1 not subject to fee cap.
-- Any unused fees below the cap added to litigation
trust expense funding.
* Applies to present, non-opioid unsecured creditors
(including second lien holders).
* UCC, Crossholder group and Non-RSA 1Ls each to support
sale.
* Professional fees for the Crossover Group and the Non-RSA
1Ls will be brought current upon execution of an amended RSA
supporting the sale. Go forward fees for either group shall be
subject to an agreed upon cap set forth in the amended RSA.
* Subject to UCC fiduciary out but will not solicit
alternative proposals.
-- Second, the OCC deal:
* $119.2 million of gross cash consideration payable to
Private Present Opioid Claimants, payable in 3 installments within
two years of closing -- the first payment is $29.7 million at
closing, the next payment is $29.7 million on the first anniversary
of closing, and the last payment is $59.7 million on the second
anniversary of closing.
* This payment stream is subject to a prepayment option
whereby the Purchaser may pay the whole amount by paying $89.2
million at closing, $95.3 million at 6 months or $102.9 million at
the 1-year mark.
* If the Purchaser elects to prepay the voluntary public
opioid trust amount, then it will also prepay the voluntary private
opioid trust amount.
* Subject to claimant documentation to be agreed, which
will contemplate consensual voluntary releases by the claimant of
the Debtors and its D&O but not such claimants' direct claims
against certain categories of third parties involved in the
production, distribution, marketing, promotion, or sale of opioid
products.
* Subject to a fee cap of $8.5 million for OCC hourly
professionals.
-- Does not include certain categories of tasks such as
the work to document and implement the resolution in principle and
certain unforeseen services and services driven by inbound
discovery and cooperation requests with respect to other case
resolutions.
-- OCC professionals removed from the wind-down budget
amount so long as they are not required to provide services during
the wind-down.
-- OCC, working with Private Claimants, to determine
allocation among Private Opioid Claimants with no input from other
parties. OCC may select a mediator for allocation, subject to the
OCC hourly professional fee cap described herein and timing
constraints of the case.
* OCC due process rights with respect to standing motion
for estate causes of action to be preserved in the contingent event
whereby the Purchaser no longer is purchasing estate causes of
action.
* OCC to support sale.
* Subject to OCC fiduciary out but will not solicit
alternative proposals.
The 1L Ad Hoc Group has agreed with the Debtors on certain
modifications to the Wind Down Budget.
Other mediation parties have certain unresolved issues, and the
Debtors hope discussions can continue with those parties.
About Endo International plc
Endo International plc is a generics and branded pharmaceutical
company. It develops, manufactures, and sells branded and generic
products to customers in a wide range of medical fields, including
endocrinology, orthopedics, urology, oncology, neurology, and other
specialy areas. On the Web: http://www.endo.com/
On Aug. 16, 2022, Endo International and certain of its
subsidiaries initiated voluntary prearranged Chapter 11 proceedings
(Bankr. S.D.N.Y. Lead Case No. 22-22549). The cases are pending
before Judge James L. Garrity, Jr. The Debtors have put up a Web
site dedicated to its restructuring: http://www.endotomorrow.com/
The Debtors tapped Skadden, Arps, Slate, Meagher & Flom, LLP as
legal counsel; PJT Partners, LP as investment banker; and Alvarez &
Marsal North America, LLC as financial advisor. Kroll Restructuring
Administration, LLC is the claims agent and administrative
advisor.
Roger Frankel, the legal representative for future claimants in the
Chapter 11 cases, tapped Frankel Wyron LLP and Young Conaway
Stargatt & Taylor, LLP as legal counsels, and Ducera Partners, LLC
as investment banker.
The U.S. Trustee for Region 2 appointed an official committee of
unsecured creditors on Sept. 2, 2022. The committee tapped Kramer
Levin Naftalis & Frankel as legal counsel; Lazard Freres & Co. LLC
as investment banker; and Dundon Advisers, LLC and Berkeley
Research Group, LLC as financial advisors.
Meanwhile, the official committee representing the Debtors' opioid
claimants tapped Cooley, LLP as bankruptcy counsel; Akin Gump
Strauss Hauer & Feld, LLP as special counsel; Province, LLC as
financial advisor; and Jefferies, LLC as investment banker.
David M. Klauder, Esq., the court-appointed fee examiner, is
represented by Bielli & Klauder, LLC.
F.R. ALEMAN: Court OKs Cash Collateral Access Thru April 19
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Florida,
Miami Division, authorized F.R. Aleman and Associates, Inc. to use
cash collateral on an interim basis in accordance with the budget.
The Debtor is permitted to use all cash, proceeds, accounts
receivable and other forms of the First National's cash collateral
within the amounts provided in the Debtor's budget, with a 10%
variance on each line item.
First National will have a replacement lien on post-petition cash
collateral of the Debtor to the same extent, validity and priority
as First National's liens on the Petition Date.
In consideration of and as adequate protection for the Debtor's
continued post-petition use of the cash collateral, the Debtor will
pay the regular monthly installment payment due under First
National's loan documents on the date such payment is due.
The authorization for the Debtor to use cash collateral will
continue until the earlier of: (i) 5:00 p.m. on April 19, 2023; or
(ii) a further Court Order prohibiting the use of cash collateral.
A final hearing on the matter is set for April 19 at 9:30 a.m.
A copy of the order is available at https://bit.ly/3IWacFq from
PacerMonitor.com.
About F.R. Aleman and Associates
Miami-based F.R. Aleman and Associates, Inc. filed a petition under
Chapter 11, Subchapter V of the Bankruptcy Code (Bankr. S.D. Fla.
Case No. 22-18696) on Nov. 10, 2022, with up to $10 million in both
assets and liabilities. Aleida Martinez-Molina has been appointed
as Subchapter V trustee.
Judge Laurel M. Isicoff oversees the case.
Hoffman Larin & Agnetti, Leto Law Firm and De La Hoz Perez &
Barbeito, P.A. serve as the Debtor's bankruptcy counsel, special
counsel and accountant, respectively.
FEILITECH US: Seeks to Hire Cozen O'Connor as Lead Counsel
----------------------------------------------------------
Feilitech US, LLC seeks approval from the U.S. Bankruptcy Court for
the Northern District of Mississippi to hire Cozen O'Connor as lead
counsel.
The firm's services include:
a. advising the Debtor regarding its rights, powers and duties
in connection with the administration of its estate, the operation
of its businesses and interactions with the subChapter V trustee;
b. advising the Debtor with respect to asset dispositions,
including sales, abandonments, and assumptions or rejections of
executory contracts and unexpired leases, and taking such actions
as may be necessary to effectuate such dispositions;
c. assisting the Debtor in the negotiation, formulation and
drafting of a Chapter 11 plan;
d. taking such actions as may be necessary with respect to
claims that may be asserted against the Debtor and property of its
estate;
e. preparing legal documents;
f. representing the Debtor with respect to inquiries of and
negotiations with creditors concerning property of the Debtor's
estate;
g. initiating, defending or otherwise participating in all
proceedings before the bankruptcy court or any other court of
competent jurisdiction; and
h. performing other necessary legal services.
Cozen O'Connor will be paid at these rates:
Robert M. Fishman, Esq. $940
Allen J. Guon, Esq. $640
Associates $360 to $505
Paraprofessionals $300
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The retainer fee is $46,022.54.
Allen Guon, Esq., a partner at Cozen O'Connor, disclosed in a court
filing that his firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Robert M. Fishman, Esq.
Allen J. Guon, Esq.
Christina M. Sanfelippo, Esq.
Cozen O'Connor
123 North Wacker Drive, Suite 1800
Chicago, IL 60606
Telephone (312) 382-3100
Telecopy (312) 382-8910
Email: rfishman@cozen. com
aguon@cozen.com
csanfelippo@cozen. com
About Feilitech US
Feilitech US, LLC is a manufacturer of spring and wire products in
Belden, Miss.
Feilitech US filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Miss. Case No. 23-10599) on Feb. 28,
2023, with $1 million to $10 million in both assets and
liabilities. Judge Selene D. Maddox oversees the case.
Judge Selene D. Maddox oversees the case.
Cozen O'Connor and Jones Walker, LLP are the Debtor's legal
counsels.
FEILITECH US: Seeks to Hire Jones Walker as Co-Counsel
------------------------------------------------------
Feilitech US, LLC seeks approval from the U.S. Bankruptcy Court for
the Northern District of Mississippi to hire Jones Walker, LLP as
co-counsel with Cozen O'Connor.
The firm's services include:
a. advising the Debtor regarding its rights, powers and duties
in connection with the administration of its estate, the operation
of its businesses and interactions with the subChapter V trustee;
b. advising the Debtor with respect to asset dispositions,
including sales, abandonments, and assumptions or rejections of
executory contracts and unexpired leases, and taking such actions
as may be necessary to effectuate such dispositions;
c. assisting the Debtor in the negotiation, formulation and
drafting of a Chapter 11 plan;
d. taking such actions as may be necessary with respect to
claims that may be asserted against the Debtor and property of its
estate;
e. preparing legal documents;
f. representing the Debtor with respect to inquiries of and
negotiations with creditors concerning property of the Debtor's
estate;
g. initiating, defending or otherwise participating in all
proceedings before the bankruptcy court or any other court of
competent jurisdiction; and
h. performing other necessary legal services.
Jones Walker will charge these hourly fees:
Kristina M. Johnson, Esq. $650
Associates $375 - $535
Paraprofessionals $270
The firm received a retainer in the amount of $20,000.
Kristina Johnson, Esq., a partner at Jones Walker, disclosed in
court filings that her firm does not have any interests adverse to
the Debtor's estate, creditors and equity interest holders.
The firm can be reached through:
Kristina M. Johnson, Esq.
Jones Walker, LLP
190 East Capitol Street, Suite 800 (39201)
Post Office Box 427
Jackson, MS 39205-0427
Tel: (601) 949-4785
Fax: (601) 949-4804
Email: kjohnson@joneswalker.com
About Feilitech US
Feilitech US, LLC is a manufacturer of spring and wire products in
Belden, Miss.
Feilitech US filed a petition under Chapter 11, Subchapter V of the
Bankruptcy Code (Bankr. N.D. Miss. Case No. 23-10599) on Feb. 28,
2023, with $1 million to $10 million in both assets and
liabilities. Judge Selene D. Maddox oversees the case.
Judge Selene D. Maddox oversees the case.
Cozen O'Connor and Jones Walker, LLP are the Debtor's legal
counsels.
FGV FRESNO LP: Seeks to Hire Goe Forsythe & Hodges as Counsel
-------------------------------------------------------------
FGV Fresno, LP seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ Goe Forsythe & Hodges,
LLP as its legal counsel.
The Debtor requires legal counsel to:
a. advise and assist the Debtor with respect to compliance with
the requirements of the Office of the U.S. Trustee;
b. advise the Debtor regarding matters of bankruptcy law,
including the rights and remedies of Debtor with respect to its
assets and claims of creditors;
c. represent the Debtor in any proceedings or hearings in the
bankruptcy court and in any action in any other court where its
rights under the Bankruptcy Code may be litigated or affected;
d. conduct examinations of witnesses, claimants or adverse
parties, and assist in the preparation of reports, accounts, and
pleadings related to the case;
e. advise the Debtor concerning the requirements of the
Bankruptcy Code and applicable rules;
f. assist the Debtor in negotiation, formulation, confirmation,
and implementation of a Chapter 11 plan of reorganization;
g. make any bankruptcy court appearances on behalf of the
Debtor; and
h. perform such other services as the Debtor may require of the
firm in connection with its Chapter 11 case.
The hourly rates charged by the firm's attorneys and paralegals are
as follows:
Attorneys $375 to $595 per hour
Of Counsel $385 to $625 per hour
Paralegals $185 to $195 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received post-petition a retainer of $35,000 from Beaumont
1600, LLC, on behalf of the Debtor's general partner, The Group of
Companies, Inc. as an equity contribution to the Debtor. The
retainer is in a segregated client trust account.
Robert Goe, Esq., a partner at Goe Forsythe & Hodges, disclosed in
a court filing that his firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Robert P Goe, Esq.
Goe Forsythe & Hodges, LLP
17701 Cowan, Suite 210
Irvine, CA 92614
Telephone: (949) 798-2460
Facsimile: (949) 955-9437
Email: rgoe@goeforlaw.com
About FGV Fresno
FGV Fresno LP, a limited partnership in Irvine, Calif., is
primarily engaged in renting and leasing real estate properties.
FGV Fresno filed its voluntary petition for Chapter 11 protection
(Bankr. C.D. Calif. Case No. 23-10170) on Jan. 31, 2023, with $10
million to $50 million in assets and $1 million to $10 million in
liabilities. Judge Scott C. Clarkson oversees the case.
The Debtor tapped Robert P Goe, Esq., at Goe Forsythe & Hodges, LLP
as legal counsel.
FLYWHEEL SPORTS: Starr's Bid to Dismiss Trustee's Complaint Denied
------------------------------------------------------------------
Bankruptcy Judge John P. Mastando, III, of the U.S. District Court
for the Southern District of New York denies the motion to dismiss
filed by Starr Indemnity & Liability Company in the adversary case
entitled In re Flywheel Sports Parent, Inc., et al., Chapter 7,
Debtors. Angela Tese-Milner, As Chapter 7 Trustee For Flywheel
Sports, Inc., Plaintiff, v. Lockton Companies, Lockton Insurance
Brokers, Continental Casualty Company, CNA Insurance Company, CNA
Financial Insurance, Starr Indemnity & Liability Company, Chubb
Insurance, David Chene, James Continenza, Brian Dubin, Travis
Frenzel, ANTHONY PASQUA, and Darren Richman, Defendants, Case No.
20-12157 (JPM), (Jointly Administered), Adv. Pro. No. 22-01109
(JPM), (Bankr. S.D.N.Y.).
In this adversary proceeding, Angela Tese-Milner, as Chapter 7
Trustee for the estate of Flywheel Sports, Inc., is seeking to
recover or avoid certain transfers made by Flywheel.
Starr Indemnity & Liability Company filed the instant Motion to
Dismiss, seeking to dismiss the Complaint for failure to state a
claim. The thrust of Starr's Motion is that the Trustee is
operating a "preference factory," with the Complaint relying on
boilerplate language that does not satisfy the applicable pleading
standards.
The Court finds that the Trustee plausibly stated all claims for
relief in the Complaint: "the Trustee identifies the nature of the
Transfers (insurance premiums), the transferor (Flywheel), the
initial transferee (Lockton), and the date and amount of each
Transfer. . . the Transfers were on account of an antecedent debt
-- on account of premiums for insurance agreements between
[Flywheel Parent] and the Insurance Company Defendants."
The Trustee alleges that Flywheel made the Transfers to pay
premiums for an insurance agreement to which Flywheel was not
party, received no benefit from, and was not obligated to pay for.
Since the Transfers are alleged to have been on account of
another's debt, a reasonable inference can be drawn that Flywheel
did not receive reasonably equivalent value. The Trustee's
assertion that the Transfers enabled the Defendants to receive more
than they would have in a chapter 7 case is buttressed by Flywheel
and Flywheel Parents' schedules, which the Trustee alleged she
reviewed in determining whether the Transfers are avoidable
preferences. From the schedules, a reasonable inference can be
drawn that Flywheel and Flywheel Parent were both insolvent on the
Petition Date.
Because the Trustee set forth a plausible claim for constructively
fraudulent conveyances, the Court concludes that the Trustee is
entitled to recover preferential transfers from not only the
initial transferee, but also any entity for whose benefit they were
made, including Starr.
A full-text copy of the Memorandum Opinion and Order dated Feb. 27,
2023 is available at https://tinyurl.com/476sehde from Leagle.com.
About Flywheel Sports
Flywheel Sports is a company that provides stadium cycling and
precision training services. To promote its services, it engages
in unsolicited SMS marketing sent en masse.
According to PacerMonitor.com, New York-based Flywheel Sports,
Inc., filed a Chapter 7 petition (Bankr. S.D.N.Y. Case No.
20-12158) on Sept. 14, 2020.
The Debtor's counsel:
Todd C. Meyers, Esq.
Kilpatrick Townsend & Stockton LLP
Tel: 404-815-6482
E-mail: tmeyers@kilpatricktownsend.com
Flywheel was estimated to have $10 million to $50 million in
liabilities and less than $50,000 in assets, according to its
Chapter 7 filings.
FOPCO INC: McElrath's Motion for Stay Pending Appeal Denied
-----------------------------------------------------------
In the appealed case is Dennis C. McElrath; 2149 Lauwiliwili LLC;
and CD Investments Limited Partnership, Appellants, v. NAN, Inc.,
Appellee, and Richard A. Yanagi; and U.S. Trustee, Office,
Trustees. Dennis C. McElrath; CD Investments Limited Partnership;
and 2149 Lauwiliwili LLC, Appellants, v. NAN, Inc.; and Richard A.
Yanagi, Appellees, CIV. Nos. 22-00047 LEK-WRP, 22-00307 LEK-WRP,
(D. Haw.), District Judge Leslie E. Kobayashi denies the
Appellants' motion for stay pending appeal.
NAN Inc., 2149 Lauwiliwili LLC, and CD Investments Limited
Partnership filed their respective proof of claims against the
Debtor FOPCO, Inc.
In March 2022, Richard A. Yanagi, in his capacity as the trustee of
FOPCO, Inc.'s Chapter 7 bankruptcy case, and the Appellants (Dennis
C. McElrath, Lauwiliwili, and CDI) reached a tentative settlement
in AP 20-90014. The Trustee filed a motion in BK 18-1084 for
approval of the settlement. After a series of hearings and
continuances, in May 2022, NAN offered the Trustee $1.25 million
for the adversary claims and removed certain terms that were
provided in earlier offers. The cash offer was more than McElrath's
$1 million offer, but the Trustee stated "a sale of the claims to
NAN could delay the closing of this case for years." McElrath then
matched NAN's offer, also including its previous non-monetary terms
with its offer.
At the final hearing on Rule 9019 Motion, the Trustee's counsel
told the bankruptcy court that, "although the NAN offer and the
McElrath offer were for the same amount of money. . . the NAN offer
appeared to be better than the McElrath offer." The bankruptcy
court approved NAN's offer and it entered the sale order on July 1,
2022.
Consequently, the Defendants/Appellants filed a motion in BK
18-1084, requesting that the bankruptcy court either stay the sale
of the adversary claims or stay AP 20-90014 pending the appeal of
the Sale Order. The bankruptcy court denied both requests.
The Appellants now request that this Court either stay AP 20-90014
or stay the sale of the adversary claims pending the appeal of the
Sale Order. In their appeal from the Sale Order, Appellants argue
that the bankruptcy court failed to comply with due process because
it did not follow required procedures in conducting the 363 sale.
The Appellants also argue that the bankruptcy court erred in
rejecting a settlement between Trustee and McElrath. The Appellants
contend the bankruptcy court assumed the Trustee's role in selling
the adversary claims and disregarded the procedural requirements
for a 363 sale.
The Appellants also argue NAN's purchase of the adversary claims
was done in bad faith. Although the Appellants take issue with
NAN's offer, they fail to show any collusion or attempt to take
advantage of other potential purchasers. Ultimately, the bankruptcy
court concluded that "in the circumstances of this case, it is
appropriate to apply section 363 procedures to the Proposed
Settlement. The Trustee entertaining competing bids is procedurally
proper and necessary to maximize the recovery of the estate." The
bankruptcy court further ruled that "the sale of the Claims to NAN
pursuant to the May 16th Offer is in the best interests of
creditors and will result in more benefit to the estate than the
Proposed Settlement with the McElrath Defendants would have."
As such, the Court finds and concludes that the Appellants fail to
carry their burden of showing that the circumstances justify an
exercise of the Court's discretion in granting a stay -- they fail
to show that they will be irreparably harmed unless the Court
orders a stay.
A full-text copy of the Order dated Feb. 27, 2023 is available at
https://tinyurl.com/4p6kbzc4 from Leagle.com.
FOURTEEN DAVISON: Seeks Approval to Hire Berger as Legal Counsel
----------------------------------------------------------------
Fourteen Davison Plaza Associates, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of New York to employ
Berger Fischoff Shumer Wexler & Goodman, LLP as its legal counsel.
The firm's services include:
a. advising the Debtor with respect to its powers and duties
in the continued management of its business and property;
b. representing the Debtor at court hearings on matters
pertaining to its affairs;
c. assisting the Debtor in the preparation and negotiation of
a plan of reorganization with its creditors;
d. preparing legal papers; and
e. other legal services necessary to administer the Debtor's
Chapter 11 case.
The firm's hourly rates are as follows:
Partners $550 to $635 per hour
Associates $400 to $475 per hour
Paralegals $185 per hour
The Debtor paid the firm a retainer of $7,500, plus $1,738 filing
fee.
Heath Berger, Esq., a partner at Berger, disclosed in a court
filing that the firm is a "disinterested person" as the term is
defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Heath S. Berger, Esq.
Berger Fischoff Shumer Wexler & Goodman, LLP
6901 Jericho Turnpike #230
Syosset, NY 1179
Phone: 800-806-1136
Email: hberger@bfslawfirm.com
About Fourteen Davison Plaza Associates
Fourteen Davison Plaza Associates, LLC filed a Chapter 11
bankruptcy petition (Bankr. E.D.N.Y. Case No. 23-70184) on Jan. 18,
2023, with as much as $1 million in both assets and liabilities.
Judge Louis A. Scarcella oversees the case.
The Debtor is represented by Heath S. Berger, Esq., at Berger
Fischoff Shumer Wexler & Goodman, LLP.
FOX SUBACUTE: Wins Cash Collateral Access Thru May 6
----------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Pennsylvania
authorized Fox Subacute at Mechanicsburg, LLC and its affiliated
debtors to use cash collateral on an interim basis through and
including the earlier of May 6, 2023, or the occurrence of an event
of default.
The Debtors will use cash collateral only:
i. for the purposes specified in the Budget;
ii. to pay United States Trustee's fees;
iii. to pay contingent fees of Weltman, Weinberg & Reis Co.,
LPA, the Debtor's special counsel; and
iv. to pay professional fees and reimbursement for expenses
allowed by the Court that PeoplesBank, A Codorus Valley Company,
and Sabra Health Care Pennsylvania LLC consent to being paid from
cash collateral or for which the Bank's and/or Sabra's collateral
is surcharged pursuant to 11 U.S.C. section 506(c).
On or before March 18 and April 15, 2023, debtor Fox Subacute at
Clara Burke, Inc. must remit to the Bank $250,000.
Fox Nursing Home Corp. d/b/a Fox Subacute at Warrington must remit
to the Bank for application to the principal balance outstanding
under a prepetition Note, payments in the amount of $112,500 each
on or before April 1 and April 29, 2023.
Clara Burke will remit to Sabra for application to the
administrative expense claim that is the subject of Sabra
Healthcare Pennsylvania, LLC's Application for Allowance of
Administrative Expense Claim a payment in the amount of $328,909 on
or before March 18, 2023. Except with respect to such payment: (a)
Clara Burke, Warrington, the Committee, and the Bank reserve all
rights with respect to the Sabra Application; and (b) the Bank
reserves all rights under the Intercreditor Agreement dated April
20, 2018 by and among, Sabra, the Bank, Clara Burke, and
Warrington.
As adequate protection, the Bank is granted a replacement lien on
the Debtors' post-petition assets, and Sabra will have a
replacement lien on the post-petition assets of Clara Burke and
Warrington with the same respective priorities as their
pre-petition lien to the same extent that the Bank and Sabra would
have had perfected liens on such assets absent the filing of the
petition.
Moreover, the Bank and Sabra are each granted a claim against the
Debtors, which claim have (a) the same priority as U.S. Trustee's
fees and professional fees and reimbursement for expenses allowed
by the Court that are authorized to be paid from cash collateral;
and (b) priority over any other administrative expenses of any
kind.
These events constitute an "Event of Default":
1. The Debtors' failure to maintain the Required Balance;
2. Use by Clara Burke or Warrington of cash collateral for
purposes other than those specified in the Approved Budget or to
pay the Weltman Fees, without the Bank's and Sabra's written
consent;
3. Use by Clara Burke or Warrington of cash collateral for
any purpose (other than payment of the Weltman Fees) in an amount
in excess of the amount specified in the Approved Budget subject to
the Acceptable Variance, without the Bank's and Sabra's written
consent;
4. The failure of Clara Burke and Warrington to make any
payment to the Bank or Sabra when and as due;
5. The failure of Mechanicsburg or South Philly to make any
payment to the Bank when and as due under the Joint Plan; or
6. The violation by Clara Burke or Warrington of any other
term or condition of the Order.
The final hearing on the cash collateral request is continued to
May 2, 2023 at 9:30 a.m.
A copy of the court's order and the Debtor's budgest is available
at https://bit.ly/3YzI7t3 from PacerMonitor.com free of charge.
Clara Burke projects $719,287 in total cash paid out for April 2023
while Warrington projects $32,725 in total cash out for the same
month.
About Fox Subacute at Mechanicsburg, LLC
Fox Subacute at Mechanicsburg, LLC is a skilled nursing facility in
Pennsylvania that specializes in pulmonary, neurological, and
rehabilitative care for patients with degenerative neurological and
neuromuscular disease; and pulmonary care and ventilator
requirements with an emphasis on vent weaning. Its facilities are
located in Plymouth Meeting, Warrington, Mechanicsburg and
Philadelphia, Pa., and are licensed by the PA Department of
Health.
On Nov. 1, 2019, Fox Subacute at Mechanicsburg and its affiliates
sought Chapter 11 protection (Bankr. M.D. Pa. Lead Case No.
19-04714). Fox Subacute at Mechanicsburg was estimated to have $1
million to $10 million in assets and liabilities as of the
bankruptcy filing.
The debtor-affiliates are Fox Nursing Home Corp. d/b/a Fox Subacute
at Warrington; Fox Subacute at Clara Burke, Inc.; and Fox Subacute
at South Philadelphia, LLC.
Judge Henry W. Van Eck oversees the cases.
The Debtors tapped Cunningham, Chernicoff & Warshawsky, P.C. as
their legal counsel, Kennedy P.C. as special counsel, Isdaner &
Company, LLC as accountant, and Three Twenty-One Capital Partners,
LLC as investment banker.
The Office of the U.S. Trustee appointed an official committee of
unsecured creditors on Dec. 11, 2019. The committee is represented
by Flaster/Greenberg P.C.
FTAI AVIATION: Fitch Puts BB- LongTerm IDR on Rating Watch Negative
-------------------------------------------------------------------
Fitch Ratings has placed FTAI Aviation Ltd.'s (FTAI) Long-Term
Issuer Default Rating (IDR) of 'BB-' as well as all of its
associated debt and preference share ratings on Rating Watch
Negative (RWN). At the same time, Fitch has assigned an expected
rating of 'B(EXP)' to FTAI's contemplated Series D preference share
issuance. The expected rating is also on RWN. The issuance size,
coupon and maturity date will be determined at the time of the
issuance. Issuance proceeds are earmarked for general corporate
purposes.
The assignment of the final rating for the Series D preference
share issuance is contingent on a successful issuance and final
documents materially conforming to information already reviewed.
KEY RATING DRIVERS
IDR
The RWN reflects the lower-than-expected tangible equity balance
following the infrastructure spin-off resulting in higher leverage
and uncertainty around the pace of deleveraging towards Fitch's
previously articulated leverage sensitivity (calculated as gross
debt to adjusted tangible equity) of 6x by 1Q24. Adjusting equity
for 50% equity credit on its outstanding preference shares and
excluding goodwill, FTAI's adjusted tangible equity position as at
YE22 was negative $170 million.
Shareholder equity amounted to $19 million at YE22, as capital
reserves were eroded by a $561 million net equity adjustment on
infrastructure assets and higher-than-anticipated one-off
adjustments for spin-off charges. Furthermore, internal capital
accumulation remained constrained by high debt servicing costs as
well as sustained high dividend pay-outs (ordinary dividends of
$128.5 million in 2022).
Pro forma for a Series D preference share issuance of similar
magnitude to previous transactions (around $100 million), gross
debt/total equity (unadjusted for preference shares and goodwill)
would be around 18x at YE22 (YE21: 2.8x pre-spin-off). While the
receipt of insurance proceeds related to claims filed for assets
held in Russia and Ukraine could support near term deleveraging,
the timing and quantum of these flows remains uncertain and,
therefore, Fitch has excluded these proceeds from analytical
projections. As a result, deleveraging hinges on more conservative
capital management, the disposal of select non-core assets as well
as strong execution on the core leasing and aerospace service
offerings (focused on the manufacturing, repair and sale of
aftermarket aircraft engine components through a joint venture).
Failure to make meaningful progress in reducing high leverage
toward Fitch's leverage threshold of 6x within six months could
result in a rating downgrade.
FTAI's ratings continue to reflect its market position as a niche
aviation lessor (focusing mainly on aged aircraft and engines),
good portfolio diversification, limited exposure to residual value
risk, limited refinance risk over the short term and a
predominantly unsecured funding profile. This is balanced against
high balance sheet leverage, as the firm's sizeable debt burden
weighs on a shallow capital base which is notably eroded post
spin-off. In addition, the profitability track record for core
aviation activities is relatively short and re-lease risk is
elevated due to FTAI's focus on shorter term leases.
At YE22, FTAI's aviation fleet portfolio was comprised of 106
aircraft and 224 engines with a combined portfolio value of around
$1.7 billion. Utilization rates are generally robust across the
portfolio but are lower for engines (56% at YE22) as compared to
aircraft (84% at YE22). Average remaining lease terms are shorter
for engines (11 months versus 42 months for aircraft), as FTAI
typically acquires engines with relatively short remaining
lifespans at a discount and seeks to lease these assets for the
remaining serviceable period. Thereafter, engines are typically
converted to aerospace product inventory.
For 2022, FTAI reported a total comprehensive loss of $395 million,
comprising $212 million in net losses from continued operations
(weighed down in particular by $120 million in Russia and Ukraine
impairments) as well as $183 million in other losses incurred on
infrastructure related derivative contracts. Positively, for 4Q22,
FTAI posted a $20 million net profit, which implies good scope for
improved earnings stability on a forward-looking basis. This
applies in particular to FTAI's aerospace business segment, which
grew to $70 million in adjusted EBITDA contribution in 2022 versus
$20 million in 2021, and according to management will be a
strategic growth driver going forward.
At YE22, FTAI's funding was comprised almost exclusively of
unsecured debt, while refinance risk is limited over the short
term, with the nearest upcoming debt maturity comprising $650
million of senior unsecured bonds coming due in October 2025. In
Fitch's view, liquidity is adequate, with $34 million in
unrestricted cash and $300 million in credit facility capacity
($150 million drawn) as of YE22. Fitch views FTAI's dividend policy
as aggressive in the context of its business model, with
distributions as a percentage of operating cash flow typically
ranging between 75%-90%. Fitch would view a reduction in the
dividend payout favorably, as it would support de-leveraging.
UNSECURED DEBT AND PREFRENCE SHARES
The unsecured debt rating is equalized with FTAI's Long-Term IDR
reflecting the unsecured funding mix and Fitch's expectation for
average recovery prospects in a stressed scenario.
The expected and existing ratings on FTAI's preferred shares are
two notches below the company's Long-Term IDR reflecting the
subordination and heightened risk of non-performance of the
instrument relative to other obligations.
RATING SENSITIVITIES
IDR
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
Failure to meaningfully reduce balance sheet leverage over the next
six months, with an aim to sustain gross debt/tangible (adjusted
for 50% equity credit on preference shares) at 6x-or-below,
resulting from weak operational performance, a material decline in
asset sale proceeds or failure to execute on other strategic
capital building initiatives would result in a one-notch downgrade.
Additionally, the recognition of sizable aircraft and/or engine
impairments, higher repossession activity, difficulty re-leasing
aircraft at economical rates, and/or a reduction in available
liquidity could also adversely impact ratings.
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
RWN Removal
Demonstrated progress in deleveraging over the near term could
result in the removal of the Rating Watch and an assignment of a
Negative Outlook.
Beyond that, the Outlook could return to Stable should leverage be
reduced and sustained at 6x-or-below. A sustained improvement in
profitability, maintenance of a predominantly unsecured funding
profile, the maintenance of operating cash flow in excess of
dividend distributions, would also support a revision of the
Outlook to Stable. Strong risk management and solid credit
performance through a full credit cycle would also be viewed
favorably in the longer-term.
UNSECURED DEBT AND PREFRENCE SHARES
The unsecured debt rating is primarily sensitive to changes in FTAI
Aviation's Long-Term IDR and secondarily to the level of
unencumbered balance sheet assets relative to outstanding debt. A
decline in the level of unencumbered asset coverage and/or a
material increase in the use of secured debt, could result in the
notching of the unsecured debt rating down from the Long-Term IDR.
The expected and existing preferred share ratings are primarily
sensitive to changes in FTAI's Long-Term IDR and is expected to
move in tandem. However, the preferred share rating could be
downgraded by an additional notch to reflect further structural
subordination should the firm consider other hybrid instruments.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Prior
----------- ------ -----
FTAI Aviation Ltd. LT IDR BB- Rating Watch On BB-
Preferred LT B(EXP)Expected Rating
senior
unsecured LT BB- Rating Watch On BB-
preferred LT B Rating Watch On B
FTAI AVIATION: Moody's Gives B1(hyb) Rating to New Preferred Shares
-------------------------------------------------------------------
Moody's Investors Service has assigned a rating of B1 (hyb) to the
new preferred shares that will be issued by FTAI Aviation Ltd.
FTAI's other ratings, including its Ba2 corporate family and senior
unsecured ratings, are not affected by this action. The outlook is
stable.
RATINGS RATIONALE
The B1 (hyb) rating assigned to FTAI's new preferred shares is two
notches below FTAI's Ba2 corporate family rating. This notching
differential is based on Moody's expectation that the loss given
default of new preferred shares would be higher compared to the
company's senior unsecured notes that comprise the preponderance of
the company's debt. The issuance of preferred shares will be FTAI's
fourth installment of preferred share issuance and its first
issuance after the spin-off of the infrastructure assets in August
of 2022. The proceeds from the issuance of new preferred shares
will be used for asset purchases.
FTAI's ratings reflect its highly profitable business model
primarily resulting from its aircraft leasing business, although
the company's aerospace products segment is a growing proportion of
the company's business. While FTAI continues to invest in popular
engines (CFM-56) that power widely used narrow-body aircraft
benefiting from recovery in global air travel, its lease revenue
moderately weakened in 2022 due to the aircraft and engines
stranded in Russia during the military conflict between Russia and
Ukraine. The company's overall performance in 2022 mostly
benefitted from asset sales, given rising demand for scarce
aircraft. The 2022 gain from asset sales was approximately $108
million as compared to $29 million in 2021.
FTAI has high leverage; however, Moody's expects that the company's
debt-to-EBITDA leverage will decline to around 5.0x from 6.3x (as
of last twelve months ended December 31, 2022 incorporating Moody's
standard adjustments) over the next 12-18 months, supported by
gradual improvement in core earnings in the aerospace leasing
segment as well as from sales of aftermarket aircraft engine
parts.
Under Moody's Hybrid Equity Credit methodology for non-banking
financial institutions, preferred equity receives 100% equity
credit. As such, pro-forma for the issuance of preferred shares,
FTAI's debt to tangible common equity moderately improves but
continues to be very high relative to Moody's longer-term
expectations.
Moody's expects that FTAI will continue to be acquisitive and rely
on its $300 million ($150 million outstanding as of December 31,
2022) revolving credit facility for opportunistic asset
acquisitions.
The stable outlook reflects Moody's expectation that FTAI will
continue its growth trajectory while maintaining its EBITDA margin
broadly in line with pre-COVID-19 levels and that its leverage will
improve in the next 12-18 months. The stable outlook also
incorporates the risk associated with FTAI's opportunistic asset
acquisitions and periodic debt-financed dividends that can at times
pressure its capital strength.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
FTAI's ratings could be upgraded if the company achieves and
maintains profitability measured as the ratio of net income to
average assets above 1% and significantly strengthens its
capitalization, while reducing debt-to-EBITDA leverage to less than
4.5x, and demonstrates effective balancing of shareholder and debt
holder interests in its financial policy decisions.
The ratings could be downgraded if FTAI's operating results
deteriorate, its capital position fails to improve, its liquidity
profile weakens, or if the company loses a material customer or
suffers a business disruption that weakens its financial
prospects.
The principal methodology used in this rating was Finance Companies
Methodology published in November 2019.
FTAI is primarily an aircraft leasing company with total assets of
$2.4 billion as of December 31, 2022. FTAI is externally managed by
FIG LLC, also a Fortress affiliate.
FTX GROUP: Alameda Sues Grayscale Over Redemptions, Trust Fees
--------------------------------------------------------------
Yueqi Yang of Bloomberg News reports that Alameda Research, the
trading arm of the bankrupt digital-asset exchange FTX, filed a
lawsuit against Grayscale Investments alleging "exorbitant
management fees" and accusing Grayscale of "improperly preventing
redemptions" from the Bitcoin and Ether trusts it manages.
"We will continue to use every tool we can to maximize recoveries
for FTX customers and creditors," John J. Ray III, chief executive
officer and chief restructuring officer for FTX, said in the
statement. "Our goal is to unlock value that we believe is
currently being suppressed by Grayscale’s self-dealing and
improper redemption ban."
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, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: Massive Asset Shortfall Emerges in Chapter 11 Probe
--------------------------------------------------------------
Coin Telegraph reports that bankrupt cryptocurrency exchange FTX
has revealed a "massive shortfall" in its digital asset and fiat
currency holdings, with billions worth of customer funds missing
from both the exchange and its United States-based arm, FTX US.
On March 2, the exchange released a presentation showing FTX had
$2.2 billion in exchange wallets and fiat accounts, of which $694
million consisted of the most liquid "Category A Assets" that
include cash, stablecoins, Bitcoin, and Ether priced at the latest
spot prices.
Only $191 million of total assets were located in the wallets of
the accounts associated with FTX US, in addition to $28 million of
customer receivables and $155 million of related party receivables.
The balances of FTX's wallets and accounts at the time of its
bankruptcy show an $8.6 billion deficit.
FTX wallets showed a $9.3 billion net borrowing by the exchange's
sister trading firm, Alameda Research, and a $107 million net
payable to Alameda from FTX US.
FTX recorded surpluses across its less liquid "Category B Assets,"
which includes its own FTX Token but the holdings are insignificant
compared to the deficits on its other held assets.
In total FTX recorded an $8.6 billion deficit across all wallets
and accounts while FTX US recorded a deficit of $116 million.
John J. Ray III, the chief restructuring officer and CEO of FTX,
said in a March 2 that statement the presentation is the second in
a “series” as FTX continues to "uncover the facts of this
situation,” adding:
"It has taken a huge effort to get this far. The exchanges’
assets were highly commingled, and their books and records are
incomplete and, in many cases, totally absent."
On Feb 28, former FTX engineering director Nishad Singh pleaded
guilty to charges of wire fraud along with wire and commodities
fraud conspiracy.
Singh's plea follows a number of Bankman-Fried’s close associates
reportedly agreeing to cooperate with U.S. prosecutors in recent
months.
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, 2022, struck a deal to
sell itself to its giant rival Binance, but Binance walked away
from the deal amid reports on FTX regarding mishandled customer
funds and alleged US agency investigations.
At 4:30 a.m. on Nov. 11, Bankman-Fried ultimately agreed to step
aside, and restructuring vet John J. Ray III was quickly named new
CEO.
FTX Trading Ltd (d/b/a FTX.com), West Realm Shires Services Inc.
(d/b/a FTX US), Alameda Research Ltd. and certain affiliated
companies then commenced Chapter 11 proceedings (Bankr. D. Del.
Lead Case No. 22-11068) on an emergency basis on Nov. 11, 2022.
Additional entities sought Chapter 11 protection on Nov. 14, 2022.
FTX Trading and its affiliates each listed $10 billion to $50
million in assets and liabilities, making FTX the biggest
bankruptcy filer in the US this year. According to Reuters, SBF
shared a document with investors on Nov. 10 showing FTX had $13.86
billion in liabilities and $14.6 billion in assets. However, only
$900 million of those assets were liquid, leading to the cash
crunch that ended with the company filing for bankruptcy.
The Hon. John T. Dorsey is the case judge.
The Debtors tapped Sullivan & Cromwell, LLP as bankruptcy counsel;
Landis Rath & Cobb, LLP as local counsel; and Alvarez & Marsal
North America, LLC as financial advisor. Kroll is the claims agent,
maintaining the page https://cases.ra.kroll.com/FTX/Home-Index
The Official Committee of Unsecured Creditors tapped Paul Hastings
as counsel, FTI Consulting, Inc., as financial advisor, and
Jefferies LLC as the investment banker. Young Conaway Stargatt &
Taylor LLP is the Committee's Delaware and conflicts counsel.
Montgomery McCracken Walker & Rhoads LLP, led by partners Gregory
T. Donilon, Edward L. Schnitzer, and David M. Banker, is
representing Sam Bankman-Fried in the Chapter 11 cases.
White-collar crime specialist Mark S. Cohen has reportedly been
hired to represent SBF in litigation. Lawyers at Paul Weiss
previously represented SBF but later renounced representing the
entrepreneur due to a conflict of interest.
FTX GROUP: Silvergate Bank Wants Customers Suits Kept Separate
--------------------------------------------------------------
Leslie A. Pappas of Law360 reports that Silvergate Bank, accused in
three federal suits of helping facilitate investor fraud within
disgraced cryptocurrency platform FTX, has urged a federal judge in
California not to combine the actions with lawsuits against former
FTX head Sam Bankman-Fried.
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, 2022, 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.
FUSION PM HOLDINGS: 2d Cir. Upholds Bankruptcy Plan Interpretation
------------------------------------------------------------------
In the appealed case captioned as IQMax, Inc., Appellant, v. Fusion
PM Holdings, Inc., Debtor-Appellee, Case No. 22-907, (2d Cir.), the
U.S. Court of Appeals for the Second Circuit affirms the judgment
of the district court upholding the bankruptcy court's
interpretation of Fusion PM Holdings, Inc.'s bankruptcy plan.
The Appellant IQMax, Inc. sold substantially all of its assets to
the Debtor-Appellee Fusion PM Holdings, Inc. in 2018, including its
proprietary software. The asset purchase agreement provided that,
in addition to other fees, IQMax would receive a "royalty fee. . .
equal to nineteen percent. . . of the Net Revenue derived by
[Fusion] from sales of" IQMax's software in excess of $1.75 million
annually.
Fusion filed for Chapter 11 bankruptcy protection in 2019. Fusion's
confirmed bankruptcy plan assumed some executory contracts and
rejected others under 11 U.S.C. Section 365(a). In particular,
Fusion "deemed rejected" "all executory contracts and unexpired
leases to which any of the Debtors are parties." But the plan
excepted "all intellectual property contracts, licenses, royalties,
or other similar agreements to which the Debtors have any rights or
obligations in effect as of the date of the Confirmation Order,"
which Fusion assumed.
In 2021, after the bankruptcy court confirmed Fusion's bankruptcy
plan, IQMax moved for a declaration that Fusion had assumed, rather
than rejected, the APA. The bankruptcy court denied the motion,
concluding that "the plain language of the asset purchase
agreement, combined with the confirmed plan. . . precluded" IQMax's
motion. It held that the bankruptcy plan was best read as assuming
"ongoing intellectual property arrangements on which the business
depended. . . such that the reorganized Debtor would be able to use
intellectual property that it. . . negotiated access to from
business partners or licensors." The APA was not such a royalty,
but instead "a form of deferred compensation. . . for assets that
had already been conveyed in full." "The mere use of the term
royalty fee. . . to characterize one aspect of the consideration
for an outright purchase" did not "transform IQMax's entitlement
into the sort of licensing or intellectual property ongoing
arrangement that" Fusion's assumption encompassed.
IQMax appealed to the U.S. District Court for the Southern District
of New York. The district court "affirmed substantially for the
reasons stated" by the bankruptcy court. Hence, this appeal.
The Second Circuit finds no error in the bankruptcy court's
interpretation of the bankruptcy plan or its application of the
plan to the APA. Thus, the Second Circuit affirms the district
court judgment for the reasons stated by the bankruptcy court.
A full-text copy of the Summary Order dated March 1, 2023 is
available at https://tinyurl.com/y4z2rc5t from Leagle.com.
GARCIA GRAIN: Wins Cash Collateral Access Thru April 7
------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
McAllen Division, authorized Garcia Grain Trading Corporation to
use cash collateral on an interim basis through April 7, 2023.
The Court said the Debtor is permitted to use cash collateral in
accordance with the budget introduced at the hearing on March 7,
2023, as modified by the Court's ruling such that the amount
designated for payment of insurance premiums will increase to
include two months' worth of payments. The modifications are
incorporated and reflected in the budget.
As adequate protection of StoneX Commodity Solutions LLC f/k/a
FCStone Merchant Services, LLC, Falcon Bank, Grainchain, Inc. and
Vantage Bank Texas interests in the cash collateral or property
being used, these secured creditors are granted continuing
replacement like kind liens or ownership positions in all of the
Debtor's inventory and accounts receivable presently owned by or
securing the indebtedness owing to StoneX, Falcon, Grainchain, and
Vantage in the same priority and in the same nature, extent, and
validity as such liens or ownership positions existed prepetition.
A hearing on the continued use of cash collateral is set for April
6 at 9 p.m.
A copy of the court's order and the Debtor's budget is available at
https://bit.ly/3FCQfTh from PacerMonitor.com.
The Debtor projects $97,086 in total operating expenses for the
period from March 10 to April 9, 2023.
About Garcia Grain Trading Corp.
Garcia Grain Trading Corp.'s line of business includes buying
and/or marketing grain, dry beans, soybeans, and inedible beans.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-70028) on February
17, 2023. In the petition signed by Octavio Garcia, its CEO and
president, the Debtor disclosed up to $50 million in both assets
and liabilities.
Judge Eduardo V. Rodriguez oversees the case.
David R. Langston, Esq., at Mullin Hoard & Brown, LLP, represents
the Debtor as legal counsel.
GFL ENVIRONMENTAL: Moody's Alters Outlook on 'B1' CFR to Positive
-----------------------------------------------------------------
Moody's Investors Service affirmed GFL Environmental Inc's B1
corporate family rating and B1-PD probability of default rating. At
the same time, Moody's affirmed the ratings on the company's debt
instruments, including the Ba3 term loan and senior secured notes
rating and B3 senior unsecured notes rating. The outlook has been
changed to positive from stable. The SGL-2 speculative-grade
liquidity rating is unchanged.
The rating actions follow the company's announced plans to dispose
of three non-core assets in the US for a gross consideration of
C$1.5 billion over the next six months. Moody's understands that
one of the three assets, equal to roughly half of the proceeds, has
been signed with the other two having a signed letter of intent.
Management has indicated they are targeting to conclude the
disposals by Q3 2022.
Affirmations:
Issuer: GFL Environmental Inc.
Corporate Family Rating, Affirmed B1
Probability of Default Rating, Affirmed B1-PD
Senior Secured First Lien Term Loan B, Affirmed Ba3 (LGD3)
Senior Secured Regular Bond/Debentures, Affirmed Ba3 (LGD3)
Senior Unsecured Regular Bond/Debentures, Affirmed B3 (LGD5)
Outlook Actions:
Issuer: GFL Environmental Inc.
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
The affirmation of GFL's B1 CFR with a positive outlook reflects
the company's intention to reduce financial leverage by allocating
the majority of the C$1.5 billion disposal proceeds to repay its
more expensive debt. Moody's estimates that debt/EBITDA (as
adjusted by Moody's) would fall to 4.5x in 2023 and further toward
4x in 2024 from 5.6x (pro forma for acquisitions) at the end of
2022. The pace of deleveraging assumes GFL will adhere to its
guided target of up to C$500 million of tuck-in acquisitions in
2023 funded mostly from free cash flow. The action is further
supported by the company's stronger business profile and track
record of good operating performance since its IPO three years ago.
Since 2019 GFL has densified its operations and grown its market
position to become the fourth largest solid waste services company
in North America, doubling its revenue and Moody's adjusted EBITDA
to C$6.76 billion and C$1.61 billion, respectively. For 2023,
Moody's expects revenue to grow to C$7.4 billion with EBITDA of
C$1.85 billion, driven by rollover of strong pricing actions taken
in 2022, full 12-month contributions from the C$1.2 billion of
acquisitions made in 2022 and extraction of ongoing cost
synergies.
GFL's credit quality is constrained by: 1) its history of
aggressive debt financed acquisition growth which has led to
financial leverage (adjusted debt/EBITDA) remaining between 5x and
5.5x since its IPO in March 2020; 2) the short time frame between
acquisitions which increases the potential for integration risks;
and 3) GFL's majority ownership by private equity firms, which may
hinder deleveraging.
However, GFL benefits from: 1) the company's growing and
diversified business model; 2) high recurring revenue supported by
long term contracts; 3) its good market position in the stable
Canadian and US nonhazardous waste industry; 4) EBITDA margin that
compares favorably with those of its higher rated industry peers;
and 5) good liquidity.
The positive outlook reflects Moody's expectation that GFL will
operate with lower financial leverage such that adjusted
debt/EBITDA will trend lower over the next 12-18 months aided by
debt repayment from asset sale proceeds. The positive outlook also
incorporates Moody's expectation of continued strong operational
performance, solid free cash flow and good liquidity over the next
12 to 18 months.
GFL has good liquidity (SGL-2). The sources total around C$780
million compared to around C$33 million ($25 million) of mandatory
debt payments over the next 12 months. As of December 31, 2022, GFL
had cash of around C$82 million, around C$300 million available
under its revolving credit facilities and Moody's expectation of
around C$400 million of free cash flow in 2023. GFL's revolver is
subject to a net leverage and an interest coverage covenant, which
Moody's expects will have sufficient buffer over the next four
quarters. GFL's next debt maturity is in 2025 comprising of $1.25
billion senior secured notes, equivalent to around 18% of total
debt.
GFL has a highly negative score (CIS-4) primarily driven by the
risks associated with its ongoing acquisitions strategy and
aggressive financial policies that keep leverage elevated and
difficult to monitor. It also reflects the highly negative
exposure to environmental risks associated with the collection,
treatment and disposal of waste. This is balanced by the good
operating track record and positive social trends of recycling and
promoting the circular economy.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Upward rating pressure could arise if GFL continues to deliver
solid operating performance and demonstrates a commitment to
maintain a more conservative and predictable financial policy, such
that adjusted debt/EBITDA steadily improves toward 4x. Moody's
would also expect GFL to maintain a strong free cash flow position
and a good liquidity profile.
The ratings could be downgraded if liquidity weakens, possibly
caused by negative free cash flow, if there is a material and
sustained decline in operating margin due to challenges integrating
acquisitions or if adjusted debt/EBITDA is sustained above 5x.
The principal methodology used in these ratings was Environmental
Services and Waste Management Companies published in April 2018.
GFL Environmental Inc., headquartered in Toronto, provides solid
waste and liquid waste collection, treatment and disposal solutions
and soil remediation services to municipal, industrial and
commercial customers in Canada and the US. GFL reported revenue of
C$6.8 billion for 2022.
GIGAMONSTER NETWORKS: Committee Taps Faegre as Legal Counsel
------------------------------------------------------------
The official committee of unsecured creditors of Gigamonster
Networks, LLC and its affiliates received approval from the U.S.
Bankruptcy Court for the District of Delaware to employ Faegre
Drinker Biddle & Reath, LLP as its legal counsel.
The committee requires legal counsel to:
a. give advice with respect to the committee's rights, duties,
and powers in the Debtors' Chapter 11 cases;
b. assist and advise the committee in its consultations and
negotiations with the Debtors relative to the administration of
their bankruptcy cases;
c. assist the committee in analyzing the claims of creditors and
the Debtors' capital structure, and in negotiating with holders of
claims and equity interests;
d. assist the committee in its investigation of the acts,
conduct, assets, liabilities, and financial condition of the
Debtors and their respective insiders, and of the operation of the
Debtors' businesses;
e. assist the committee in its analysis of, and negotiations
with, the Debtors or any third parties concerning matters related
to, among other things, the assumption or rejection of leases of
non-residential real property and executory contracts, asset
dispositions, financing of other transactions, and the terms of any
plan of reorganization or liquidation for the Debtors and
accompanying disclosure statement and related plan documents;
f. review and analyze legal documents, statements of operations
and schedules filed with the court by the Debtors or third parties,
advise the committee as to their propriety and, after consultation
with the committee, take appropriate action;
g. prepare legal papers;
h. assist and advise the committee as to its communications with
the general creditor body regarding significant matters in the
Chapter 11 cases;
i. advise and assist the committee with respect to any
legislative, regulatory or governmental activities;
j. represent the committee at all hearings and other proceedings
before the court;
k. investigate and analyze any claims against non-debtor
affiliates;
l. assist the committee in preparing pleadings and applications
as may be necessary in furtherance of the committee's interests and
objectives; and
m. perform other legal services.
Faegre will be paid at these rates:
Partners $750 to $1,350 per hour
Associates and Counsel $545 to $745 per hour
Paraprofessionals $305 to $435 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Patrick Jackson, Esq., a partner at Faegre, disclosed in court
filings that his firm is a "disinterested person" within the
meaning of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Patrick A. Jackson, Esq.
Faegre Drinker Biddle & Reath, LLP
1050 K Street NW, Suite 400
Washington, DC 20001
Telephone: (202) 312-7400
Facsimile: (202) 312 7461
Email: patrick.jackson@faegredrinker.com
About GigaMonster Networks
GigaMonster Networks, LLC and affiliates develop and deploy
universal access networks (UANs) in multi-family and commercial
real estate properties, providing internet, video and other network
services to approximately 400 customer properties and nearly 35,000
end-user subscribers. The Debtors contract with property owners to
set up UANs in their buildings and also provide internet services
to subscribers in those buildings.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10051) on Jan.
16,
2023. In the petition signed by its chief restructuring officer,
Rian Branning of Novo Advisors, LLC, GigaMonster Networks disclosed
up to $100 million in both assets and liabilities.
Judge Kate Stickles oversees the cases.
The Debtors tapped Pachulski Stang Ziehl and Jones, LLP as legal
counsel; Novo Advisors, LLC as restructuring advisor; Bank Street
Group, LLC as investment banker; and Kroll Restructuring
Administration as claims and noticing agent.
On Jan. 30, 2023, the U.S. Trustee for Region 3 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee tapped Faegre Drinker Biddle &
Reath, LLP as legal counsel and M3 Advisory Partners, LP as
financial advisor.
GIGAMONSTER NETWORKS: Panel Taps M3 Advisory as Financial Advisor
-----------------------------------------------------------------
The official committee of unsecured creditors of Gigamonster
Networks, LLC and its affiliates received approval from the U.S.
Bankruptcy Court for the District of Delaware to employ M3 Advisory
Partners, LP as financial advisor.
The committee requires a financial advisor to:
a. assist with the analysis, review and monitoring of the
Debtors' Chapter 11 process, including, but not limited to,
assessment of potential recoveries for general unsecured
creditors;
b. assist with the review of financial information prepared by
the Debtors, including, but not limited to, cash flow projections
and budgets, business plans, cash receipts and disbursement
analysis, asset and liability analysis, and the economic analysis
of proposed transactions for which court approval is sought;
c. assist with the assessment and monitoring of the Debtors'
short-term cash flow, liquidity and operating results;
d. analyze the Debtors' proposed business plans and Chapter 11
plan, and develop alternative scenarios, if necessary;
e. assess the Debtors' various pleadings and proposed treatment
of unsecured creditor claims therefrom;
f. prepare or review, as applicable, avoidance action and claim
analyses;
g. assist the committee in reviewing the Debtors' financial
reports, including, but not limited to, statements of financial
affairs, schedules of assets and liabilities, debtor-in-possession
budgets, and monthly operating reports;
h. advise the committee on the current state of the Chapter 11
cases;
i. advise the committee in negotiations with the Debtors and
third parties as necessary;
j. assist with the prosecution of the committee's responses or
objections to the Debtors' motions, including attendance at
hearings and depositions, and providing expert reports and
testimony on case issues as required by the committee; and
k. other general business consulting services.
The firm will charge these hourly fees:
Managing Partner $1,350 per hour
Senior Managing Director $1,245 per hour
Managing Director $1,025 to $1,150 per hour
Director $840 to $945 per hour
Vice President $750 per hour
Senior Associate $650 per hour
Associate $550 per hour
Analyst $450 per hour
As disclosed in court filings, M3 Advisory Partners is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Mohsin Y. Meghji
M3 Advisory Partners, LP
1700 Broadway, 19th Floor
New York, NY 10019
Tel: (212) 202-2200
Email: mmeghji@m3-partners.com
About GigaMonster Networks
GigaMonster Networks, LLC and affiliates develop and deploy
universal access networks (UANs) in multi-family and commercial
real estate properties, providing internet, video and other network
services to approximately 400 customer properties and nearly 35,000
end-user subscribers. The Debtors contract with property owners to
set up UANs in their buildings and also provide internet services
to subscribers in those buildings.
The Debtors sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10051) on Jan.
16,
2023. In the petition signed by its chief restructuring officer,
Rian Branning of Novo Advisors, LLC, GigaMonster Networks disclosed
up to $100 million in both assets and liabilities.
Judge Kate Stickles oversees the cases.
The Debtors tapped Pachulski Stang Ziehl and Jones, LLP as legal
counsel; Novo Advisors, LLC as restructuring advisor; Bank Street
Group, LLC as investment banker; and Kroll Restructuring
Administration as claims and noticing agent.
On Jan. 30, 2023, the U.S. Trustee for Region 3 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee tapped Faegre Drinker Biddle &
Reath, LLP as legal counsel and M3 Advisory Partners, LP as
financial advisor.
GIRARDI & KEESE: Judge Enters 2nd Not Guilty Plea for Tom Girardi
-----------------------------------------------------------------
A federal judge in Chicago entered a not guilty plea for Tom
Girardi on Friday, March 3, 2023, as the disgraced former attorney
prepares for a hearing to determine his ability to face fraud and
contempt charges over an alleged multimillion-dollar theft from
clients of now-defunct Girardi Keese.
Mr. Girardi was charged last month with misappropriating more than
$3 million in settlement funds that belonged to families of victims
of a 2018 plane crash.
Reuters reports that U.S. Magistrate Judge Jeffrey Cummings set
bail at $250,000 and said Girardi's brother Robert, his appointed
conservator, is responsible for covering it.
Girardi's attorney, federal public defender Seema Ahmad, told the
court her client is living in a facility for Alzheimer's treatment.
Cummings gave her until Wednesday to file a motion asking for a
hearing to determine whether Girardi is competent to stand trial.
Separate competency proceedings have already been set in motion in
Los Angeles federal court, where Girardi was charged last month
with embezzling $15 million from clients between 2010 and 2020,
Ahmad said.
Girardi was charged in Chicago alongside David Lira, his
son-in-law, and Christopher Kamon, the former chief financial
officer of his defunct law firm Girardi Keese. Lira also worked at
Girardi Keese.
They each face eight counts of wire fraud and four counts of
criminal contempt of court. Lira and Kamon have pleaded not
guilty.
Chicago federal prosecutor Corey Rubenstein said each count could
result up to 20 years in prison.
The charges stem from allegations that Girardi, Lira and Kamon
misappropriated more than $3 million in 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.
Girardi, 83, was a prominent figure in the plaintiffs bar before
the Lion Air allegations first emerged and led to the collapse of
his law firm in late 2020. Girardi is the estranged husband of
Erika Jayne Girardi, a singer and a star on the reality TV show
"Real Housewives of Beverly Hills."
Girardi and Kamon have also pleaded not guilty to the Los Angeles
charges. The judge in that case also set Girardi's bail at
$250,000.
About Girardi & Keese
Girardi and Keese or Girardi & Keese was a Los Angeles-based law
firm founded in 1965 by lawyers Thomas Girardi and Robert Keese. It
served clients in California in a variety of legal areas. It was
known for representing plaintiffs against major corporations.
An involuntary Chapter 7 petition (Bankr. C.D. Cal. Case No.
20-21022) was filed in December 2020 against GIRARDI KEESE by
alleged creditors Jill O'Callahan, Robert M. Keese, John Abassian,
Erika Saldana, Virginia Antonio, and Kimberly Archie.
The petitioners' attorneys:
Andrew Goodman
Goodman Law Offices, Apc
Tel: 818-802-5044
E-mail: agoodman@andyglaw.com
Elissa D. Miller, a member of the firm SulmeyerKupetz, has been
appointed as Chapter 7 trustee for GIRARDI KEESE. The Chapter 7
trustee can be reached at:
Elissa D. Miller
333 South Grand Ave., Suite 3400
Los Angeles, California 90071-1406
Telephone: (213) 626-2311
Facsimile: (213) 629-4520
E-mail: emiller@sulmeyerlaw.com
An involuntary Chapter 7 petition was also filed against Thomas
Vincent Girardi (Case No. 20-21020) on Dec. 18, 2020. The Chapter
7 trustee can be reached at:
Jason M. Rund
Email: trustee@srlawyers.com
840 Apollo Street, Suite 351
El Segundo, CA 90245
Telephone: (310) 640-1200
GOLDEN KEY GROUP: Committee Taps Whiteford Taylor as Legal Counsel
------------------------------------------------------------------
The official committee of unsecured creditors of Golden Key Group,
LLC seeks approval from the U.S. Bankruptcy Court for the District
of Maryland to employ Whiteford Taylor & Preston, LLP as its legal
counsel.
The committee requires legal counsel to:
(a) give legal advice regarding the rights, powers and duties
of the committee under the Bankruptcy Code;
(b) advise and consult with the committee on the conduct of
the Debtors' bankruptcy cases including all legal and
administrative requirements under Chapter 11;
(c) attend meetings and negotiate with representatives of the
Debtors, the secured and unsecured creditors, equity holders,
employees, and other parties in interest;
(d) advise the committee regarding any contemplated sale of
assets or business combinations;
(e) advise the committee regarding pre-bankruptcy and
post-petition financing and cash collateral arrangements and
negotiate documents relating thereto;
(f) advise the committee on matters relating to the Debtors'
assumption, assumption and assignment or rejection of executory
contracts and unexpired leases;
(g) advise the committee on matters relating to the ordinary
course of business including employment matters, environmental,
banking, insurance, securities, corporate, business operation,
contracts, joint ventures, real and personal property, press and
public relations matters, and regulatory matters;
(h) provide advice and counseling on actions to protect and
preserve the Debtors' estates, including actions and proceedings by
the Debtors or other designated parties to recover assets, defense
of actions and proceedings brought against the estates,
negotiations regarding all litigation in which the committee may be
involved, and objections to claims filed against the estate;
(i) prepare legal papers;
(j) review all pleadings, financial and other reports filed by
the Debtors and advise the committee about the implications;
(k) review the nature and validity of any liens asserted
against the Debtors' property and advise the committee concerning
the enforceability of such liens;
(l) investigate the acts, conduct, assets, liabilities, and
financial condition of the Debtors, the operation of the Debtors'
business and the desirability of the continuance of such business,
and any other matter relevant to the cases or to the formulation of
a Chapter 11 plan;
(m) commence and conduct ligation necessary or appropriate to
assert rights held by the committee or protect assets of the
Chapter 11 estate;
(n) negotiate and participate in the preparation of the
Debtors' plan of reorganization and related documents, and advise
and participate in the confirmation of such plan;
(o) attend meetings with third parties;
(p) appear before the bankruptcy court, other courts, and the
Office of the U.S. Trustee;
(q) meet and coordinate with other legal counsel and other
professionals representing the Debtors and other parties in
interest; and
(r) perform other necessary legal services.
The firm will be paid at these rates:
Partners $700 per hour
Associates $350 per hour
Paralegals $400 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
Brent Strickland, Esq., a partner at Whiteford, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Brent C. Strickland, Esq.
Whiteford, Taylor & Preston L.L.P.
111 Rockville Pike, Suite 800
Rockville, MD 20850
Telephone: (410) 347-9402
Facsimile: (410) 223-4302
Email: bstrickland@wtplaw.com
About Golden Key Group
Golden Key Group, LLC is a professional services firm dedicated to
helping federal and commercial clients solve today's strategic,
organizational and operational challenges while addressing their
future needs. Founded in 2002, Golden Key Group's solution
offerings include Human Capital Management Support, Human Resources
Operations, Employee Training and Leadership Development,
Professional Consulting Services, Program Management Office,
Acquisition and Category Management, Analytics and Information
Technology, Executive Search Services, and Select Solutions. The
company is based in Landover, Md.
Golden Key Group filed its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. D. Md. Case No. 23-10414)
on Jan. 20, 2023, with 1 million to $10 million in assets and $10
million to $50 million in liabilities. Gretchen McCracken, Golden
Key Group's chief executive officer and managing member, signed the
petition.
Judge Maria Ellena Chavez-Ruark oversees the case.
Paul Sweeney, Esq., at YVS Law, LLC represents the Debtor as
counsel.
John Fitzgerald, III, Acting U.S. Trustee for Region 4, appointed
an official committee to represent unsecured creditors in the
Debtor's Chapter 11 case. The committee is represented by Whiteford
Taylor & Preston, LLP.
GRADE A HOME: Wins Cash Collateral Access Thru March 21
-------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Grade A Home, LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 15% variance, through March 21, 2023.
The Debtor requires the use of the cash collateral of Toorak
Capital Partners, LLC to continue its ordinary course business
operations and maintain the value of its bankruptcy estate.
The Court said Toorak will receive monthly adequate protection
payments as provided in the Debtors' Interim Budget.
As adequate protection, Toorak is granted valid and perfected
additional and replacement security interests in, and liens upon
the Debtor's assets.
To the extent of the aggregate Diminution of Value, if any, of its
interest in the cash collateral, Toorak is granted, in addition to
claims under 11 U.S.C. section 503, an allowed superpriority
administrative expense claim pursuant to 11 U.S.C. section 507(b).
The Adequate Protection Liens are subject and subordinate to a
carve-out of funds for all fees required to be paid to: (i) the
Clerk of the Bankruptcy Court, (ii) the Office of the United States
Trustee pursuant to 28 U.S.C. section 1930(a), if any, (iii) all
reasonable fees and expenses incurred by a trustee, if any, under
11 U.S.C. section 726(b) in an amount not exceeding $15,000, and
(iv) all fees and expenses of the Subchapter V Trustee approved by
the Court, to the extent such fees and expenses are provided for in
the Budget or any subsequent budgets and allowed by Order of the
Bankruptcy Court.
Grade A Home says its financial distress was precipitated by
unanticipated repairs and vacancies. Grade A Home successfully
closed on the sale of one of its properties in Houston, Texas, but
was unable to sell the remaining two properties as the Properties
were undergoing renovations and repairs. As a result of the
vacancies and repair costs, the Debtor defaulted under its
obligations to Toorak, which posted the Properties for a March 2023
foreclosure date. Toorak asserts a lien on the Debtor's cash
through a recorded assignment of rents.
A final hearing on the matter is set for March 21, 2023 at 3:30
p.m.
A copy of the Debtor's motion is available at
https://bit.ly/3YGEVMB from PacerMonitor.com.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3l3KSFp from PacerMonitor.com.
The Debtor projects total reorganizational expenses, on a monthly
basis, as follows:
$4,500 for March 2023;
$4,500 for April 2023;
$4,500 for May 2023;
$4,500 for June 2023; and
$4,500 for July 2023.
About Grade A Home LLC
Grade A Home LLC sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-30798) on March 6,
2023. In the petition signed by Muhammad Amir Sharif, member, the
Debtor disclosed up to $10 million in both assets and liabilities.
Suan Tran Adams, Esq., at Tran Singh, LLP, represents the Debtor as
legal counsel.
GULF COAST TRANS: Files Emergency Bid to Use Cash Collateral
------------------------------------------------------------
Gulf Coast Transportation, Inc. asks the U.S. Bankruptcy Court for
the Middle District of Florida, Tampa Division, for authority to
use cash collateral on an emergency basis in accordance with the
budget.
The Debtor requires the use of cash collateral to fund operating
expenses necessary to continue the operation of its business, to
maintain the estate, to maximize the return on its assets.
The Debtor's primary secured creditor is the U.S. Small Business
Administration in the amount of $500,000 for an Economic Injury
Disaster Loan. The Lender filed a UCC financing statement asserting
a security interest in, among other things, all accounts
receivable.
In exchange for the Debtor's ability to use cash collateral in the
operation of its business, the Debtor proposes to grant to the
Lender, as adequate protection, a replacement lien to the same
extent, validity, and priority as existed on the Petition Date.
The Debtor believes that it can stabilize its business operations
and maintain going concern value. Otherwise, the Debtor's business
operations will cease, and its assets will have only liquidation
value.
A copy of the motion is available at https://bit.ly/3LfgUZW from
PacerMonitor.com.
About Gulf Coast Transportation, Inc.
Gulf Coast Transportation, Inc. sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00872) on
March 8, 2023. In the petition signed by Justin Morgaman, vice
president, the Debtor disclosed up to $1 million in both assets and
liabilities.
Edward J. Peterson, Esq., at Johnson, Pope, Bokor Ruppel & Burns,
LLP, represents the Debtor as legal counsel.
HAIRY DEALINGS: Files Emergency Bid to Use Cash Collateral
----------------------------------------------------------
Hairy Dealings, Inc. asks the U.S. Bankruptcy Court for the Middle
District of Florida, Tampa Division, for authority to use cash
collateral on an interim basis and to provide adequate protection
to the Huntington National Bank which may hold a security interest
in the Debtor's cash and/or cash equivalents.
The Debtor requires the use of cash collateral to fund ordinary
business operations and necessary expenses in accordance with the
cash budget.
Prior to the Petition Date, the Debtor obtained financing from
Huntington which is purportedly secured by a lien on the Debtor's
cash and/or cash equivalents. Huntington may assert a first
priority security interest in the Debtor's cash and cash
equivalents. The outstanding balance owed to Huntington in
connection with a series of SBA-backed loans to the Debtor total
approximately $255,000.
The cash collateral the Debtor seeks to use is comprised of cash on
hand and funds to be received during normal operations which may be
encumbered by the lien of Huntington.
As adequate protection for the use of cash collateral, the Debtor
proposes to grant Huntington a replacement lien on its
post-petition cash collateral to the same extent, priority, and
validity as its pre-petition liens, to the extent its use of cash
collateral results in a decrease in value of Huntington's interest
in the cash collateral. All interests on cash collateral are
adequately protected by replacement liens and the proposed adequate
protected is fair and reasonable and sufficient to satisfy any
diminution in value of Huntington's prepetition collateral.
A copy of the Debtor's motion and budget is available at
https://bit.ly/3SWg3z9 from PacerMonitor.com.
The Debtor projects total expenses, on a weekly basis, as follows:
$5,177 for the week of March 6, 2023;
$834 for the week of March 13, 2023;
$2,372 for the week of March 20, 2023; and
$762 for the week of March 27, 2023.
About Hairy Dealings, Inc.
Hairy Dealings, Inc. is a closely held Florida limited liability
company formed in 2019 for the purpose of acquiring and operating a
"Tune Up, The Manly Salon" franchise in Tampa, Florida. The Debtor
offers a unique haircut experience and full menu of modern men's
salon services, which also include complimentary cocktails or beer
with every visit.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Fla. Case No. 23-00782) on March 1,
2023. In the petition signed by Johnnie R. Tilghman, president, the
Debtor disclosed up to $500,000 in both assets and liabilities.
HARRIS PHARMACEUTICAL: Trustee Hires Accounting Consultant
----------------------------------------------------------
Amy Denton Mayer, the Subchapter V trustee appointed in Harris
Pharmaceutical, Inc.'s bankruptcy case, seeks approval from the
U.S. Bankruptcy Court for the Middle District of Florida to employ
Accounting & Business Partners, LLC.
The trustee requires an accounting consultant to analyze whether
distributions made to Janice Harris and Dr. Brian Harris or to the
Internal Revenue Service were attributable to tax obligations
stemming from income earned by and taxable to the Debtor or income
earned by and taxable to other non-debtor entities.
The firm will be paid at the rate of $195 per hour.
Andrea Bone, a partner at Accounting & Business Partners, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Andrea Bone
Accounting & Business Partners, LLC
10730 102nd Ave. N.
Seminole, FL 33778
Tel: (727) 828-9945
About Harris Pharmaceutical
Harris Pharmaceutical, Inc. is a manufacturer of pharmaceutical and
medicine products in Fort Myers, Fla.
Harris Pharmaceutical filed a petition under Chapter 11, Subchapter
V of the Bankruptcy Code (Bankr. M.D. Fla. Case No. 20-08071) on
Oct. 29, 2020, disclosing $4,229,666 in total assets and $2,207,513
in total liabilities as of Sept. 30, 2021.
Judge Caryl E. Delano oversees the case.
The Debtor tapped the Law Office of Leon A. Williamson, Jr., PA as
bankruptcy counsel.
Amy Denton Harris is the Subchapter V trustee appointed in the
Debtor's case. Stichter, Riedel, Blain & Postler P.A., Westerman
Ball Ederer Miller Zucker&Sharfstein, LLP, and David R. Softness,
P.A. serve as the trustee's special counsels. Hughes, Snell & Co.,
PA is the trustee's accountant while Accounting & Business
Partners, LLC is the accounting consultant.
HI-POINT CONSTRUCTION: Gets OK to Hire Winegarden as Legal Counsel
------------------------------------------------------------------
Hi-Point Construction Co. received approval from the U.S.
Bankruptcy Court for the Eastern District of Michigan to employ
Winegarden, Haley, Lindholm, Tucker & Himelhoch, P.L.C. as its
legal counsel.
Zachary R. Tucker, Esq., the main attorney handling the Debtor's
Chapter 11 case, will be paid at the rate of $300 per hour.
The firm holds the sum of $4,000 as a retainer.
As disclosed in court filings, Tucker & Himelhoch is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached through:
Zachary R. Tucker, Esq.
Winegarden, Haley, Lindholm, Tucker & Himelhoch, P.L.C.
9460 S. Saginaw Rd, Suite A
Grand Blanc, MI 48439
Telephone: (810) 579-3600
Email: ztucker@winegarden-law.com
About Hi-Point Construction Co.
Hi-Point Construction Co., a construction company in Mich., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
E.D. Mich. Case No. 23-30135) on Jan. 20, 2023, with up to $100,000
in assets and up to $10 million in liabilities. Jeremy Huntoon,
owner of Hi-Point Construction Co., signed the petition.
Judge Joel D. Applebaum oversees the case.
The Debtor tapped Zachary R. Tucker, Esq., at Winegarden, Haley,
Lindholm, Tucker & Himelhoch, P.L.C. as bankruptcy counsel and CMM
& Associates as financial advisor.
HI-POINT CONSTRUCTION: Taps CMM & Associates as Financial Advisor
-----------------------------------------------------------------
Hi-Point Construction Co. seeks approval from the U.S. Bankruptcy
Court for the Eastern District of Michigan to employ CMM &
Associates as its financial advisor.
The Debtor requires a financial advisor to:
-- work with the Debtor to project cash flow using a 13-week
cash flow spreadsheet created by the firm;
-- project available free cash flow covering a 36 to up to
60-month timeframe in accordance to subChapter V bankruptcy
requirements;
-- attest to the finished projections as required to validate
the process;
-- help incorporate the 13-week cash flow projections in the
management of the business, adding the format into the accounting
software of the Debtor;
-- work closely with the Debtor to create a feasible
reorganization plan;
-- help creditors understand the available free cash flow in
accordance with the plan; and
-- attend court hearings as requested by the Debtor.
The firm will be paid at these rates:
Charles M. Mouraine $325 per hour
Charles Flint $250 per hour
The retainer fee is $5,000.
Charles Mouraine, a partner at CMM & Associates, disclosed in a
court filing that his firm is a "disinterested person" as the term
is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Charles M. Mouraine
CMM & Associates
43313 Woodward Ave # 1189
Telephone: (248) 767-9492
Facsimile: (248) 562-1959
Email: cmouraine@cmmengllc.com
About Hi-Point Construction Co.
Hi-Point Construction Co., a construction company in Mich., sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
E.D. Mich. Case No. 23-30135) on Jan. 20, 2023, with up to $100,000
in assets and up to $10 million in liabilities. Jeremy Huntoon,
owner of Hi-Point Construction Co., signed the petition.
Judge Joel D. Applebaum oversees the case.
The Debtor tapped Zachary R. Tucker, Esq., at Winegarden, Haley,
Lindholm, Tucker & Himelhoch, P.L.C. as bankruptcy counsel and CMM
& Associates as financial advisor.
HIE HOLDINGS: Trustee Taps Finders Keepers as Auctioneer
--------------------------------------------------------
Elizabeth Kane, the Chapter 11 trustee for Hie Holdings, Inc.,
seeks approval from the U.S. Bankruptcy Court for the District of
Hawaii to employ Finders Keepers, Inc., a Honolulu-based auction
firm, to sell the Debtor's personal property.
Finders Keepers will be paid a commission of:
-- 5 percent of the sales price in case of sale of all assets in
the aggregate to a single buyer;
-- 20 percent of the sales price in case of online auction and
sale of assets;
-- 25 percent of the sales price in case of online auction and
sale of assets with disposal of loose trash and unwanted machinery,
equipment, abandoned items from auction.
As disclosed in court filings, Finders Keepers is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Finders Keepers, Inc.
d/b/a Oahu Auctions
650 Iwilei Road
Honolulu, HI 96817
Tel: (808) 371-6055
Email: info@oahuauctions.com
About Hie Holdings
HIE Holdings, Inc. is the parent entity of Royal Hawaiian Water
Co., Ltd., and Hawaiian Isles Kona Coffee Company, Ltd. HIE
Holdings is, in turn, owned by Michael Boulware, Julie Boulware and
the Glenn Boulware Trust.
Royal Hawaiian, doing business as Hawaiian Isles Water Company,
operates a water bottling facility in Halawa, Oahu, while Hawaiian
Isles Kona Coffee, doing business as Hawaii Coffee Roasters,
distributes coffee.
Royal Hawaiian sought for Chapter 11 bankruptcy protection (Bankr.
D. Hawaii Case No. 22-00524) on July 30, 2022; HIE Holdings (Bankr.
D. Hawaii Case No. 22-00534) on Aug. 3, 2022; and Hawaiian Isles
Kona Coffee (Case No. 22-00546) on Aug. 5, 2022. The cases are
jointly administered under Case No. 22-00534.
At the time of the filing, each of the Debtors reported assets
between $1 million and $10 million and liabilities between $1
million and $10 million.
Judge Robert J. Faris oversees the cases.
Chuck C. Choi, Esq., at Choi & Ito and KDL CPAs, LLC serve as the
Debtors' legal counsel and accountant, respectively.
Elizabeth A. Kane, the Chapter 11 trustee appointed in the Debtor's
case, is represented by Pettit Law Hawai'i, LLLC.
HIGHLAND CAPITAL: Denial of Dugaboy's Motion to Compel Affirmed
---------------------------------------------------------------
In the appealed case captioned In the Matter of Highland Capital
Management, L.P. Debtor, The Dugaboy Investment Trust, Appellant,
v. Highland Capital Management, L.P., Appellee, Case No. 22-10831,
(5th Cir.), the U.S. Court of Appeals for the Fifth Circuit affirms
the district court's order dismissing Dugaboy Investment Trust's
appeal.
Dugaboy Investment Trust appeals the district court's order
dismissing, for lack of prudential standing, its appeal of the
bankruptcy court's order denying its Motion to Compel Compliance
with Bankruptcy Rule 2015.3.
In January 2021, Highland Capital Management, L.P. filed its
reorganization plan. The next month, at the Plan's confirmation
hearing, Dugaboy brought up the issue of Highland's non-compliance
with Bankruptcy Rule 2015.3's requirement that "debtors submit
periodic financial reports of the value, operations, and
profitability" of each non-debtor entity in which the debtor "holds
a substantial or controlling interest." Despite Dugaboy's protests,
the bankruptcy court entered the Confirmation Order and approved
the Plan on Feb. 22, 2021. Dugaboy's interest was consequently
terminated under the confirmed plan.
On April 29, 2021, raising the same argument, Dugaboy filed its
Motion to Compel Compliance with Bankruptcy Rule 2015.3 with the
bankruptcy court. However, before the bankruptcy court ruled on the
motion, the Plan became effective on Aug. 11, 2021. Accordingly,
the bankruptcy court denied the motion as moot.
Dugaboy filed its notice of appeal of the order. The district court
dismissed the appeal for lack of jurisdiction. In doing so, it held
that Dugaboy lacked standing because it was no longer a creditor
and did not have a claim in the estate, and therefore lacked
financial injury flowing from the order.
This appeal followed.
Upon reviewing the record, the Fifth Circuit agrees "that Dugaboy
fails to meet these requirements. Dugaboy cannot, and does not,
point to any direct pecuniary harm. . . Dugaboy's main argument is
that, if the bankruptcy court had required Highland to submit
reports under Rule 2015.3, Dugaboy could have used that information
to discover whether there were any claims against the estate that
arose from transactions between Highland and its non-debtor
affiliates. . . Even assuming an injury occurred, any potential
pecuniary harm to Dugaboy is indirect. . . As the district court
aptly explained: "It is unclear how post-dated reports disclosing
years-old facts could lead to any direct recovery by a creditor,
let alone recovery by a non-creditor with a purported ownership in
non-debtor affiliates." Thus, the Fifth Circuit concludes that the
district court properly found that Dugaboy lacked standing.
In a last-ditch effort to avoid dismissal, Dugaboy contends that it
has standing under 11 U.S.C. Section 1109(b). However, the Court
will not consider this argument, which is raised for the first time
on appeal.
A full-text copy of the PER CURIAM dated Feb. 28, 2023 is available
at https://tinyurl.com/yc5k6zue from Leagle.com.
About Highland Capital Management
Highland Capital Management, LP was founded by James Dondero and
Mark Okada in Dallas in 1993. Highland Capital is the world's
largest non-bank buyer of leveraged loans in 2007. It also manages
collateralized loan obligations. In March 2007, it raised $1
billion to buy distressed loans. Collateralized loan obligations
are created by bundling together loans and repackaging them into
new securities.
Highland Capital Management sought Chapter 11 protection (Bank. D.
Del. Case No. 19-12239) on Oct. 16, 2019. On Dec. 4, 2019, the case
was transferred to the U.S. Bankruptcy Court for the Northern
District of Texas and was assigned a new case number (Bank. N.D.
Tex. Case No. 19-34054). Judge Stacey G. Jernigan is the case
judge.
At the time of the filing, Highland had between $100 million and
$500 million in both assets and liabilities.
The Debtor tapped Pachulski Stang Ziehl & Jones LLP as bankruptcy
counsel, Foley & Lardner LLP as special Texas counsel, and Teneo
Capital, LLC as litigation advisor. Kurtzman Carson Consultants,
LLC, is the claims and noticing agent.
The U.S. Trustee for Region 6 appointed a committee of unsecured
creditors on Oct. 29, 2019. The committee tapped Sidley Austin LLP
and Young Conaway Stargatt & Taylor LLP as bankruptcy counsel, and
FTI Consulting, Inc. as financial advisor.
HOLDINGS MANAGEMENT: Starts Subchapter V Bankruptcy Case
--------------------------------------------------------
Holdings Management Company filed for chapter 11 protection in the
District of Maryland. The Debtor elected on its voluntary petition
to proceed under Subchapter V of chapter 11 of the Bankruptcy
Code.
The Debtor is a Maryland corporation and commercial manufacturer of
custom architectural millwork packages and acoustic building
materials. The company was founded in 2019.
As a 100% woman-owned, small business, the Debtor is contracted by
large and mid-size construction managers, general contractors,
product designers, architects, procurement managers, supply chain
buyers, origin manufacturers, resellers, and wholesalers, on
projects ranging in size from $50,000 to $2,500,00.
The Debtor occupies a 33,000 sg. ft. facility in Savage, Maryland
and employs over 20 people.
Year over year, Holdings Management has grown almost 50% since
inception, with revenues on pace to exceed $5,000,000 annually,
despite having to overcome challenges like the Covid-19 pandemic.
The Debtor has generated over $8,000,000 in revenue in its short
existence and has a backlog totaling over $7,500,000.
In addition to custom-designed manufacturing -- from raw lumber to
finished product -- of architectural millwork packages featuring
superior workmanship and a variety of higher quality materials, the
Debtor also manages the installation of its architectural millwork
packages by subcontracting to other local, small, and
minority-owned businesses.
A second revenue stream for the Debtor is Baux, a world leader in
sustainable acoustic products for any interior environment.
Headquartered in Sweden, Baux has chosen the Debtor as its North
American manufacturer, fulfilling Baux orders for all of North
America, including Hawaii, Puerto Rico and Canada.
The Debtor is currently suffering significant cashflow issues due
to non-payment on two projects for which it has already completed
work. One being a local state college where the total for all work
performed by the Debtor exceeds $2,500,000, yet the Debtor remains
to be paid approximately $1,000,000 by the general contractor,
despite the completion in September 30, 2022 and with no
deficiencies reported as to HMC's work. The second project being a
federal government building in Northern Virginia, where the Debtor
completed work of approximately $1,800,000, yet has been paid less
than $850,000.
These projects have not only strained cashflow for the Debtor, but
has had the result of straining the Debtor's relationships with its
suppliers and subcontractors. Furthermore, because of the
non-payment, HMC was not able to afford its employer sponsored
healthcare plan, and could not meet its regular obligations to
financial partners, landlord, and others.
The Debtor's Chapter 11 filing was necessitated to provide the
Debtor with relief from the collection efforts of its junior
lenders who have attempted to intercept the Debtor's receivables in
violation of the rights of parties' with senior interests and the
Maryland Construction Trust Fund Act halting the Debtor's cashflow
with clients holding funds due to the Debtor in the
face of conflicting claims.
With the benefit of the relief needed to continue operating while
pursuing amounts it is owed for the work completed on the two large
projects, the Debtor plans to restructure its debts while
continuing to provide quality products and services, by way of its
many skilled and dedicated employees, and thereby make significant
contributions to the economy.
According to court filings, Holdings Management Company has total
liabilities of $6,421,975 owed to 1 to 49 creditors. The petition
states that funds will be available to unsecured creditors.
About Holdings Management Company
Holdings Management Company -- https://www.hmcoinc.com/ --
manufactures a wide range of commercial custom items and packages.
Holdings Management Company filed a petition for relief under
Subchapter V of Chapter 11 of the Bankruptcy Code (Bankr. D. Md.
Case No. 23-11233) on Feb, 24, 2023. In the petition filed by Kara
Anne DiPietro, as president, the Debtor reported total assets of
$4,401,707 and total liabilities of $6,421,975.
The Debtor is represented by:
Joseph M. Selba, Esq.
TYDINGS & ROSENBERG LLP
1 E. Pratt Street
Suite 901
Baltimore, MD 21202
Tel: 410-752-9700
Email: jselba@tydingslaw.com
HOT'Z POWER: Files Emergency Bid to Use Cash Collateral
-------------------------------------------------------
Hot'z Power Wash, Inc. asks the U.S. Bankruptcy Court for the
Southern District of Texas, Houston Division, for authority to use
cash collateral to pay its necessary expenses of its business in
the ordinary course through March 22, 2023.
The Internal Revenue Service, Corporation Service Company, as
Representative, and SOS Capital purport to hold liens or security
interests in the Debtor's inventory and accounts.
The Debtor filed the bankruptcy with the intention of reorganizing
after a personal injury lawsuit was filed against it. Hot'z also
intends to address a federal tax lien recorded by the IRS.
To adequately protect the Lenders' interests in the collateral, the
Debtor proposes to grant the Lenders post-petition replacement
liens in the same assets of the Debtor that such entity had prior
to the filing of the chapter 11 bankruptcy case.
In addition, the Debtor will provide the Lenders with information
relating to projected revenues and expenses, actual revenue and
expenses, and variances from the interim budget.
The Debtor also requests the Court to schedule an emergency
preliminary hearing on the matter.
A copy of the motion is available at https://bit.ly/3IUV5fk from
PacerMonitor.com.
A copy of the Debtor's budget is available at
https://bit.ly/3L3mqia from PacerMonitor.com.
The Debtor projects $34,883 in income and $32,137 in expenses.
About Hot’z Power Wash, Inc.
Hot’z Power Wash, Inc. is a pressure washing company that
specializes in restaurant kitchen exhaust systems and has been in
business for over 10 years.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D. Tex. Case No. 23-30749) on March 5,
2023. In the petition signed by James Finney, president, the Debtor
disclosed up to $100,000 in both assets and liabilities.
Reese Baker, Esq., at Baker & Associates, represents the Debtor as
legal counsel.
HYSTER-YALE MATERIALS: S&P Affirms 'B-' ICR, Outlook Stable
-----------------------------------------------------------
S&P Global Ratings revised the outlook on Ohio-based lift truck
manufacturer Hyster-Yale Materials Handling Inc. to stable from
negative and affirmed all ratings, including its 'B-' issuer credit
rating.
The stable outlook reflects the company's improved operating
performance and liquidity. Forward economic indicators suggest more
moderate 2023 cost inflation trends, absent any additional effects
from geopolitical events of global supply chain constraints.
S&P said, "We expect increased shipment volumes of higher priced
backlog to drive good revenue growth in 2023. Notwithstanding some
lingering inflation and supply chain constraints, particularly in
sourcing certain components, and in certain geographies, a general
easing of supply chain issues helped drive an 11% increase in unit
shipments sequentially. We anticipate that in 2023, supply chains
will remain at least stable relative to the fourth quarter of 2022,
which should support continued year-over-year unit shipment growth.
Further, 2023 shipments will largely be of higher-priced units
currently in the backlog, and we therefore forecast mid to high
single digit percent revenue growth in 2023.
"Revenue growth combined with our forecast for Hyster-Yale's S&P
Global Ratings-adjusted EBITDA margin to improve meaningfully,
should translate to significant leverage improvement in 2023. We
forecast around 200 basis points of S&P Global Ratings-adjusted
EBITDA margin improvement in 2023 since we anticipate 2023 unit
shipments will include a greater level of higher-priced and
higher-margin units as compared to those shipped in 2022. The rise
in inflation, extended delivery lead times, and an inability to
reprice units within the backlog led to significant margin
contraction in 2022.
"We believe many of the units shipped in 2023 will be priced to
cover input costs, and that there will be a product mix shift to
higher-margin trucks, given the company's strategy of selectively
booking higher-margin units. Further, given the easing of many
supply chain constraints, the company has been able to execute on
lower-priced and lower-margin orders still in the backlog, and we
anticipate the company will work through its lower-margin units in
its backlog in 2023 and begin shipping the existing higher-margin
backlog in the back half of the year. Therefore, we forecast
Hyster-Yale's S&P Global Ratings-adjusted EBITDA margin will
improve toward 4% in 2023, from 2% in 2022. This margin growth,
along with our expectation of revenue growth, translates to a
meaningful improvement in S&P Global Ratings-adjusted leverage
under our forecast to between 4x and 5x in 2023, from 8.9x as of
Dec. 31, 2022.
"Still, as of the end of 2022, the lead time on trucks remains
extended, at just under a year, as compared to normalized lead
times of between three and four months. Given these extended lead
times and the company's limited ability to reprice its backlog,
Hyster-Yale may be challenged in improving its EBITDA margin if
input costs continue to increase. While the company has taken steps
to improve its pricing flexibility on new orders, and while we are
not incorporating continued input costs increases in our forecast,
risks remain around Hyster-Yale's ability to meaningfully address
pricing and improve its EBITDA margin this year.
"We forecast Hyster-Yale's FOCF generation will improve in 2023. We
expect the company's adjusted FOCF to improve in 2023 to between
$50 million and $70 million from about $27 million in 2022,
supported by increased shipments, improving margins, and plans to
reduce inventory by using current inventory to build out trucks. We
believe Hyster-Yale will use it FOCF to pay down its U.S. and
non-U.S. revolving credit facilities. The company had about $59
million of cash on the balance sheet and $135 million outstanding
under its U.S. credit facility at the end of 2022."
The stable outlook reflects our expectation for S&P Global
Ratings-adjusted leverage to improve and remain between 4x-5x over
the next 12 months as significant price realization and increased
volume drive good EBITDA growth and adequate liquidity.
S&P could lower its rating on Hyster-Yale over the next 12 months
if:
-- S&P believes the company's S&P Global Ratings-adjusted leverage
will remain very high and we view the capital structure as
unsustainable. This could occur if demand decreases compared to the
forecast and company draws further on the ABL; or
-- Weakened operating performance causes a material decline in the
company's liquidity sources (including cash and revolver
availability).
S&P could raise its ratings on Hyster-Yale if:
-- S&P believes the company is able to deliver on its backlog and
the company begins to generate operating profit such that S&P
Global Ratings-adjusted debt leverage will remain below 4.0x; or
-- FOCF is consistently positive, and liquidity remains adequate
with improving leverage metrics.
ESG credit indicators: E-2, S-2, G-2
IMPRIVATA INC: Fitch Alters Outlook on 'B' LongTerm IDR to Negative
-------------------------------------------------------------------
Fitch Ratings has affirmed Imprivata, Inc.'s Long-Term Issuer
Default Rating (IDR) at 'B'. Fitch has also affirmed the company's
$100 million secured revolving credit facility (RCF) and $1.113
billion first-lien secured term loan at 'BB-'/'RR2'. The Rating
Outlook has been revised to Negative from Stable. The second-lien
term loan is not being rated.
The ratings are supported by Imprivata's strong market position
within identity governance and multi factor authentication (MFA)
for healthcare providers as well as secular growth trends for data
security and access management within a complex regulatory
environment.
The Negative Outlook reflects weaker credit protection metrics post
the acquisition of SecureLink in 2022. At the IT security industry
level, Fitch believes the heightened awareness of IT security risks
arising from high profile security breaches in recent years
provides support for the secular growth of the industry.
KEY RATING DRIVERS
Sizable and Growing Market Opportunity: Digitization of care
delivery, proliferation of health care systems and devices,
pivoting to telehealth, increased cybersecurity threats, HIPAA
requirements, and increased regulation of licensed prescribers are
all driving the demand for identity governance, MFA and endpoint
security. Additionally, awareness of and demand for cyber security
are accelerating, given the breach of over 40 million patient
records in 2020 alone. Imprivata has strong market share amongst
U.S. hospitals that deploy a digital identity solution, with
significant greenfield opportunities as only a third of U.S. based
hospital systems have adopted an SSO solution thus far.
Diversified Customer Base with High Retention Rates: Imprivata
serves over 4,000 customers with no material customer
concentration. Additionally, the company maintains high-90s gross
retention rate and has a strong track record of expanding its share
of wallet over time as demonstrated by its net retention rate of
over 100%. While subscriptions renew annually, they are secured
under longer-term multi-year agreements providing strong revenue
visibility.
Strong Use Case Supports Long-Term Growth: Imprivata's solutions
are purpose-built for the health care industry, in compliance with
regulatory requirements, and integrated with hospitals legacy
on-prem solutions and with the largest electronic health record
(EHR) providers and diagnostic systems. The addition of SecureLink
adds capabilities for vendor-privileged access management further
expand use cases. In addition to providing access management for
healthcare industry, Imprivata's solutions can also be implemented
in non-healthcare settings providing another dimension of growth
opportunities.
Attractive Margin and FCF Profile: Despite Imprivata's limited
scale, its margin profile is in line with best-in-class software
peers. Imprivata's EBITDA margin profile also compares favorably
with its horizontal peers like Okta and Sailpoint. Minimal capex
and working capital requirements result in FCF margins in the
teens, despite the interest burden.
Niche Player with Limited Scale: While Imprivata occupies a leading
market position within the health care vertical, its ratings are
limited by its scale and lack of end-market diversification
relative to other software technology peers. Imprivata's
purpose-built software product has gained some traction in
non-health-care settings, but it competes with horizontal peers
like Okta and SailPoint, which have much larger scale, sizable
installed base and more established cloud offerings.
Elevated Financial Leverage: Pro forma for the SecureLink
acquisition, Fitch estimates gross leverage to be over 8x in fiscal
2022, approaching 7x by 2023. Given the scale and the private
equity ownership of the company, Fitch believes the company is
likely to optimize ROE through acquisitions to accelerate growth or
dividends to the owners with financial leverage remaining at
elevated levels.
DERIVATION SUMMARY
Imprivata's industry expertise, revenue scale, profitability and
leverage profile are consistent with the 'B' rating category. The
company has a smaller revenue scale as a result of its narrow
end-market focus relative to its larger and more diversified
horizontal peers like Okta and Sailpoint. Imprivata also competes
with Identity Automation, which is vertically focused on the health
care segment, albeit significantly smaller in scale and with a
narrower service offering than Imprivata.
Imprivata has market-leading EBITDA and FCF margins, well in excess
of its larger peers, demonstrating its superior value proposition.
Imprivata's operating profile benefits from its deep integration
with other health care IT providers, its comprehensive product
offering, as well as the growing cyber security threats faced by
the health care industry.
KEY ASSUMPTIONS
- Revenue growth in low teens partially driven by acquisitions;
- EBITDA margins expected to sustain above 40%;
- Normalized FCF in the mid-high teens;
- Aggregate incremental $300 million acquisition through 2026;
- No dividend payment to shareholders through 2026.
KEY RECOVERY RATING ASSUMPTIONS
- The recovery analysis assumes that Imprivata would be
reorganized
as a going-concern in bankruptcy rather than liquidated.
- Fitch has assumed a 10% administrative claim.
Going-Concern (GC) Approach
In the event of a bankruptcy reorganization, Fitch expects
Imprivata would suffer customer churn pressuring the revenue and
compressed EBITDA margins on lower revenue scale. This would result
in going concern EBITDA (GC EBITDA) of $142 million, approximately
19% below the projected level of 2023 EBITDA, which includes
SecureLink and planned cost optimization. In the event of
bankruptcy, Fitch believes the execution of identified cost
optimization would be accelerated.
Fitch uses an EV multiple of 7x, which aligns with other software
companies that exhibit highly recurring revenue, strong
profitability, high FCF conversion, and high revenue retention
rates. The choice of this multiple considered the following
factors:
- The historical bankruptcy case study exit multiples for
technology peer companies ranged from 2.6x-10.8x;
- Of these companies, only three were in the software sector:
Allen Systems Group, Inc., Avaya, Inc. and Aspect Software
Parent, Inc., which received recovery multiples of 8.4x,
8.1x and 5.5x, respectively;
- The highly recurring nature of Imprivata's revenue and
mission critical nature of the product support the
high-end of the range.
- Fitch arrived at an EV of $994 million. After applying
the 10% administrative claim, adjusted EV of $895 million
is available for claims by creditors;
- Fitch assumes a fully drawn revolver in its recovery analysis
since credit revolvers are tapped as companies are under
distress. Fitch assumes a full draw on Imprivata's $100
million revolver;
- Fitch estimates strong recovery prospects for the first lien
senior secured credit facilities and rates them 'BB-'/'RR2',
or two notches above Imprivata's 'B' IDR.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- Fitch's expectation of gross leverage (total debt with equity
credit/operating EBITDA) sustaining below 5.5x;
- (Cash flow from operations [CFO] - capex)/total debt with
equity credit ratio sustaining above 8%;
- End-market or product diversification.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Fitch's expectation of gross leverage sustaining above
7.5x as a result of more aggressive capital allocation or
weaker than anticipated operating performance;
- (CFO - capex)/total debt with equity credit ratio sustaining
below 3%;
- EBITDA Interest coverage ratio sustained below 2.0x.
The Rating Outlook could be stabilized with expectation of
strengthening credit protection metrics.
LIQUIDITY AND DEBT STRUCTURE
Adequate Liquidity: Fitch projects that Imprivata's liquidity will
be adequate, supported by its FCF generation, an undrawn $100
million RCF, and readily available cash and cash equivalents. Fitch
expects Imprivata's cash flow to be supported by normalized EBTIDA
margins in the low 40% range.
Debt Structure: Imprivata has $1,113 million of secured first-lien
debt due 2027 and $300 million second-lien debt due 2028. Given the
recurring revenue nature of the business and adequate liquidity,
Fitch believes Imprivata will be able to make its required debt
payments.
ISSUER PROFILE
Imprivata is a provider of digital identity solutions to the
healthcare industry, enabling providers to securely access multiple
healthcare applications through a secure single sign on
application. Imprivata provides access management, mobile
provisioning, authentication, identity governance and patient
identification solutions.
ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of
ESG credit relevance is a score of '3'. This means ESG issues are
credit-neutral or have only a minimal credit impact on the entity,
either due to their nature or the way in which they are being
managed by the entity.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
Imprivata Inc. LT IDR B Affirmed B
senior secured LT BB- Affirmed RR2 BB-
INDEPENDENT PET: $9.5MM New Money DIP Loan Wins Final OK
--------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware authorized
Independent Pet Partners Holdings, LLC and its debtor-affiliates to
use cash collateral and obtain postpetition financing, on a final
basis.
Members of the Debtors' pre-bankruptcy lending syndicate have
committed to provide New Money Loans in an aggregate principal
amount not to exceed $9.557 million, consisting of:
(1) upon entry of the Interim Order, an Initial New Money Draw
in an aggregate principal amount of up to $5.263 million
representing the Interim "New Money DIP Loans; and
(2) upon entry of the Final Order, an additional draw in an
aggregate principal amount that will not, when combined with all
Interim New Money DIP Loans advanced prior to the date, exceed
$9.557 million in aggregate principal amount, representing the
Final New Money DIP Loans.
Certain prepetition loan obligations will be rolled up into the DIP
facility. Specifically, a superpriority term loan facility in the
principal amount of up to $17.7 million, of which (x) $5.263
million was deemed funded on the date of the Interim Draw, and (y)
an additional $12.437 million will be deemed funded, subject to the
entry of and the terms of the Final Order.
The DIP facility matures April 16, 2023.
Acquiom Agency Services, LLC serves as administrative and
collateral agent under the DIP Facility. CION Investment
Corporation, Main Street Capital Corporation, MCS Income Fund,
Inc., Newstone Capital Partners III, L.P, Newstone Capital Partners
III-A, L.P. and Newstone Capital Partners III-B, L.P. are the DIP
Lenders.
Acquiom serves as administrative and collateral agent under a
Prepetition Priming Facility. As of the Petition Date, each of the
Debtors was liable to the Prepetition Priming Secured Parties in
respect of the Prepetition Priming Loans in the aggregate principal
amount of not less than $9.157 million.
Acquiom also is the successor to CIT Bank, N.A., as administrative
and collateral agent, under the prepetition revolving credit
facility. As of the Petition Date, each of the Debtors was liable
to the Prepetition ABL Secured Parties in the aggregate principal
amount of not less than $17.471 million.
Certain of the Debtors are also borrowers under a prepetition
Delayed Draw Term Loan Facility with Wilmington Trust, National
Association, as administrative and collateral agent. As of the
Petition Date, each of the Debtors was liable to the Prepetition
DDTL Secured Parties in the aggregate principal amount of not less
than $84 million.
The Debtors are required to comply with these milestones:
(a) These Chapter 11 Cases will have been filed on February 5,
2023;
(b) The Debtors will have filed the Bid Procedures Motion on
or prior to the date that is one Business Day after the Petition
Date;
(c) The Bankruptcy Court will have entered the Interim DIP
Order on or prior to the date that is three Business Days after the
Petition Date;
(d) The Bankruptcy Court will have entered the Bid Procedures
Order on or prior to February 24, which is 19 days after the
Petition Date;
(e) The Debtors will have filed a motion for entry of the
Store Closing Sales on or prior to the date that is one Business
Day after the Petition Date;
(f) The Bankruptcy Court will have entered the interim Store
Closing Sales Order on or prior to the date that is three Business
Days after the Petition Date;
(g) The Bankruptcy Court will have entered the final Store
Closing Sales Order on or prior to March 12, which is 35 days after
the Petition Date;
(h) The consummation of the Store Closing Sales will have
occurred in accordance with the Store Closing Sales Order on or
prior to March 7, which is 30 days after the Petition Date;
(i) The Bankruptcy Court will have entered the Final DIP Order
on or prior to March 12, which is 35 days after the Petition Date;
(j) The Bankruptcy Court will have entered a Sale Order on or
prior to April 1, which is 55 days after the Petition Date; and
(k) The consummation of a Sale will have occurred on or prior
to April 16, which is 70 days after the Petition Date.
The Debtors' failure to comply with any of these milestones will
constitute an Event of Default.
As adequate protection, the Secured Parties under the prepetition
credit facilities are granted additional and replacement, valid,
binding, enforceable, non-avoidable, and effective and
automatically perfected postpetition security interests in and
liens.
As further adequate protection, the Adequate Protection Claims will
be allowed superpriority administrative expense claims in each of
the Chapter 11 Cases.
A copy of the order is available at https://bit.ly/3myWTTy from
PacerMonitor.com.
About Independent Pet Partners Holdings, LLC
Independent Pet Partners Holdings, LLC and various affiliated
entities sought protection under Chapter 11 of the U.S. Bankruptcy
Code (Bankr. D. Del. Lead Case No. 23-10153) on February 5, 2023.
In the petition signed by Stephen Coulombe, co-chief restructuring
officer, the Debtor disclosed up to $500 million in both assets and
liabilities.
Independent Pet Partners offers a one-stop pet experience with
healthy, high-quality food products and treats and a range of pet
services, including grooming, self-wash, pet parent education, and
veterinary services. The Debtors also sell goods through their
e-commerce platform with each of the Debtors' banners having its
own standalone website. As of the Petition Date, the Debtors
operated under four unique regional banners: Chuck and Don's,
Kriser's Natural Pet, Loyal Companion, and Natural Pawz.
Judge Laurie Selber Silverstein oversees the case.
The Debtors tapped McDonald Hopkins, LLC as general counsel, Young
Conaway Stargatt and Taylor, LLP as co-counsel, Berkeley Research
Group, LLC as co-chief restructuring officer, Houlihan Lokey
Capital, Inc. as financial advisor and investment banker, and Omni
Agent Solutions as notice, claims, and balloting agent.
CION Investment Corporation; Main Street Capital Corporation; MCS
Income Fund, Inc.; Newstone Capital Partners III, L.P; Newstone
Capital Partners III-A, L.P.; and Newstone Capital Partners III-B,
L.P., as DIP Lenders and Prepetition Lenders, are represented by
Dechert LLP.
Co-counsel to the DIP Lenders and Prepetition Lenders is Richards,
Layton & Finger, P.A.
Acquiom Agency Services, LLC, as administrative and collateral
agent under the DIP facility and as Prepetition ABL Agent, and
Prepetition Priming Agent, is represented by Paul Hastings, LLP.
Wilmington Trust, National Association, as Prepetition DDTL Agent,
is represented by Arnold & Porter Kaye Scholer LLP.
INDUSTRIAL SCREW: Taps Hayward PLLC as Bankruptcy Counsel
---------------------------------------------------------
Industrial Screw Conveyors, Inc. seeks approval from the U.S.
Bankruptcy Court for the Northern District of Texas to employ
Hayward, PLLC to handle its Chapter 11 bankruptcy proceedings.
The firm will be paid at these rates:
John P. Lewis, Jr. $450 per hour
Jamie Kirk $250 to $400 per hour
Paralegal $195 per hour
In addition, the firm will seek reimbursement for expenses
incurred.
The Debtor paid the Debtor a retainer of $40,000.
John Lewis, Jr., Esq., a partner at Hayward, 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:
John P. Lewis, Jr., Esq.
Jamie Kirk, Esq.
Hayward PLLC
10501 North Central Expy., Suite 106
Dallas, Texas 75231
Tel: (972) 755-7100
Email: JKirk@HaywardFirm.com
JPLewis@HaywardFirm.com
About Industrial Screw Conveyors
Industrial Screw Conveyors, Inc. is a single asset real estate (as
defined in 11 U.S.C. Sec. 101(51B)). Its business is located at
4133 Conveyor Drive, Burleson, Texas.
Industrial Screw Conveyors filed a petition for relief under
Chapter 11 of the Bankruptcy Code (Bankr. N.D. Texas Case No.
23-30228) on Feb. 7, 2023, with $1 million to $10 million in assets
and $10 million to $50 million in liabilities. William A. Hartley,
president of Industrial Screw Conveyors, signed the petition.
Judge Scott W. Everett oversees the case.
The Debtor is represented by Hayward, PLLC.
INSECTARIUM AND BUTTERFLY: Voluntary Chapter 11 Case Summary
------------------------------------------------------------
Debtor: Insectarium and Butterfly Pavilion, Inc.
8046 Frankford Avenue
Philadelphia, PA 19136
Case No.: 23-10675
Business Description: The Debtor is a science museum showcasing
one of the most diverse living arthropod
collections in the United States. With two
floors of new museum exhibits, a 7,000
square foot tropical butterfly pavilion, and
Next Generation aligned educational
programming, the Company offers a unique and
interactive experience for all to enjoy.
Chapter 11 Petition Date: March 8, 2023
Court: United States Bankruptcy Court
Eastern District of Pennsylvania
Judge: Hon. Patricia M. Mayer
Debtor's Counsel: Robert M. Cambridge, Esq.
LAW OFFICE OF ROBERT M. CAMBRIDGE
3806 23rd Street N.
Arlington, Virginia 22207
Tel: (703) 243-2533
Email: bcesq@verizon.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Robert M. Cambridge as secretary and
director.
The Debtor failed to include in the petition a list of its 20
largest unsecured creditors.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/JXGWASA/Insectarium_and_Butterfly_Pavilion__paebke-23-10675__0001.0.pdf?mcid=tGE4TAMA
INVACARE CORPORATION: Seeks to Hire Kirkland & Ellis as Counsel
---------------------------------------------------------------
Invacare Corporation and its affiliates seek approval from the U.S.
Bankruptcy Court for the Southern District of Texas to hire the law
firms of Kirkland & Ellis, LLP and Kirkland & Ellis International,
LLP to handle their Chapter 11 cases.
The firms' services include:
a. advising the Debtors with respect to their powers and
duties in the continued management and operation of their
businesses and properties;
b. advising and consulting on the conduct of the Debtors'
bankruptcy cases, including all of the legal and administrative
requirements of operating in Chapter 11;
c. attending meetings and negotiating with representatives of
creditors and other parties in interest;
d. taking all necessary actions to protect and preserve the
Debtors' estates, including prosecuting actions on the Debtors'
behalf, defending any action commenced against the Debtors, and
representing the Debtors in negotiations concerning litigation in
which they are involved, including objections to claims filed
against the estates;
e. preparing pleadings;
f. representing the Debtors in connection with obtaining
authority to continue using cash collateral and post-petition
financing;
g. advising the Debtors in connection with any potential sale
of assets;
h. appearing before the bankruptcy court and any appellate
courts;
i. advising the Debtors regarding tax matters;
j. taking any necessary action to negotiate, prepare, and
obtain approval of a disclosure statement and confirmation of a
Chapter 11 plan and all documents related thereto; and
k. other necessary legal services including: (i) analyzing the
Debtors' leases and contracts and the assumption and assignment or
rejection thereof; (ii) analyzing the validity of liens against the
Debtors' assets; and (iii) advising the Debtors on corporate and
litigation matters.
The firms will charge these hourly fees:
Partners $1,195 - $2,245
Of Counsel $820 - $2,125
Associates $685 - $1,395
Paraprofessionals $295 - $575
Kirkland & Ellis received a retainer in the amount of $200,000.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, the
firms disclosed that:
-- they have not agreed to any variations from, or
alternatives to, their standard or customary billing arrangements
for this engagement;
-- none of the professionals included in the engagement vary
their rate based on the geographic location of the bankruptcy
case;
-- the firms represented the Debtors during the 12-month
period before the petition date, using these hourly rates:
Partners $1,135 - $1,995
Of Counsel $805 - $1,845
Associates $650 - $1,245
Paraprofessionals $265 - $495; and
-- the Debtors approved the firms' budget and staffing plan
for the period from Jan. 9 to March 3, 2023.
The firms can be reached through:
Ryan Blaine Bennett, P.C.
Kirkland & Ellis, LLP
Kirkland & Ellis International, LLP
300 North LaSalle Street
Chicago, IL 60654
Tel: (312) 862-2000
Fax: (312) 862-2200
Email: ryan.bennett@kirkland.com
About Invacare Corporation
Invacare Corporation is engaged in the manufacturing of home
medical devices. It also provides clinical solutions for post-acute
care, rehab, homecare, and respiratory markets.
Invacare Corporation and its affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 23-90068) on Jan. 31, 2023. In the petition signed by Kathleen
Leneghan, senior vice president and chief financial officer, the
Debtor disclosed up to $1 billion in both assets and liabilities.
The Debtors tapped Kirkland and Ellis, LLP and Kirkland and
International LLP as bankruptcy counsel, McDonald Hopkins, LLC as
bankruptcy co-counsel, Huron Consulting Group as restructuring
advisor, Miller Buckfire and Co. as financial advisor and
investment banker, and Epiq Corporate Restructuring, LLC, as
claims, noticing, and solicitation agent and administrative
advisor.
The DIP Term Loan Lenders led by Cantor Fitzgerald Securities, as
administrative agent, and GLAS Trust Corporation Limited, as
collateral agent, have retained Davis Polk & Wardwell LLP, Ducera
Partners, Porter Hedges LLP, Baker & McKenzie LLP, McDermott Will &
Emery LLP, Shipman & Goodwin LLP as advisors.
PNC Bank, National Association, and the ABL DIP Lenders, have
retained Blank Rome LLP, and B. Riley Advisory Services as
advisors.
About Invacare Corporation
Headquartered in Elyria, Ohio, Invacare Corporation (IVC) is a
leading manufacturer and distributor in its markets for medical
equipment used in non-acute care settings. The company provides
clinically complex medical device solutions for congenital (e.g.,
cerebral palsy, muscular dystrophy, spina bifida), acquired (e.g.,
stroke, spinal cord injury, traumatic brain injury, post-acute
recovery, pressure ulcers) and degenerative (e.g., ALS, multiple
sclerosis, elderly, bariatric) ailments. Invacare employs
approximately 3,400 associates and markets its products in more
than 100 countries around the world.
Invacare Corp. and 2 U.S. subsidiaries sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 23-90068) on January 31, 2023. In the petition signed by
Kathleen Leneghan, senior vice president and chief financial
officer, the Debtor disclosed up to $1 billion in both assets and
liabilities.
The Debtors tapped Kirkland and Ellis, LLP and Kirkland and
International LLP as bankruptcy counsel, McDonald Hopkins, LLC as
bankruptcy co-counsel, Huron Consulting Group as restructuring
advisor, Miller Buckfire and Co. as financial advisor and
investment banker, and Epiq Corporate Restructuring, LLC, as
claims, noticing, and solicitation agent and administrative
advisor. Street Advisory Group, LLC is serving as strategic
communications advisor to the company.
Judge Christopher M. Lopez oversees the cases.
The DIP Term Loan Lenders led by Cantor Fitzgerald Securities, as
administrative agent, and GLAS Trust Corporation Limited, as
collateral agent, have retained Davis Polk & Wardwell LLP, Ducera
Partners, Porter Hedges LLP, Baker & McKenzie LLP, McDermott Will &
Emery LLP, Shipman & Goodwin LLP as advisors.
PNC Bank, National Association, and the ABL DIP Lenders, have
retained Blank Rome LLP, and B. Riley Advisory Services as
advisors.
Brown Rudnick LLP is serving as legal counsel and GLC Advisors &
Co., LLC is serving as investment banker to the ad hoc committee of
unsecured notes.
The U.S. Trustee for Region 7 appointed an official committee to
represent unsecured creditors in the Debtors' Chapter 11 cases. The
committee is represented by Kilpatrick Townsend & Stockton, LLP.
INW MANUFACTURING: Moody's Cuts CFR to 'Caa3', Outlook Negative
---------------------------------------------------------------
Moody's Investors Service downgraded INW Manufacturing, LLC's
Corporate Family Rating to Caa3 from Caa1 and Probability of
Default Rating to Caa3-PD from Caa1-PD. Moody's additionally
downgraded the company's senior secured term loan rating to Caa3
from Caa2. The ratings outlook is negative.
The downgrades reflect Moody's view that the potential for a
distressed exchange or other default has increased materially.
Moody's is concerned about the company's high leverage and weak
liquidity with negative free cash flow further pressured by rising
interest rates creating challenges for the company to fund its $22
million of required annual term loan amortization. Free cash flow
in the first nine months of fiscal 2022 was negative, as INW
experienced inflationary cost pressures, supply chain challenges,
and the loss of income from one of its manufacturing facilites due
to a fire. The company's Dallas One manufacturing facility incurred
fire damage in July 2021 and was temporarily closed until June
2022. During this time period, INW's capital expenditures were
higher than normal as the company invested in the rebuild of this
facility. Moody's believes that INW is likely to incur negative
free cash flow in fiscal 2023 as well, as inflationary cost
pressures and supply chain challenges continue to negatively impact
the company.
Liquidity is weak based on $23 million in cash as of September
2022, negative free cash flow projected for fiscal 2023, and
approximately $38 million of capacity on the $115 million senior
secured asset-based revolving credit facility expiring in 2026. The
liquidity position puts pressure on INW to quickly improve earnings
at a time when volume pullbacks by customers and earnings declines
at the company's Bee Health business due to the economic slowdown
in the UK will create headwinds into 2023. Moody's thus views
default risk as growing including the potential for a distressed
exchange transaction.
The downgrade of the company's senior secured term loan to Caa3
from Caa2 reflects a one notch upward override to the Ca implied
outcome based on the loss given default model. While default risk
is elevated, Moody's believes the company's good market position
and co-manufacturing capabilities enhance recovery prospects in the
event of a default, which recovery expectation is adequately
reflected in a Caa3 rating.
Cost increases, supply chain challenges, and labor shortages have
all been headwinds for the company in the 12 months ended September
30, 2022. Moody's expects that the company will continue to face
cost increases and supply chain challenges over the next year,
albeit with some moderation. As of September 30, 2022, INW's
Moody's adjusted debt to EBITDA was high at 8.8x. Moody's projects
that INW's debt to EBITDA will remain in the 8x-9x range in the
next 12 to 18 months as EBITDA as growth is likely to be limited.
Moody's lowered the credit impact score to CIS-5 from CIS-4 and the
governance issuer profile score to G-5 from G-4, and the financial
strategy and risk management score to 5 from 4. The changes reflect
the heightened risk of a distressed exchange or other debt
restructuring because of the high leverage and negative free cash
flow.
The following ratings/assessments are affected by the action:
Downgrades:
Issuer: INW Manufacturing, LLC
Corporate Family Rating, Downgraded to Caa3 from Caa1
Probability of Default Rating, Downgraded to Caa3-PD
from Caa1-PD
Senior Secured Bank Credit Facilities, Downgraded to Caa3 (LGD4)
from Caa2 (LGD4)
Outlook Actions:
Issuer: INW Manufacturing, LLC
Outlook, Remains Negative
RATINGS RATIONALE
INW's Caa3 CFR reflects the company's high debt-to-EBITDA of 8.8x
(Moody's adjusted) for the LTM period ended September 30, 2022, and
weak liquidity due to elevated $22 million of required annual term
loan amortization and negative free cash generation flow during the
LTM period and projected for fiscal 2022 and fiscal 2023. Earnings
quality is weak with management's EBITDA estimate containing
sizable add-backs of cash expenses as well as future savings
estimates. The rating also reflects the company's relatively small
scale and its aggressive revenue growth strategy based on
acquisitions and organic growth. The vitamin minerals and
supplements (VMS) co-packaging industry is very competitive but has
reasonably good longer term growth prospects because of consumer
focus on health and wellness. INW attempts to differentiate itself
from competitors by creating a one-stop-shop in which it can offer
customers many different product formats, such as powders, tablets,
capsules, liquids, soft-gels, bars, and gummies.
At the time of the leveraged buyout in March 2021, Cornell Capital
planned to double INW's EBITDA through organic growth and
acquisitions. Moody's believes this growth strategy would help the
company expand its customer reach but weak liquidity and a needed
focus on improving cash flow makes acquisitions unlikely over the
next year. The aggressive growth strategy also increases credit
risk and integration risk as future acquisitions are likely to be
debt financed, although Cornell Capital has supported the company
in the past through an additional equity investment in fiscal 2021.
INW's management team has stated that they would like to maintain a
debt-to-EBITDA ratio of 4.0-5.0x over the long-term.
Moody's expects INW to operate with weak liquidity based on $22.6
million of cash as of September 30, 2022, approximately $38.7
million of availability under the $115 million ABL revolver (as of
September 2022), negative free cash flow, and approximately $22
million of required annual term loan amortization.
INW's ESG credit impact score is very highly negative (CIS-5)
driven by its exposure to very highly negative governance risks as
a result of elevated risks of a distressed exchange or other
default. INW is moderately negatively exposed to environmental and
socials risks.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The negative outlook reflects the increased risks of a distressed
exchange or other default due to challenges to improve EBITDA
quickly, continued negative free cash flow, and high leverage.
These factors are weakening liquidity and will likely create
challenges for INW to fund its term loan amortization in 2023.
INW's ratings could be upgraded if the company materially improves
its liquidity including sustaining positive free cash flow and
increasing effective revolver capacity. Consistent revenue and
earnings growth would also be necessary for an upgrade.
INW's ratings could be downgraded if the company is unable to
improve earnings and free cash flow and reduce leverage. The
ratings could also be downgraded if Moody's believes the likelihood
of default, including a distressed exchange, increases recovery
expectations diminish.
The principal methodology used in these ratings was Consumer
Packaged Goods published in June 2022.
INW Manufacturing, LLC ("INW") headquartered in Famington, Utah
provides development and manufacturing services for the global
nutrition and wellness industry. The main company's capabilities
include powders, solid dose, cosmetics, liquids, gel packs and
nutrition bars; serving 550+ customers in the sports, nutrition,
diet, energy, hydration, personal care, cosmetics, pet care and
other related industries. The company has 14 manufacturing
facilities that produce over 4,000 SKUs. Cornell Capital acquired
the company in a March 2021 leveraged buyout simultaneous with the
purchase of Bee Health, and subsequently acquired Capstone
Nutrition in May 2021.
IRREGULAR MIKES: Gets OK to Hire Gabriel Del Virginia as Counsel
----------------------------------------------------------------
Irregular Mikes, LLC received approval from the U.S. Bankruptcy
Court for the Southern District of New York to employ the Law
Offices of Gabriel Del Virginia as its legal counsel.
The firm's services include:
a. providing the Debtor with legal advice regarding its
authorities and duties in the continued operation of its business
and the management of its property and affairs;
b. preparing legal documents and assisting the Debtor and its
accounting professionals in preparing monthly reports to be
submitted to the Office of the U.S. Trustee; and
c. other legal services for the Debtor, which may be necessary
and appropriate in the conduct of its bankruptcy case.
The firm will be paid at these rates:
Partners $500 per hour
Associates $325 per hour
Paralegals $135 per hour
In addition, the firm will receive reimbursement for out-of-pocket
expenses incurred.
The firm received from the Debtor a retainer of $12,200, inclusive
of filing fee.
Gabriel Del Virginia, Esq., disclosed in a court filing that the
firm is a "disinterested person" as the term is defined in Section
101(14) of the Bankruptcy Code.
The firm can be reached at:
Gabriel Del Virginia, Esq.
Law Offices of Gabriel Del Virginia
30 Wall Street, 12th Floor
New York, NY 10005
Tel: (212) 371-5478
Fax: (212) 371-0460
Email: gabriel.delvirginia@verizon.net
About Irregular Mikes
Irregular Mikes, LLC was established in May 2021 as a domestic
limited liability company type registered at 1152 First Avenue, New
York.
Irregular Mikes filed voluntary petition for relief under Chapter
11 of the Bankruptcy Code (Bankr. S.D.N.Y., Case No. 23-10084) on
Jan. 24, 2023, with 500,000 to $1 million in both assets and
liabilities. Judge Lisa Beckerman oversees the case.
The Law Offices of Gabriel Del Virginia represents the Debtor in
its Chapter 11 case.
ISLAND INDUSTRIES: Motion to Dismiss Sigma's Complaint Granted
--------------------------------------------------------------
District Judge Jon P. McCalla grants the motion to dismiss filed by
the Defendants Island Industries, Inc. and R. Glenn Sanders in the
case styled Sigma Corporation, Plaintiff, v. Island Industries,
Inc. and R. Glenn Sanders, Defendants, Case No. 3:22-cv-00402,
(W.D. Tenn.).
On June 13, 2017, Island Industries, Inc. filed a complaint against
Sigma Corporation in the U.S. District Court for the Central
District of California, alleging violations of the False Claims
Act. That action was unsealed after the U.S. Department of Justice
declined to intervene, and Island thereafter filed an amended
complaint and pursued the FCA action.
The Parties' California Case was a qui tam action brought under the
FCA. The Plaintiff alleges that it is entitled to damages because
that action was "intended to cripple Sigma's business so that
Island could gain a competitive advantage." The Plaintiff also
lists the full amount of the judgment against it as damages in the
instant action.
To the extent that Plaintiff alleges that its damages constitute
the California Case's judgment against it, the Court holds that the
Plaintiff cannot prevail in the instant action. The Court finds
that the Plaintiff's instant action is an impermissible end-run
around this bar to indemnification under the FCA
The Plaintiff's Complaint alleges that the Defendant
misappropriated trade secrets in violation of three statutes: (1)
the Defend Trade Secrets Act; (2) the New Jersey Trade Secrets Act;
and (3) the Tennessee Uniform Trade Secrets Act. According to the
Plaintiff, it was harmed by the Defendants' acquisition of its list
of suppliers, along with other unspecified information "on the
development of welded outlets," from a now-former employee between
2011 and 2016. The Plaintiff also alleges that the Defendants
"produced documents containing" trade secrets in the course of
discovery in the California Case and "ignored Sigma's repeated
requests to mark the documents "confidential."
The Court has only considered the disposition of the California
Case, as well as the existence of documents which allegedly
contained trade secrets and were subject to discovery in that case
and the non-existence of an assertion of a protective order in that
case.
The Court finds that the Plaintiff does not state a facially
plausible claim for indemnification. The Court notes that the
Plaintiff's Complaint fails to state a claim for misappropriation
of trade secrets. . . it does not point to a single measure it took
to protect its allegedly secret supplier list, and there are
indications that the Plaintiff failed to take reasonable measures
to protect this trade secret. Viewing the Complaint in the light
most favorable to the Plaintiff, the Court concludes that the
Plaintiff has failed to make out a cognizable claim.
The Defendants claim that they are entitled to reasonable
attorney's fees. The Court finds, however, that the Plaintiff's
behavior does not rise to the level of bad faith. Even if the
supplier list was not legally a trade secret, the Court finds no
evidence that the Defendants "voluntarily took measures to protect
it" once they received it and there is no "intentionally muddled
timeline" set out in the Complaint. While the Plaintiff's claim
does not have merit, it is not so devoid of support that the Court
will find that it was a "bad faith" claim. Accordingly, the
Defendants' request for attorneys' fees is denied.
A full-text copy of the ORDER dated Feb. 28, 2023 is available at
https://tinyurl.com/537a79ac from Leagle.com.
About Island Industries
Island Industries, Inc. is a Memphis, Tenn.-based distributor of
pipe and component products serving a variety of markets.
Island Industries sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. Tenn. Case No. 22-20380) on Feb. 2,
2022, listing as much as $10 million in both assets and
liabilities. Judge Jennie D. Latta oversees the case.
The Debtor tapped Glankler Brown, PLLC as bankruptcy counsel, The
Winchester Law Firm PLLC as special counsel, and Alexander Thompson
Arnold, PLLC as accountant.
JESS HALL'S SERENDIPITY: Seeks to Hire Rosen Systems as Auctioneer
------------------------------------------------------------------
Jess Hall's Serendipity, LLC seeks approval from the U.S.
Bankruptcy Court for the Northern District of Texas to employ
Dallas-based auction firm Rosen Systems, Inc.
The Debtor requires the services of an auctioneer in connection
with the sale of its properties, including furniture, fixtures and
equipment, which it used to operate its business in Fort Worth,
Texas.
Rosen Systems will charge each buyer a fee equal to 15 percent of
the gross purchase price of each item sold. In addition, the firm
will charge up to $20,000 for actual and necessary expenses.
Kyle Rosen, vice president of Auction Sales of Rosen Systems,
disclosed in a court filing that the firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Kyle Rosen
Rosen Systems, Inc
2323 Langford Street
Dallas, TX 75208
Telephone: (972) 248-2266
Facsimile: (972) 679-5586
Email: kyle@rosensystems.com
About Jess Hall's Serendipity
Jess Hall's Serendipity, LLC is a Fort Worth-based manufacturer of
spice blends and hot sauces.
Jess Hall's filed its voluntary petition for Chapter 11 protection
(Bankr. N.D. Texas Case No. 23-40073) on Jan. 9, 2023, with
$500,000 to $1 million in assets and $1 million to $10 million in
liabilities. Brian Crisp, chief restructuring officer of Jess
Hall's, signed the petition.
Judge Mark X. Mullin oversees the case.
Scott D. Lawrence, Esq., at Wick Phillips Gould & Martin, LLP and
Lain Faulkner & Co., P.C. serve as the Debtor's legal counsel and
restructuring advisor, respectively. Brian Crisp, a director at
Lain Faulkner & Co., serves as the Debtor's chief restructuring
officer.
JIVANA LLC: Taps Law Office of Richard M. McGill as Counsel
-----------------------------------------------------------
Jivana, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Maryland to employ the Law Office of Richard M.
McGill.
The Debtor requires legal counsel to:
a. give advice with respect to the powers and duties of the
Debtor in the continued operation of its business and management of
its property;
b. represent the Debtor in proceedings instituted by or against
the Debtor;
c. prepare legal documents;
d. assist the Debtor in the preparation of schedules and
statements of financial affairs and any amendments thereto which
the Debtor is required to file in its bankruptcy proceedings;
e. assist the Debtor in the preparation of its plan of
reorganization and disclosure statement, including negotiations
with creditors with respect thereto; and
f. perform other legal services.
The firm will be paid at the rate of $400 per hour and will be
reimbursed for out-of-pocket expenses incurred. It received a
retainer from the Debtor in the amount of $10,000.
Richard McGill, Esq., a partner at the Law Office of Richard M.
McGill, disclosed in a court filing that his firm is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Richard M. McGill, Esq.
Law Office of Richard M. McGill
5303 West Court Drive
Upper Marlboro, MD 20773
Tel: (301) 627-5222
Email: mcgillrm@aol.com
About Jivana LLC
Jivana, LLC filed a Chapter 11 bankruptcy petition (Bankr. D. Md.
Case No. 23-10893) on Feb. 10, 2023, with as much as $1 million in
both assets and liabilities. Judge Maria Ellena Chavez-Ruark
oversees the case.
The Debtor is represented by Richard M. McGill, Esq., at the Law
Office of Richard M. McGill.
KEY DIGITAL: Seeks Cash Collateral Access
-----------------------------------------
Key Digital Systems, Inc. asks the U.S. Bankruptcy Court for the
Southern District of New York for authority to use cash collateral
and provide adequate protection.
The creditors that have asserted liens on certain of the Debtor's
assets are JPMorgan Chase Bank N.A., the U.S. Small Business
Administration, and Digital Hifi, Inc.
On May 28, 2020, the Debtor entered into a Term Note in the
principal amount of $435,302. for a term through March 18, 2021,
and an interest rate of 3% over the above Note Rate, which is
defined as the Applicable Margin (11.44%) plus LIBOR. On May 28,
2020, the Debtor entered into a Credit Agreement with Chase.
On November 28, 2005, December 26, 2007, April 21, 2016, February
2, 2018 and June 26, 2028, Chase filed UCC-1 Financing Statements
against the Debtor each of which have been continued through the
Petition Date or longer.
On August 15, 2020, the Debtor and the SBA entered into an Amended
Loan Authorization and Agreement in the principal amount of
$500,000 with a 30-year term and an interest rate of 3.75% per
annum with payments in the amount of $2,482 per month to commence
24 months from the date of the note.
On August 27, 2020, the SBA filed a UCC-1 Financing Statement
disclosing an alleged blanket security interest.
Digital Hifi is related to the Debtor to the extent of some
overlapping equity ownership. Digital Hifi formerly owned the real
property where the Debtor operates. Digital Hifi sold the property
to an unrelated third party that, in turn, leased the real property
to Digital Hifi. Digital Hifi sublets to the Debtor on a month to
month basis.
On July 13, 2022, the Debtor executed a revolving term promissory
note with Digital Hifi in the maximum principal amount of $1
million with a fixed interest rate of 3% and a Commercial Security
Agreement of the same date granting a blanket security interest in
collateral.
On September 6, 2022, Digital Hifi filed a UCC-1 Financing
Statements against the Debtor asserting a lien on all assets.
As adequate protection for the Debtor's use of the Collateral in
which the Secured Creditors assert an interest and for the purpose
of adequately protecting them from Collateral Diminution, the
Debtor will grant the Secured Creditors replacement liens in all of
the Debtor's post-petition assets and proceeds, including the cash
collateral and the proceeds of the foregoing, to the extent that
the Secured Creditors had a valid security interests in said
pre-petition assets on the Petition Date and in the continuing
order of priority that existed as of the Petition Date, subject to
investigation by the Debtor and any creditors or committee
appointed in the Debtors' Chapter 11 cases.
The Replacement Liens will be subject and subordinate only to: (a)
United States Trustee fees payable under 28 U.S.C. Section 1930 and
31 U.S.C Section 3717; (b) professional fees of duly retained
professionals in the Chapter 11 case as may be awarded pursuant to
Sections 330 or 331 of the Code or pursuant to any monthly fee
order entered in the Debtor's Chapter 11 case; (c) the fees and
expenses of a hypothetical Chapter 7 trustee to the extent of
$10,000; and (d) the recovery of funds or proceeds from the
successful prosecution of avoidance actions pursuant to sections
502(d), 544, 545, 547, 548, 549, 550 or 553 of the Bankruptcy
Code.
A copy of the motion is available at https://bit.ly/3SRK7Mf from
PacerMonitor.com.
About Key Digital Systems, Inc.
Key Digital Systems, Inc. designs and engineers intuitive digital
A/V connectivity and control solutions. The Debtor delivers
reliable, super-quality, easilyimplemented, versatile,
high-performance products for corporate, education, government,
houseof-worship, bar and restaurant, digital signage and
residential A/V applications.
The Debtor designs and engineers its products in-house at its
headquarters located at 521 West 3rd Street, Mount Vernon, New York
10553, Westchester County.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. S.D.N.Y. Case No. 23-22176) on March 3,
2023. In the petition signed by Mikhail Tsinberg, president, the
Debtor disclosed up to $10 million in both assets and liabilities.
Dawn Kirby, Esq., at Kirby Aisner & Curley LLP, represents the
Debtor as legal counsel.
L&L WINGS: Move to Dismiss Appealed Case Granted
------------------------------------------------
Chief District Judge Laura Taylor Swain for the Southern District
of New York grants L&L Wings, Inc.'s motion to dismiss the appealed
case In Re: L&L Wings, Inc., Chapter 11, Debtor. Marco Destin,
Inc., Panama Surf & Sport, Inc., E&T, Inc., Appellants, v. L&L
Wings, Inc., Appellee, Case No. 22-CV-1082-LTS, (S.D.N.Y.).
The Appellants Marco Destin Inc., Panama Surf & Sport Inc., and E&T
Inc. filed this appeal from the Jan. 21, 2022 Order of the
bankruptcy court for denying Appellants' motion seeking relief from
the automatic stay. The Appellants assert that the bankruptcy court
erred as a matter of fact and as a matter of law when it denied
them "limited stay relief" to bring a fraud-on-the-court action
against the principals of the Debtor/Appellee L&L Wings and name
the Appellee solely as a "nominal party" in the contemplated
lawsuit.
The Appellants seek "limited relief" from the automatic stay in
order to bring a fraud-on-the-court action against L&L Wings, as a
"nominal" defendant, and its principals, as the intended
defendants. The Court holds that it is without power to order the
relief requested, because the appeal is constitutionally moot.
Appellants ask the Court to modify the bankruptcy court's automatic
stay, which barred them from commencing any action against the
Debtor after the commencement of the Debtor's bankruptcy case.
The Court finds that the Appellants did not seek a stay of the
bankruptcy proceedings pending appeal, nor did they object to the
Debtor's subsequently proposed Third Amended Plan of
Reorganization, or, ultimately, to the order confirming the Plan.
Bankruptcy Judge David S. Jones entered the Confirmation Order on
March 1, 2022. It has since become final and, according to the
Debtor's uncontroverted proffer, the Plan has been substantially
consummated.
Under section 1141 of the Bankruptcy Code, "the confirmation of a
plan . . . discharges the debt from any debt that arose before the
date of such confirmation." The automatic stay has thus expired.
The Bankruptcy Code further provides that a "discharge in a case
under this title . . . operates as an injunction against the
commencement or continuation of an action . . . to collect, recover
or offset any such debt as a personal liability of the debtor."
The Court explains that "Once the Confirmation Order confirming the
Plan was entered in the bankruptcy case, the automatic stay was
extinguished and replaced with a discharge injunction. . . the
automatic stay that has been abrogated and superseded by a
permanent injunction forecloses any relief from the stay." The
Court concludes that the appeal is moot, the Court lacks subject
matter jurisdiction of it, and therefore, it must be dismissed.
A full-text copy of the Memorandum Opinion and Order dated March 1,
2023 is available at https://tinyurl.com/4byxz8xa from Leagle.com.
About L&L Wings
L&L Wings, Inc. is a New York-based retailer of beachwear and beach
sundry items. It operates 26 stores throughout North Carolina,
South Carolina, Florida, Texas and California.
L&L Wings sought protection under Chapter 11 of the Bankruptcy Code
(Bankr. S.D.N.Y. Case No. 21-10795) on April 24, 2021. In the
petition signed by Ariel Levy, president, the Debtor disclosed up
to $50 million in assets and up to $100 million in liabilities.
Judge Shelley C. Chapman oversees the case.
The Debtor tapped Davidoff Hutcher & Citron LLP as legal counsel;
WebsterRogers LLP as accountant; CFGI as financial advisor; A&G
Realty Partners, LLC as real estate consultant; and SSG Advisors,
LLC as investment banker.
On May 7, 2021, the U.S. Trustee for Region 2 appointed an official
committee of unsecured creditors. Otterbourg PC and Thompson Hine,
LLP serve as the committee's bankruptcy counsel and special
counsel, respectively.
LIGHTNING TECHNOLOGIES: PALIoT Enjoined From Using Trade Secrets
----------------------------------------------------------------
District Judge Denise Page Hood for the Eastern District of
Michigan grants the motion for preliminary injunction filed by the
Plaintiff Palltronics, Inc. in the case styled PALLTRONICS, INC.,
Plaintiff, v. PALIoT SOLUTIONS, INC., Defendant, Case No. 22-12854
(E.D. Mich.).
In the instant Motion, the Plaintiff seeks an order enjoining the
Defendant PALIoT Solutions, LLC from continued violations of a
bankruptcy court's Final Sale Order and its associated Asset
Purchase Agreement. The Plaintiff seeks to halt and correct what
the Plaintiff deems the brazen and malicious theft and
misappropriation of Assets exclusively acquired by Plaintiff from
Lightning Technologies, Inc. under the Sale Order and APA entered
in the Bankruptcy Action, Case No. 21-4109-tjt. The Plaintiff
argues that allowing Defendant to continue violating the Sale Order
undermines the integrity of the bankruptcy process.
In its 6-year existence, Lightning spent tens of millions of
dollars developing a state-of-the-art shipping pallet and
implementing matching business applications for using that Pallet
all of which constituted valuable intellectual property, including
but not limited to trade secrets. During the bankruptcy
proceedings, Lightning's Assets were sold at auction, free of any
other claim or interest. The Plaintiff was the winning bidder and
the Defendant was the losing, backup, bidder. The Defendant set up
a directly competing business by stealing key portions of
lightning's assets, including trade secrets.
The Court finds that "Plaintiff has shown through its Complaint,
briefs, documents and declarations submitted, that the Plaintiff
suffered and continues to suffer immediate and irreparable harm if
an injunction is not entered. Plaintiff's harm includes goodwill
with potential clients and breaches of the confidentiality
agreements signed by several of Defendant's employees (who are not
parties to this action, but many are in leadership positions with
Defendant) previously employed by Lightning."
As shown by the Plaintiff, the Court determines that "the Defendant
is a brand-new company, founded by one or more of Lightning's
former employees. Defendant has managed to accomplish in one year,
what it took Lightning over five years and $25 million in research
and development to achieve. It can be inferred that such dramatic
progress was possible because Defendant relied on Lightning's
former employees' knowledge of the trade secrets, processes, and
other information they gained from working at Lightning to set up
its business. Defendant was found by the Bankruptcy Court to have
violated its Sales Order by using Lightning's LinkedIn website to
steer other businesses to Defendant's website. Plaintiff has
further shown that Defendant is using Lightning's Trade Secrets and
other assets without Plaintiff's authorization. Defendant
essentially admits to using the same processes but arguing that
these processes may be obtained from others in the industry and are
well-known in the industry."
The Plaintiff having shown that it is irreparably harmed by
Defendant's use of its Trade Secrets and other confidential
information, the Court holds that a preliminary injunction be
issued in this matter pending the litigation and ultimate
resolution of this matter. Accordingly, the Court orders that the
Defendant, its employees and agents, are enjoined from using any
Trade Secrets set forth in Schedule 2.1.4 of the Asset Purchase
Agreement.
As suggested by the Defendant, the Court finds that a "significant"
bond is appropriate in this instance based on the Defendant's
argument that the processes it uses are well known in the industry
and that the injunction would put it out of business. The Court
sets a security in the amount of $100,000 to cover costs in
litigating this case appears to be sufficient at this time.
A full-text copy of the Order dated Feb. 27, 2023 is available at
https://tinyurl.com/bdfp93aw from Leagle.com.
About Lightning Technologies
Lightning Technologies, Inc., operated a business that had "spent
tens of millions of dollars" and more than five years researching
and developing a revolutionary multi-component, extended-use
shipping pallet, which had sections "made of an engineered wood
core structure [held together with proprietary adhesive, rather
than fasteners and] coated with a proprietary polymer [called
Exobond] to give it strength and rigidity." Embedded in the pallets
was a proprietary tracking device that uses a snorkel device which
allows the tracker to be sprayed after its insertion into the
pallet, and that "could monitor the physical location of the
pallet, the temperature and humidity, and shock or vibration."
Lightning Technologies also developed a business plan which
included sources for the necessary materials for the pallets; sets
of customers who would use the pallets; and methods "to track the
movement of the pallets through the supply chain and earn an
accumulation of carbon credits."
On Feb. 5, 2021, an involuntary bankruptcy petition under Chapter 7
was filed against Lightning Technologies by three petitioning
creditors (Bankr. E.D. Mich. Case No. 21-41019). On Feb. 8, 2021,
the Debtor stipulated to the entry of an order for relief under
Chapter 7, the Court entered such an order, and a trustee was
appointed.
LOS ARMANDOS: Voluntary Chapter 11 Case Summary
-----------------------------------------------
Debtor: Los Armandos Mexican Food, Inc.
5820 W McDowell Rd
Phoenix, AZ 85035
Chapter 11 Petition Date: March 7, 2023
Court: United States Bankruptcy Court
District of Arizona
Case No.: 23-01442
Judge: Hon. Scott H. Gan
Debtor's Counsel: Jacob R. Goodman, Esq.
GOODMAN LAW PRACTICE PLC D/B/A ROCK LAW FIRM
PO Box 28365
Tempe, AZ 85285-8365
Tel: (580) 605-4409
Fax: (602) 491-2062
Email: Jacob@rocklawaz.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Francisco Vasquez as officer.
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/L3P7R3Y/LOS_ARMANDOS_MEXICAN_FOOD_INC__azbke-23-01442__0001.0.pdf?mcid=tGE4TAMA
LOYALTY VENTURES: Case Summary & Nine Unsecured Creditors
---------------------------------------------------------
Lead Debtor: Loyalty Ventures Inc.
8235 Douglas Avenue, Suite 1200
Dallas, TX 75225
Business Description: Debtor Loyalty Ventures Inc. is the ultimate
parent of 45 subsidiaries located worldwide
that collectively own and operate
(i) BrandLoyalty, a European-based business
that provides loyalty campaigns to high-
frequency retailers and grocers, and (ii)
AIR MILES, Canada's most recognized consumer
loyalty program.
Chapter 11 Petition Date: March 10, 2023
Court: United States Bankruptcy Court
Southern District of Texas
Four affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Loyalty Ventures Inc. (Lead Case) 23-90111
LVI Sky Oak LLC 23-90112
Rhombus Investments L.P. 23-90113
LVI Lux Holdings S.a r.l. 23-90114
Judge: Hon. Christopher M. Lopez
Debtors'
Legal
Counsel: Matthew D. Cavenaugh, Esq.
Jennifer F. Wertz, Esq.
J. Machir Stul, Esq.
Victoria Argeroplos, Esq.
JACKSON WALKER LLP
1401 McKinney Street, Suite 1900
Houston, TX 77010
Tel: (713) 752-4200
Fax: (713) 752-4221
Email: mcavenaugh@jw.com
jwertz@jw.com
mstull@jw.com
vargeroplos@jw.com
Debtors'
United States
Bankruptcy
Counsel: Philip C. Dublin, Esq.
Meredith A. Lahaie, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
One Bryant Park
New York, New York 10036
Tel: (212) 872-1000
Fax: (212) 872-1002
Email: pdublin@akingump.com
mlahaie@akingump.com
- and -
Marty L. Brimmage, Jr., Esq.
Lacy M. Lawrence, Esq.
Rachel Biblo Block, Esq.
AKIN GUMP STRAUSS HAUER & FELD LLP
2300 N. Field Street, Suite 1800
Dallas, Texas 75201
Tel: (214) 969-2800
Fax: (214) 969-4343
Email: mbrimmage@akingump.com
llawrence@akingump.com
rbibloblock@akingump.com
Canadian
Legal Counsel
to LoyaltyOne: CASSELS BROCK & BLACKWELL LLP
Debtors'
Investment
Banker: PJT PARTNERS LP
Debtors'
United States
Financial &
Restructuring
Advisor: ALVAREZ & MARSAL NORTH AMERICA, LLC
Canadian Financial
& Restructuring
Advisor to
LoyaltyOne: ALVAREZ & MARSAL CANADA ULC
Total Assets as of Sept. 30, 2022: $1,591,218,000
Total Debts as of Sept. 30, 2022: $1,980,850,000
The petitions were signed by John J. Chestnut as chief financial
officer of Loyalty Ventures Inc.
A full-text copy of Loyalty Ventures Inc.'s petition is available
for free at PacerMonitor.com at:
https://www.pacermonitor.com/view/UGIUDAQ/Loyalty_Ventures_Inc__txsbke-23-90111__0001.0.pdf?mcid=tGE4TAMA
Consolidated List of Nine Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Bread Financial Holdings, Inc. Contract Claim Undetermined
3095 Loyalty Circle
Columbus, OH 43219
United States
President and Chief Executive Officer
Ralph Andretta
Tel: (718) 248‐1622
Email: ralph.andretta@breadfinancial.com
2. Eligible Brand Loyalty February 2023 $827,013
Omnibus Incentive Plan Employees Annual Vesting
Koningsweg 101 Amounts
Den Bosch, 5211 BH
The Netherlands
3. PricewaterhouseCoopers LLP Trade Payable $250,000
2121 N Pearl St Suite 2000
Dallas, TX 75201
United States
Mitch Bramlett
Tax Partner
Fax: (214) 754‐7476
Email: mitch.bramlett@us.pwc.com
4. Abnormal Security Corp Trade Payable $143,577
797 Bryant St
San Francisco, CA 94107
United States
Evan Reiser
Chief Executive Officer
Tel: (646) 283‐9493
Email: ereiser@abnormalsecurity.com
5. Nasdaq Trade Payable $62,000
805 King Farm Boulevard
Rockville, MD 20850
United States
Vice President, Deputy General
Counsel and Corporate Secretary
Erika Moore
Tel: (212) 401‐8769
Email: erika.moore@nasdaq.com
6. Auditboard Trade Payable $22,887
12900 Park Plaza Drive
Suite 200
Cerritos, CA 90703
United States
Tina Yeh
VP of Finance and Operations
Tel: (877) 769‐5444
Email: tyeh@auditboard.com
7. AVI Systems Trade Payable $22,541
9675 W 76th St, Ste 130
Eden Prairie, MN 55344
United States
Jeff Stoebner
President and Chief Executive Officer
Tel: (701) 223‐380
Email: jeff.stoebner@avisystems.com
8. Ernst & Young Product Sales LLC Trade Payable $3,838
950 Main Avenue, Suite 1800
Cleveland, OH 44113
United States
Yvonne Xu
Managing Director
Tel: (214) 969‐8917
Email: yvonne.xu@ey.com
9. Computershare Inc. Trade Payable $1,644
Yarra Falls 452 Johnston St
Abbotsford, Victoria, 3067
Australia
Stuart Irving
Chief Executive Officer
Email: stuart.irving@computershare.com.au
Tel: (781) 575‐2000
LUXE SPACES: Has Final OK on Cash Collateral Access
---------------------------------------------------
The U.S. Bankruptcy Court for the Middle District of Louisiana
authorized Luxe Spaces, LLC to use cash collateral on a final basis
in accordance with the budget, with a 10% variance.
As previously reported by the Troubled Company Reporter, the Debtor
requires access to cash collateral to meet necessary expenses
incurred in the ordinary course of its business while it
restructures and reorganizes its indebtedness and business in a
manner that maximizes value and is fair and equitable to all
parties-in-interest.
It is not clear who has an interest in cash collateral. The Debtor
ran a UCC search prior to the Petition Date, which revealed that
multiple financing statements had been filed against the Debtor.
The earliest was filed on October 19, 2021, with UCC-1 filing
number of 17-1490865.
However, the secured party is described as "First Corporate
Solutions as Representative." Most of the so-called secured parties
appear to be service of process companies such as "Corporation
Service Company, as Representative."
The Court Order provides that the secured parties, if any, are
granted, effective immediately and without the necessity of the
execution by the Debtor of financing statements, mortgages,
security agreements, or otherwise, in accordance with 11 U.S.C.
section 361(2), replacement security interests in and liens on all
post-petition accounts of the Debtor on which secured parties, if
any, hold valid and perfected liens as of January 18, 2023 and all
proceeds of the foregoing, in the same respective priority it held
prior to the Petition Date, and subject and subordinate only to
valid, perfected, enforceable and non-avoidable liens and security
interests granted by law or by the Debtor to any person or entity
that were superior in priority to the prepetition security
interests and liens held by any secured parties, and only to the
extent that the liens of any secured parties are not otherwise
subject to avoidance or subordination, which Adequate Protection
Liens are granted to secure the amount of any post-petition
diminution in the value of the interests of secured parties, if
any, in the cash collateral to the extent such interests are
entitled to adequate protection against such diminution under the
Bankruptcy Code.
As an additional form of adequate protection, the Debtor will remit
$1,150 per week to the Subchapter V Trustee.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3mxQMz3 from PacerMonitor.com.
The Debtor projects total payments, on a weekly basis, as follows:
$232,755 for March 4, 2023;
$45,150 for March 11, 2023;
$42,288 for March 18, 2023; and
$43,090 for March 25, 2023.
About Luxe Spaces, LLC
Luxe Spaces, LLC is a Baton Rouge, La.-based corporate housing
company. Luxe Spaces leases apartments, houses, condos, townhomes,
etc. and then sublets them to, among others, film and televisions
production companies, governmental agencies such as FEMA, and
private businesses looking to temporarily house their executives.
The Debtor sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. La. Case No. 23-10042) on January 18,
2023. In the petition signed by Stephanie R. Clarke, manager, the
Debtor disclosed up to $500,000 in assets and up to $1 million in
liabilities.
Judge Michael A. Crawford oversees the case.
Ryan J. Richmond, Esq., at Sternberg, Naccari & White, LLC, is the
Debtor's legal counsel.
M.A.R. DESIGNS: Taps Francisco J. Rodriguez as Litigation Counsel
-----------------------------------------------------------------
M.A.R. Designs & Construction, Inc. seeks approval from the U.S.
Bankruptcy Court for the Southern District of Texas to employ the
Law Office of Francisco J. Rodriguez as special litigation
counsel.
The Debtor needs the firm's legal assistance in connection with the
following cases filed in the state district courts of Hidalgo
County:
-- C-1263-21 B; M.A.R. Designs & Construction, Inc. vs. Comack
Investments, LP, et al.;
-- C-2975-21-G; Comack Investments, LP vs. M.A.R. Designs &
Construction, Inc., et al.;
-- C-3147-22-B; M.A.R. Designs & Construction, Inc. vs. David
Lozano and Jack B. Eggleston;
-- C-4215-19-C; M.A.R. Designs & Construction, Inc. vs.
Alejandro Moreno vs. Sierra Title of Hidalgo County, Inc.;
-- C-3143-22-E; M.A.R. Designs & Construction, Inc. vs. Lauren
K. Christy and Gregory P. Kerr;
-- C-2522-20-B; Carlos Lozano Gonzalez, et al vs. M.A.R. Designs
& Construction, Inc.;
-- C-0384-20-J; Global Bottomline vs. M.A.R. Designs &
Construction, Inc.
The firm will be paid $400 per hour for partner time, and $300 per
hour for associate time. In addition, the firm will be reimbursed
for out-of-pocket expenses incurred.
The firm received a $10,000 retainer.
As disclosed in court filings, the Law Office of Francisco J.
Rodriguez is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Francisco J. Rodriguez, Esq.
Law Office of Francisco J. Rodriguez
1111 W. Nolana Ave. Suite A
McAllen, TX 78504
Tel: (956) 678-4363
Fax: (956) 687-6415
About M.A.R. Designs & Construction
M.A.R. Designs & Construction, Inc. sought protection for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Texas Case No.
23-70001) on Jan. 1, 2023, with as much as $1 million in both
assets and liabilities.
Judge Eduardo V. Rodriguez oversees the case.
The Debtor tapped Antonio Martinez, Jr., Esq., as bankruptcy
counsel; the Law Office of Francisco J. Rodriguez as special
litigation counsel; and Carr Riggs & Ingram, LLC as accountant.
MADERA COMMUNITY: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Madera Community Hospital
1250 E. Almond Ave.
Madera, CA 93637
Case No.: 23-10457
Business Description: The Debtor operates a general medical and
surgical hospital.
Chapter 11 Petition Date: March 10, 2023
Court: United States Bankruptcy Court
Eastern District of California
Judge: Hon. Rene Lastreto II
Debtor's Counsel: Riley C. Walter, Esq.
WANGER JONES HELSLEY
265 E. River Park Circle, Ste. 310
Fresno, CA 93720-1563
Tel: (559) 892-2002
Email: rwalter@wjhattorneys.com
Estimated Assets: $50 million to $100 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by Karen Paolinelli, MSN, RN, FNP-C, PA-C,
chief executive officer.
A full-text copy of the petition is available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/4N3B6GQ/Madera_Community_Hospital__caebke-23-10457__0001.0.pdf?mcid=tGE4TAMA
List of Debtor's 20 Largest Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Citizens Business Bank $1,100,556
P.O. Box 3938
Ontario, CA
2. State of California $776,412
Emergency Medical
Services Authority
10901 Gold Center Dr.
#400, Rancho Cordova
CA, 95670
3. Arya Medical Group $300,723
1660 E. Herndon Ave.
Ste. 101, Fresno, CA 93720
4. Cardinal Health $239,891
Medical Products and Services
P.O. Box 100316
Pasadena, CA 91189-0316
5. SnapMedtech Inc. $226,327
P.O. Box 100316
Pasadena, CA 91189-0316
6. Nuwest Group Holdings, LLC $215,438
P.O. Box 940
Roseville, CA 95661
7. Beckman Coulter, Inc. $189,902
Dept. CH 10164
Palatine, IL 60055-0164
8. Gateway Acceptance $156,073
for Valley Medical Staffing
P.O. Box 4053
Concord, CA 94524
9. Gateway Acceptance Co. $152,352
for VEMA Staffing Partners
P.O. Box 4053
Concord, CA 94524-4053
10. Triage LLC $133,036
P.O. Box 7733328
Chicago, IL 60677-3328
11. Central California $117,041
Anestesiology
2276 Ashcroft Avenue
Clovis, CA 93611
12. CEP America-California $107,373
1601 Cummins Dr.
Ste D
Modesto, CA 95358-6411
13. Westways Staffing Services, Inc. $98,852
P.O. Box 970
San Jose, CA 95108
14. Zimmer, Inc. $95,140
14235 Collections Center Drive
Chicago, IL 60693
15. Wells Fargo Business Credit $90,207
P.O. Box 713424
Philadelphia, PA 19171-3424
16. Trusted Health, Inc. $87,175
P.O. Box 7775
PMB-62915
San Francisco, CA 94120-7775
17. Cardinal Health 110, LLC $85,598
PO Box 56412
Los Angeles, CA 90074-6412
18. OR Nurses Nationwide, Inc. $82,395
P.O. Box 55963
Dept 5158
Little Rock AR
72215
19. Aptiva Corp. $79,204
825 Georges Road
Suite 1
North Brunswick, NJ 8902
20. Sysco Food Services $79,126
of Central California
P.O. Box 729
Modesto, CA 95353-0729
MAXAR TECHNOLOGIES: Moody's Alters Outlook on B2 CFR to Negative
----------------------------------------------------------------
Moody's Investors Service changed Maxar Technologies Inc.'s outlook
to negative from stable and affirmed the company's B2 corporate
family rating, B2-PD probability of default rating, B2 senior
secured bank credit facilities ratings, and B2 senior secured notes
ratings. The company's speculative grade liquidity rating was
maintained at SGL-2.
"The outlook was changed to negative to reflect the company's high
financial leverage and execution risks of improving EBITDA and
deleveraging to a level that will support the B2 rating by the end
of 2023," said Peter Adu, Moody's Vice President and Senior Credit
Officer.
Affirmations:
Issuer: Maxar Technologies Inc.
Corporate Family Rating, Affirmed B2
Probability of Default Rating, Affirmed B2-PD
Senior Secured Bank Credit Facility, Affirmed B2 (LGD3)
Senior Secured Regular Bond/Debenture, Affirmed B2 (LGD3)
Outlook Actions:
Issuer: Maxar Technologies Inc.
Outlook, Changed To Negative From Stable
RATINGS RATIONALE
Maxar's B2 CFR is constrained by: (1) high financial leverage
(Debt/EBITDA of 8.2x for 2022 compared to 5.2x for 2021) and
challenges reducing the metric below 6x by the end of 2023 due to
limited visibility on forward activity; (2) delayed launch and
operational risks for its next generation WorldView Legion six
satellite constellation; (3) lack of growth in the manufacture of
geosynchronous (GEO) satellites due to technological change; (4)
budget limitations of government and commercial customers due to
the effects of the COVID-19 pandemic, which will impact timing of
new orders; and (5) event risk of higher financial leverage with
private equity ownership should the acquisition by Advent
International (Advent) proceed. The rating benefits from: (1) a
leading market position in satellite-based imaging services as well
as being an important supplier to the US Government; (2) potential
for considerable free cash flow generation after WorldView Legion
becomes operational as capital expenditures will decline; and (3)
good liquidity.
Maxar's ESG credit impact score is highly negative (CIS-4)
reflecting high governance risk as a result of its elevated
financial leverage.
Maxar has good liquidity (SGL-2) through 2023 with sources totaling
approximate $450 million while the company has term loan
amortization of about $15 million. Liquidity sources include cash
of $52 million at December 31, 2022, $351 million of availability
(net of $125 million of drawings and $24 million of letters of
credit) under its $500 million revolving credit facility that
expires in 2027, and Moody's expected free cash flow of about $50
million in 2023. Maxar's revolver has leverage and coverage
covenants and cushion under the leverage covenant is likely to fall
below 10% through the next 12 months due to step downs. Because
most assets are encumbered, the company has limited flexibility to
generate liquidity from asset sales.
The outlook is negative because the delayed launch of its WorldView
Legion satellite constellation will likely keep financial leverage
above 6x in 2023.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The rating could be upgraded if Maxar successfully launches its
WorldView Legion satellite constellation and sustains Debt/EBITDA
below 5x.
The rating could be downgraded if Maxar sustains Debt/EBITDA above
6x and EBITDA-Capex/Interest below 1x or if liquidity becomes
weak.
The principal methodology used in these ratings was Communications
Infrastructure published in February 2022.
Headquartered in Westminster, Colorado, Maxar is a space technology
and intelligence company. Revenue for the fiscal year ended
December 31, 2022 was $1.6 billion.
MEND CORRECTIONAL: Move to Stay Jama's Suit Granted in Part
-----------------------------------------------------------
Magistrate Judge John F. Docherty for the District of Minnesota
grants in part the Plaintiff Abdiweli Jama's Motion to Stay the
case Abdiweli Jama, Plaintiff, v. Wright County, Officer Michael
Peterson, MEnD Correctional Care, PLLC, Melanie Hirsch, Kiefer
Prudhomme, Defendants, Case No. 22-CV-483 (PJS/JFD), (D. Minn.).
On Dec. 1, 2022, Defendant MEnD Correctional Care, PLLC filed a
notice of bankruptcy. Consequently, the Court asked each of the
non-bankrupt defendants to file a letter "with their position on
whether the bankruptcy stay should apply to them." The Wright
County Defendants responded that they could "proceed with
discovery, expert discovery, and motion practice . . . without
MEnD." Melanie Hirsch submitted that the automatic stay should
apply to her as well as MEnD, because MEnD must indemnify her and a
judgment against her would affect MEnD's estate in bankruptcy.
The Plaintiff moves to "stay all deadlines" in the case or, in the
alternative, moves to stay all proceedings in the case until MEnD's
bankruptcy stay is lifted or, again in the alternative, moves to
extend all deadlines by 90 days. The Plaintiff argues that
discovery could proceed between him and the Wright County
defendants, but that doing so would "effectively bifurcate the
litigation," forcing him to litigate the case twice, wasting his
own resources and the Court's time.
The instant motion and the letters of the parties present two
questions. First, does the automatic bankruptcy stay that applies
to MEnD also apply to Ms. Hirsch? Second, should the Court stay the
deadlines in the scheduling order until MEnD's bankruptcy
proceedings are concluded, for a shorter period, or not at all?
As a threshold matter, the Court is not convinced that it has the
authority to find that the automatic bankruptcy stay applies to Ms.
Hirsch. The parties have not cited the Eighth Circuit precedent
holding that the District Court may extend an automatic bankruptcy
stay without any involvement of the Bankruptcy Court. Even assuming
that the Court did have the power to extend the automatic
bankruptcy stay to Ms. Hirsch, it would decline the invitation to
extend its reach into bankruptcy matters because it is not clear
that a judgment against Ms. Hirsch would "have an immediate adverse
economic consequence for MEnD's estate."
While the Court declines to extend the automatic bankruptcy stay to
Ms. Hirsch, it acknowledges that the stay itself presents
logistical challenges in litigating this suit. To accommodate those
challenges, the Court will extend the deadlines in the scheduling
order by 90 days. This reprieve will allow the parties to pursue
remedies before the Bankruptcy Court and it will give Wright
County, Ms. Hirsch, and the Plaintiff time to resume discovery and
motion practice. The Court understands that litigating a case with
or against a bankrupt defendant presents challenges. However, the
Court will not grant an indefinite stay during a corporate
bankruptcy which could take years to resolve. Absent an order from
the Bankruptcy Court, the Court considers the automatic stay to
apply to MEnD only, and to no other defendants.
A full-text copy of the Order dated Feb. 27, 2023 is available at
https://tinyurl.com/4yxphm48 from Leagle.com.
About MEnD Correctional Care
MEnD Correctional Care, PLLC, is a health care services and
management company in Sartell, Minn.
MEnD Correctional Care filed its voluntary petition for Chapter 11
protection (Bankr. D. Minn. Case No. 22-60407) on Nov. 30, 2022,
with up to $50,000 in assets and $1 million to $10 million in
liabilities. Todd Leonard, MD CCHP-P, president and chief medical
officer, signed the petition.
Judge Michael E. Ridgway oversees the case.
Steven B. Nosek, P.A., serves as the Debtor's legal counsel.
MICROSTRATEGY INC: Group One Trading Ceases to Own Class A Shares
-----------------------------------------------------------------
Group One Trading, LP disclosed in a Schedule 13G/A filed with the
Securities and Exchange Commission that as of Jan. 31, 2023, it has
ceased to beneficially own shares of Class A common stock of
MicroStrategy Incorporated. A full-text copy of the regulatory
filing is available for free at:
https://www.sec.gov/Archives/edgar/data/932540/000093254023000003/MSTR13G-A.txt
About MicroStrategy
Microstrategy Incorporated is an enterprise analytics software and
services company. Since its founding in 1989, MicroStrategy has
been focused on empowering organizations to leverage the immense
value of their data. MicroStrategy pursues two corporate
strategies in the operation of its business. One strategy is to
acquire and hold bitcoin and the other strategy is to grow its
enterprise analytics software business.
Microstrategy reported a net loss of $1.47 billion for the year
ended Dec. 31, 2022, compared to a net loss of $535.48 million
for the year ended Dec. 31, 2021. As of Dec. 31, 2022, the Company
had $2.41 billion in total assets, $2.79 billion in total
liabilities, and a total stockholders' deficit of $383.12 million.
MINESEN COMPANY: Parties' Appeals of Decision on Assumption Denied
------------------------------------------------------------------
District Judge Leslie E. Kobayashi for the District of Hawaii
dismisses has issued order dismissing the appeals from the
bankruptcy court's memorandum of decision regarding assumption
executory contracts and leases.
On Nov. 17, 2021, the bankruptcy court issued its Memorandum of
Decision Regarding Assumption of Executory Contracts and Leases.
The Debtor-Appellant The Minesen Company filed its notice of appeal
of the Nov. 17 Decision. Likewise,
Creditor-Appellee/Cross-Appellant Army Morale, Welfare, and
Recreation Fund and Creditor/Party-in-Interest/Cross-Appellant
Pangolin LLC filed their respective notice of cross-appeal of the
Nov. 17 Decision.
At the outset, the Court notes that each of the parties has
recognized a jurisdictional issue. Both MWR and Minesen point out
that the Nov. 17 Decision was not intended to be a final order. The
MWR Brief alluded to the possible lack of jurisdiction over
Minesen's Appeal because the Nov. 17 Decision is not a final
judgment or order, and MWR stated that, in filing the MWR
Cross-Appeal and responding to Minesen's Appeal, MWR "does not
waive its rights to seek dismissal of this appeal for lack of
jurisdiction." Pangolin noted "there is some indication that the
Nov. 17 Decision may be an interlocutory order and is being treated
as such by the bankruptcy court." In response to the MWR Brief and
the Pangolin Brief, Minesen also acknowledged that the bankruptcy
court expressed doubts about whether the Nov. 17 Decision was an
appealable final order and that the subsequent developments in BK
19-849 "may significantly impact the issues presented in this
appeal." Minesen therefore "reserved the right to seek dismissal of
this appeal for lack of jurisdiction or on any other applicable
grounds."
Because the bankruptcy court's Nov. 17 Decision was not a final
judgment, order, or decree, the Court dismisses the parties'
appeals for lack of subject matter jurisdiction over them.
Moreover, that Court finds the bankruptcy court's June 13, 2022
post-appeal statements about the Nov. 17 Decision and the
post-appeal proceedings in BK 19-849 also support the Court's
conclusion. The bankruptcy court's statements indicate that the
granting of the Assumption Motion would not become a final ruling
until the Required Cures were completed. That had not been done by
the time that the instant appeals were taken.
The appealed case is The Minesen Company,
Debtor/Appellant/Cross-Appellee, v. Army Morale, Welfare, and
Recreation Fund, Creditor/Appellee/Cross-Appellant, and Pangolin
LLC, Creditor/Party-in-Interest/Appellee/Cross-Appellant, Civ. No.
21-00478 LEK-WRP, (D. Haw.).
A full-text copy of the Order dated Feb. 27, 2023 is available at
https://tinyurl.com/5heyz45p from Leagle.com.
About The Minesen Company
The Minesen Company -- http://www.innatschofield.com/-- owns a
transient military lodging facility at Schofield Barracks in
central Oahu known as the Inn at Schofield Barracks. It is based in
Wahiawa, Hawaii.
The Minesen Company filed a petition for Chapter 11 protection
(Bankr. D. Hawaii Case No. 19-00849) on July 4, 2019, with up to
$50 million in assets and up to $10 million in liabilities. Max
Jensen, president of The Minesen Company, signed the petition.
Judge Robert J. Faris oversees the case.
The Debtor tapped Goodsill Anderson Quiin & Stifel as bankruptcy
counsel; Snell & Wilmer, LLP, Keith M. Kiuchi, A Law Corporation
and Crowell & Moring, LLP as special counsels; Joseph M. Salvator
CPA, PC as accountant; and Schlissel & Associates, LLC as tax
advisor.
Dane S. Field, the Chapter 11 trustee appointed in the Debtor's
case, tapped Klevansky Piper, LLP, as legal counsel and Peter K.
Matsumoto, CPA, as accountant.
MYLIFE.COM INC: Seeks to Hire BPM LLP as Accountant
---------------------------------------------------
Mylife.com, Inc. seeks approval from the U.S. Bankruptcy Court for
the Central District of California to employ BPM, LLP.
The Debtor requires an accountant to prepare its 2021 and 2022
federal and state tax returns and provide related tax advice.
The firm will be paid the sum of $23,000 for the 2022 tax return
and $9,082 for the 2021 tax return.
Shreedhar Kothari, a partner at BPM, disclosed in a court filing
that the firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Shreedhar Kothari
BPM LLP
1723 Cloverfield Blvd.
Santa Monica, CA 90404
Tel: (310) 828-9798
Fax: (310) 453-7610
About Mylife.com Inc.
Mylife.com, Inc. is an American information brokerage firm founded
by Jeffrey Tinsley in 2002 as Reunion.com.
On Sept. 2, 2022, Mylife.com Inc., doing business as Reunion.com
Inc., filed for Chapter 11 protection (C.D. Calif. Case No.
22-14858), with between $500,000 and $1 million in assets and
between $10 million and $50 million in liabilities. Jeffrey
Tinsley, chief executive officer of Mylife.com, signed the
petition.
Judge Ernest M. Robles oversees the case.
The Debtor tapped Leslie Cohen Law, PC as bankruptcy counsel;
Larson, LLP and Hahn & Hahn, LLP as special counsels; and BPM, LLP
as accountant.
NAVARRO PECAN: Taps Brad Walker of Riverbend as CRO
---------------------------------------------------
Navarro Pecan Company, Inc. seeks approval from the U.S. Bankruptcy
Court for the Northern District of Texas to employ Brad Walker of
Riverbend Special Situations Group as chief restructuring officer.
The firm's services include:
i. Executive Management
The CRO's executive management functions are to (a) perform
customary chief restructuring officer duties required during the
Debtor's Chapter 11 case; (b) assist the Debtor's senior executives
in managing the financial operations of the Debtor; (c) assist the
senior executives and managers of the Debtor on analysis and
decisions to improve the financial and operating performance of the
Debtor; (d) participate in meetings of the Debtor's board of
directors; (e) participate in meetings between the Debtor and its
lenders; (f) participate in meetings between the Debtor and any
potential investors; (g) participate in meetings between the Debtor
and key creditors; (h) participate in meetings between the Debtor
and bankruptcy professionals; and (i) participate in meetings
between the Debtor and potential buyers;
ii. Lender Management
The CRO's lender management functions are to (a) lead
communications and reporting with lenders, Truist Bank NA and
Hillcrest Bank NA; (b) manage the proposed payoff process with
Hillcrest; (c) manage the reporting and operational support needed
to segregate Truist's collateral; and (d) assist the Debtor in
managing the wind down with the lenders;
iii. Cash Management, Accounting, and Operations Support
The CRO's cash management, accounting, and operational support
functions are to (a) assist in preparing and reviewing the Debtor's
rolling weekly cash flow statement and weekly variance analysis;
(b) monitor performance against the cash flow statement and lead
communications regarding cash flow statement variances; (c) provide
periodic forecast modifications to the weekly cash flow statement;
(d) review all disbursements of cash in accordance with the weekly
cash flow statement; (e) provide appropriate internal reporting
related to sales, accounts receivable, inventory, operating, and
bankruptcy expenses; (f) ensure all accounts receivable are clearly
identified to the appropriate secured party and properly rolled
forward; (g) evaluate inventory for liquidation or sale; (h) report
weekly on the process of converting excess inventory to cash; and
(i) identify and track cost savings initiatives as needed;
iv. Sale Process
The CRO's responsibilities related to a sales process are to
(a) assist the Debtor in its sale process with potential buyers;
(b) communicate with potential buyers; (c) provide asset reporting
as requested; and (d) provide profits and loss statements and cash
flow projections to support a potential purchase;
v. Chapter 11 Case
The CRO's responsibilities related to the Debtor's Chapter 11
case are to (a) prepare for and attend bankruptcy hearings; (b)
provide testimony as required; (c) assist the Debtor's management
and counsel with all aspects of the bankruptcy process; (d) prepare
for and attend the Section 341 meeting of creditors under the
Bankruptcy Code; and (e) prepare material as requested by the
court.
The firm will be paid at these rates:
Brad Walker $475 per hour
Managing Directors $375 to $475 per hour
Directors $325 per hour
Associates $225 per hour
Brad Walker, a partner at Riverbend, disclosed in a court filing
that his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Brad Walker
Brad Walker, LLC
d/b/a Riverbend Special Situations Group
Riverbend Solutions Group
12400 Coit Rd #900,
Dallas, TX 75251
About Navarro Pecan Company
Founded in 1977, Navarro Pecan Company Inc. is a pecan sheller that
owns a state-of-the-art facility in Corsicana, Texas. Its pecans
are found in a variety of brand-name food products in the ice
cream, confectionery, cereal, snack food and bakery industries.
Navarro Pecan Company filed a petition for relief under Chapter 11
of the Bankruptcy Code (Bankr. N.D. Texas Case No. 23-40266) on
Jan. 30, 2023. In the petition filed by its chief restructuring
officer, Brad Walker, the Debtor reported $10 million to $50
million in both assets and liabilities.
Judge Edward L. Morris oversees the case.
The Debtor is represented by Joshua N. Eppich, Esq., at Bonds Ellis
Eppich Schafer Jones, LLP.
NB LOFT VUE: Trustee Taps Ryan LLC as Property Tax Consultant
-------------------------------------------------------------
Randy Williams, the Chapter 11 trustee for NB Loft Vue, DST and NB
Vue Mac, DST, seeks approval from the U.S. Bankruptcy Court for the
Southern District of Texas to employ Ryan, LLC to provide property
tax consulting services.
The firm will render these services:
a. manage and contest the valuation for property tax purposes
for tax year 2021 over the student housing facility known as
LoftVue located at 3125 McCart Ave. and 3120 Forest Park Blvd.,
Fort Worth, Texas; and
b. file for and receive for distribution of any received
refunds due to the contest of the property tax assessments
associated with tax year 2021 against Tarrant County Appraisal.
The firm will receive compensation equal to 20 percent of any tax
savings generated.
As disclosed in court filings, Ryan, LLC is a "disinterested
person" as that term is defined in Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Kevin McCune
Ryan, LLC
Three Galleria Tower
13155 Noel Road, Suite 100
Dallas, TX 75240-5090
Tel: 972-934-0022
Email: kevin.mccune@ryan.com
About NP Loft Vue and NB Vue Mac
NP Loft Vue DST and NB Vue Mac DST sought protection under Chapter
11 of the Bankruptcy Code (Bankr. S.D. Texas Lead Case No.
21-32292) on July 6, 2021, with as much as $50 million in both
assets and liabilities. Patrick Nelson, the Debtors' authorized
representative, signed the petition.
Judge Marvin Isgur oversees the cases.
The Debtors tapped Tucker Ellis, LLP and Munsch Hardt Kopf & Harr,
P.C. as legal counsels, and O'Boyle Properties, Inc. as investment
banker.
Randy W. Williams is the Chapter 11 trustee appointed in the
Debtors' cases. Jackson Walker, LLP, TPS-West, LLC and Ryan, LLC
serve as the trustee's legal counsel, accountant and property tax
consultant, respectively.
NESV ICE: Court Estimates Claims, Rules on Certain Plan Objections
------------------------------------------------------------------
Bankruptcy Judge Christopher J. Panos for the District of
Massachusetts, on February 28, 2023, has issued an amended order
regarding estimation of claims, valuation, and tentative rulings on
certain objections to the confirmation of the Second Amended Joint
Plan of Reorganization of NESV Ice, LLC and affiliates.
Judge Panos estimates the claim of SHS ACK, LLC "in the amount set
forth in the proof of claim filed by SHS reduced by (i) any
interest at the default rate claimed with respect to the
Construction Note accruing before April 26, 2021 and (ii) any
interest at the default rate claimed with respect to the Term Note
accruing before June 29, 2019. . . For purposes of estimation, I
have not considered other defenses and objections asserted to the
SHS claim, such as waiver, estoppel, and unenforceable penalty
defenses raised by the Plan Proponents, all of which are reserved
for final adjudication of the claim. . . I have estimated $400,000
for SHS's counsel's postpetition attorneys' fees, costs and
charges."
As to the secured claim of Construction Source Management, LLC,
Judge Panos estimates CMS claim "to be $3,393,009, which is
$1,276,071 (the undisputed amount), plus $2,116,938 (the disputed
$4.6 million amount with certain downward adjustments upon
consideration of various defenses, credits, and counterclaims). . .
the portion of the secured claim asserted by CSM for approximately
$3 million in additional site work should be reduced to $1.6
million. . . I have not assessed whether CSM would have unsecured
contract or quantum meruit claims against Ice or other Debtors for
these site work charges. . . I estimate the delay damages component
of CSM's secured claim at $280,000. . . additional HVAC, Plumbing,
and Refrigeration Charges at $753,938. . . minus $367,000
(credits), and minus $150,000 (culvert)."
Judge Panos finds that Ashcroft Sullivan Sports Village Lender, LLC
"filed a proof of claim asserting $7.73 million with respect to a
mortgage granted on or about Dec. 13, 2019 by all Debtors, except
for Land East, over their real property securing a $7.5 million
debt owed by their parent company (Ajax 5Cap NESV, LLC) to
Ashcroft. . . None of the Debtors are obligors or guarantors of the
original mortgage made by Ashcroft to Ajax. . . The credible
evidence presented demonstrated that Ashcroft loaned at least $7.5
million to Ajax, of which $5.6 million was intended for and used
for the benefit of the Debtors and their Project. . . Given the
values established. . . for the Rink and the largely undeveloped
land owned by the other Debtors. . . it does not appear that it is
necessary to estimate a specific amount of Ashcroft's secured claim
against each Debtor."
SHS and CSM have objected to confirmation of the Plan, among other
things, because there is no impaired accepting class of creditors
of Land East because Ashcroft, which is impaired under Class 4 of
the Plan and has voted to accept the Plan, is the only accepting
class, but has no claim against that Debtor.
Judge Panos settles that "I have further discretion to decline to
enforce the intercreditor voting agreement embodied in the
Subordination Agreement. . . However, provisions in such an
agreement cannot invalidate applicable provisions of the Bankruptcy
Code, and I would likely find the voting provision to be
unenforceable, adopting the reasoning of the court in In re SW
Boston Hotel Venture, LLC, 460 B.R. 38 (Bankr. D. Mass. 2011)
finding that because of the express terms of the subordination
agreement, senior lender was entitled to vote the claim of the
subordinated lender because, while § 1126(a) grants a right to
vote to a holder of a claim, it "does not expressly or implicitly
prevent that right from being delegated or bargained away by such
holder" and "Federal Rules of Bankruptcy Procedure 3018 and 9010
explicitly permit agents and other representatives to take actions,
including voting, on behalf of parties. . . My rulings on these
issues are tentative and are intended to provide guidance to the
parties to assist them in preparing arguments and considering
evidence to be presented at Phase II of the confirmation hearing."
The Court will schedule a further evidentiary hearing on
confirmation after conducting a case management conference with
parties-in-interest.
A full-text copy of the Amended Order dated Feb. 28, 2023 is
available at https://tinyurl.com/5d5xc5jt from Leagle.com.
About NESV Ice, LLC
NESV Ice, LLC and affiliates NESV Swim, LLC, NESV Field, LLC, NESV
Hotel, LLC, NESV Tennis, LLC, NESV Land, LLC, and NESV Land East,
LLC, offer fitness and sports training services. The Debtor sought
protection under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D.
Mass. Lead Case No. 21-11226) on August 26, 2021. The petitions
were signed by Stuart Silberberg as manager.
Judge Christopher J. Panos oversees the case.
William McMahon, Esq., at Downes McMahon LLP is the Debtor's
counsel.
NOVA WILDCAT: Gets Court Approval to Sell All Assets
----------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
bidding procedures for the sale of substantially all or any portion
of the assets of Nova Wildcat Shur-Line Holdings Inc. and its
debtor-affiliates.
The Debtors believe that the bidding procedures will best
facilitate a potential auction, thereby maximizing recoveries for
all creditors. The bidding procedures provide for substantial
flexibility with respect to the number and structure of any sale
transactions.
Any prospective bidder that intends to participate in the auction
must submit an offer in writing on or before March 15, 2023, at
5:00 p.m. (prevailing Eastern Time).
An auction, if required, will be conducted on March 20, 2023, at
10:00 a.m. (prevailing Eastern Time) at the offices of Reed Smith
LLP, 599 Lexington Avenue, 22nd Floor, New York, New York 10022.
Objections to the sale, if any, must be filed no later than 5:00
p.m. (prevailing Eastern Time) on March 13, 2023.
A sale hearing will take place on March 24, 2023, at 10:00 a.m.
(prevailing Eastern Time) before the Hon. Craig T. Goldblatt, US
Bankruptcy Court, 824 N. Market Street, Wilmington, Delaware
19801.
Any party interested in submitting a bid for any of the Debtors'
assets should contact the Debtors' investment banker: SSG Advisors
LLC, Attn: J. Scott Victor and Teresa C. Kohl, by email at
jsvictor@ssgca.com and tkohl@ssgca.com.
According to court documents, in December 2022, the Debtors engaged
SSG Advisors, LLC ("SSG"), as their investment banker, and Carl
Marks Advisory Group, LLC ("CMAG"), as their financial advisor, to
assist the Debtors in their consideration of strategic alternatives
after an extended period of experiencing constrained liquidity and
operational issues as a result of the COVID-19 pandemic and the
accompanying supply chain disruptions. The Debtors, in
consultation with their advisors, ultimately determined that the
best path forward was the commencement of these chapter 11 cases to
implement a sale of substantially all or any portion of the
Debtors' assets in one or more sale transactions under section 363
of the Bankruptcy Code. The Debtors believe a section 363 sale
process will provide maximum value to all stakeholders.
Investment banker SSG began marketing the assets in early December
2022. The Debtors developed an extensive list of parties whom they
believe may be interested in, and whom they reasonably believe
would have the financial resources to consummate a sale. They
distributed a teaser to prospective purchasers in December 2022 and
already have executed confidentiality agreements with 46
prospective purchasers with more anticipated to follow. During the
sale process, SSG and the Debtors will work with all interested
parties to provide all due diligence and will continue to actively
seek potential interested purchasers.
The Debtors assert that the marketing process and the bidding
procedures provide appropriate time for the Debtors to finish
marketing the assets, receive and evaluate bids, execute one or
more stalking horse agreements, and hold an auction (if necessary)
to determine the highest or otherwise best bid(s), particularly in
light of the pre-petition marketing process already conducted by
the Debtors and SSG and the liquidity constraints that the Debtors
are anticipated to continue to face in these chapter 11 cases.
About Nova Wildcat Shur-Line Holdings
Nova Wildcat Shur-Line Holdings Inc. -- https://www.h2bgroup.com/
-- also known as H2 Brands Group, is a one-stop shop for thousands
of home and hardware products. Nova Wildcat is a privately held
brand portfolio housed under the H2B umbrella. The Company owns
more than 10 brands consisting of an assortment of consumable
products intended to reach every room of the average consumer's
home.
Nova Wildcat Shur-Line Holdings Inc. and certain of its affiliates
sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
D. Del. Case No. 23-10114) on Jan. 29, 2023. In the petition filed
by Mark Rostagno, as CEO and director, Nova Wildcat Shur-Line
estimated assets between $10 million and $50 million and
liabilities between $50 million and $100 million.
The case is overseen by Honorable Bankruptcy Judge Craig T
Goldblatt.
The Debtors tapped REED SMITH LLP as counsel; CARL MARKS ADVISORY
GROUP, LLC, as restructuring advisor; and SSG ADVISORS, LLC, as
investment banker. EPIQ BANKRUPTCY SOLUTIONS, LLC, is the claims
agent.
NOVA WILDCAT: Gets Tentative Okay for Sale, DIP Loan
----------------------------------------------------
Leslie A. Pappas of Law360 reports that bankrupt home goods
supplier Nova Wildcat Shur-Line Holdings Inc. won tentative court
approval Thursday, March 2, 2023, for its Chapter 11 bankruptcy
financing, sale process and key employee compensation plans after a
soliloquy from a Delaware bankruptcy judge prompted renewed talks
that resolved all objections.
The Court approved the implementation of a key employee retention
program ("KERP") and a key employee incentive program (the "KEIP").
KERP awards total $816,115, and participants include 22
non-insider employees of the Debtors determined to be critical to
continued operations by and consummation of the sales. KEIP
participants are the three top executives and payouts are capped at
$1,032,418.
The DIP financing order authorizes the Debtor to obtain up to $48.5
million in post-petition financing and other financial
accommodations in connection with the debtor-in-possession
financing pursuant to a Debtor-In-Possession Credit Agreement dated
as of Feb. 2, 2023, with PNC Bank, National Association, in its
capacity as administrative agent and collateral agent, and the
financial institutions from time to time.
The Court approved bidding procedures, setting a March 15, 2023
deadline for initial bids, and an auction on March 20, 2023, at
10:00 A.M. (prevailing Eastern Time).
On March 10, 2023, the Court entered an order approving the
Debtors' motion to name Gordon Brothers Commercial & Industrial,
LLC, on behalf of its contractual joint venture with Nations
Capital, Inc., or its designee, as the stalking horse bidder.
Absent higher and better offers, Gordon Brothers will acquire the
assets for a cash consideration of $27,100,190, subject to certain
holdbacks and adjustments.
About Nova Wildcat Shur-Line Holdings
Nova Wildcat Shur-Line Holdings Inc. -- https://www.h2bgroup.com/
-- also known as H2 Brands Group, is a one-stop shop for thousands
of home and hardware products. Nova Wildcat is a privately held
brand portfolio housed under the H2B umbrella. The Company owns
more than 10 brands consisting of an assortment of consumable
products intended to reach every room of the average consumer's
home.
Nova Wildcat Shur-Line Holdings Inc. and certain of its affiliates
sought relief under Chapter 11 of the U.S. Bankruptcy Code (Bankr.
D. Del. Case No. 23-10114) on Jan. 29, 2023. In the petition filed
by Mark Rostagno, as CEO and director, Nova Wildcat Shur-Line
estimated assets between $10 million and $50 million and
liabilities between $50 million and $100 million.
The case is overseen by Honorable Bankruptcy Judge Craig T
Goldblatt.
The Debtors tapped REED SMITH LLP as counsel; CARL MARKS ADVISORY
GROUP, LLC, as restructuring advisor; and SSG ADVISORS, LLC, as
investment banker. EPIQ BANKRUPTCY SOLUTIONS, LLC, is the claims
agent.
OFFICE PROPERTIES: Moody's Cuts CFR & Unsecured Bond Rating to Ba2
------------------------------------------------------------------
Moody's Investors Service has downgraded the senior unsecured
rating of Office Properties Income Trust (OPI) to Ba2 from Ba1. The
senior unsecured rating of Select Income REIT was also downgraded
to Ba2 from Ba1. Moody's has maintained the SGL rating at SGL-3.
This concludes Moody's review of the ratings. The rating outlook
is negative.
The ratings downgrades reflect OPI's high leverage and challenges
it faces as it seeks to execute asset sales and reduce debt levels
amidst a challenging transaction environment for commercial office
real estate. The downgrades also consider the REIT's need to raise
external capital in consideration of upcoming funding needs,
including redevelopment spending as well as the refinancing of $350
million unsecured bonds that come due in mid-2024. The REIT's high
leverage and liquidity position also raise concerns about financial
policy and governance.
The negative outlook reflects OPI's external capital needs (which
will likely come with significant costs) as well as operating risks
given its high amount of lease expirations in 2023 and 2024 that
could pressure occupancy and cash flows.
Downgrades:
Issuer: Office Properties Income Trust
Corporate Family Rating, Downgraded to Ba2 from Ba1
Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from
Ba1
Issuer: Select Income REIT
Senior Unsecured Regular Bond/Debenture, Downgraded to Ba2 from
Ba1
Outlook Actions:
Issuer: Office Properties Income Trust
Outlook, Changed To Negative From Rating Under Review
Issuer: Select Income REIT
Outlook, Changed To Negative From Rating Under Review
RATINGS RATIONALE
The Ba2 senior unsecured rating reflects OPI's high-quality tenant
base which includes a large percentage of investment-grade and
government tenants. OPI also maintains low secured debt levels and
a mostly unencumbered property portfolio which provides some
financial flexibility as it considers upcoming funding needs. Fixed
charge coverage is solid for the existing rating levels and it has
modest floating rate debt, although Moody's expects this metric to
decline with rising interest rates and increased revolver usage.
Credit challenges include OPI's elevated leverage and difficult
office leasing conditions due to a weak macroeconomic environment
and the evolving transition to a hybrid work environment. Debt
reduction will be challenging and depend on the REIT's ability to
execute targeted asset sales (in a difficult transaction
environment for office real estate) and leasing activity as it has
26% of leases expiring over the course of 2023 and 2024. OPI also
has some redevelopment risk as it has two projects under
construction totaling about $340 million of investment. One of
these projects is 54% pre-leased and the other is 28%, which will
weigh on cash flows until they are leased and yielding their
expected returns. Moody's also views OPI's external management
structure as a credit challenge, creating potentially significant
conflicts of interest between investors and management.
OPI's SGL-3 rating reflects the REIT's reliance on external capital
as Moody's consider its funding needs over the next eighteen
months. OPI had $567 million of liquidity as of December 31, 2022,
including $555 million available on its $750 million unsecured
revolver and $12 million cash. Moody's expect the REIT to use some
of this liquidity and rely on its revolver in order to fund
completion of its two partially leased redevelopment projects
expected to deliver in 2023. Furthermore, OPI will need to address
the maturity of its revolver which has a final maturity in January
2024, in addition to $350 million of bonds that come due in
mid-2024. OPI does have a mostly unencumbered property portfolio
that enhances financial flexibility, but there is risk that the
REIT places secured financing on some of its higher quality assets
in order to secure needed capital, thereby reducing the value of
assets left for unsecured bondholders.
The negative outlook reflects OPI's external capital needs (which
will likely come with significant costs) as well as operating risks
given its high amount of lease expirations in 2023 and 2024 that
could pressure occupancy and cash flows.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
OPI's ratings could be downgraded if the REIT were to experience
poor execution on renewal of its line of credit or a material
decline in liquidity, as measured by cash and line of credit
capacity as compared with upcoming funding needs. Fixed charge
coverage below 2.3x or secured debt above 15% of gross assets, with
a material decline in the quality of its unencumbered asset pool,
would also result in a ratings downgrade.
An upgrade is unlikely given the negative outlook, but longer term
would reflect strong operating performance (as measured by net
effective rent growth and sustained occupancy gains), Net
Debt/EBITDA below 7x and fixed charge coverage above 3x on a
sustained basis.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
Office Properties Income Trust is a real estate investment trust,
or REIT, focused on owning and leasing high quality office
properties to tenants with high credit quality characteristics in
select, growth-oriented U.S. markets.
OLYMPUS WATER: S&P Places 'B-' ICR on Watch Dev. on Diversey Deal
-----------------------------------------------------------------
S&P Global Ratings placing all of its ratings on Olympus Water
Holdings IV L.P., including its 'B-' issuer credit rating and debt
ratings, on CreditWatch with developing implications.
The CreditWatch placement reflects the possibility that S&P could
affirm, lower, or raise its ratings on the company by one notch,
when additional information on the debt structure is available, and
S&P believes there is considerable certainty about the close of the
transaction.
Olympus Water announced it has entered into a definitive agreement
to acquire Diversey Holdings Ltd. in an all-cash transaction valued
at an enterprise value of approximately $4.6 billion, including the
assumption of debt. Upon completion of the merger, expected to
close in the second half of 2023, Diversey will become a private
company.
The CreditWatch placement follows the announcement that Olympus
Water Holdings IV L.P. has entered into a definitive agreement to
acquire Diversey Holdings Ltd. for about $4.6 billion in an
all-cash transaction. S&P said, "Based on the announcement, we
expect the transaction to close in the second half of 2023;
however, we expect to have further clarity regarding plans to fund
the transaction and the proposed debt level, and structure of the
newly created entity within the next few months. We placed our 'B-'
issuer credit rating on Solenis on CreditWatch with developing
implications to reflect that we may affirm, lower, or raise our
rating on the company depending on our assessment of the effect the
transaction could have on the company's financial and business risk
profiles." Key areas of focus would include the pro forma operating
strategy, capital structure, integration risk, and financial
policies going forward. Currently, Platinum Equity owns Solenis.
Diversey is a publicly traded company, which will be taken private
post merger.
S&P said, "The CreditWatch placement reflects the likelihood we'll
affirm, lower, or raise the issuer credit rating on Olympus within
the next few months following the announced merger with Diversey.
If the deal goes ahead as planned, Solenis' credit quality might
benefit from a combination with Diversey's stronger business, but
on the other hand, a potentially leveraging deal with unsustainable
levels of debt, combined with integration risk would be a credit
negative. We expect to resolve the CreditWatch placement in the
coming months as we have further clarification on the combined
capital structure and a clearer view of the combined entities'
business. S&P Global Ratings notes this is not a static situation
and would look to resolve this CreditWatch as soon as possible as
further information and details emerge."
ESG credit indicators: E-2, S-2, G-3
PACKABLE HOLDINGS: Court OKs Deal on Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware signed off
on a fifth stipulation extending:
-- debtor Packable Holdings, LLC's interim access to cash
collateral; and
-- the Official Committee of Unsecured Creditors' Challenge
Period under the Interim Cash Collateral.
The Fifth Stipulation was entered by the Debtors, the Committee and
JPMorgan Chase Bank, N.A. on behalf of itself and the lenders under
the ABL facility.
Upon the Committee's appointment in September and the panel's
retention of counsel, the Committee, the Debtors and the ABL Agent
worked collaboratively in an effort to narrow or resolve any open
issues with respect to cash collateral. That process was not
complete by the time set for objections to, and final hearing on,
cash collateral. Accordingly, the parties agreed (and the ABL Agent
consented) to continue the final hearing on cash collateral and to
continue to operate in accordance with the Interim Cash Collateral
Order.
While the liquidation of the Debtors' assets has continued, the
parties have simultaneously engaged in discussions (and
productions) concerning the Committee's requests for certain
documents and information from, among others, the Debtors and the
ABL Agent.
The Committee, the Debtors, and the ABL Agent have agreed to extend
the Challenge Period through the earlier of (a) May 17, 2023, and
(b) the deadline to object to confirmation of a chapter 11 plan.
They also have agreed that a final hearing on Cash Collateral will
be continued until April 17, 2023 and have further agreed that this
extension of time will not, in and of itself, constitute a default
under the Interim Cash Collateral Order.
Debtors Holdings and Pharmapacks, LLC are borrowers under a Credit
Agreement, dated as of July 24, 2020, by and among Holdings and
Pharmapacks, JPMorgan Chase Bank, N.A. as agent and lender, and the
additional lenders from time to time party thereto in, an aggregate
principal amount not to exceed $60 million, with availability based
on the value of certain of the Debtors' accounts receivable and
inventory, less certain offsets, reserves, and availability blocks.
The ABL Facility was slated to mature January 15, 2023.
All obligations under the ABL Facility are guaranteed on a senior
secured first-lien basis by each of Packable's wholly owned
domestic subsidiaries. Pursuant to a Pledge and Security agreement
dated as of July 24, 2020, the ABL Facility is secured by first
priority security interests in and liens on the "Collateral", which
is comprised of substantially all of the Debtors' assets, including
intellectual property. In addition, the ABL Lenders have cash
dominion over Packable's operating accounts and, in specified
circumstances, over its investment account.
On April 14, 2022, contemporaneously with the closing of the Term
Loan Facility, the ABL Lenders and Packable entered into a
forbearance agreement to address certain defaults by Packable and
an agreed-upon forbearance by the ABL Lenders. The ABL Forbearance
Agreement required Packable to maintain minimum liquidity of at
least $10 million at all times, and to deposit cash into a
restricted cash account to cure any deficiency in the borrowing
base in the event the borrowing base fell below $47 million.
On April 14, 2022, Holdings entered into the Term Loan Credit
Agreement, which governs a multi-tranche term loan facility with
Alter Domus (US) LLC, and certain Term Loan Lenders to the Debtors
comprised of $86,652,935 in Tranche A loans and $8,715,000 in
bridge loans. As of the Petition Date, the aggregate principal
amount outstanding under the Term Loan Facility was $95.368
million.
A copy of the stipulation is available at https://bit.ly/41StS5G
from PacerMonitor.com.
A copy of the order is available at https://bit.ly/3LjYQxR from
PacerMonitor.com.
About Packable Holdings LLC
Packable Holdings LLC -- https://www.packable.com/ -- is a
multi-marketplace e-commerce enablement platform.
Packable Holdings LLC and five affiliates sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Del. Lead Case
No. 22-10797) on August 29, 2022. In the petition filed by Maria
Harris, as chief legal officer, the Debtor reported assets and
liabilities between $100 million and $500 million each.
Judge Craig T. Goldblatt oversees the case.
Cooley LLP and Potter Anderson & Corroon LLP serve as the Debtors'
attorneys. Alvarez and Marsal North America, LLC, is the financial
advisor. Epiq Corporate Restructuring, LLC, is the claims agent.
Hilco Merchant Resources, LLC, is the liquidation agent.
The Official Committee of Unsecured Creditors is represented by
A.M. SACCULLO LEGAL, LLC and KELLEY DRYE & WARREN LLP.
JPMorgan Chase Bank, N.A., as Administrative Agent, is represented
by RICHARDS, LAYTON & FINGER, P.A. and MORGAN, LEWIS & BOCKIUS
LLP.
PARTY CITY HOLDCO: $150MM DIP Loan from Ankura Wins Final OK
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Party City Holdco Inc. and its
debtor-affiliates to use cash collateral and obtain postpetition
financing, on a final basis.
Party City Holdings, Inc. and Party City Corporation have entered
into a senior secured, superpriority and priming
debtor-in-possession term loan credit facility consisting of new
money term loans in an aggregate principal amount of $150 million
with:
-- Party City Holdco Inc, PC Nextco Holdings, LLC, PC Nextco
Finance, Inc., PC Intermediate Holdings, Inc., the other DIP
Guarantors, as guarantors;
-- the several financial institutions or other entities from
time to time party thereto as DIP Lenders; and
-- Ankura Trust Company, LLC, as administrative agent and
collateral agent.
About $75 million was made available immediately upon entry of an
Interim Order, and the remainder is available subject to and upon
the date of entry of the Final Order,
The Debtors are parties to several loan agreements. As of Petition
Date, Party City Holdings, Inc. as issuer under an indenture for
the 8.750% senior secured first lien notes due 2026 dated as of
February 19, 2021, and its affiliates as guarantors were indebted
and liable to Ankura Trust Company, LLC, as trustee and collateral
trustee for the benefit of the holders of the Prepetition 1L Fixed
Notes, in the aggregate principal amount of not less than $750
million of the outstanding Prepetition 1L Fixed Notes.
The Company as issuer under an indenture for the senior secured
first lien floating rate notes due 2025 dated as of July 30, 2020,
and its affiliates as Prepetition 1L Floating Notes Guarantors were
indebted and liable to Ankura Trust Company, LLC, as trustee and
collateral trustee under the Prepetition 1L Floating Notes in the
aggregate principal amount of not less than $161.699 million of the
outstanding Prepetition 1L Floating Notes.
Party City Holdings and Party City Corp. as borrowers under the ABL
Credit Agreement dated as of August 15, 2015, and their affiliates
as Prepetition ABL Guarantors were indebted and liable to JPMorgan
Chase Bank, N.A., as administrative agent and collateral agent
under the Prepetition ABL facility, for not less than:
a) $369.362 million in outstanding principal amount of ABL
Revolving Loans, plus interest and fees thereon, plus $38 million
of the aggregate stated principal amount available for drawing
under all outstanding letters of credit and all unpaid
reimbursement obligations with respect to drawn letters of credit;
and
b) $17.110 million in outstanding principal amount of FILO
Loans.
As adequate protection:
a. Each Prepetition 1L Notes Trustee, for itself and for the
benefit of the other applicable Prepetition 1L Notes Secured
Parties, is granted, on account of its Adequate Protection Claims,
a valid, perfected replacement security interest in and lien upon
all of the DIP Collateral, subject and subordinate to (i)
Prepetition Permitted Senior Liens, (ii) the Carve-Out, (iii) the
DIP Liens and (iv) and in the case of Prepetition ABL Priority
Collateral, (x) the Prepetition ABL Liens and (y) the ABL Adequate
Protection Liens.
b. Each Prepetition 1L Notes Trustee, for itself and for the
benefit of the other applicable Prepetition 1L Notes Secured
Parties, is granted, subject to the Carve-Out, an allowed
superpriority administrative expense claim on account of such
Prepetition 1L Notes Secured Parties' Adequate Protection Claims as
provided for in section 507(b) of the Bankruptcy Code, which
Prepetition 1L Notes 507(b) Claim will be payable from and have
recourse to all DIP Collateral and all proceeds thereof.
c. The Prepetition ABL Agent, for itself and for the benefit
of the Prepetition ABL Lenders is hereby granted, on account of its
Adequate Protection Claims, a valid, perfected replacement security
interest in and lien upon all of the DIP Collateral, in the case of
the Prepetition ABL Priority Collateral, senior to all other liens
but in the case of DIP 1L Notes Priority Collateral subject and
subordinate to, in the case of DIP 1L Notes Priority Collateral,
(i) the Prepetition Permitted Senior Liens, (ii) the Carve-Out,
(iii) the DIP Liens, (iv) the Prepetition 1L Notes Liens, and (v)
the 1L Notes Adequate Protection Liens.
d. The Prepetition ABL Agent, for itself and for the benefit
of the Prepetition ABL Lenders, is granted an allowed superpriority
administrative expense claim on account of such Prepetition ABL
Secured Parties' Adequate Protection Claims as provided for in
section 507(b) of the Bankruptcy Code which Prepetition ABL 507(b)
Claim will be payable from and have recourse to all DIP Collateral
and all proceeds thereof.
With respect to the Prepetition ABL Priority Collateral, the
Prepetition ABL 507(b) Claim will be senior to all other claims of
any kind and with respect to the DIP 1L Notes Priority Collateral,
the Prepetition ABL 507(b) Claim will be subject and subordinate
only to the CarveOut, the DIP Superpriority Claims, the Prepetition
1L Notes 507(b) Claim, the Prepetition Permitted Senior Liens, and
the prepetition claims of the Prepetition 1L Notes Secured
Parties.
The term Carve-Out means the sum of (i) all fees required to be
paid to the Clerk of the Court and to the U.S. Trustee under 28
U.S.C. section 1930(a) plus interest at the statutory rate, if any,
pursuant to 31 U.S.C. section 3717; (ii) all reasonable and
documented fees and expenses up to $100,000 incurred by a trustee
under section 726(b) of the Bankruptcy Code; (iii) subject, in each
case, to application of any retainers that may be held and to the
extent allowed at any time, whether by interim order, procedural
order, final order or otherwise, all unpaid fees and expenses
incurred by persons or firms retained by the Debtors or the
Creditors' Committee pursuant to section 327, 328, 363, or 1103 of
the Bankruptcy Code at any time before or on the first business day
following delivery by the DIP Agent of a Carve-Out Trigger Notice
and without regard to whether such fees and expenses are provided
for in any Approved Budget, whether allowed by the Court prior to
or after delivery of a Carve-Out Trigger Notice; and (iv) Allowed
Professional Fees of Estate Professionals in an aggregate amount
not to exceed $4 million incurred after the first business day
following delivery by the DIP Agent of the Carve-Out Trigger
Notice.
A copy of the Final DIP Order is available at
https://bit.ly/3ZPQ5Q5 from PacerMonitor.com.
About Party City
Party City Holdco Inc. is a party-supply retailer in the U.S., with
761 company-owned stores as of September 2022, e-commerce
operations, and a large wholesale operation that supplies retail
operations and third parties.
Party City Holdco Inc. and 13 affiliates sought Chapter 11
bankruptcy protection (Bankr. S.D. Tex. Lead Case No. 23-90005) on
Jan. 17, 2023. Party City reported $2.869 billion in total assets
against $3.022 billion in total liabilities as of Sept. 30, 2022.
The Hon. David R. Jones presides over the case.
AlixPartners LLP's David Orlofsky serves as the Debtors' Chief
Restructuring Officer. Paul, Weiss, Rifkind, Wharton & Garrison
LLP and Porter Hedges LLP serve as the Debtors' chapter 11 counsel.
Moelis & Company LLC is the Debtors' Investment Banker; Kroll
Restructuring Administration LLC acts as the notice and claims
agent; and A&G Realty Partners, LLC is the Real Estate Advisor.
JPMorgan Chase Bank, N.A., as Prepetition ABL Agent, is represented
by Simpson Thacher & Bartlett LLP. The Ad Hoc Group of lenders is
represented by Davis Polk & Wardwell LLP. The Ad Hoc Group's
advisors also include Lazard Ltd., and Haynes and Boone, LLP, as
Texas local counsel. Ankura Trust Company, LLC, as DIP Agent,
repetition 1L Fixed Notes Trustee, and Prepetition 1L Floating
Notes Trustee, is represented by Chapman and Cutler LLP as counsel.
PEARL INC: Seeks to Hire The De Leo Law Firm as Legal Counsel
-------------------------------------------------------------
Pearl Inc. seeks approval from the U.S. Bankruptcy Court for the
Eastern District of Louisiana to hire The De Leo Law Firm, LLC to
serve as its legal counsel in its Chapter 11 bankruptcy
proceedings.
The firm's billing rate is $375 per hour for Robin De Leo, Esq.,
managing member of De Leo Law Firm, and $95 per hour for
paralegals.
De Leo Law Firm received a retainer in the amount of $18,000.
The firm can be reached through:
Robin R. De Leo, Esq.
The De Leo Law Firm, LLC
800 Ramon St.
Mandeville, LA 70448
Tel: (985) 727-1664
Fax: (985) 727-4388
Email: lisa@northshoreattorney.com
About Pearl Inc.
Pearl, Inc., a seafood wholesaler in Chauvin, La., filed its
voluntary petition for relief under Chapter 11 of the Bankruptcy
Code (Bankr. E.D. La. Case No. 23-10276) on Feb. 28, 2023, with
$262,118 in assets and $1,248,246 in liabilities. Andrew Blanchard,
chief operating officer and president, signed the petition.
Judge Meredith S. Grabill oversees the case.
Robin R. De Leo, Esq., at The De Leo Law Firm, LLC represents the
Debtor as counsel.
PERFORMANCE FOOD: S&P Alters Outlook to Pos., Affirms 'BB-' ICR
---------------------------------------------------------------
S&P Global Ratings revised its outlook on U.S.-based foodservice,
vending, and convenience store distributor Performance Food Group
Inc. (PFG) to positive from stable and affirmed its ratings on the
company, including the 'BB-' issuer credit rating.
The positive outlook reflects the potential for a higher rating
over the next 12 months if PFG continues to expand its market
share, enhance margins, and maintain S&P Global Ratings-adjusted
leverage below 4x while successfully navigating potentially weaker
macroeconomic conditions.
The outlook revision reflects PFG's positive operating momentum due
to growing volumes, market share gains, and improving
profitability. S&P said, "We believe the company is on track to
grow net sales approximately 13% in fiscal year 2023 ending July 1
2023, as the result of pricing actions and volume growth. The
company's foodservice segment, which accounts for approximately 50%
of net sales, benefits from growth in the food-away-from-home
segment. The company is also achieving volume growth through the
addition of new customers, particularly independent restaurants,
which generate higher margins due to value-added services and
better product mix. Case volumes grew 6.6% in its independent
channel during the second quarter of fiscal 2023. Additionally, the
company is selling more of its own brands to independent
restaurants than national brands, which is contributing to EBITDA
margin expansion. We expect S&P Global Ratings-adjusted EBITDA
margin to be in the low-2% area this year, up from 1.9% in fiscal
year 2022, due to improvements in PFG's customer and product mix,
as well as continued synergies from the 2021 acquisition of
Core-Mark. Still, the risk of a recession in the U.S. over the next
12 months remains elevated and PFG's volumes could be pressured if
demand for its products and services weakens. The company's ability
to successfully navigate through a potentially weaker macroeconomic
environment will be an important rating consideration."
PFG continues to generate solid free operating cash flow (FOCF),
which it used to reduce S&P Global Ratings-adjusted leverage to
below 4x. PFG's S&P Global Ratings-adjusted leverage improved to
3.9x in the second quarter of fiscal 2023 compared to 5.1x at the
end of fiscal 2022, because debt reduced and EBITDA grew. The
company generated about $325 million of FOCF during the first half
of fiscal 2023, repaying about $230 million of debt outstanding on
its asset-backed lending facility (ABL). S&P expects leverage to
remain below 4x in its base-case forecast as the company continues
to expand EBITDA. As a result, S&P revised its financial risk
profile to significant from aggressive.
PFG maintains a 2.5x-3.5x net debt to S&P Global Ratings-adjusted
EBITDA leverage target. S&P said, "While the company is currently
within its leverage target, we believe it could consider larger
strategic acquisitions that would push S&P Global Ratings-adjusted
debt to EBITDA beyond the 3x-4x range that we envision in our
base-case scenario. The company has a track record of pursuing
large debt-funded acquisitions, and while it has consistently
delevered over time, we believe growth through strategic
acquisitions remains a key aspect of its financial policy. As a
result, we revised our financial policy modifier to negative from
neutral."
The rating continues to incorporate PFG's meaningful scale in the
intensely competitive foodservice distribution industry and its
track record of successful acquisitions. PFG remains the number
three company in the foodservice industry (excluding foodservice in
convenience stores), behind Sysco and USF, with profit margins
remaining lower than these competitors due to their greater size,
purchasing power, and route density across the country. Further,
PFG's convenience store distribution segment generates lower
margins due to the high concentration of cigarette sales. However,
we believe its leading presence in this channel presents a
potential upside if the company is able to win shares in the
foodservice side of convenience stores, which has margins similar
to the legacy foodservice business.
The positive outlook reflects the potential for a higher rating
over the next 12 months if PFG continues to expand its market
share, enhance margins, and maintain S&P Global Ratings-adjusted
leverage below 4x while successfully navigating potentially weaker
macroeconomic conditions.
S&P could raise its ratings on PFG if the company:
-- Demonstrates consistent sales and earnings growth through
successful execution of its customer, product, and operational
improvement initiatives;
-- Generates solid FOCF in line with S&P's base-case forecast
through improving operating results, good working capital, and
inventory management; and
-- Sustains S&P Global Ratings-adjusted leverage below 4x.
S&P could revise its outlook to stable if:
-- S&P expects S&P Global Ratings-adjusted leverage to remain
around 4x or more on a sustained basis due to weaker-than-expected
performance; or
-- S&P believes economic challenges will reduce sales growth
prospects and pressure EBITDA margin expansion.
ESG credit indicators: E-2, S-2, G-2
PERFORMANCE POWERSPORTS: Committee Taps Cole Schotz as Counsel
--------------------------------------------------------------
The official committee of unsecured creditors of Performance
Powersports Group Investor, LLC and its affiliates seeks approval
from the U.S. Bankruptcy Court for the District of Delaware to
employ Cole Schotz P.C. as its counsel.
The firm's services include:
a. providing legal advice with respect to the committee's
powers, rights, duties, and obligations in the Debtors' Chapter 11
cases;
b. assisting and advising the committee in its consultations
with the Debtors regarding the administration of the cases;
c. assisting the committee in reviewing and negotiating terms
for unsecured creditors with respect to (i) the execution of a
debtor-in-possession financing facility and the use of cash
collateral, (ii) the sale of the Debtors' assets, including
negotiating bid procedures and proposed asset purchase agreements,
(iii) the confirmation of a Chapter 11 plan of reorganization or
liquidation, and (iv) other requests for relief, which would impact
unsecured creditors;
d. investigating the liens asserted by the Debtors' lender and
any potential causes of action against the Debtors' lender;
e. advising the committee on the corporate aspects of the
Debtors' reorganization or liquidation and the plan or other means
to effect reorganization or liquidation that may be proposed in
connection therewith, and participating in the formulation of any
such plan or means of implementing reorganization or liquidation,
as necessary;
f. taking all necessary actions to protect and preserve the
estates of the Debtors for the benefit of creditors, including the
investigation of the acts, conduct, assets, liabilities, and
financial condition of the Debtors, the investigation of the prior
operation of the Debtors' businesses and the investigation and
prosecution of estate claims, causes of action, and any other
matters relevant to the Chapter 11 cases;
g. preparing legal papers;
h. advising and representing the committee in hearings and
other judicial proceedings in connection with all necessary
motions, applications, objections and other pleadings, and
otherwise protecting the interests of those represented by the
committee; and
i. other necessary legal services.
The firm will be paid at these rates:
Seth Van Aalten, Member $950 per hour
Sarah A. Carnes, Member $760 per hour
G. David Dean, Member $750 per hour
Bryant P. Churbuck, Associate $460 per hour
Michael E. Fitzpatrick, Associate $400 per hour
Larry S. Morton, Paralegal $355 per hour
Seth Van Aalten, Esq., a member of Cole Schotz, disclosed in a
court filing that his firm is a "disinterested person" as that term
is defined in Section 101(14) of the Bankruptcy Code.
In accordance with Appendix B-Guidelines for reviewing fee
applications filed by attorneys in larger Chapter 11 cases, Cole
Schotz disclosed the following:
Question: Did you agree to any variations from, or alternatives
to, your standard or customary billing arrangements for this
engagement?
Response: No.
Question: Do any of the professionals included in this
engagement vary their rate based on the geographic location of the
bankruptcy case?
Response: No.
Question: If you represented the client in the 12 months
prepetition, disclose your billing rates and material financial
terms for the prepetition engagement, including any adjustments
during the 12 months prepetition. If your billing rates and
material financial terms have changed postpetition, explain the
difference and the reasons for the difference.
Response: Not applicable.
Question: Has your client approved your prospective budget and
staffing plan, and, if so for what budget period?
Response: The firm expects to develop a prospective budget and
staffing plan to reasonably comply with the U.S. Trustee's request
for information and additional disclosures, as to which the firm
reserves all rights.
Cole Schotz can be reached through:
Seth Van Aalten, Esq.
Cole Schotz PC
1325 Avenue of the Americas, 19th Floor
New York, NY 10019
Tel: 212-752-8000
Fax: 212-752-8393
Email: svanaalten@coleschotz.com
About Performance Powersports Group Investor
Performance Powersports Group Investor, LLC --
https://colemanpowersportsusa.com/ -- is a leading producer of
entry-level powersports equipment sold through "Big Box" retailers.
Performance Powersports is in the business of adventure, selling
dirt bikes, go-karts, ATVs, golf carts, and the like to retailers
throughout the US.
PPGI and three affiliates, including Performance Powersports Group
Holdings, Inc., sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10047) on Jan. 16,
2023.
In the petition signed by its chief financial officer, Ken Vanden
Berg, PPGI disclosed $100 million to $500 million in both assets
and liabilities. The petition states that funds will be available
to unsecured creditors.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Klehr Harrison Harvey Branzburg LLP as legal
counsel and Omni Agent Solutions as claims, noticing and
administrative agent. Triple P RTS, LLC and Triple P Securities,
LLC, wholly owned firms by Portage Point Partners, LLC, are the
Debtors' restructuring advisor and investment banker,
respectively.
On Jan. 30, 2023, the U.S. Trustee for Region 3 appointed an
official committee to represent unsecured creditors in the Debtors'
Chapter 11 cases. The committee is represented by Cole Schotz P.C.
Tankas Funding VI, LLC, as DIP lender, is represented by Kirkland &
Ellis LLP.
PERFORMANCE POWERSPORTS: Panel Taps Accordion as Financial Advisor
------------------------------------------------------------------
The official committee of unsecured creditors of Performance
Powersports Group Investor, LLC and its affiliates seek approval
from the U.S. Bankruptcy Court for the District of Delaware to
employ Accordion Partners, LLC as financial advisor.
The firm's services include:
a. assistance in the review of financial and related disclosures
required by the Court, including the Schedules of Assets and
Liabilities, the Statement of Financial Affairs and Monthly
Operating Reports;
b. assistance in the preparation of analyses required to assess
any proposed Debtor-In-Possession ("DIP") financing or use of cash
collateral;
c. assistance with the assessment and monitoring of the Debtors'
short term cash flow projections, liquidity, and operating
results;
d. assistance with the review of any key employee retention or
incentive plans proposed by the Debtors;
e. assistance with the review of the Debtors' cost/benefit
analysis with respect to the assumption or rejection of various
executory contracts and leases;
f. assistance with the review of the Debtors' identification of
potential cost savings, including overhead and operating expense
reductions and efficiency improvements;
g. assistance with the review of the Debtors' potential
disposition or liquidation of either core or non-core assets (if
applicable);
h. assistance in the review and monitoring of the asset sale
process (if applicable), including, but not limited to, an
assessment of the adequacy of the marketing process, completeness
of any buyer lists, review and quantifications of any bids;
i. assistance in the review of the claims reconciliation and
estimation process;
j. assistance in the review of other financial information
prepared by the Debtors, including, but not limited to,
projections, budgets, business plans, cash receipts and
disbursement analyses, asset and liability analyses, and other
relevant information;
k. assistance in the financial and the economic analysis of
proposed transactions for which Court approval is sought;
l. attendance at meetings and assistance in discussions with the
Debtors, potential investors, banks, other secured lenders, the
Committee and any other official committees organized in these
chapter 11 proceedings, the U.S. Trustee, other parties in interest
and professionals hired by the same, as requested;
m. assistance in the review and/or preparation of information
and analysis necessary for the confirmation of a plan and related
disclosure statement in these chapter 11 proceedings;
n. assistance in the evaluation and analysis of avoidance
actions, including, avoidable transactions and preferential
transfers;
o. assistance in the prosecution of Committee
responses/objections to the Debtors' motions, including attendance
at depositions and provision of expert reports/testimony on case
issues as required by the Committee; and
p. such other general business consulting or other assistance as
the Committee or its counsel may deem necessary that are consistent
with the role of a financial advisor and not duplicative of
services provided by other professionals in this proceeding.
The firm will be paid at these rates:
Senior Managing Director/Managing Director $750 to $975 per
hour
Senior Director/Director $575 to $750 per
hour
Vice President $475 to $575 per
hour
Associate/Analyst $300 to $475 per
hour
The firm will also be reimbursed for reasonable out-of-pocket
expenses incurred.
Matthew Pascucci, a partner at Accordion Partners, LLC, disclosed
in a court filing that the firm is a "disinterested person" as the
term is defined in Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Matthew Pascucci
Accordion Partners, LLC
111 Huntington Avenue, Suite 630
Boston, MA 02199
Tel: (617) 378-0007
About Performance Powersports Group Investor
Performance Powersports Group Investor, LLC --
https://colemanpowersportsusa.com/ -- is a leading producer of
entry-level powersports equipment sold through "Big Box" retailers.
Performance Powersports is in the business of adventure, selling
dirt bikes, go-karts, ATVs, golf carts, and the like to retailers
throughout the US.
PPGI and three affiliates, including Performance Powersports Group
Holdings, Inc., sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. D. Del. Lead Case No. 23-10047) on Jan. 16,
2023.
In the petition signed by its chief financial officer, Ken Vanden
Berg, PPGI disclosed $100 million to $500 million in both assets
and liabilities. The petition states that funds will be available
to unsecured creditors.
Judge Laurie Selber Silverstein oversees the cases.
The Debtors tapped Klehr Harrison Harvey Branzburg LLP as legal
counsel and Omni Agent Solutions as claims, noticing and
administrative agent. Triple P RTS, LLC and Triple P Securities,
LLC, wholly owned firms by Portage Point Partners, LLC, are the
Debtors' restructuring advisor and investment banker,
respectively.
Tankas Funding VI, LLC, as DIP lender, is represented by Kirkland &
Ellis LLP.
The U.S. Trustee for Regions 3 and 9 appointed an official
committee to represent unsecured creditors in the Debtors' Chapter
11 cases. Cole Schotz P.C. and Accordion Partners, LLC serve as the
committee's legal counsel and financial advisor, respectively.
PHASE ONE SERVICES: Cash Collateral Access OK'd Thru March 23
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Phase One Services LLC to use cash
collateral on an interim basis in accordance with the budget, with
a 10% variance, through March 23, 2023.
As previously reported by the Troubled Company Reporter, a search
in the Texas Secretary of State shows that allegedly secured
positions are held by (1) First Corp Solutions (believed to be TBS
Factoring); (2) U.S. Small Business Administration; (3) Corporation
Service Company (Vehicle Lien)(Believed to be Dakota Financial),
(4) Navitas Credit (Vehicle Lien), (5) Corporation Service Company
(Unknown Creditor), (6) The LCF Group, (7) Plexe LLC, and (8)
Cashable LLC.
As adequate protection for the use of cash collateral, the parties
are granted replacement liens on all post-petition cash collateral
and post-petition acquired property to the same extent and priority
they possessed as of the Petition Date.
A further hearing on the matter is set for March 23 at 9:30 a.m.
A copy of the order is available at https://bit.ly/3F8Guvt from
PacerMonitor.com.
About Phase One Services LLC
Phase One Services LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. S. D. Tex. Case No. 23-30835) on March
8, 2023. In the petition signed by Ashley Williams, president, the
Debtor disclosed up to $1 million in both assets and liabilities.
Judge Marvin Isgur oversees the case.
Robert C Lane, Esq., at The Lane Law Firm, represents the Debtor as
legal counsel.
POINT BUCKLER: Case Summary & Seven Unsecured Creditors
-------------------------------------------------------
Debtor: Point Buckler Club, LLC
3826 Denverton Road
Suisun City, CA 94585
Business Description: Point Buckler is a Single Asset Real Estate
(as defined in 11 U.S.C. Section 101(51B)).
Chapter 11 Petition Date: March 10, 2023
Court: United States Bankruptcy Court
Eastern District of California
Case No.: 23-20755
Judge: Hon. Fredrick E. Clement
Debtor's Counsel: Marc Voisenat, Esq.
LAW OFFICE OF MARC VOISENAT
2329 A Eagle Avenue
Alameda, CA 94501
Tel: 510-263-8755
Fax: 510-272-9158
Email: voisenat@gmail.com
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $10 million to $50 million
The petition was signed by John Sweeney as managing member.
A full-text copy of the petition containing, among other items, a
list of the Debtor's seven unsecured creditors is available for
free at PacerMonitor.com at:
https://www.pacermonitor.com/view/5LU2D3Q/Point_Buckler_Club_LLC__caebke-23-20755__0001.0.pdf?mcid=tGE4TAMA
PUERTO RICO: PREPA Bankruptcy Fight Could Upend Muni Market
-----------------------------------------------------------
Michelle Kaske of Bloomberg News reports that a fight between
Puerto Rico's bankrupt power utility and its creditors over who can
stake a claim to its revenue is likely to have implications beyond
the commonwealth, affecting billions of debt in the broader $4
trillion municipal-bond market.
Holders of Puerto Rico Electric Power Authority debt say they have
a right to the utility’s future revenue. Prepa, as the agency is
called, believes investors only have a claim to about $16 million
in a sinking fund held by a bond trustee, just a sliver of the $9
billion the utility owes.
About Puerto Rico
Puerto Rico is a self-governing commonwealth in association with
the United States. The chief of state is the President of the
United States of America. The head of government is an elected
Governor. There are two legislative chambers: the House of
Representatives, 51 seats, and the Senate, 27 seats. The
governor-elect is Ricardo Antonio "Ricky" Rossello Nevares, the son
of former governor Pedro Rossello.
In 2016, the U.S. Congress passed PROMESA, which, among other
things, created the Financial Oversight and Management Board and
imposed an automatic stay on creditor lawsuits against the
government, which expired May 1, 2017.
The members of the oversight board are: (i) Andrew G. Biggs, (ii)
Jose B. Carrion III, (iii) Carlos M. Garcia, (iv) Arthur J.
Gonzalez, (v) Jose R. Gonzalez, (vi) Ana. J. Matosantos, and (vii)
David A. Skeel Jr.
On May 3, 2017, the Commonwealth of Puerto Rico filed a petition
for relief under Title III of the Puerto Rico Oversight,
Management, and Economic Stability Act ("PROMESA"). The case is
pending in the United States District Court for the District of
Puerto Rico under case number 17-cv-01578. A copy of Puerto Rico's
PROMESA petition is available at
http://bankrupt.com/misc/17-01578-00001.pdf
On May 5, 2017, the Puerto Rico Sales Tax Financing Corporation
(COFINA) commenced a case under Title III of PROMESA (D.P.R. Case
No. 17-01599). Joint administration has been sought for the Title
III cases.
On May 21, 2017, two more agencies -- Employees Retirement System
of the Government of the Commonwealth of Puerto Rico and Puerto
Rico Highways and Transportation Authority (Case Nos. 17-01685 and
17-01686) -- commenced Title III cases.
U.S. Chief Justice John Roberts named U.S. District Judge Laura
Taylor Swain to preside over the Title III cases.
The Oversight Board has hired as advisors, Proskauer Rose LLP and
O'Neill & Borges LLC as legal counsel, McKinsey & Co. as strategic
consultant, Citigroup Global Markets as municipal investment
banker, and Ernst & Young, as financial advisor.
Martin J. Bienenstock, Esq., Scott K. Rutsky, Esq., and Philip M.
Abelson, Esq., of Proskauer Rose LLP; and Hermann D. Bauer, Esq.,
at O'Neill & Borges LLC are onboard as attorneys.
Prime Clerk LLC is the claims and noticing agent. Prime Clerk
maintains a case web site at:
https://cases.primeclerk.com/puertorico
Jones Day is serving as counsel to certain ERS bondholders.
Paul Weiss is counsel to the Ad Hoc Group of Puerto Rico General
Obligation Bondholders.
PUREGANIC LLC: Wins Interim Cash Collateral Access
--------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
authorized Pureganic LLC and Pureganic Cafe LLC to use cash
collateral on an interim basis in accordance with its agreement
with Webster Bank, N.A.
The Debtors require the use of Webster's cash collateral on a
continued basis to pay ordinary operating expenses relating to its
business.
Webster loaned $250,000 to Pureganic Cafe and Pureganic LLC, and
holds a lien on substantially all the Debtors' assets, including
their cash, accounts, personal property and cash equivalents, which
property constitutes cash collateral within the meaning of Section
363 of the Bankruptcy Code. Pureganic LLC ceased operations on
November 30, 2022. Cafe is the only operating entity as of the
filing of the Chapter 11 cases.
As of the Petition Date, the Debtors acknowledged they owe the
Lender not less than $243,133 plus interest, costs, fees,
attorneys' fees and other charges.
Up until November 30, 2022, Pureganic operated a vegan restaurant
under the name, The Pureganic Cafe, located at 46 Purchase Street,
Rye, NY 10580. After Pureganic's cessation of operations, Cafe
opened its own vegan restaurant, albeit under the same trade name,
at 305 Halstead Avenue, Harrison, NY 10528.
As adequate protection, commencing on February 16, 2023, and
continuing thereafter on or before the 16th day of each and every
consecutive month thereafter, the Debtors will pay directly to the
Lender $2,851 per month.
Webster is also granted a valid, perfected and enforceable
post-petition replacement lien on and security interest in all
assets of the Debtors and the proceeds thereof.
In addition to the Replacement Liens granted to Webster, Pureganic
will further grant replacement liens and security interests in all
assets of Pureganic (but not Cafe) to CAN Capital and any other
party who filed prior to the Petition Date a UCC-1 financing
statement against Pureganic with the Secretary Of the State of New
York, with such Replacement Liens to continue in the same order and
priority that existed as of the Petition Date.
As additional adequate protection for the Debtor's use of cash
collateral, the Lender will be granted a superpriority
administrative claim, to the extent of any post-Petition Date
diminution in value of its Collateral arising from Cafe's use of
the cash collateral. The Superpriority Claim will have priority
over all other administrative expense claims and unsecured claims
against the Debtors' estates, now existing or hereafter arising, of
any kind or nature whatsoever.
The Debtors' ability to use the cash collateral will terminate on
the earlier of (a) 10 days following written notice of any Event of
Default being given to the parties as and the Debtors' failure to
cure the default, or (b) on April 7, 2023, which date the Debtor
may seek to extend for cause shown.
These events constitute an "Event of Default":
a. Reversal, stay, vacatur or modification (without the prior
consent of Lender) of the Stipulated Order;
b. Appointment of a Chapter 11 trustee in, or dismissal or
conversion of, the Debtors' cases to Chapter 7 cases;
c. The filing of any motion by the Debtors seeking to prime or
subordinate any lien or security interest of Lender to encumber any
or all collateral subject to such lien or security interest without
the Lender's consent;
d. Failure to comply with the terms of the Stipulated Order;
e. Failure to comply with the terms, conditions and covenants
contained in the Loan Documents;
f. Failure to maintain insurance as is required by the terms
of the Loan Documents;
g. Failure to make any payment to Lender in accordance with
the terms of the Stipulated Order;
h. Failure to timely file Monthly Operating Reports;
i. Failure of a Final Order Authorizing Use of Cash Collateral
to be entered by February 28, 2023;
j. Failure to file a plan of reorganization or liquidation by
April 7, 2023, provided that the Debtor will have the right to seek
to extend this deadline for cause shown; and
k. Entry of a final order granting a successful Lien Challenge
as against the Lender.
A copy of the Court's order and the Debtor's budget is available at
https://bit.ly/3ZIsNvh from PacerMonitor.com.
The Debtor projects total operating expenses, on a monthly basis,
as follows:
$87,163 for March 2023;
$81,521 for April 2023;
$73,445 for May 2023; and
$87,950 for June 2023.
About Pureganic, LLC
Pureganic LLC and Pureganic Cafe LLC sought protection under
Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead Case
No. 23-22011) on January 7, 2023. In the petition signed by Robert
L. Deak, managing member, the Debtor disclosed up to $50,000 in
assets and up to $1 million in liabilities.
Up until November 30, 2022, Pureganic operated a vegan restaurant
under the name, The Pureganic Cafe, located at 46 Purchase Street,
Rye, NY 10580. After Pureganic's cessation of operations, Cafe
opened its own vegan restaurant, albeit under the same trade name,
at 305 Halstead Avenue, Harrison, NY 10528.
Robert L. Rattet, Esq., at Davidoff Hutcher & Citron LLP,
represents the Debtors as legal counsel.
PWM PROPERTY: Reaches West Madison Mortgage Loan Settlement
-----------------------------------------------------------
PWM Property Management LLC, et al., submitted a Supplement to
Disclosure Statement for the Second Amended Joint Chapter 11 Plan
of Reorganization dated March 7, 2023.
Pursuant to the Second Amended Plan, the West Madison Debtors have
made certain modifications to the Amended Plan to incorporate the
terms of the West Madison Mortgage Loan Settlement and the
resolution of the SLG Limited Objection.
Specifically, if the West Madison Debtors consummate the Second
Amended Plan through the West Madison Mortgage Loan Amendment, PWM
shall assign its equity interests in Eternal Fame, the indirect
parent company of West Madison Owner, to HNAGNA, the direct parent
of PWM, instead of to HNA Capital Leasing. Following the Effective
Date, PWM shall be dissolved in accordance with the terms of the
Delaware Limited Liability Company Act.
Pursuant to the West Madison Mortgage Loan Amendment, the West
Madison Mortgage Lender will consent to HNAGNA, rather than HNA
Capital Leasing, being the direct owner of the equity interests in
Eternal Fame, and the West Madison Mortgage Loan Amendment will be
revised to increase the cash portion of the West Madison Settlement
Payment from $3,500,000 to $4,100,000.
The West Madison Debtors and the West Madison Mortgage Lender have
also agreed that the Relief From Stay Motion would be granted on a
conditional basis and the automatic stay under section 362 of the
Bankruptcy Code would be lifted to allow the West Madison Mortgage
Lender to pursue all available remedies under the West Madison
Mortgage Loan Agreement and applicable law, including the
appointment of a receiver with respect to, or the foreclosure of,
181 West Madison, if:
* the West Madison Mortgage Loan Amendment Effective Date does
not occur by May 31, 2023 (unless such deadline is extended by the
West Madison Debtors with the consent of the West Madison Mortgage
Lender), and the West Madison Debtors do not receive a bid pursuant
to the West Madison Bidding Procedures by July 31, 2023 (unless
such deadline is extended by the West Madison Debtors with the
consent of the West Madison Mortgage Lender) that would either (i)
result in prompt payment in full in cash of the $240,000,000.00
outstanding aggregate principal amount under the West Madison
Mortgage Loan Agreement, plus any accrued and unpaid interest at
the non-default contract rate of 3.90%, plus all Lender Expenses,
including reasonable attorneys' fees and special servicing fees
incurred by the West Madison Mortgage Lender, in each case, through
the West Madison Sale Effective Date, that the West Madison Debtors
are required to pay under and in accordance with the West Madison
Mortgage Loan Documents and the West Madison Cash Collateral Order,
or (ii) continue the West Madison Mortgage Loan and the West
Madison Mortgage Loan Documents in effect and, if 181 West Madison
itself is to be sold to a new owner pursuant to that bid (rather
than that bid being for the direct or indirect equity interests in
the West Madison Owner), provide for the assumption of the West
Madison Mortgage Loan Documents by that new owner, all subject to
(x) compliance with the provisions for a Transfer of the West
Madison Mortgage Loan Agreement (whether that bid is for the direct
or indirect equity interests in the West Madison Owner or for the
direct ownership of 181 West Madison); and (y) to any modifications
of the West Madison Mortgage Loan Documents agreed to by the West
Madison Mortgage Lender (a "West Madison Qualified Bid"), or
* the West Madison Debtors receive a West Madison Qualified
Bid by July 31, 2023 but the sale transaction does not close by
August 31, 2023 (unless such deadline is extended by the West
Madison Debtors with the consent of the West Madison Mortgage
Lender).
The treatment of Allowed Claims in Class 3B and Allowed Interests
in Class 12 has been modified under the Second Amended Plan, and
the West Madison Debtors are conducting a supplemental solicitation
of votes to accept or reject the Second Amended Plan from the
Holders of such Claims and Interests. Additionally, Allowed
Interests in Class 7 have been added under the Second Amended Plan
and will be Reinstated under the Second Amended Plan.
Class 3B consists of West Madison Mortgage Loan Claims. In full and
final satisfaction, compromise, settlement, release, and discharge
of and in exchange for an Allowed West Madison Mortgage Loan Claim:
* If the West Madison Mortgage Loan Amendment Effective Date
shall have occurred by the deadline for the same provided in the
definition thereof, each Holder of an Allowed West Madison Mortgage
Loan Claim against the West Madison Owner shall receive the
treatment set forth in the West Madison Mortgage Loan Amendment,
including payment in Cash of the West Madison Settlement Payment;
provided that, for the avoidance of doubt, 3.90% is the non-default
contract rate as of the West Madison Mortgage Loan Amendment
Effective Date through the maturity of the West Madison mortgage
loan under the West Madison Mortgage Loan Agreement;
* If the West Madison Mortgage Loan Amendment Effective Date
shall not have occurred by the deadline for the same provided in
the definition thereof but the West Madison Sale Effective Date
shall have occurred by the deadline for the same provided in the
definition thereof, either (a) from the Cash proceeds from the sale
of 181 West Madison, the amount that must be paid under a West
Madison Qualified Bid under clause (a) of the definition thereof
(which will be the Allowed amount of the West Madison Mortgage Loan
Claim on the West Madison Sale Effective Date); or (b) the
treatment set forth in the West Madison Mortgage Loan Documents
(including compliance with the provisions for a Transfer of the
West Madison Mortgage Loan Agreement), subject to any modifications
of the West Madison Mortgage Loan Documents agreed to by the West
Madison Mortgage Lender in its sole discretion, all the foregoing
pursuant to and in accordance with the West Madison Bidding
Procedures; or
* If the West Madison Relief From Stay Effective Date shall
have occurred, the automatic stay under section 362 of the
Bankruptcy Code shall be lifted pursuant to the Relief From Stay
Order, and each Holder of an Allowed West Madison Mortgage Loan
Claim against the West Madison Owner shall be entitled to pursue
all of its right and remedies under the West Madison Mortgage Loan
Documents and applicable law, including by seeking the appointment
of a receiver with respect to, or the foreclosure of, 181 West
Madison, pursuant to and in accordance with the Relief From Stay
Order.
and, in each case, other than if the West Madison Mortgage Lender
is paid on the West Madison Sale Effective Date from the proceeds
from the sale of 181 West Madison in accordance with clause (a) of
this subparagraph (ii) of this paragraph c, the West Madison
Mortgage Lender shall retain its Liens under the West Madison
Mortgage Loan Documents and the West Madison Cash Collateral
Order.
Class 7 consists of Equity Interests in West Madison Owner. On the
Effective Date, each Interest in West Madison Owner shall be
Reinstated.
Class 12 consists of PWM Property Management LLC Common Equity
Interests. On the Effective Date, in full and final satisfaction,
compromise, settlement, release, and discharge of and in exchange
for the PWM Property Management LLC Common Equity Interests, the
Holder of such Interests shall receive 100% of the equity interests
in Eternal Fame.
The Second Amended Plan has been modified to clarify that if the
West Madison Relief From Stay Effective Date has occurred, all
Allowed Administrative Claims against the West Madison Debtors
shall be paid in the ordinary course of business from the West
Madison Debtors' operating accounts either by the receiver
contemplated in the Relief From Stay Order, if such payment is
permitted under applicable law, or by the West Madison Debtors at
the direction of the receiver.
The Second Amended Plan also clarifies that if the West Madison
Relief From Stay Effective Date or the West Madison Sale Effective
Date has occurred, the Allowed General Unsecured Claims against the
West Madison Debtors shall be either paid in full in Cash on the
Effective Date or Reinstated.
The Bankruptcy Court has scheduled the confirmation hearing with
respect to the Second Amended Plan (the "West Madison Confirmation
Hearing") for April 4, 2023, at 2:00 p.m. The deadline by which all
objections to the Second Amended Plan must be filed with the
Bankruptcy Court and served so as to be actually received by the
appropriate notice parties is March 22, 2023, at 4:00 p.m.
A full-text copy of the Disclosure Statement Supplement dated March
7, 2023 is available at https://bit.ly/3LkWwGR from
PacerMonitor.com at no charge.
Attorneys for the Debtors:
Thomas E Lauria, Esq.
Fan B. He, Esq.
WHITE & CASE LLP
200 South Biscayne Boulevard, Suite 4900
Miami, FL 33131
Telephone: (305) 371-2700
- and -
Bojan Guzina, Esq.
Jason N. Zakia, Esq.
Gregory F. Pesce, Esq.
WHITE & CASE LLP
111 South Wacker Drive
Chicago, Illinois 60606
Telephone: (312) 881-5400
- and -
Edmon L. Morton, Esq.
Kenneth J. Enos, Esq.
Allison S. Mielke, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1000 North King Street
Wilmington, DE 19801
Telephone: (302) 571-6600
About PWM Property Management
PWM Property Management LLC, et al., are primarily engaged in
renting and leasing real estate properties. They own two premium
office buildings, namely 245 Park Avenue in New York City, a
prominent commercial real estate assets in Manhattan's prestigious
Park Avenue office corridor, and 181 West Madison Street in
Chicago, Illinois.
On Oct. 31, 2021, PWM Property Management LLC and its affiliates
sought Chapter 11 protection (Bankr. D. Del. Lead Case No.
21-11445). PWM estimated assets and liabilities of $1 billion to
$10 billion as of the bankruptcy filing.
The cases are pending before the Honorable Judge Mary F. Walrath
and are being jointly administered for procedural purposes under
Case No. 21-11445.
The Debtors tapped White & Case LLP as restructuring counsel; Young
Conaway Stargatt & Taylor, LLP as local counsel; and M3 Advisory
Partners, LP, as restructuring advisor. Omni Agent Solutions is
the claims agent.
R.R. DONNELLEY: Moody's Rates New $1.25BB Secured Term Loan 'B1'
----------------------------------------------------------------
Moody's Investors Service assigned a B1 rating to R.R. Donnelley &
Sons Company's ("RRD") $1.25 billion senior secured term loan B due
in 2028. The company's B3 corporate family rating, B3-PD
probability of default rating, B1 senior secured notes rating, Caa1
senior unsecured notes ratings, and stable outlook remain
unchanged.
Net proceeds from the new term loan will be used to refinance RRD's
existing debt, including the outstanding balance of the existing
$750 million term loan, $75 million senior unsecured notes due
2023, and $50 million senior unsecured notes due 2024. RRD also
plans to use about $300 million of the proceeds to redeem about
$180 million of the 10% Holdco PIK notes due 2031 at RRD Parent,
Inc. plus a make-whole premium. The company will also exchange and
cancel $80 million of 6.125% secured notes due 2026 and $35 million
of unsecured notes due 2027-2031 held by Chatham funds for $119
million additional Holdco PIK notes. The exchange and redemption
will reduce the Holdco PIK notes to about $1.0 billion from $1.07
billion at year end 2022.
The transaction will increase RRD's consolidated debt by about $200
million, increasing the Moody's adjusted debt/EBITDA leverage,
including the $1 billion Holdco Payment-In-Kind (PIK) notes, to
6.1x from 5.7x at year end 2022. However, it will improve the
company's debt maturity profile such that there will not be any
scheduled maturity until 2026 and the amount of debt maturing in
2026 will now reduce from over $900 million to about $100 million.
Assignments:
Issuer: R.R. Donnelley & Sons Company
Backed Senior Secured Bank Credit Facility, Assigned B1 (LGD3)
LGD Adjustments:
Issuer: R.R. Donnelley & Sons Company
Senior Secured Bank Credit Facility, LGD adjusted to (LGD3) from
(LGD2)
Senior Secured Regular Bond/Debenture, LGD adjusted to (LGD3) from
(LGD2)
RATINGS RATIONALE
R.R. Donnelley & Sons Company's B3 stable CFR is constrained by:
(1) high leverage of about 6.1x at 2022 (Moody's adjusted
Debt/EBITDA including the $1 billion Holdco PIK notes and pro forma
for the refinancing transaction); (2) high exposure to the secular
decline in commercial printing due to digital substitution
pressuring its revenue and profitability; (3) execution risks as it
transforms itself from a commercial printer focused on manuals,
publications, brochures, and business cards to innovative
businesses such as packaging, labels, direct marketing and digital
print; (4) limited operating track record under the new private
ownership by Chatham Asset Management and the potential for more
aggressive financial policies such as shareholder friendly
transactions. However, the company benefits from: (1) good position
in the commercial printing market, large scale and client
diversity; (2) continued cost reduction, which partially mitigates
the pressure on EBITDA; and (3) good liquidity, including its
ability to generate positive free cash flow despite ongoing demand
pressures.
RRD's ESG credit impact score is highly negative (CIS-4) reflecting
its highly negative social and governance risks. Social risks weigh
on the credit rating because print media continues to be disrupted
by digital services. Governance risks also weigh on the credit
rating due to potential aggressive financial policies and limited
record under new private ownership by Chatham Asset Management.
RRD has good liquidity pro forma for the announced refinancing,
with sources totaling about $700 million versus about $10 million
mandatory debt amortization in 2023. Liquidity is supported by $300
million of cash at year end 2022, Moody's expected free cash flow
of about $140 million in 2023 and about $258 million of
availability under its $650 million ABL facility due April 2026
(subject to a borrowing base and after $67 million of letters of
credit). RRD's facility is subject to a springing fixed interest
charge coverage covenant and cushion is likely to exceed 25% if it
becomes applicable.
The stable outlook reflects Moody's expectation that RRD will
maintain good liquidity as its leverage increases to around 6.5x in
the next 12-18 months as EBITDA improvement lags the rising Holdco
PIK notes balance from accrual of 10% interest. The outlook also
reflects Moody's expectation that the company will use asset sale
proceeds to repay some of its debt and will manage its cost
structure to offset the secular decline in its commercial printing
segment.
RRD has four classes of debt: (1) unrated $650 million ABL facility
due April 2026; (2) B1-rated $450 million ($102 million pro forma
for the transaction) secured notes due November 2026 and $750
million (face value) secured term loan B due November 2026, which
the company plans to replace with the new B1 rated $1.25 billion
secured term loan B due March 2028; (3) Caa1-rated senior unsecured
notes and debentures due 2023 through 2031; and (4) unrated $1
billion Holdco PIK subordinated notes due in October 2031. RRD's
ABL facility benefits from a first priority lien on accounts
receivable, inventory, and equipment and a second priority lien on
principal properties. The term loan and secured notes benefit from
first priority liens on principal properties and second priority
liens on accounts receivable, inventory, and equipment. This drives
their B1 rating, which is two notches above the CFR. The Caa1
rating on the unsecured notes and debentures is one notch below the
CFR to reflect their junior ranking behind the ABL facility, term
loan and secured notes but ahead of the Holdco PIK notes and its
capitalized accrued interest.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATING
Factors that could lead to a downgrade
-- If the company is not able to successfully execute its
transformation into innovative businesses to minimize pressure from
commercial printing. Quantitatively this would reflect
Moody's expectations of ongoing revenue and EBITDA declines
-- Sustaining leverage above 7x (5.7x at year end 2022)
-- Weak liquidity, possibly from consistent negative free cash
flow
Factors that could lead to an upgrade
-- Generating sustainable positive organic growth in revenue and
EBITDA
-- Sustaining leverage below 5x (5.7x at year end 2022)
The principal methodology used in this rating was Media published
in June 2021.
Headquartered in Chicago, Illinois, R.R. Donnelley & Sons Company
is the leader in the North American commercial printing industry.
R.R. DONNELLEY: S&P Rates New $1.25BB Term Loan Rated 'B'
---------------------------------------------------------
S&P Global Ratings assigned its 'B' issue-level rating and '3'
recovery rating to R.R. Donnelley & Sons Co.'s (RRD) new $1.25
billion term loan B due 2028. The '3' recovery rating reflects its
expectation for meaningful (50%-70%; rounded estimate: 55%)
recovery in the event of a payment default. S&P's 'B' issuer credit
rating on the company is unchanged.
S&P expects RRD will use the proceeds from the term loan to fully
repay its existing $750 million term loan B facility due 2026 ($743
million outstanding) and redeem $125 million of its senior
unsecured notes due between 2023 and 2024 and about $306 million of
its existing payment-in-kind (PIK) holdco notes through a dividend
payment to RRD Parent Inc. The company will use the remainder to
pay fees and expenses and for general corporate purposes.
RRD reported a strong operating performance in 2022, including a
rise in its volume and price increases supported by its effective
cost rationalization, which led to an improvement in its EBITDA
margin. S&P said, "The company's S&P Global Ratings-adjusted
leverage was 6.4x as of Dec. 31, 2022, which is at the stronger end
of our projections. Pro forma for this transaction, we expect RRD's
S&P Global Ratings-adjusted leverage to be between 5.8x – 6.2x in
2023 because it will offset the increase in its total S&P Global
Rating-adjusted debt with continued EBITDA growth. We forecast free
operating cash flow to debt of about 5% - 6% over the next 12
months, which is within our threshold for the current rating."
ISSUE RATINGS--RECOVERY ANALYSIS
Key analytical factors
-- S&P's simulated default scenario contemplates a default
occurring in 2026 stemming from an economic downturn and ongoing
pricing pressure due to overcapacity in the commercial printing
industry.
-- RRD is the borrower under the senior secured asset-based
lending (ABL) facility due 2026 and the $1.25 billion senior
secured term loan due 2028. It is also the issuer of the senior
notes with maturities from 2026-2031.
-- The company's domestic wholly owned subsidiaries (other than
its immaterial subsidiaries) guarantee the ABL, the $1.25 billion
term loan, and the $102 million of outstanding 6.125% senior
secured notes due 2026 (after the proposed exchange of $80
million).
-- The term loan and senior secured notes have a second-lien on
the ABL collateral. The obligations outstanding under the senior
secured term loan and senior notes are secured by the guarantors'
assets (subject to exclusions) and a 65% pledge of the capital
stock of its first-tier foreign subsidiaries.
-- The senior unsecured notes do not benefit from subsidiary
guarantees and limit liens on principal property (generally defined
as U.S. manufacturing facilities with a gross book value over 1% of
consolidated net tangible assets).
-- The $1,003 million unsecured holdco PIK notes (net of proposed
redemption and exchange) are structurally subordinated to all of
the company's existing debt.
-- In S&P's analysis, it assumes entities that guarantee the
senior secured credit facilities represent about 60% of the
company's net emergence value while its foreign non-guarantor
entities and unpledged assets represent about 40%.
Simulated default assumptions
-- Year of default: 2026
-- EBITDA at emergence: About $260 million
-- Implied enterprise value (EV) multiple: 5x
-- ABL credit facility is about 60% drawn at default
Simplified waterfall
-- Net enterprise value (after bankruptcy administrative costs):
About $1.23 billion
-- Value available to ABL facility: $1.06 billion
-- Secured ABL facility claims: About $398 million
--Recovery expectations: 90%-100% (rounded estimate: 95%)
-- Value available to term loan claims: $662 million
-- Senior secured debt claims: About $1.4 billion
--Recovery expectations: 50%-70% (rounded estimate: 55%)
-- Value available to senior unsecured claims: $173 million
-- Senior notes and pari passu deficiency claims: About $856
million
--Recovery expectations: 10%-30% (rounded estimate: 20%)
-- Value available to subordinated debt: $0 million
-- Total subordinated claims: $1.41 billion
--Recovery expectations: 0%-10% (rounded estimate: 0%)
RACKSPACE TECHNOLOGY: Lenders Hire Legal Counsel as Preventive Move
-------------------------------------------------------------------
Reshmi Basu and Rachel Butt of Bloomberg News report that lenders
of Rackspace Technology have retained Gibson Dunn & Crutcher LLP as
legal counsel in an effort to maintain a united front in the event
the company pursues a debt restructuring, according to people with
knowledge of the situation.
In a preventive move, the first-lien lender group has signed a
cooperation agreement that binds them to act together in potential
negotiations, the people said, who asked not to be identified
because the matter is private.
"Rackspace Technology is in full compliance with all our debt
facilities, continues to make all required interest and principal
payments on schedule," the Company said.
About Rackspace Technology
Based in San Antonio, Texas, Rackspace Technology Global Inc.
provides information technology services. Rackspace combines its
broad IT industry expertise with leading technologies across
applications, data and security to deliver end-to-end multicloud
solutions. The company's 100,000-plus customer base is accessed
through a network presence in more than 60 markets around the
world.
* * *
In January 2023, Moody's Investors Service downgraded Rackspace
Technology Global, Inc.'s corporate family rating to Caa1 from B2
and its probability of default rating to Caa1-PD from B2-PD. The
ratings on Rackspace's senior secured debt, comprised of a $375
million senior secured revolver (undrawn) due 2025, $2.3 billion
senior secured term loan B due 2028 and $550 million senior secured
notes due 2028 were downgraded to B3 from B1. Ratings on the
company's $550 million senior unsecured notes due 2028 were
downgraded to Caa3 from Caa1. The rating outlook was changed to
negative from stable.
According to Moody's, "The downgrades and change in outlook to
negative reflect, in part, Rackspace's governance weaknesses,
including aggressive financial strategy and risk management
practices as evidenced by rising debt leverage (Moody's adjusted)
in concert with weakening profitability tied to its former public
cloud growth strategy. The company now faces very high execution
risks associated with its pivot to a new and still-to-be-proven
business model from a previous multi-year business strategy as it
confronts declining revenue trends, persistent margin pressures and
weakening free cash flow. With the company itself having limited
visibility into its turnaround progress over the next 12-18 months,
Moody's believes the possibility of distressed debt exchanges are a
risk, especially given Rackspace's significant private equity
ownership and current debt trading levels.
RACOLE EXTENSIONS: Hires Frost & Associates LLC as Counsel
----------------------------------------------------------
Racole Extensions, LC seeks approval from the U.S. Bankruptcy Court
for the District of Maryland to employ Frost & Associates, LLC as
its bankruptcy counsel.
The Debtor requires legal counsel to:
a. prepare bankruptcy schedules and financial statements;
b. provide the Debtor with legal advice with respect to its
powers and duties pursuant to the Bankruptcy Code;
c. prepare legal papers;
d. assist in the analyses and provide representations with
respect to lawsuits, which the Debtor is or may be party to;
e. negotiate, prepare, file and seek approval of a plan of
reorganization;
f. represent the Debtor at the meetings of creditors, hearings
and other proceedings; and
g. perform other necessary legal services.
The firm will be paid at these rates:
Daniel A. Staeven $545 per hour
Rebecca Sheppard $525 per hour
Glen Frost $645 per hour
Attorneys $525 to $645 per hour
Paralegals $100 to $265 per hour
The Debtor paid the firm an advance retainer of $7,238.
As disclosed in court filings, Frost & Associates is a
"disinterested person" within the meaning of Section 101(14) of the
Bankruptcy Code.
The firm can be reached through:
Daniel Alan Staeven, Esq.
Frost & Associates, LLC
839 Bestgate Rd. Ste. 400
Annapolis, MD 21401
Phone: 410-497-5947
Email: daniel.staeven@frosttaxlaw.com
About Racole Extensions
Racole Extensions, LC filed a Chapter 11 bankruptcy petition
(Bankr. D. Md. Case No. 23-11165) on Feb. 22, 2023, with $100,001
to $500,000 in both assets and liabilities. Judge David E. Rice
oversees the case.
Daniel Alan Staeven, Esq., at Frost & Associates, LLC is the
Debtor's legal counsel.
RENAISSANCE HOLDING: Moody's Rates Extended $145MM Revolver 'B2'
----------------------------------------------------------------
Moody's Investors Service assigned a B2 rating to Renaissance
Holding Corp.'s ("Renaissance Learning") proposed newly extended
5-year $145 million revolver due 2028 and a new 7-year $1,575
million first lien term loan due 2030. The proposed new first lien
term loan will be used to repay existing first lien term loans as
well as pay related expenses. The company's existing ratings
including the B3 Corporate Family Rating and stable outlook are not
affected.
In early February, the company announced an all equity funded
acquisition of UK based GL Education, a K-12 assessment company.
Pro forma for the acquisition and the refinancing transaction,
debt-to-EBITDA leverage as of year-end 2022 is in the low 9x (after
expensing software development cost). The equity funded
acquisition, together with the proposed refinancing transaction are
viewed as credit positive because the improvement in leverage and
extension of the maturity profile for its first lien credit
facilities provide more flexibility to execute the operating plan.
Nevertheless, there is no impact to the company's B3 CFR, B3-PD
Probability of Default Rating (PDR), B2 rating for the existing
first lien credit facilities (revolver and term loan), and Caa2
rating on the second lien term loan. The company's $445 million
second lien term loan maturing in 2026 is not part of this
refinancing transaction. Moody's expects to withdraw the B2 ratings
on the various tranches of the existing first lien revolver and
term loan if they are no longer outstanding following the
refinancing.
The existing ratings are not affected despite improvement in credit
metrics because debt-to-EBITDA leverage (pro forma for the
acquisition) in the low 9x range remains very high and above the 7x
upgrade factor to be considered for a B2 CFR. With expected
earnings growth, Moody's forecasts debt-to-EBITDA leverage to
decline to the low 8x level over the next 12 to 18 months. Over the
longer term, however, Renaissance Learning's leverage is expected
to remain high given its private equity ownership and a very
aggressive growth through acquisition strategy. Prior to this
equity funded acquisition, Renaissance Learning completed two
back-to-back large debt funded acquisitions in 2021 and 2022.
Moody's expects the company will remain very acquisitive with any
de-leveraging achieved with earnings growth offset by re-leveraging
transactions. Additionally, the significant increase in interest
expense as a result of a much higher interest rate environment is
going to put a drag on free cash flow generation over the next
year. Moody's projects free cash flow generation of about $40
million over the next year (about 2% of debt) factoring in interest
rate hedges on about $1.2 billion of debt.
The following ratings/assessments are affected by the action:
New Assignments:
Issuer: Renaissance Holding Corp.
Senior Secured first lien credit facilities (revolver and term
loan), Assigned B2 (LGD3)
RATINGS RATIONALE
Renaissance Learning's B3 CFR broadly reflects its persistently
high leverage as the result of an aggressive financial policy. Pro
forma for the GL Education acquisition as well as the refinancing
transaction, Moody's adjusted debt-to-EBITDA is in the low 9x range
(after expensing software development cost) as of year-end 2022.
Moody's projects debt-to-EBITDA leverage will decline to the low 8x
level over the next 12 to 18 months through earnings growth. The
rating is also constrained by the competitive nature of the
industry with other participants in the relatively fragmented K-12
digital learning and assessment market. High investment needs will
consume cash as the company continues to enhance content and
product features to maintain competitiveness. Rising interest costs
will also be a drag on free cash flow. However, the B3 CFR is
supported by Renaissance Learning's established brand name with a
portfolio of well-recognized product offerings in the digital
education market, and solid growth prospects driven by favorable
industry fundamentals such as the transition of educational
services to more digital-oriented delivery. The rating also
benefits from the company's relatively stable cash generating
capability due to a high level of recurring revenue and good
margins.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
The stable outlook reflects Moody's view that debt-to-EBITDA
leverage will decline to the low 8x range over the next 12 to 18
months through earnings growth. The stable outlook also reflects
Moody's expectation that the company will maintain good liquidity
including modest free cash flow generation over the next year.
The ratings could be upgraded if the company delivers sustained
organic revenue and earnings growth, with Moody's adjusted
debt-to-EBITDA maintained below 7x and free cash flow as a
percentage of debt sustained above 5%.
The ratings could be downgraded if operating performance
deteriorates that results in worsened credit metrics with weak or
negative free cash flow generation.
The principal methodology used in these ratings was Business and
Consumer Services published in November 2021.
Renaissance Learning is a provider of subscription-based
educational practice and assessment software and school improvement
programs for kindergarten through senior high (K-12) schools. The
company was acquired by private equity firm Francisco Partners in
2018 with Blackstone acquiring an ownership interest in 2022. Pro
forma for the GL Education acquisition, fiscal year 2022 revenue
was approximately $655 million.
RENNASENTIENT INC: Court OKs Interim Cash Collateral Access
-----------------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized Rennasentient, Inc. to use
cash collateral on an interim basis in accordance with the budget,
with a 10% variance.
Wells Fargo Bank and the U.S. Small Business Administration assert
an interest in the Debtor's cash collateral. Wells Fargo is owed
$824,000 and the SBA is owed $147,750.
As adequate protection, the Secured Creditors are granted a lien in
after-acquired revenue to the same extent and priority as they had
prior to the filing of the case.
A further hearing on the matter is set for March 22, 2023 at 10
a.m.
A copy of the order is available at https://bit.ly/41SxRPy from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3L4j3Y4 from
PacerMonitor.com.
The Debtor projects $110,000 in revenue and $97,600 in total
expenses for the period from February 21 to March 23, 2023.
About Rennasentient, Inc.
Rennasentient, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. E.D.N.C. Case No. 23-00485) on February 21,
2023. In the petition signed by Eric Webb, president, the Debtor
disclosed up to $1 million in assets and up to $10 million in
liabilities.
Philip M. Sasser, Esq., at Sasser Law Firm, represents the Debtor
as legal counsel.
REPUBLIC METALS: Levine Has No Ownership in Precious Metals Deposit
-------------------------------------------------------------------
In the appealed case In re Miami Metals I, Inc., Case No. 22-cv-606
(JGK), (S.D.N.Y.), District Judge John G. Koeltl for the Southern
District of New York affirms the order and judgment of the
bankruptcy court.
The appellants in this bankruptcy appeal, Mitchell Levine and Erie
Management Partners, LLC, deposited precious metals with Republic
Metals Corporation and its affiliates. Initially, no written
agreement governed the ownership of the Levine Parties' deposits
with RMC, although Levine and Richard Rubin (RMC's first CEO),
agreed that Levine's "metals would always be there when Levine
needed them." Then, from 2011 through 2014, Levine signed three
versions of RMC's Standard Terms and General Operating Conditions,
twice on behalf of Erie Management and once on his own behalf.
After the Debtors filed for Chapter 11 bankruptcy, the Levine
Parties asserted ownership interests in their deposits. The
Appellees, Senior Lenders of the Debtors, sought to include the
Levine Parties' deposits as property of the bankruptcy estate. The
Senior Lenders argued that the Bucket One Decision was dispositive
of the Levine Parties' claims because of the Levine Parties'
agreement to the Standard Terms.
The bankruptcy court agreed, noting that under each of the three
versions of the Standard Terms that Levine signed, the Standard
Terms governed the entire relationship of the parties and overrode
any contrary arrangements. As for the Levine Parties' argument that
they had a unique relationship with the Debtors before Levine
signed the Standard Terms, the bankruptcy court found this argument
foreclosed by the "broad scope of the Standard Terms." While Levine
"may sincerely have had a different understanding of the parties'
relationship," the bankruptcy court reasoned, "he is charged with
knowledge of the terms of the contract that he signed on three
different occasions." As such, the bankruptcy court held that the
disputed assets were the property of the bankruptcy estate. The
bankruptcy court entered judgment for the Senior Lenders, and the
Levine Parties filed this appeal.
The Levine Parties raise two arguments on appeal to support their
contention that they own their deposits with RMC. First, they argue
that the bankruptcy court erred in applying the parol evidence rule
to bar evidence that the Levine Parties began leasing to RMC their
gold and silver deposits in 2015 and their platinum deposits in
2018. Second, the Levine Parties argue that the bankruptcy court
erred in applying the Standard Terms to deposits delivered before
the execution of the Standard Terms.
The Court finds that the bankruptcy court's decision withstands
both challenges. The plain language of the Standard Terms disposes
of the Levine Parties' second argument. The Court notes that each
of the three versions of the Standard Terms that Levine signed
between 2011 and 2014 contained an identical introductory clause
stating that the Standard Terms govern "any and all business
dealings between RMC and" the Levine Parties and "shall override
any and all provisions, terms, and stipulations in Customer
purchase orders, sales orders and/or any other Customer documents."
The bankruptcy court therefore concluded properly that the Standard
Terms applied to the Levine Parties' pre-2015 deposits. Because the
Standard Terms applied to these deposits, the bankruptcy court also
correctly determined, for the reasons explained in the Bucket One
Decision -- the merits of which the Levine Parties do not challenge
-- that deposits subject to the Standard Terms were sold, rather
than bailed, with ownership passing from the Levine Parties to RMC.
Because the Levine Parties have no continuing ownership interest in
the deposits at issue, the Court concludes that the bankruptcy
court correctly granted summary judgment for the Senior Lenders and
against the Levine Parties.
A full-text copy of the Memorandum Opinion & Order dated Feb. 27,
2023 is available at https://tinyurl.com/2jkxccw6 from Leagle.com.
About Miami Metals I
Founded in 1980, Republic Metals Refining Corporation and its
affiliates are refiner of precious metals with a primary focus on
gold and silver. They have the capacity to produce approximately
80 million ounces of silver and 350 tons of gold, along with over
55 million pieces of minted products per annum. Suppliers ship
unrefined gold and silver to Republic for refining from all over
the United States and the Western Hemisphere. They provide their
products and services to a diverse base of global mining
corporations, financial institutions and jewelry manufacturers.
Republic Metals Refining, Republic Metals Corporation and Republic
Carbon Company, LLC, sought protection under Chapter 11 of the
Bankruptcy Code (Bankr. S.D.N.Y. Case Nos. 18-13359 to 18-13361) on
Nov. 2, 2018. Republic Metals Refining Corporation is now known as
Miami Metals I, Inc.; Republic Metals Corporation as Miami Metals
II, Inc.; and Republic Carbon Company as Miami Metals III LLC.
In the petition signed by CRO Scott Avila, Republic Metals Refining
was estimated to have assets of $1 million to $10 million and
liabilities of $100 million to $500 million.
The Debtors tapped Akerman LLP as their legal counsel; Paladin
Management Group, LLC, as financial advisor; and Donlin, Recano &
Company, Inc., as claims and noticing agent.
ROCKLEY PHOTONICS: Fine-Tunes Plan Documents
--------------------------------------------
Rockley Photonics Holdings Limited, submitted a Second Amended
Prepackaged Plan of Reorganization dated March 7, 2023.
The Debtor seeks to consummate the Restructuring Transactions on
the Effective Date of the Plan. The Debtor is the proponent of the
Plan within the meaning of section 1129 of the Bankruptcy Code.
This Plan is supported by the Prepetition Noteholders who
collectively hold Super Senior Notes in aggregate principal amount
of approximately $90.65 million and Existing Notes in aggregate
principal amount of approximately $29.31 million.
The Amended Plan does not alter the proposed treatment for
unsecured creditors and the equity holder:
* each General Unsecured Claim shall receive, at the election
of the Debtor (with the consent of the Prepetition Noteholders):
(i) payment in full in Cash of the amount of its Allowed General
Unsecured Claim plus postpetition interest to the extent necessary
under applicable law to render such Unsecured Claim Unimpaired on
the later of (A) the Effective Date and (B) the date such Allowed
General Unsecured Claim becomes payable in the ordinary course of
business in accordance with the terms and conditions of the
particular transaction giving rise to such Allowed General
Unsecured Claim; (ii) Reinstatement of such Allowed General
Unsecured Claim; or (iii) such other treatment rendering its
Allowed General Unsecured Claim Unimpaired in accordance with
section 1124 of the Bankruptcy Code.
* On the Effective Date, all Allowed Interests in the Debtor
shall be cancelled, extinguished, and released, as of the Effective
Date.
The Debtor shall fund distributions under the Plan, as applicable,
with (1) the issuance of the Reorganized Rockley Equity; (2)
proceeds from issuance of the Exit Financing; (3) proceeds from
issuance of the Reorganized Rockley Equity pursuant to the
Prepetition Noteholder Private Placement; and (4) Cash on hand.
Each distribution and issuance referred to in Article VI of the
Plan shall be governed by the terms and conditions set forth in the
Plan applicable to such distribution or issuance and by the terms
and conditions of the instruments or other documents evidencing or
relating to such distribution or issuance, which terms and
conditions shall bind each Entity receiving such distribution or
issuance.
"Related Party" means, with respect to any Entity, and in each case
solely in its capacity as such with respect to the Entity to which
it is related, each of such Entity's current and former., direct or
indirect, directors, members, managers, officers, control persons,
equity holders, partners, participants, managed accounts or funds,
fund advisors or managers, investment managers, management
companies, affiliates, predecessors, successors, assigns,
subsidiaries, principals, employees, agents, trustees, financial
advisors, attorneys, accountants, investment bankers, consultants,
representatives, and other professionals and advisors; provided
that with respect to the Debtor, its current and former equity
holders shall not be included as Related Parties of the Debtor as
used herein.
"Released Parties" means, collectively, and in each case in its
capacity as such: (a) the Debtor; (b) the Reorganized Debtor; (c)
each of the Prepetition Noteholders; (d) the Prepetition Trustee;
(e) each of the Exit Financing Parties; (f) the Exit Financing
Representative; and (g) each Related Party of each Entity in clause
(c) through this clause.
Counsel for the Debtor:
PILLSBURY WINTHROP SHAW PITTMAN LLP
John A. Pintarelli, Esq.
Dania Slim, Esq.
Kwame O. Akuffo, Esq.
Alana A. Lyman, Esq.
31 West 52nd Street
New York, NY 10019-6131
Phone: (212) 858-1000
Fax: (212) 858-1500
Email: john.pintarelli@pillsburylaw.com
dania.slim@pillsburylaw.com
kwame.akuffo@pillsburylaw.com
alana.lyman@pillsburylaw.com
PILLSBURY WINTHROP SHAW PITTMAN LLP
Joshua D. Morse, Esq.
Jonathan Doolittle, Esq.
Four Embarcadero Center, 22nd Floor
San Francisco, CA 94111-5998
Phone: (415) 983-1000
Fax: (415) 983-1200
Email: joshua.morse@pillsburylaw.com
jonathan.doolittle@pillsburylaw.com
About Rockley Photonics
Rockley Photonics Holdings Limited specializes in the research and
development of integrated silicon photonics chipsets. The Company
has developed a ground-breaking versatile, application specific,
third generation silicon photonics platform specifically designed
for the optical integration challenges facing numerous mega-trend
markets. The Company has partnered with multiple tier-1 customers
across markets to deliver complex optical systems required for
transformational sensors, communications, and medical product
realization.
Rockley Photonics filed a Chapter 11 bankruptcy petition (Bankr.
S.D.N.Y Case No. 23 10081) on Jan. 23, 2023. In the petition signed
by Richard A. Meier, chief executive officer, the Debtor disclosed
$90,880,000 in assets and $120,733,000 in liabilities.
The Debtor tapped PILLSBURY WINTHROP SHAW PITTMAN LLP as bankruptcy
counsel; JEFFERIES LLC as investment banker; and ALVAREZ & MARSAL,
LLC as financial advisor. WALKERS LAW FIRM is the Cayman Islands
counsel. KROLL, LLC, is the claims agent.
RODA LLC: Seeks to Hire Thomas L Strong CPA as Accountant
---------------------------------------------------------
Roda, LLC seeks approval from the U.S. Bankruptcy Court for the
District of Oregon to employ Thomas L Strong CPA PC.
The Debtor requires an accountant to prepare federal and state
income tax returns and other submissions required by the taxing
authorities and provide other general accounting services.
The firm will be paid at these rates:
Thomas L. Strong, CPA $250 per hour
Scott A. Hall, CPA $180 per hour
Cynthia Awa, Admin. Assistant $90 per hour
The fees and expenses of the firm are capped at $7,500.
As disclosed in court filings, Thomas L Strong CPA is a
"disinterested person" as the term is defined in Section 101(14) of
the Bankruptcy Code.
The firm can be reached at:
Thomas L. Strong, CPA
Thomas L Strong CPA PC
dba Young & Company CPAS
11200 SW Allen Blvd., Ste. 100
Beaverton, OR 97006
Tel: (503) 646-4800
Fax: (503) 526-9329
About Roda LLC
Roda, LLC, a company in Washington County, Ore., sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. D. Ore. Case
No. 23-30250) on Feb. 6, 2023. In the petition signed by its
managing member, Roy MacMillan, the Debtor disclosed up to $10
million in both assets and liabilities.
Judge Teresa H. Pearson oversees the case.
Douglas R. Ricks, Esq., at Vander Bos and Chapman, LLP,
Intellequity Legal Services, LLC and Thomas L Strong CPA PC serve
as the Debtor's bankruptcy counsel, special counsel and accountant,
respectively.
RV DOCTOR: Case Summary & 12 Unsecured Creditors
------------------------------------------------
Debtor: RV Doctor, Inc.
16140 Lee Road, Suite 140
Fort Myers, FL 33912
Business Description: RV Doctor, Inc.
Chapter 11 Petition Date: March 8, 2023
Court: United States Bankruptcy Court
Middle District of Florida
Case No.: 23-00256
Judge: Hon. Caryl E. Delano
Debtor's Counsel: Richard Johnston, Jr., Esq.
JOHNSTON LAW, PLLC
7370 College Parkway, Suite 210
Fort Myers, FL 33907
Tel: 239-600-6200
Fax: 877-727-4513
Email: richard@richardjohnstonlaw.com
Estimated Assets: $0 to $50,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Janice M. Akard as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 12 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/YTJI65A/RV_Doctor_Inc__flmbke-23-00256__0001.0.pdf?mcid=tGE4TAMA
RYZE RENEWABLES: Case Summary & 11 Unsecured Creditors
------------------------------------------------------
Two affiliates that concurrently filed voluntary petitions for
relief under Chapter 11 of the Bankruptcy Code:
Debtor Case No.
------ --------
Ryze Renewables II, LLC 23-10289
5233 E. El Campo Grande Ave, Las Vegas,
NV 89115
Ryze Renewables Las Vegas, LLC 23-10290
5233 E. El Campo Grande Ave, Las Vegas,
NV 89115
Business Description: The Debtors were formed in 2017 in
connection with the planned repurposing of
an existing biofuels refinery located in Las
Vegas, Nevada that, once complete, will have
the capacity to produce 7,500 barrels of
renewable diesel per day by converting non-
edible renewable and waste feedstocks to
premium low-carbon fuels. Such biofuels are
one of the most sought-after methods to
reduce carbon emissions.
Chapter 11 Petition Date: March 9, 2023
Court: United States Bankruptcy Court
District of Delaware
Judge: Hon. Mary F. Walrath
Debtors' Counsel: Pauline K. Morgan, Esq.
YOUNG CONAWAY STARGATT & TAYLOR, LLP
1000 N King St, Wilmington, DE 19801
Tel: 302-571-6600
Email: pmorgan@ycst.com
Debtors'
Restructuring
Counsel: PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
Debtors'
Special
Construction
Counsel: STINSON LLP
Debtors'
CRO Provider: ALVAREZ & MARSAL NORTH AMERICA, LLC
Debtors'
Investment
Banker: GUGGENHEIM PARTNERS, LLC
Debtors'
Notice,
Claims &
Balloting
Agent and
Administrative
Advisor: STRETTO
Each Debtor's
Estimated Assets: $100 million to $500 million
Each Debtor's
Estimated Liabilities: $100 million to $500 million
The petitions were signed by Klaus Gerber as chief restructuring
officer.
Full-text copies of the petitions are available for free at
PacerMonitor.com at:
https://www.pacermonitor.com/view/F66HIJQ/Ryze_Renewables_II_LLC__debke-23-10289__0001.0.pdf?mcid=tGE4TAMA
https://www.pacermonitor.com/view/P3O2QIY/Ryze_Renewables_Las_Vegas_LLC__debke-23-10290__0001.0.pdf?mcid=tGE4TAMA
List of Debtors' 11 Unsecured Creditors:
Entity Nature of Claim Claim Amount
1. Georgia's Own Credit Union Unsecured Fees $3,120,697
PO Box 105205 and Expenses
Atlanta, GA 30348
Attn: Marla Anderson Smith
Tel: 404-874-1166
Email: masmith@georgiasown.org
2. Biodiesel of Las Vegas Contract $2,250,000
5233 E El Campo Grande Ave Counterparty
Las Vegas, NV 89115
Tel: 702-942-4395
Email: gpaulk@nclasvegas.com
3. Georgia's Own Credit Union USDA Annual Loan $693,000
PO Box 105205 Guarantee Fee
Atlanta, GA 30348
Attn: Marla Anderson Smith
Tel: 404-874-1166
Email: masmith@georgiasown.org
4. Starr Surplus Lines Insurance $140,265
Insurance Company
399 Park Avenue
8th Floor
New York, NY 10022
Tel: 855-782-7725
Email: Claims@starrcompanies.com
5. Johnson, Kendall & Insurance $47,350
Johnson, Inc. Broker Fees
109 Pheasant Run
Newtown, PA 18940
Tel: 215-968-4741
Fax: 215-968-0973
Email: info@jkj.com
6. Clark County, Nevada Taxes and Fees $32,666
(Assessor)
500 S Grand Central Pkwy
Box 551220
Las Vegas, NV 89155-1220
Tel: 702-455-4997
Email: AOCustomerServiceRequests@
ClarkCountyNV.gov
7. Clark County, Taxes and Fees $19,058
Nevada (Treasurer)
500 S Grand Central Pkwy
Box 551220
Las Vegas, NV 89155-1220
Tel: 702-455-4323
Fax: 702-455-5969
Email: trptm@clarkcountynv.gov
8. Clark County, Nevada Taxes and Fees $10,504
(Division of Air Quality)
500 S Grand Central Pkwy
Box 551220
Las Vegas, NV 89155-1220
Tel: 702-455-5942
Fax: 702-383-9994
Email: AirQuality@ClarkCountyNV.gov
9. City of North Las Vegas Taxes and Fees $9,053
District 65 Northern Beltway Area,
PO Box 842092
Los Angeles, CA 90084-2092
Tel: 702-796-0082
10. NC Industries, LLC Litigation N/A
6600 Amelia Earhart Ct.
Suite C
Las Vegas, NV 89119
Attn: Nicole E. Lovelock and
Andrea M. Champion
Tel: 702-805-8450
Email: nlovelock@joneslovelock.com;
achampion@joneslovelock.com
11. MMC, INC. Contractor N/A
6600 Amelia Earhart Court #B
Las Vegas, NV 89119
Fax: 702-642-9936
Email: gpaulk@nclasvegas.com;
mmc-info@nclasvegas.com
SBA COMMUNICATIONS: Moody's Ups CFR to Ba2 & Unsecured Debt to Ba3
------------------------------------------------------------------
Moody's Investors Service upgraded SBA Communications Corporation's
corporate family rating to Ba2 from Ba3 and its senior unsecured
debt ratings to Ba3 from B1. The Speculative Grade Liquidity rating
remains unchanged at SGL-1. Moody's also upgraded the senior
secured debt ratings of SBA Senior Finance II, LLC to Ba2 from Ba3.
The outlook is stable for both entities.
The ratings upgrade reflects strong industry fundamentals and
growth prospects for SBA's tower business in addition to robust,
internally generated cash flows which help support higher leverage
at the current rating level.
The stable outlook reflects Moody's expectation that SBA will
continue to generate significant free cash flow while maintaining
strong liquidity. It also assumes the company will remain
disciplined in managing its future growth without a meaningful
increase to leverage.
Upgrades:
Issuer: SBA Communications Corporation
Corporate Family Rating, Upgraded to Ba2 from Ba3
Senior Unsecured Regular Bond/Debenture, Upgraded to Ba3 from B1
Issuer: SBA Senior Finance II, LLC
Backed Senior Secured Bank Credit Facility, Upgraded to Ba2 from
Ba3
Outlook Actions:
Issuer: SBA Communications Corporation
Outlook, Remains Stable
Issuer: SBA Senior Finance II, LLC
Outlook, Remains Stable
RATINGS RATIONALE
SBA Communications Ba2 CFR reflects the company's (i) solid market
position as the third largest wireless tower operator in the US,
(ii) highly profitable business with strong, predictable cash flows
and operating margins, (iii) long term, contractual relationships
with large, investment-grade rated, telecommunications operators
and (iv) broad geographic concentration across US and international
markets. In addition, the rating reflects Moody's expectation that
the company's credit profile will benefit from strong underlying
fundamentals over the next 12-18 months, including robust demand
for wireless connectivity and wireless tower infrastructure.
Moody's expect SBA to continue to operate with a debt-heavy capital
structure, with adjusted net debt-to-EBITDA in the mid-7.0x range.
The company's aggressive capital allocation strategy that is
supportive of operating at high leverage levels as it seeks
strategic growth, will limit improvement in leverage on a
longer-term basis. Potential earnings volatility related to carrier
consolidation and equipment decommissions as well as longer-term,
substitute technology risk are other rating considerations.
SBA's SGL-1 Speculative Grade Liquidity Rating reflects Moody's
expectation for strong liquidity over the next 12-18 months. The
liquidity profile is supported by $144 million of cash and $780
million in availability under its $1.5 billion secured revolver due
July 2026, as of December 31, 2022. Moody's expect operating cash
flow generation of over $1.5 billion over the next 12-month period.
Given the projected cash flow and cash balance, Moody's expect SBA
will comfortably meet its contractual obligations over the forecast
period. Further, in November 2022, SBA issued $850 million of
five-year tower revenue notes in an ABS offering, using proceeds to
repay amounts outstanding under its revolver as well as its $640
million maturity due March 2023. Near-term maturities include $620
million in tower notes due October 2024.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
SBA's ratings could be upgraded if the company continues to
demonstrate EBITDA growth and allocates free cash flow towards
deleveraging such that: adjusted net debt to EBITDA is sustained
meaningfully below 7.0x.
SBA's ratings could be downgraded if the company adopts a more
aggressive financial policy, including large debt-financed
acquisitions or share repurchases, or lower-than-expected cash flow
growth such that: adjusted net debt to EBITDA is sustained above
8.0x.
The principal methodology used in these ratings was REITs and Other
Commercial Real Estate Firms published in September 2022.
Headquartered in Boca Raton, Florida, SBA Communications
Corporation (NASDAQ: SBAC) is the third largest independent owner
and operator of wireless tower assets in the U.S. As of December
31, 2022, SBA owned 17,416 communications sites in the US and its
territories and 21,895 wireless towers in South America, Central
America, Canada, South Africa, the Philippines, and Tanzania.
SCHARN INDUSTRIES: Seeks Cash Collateral Access
-----------------------------------------------
Scharn Industries, LLC asks the U.S. Bankruptcy Court for the
Eastern District of Massachusetts for authority to use cash
collateral claimed by Diverse Capital for the period from March 1
to May 30, 2023.
At various times prior to the bankruptcy filing date, the Debtor
entered into documents entitled Sale of Future Receipts Agreement.
Although Diverse Capital acknowledges the funds due to the Creditor
by the Debtor is not a loan, Diverse Capital has recorded a UCC
Financing Statement so the Debtor is filing the motion to use cash
collateral in an abundance of caution.
The amount of debt owed to Diverse Capital is approximately
$164,950. The value of the collateral in its present condition is
scheduled as approximately $10,000 for inventory and $53,000 for
accounts receivable.
The total dollar amount sought to be used for the period of March 1
to May 30, 2023, is approximately $229,000. As adequate
protection, Diverse Capital will be granted rollover lien in the
Debtor's post-petition accounts receivable.
The Debtor's counsel notes Cloud Fund, LLC, asserts a consensual
lien on the Debtor's assets through its servicing agent Delta
Bridge Funding LLC pursuant to a Future Receivables Purchase and
Sale Agreement.
About Scharn Industries, LLC
Scharn Industries, LLC sought protection under Chapter 11 of the
U.S. Bankruptcy Code (Bankr. D. Mass. Case No. 23-10298) on
February 28, 2023. In the petition signed by Scott Scharn, manager,
the Debtor disclosed up to $100,000 in assets and up to $1 million
in liabilities.
Gary W. Cruickshank, Esq., at Cruickshank Law, serves as counsel to
the Debtor.
SERTA SIMMONS: Class 6B Unsecureds to Recover Up to 3.3%
--------------------------------------------------------
Serta Simmons Bedding, LLC, et al., submitted a Revised Disclosure
Statement for Joint Chapter 11 Plan dated March 7, 2023.
As a result of extensive negotiations with their secured creditors,
the Debtors entered into a restructuring support agreement
(including any amendments, modifications and joinders thereto, the
"Restructuring Support Agreement") with the Consenting Creditors
party thereto, who hold, in the aggregate, approximately 85% of the
outstanding principal amount of the FLFO Term Loans and 83% of the
outstanding principal amount of FLSO Term Loans the outstanding
indebtedness under the PTL Credit Agreement, and the Consenting
Equity Holders.
The Restructuring will be effectuated pursuant to the Plan, which
provides for, in relevant part, the following treatment of Claims
and Interests:
* Holders of an Allowed Other Secured Claim and an Allowed
Priority Non-Tax Claim will be unimpaired under the Plan.
* Holders of an Allowed FLFO Claim shall receive, in full and
final satisfaction of such Claim, such holder's Pro Rata share of
New Term Loans equal in amount to the aggregate amount of their
Allowed FLFO Claims.
* Holders of an Allowed FLSO Claim shall receive, in full and
final satisfaction of such Claim, such holder's Pro Rata share of
(i) 100% of the New Common Interests issued on the Effective Date,
less any New Common Interests distributed to holders of Class 5
Non-PTL Claims under the Plan and subject to dilution by the New
Common Interests distributed pursuant to a post-emergence
equity-based management incentive plan as described in the Plan
(the "Management Incentive Plan"), and (ii) $105 million in
aggregate principal amount of New Term Loans. Receipt of such
consideration shall be effected as described in the Restructuring
Transactions Exhibit.
Class 3 consists of FLFO Claims. Except to the extent that a holder
of an Allowed FLFO Claim agrees to a less favorable treatment of
such Claim, each such holder shall receive, in full and final
satisfaction of such Claim and in accordance with the Plan, on the
Effective Date or as soon as reasonably practicable thereafter,
such holder's Pro Rata share of New Term Loans equal in amount to
the aggregate amount of their Allowed FLFO Claims. This Class will
receive a distribution of 100% of their allowed claims.
Class 4 consists of FLSO Claims. Except to the extent that a holder
of an Allowed FLSO Claim agrees to a less favorable treatment of
such Claim, each such holder shall receive, in full and final
satisfaction of such Claim and in accordance with the Plan, on the
Effective Date, or as soon as reasonably practicable thereafter,
such holder's Pro Rata share of (i) 100% of the New Common
Interests issued on the Effective Date, less any New Common
Interests distributed to holders of Class 5 Non-PTL Claims under
the Plan and subject to dilution by the New Common Interests
distributed pursuant to the Management Incentive Plan, and (ii) the
aggregate amount of New Term Loans less amounts distributed on
account of Class 3. Receipt of such consideration shall be effected
as described in the Restructuring Transactions Exhibit. This Class
will receive a distribution of 73.8% - 75.7%6 of their allowed
claims.
Class 5 consists of Non-PTL Term Loan Claims. This Class will
receive a distribution of 0.6% - 2.4% of their allowed claims. On
the Effective Date, all Non-PTL Term Loan Claims will be cancelled,
released, and extinguished and will be of no further force and
effect. Each Holder of such Allowed Non-PTL Term Loan Claims will
receive:
* If Class 5 votes to accept the Plan: Its Pro Rata share of
4% of New Common Interests issued on the Effective Date, subject to
dilution by the New Common Interests distributed pursuant to the
Management Incentive Plan.
* If Class 5 votes to reject the Plan: Its Pro Rata share of
1% of New Common Interests issued on the Effective Date, subject to
dilution by the New Common Interests distributed pursuant to the
Management Incentive Plan.
Class 6B consists of Other General Unsecured Claims. Except to the
extent that a holder of an Allowed Other General Unsecured Claim
agrees to less favorable treatment, each holder of an Allowed Other
General Unsecured Claim shall receive, in full and final
satisfaction of such Claim, its Pro Rata Share of the Other General
Unsecured Claims Recovery Pool as set forth in the GUC Recovery
Allocation Table. This Class will receive a distribution of 0% -
3.3% of their allowed claims.
Upon its full implementation, the Plan will effect a significant
deleveraging of the Debtors' capital structure by reducing the
Company's total debt by approximately $1.59 billion. The reduced
debt burden and exit financing anticipated under the Plan will
provide the Debtors with sufficient liquidity, not only to continue
funding their operations, but to make the necessary capital
expenditures and investments to ensure that the Company will remain
an industry leader in mattresses, as well as resolve pending
disputes and ongoing litigation with certain of its significant
creditors.
A full-text copy of the Revised Disclosure Statement dated March 7,
2023 is available at https://bit.ly/3JzfZlS from Epiq Corporate
Restructuring, LLC, claims agent.
Attorneys for Debtors:
Ray C. Schrock, Esq.
Alexander W. Welch, Esq.
Weil, Gotshal & Manges LLP
Ray C. Schrock, P.C.
767 Fifth Avenue
New York, NY 10153
Telephone: (212) 310-8000
Email: ray.schrock@weil.com
Alexander.Welch@weil.com
-and-
WEIL, GOTSHAL & MANGES LLP
Gabriel A. Morgan, Esq.
Stephanie N. Morrison, Esq.
700 Louisiana Street, Suite 1700
Houston, Texas 77002
Telephone: (713) 546-5000
Facsimile: (713) 224-9511
Email: Gabriel.Morgan@weil.com
Stephanie.Morrison@weil.com
About Serta Simmons Bedding
Serta Simmons Bedding, together with its non-debtor affiliates, are
manufacturers and marketers of bedding products in North America,
operating various bedding manufacturing facilities across the
United States and Canada.
Serta Simmons Bedding, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. S.D. Tex. Lead Case
No. 23-90020) on Jan. 23, 2023. The petitions were signed by John
Linker, chief financial officer, treasurer and assistant secretary.
At the time of filing, the Debtors estimated $1 billion to $10
billion in both assets and liabilities.
Gabriel Adam Morgan, Esq. at the Weil, Gotshal & Manges represents
the Debtor as counsel. The Debtor also tapped Evercore Group, LLC
as its investment banker; FTI Consulting, Inc. as its Financial
Advisor; Epiq Corporate Restructuring, LLC as its claims and
noticing agent; and Pricewaterhousecoopers LLP as its tax services
advisor.
SERTA SIMMONS: Wins Final OK of $125MM DIP Loan from Eclipse
------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of Texas,
Houston Division, authorized Serta Simmons Bedding, LLC to use cash
collateral and obtain postpetition financing, on a final basis.
The Debtors obtained senior secured postpetition financing on a
superpriority basis in the aggregate principal amount of up to $125
million pursuant to the terms and conditions of the Senior Secured
SuperPriority Debtor-in-Possession ABL Credit Agreement, by and
among (a) Dawn Intermediate, LLC, (b) SSB, (c) National Bedding
Company L.L.C. and SSB Manufacturing Company, as borrowers, (d)
Eclipse Business Capital LLC, as administrative agent, and (e) the
lenders from time to time party thereto. About $35 million plus
the aggregate amount of Letters of Credit, became available
immediately upon entry of the Interim DIP Order.
Holdings, Top Borrower, certain of the other Debtors, UBS AG,
Stamford Branch -- as administrative agent for its own benefit and
the benefit of the lenders from time to time party thereto -- are
party to the ABL Credit Agreement dated as of November 8, 2016 and
a Prepetition ABL Payoff Letter. Pursuant to the Prepetition ABL
Documents, the Prepetition ABL Lenders provided revolving credit,
banking products and other financial accommodations to, and issued
letters of credit for the account of, the Prepetition ABL Obligors.
Under the Prepetition ABL Documents, the Prepetition ABL Lenders
provided the Prepetition ABL Obligors with, among other things up
to $200 million in Revolving Commitments, including a $40 million
Letter of Credit Sublimit. As of the Petition Date, there were (i)
no outstanding revolving loans, (ii) $28 million in Existing
Letters of Credit and (iii) other outstanding obligations under the
Prepetition ABL Documents.
Holdings, Top Borrower, and certain of the other Debtors as
borrowers, UBS AG, Stamford Branch -- as administrative agent and
collateral agent for its own benefit and the lenders, and the
lenders from time to time party thereto -- are party to the
SuperPriority Term Loan Agreement, dated as of June 22, 2020. As of
the Petition Date, the Prepetition PTL Obligors were obligated
under the Prepetition PTL Agreement o the Prepetition PTL Lenders
in the aggregate outstanding principal amount of not less than
$1.027 billion, on account of Term Loans. The Prepetition PTL
Obligations are secured by (a) first priority security interests in
and liens on the Term Loan Priority Collateral, and (b) second
priority security interests in and liens on the ABL Priority
Collateral.
The Debtors require the use of cash collateral and to obtain credit
pursuant to the DIP Facility to administer their cases and fund
operations.
To the extent of any Diminution in Value, each of the Prepetition
PTL Agent (for the benefit of itself and the other Prepetition PTL
Lenders) and the Prepetition Non-PTL Agent (for the benefit of
itself and the other Prepetition Non-PTL Lenders) are granted
valid, binding, enforceable, non-avoidable and perfected
replacement and additional postpetition security interests in, and
liens on the Term Loan Priority Collateral. The Adequate Protection
Liens granted to the Prepetition PTL Agent will secure the
Prepetition PTL Obligations and the Adequate Protection Liens
granted to the Prepetition NonPTL Agent shall secure the
Prepetition Non-PTL Obligations.
The Adequate Protection Liens will be (A) deemed to be valid,
binding, non-avoidable, enforceable and fully perfected as of the
Petition Date and (B) in all instances, subject to the
Intercreditor Agreements.
As further adequate protection of the interests of (A) the
Prepetition PTL Agent and the other Prepetition PTL Lenders with
respect to the Prepetition PTL Obligations and (B) the Prepetition
Non-PTL Agent and the other Prepetition Non-PTL Lenders with
respect to the Prepetition Non-PTL Obligations, each of the
Prepetition PTL Agent (for the benefit of itself and the other
Prepetition PTL Lenders) and the Prepetition Non-PTL Agent (for the
benefit of itself and the other Prepetition Non-PTL Lenders) is
granted an allowed administrative claim against the Debtors'
estates under section 503 of the Bankruptcy Code, with priority
over all administrative expense claims and unsecured claims against
the Debtors and their estates of any kind or nature whatsoever, to
the extent that the Adequate Protection Liens do not adequately
protect against any Diminution in Value of the Prepetition PTL
Agent's and the Prepetition Non-PTL Agent's interests in the
Prepetition Collateral.
Serta Simmons Bedding LLC filed for chapter 11, aiming to cut
nearly $1.6 billion in debt from its balance sheet and end a
yearslong feud with Angelo Gordon & Co., Apollo Global Management
Inc. and other minority lenders.
A copy of the order is available at https://bit.ly/3L2w98h from
PacerMonitor.com.
About Serta Simmons Bedding
Headquartered in Atlanta, Georgia, Serta Simmons Bedding, LLC --
https://sertasimmons.com/ -- is one of the leading mattress
manufacturers in North America with its iconic Serta, Beautyrest,
Simmons and Tuft & Needle brands.
Serta Simmons Bedding, LLC and its affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D. Tex. Lead
Case No. 23-90020) on January 23, 2023. In the petition signed by
John Linker. chief financial offier, treasurer, and assistant
secretary, the Debtor disclosed up to $10 billion in both assets
and liabilities.
Judge David R. Jones oversees the case.
Gabriel A. Morgan, Esq., and Ray C. Schrock, Esq., at Weil, Gotshal
& Manges LLP, represent the Debtor as counsel.
Wilmington Savings Fund Society, FSB, is the successor
administrative agent and collateral agent under the Prepetition PTL
Facility. As of the Petition Date, not less than $1.027 billion is
outstanding under this facility.
Gibson, Dunn & Crutcher LLP serves as counsel to the ad hoc group
of Prepetition PTL Lenders and Jackson Walker L.L.P., serves as
local counsel to the Ad Hoc Priority Lender Group. Centerview
Partners LLC, serves as financial advisor to the Ad Hoc Priority
Lender Group.
Wilmer Cutler Pickering Hale and Dorr LLP, serves as counsel to the
Prepetition PTL Agent, and Latham & Watkins is the counsel to the
Prepetition PTL Agent.
Kelley Drye & Warren LLP, is lead counsel to the Official Committee
of Unsecured Creditors.
SIGNATURE BANK: FDIC Appointed as Receiver
------------------------------------------
Signature Bank, New York, NY, was closed March 12 by the New York
State Department of Financial Services, which appointed the Federal
Deposit Insurance Corporation (FDIC) as receiver. To protect
depositors, the FDIC transferred all the deposits and substantially
all of the assets of Signature Bank to Signature Bridge Bank, N.A.,
a full-service bank that will be operated by the FDIC as it markets
the institution to potential bidders.
Signature Bank had 40 branches across the country in New York,
California, Connecticut, North Carolina, and Nevada. Banking
activities will resume Monday, March 13, 2023, including on-line
banking. Depositors and borrowers will automatically become
customers of Signature Bridge Bank, N.A. and will continue to have
uninterrupted customer service and access to their funds by ATM,
debit cards, and writing checks in the same manner as before.
Signature Bank's official checks will continue to clear. Loan
customers should continue making loan payments as usual.
The transfer of all the deposits was completed under the systemic
risk exception approved Sunday. All depositors of the institution
will be made whole. No losses will be borne by the taxpayers.
Shareholders and certain unsecured debt holders will not be
protected. Senior management has also been removed. Any losses to
the Deposit Insurance Fund (DIF) to support uninsured depositors
will be recovered by a special assessment on banks, as required by
law.
These actions will protect depositors and preserve the value of the
assets and operations of Signature Bank, which may improve
recoveries for creditors and the DIF.
Signature Bank had total assets of $110.4 billion and total
deposits of $82.6 billion as of December 31, 2022. As receiver, the
FDIC will operate Signature Bridge Bank, N.A. to maximize the value
of the institution for a future sale and to maintain banking
services in the communities formerly served by Signature Bank.
A bridge bank is a chartered national bank that operates under a
board appointed by the FDIC. It assumes the deposits and certain
other liabilities and purchases certain assets of a failed bank.
The bridge bank structure is designed to "bridge" the gap between
the failure of a bank and the time when the FDIC can stabilize the
institution and implement an orderly resolution.
The FDIC named Greg D. Carmichael as CEO of Signature Bridge Bank,
N.A. Mr. Carmichael recently served as president and CEO of Fifth
Third Bancorp.
Superintendent Adrienne A. Harris said Sunday DFS is in close
contact with all regulated entities in light of market events,
monitoring market trends, and collaborating closely with other
state and federal regulators to protect consumers, ensure the
health of the entities we regulate, and preserve the stability of
the global financial system.
The regulator's action follows the announcement March 8 by Jolla,
Calif.-based Silvergate Capital Corporation (NYSE:SI), the holding
company for Silvergate Bank, of its intent to wind down operations
and voluntarily liquidate the Bank in an orderly manner and in
accordance with applicable regulatory processes.
In light of recent industry and regulatory developments, Silvergate
believes an orderly wind down of Bank operations and a voluntary
liquidation of the Bank is the best path forward. The Bank's wind
down and liquidation plan includes full repayment of all deposits.
The Company is also considering how best to resolve claims and
preserve the residual value of its assets, including its
proprietary technology and tax assets.
In connection with the above, Centerview Partners LLC is acting as
financial advisor, Cravath, Swaine & Moore LLP is acting as legal
advisor and Strategic Risk Associates is providing transition
project management assistance.
In addition, Silvergate Bank made a decision to discontinue the
Silvergate Exchange Network (SEN), which it announced on March 3,
2023 on its public website. All other deposit-related services
remain operational as the Company works through the wind down
process. Customers will be notified should there be any further
changes.
SILICON VALLEY BANK: FDIC Appointed as Receiver
-----------------------------------------------
Silicon Valley Bank, Santa Clara, California, was closed Friday,
March 10, by the California Department of Financial Protection and
Innovation, which appointed the Federal Deposit Insurance
Corporation (FDIC) as receiver. To protect insured depositors, the
FDIC created the Deposit Insurance National Bank of Santa Clara
(DINB). At the time of closing, the FDIC as receiver immediately
transferred to the DINB all insured deposits of Silicon Valley
Bank.
All insured depositors will have full access to their insured
deposits no later than Monday morning, March 13, 2023. The FDIC
will pay uninsured depositors an advance dividend within this week.
Uninsured depositors will receive a receivership certificate for
the remaining amount of their uninsured funds. As the FDIC sells
the assets of Silicon Valley Bank, future dividend payments may be
made to uninsured depositors.
Silicon Valley Bank had 17 branches in California and
Massachusetts. The main office and all branches of Silicon Valley
Bank will reopen on Monday, March 13, 2023. The DINB will maintain
Silicon Valley Bank's normal business hours. Banking activities
will resume no later than Monday, March 13, including on-line
banking and other services. Silicon Valley Bank’s official checks
will continue to clear. Under the Federal Deposit Insurance Act,
the FDIC may create a DINB to ensure that customers have continued
access to their insured funds.
As of December 31, 2022, Silicon Valley Bank had approximately
$209.0 billion in total assets and about $175.4 billion in total
deposits. According to various reports, it was the 16th-largest
bank in the United States at the time of its failure on March 10.
At the time of closing, the amount of deposits in excess of the
insurance limits was undetermined. The amount of uninsured deposits
will be determined once the FDIC obtains additional information
from the bank and customers.
Customers with accounts in excess of $250,000 should contact the
FDIC toll–free at 1-866-799-0959.
The FDIC as receiver will retain all the assets from Silicon Valley
Bank for later disposition. Loan customers should continue to make
their payments as usual.
Silicon Valley Bank is the first FDIC–insured institution to fail
this year. The last FDIC–insured institution to close was Almena
State Bank, Almena, Kansas, on October 23, 2020.
SILLY AXE CAFE: Seeks to Hire Goldberg Simpson as Legal Counsel
---------------------------------------------------------------
The Silly Axe Cafe, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Kentucky to employ Goldberg
Simpson, LLC to serve as legal counsel in its Chapter 11 case.
The firm's services include:
a. giving legal advice with respect to the Debtor's powers and
duties in the continued operations and management of its property;
b. taking all necessary actions to protect and preserve the
Debtor's estate, including the prosecution of actions on behalf of
the Debtor, the defense of any actions commenced against the
Debtor, negotiations concerning all litigation in which the Debtor
is involved, if any, and objecting to claims filed against the
Debtor's estate;
c. preparing legal papers; and
d. other legal services in connection with the Debtor's
bankruptcy case and the formulation and implementation of its
Chapter 11 plan.
The firm will be paid based upon its normal and usual hourly
billing rates. In addition, the firm will receive reimbursement for
out-of-pocket expenses incurred.
Michael McClain, Esq., at Goldberg Simpson, disclosed in a court
filing that his firm is a "disinterested person" within the meaning
of Section 101(14) of the Bankruptcy Code.
The firm can be reached through:
Michael W. McClain, Esq.
Goldberg Simpson, LLC
9301 Dayflower Street
Prospect, KY 40059
Tel: (502) 589-4440
Fax: (502) 410-0528
Email: mmcclain@goldbergsimpson.com
About The Silly Axe Cafe
The Silly Axe Cafe, LLC filed a Chapter 11 bankruptcy petition
(Bankr. D. Ky. Case No. 23-30368) on Feb. 15, 2022, with up to
$50,000 in assets and up to $500,000 in liabilities. Judge Charles
R. Merrill oversees the case.
Michael W. McClain, Esq., at Goldberg Simpson, LLC is the Debtor's
legal counsel.
SOLER & SOLER: Case Summary & 10 Unsecured Creditors
----------------------------------------------------
Debtor: Soler & Soler Hauling, Inc.
18645 SW 103rd Court
Miami, FL 33157
Business Description: Soler & Soler is a family-owned cargo
hauling company that operates interstate in
48 states. Cargo hauled by the company
includes fresh produce, general freight,
metal sheet, building materials, grain feed
hay, coal, meat, refrigerated food,
beverages, and paper products.
Chapter 11 Petition Date: March 10, 2023
Court: United States Bankruptcy Court
Southern District of Florida
Case No.: 23-11917
Judge: Hon. Laurel M. Isicoff
Debtor's Counsel: Timothy S. Kingcade, Esq.
KINGCADE, GARCIA & MCMAKEN, P.A.
1370 Coral Way
Miami, FL 33145
Tel: 305-285-9100
Email: scanner@miamibankruptcy.com
Total Assets: $1,187,949
Total Liabilities: $5,946,472
The petition was signed by Edisley Soler Negrin as president.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 10 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/GIKOOIA/Soler__Soler_Hauling_Inc__flsbke-23-11917__0001.0.pdf?mcid=tGE4TAMA
STARKCORP INC: Case Summary & 12 Unsecured Creditors
----------------------------------------------------
Debtor: Starkcorp, Inc.
1100 Peachtree Street
Suite 250
Atlanta, GA 30309
Business Description: Starkcorp provides support activities for
forestry. Starkcorp is organized into three
business groups: Fire Protection Services,
Private Security, and Emergency Medical
Services.
Chapter 11 Petition Date: March 7, 2023
Court: United States Bankruptcy Court
Northern District of Georgia
Case No.: 23-52263
Debtor's Counsel: Paul Reece Marr, Esq.
PAUL REECE MARR, P.C.
6075 Barfield Road
Suite 213
Sandy Springs, GA 30328-4402
Tel: (770) 984-2255
Fax: (678) 623-5109
Email: paul.marr@marrlegal.com
Estimated Assets: $100,000 to $500,000
Estimated Liabilities: $1 million to $10 million
The petition was signed by Kent Stark as president/CEO.
A full-text copy of the petition containing, among other items, a
list of the Debtor's 12 unsecured creditors is available for free
at PacerMonitor.com at:
https://www.pacermonitor.com/view/PN6TUCY/Starkcorp_Inc__ganbke-23-52263__0001.0.pdf?mcid=tGE4TAMA
SWS SERVICES: Files Emergency Bid to Use Cash Collateral
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SWS Services, Inc. asks the U.S. Bankruptcy Court for the Middle
District of Tennessee for authority to use cash collateral on an
emergency basis for ordinary and necessary operating expenses of
its business.
The Debtor says its request must be considered on an expedited
basis, as the Debtor must pay the daily operating expenses of the
business.
Alternative Funding Group, Bernard and Fifth, Corporation Service
Company, CT Corporation, Epic Advance, Everett Business Funding,
MidCumberland Area Development Corp., On Deck, Rapid Finance, and
Volunteer State Bank assert a security interest and lien in cash
collateral of the Debtor.
The Debtor is not aware of any other creditor claiming an interest
in the cash collateral, and more specifically the Debtor's accounts
receivables. The Debtor has a minimal amount of accounts
receivables and receives approximately $35,000 per month timely
paid by all of the residents of the property.
The Debtor has reviewed all of the claims in the case and believes
that Volunteer State Bank holds a first lien on the cash
collateral, and the remainder of the claimants are rendered
unsecured.
A copy of the motion is available at https://bit.ly/3Jw46Nv from
PacerMonitor.com.
A copy of the budget is available at https://bit.ly/3kV5AYc from
PacerMonitor.com.
The Debtor projects $34,650 in monthly income and $29,850 in
monthly expenses.
About SWS Services, Inc.
SWS Services, Inc. sought protection under Chapter 11 of the U.S.
Bankruptcy Code (Bankr. M.D. Tenn. Case No. 23-00835) on March 8,
2023. In the petition signed by Shanna Wheeler, owner and
president, the Debtor disclosed up to $500,000 in assets and up to
$1 million in liabilities.
Steven L. Lefkovitz, Esq., at Lefkovitz and Lefkovitz, represents
the Debtor as legal counsel.
SYLVAMO CORP: Moody's Alters Outlook on 'Ba2' CFR to Positive
-------------------------------------------------------------
Moody's Investors Service affirmed Sylvamo Corporation's Ba2
corporate family rating, Ba2-PD probability of default rating and
B1 rating on the senior unsecured notes. Moody's also changed the
outlook to positive from stable. At the same time, Moody's
downgraded the senior secured bank credit facility ratings to Ba2
from Ba1 and assigned a Ba2 rating to the proposed $300 million
senior secured term loan due in 2028. The downgrade of the senior
secured rating reflects the change in the capital structure with
secured debt representing the majority of the company's
indebtedness and less unsecured debt providing loss-absorption
following the proposed tender offer. On Feb. 22, Sylvamo commenced
a cash tender offer for any or all of $450 million 7% senior
unsecured notes and consent solicitation for amendment of certain
covenants. The net proceeds of the term loan will be used to redeem
senior unsecured notes.
"The positive outlook reflects significant debt paydown since the
company's spin-off which will allow the company to maintain strong
credit metrics even during the trough of the cycle," said
Anastasija Johnson, Senior Credit Officer at Moody's Investors
Service.
Assignments:
Issuer: Sylvamo Corporation
Senior Secured Term Loan A, Assigned Ba2 (LGD3)
Downgrades:
Issuer: Sylvamo Corporation
Senior Secured Bank Credit Facility, Downgraded to Ba2 (LGD3) from
Ba1 (LGD3)
Affirmations:
Issuer: Sylvamo Corporation
Corporate Family Rating, Affirmed Ba2
Probability of Default Rating, Affirmed Ba2-PD
Backed Senior Unsecured Regular Bond/Debenture, Affirmed B1
(LGD5)
Outlook Actions:
Issuer: Sylvamo Corporation
Outlook, Changed To Positive From Stable
RATINGS RATIONALE
Sylvamo's Ba2 CFR reflects its leading global market positions in
uncoated free sheet (UFS), geographic diversity and operational
flexibility with seven low cost operations across Brazil, the US
and Europe; good backward vertical integration into pulp to
minimize input cost volatility. The rating also reflects strong
credit metrics with Moody's adjusted debt/EBITDA of approximately
1.6 times in the twelve months ended December 2022. Since the
company was spun off from International Paper in October 2021,
management has paid off approximately $560 million or 37% of its
debt from cash flow and proceeds of the sale of its Russian
business. Moody's do not anticipate further debt reduction outside
of amortization as management has achieved its balance sheet debt
target of about $1 billion. Moody's expect leverage metrics to
remain strong in 2023 despite a projected decline in earnings amid
the ongoing secular decline in paper usage, slower economic
activity and lower prices.
Sylvamo's rating is constrained by its significant exposure to the
long-term secular decline of commodity paper in North America and
Western Europe which continues to be replaced by digital
alternative and the possible need to reduce UFS capacity to match
on-going demand declines in North America and Europe. Following the
sale of the Russian business, the company acquired Nymolla mill in
Sweden, strengthening its business profile. While the company's
lower cost assets will allow it to continue to produce as other
market participants may have to close capacity amid demand decline
for the printing and writing paper, longer-term the secular decline
in its core product represent credit risks, such as potential
leveraging to get into other businesses to grow revenue and
earnings and sustain returns to shareholders. Since its spin-off
the company has introduced dividends and started a share repurchase
program, but also set an absolute debt amount target, which will
allow it to maintain strong credit metrics even at the trough of
the cycle. Other constraining factor for the rating include it
relatively small size compared to its peers and relatively short
track record of operating under the current financial policy.
Moody's expect shareholder remuneration to increase if the company
receives consent to remove certain covenants related to its
distributions.
Sylvamo's revolving credit facility and term loans are rated Ba2,
in line with the corporate family rating, reflecting their dominant
position in the capital structure, which also includes senior
unsecured notes. The notes are rated B1, in accordance with
Moody's Loss Given Default for Speculative-Grade Companies
methodology.
FACTORS THAT COULD LEAD TO AN UPGRADE OR DOWNGRADE OF THE RATINGS
Moody's could upgrade the rating if:
-- Sylvamo demonstrates and maintains conservative financial
policies to establish a longer-track record of stronger
metrics
-- The company reinvests in its assets to maintain its
strong arket position and actively manages supply and
demand to support pricing
-- Sustains strong credit metrics such as Debt to EBITDA
below 3x and (RCF-Capex)/Debt above 12%
Moody's could downgrade the rating if:
-- The company experiences a sustained deterioration in
operating performance
-- Should Moody's expectations of normalized Debt to
EBITDA exceed 4x or (RCF-Capex)/Debt drop below 6%
Sylvamo Corporation is the largest global producer of uncoated
freesheet (UFS) paper (used primarily for photocopying and
commercial printing applications). The company generated sales of
$3.6 billion in the twelve months ended December 2022.
The principal methodology used in these ratings was Paper and
Forest Products published in December 2021.
TGPC PROPERTIES LLC: Gets OK to Hire Carel Marbry as Bookkeeper
---------------------------------------------------------------
TGPC Properties, LLC received approval from the U.S. Bankruptcy
Court for the District of Arizona to employ Carel Marbry, a
bookkeeper at The Gathering Place Church.
The Debtor requires a bookkeeper to:
a. provide periodic input for tax-planning and other tax-related
tasks;
b. assist with the Debtor's bookkeeping needs related to its
business operations and Chapter 11 case, including the preparation
of monthly and periodic operating reports, balance sheets, profit
and loss statements, and statements of cash flows; and
c. provide any other bookkeeping services mutually agreed upon
with the Debtor.
As disclosed in court filings, Ms. Marbry is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
Ms. Marbry holds office at:
Carel Marbry
5536 N. 6th Street
Phoenix, AZ 85023
About TGPC Properties
TGPC Properties, LLC is primarily engaged in renting and leasing
real estate properties.
TGPC Properties filed a petition for relief under Chapter 11 of the
Bankruptcy Code (Bankr. D. Ariz. Case No. 22-08374) on Dec. 19,
2022, with $1 million to $10 million in both assets and
liabilities. Paul Johnson, manager, signed the petition.
Judge Madeleine C. Wanslee oversees the case.
The Debtor is represented by D. Lamar Hawkins, Esq., at Guidant
Law, PLC as legal counsel and Carel Marbry of The Gathering Place
Church as bookkeeper.
TOP HOME CARE: Taps The Office of Keith B. Bittel as Accountant
---------------------------------------------------------------
Top Home Care Agency, LLC seeks approval from the U.S. Bankruptcy
Court for the Western District of Pennsylvania to employ The Office
of Keith B. Bittel, CPA as its accountant.
The firm's services include the preparation of annual and quarterly
returns, assistance with books, and general tax advice.
The firm's hourly rates range from $20 to $85 per hour.
Keith Bittel, a certified public accountant and partner at The
Office of Keith B. Bittel, CPA, disclosed in a court filing that
his firm is a "disinterested person" as the term is defined in
Section 101(14) of the Bankruptcy Code.
The firm can be reached at:
Keith B. Bittel, CPA
The Office of Keith B. Bittel, CPA
P.O. Box 226
Coraopolis, PA 15108
Dallas, TX 75208
Tel: (972) 248-2266
Fax: (972) 248-6887
Email: info@rosensystems.com
About Top Home Care Agency
Top Home Care Agency, LLC filed its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code (Bankr. W.D. Pa. Case No.
23-20082) on Jan. 16, 2023, with up to $50,000 in assets and
$500,001 to $1 million in liabilities.
Judge Carlota M. Bohm oversees the case.
The Debtor tapped Christopher M. Frye, Esq., at Steidl and
Steinberg, P.C. as legal counsel and The Office of Keith B. Bittel,
CPA as accountant.
TUESDAY MORNING: To Close Last Store in Long Island
---------------------------------------------------
TBR News Media reports that Dallas-based discount home goods
retailer Tuesday Morning has announced plans to close more than
half its stores, including the one in Greenlawn Plaza, 773 Pulaski
Road, Greenlawn which is the last one on Long Island. A closing
sale at that location is in progress.
The company filed for Chapter 11 bankruptcy protection in February.
Officials say the least profitable stores, which include all in New
York State, will be closed, according to Business Insider.
The department store chain first opened its doors in 1974 and sells
"name brand merchandise at unbeatable prices in a casual, no-frills
atmosphere." In 2020, the company also filed for bankruptcy and
closed over 200 stores.
While an official closing date for the Greenlawn store was not
named, the business's website says it is "closing soon."
About Tuesday Morning
Dallas, Texas-based Tuesday Morning Corporation is an off-price
retailer specializing in products for the home, including upscale
home textiles, home furnishings, housewares, gourmet food, toys and
seasonal decor, at prices generally below those found in boutique,
specialty and department stores, catalogs and on-line retailers.
Tuesday Morning and several affiliates filed for Chapter 11
bankruptcy protection (Bankr. N.D. Texas Lead Case No. 23-90001) on
Feb. 14, 2023.
The Debtors said both assets and liabilities, on a consolidated
basis, are between $100 million and $500 million.
The Hon. Edward L. Morris presides over the case.
Lawyers at Munsch Hardt Kopf & Harr, P.C., serve as counsel to the
Debtors. The Debtors tapped Piper Sandler as investment banker;
and Stretto, Inc., as claims and noticing agent.
TURNER OAKWOOD: Taps Ellen Nightingale of Biathrow as Broker
------------------------------------------------------------
Turner Oakwood Properties, LLC seeks approval from the U.S.
Bankruptcy Court for the Eastern District of North Carolina, to
employ Ellen Nightingale, a real estate broker at Biathrow Randall
& Shaked Realty Group/Berkshire Hathaway Homeservices.
The broker will facilitate the sale of certain real property, of
which 50 percent is owned by the Debtor.
The broker will receive a commission equal to 6 percent of the
total gross sales price of the real property.
As disclosed in court filings, Ms. Nightingale is disinterested
within the meaning of Section 327(a) of the Bankruptcy Code.
The firm can be reached through:
Ellen Nightingale
Biathrow Randall & Shaked Realty Group/
Berkshire Hathaway Homeservices
3700 Computer Dr., Ste 100
Raleigh, NC 27609
Phone: 919-621-1296
Email: ellen.nightingale@bhhsysu.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
Sept. 12, 2022. In the petition signed by its manager, Augusta
Bernadette Turner, 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.
TURNER OAKWOOD: Wins Interim Cash Collateral Access
---------------------------------------------------
The U.S. Bankruptcy Court for the Eastern District of North
Carolina, Raleigh Division, authorized Turner Oakwood Properties,
LLC to use cash collateral on an interim basis, to pay for
post-petition, necessary and reasonable operating expenses, as
detailed in the Debtor's March and April 2023 budget, with a 10%
variance.
The Debtor requires access to cash collateral generated by its
operations so it may remain in business.
On October 16, 2006, Celeste Turner and Augusta Turner signed a
promissory note in favor of Wells Fargo Bank, N.A., in the original
principal balance of $248,000. The note is secured by a deed of
trust and assignment of rents recorded in Book 12217, at Page 1868,
of the Wake County Registry, which encumbers 404 E. Edenton Street.
Upon information and belief, SN Servicing is the servicer of the
loan.
On October 26, 2006, the Turners signed a promissory note in favor
of Countrywide Bank, N.A., in the original principal balance of
$227,500. The note is secured by a deed of trust and assignment of
rents recorded in Book 12236, at Page 1382, of the Wake County
Registry, which encumbers 6 N. Bloodworth Street. Shellpoint is the
servicer of this loan.
As adequate protection for the Debtor's use of cash collateral, the
Cash Collateral Creditors are granted postpetition replacement
liens on the same assets to which their liens attached
pre-petition, to the same extent, and with the same validity and
priority as existed on the petition date.
These events constitute an "Event of Default":
a. The Debtor will fail to comply with any of the terms or
conditions of the Order;
b. The Debtor will fail to maintain insurance;
c. The Debtor will use cash collateral other than as agreed in
the Order; or
d. Appointment of a trustee or examiner in this proceeding, or
the conversion of the case to a proceeding under Chapter 7 of the
Bankruptcy Code.
A further hearing on the matter is set for April 3 at 12:30 p.m.
A copy of the order and the Debtor's budget is available at
https://bit.ly/3Zzp9Ej from PacerMonitor.com.
The Debtor projects $2,700 in total income and $2,624 in total
expenses for its 404 E. Edenton property.
About Turner Oakwood Properties, LLC
Turner Oakwood Properties, LLC sought protection under Chapter 11
of the U.S. Bankruptcy Code (Bankr. E.D.N.C. Case No. 22-02049) on
September 12, 2022. In the petition signed by Augusta Bernadette
Turner, its 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.
VESTAVIA HILLS: Taps Hall Booth Smith as Special Litigation Counsel
-------------------------------------------------------------------
Vestavia Hills, Ltd. seeks approval from the U.S. Bankruptcy Court
for the Southern District of California to employ Hall Booth Smith,
P.C. as special litigation counsel.
The Debtor needs the firm's legal assistance in connection with the
case captioned as Myers vs. Vestavia Hills Ltd., et al. (Case No.
01-CV-2023-900020) filed in the Circuit Court of Jefferson County,
Alabama, Birmingham Division.
The firm's services will be paid by the insurance company, CNA,
pursuant to the terms of the Debtor's insurance policy.
As disclosed in court filings, Hall Booth Smith is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Carl C. Williams, Esq.
Hall Booth Smith, P.C.
2001 Park Place North Suite 870
Birmingham, AL 35203
Tel: (205) 533-9656
Email: cwilliams@hallboothsmith.com
About Vestavia Hills
Vestavia Hills, Ltd., which conducts business under the name Mount
Royal Towers, operates a continuing care retirement community and
assisted living facility for the elderly in Vestavia Hills, Ala. It
offers individualized senior living options for a convenient
community lifestyle and provides personalized nursing care.
Vestavia Hills sought Chapter 11 protection (Bankr. S.D. Calif.
Case No. 20-00018) on Jan. 3, 2020, with $18,531,957 in assets and
$29,742,790 in liabilities. Judge Louise Decarl Adler oversees the
case.
The Debtor tapped Sullivan Hill Rez & Engel as bankruptcy counsel;
Campbell Partners, APC and Hall Booth Smith, P.C. as special
litigation counsels; and Harbuck Keith & Holmes, LLC as special
Alabama licensing and regulatory counsel.
VISTAGEN THERAPEUTICS: Registers 12.4M Shares for Possible Resale
-----------------------------------------------------------------
Vistagen Therapeutics, Inc. has filed a Form S-3 registration
statement with the Securities and Exchange Commission relating to
the resale from time to time of up to 12,410,100 shares of the
Company's common stock, par value $0.001 per share, by certain
selling stockholders. The Company is registering the Shares on
behalf of the Selling Stockholders to satisfy certain registration
rights that the Company granted to the Selling Stockholders in
connection with the completion of its acquisition of Pherin
Pharmaceuticals, Inc. The Company will not receive any of the
proceeds from the sale of the Shares offered.
The Company is registering the Shares to provide the Selling
Stockholders with freely tradable securities and to satisfy the
registration rights such stockholders received in connection with
the issuance of the Shares held by the Selling Stockholders. This
prospectus does not necessarily mean that the Selling Stockholders
will offer or sell those shares.
All selling and other expenses incurred by the Selling Stockholders
will be paid by such stockholders, except for certain legal fees
and expenses, which will be paid by the Company. The Selling
Stockholders may sell, transfer or otherwise dispose of any or all
of the Shares offered by this prospectus from time to time on The
Nasdaq Capital Market or any other stock exchange, market, or
trading facility on which the shares are traded, or in private
transactions. The Shares may be offered and sold or otherwise
disposed of by the Selling Stockholders at fixed prices, market
prices prevailing at the time of sale, prices related to prevailing
market prices, or privately negotiated prices.
The Company's common stock is listed on the Nasdaq Capital Market
under the symbol "VTGN." On March 1, 2023, the closing price of
the Company's common stock on the Nasdaq Capital Market was $0.18
per share.
A full-text copy of the prospectus is available for free at:
https://www.sec.gov/Archives/edgar/data/1411685/000143774923005232/vtgn20230228_s3.htm
About VistaGen
Headquartered in San Francisco, California, VistaGen Therapeutics,
Inc. -- http://www.vistagen.com-- is a biopharmaceutical company
committed to developing and commercializing innovative medicines
with the potential to go beyond the current standard of care for
anxiety, depression, and other CNS disorders.
VistaGen reported a net loss and comprehensive loss of $47.76
million for the fiscal year ended March 31, 2022, compared to a
net loss and comprehensive loss of $17.93 million for the fiscal
year ended March 31, 2021. As of Dec. 31, 2022, the Company had
$29.71 million in total assets, $9.03 million in total liabilities,
and $20.67 million in total stockholders' equity.
In its Quarterly Report filed on February 7, 2023, Vistagen
Therapeutics said it had cash and cash equivalents of
approximately
$25.0 million at December 31, 2022, which it believes will not be
sufficient to fund its planned operations for the next 12 months,
which raises substantial doubt regarding its ability to continue as
a going concern.
VOA INC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------
Debtor: VOA, Inc.
d/b/a El Pescador 7
4108 Florence Ave.
Bell Gardens, CA 90201
Chapter 11 Petition Date: March 7, 2023
Court: United States Bankruptcy Court
Central District of California
Case No.: 23-11294
Judge: Hon. Ernest M. Robles
Debtor's Counsel: Lazaro E. Fernandez, Esq.
LAW OFFICES OF LAZARO E. FERNANDEZ, INC.
3600 Lime St., Ste. 326
Riverside, CA 92501
Tel: 951-684-4474
Fax: 951-684-4625
Email: lef17@pacbell.net
Estimated Assets: $1 million to $10 million
Estimated Liabilities: $1 million to $10 million
The petition was signed by Vicente Ortiz 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/7RKIUUQ/VOA_Inc__cacbke-23-11294__0001.0.pdf?mcid=tGE4TAMA
VOIP-PAL.COM INC: Robert Mitchell Has 5.9% Stake as of Feb. 10
--------------------------------------------------------------
In a Schedule 13G filed with the Securities and Exchange
Commission, Robert P. Mitchell disclosed that as of Feb. 10, 2023,
he beneficially owns 134,325,235 shares of common stock of
VoIP-Pal.com Inc., representing 5.9 percent of the shares
outstanding. A full-text copy of the regulatory filing is
available for free at:
https://www.sec.gov/Archives/edgar/data/1410738/000149315223005958/formsc13g.htm
About VOIP-PAL.com
Since March 2004, VOIP-PAL.com has developed technology and patents
related to Voice-over-Internet Protocol (VoIP) processes. All
business activities prior to March 2004 have been abandoned and
written off to deficit. The Company operates in one reportable
segment being the acquisition and development of VoIP-related
intellectual property including patents and technology.
Vancouver, Canada-based Davidson & Company LLP, the Company's
auditor since 2015, issued a "going concern" qualification in its
report dated Dec. 23, 2022, citing that the Company has suffered
recurring losses from operations and has a net capital deficiency
that raise substantial doubt about its ability to continue as a
going concern.
VOYAGER DIGITAL: Judge Wiles Won't Let SEC to Fine Advisers
-----------------------------------------------------------
Steven Church and Amelia Pollard of Bloomberg News report that US
regulators won't be allowed to punish executives or advisers
involved in the bankruptcy of Voyager Digital Ltd. for creating a
new cryptocurrency that would help repay customers of the failed
digital asset lender, a judge said Monday.
The comments by US Bankruptcy Judge Michael Wiles reflect a growing
conflict between efforts to rehabilitate troubled crypto companies
and an increased regulatory push by the US Securities and Exchange
Commission. SEC lawyers have opposed a legal protection typically
given to executives and restructuring advisers of a bankrupt
company. The protection blocks lawsuits against those professionals
for implementing a court-approved bankruptcy plan.
The SEC's position would "leave a sword hanging over the heads of
anybody who's going to do this transaction," Wiles said. "How can a
bankruptcy case or any court proceeding function with that kind of
suggestion?"
Wiles's remarks came during the third day of debate over a plan by
Voyager to issue a new cryptocoin and sell itself to Binance.US,
the US arm of the world's biggest crypto exchange. SEC lawyers
argue that the proposals likely will violate federal law because,
in their view, the new coin is an unregistered security and
Binance.US is operating an unregulated securities exchange.
SEC lawyer Therese A. Scheuer argued that the legal protections are
so broad that Voyager employees and lawyers would have permission
to violate securities laws. After several minutes of debate,
Voyager lawyers agreed to change the plan to narrow the legal
releases.
Voyager must win court approval of its sale to Binance.US by March
6, 2023 or the deal could be canceled.
The protections would still allow the SEC and other regulatory
agencies to take court action to shut down Binance.US or block
Voyager from issuing the cryptocoin, Wiles said. But allowing the
SEC to go after individuals for their work on the proposals, should
they be approved, would be wrong, Wiles said.
The SEC and a handful of Voyager customers are fighting the sale
and the related payout plan, but for different reasons. The
customers have complained that Voyager should have turned over
their crypto assets earlier and that the Binance.US deal is risky.
The bankruptcy is Voyager Digital Holdings Inc., 22-10943, U.S.
Bankruptcy Court for the Southern District of New York
(Manhattan).
About Voyager Digital Holdings
Based in Toronto, Canada, Voyager Digital Holdings Inc. --
https://www.investvoyager.com/ -- runs a cryptocurrency platform.
Voyager claims to offer a secure way to trade over 100 different
crypto assets using its easy-to-use mobile application. Through
its subsidiary Coinify ApS, Voyager provides crypto payment
solutions for both consumers and merchants around the globe.
Voyager Digital Holdings Inc. and two affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead
Case No. 22-10943) on July 5, 2022. In the petition filed by
Stephen Ehrlich, chief executive officer, the Debtors estimated
assets and liabilities between $1 billion and $10 billion.
Judge Michael E. Wiles oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy
counsel; Berkeley Research Group, LLC as financial advisor; Moelis
& Company as investment banker; Consello Group as strategic
financial advisor; Deloitte Tax, LLP as tax services provider; and
Deloitte & Touche, LLP as accounting advisor. Stretto, Inc., is
the claims agent.
On July 19, 2022, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors in these Chapter 11
cases. The committee tapped McDermott Will & Emery, LLP as
bankruptcy counsel; FTI Consulting, Inc. as financial advisor;
Cassels Brock & Blackwell, LLP as Canadian counsel; and Epiq
Corporate Restructuring, LLC as noticing and information agent.
The committee also tapped the services of Harney Westwood &
Riegels, LP, in connection with Three Arrows Capital Ltd.'s
liquidation proceedings in British Virgin Islands.
On July 6, 2022, the Debtors filed a joint Chapter 11 plan of
reorganization.
* * *
Following an auction process, the Debtors in September 2022
selected the bid submitted by FTX US' West Realm Shires Inc. as the
winning bid for the assets. But after a series of events, FTX
collapsed in November 2022, before the sale could be completed.
After reopening bidding, Voyager Digital selected the offer from
U.S. exchange BAM Trading Services Inc. (doing business as
"Binance.US") as the highest and best bid for its assets.
Binance's bid is valued at $1.022 billion.
VOYAGER DIGITAL: Wins Approval of Plan, Sale to Binance.US
----------------------------------------------------------
U.S. Bankruptcy Judge Michael E. Wiles entered an order confirming
the Third Amended Joint Plan of Voyager Digital Holdings, Inc. and
Its Debtor Affiliates and approving the explanatory Disclosure
Statement.
Judge Wiles also denied a motion by pro se account holders to
appoint a trustee, noting that at this late stage in the Chapter 11
cases, there is no "cause" to interrupt the confirmation process
and to throw everything into disarray.
The Plan provides for a sale of customer accounts to BAM Trading
Services Inc. (which does business as Binance.US), though account
holders can elect not to become customers of Binance.US. The Plan
also includes a backup option in the event that the proposed deal
with Binance.US does not close.
Judge Wiles on March 11, 2023, entered a 50-page decision
explaining his ruling to allow the deal with Binance.US over
objections from the U.S. Securities and Exchange Commission and
state regulators.
"This bankruptcy case has been pending since July 2022. Customers
and creditors have been denied access to their assets for many
months, and they deserve to have a resolution of the case.
Bankruptcy cases are very expensive, and each and every delay means
that administrative expenses eat away at the recoveries that
creditors may receive. I have a proposed plan of reorganization
before me, and I have an obligation to make a ruling -- now -- as
to whether it can be confirmed. I cannot simply put the entire case
into an indeterminate and expensive deep freeze while regulators
figure out whether they do or do not think there is any problem
with the transactions that are being proposed," Judge Wiles said.
Vague Claims by SEC
The judge notes that SEC has hinted vaguely that it thinks there
"might" be issues with the Debtors' sales of VGX and/or with some
unspecified aspect of Binance.US's business, but pointed out that
the SEC has explicitly stopped short of contending that anything
actually is illegal, and has repeatedly declined to offer evidence
or to take a firm position on these points.
Questioning the Plan's feasibility, the SEC argued that in its view
the Debtors had the burden to prove that the rebalancing of the
Debtors' cryptocurrency portfolios (in preparation for plan
distributions) would not involve illegal purchases and sales of
securities. The objection did not take the position that any
particular cryptocurrencies are securities, or otherwise explain
how or why the Debtors' rebalancing activities might be illegal,
although it did contain a vague footnote suggesting that the VGX
token was one as to which some unspecified issue might exist. The
SEC also suggested that the Debtors should be required to prove
that Binance.US is not operating as a securities broker without
registering as such. Once again, the SEC did not actually take the
position that Binance.US is operating as an unregistered and
unlicensed securities broker -- it just suggested that the Debtors
had the burden to prove the negative.
"Voyager's case is a high-profile one, and the facts that Voyager
has been attempting to sell itself to another firm, and to make "in
kind" distributions of cryptocurrencies to account holders, has
been known for many months. The SEC and all other government
agencies have had a full and fair opportunity to object if they
believe that the rebalancing transactions that I have previously
approved and that are contemplated by the plan are illegal in any
way, or if they believe that the distributions of cryptocurrencies
and cash that are contemplated by the plan are violative in any way
of any applicable statute, rule or regulation. I have no desire or
intention to approve anything that runs afoul of legal limits, just
as I have no desire to approve anything that will put customers at
risk. The plain fact is, however, that the SEC has not actually
made any objection. It has only vaguely hinted at possible issues
that have not even been described in a manner that would permit the
Court or the parties to address them," Judge Wiles said.
Liquidation Analysis
The SEC has complained that the Debtors did not disclose whether
there are meaningful economic benefits to the Binance.US
transaction apart from the $20 million that Binance.US would pay in
excess of the market valued of cryptocurrencies. The judge
overruled this objection.
The Liquidation Analysis that was attached to the Disclosure
Statement included projections as to what creditors' recoveries
would be under the Binance.US transaction, under the alternative
"toggle" proposal, and under a chapter 7 liquidation. It stated
that for various reasons (which were explained in footnotes) that
the Binance.US proposal would result in $90 million more being
available for distribution, resulting in approximately 5% greater
recoveries for creditors when compared to the toggle option and
about a 14% increase when compared to a possible chapter 7
liquidation.
"During the hearing there were many questions about these
calculations. The Debtors testified that their current estimates
are that the Binance.US deal will produce approximately $100
million more in distributable assets than the so-called "toggle"
plan would provide. I found the Debtors' explanations and
testimony about these points to be reasonable and credible, and I
note that no contrary evidence was presented," Judge Wiles stated.
Settlement With CEO
The Debtors also have proposed a settlement of claims against the
Debtors' CEO (Mr. Ehrlich) and former Chief Financial Officer (Mr.
Psaropoulos).
The Debtors offered evidence that two independent directors were in
charge of a Special Committee that investigated possible claims
against officers and directors; that the Special Committee hired
outside counsel (the Quinn Emmanuel firm) to assist in that
investigation; that the Special Committee had concluded that the
only claims against insiders that were worth pursuing were claims
against Mr. Ehrlich and Mr. Psaropolous relating to the Three
Arrows loans; that the Special Committee further concluded that
those claims would be subject to various defenses and that the
claims were not "slam dunks;" that the Special Committee had
investigated the officers' resources and that the proposed
settlements would provide for payments that represent a significant
percentage of the officers' available assets; that the Debtors
would release other claims against the two officers but would not
actually release claims relating to the Three Arrows loans, and
instead would only agree that any further recoveries on the
Debtors' claims as to the Three Arrows loans would come from
insurance proceeds and not from the individual assets of the
settling parties. The Debtors also reserved their rights to seek
to undo a transaction by which Voyager allegedly paid as much as
$10 million, just before its bankruptcy filing, for an additional
$10 million of director and officer liability coverage.
"I understand that this settlement is disappointing to some of the
pro se parties who have appeared, a number of whom expressed a
strong resentment towards the two settling parties and who
expressed a strong desire to pursue them more vigorously and to
demand a higher percentage of their net worth before settling. I
sympathize with these parties' frustrations, but the only actual
evidence that I have on the relevant points is the evidence
submitted by the Debtors, and I conclude from that evidence that
the settlement is a reasonable one," Judge Wiles stated.
About Voyager Digital Holdings
Based in Toronto, Canada, Voyager Digital Holdings Inc. --
https://www.investvoyager.com/ -- runs a cryptocurrency platform.
Voyager claims to offer a secure way to trade over 100 different
crypto assets using its easy-to-use mobile application. Through
its subsidiary Coinify ApS, Voyager provides crypto payment
solutions for both consumers and merchants around the globe.
Voyager Digital Holdings Inc. and two affiliates sought protection
under Chapter 11 of the U.S. Bankruptcy Code (Bankr. S.D.N.Y. Lead
Case No. 22-10943) on July 5, 2022. In the petition filed by
Stephen Ehrlich, chief executive officer, the Debtors estimated
assets and liabilities between $1 billion and $10 billion.
Judge Michael E. Wiles oversees the cases.
The Debtors tapped Kirkland & Ellis, LLP as general bankruptcy
counsel; Berkeley Research Group, LLC as financial advisor; Moelis
& Company as investment banker; Consello Group as strategic
financial advisor; Deloitte Tax, LLP as tax services provider; and
Deloitte & Touche, LLP as accounting advisor. Stretto, Inc., is
the claims agent.
On July 19, 2022, the U.S. Trustee for Region 2 appointed an
official committee of unsecured creditors in these Chapter 11
cases. The committee tapped McDermott Will & Emery, LLP as
bankruptcy counsel; FTI Consulting, Inc. as financial advisor;
Cassels Brock & Blackwell, LLP as Canadian counsel; and Epiq
Corporate Restructuring, LLC as noticing and information agent.
The committee also tapped the services of Harney Westwood &
Riegels, LP, in connection with Three Arrows Capital Ltd.'s
liquidation proceedings in British Virgin Islands.
On July 6, 2022, the Debtors filed a joint Chapter 11 plan of
reorganization.
* * *
Following an auction process, the Debtors in September 2022
selected the bid submitted by FTX US' West Realm Shires Inc. as the
winning bid for the assets. But after a series of events, FTX
collapsed in November 2022, before the sale could be completed.
After reopening bidding, Voyager Digital selected the offer from
U.S. exchange BAM Trading Services Inc. (doing business as
"Binance.US") as the highest and best bid for its assets.
Binance's bid is valued at $1.022 billion.
WILLOW LAKE: Taps Gold, Weems, Bruser, Sues & Rundell as Counsel
----------------------------------------------------------------
Willow Lake Holdings, LLC and Willow Lake Mitigation, LLC received
interim approval from the U.S. Bankruptcy Court for the Western
District of Louisiana to employ Gold, Weems, Bruser, Sues &
Rundell, APLC to handle their Chapter 11 cases.
The firm will be paid at these rates:
Shareholders $300 to $435 per hour
Associates $265 to $310 per hour
Paralegals $90 per hour
In addition, the firm will be reimbursed for out-of-pocket expenses
incurred.
The firm received a $98,879.45 retainer.
Bradley Drell, Esq., a partner at Gold Weems Bruser Sues & Rundell,
disclosed in a court filing that his firm is a "disinterested
person" as the term is defined in Section 101(14) of the Bankruptcy
Code.
The firm can be reached at:
Bradley L. Drell, Esq.
Gold Weems Bruser Sues & Rundell, APLC
P.O. Box 6118
Alexandria, LA 71307-6118
Tel: (318) 445-6471
Fax: (318) 445-6476
Email: bdrell@goldweems.com
About Willow Lake
Willow Lake Holdings, LLC owns a 374.91-acre property in Cameron
Parish, La., valued at $800,000.
Willow Lake Holdings and affiliate, Willow Lake Mitigation, LLC,
filed voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code (Bankr. W.D. La. Lead Case No. 23-20083) on Feb.
27, 2023. In the petition signed by its manager, William Barron,
Willow Lake Holdings reported $800,000 in assets and $4,323,619 in
liabilities.
Judge John W. Kolwe presides over the cases.
Bradley L. Drell, Esq., at Gold, Weems, Bruser, Sues & Rundell,
APLC represents the Debtor as counsel.
[*] 4 Retailers That Sought Bankruptcy Protection in 2023
---------------------------------------------------------
Ivana Xie of The U.S. Sun reports on the four stores that filed for
Chapter 11 bankruptcy protection in 2023 as closures take over the
retail industry.
Several businesses have already filed for bankruptcy in 2023, which
typically means more stores will be closing.
Soaring inflation has pushed beauty, restaurants, and other retail
stores to close their doors.
The Covid-19 pandemic was a tough obstacle for many companies
already.
With other economic challenges, some businesses have no other
choice but to shut down.
The move to file for Chapter 11 bankruptcy protection allows a
business to keep trading while it restructures its debts.
* PARTY CITY
Party City plans to close down over 20 stores, but there will be
potentially more closures coming up.
The beloved party supplies provider is closing 10 stores and
auctioning off 12 stores in the upcoming weeks.
* TUESDAY MORNING
Similarly, Tuesday Morning filed for bankruptcy on February 14.
The company stated that it had too many stores, and the stores were
located in unprofitable areas.
The company intends to close out 264 of the 464 stores.
Unfortunately, due to decreased foot traffic and in-person sales,
Tuesday Morning had to file for bankruptcy.
The company also filed for bankruptcy in 2020 during the Covid-19
pandemic.
* CORNER BAKERY
Corner Bakery Cafe closed its last remaining location in Arlington,
Virginia, on February 27.
The cafe chain declared Chapter 11 bankruptcy after it struggled
during the Covid-19 pandemic.
The chain has a $30million debt pile, but its chiefs have claimed
this is closer to between $20million and $24million.
* FORMER BRANDS
Forma Brands filed for bankruptcy in January, which owns the
popular beauty brand, Morphe Cosmetics.
Morphe Cosmetics announced the closures of all its 18 stores in the
US in January.
The company said in a statement that it will be shutting down its
physical stores in the US, which will help it focus on e-commerce
and wholesale.
Morphe products will continue to be sold at retailers such as Ulta
Beauty and Target.
Forma generates nearly 80 percent of its sales from Morphe, but it
has since suffered.
In 2021, revenue tied to celebrities James Charles, Jeffree Star,
and Jaclyn Hill fell by 66 percent.
Morphe tweeted on January 5: "We have made the difficult decision
to close all Morphe stores in the U.S.
"We are forever grateful to our store teams for their passion,
talent and dedication over the years."
* OTHER STORE CLOSURES
Similarly, Bed Bath & Beyond recently filed for bankruptcy and is
closing 150 stores in the US by the end of March.
More than 50 closures had already been announced, but another 62
locations were confirmed earlier this March 2023.
The store owes $550million to Chase and another $375million to
lender Sixth Street.
In addition, department store JCPenney declared bankruptcy in May
2020, and it was expected to close over 800 stores nationwide.
While JCPenney has around 670 locations today, the company had to
restructure its debt and close over 200 stores.
Stores in Oswego, New York, and Indiana are closing doors by spring
2023.
The company filed for Chapter 11 bankruptcy protection on January
17, 2023.
Since the pandemic, Party City faced declining sales as it relied
on social gatherings to generate revenue.
At the same time, the soaring inflation worsened the company's
financial health.
[*] Commercial Chapter 11 Filings Rose 83% in Feb. 2023 Y/Y
-----------------------------------------------------------
New bankruptcy filings in February 2023 registered double-digit
increases year-over-year across all U.S. major filing categories,
according to data provided by Epiq Bankruptcy. The 31,889 total new
bankruptcy filings in February were up 18 percent from the 27,006
filings registered in February 2022. Total commercial filings also
increased 18 percent, to 1,696 versus 1,442. Commercial chapter 11
filings increased 83 percent to 373 filings, up from 204.
Subchapter V small business elections increased 45 percent to 120
versus the 83 filings registered the previous year.
Continuing year-over-year, total individual filings increased 18
percent to 30,193 versus 25,564 in February 2022. While still below
pre-pandemic levels, individual chapter 7 filings increased 12
percent to 16,991 versus 15,190, and individual chapter 13 filings
increased 28 percent to 13,149 versus 10,311 the previous year.
Comparing month-over-month, and considering there are three fewer
days in February, the 31,889 total filings were still 2 percent
higher than the 31,161 total filings in January. Conversely, total
commercial filings decreased 1 percent to 1,696 from 1,713 the
month prior. Total chapter 11 filings remained flat — 373 versus
376 — and subchapter V elections increased 5 percent to 120 from
114. Total individual filings increased 3 percent to 30,193 from
29,448, and individual chapter 7 filings increased 8 percent to
16,991 from 15,717, while individual chapter 13 filings decreased 4
percent to 13,149 from the 13,678 filed in January 2023.
"The growing number of households and businesses filing for
bankruptcy reflects the mounting economic challenges they now
face," said ABI Executive Director Amy Quackenboss. "Debt loads are
expanding as the prices of goods and services have gone up with
inflation and the cost of borrowing continues to rise. While
pandemic relief efforts have largely expired, the safe haven of
bankruptcy is continually available for financially distressed
businesses and consumers."
Comparing open to closed cases, while new filings are on the rise,
the current 662,204 total open cases represent another
month-over-month decline. There are 36 percent fewer open cases
since May 2019, when there were more than 1 million. Looking back
one year, there are 52,662 fewer open cases than the 714,866 cases
open in February 2022, a 7 percent decline.
"Overall, the stimuluses have had a positive effect for individuals
and companies, as 10,843 more cases have closed than opened in
2023," said Gregg Morin, Vice President of Business Development and
Revenue for Epiq Bankruptcy. "However, as new monthly filings rise,
this trend is likely to end."
[*] February 2023 U.S. Total Bankruptcy Filings Rose 18%
--------------------------------------------------------
New bankruptcy filings in February 2023 registered double-digit
increases year-over-year across all U.S. major filing categories,
according to data provided by Epiq Bankruptcy, the leading provider
of U.S. bankruptcy filing data. Epiq Bankruptcy is a division of
Epiq, a global technology-enabled services leader to the legal
services industry and corporations.
The 31,889 total new bankruptcy filings in February 2023 were up 18
percent from the 27,006 filings registered in February 2022. Total
commercial filings increased 18 percent to 1,696 versus 1,442.
Commercial Chapter 11 filings increased 83 percent to 373 filings,
up from 204. Subchapter V small business filings increased 45
percent to 120 versus the 83 filings registered the previous year.
Continuing year-over-year, total individual filings increased 18
percent to 30,193 versus 25,564 in February 2022. While still below
pre-pandemic levels, individual Chapter 7 filings increased 12
percent to 16,991 versus 15,190, and individual Chapter 13 filings
increased 28 percent to 13,149 versus 10,311 the previous year.
Comparing month-over-month, and considering there are three fewer
days in February, the 31,889 total filings were still two percent
higher than the 31,161 in January. Total commercial filings
decreased one percent to 1,696 from 1,713 the month prior. Total
Chapter 11 filings remained flat 373 versus 376 and Subchapter V
increased five percent to 120 from 114. Total individual filings
increased three percent to 30,193 from 29,448 while individual
Chapter 7 filings increased eight percent to 16,991 from 15,717 and
the individual Chapter 13 filings decreased four percent to 13,149
from the 13,678 filed in January.
"The growing number of households and businesses filing for
bankruptcy reflects the mounting economic challenges they now
face," said ABI Executive Director Amy Quackenboss. "Debt loads are
expanding as the prices of goods and services have gone up with
inflation and the cost of borrowing continues to rise. While
pandemic relief efforts have largely expired, the safe haven of
bankruptcy is continually available for financially distressed
businesses and consumers."
Comparing open to closed cases, while new filings are on the rise,
the current 662,204 total open cases represent another
month-over-month decline. There are 36 percent fewer open cases
since May 2019 when there were more than one million. Looking back
one year, there are 52,662 fewer open cases than the 714,866 in
February 2022, a seven percent decline.
"Overall, the stimuluses have had a positive effect for individuals
and companies, as 10,843 more cases have closed than opened in
2023," said Gregg Morin, Vice President of Business Development and
Revenue for Epiq Bankruptcy. "However, as new monthly filings rise,
this trend is likely to end."
ABI has partnered with Epiq Bankruptcy to provide the most current
bankruptcy filing data for analysts, researchers, and members of
the news media. Epiq Bankruptcy is the leading provider of data,
technology, and services for companies operating in the business of
bankruptcy. Its new Bankruptcy Analytics subscription service
provides on-demand access to the industry’s most dynamic
bankruptcy data, updated daily. Learn more at
https://bankruptcy.epiqglobal.com.
[^] BOND PRICING: For the Week from March 6 to 10, 2023
-------------------------------------------------------
Company Ticker Coupon Bid Price Maturity
------- ------ ------ --------- --------
99 Escrow Issuer Inc NDN 7.500 45.466 1/15/2026
99 Escrow Issuer Inc NDN 7.500 45.703 1/15/2026
99 Escrow Issuer Inc NDN 7.500 45.636 1/15/2026
Accelerate
Diagnostics Inc AXDX 2.500 91.061 3/15/2023
Air Methods Corp AIRM 8.000 5.793 5/15/2025
Air Methods Corp AIRM 8.000 5.813 5/15/2025
Amyris Inc AMRS 1.500 30.000 11/15/2026
Audacy Capital Corp CBSR 6.500 12.610 5/1/2027
Audacy Capital Corp CBSR 6.750 12.417 3/31/2029
Audacy Capital Corp CBSR 6.750 13.299 3/31/2029
Avaya Inc AVYA 6.125 26.500 9/15/2028
Avaya Inc AVYA 8.000 25.750 12/15/2027
Avaya Inc AVYA 6.125 28.000 9/15/2028
BPZ Resources Inc BPZR 6.500 3.017 3/1/2049
Bed Bath & Beyond Inc BBBY 3.749 32.777 8/1/2024
Bed Bath & Beyond Inc BBBY 4.915 12.990 8/1/2034
Cardlytics Inc CDLX 1.000 42.422 9/15/2025
Clovis Oncology Inc CLVS 1.250 12.750 5/1/2025
Clovis Oncology Inc CLVS 4.500 19.875 8/1/2024
Clovis Oncology Inc CLVS 4.500 11.614 8/1/2024
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 8.890 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 8.816 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 2.800 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 2.800 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 1.955 8/15/2027
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 5.375 8.665 8/15/2026
Diamond Sports Group
LLC / Diamond
Sports Finance Co DSPORT 6.625 1.517 8/15/2027
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.250 1/15/2023
Endo Finance LLC /
Endo Finco Inc ENDP 5.375 5.000 1/15/2023
Energy Conversion
Devices Inc ENER 3.000 0.764 6/15/2013
Envision Healthcare EVHC 8.750 23.159 10/15/2026
Envision Healthcare EVHC 8.750 23.681 10/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 16.029 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 40.000 7/15/2023
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 11.500 15.374 7/15/2026
Exela Intermediate
LLC / Exela
Finance Inc EXLINT 10.000 40.000 7/15/2023
Federal Home
Loan Banks FHLB 1.300 99.268 3/21/2023
GNC Holdings Inc GNC 1.500 0.819 8/15/2020
Goodman Networks Inc GOODNT 8.000 1.000 5/31/2022
Gossamer Bio Inc GOSS 5.000 29.550 6/1/2027
Invacare Corp IVC 5.000 6.000 11/15/2024
Invacare Corp IVC 4.250 6.000 3/15/2026
JPMorgan Chase
Financial Co LLC JPM 4.653 97.481 4/27/2037
Lannett Co Inc LCI 7.750 21.862 4/15/2026
Lannett Co Inc LCI 4.500 16.938 10/1/2026
Lannett Co Inc LCI 7.750 21.890 4/15/2026
Lightning eMotors Inc ZEV 7.500 59.500 5/15/2024
Lumbermens Mutual
Casualty Co KEMPER 8.450 1.157 12/1/2097
MAI Holdings Inc MAIHLD 9.500 35.297 6/1/2023
MAI Holdings Inc MAIHLD 9.500 35.297 6/1/2023
MAI Holdings Inc MAIHLD 9.500 35.297 6/1/2023
MBIA Insurance Corp MBI 16.052 7.000 1/15/2033
MBIA Insurance Corp MBI 16.398 7.000 1/15/2033
Macy's Retail
Holdings LLC M 6.700 85.215 7/15/2034
Mashantucket Western
Pequot Tribe MASHTU 7.350 42.000 7/1/2026
Morgan Stanley MS 1.800 72.516 8/27/2036
National CineMedia LLC NATCIN 5.750 2.757 8/15/2026
OMX Timber Finance
Investments II LLC OMX 5.540 0.850 1/29/2020
Party City Holdings PRTY 8.750 18.750 2/15/2026
Party City Holdings PRTY 10.130 18.500 7/15/2025
Party City Holdings PRTY 8.750 20.000 2/15/2026
Party City Holdings PRTY 6.625 0.750 8/1/2026
Party City Holdings PRTY 6.625 0.010 8/1/2026
Party City Holdings PRTY 10.130 16.989 7/15/2025
Photo Holdings
Merger Sub Inc SFLY 11.000 42.356 10/1/2027
Renco Metals Inc RENCO 11.500 24.875 7/1/2003
Rite Aid Corp RAD 7.700 38.444 2/15/2027
RumbleON Inc RMBL 6.750 34.428 1/1/2025
SVB Financial Group SIVB 4.250 2.895 N/A
SVB Financial Group SIVB 4.000 2.200 N/A
SVB Financial Group SIVB 4.700 3.083 N/A
SVB Financial Group SIVB 4.100 2.569 N/A
SVB Financial Group SIVB 3.500 37.500 1/29/2025
Shift Technologies Inc SFT 4.750 12.125 5/15/2026
Talen Energy Supply TLN 10.500 47.000 1/15/2026
Talen Energy Supply TLN 6.500 45.938 6/1/2025
Talen Energy Supply TLN 6.500 43.750 9/15/2024
Talen Energy Supply TLN 10.500 45.924 1/15/2026
Talen Energy Supply TLN 6.500 43.409 9/15/2024
Talen Energy Supply TLN 10.500 33.000 1/15/2026
Team Inc TISI 5.000 75.668 8/1/2023
TerraVia Holdings Inc TVIA 5.000 4.644 10/1/2019
Tricida Inc TCDA 3.500 9.375 5/15/2027
US Renal Care Inc USRENA 10.625 30.725 7/15/2027
US Renal Care Inc USRENA 10.625 30.804 7/15/2027
UpHealth Inc UPH 6.250 30.842 6/15/2026
WeWork Cos Inc WEWORK 7.875 49.374 5/1/2025
WeWork Cos Inc WEWORK 7.875 50.192 5/1/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 39.912 7/10/2025
WeWork Cos LLC /
WW Co-Obligor Inc WEWORK 5.000 41.698 7/10/2025
Wesco Aircraft
Holdings Inc WAIR 8.500 48.250 11/15/2024
Wesco Aircraft
Holdings Inc WAIR 13.125 8.133 11/15/2027
Wesco Aircraft
Holdings Inc WAIR 8.500 49.500 11/15/2024
Wesco Aircraft
Holdings Inc WAIR 13.125 6.768 11/15/2027
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
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equity securities trade in public market are determined by more
than a balance sheet solvency test.
On Thursdays, the TCR delivers a list of recently filed
Chapter 11 cases involving less than $1,000,000 in assets and
liabilities delivered to nation's bankruptcy courts. The list
includes links to freely downloadable images of these small-dollar
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Monthly Operating Reports are summarized in every Saturday edition
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The Sunday TCR delivers securitization rating news from the week
then-ending.
TCR subscribers have free access to our on-line news archive.
Point your Web browser to http://TCRresources.bankrupt.com/and use
the e-mail address to which your TCR is delivered to login.
*********
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